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AFH Fin Group Plc (AFHP)

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Friday 28 June, 2019

AFH Fin Group Plc

Proposed Conditional Placing

RNS Number : 7438D
AFH Financial Group Plc
28 June 2019
 

THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014.

28 June 2019

AFH FINANCIAL GROUP PLC

("AFH" or the "Company")

Proposed Conditional Placing of Convertible Unsecured Loan Stock

AFH Financial Group plc (AIM: AFHP), a leading financial planning led wealth management firm, announces that it proposes to raise up to £20 million through a conditional placing ("Placing") of 4.0 per cent. convertible unsecured loan stock 2024 ("CULS") in denominations of £5,000 nominal each and in integral multiples of £5,000 in excess thereof. The Company intends to apply for admission of the CULS to trading on the International Securities Market operated by the London Stock Exchange.

 

Summary of the Placing

 

·     Placing of CULS to raise up to £20 million for the Company, subject to Shareholder approval at a general meeting of the Company to be held on 29 July 2019 (the "General Meeting").

 

·      Net proceeds of the Placing to be used to execute the Company's acquisition pipeline and for general corporate purposes. The Company currently has a strong pipeline of potential acquisitions under consideration and due diligence.

 

·     Liberum Capital Limited ("Liberum") and Shore Capital Stockbrokers Limited ("Shore Capital") have been appointed as Joint Placing Agents in connection with the Placing.

 

·      The Placing will be conducted by way of a Bookbuild and is expected to close at 12.00 p.m. (London time) on 11 July 2019, but may be closed earlier or later at the discretion of the Company, Liberum and Shore Capital.

 

·      Books for the Placing are open with immediate effect.

 

Reasons for the Placing and Use of Proceeds

 

The Board considers that the issue of the CULS will provide:

 

·      long-term structural gearing at a fixed cost that is competitive with the cost of other forms of gearing that the Company might have employed and which has the potential to be converted into the permanent capital base of the Company;

 

·     additional funds available for investment which, as the initial Conversion Price is at a premium to the market price of Ordinary Shares, reduces the dilution of current Shareholders than would otherwise be the case on an equity fundraising at the existing market price;

 

·     relative to other forms of gearing, a close alignment of interests between CULS Holders and those of Shareholders, through being convertible into Ordinary Shares in the future and relatively long-term in nature; and

 

·      following any conversion of CULS:

an increased number of Ordinary Shares in issue, which should, in due course, enhance the liquidity in the market for the Ordinary Shares; and

a wider Shareholder base for the Company to support its growth ambitions.

 

Alongside its strategy to drive organic growth, the Board intends to continue to execute its strategy of making selective acquisitions within the Financial Planning and Wealth Management sector whilst providing a professional and cost-effective service to its clients. The Board believes that the Company remains well positioned to take advantage of consolidation opportunities in the sector and currently has a strong near-term pipeline, with five potential acquisitions currently at various stages of the due diligence process. The Company is undertaking the Placing to provide it with a strong platform to finance such acquisition opportunities as well as providing funds for general corporate purposes. The Company is also currently exploring options to access additional capital, including the use of bank debt, to enhance its ability to undertake value-adding acquisitions and for general corporate purposes.

 

The Company also considers that the Placing will provide CULS Holders with:

 

·      an attractive yield of 4.0 per cent. per annum;

 

·     capital protection through repayment at par (to the extent the CULS have not been redeemed, purchased or converted into Ordinary Shares); and

 

·    the potential to participate in further growth of the Company through the ability to convert the CULS into new Ordinary Shares over the next five years (to the extent the CULS have not already been converted into Ordinary Shares).

 

Summary of the terms of the CULS

 

The interest rate on the CULS will be 4.0 per cent. per annum (less any deduction or withholding required by law), payable semi annually in equal instalments in arrears on 30 June and 31 December in each year with the first interest payment on 31 December 2019 in respect of the period from Admission (expected to be 30 July 2019) to 31 December 2019.

 

CULS Holders will be able to convert their CULS into Ordinary Shares on a quarterly basis throughout the life of the CULS commencing on 31 December 2019 with the final conversion date being on 30 June 2024. All outstanding CULS will be repayable at par (plus any accrued interest) on 30 July 2024 ("Final Maturity Date"). The initial Conversion Price will be 420 pence ("Conversion Price"), representing a 16.67 per cent. premium to the Mid Market Price of the Ordinary Shares of 360 pence on 27 June 2019. Based on the initial Conversion Price, a holder of £5,000 nominal of CULS would be entitled to 1,190 Ordinary Shares on conversion of their CULS. Under the terms of the Trust Deed, the Conversion Price will be subject to subsequent adjustment on the occurrence of certain events.

 

At any time during the 30 day period commencing 40 days prior to the Final Maturity Date and expiring 10 days prior to the Final Maturity Date ("Compulsory Conversion Period") the Company will be entitled to require remaining CULS Holders to convert their outstanding CULS into Ordinary Shares by giving the CULS Holders notice in writing ("Compulsory Conversion Notice") provided that the Mid Market Price is, for at least 20 dealing days during the period of 30 consecutive dealing days immediately prior to the date of the Compulsory Conversion Notice, at least 20 per cent. above the Conversion Price prevailing at the start of such 30 day period. For the avoidance of doubt, the 30 dealing days referred to must expire during the Compulsory Conversion Period. In the event of such Compulsory Conversion Notice being given as aforesaid each CULS Holder shall be deemed to have exercised their Conversion Rights on the date of the Compulsory Conversion Notice at such Conversion Price prevailing at the start of such 30 dealing day period referred to above.

 

Any CULS not previously redeemed, purchased or converted will be repaid by the Company on the

Final Maturity Date at its nominal amount plus accrued interest.

 

A summary of the terms of the CULS is set out in Appendix I below.  

 

Outlook and current trading

 

On 28 May 2019, the Company released its interim results for the six month period ended 30 April 2019. In those results, the Chief Executive of the Company stated:

 

"I am pleased to report another set of strong results for the first half of 2019 demonstrating our progress as we continue to build ourselves into the leading financial planning-led wealth manager in the UK.  Despite turbulence in the equity markets and subdued investor confidence over the period, we have delivered increased revenues, reporting 61% growth from the previous period to £36.6 million and improved trading margins demonstrated by our underlying EBITDA[1] margin increasing to 21.0%. 

 

Our growth continues to be generated organically from new and existing clients together with the benefits of the four acquisitions made in the first half of FY 2019 as well as those acquisitions made towards the end of 2018. Our protection business, which is not aligned to the stock markets, continued the strong growth reported in 2018.

 

Following the Company's success in meeting its strategic and financial aspirations set out in January 2017, the Board set new aspirational targets in January 2019 to be achieved within a three to five-year period.

 

The overarching strategy of the Company continues to be to generate long term value for shareholders by driving revenue growth and margin expansion while providing exceptional value and service to our clients, using our increasing size to drive down platform and fund management charges aligned to an appropriate risk-based investment model.

 

On the basis of our results and the opportunities identified, we look forward to continuing to deliver continued profitable growth in the second half of 2019 and beyond."

 

The Board has also set new aspirations to be achieved within a three to five year timeframe:

 

·      funds under management of £10 billion;

 

·      revenues of £140 million per annum; and

 

·      underlying EBITDA margin of 25 per cent. of revenue.

 

There has been no material change in the outlook or trading of the Company since the release of its interim results.

 

Details of the Placing

 

Liberum and Shore Capital are acting as Joint Placing Agents in connection with the Placing.

 

The Placing is being conducted by way of a Bookbuild process and will be launched immediately following the release of this Announcement and will be made available to eligible new and existing institutional investors. The final number of CULS to be issued pursuant to the Placing will be agreed between the Company and the Joint Placing Agents following close of the Placing and will be announced shortly thereafter. The Placing size may be increased or decreased at the discretion of the Company and the Joint Placing Agents. The book will close at the sole discretion of the Joint Placing Agents.

 

The Placing is subject to the terms and conditions set out in Appendix II to this Announcement (which, together with the summary of the CULS set out in Appendix I and the definitions set out in Appendix III, forms part of this Announcement, such Announcement and Appendices together being, this "Announcement"). The Placing is not being underwritten. The Placing is subject, inter alia, to Shareholder approval at the General Meeting to issue the CULS and disapply statutory pre-emption rights in respect of the issue of the CULS.

 

By choosing to participate in the Placing and by making an oral and/or written legally binding offer to acquire CULS, investors will be deemed to have read and understood this Announcement in its entirety, including Appendix II, and to be making such offer on the terms and subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in Appendix II.

 

Appendix I sets out a summary of the terms of the CULS. Appendix II and Appendix III set out further information relating to the Placing and the terms and conditions of the Placing. Unless otherwise defined in the terms and conditions, capitalised terms used in this Announcement shall have the meaning given to them in Appendix III.

 

The Company intends, on or around 12 July 2019, to publish Admission Particulars in connection with the admission of the CULS to trading on the International Securities Market, a market operated by the London Stock Exchange. Those Admission Particulars will also include the notice of the General Meeting.

 

Enquiries:

 

AFH Financial Group PLC                                                                    01527 577 775

Alan Hudson, Chief Executive Officer

Paul Wright, Chief Financial Officer

 

Liberum (Nominated Adviser and Joint Placing Agent)                        020 3100 2000

John Fishley / Richard Bootle / Euan Brown / Kane Collings

 

Shore Capital (Joint Placing Agent)                                                      020 7408 4090

Hugh Morgan / Edward Mansfield / Daniel Bush

 

Yellow Jersey PR Limited (Financial PR)                                              077 4884 3871

Felicity Winkles / Tim Thompson / Annabel Atkins

 

 

Important Notices

This Announcement contains forward-looking statements, including but not limited to statements about the Company's future plans and prospects.  By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and therefore are based on current beliefs and expectations about future events.  Forward-looking statements are not guarantees of future performance and actual operating results and financial condition, and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this Announcement.  Accordingly, prospective investors should not rely on these forward-looking statements.  The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  None of the Company, the Directors or the Joint Placing Agents undertake any obligation nor do they intend to revise or update any document unless required to do so by applicable law or regulation.

This Announcement and the information contained in it is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from the United States (including its territories and possessions, any state of the United States or any Excluded Jurisdiction or any other jurisdiction where to do so might constitute a violation of local securities laws or regulations.  The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever.  Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised.  Failure to comply with this directive may result in a violation of the US Securities Act of 1933, as amended ("Securities Act") or the applicable laws of other jurisdictions. 

This Announcement is for information purposes only and does not constitute an offer or invitation to sell or issue or the solicitation of an offer to buy, acquire or subscribe for CULS to or by anyone in any Excluded Jurisdiction or to any person to whom it is unlawful to make such offer or invitation or undertake such solicitation.  Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.  Subject to certain exceptions, the CULS may not be offered or sold in any Excluded Jurisdiction or to, or for the account or benefit of any national resident or citizen of any Excluded Jurisdiction.  This Announcement does not constitute an extension into the United States of the offer mentioned in this Announcement, nor does it constitute nor form part of an offer to sell securities or the solicitation of an offer to buy securities in the United States.  The CULS have not been and will not be registered under the Securities Act or under any securities laws or with any securities regulatory authority of any state or other jurisdiction of the United States.  The CULS may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into or within the United States absent registration under the Securities Act or an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States.  There will be no public offer of the CULS in the United States.

The distribution of this Announcement and the offering of the CULS in certain jurisdictions other than the United Kingdom may be restricted by law.  Subject to certain exceptions, no action has been taken by the Company or the Joint Placing Agents that would permit an offering of the CULS or possession or distribution of this Announcement or any other offering or publicity material relating to the CULS in the Excluded Jurisdictions or in any other jurisdiction where action for that purpose is required.  Persons into whose possession this Announcement comes are required by the Company or the Joint Placing Agents to inform themselves about, and to observe, any such restrictions.

This Announcement has been issued by, and is the sole responsibility of, the Company.  No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Placing Agents or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

The Joint Placing Agents, each of which is authorised and regulated in the United Kingdom by the FCA, are each acting exclusively for the Company and no one else in connection with the Placing and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice, in relation to the Placing or any other matter referred to in this Announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on the Joint Placing Agents by the FSMA or the regulatory regime established thereunder, the London Stock Exchange, the Rules of the International Securities Market, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable,  neither the Placing Agents, nor any of their respective affiliates, directors, officers, employees, advisers, representatives or agents accept any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this Announcement, including its accuracy or completeness or for any other statement made or purported to be made by it or on behalf of it, the Company, the Directors or any other person, in connection with the Company, the CULS, the Placing or Admission, and nothing in this Announcement should be relied upon as a promise of representation in this respect, whether as to the past or the future.  Each of the Joint Placing Agents, and their respective affiliates, directors, officers, employees, advisers, representatives or agents, accordingly disclaims to the fullest extent permitted by law all and any responsibility or liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this Announcement or any such statement.

Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.

No statement in this Announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.  The price of shares and securities and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares or securities.

The CULS to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than on the London Stock Exchange's International Securities Market.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

 

Information for distributors:

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the securities the subject of the Placing have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of eligible counterparties and professional clients only, each as defined in MiFID II and (ii) all channels for distribution of the securities to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the securities (a "Distributor") should take into consideration the manufacturer's target market assessment; however, a distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the securities and determining appropriate distribution channels.

 

The target market assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.

 

For the avoidance of doubt, the target market assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the securities.

 

The securities are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the EEA.

 

For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of article 4(1) of MiFID II; or (ii) a customer within the meaning of EU Directive 2002/92/EC, where that customer would not qualify as a professional client as defined in point (10) of article 4(1) of MiFID II. Consequently, no key information document required by EU regulation no 1286/2014, as amended (the "PRIIPs regulation") for offering or selling the securities or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the securities or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs regulation.

 

 

 

Appendix I

 

Summary of the CULS

The following summary of the CULS has been extracted from the Placing Proof without material amendment.

The Trust Deed will contain provisions, inter alia, to the following effect:

1          Definitions

In addition to the defined terms set out in Appendix III and otherwise defined in this Announcement the following additional definitions apply for the purpose of this Appendix I:

"Expert" means a financial adviser (which may, for the avoidance of doubt, be the auditors for the time being of the Company) appointed by the Company and approved in writing by the Trustee (such approval not to be unreasonably withheld or delayed) or, if the Company fails to make such appointment and such failure continues for a reasonable period (as determined by the Trustee), appointed by the Trustee following notification to the Company and provided that the Trustee has no obligation to make such appointment unless it has been indemnified and/or provided with security and/or pre-funded to its satisfaction in respect of all costs, fees and expenses of such adviser and of the Trustee in connection with such appointment;

"Further CULS" means further unsecured loan stock of the Company issued pursuant to the provisions described in paragraph 13 and constituted by a trust deed supplemental to the Trust Deed;

"Relevant Electronic System" means any computer-based system enabling title to units of CULS to be evidenced and transferred without a written instrument;

"subsidiary" means any company which is for the time being a subsidiary (within the meaning of section 1159 of the Companies Act) of the Company; and

"Uncertificated Conversion Notice" means a properly authenticated dematerialised instruction and/or other instruction or notification received by the Company (or by such person as it may require for these purposes) in such form and subject to such terms and conditions as may from time to time be prescribed by the Company (subject always to the CREST Regulations and the facilities, rules and requirements of the Relevant Electronic System) and that specifies (in accordance with the form prescribed by the Company) the nominal amount of CULS in respect of which the Conversion Rights are being exercised.

References in this Appendix I to "paragraphs" are to paragraphs of this Appendix I.

2          Interest

2.1       The CULS will bear interest (which shall accrue from day to day) on the nominal amount of the CULS at the rate of 4.0 per cent. per annum (less any deduction or withholding required by law) such interest to be payable semi annually in equal instalments in arrear on 30 June and 31 December in each year (each an "Interest Payment Date"), save that the first payment of interest on the CULS, which will be made on 31 December 2019 (the "First Interest Payment Date"), will be in respect of the period from and including the Issue Date to (but excluding) 31 December 2019 and the final payment of interest on the CULS (the "Final Interest Payment Date") will be in respect of the period from (and including) the Interest Payment Date immediately preceding the Final Maturity Date to (but excluding) the Final Maturity Date.

2.2       The amount of interest payable in respect of any period which is either shorter or longer than an Interest Period (as defined below) shall be calculated at (i) the rate of 4.0 per cent. per annum divided by two multiplied by (ii) the number of calendar days in the relevant period from (and including) the first day of such period to (but excluding) the last day of such period divided by the number of calendar days in the Interest Period in which the relevant period falls.

"Interest Period" means each period from (and including) an Interest Payment Date to (but excluding) the next successive Interest Payment Date and, for the purposes of this definition, the first Interest Period shall be 30 June 2019 to 30 December 2019 and the final Interest Period shall be 30 June 2024 to 30 December 2024.

3          Conversion

3.1       Each CULS Holder (and for the purposes of paragraph 5 the Trustee and for the purposes of paragraph 3.3 the Company, on his behalf) shall (on and subject to the provisions herein) have the right to convert the whole or such part (being an integral multiple of £5,000 nominal) of his or her CULS as he or she may specify into fully paid Ordinary Shares. The number of Ordinary Shares to be issued by the Company on the exercise of a Conversion Right shall be determined by dividing the nominal amount of the CULS to be converted by the conversion price in effect on the relevant Conversion Date ("Conversion Price"). The initial Conversion Price is 420 pence per Ordinary Share (which shall be subject to adjustment in circumstances described in paragraph 4).

3.2       Conversion at the option of CULS Holders. The Conversion Rights shall be exercisable (in the manner described in paragraph 3.4 or paragraph 3.5, as applicable) at any time during the periods of 28 days ending 31 March, 30 June, 30 September and 31 December each year commencing 28 days prior to 31 December 2019 and ending 28 days prior to 30 June 2024 (each such period and any other period during which the Conversion Rights may be exercised a "Conversion Period") provided that the documents or notifications required are received by 6.00 pm on the last day of the relevant Conversion Period (each such last day a "Conversion Date" and the final Conversion Date falling on 30 June 2024 being the "Final Conversion Date").

3.3       Conversion at the option of the Company. At any time during the Compulsory Conversion Period the Company will be entitled to require all remaining CULS Holders to convert all their outstanding CULS into Ordinary Shares by giving the CULS Holders notice in writing ("Compulsory Conversion Notice") provided that the Mid Market Price is, for at least 20 dealing days during the period of 30 consecutive dealing days immediately prior to the date of the Compulsory Conversion Notice, at least 20 per cent. above the Conversion Price prevailing at the start of such 30 day period. For the avoidance of doubt, the 30 dealing days referred to in this paragraph must expire during the Compulsory Conversion Period. In the event of such Compulsory Conversion Notice being given as aforesaid, each CULS Holder shall be deemed to have exercised their Conversion Rights on the date of the Compulsory Conversion Notice at such Conversion Price prevailing at the start of such 30 dealing day period referred to above (and the provisions of paragraph 3.12 shall apply accordingly). The date of the deemed exercise of the Conversion Rights pursuant to this paragraph 3.3 shall be deemed to be a Conversion Date and the provisions of paragraphs 3.4 and 3.5 shall not apply. The Company shall have the right to issue any Ordinary Shares arising on conversion pursuant to this paragraph 3.3 in certificated form.

A certificate signed by the Directors as to the Mid Market Price may be relied upon by the Trustee as sufficient evidence thereof and, if so relied upon, shall (in the absence of manifest error) be binding on all parties.

3.4       Subject to paragraph 3.3, in order to exercise, in whole or in part, the Conversion Rights which are conferred by any CULS that is on the relevant Conversion Date in certificated form, the CULS Holder must lodge the relevant CULS certificate(s) (or such other document(s) as the Company may, in its absolute discretion, accept) at the office of the Company's registrars specified in the CULS certificate (or at such other place as the Company may from time to time notify the CULS Holders) during the relevant Conversion Period having completed and signed the notice of exercise of Conversion Rights thereon (a "Conversion Notice") (or by giving such other notice of exercise of Conversion Rights as the Company may, in its absolute discretion, accept). The Company may (at its sole discretion) accept as valid notices of exercise of Conversion Rights which are received after the relevant Conversion Date. Once lodged, a notice of exercise of Conversion Rights shall be irrevocable, save with the consent of the Company. Compliance must also be made with any statutory and regulatory requirements for the time being applicable.

3.5       Subject to paragraph 3.3, in order to exercise, in whole or in part, the Conversion Rights which are conferred by any CULS that is on the relevant Conversion Date in uncertificated form shall be exercisable, in whole or in part, (and treated by the Company as exercised) on that Conversion Date if an Uncertificated Conversion Notice is received as referred to below during the Conversion Period (but not later than the latest time for input of the instruction permitted by the Relevant Electronic System on that date) by the Company's Regulators (or by such person as it may require for such purposes) in such form and subject to such terms and conditions as may from time to time be prescribed by the Company (subject always to the CREST Regulations and the facilities, rules and requirements of the Relevant Electronic System concerned). The Company may, in addition but subject to the CREST Regulations and the facilities, rules and requirements of the Relevant Electronic System, determine when any such properly authenticated dematerialised instruction and/or other instruction or notification is to be treated as received by the Company (or by such other person as it may require for these purposes). Without prejudice to the generality of the foregoing, the effect of an Uncertificated Conversion Notice may be such as to divest the holder of the CULS concerned of the power to transfer such CULS to another person. Once lodged, an Uncertificated Conversion Notice shall be irrevocable, save with the consent of the Company. Compliance must also be made with any statutory and regulatory requirements for the time being applicable.

3.6       Fractions of Ordinary Shares will not be issued on exercise of Conversion Rights, and no payment of cash or other adjustment will be made in lieu thereof. Fractional entitlements will be rounded down.

3.7       The Company shall notify all CULS Holders via a Regulatory Information Service not less than four nor more than eight weeks prior to each Conversion Date (other than deemed Conversion Dates under paragraphs 3.3, 3.14 and 5) reminding them of their Conversion Rights then arising or current and stating the relevant basis of conversion (including the Conversion Price) (after taking into account any appropriate adjustments pursuant to Condition 4). Such notice shall give the address of the Registrars.

3.8       Ordinary Shares allotted pursuant to the exercise (or deemed exercise) of Conversion Rights which are conferred by any CULS that is in certificated form will be allotted not later than 14 days after, and with effect from, the relevant Conversion Date to the CULS Holder credited as fully paid and such allotment and issue shall (subject to any amount of accrued interest to which he or she may be entitled under the provisions of paragraph 3.12) be in full satisfaction and discharge of the principal moneys in respect of the CULS so converted.

3.9       The Company shall not later than the expiry of 28 days next following the relevant Conversion Date send, or procure to be sent, free of charge (at the risk of the person(s) entitled thereto) certificates in respect of Ordinary Shares allotted pursuant to the exercise (or deemed exercise) of Conversion Rights which are conferred by any CULS held in certificated form to the person(s) in whose name(s) the CULS is registered at the date of exercise (and, if more than one, to the first-named, which shall be sufficient despatch for all). In the event of partial exercise of the Conversion Rights evidenced by a Certificate, the Company shall, at the same time, issue a new Certificate in the name of the holder for the balance of that holder's CULS not converted.

3.10      Ordinary Shares allotted pursuant to the exercise of Conversion Rights which are conferred by any CULS that is in uncertificated form will be allotted not later than 14 days after, and with effect from, the relevant Conversion Date to the CULS Holder credited as fully paid and such allotment and issue shall (subject to any amount of accrued interest to which he or she may be entitled under the provisions of paragraph 3.12) be in full satisfaction and discharge of the principal moneys in respect of the CULS so converted. The Company shall procure that the appropriate instructions are given to enable such Ordinary Shares to be evidenced by means of the Relevant Electronic System as a holding of the person(s) in whose name(s) the CULS in respect of which Conversion Rights have been exercised were registered at the date of such exercise.

3.11      For the avoidance of doubt, unless the Company otherwise determines or unless the CREST Regulations or the facilities, rules or requirements of the Relevant Electronic System otherwise require, the Ordinary Shares issued on the exercise of Conversion Rights shall be issued in certificated form where such Conversion Rights were conferred by CULS which was held in certificated form and in uncertificated form where such Conversion Rights were conferred by CULS which was held in uncertificated form.

3.12      Interest on CULS converted under this paragraph 3 shall be payable up to but excluding, but shall cease to accrue immediately after, the relevant Conversion Date (whether or not this is an Interest Payment Date in respect of the CULS). Ordinary Shares allotted on conversion shall be credited as fully paid. Such Ordinary Shares will not rank for any dividends or other distributions declared, paid or made on the Ordinary Shares by reference to a record date before the relevant Conversion Date, but, subject thereto, will rank in full for all dividends and other distributions declared, paid or made on the Ordinary Shares by reference to a record date on or after the relevant Conversion Date and otherwise will rank pari passu in all other respects, and form one class, with the Ordinary Shares in issue on the relevant Conversion Date.

3.13      Without prejudice to the generality of the final sentence of paragraph 3.4 and 3.5, the exercise of Conversion Rights by any CULS Holder (save in respect of a QIB) whose registered address is in an Excluded Jurisdiction or who is a citizen or national of, or resident in, an Excluded Jurisdiction or a custodian, nominee or trustee for a citizen or national of, or resident in, an Excluded Jurisdiction (including without limitation any US Person), and the right of such a CULS Holder to receive the Ordinary Shares falling to be issued to him following the exercise of his or her Conversion Rights, will be subject to such requirements, conditions, restrictions, limitations or prohibitions as the Company may at any time impose, in its absolute discretion, for the purpose of complying with any applicable securities laws of the relevant jurisdiction, which, in the case of the United States, shall include the US Securities Act and any rules or regulations promulgated under such acts. As used in this document, "US Person" means any person or entity defined as such in Rule 902(k) under the US Securities Act, and without limiting the generality of the foregoing, US Person includes a natural person resident in the United States, a corporation or partnership organised or incorporated under the laws of the United States (including any State thereof) and an estate or trust, if any executor, administrator or trustee is a US Person, but shall not include a branch or agency of a US Person located outside the United States if such agency or branch operates for valid business reasons and is engaged in the business of insurance or banking and is subject to substantive insurance or banking regulation, respectively, in the jurisdiction where located.

3.14      Conversion by Trustee

The Trustee may, at its absolute discretion and without any responsibility for any loss occasioned thereby, at any time during the period of ten days before the Final Maturity Date (or such earlier date as all the CULS then outstanding shall be due to be redeemed by the Company) (the "Trustee Conversion Period"), exercise all Conversion Rights not exercised by CULS Holders (or deemed to be exercised pursuant to these Conditions) on or before the Trustee Conversion Period at the Conversion Price applicable on the date of commencement of the Trustee Conversion Period and sell for the benefit of the CULS Holders entitled thereto the Ordinary Shares allotted on such conversion, provided that the Trustee shall not exercise such Conversion Rights unless an Expert (acting as an expert and not an arbitrator) shall have stated in writing that in its opinion the exercise of such Conversion Rights and prompt sale by the Trustee would be in the interests of the CULS Holders concerned as a body and provided further that the Trustee shall not exercise such Conversion Rights in respect of any CULS whose holder has requested redemption thereof. The period of ten days referred to in this paragraph 3.14 shall be deemed to be a Conversion Period and the date of exercise of such Conversion Rights by the Trustee shall be deemed to be a Conversion Date and the provisions of paragraph 3.12 shall apply accordingly.

4          Adjustments of the Conversion Price

4.1       The Conversion Price shall from time to time be adjusted in accordance with the provisions of this paragraph 4.

4.2       Definitions

The following expressions shall, save as otherwise provided, have the following meanings in this paragraph 4:

"Average Mid Market Price" means the average of the Mid Market Price on each of the five consecutive dealing days up to and including the Effective Date;

"Fair Market Value" means the fair market value as determined by an Expert on the basis of a commonly accepted market valuation method and taking into account such factors as the Expert considers appropriate;

"Securities" means any securities, including without limitation the Ordinary Shares and any other shares in the capital of the Company and options, warrants or other rights to subscribe for or purchase or acquire Ordinary Shares or any other shares in the capital of the Company;

"Relevant Stock Exchange" means AIM or, if at the relevant time the Ordinary Shares are not at that time listed and admitted to trading on AIM, the principal stock exchange or securities market on which the Ordinary Shares are then listed, admitted to trading or quoted or dealt in.

4.3       Consolidation, sub-division or reclassification of Ordinary Shares

If and whenever there shall be a consolidation, sub-division or reclassification of the Ordinary Shares, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately before such alteration by the following fraction:

A
B

where:
A          is the number of Ordinary Shares in issue immediately before such alteration; and
B          is the number of Ordinary Shares in issue immediately after such alteration.

Such adjustment shall become effective on the date the alteration takes effect.

4.4       Capitalisation issue

If and whenever the Company shall allot to holders of Ordinary Shares any Ordinary Shares credited as fully paid by way of capitalisation of reserves or profits (including any share premium account or capital redemption reserve) other than Ordinary Shares (in an amount equal to the amount of the cash dividend foregone) issued in lieu of a cash dividend on a date (or by reference to a record date) on or before the Final Maturity Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately before such issue by the following fraction:

A
B

where:
A          is the number of Ordinary Shares in issue immediately before such issue; and
B          is the number of Ordinary Shares in issue immediately after such issue.

Such adjustment shall become effective on the date of issue of such Ordinary Shares.

4.5       Relevant Dividend

If the Company declares or pays dividends per Ordinary Share ("Relevant Dividend") to holders of Ordinary Shares of an amount exceeding 50 per cent. of the amount of audited statutory fully diluted earnings per Ordinary Share for a financial year ("Dividend Threshold"), the Conversion Price shall be adjusted downwards by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

A - B
A - C

Where:

A          is the Average Mid Market Price of the Ordinary Shares on the Effective Date;

B          is the portion of the Fair Market Value of the Relevant Dividend attributable to one Ordinary Share, with such portion being determined by dividing the Fair Market Value of the Relevant Dividend by the number of Ordinary Shares entitled to receive the Relevant Dividend;

C          is the amount (if any) by which the Dividend Threshold is exceeded in respect of the relevant financial year.

For the purposes of the above Fair Market Value shall be determined as at the Effective Date.

In making any calculations for the purposes of this paragraph 4.5, such adjustments (if any) shall be made as an Expert may determine in good faith to be appropriate to reflect any consideration or subdivision of Ordinary Shares or the issue of Ordinary Shares by way of capitalisation of profits or reserves (or any like or similar event) or any change in the number of Ordinary Shares in issue in the relevant financial year.

Such adjustment shall become effective on the Effective Date.

"Effective Date" means, in respect of this paragraph 4.5, the first date on which the Ordinary Shares are traded ex-the Relevant Dividend on the Relevant Stock Exchange.

4.6       Rights Issues - Ordinary Shares

If and whenever the Company shall issue Ordinary Shares to Shareholders as a class by way of rights, or shall issue or grant to Shareholders as a class by way of rights, any options, warrants or other rights to subscribe for or purchase or otherwise acquire any Ordinary Shares, or any Securities which by their terms of issue carry (directly or indirectly) rights of conversion into, or exchange or subscription for any Ordinary Shares (or shall grant any such rights in respect of existing Securities so issued), in each case at a price per Ordinary Share which is less than 90 per cent. of the Mid Market Price per Ordinary Share on the Effective Date, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

A + B
A + C

where:

A          is the number of Ordinary Shares in issue on the Effective Date;

B          is the number of Ordinary Shares which the aggregate consideration (if any) receivable for the Ordinary Shares issued by way of rights, or for the Securities issued by way of rights or for the options or warrants or other rights issued by way of rights and for the total number of Ordinary Shares deliverable on the exercise thereof, would purchase at such Average Mid Market Price on the Effective Date; and

C          is the number of Ordinary Shares to be issued or, as the case may be, the maximum number of Ordinary Shares which may be issued upon exercise of such options, warrants or rights calculated as at the date of issue of such options, warrants or rights or upon conversion or exchange or exercise of rights of subscription or purchase in respect thereof at the initial conversion, exchange, subscription, purchase or acquisition price or rate;

Such adjustment shall become effective on the Effective Date (or, if later, the dealing day following the record date or other due date for establishment of the entitlement of Shareholders to participate in the relevant issue or grant).

"Effective Date" means, in respect of this paragraph 4.6, the first date on which the Ordinary Shares are traded ex-rights, ex-options or ex-warrants on the Relevant Stock Exchange.

4.7       Rights Issues - Securities

If and whenever the Company shall issue any Securities (except where the Conversion Price falls to be adjusted under paragraphs 4.4 or 4.6 above) to Shareholders as a class by way of rights or grant to Shareholders as a class by way of rights any options, warrants or other rights to subscribe for or purchase or otherwise acquire any securities (except where the Conversion Price falls to be adjusted under paragraphs 4.4 or 4.6 above), the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

A - B
A

where:

A          is the Average Mid Market Price on the Effective Date; and

B          is the Fair Market Value on the Effective Date of the portion of the rights attributable to one Ordinary Share.

Such adjustment shall become effective on the Effective Date.

"Effective Date" means, in respect of this paragraph 4.7, the first date on which the Ordinary Shares are traded ex-rights, ex-options or ex-warrants on the Relevant Stock Exchange.

4.8       Issue of Ordinary Shares

If and whenever the Company shall issue (otherwise than as mentioned in paragraph 4.6 above) wholly for cash or for no consideration any Ordinary Shares (other than Ordinary Shares issued on the conversion of the CULS or on the exercise of any rights of conversion into, or exchange or subscription for or purchase of, Ordinary Shares) or issue or grant (otherwise than as mentioned in paragraph 4.6 above) wholly for cash or for no consideration any options, warrants or other rights to subscribe for or purchase or otherwise acquire Ordinary Shares (other than the CULS, which term shall for this purpose include any Further CULS), in each case at a consideration receivable per Ordinary Share (based, where appropriate, on such number of Ordinary Shares as determined by reference to the proviso below) which is less than 90 per cent. of the Average Mid Market Price on the date of the first public announcement of the terms of such issue or grant, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

A + B
A + C

where:

A          is the number of Ordinary Shares in issue on the date of first public announcement of the terms of such issue or grant;

B          is the number of Ordinary Shares which the aggregate consideration (if any) receivable for the issue of such Ordinary Shares or, as the case may be, for the Ordinary Shares to be issued or otherwise made available upon the exercise of any such options, warrants or rights, would purchase at such Average Mid Market Price on the Effective Date; and

C          is the number of Ordinary Shares to be issued pursuant to such issue of such Ordinary Shares or, as the case may be, the maximum number of Ordinary Shares which may be issued upon exercise of such options, warrants or rights calculated as at the date of issue of such options, warrants or rights,

Such adjustment shall become effective on the Effective Date.

"Effective Date" means, in respect of this paragraph 4.8, the date of issue of such Ordinary Shares or, as the case may be, the issue or grant of such options, warrants or rights.

4.9        Issue of Securities

If and whenever the Company shall issue wholly for cash or for no consideration any Securities (other than the CULS, which term shall for this purpose exclude any Further CULS) which by their terms of issue carry (directly or indirectly) rights of conversion into, or exchange or subscription for, purchase of, or rights to otherwise acquire, Ordinary Shares (or shall grant any such rights in respect of existing Securities so issued) or Securities which by their terms might be reclassified or redesignated as Ordinary Shares, and the consideration per Ordinary Share receivable upon conversion, exchange, subscription, purchase, acquisition, reclassification or redesignation is less than 90 per cent. of the Average Mid Market Price on the date of the first public announcement of the terms of issue of such Securities (or the terms of such grant), the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

A + B
A + C

where:

A          is the number of Ordinary Shares in issue on the date of first public announcement of the terms of such Securities (but where the relevant Securities carry rights of conversion into or rights of exchange or subscription for, purchase of, or rights to otherwise acquire Ordinary Shares which have been issued, purchased or acquired by the Company for the purposes of or in connection with such issue, less the number of such Ordinary Shares so issued, purchased or acquired);

B          is the number of Ordinary Shares which the aggregate consideration (if any) receivable for the Ordinary Shares to be issued or otherwise made available upon conversion or exchange or upon exercise of the right of subscription, purchase or acquisition attached to such Securities or, as the case may be, for the Ordinary Shares to be issued or to arise from any such reclassification or redesignation would purchase at such Average Mid Market Price; and

C          is the maximum number of Ordinary Shares to be issued or otherwise made available upon conversion or exchange of such Securities or upon the exercise of such right of subscription, purchase or acquisition attached thereto at the initial conversion, exchange or subscription, purchase or acquisition price or rate or, as the case may be, the maximum number of Ordinary Shares which may be issued or arise from any such reclassification or redesignation;

provided that if at the Effective Date such number of Ordinary Shares is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time (which may be when such securities are converted or exchanged or rights of subscription, purchase or acquisition are exercised or, as the case may be, such Securities are reclassified or redesignated or at such other time as may be provided), then for the purposes of this paragraph 4.9, "C" shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Effective Date and as if such conversion, exchange, subscription, purchase, acquisition, reclassification or, as the case may be, redesignation had taken place on the Effective Date.

Such adjustment shall become effective on the Effective Date.

"Effective Date" means, in respect of this paragraph 4.9, the date of issue of such Securities or, as the case may be, the grant of such rights.

4.10      Modification of Rights

If and whenever there shall be any modification of the rights of conversion, exchange, subscription, purchase or acquisition attaching to any Securities (other than the CULS, which term shall for this purpose include any Further CULS) as are mentioned in paragraph 4.9 (other than in accordance with the terms (including terms as to adjustment) applicable to such Securities upon issue) so that following such modification the consideration per Ordinary Share receivable has been reduced and is less than 90 per cent. of the Average Mid Market Price on the date of the first public announcement of the proposals for such modification, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the Effective Date by the following fraction:

A + B
A + C

where:

A          is the number of Ordinary Shares in issue on the date of the first public announcement of the proposals for such modification (but where the relevant Securities carry rights of conversion into or rights of exchange or subscription for, or purchase or acquisition of, Ordinary Shares which have been issued, purchased or acquired by the Company for the purposes of or in connection with such securities, less the number of such Ordinary Shares so issued, purchased or acquired);

B          is the number of Ordinary Shares which the aggregate consideration (if any) receivable for the Ordinary Shares to be issued or otherwise made available upon conversion or exchange or upon exercise of the right of subscription, purchase or acquisition attached to the Securities so modified would purchase at such Average Mid Market Price on the date of such first public announcement or, if lower, the existing conversion, exchange, subscription, purchase or acquisition price or rate of such Securities; and

C          is the maximum number of Ordinary Shares which may be issued or otherwise made available upon conversion or exchange of such securities or upon the exercise of such rights of subscription, purchase or acquisition attached thereto at the modified conversion, exchange, subscription, purchase or acquisition price or rate but giving credit in such manner as an Expert shall consider in good faith appropriate for any previous adjustment under this paragraph 4.10 or paragraph 4.9 above,

provided that if at the Effective Date such number of Ordinary Shares is to be determined by reference to the application of a formula or other variable feature or the occurrence of any event at some subsequent time (which may be when such Securities are converted or exchanged or rights of subscription, purchase or acquisition are exercised or at such other time as may be provided), then for the purposes of this paragraph 4.10, "C" shall be determined by the application of such formula or variable feature or as if the relevant event occurs or had occurred as at the Effective Date and as if such conversion, exchange, subscription, purchase or acquisition had taken place on the Effective Date.

Such adjustment shall become effective on the Effective Date.

"Effective Date" means, in respect of this paragraph 4.10, the date of modification of the rights of conversion, exchange, subscription, purchase or acquisition attaching to such Securities.

4.11      Change of Control

If a Change of Control (as defined in paragraph 5) shall occur, then upon any exercise of Conversion Rights during the Change of Control Period (as defined below) the Conversion Price (the "Change of Control Conversion Price") shall be determined as set out below:

COCCP = OCP/(1+ (CP x c/t))

where:

Change of Control Period

means the period commencing on the Change of Control and ending 60 days following the Change of Control or, if later, 60 days following the date on which a Change of Control Notice is served on the CULS Holders

COCCP

means the Change of Control Conversion Price;

OCP

means the Conversion Price in effect on the relevant Conversion Date;

CP

means 16.67 per cent. (expressed as a fraction);

c

means the number of calendar days from and including the date the Change of Control occurs to but excluding the Final Maturity Date; and

t

means the number of calendar days from and including the Issue Date of the CULS to but excluding the Final Maturity Date.

4.12      General

4.13      If the Company determines in good faith that an adjustment should be made to the Conversion Price as a result of one or more circumstances not referred to above in this paragraph 4 (even if the relevant circumstance is specifically excluded from the operation of paragraphs 4.3 to 4.11 above), the Company shall, at its own expense and acting reasonably, request an Expert to determine as soon as practicable what adjustment (if any) to the Conversion Price is fair and reasonable to take account thereof and the date on which such adjustment (if any) should take effect and upon such determination such adjustment (if any) shall be made and shall in good faith take effect in accordance with such determination, provided that an adjustment shall only be made pursuant to this paragraph 4.13 if such Expert is so requested to make such a determination not more than 21 days after the date on which the relevant circumstance arises and if the adjustment would result in a reduction to the Conversion Price.

4.14      Notwithstanding the foregoing provisions:

4.14.1   where the events or circumstances giving rise to any adjustment pursuant to this paragraph 4 have already resulted or will result in an adjustment to the Conversion Price or where the events or circumstances giving rise to any adjustment arise by virtue of any other events or circumstances which have already given or will give rise to an adjustment to the Conversion Price or where more than one event which gives rise to an adjustment to the Conversion Price occurs within such a short period of time that, in the reasonable opinion of the Company, a modification to the operation of the adjustment provisions is required to give the intended result, such modification shall be made to the operation of the adjustment provisions as may be advised in good faith by an Expert to be in its opinion appropriate to give the intended result;

4.14.2   such modification shall be made to the operation of the conditions of the Trust Deed as may be advised in good faith by an Expert to be in its opinion appropriate (i) to ensure that an adjustment to the Conversion Price or the economic effect thereof shall not be taken into account more than once and (ii) to ensure that the economic effect of a dividend is not taken into account more than once; and

4.14.3   other than pursuant to paragraph 4.3, no adjustment shall be made that would result in an increase to the Conversion Price.

4.15      All adjustments to the Conversion Price shall be rounded upwards if necessary to four decimal places. The Company will forthwith notify the CULS Holders in writing (in a form previously approved in writing by the Trustee) of any adjustment to the Conversion Price pursuant to paragraph 4.

4.16      The Trustee shall not be under any duty or obligation to monitor whether any event or circumstance has happened or exists pursuant to paragraph 4 and it may assume until it has actual knowledge by way of express notice in writing from the Company to the contrary that no such event has occurred and will not be responsible to any party for any loss arising from any failure by it to do so. The Trustee shall not at any time be under any duty or responsibility to any CULS Holder with respect to the nature or the extent of any adjustment to the Conversion Price when made, or with respect to the method employed in making the same.

5          Change of Control

5.1        If, whilst any of the CULS remains capable of being converted, any offer is made to all (or as nearly as may be practicable all) the Shareholders (or to all (or as nearly as may be practicable all) other than the offeror and/or any company controlled by the offeror and/or persons associated, connected or acting in concert with the offeror) to acquire the whole or any part of the Ordinary Shares (an "Offer") and the Company becomes aware that the right to cast more than 50 per cent. of the votes which may ordinarily be cast on a poll at a general meeting of the Company or to appoint and/or remove all or a majority of the members of the Board has or will become vested in the offeror and/or any company controlled by the offeror and/or persons associated, connected or acting in concert with the offeror ("Change of Control"), the Company shall give notice of that fact in writing (in a form previously approved in writing by the Trustee) (a "Change of Control Notice") to all CULS Holders within 14 days of its becoming so aware. The publication of a scheme of arrangement pursuant to Part 26 of the Companies Act providing for the acquisition by any person of the whole or any part of the Ordinary Shares shall be deemed to be the making of an Offer.

5.2        If an offer, proposal, scheme or other arrangement which is on terms as to consideration which are, in the opinion of an Expert, fair and reasonable (having regard to the terms of the Conversion Rights and the period during which they may be exercised and to the terms of such offer and to any other circumstances which may appear to such Expert) (a "Comparable CULS Offer") has already been, or not later than 30 days after the date of such Change of Control Notice is, made or put to all CULS Holders then the Company shall forthwith thereafter give further notice in writing of that fact (in a form previously approved in writing by the Trustee) to all CULS Holders (a "Comparable CULS Offer Notice") and each CULS Holder may, by giving written notice to the Company (in a form previously approved in writing by the Trustee) within the 30 days after the service of a Comparable CULS Offer Notice, require the Company to repay the whole or any part (being an integral multiple of £5,000 nominal) of his or her CULS at its nominal amount together with accrued interest up to (but excluding) the date specified in the Comparable CULS Offer Notice (which date shall be a date falling not less than eight weeks and not more than ten weeks following the date of the Comparable CULS Offer Notice), in which event the Company shall be bound to repay such CULS together with interest accrued accordingly.

5.3        If no Comparable CULS Offer is made within the 30 days after the date of a Change of Control Notice, the Company shall forthwith give notice in writing of that fact (in a form previously approved in writing by the Trustee) (a "Default Notice") to all CULS Holders and each CULS Holder shall have the right by giving written notice (in a form previously approved in writing by the Trustee) to the Company within 30 days after service of such Default Notice, (a) to require the Company to repay the whole or any part (being an integral multiple of £5,000 nominal) of his or her CULS at its nominal amount together with accrued interest up to (but excluding) the date specified in the Default Notice (which date shall be a date falling not less than eight weeks and not more than 10 weeks following the date of such Default Notice), in which event the Company shall be bound to repay such CULS together with accrued interest accordingly, and/or (b) to exercise his or her Conversion Rights in respect of the whole or any part (being an integral multiple of £5,000 nominal) of his or her CULS as he or she may specify (and so that for this purpose such 30-day period shall be deemed to be a Conversion Period, the last day thereof shall be deemed to be a Conversion Date and the provisions of paragraph 3.12 shall apply accordingly) at the Conversion Price applicable on such deemed Conversion Date (after making any appropriate adjustments pursuant to paragraph 4).

5.4        The Change of Control Notice shall also specify:

5.4.1     all information material to CULS Holders concerning the Change of Control;

5.4.2     the Conversion Price immediately prior to the occurrence of the Change of Control and the indicative Change of Control Conversion Price (as defined in paragraph 4.11) applicable on the basis of such Conversion Price;

5.4.3     the closing price of the Ordinary Shares as at the latest practicable date prior to the        publication of the Change of Control Notice; and

5.4.4     such other information relating to the Change of Control as the Trustee may require.

5.5        The Trustee shall not be required to monitor or take any steps to ascertain whether a Change of Control or any event which could lead to a Change of Control has occurred or may occur and will not be responsible or liable to CULS Holders or any person for any loss arising from any failure by it to do so.

6          Undertakings

6.1        If, whilst any CULS remains capable of being converted, the Company commences liquidation (whether voluntary or compulsory) it shall forthwith give notice in writing thereof (in a form previously approved in writing by the Trustee) ("Liquidation Notice") to all CULS Holders and thereupon each CULS Holder shall in respect of the whole or any part (being an integral multiple of £5,000 nominal) of his or her CULS be entitled within four weeks after the service of the Liquidation Notice to elect by notice in writing to the Company to be treated as if a Conversion Date had occurred on the day immediately preceding the date of such commencement of liquidation ("Liquidation Conversion Day") and his or her Conversion Rights had been exercisable and had been exercised in full with effect on the Liquidation Conversion Day at the Conversion Price then applicable (after making any appropriate adjustments pursuant to paragraph 4). In that event, subject as hereafter provided in this paragraph 6.1, each CULS Holder making such an election shall, in lieu of the payments which would otherwise be due in respect of his or her CULS be deemed to have had his CULS converted as a result of such election and be entitled to participate in the assets available in the liquidation pari passu with the Ordinary Shareholders (after giving effect to the rights of any other securities carrying rights to participate in the assets of the Company available on a liquidation) as if he or she were the holder of the Ordinary Shares to which he or she would have become entitled had the CULS in respect of which he or she shall have made such election been converted as aforesaid. Notwithstanding the foregoing, a CULS Holder making such an election shall be entitled to receive and retain any payment in respect of the CULS in relation to which he or she shall have made such election which shall have become due on or prior to the Liquidation Conversion Day as though he or she had not made such election. For the purpose of determining the assets in which any CULS Holder making an election as aforesaid shall be entitled to participate, the provisions of paragraph 3.12 shall be deemed to apply as if the Liquidation Conversion Day were a Conversion Date, provided that if such CULS Holder shall receive any payment on the CULS in relation to which he or she shall have made such an election in respect of interest falling due on the CULS on such Liquidation Conversion Day or any day thereafter up to and including the date of service of the Liquidation Notice by the Company, he or she shall be entitled to retain such payment.

If, at any time, the Company posts a notice to its Ordinary Shareholders convening a meeting at which a resolution will be proposed to wind up the Company ("Winding Up Resolution"), it may at the same time give notice in writing to all CULS Holder (in a form previously approved in writing by the Trustee) ("Winding Up Notice") in which event the period of four weeks referred to above shall commence on the date of the Winding Up Notice and a CULS Holder shall, in respect of the whole or any part (being an integral multiple of £5,000 nominal) of his or her CULS, be entitled to elect within that period by notice in writing to the Company that, if such resolution is passed, he or she should be treated as if a Conversion Date had occurred on the day immediately preceding the date on which the Winding Up Resolution is passed and his or her Conversion Rights had been exercisable and had been exercised in full with effect on that date on the same basis, mutatis mutandis, as is referred to above (and, for the avoidance of doubt, if the Company shall give a Winding Up Notice to CULS Holders as referred to in this paragraph, no further notice shall be given to CULS Holders under this paragraph 6.1 on commencement of the liquidation). Subject to this paragraph 6.1, the Conversion Rights shall lapse in the event of the liquidation of the Company.

6.2        If, whilst any CULS remains capable of being converted, the CULS shall become immediately due and repayable in accordance with the provisions of the Trust Deed (for any reason other than the liquidation of the Company), the Company shall forthwith give notice in writing thereof to all CULS Holders (in a form previously approved in writing by the Trustee), and thereupon each CULS Holder shall in respect of the whole or any part (being an integral multiple of £5,000 nominal) of his or her CULS be entitled within six weeks after the service of such notice to exercise his or her Conversion Rights (such exercise to be with effect as on the day immediately preceding the date on which the CULS shall have become so due and repayable, which day shall be deemed to be a Conversion Date) at the Conversion Price then applicable (after making any appropriate adjustments pursuant to paragraph 4) by completing and signing the Conversion Notice(s) on the Certificate(s) representing the CULS in respect of which he or she wishes to exercise his or her Conversion Rights and depositing the same at the office of the Company's Registrars or lodging an Uncertificated Conversion Notice (as the case may be), in each case before the expiry of such period of six weeks.

6.3        While any Conversion Rights remain capable of exercise by any CULS Holder or the Trustee, save with the previous sanction of a Special Resolution or with the prior approval of the Trustee where, in the Trustee's opinion, it is not materially prejudicial to the interests of the CULS Holders to give such approval, the Company shall procure that no compromise or arrangement (to which Part 26 of the Companies Act applies) affecting the Ordinary Shares shall be proposed unless the CULS Holders shall be parties to the compromise or arrangement and unless the compromise or arrangement shall be subject to approval by the CULS Holders in the manner prescribed by section 899 of the Companies Act provided that these provisions shall not apply (i) if an offer, proposal, scheme or other arrangement which is, in the opinion of an Expert, fair and reasonable (having regard to the terms of the Conversion Rights and the periods during which they may be exercised and to the terms of such compromise or arrangement and to any other circumstances which may appear to such Expert to be relevant) has already been, or not later than the date on which the document containing particulars of the compromise or arrangement shall first be issued to the parties thereto is, made or put to all CULS Holders, (ii) if the Trustee shall be of the opinion that implementation of such compromise or arrangement will not be prejudicial to the interests of the CULS Holders or (iii) to a scheme of arrangement to which paragraph 5 applies.

7          Covenants relating to Conversion Rights

7.1        While any Conversion Rights remain capable of exercise by any CULS Holder or the Trustee, save with the previous sanction of Special Resolution or with the prior approval of the Trustee where, in the Trustee's opinion, it is not materially prejudicial to the interests of the CULS Holders to give such approval, the Company shall:

7.1.1     use all reasonable endeavours to procure that (a) the CULS shall at all times remain admitted to trading on the International Securities Market of the London Stock Exchange and (b) the Ordinary Shares which are fully paid shall at all times remain admitted to trading either on AIM or one of the stock markets of the London Stock Exchange;

7.1.2     use all reasonable endeavours to ensure that during such time as the Ordinary Shares are admitted to trading on AIM or one of the stock markets of the London Stock Exchange, all the Ordinary Shares allotted on exercise of Conversion Rights will, on allotment, be admitted to trading on AIM or the relevant market of the London Stock Exchange;

7.1.3     not issue any securities or rights to subscribe for or to convert or exchange any securities into shares or securities or reclassify issued share capital into shares or securities of a particular class where such shares or securities would on issue, conversion, exchange or reclassification have as regards voting, dividends, other distributions or capital more favourable rights than those attached to the Ordinary Shares;

7.1.4     send to all CULS Holders a copy of any document sent by the Company to Shareholders at the time the same is sent to Shareholders;

7.1.5     ensure that sufficient authorities to issue Ordinary Shares are obtained from holders of existing Ordinary Shares to satisfy in full all rights for the time being outstanding of conversion into, subscription for, and other acquisition of, Ordinary Shares, including, without limitation, the rights conferred by the CULS; and

7.1.6     as soon as practicable after the announcement of any event giving rise to an  adjustment to the Conversion Price pursuant to the Conditions, give notice to the CULS Holders in accordance with paragraph 3.7 advising them of the date on which the relevant adjustment to the Conversion Price is likely to become effective.

7.2        While any Conversion Rights remain capable of exercise by any CULS Holder or the Trustee and save with the sanction of Special Resolution or (save in respect of paragraph 7.2.2) with the prior approval of the Trustee where, in the Trustee's opinion, it is not materially prejudicial to the interests of the CULS Holders to give such approval:

7.2.1     the Company shall, subject only to their being admitted to trading on a market of the London Stock Exchange or any other stock exchange or securities market on which the Ordinary Shares may then be listed or quoted or dealt in, issue, allot and deliver Ordinary Shares on exercise of Conversion Rights;

7.2.2     the Company shall not declare or pay dividends to holders of Ordinary Shares if at the relevant time any interest due and payable in respect of the CULS has not been paid; and

7.2.3     the Company shall not take any action if the effect thereof would be that, on conversion of the CULS, Ordinary Shares could not, under any applicable law then in effect, be legally issued as fully paid.

8          Purchase and redemption

8.1        The Company or any subsidiary of the Company may at any time purchase CULS on any market of the London Stock Exchange (if the CULS is then admitted to trading on any market of the London Stock Exchange) or on any other stock exchange on which the CULS is for the time being listed or quoted or by tender (available to all CULS Holders alike) or by private treaty.

8.2        All CULS not previously redeemed, purchased or converted in accordance with the Trust Deed will be redeemed by the Company on 30 July 2024 at its nominal amount, together with interest accrued up to (but excluding) the date of final repayment of the CULS.

8.3        All CULS repaid, redeemed, purchased or converted in accordance with the provisions of the Trust Deed shall be cancelled and the Company shall not be at liberty to keep the same alive for the purposes of re-sale or re-issue or to resell or re-issue the same.

8.4        The Company may exercise its rights and powers of conversion, redemption and purchase as regards the CULS and any Further CULS at its sole discretion and without obligation to maintain the ratio between the nominal amounts for the time being outstanding of CULS of any series.

9          Events of default

9.1        Upon the occurrence of any of the following events the Trustee may at its discretion and, if requested in writing by CULS Holders holding at least one-quarter in nominal amount of the CULS then outstanding or directed by a Special Resolution, shall (subject in each case to being indemnified and/or secured and/or pre-funded by CULS Holders to its satisfaction) give written notice to the Company that the CULS is (and it shall thereupon forthwith become) immediately due and payable at its nominal amount together with accrued interest as provided in the Trust Deed:

9.1.1     if the Company is in default for a period of 30 days or more in the payment on the due date of any principal or interest or principal due in respect of the CULS; or

9.1.2     if an order is made or an effective resolution passed for the winding-up or dissolution of the Company (except for the purpose of a reconstruction or amalgamation the terms of which have previously been approved in writing by the Trustee (such consent not to be unreasonably withheld or delayed) or by a Special Resolution); or

9.1.3     if:

(a)        the Company is unable or admits inability to pay its debts as they fall due;

(b)        the value of the assets of the Company is less than its liabilities (taking into account contingent and prospective liabilities);

(c)        a moratorium is declared in respect of any indebtedness of the Company;

(d)        the Company ceases or threatens to cease to carry on all or substantially all of its business, which shall not include a reconstruction or amalgamation the terms of which have previously been approved in writing by the Trustee (such consent not to be unreasonably withheld or delayed) or by a Special Resolution; or

9.1.4     if an encumbrancer takes possession or a receiver or administrator or administrative receiver or other similar official is appointed of the Company or of the whole or a substantial part of the assets or undertaking of the Company or a distress or execution is levied or enforced on or sued out against the whole or a substantial part of the assets or property of the Company and, in each case, is not discharged within 30 days of being levied, enforced or sued out; or

9.1.5     if the Company breaches any of the provisions binding on it under or pursuant to the Trust Deed (other than any covenant for the payment of principal and interest in respect of the CULS) or if any event occurs or any action is taken or fails to be taken which is (or but for the provisions of any applicable law would be) a breach of any of the covenants contained in the Trust Deed and (except where in the opinion of the Trustee the same is not capable of remedy, when no such continuation or notice as is herein provided will be required) the same continues for more than 14 days after receipt by the Company of written notice from the Trustee requiring the same to be remedied; or

9.1.6     if the Company, without the prior written consent of the Trustee or without the approval of a Special Resolution, alters the rights attached to all or any of its Ordinary Shares in issue from time to time or attaches any special rights, privileges or restrictions thereto, and in each case (except where, in the opinion of the Trustee, such alteration or attachment is not capable of cancellation when no such continuation or notice as is herein provided shall be required) such alteration or attachment shall continue for more than 14 days after written notice requiring such alteration or attachment to be cancelled shall have been given to the Company by the Trustee, provided that nothing in this paragraph shall restrict the right of the Company to consolidate or sub-divide Ordinary Shares or convert Ordinary Shares into stock or vice versa and no such consolidation, subdivision or conversion shall give rise to any rights under this paragraph 9.

9.2        Provided that no such event set out in any of paragraphs 9.1.3 to 9.1.6 above (both inclusive) shall constitute an event of default on the occurrence of which the CULS may become immediately due and repayable unless the Trustee shall have certified in writing that, in its opinion, such event is materially prejudicial to the interests of the CULS Holders.

10         Enforcement

10.1      The Trustee may at any time, at its discretion and without notice, take such proceedings and/ or other action as it may think fit against or in relation to the Company to enforce its obligations under the Trust Deed. Notwithstanding the Trustee having received payment in respect of all or any of the CULS after the same shall have become immediately due and payable under the provisions of paragraph 9, the CULS shall be deemed to remain outstanding for the purposes of and for the relevant period of four weeks or six weeks as mentioned in paragraph 6.1 and 6.2 respectively.

10.2      Proof that as regards any specified CULS Holder the Company has made default in paying any amount due in respect of his or her CULS shall (unless the contrary be proved) be sufficient evidence that the same default has been made as regards all other CULS Holders in respect of which the relevant amount is due and payable.

11         Subordination

11.1      The rights and claims of the CULS Holders may, in the event of the winding-up or dissolution of the Company, be subordinated to the claims of creditors in respect of the Company's secured and unsecured borrowings such that, on such winding-up or dissolution, no payments (whether of principal or outstanding or accrued interest) will be made to the CULS Holders until payment in full has been made to all such creditors.

11.2      Any amounts paid to the Trustee in the winding-up of the Company in respect of the claims of the holders of the CULS shall be held by the Trustee upon trust to be applied:

11.2.1   first, for distribution in or towards payment or satisfaction of all liabilities incurred and payments made by the Trustee and/or any attorney, manager or agent of the Trustee in carrying out its functions under the provisions of these presents and all remuneration payable to the Trustee;

11.2.2   second, to the extent of any shortfall, for distribution in or towards payment or satisfaction of the claims of all creditors in respect of the Company's secured and unsecured borrowings which are admitted to proof in the winding up of the Company excluding any indebtedness subordinated to the CULS or which is expressed to rank pari passu with the CULS; and

11.2.3   third, in or towards payment pari passu and rateably of all principal moneys, interest and other amounts (if any) due in respect of the CULS (to the extent that the claims in the name of the Trustee in respect thereof shall be admitted in such winding-up).

12         Denomination and transfer

The CULS will be denominated, and will be registered and transferable without payment of any fee (excepting all transfer taxes), in integral multiples of £5,000 nominal. The Trust Deed will contain provisions enabling the CULS to be held and transferred in uncertificated form. The Trustee may, without any sanction of CULS Holders, concur with the Company in making modifications to the provisions of the Trust Deed in order to reflect changes in the CREST Regulations or in the applicable law and practice relating to the holding or transfer of CULS in uncertificated form and the issue of Ordinary Shares in uncertificated form on conversion of CULS.

13         Issues of further unsecured loan stock

Provision will be made in the Trust Deed to enable further convertible unsecured loan stock of the Company to be issued either so as to be identical in all respects with and to form a single series with the CULS or on such terms, including rights as to interest, ranking (but not ranking ahead of the CULS), conversion, repayment and otherwise as the Directors may determine. Such further convertible unsecured loan stock shall, if identical and forming a single series with the CULS, and may in any other case with the consent of the Trustee, be constituted by a trust deed supplemental to the Trust Deed and shall accordingly, if so constituted, be Further CULS.

14         Modification of rights, etc.

14.1      The Trustee may from time to time without the consent or sanction of the CULS Holders (but only if and insofar as in the opinion of the Trustee the interests of the CULS Holders will not be materially prejudiced thereby), on such terms and subject to such conditions as it shall deem expedient, waive or authorise any breach or proposed breach by the Company of any of the covenants or provisions of the Trust Deed, determine that any act or omission which would or could constitute an event of default under the Trust Deed shall not do so, or agree to any modification of the provisions of the Trust Deed. The Trustee may also agree, without such consent or sanction, to any modification of the Trust Deed which is of a formal, technical or minor nature or to correct a manifest error or an error which is in the opinion of the Trustee proven. Provision will be made for convening separate meetings of the holders of the CULS and each series of any Further CULS when the Trustee considers this appropriate.

14.2      In connection with the exercise by it of any of its trusts, powers, authorities and discretions under the Trust Deed (including, without limitation, any modification, waiver, authorisation or determination), the Trustee shall have regard to the general interests of the CULS Holders as a class but shall not have regard to any interests arising from circumstances particular to individual CULS Holders (whatever their number) and, in particular but without limitation, shall not have regard to the consequences of such exercise for individual CULS Holders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political subdivision thereof and the Trustee shall not be entitled to require, nor shall any CULS Holder be entitled to claim, from the Company, the Trustee or any other person, any indemnification or payment in respect of any tax consequences of any such exercise on individual CULS Holders.

15         Trustee's indemnification and consents

15.1      The Company shall pay or discharge all reasonably and properly incurred liabilities incurred by the Trustee in relation to the preparation and execution of, the exercise of its powers and the performance of its duties under, and in any other manner in relation to, the Trust Deed, including, but not limited to, travelling expenses and any stamp, issue, registration, documentary and other taxes or duties paid or payable by the Trustee in connection with any action taken or contemplated by or on behalf of the Trustee for enforcing, or resolving any doubt concerning, or for any other purpose in relation to, these presents, except for those liabilities which result from the fraud, gross negligence or wilful misconduct of the Trustee

15.2      Any consent given by the Trustee may be given on such terms and subject to such conditions (if any) as the Trustee may in its absolute discretion think fit and, notwithstanding anything to the contrary in this Part 3, may be given retrospectively.

16         Payments

16.1      Method of payment

16.1.1   CULS in certificated form

Payment of interest will be made by transfer to a Sterling account (or other account to which Sterling may be credited) maintained by the CULS Holder with a bank in the City of London as previously notified to the Registrar, or in the absence of a bank account by cheque posted to the registered address of the first-named holder on the CULS Register. Payment of the nominal amount will be made by cheque posted to the registered address of the first-named holder on the CULS Register.

16.1.2   CULS in uncertificated form

The Company shall pay or cause to be paid payments of nominal amount in respect of CULS held in uncertificated form by way of a CREST assured payment in accordance with the CREST Regulations.

Payments of interest in respect of CULS held in uncertificated form will be made by transfer to a Sterling account (or other account to which Sterling may be credited) maintained by the CULS Holder with a bank in the City of London where previously notified to the Registrar, or by cheque posted to the address of the first-named holder on the CULS Register relating to CULS held in uncertificated form, or by way of a CREST assured payment in accordance with the CREST Regulations.

16.2      Payments subject to fiscal laws

All payments in respect of the CULS are subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment. No commissions or expenses shall be charged to CULS Holders in respect of such payments.

16.3      Non-Business Days

Every cheque sent through the post shall be sent by first class post on or before the Business Day next preceding the due date of the relevant nominal and/or interest payment unless such due date is not a Business Day, in which event it shall be sent on or before the second Business Day next preceding the due date of the relevant payment. Where payment is to be made by transfer to a Sterling bank account, payment instructions (for value the due date or, if the due date is not a Business Day, for value the next succeeding Business Day) will be initiated on the due date for payment. A holder of CULS shall not be entitled to any interest or other payment in respect of any delay in payment resulting from the due date for payment not being a Business Day.

16.4      Record date

Each payment in respect of CULS will be made to the person shown as the CULS Holder in the CULS Register or in the case of joint holders to the person whose name stands first in the CULS Register at the close of business on the fifteenth day before the due date for such payment.

16.5      Fractions

When making payments of nominal amount and/or interest to CULS Holders, the relevant payment will be rounded down to the nearest whole penny.

17         Removal, retirement and replacement of Trustee

The Trust Deed will contain provisions for the removal of the Trustee by a Special Resolution and will permit the Trustee to retire at any time on not less than three months' prior written notice without assigning any reason. The Company will have the power to appoint a new Trustee but such new Trustee shall be subject to the approval of a Special Resolution.

18         Auditors

The Trust Deed will provide that the Trustee may rely on certificates or reports provided by the Auditors or other experts in accordance with the provisions of the Trust Deed whether or not any such certificate or report shall be addressed to the Trustee and whether or not any such certificate or report or any engagement letter or other document entered into by the Trustee and/or the Auditors or such other experts in connection therewith contains any limit (whether monetary or otherwise) on the liability of the Auditors or such other expert.

19         Governing Law

The Trust Deed will be governed by, and construed in accordance with, the law of England and Wales.

 

 

 

 

 

 

Appendix II

 

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THE TERMS AND CONDITIONS SET OUT HEREIN ARE ONLY DIRECTED AT, AND BEING DISTRIBUTED TO, PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (A) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE OF THE EEA TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE OF THE EEA) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); (B) IF IN THE UNITED KINGDOM, PERSONS WHO FALL WITHIN THE DEFINITION OF "INVESTMENT PROFESSIONALS" IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") OR ARE PERSONS FALLING WITHIN ARTICLE 49(2) OF THE ORDER AND ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86(7) OF THE FSMA; (C) IF IN THE UNITED STATES, PERSONS REASONABLY BELIEVED TO BE QIBS AS DEFINED UNDER THE SECURITIES ACT; OR (D) ANY OTHER PERSON TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED; AND, IN EACH CASE, WHO HAVE BEEN INVITED TO PARTICIPATE IN THE PLACING BY THE JOINT PLACING AGENTS (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY PERSON WHO HAS RECEIVED OR IS DISTRIBUTING THESE TERMS AND CONDITIONS MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THESE TERMS AND CONDITIONS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THESE TERMS AND CONDITIONS DO NOT THEMSELVES CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY (INCLUDING THE CULS AND ANY ORDINARY SHARES INTO WHICH THE CULS CONVERT). THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND THE SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY IN, INTO OR WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THERE WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN ACQUISITION OF CULS.

References in these terms and conditions to the Joint Placing Agents shall, where the context so admits, be to either or both of them.

If a person indicates to the Joint Placing Agents that it wishes to participate in Placing by making an oral/or written (which includes e-mail) offer to acquire CULS pursuant to the Placing (each such person, a "Placee") it will be deemed to have read and understood these terms and conditions and the Announcement of which it forms part and the draft Admission Particulars dated 28 June 2019 prepared by, and relating to, the Company (the "Placing Proof") in their entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, indemnities, agreements and acknowledgements, contained in these terms and conditions. In particular, each such Placee represents, warrants and acknowledges that it is a Relevant Person and undertakes that it will acquire, hold, manage and dispose of any of the CULS that are allocated to it for the purposes of its business only. Further, each such Placee represents, warrants and agrees that: (a) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that the CULS subscribed for by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of the Joint Placing Agents has been given to each such proposed offer or resale; and (b) it is and, at the time the CULS are acquired, will be either (i) outside the United States, and acquiring the CULS in an offshore transaction in accordance with Rule 903 and Rule 904 of Regulation S for its own account or purchasing the CULS for an account with respect to which it exercises sole investment discretion; or (ii) a QIB. These terms and conditions do not constitute an offer to sell or issue or the invitation or solicitation of an offer to buy or acquire CULS in the United States or any other jurisdiction where to do so may be unlawful, including, without limitation, Australia, Canada, Japan, New Zealand, the Republic of South Africa or any other Excluded Jurisdiction.

These terms and conditions and the information contained herein are not for release, publication or distribution, directly or indirectly, in whole or in part, to persons in the United States, subject to certain exceptions, or Australia, Canada, Japan, New Zealand, the Republic of South Africa or any other Excluded Jurisdiction.

In particular, the CULS referred to in these terms and conditions have not been and will not be registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States and the CULS may not be offered or sold directly or indirectly in, into or within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. There will be no public offering of the CULS in the United States. Subject to certain exceptions, no offering of the CULS will be made in the United States. The CULS have not been approved or disapproved by the U.S. Securities and Exchange Commission, or state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of these terms and conditions. Any representation to the contrary is a criminal offence in the United States.

The distribution of these terms and conditions and the offer and/or placing of CULS in certain other jurisdictions may be restricted by law. No action has been taken by the Joint Placing Agents or the Company that would permit an offer of the CULS or possession or distribution of these terms and conditions or any other offering or publicity material relating to the CULS in any jurisdiction where action for that purpose is required, save as mentioned above. Persons into whose possession these terms and conditions come are required by the Joint Placing Agents and the Company to inform themselves about and to observe any such restrictions.

Each Placee's commitments will be made solely on the basis of the information set out in this Announcement and the Placing Proof which has or will be provided to each Placee. Each Placee, by participating in the Placing, agrees that it has neither received nor relied on any other information, representation, warranty or statement made by or on behalf of any of the Joint Placing Agents or the Company and none of the Joint Placing Agents, the Company, or any person acting on such person's behalf nor any of their respective affiliates has or shall have liability for any Placee's decision to accept this invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

No undertaking, representation, warranty or any other assurance, express or implied, is made or given by or on behalf of the Joint Placing Agents or any of their respective affiliates, their respective directors, officers, employees, agents, advisers, or any other person, as to the accuracy, completeness, correctness or fairness of the information or opinions contained in the Placing Proof or this Announcement or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Company or the Placing and no such person shall have any responsibility or liability for any such information or opinions or for any errors or omissions. Accordingly, save to the extent permitted by law, no liability whatsoever is accepted by the Joint Placing Agents or any of their respective directors, officers, employees or affiliates or any other person for any loss howsoever arising, directly or indirectly, from any use of this announcement or such information or opinions contained herein or otherwise arising in connection with the Placing Proof.

These terms and conditions, this Announcement and the Placing Proof have been prepared and issued by the Company, and each of these documents is the sole responsibility of the Company.

The Placing

The Joint Placing Agents have agreed, pursuant to the Placing Agreement, to use reasonable endeavours to place, as agents for the Company, the CULS with Placees at a subscription price of £5,000 per £5,000 nominal of CULS (the Placing Price").  The Placing is not being underwritten by the Joint Placing Agents or otherwise and the Joint Placing Agents are not obliged to subscribe for any CULS pursuant to the Placing or otherwise.

Application will be made for the admission of the CULS to trading on the London Stock Exchange's International Securities Market ("Admission").

Subject to the conditions below being satisfied, it is expected that Admission will become effective on 30 July 2019 and that dealings for normal settlement in the CULS will commence at 8.00 a.m. on the same day.

The Placing is conditional, inter alia, upon:

(i)            Admission becoming effective by not later than 8.00 a.m. on 30 July 2019 (or such later time and/or date as the Company and the Joint Placing Agents may agree being not later than 9 August 2019); and

(ii)           the Placing Agreement having become unconditional in all respects and not having been terminated in accordance with its terms.

Bookbuild of the Placing

Commencing today, the Joint Placing Agents will be conducting the Bookbuild to determine demand for participation in the Placing. The Joint Placing Agents will seek to procure Placees as agent for the Company as part of this Bookbuild. These terms and conditions give details of the terms and conditions of, and the mechanics of participation in, the Placing.

Principal terms of the Bookbuild

(a)           By participating in the Placing, Placees will be deemed to have read and understood this Announcement, these terms and conditions and the Placing Proof in their entirety and to be participating and making an offer for any CULS on these terms and conditions, and to be providing the representations, warranties, indemnities, acknowledgements and undertakings, contained in these terms and conditions.

(b)           The Joint Placing Agents are arranging the Placing severally, and not jointly, nor jointly and severally, as agents of the Company.

(c)           Participation in the Placing will only be available to persons who are Relevant Persons and who may lawfully be and are invited to participate by any of the Joint Placing Agents.

(d)           Any offer to subscribe for CULS should state the aggregate nominal value of CULS which the Placee wishes to acquire or the total monetary amount which it wishes to commit to acquire CULS at the Placing Price.

(e)           The Bookbuild is expected to close on 11 July 2019 but may close earlier or later at the discretion of the Joint Placing Agents and the Company. The timing of the closing of the books and scaling back of any allocations will be agreed between the Joint Placing Agents and the Company following completion of the Bookbuild. The Joint Placing Agents may, in agreement with the Company, accept offers to subscribe for CULS that are received after the Bookbuild has closed.

(f)            An offer to subscribe for CULS in the Bookbuild will be made on the basis of these terms and conditions and the Placing Proof and will be legally binding on the Placee by which, or on behalf of which, it is made and will not be capable of variation or revocation after the close of the Bookbuild.

(g)           Subject to paragraph (e) above, the Joint Placing Agents reserve the right not to accept an offer to subscribe for CULS, either in whole or in part, on the basis of the Allocation Policy and may scale down any offer to subscribe for CULS for this purpose.

(h)           Acceptance of any offer incorporating these terms and conditions (whether orally or in writing or evidenced by way of a trade confirmation) will constitute a legally binding commitment upon such Placee in favour of the Joint Placing Agents to acquire the amount of CULS they have agreed to subscribe for (subject to scaling back at the option of the Joint Placing Agents as they in their sole discretion shall determine). Each Placee will have an immediate, separate, irrevocable and binding obligation owed to the Joint Placing Agents to pay to the Joint Placing Agents (or as the Joint Placing Agents may direct) as agent for the Company in cleared funds an amount equal to the aggregate Placing Price in respect of the CULS it has been agreed to subscribe for (subject to scaling back as aforesaid).

(i)            The Company will make a further announcement following the close of the Bookbuild detailing the aggregate nominal value of the CULS to be issued pursuant to the Placing (the "Placing Results Announcement"). It is expected that such Placing Results Announcement will be made as soon as practicable after the close of the Bookbuild.

(j)            Subject to paragraphs (g) and (h) above, the Joint Placing Agents reserve the right not to accept offers to subscribe for CULS or to accept offers to subscribe for CULS, either in whole or in part, on the basis of allocations determined at the Joint Placing Agents' discretion and may scale down any offers to subscribe for CULS as the Joint Placing Agents may determine, subject to agreement with the Company. The acceptance of offers to subscribe for CULS shall be at the Joint Placing Agents' absolute discretion, subject to agreement with the Company.

(k)           Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all CULS to be acquired pursuant to the Placing will be required to be made at the time specified by the Joint Placing Agents and all CULS to be acquired pursuant to the Placing will be required to be made at the later time specified, on the basis explained below under the paragraph entitled "Registration and Settlement".

(l)            No commissions are payable to Placees in respect of the Placing.

(m)         By participating in the Bookbuild, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee. All obligations under the Placing will be subject to the fulfilment of the Conditions (as defined below) under the paragraph entitled "Conditions of the Placing and Termination of the Placing Agreement".

Conditions of the Placing and Termination of the Placing Agreement

Placees will only be called on to acquire CULS if the obligations of the Joint Placing Agents under the Placing Agreement have become unconditional in all respects and the Joint Placing Agents have not terminated the Placing Agreement prior to Admission.

The Joint Placing Agents' obligations under the Placing Agreement in respect of the Placing are conditional upon, inter alia:

(a)           the Admission Particulars being approved by the London Stock Exchange not later than 6.00 p.m. on the second Business Day following the completion of the Bookbuild (or such later time and/or date as the Company and the Joint Placing Agents may agree);

(b)           Admission occurring not later than 8.00 a.m. on 30 July 2019 (or such later time and/or date as the Company and the Joint Placing Agents may agree not being later than 9 August 2019);

(c)           the passing of the Resolutions (without amendment) at the General Meeting on 29 July 2019 (or, with the Joint Placing Agents' written consent (such consent not to be unreasonably withheld or delayed), at any adjournment thereof);

(d)           the warranties given by the Company to the Joint Placing Agents as contained in the Placing Agreement being true, accurate and not misleading on and as of the date of the Placing Agreement and at all times between the date of the Placing Agreement and Admission, by references to the facts and circumstances from time to time subsisting;

(e)           there not having occurred, in the opinion of either of the Joint Placing Agents (acting in good faith), a material adverse change affecting the condition of, or in the earnings, management, business affairs, solvency or prospects of, (i) the Company or (ii) the Group taken as a whole, in each case whether or not arising in the ordinary course of business at any time prior to Admission; and

(f)            no supplementary Admission Particulars are published by the Company prior to Admission which the Joint Placing Agents (in their bona fide opinion, acting in good faith) consider to be material and adverse in the context of the Placing.

(all such conditions included in the Placing Agreement being together the "Conditions").

The Placing Agreement can be terminated at any time before Admission by the Joint Placing Agents giving notice to the Company in certain circumstances, including (but not limited to) where (a) any Conditions are not satisfied in all material respects at the required times (unless waived); and (b) there has been a breach by the Company of any of the warranties, undertakings or covenants in the Placing Agreement and in each case, the effect, in the good faith opinion of the Joint Placing Agents, is singly or in the aggregate material in the context of the Placing and/or is such as to make it impracticable or inadvisable to proceed with the Placing, Admission or to market or enforce contracts for the sale of, any CULS.

If any Condition has not been satisfied, has not been waived by the Joint Placing Agents or has become incapable of being satisfied (and is not waived by the Joint Placing Agents as described below) or if the Placing Agreement is terminated, all obligations under these terms and conditions will automatically terminate. By participating in the Placing, each Placee agrees that its rights and obligations hereunder are conditional upon the Placing Agreement becoming unconditional in all respects in respect of the Placing and that its rights and obligations will terminate only in the circumstances described above and will not be capable of rescission or termination by it after oral or written confirmation by the Joint Placing Agents (at the Joint Placing Agents' discretion) following the close of the Bookbuild.

The Joint Placing Agents may in their absolute discretion in writing waive fulfilment of certain of the Conditions or extend the time provided for fulfilment of such Conditions. Any such extension or waiver will not affect Placees' commitments as set out in these terms and conditions.

By participating in the Placing each Placee agrees that the exercise by the Company or the Joint Placing Agents of any right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company and the Joint Placing Agents (as the case may be) and that neither the Company nor the Joint Placing Agents need make any reference to such Placee (or to any other person whether acting on behalf of any Placee or otherwise) and that neither the Company nor the Joint Placing Agents shall have any liability to such Placee (or to any other person whether acting on behalf of any Placee or otherwise) whatsoever in connection with any such exercise.

Neither the Joint Placing Agents nor the Company, shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision made by the Joint Placing Agents as to whether or not to waive or to extend the time and/or date for the fulfilment of any Condition and/or whether or not to exercise any termination right.

Placing Procedure

Placees will be notified of their allocations under the Placing on or around 11 July 2019 (or such other time and/or date may be notified).

Payment in full for any CULS allocated in respect of the Placing at the Placing Price must be made by no later than 30 July 2019 (or such other date as shall be notified to each Placee by the relevant Placing Agent) on the closing date for the Placing (or such other time and/or date as the Company and the Joint Placing Agents may agree). The Joint Placing Agents will notify Placees if any of the dates in these terms and conditions should change, including as a result of delay in the posting of the Admission Particulars or the production of supplementary Admission Particulars or otherwise.

Registration and Settlement

Settlement of transactions in the CULS following Admission will take place within the CREST system, subject to certain exceptions. The Joint Placing Agents and the Company reserve the right to require settlement for, and delivery of, the CULS to Placees by such other means that they deem necessary if delivery or settlement is not possible within the CREST system within the timetable set out in the Placing Proof or would not be consistent with the regulatory requirements in the Placee's jurisdiction. Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which they have in place with the relevant Placing Agent.

Settlement for the Placing will be on a delivery versus payment basis and settlement is expected to take place on 30 July 2019. Interest is chargeable daily on payments to the extent that value is received after the due date from Placees at the rate of 2 percentage points above prevailing LIBOR. Each Placee is deemed to agree that if it does not comply with these obligations, the Joint Placing Agents may sell any or all of the CULS allocated to it on its behalf and retain from the proceeds, for its own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. By communicating a bid for CULS, each Placee confers on the Joint Placing Agents all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Joint Placing Agents lawfully take in pursuance of such sale. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon any transaction in the CULS on such Placee's behalf.

If any of the Conditions are not fulfilled (or, where appropriate, waived) the Joint Placing Agents will return any funds received by them from Placees to the Placees.

Acceptance

By participating in the Placing, a Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Joint Placing Agents and the Company, the following:

1.              in consideration of its allocation of a placing participation, to subscribe at the aggregate Placing Price for any CULS comprised in its allocation for which it is required to subscribe pursuant to these terms and conditions;

2.              it has read and understood this Announcement (including these terms and conditions) and the Placing Proof in their entirety and that it has neither received nor relied on any information given or any investigations, representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the CULS, or otherwise, other than the information contained in this Announcement (including these terms and conditions) and the Placing Proof that in accepting the offer of its placing participation it will be relying solely on the information contained in this Announcement (including these terms and conditions) and the Placing Proof, receipt of which is hereby acknowledged, and undertakes not to redistribute or duplicate such documents;

3.              its oral commitment will be made solely on the basis of the information set out in this Announcement and the Placing Proof and the information publicly announced to a Regulatory Information Service by or on behalf of the Company on the date of this announcement, such information being all that such Placee deems necessary or appropriate and sufficient to make an investment decision in respect of the CULS and that it has neither received nor relied on any other information given, or representations or warranties or statements made, by the Joint Placing Agents or the Company nor any of their respective affiliates and none of the Joint Placing Agents or the Company will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement;

4.              the content of this Announcement, these terms and conditions and the Placing Proof are exclusively the responsibility of the Company and agrees that the Joint Placing Agents nor any of their respective affiliates nor any person acting on behalf of any of such persons will be responsible for or shall have liability for any information, representation or statements contained therein or any information previously published by or on behalf of the Company, and neither the Joint Placing Agents or Company, or any of their respective affiliates or any person acting on behalf of any such person will be responsible or liable for a Placee's decision to accept its placing participation;

5.              (i) it has not relied on, and will not rely on, any information relating to the Company contained or which may be contained in any research report or investor presentation prepared or which may be prepared by any of the Joint Placing Agents or any of their affiliates; (ii) none of the Joint Placing Agents, their affiliates or any person acting on behalf of any of such persons has or shall have any responsibility or liability for public information relating to the Company; (iii) the Joint Placing Agents, their affiliates or any person acting on behalf of any of such persons has or shall have any responsibility or liability for any additional information that has otherwise been made available to it, whether at the date of publication of such information, the date of these terms and conditions or otherwise; and that (iv) the Joint Placing Agents, their affiliates or any person acting on behalf of any of such persons make no representation or warranty, express or implied, as to the truth, accuracy or completeness of any such information referred to in (i) to (iii) above, whether at the date of publication of such information, the date of this Announcement or otherwise;

6.              it has made its own assessment of the Company and has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing, and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its decision to participate in the Placing;

7.              it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person, (ii) it is and will remain liable to the Company and the Joint Placing Agents for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) if it is in the United Kingdom, it is a person (a) who has professional experience in matters relating to investments and who falls within the definition of "investment professionals" in Article 19(5) of the Order or who falls within Article 49(2) of the Order, and (b) is a "qualified investor" as defined in section 86 of the FSMA, (iv) if it is in a member state of the EEA, it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive, and (v) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, the CULS subscribed by it in the Placings are not being acquired on a non-discretionary basis for, or on behalf of, nor will they be acquired with a view to their offer or resale to persons in a member state of the EEA in circumstances which may give rise to an offer of shares to the public, other than their offer or resale to qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive in a member state of the EEA which has implemented the Prospectus Directive;

8.              if it has received any confidential price sensitive information about the Company in advance of the Placing, it has not (i) dealt in the securities of the Company; (ii) encouraged or required another person to deal in the securities of the Company; or (iii) disclosed such information to any person, prior to the information being made generally available;

9.              it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 and the Criminal Justice (Money Laundering and Terrorism Financing) Act 2010 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and, if it is making payment on behalf of a third party, it has obtained and recorded satisfactory evidence to verify the identity of the third party as may be required by the Regulations;

10.            it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the CULS in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

11.            it is not acting in concert (within the meaning given in the City Code on Takeovers and Mergers) with any other Placee or any other person in relation to the Company;

12.            it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the CULS in, from or otherwise involving the United Kingdom;

13.            it and any person acting on its behalf is entitled to acquire the CULS under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in these terms and conditions);

14.            unless otherwise agreed by the Company (after agreement with the Joint Placing Agents), it is not, and at the time the CULS are subscribed for and purchased will not be, subscribing for and on behalf of a resident of Australia, Canada, Japan, New Zealand, the Republic of South Africa or any other Excluded Jurisdiction and further acknowledges that the CULS have not been and will not be registered under the securities legislation of any Excluded Jurisdiction and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

15.            it does not expect the Joint Placing Agents to have any duties or responsibilities towards it for providing protections afforded to clients under the rules of the FCA Handbook (the "Rules") or advising it with regard to the CULS and that it is not, and will not be, a client of any of the Joint Placing Agents as defined by the Rules. Likewise, any payment by it will not be treated as client money governed by the Rules;

16.            any exercise by the Joint Placing Agents of any right to terminate the Placing Agreement or of other rights or discretions under the Placing Agreement or the Placing shall be within the Joint Placing Agents' absolute discretion and the Joint Placing Agents shall not have any liability to it whatsoever in relation to any decision to exercise or not to exercise any such right or the timing thereof;

17.            neither it, nor the person specified by it for registration as a holder of CULS is, or is acting as nominee(s) or agent(s) for, and that the CULS will not be allotted to, a person/person(s) whose business either is or includes issuing depository receipts or the provision of clearance services and therefore that the issue to the Placee, or the person specified by the Placee for registration as holder, of the CULS will not give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the CULS are not being acquired in connection with arrangements to issue depository receipts or to issue or transfer CULS into a clearance system;

18.            the person who it specifies for registration as holder of the CULS will be (i) itself or (ii) its nominee, as the case may be, and acknowledges that the Joint Placing Agents and the Company will not be responsible for any liability to pay stamp duty or stamp duty reserve tax (together with interest and penalties) resulting from a failure to observe this requirement; and each Placee and any person acting on behalf of such Placee agrees to participate in the Placing on the basis that the CULS will be allotted to a CREST stock account of one of the Joint Placing Agents who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

19.            where it is acquiring CULS for one or more managed accounts, it is authorised in writing by each managed account to acquire CULS for that managed account;

20.            if it is a pension fund or investment company, its acquisition of any CULS is in full compliance with applicable laws and regulations;

21.            it has not offered or sold and will not offer or sell any CULS to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA;

22.            it has not offered or sold and will not offer or sell any CULS to persons in any member state of the EEA prior to Admission except to persons whose ordinary activities involve them acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive;

23.            participation in the Placing is on the basis that it is not and will not be a client of either of the Joint Placing Agents and that the Joint Placing Agents will have no duties or responsibilities to it for providing the protections afforded to their clients nor for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or the contents of these terms and conditions;

24.            to provide the Joint Placing Agents with such relevant documents as they may reasonably request to comply with requests or requirements that either they or the Company may receive from relevant regulators in relation to the Placing, subject to its legal, regulatory and compliance requirements and restrictions;

25.            any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales and it submits (on its behalf and on behalf of any Placee on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the CULS (together with any interest chargeable thereon) may be taken by the Joint Placing Agents in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

26.            to fully and effectively indemnify and hold harmless the Company and each of the Joint Placing Agents and each of their respective affiliates, subsidiaries, branches, associates and holding companies, and in each case their respective directors, employees, officers and agents (each, an "Indemnified Person") from and against any and all losses, claims, damages, liabilities and expenses (including legal fees and expenses) ("Losses") (i) arising from any breach by such Placee of any of the provisions of these terms and conditions and (ii) incurred by any Indemnified Person arising from the performance of the Placee's obligations as set out in these terms and conditions;

27.            to indemnify on an after-tax basis and hold the Company and each of the Joint Placing Agents and any of their affiliates and any person acting on their behalf harmless from any and all losses, claims, damages, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgments, agreements and undertakings in these terms and conditions and further agrees that the provisions of these terms and conditions shall survive after completion of the Placing;

28.            in making any decision to subscribe for the CULS, (i) it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the CULS; (ii) it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with, the Placing; (iii) it has relied on its own examination, due diligence and analysis of the Company and its affiliates taken as a whole (including the markets in which the Group operates) and the terms of the Placing (including the merits and risks involved); (iv) it has had sufficient time to consider and conduct its own investigation with respect to the offer and subscribe for the CULS, including the legal, regulatory, tax, business, currency and other economic and financial considerations relevant to such investment and (v) will not look to the Joint Placing Agents, any of their respective affiliates or any person acting on their behalf for all or part of any such loss or losses it or they may suffer;

29.            the Joint Placing Agents and the Company and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgments and undertakings which are irrevocable;

30.            its commitment to acquire CULS will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing, and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Joint Placing Agents' conduct of the Placing; and

31.            its commitment to acquire CULS will continue notwithstanding any non-material changes (materially to be determined by the Joint Placing Agents in their discretion) between the Placing Proof and the final Admission Particulars as published.

Please also note that the agreement to allot and issue CULS to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the UK relates only to their issue to Placees, or such persons as they nominate as their agents, direct from the Company for the CULS in question. Such agreement assumes that such CULS are not being acquired in connection with arrangements to issue depositary receipts or to transfer such CULS into a clearance service. If there were any such arrangements, or the settlement related to other dealing in such CULS, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Joint Placing Agents would be responsible and Placees shall indemnify the Company and the Joint Placing Agents on an after-tax basis for any stamp duty or stamp duty reserve tax paid by them in respect of any such arrangements or dealings. Furthermore, each Placee agrees to indemnify on an after-tax basis and hold each of the Joint Placing Agents and/or the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent. If this is the case, it would be sensible for Placees to take their own advice and they should notify the relevant Bank accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any CULS or the agreement by them to acquire any CULS.

Selling Restrictions

By participating in the Placing, a Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Joint Placing Agents and the Company, the following:

1.              it is not a person who has a registered address in, or is a resident, citizen or national of, a country or countries, in which it is unlawful to make or accept an offer to subscribe for CULS;

2.              it has fully observed and will fully observe the applicable laws of any relevant territory, including complying with the selling restrictions set out herein and obtaining any requisite governmental or other consents and it has fully observed and will fully observe any other requisite formalities and pay any issue, transfer or other taxes due in such territories;

3.              if it is in the United Kingdom, it is a person (i) who has professional experience in matters relating to investments and who falls within the definition of "investment professionals" in Article 19(5) of the Order or who falls within Article 49(2) of the Order, and (ii) is a "qualified investor" as defined in section 86 of the FSMA;

4.              if it is in a member state of the EEA, it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive;

5.              it is a person whose ordinary activities involve it (as principal or agent) in acquiring, holding, managing or disposing of investments for the purpose of its business and it undertakes that it will (as principal or agent) acquire, hold, manage or dispose of any CULS that are allocated to it for the purposes of its business;

6.              it is and, at the time the CULS are purchased, will be either (i) outside the United States, purchasing in an offshore transaction pursuant to Regulation S or (ii) a QIB that makes each of the representations, warranties, acknowledgments and agreements set out in paragraph 9 below;

7.              none of the CULS have been or will be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States;

8.              none of the CULS may be offered, sold, taken up or delivered directly or indirectly, in whole or in part, into or within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States;

9.              if it is in the United States, (i) it is a QIB and is acquiring the CULS for its own account or for the account of one or more QIBs with respect to whom it has the authority to make, and does make, the representations and warranties set forth herein, for investment purposes and not with a view to further distribution of such CULS; (ii) it is aware, and each beneficial owner of the CULS has been advised, that the sale of CULS to it is in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act; (ii) it will only offer, resell, pledge or otherwise transfer the CULS (a) to a person that the seller and any person acting on its behalf reasonably believes is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A, (b) outside the United States in accordance with Regulation S under the Securities Act, (c) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), or (d) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state or other jurisdiction of the United States; and (iii) notwithstanding anything to the contrary, it understands that CULS may not be deposited into any unrestricted depositary receipt facility in respect of CULS established or maintained by a depositary bank unless and until such time as such CULS are no longer "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act; and

10.            it (on its behalf and on behalf of any Placee on whose behalf it is acting) has (a) fully observed the laws of all relevant jurisdictions which apply to it; (b) obtained all governmental and other consents which may be required; (c) fully observed any other requisite formalities; (d) paid or will pay any issue, transfer or other taxes; (e) not taken any action which will or may result in the Company or the Joint Placing Agents (or any of them) being in breach of a legal or regulatory requirement of any territory in connection with the Equity Placings; (f) obtained all other necessary consents and authorities required to enable it to give its commitment to subscribe for the relevant CULS; and (g) the power and capacity to, and will, perform its obligations under the terms contained in these terms and conditions.

Miscellaneous

The Company reserves the right to treat as invalid any application or purported application for CULS that appears to the Company or its agents to have been executed, effected or dispatched from the United States or an Excluded Jurisdiction or in a manner that may involve a breach of the laws or regulations of any jurisdiction or if the Company or its agents believe that the same may violate applicable legal or regulatory requirements or if it provides an address for delivery of the certificates in respect of the CULS in or in the case of a stock account in CREST, to a CREST member whose registered address would be in, an Excluded Jurisdiction or the United States, or any other jurisdiction outside the United Kingdom in which it would be unlawful to deliver such certificates or make such a credit.

When a Placee or person acting on behalf of the Placee is dealing with any of the Joint Placing Agents, any money held in an account with any of the Joint Placing Agents on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Joint Placing Agents' money in accordance with the client money rules and will be used by each of the Joint Placing Agents in the course of its own business; and the Placee will rank only as a general creditor of the relevant Placing Agent.

Times

Unless the context otherwise requires, all references to time are to London time. All times and dates in these terms and conditions may be subject to amendment. The Joint Placing Agents will notify Placees and any persons acting on behalf of the Placees of any changes.

 

 

Appendix III

 

Definitions

 

"Admission"

admission of the CULS to be issued pursuant to the Placing to trading on the London Stock Exchange's International Securities Market becoming effective in accordance with the LSE Admission Standards

"Allocation Policy"

the allocation of CULS amongst Placees agreed between the Company and the Joint Placing Agents following completion of the Bookbuild

"AIM"

the market of that name operated by the London Stock Exchange

"Board"

the directors of the Company

"Bookbuild"

the bookbuild process being the manner in which the Placing is being conducted

"Business Day"

a day on which banks generally are open for business in London, excluding Saturdays and Sundays

"Companies Act"

the Companies Act 2006 as amended from time to time

"Conversion Rights"

the rights for the conversion of the CULS into Ordinary Shares in accordance with the conditions of the Trust Deed

"CREST"

the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the CREST Regulations)

"CREST Regulations"

the Uncertificated Securities Regulations 2001, (S.I. 2001 No. 3755), as amended from time to time

"CULS Holders"

the person(s) entered in the CULS Register as the holders of the CULS

"CULS Register"

the register in respect of the CULS

"EBITDA"

earnings before interest, tax, depreciation and amortization

"Excluded Jurisdiction"

the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa or any other state or jurisdiction where the offer or sale of the securities referred to in this Announcement is not permitted

"Group"

AFH Financial Group plc and its subsidiaries from time to time

"Joint Placing Agent(s)"

Liberum and Shore Capital

"London Stock Exchange"

the London Stock Exchange plc

"Mid Market Price"

the closing middle market price of an Ordinary Share (as derived from the Stock Exchange Daily Official List or any other record of daily prices approved in writing by the Trustee)

"Ordinary Shares"

ordinary shares having a nominal value of 10 pence each in the capital of the Company

"Regulatory Information Service"

a primary information provider or an incoming information society service, established in an EEA state other than the UK, that disseminates regulated information in accordance with the minimum standards set out in Article 12 of the TD implementing Directive

"Resolutions"

the resolutions to be approved at the General Meeting

"Placing Agreement"

the placing agreement between the Company and the Joint Placing Agents dated 28 June 2019

"Shareholders" or "Ordinary Shareholders"

holders of Ordinary Shares

"Trustee"

the trustee for the time being of the CULS, which on issue of the CULS shall be The Law Debenture Trust Corporation PLC

"Trust Deed"

the trust deed to be entered into between the Company and the Trustee constituting the CULS

"United States"

the United States of America, its territories and possessions, any state of the United States and the District of Columbia

 

[1] Underlying excludes amortisation of intangible assets arising on business combinations and the non-cash charge/credit for share based payment costs


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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