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Eco City Vehicles ECV Update on trading, Placing and Directorate Changes



  Eco City Vehicles (ECV) - Update on trading, Placing and Directorate Changes

RNS Number : 8056L
Eco City Vehicles PLC
07 September 2012
 



7 September 2012

                                       

                            Eco City Vehicles PLC

                        ("ECV", "Company" or "Group")

                                       

  Update on trading, firm share placing, revised financing arrangements and
                                Board changes

                                       

Eco City Vehicles, a developer and supplier of the London licensed Mercedes
taxi, is pleased to make the following announcements to strengthen the
business and position it for future long term growth.  

 

Summary 

                                       

·     Update on trading with strong growth in new Mercedes Vito sales and
market share  achieved in the first seven months of 2012

·     Firm share placing to raise £1.75 million to reduce debt and boost
working capital

·     Board changes to position the Company for next phase of development

·     Revised loan repayment arrangements

·     Acquiring the benefit of a loan provided to One80 Limited secured
against certain of its assets

 

Current trading

 

The Company has experienced strong trading  in the first seven months of  2012 
against  a  challenging  economic  and  industry  environment.  This  reflects 
increasing momentum of sales and popularity for the latest Mercedes Vito  Euro 
V model.

Throughout the seven-month period, ECV continued to enjoy solid demand for the
Mercedes Vito.  Based on  Transport for London (TfL)  data, the Mercedes  Vito 
increased its share of the new London licensed taxi market to 36% in the first
seven months of the  year, up from a  market share of 22%  in the same  period 
last year. New Vito  taxi licenses increased  by 102% to  354 vehicles in  the 
first seven months against 175 in the  same period last year, and 331 for  the 
whole of 2011. This means that new licenses in the first seven months of  2012 
represented 107% of the annual license sales achieved last year.

The latest version of the Blue Efficiency Vito taxi,  which was launched a
year ago, complies with stringent new European Union vehicle emission
standards as well as providing superior quality, improved fuel efficiency,
comfort and six-seat capacity.

 

Share Placing

 

ECV has  raised £1.75  million (before  expenses) through  a firm  placing  of 
116,666,666 ordinary shares at 1.5 pence per share (the "Placing") The Company
has undertaken the Placing to certain new and existing institutional investors
at a price of 1.5 pence per share (representing a discount of approximately 18
per cent. against the closing mid-market price on 6 September 2012).

 

The net proceeds  of the  Placing will  be used  to repay  debt, fund  capital 
investment and to provide additional working capital to support the growth  of 
the Company. The new funds will  reduce the Group's borrowing by £0.6  million 
from approximately  £3.8  million  to  approximately  £3.2  million.   Further 
details of the  proposed use  of the  Placing proceeds  and the  terms of  the 
Placing are set out below.

 

Board Changes

 

The Company also  announces that it  proposes to make  certain changes to  its 
Board following the  completion of the  Placing in order  to lead the  Company 
through the next phase in its development.  The Company intends to seek a  new 
Chief Executive Officer ("CEO") and,  once a suitable candidate is  confirmed, 
Peter DaCosta  intends to  assume  a Non-Executive  Director role.  Whilst  Mr 
DaCosta's intention  is  to reduce  his  time-commitment to  the  Company,  he 
expects to  remain actively  involved with  the Company  and, in  addition  to 
providing the benefit of his  substantial industry experience, his focus  will 
be on sourcing and assessing new  opportunities. The process for recruiting  a 
new CEO will be led by John Swingewood.

 

The Company  also  announces  that Tim  Yeo  will  retire from  the  Board  on 
completion of the Placing, to be replaced as chairman by John Swingewood. Tim,
who has chaired the Company  since its admission to  AIM in October 2007,  has 
recently taken on new  chairmanships in the education  and energy sectors  and 
wishes to devote more time to those.  Keith Marder is also stepping down  from 
the Board on completion of the Placing  but will remain as an employee of  the 
business and a director of the Company's subsidiaries.

 

Tim Yeo non-executive chairman of ECV, said:

 

"I am pleased  that the Company  is making good  progress after a  challenging 
period. Now that trading has improved and the Company's finances are being put
on a stronger  footing it is  the right  time for management  and board  level 
changes  to  position  the  business  for  the  future.  My  successor,   John 
Swingewood, will  be  able to  lead  the process  of  recruiting a  new  Chief 
Executive and I wish him and the Company every success in future."

 

John Swingewood, chairman delegate, said:

 

"We are delighted to announce the  successful fundraising which puts us in  an 
excellent position. We are all  extremely grateful for the skilful  leadership 
and commitment Tim has given the Company in his five years as Chairman. I look
forward to  recruiting a  new  Chief Executive  and increasing  the  Company's 
market share. "

 

Enquiries:

 

Eco City Vehicles plc
Peter DaCosta, Chief Executive Officer +44 20 7377 2182

Ran Oren, Finance Director
Luther Pendragon
Neil Thapar, Alexis Gore               +44 20 7618 9100
Numis Securities Limited
Stuart Skinner (Nominated Adviser)     +44 20 7260 1000
David Poutney (Corporate Broker)

 

Use of proceeds

 

The net  funds  raised from  the  Placing will  be  used principally  for  the 
following purposes:

 

·    Repayment  of  £0.25  million  of  debt  owed  to  the  KPM-UK  Taxi  Plc 
Discretionary Pension Scheme (the "Pension Scheme")

·   Capital  investment  of  approximately  £0.1  million  in  infrastructure, 
enabling part of  the after sales  division to obtain  an accreditation  which 
will enable the division to diversify its revenue streams

·   Repayment of £0.1 million of debt owed to Lee DaCosta, the son of director
Peter DaCosta

·   Working capital:  funds will also  be used to  provide additional  working 
capital to the business

 

Financing arrangements

 

As at the date of  this announcement and before deployment  of any of the  net 
funds raised from the Placing, the Company has various outstanding liabilities
with related parties and  its directors (in relation  to unpaid bonuses,  fees 
and  loans)  which   are  being  restructured.    Further  details  of   these 
arrangements are set out in appendix 1.

 

The Directors believe that  these new arrangements  together with the  Placing 
proceeds provide the Company with  substantially increased clarity in  respect 
of the  expected  repayment profile  of  its key  liabilities  and  materially 
strengthen  its  financial  position.   The  current  economic  climate  makes 
forecasting difficult and  the Board  will continue to  monitor the  Company's 
financial position having regard to its ongoing trading performance.

 

Related Party Transactions

 

The transactions entered into  with the beneficiaries  of the Pension  Scheme, 
Global Meter Systems Limited, Peter DaCosta and Keith Marder in respect of the
outstanding loans and bonus payments due to them referred to in appendix 1 are
related party transactions and, for the purposes of Rule 13 of the AIM  Rules, 
the Company's directors consider, having consulted with its nominated adviser,
that the terms  of such transactions  are fair and  reasonable insofar as  its 
shareholders are concerned.

 

EIS Relief

 

The Company has received provisional  confirmation from HMRC that the  Placing 
Shares are eligible for relief under the Enterprise Investment Scheme.

 

Terms of the Placing

 

The Placing comprises a placing of 116,666,666 ordinary shares in the  Company 
(the "Placing Shares"), which are expected to be admitted to trading on AIM on
13 September ("Admission").  The Placing Shares have been placed at 1.5  pence 
per share (the "Placing Price") with new and existing institutional investors.
The Placing will raise proceeds of £1,750,000 before expenses for the Company.
The  Placing  Price  of  1.5  pence   per  share  represents  a  discount   of 
approximately 18 per cent.  to the closing price  of 1.825 pence per  ordinary 
share on  6  September  2012  (being  the last  business  day  prior  to  this 
announcement).  Under the terms of the placing agreement, Numis, as agent  for 
the Company, has agreed  to use its reasonable  endeavours to procure  placees 
for the Placing Shares at  the Placing Price. Numis  will be paid an  advisory 
fee and  a placing  commission,  from which  it  will settle  any  sub-placing 
commissions payable. The  Placing Shares will  represent approximately 26  per 
cent. of the enlarged share capital of the Company. The Placing Share will  be 
in registered  form  and  capable  of  being  held  in  certificated  form  or 
uncertificated form in CREST.

 

The Placing is conditional,  inter alia, upon  the placing agreement  becoming 
unconditional, and admission of the Placing Shares to trading on AIM  becoming 
effective. The Placing is not being underwritten.

The Placing Agreement contains  customary warranties given  by the Company  to 
Numis as to matters relating to the  Company and its business and a  customary 
indemnity given by the Company to Numis in respect of liabilities arising  out 
of or  in connection  with the  Placing. Numis  is entitled  to terminate  the 
Placing Agreement  in certain  circumstances  prior to  Admission,  including, 
inter alia,where any of the warranties are found not to be true or accurate or
were misleading in any material respect or on the occurrence of  certain force 
majeure events.

 

Peter DaCosta, Michael  Troullis and Keith  Marder have agreed  to enter  into 
lock-in agreements with the Company and Numis whereby they have agreed not  to 
dispose of any shares in the Company for a period of six months from the  date 
of completion of  the placing, and  have agreed to  certain orderly  marketing 
restrictions for a period of 12 months after expiry of that six month period.

 

Application will be made to the  London Stock Exchange for the Placing  Shares 
to be admitted to trading on AIM.   It is expected that Admission will  become 
effective and that trading in the Placing Shares will commence on AIM at  8.00 
a.m. on 13  September 2012.  The Placing Shares  will, when  issued and  fully 
paid, rank  pari passu  in all  respects with  the existing  ordinary  shares, 
including the right to  receive any dividend  or other distribution  declared, 
made or paid after Admission.

 

One80 Limited

 

There is no update to the position  in relation to One80 disclosed on 20  July 
2012.  As at the date of this announcement the valuation report required under
s593 Companies Act 2006 has not been completed and no shares in the capital of
ECV have been issued to the seller.  The Company will release further  updates 
as appropriate.

 

ECV is the legal and  beneficial holder of 16,250  A ordinary shares of  £0.01 
each in the  capital of One80,  representing 61.9% of  its total issued  share 
capital.  ECV also holds the beneficial interest in 3,850 B ordinary shares of
£0.01 each,  such interest  having been  acquired from  Jevon  Thurston-Thorpe 
pursuant to the transaction described in the announcement dated 20 July 2012. 
These shares represent a further 14.67% of One80's total issued share capital,
and ECV has voting control in  relation to such shares.  Accordingly, ECV  has 
control of 76.6% of the voting rights in One80.

 

One80 is party to a licence agreement,  signed in July 2011, which provides  a 
fixed licence fee per  Vito taxi produced with  a minimum guaranteed level  of 
450 units per annum. The transfer of second stage manufacture to Mercedes-Benz
enabled One80 to reduce its cost base and moved One80 into an EBITDA  positive 
position.  One80 owns the intellectual property rights to the rear wheel steer
technology used on the Mercedes Vito taxi.

 

The Company has entered into an agreement to acquire the benefit of a £250,000
short-term loan made to One80  by Cabvision Network Limited.  The  acquisition 
of the benefit of the  One80 Loan by ECV will  ensure that the One80 Loan  and 
the related  security over  One80's assets  are under  the control  of ECV  as 
majority shareholder rather  than an  external party.   As a  result ECV  will 
control the enforceability of the loan and related security over the  relevant 
assets of One80, which are important  to the business of ECV. Further  details 
are set out in appendix 1.

Cabvision settlement

On 13  July  2012  ECV and  certain  other  group companies  entered  into  an 
agreement with  a number  of third  parties which,  together with  a  separate 
agreement concluded on 6 July 2012  with other parties who had claims  against 
Cabvision Limited,  effects a  full and  final settlement  of all  outstanding 
claims against  Cabvision Limited,  ECV  and the  other group  companies.  The 
settlement has removed all and any risk of claims against or liability of  the 
Group under Section 51 of the Senior Courts Act 1981 or otherwise.

                                  APPENDIX 1

                            FINANCING ARRANGEMENTS

                                       

As at the date of this announcement,  and before the deployment of any of  the 
net funds raised from the Placing, the outstanding liabilities of the  Company 
and its subsidiaries (the "Group") include the following:

 

·      £1.5 million owing to the Pension Scheme, whose beneficiaries are Peter
DaCosta, Michael Troullis and Keith Marder (all directors and/or  shareholders 
of ECV) (the "Pension Scheme Loan") together with accrued interest of  £66,120 
as at 31 August 2012;

·      accrued rent  arrears of  approximately £200,000 owing  to the  Pension 
Scheme relating to premises owned by the Pension Scheme;

·      £514,000 in outstanding arrears  owing to Global Meter Systems  Limited 
(the "Global Meters Arrears");

·      £60,964 owing to executive directors in respect of loans they have made
to the Company;

·      £126,000  in  deferred  gross  bonuses  owing  to  executive  directors 
together with employer national insurance contributions in relation thereto;

·      £97,500 in deferred fees owing to non-executive directors;

·      £100,000 owing to Lee DaCosta, the son of director Peter DaCosta; and

·      £250,000 plus accrued interest owing to Cabvision Networks Limited.

 

The Pension Scheme Loan

 

The Pension Scheme Loan  was provided in  various tranches and  was due to  be 
repaid in tranches on various  dates as previously announced  on 2 May and  22 
June 2012.   However, the  beneficiaries of  the Pension  Scheme (being  Peter 
DaCosta, Keith Marder and  Michael Troullis) and the  Company have now  agreed 
revised repayment terms, pursuant to which £0.25 million, including associated
expenses, will be paid out of the Placing Proceeds.

 

In accordance with these revised  repayment terms, repayment of the  remaining 
£1.25 million outstanding principal amount will commence:

 

(a)          once the Company has achieved a cumulative consolidated EBITDA of
£1 million on a consolidated basis (the "Target"), to be measured on a monthly
basis from 1 September 2012; and

 

(b)          once the  loan of £250,000  owed by the  trustees of the  Pension 
Scheme to Barclays  Bank plc  has been  repaid (which  the beneficiaries  have 
undertaken to repay using the £250,000 Pension Scheme Loan repayment  referred 
to above),

 

(together the "Repayment  Conditions").  Repayments  will be  made in  monthly 
instalments of £20,800,  starting in  the month after  the Target  is met  and 
ending in September 2017.  The remaining balance outstanding at September 2017
will be repaid but, subject to compliance with H M Revenue and Customs' rules,
will be  re-lent  to the  Company  on  substantially similar  terms  to  those 
described in this paragraph.  Interest will accrue  at a rate of 5% per  annum 
from the date of this Announcement and will be payable on 31 December 2012 and
on 31 December in  each year thereafter (subject  to the Repayment  Conditions 
being satisfied).  Interest accrued up  to 31 August 2012, totalling  £66,120, 
and interest accruing thereafter, up to  a total of £33,880, will be  deferred 
and paid in 12 monthly payments which will commence after satisfaction of  the 
Repayment Conditions.

 

It has also  been agreed  that arrears of  rent of  approximately £200,000  in 
respect of premises owned by the  Pension Scheme and occupied by the  Company, 
will be paid in equal monthly instalments over a period of 12 months once  the 
Repayment Conditions have been satisfied.  Interest will accrue on the arrears
at a rate of 5% per annum.

 

KPM-UK Taxes Plc, a wholly owned subsidiary of the Company, has the benefit of
a claim for a refund of  VAT in an amount of  up to £2.8m ("VAT Claim").   The 
Company has agreed that any compensation net of corporation tax received  from 
HMRC as a result of the VAT Claim will be applied firstly in repayment of  the 
Pension Scheme Loan and  secondly (provided the Pension  Scheme Loan has  been 
repaid in full) in repayment of the Global Meters Arrears.

 

The beneficiaries of the Pension Scheme have also agreed to use all reasonable
endeavours to procure that the trustees of the Pension Scheme offer reasonable
alternative repayment terms  to the  Company in  the event  that the  Company, 
acting reasonably, is  unable to  meet the revised  repayment terms  described 
above (subject always to compliance with HMRC rules).

 

The revised  repayment  terms described  above  require the  approval  of  the 
corporate trustee of  the Pension  Scheme.  The beneficiaries  of the  Pension 
Scheme have  agreed  to use  all  reasonable  endeavours to  ensure  that  the 
necessary documentation is entered into by the Pension Scheme trustees  within 
30 business days  of the date  of this  Announcement to give  effect to  these 
revised terms.   A further  announcement  will be  made  at that  point.   The 
revised repayment  terms  set  out  above  therefore  remain  subject  to  the 
agreement of the Pension Scheme trustees and no guarantee can be given at this
stage that they will agree to such terms.

 

The parties have further agreed that once the Company is in a position to  pay 
a dividend  then the  Company shall  be permitted  to increase  the amount  of 
repayments of the Pension Scheme Loans to an amount equal to the amount of any
dividends paid, such amount to be allocated by the Company between the Pension
Scheme Loan and the Global Meters Arrears described below.

 

The Global Meters Arrears

 

Repayment of the Global Meters  Arrears will commence following completion  of 
the Placing and once the £250,000 loan owed by the Pension Scheme to  Barclays 
Bank Plc has been  repaid.  It will  be repaid by way  of monthly payments  of 
£10,000.  Interest will accrue  from the date of  this Announcement at a  rate 
equal to 5% per annum payable on  31 December 2012 and on 31 December in  each 
year thereafter, subject  to the  repayment of  the Pension  Scheme Loan  from 
Barclays Bank plc as described above.

 

As described above the Company may increase payments to Global Meters provided
such payments are matched by  dividends, and do not  exceed the amount of  any 
dividends when  aggregated  with  any additional  repayments  made  under  the 
Pension Scheme Loan.

 

Amounts owing to directors

 

The  Company  has  agreed  with  Peter  DaCosta  and  Keith  Marder  that  the 
outstanding loans of  £12,450 and  £48,514 respectively  made by  them to  the 
Company will be  repaid to each  of them  in equal monthly  instalments of  in 
aggregate £5,000 commencing in the month  following the Placing or, if  later, 
once the £250,000 loan  owed by the  Pension Scheme to  Barclays Bank Plc  has 
been repaid.  Interest will accrue at a rate of 5% per annum.  Both Mr DaCosta
and Mr Marder have been granted options to convert the outstanding balance  of 
the loans to ECV shares at 1.5p per share, to be exercised at any time in  the 
period of six months commencing on completion of the Placing.

 

The outstanding bonus payments of  £63,000 owed to each  of Mr DaCosta and  Mr 
Marder will be satisfied by  the issue to each of  them of such number of  ECV 
shares at 1.5p per share having an  aggregate value equal to 50% of the  bonus 
payment after income tax and national insurance contributions have been  paid, 
with the remaining sum being repaid  in cash in monthly repayments of  £5,000, 
such repayments  to commence  following  repayment of  the loans  referred  to 
above.  Interest will accrue on  the amount owed at a  rate of 5% per  annum.  
Any outstanding bonus balance will be repaid in cash upon either of Mr DaCosta
or Mr Marder leaving  the Company.  Both  Mr DaCosta and  Mr Marder have  been 
granted options  to convert  the remaining  outstanding balance  of the  bonus 
payments to ECV shares at 1.5p per share,  to be exercised at any time in  the 
period of six months commencing on completion of the Placing.

 

Further, John  Swingewood  and Jeremy  Fenn,  non-executive directors  of  the 
Company, are  each  owed fees  of  £27,000  and £19,500  respectively  by  the 
Company.  They have each agreed to receive  ECV shares in lieu of those  fees, 
at 1.5p per share.  They have also agreed to use the fees that will be payable
to them over the next 12 months to purchase ECV shares, at 1.5p per share,  on 
a quarterly basis. 

 

Tim Yeo will also  receive approximately £51,000 in  relation to fees owed  to 
him for the period from October 2011 and in respect of his three month  notice 
period.

 

Amount owing to Lee DaCosta

 

In January 2011 the Group received  an interest-free loan from Lee DaCosta  of 
£100,000 which will be repaid following completion of the Placing.

 

Acquisition of One80 Loan

 

The Company has entered into an agreement to acquire the benefit of a £250,000
short-term loan  at  par (plus  accrued  unpaid  interest) made  to  One80  by 
Cabvision Network Limited (the "One80 Loan"). The One80 Loan was made to One80
in August 2011  as a short-term  facility, is secured  against certain of  the 
assets of One80 and carries interest of 3% per month.  The acquisition of  the 
benefit of the  One80 Loan  by ECV  will ensure that  the One80  Loan and  the 
related security over One80's assets are under the control of ECV as  majority 
shareholder rather than an external party.   As a result ECV will control  the 
enforceability of the loan  and related security over  the relevant assets  of 
One80, which are important to the business of ECV.  The secured assets include
the rear wheel steer technology developed and owned by One80 which is used  on 
the Mercedes Vito taxi.  The technology is installed in Mercedes Vito taxis in
order to  meet the  Conditions of  Fitness of  the Public  Carriage Office  of 
Transport for London.   The agreement  is conditional on  payment of  £250,000 
plus interest and on payment of the £100,000 due to Lee DaCosta, as  described 
above.

 

 

 

 

                                  APPENDIX 2

                                       

                     TERMS AND CONDITIONS OF THE PLACING

                                       

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT")  AND 
THE INFORMATION IN IT, IS RESTRICTED,  AND IS NOT FOR PUBLICATION, RELEASE  OR 
DISTRIBUTION, DIRECTLY OR  INDIRECTLY, IN  WHOLE OR IN  PART, IN  OR INTO  THE 
UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE  REPUBLIC OF SOUTH AFRICA OR  ANY 
OTHER  JURISDICTION  IN  WHICH  SUCH  PUBLICATION  OR  DISTRIBUTION  WOULD  BE 
UNLAWFUL.

MEMBERS OF THE  PUBLIC ARE  NOT ELIGIBLE  TO TAKE  PART IN  THE PLACING.  THIS 
APPENDIX AND  THE TERMS  AND CONDITIONS  SET OUT  HEREIN ARE  FOR  INFORMATION 
PURPOSES ONLY AND ARE DIRECTED  ONLY AT: (A) PERSONS  IN MEMBER STATES OF  THE 
EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7)
OF THE  FINANCIAL  SERVICES AND  MARKETS  ACT 2000,  AS  AMENDED,  ("QUALIFIED 
INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE
EU PROSPECTUS DIRECTIVE  (WHICH MEANS  DIRECTIVE 2003/71/EC  AND INCLUDES  ANY 
RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE  "PROSPECTUS 
DIRECTIVE"); (B) IN THE  UNITED KINGDOM, QUALIFIED  INVESTORS WHO ARE  PERSONS 
WHO (I) FALL WITHIN  ARTICLE 19(5) OF THE  FINANCIAL SERVICES AND MARKETS  ACT 
2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) FALL WITHIN  ARTICLE 
49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC")
OF THE  ORDER; OR  (III) ARE  PERSONS TO  WHOM IT  MAY OTHERWISE  BE  LAWFULLY 
COMMUNICATED (ALL  SUCH  PERSONS  TOGETHER  BEING  REFERRED  TO  AS  "RELEVANT 
PERSONS").  THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT
BE ACTED  ON  OR RELIED  ON  BY PERSONS  WHO  ARE NOT  RELEVANT  PERSONS.  ANY 
INVESTMENT OR INVESTMENT  ACTIVITY TO WHICH  THIS APPENDIX AND  THE TERMS  AND 
CONDITIONS SET OUT HEREIN  RELATES IS AVAILABLE ONLY  TO RELEVANT PERSONS  AND 
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

THE ANNOUNCEMENT INCLUDING THIS APPENDIX IS FOR INFORMATION PURPOSES ONLY  AND 
DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES
IN THE  COMPANY.   THIS  ANNOUNCEMENT HAS  BEEN  ISSUED  BY AND  IS  THE  SOLE 
RESPONSIBILITY OF THE COMPANY.

THE ANNOUNCEMENT  INCLUDING  THIS  APPENDIX  IS  NOT  AN  OFFER  FOR  SALE  OR 
SUBSCRIPTION IN ANY  JURISDICTION IN  WHICH SUCH OFFER,  SOLICITATION OR  SALE 
WOULD BE  UNLAWFUL  UNDER  THE  SECURITIES  LAWS  OF  ANY  JURISDICTION.   THE 
ANNOUNCEMENT INCLUDING THIS  APPENDIX IS NOT  AN OFFER OF  OR SOLICITATION  TO 
PURCHASE OR  SUBSCRIBE FOR  SECURITIES IN  THE UNITED  STATES. THE  SECURITIES 
REFERRED TO HEREIN HAVE  NOT BEEN AND  WILL NOT BE  REGISTERED UNDER THE  U.S. 
SECURITIES ACT OF  1933, AS  AMENDED (THE "SECURITIES  ACT"), AND  MAY NOT  BE 
OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR
IN A  TRANSACTION  NOT  SUBJECT  TO,  THE  REGISTRATION  REQUIREMENTS  OF  THE 
SECURITIES ACT. NEITHER THE UNITED  STATES SECURITIES AND EXCHANGE  COMMISSION 
NOR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION  OF 
THE UNITED  STATES  HAS  APPROVED  OR DISAPPROVED  OF  AN  INVESTMENT  IN  THE 
SECURITIES OR  PASSED  UPON OR  ENDORSED  THE MERITS  OF  THE PLACING  OR  THE 
ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT.  ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE IN THE UNITED STATES. NO PUBLIC OFFERING
OF SECURITIES IS  BEING MADE  IN THE UNITED  STATES. NO  MONEY, SECURITIES  OR 
OTHER CONSIDERATION  FROM  ANY  PERSON  INSIDE  THE  UNITED  STATES  IS  BEING 
SOLICITED AND,  IF SENT  IN  RESPONSE TO  THE  INFORMATION CONTAINED  IN  THIS 
ANNOUNCEMENT, WILL NOT BE ACCEPTED.

EACH PLACEE SHOULD CONSULT  WITH ITS OWN ADVISERS  AS TO LEGAL, TAX,  BUSINESS 
AND RELATED ASPECTS OF AN INVESTMENT  IN PLACING SHARES.  The price of  shares 
and the income from them (if any) may go down as well as up and investors  may 
not get back the full amount invested on disposal of shares.

Persons who are invited to  and who choose to  participate in the Placing,  by 
making (or  on  whose behalf  there  is made)  an  oral or  written  offer  to 
subscribe for Placing Shares (the "Placees"), will be deemed to have read  and 
understood this Announcement, including this Appendix, in its entirety and  to 
be making such  offer on the  terms and  conditions, and to  be providing  the 
representations, warranties, acknowledgements,  and undertakings contained  in 
this Appendix.  In  particular,  each such  Placee  represents,  warrants  and 
acknowledges that:

1.            it is a Relevant Person  (as defined above) and undertakes  that 
it will  acquire, hold,  manage or  dispose  of any  Placing Shares  that  are 
allocated to it for the purposes of its business;

2.            in the case of any Placing Shares acquired by it as a  financial 
intermediary, as  that  term  is  used  in  Article  3(2)  of  the  Prospectus 
Directive, (i) the Placing Shares acquired by it in the Placing have not  been 
acquired on behalf of, nor have they been acquired with a view to their  offer 
or resale to, persons in any Member State of the European Economic Area  which 
has implemented the Prospectus Directive other than Qualified Investors or  in 
circumstances in which the prior consent of Numis has been given to the  offer 
or resale; or (ii) where Placing Shares have been acquired by it on behalf  of 
persons in any  member state of  the EEA other  than Qualified Investors,  the 
offer of  those Placing  Shares to  it  is not  treated under  the  Prospectus 
Directive as having been made to such persons; and

3.            (a) (i) it is not in the United States and (ii) it is not acting
for the account  or benefit  of a person  in the  United States, (b)  it is  a 
dealer or  other professional  fiduciary  in the  United  States acting  on  a 
discretionary basis for  a non-US person  (other than an  estate or trust)  in 
reliance on Regulation S; or (c) it is otherwise acquiring the Placing  Shares 
in an "offshore transaction"  meeting the requirements  of Regulation S  under 
the Securities Act.

The Company and Numis will rely upon  the truth and accuracy of the  foregoing 
representations, acknowledgements and agreements.

This Announcement  does  not constitute  an  offer, and  may  not be  used  in 
connection with an offer, to sell or issue or the solicitation of an offer  to 
buy or subscribe for Placing Shares in any jurisdiction in which such offer or
solicitation is  or may  be unlawful.  This Announcement  and the  information 
contained  herein  is  not  for  publication  or  distribution,  directly   or 
indirectly, to persons in the United  States, Australia, Canada, Japan or  the 
Republic  of  South  Africa  or  in  any  other  jurisdiction  in  which  such 
publication or distribution  is unlawful. Persons  into whose possession  this 
Announcement may come are required by  the Company to inform themselves  about 
and to observe any  restrictions of transfer of  this Announcement. No  public 
offer of securities of the  Company is being made  in the United Kingdom,  the 
United States or elsewhere.

In particular, the Placing  Shares referred to in  this Announcement have  not 
been and will not be  registered under the Securities Act  or any laws of,  or 
with any securities regulatory authority  of, any state or other  jurisdiction 
of the  United States,  and may  not be  offered, sold,  pledged or  otherwise 
transferred 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 the securities laws  of any state or other jurisdiction  of 
the United States. The Placing Shares  are being offered and sold outside  the 
United States  in  accordance  with  Regulation S  under  the  Securities  Act 
("Regulation S").

The Placing Shares have not been approved or disapproved by the US  Securities 
and Exchange Commission, any state  securities commission or 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 this Announcement. Any representation to the contrary is a criminal offence
in the United States.

The relevant clearances  have not been,  nor will they  be, obtained from  the 
securities commission of any  province or territory  of Canada; no  prospectus 
has  been  lodged  with  or  registered  by  the  Australian  Securities   and 
Investments Commission or the  Japanese Ministry of  Finance; and the  Placing 
Shares have  not  been, nor  will  they be,  registered  under or  offered  in 
compliance with the  securities laws of  any state, province  or territory  of 
Australia, Canada, Japan  or the  Republic of South  Africa. Accordingly,  the 
Placing Shares may not (unless an exemption under the relevant securities laws
is applicable) be offered, sold, resold or delivered, directly or  indirectly, 
in or into Australia,  Canada, Japan or  the Republic of  South Africa or  any 
other jurisdiction outside the United Kingdom.

Persons (including,  without limitation,  nominees and  trustees) who  have  a 
contractual or other legal  obligation to forward a  copy of this Appendix  or 
the Announcement of which it forms part should seek appropriate advice  before 
taking any action.

In this  Appendix, unless  the context  otherwise requires,  "Placee" means  a 
Relevant Person (including  individuals, funds  or others) on  whose behalf  a 
commitment to subscribe for Placing Shares has been given.

Details of the Placing Agreement and the Placing Shares

Numis has entered into a Placing Agreement (the "Placing Agreement") with  the 
Company under which Numis has, on the terms and subject to the conditions  set 
out therein, undertaken to use its reasonable endeavours to procure, as  agent 
for the Company, subscribers for the Placing Shares.  The Placing has not been
underwritten.

The Placing Shares will, when  issued and fully paid,  rank pari passu in  all 
respects with  the existing  issued  ordinary shares  in  the capital  of  the 
Company ("Ordinary Shares"), including the right to receive all dividends  and 
other distributions (if any) declared,  made or paid on  or in respect of  the 
Ordinary Shares after the date of issue of the Placing Shares.

The Company, subject to certain exceptions, has agreed not to allot, issue  or 
grant any rights in respect of its  Ordinary Shares in the period of 180  days 
from the date of Admission without Numis's prior consent, such consent not  to 
be unreasonably withheld.

Application for admission to trading

Application will be made to the London Stock Exchange for admission to trading
of the Placing Shares on AIM ("Admission"). It is expected that settlement  of 
any such shares and Admission will become effective on or around 13  September 
2012 and that dealings in the Placing Shares will commence at that time.

Participation in, and principal terms of, the Placing

1.            Numis  (whether through  itself  or any  of its  affiliates)  is 
arranging the Placing as placing agent of the Company for the purpose of using
reasonable endeavours to procure Placees at the Placing Price for the  Placing 
Shares.

2.            Participation in the Placing  will only be available to  persons 
who may lawfully be, and are, invited  to participate by Numis. Numis and  its 
affiliates may participate in the Placing as principal.

3.            This Appendix gives details of the terms and conditions of,  and 
the mechanics of participation in, the Placing. No commissions will be paid to
Placees or by Placees in respect of any Placing Shares.

4.            The placing price  will be a  fixed price of  1.5 pence per  New 
Ordinary Share (the "Placing Price").

5.            Each Placee's allocation will be confirmed to Placees orally  by 
Numis, and a trade confirmation or contract note will be dispatched as soon as
possible thereafter. The oral confirmation  to such Placee will constitute  an 
irrevocable legally  binding commitment  upon such  person (who  will at  that 
point become a  Placee) in favour  of Numis  and the Company,  under which  it 
agrees to acquire the number of Placing Shares allocated to it at the  Placing 
Price on the terms and conditions set  out in this Appendix and in  accordance 
with the Company's Articles of Association.

6.            Except as  required by law  or regulation, no  press release  or 
other announcement will be made by Numis or the Company using the name of  any 
Placee (or its agent), in its capacity  as Placee (or agent), other than  with 
such Placee's prior written consent.

7.            Irrespective of the time at which a Placee's allocation pursuant
to the Placing is confirmed, settlement for all Placing Shares to be  acquired 
pursuant to the Placing will be required to  be made at the same time, on  the 
basis explained below under "Registration and Settlement".

8.            All obligations under the Placing will be subject to  fulfilment 
or (where applicable) waiver of, amongst other things, the conditions referred
to below  under "Conditions  of the  Placing"  and to  the Placing  not  being 
terminated on the basis referred to below under "Right to terminate under  the 
Placing Agreement".

9.            By participating in the Placing, each Placee will agree 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.

10.          To the fullest  extent permissible by law,  none of the  Company, 
Numis or  any of  their  respective affiliates  shall  have any  liability  to 
Placees (or  to any  other person  whether acting  on behalf  of a  Placee  or 
otherwise of these terms and conditions). In particular, none of the  Company, 
Numis  or  any  of  their  respective  affiliates  shall  have  any  liability 
(including to the fullest extent permissible by law, any fiduciary duties)  in 
respect of Numis' conduct of the Placing. Each Placee acknowledges and  agrees 
that the Company is responsible for the allotment of the Placing Shares to the
Placees and Numis shall have  no liability to the  Placees for the failure  of 
the Company to fulfil those obligations. 

Conditions of the Placing

Numis' obligations  under the  Placing  Agreement in  respect of  the  Placing 
Shares are conditional on, inter alia:

(a)          the warranties  contained in  the Placing  Agreement being  true, 
accurate and not misleading as at the date of the Placing Agreement and at all
times before Admission as though  they had been given  and made on such  dates 
(by reference to the facts and circumstances existing at such dates);

(b)          the Company  allotting, subject  only to  Admission, the  Placing 
Shares in accordance with the Placing Agreement;

(c)           Admission taking place not later  than 8.00 a.m on 13  September 
2012 or such later date as the Company and Numis may otherwise agree not being
later than 8.00 a.m on 27 September 2012;

(d)          there having been no Material  Adverse Change (as defined in  the 
Placing Agreement) prior to Admission; and

(e)          the Placing Agreement not having lapsed or been terminated  prior 
to Admission.

If (i) any of the conditions contained in the Placing Agreement in relation to
the Placing Shares are not fulfilled or waived by Numis by the respective time
or date where specified (or such later  time or date as the Company and  Numis 
may agree not being  later than 8.00  a.m on 27 September  2012), or (ii)  the 
Placing Agreement is terminated as described below, the Placing in relation to
the Placing  Shares  will  lapse  and  the  Placee's  rights  and  obligations 
hereunder in relation to the Placing Shares shall cease and terminate at  such 
time and each Placee agrees that no claim can be made by the Placee in respect
thereof and any funds  delivered by Placee to  Numis will be returned  without 
interest as soon as reasonably practicable (and at each Placee's risk).

Numis may, at its discretion and upon  such terms as it thinks fit, waive,  or 
extend the period for, compliance by the Company with the whole or any part of
any of the Company's obligations in relation to the conditions in the  Placing 
Agreement, save that the condition relating to Admission taking place may  not 
be waived. Any such extension or  waiver will not affect Placees'  commitments 
as set out in this Announcement.

Neither Numis 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 they may make as to  whether or not to waive or to extend  the 
time and/or date for the satisfaction of any condition to the Placing nor  for 
any decision they  may make  as to  the satisfaction  of any  condition or  in 
respect of the  Placing generally  and by  participating in  the Placing  each 
Placee agrees that  any such  decision is  within the  absolute discretion  of 
Numis.

Right to terminate under the Placing Agreement

Numis is entitled,  at any  time before  Admission, to  terminate the  Placing 
Agreement by giving notice to the Company in certain circumstances, including,
inter alia,  a  breach  of  the  warranties given  to  Numis  in  the  Placing 
Agreement, the failure  of the Company  to comply with  obligations under  the 
Placing Agreement or, the  occurrence of a force  majeure event which, in  the 
good faith opinion of  Numis, make it impracticable  or inadvisable to  market 
the Placing Shares or to enforce contracts for the subscription of the Placing
Shares.  Following  Admission,  the  Placing  Agreement  is  not  capable   of 
termination to  the extent  that it  relates  to the  Placing of  the  Placing 
Shares.

The rights  and  obligations  of  the Placees  shall  terminate  only  in  the 
circumstances described in these terms and conditions and will not be  subject 
to termination by the Placee or any  prospective Placee at any time or in  any 
circumstances. By  participating  in  the  Placing,  Placees  agree  that  the 
exercise by Numis of  any right of termination  or other discretion under  the 
Placing Agreement shall be within the  absolute discretion of Numis, and  that 
it need not make any reference to Placees and that it shall have no  liability 
to Placees whatsoever in connection with any such exercise or decision not  to 
exercise.  Placees will have  no rights against Numis,  the Company or any  of 
their respective directors or employees  under the Placing Agreement  pursuant 
to the Contracts (Rights of Third Parties) Act 1999 (as amended).

No Admission Document or Prospectus

The Placing  Shares are  being offered  to a  limited number  of  specifically 
invited persons only and will  not be offered in such  a way as to require  an 
admission document  or  prospectus in  the  United  Kingdom or  in  any  other 
jurisdiction. No offering document, admission document or prospectus has  been 
or will  be submitted  to  be approved  by  the Financial  Services  Authority 
("FSA") or submitted to the London Stock Exchange in relation to the  Placing, 
and Placees' commitments will be made  solely on the basis of the  information 
contained in  the  Announcement (including  this  Appendix) and  the  Exchange 
Information  (as  defined  further  below).   Each  Placee,  by  accepting   a 
participation in the Placing, agrees that the content of this Announcement  is 
exclusively the responsibility of the Company and confirms that it has neither
received nor  relied  on  any  other  information  (other  than  the  Exchange 
Information), representation, warranty, or statement  made by or on behalf  of 
the Company or Numis or any other person and neither Numis nor the Company nor
any other person will  be liable for any  Placee's decision to participate  in 
the Placing  based  on  any other  information,  representation,  warranty  or 
statement which the  Placees may have  obtained or received  and, if given  or 
made, such  information, representation,  warranty or  statement must  not  be 
relied upon  as  having  been  authorised by  Numis,  the  Company,  or  their 
respective officers, directors, employees or agents. 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. Neither the Company, nor Numis are making any undertaking or warranty
to any Placee regarding the legality of an investment in the Placing Shares by
such Placee under any legal, investment  or similar laws or regulations.  Each 
Placee should not consider any information  in this Announcement to be  legal, 
tax or business  advice. Each  Placee should  consult its  own solicitor,  tax 
adviser and financial adviser for independent legal, tax and financial  advice 
regarding an investment in the Placing Shares. Nothing in this paragraph shall
exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Settlement  of  transactions  in  the  Placing  Shares  (ISIN:   GB0034353754) 
following Admission will  take place  within CREST provided  that, subject  to 
certain exceptions, Numis reserves  the right to  require settlement for,  and 
delivery of, the  Placing Shares  (or a portion  thereof) to  Placees by  such 
other means that it deems necessary if delivery or settlement is not  possible 
or practicable within CREST within the timetable set out in this  Announcement 
or would not be  consistent with the regulatory  requirements in any  Placee's 
jurisdiction.

Each Placee  allocated Placing  Shares in  the Placing  will be  sent a  trade 
confirmation or contract note, in accordance with the standing arrangements in
place with Numis, stating the number of Placing Shares allocated to it at  the 
Placing Price,  the  aggregate  amount  owed  by  such  Placee  to  Numis  and 
settlement instructions.  Each  Placee  agrees  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 that it  has 
in place with Numis.

It is expected that settlement will be on 13 September 2012 on a T+3 basis  in 
accordance with the instructions set out in the trade confirmation.

Interest is chargeable daily on payments not received from Placees on the  due 
date in accordance  with the arrangements  set out  above at the  rate of  two 
percentage points above LIBOR as determined by Numis.

Each Placee  is  deemed to  agree  that, if  it  does not  comply  with  these 
obligations, Numis may sell any or all of the Placing Shares allocated to that
Placee on  such Placee's  behalf  and retain  from  the proceeds,  for  Numis' 
account and  benefit  (as agent  for  the Company),  an  amount equal  to  the 
aggregate amount owed by the Placee plus any interest due. The relevant Placee
will, however,  remain liable  and shall  indemnify Numis  on demand  for  any 
shortfall below the aggregate amount  owed by it and  may be required to  bear 
any stamp duty or stamp duty reserve tax or securities transfer tax  (together 
with any interest or penalties) which may arise upon the sale of such  Placing 
Shares on such  Placee's behalf. By  communicating a bid  for Placing  Shares, 
each Placee confers  on Numis  all such  authorities and  powers necessary  to 
carry out any such  sale and agrees  to ratify and  confirm all actions  which 
Numis lawfully takes in pursuance of such sale.

If Placing Shares  are to  be delivered to  a custodian  or settlement  agent, 
Placees should ensure that the trade  confirmation or contract note is  copied 
and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares  are registered in  a Placee's name  or that of  its 
nominee or in the name of any person for whom a Placee is contracting as agent
or that of a nominee for such  person, such Placing Shares should, subject  as 
provided below, be so registered free from  any liability to UK stamp duty  or 
stamp duty  reserve  tax or  securities  transfer  tax. Placees  will  not  be 
entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

By participating in  the Placing each  Placee (and any  person acting on  such 
Placee's   behalf)   makes   the   following   representations,    warranties, 
acknowledgements, agreements  and undertakings  (as the  case may  be) to  the 
Company and Numis:

1.            represents  and warrants  that it  has read  and understood  the 
Announcement,  including  this  Appendix,  in   its  entirety  and  that   its 
subscription of Placing  Shares is subject  to and based  upon all the  terms, 
conditions,  representations,  warranties,  acknowledgements,  agreements  and 
undertakings and  other information  contained herein  and undertakes  not  to 
redistribute or duplicate this Announcement;

2.            acknowledges that  no offering document,  admission document  or 
prospectus has been prepared in connection with the Placing and represents and
warrants that it has not received and will not receive a prospectus, admission
document or other offering document in connection therewith;

3.            acknowledges that the Ordinary Shares are admitted to trading on
AIM, and the  Company is therefore  required to publish  certain business  and 
financial  information  in  accordance  with  the  AIM  Rules  for   Companies 
(collectively "Exchange  Information"),  which  includes  the  Company's  most 
recent  balance  sheet  and  profit   and  loss  account  and  the   Company's 
announcements and circulars  published in the  past 12 months  and that it  is 
able to obtain or access such information without undue difficulty;

4.            acknowledges  that none  of  Numis, the  Company, any  of  their 
respective affiliates  or any  person acting  on  behalf of  any of  them  has 
provided it, and will not provide it, with any material regarding the  Placing 
Shares or the Company other than  this Announcement; nor has it requested  any 
of Numis, the  Company, their respective  affiliates or any  person acting  on 
behalf of any of them to provide it with any such information;

5.             acknowledges  that   the  content  of   this  Announcement   is 
exclusively the responsibility  of the Company,  and that none  of Numis,  its 
affiliates or any person acting on its  or their behalf has or shall have  any 
liability for any information, representation  or statement contained in  this 
Announcement or any information previously or concurrently published by or  on 
behalf of the Company,  and will not  be liable for  any Placee's decision  to 
participate in  the  Placing  based  on  any  information,  representation  or 
statement contained in  this Announcement  or otherwise.  Each Placee  further 
represents, warrants  and agrees  that the  only information  on which  it  is 
entitled to rely and on which such  Placee has relied in committing itself  to 
acquire the Placing Shares is contained in this Announcement and any  Exchange 
Information, such information  being all that  it deems necessary  to make  an 
investment decision in respect of the  Placing Shares and that it has  neither 
received nor  relied  on  any  other  information  given  or  representations, 
warranties or statements made by Numis, the Company or any of their respective
directors, officers or  employees or  any person acting  on behalf  of any  of 
them,  or,  if  received,  it  has  not  relied  upon  any  such  information, 
representations,  warranties   or   statements   (including   any   management 
presentation that may  have been  received by  any prospective  Placee or  any 
material prepared  by the  Research Department  of Numis  (the views  of  such 
Research Department not representing and  being independent from those of  the 
Company  and  the  Corporate  Finance  Department  of  Numis  and  not   being 
attributable to the same)), and neither  Numis nor the Company will be  liable 
for any  Placee's decision  to  accept an  invitation  to participate  in  the 
Placing based on any other information, representation, warranty or statement.
Each Placee further  acknowledges and agrees  that it may  not place the  same 
degree of reliance  as it  may otherwise place  on a  prospectus or  admission 
document. Each  Placee further  acknowledges  and agrees  that it  has  relied 
solely on its own investigation of  the business, financial or other  position 
of the Company in deciding to participate in the Placing and it will not  rely 
on any investigation that Numis, its affiliates or any other person acting  on 
its or their behalf has or may have conducted;

6.            represents and warrants that it has neither received nor  relied 
on any  confidential price  sensitive information  concerning the  Company  in 
accepting this invitation to participate in the Placing;

7.             acknowledges  that   Numis  does   not  have   any  duties   or 
responsibilities to it, or its clients, similar or comparable to the duties of
"best  execution"  and  "suitability"  imposed  by  the  Conduct  of  Business 
Sourcebook in the FSA's Handbook of Rules  and Guidance and that Numis is  not 
acting for  it or  its clients  and that  Numis will  not be  responsible  for 
providing protections to it or its clients;

8.            acknowledges that none of Numis, any person acting on behalf  of 
it or them, or any of its affiliates  has or shall have any liability for  the 
Exchange Information,  any  publicly available  or  filed information  or  any 
representation  relating  to  the  Company,  provided  that  nothing  in  this 
paragraph   excludes   the   liability   of   any   person   for    fraudulent 
misrepresentation made by that person;

9.            that, save in the  event of fraud on the  part of Numis (and  to 
the extent permitted  by the Rules  of the FSA),  neither Numis, its  ultimate 
holding company nor  any direct  or indirect subsidiary  undertakings of  that 
holding company, nor any of their respective directors and employees shall  be 
liable to Investors for any matter arising out of Numis' role as placing agent
or otherwise in connection with the Placing and that where any such  liability 
nevertheless arises as a  matter of law Investors  will immediately waive  any 
claim against any of such persons which you may have in respect thereof;

10.          represents and warrants that (i)  it is not in the United  States 
and (ii) it is not acting for the account or benefit of a person in the United
States;

11.          acknowledges that the Placing  Shares are being offered and  sold 
only pursuant to Regulation  S under the Securities  Act in a transaction  not 
involving a public offering of securities in the United States and the Placing
Shares have not been and  will not be registered  under the Securities Act  or 
with any state  or other jurisdiction  of the United  States, nor approved  or 
disapproved by the US Securities and Exchange Commission, any state securities
commission in  the  United  States  or  any  other  United  States  regulatory 
authority, and that the offer  and sale of the Placing  Shares to it has  been 
made outside of the United States  in an 'offshore transaction' (as such  term 
is defined  in  Regulation S  under  the Securities  Act)  and agrees  not  to 
reoffer, resell,  pledge  or  otherwise transfer  the  Placing  Shares  except 
pursuant to  an  exemption from,  or  in a  transaction  not subject  to,  the 
registration requirements of  the Securities Act  and otherwise in  accordance 
with any applicable securities laws of any state or jurisdiction of the United
States;

12.          unless  otherwise  specifically  agreed in  writing  with  Numis, 
represents and  warrants that  neither it  nor the  beneficial owner  of  such 
Placing Shares will be a resident of Australia, Canada, Japan or the  Republic 
of South Africa;

13.          acknowledges that the Placing Shares  have not been and will  not 
be registered under the securities legislation of Australia, Canada, Japan  or 
the Republic of South  Africa and, subject to  certain exceptions, may not  be 
offered, sold, taken up,  renounced or delivered  or transferred, directly  or 
indirectly, within those jurisdictions;

14.          represents  and warrants  that the  issue to  it, or  the  person 
specified by it for  registration as holder, of  Placing Shares will not  give 
rise to a liability under any of sections 67, 70, 93 or 96 of the Finance  Act 
1986 (depositary receipts and clearance services) and that the Placing  Shares 
are not being  acquired in  connection with arrangements  to issue  depositary 
receipts or to transfer Placing Shares into a clearance system;

15.          represents  and  warrants that:  (i)  it has  complied  with  its 
obligations under the Criminal  Justice Act 1993, section  118 of FSMA and  in 
connection with money laundering and terrorist financing under the Proceeds of
Crime Act  2002  (as  amended),  the Terrorism  Act  2000  (as  amended),  the 
Terrorism Act 2006 and  the Money Laundering Regulations  2007 and (ii) it  is 
not a person:  (a) with  whom transactions  are prohibited  under the  Foreign 
Corrupt Practices Act of 1977 or any economic sanction programmes administered
by, or regulations promulgated by, the Office of Foreign Assets Control of the
U.S. Department  of  the Treasury;  (b)  named  on the  Consolidated  List  of 
Financial Sanctions Targets maintained by  HM Treasury of the United  Kingdom; 
or (c) subject to financial sanctions imposed pursuant to a regulation of  the 
European Union or a  regulation adopted by the  United Nations (together,  the 
"Regulations");  and,  if making  payment on  behalf of  a third  party,  that 
satisfactory evidence  has been  obtained and  recorded by  it to  verify  the 
identity of the  third party  as required by  the Regulations  and, if  making 
payment on  behalf of  a  third party,  that  satisfactory evidence  has  been 
obtained and recorded  by it  to verify  the identity  of the  third party  as 
required by  the  Regulations and  has  obtained all  governmental  and  other 
consents (if  any)  which  may  be  required for  the  purpose  of,  or  as  a 
consequence of, such  purchase, and  it will  provide promptly  to Numis  such 
evidence, if any, as to the identity or location or legal status of any person
which Numis  may request  from it  in  connection with  the Placing  (for  the 
purpose of complying with such Regulations or ascertaining the nationality  of 
any person or the jurisdiction(s) to which any person is subject or otherwise)
in the form and manner requested by Numis on the basis that any failure by  it 
to do so may result in the number  of Placing Shares that are to be  purchased 
by it  or at  its direction  pursuant to  the Placing  being reduced  to  such 
number, or to nil, as Numis may decide at its sole discretion;

16.          if a financial intermediary, as that term is used in Article 3(2)
of the Prospectus Directive, represents  and warrants that the Placing  Shares 
purchased 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 a Member State  of the European Economic Area which  has 
implemented the Prospectus  Directive other  than Qualified  Investors, or  in 
circumstances in which the prior consent of Numis has been given to the  offer 
or resale;

17.          represents and warrants that it has not offered or sold and  will 
not offer or sell any Placing Shares to persons in the European Economic  Area 
prior to Admission 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 in and  which will not result in  an offer to the public  in 
any member  state of  the European  Economic Area  within the  meaning of  the 
Prospectus Directive  (including  any  relevant implementing  measure  in  any 
member state);

18.          represents and warrants that  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 the FSMA) relating to the Placing Shares in circumstances  in 
which section 21(1) of the FSMA does not require approval of the communication
by an authorised person;

19.          represents and warrants that it has complied and will comply with
all applicable provisions of the FSMA with  respect to anything done by it  in 
relation to the  Placing Shares in,  from or otherwise  involving, the  United 
Kingdom;

20.          if  in a  Member  State of  the  European Economic  Area,  unless 
otherwise specifically agreed with Numis  in writing, represents and  warrants 
that it  is  a  Qualified  Investor  within  the  meaning  of  the  Prospectus 
Directive;

21.          if in the  United Kingdom, represents and  warrants that it is  a 
person (i) who has professional experience in matters relating to  investments 
falling within Article 19(1)  of the Financial Services  and Markets Act  2000 
(Financial Promotion) Order  2005 (the "Order");  (ii) falling within  Article 
49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc")
of the Order;  or (iii) to  whom this Announcement  may otherwise be  lawfully 
communicated;

22.          represents and  warrants that  it and  any person  acting on  its 
behalf is  entitled  to acquire  the  Placing Shares  under  the laws  of  all 
relevant jurisdictions and that it has all necessary capacity and has obtained
all necessary consents and authorities  and taken any other necessary  actions 
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 this Announcement)
and will honour such obligations;

23.          where it  is acquiring  Placing Shares  for one  or more  managed 
accounts, represents and  warrants that it  is authorised in  writing by  each 
managed account: (a) to acquire the  Placing Shares for each managed  account; 
(b) to make on its  behalf the representations, warranties,  acknowledgements, 
undertakings and agreements in this Appendix and the Announcement of which  it 
forms part; and (c) to receive on its behalf any investment letter relating to
the Placing in the form provided to it by Numis;

24.          undertakes that  it (and any  person acting on  its behalf)  will 
make payment for the  Placing Shares allocated to  it in accordance with  this 
Announcement on  the due  time and  date  set out  herein, failing  which  the 
relevant Placing Shares may be placed with other subscribers or sold as  Numis 
may in its sole discretion determine and without liability to such Placee  and 
it will remain  liable and will  indemnify Numis on  demand for any  shortfall 
below the net proceeds of such sale  and the placing proceeds of such  Placing 
Shares and may be required to bear  the liability for any stamp duty or  stamp 
duty reserve  tax or  security transfer  tax (together  with any  interest  or 
penalties due pursuant to or referred to in these terms and conditions)  which 
may arise upon  the placing or  sale of  such Placee's Placing  Shares on  its 
behalf;

25.          acknowledges that none  of Numis, any of  its affiliates, or  any 
person acting on behalf of any of  them, is making any recommendations to  it, 
advising it regarding the suitability of any transactions it may enter into in
connection with the Placing  and that participation in  the Placing is on  the 
basis that it is not and will not be treated for these purposes as a client of
Numis and that Numis has no duties or responsibilities to it for providing the
protections afforded to their respective clients or customers or for providing
advice in  relation to  the Placing  nor in  respect of  any  representations, 
warranties, undertakings or indemnities contained in the Placing Agreement nor
for the  exercise  or performance  of  any  of their  rights  and  obligations 
thereunder including any rights  to waive or vary  any conditions or  exercise 
any termination right;

26.          undertakes that the person whom it specifies for registration  as 
holder of the Placing Shares  will be (i) itself or  (ii) its nominee, as  the 
case may  be.  Neither Numis  nor  the Company  will  be responsible  for  any 
liability to stamp duty or stamp duty reserve tax resulting from a failure  to 
observe this requirement. Each Placee and any person acting on behalf of  such 
Placee agrees to  participate in the  Placing and it  agrees to indemnify  the 
Company and Numis in respect of the same on the basis that the Placing  Shares 
will be allotted to  the CREST stock  account of Numis who  will hold them  as 
nominee on  behalf of  such Placee  until settlement  in accordance  with  its 
standing settlement instructions;

27.          acknowledges that these terms  and conditions and any  agreements 
entered  into  by  it  pursuant  to   these  terms  and  conditions  and   any 
non-contractual  obligations  arising  out  of  or  in  connection  with  such 
agreement shall be governed  by and construed in  accordance with the laws  of 
England and Wales and  it submits (on  behalf of itself and  on behalf of  any 
person on whose  behalf it  is acting) to  the exclusive  jurisdiction of  the 
English  courts  as   regards  any   claim,  dispute   or  matter   (including 
non-contractual matters)  arising  out  of  any  such  contract,  except  that 
enforcement proceedings in respect of the  obligation to make payment for  the 
Placing Shares (together with any interest chargeable thereon) may be taken by
the Company  or Numis  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;

28.          acknowledges that  time shall  be of  the essence  as regards  to 
obligations pursuant to this Appendix;

29.          agrees that  the Company, Numis  and their respective  affiliates 
and  others  will  rely  upon  the   truth  and  accuracy  of  the   foregoing 
representations, warranties, acknowledgements and undertakings which are given
to Numis on its own  behalf and on behalf of  the Company and are  irrevocable 
and are irrevocably authorised to produce this Announcement or a copy  thereof 
to any interested party in any administrative or legal proceeding or  official 
inquiry with respect to the matters covered hereby;

30.          agrees to indemnify on an  after-tax basis and hold the  Company, 
Numis and their respective affiliates harmless from any and all costs, claims,
liabilities and expenses (including legal fees and expenses) arising out of or
in  connection   with  any   breach   of  the   representations,   warranties, 
acknowledgements, agreements  and undertakings  in this  Appendix and  further 
agrees that the provisions of this Appendix shall survive after completion  of 
the Placing;

31.          acknowledges that no action has been  or will be taken by any  of 
the Company, Numis or any person acting on behalf of the Company or Numis that
would, or is intended to, permit a  public offer of the Placing Shares in  any 
country or jurisdiction where any such action for that purpose is required;

32.          acknowledges that  it is  an institution that  has knowledge  and 
experience in financial, business and  international investment matters as  is 
required to  evaluate the  merits and  risks of  subscribing for  the  Placing 
Shares. It  further  acknowledges  that  it is  experienced  in  investing  in 
securities of this  nature and  in this  sector and is  aware that  it may  be 
required to bear, and  it, and any  accounts for which it  may be acting,  are 
able to bear, the economic risk of, and is able to sustain, a complete loss in
connection with the Placing.  It has relied upon  its own examination and  due 
diligence of the Company and its associates taken as a whole, and the terms of
the Placing, including the merits and risks involved;

33.          acknowledges that its commitment to subscribe for Placing  Shares 
on the terms set  out herein and  in the trade  confirmation or contract  note 
will continue notwithstanding any amendment that may in future be made to  the 
terms 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  conduct 
of the Placing;

34.          acknowledges that  Numis or any  of its affiliates  acting as  an 
investor for its own  account may take  up shares in the  Company and in  that 
capacity may retain, purchase or sell for its own account such shares and  may 
offer or sell such shares other than in connection with the Placing;

35.          represents  and  warrants  that,  if it  is  a  pension  fund  or 
investment company, its purchase of Placing Shares is in full compliance  with 
all applicable laws and regulation;

37.          irrevocably appoints  any director  or employee of  Numis as  its 
agent for the purpose  of executing and delivering  to the Company and/or  its 
registrars any document on its behalf necessary to enable it to be  registered 
as the holder of Placing Shares;

38.          acknowledges that its name  and participation in the Placing  may 
be disclosed  if  required by  law  or  any applicable  rules  or  regulations 
including the AIM Rules for Companies of the Takeover Code; and

39.          to  the fullest  extent  permitted by  law, it  acknowledges  and 
agrees to  the  disclaimers  contained  in  the  Announcement  including  this 
Appendix.

The representations, warranties, acknowledgments and undertakings contained in
this Appendix are given to Numis and the Company and are irrevocable and shall
not be capable of termination in any circumstances.

The agreement to settle a Placee's subscription (and/or the subscription of  a 
person for whom such Placee  is contracting as agent)  free of stamp duty  and 
stamp  duty  reserve  tax  depends  on  the  settlement  relating  only  to  a 
subscription by it and/or such person direct from the Company for the  Placing 
Shares in question.  Such agreement assumes  that the Placing  Shares are  not 
being subscribed  for  in connection  with  arrangements to  issue  depositary 
receipts or to transfer the Placing Shares into a clearance service. If  there 
are any such arrangements, or the  settlement relates to any other  subsequent 
dealing in the Placing  Shares, stamp duty  or stamp duty  reserve tax may  be 
payable, for which neither the Company nor Numis will be responsible, and  the 
Placee to whom (or on behalf of whom, or in respect of the person for whom  it 
is participating  in the  Placing  as an  agent  or nominee)  the  allocation, 
allotment, issue or delivery of Placing Shares has given rise to such UK stamp
duty or stamp duty reserve tax undertakes  to pay such UK stamp duty or  stamp 
duty reserve tax forthwith and to indemnify on an after-tax basis and to  hold 
harmless the Company and  Numis in the  event that any  of the Company  and/or 
Numis has incurred any such liability to  UK stamp duty or stamp duty  reserve 
tax. If this is the  case, each Placee should seek  its own advice and  notify 
Numis accordingly.

In addition, Placees should note that they  will be liable for any 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 
subscription by  them  of any  Placing  Shares or  the  agreement by  them  to 
subscribe for any Placing Shares.

Each Placee, and any person acting on behalf of the Placee, acknowledges  that 
Numis does not owe any fiduciary or  other duties to any Placee in respect  of 
any representations, warranties,  undertakings or indemnities  in the  Placing 
Agreement.

Each Placee and  any person acting  on behalf of  the Placee acknowledges  and 
agrees that Numis or any of its affiliates may, at their absolute  discretion, 
agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with  Numis, 
any money held in  an account with  Numis 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 FSA  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 Numis'  money in accordance with the client  money 
rules and will  be used by  Numis in the  course of its  own business and  the 
Placee will rank only as a general creditor of Numis.

All times and dates  in this Announcement may  be subject to amendment.  Numis 
shall notify the Placees and any person acting on behalf of the Placees of any
changes.

Past performance is no guide to future performance and persons needing  advice 
should consult an independent financial adviser.

DEFINITIONS

In this Appendix 2:

'Admission' means  the admission  of  the Placing  Shares  to trading  on  AIM 
becoming effective (pursuant to Rule 6 of the AIM Rules for Companies);

'Announcement' means  this  announcement  (including the  appendices  to  this 
announcement);

'CREST' means the relevant system, as defined in the Uncertificated Securities
Regulations 2001 (SI 2001/3755), as amended (in respect of which Euroclear  UK 
& Ireland Limited is the operator);

'FSA' means the Financial Services Authority  of the United Kingdom acting  in 
its capacity as the competent authority for the purposes of Part IV of FSMA;

'FSMA' means the Financial Services and Markets Act 2000 (as amended);

'London Stock Exchange' means the London Stock Exchange plc;

the 'Company' means Eco City Vehicles plc;   

'Ordinary Share' means an ordinary share of 1 pence each in the capital of the
Company;

'Placee' means any person (including individuals, funds or otherwise) by  whom 
or on whose behalf a commitment to acquire Placing Shares has been given;

'Placing' means the placing of the Placing  Shares by Numis, on behalf of  the 
Company, with both new and existing institutional investors;

'Placing Agreement' means the placing agreement dated 7 September 2012 between
the Company and Numis in respect of the Placing;

'Placing Price' means 1.5 pence per Ordinary Share at which the Placing Shares
are placed;

'Placing Shares' means  the up  to 116,666,666  Ordinary Shares  to be  issued 
pursuant to the Placing;

'Prospectus Directive' means the Directive  of the European Parliament and  of 
the Council of the European Union 2003/71/EC;

'Securities Act' means the US Securities Act of 1933, as amended;

'United Kingdom'  or  'UK' means  the  United  Kingdom of  Great  Britain  and 
Northern Ireland; and

'United States' or 'US'  means the United States  of America, its  territories 
and possessions, any state of the United States and the District of Columbia.

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
MSCFMGGLFNVGZZM -0- Sep/07/2012 13:39 GMT
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