27th Jul 2006 07:03
Cohort PLC27 July 2006 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, SOUTH AFRICA OR THE REPUBLIC OF IRELAND. 27 July 2006 COHORT PLC ("COHORT" OR THE "COMPANY") Maiden acquisition of MASS Consultants for initial net consideration of £12.5 million and Placing of 6.55 million shares at 135p per share to raise £8.8 million before expenses Cohort plc, owner of Systems Consultants Limited, a leading independent defencetechnical services business, today announces that it has conditionally agreed toacquire MASS Consultants Limited ("MASS"), a UK-based independent defenceSystems House, for an initial net consideration of £12.5 million. Furtherdeferred payments of up to £0.5 million are subject to MASS winning to twospecific substantial overseas contracts within 24 months after completion of thetransaction which is scheduled for 1 August 2006. Deal Highlights • Maiden acquisition since Cohort's March 2006 listing on AIM is in line with stated growth strategy• Expands Cohort footprint across joint defence establishments (Land, Sea & Air)• Mass' strong order book provides considerable forward visibility• Provides enhanced profile of the Cohort Group across the MOD• Creates a platform to bid for larger contracts and enhance the group's ability to cross-sell its services into different areas of defence• Funded in part by a Placing to raise £8.8 million Commenting on the Acquisition, Nick Prest CBE, Chairman of Cohort plc said: "The acquisition of MASS is consistent with Cohort's stated strategy of buildingan independent business supplying technical services to the defence market. Theacquisition will substantially increase the scale of the group and build itscapabilities into new related areas. MASS is an excellent fit with our existingbusiness, and should offer significant opportunities for growth in the future." Enquiries Cohort Group plc 014 9141 2102Stanley Carter, Chief ExecutiveSimon Walther, Finance Director Investec 020 7597 5970Michael Ansell / Rupert Krefting Gainsborough Communications 020 7190 1705Julian WalkerAndy Cornelius Introduction The Board of Cohort, owner of Systems Consultants Services Limited ("SCS"), aleading independent defence technical services business, announces that it hasconditionally agreed to acquire MASS Consultants Limited ("MASS"), a UK-basedindependent defence Systems House, for an initial net consideration of £12.5million plus further deferred payments of up to £0.5 million subject to MASSwinning to two specific substantial overseas contracts within 24 months aftercompletion of the transaction. It is expected that the acquisition of MASS willbe completed on 1 August 2006. The vendors of MASS ("Vendors") will receive £11.75 million of the initial netconsideration in cash on completion, funded in part by way of a Vendor Placingof 5,500,000 new Ordinary Shares at 135p per share ("the Placing Price") toraise £7.4 million and funded also by the issue to a continuing director of MASSof 185,185 new Ordinary Shares to a value of £0.25 million at the Placing Pricewith the balance from Cohort's existing cash resources. In addition one of theVendors of MASS ("Vendors") will retain 555,556 new Ordinary Shares("Consideration Shares") to the value of £0.75 million at the Placing Priceissued to him as part of his consideration entitlement. In addition, Cohort israising a further £1.4 million by way of a cash placing at the Placing Price of1,050,000 new Ordinary Shares ("Cash Placing"). The Vendor Placing and CashPlacing (together "the Placing") have both been underwritten in full byInvestec. The Cash Placing is not conditional upon completion of the acquisitionof MASS. If the acquisition does not complete, the Vendor Placing will notoccur. Information on MASS MASS Consultants Limited is a privately owned, UK-based independent SystemsHouse. It was formed in 1983 and is based in St Neots, near Cambridge, UK andhas an office in Lincoln, UK. MASS has a defence and aerospace focus anddelivers systems engineering, software and electronic engineering service andsolutions (including design and manufacture) to government and industry. MASShas a particular strength in the provision of managed services for secure ITsystems. Its major customer is the UK Ministry of Defence (MoD), whichaccounted for 71% of turnover in the year ended 31 March 2006. Othersignificant customers in this period included MBDA, ITT Defence, Ofcom, VTShipbuilding and BAE Systems. MASS's business spans three principal areas ofactivity: Managed Services, Electronic Warfare (EW) and Secure Communications. MASS's Managed Services activities centre on the provision of specialisttechnical and IT services at secure MoD and Government sites. In 2000, MASSwon a ten year, £43 million contract to support a highly secure MoD ComputerCentre. The scope of work includes systems modelling, IT maintenance andsupport, operational analysis, software development and team management. Inaddition, MASS has recently won a five year extension contract (valued at £6.5million) to continue its specialist support services provided to the UK's AirWarfare Centre at RAF Waddington in Lincoln. The scope of its work includestactics and countermeasures development, IT maintenance and support and databasedevelopment for the tri-service Defence Electronic Warfare Centre. InElectronic Warfare, MASS also provides independent advice, training, datasupport and data management tools and is a contractor in the provision of EWOperational Support services. It has established a secure installation inLincoln from which these services are delivered to both UK and export customers.In the latter case, these are either provided directly or in conjunction withequipment manufacturers. In Secure Communications, MASS has particular capabilities in research studies,design services, flight qualification, security accreditation and encryptionsolutions. It has successfully produced a number of systems in recent years. Key programmes have included the development of equipment for the Bowmancommunication system, the US JTRS programme, secure helicopter communicationsand secure radio management systems for large airborne platforms. Inparticular, MASS was awarded a three year £9 million contract in March 2006 todevelop, integrate and support an improved communications and radio managementcapability on one of the UK's leading ISTAR platforms. Moreover, MASS's securecommunications capability includes secure networks and the integration ofsystems in secure shared working environments. MASS has approximately 100 employees of whom approximately 80% are professionalengineers with the first degrees in areas such as electronic engineering,cybernetics, communications, computing, mathematics and physics. In the year ended 31 March 2006, MASS reported an audited turnover of £11.0million (2005: £11.2 million), profit before tax, interest and exceptionalitems of £0.3 million (2005: £0.5 million) and profit before tax of £0.6m (2005:£0.6m). In 2006, an exceptional profit of £0.2m was earned on the sale of afixed asset investment. MASS has a substantial order book which currentlystands at approximately £34 million. The assets of Mass on completion areestimated to be £0.3 million (excluding the £1m in cash paid into MASS as partof the pre-sale restructuring described below). Reasons for the acquisition Cohort was floated in March 2006 with the stated aim of building an independentgroup in defence technical services, including through the acquisition ofcomplementary companies. The Directors of Cohort believe that MASS's activitiesare complementary to those of the group's existing operations carried outthrough its current sole operating subsidiary, SCS. SCS has a particularstrength in the land based aspects of defence whereas MASS has well establishedfootprints in the air and maritime sectors. Together SCS and MASS havesignificant presences in terms of long term contracts at key Joint (land, seaand air) defence establishments: SCS at the Joint Warfare Development andTraining Centre of the Permanent Joint Headquarters at Northwood and MASS at theDefence Electronic Warfare Centre at RAF Waddington. The Directors believe that the acquisition will raise the profile of the Cohortgroup across the MoD, provide a platform to bid for larger contracts andenhance the group's ability to cross sell its services into different areas ofdefence. MASS's strong order book provides considerable forward visibility. The Directorsof Cohort anticipate that the acquisition will be earnings enhancing (beforegoodwill amortisation) in the first full year of ownership. This statementshould not be interpreted to mean that the Company's future earnings per sharefollowing the acquisition will necessarily be greater than or equal to theCompany's historical earnings per share. Terms of the acquisition Pursuant to the acquisition agreement dated 27 July 2006 ("AcquisitionAgreement"), Cohort has conditionally agreed to acquire the entire issued sharecapital of MASS Communications Systems Limited, the holding company of MASS foran initial net consideration of £12.5 million. As part of the arrangements for a pre-sale restructuring of the MASS group,Cohort has agreed to pay one of the Vendors an additional £1 million in cash,which will be used to acquire certain assets from MASS Communications SystemsLimited not being acquired by Cohort, which in turn will be acquired by Cohortwith the benefit of the additional £1 million in cash on the balance sheet,hence the net consideration of £12.5 million. The Vendors will thereforereceive a total initial payment of £13.5 million including £12.5 million incash, a further £0.25 million being paid to the Vendors by a continuing directorof MASS as referred to above, and the balance of £0.75 million being satisfiedin Consideration Shares (555,556 new Ordinary Shares valued at the PlacingPrice). The Vendors will also be entitled to further deferred paymentstotalling no more than £0.5 million subject to MASS winning two specificsubstantial overseas contracts within 24 months after completion of thetransaction, in which event the deferred sums are to be paid as a commissionagainst revenues received under those contracts. The Acquisition Agreement isconditional, inter alia, on the Placing Agreement between the Company andInvestec becoming unconditional in all respects, including the admission to AIMof the new Ordinary Shares issued pursuant to that agreement and it not beingterminated in accordance with its terms. The Placing Investec, as agent for Cohort, has agreed to procure subscribers for 1,050,000Ordinary Shares ("Cash Placing Shares") or, failing which, to subscribe itselffor such shares at the Placing Price on and subject to the terms of a placingagreement dated 27 July 2006 between Cohort and Investec ("Placing Agreement"). The Cash Placing is conditional, inter alia, on the Acquisition Agreementremaining in full force and effect, the Placing Agreement not being terminatedin accordance with its terms and admission of the Cash Placing Shares to tradingon the AIM market of the London Stock Exchange and becoming effective inaccordance with the AIM Rules by no later than 31 July 2006 (or such later dateas may be agreed being no later than 14 August 2006). It is expected thatdealings in the Cash Placing Shares will commence on AIM at 8am on 31 July 2006.The Cash Placing is not conditional upon the Acquisition Agreement beingcompleted or the Vendor Placing Shares being issued. Investec, as agent for Cohort, has agreed to procure subscribers for 5,500,000new Ordinary Shares ("Vendor Placing Shares") or, failing which, subscribeitself for such shares at the Placing Price on and subject to the terms of thePlacing Agreement with the proceeds of the placing of £7.4 million being paid tothe Vendors. The Vendor Placing is conditional, inter alia, on the AcquisitionAgreement being completed, the Placing Agreement not being terminated inaccordance with its terms and admission of the Cash Placing Shares and theadmission of the Vendor Placing Shares to trading on the AIM market of theLondon Stock Exchange and becoming effective in accordance with the AIM Rules byno later than 1 August 2006 (or such later date as may be agreed being no laterthan 15 August 2006). It is expected that dealings in the Vendor Placing Shares will commence on AIMat 8am on 1 August 2006. The Cash Placing is not conditional upon theAcquisition Agreement being completed or the Vendor Placing Shares being issued.On Admission, the new Ordinary Shares will rank pari passu in all respects withthe existing ordinary shares in Cohort, including the right to receive thedividend of 0.4p per share payable on 6 September 2006 to shareholders on theregister on 4 August 2006 (subject to approval at the annual general meeting on31 August 2006). Subscriptions Simon Walther, Finance Director of Cohort, has agreed to subscribe for 10,000new Ordinary Shares at the Placing Price. Following the issue of these shares,Mr Walther will be beneficially interested in 10,000 Ordinary Sharesrepresenting 0.03% of the enlarged issued share capital. A continuing directorof MASS has also agreed to subscribe for 37,037 new Ordinary Shares at thePlacing Price. These subscriptions ("Subscription Shares") are being carriedout on the same terms as the Cash Placing. Current Trading and Prospects Announcing its maiden preliminary results for the year ended 30 April 2006 on 6July 2006, the Company announced that the Board was positive about the outlookfor the group. The Board remains of this opinion. Admission, Settlement and Dealings Application has been made to the AIM Market of the London Stock Exchange for theConsideration Shares, the Cash Placing Shares, the Vendor Placing Shares andthe Subscription Shares to be admitted to trading. It is expected that Admissionof the Cash Placing Shares and the Subscription Shares will become effective andthat dealings will commence at 8.00am on 31 July 2006. It is expected thatAdmission of the Consideration Shares and the Vendor Placing Shares will becomeeffective and that dealings will commence at 8.00am on 1 August 2006. It isexpected that the Cash Placing Shares and the Vendor Placing Shares will beissued in uncertificated form and that CREST accounts will be credited on 31July 2006 for the Cash Placing Shares and on 1 August 2006 for the VendorPlacing Shares. Investec Investment Banking, a division of Investec Bank (UK) Limited, which isauthorised and regulated by the Financial Services Authority and is a member ofthe London Stock Exchange, is acting exclusively for Cohort in connection withthe Placing and is not acting for any other person other than Cohort and willnot be responsible to any person other than Cohort for providing theprotections afforded to its customers or for providing advice on thetransactions or arrangements referred to in this announcement. Appendix Terms and Conditions of and Important Information relating to the Vendor Placingand the Cash Placing (together the "Placings") By participating in the Vendor Placing or the Cash Placing and acquiring VendorPlacing Shares or Cash Placing Shares in the capital of the Company placeeswill be agreeing that they have read and understood this Appendix in itsentirety and to be making such offer to acquire Vendor Placing Shares or CashPlacing Shares on the terms and conditions, and to be providing therepresentations, warranties and acknowledgements, contained in this Appendix. The Placings, and the terms and conditions herein, are directed exclusively atinvestment professionals (within Article 19(5) of the Financial Services andMarkets Act 2000 (Financial Promotion Order) 2005 ("FPO") and high net worthcompanies, unincorporated associations etc (within Article 49 of the FPO) (suchcategories of investors being referred to as "Relevant Persons") who are alsoqualified investors for the purposes of section 86 of the Financial Services andMarkets Act 2000 ("FSMA"). No person other than Relevant Persons contacted byInvestec may participate in the Placings or rely on any communication relatingto the same. Accordingly, this announcement is exempt from the generalrestriction set out in Section 21 of FSMA on the communication of invitations orinducements to engage in investment activity and has not been approved by aperson who is authorised under the FSMA. Members of the public are not entitled to take part in the Vendor Placing or theCash Placing and this announcement is communicated to them for the purposes ofinformation only. The offer of the Vendor Placing Shares and the Cash PlacingShares has not been made to the public for the purposes of the section 102B ofFSMA. This announcement and the terms and conditions herein must not be reliedon, acted on or responded to by persons who are not Relevant Persons. This announcement and Appendix do not constitute an offer to sell or issue orsolicitation of an offer to buy or subscribe for new Ordinary Shares in anyjurisdiction, including, without limitation, the United Kingdom, the UnitedStates, Canada, Australia, Japan and the Republic of Ireland. This announcementand the information contained herein are not for publication or distribution,directly or indirectly, to persons in the United States, Canada, Australia,Japan, the Republic of Ireland or in any jurisdiction in which such publicationor distribution is unlawful. The Vendor Placing Shares and the Cash PlacingShares referred to in this announcement have not been and will not be registeredunder the US Securities Act of 1933 ("the Securities Act") and may not beoffered or sold within the United States absent registration or an exemptionfrom registration. The Vendor Placing Shares and the Cash Placing Shares are tobe offered and sold outside the United States in accordance with Regulation Sunder the Securities Act. The distribution of this announcement and the placing and/or issue of the VendorPlacing Shares and the Cash Placing Shares in certain jurisdictions may berestricted by law. Persons to whose attention this announcement has been drawnare required by the Company and Investec to inform themselves about and toobserve any such restrictions. Any acquisition or application for Cash Placing Shares or Vendor Placing Sharesby placees should only be made on the basis of information contained in thisdocument. The Cash Placing Investec, as agent for Cohort, has conditionally agreed to procure subscribersfor 1,050,000 Ordinary Shares ("Cash Placing Shares") or, failing which, tosubscribe itself for such shares at a price of 135p per share (the "PlacingPrice") to raise approximately GBP1.4 million on and subject to the terms of aplacing agreement dated 27 July 2006 between Cohort and Investec ("PlacingAgreement"). The placing of the Cash Placing Shares ("Cash Placing") isconditional, inter alia, on the Acquisition Agreement remaining in full forceand effect, the Placing Agreement not being terminated in accordance with itsterms and admission of the Cash Placing Shares to trading on the AIM market ofthe London Stock Exchange and becoming effective in accordance with the AIMRules ("Cash Placing Shares Admission") by no later than 31 July 2006 (or suchlater date as may be agreed being no later than 14 August 2006). The Cash Placing is not conditional upon the Acquisition Agreement beingcompleted or the Vendor Placing Shares being issued. Application has been made to the London Stock Exchange for the admission of theCash Placing Shares to trading on AIM. It is expected that Admission will occurand that dealings will commence on 31 July 2006 at which time it is alsoexpected that the Cash Placing Shares will be enabled for settlement in CREST. Vendor Placing Investec, as agent for Cohort, has agreed to procure subscribers for 5,500,000new Ordinary Shares ("Vendor Placing Shares") or, failing which, subscribeitself for such shares at the Placing Price on and subject to the terms of thePlacing Agreement with the proceeds of the Vendor Placing of £7.4 million beingpaid to the Vendors. The placing of the Vendor Placing Shares ("Vendor Placing")is conditional, inter alia, on: the Acquisition Agreement being completed, thePlacing Agreement not being terminated in accordance with its terms and CashPlacing Shares Admission by no later than 31 July 2006 (or such later date asmay be agreed being no later than 14 August 2006) and admission of the VendorPlacing Shares to trading on the AIM market of the London Stock Exchange andbecoming effective in accordance with the AIM Rules ("Vendor Placing SharesAdmission") by no later than 1 August 2006 (or such later date as may be agreedbeing no later than 15 August 2006). Prospective Placees will be contacted by Investec to invite them to submit a bidin the Placing process for either Cash Placing Shares and or Vendor PlacingShares. If a bid is successful, the Placee's allocation will be confirmed to itorally following the close of the Cash Placing or the Vendor Placing process,and a conditional contract note will be dispatched as soon as possiblethereafter. Investec's oral confirmation to the Placee after the Cash Placingprocess or the Vendor Placing process has closed in connection with thisannouncement will constitute a legally binding commitment upon the Placee tosubscribe for the number of Cash Placing Shares or Vendor Placing Sharesallocated to it on the terms and conditions set out in this Appendix. Investecis arranging the Cash Placing and the Vendor Placing as agent of the Company.Participation will only be available to persons invited to participate byInvestec. Further terms of the Placing Agreement If the conditions of the Placing Agreement applicable to the Cash Placing arenot fulfilled or waived on or before 8.00 am on 31 July 2006 (or such latertime and date as the Company and Investec may agree, being no later than 8.00 amon 14 August 2006) the Cash Placing will not become unconditional and any CashPlacing monies paid in advance in respect of Cash Placing Shares will bereturned to the placees, without interest, as soon as practicable thereafter. If the conditions of the Placing Agreement applicable to the Vendor Placing arenot fulfilled or waived on or before 8.00 am on 1 August (or such later timeand date as the Company and Investec may agree, being no later than 8.00 am on15 August 2006) the Vendor Placing will not become unconditional and any VendorPlacing monies paid in advance in respect of Vendor Placing Shares will bereturned to the placees, without interest, as soon as practicable thereafter. In consideration of its services in connection with the Cash Placing, theCompany will pay to Investec a commission of a four percent of the aggregatevalue, at the Placing Price, of the Cash Placing Shares. In consideration ofits services in connection with the Vendor Placing, Investec will receive fromthe Vendor Placing proceeds a commission of a four percent of the aggregatevalue, at the Placing Price, of the Vendor Placing Shares. The Placing Agreement contains warranties given by the Company with respect tothe Group, its businesses and certain matters connected with the Placing.Investec is entitled to terminate the Placing Agreement in certain circumstancesprior to Admission, principally in the event that any of the warrantiescontained therein are, or become, materially untrue, inaccurate or misleading orif an event of force majeure arises. In addition, the Company has given anindemnity to Investec and its affiliates in respect of, amongst other things,the performance by Investec of its services in connection with the Placings andthe applications on behalf of the Company to the London Stock Exchange for CashPlacing Admission and Vendor Placing Admission. The exercise by Investec of any right of termination under the Placing Agreementshall be within its absolute discretion and Investec shall not have anyliability to any Placee, or any other person for whom any Placee is subscribingPlacing Shares, in respect of any decision which either may make as to whetheror not to exercise any right of termination or any of its other rights under thePlacing Agreement. General These terms and conditions apply to persons making an offer to subscribe forCash Placing Shares under the Cash Placing and or an offer to subscribe forVendor Placing Shares under the Vendor Placing. Each person to whom theseconditions apply, as described above, who confirms his agreement to Investec tosubscribe for Cash Placing Shares or Vendor Placing Shares (which may includeInvestec and/or its nominee(s)) hereby agrees with each of Investec and theCompany to be bound by these terms and conditions as being the terms andconditions on which the Cash Placing Shares or Vendor Placing Shares will beissued under the Placings. A Placee shall, without limitation, become so boundif Investec confirms to it (i) the Placing Price and (ii) its allocation (the"Confirmation"). Conditional on (i) Cash Placing Shares Admission occurring on 31 July 2006 orsuch later date as the Company and Investec may agree (not being later than 14August 2006), and (ii) Investec having given Confirmation, each Placee agrees tosubscribe for the number of Cash Placing Shares allocated to it, at the PlacingPrice. To the fullest extent permitted by law, each Placee acknowledges andagrees that it will not be entitled to exercise any remedy of rescission at anytime. This does not affect any other rights a Placee may have. A conditionalcontract note will be dispatched as soon as possible following the Confirmation. Each Placee undertakes to pay the Placing Price for the Cash Placing Sharesissued to such Placee on a delivery versus payment ("DVP") basis within CRESTas shall be directed by Investec. Liability for stamp duty and stamp dutyreserve tax is described below. In the event of failure by any Placee to pay asso directed, the relevant Placee shall be deemed hereby to have appointedInvestec or any nominee of Investec to sell (in one or more transactions) any orall of the Cash Placing Shares in respect of which payment shall not have beenmade as directed by Investec. Conditional on (i) Vendor Placing Shares Admission occurring on 1 August 2006 orsuch later date as the Company and Investec may agree (not being later than 15August 2006), and (ii) the Confirmation, each Placee agrees to subscribe for thenumber of Vendor Placing Shares allocated to it, at the Placing Price. To thefullest extent permitted by law, each Placee acknowledges and agrees that itwill not be entitled to exercise any remedy of rescission at any time. This doesnot affect any other rights a Placee may have. A conditional contract note willbe dispatched as soon as possible following the Confirmation. Each Placee undertakes to pay the Placing Price for the Vendor Placing Sharesissued to such Placee on a delivery versus payment ("DVP") basis within CRESTas shall be directed by Investec. Liability for stamp duty and stamp dutyreserve tax is described below. In the event of failure by any Placee to pay asso directed, the relevant Placee shall be deemed hereby to have appointedInvestec or any nominee of Investec to sell (in one or more transactions) any orall of the Vendor Placing Shares in respect of which payment shall not have beenmade as directed by Investec. This announcement is the sole responsibility of the Company. Investec is actingas nominated adviser and broker to the Company and to no other person inrelation to the Placings. Investec will not be responsible to any person otherthan the Company for providing the protections afforded to the customers ofInvestec nor for advising any person other than the Company on the transactionsand arrangements referred to in this document. No offering document or prospectus has been or will be submitted to be approvedby the UKLA in relation to the Placings and the Placees' commitments will bemade solely on the basis of the information contained in this announcement. EachPlacee, by accepting a participation in the Cash Placing or the Vendor Placing,agrees that the content of this announcement is exclusively the responsibilityof the Company and confirms that it has neither received nor relied on any otherinformation, representation, warranty or statement made by or on behalf ofInvestec or the Company and neither Investec or the Company will be liable forany Placee's decision to accept this invitation to participate in the CashPlacing or the Vendor Placing based on any other information, representation,warranty or statement which the Placee may have obtained or received. EachPlacee acknowledges and agrees that it has relied on its own investigation ofthe business, financial or other position of the Company in deciding toparticipate in the Cash Placing or the Vendor Placing. Nothing in this paragraphshall exclude the liability of any person for fraudulent misrepresentation. By participating in either of the Placings, each Placee irrevocably represents,warrants and undertakes to Investec and the Company that: (a) it and/or each person on whose behalf it is participating (in whole or inpart) in the Cash Placing or the Vendor Placing or to whom it allocates its("Placing Shares" which shall mean Cash Placing Shares and or Vendor PlacingShares) in whole or in part: (i) has the capacity and authority and is entitled to enter into and perform itsobligations as a subscriber of Placing Shares and will honour suchobligations; and (ii) has fully observed all laws of relevant jurisdictions and obtained allnecessary governmental or other consents in either case which may be requiredin relation to the subscription by it of Placing Shares; (b) it is not a person who is resident in, or a citizen of, the United States,Canada, Australia, the Republic of Ireland or Japan (or an agent or nominee ofsuch a person) or a corporation, partnership or other entity organised under thelaws of any such jurisdiction (or an agent or nominee of such a person); (c) it is a Relevant Person and a qualified investor for the purposes of section86 of FSMA; (d) in agreeing to subscribe for Placing Shares it has received and read thisdocument including this Appendix and is not relying on any information,representation or warranty relating to the Placing, the Placing Shares or theCompany other than as contained in this document and it has not relied on and isnot relying on any representation or warranty or agreement by Investec or theCompany or any of their respective directors, employees or agents or any otherperson except as set out in the express terms herein; (e) save where Investec has been given prior written notice to the contrary, inparticipating in the Placing it is acting as principal and for no other personand that its acceptance of that participation will not give any other person acontractual right to require the issue by the Company of any of the PlacingShares; (f) it irrevocably confirms Investec's discretion with regard to the PlacingAgreement and agrees that Investec owes it no fiduciary or other duties inrespect of any claim it may have relating to the Cash Placing or the VendorPlacing (together the "Placings" and individually a "Placing") ; (g) it acknowledges that the Placing Shares have not been and will not beregistered under the Securities Act or under the securities laws of any Stateof the United States, that the relevant clearances have not been and will not beobtained from the Securities Commission of any province of Canada and that thePlacing Shares have not been and will not be registered under the securitieslaws of Australia, the Republic of Ireland or Japan and, therefore, the PlacingShares may not, subject to certain exceptions, be directly or indirectly offeredor sold in the United States, Canada, Australia, the Republic of Ireland orJapan; (h) it acknowledges and agrees that neither it nor any affiliate, nor any personacting on its or any affiliate's behalf, has or will offer, sell, take up,renounce, transfer or deliver directly or indirectly any Placing Shares withinthe United States, Canada, Australia, the Republic of Ireland or Japan or offer,sell, take up, renounce, transfer or deliver in favour of a resident of theUnited States, Canada, Australia, the Republic of Ireland or Japan; (i) it has not offered or sold and will not offer or sell any Placing Shares inthe United Kingdom prior to Admission except in circumstances which have notresulted and will not result in an obligation to publish an approved prospectusarising under section 85(1) of the FSMA or a breach of such section; (j) it has complied with all relevant laws of all territories, or obtained allrequisite governmental or other consents which may be required in connectionwith its participation in the Placing; that it has complied with all requisiteformalities and that it has not taken any action or omitted to take any actionwhich will or may result in Investec or the Company or any of their respectivedirectors, officers, agents, employees or advisors acting in breach of the legaland regulatory requirements of any territory in connection with the Placings orits application; that it is not in a territory in which it is unlawful to makean offer to subscribe for Placing Shares; and that it will pay any issue orother taxes due under any relevant non-UK laws; (k) it acknowledges and agrees in connection with its participation in thePlacing that Investec is not acting for it in relation to the Placing orotherwise and that Investec will not have any duties or responsibilities to itfor providing the protections afforded to their customers or for advising itwith regard to the Placings or the Placing Shares, nor do the contents of thisannouncement constitute the giving of investment advice by Investec to it andnor does it expect Investec to have a duty to it similar or comparable to the"best execution", "suitability" and "risk warnings" rules of The FinancialServices Authority; (l) it has obtained all necessary consents and authorities to enable it to giveits commitment to subscribe for Placing Shares and to perform its obligationsas set out herein; (m) save where Investec has been given prior written notice to the contrary, itis not a person falling within subsections (6), (7) or (8) of sections 67 or 70or subsections (2) and (3) of section 93 or subsection (1) of section 96 of theFinance Act 1986 (or an agent or nominee of such person); (n) save where Investec has been given prior written notice to the contrary, theissue of Placing Shares to it (whether as principal, agent or nominee) will notbe subject to stamp duty or stamp duty reserve tax at the increased ratesreferred to in sections 67 or 93 (Depositary Receipts) or sections 70 or 96(Clearance Services) of the Finance Act 1986; (o) in the case of a person who confirms to Investec on behalf of a Placee anagreement to acquire Placing Shares and/or who settle with Investec on a DVPbasis, that person represents and warrants that he has authority to do all suchacts on behalf of the Placee; (p) to the extent that a Placee is acquiring Placing Shares on behalf of a thirdparty and prior written notice of such matter has been given to Investec ascontemplated by paragraph (e) of this appendix: (i) such Placee has carried out applicable procedures to verify the identity ofsuch third party for the purposes of the Money Laundering Regulations 2003 (the"Regulations"); (ii) such Placee has complied fully with its obligations pursuant to the Regulations; and (iii) such Placee will provide Investec on demand with any information it might require for the purposes of verification under the Regulations; (q) it is aware of, has complied with and will comply with its obligations inconnection with money laundering under the Proceeds of Crime Act 2002 andinsider dealing under the Criminal Justice Act 1993; (r) it acknowledges that the issue of the Placing Shares to it will be issued subject to the terms and conditions set out herein; (s) it has read this announcement; (t) acknowledges that no offering document or prospectus has been prepared inconnection with the Placing of the Placing Shares; (u) acknowledges that the content of this announcement is exclusively theresponsibility of the Company and that neither Investec nor any person actingon their behalf is responsible for or shall have any liability for anyinformation, representation or statement relating to the Company contained inthis announcement or any information previously published by or on behalf of theCompany and will not be liable for any Placee's decision to participate in thePlacings based on any information, representation or statement contained in thisannouncement or otherwise; and (v) represents and warrants that it has not received a prospectus or otheroffering document and has not relied on any information other than informationcontained in this announcement or any information previously published by or onbehalf of the Company and acknowledges and agrees that it has relied on its owninvestigation of the business, financial or other position of the Company indeciding to participate in the Placing. In the event that a Placee is not able to give the warranties in (m) and (n)above, stamp duty or stamp duty reserve tax may be chargeable or may bechargeable at a higher rate. Neither Investec nor the Company will beresponsible for any resulting liability to stamp duty or stamp duty reserve tax,which shall be for the account of the Placee and in respect of which the Placeeagrees to indemnify, and keep indemnified, Investec and the Company. Each Placee irrevocably appoints any duly authorised officer of Investec as itsagent for the purpose of executing and delivering to the Company and/or itsregistrars any documents on its behalf necessary to enable it to be registeredas the holder of any of the Placing Shares offered to it. Settlement of the transactions in the Placing Shares following Admission willtake place within the CREST system against Investec's CREST account 331. Investec will endeavour to meet the demands of those Placees indicating thatthey wish to hold their Placing Shares in certificated form. In the case of a joint agreement to subscribe for Placing Shares, references toa Placee in these terms and conditions are to each Placee who is a party tosuch agreement and each such Placee's liability is joint and several. These terms and conditions and all documents and agreements into which theseterms and conditions are incorporated by reference or otherwise validly form apart will be governed by and construed in accordance with English law. For theexclusive benefit of Investec and the Company, each Placee irrevocably submitsto the exclusive jurisdiction of the English courts in respect of these matters.This does not prevent an action being taken against the Placee in anotherjurisdiction. END This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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