Arbuthnot Regulatory News (ARBB)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, OR INTO, THE UNITED STATES, AUSTRALIA, SOUTH AFRICA, CANADA OR JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL

PRESS ANNOUNCEMENT

28 October 2011

Initial Public Offering of Secure Trust Bank PLC

Publication of Admission Document

Further to the announcement by Arbuthnot Banking Group PLC ("Arbuthnot") on 18 October 2011 regarding the proposed flotation of its subsidiary, Secure Trust Bank PLC ("Secure Trust Bank"), Arbuthnot today announces the pricing of the placing of new and existing ordinary shares in Secure Trust Bank (the "Placing") and the publication of the Admission Document. Admission of Secure Trust Bank's ordinary shares to trading on AIM ("Admission") and commencement of dealings in Secure Trust Bank's ordinary shares on AIM is expected to occur on 2 November 2011 under AIM symbol "STB".

Secure Trust Bank is a retail bank operating in the United Kingdom. Secure Trust Bank's lending activities comprise motor finance, retail point of sale finance and personal unsecured lending. Lending is funded by customer deposits, comprising instant access, notice and term deposit accounts, fee-based current accounts and the OneBill account, a household budgeting product. Profit before tax and group recharges in the six months to 30 June 2011 was £5.0 million. For the period ended 31 December 2010, profit before tax and group recharges was £9.6 million. As at 30 June 2011, Secure Trust Bank had total assets of £247.0 million and shareholders' equity of £16.5 million.

Placing statistics:

The Placing is only being directed at and made available to certain qualifying investors in the United Kingdom. The Placing is not being made available to the public. The terms and conditions of the Placing are set out in the Appendix to this announcement.

The proceeds of the issue of the new ordinary shares will be used to provide Secure Trust Bank with further capital to support significant expansion of the loan book including, where appropriate, to make selective acquisitions of loan books and businesses and to grow within its chosen markets.

The cash proceeds received by Arbuthnot from the sale of existing ordinary shares and the payment of a £3.4 million dividend to Arbuthnot by Secure Trust Bank, conditional on Admission, will be used by Arbuthnot to increase the capital of the Arbuthnot group and develop its strategic plans.

On Admission, Arbuthnot will retain a substantial majority shareholding in Secure Trust Bank, with 75.5 per cent. of Secure Trust Bank's ordinary shares. Arbuthnot will continue to consolidate Secure Trust Bank for accounting and regulatory capital purposes. The shareholding in Secure Trust Bank held by shareholders other than Arbuthnot will be reflected as a minority interest in the accounts of Arbuthnot.

Arbuthnot has agreed to a six month lock-up arrangement with Secure Trust Bank's broker, Collins Stewart Europe Limited ("Collins Stewart"), and nominated adviser, Hawkpoint Partners Limited ("Hawkpoint"). 75.5 per cent. of Secure Trust Bank's ordinary shares will be subject to such lock-up arrangement following Admission.

The Admission Document, which was published today, is available to the public, free of charge during normal business hours on any weekday (except Saturdays, Sundays and public holidays) at the offices of Simmons & Simmons LLP, CityPoint, One Ropemaker Street, London, EC2Y 9SS from the date of this announcement until one month from the date of Admission, and on Secure Trust Bank's website (www.securetrustbank.com).

Hawkpoint is acting as nominated adviser and financial adviser to Arbuthnot and to Secure Trust Bank and Collins Stewart is acting as Secure Trust Bank's broker in respect of the Placing and Admission. Hawkpoint and Collins Stewart have been appointed as Secure Trust Bank's nominated adviser and broker respectively following Admission.

Enquiries:

IMPORTANT NOTICE

This announcement does not constitute or form part of, and should not be construed as, an offer to sell or issue, or a solicitation of any offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever nor should the fact of its distribution form the basis of, or be relied on in connection with, any contract therefor.

Investors should not subscribe for or purchase any securities referred to in this announcement except on the basis of information in the Admission Document which has been issued by Secure Trust Bank in connection with the Placing of and admission of the Ordinary Shares to trading on AIM. In the event of any discrepancy between this announcement and the Admission Document, the Admission Document will prevail. The information contained in this announcement is for background purposes only. It is not the purpose of this announcement to provide, and reliance may not be placed on this announcement as providing, a complete and comprehensive analysis of Arbuthnot's or Secure Trust Bank's financial or commercial position or prospects.

The date of Admission may be influenced by circumstances such as market conditions. There is no guarantee that Admission will occur and financial decisions should not be based on Arbuthnot's intentions in relation to Admission at this stage. Investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested. Persons considering investment in such investments should consult an authorised person specialising in advising on such investments. This announcement does not constitute a recommendation concerning any offer of securities. The value of securities can decrease as well as increase. Potential investors should consult a professional adviser as to the suitability of any investment for the person concerned.

No representation or warranty, express or implied, is or will be made by or on behalf of Hawkpoint, and no responsibility or liability is or will be accepted by Hawkpoint or its affiliates, as to the accuracy, completeness or verification of the information set out in this announcement, and nothing contained in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. Hawkpoint and each of its affiliates accordingly disclaims, to the fullest extent permitted by law, all and any liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement or any such statement.

The distribution of this announcement outside the United Kingdom may be restricted by law and therefore any persons outside the United Kingdom into whose possession this announcement comes should inform themselves about and observe any such restrictions in connection with the Placing, the acquisition of securities and/or the distribution of this announcement. Any failure to comply with such restrictions may constitute a violation of the securities laws of any jurisdiction outside the United Kingdom. This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction in which such offer would be unlawful. In particular, this announcement does not constitute an offer to buy securities, and it is not for distribution, directly or indirectly, in or into the United States, Australia, South Africa, Canada or Japan. The Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended, any state securities laws in the United States or any securities laws of Australia, South Africa, Canada or Japan or in any country, territory or possession where to offer them may contravene local securities laws or regulations. Accordingly, the Ordinary Shares may not, subject to certain limited exceptions, be offered or sold, directly or indirectly, in or into the United States, Australia, South Africa, Canada or Japan.

This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding Arbuthnot's or Secure Trust Bank's financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would, "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Arbuthnot's and Secure Trust Bank's control that could cause the actual results, performance or achievements of Arbuthnot or Secure Trust Bank to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Arbuthnot's and Secure Trust Bank's present and future business strategies and the environment in which Arbuthnot and Secure Trust Bank will operate in the future. These forward-looking statements speak only as at the date of this announcement. Arbuthnot expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in Arbuthnot's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules for Companies.

Hawkpoint Partners Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as nominated adviser to Arbuthnot Banking Group PLC and Secure Trust Bank PLC and is acting for no-one else in connection with the Placing and Admission and will not be responsible to anyone other than Arbuthnot Banking Group PLC and Secure Trust Bank PLC for providing the protections afforded to clients of Hawkpoint Partners Limited nor for providing advice in connection with the Placing and Admission or any other matter referred to herein.

The contents of this announcement, which have been prepared by and are the sole responsibility of Arbuthnot, have been approved by Hawkpoint solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000.

Neither the content of Arbuthnot's or Secure Trust Bank's website nor any website accessible by hyperlinks on Arbuthnot's website is incorporated in, or forms part of, this announcement.

APPENDIX

Terms and Conditions of the Placing of new and existing shares in Secure Trust Bank

IMPORTANT INFORMATION FOR PLACEES ONLY (PURSUANT TO THE PLACING OF NEW AND EXISTING ORDINARY SHARES IN SECURE TRUST BANK)

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT AND REFERRED TO HEREIN ARE DIRECTED ONLY AT PERSONS SELECTED BY COLLINS STEWART EUROPE LIMITED ("COLLINS STEWART" AND THE "PLACING AGENT") WHO ARE "INVESTMENT PROFESSIONALS" FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "FPO") OR "HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC" FALLING WITHIN ARTICLE 49(2) OF THE FPO OR TO PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.

THE ORDINARY SHARES THAT ARE THE SUBJECT OF THE PLACING (THE "PLACING SHARES") ARE NOT BEING OFFERED OR SOLD TO ANY PERSON IN THE EUROPEAN UNION, OTHER THAN TO "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE"), WHICH INCLUDES LEGAL ENTITIES WHICH ARE REGULATED BY THE FINANCIAL SERVICES AUTHORITY (THE "FSA") OR ENTITIES WHICH ARE NOT SO REGULATED WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN SECURITIES.

The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold or delivered, directly or indirectly, in or into the United States absent registration except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. No public offering of the Placing Shares is being made in the United States. The Placing (as defined below) is being made outside the United States in offshore transactions (as defined in Regulation S under the Securities Act ("Regulation S")) meeting the requirements of Regulation S under the Securities Act. Persons receiving this announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Placing.

This announcement does not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction including, without limitation, the United States, Canada, Australia, South Africa, Japan or any other jurisdiction in which such offer or solicitation is or may be unlawful (a "Prohibited Jurisdiction"). This announcement and the information contained herein are not for publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

The distribution of this announcement, the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law and/or regulation. No action has been taken by Secure Trust Bank, Collins Stewart or any of their respective Affiliates (as defined below) that would permit an offer of the Placing Shares or possession or distribution of this announcement, the Admission Document or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this announcement and the Admission Document are required to inform themselves about and to observe any such restrictions.

Collins Stewart Europe Limited, which is authorised and regulated in United Kingdom by the Financial Services Authority, is acting for Secure Trust Bank and Arbuthnot and for no one else in connection with the Placing and will not be responsible to anyone other than Secure Trust Bank and Arbuthnot for providing the protections afforded to clients of Collins Stewart Europe Limited or for affording advice in relation to the Placing, or any other matters referred to herein.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral offer to take up Placing Shares is deemed to have read and understood this announcement and the Admission Document in its entirety and to be providing the representations, warranties, undertakings, agreements and acknowledgements contained herein.

Details of the Placing Agreement and the Placing Shares

Secure Trust Bank has entered into a placing agreement (the "Placing Agreement") with Arbuthnot, Collins Stewart and Hawkpoint, under which Collins Stewart has, subject to the terms set out therein, agreed to use reasonable endeavours, as agents of Secure Trust Bank and Arbuthnot, to procure Placees for the Placing Shares (the "Placing").

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with each other.

The Placing Shares will be issued free of any encumbrance, lien or other security interest.

Application for listing and admission to trading

Application has been made to London Stock Exchange plc (the "London Stock Exchange") for admission to trading of the Placing Shares on the AIM market of the London Stock Exchange ("Admission"). It is expected that Admission will become effective and that dealings will commence on 2 November 2011, and in any event no later than 4 November 2011.

Participation in, and principal terms of, the Placing

Each of Collins Stewart and its respective Affiliates (as defined below) is entitled to participate as a Placee.

A single price (the "Placing Price") will be payable to Collins Stewart by all Placees.

Prospective Placees will be identified and contacted by Collins Stewart.

The Placing is expected to close at 4.30 p.m. on 28 October 2011. However, Secure Trust Bank may, with the prior approval of Hawkpoint and Collins Stewart, bring forward or postpone this date. In the event such date is changed, Secure Trust Bank will notify investors who have applied for Placing Shares either by post, by electronic mail or by the publication of a notice through a regulatory information service provider to the London Stock Exchange.

Collins Stewart will re-contact and confirm orally to Placees the size of their respective allocations and a trade confirmation will be dispatched as soon as possible thereafter. Collins Stewart's oral confirmation of the size of allocations and each Placee's oral commitments to accept the same will constitute a legally binding agreement pursuant to which each such Placee will be required to accept the number of Placing Shares allocated to the Placee at the Placing Price and otherwise on the terms and subject to the conditions set out herein.

Collins Stewart reserves the right to scale back the number of Placing Shares to be subscribed by any Placee. The Placing Agent also reserves the right not to accept offers to subscribe for Placing Shares or to accept such offers in part rather than in whole. Collins Stewart shall be entitled to effect the Placing by such method as it shall in its sole discretion determine. To the fullest extent permissible by law, neither Collins Stewart or any holding company thereof, nor any subsidiary, branch or affiliate of Collins Stewart (each an "Affiliate") nor any person acting on behalf of any of the foregoing shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither of Collins Stewart nor any Affiliate thereof nor any person acting on its behalf shall have any liability to Placees in respect of its conduct of the Placing. No commissions will be paid to Placees or directly by Placees in respect of any Placing Shares.

Each Placee's obligations will be owed to Secure Trust Bank, Arbuthnot and to Collins Stewart. Following the oral confirmation referred to above, each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Collins Stewart, to pay to Collins Stewart (or as Collins Stewart may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire. Secure Trust Bank shall allot such Placing Shares to each Placee following each Placee's payment to Collins Stewart of such amount.

All obligations of Collins Stewart under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing".

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of Collins Stewart under the Placing Agreement are conditional, inter alia, on:

(i) Admission occurring by no later than 8.00 a.m. on 2 November 2011 (or such later date as may be agreed between Secure Trust Bank and Collins Stewart, not being later than 4 November 2011);

(ii) Secure Trust Bank delivering, by no later than 7.00 a.m. on the day of (and prior to) Admission, to Collins Stewart certificates confirming, inter alia, that none of the warranties given by Secure Trust Bank in the Placing Agreement has been breached or was untrue, inaccurate or misleading when made or is untrue or inaccurate by reference to the facts subsisting on the date of the certificate;

(iii) Secure Trust Bank and Arbuthnot having complied in all material respects with their respective obligations under the Placing Agreement which fall to be performed or satisfied on or prior to Admission; and

(iv) Secure Trust Bank allotting the new ordinary shares, prior to and conditionally only on Admission.

If (a) the conditions are not fulfilled (or to the extent permitted under the Placing Agreement waived by Collins Stewart and Hawkpoint), or (b) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and each Placee's rights and obligations hereunder shall cease and determine at such time and no claim may be made by a Placee in respect thereof. Neither Collins Stewart nor any of its Affiliates 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 it may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition in the Placing Agreement or in respect of the Placing generally.

By participating in the Placing, each Placee agrees that its rights and obligations hereunder terminate only in the circumstances described above and under "Right to terminate under the Placing Agreement" below, and will not be capable of rescission or termination by the Placee.

Right to terminate under the Placing Agreement

Collins Stewart and Hawkpoint may, at any time before Admission, terminate the Placing Agreement by giving notice to Secure Trust Bank if:

a) there has been a breach by Secure Trust Bank or Arbuthnot of any of the warranties given pursuant to the Placing Agreement or any statement made in any of the marketing documents (which includes the Admission Document) was untrue, inaccurate or misleading in any material respect when made or becomes untrue, inaccurate or misleading in any material respect by reference to the facts and circumstances existing from time to time or any matter arising which might reasonably be expected to give rise to a claim under the indemnities contained in the Placing Agreement; or

b) there is a material breach by Secure Trust Bank or Arbuthnot of any of their respective obligations under the Placing Agreement (to the extent such obligations fall to be performed prior to Admission); or

c) in the opinion of Collins Stewart and Hawkpoint (acting in good faith), there has been a material adverse change, whether or not foreseeable at the date of the Placing Agreement, in, or any development involving a prospective material adverse change in or affecting, the condition, financial, operational, legal or otherwise, or the earnings or business affairs or business prospects of the Group (taken as a whole), whether or not arising in the ordinary course of business; or

d) there has been a suspension of trading in securities generally on the London Stock Exchange or the New York Stock Exchange or trading is limited or minimum prices established on any such exchange, a declaration of a banking moratorium in London or by the US federal or New York State authorities or any material disruption to commercial banking or securities settlement or clearance services in the US or the UK or any change, or development involving a prospective change, in national or international financial, economic, political, industrial or market conditions or currency exchange rates or exchange controls, or any incident of terrorism or outbreak or escalation of hostilities or any declaration by the UK or the US of a national emergency or war, in each case the effect of which (either singly or together with any other event referred to in this paragraph) is such as to make it, in the judgment of Collins Stewart and Hawkpoint (in their good faith opinion and following consultation with Secure Trust Bank and Arbuthnot) impracticable or inadvisable to market the Placing Shares or to enforce contracts for the sale of the Placing Shares. 

By participating in the Placing, each Placee agrees with Collins Stewart and Hawkpoint that the exercise by Collins Stewart and Hawkpoint of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Collins Stewart and Hawkpoint and that Collins Stewart and Hawkpoint need not make any reference to the Placee in this regard and that, to the fullest extent permitted by law, Collins Stewart and Hawkpoint shall not have any liability whatsoever to the Placee in connection with any such exercise.

No offering document or prospectus has been or will be prepared in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in the Admission Document, including the terms and conditions of the Placing which are repeated in this appendix. Each Placee, by accepting a participation in the Placing, agrees that the content of the Admission Document is exclusively the responsibility of Secure Trust Bank and the persons stated therein as accepting responsibility for the Admission Document and confirms to Collins Stewart, its Affiliates and Secure Trust Bank that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of Collins Stewart (other than the amount of the relevant Placing participation in the oral confirmation given to Placees and the trade confirmation referred to below), any of its Affiliates, any persons acting on its behalf or Secure Trust Bank other than the Admission Document and neither Collins Stewart nor any of its Affiliates, nor any persons acting on its behalf, nor Secure Trust Bank will be liable for the decision of any Placee to participate in the Placing based on any other information, representation, warranty or statement which the Placee may have obtained or received (regardless of whether or not such information, representation, warranty or statement was given or made by or on behalf of any such persons) other than the Admission Document. By participating in the Placing, each Placee acknowledges to and agrees with Collins Stewart for itself and its Affiliates and as agent for Secure Trust Bank that, except in relation to the information contained in the Admission Document, it has relied on its own investigation of the business, financial or other position of Secure Trust Bank in deciding to participate in the Placing. 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 GB00B6TKHP66) following Admission will take place within the CREST system, using the delivery versus payment (DVP) mechanism, subject to certain exceptions. Collins Stewart reserves the right to require settlement for and delivery of the Placing Shares to Placees by such other means that it deems necessary, if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction. 

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation stating the number of Placing Shares allocated to it, the Placing Price, the aggregate amount owed by such Placee to Collins Stewart and settlement instructions. Placees should settle against CREST ID: 288. It is expected that such trade confirmation will be despatched on 28 October 2011 and that this will also be the trade date. 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 which it has in place with Collins Stewart.

It is expected that settlement will be on 2 November 2011 on a T+3 basis in accordance with the instructions set out in the trade confirmation unless otherwise notified by Collins Stewart.

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 2 percentage points above the base rate of Barclays Bank Plc.

Each Placee is deemed to agree that if it does not comply with these obligations, Collins Stewart may sell any or all of the Placing Shares allocated to the Placee on such Placee's behalf and retain from the proceeds, for its own account and profit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The Placee will, however, remain liable for any shortfall below the aggregate amount owed by such Placee and it may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

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

Insofar as Placing Shares are registered in the Placee's name or that of its nominee or in the name of any person for whom the Placee is contracting as agent or that of a nominee for such person, such Placing Shares will, subject as provided below, be so registered free from any liability to PTM levy, stamp duty or stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax is payable in respect of the issue or transfer of the Placing Shares, neither Collins Stewart nor Secure Trust Bank shall be responsible for the payment thereof. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and Warranties

By participating in the Placing, each Placee (and any person acting on such Placee's behalf):

1. represents and warrants that it has read and understood the Admission Document in its entirety and acknowledges that its participation in the Placing will be governed by the terms of the Admission Document;

2. acknowledges that no prospectus has been prepared in connection with the placing of the Placing Shares;

3. agrees to indemnify on an after-tax basis and hold harmless each of Secure Trust Bank, Arbuthnot, Collins Stewart, their respective Affiliates and any person acting on its behalf 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 announcement and further agrees that the provisions of this announcement shall survive after completion of the Placing;

4. acknowledges that the Placing Shares of Secure Trust Bank will be admitted to the AIM market of the London Stock Exchange, and Secure Trust Bank is therefore required to publish certain business and financial information in accordance with the rules and practices of the London Stock Exchange (collectively, the "Exchange Information") and that the Placee is able to obtain or access the Exchange Information without undue difficulty;

5. acknowledges that neither Collins Stewart, nor any of its Affiliates nor any person acting on their behalf has provided, and will not provide it with any material or information regarding the Placing Shares or Secure Trust Bank other than the Admission Document; nor has it requested Collins Stewart, any of its Affiliates or any person acting on its behalf to provide it with any such material or information;

6. acknowledges that the content of the Admission Document is exclusively the responsibility of Secure Trust Bank and the persons stated therein as accepting responsibility for the Admission Document and that neither Collins Stewart, nor any of its Affiliates nor any person acting on their behalf will be responsible for or shall have any liability for any information, representation or statement relating to Secure Trust Bank contained in the Admission Document or any information previously published by or on behalf of Secure Trust Bank and neither Collins Stewart, nor any of its Affiliates nor any person acting on its behalf will be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in the Admission Document 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 to subscribe for or acquire the Placing Shares is contained in the Admission Document 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 relied on its own investigation with respect to the Placing Shares and Secure Trust Bank in connection with its decision to subscribe for the Placing Shares and acknowledges that it is not relying on any investigation that Collins Stewart, any of its Affiliates or any person acting on their behalf may have conducted with respect to the Placing Shares or Secure Trust Bank and none of such persons has made any representations to it, express or implied, with respect thereto;

7. acknowledges that it has not relied on any information relating to Secure Trust Bank contained in any research reports prepared by Collins Stewart, its Affiliates or any person acting on its or any of its Affiliates' behalf and understands that (i) none of Collins Stewart, any of its Affiliates nor any person acting on its behalf has or shall have any liability for public information or any representation; (ii) none of Collins Stewart, any of its Affiliates nor any person acting on their behalf has or shall have any liability for any additional information that has otherwise been made available to such Placee, whether at the date of publication, the date of the Admission Document or otherwise; and that (iii) none of Collins Stewart, any of its Affiliates nor any person acting on their behalf makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information, whether at the date of publication, the date of the Admission Document or otherwise;

8. represents and warrants that (i) it (or the beneficial owner, as applicable) is entitled to acquire the Placing Shares under the laws and regulations of all relevant jurisdictions which apply to it (or the beneficial owner, as applicable); (ii) it (or the beneficial owner, as applicable) has fully observed such laws and regulations and obtained all such governmental and other guarantees and other consents and authorities which may be required thereunder and complied with all necessary formalities; (iii) it (or the beneficial owner, as applicable) has all necessary capacity to commit to participation in the Placing and to perform its obligations in relation thereto and will honour such obligations; (iv) it (or the beneficial owner, as applicable) has paid any issue, transfer or other taxes due in connection with its (or the beneficial owner's, as applicable) participation in any territory and (v) it (or the beneficial owner, as applicable) has not taken any action which will or may result in Secure Trust Bank, Arbuthnot, Collins Stewart, any of their respective Affiliates or any person acting on their behalf being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing;

9. represents and warrants that the allocation, allotment, issue or transfer and delivery to the Placee, or the person specified by the Placee 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 issue or transfer Placing Shares into a clearance system;

10. represents and warrants that it understands that the Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States of America, its territories or possessions, any state of the United States or the District of Columbia (the "United States") and that Secure Trust Bank has not been registered as an "investment company" under the United States Investment Company Act of 1940, as amended;

11. represents and warrants that neither it nor its Affiliates nor any person acting on its or their behalf have engaged or will engage in any "directed selling efforts" with respect to the Placing Shares;

12. represents and warrants that it is, or at the time the Placing Shares are acquired, it will be, (a) the beneficial owner of such Placing Shares and is neither a person located in the United States of America, its territories or possessions, any state of the United States or the District of Columbia (the "United States") nor on behalf of a person in the United States, (b) acquiring the Placing Shares in an offshore transaction (as defined in Regulation S under the Securities Act) and (c) will not offer or sell, directly or indirectly, any of the Placing Shares in the United States except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

13. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to Admission except to "qualified investors" as defined in Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive;

14. 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 FSMA) relating to the Placing Shares in circumstances in which it is permitted to do so pursuant to section 21 of FSMA;

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

16. if it is a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, it represents, warrants, acknowledges and agrees that the Placing Shares acquired by it have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Placing Shares to the public other than their offer or resale in a Member State of the European Economic Area which has implemented the Prospectus Directive to qualified investors as so defined who are not financial intermediaries or in circumstances in which the prior consent of Collins Stewart has been obtained to each such proposed offer or resale, provided that such consent shall not be given in circumstances where such offer of Placing Shares would result in a requirement for the publication by Secure Trust Bank of a prospectus pursuant to Article 3 of the Prospectus Directive;

17. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Anti-terrorism Crime and Security Act 2001 and the Money Laundering Regulations (2007) (the "Regulations") and, if it is 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;

18. represents and warrants that it is (a) a person falling within Article 19(5) of the FPO or (b) a person falling within Article 49(2)(a) to (d) of the FPO 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;

19. represents and warrants that it is a qualified investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive;

20. undertakes that it (and any person acting on its behalf) will pay for the Placing Shares acquired by it in accordance with the Admission Document on the due time and date set out herein against delivery of such Placing Shares to it, failing which the relevant Placing Shares may be placed with other Placees or sold as Collins Stewart may, in its absolute discretion, determine and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in the Admission Document) which may arise upon the sale of such Placee's Placing Shares on its behalf;

21. acknowledges that none of Collins Stewart, any of its Affiliates nor any person acting on their behalf is making any recommendations to it or advising it regarding the suitability or merits of any transaction it may enter into in connection with the Placing, and acknowledges that neither Collins Stewart, any of its Affiliates nor any person acting on their behalf has any duties or responsibilities to it for providing advice in relation to the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of Collins Stewart's or Hawkpoint's rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;

22. undertakes that (i) the person whom it specifies for registration as holder of the Placing Shares will be (a) the Placee or (b) the Placee's nominee, as the case may be, (ii) neither Collins Stewart nor Secure Trust Bank will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement and (iii) the Placee and any person acting on its behalf agrees to acquire or subscribe for the Placing Shares on the basis that the Placing Shares will be allotted to the CREST stock account of Collins Stewart which will hold them as settlement agent as nominee for the Placees until settlement in accordance with its standing settlement instructions with payment for the Placing Shares being made simultaneously upon receipt of the Placing Shares in the Placee's stock account on a delivery versus payment basis;

23. acknowledges that any agreements entered into by it pursuant to these terms and conditions (and any non-contractual obligations connected with such agreements) shall be governed by and construed in accordance with the laws of England 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 arising out of any such contract;

24. acknowledges that it irrevocably appoints any director of Collins Stewart as its agent for the purposes of executing and delivering to Secure Trust Bank and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing;

25. represents and warrants that it is not a resident of any Prohibited Jurisdiction and acknowledges that the Placing Shares have not been and will not be registered nor will a prospectus be cleared in respect of the Placing Shares under the securities legislation of any Prohibited Jurisdictions and, subject to certain exceptions, may not be offered, sold, taken up, renounced, delivered or transferred, directly or indirectly, within any Prohibited Jurisdiction;

26. represents and warrants that any person who confirms to Collins Stewart on behalf of a Placee an agreement to subscribe for or acquire Placing Shares and/or who authorises Collins Stewart to notify the Placee's name to Secure Trust Bank's registrar, has authority to do so on behalf of the Placee;

27. acknowledges that the agreement to settle each Placee's acquisition of Placing Shares (and/or the acquisition of a person for whom it is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from Secure Trust Bank of the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there were any such arrangements, or the settlement related to other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither Secure Trust Bank nor Collins Stewart will be responsible. If this is the case, the Placee should take its own advice and notify Collins Stewart accordingly;

28. acknowledges that the Placing Shares will be issued and/or transferred subject to the terms and conditions set out in this announcement;

29. acknowledges that when a Placee or any person acting on behalf of the Placee is dealing with Collins Stewart any money held in an account with Collins Stewart 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 relevant rules and regulations of the FSA. 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 Collins Stewart money in accordance with the client money rules and will be used by Collins Stewart in the course of its business; and the Placee will rank only as a general creditor of Collins Stewart (as the case may be);

30. acknowledges and understands that Secure Trust Bank, Arbuthnot, Collins Stewart, and others will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, undertakings and acknowledgements;

31. acknowledges that until 40 days after the later of the commencement of the Placing and the closing date, an offer or sale of Placing Shares within the United States by any dealer (whether or not participating in the Placing) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A under the Securities Act or pursuant to another exemption from registration under the Securities Act to a person that is a "qualified purchaser" (as defined in Section 2(a)(51) of the United States Investment Company Act of 1940, as amended); and

32. acknowledges that the basis of allocation will be determined by Collins Stewart (after consulting with Secure Trust Bank and Arbuthnot) at its absolute discretion. The right is reserved to reject in whole or in part and/or scale back any participation in the Placing.

The acknowledgements, agreements, undertakings, representations and warranties referred to above are given to each of Secure Trust Bank, Arbuthnot and Collins Stewart (for its own benefit and, where relevant, the benefit of its Affiliates and any person acting on its behalf) and are irrevocable.

No UK stamp duty or stamp duty reserve tax should be payable to the extent that the Placing Shares are issued or transferred (as the case may be) into CREST to, or to the nominee of, a Placee who holds those shares beneficially (and not as agent or nominee for any other person) within the CREST system and registered in the name of such Placee or such Placee's nominee.

Any arrangements to issue or transfer the Placing Shares into a depositary receipts system or a clearance service or to hold the Placing Shares as agent or nominee of a person to whom a depositary receipt may be issued or who will hold the Placing Shares in a clearance service, or any arrangements subsequently to transfer the Placing Shares, may give rise to stamp duty and/or stamp duty reserve tax, for which neither Secure Trust Bank nor Collins Stewart 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 stamp duty or stamp duty reserve tax undertakes to pay such stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless Secure Trust Bank and Collins Stewart in the event that any of Secure Trust Bank and/or Collins Stewart has incurred any such liability to stamp duty or stamp duty reserve tax.

In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to subscribe for or acquire any Placing Shares.

All times and dates in this announcement may be subject to amendment. Collins Stewart shall notify the Placees and any person acting on behalf of the Placees of any such changes.

The rights and remedies of Collins Stewart, Arbuthnot and Secure Trust Bank under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise or partial exercise of one will not prevent the exercise of others.

Each Placee may be asked to disclose in writing or orally to Collins Stewart:

(a) if he is an individual, his nationality; or

(b) if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.