CLP.L Regulatory News (CLP)

11 Aug 2005 13:04

Brainspark PLC11 August 2005 FOR IMMEDIATE RELEASE 11 August 2005 BRAINSPARK PLC ("Brainspark" or the "Company") Potential financing and sale of the Company's investment in Geosim Systems Ltd ("Geosim") The Company announces that, together with Geosim and the other shareholders inGeosim, it has entered into heads of terms with a US private equity firm, (the"Firm") (the "Geosim Agreement"). The Company holds a 50.1 per cent. stake in Geosim, which is shown at a value of£1,375,000 in the Company's accounts as at 31 December 2004 after a three years'goodwill amortisation from an historic valuation of approximately £3,393,000. The Geosim Agreement provides that the Firm will be retained to work with Geosimover a 12 month period starting on 9 August 2005 (the "Exclusive Period"). TheFirm's remuneration is geared to its success in finding persons wishing toinvest in Geosim or license Geosim's products. On signature of formal documentation, the Firm has agreed to pay GeosimUS$240,000 in respect of the first three calendar months of the Exclusive Period(the "Pre-Payment"). The Firm has further agreed to pay Geosim an additionalUS$80,000 for each of the next six months, for a total of US$720,000, includingthe Pre-Payment (the "Exclusivity Payment"). In addition, exclusivity on videogames applications will be granted to a newcompany, a third of whose equity will be owned by the Firm, subject to the Firmbringing material business within one year after the end of the ExclusivePeriod. The Exclusivity Payment will be converted into equity at a valuation to beagreed, to be not less than US$10,000,000. Subject to a number of conditions and formal documentation the Company hasgranted the Firm the right to acquire 50 per cent of the Company's stake inGeosim for $6,262,500. There can be no assurance that the Firm will exercise its right to purchase 50per cent. of the Company's stake in Geosim and a further announcement will bemade in due course. ENDS Further information Francesco Gardin, Brainspark PLC 0039 0228 0141Roland Cornish, Beaumont Cornish Limited 020 7628 3396 This information is provided by RNS The company news service from the London Stock Exchange