14 May 2009 13:04
For Immediate Release 14 May 2009
BRAINSPARK PLC
('Brainspark' or 'the Company')
Update on London Asia Capital Plc Arrangements
Further to the announcement made by the Company on 26 February 2009, regarding the appointment of three directors of China IPO Group plc ('China IPO'), a wholly owned subsidiary of Brainspark, to the board of London Asia Capital plc ('LAC'), China IPO, has agreed, in principle, with LAC, the following terms for making CIPO's services and the three directors available to assist in returning part of the available cash to LAC's shareholders and restoring LAC's shares to AIM:
The fee payable to China IPO for this activity is to be success-based. China IPO will receive a percentage fee payable on the occurrence of one of the following events:
the distribution by the Company of its assets to its shareholders whether such assets are cash or non-cash assets distributed in specie and whether distributed by way of dividends or by way of distributions on a liquidation of the Company; and/or
the admission of the entire ordinary share capital of LAC or its successor company to trading on AIM ("Relisting") (including a Relisting by way of a merger); and/or
the sale of the entire issued share capital of LAC.
2. The term of the agreement will be five years from the date of the signed agreement.
3. The fees payable will be on the basis shown in the table below and satisfied at the option of China IPO in LAC shares or cash with the exception of the first £5 million, which may only be satisfied in shares.
| Cash returned or assets distributed or market capitalisation on Relisting £ million | Fee Rate | To be satisfied in |
| The first 0 - 5 | 5% | LAC shares |
| The excess from 5 - 10 | 10% on such excess over £5m | Cash or LAC shares (at the option of China IPO) |
| The excess from 10 - 15 | 15% on such excess over £10m | |
| The excess over 15 and above | 20% on such excess over £15m |
4. However, if cash or non-cash assets are returned following a Relisting, China IPO shall only be entitled to receive a fee on the occurrence of the Relisting and not in respect of that subsequent distribution of cash or assets. For the avoidance of doubt, if cash or non-cash assets are returned prior to a Relisting, China IPO shall be entitled to receive a fee on the occurrence of both the return of that cash or those assets and on the subsequent Relisting.
A General Meeting called by LAC for 4 June 2009 will seek their shareholders approval to reappoint the three China IPO directors, being Messrs Gardin, Bailey and Lord Cromer, and authorize the allotment of the necessary LAC securites needed to satisfy China IPO's success fee. The China IPO, LAC agreement is therefore conditional on the approval of the LAC resolutions at the General Meeting and the approval of China IPO's Board.
In addition, there is a proposed arrangement between China IPO and the three directors, being Messrs Gardin, Bailey and Lord Cromer, in which the fees payable to China IPO by LAC, in connection with the above arrangements, are split between China IPO and the three directors.
A further announcement will be made when the formal agreements are executed and the outstanding arrangements finalised.
For enquiries, please contact:
Dennis Bailey, Brainspark plc 01628 477785
Roland Cornish, Beaumont Cornish Limited 020 7628 3396