EGI.L Regulatory News (EGI)

22 June 2017

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

RECOMMENDED CASH ACQUISITION

of

Electrical Geodesics, Inc. ("EGI" or the "Company")

by Philips Holding USA Inc. ("Philips")

through its wholly owned subsidiary Healthcare Technology Merger Sub, Inc. ("Merger Sub")

to be effected under the terms of a merger agreement by and among EGI, Philips and Merger Sub

EGI, a leading neurodiagnostic medical technology company, is pleased to announce that it has reached an agreement on the terms of a recommended acquisition ("Acquisition") under which Philips will acquire all of the outstanding shares of EGI ("Company Common Stock") for an aggregate consideration of £29.0 million in cash pursuant to the terms of an agreement and plan of merger entered into on 21 June 2017 between EGI, Philips, Merger Sub and others ("Merger Agreement").

Philips is a leading health technology company focused on improving people's health and enabling better outcomes across the health continuum from healthy living and prevention, to diagnosis, treatment and home care. Philips is a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care.

The EGI Board of Directors (the "Board"), unanimously approved the Merger Agreement and has recommended that the Stockholders vote in favour of adoption of the Merger Agreement. As described in greater detail below, this transaction will require the approval of Stockholders at a special meeting of the Company to be held on 17 July 2017 as described below.

Certain capitalized terms used in this announcement have the meanings specified in the Appendix affixed hereto.

Key terms of the Acquisition

· Under the terms of the Merger Agreement, Stockholders will be entitled to receive £1.054 (105.4p) for each share of Company Common Stock.

· The Acquisition Price is fixed and will be paid in Pounds Sterling.

· The Acquisition Price values the entire issued and to be issued share capital of Company at approximately £29.0 million and represents a premium of approximately 36 percent to the closing price of £0.775 (77.5p) on 20 June 2017.

· As at the date of this announcement, EGI has 27,525,709 shares of Company Common Stock outstanding and admitted to trading on AIM.

· Merger Sub is a newly incorporated company formed for the purpose of implementing the Acquisition. Merger Sub has not carried on any business prior to the date of the Merger Agreement and has not prepared any historical financial accounts. The Acquisition is proposed as a merger of Merger Sub with and into the Company, in accordance with the Delaware General Corporation Law, with the Company being the surviving corporation. The Acquisition is not governed by the UK City Code on Takeovers and Mergers ("Takeover Code") by virtue of EGI's status as a corporation incorporated in Delaware with its principal office located outside the UK. Accordingly, the Acquisition is not subject to the jurisdiction of, nor is it being regulated by, the Panel on Takeovers and Mergers in the UK and Stockholders will not be afforded the protections of the Takeover Code.

· The Acquisition is subject to the approval of Stockholders at a Special Meeting of the Company to be convened by way of an explanatory circular and notice of meeting ("Proxy Statement") to be published as soon as practicable and, in any event, within 30 days of the date of this Announcement. At the Special Meeting the Stockholders will be asked to consider and vote on two resolutions (the "Resolutions") as follows:

1. a resolution approving and adopting the Acquisition and the terms of the Merger Agreement (the "Merger Resolution"), which resolution will require approval by Stockholders holding a majority (greater than 50%) of the issued and outstanding shares of Company Common Stock entitled to vote at the Special Meeting; and

2. a resolution approving the delisting of the Company Common Stock from AIM prior to the closing of the Acquisition (the "Delisting Resolution"), which resolution will require approval by Stockholders holding at least 75% of the votes cast at the Special Meeting.

· In connection with the entry into the Merger Agreement, officers and directors of the Company, holding approximately 58.0 percent of the outstanding Company Common Stock, including Dr. Don Tucker (holding 50.9 percent of the total outstanding shares in Company Common Stock) and Dr. Ann Bunnenberg (holding 6.4% of the total outstanding shares in Company Common Stock), entered into the Voting Agreement, which obligates such officers and directors to affirmatively vote all of their shares of Company Common Stock in favour of the Resolutions and against any competing proposal.

· The Special Committee comprised of Dr. John Brown (Chair), Dr. Raymond Englander, and Ms. Christine Soden and the Board consider the terms of the Acquisition to be fair to all Stockholders. Accordingly the Board, and the Special Committee, have unanimously approved the transaction and intend unanimously to recommend that the Stockholders vote in favour of the Resolutions to be proposed at the Special Meeting.

· The Proxy Statement, which will be mailed to stockholders shortly after this Announcement, incorporates a notice convening the Special Meeting at 9:00 a.m. Pacific time on 17 July 2017 at the offices of Company, 500 East 4th Avenue, Suite 200, Eugene, OR 97401, USA.

· The Company will make an application to the London Stock Exchange for the cancellation of the Company's shares admitted to AIM and the delisting of the Company from AIM (the "Cancellation") to take effect from 7.00 a.m. (London time) on the date following the date of closing of the Merger. As a result, after the Acquisition, the Company Common Stock will no longer be publicly traded on AIM or elsewhere.

· The Acquisition is subject to the satisfaction or waiver of the conditions and further terms that are set out in the Merger Agreement and will be further described in the Proxy Statement.

· The Merger Agreement contains a termination fee of $1.4 million which the Company would be required to pay to Philips if, among other conditions, the Merger Agreement terminated because the Acquisition is not consummated by the Outside Date, the Stockholder's fail to approve the Merger Resolution or the Delisting Resolution at the Special Meeting (or at any adjournment or postponement thereof), or Philips terminates the Merger Agreement because of a material breach by the Company.

· At closing of the Acquisition, the following key officers of the Company will receive a retention bonus of $150,000: Robert Bell, Ann Bunnenberg, Paul Holman, Phan Luu and Gary Weber. The retention bonuses were approved by the independent members of the Board and are consistent with the key officer employment contracts and the Company's existing incentive bonus plan. In addition, the independent member of the Board approved the payment, at closing of the Acquisition, to each member of the Special Committee of additional service fees in recognition of the significant extra service and responsibilities undertaken in connection with the consideration and evaluation of potential acquisition transactions. The amounts are consistent with the non-executive Directors' existing service contracts with the Company. The amounts payable at closing to the Special Committee members are as follows: Dr. Brown - $88,500; Ms. Soden - $96,500; and Dr. Englander - $89,500. Each committee member will also receive all unpaid Non-Executive Director fees (plus interest) through 30 June 2017, this amounts to approximately $199,000 in total.

Each of the Board and the Special Committee considers the Acquisition to be advisable and in the best interests of the Stockholders. Accordingly, each of the Board and the Special Committee unanimously recommends that Stockholders vote in favour of the Resolutions to be proposed at the Special Meeting.

For Further Information:

EGI:

Ann Bunnenburg +1 541 6897 7962

Peel Hunt LLP (NOMAD and Broker):

James Steel, Oliver Jackson +44 (0) 20 7418 8900

Expected Timetable of Principal Events

*Subject to satisfaction or waiver of other conditions to closing as provided for in the Merger Agreement.

Reasons for the Acquisition

In the course of reaching its decision to approve the Merger Agreement, to declare that the Merger Agreement and the Acquisition are fair to, advisable and in the best interests of the Stockholders and to recommend that the Stockholders adopt the Merger Agreement, the Special Committee consulted with senior management. The Special Committee also consulted with its financial advisor, regarding certain financial terms of the Acquisition, as well as its outside legal counsel regarding its fiduciary duties, the terms of the Merger Agreement, and related legal matters. The following discussion includes the material reasons and factors considered by the Special Committee in making its decision and recommendation, but is not, and is not intended to be, exhaustive.

Factors considered by the Special Committee weighing in favour of the Acquisition included:

Acquisition Price. The Special Committee considered the following with respect to the Acquisition Price to be received by the Stockholders:

· that holders of Company Common Stock will be entitled to receive an Acquisition Price that provides liquidity and as compared to the uncertain future long-term value to Stockholders that might or might not be realized if we remained independent (or if we were sold in a stock deal and the Stockholders received stock of the purchaser or the combined companies as the Acquisition Price);

· the fact that the per share value of the Acquisition Price represents a significant premium (36%) over the closing price of Company Common Stock on AIM on 20 June 2017 (with such calculations done as of the date of the Board's and Special Committee's approval of the Merger Agreement); and

· the then-current financial market conditions and the recent and historical market prices of Company Common Stock, including the market price performance of Company Common Stock relative to that of other industry participants.

Prospects in Remaining Independent. The Special Committee considered the possibility of continuing to operate Company as an independent public company, including the perceived risks and uncertainties of remaining an independent public company. In considering the alternative of pursuing growth as an independent company, the Special Committee considered the following factor:

· the fact that Company would likely have difficulty raising additional financing and would thus have limited growth opportunities, and that any equity capital raised would likely be at a price below the Acquisition Price, thus likely diluting the current equity.

Financial Forecasts. The Special Committee considered the financial forecasts provided by management.

Terms of the Merger Agreement. The Special Committee considered the terms and conditions of the Merger Agreement and the course of negotiations thereof, including:

· the conditions to Philips' obligations to complete the Acquisition, including the ability of Philips to terminate the Merger Agreement under certain specified circumstances;

· the structure of the transaction as a merger, and the fact that the Merger Agreement requires approval by the Stockholders, which together would provide a period of time during which a Superior Proposal could be made;

· our ability, under certain circumstances, to furnish information to and conduct negotiations with third parties, subject to the terms and conditions as set forth in the Merger Agreement;

· the ability of the Board, in connection with an Acquisition Proposal and under certain other circumstances, to change its recommendation that the Stockholders adopt the Merger Agreement, subject to the terms and conditions as set forth in the Merger Agreement;

· Stockholders who do not wish to accept the Acquisition Price and do not vote for the Merger Resolution will be entitled to demand appraisal rights under Delaware law; and

· that the Acquisition would only proceed, if among other conditions: (i) the Merger Agreement is approved by Stockholders holding a majority (greater than 50%) of the issued and outstanding shares of Company Common Stock entitled to vote at the Special Meeting, and (ii) delisting of the Company Common Stock from AIM is approved by Stockholders holding at least 75% of the votes cast at the Special Meeting.

In the course of its deliberations, the Special Committee also considered a variety of risks and factors weighing against the Acquisition, including:

Risks of Announcement and Closing

The Special Committee considered:

· the risks and contingencies related to the announcement and pendency of the Acquisition;

· the conditions to Philips' obligation to complete the Acquisition and the right of Philips to terminate the Merger Agreement under certain specified circumstances;

· the risks of a delay in receiving, or a failure to receive, the necessary approvals and clearances necessary to complete the Acquisition; and

· the risks and costs to Company if the Acquisition is not completed, including the diversion of management and the potential impact on the stock price.

Cash Transaction

Our Special Committee considered that the Acquisition Price is cash and, as a result, the Stockholders will forego any potential future increase in the value that might result from possible growth, and that income realized as a result of the Acquisition will generally be taxable to the Stockholders.

Termination Fee and Other Alternative Acquirers

The Special Committee considered the possibility that the Termination Fee payable to Philips under the circumstances set forth in the Merger Agreement might discourage a competing proposal to acquire Company or reduce the price of any such proposal. The Special Committee also considered the limited recourse available against Philips and Merger Sub if the Merger Agreement were terminated.

Interests of Directors and Officers

The Special Committee considered the interests that certain of the Directors and executive officers may have with respect to the Acquisition (including the compensation payable to Company executives in connection with the Acquisition) in addition to their interests as Stockholders.

Fairness Opinion

On 20 June 2017, Raymond James rendered to the Special Committee an opinion that, based upon and subject to various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing its opinion, the Acquisition Price to be paid to the holders of Company Common Stock (other than as specified in such opinion) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. Raymond James' opinion did not address any other term or aspect of the Merger Agreement or the Acquisition and does not constitute a recommendation to any stockholder of the Company or any other person as to how such stockholder or other person should vote with respect to the Acquisition or otherwise act with respect to the Acquisition or any other matter.

The foregoing discussion is not intended to be exhaustive, but we believe it addresses much of the material information and many of the principal factors considered by the Special Committee in its consideration of the Acquisition.

In light of the variety of factors considered in connection with its evaluation of the Acquisition and the complexity of these matters, the Special Committee did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its determination, and individual Directors may have given different weight to different factors. In addition, the Special Committee did not reach any specific conclusions with respect to any of the factors or reasons considered. Instead, the Special Committee conducted an overall analysis of the factors and reasons described above and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the Merger Agreement and accordingly recommends that the Stockholders vote "FOR" the Resolutions.

Termination Payments

The Merger Agreement contains circumstances in which the Company may be obliged to make termination payments including:

· if Philips terminates due to the following reasons:

○ Philips or the Company terminates because the Acquisition will not have been consummated by the Outside Date, Philips or the Company terminates because the Stockholders fail to approve the Merger Resolution or the Delisting Resolution at the Special Meeting or at any adjournment or postponement thereof taken in accordance with the Merger Agreement, or Philips terminates because of Company's material breach, and, in each case,

o a bona fide Acquisition Proposal shall have been made to the Company or any of its stockholders or any person and shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to the Company (and such Acquisition Proposal shall not have been publicly withdrawn) on a bona fide basis without qualification (1) at least 30 Business Days prior to the date of termination, with respect to any termination pursuant to Section 8.1(b) of the Merger Agreement or (2) at least 10 Business Days prior to the date of the Special Meeting, with respect to termination pursuant to Section 8.1(c) of the Merger Agreement, and

o within 12 months after such termination, (1) the Company shall have entered into an Alternative Acquisition Agreement with respect to, or shall have consummated or shall have approved or recommended to the Stockholders or otherwise not opposed an Acquisition Proposal or (2) there shall have been consummated an Acquisition Proposal with respect to the Company (with "50%" being substituted in lieu of "15%" in each instance thereof in the definition of "Acquisition Proposal" for this purpose), then immediately prior to or concurrently with the occurrence of either of the events described in the foregoing clause, or

o Company terminates pursuant to Section 8.1(f) (Alternative Acquisition Agreement) of the Merger Agreement or Philips terminates pursuant to Section 8.1(g) (Company Recommendation Matters) of the Merger Agreement, then promptly, but in no event later than two Business Days after the date of such termination,

○ the Company shall pay the termination fee of $1.4 million (the "Termination Fee") to Philips and, in each case, shall also pay all of the reasonable and documented out-of-pocket expenses, including those of the Paying Agent, incurred by Philips or Merger Sub in connection with the Merger Agreement and the transactions contemplated by the Merger Agreement, in an amount not to exceed $160,000 (the "Expense Reimbursement").

Company management and employees

Following the Acquisition, substantially all of the officers of the Company, including the CEO, are expected to continue their employment with the Company.

Related Party Transactions

On 20 February 2017, the Board established the Special Committee, consisting of the disinterested, non-management members of the Board, to review any offers and proposals for the acquisition of all or a portion of the Company and provide guidance and recommendations to the Board regarding such acquisition offers and proposals. At a meeting held on 24 February 2017, the Board approved (with Drs. Tucker and Bunnenberg abstaining) a retention bonus of $150,000 payable to Don Tucker, Ann Bunnenberg, Gary Weber, Paul Holman, Robert Bell, Phan Luu payable on closing of an acquisition transaction (so long as are employed by the Company as of the date of payment) consistent with and in accordance with their employment contracts and the Company's existing incentive bonus plan. Subsequent to the approval, Dr. Tucker waived his right to receive the retention bonus.

At a meeting held on 20 June 2017, the Board, including Dr. Tucker as a disinterested director (with the members of the Special Committee abstaining), approved compensation payable to each member of the Special Committee on closing of an acquisition transaction in recognition of the significant extra service and responsibilities of the Special Committee members have undertaken in connection with the consideration and evaluation of potential acquisition transactions. The amounts payable to the Special Committee members are as follows: Dr. Brown - $88,500; Ms. Soden - $96,500; and Dr. Englander - $89,500. The amounts are consistent with the existing service contracts between each member of the Special Committee and the Company. Each member will also receive all unpaid Non-Executive Director fees (plus interest) through 30 June 2017, this amounts to approximately $199,000 in total.

In accordance with and as required by the AIM Rules, with the exception of Dr. Bunnenberg, Dr. Brown, Ms. Soden, and Dr. Englander, the independent Director of the Company (Dr. Tucker), having consulted with Peel Hunt LLP, considers that the payments detailed in the prior paragraph and the payment to Ann Bunnenberg of $150,000 are fair and reasonable insofar as the Stockholders are concerned.

Current Trading

The market factors that the Company discussed in its trading and business updates on 13 January 2017 and 6 March 2017 as well as the Final Results issued on 20 April 2017 have unfavourably influenced revenue for the first half of 2017. The adverse impact on revenues was incurred during the first quarter of 2017, while revenues for the second quarter of 2017 are expected to be below the same period of the prior year but broadly more consistent with past comparable periods. The Company anticipates a 20% to 27% decrease in revenue for the first half of 2017 compared to the same period in 2016. The Company's near term sales prospects remain active and management expects that the pattern of revenues being materially second half weighted will continue and be a feature of the current financial year. The Company is expecting low single-digit percentage sales growth in the year ending 31 December 2017.

Important Information

On an unaudited basis, the Company's cash reserves at 31 May 2017 were approximately $0.7 million and borrowings under the Company's revolving credit facility were $1.1 million. As further described in Note 8 to the Company's 2016 Consolidated Financial Statements, a note payable in the amount of $1.0 million matures on February 28, 2018 (or on closing of the Acquisition). Additionally, the Company's revolving credit facility matures on June 3, 2018. In the event that the Acquisition is not completed within the timelines indicated, the Company would be required to raise further debt or equity financing in the near term in order to provide additional working capital. There can be no certainty that such financing will be made available or, if such financing is secured, what the terms of such financing will be. 

Proxy Statement

EGI plans to send to its Stockholders a Proxy Statement in connection with the Acquisition and the Merger Agreement. The Proxy Statement will contain important information about the proposed merger and related matters. STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY WHEN IT BECOMES AVAILABLE AND PROMPTLY RESPOND AS PROVIDED IN SUCH DOCUMENT. Such Proxy Statement will be mailed to all record holders of Company Common Stock as of the Record Date, and we expect that additional copies will be made available to nominee holders to share with their underlying beneficial holders. Stockholders will also be able to obtain free copies of the Proxy Statement (when it is available) and other documents notified by EGI in accordance with the AIM Rules for Companies through the website maintained by EGI at www.egi.com. In addition, Stockholders will be able to obtain copies of the Proxy Statement and the Merger Agreement from EGI by contacting the Company's Secretary: ATTN: Dr. Ann Bunnenberg, 500 East 4th Avenue, Suite 200, Eugene, OR 97401.

Disclaimers

Peel Hunt, which is authorised and regulated in the UK by the Financial Conduct Authority is acting exclusively for EGI and no one else in connection with the matters set out in this announcement. In connection with such matters, Peel Hunt will not regard any other person as their client, nor will they be responsible to any other person for providing the protections afforded to clients of Peel Hunt or for providing advice in relation any matter referred to herein.

This announcement is for information purposes only and is not intended to, and does not constitute, or form part of any offer, invitation, inducement or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. Any vote, decision in respect of, or other response to, the Acquisition should be made only on the basis of the information contained in the Proxy Statement. Each Stockholder is urged to consult its independent professional advisers immediately regarding the tax consequences of the Acquisition applicable to them.

In accordance with normal practice in the United Kingdom, Philips or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Company Common Stock, other than pursuant to the Acquisition, until the date on which the Acquisition becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the United Kingdom, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.

Overseas Stockholders

The implications of the Acquisition for Overseas Stockholders may be affected by the laws of the relevant jurisdictions. Overseas Stockholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of each Overseas Stockholder to satisfy himself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required, or the compliance with other necessary formalities which are required to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction.

Any person (including without limitation, nominees, trustees and custodians) who would, or otherwise intends to, forward this announcement, the Proxy Statement or any accompanying document to any jurisdiction outside the United Kingdom should refrain from doing so and seek appropriate professional advice before taking any action.

If any Overseas Stockholder remains in any doubt, it should consult an appropriate independent professional adviser in its relevant jurisdiction without delay. In particular, the ability of persons who are not resident in the United Kingdom to vote their Company Common Stocks at the Special Meeting or to execute and deliver a Form of Proxy appointing another to vote their Company Common Stocks in respect of the Special Meeting on their behalf, may be affected by the laws of the relevant jurisdiction in which they are located.

Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. Overseas Stockholders should consult their own legal and tax advisers with regard to the legal and tax consequences of the Acquisition on their particular circumstances.

Forward Looking Statements

This announcement contains statements that are or may be forward-looking statements. All statements other than statements of historical facts included in this announcement may be forward-looking statements, including statements that relate to Company, Philips and/or their respective subsidiaries' future prospects, developments and strategies prior to and after the consummation of the Acquisition.

Forward-looking statements may be identified by their use of terms and phrases such as "believe", "targets", "expects", "aim", "anticipate", "projects", "would", "could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative of those, variations or comparable expressions, including references to assumptions. Forward-looking statements may include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Company's and Philips' operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Company's and Philips' business. The forward-looking statements in this announcement are based on current expectations and are subject to known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially from any results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of Company, Philips and/or their respective subsidiaries and the environment in which each will operate in the future prior to and after the consummation of the Acquisition and readers are cautioned not to place undue reliance on such forward-looking statements. All subsequent oral or written forward-looking statements attributed to Company, Philips and/or their respective subsidiaries or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above.

Each forward-looking statement speaks only as at the date of this announcement. Except as required by applicable law or regulatory requirement (including the AIM Rules), neither Company nor any other party intends to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.

There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

No Revenue or Profit Forecasts or Estimates

No statement in this announcement is intended as a revenue or profit forecast or estimate for any period and no statement in this announcement should be interpreted to mean that earnings/loss or earnings/loss per share for EGI or Philips, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings/loss or earnings/loss per share for EGI or Philips, as appropriate.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Exchange Rates

The Acquisition Price is fixed in pounds sterling and the risk of fluctuations of USD equivalent at closing will be borne by Stockholders.

APPENDIX

DEFINITIONS

The following definitions apply throughout this announcement, unless the context otherwise requires:

References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted by or under any other enactment before or after the date of this announcement

All the times referred to in the Proxy Statement are Pacific Times of the United States unless otherwise stated.

References to the singular include the plural and vice versa.