Nanoco Regulatory News (NANO)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, SOUTH AFRICA OR JAPAN OR ANY OTHER STATE OR JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

NANOCO GROUP PLC

("Nanoco" or "the Company")

Proposed Placing of up to 16.7 million new Ordinary Shares

Nanoco Group plc (AIM: NANO) announces today its intention to raise gross proceeds of up to £15 million through the issue of up to 16.7 million new ordinary shares (the "Placing") of 10 pence each (the "Placing Shares"), representing approximately 8.85 per cent of the existing Ordinary Shares of the Company.

The net proceeds of the Placing will be used to accelerate Nanoco's manufacturing programme, to invest further in product development and to build its technical sales and marketing team.

Michael Edelman, CEO of Nanoco, said: "With the successful commissioning of the two Semi-Tech production lines at our Runcorn facility, announced separately today, we have proven that we are able to manufacture our unique cadmium-free quantum dots (CFQDTM) on a commercial scale. We are very excited about the future. Our planned investment in the next phase of our growth will significantly accelerate the delivery of quantum dots to our customers as well as extending our ability to develop tailored products for new and existing customers and markets. Our culture of carefully controlling cash remains."

Background

Nanoco was founded in 2001 to progress and commercialise quantum dot technology developed at the University of Manchester and Imperial College, London. Nanoco has previously raised approximately £10 million and was admitted to AIM on 1 May 2009, following a reverse acquisition. As at 31 December 2010, Nanoco had an unaudited net cash position of £4.0 million.

Manufacturing development

In January 2010, Nanoco hired a manufacturing director with extensive experience in the speciality chemicals industry to continue the development of Nanoco's production scale-up programme. Nanoco announced separately today the successful commissioning of two Semi-Tech production lines at its new facility in Runcorn, Cheshire, with a combined initial annual capacity of 25kg per year. These two production lines are capable of producing red quantum dots on a commercial scale. Nanoco is now trialling batches for a specific customer application and expects to be able to deliver 1kg of red CFQDTM to the customer within the next few months. Once validated by the customer, this will, subject to the Company's satisfaction of certain other contractual terms and conditions, trigger a US$2 million milestone payment. The Company also anticipates shipping 1kg of green CFQDTM in mid 2011, subject to similar terms and conditions.

Product development

Through Joint Development Agreements ("JDA") with its customers, Nanoco has focused its original lab-based technology into real-world applications in the LED and photovoltaic (solar) markets, creating products which have achieved a number of technical and physical performance tests set by these JDA customers. The Company has identified additional potential markets such as QD-Electroluminescent ("OLED" type) televisions, sensors and anti-counterfeiting applications.

Use of Proceeds

Production

Following the successful commissioning of the Semi-Tech lines in Runcorn, the Company intends to use part of the net proceeds of the Placing to invest in two further Kilo Manufacturing Plant lines, which are expected to increase total capacity from 25kg per annum to up to 150kg per annum, with the aim of having this facility commissioned during 2012.

Product and market development

In addition, it is intended to increase the size of Nanoco's R&D and technical sales teams to target other commercially attractive markets such as OLED televisions, sensors and anti-counterfeiting applications.

Intellectual property protection

In conjunction with the increase in technology and product development facilitated by the increased resources of the R&D teams, Nanoco intends to accelerate its filing of patents to further expand and protect its intellectual property portfolio.

Nanoco believes that this investment in production, new application developments, sales, marketing and intellectual property will help effect its transformation from a technology development company to a manufacturing company with a strong position in attractive markets.

The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated book-building process to be carried out by BofA Merrill Lynch, which is acting as sole manager and bookrunner in relation to the Placing. The identity of placees in the Placing ("Placees") and the basis of the allocations is at the discretion of Nanoco and BofA Merrill Lynch. The number of Placing Shares and the price at which the Placing Shares are to be placed (the "Placing Price") will be agreed by Nanoco with BofA Merrill Lynch at the close of the book-building process. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable after the close of the book-building process.

The Placing Shares will be issued credited as fully paid and will rank pari passu with the existing Ordinary Shares of the Company, including the right to receive all dividends and other distributions declared in respect of such shares after the date of issue of the Placing Shares.

The Company will apply for admission of the Placing Shares to trading on the AIM market of London Stock Exchange plc ("Admission"). It is expected that the Admission will take place and that trading will commence on 3 February 2011.

The Placing is conditional, inter alia, upon Admission becoming effective and the placing agreement made between the Company and BofA Merrill Lynch not being terminated. It is anticipated that the settlement date will be 3 February 2011.

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing.

Investors will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be making an offer on the terms and conditions and providing the representations, warranties and acknowledgements, contained in the Appendix.

For further information please contact:

Notes for editors:

About Nanoco Group plc

Nanoco is a world leader in the development and manufacture of commercial quantities of quantum dots for use in multiple applications including lighting, solar cells and biological imaging. Nanoco's quantum dots, which are free of heavy metals and comply with RoHS legislation, can be combined into a wide range of materials including liquids, polymers and glass. Nanoco forms strategic partnerships with major end users across a range of applications.

Nanoco was founded in 2001 and is based in Manchester, UK. Nanoco began trading on the AIM market of the London Stock Exchange in May 2009 under the ticker symbol NANO.

For further information, please visit www.nanocotechnologies.com.

This announcement is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "Securities Act"), or in accordance with an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Company has not registered and does not intend to register any of the Placing Shares under the Securities Act. The Placing Shares will not be offered or sold to the public in the United States.

The Placing Shares referred to in this announcement are being offered and sold outside the United States in accordance with Regulation S under the Securities Act and in the United States to "qualified institutional buyers" in accordance with an exemption from registration under the Securities Act. The Placing Shares are not being offered to, and will not be placed with, persons in Canada.

This announcement contains or may contain certain forward-looking statements with respect to certain plans of the Company and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made herein by or on behalf of the Company speak only as of the date they are made. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Announcement Terms and Conditions

This Announcement contains (or may contain) certain forward-looking statements with respect to certain plans of the Company and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. Examples of forward-looking statements include, amongst others, statements regarding the Company's future financial position, income growth, impairment charges, business strategy, projected levels of growth in the nanotechnology and related markets, projected costs, estimates of capital expenditure, and plans, dividend growth and objectives for future operations of the Company and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, UK domestic, American domestic, Chinese and Japanese domestic and global economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under United Kingdom Accounting Standards (including the United Kingdom Generally Accepted Accounting Practice, and the Companies Act 2006 (as amended)), together with International Financial Reporting Standards as adopted by the European Union (all such standards, interpretations and legislation together "IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future explorations, acquisitions and other strategic transactions and the impact of competition - a number of which factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by the Financial Services Authority (the "FSA"), London Stock Exchange or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

This Announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This Announcement has been issued by and is the sole responsibility of the Company.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Merrill Lynch International ("Merrill Lynch") or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any responsibility or liability therefor is expressly disclaimed.

Merrill Lynch, which is authorised and regulated in the United Kingdom by the FSA, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Merrill Lynch or for providing advice to any other person in relation to the Placing or any other matter referred to herein.

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Merrill Lynch or any of their respective affiliates that would permit an offering of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Merrill Lynch to inform themselves about, and to observe such restrictions.

The price of shares and the income from them (if any) may go down as well as up and investors may not get back the full amount invested on disposal of the shares. No statement in this Announcement is intended to be a profit forecast or profit estimate.

APPENDIX: FURTHER DETAILS OF THE PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS ("QUALIFIED INVESTORS") (AS DEFINED IN ARTICLE 2 (1)(E) OF EU DIRECTIVE 2003/71/EC (including any relevant implementing measure in any member state of the European Union) (THE "PROSPECTUS DIRECTIVE")); AND/OR (B) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS AND PERSONS WHO ARE (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC) OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS IN (A) AND (B) TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN NANOCO GROUP PLC.

Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to subscribe for Placing Shares has been given (the "Placees") will be deemed to have read and understood this Announcement, including the Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the Appendix. In particular, each such Placee represents, warrants and acknowledges that it is:

(i) a Relevant Person (as defined above) and undertakes that it will subscribe for, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; and

(ii) outside the United States and is subscribing for the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion in an offshore transaction pursuant to Rule 903 or Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act"); or if it is not outside the United States, is a qualified institutional buyer ("QIB") within the meaning of Rule 144A under the Securities Act, and has duly executed an investment letter in the form provided to it and has delivered the same to Merrill Lynch.

This Announcement, including the Appendix, is not for distribution directly or indirectly in or into the United States (such term to be understood throughout this Announcement and the Appendix as including the United States' territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, South Africa or Japan or any jurisdiction into which the same would be unlawful. This Announcement does not constitute or form part of an offer or solicitation to purchase or subscribe for shares in the capital of the Company in the United States, Canada, Australia, South Africa or Japan or any jurisdiction in which such an offer or solicitation is unlawful. In particular, the Placing Shares referred to in this Announcement have not been, and will not be, registered under the Securities Act and may not be offered or sold in the United States absent registration or an exemption from the registration requirements under the Securities Act. Any offering to be made in the United States will be made only to QIBs in reliance on Rule 144A under the Securities Act, or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Placing Shares are being offered and sold outside the United States pursuant to Rule 903 or Rule 904 of Regulation S under the Securities Act. No public offering of securities of the Company will be made in connection with the Placing in the United Kingdom, the United States, Australia, Canada, South Africa, Japan or elsewhere.

No prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission, the South African Financial Services Board or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be qualified by a prospectus filed under the securities laws of any Canadian jurisdiction (collectively, "Canadian Securities Laws"), or of any state, province or territory of Australia or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, South Africa or Japan or any other jurisdiction outside the United Kingdom.

The Placing Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission (the "SEC"), any state securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is unlawful. Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendix or this Announcement should seek appropriate advice before taking any action.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website are incorporated in, or form part of, this Announcement.

TERMS AND CONDITIONS

Details of the Placing

Merrill Lynch has entered into an agreement with the Company (the "Placing Agreement") pursuant to which, subject to the conditions set out therein, Merrill Lynch has agreed, inter alia, to use reasonable endeavours to procure subscribers for the Placing Shares at a price determined following completion of the bookbuilding process in respect of the Placing (the "Bookbuild") described in this Announcement and set out in the Placing Agreement.

The price at which the Placing Shares are to be issued will be set out in an executed version of the terms of Placing (the "Terms of Placing"). The issue of the Placing Shares has been underwritten by Merrill Lynch subject to the terms and conditions of the Placing Agreement including the execution of the Terms of Placing by the Company and Merrill Lynch.

The Placing Shares have been duly authorised and on the date of closing as set out in the executed version of the Terms of Placing will be validly issued and fully paid and will rank pari passu in all respects with the existing ordinary shares in the share capital of the Company including the right to receive all dividends and other distributions declared in respect of such ordinary shares after the date of issue of the Placing Shares.

As part of the Placing, the Company has agreed that it will not issue or sell any ordinary shares for a period of 180 days after Admission, without the prior consent of Merrill Lynch. These agreements are subject to certain customary exceptions and do not prevent the Company from granting or facilitating the exercise of options or share issues pursuant to the terms of the existing employee share schemes of the Company disclosed in publicly available information relating to the Company published prior to 26 January 2011.

Application for admission to trading

Application will be made to London Stock Exchange plc (the "London Stock Exchange") for admission to trading of the Placing Shares on its AIM market ("AIM"). It is expected that Admission will become effective on or about 3 February 2011 and that dealings in the Placing Shares on the London Stock Exchange will commence at that time.

Bookbuild

Merrill Lynch will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Merrill Lynch and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

1. Merrill Lynch is acting pursuant to the Placing Agreement as sole lead manager and bookrunner to the Placing and as agent of the Company in relation to the Placing.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Merrill Lynch. Merrill Lynch and its respective affiliates are entitled to enter bids in the Bookbuild as principal.

3. The Bookbuild will establish a single price payable to Merrill Lynch by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the number of Placing Shares to be issued will be agreed between Merrill Lynch and the Company following completion of the Bookbuild. The Placing Price and the number of Placing Shares to be issued will be announced on an information service approved by the FSA and on the FSA's list of Registered Information Services ("Regulatory Information Service") following the completion of the Bookbuild.

4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Merrill Lynch. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price, which is ultimately established by the Company and Merrill Lynch, or at prices up to a price limit specified in its bid. Bids may be scaled down by Merrill Lynch on the basis referred to in paragraph 8 below.

5. The Bookbuild is expected to close at short notice during the course of 27 January 2011 at the discretion of Merrill Lynch, but may be closed earlier or later at the discretion of Merrill Lynch. Merrill Lynch may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right (upon the agreement of Merrill Lynch) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

6. Each prospective Placee's allocation will be agreed between Merrill Lynch and the Company and will be confirmed orally by Merrill Lynch as agent of the Company following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person in favour of Merrill Lynch and the Company, under which it agrees to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association.

7. A bid in the Bookbuild will be made on the terms and subject to the conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and except with Merrill Lynch's consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Merrill Lynch as agent of the Company, to pay in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for and that the Company has agreed to allot and issue to such Placee. Each Placee's obligation will be owed to the Company and to Merrill Lynch. Merrill Lynch reserves the right not to accept bids or to accept bids in part rather than in whole. The acceptance of the bids shall be at Merrill Lynch's absolute discretion.

8. Subject to paragraphs 4 and 5 above, Merrill Lynch may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale down any bids for this purpose on such basis as they may determine. Merrill Lynch may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

9. Except as required by law or regulation, no press release or other announcement will be made by Merrill Lynch or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

10. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and settlement".

11. All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement".

12. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

13. To the fullest extent permissible by law, neither Merrill Lynch nor any of its affiliates shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Merrill Lynch nor any of its affiliates shall have any responsibility or liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Merrill Lynch's conduct of the Bookbuild or of such alternative method of effecting the Placing as Merrill Lynch and the Company may agree.

Conditions of the Placing

The obligations of Merrill Lynch under the Placing Agreement are conditional on, amongst other things:

1. no material adverse change in, or any development involving a prospective material adverse change in or affecting, the condition, financial, operational or otherwise, or in the earnings, management, business affairs, business prospects or financial prospects of the Company or any of its subsidiary undertakings including, where the context requires, any one or more such companies (the "Group"), in each case, whether or not arising in the ordinary course of business having occurred or being discovered following the execution of the Placing Agreement;

2. the Terms of Placing having been executed and delivered by the Company and Merrill Lynch;

3. the representations, warranties and agreements of the Company set out in the Placing Agreement being true, accurate and complete as of the date of the Placing Agreement, the date of execution of the Terms of Placing and at Admission;

4. the Company having complied with all of the agreements and undertakings and satisfied or performed all of the conditions and obligations on its part to be performed or satisfied under the Placing Agreement on or before Admission; and

5. Admission having occurred by 8.00 a.m. (London time) on or about 3 February 2011 (or such later date as may be agreed between the Company and Merrill Lynch).

If any of the conditions set out in the Placing Agreement are not fulfilled or, where permitted, waived by Merrill Lynch by the time and/or date specified therein (or such later time and/or date as the Company and Merrill Lynch may agree), the Placing Agreement shall cease and determine, the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time, and each Placee agrees that no claim can be made by the Placee in respect thereof.

Neither Merrill Lynch nor the Company nor any other person shall have any responsibility or liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Merrill Lynch.

Termination of the Placing

Merrill Lynch is entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company if, amongst other things:

1. any of the conditions referred to above under the paragraph entitled "Conditions of the Placing" have not been satisfied by the Company or (to the extent capable of being waived) waived by Merrill Lynch;

2. there has been a breach of any of the warranties and representations contained in the Placing Agreement or any failure to perform any of the undertakings or agreements in the Placing Agreement;

3. it shall come to the notice of Merrill Lynch that any statement contained in this Announcement and any other document or announcement issued or published by or on behalf of the Company in connection with the Placing (the "Placing Documents"), or any of them, is or has become untrue, incorrect or misleading in any respect which, in the good faith opinion of Merrill Lynch, is material in the context of the Company, the Group as a whole, the Placing (including Merrill Lynch's underwriting commitment) or the after-market for the Placing Shares; or any matter has arisen, which would, if the Placing were made at that time, constitute a material omission from the Placing Documents or a material omission from or misleading inaccuracy in certain publicly available information published by the Company and which Merrill Lynch acting in good faith considers to be material in the context of the Company, the Group, the Placing or the underwriting of the Placing Shares, Admission or the after-market for the Placing Shares;

4. in the opinion of Merrill Lynch acting in good faith, there has been, or Merrill Lynch has become aware of, or there has been made public, a material adverse change, or any development reasonably likely to involve a material adverse change, in the condition (financial, operational, legal or otherwise) or in the earnings, business affairs, solvency or prospects of the Company, whether or not arising in the ordinary course of business since the date of the Placing Agreement;

5. there has occurred (a) any material adverse change in the financial markets in the United States, the United Kingdom, member states of the European Union or in the international financial markets, (b) any outbreak or escalation of hostilities, act of terrorism or other calamity or crisis or (c) any change or development involving a prospective change in national or international political, financial or economic conditions, or currency exchange rates, in each case the effect of which is such as to make it, in the good faith judgement of Merrill Lynch, impracticable or inadvisable to market the Placing Shares or to enforce contracts for the sale of the Placing Shares; or

6. if admission to trading of the ordinary shares issued or to be issued in the capital of the Company on AIM has been withdrawn, or trading in any shares of the Company has been suspended or limited by AIM or the London Stock Exchange, or if trading generally on the London Stock Exchange has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by the London Stock Exchange or by such system or by order of the regulatory authorities of the United States, the United Kingdom or any other governmental or self-regulatory authority, or a material disruption has occurred in commercial banking or shares settlement or clearance services in the United States, the United Kingdom or in Europe.

Upon such notice being given, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by Merrill Lynch of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Merrill Lynch and that it need not make any reference to Placees and that it shall have no responsibility or liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No prospectus

No AIM admission document, prospectus or other offering document has been or will be submitted to be approved by the London Stock Exchange or the FSA in relation to the Placing and the Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) released by the Company today and the Exchange Information (as defined below), and subject to the further terms set forth in the trade confirmation to be provided to individual Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than information previously published by the Company by notification to a Regulatory Information Service), representation, warranty, or statement made by or on behalf of the Company or Merrill Lynch or any other person and neither Merrill Lynch nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Placees who are allocated Placing Shares in the Placing will be issued with the Placing Shares that they have been allocated on a delivery versus payment basis within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in Merrill Lynch's opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares will be sent a trade confirmation stating the number of Placing Shares to be allocated to it at the Placing Price, the aggregate amount owed by such Placee to Merrill Lynch and settlement instructions.

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Merrill Lynch.

It is expected that settlement will be on 3 February 2011 on a T + 4 basis in accordance with the instructions given to Merrill Lynch.

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 two percentage points above LIBOR as determined by Merrill Lynch.

Each Placee is deemed to agree that, if it does not comply with these obligations, Merrill Lynch may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and shall be required to bear any stamp duty, stamp duty reserve tax or other stamp, securities, transfer, registration, execution, documentary or other similar impost, duty or 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, Placees 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 a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. 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 this Announcement, including the Appendix, in its entirety and that its subscription for the Placing Shares is subject to and based upon all the terms, conditions, warranties, acknowledgements and undertakings and other information contained herein;

2. acknowledges that no offering document, listing particulars, prospectus or AIM admission document has been prepared in connection with the Placing and represents and warrants that it has not received a prospectus, listing particulars, AIM admission document or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

3. acknowledges that the ordinary shares in the capital of the Company are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information (the "Exchange Information") in accordance with the current rules and practices of the FSA and the current rules published by the London Stock Exchange applicable to companies with a class of securities admitted to trading on AIM (the "AIM Rules"), which includes a description of the nature of the Company's business and the Company's most recent AIM admission document and financial statements and similar statements for preceding financial years, and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4. acknowledges that neither Merrill Lynch nor the Company nor any of their respective affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares, the Placing or the Company or any other person other than this Announcement; nor has it requested any of Merrill Lynch, the Company, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

5. acknowledges that (i) unless otherwise agreed with the Company and Merrill Lynch, it and, if different, the beneficial owner of the Placing Shares is not, and at the time the Placing Shares are acquired will not be residents of Australia, South Africa or Japan or in or otherwise governed by Canadian Securities Laws, and (ii) the Placing Shares have not been and will not be registered or qualified by a prospectus under the securities legislation of the United States, Australia, Canada, South Africa or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, in or into those jurisdictions;

6. represents and warrants that, if resident in Australia, it is a "professional investor" or "sophisticated investor" for the purposes of Part 6D.2 of the Corporations Act;

7. represents and warrants that, if resident in Australia, it has not acquired the Placing Shares for the purposes of selling or transferring such shares, or granting, issuing or transferring interests in, or options over them;

8. acknowledges that the Placing Shares have not been and will not be qualified by a prospectus under Canadian Securities Laws and are not being offered or sold to any person in any Canadian jurisdiction;

9. acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither Merrill Lynch, its affiliates nor any person acting on their behalf has or shall have any responsibility or liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company. 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 itself to subscribe for the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by Merrill Lynch or the Company and neither Merrill Lynch nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

10. acknowledges that neither Merrill Lynch, nor any person acting on behalf of Merrill Lynch, nor any affiliates of Merrill Lynch, has or shall have any responsibility or liability for any publicly available or filed information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

11. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if 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;

12. if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of Merrill Lynch has been given to the proposed offer or resale;

13. represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to Qualified Investors or otherwise in circumstances which have not resulted and which will not result in a contravention of section 85(1) of the Financial Services and Markets Act 2000 ("FSMA");

14. represents and warrants that it has not offered or sold and, prior to the expiry of a period of four months from Admission, will not offer or sell any Placing Shares to persons in Canada, except in circumstances which will not trigger any obligation to prepare and file a prospectus or similar document under Canadian Securities Laws;

15. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to Qualified Investors or otherwise in circumstances which have not resulted and which will not result in the requirement to publish a prospectus in any member state of the European Economic Area within the meaning of the Prospectus Directive;

16. 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 section 21(1) of FSMA does not require approval of the communication by an authorised person;

17. 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;

18. represents and warrants that it is a person falling within Article 19(1), Article 19(5) and/or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom this Announcement may otherwise be lawfully communicated;

19. represents and warrants that, if it is in any member state of the European Union, it is a Qualified Investor;

20. represents and warrants that it and any person acting on its behalf has capacity and authority, has obtained all requisite consents and is otherwise entitled to subscribe for and purchase the Placing Shares under the laws of all relevant jurisdictions which would apply to it, and that it and any person acting on its behalf is in compliance with applicable laws in the jurisdiction of its residence, the residence of the Company, or otherwise;

21. undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as Merrill Lynch may in its discretion determine and without liability to such Placee;

22. acknowledges that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

23. acknowledges that neither Merrill Lynch, its affiliates, nor any person acting on its or their behalf, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Merrill Lynch and that Merrill Lynch does not and will not have any duties or responsibilities to it for providing the protections afforded to its clients or customers or 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 its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

24. undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither Merrill Lynch nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and Merrill Lynch in respect of the same on the basis that the Placing Shares will be issued to a stock account of Merrill Lynch who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

25. acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales 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, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or Merrill Lynch in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

26. agrees that the Company, Merrill Lynch and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given on behalf of Merrill Lynch and the Company, and which are irrevocable, and it irrevocably authorises Merrill Lynch to produce this Announcement, pursuant to, or in connection with, or as may be required by, any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

27. agrees to indemnify (on an after‑tax basis) and hold the Company, Merrill Lynch and their respective affiliates harmless 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 Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

28. acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the related trade confirmation will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing.

29. acknowledges that no action has been or will be taken by any of the Company, Merrill Lynch or any person acting on behalf of the Company or Merrill Lynch that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

30. acknowledges that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

31. acknowledges and agrees that Merrill Lynch does not owe any fiduciary or other duties to it or any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

32. warrants and represents that it has (a) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (b) had access to review publicly available information concerning the Company and its subsidiaries that it considers necessary or appropriate and sufficient in making an investment decision; (c) reviewed such information as it believes is necessary or appropriate in connection with its subscription for the Placing Shares; and (d) made its investment decision based upon its own judgement, due diligence and analysis and not upon any view expressed or information provided by or on behalf of Merrill Lynch; and

33. acknowledges that in connection with the Placing, Merrill Lynch and any of its respective affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Accordingly, references in this Announcement to shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to Merrill Lynch and any relevant affiliate acting in such capacity. Merrill Lynch does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The foregoing representations, warranties and confirmations are given for the benefit of the Company as well as Merrill Lynch. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the Placing Shares in question.

In addition, by participating in the Placing, each Placee (and any person acting on a Placee's behalf) subscribing for Placing Shares pursuant to Rule 903 or Rule 904 of Regulation S of the Securities Act represents, warrants and acknowledges that (i) the Placing Shares are being offered and sold pursuant to Regulation S under the Securities Act in a transaction not involving a public offering of securities in the United States and the Placing Shares have not been and will not be registered under the Securities Act, (ii) the offer and sale of the Placing Shares to it has been made outside of the United States in an "offshore transaction" (as such term is defined in Regulation S under the Securities Act), and (iii) it is outside of the United States during any offer or sale of Placing Shares to it.

In addition, by participating in the Placing, each Placee (and any person acting on such Placee's behalf) who is in the United States subscribing for Placing Shares being offered under a relevant exemption from the registration requirements of the Securities Act:

1. represents and warrants that it is a "qualified institutional buyer" ("QIB") within the meaning of Rule 144A under the Securities Act;

2. represents and warrants that it understands and acknowledges that the Placing Shares have not been, and will not be, registered under the Securities Act or with any state or other jurisdiction of the United States;

3. represents and warrants that the Placing Shares will not be reoffered, resold, pledged or otherwise transferred by it except (a) outside the United States in an offshore transaction pursuant to Rule 903 or Rule 904 of Regulation S under the Securities Act, (b) in the United States to a person whom the seller reasonably believes is a QIB and to whom notice is given that the offer, sale or transfer is being made in reliance on Rule 144A under the Securities Act, (c) pursuant to Rule 144 under the Securities Act (if available), (d) to the Company, or (e) pursuant to an effective registration statement under the Securities Act, in each case in compliance with all applicable laws;

4. acknowledges that the Placing Shares are "restricted securities" as defined in Rule 144(a)(3) under the Securities Act;

5. represents and warrants that it will notify any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Placing Shares of the foregoing restrictions on transfer;

6. represents and warrants that for so long as the Placing Shares are "restricted securities" (within the meaning of Rule 144(a)(3) under the Securities Act), it will segregate such Placing Shares from any other shares that it holds that are not restricted securities, shall not deposit such shares in any depositary facility established or maintained by a depositary bank and will only transfer such Placing Shares in accordance with the foregoing restrictions;

7. represents and warrants that if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, each such account is a QIB, it has sole investment discretion with respect to each such account and it has full power and authority to make the acknowledgements, representations, warranties and agreements herein on behalf of each such account;

8. represents and warrants that it is acquiring such Placing Shares for its own account (or the account of a QIB as to which it has sole investment discretion) for investment purposes and (subject to the disposition of its property being at all times within its control) not with a view to any distribution of the Placing Shares; and

9. represents and warrants that no representation has been made as to the availability of the exemption provided by Rule 144 or any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares.

In addition, Placees should note that they will be liable for any stamp duty and any other stamp, issue, securities, transfer, registration, documentary or other similar impost, duty or tax (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that Merrill Lynch or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with Merrill Lynch, any money held in an account with Merrill Lynch 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 rules and regulations of the FSA made under FSMA. 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 Merrill Lynch's money in accordance with the client money rules and will be used by Merrill Lynch in the course of its own business; and the Placee will rank only as a general creditor of Merrill Lynch. All times and dates in this Announcement may be subject to amendment. Merrill Lynch shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.