R4E.L Regulatory News (R4E)

First Artist Corporation Plc

("First Artist", the "Company" or the "Group")

Offer update

Subscription Agreement

Unsecured Loan Agreement

Facility Agreement

Issue of Equity

Total Voting Rights

On 10 August 2010, the Board of Directors of the Company announced that it had received an approach from a third party that may or may not have led to an offer being made for the Company.

The Board now announces that the potential offeror, Pivot Entertainment LLC, ('Pivot'), a New York based entertainment marketing company whose principals have significant experience working in the performing and visual artists industry, has agreed to invest $4m in the Company via a subscription for new ordinary shares of 2.5p each in the Company ("Ordinary Shares") and to provide the Company with a long-term unsecured loan. This is the first stage of an investment programme by Pivot into the Company intended to enhance the business and reduce bank debt. As a result of the investment made by Pivot a number of changes to the Board are anticipated but are yet to be finalised.

As stated on 10 August 2010, the initial approach was at a very early stage with no certainty that an offer for the Company would be forthcoming. First Artist has since been advised by Pivot that it is no longer considering making an offer for the Company. The Company is not in talks with any other party that may or may not lead to an offer being made for the Company. Consequently the Company no longer remains in an Offer Period pursuant to the Takeover Code. However, Pivot reserves the right to consider making an offer for the Company within the next six months following the date of this announcement should a third party announce an offer for the Company.

Subscription Agreement

Pivot has entered into a subscription agreement with the Company to subscribe for 9,900,000 new Ordinary Shares ('the Subscription Shares') at a subscription price of 11 pence per Subscription Share (the 'Subscription'). The Subscription is conditional on admission of the Subscription Shares to trading on AIM. The subscription will raise approximately £1.1m before expenses.

Unsecured Loan Agreement

Simultaneously, the Company announces that it has entered into an agreement with Pivot to provide the Company with an unsecured loan facility of £1.4m (the 'Loan'). The Loan is for a maximum term of 5 years. The Loan attracts interest at 8 per cent. per annum.

The proceeds from the Subscription and Loan will be used to repay existing liabilities owed to Drew Hodges as at 31 October 2010 in connection with the Company's acquisition of Spot and Company of Manhattan Inc. This is the first stage of an investment programme by Pivot into the Company intended to enhance the business and reduce bank debt.

Facility Agreement

It is intended that the Company's existing facility with Allied Irish Bank (GB) will continue in place until 31 January 2011 (subject to the waiver of certain financial covenants during that period and subject to satisfaction of certain conditions). This existing facility would then be replaced with a £14,500,000 revolving credit facility ("New AIB Facility") to be used to refinance the Company's existing facilities and for working capital, provided that the Company, in addition to monies received pursuant to the Subscription and the Loan, receives by 31 January 2011 a further £4.5m pursuant to a further unsecured term loan facility to be provided by Pivot to the Company (in terms otherwise identical to the Loan). This would be the subject of a further announcement as discussions concerning further investment in the Company progress.

Issue of Equity

Application has been made for the admission ("Admission") of the Subscription Shares to trading on AIM. It is expected that Admission will become effective and that dealings will commence on 10 December 2010. Upon issue, the Subscription Shares will rank pari passu in all respects with the Company's existing Ordinary Shares.

On Admission, Pivot will directly hold 9,900,000 Ordinary Shares. In addition, Stoller Family Partners LP, a company connected to Pivot, holds 2,000,000 Ordinary Shares giving a combined interest of 11,900,000 Ordinary Shares representing 29.86 per cent. of the enlarged issued share capital of the Company.

Total Voting Rights

Following the Subscription, the total number of shares in issue will be 39,856,103. There are no shares held in treasury. The total number of voting rights in the Company is therefore 39,856,103.

The above figure of 39,856,103 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company, under the Disclosure and Transparency Rules.

This announcement is being made with the consent of Pivot Entertainment LLC. 

Commenting on the investment made by Pivot, Jon Smith said,

"The financial structure of the Group is a legacy of decisions made under very different economic circumstances. The current recession has been unkind to companies with high gearing. We have worked assiduously with our bank Allied Irish Bank (GB) who have been immensely supportive to reconstruct our Group and it's financing.

We feel that the transaction with Pivot brings with it not only financial strength but a creative complement which should greatly assist trading across the Group in the coming years. Pivot has considerable experience within the entertainment industry and we look forward to working closely with them.

I would pertinently wish to thank Allied Irish Bank whose support in this Group has never wavered and their belief in the underlying strength of this business is much appreciated."

Enquiries:

First Artist Corporation Plc

Jon Smith/Shirley Stapleton Tel: +44 20 79930000

Seymour Pierce Limited

Stewart Dickson / Tom Sheldon Tel: +44 20 71078000