The London Stock Exchange AIM Market: Securing Capital through an Initial Public Listing or Dual Listing

Breakfast Briefing and Web Cast October 4, 2007

Contents Tab Number

The London Stock Exchange AIM Market: Securing Capital through an Initial Public Listing or Dual Listing .............. 1

Presentation Slides Speaker and Company Profiles .................................................. 2 Introduction to AIM Guide to AIM AIM–NASDAQ Comparison ........................................................ 3

Speaker and Company Profiles Speakers:

Richard Webster-Smith, London Stock Exchange

Jeremy Landau and Alex Gibson, K&L Gates

Steve Smith, Ernst & Young UK

Nigel Daly, Piper Jaffray & Co.

Heather Salmond, Abchurch Communications

Alex Munro, London Bridge Capital

Series Host: Stephan Coonrod, K&L Gates

1

The London Stock Exchange AIM Market:

Securing Capital Through an Initial Public Listing or Dual Listing

Presentation Topics

AIM: Supporting the Growth of Small and Midcap CompaniesRichard Webster-Smith, London Stock Exchange

Introduction to AIM – the Legal ProcessJeremy Landau and Alex Gibson, K&L Gates

Key Accounting Issues for an AIM IPOSteve Smith, Ernst & Young UK

The Nomad's Point of View - Securing Capital and Who Should Look to List on AIMNigel Daly, Piper Jaffray London

How to Communicate an IPOHeather Salmond, Abchruch Communications

Preparing Companies Before the AIM Admission ProcessAlex Munro, London Bridge Capital

2

Supporting the growth

of small and midcap

companies

October 2007

UK Companies

Total companiesDomestic: 3,281International: 666

Market capitalisationMain Market:UK listed: US$3,794bnInternational listed: US$5,061bnAIM: US$208bn

Equity turnover (Jan-July 2007)Main Market:Domestic: US$5,586 bnInternational: US$6,840bnAIM: US$103bn

Source: London Stock Exchange statistics – August 2007

London Stock Exchange - key statistics

3

UK Companies

Total number of IPOs on the LSE, Nasdaq and NYSE 2000-2007

0

50

100

150

200

250

300

350

400

450

2000 2001 2002 2003 2004 2005 2006 2007

Lon Stock ExchangeNasdaqNYSE

The platform of choice for international companies

In 2006: • London Stock Exchange - 367 new companies joined in 2006. NYSE, Nasdaq & Hong Kong Stock Exchange had 332

IPOs in 2006.• $104bn were raised on the London Stock Exchange, $40bn on NYSE, and $29bn on Nasdaq

• First half of 2007 - $26bn were raised on the London Stock Exchange. NYSE and Nasdaq raised $21bn combined.

Source: London Stock Exchange and Exchanges website – August 2007

UK CompaniesThe widest choice of proven global markets

A choice of globally respected markets supported by a wide range of institutional & retail investors

Supports more established companies seeking further

growth.1,596 issuers

Supports earlier stage companies in their initial growth period.

1,685 issuers

Main Market

Sponsor

UK Listing AuthorityNominated Adviser (Nomad)

Source: London Stock Exchange statistics – August 2007

4

UK Companies

The world’s most successful growth market

UK Companies

• AIM companies: 1,685

• Overseas AIM companies: 329

• IPOs on AIM in 2006: 341• 232 UK • 109 overseas

• IPOs on AIM in 2007: 134

• Capital raised (new & further) since 1995: US$104bn

• Capital raised (new & further) in 2006: US$31bn• $US 21bn UK companies• $US 10bn overseas companies

Key Statistics

Source: London Stock Exchange trade statistics – August 2007

5

UK CompaniesAIM – critical mass to support growth

Source: London Stock Exchange trade statistics – August 2007

Number of admission 1995 to 2007

123145

107

75102

277

177160 162

355

519

462

201

0

100

200

300

400

500

600

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Num

ber

of a

dmis

sion

s

UK Companies

0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004 2005 2006 2007

Fund

s ra

ised

($b

n)

Further money raised ($bn)

Money raised at admission ($bn)

Raising new and further capital on AIM

More money was raised on AIM in 2006 ($31bn) as on NASDAQ ($29bn).

If AIM were an independent stock exchange it would be the sixth largest in the world (by money raised).

Source: London Stock Exchange trade statistics – August 2007

6

UK Companies

Flexible regulation

Admission Rules

• No minimum size to be admitted

• No minimum financial history required

• No minimum amount of shares to be in public hands

• In most cases, no prior shareholder approval required for transactions

• Admission documents not pre-vetted by Exchange or UKLA but by nominated adviser

• Nominated adviser (Nomad) required at all times

Appropriate regulation and oversight

UK Companies

Continuing obligations

AIM companies are subject to the AIM Rules which outline the continuing obligations ofbeing on a public market. Some of the key continuing obligations are:

• AIM companies must have a Nomad at all times, otherwise they will be suspended from the market

• AIM companies must disclose all price sensitive information in a timely manner including substantial transactions, related party transaction, reverse takeovers and other miscellaneous transactions

• Half yearly and annual report and accounts required in adherence with deadlines

• All directors accept full responsibility, collectively and individually for the AIM Rules

• Restrictions on deals for directors and applicable employees on AIM securities during close periods

• UK Corporate Governance standards

Appropriate regulation and oversight

7

UK CompaniesAIM: a market for companies of all sizes

Source: London Stock Exchange trade statistics – August 2007

Distribution of AIM Companies by Market Value August 2006 vs August 07

0

50

100

150

200

250

300

350

400

Less than$3.9m

$3.9m - $9.9m $9.9m -$19.8m

$19.8m -$49.5m

$49.5m -$99m

$99m - $198m $198m -$495m

$495m -$990m

$990m -$1980m

over £1980m

Market Value (US$)

No

of C

ompa

nies

No of companies August-06

No of companies August-07

UK CompaniesA diverse market

Source: London Stock Exchange trade statistics – August 2007

Top AIM sectors by market capitalisation and no. of companies Aug 07

-

5,000

10,000

15,000

20,000

25,000

30,000

Real Estate Mining SupportServices

GeneralFinancial

Oil & GasProducers

Softw are &ComputerServices

Media EquityInvestmentIntruments

Travel & Leisure

Pharmaceuticals& Biotechnology

Mkt

Val

ue (U

S$m

)

0

50

100

150

200

250

Num

ber o

f com

pani

es

Latest Market Value USD$Number of Companies

8

UK CompaniesUS companies - sectors

Sector distribution of US companies by number August 07

Other24%

Oil & Gas Producers12%

Electronic & Electrical Equipment

12%Software & Computer

Services11%

Pharmaceuticals & Biotechnology

9%

Support Services5%

General Financial5%

Health4%

Media4%

Speciality & Other Finance4%

Automobiles & Parts5%

Chemicals5%

UK CompaniesUS companies – size distribution

Distribution of US companies by market value August 07

0

2

4

6

8

10

12

14

16

18

20

22

Less than $9.9m

$9.9m - $19.8m

$19.8m - $49.5m

$49.5m -$99m

$99m - $198m

$198m - $495m

$495m - $990m

over $990m

Market Value (US $)

No.

of C

ompa

nies

9

UK CompaniesInstitutional investors understand AIM

All of the main UK institutions invest in AIM.

151413

12111098

7654321

Rank

692.1778RAB Capital719.85120F & C Asset Management

750.2054CSFB

725.0027Lansdowne Partners

750.7459UBS

1,077.3290Gartmore993.7057Schroders886.1172Goldman Sachs

1,115.16118AXA1,178.105Cede & Co1,179.3167Merrill Lynch1,290.3184AMVESCAP1,297.9750New Star Asset Management1,341.29130Artemis Investment Bank2,052.41160Fidelity

Value of Investments (US$m)No of InvestmentsMost active Institutions by value of investment

Source: London Stock Exchange trade statistics – December 2006

UK Companies

Better value than NYSE or NASDAQ

Admission fees for Non-domestic Equities US$8,980

Annual fees for Non-domestic Equities US$8,980

Source: London Stock Exchange – August 2007

Simple, cost-effective

10

UK CompaniesCase study – Clipper Windpower Plc

Core business activitiesThe Clipper Group designs wind turbines and is a developer and owner of wind development projects. Since it was founded in 2001, the group has focused on developing advanced wind turbine technology embodied in its new Liberty 2.5MW turbine. The Liberty turbine has been designed to provide a machine that is more efficient, more reliable, easier to erect and maintain and offers a significantly longer life than conventional wind turbines in the market. Through these advances, the company believes the Liberty turbine offers a lower cost of energy over a full range of wind classes than thatoffered by competitors’ turbines in the market.

ObjectivesThe net proceeds were used to fund the tooling, manufacture and assembly of the Liberty turbine and for continuing project development and construction. In addition, the Directors used a portion of the net proceeds to expand and strengthen the management and engineering team and for further development and commercialisation of its technology. Initially, the proceeds will provide funding for the manufacture of turbines for installation into Clipper’s most advanced power projects, located in Maryland, and Iowa, USA as well as providing funding for infrastructure costs of these projects.

“The AIM market has enabled our company efficiently to move to the next level of its development and build out a production platform for our industry leading turbine

technology. Clipper Windpower achieved its principal goals in the AIM offering as well as

broadening our exposure to European investors and increasing our global profile.”

Jim Dehlsen - Chairman and CEO

Transaction Synopsis

Date of Admission : 15 September 2005Market: AIMTransaction: PlacingMarket Cap. admission: $358mCapital raised initially: $149mFTSE Classification: Utilities - ElectricityCountry of Incorporation: UK re-incorporation (USA)Nominated Adviser: Lehman BrothersBrokers: Lehman Brothers

UK Companies

Overview of Clipper IPO

Clipper was admitted to AIM on 15 September 2005

July 06, Clipper Windpower and BP announce a strategic turbine supply and joint development agreement.

Shareholder % Dehlson Associated LLc 14.6

Energy Spectrum Partners II and III L.P

8.5

Hare & Co 8.0

Trustees of the Dehlson Family Trust

6.2

Lucas Energy Total Return Master Fund L.P.

3.2

Montecito Bank and Trust 4.4

Pioneer Asset Management SA

4.0

Lansdowne Partners Ltd 3.2

Threadneedle Asset Management

3.2

Fidelity Investments 2.5

Shell Pension 1.9

Shareholder £m $m % Market Cap, on admission 181 334

Fund Raised 75 138 – Primary 67 120 87

– Secondary 10 18.5 13

Placing price per share 190p

Free Float 65%

Case study – Clipper Windpower Plc

11

UK Companies

As companies mature and grow, the Main Market offers a migrationpath

FIRST QUANTUM MINERALS joined AIM in April 2001. Their market cap is now over C$4.5 billion, and in March 2007 they announced they will migrate to the Main Market

AIM is a platform for growth

UK Companies

To summarise… why choose AIM

• The world’s most successful growth market

• An internationally focused, professional investor base

• Comprehensive research coverage for international companies

• A more flexible approach to regulation

• Better value than NYSE or NASDAQ

The Exchange of choice for companies wishing to access the international capital markets

12

AIMTAKING YOUR COMPANY PUBLIC ON THE

LONDON STOCK EXCHANGE

INTRODUCTION

Preparing for IPOCorporate structureRegulationHow to IPO

13

KEY PREPARATIONSAppointment of advisers

Plan and prepareSpeak to your lawyers at an early stage

KEY PREPARATIONSOrganisation of company’s management

Agree a timetableSet up working groupsGet the right non-executive directors

14

CORPORATE STRUCTURERoutes for US Companies

Three main routesTax considerationsUS company admitted to AIM directly

Regulation SElectronic trading – CREST and SISIncreased liquidity

CORPORATE STRUCTURERoutes for US Companies

US company admitted via UK PLC holding company

pre-admission reorganisationshare for share exchange

US company admitted via off-shore holding company

tax considerations

15

US COMPANIESLighter regulation on AIM

No Sarbanes Oxley equivalent rulesNo Sarbanes Oxley equivalent costsGuidance on corporate governance produced by Quoted Companies Alliance

AIM has a lighter approach to regulation

The reality of SOX

Increased Cost

SOX has negatively impacted companies’ bottom line by

increasing the cost of compliance

Uncertainty

SOX has increased international companies’ uncertainty due to the

changing regulatory framework

Increased Risk

SOX has increased international companies exposure to US

litigation

Increased Threat

SOX has increased the threat to the individuals in key roles (CEO

& CFO) of personal liability claims

Lost opportunity

Acquisitions become riskier, harder and slower to complete

16

CASE STUDY – DAWSON HOLDINGS PLC

First company on AIM in 1995Printed media distributorShare price $8.25 to $15.40 in 1 yearSpringboard to full listShares as acquisition currencyTurnover up from $122m in 1990 to $1.3bn in 1999

The AIM Market of the London Stock Exchange

1. AIM in context2. Basic requirements for an AIM Listing3. AIM Admission Process

17

AIM in context

Over $30 billion funds raised by AIM companies in 2006 (c.f. $16 billion in 2005)Over 1650 companies now on AIM – combined market cap of circa £110 billionMore companies on AIM than Official ListAIM’s popularity on international stageOther secondary markets can’t competeAIM – the only credible market for SMEs

HOW TO IPO

Basic requirementsAdvisersProcess

18

HOW TO IPOBasic requirements

Requirementsno trading record neededno minimum market capno minimum public float

Only 45 AIM rulesLess stringent continuing obligations

HOW TO IPOBasic requirements

AIM Rules:Shares capable of being offered to publicAppoint and retain Nomad and BrokerNo restrictions on transfer of sharesEligibility for electronic settlement All securities of class to be listed“Lock in” requirements

19

HOW TO IPOYour Advisers!

LEGAL

CompanyBoard ofDirectors

Nominated adviser/Broker

PR PrintersRegistrar

Company'sLawyers

(UK + US)

NOMAD'sLawyers

(UK)

Auditors

ReportingAccountants

ACCOUNTING

HOW TO IPOOverview of process

Admission document draftedLegal due diligenceFinancial due diligenceVerification – protecting directorsLondon Stock Exchange formal dealing notice10-14 week timetable

20

K&L Gates: A Few FactsOver the last 2 years:

1st Spin out of businesses from NASDAQ onto AIM (life sciences)

1st Greek based company to IPO on AIM (technology)

1st Japanese company to IPO on AIM (technology)

1st Share for share takeout offer for an AIM company using Japanese paper (natural resources)

1st Fundraising to use a prospectus under the new UK Prospective Regime (financial services)

1st Spin out of a subsidiary of a JASDAQ listed Japanese company onto AIM (manufacturing)

1st US company to utilise SIS System for trading restricted US Reg. S stock

Advised on more than 40 AIM IPO’s over last two years

Advised on more than 200 IPO’s over last eight years

IPO Services

The Financial Aspects of an IPOHelping you to understand the challenges that you may face in listing your company on the Alternative Investment Market

Steve SmithIPO Leader UK NorthTransaction Advisory ServicesErnst & Young LLP+44 161 333 2667ssmith@uk.ey.com

Seattle4 October 2007

21

Ernst & Young in the IPO Space

Number of dealsEY

14%

DT14%

KPMG11%

PwC12%

Other49%

Total capital raised

EY29%

DT18%

KPMG15%

PwC23%

Other15%

Source: Dealogic, Thomson Financial

Globally 2006UK IPOs (>£200m) 2006 (% of proceeds raised)

UK IPOs 2006 (% of proceeds raised)

D T10%

EY46%

KP M G3%

P WC30%

Other9%

Unkno wn2% D T

11%

EY38%

KP M G6%

P WC28%

Other11%

Unkno wn6%

Source: Dealogic, Thomson Financial

• Short form report

• Working capital report

• Long form report

• Comfort letters

Reporting Accountant

AIM Candidate

Parties involved in an IPO

• Issue audit opinion on financial statements

• Comfort letters

Auditor

• Analysis and optimization of key business processes, KPIs

• Development of IFRS compliant reporting policy & procedures

• Definition of internal controls framework

• IT Audit & Security

• Tax structuring & transfer pricing

• Management incentive schemes, Non-executive directors system

• Environmental DD

• Legal DD

Other Advisors

• Test marketing

• Identify investors

• Valuation benchmarking

• Marketing roadshow

• Book-building and pricing

Broker

Lawyers

Financial PR

Registrars

NOMAD

• Ensure that the directors of the Company have received satisfactory advice and guidance as to the nature of their obligations

• Coordinate the work of other professionals – such as accountants and lawyers who are involved in preparing a Company for the market

• Issue an opinion that it is satisfied that the Company applying to AIM is appropriate to be admitted.

Competent Person

• Resource companies

22

The AIM Admission Document

The Public Document – similar to a Prospectus

Description of the business

− A balanced appraisal of the business and its prospects

− The risk factors

− Details of the offer and the use of funds

Financial information

− Includes historical financial track record – 3 years possibly with recent stub period

› Accountant’s report

› Previously audited financial information with audit reports

Legal disclosures

− Includes working capital statement and significant change in financial position disclosure

The role of the accountant in an IPOReporting accountant

• Preparation of accountant’s (short form) report(s)

• Preparation of long form report

• Preparation of working capital report

• Other comfort letters

Tax advisor

• Structuring advice

• Independent tax diligence

• Tax clearances

• Review tax section of the prospectus/admission document

23

Short form Public report, included in document

Reports on the financial information supplied on the Company

• Typically 3 years

• US GAAP is acceptable

Gives an opinion similar to audit opinion – “true and fair view”

• Review audit files for a period of up to three years to the date of the latest audited accounts

• Perform additional audit work (if necessary) to ascertain that the report gives a true and fair view

• Reporting Accountant ensures there is adequate reliable evidence to support the opinion

Need to watch the 135 day rule (under US rule144a) for age of financial information if shares are offered in the US as well

Long form report Private document – addressed to the Nomad and the Company

Full scope due diligence report prepared to assist in the drafting of the admission document, to determine the suitability of the Company for admission and covering:

• History, development and strategy of the business

• Management, employees and organisation structure

• Financial reporting procedures and accounting policies

• Historical financial information

• Taxation

Significant amount of information required from Company

Substantial management time commitment

24

Working capital report Private document – addressed to the Nomad and the Company

Directors are required to make a statement in admission document concerning sufficiency of working capital for 12 months

Company prepares financial projections model for valuation purposes but also to support this statement

Accountant’s report on this in order to give comfort on the statement

• Detailed review of model

• Sensitivity analysis

Significant management time – taken in preparation of model and accountant’s review

Other comfort letters Pro forma financial information

• In admission document to illustrate changes due to IPO

• Reporting accountant reports on this (private report)

Profit forecast

• Try to avoid making profit forecasts in admission document

• If made, must be reported on by accountant’s

• Significant piece of work

Review of admission document

• General assistance in drafting process

• Comfort on certain financial/tax matters

US share offering would require separate ‘SAS 72’ comfort letter

25

Roles of reporting accountant vs auditorThe role of the Reporting Accountant and Auditor are different and will be conducted by different teams whether the Reporting Accountant is from the same firm or a different firm.

Based on the future structure of the Group, prepare a pro forma balance sheet and income statement that supports the marketing process

NonePro forma

Comfort on selected financial information disclosed in the ProspectusNoneProspectus

Review and report on the forecast cash flows and funding position of the Group to be listed

NoneWorking Capital Report

Formal sign off on the appropriateness of the Group’s financial reporting procedures and controls

NoneFinancial Reporting Procedures

Review and report on the affairs of the Group to be listed to enable the Sponsor to approve the IPO

NoneLong Form Report

To give a fresh, audit style, opinion on the financial informationAudit the financials of the legal entities which will eventually form part of the Group

Short Form Report

Role of the reporting accountantRole of the auditorDeliverable

In effect, the Sponsor requires support from the Reporting Accountant to meet its regulatory responsibility

Issues that may be encounteredOur experience in performing IPOs indicates that the Reporting Accountant may need to deal with issues in the following areas

The evolving nature of tax legislation of many countries may mean that changes are required to meet Nomad and market expectationsTaxation

Local historical audit evidence available may not be sufficient to enable sign-off. This may require significant reworkDocumentation

The historical accounting policies may not be in line with your peer group and may need to be amendedAccounting policies

There will be a series of related party transactions and balances that need to be appropriately disclosedRelated party disclosures

Demonstrable unencumbered title to assets (throughout their operating life) needs to be demonstratedAsset title

Public companies have additional disclosure obligationsHigher burden oftransparency and disclosure

Our approach and early issues review is designed to identify these potential issues, enabling us to design solutions which can then be implemented without disruption to the timetable.

26

To conclude

In our experience AIM is open for US companies

• It will take longer than you expect

• Plan as early as you can

Choose advisors carefully

• Knowledge

• Experience

• Reputation

ERNST & YOUNG LLP www.ey.com

Disclaimer: Information in this presentation is intended to provide only a general outline of the subjects covered.

It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place

of professional advice. Ernst & Young accepts no responsibility for any loss arising from any action taken or not taken

by anyone using this material.

The UK firm Ernst & Young LLP is a limited liability partnership registered in England and Wales with

registered number OC300001 and is a member practice of Ernst & Young Global.

27

The NOMAD’s Point of View Securing Capital and Who Should Look to List on AiM?

Palo AltoSan FranciscoLondon Minneapolis New YorkChicagoHong KongShanghaiBeijing

Table of Contents

Section I Securing Capital

Section II Who Should Look to List on AiM?

Appendix A IPO Process

Appendix B Liquidity case study

Appendix C Overview of Piper Jaffray

28

SECTION ISecuring Capital

Possible reasons for considering AiM

• Access development capital

• Secure future funding rounds

• Remove inefficient financing

• Provide an exit for existing shareholders

• Achieve greater liquidity

• Gain an international shareholder base

• Facilitate expansion into Europe

• Enhance the Company’s profile and status – increase press coverage and transparency of public reporting

• Provide currency to make acquisitions

• Provide currency to incentivise staff and encourage employee share ownership

• Achieve a dual listing

• Avoid costly U.S. regulatory environment

There are several good

reasons to consider an

AiM IPO, but for smaller

U.S. companies the key

driver has often been to

avoid the costly U.S.

regulatory environment

accompanying a listing

in the U.S.

Regulatory arbitrage is

not well received by

institutional investors

“WHY AiM?” – the first question from institutional investors

29

Successful listing characteristics - generally

• Realistic valuation expectations

• Experienced management team – professional, dynamic, communicative and open

• Strong track record of delivery

• Growth potential

• Visibility of future earnings

- recurrent revenue

- company newsflow

• Well positioned in a significant and well defined market

• Clearly defined strategy and robust business plan

• Competitive advantage - innovative products/services/technology

• Protected market position

- barriers to entry

- IP

• Size of free float

- greater liquidity and free-float is valued highly by investors

- 25%+ of outstanding shares

- at least $20-25m in absolute terms

• Quality of NOMAD

The quality threshold for companies seeking an IPO is not lower on AiM

Institutional investors

are increasingly focused

on high quality

companies as the

market softens, a

situation which is

exacerbated for foreign

companies

Successful listing characteristics – U.S. companies

• Clear rationale for AiM listing

– international revenues

– international operations, preferably with a European presence

– defined international expansion plans

• Adoption of, or readiness to adopt, UK plc practices

– Board structureChairman and CEO separate

independent non-executives – at least two

regular re-election

audit, remuneration and nomination committees

– investor protectionspre-emption rights

disclosure of substantial share interests

mandatory take-over provisions

– non-U.S. holding companymay be beneficial to avoid SEC registration obligations

but consider tax implications

– preferred stock converted into ordinary shares

U.S. companies can increase the warmth of welcome by investors by articulating clear business reasons to list on AiM and by adopting certain corporate governance good practices

30

Other key issuesPrimary vs. Secondary• Primary preferred by investors but must be clear rationale and justification• Partial exit possible

– small proportion of overall offering size: more than 50% exceptional– small proportion of holders’ shares sold – shares being sold by longer term shareholders, though wary of founders cashing-out– but positive effect on offering size and liquidity– often through Greenshoe

Board presence• Remote in distance and time zones

– executive management regularly required to be in UK – recommend one director to be based in the UK

Share option schemes• Needs justification to price at less than the IPO price• The longer between award and IPO the better if priced at a discount, even if priced at ‘fair

value’• Performance hurdles

Other key issues (cont’d)Accounting standards and financial history• U.S. GAAP is permissible• A three year track record will not be required

Company lock-up

• 6 – 12 months– with 6 - 12 month orderly market agreement

Shareholder lock-ups• For companies whose main business activity has not been independent and revenue earning

for two years prior to Admission, 12 months lock-up for Directors, Substantial Shareholders (≥10%) and their Associates and Applicable Employees (≥0.5%) (Rule 7 of the AiM Rules for Companies)

• Otherwise,– 12 month lock-up for senior management– with 6 - 12 month orderly market agreement– may be longer if selling stock on IPO

• Limited exceptions – take-over offer, death or court order or, if not Rule 7, with agreement of NOMAD

31

Other key issues (cont’d)Transfer restrictions of stock• Under Reg. S offerings, no offers or sales of shares in the U.S. or to U.S. Persons (for 12

month period)– no distribution to LPs possible– possible to sell to QIBs through Rule 144A if require U.S tranche

• Traded in certificated form or electronically through SIS to enable non-U.S. persons compliance

– impacts secondary market liquidity– set up second line of stock that can be CREST settled once seasoned (Protonex)

U.S. securities filings• Will not be avoided if over 300 stockholders worldwide (for a U.S. issuer) – difficult to control

Recent corporate activity• Such as funding rounds or awards of share options (even if at ‘fair market value’)

– provides a valuation reference point for investors– strong justification needed for uplift– the more time and more newsflow after activity the easier to justify

Collation of all significant information for drafting of the Admission document/prospectus Review of all material company contracts, etc

Due diligence and preparation of offering

documents

Research forms a key part of the marketing process by raising investor awareness prior to offeringProvides investors with an objective and independent view of valuation

Research analysts accumulate investor feedback on valuation and story Establish price range for the offering

Senior management communicate ‘equity story’ to key investors globallyAssessment of quality and price sensitivity of demand

Recommend IPO price by bookbuilding analysis of demand and quality of investorsPricing to provide stock with the right momentum in aftermarket

Committing capital to market makingPeriodic presentations to keep investors informed of the Company’s progress and prospects

Research

Investor education

Roadshow and bookbuilding

Pricing/Closing

On going support

Overview of IPO process

32

Indicative timetable

ADMISSION

WEEK 12

WEEK10

WEEK 8

WEEK 7

WEEKS 2-6

WEEK1

• Pricing and allocation of the IPO• Six copies of final Admission documents submitted to the LSE• AiM declaration submitted • Nominated Adviser announcement

• Final draft accountants report• Final draft Admission document• Ten day announcement released• Marketing to institutions

• First draft accountants report• Second draft Admission document

• First draft Admission document• Draft due diligence reports

• Appoint accountants and lawyers• Due Diligence – legal• Due Diligence – financial• Due Diligence – commercial• Due Diligence – IT / other

• Appoint Nominate Adviser• Appoint Broker

Outline timetable

Valuation process overview

Investor educationResearch preparation/ Build investment case Roadshow

PricingBalance price and demand

through stable allocations to ensure strong aftermarket

performance

• Set guidelines for pre-marketing approach to valuation discussion with investors

• Piper Jaffray receives investor feedback on valuation and story

• Establish indicative price range for prospectus

• Education on operating and financialassumptions

• Ongoing dialogue withsyndicate analysts

• Articulation of keyinvestment themes

• Consensus generationon projections andvaluation framework

• Senior management communicates ‘story’ to investors – bookbuilding commences

• Assessment of quality and price sensitivity of demand (consideration of aftermarket performance)

• Recommend IPO price

Company projectionspreparation

• To be able to determine an indicative valuation range, Piper Jaffray will work closely with the company to produce detailed financial projections based on company assumptions

• Company will be benchmarked against its peers• A DCF model will then be constructed, against which a

valuation range can be benchmarked

IPO ‘Pricing’

Initialvaluation range

Research analyst

presentation

Indicative price range set and Preliminary prospectus distributed

IPO pricingagreed

3-4 weeksBuild investment

case

1-2 weeksEncourage perception of

scarcity/competition among investors

1-2 weeksCreating demand

tension

Researchpublication (including

valuation)

Low

High

Potential‘Valuation

Range’

TodayBuild detailed

financial model

33

SECTION IIWho Should Look to List on AiM?

A market for companies of all sizes

Distribution of AIM Companies by M arket Value August 2006 vs August 07

123

178

222

367

233

199

145

2310 6

104

171

227

359

274

242

183

68

204

0

50

100

150

200

250

300

350

400

Less than$3.9m

$3.9m - $9.9m $9.9m - $19.8m $19.8m -$49.5m

$49.5m - $99m $99m - $198m $198m -$495m

$495m -$990m

$990m -$1980m

over $1980m

M arket Value (US$)

No.

of C

ompa

nies

The majority of AiM

companies have a

market cap below

$200m – a striking

contrast to NASDAQ

and the LSE Official List

– although sizes are

growing

60% of AiM companies

by value now have a

market cap. greater than

$200m

U.S. companies on AiM

tend to be larger than

the market as a whole

No. of companies August-06

No. of companies August-07

Distribution of US companies by Market alue August 07

6 6

14

16

21

65

2

0

2

4

6

8

10

12

14

16

18

20

22

Less than $9.9m

$9.9m - $19.8m

$19.8m - $49.5m

$49.5m -$99m

$99m - $198m

$198m - $495m

$495m - $990m

over $990m

Market Value (US $)

No.

of C

ompa

nies

Source: London Stock ExchangeData through Aug 31, 2007

34

A market for companies of all sectors

Sector distribution of US companies by number August 07

9 9

8

7

4 4 4 4

3 3 3

0

1

2

3

4

5

6

7

8

9

10

Electronic &Electrical

Equipment

Oil & GasProducers

Software &ComputerServices

Pharmaceuticals&

Biotechnology

Automobiles &Parts

Chemicals GeneralFinancial

SupportServices

Health Media Speciality &Other Finance

No.

of C

ompa

nies

While real estate,

natural resources,

support services and

financials lead the pack,

AiM is a market open to

all sectors

For U.S. companies,

Technology, Healthcare

and Oil & Gas

companies dominate

Top AIM sectors by market capitalisation and no. of companies August 07

106179

146 193102

143 116 66 8876

-

5,000

10,000

15,000

20,000

25,000

30,000

Real Estate Mining SupportServices

GeneralFinancial

Oil & GasProducers

Softw are &ComputerServices

Media EquityInvestmentIntruments

Travel & Leisure

Pharmaceuticals& Biotechnology

Mkt

Val

ue (

US$

m)

0

50

100

150

200

250

Num

ber o

f com

pani

esMarket Value USD$Number of Companies

Source: London Stock ExchangeData through Aug 31, 2007

A market for companies seeking to secure capital

Number of admissions 1995 to 2007

123145

107

75102

277

177160 162

355

519

462

201

0

100

200

300

400

500

600

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Num

ber o

f adm

issi

ons

AiM is maturing as a

market – the average

amount raised by

companies floating on

AiM is now c. $95m*

and growing

However, the climate for

IPOs on AiM, and

foreign companies in

particular, has cooled

recently

* Excluding IPOs <$5m; 2007 YTD

Note: Includes transfer and relistings

3.51.2 1.0 2.2

5.5

12.8

19.7

10.62.6

1.1 1.02.0

3.7

4.9

11.4

15.3

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2000 2001 2002 2003 2004 2005 2006 2007

Fund

s ra

ised

($b

n)

Further money raised ($bn)

Money raised at admission ($bn)

35

A market for high quality growth companies

• No minimum capitalisation, free float or shareholder requirements– allows earlier stage, smaller companies to float– attracts investors seeking high growth opportunities– ‘Bigger fish in a smaller pond’

• No operating history and trading record required (if no offer to the public and prospectus)– companies can be admitted to AiM before they are old enough to list on the Main

Market in London or on NASDAQ

• Internationally orientated institutional investors hungry for high quality, high growth stories, regardless of country of incorporation

– companies that meet the standards discussed earlier will attract strong investor interest

AiM allows high quality

companies with a strong

equity story to achieve a

public market quotation

sooner than on the full

Official List in London or

on NASDAQ

APPENDIX AIPO Process

36

Preparation: due diligence and documentation

Regulatory and legal requirements and market practice oblige Piper Jaffray and transaction counsel to undertake extensive due diligence

Due diligence process:

• Piper Jaffray and lawyers meet with Issuer’s management, board and auditors• The Admission document/prospectus must fully and accurately portray the issuer’s affairs with no material omissions• Key selling messages developed

– position the Issuer– address potential concerns

Admission document/Prospectus:Admission document/prospectus serves two functions – a disclosure document (approved by, and filed with, the UKLA if a prospectus) and a marketing document to sell the offer. The Admission document/prospectus contains:

• business activities• trading history • management structure• future direction

Research report – prepared by the senior syndicate managers’ research analysts (who give their independent view), distributed before the offering and used as the managers’ principal marketing tool, guiding investors towards the appropriate valuation. One-on-one and roadshow presentations – used to market the Issuer and its investment case to investors.

• details of offering

• current shareholders

• risk factors

• other financial and legal information

Pre-marketing

Roadshow

Bookbuilding

Pricing/Allocation/

ClosingStabilisationDue

Diligence

Preparation of offering materials

Research

Legal documentation

• Regulates the offering and placement of shares• Partly based on letter of engagement, but also includes representations and warranties by the

Issuer and selling shareholdersUnderwriting Agreement

• General agreement between the Issuer and Piper Jaffray • Regulates rights and obligations in the course of preparation of the issue, including

commission and reimbursement of costsEngagement Letter

• Auditors’s confirmation regarding accuracy of financial data published in the prospectus• Negative assurance of no material change since last auditLetter of Comfort

• Submitted by lawyers• 10b5 opinion not required if no selling into the USLegal Opinion

• Company, directors, selling shareholders• Designed to protect investorsLock up

Pre-marketing

Roadshow

Bookbuilding

Pricing/Allocation/

ClosingStabilisationDue

Diligence

Preparation of offering materials

Research

37

Importance of research

It is important for the Issuer to appoint a Lead Manager whose investment research is highly regarded

Piper Jaffray would produce comprehensive research and co-ordinate research production by any other syndicate members

Institutional investors rely heavily on research in making investment decisions

Research forms a key part of the marketing process for any new issue

• raises investor awareness prior to offering

• explains valuation

• provides investors with an objective and independent view

• induces investors to alter portfolio allocationsInvestor education enables the indicated size and price range to be based on accurate feed-back

Approximately two weeks prior to launch, specific investor education of the issue would commence

From this pre-marketing a picture of the likely level of investor demand will emerge. Based on this feedback, the Issuer and Piper Jaffray set the expected size and the anticipated price range of the offering. This allows extensive but directed ‘price talk’with institutions during the building of the book of demand, creating price tension

Pre-marketing

Roadshow

Bookbuilding

Pricing/Allocation/Closing

StabilisationDueDiligence

Preparation of offering materials

Research

Germany

ActivestAllianz/DIT Bayern Invest Cominvest DWS DeutscheDGZ-DekaBankFrankfurt TrustInvesco Kapital

Lupus AlphaNordinvestOppenheimDeutsche Postbank SEBUnion InvestWest AM

France

Spain

Scandinavia

AP3BankInvestCarnegie AMDanske Capital

Den Danske Bank NordeaUnibank

Netherlands

ABN AmroASWDelta LloydDe MelloDSM PFGo Capital

INGInsingerMacCapitalProgress (Unilever) Robeco

Belgium/Luxembourg

Banque de LuxembourgBGL InvesmentCorluyDexiaEthiasFortisGIMV

KBCINGPetercamPuilaetcoQuest for GrowthSERCAM

Italy

SwitzerlandAdamantBank Julius Baer & Co.Bank ThalerBank LeuBellevue Asset ManagementClariden BankCompania Intl FinancieraCredit Suisse Asset Mgmt.EFG International

Lombard Odier Darier MicroValue AGPictet & CieSuvaSwissca Portfolio Mgmt.Swissfirst Bank (Zurich)UBS GAMUnion Bancaire Privee

Aletti Gestielle AM.Anima S.G.R.p.AAntonveneta ABN AmroArcaAzimutBNL Gestioni Bipiemme Gestioni S.G.R.S.p.A

CapitalgestCAAM IMErselEuromobiliare AMGenerali AM.Julius BaerMonte Paschi AMRAS AMSanpaolo IMI AM

Roadshows

UK Jupiter LansdowneLegal & General LiontrustM & G MarlboroughMarathon AM Merrill Lynch IMMilleniumMKM LongboatMorgan Stanley AM Morley New Star AM Newton IMOdey Old Mutual AMPolar Capital PolygonPutnamRAB CapitalRCM (U.K.) LtdReabourne LtdRothschild AMRoyal London AMSarasin IM.Schroder IMScottish WidowsSoc Gen AM. UKStandard LifeThreadneedle AMTT InternationalUniversities Superannuation UBS Walter Capital Axa

BNP Paribas CCRCDCCGU Victoire AM

Credit LyonnaisLCF RothschildFortisMeeschaertOptigestionSGAM

Banco Popular Barclays FondosBBVABSCH

CaixagestCaixa CatalunyaGesbetaGesmadridSantander

AberforthAbingworthABN Amro AdelphiAegon IMAlliance Trust ArtemisAxa FramlingtonBaring AMBlackrockBlueCrest BradshawCanada lifeCapital InternationalCCLACheyne CloseCQSFidelity Findlay Park First State F&CGartmoreGLG PartnersHealthcorHenderson Herald IMHermesInsight IMINVESCO Perpetual JO HambroJP Morgan AM

Pre-marketing

Roadshow

Bookbuilding

Pricing/Allocation/ Closing

StabilisationDueDiligence

Preparation of offering materials

Research

38

Bookbuilding

Offer launched on indicative pricing termsOffer price fixed after marketing/roadshows completedUnderwriting occurs after bookbuilding completeAllocation to investors

The bookbuilding process is designed to identify sources of highest demand and create ‘competitive tension’ among investors

Build book of demand

Sizing and pricing

Indicative valuation

Pre-marketing

Pricerange

Determine demand at different prices

Provide feedback to investors

Bookbuilding is designed to achieve the optimum price for the offering• pricing which reflects genuine demand in the marketplace and offers transparency of investor demand, allowing

assessment of investor quality and the effect of changes in price upon demand

Pre-marketing

Roadshow

Bookbuilding

Pricing/Allocation/

ClosingStabilisationDue

Diligence

Preparation of offering materials

Research

Setting the price

Price range

• Attractive value proposition to investors within range

• Large enough range around fair price to allow for market adjustments

• Ensure price range creates pricing discussion

• High level of confidence in achieving forecasts underpinning valuation

• Flexibility to move price range if required

+

Roadshow• Management convincing investment

community of strategy (vision) and business plan

• Broader introduction to financial markets

Market• General market sentiment• Share price movements in direct

comparables • Newsflow on sector

- earnings- industry trends

Investor interest• Anchor investors, setting trend and

building momentum in the book• General level of oversubscription of

quality accounts• Price limits• Indications on aftermarket interest

+

Offer price

• Maximise value for selling shareholders whilst

• Giving stock right momentum in aftermarket

• Offering fair value for balanced investor group

• Giving management opportunity to deliver and provide medium-term impetus to stock

Pre-marketing

Roadshow

Bookbuilding

Pricing/Allocation/

ClosingStabilisationDue

Diligence

Preparation of offering materials

Research

39

Allocation criteria

• Price leadership; price limits• Size of order (relative to average holding size)• Timing of order• Stability of order (demand increase; limit changes)• Seriousness of order - record in similar investments; level of analysis completed• Participation in one-on-one, roadshow and research call• Anticipated aftermarket behaviour (previous experience of aftermarket holding/buying/selling• Behaviour in previous offerings

Allocation

Pre-marketing

Roadshow

Bookbuilding

Pricing/Allocation/

ClosingStabilisationDue

Diligence

Preparation of offering materials

Research

Time

Pric

e

Stabilisation supports aftermarket, if requiredObjective is to stabilise aftermarket performance of the IPO and to ensure an orderly market for investors with sufficient trading liquidity and demand to absorb any selling pressure if required

The Lead Manager is given a ‘Greenshoe’ over-allotment option by the issuer/selling shareholder to facilitate stabilisation – usually 15% of offering

The existence of the option provides investors with confidence when bidding, maximising proceeds, that there will be stabilisation

As a successful offering will be oversubscribed, the Greenshoe will be allocated, thus creating a short position for the syndicate

• if the share price falls in initial trading, Piper Jaffray will place a bid in the market at issue price to absorb any shares offered, thus reducing the short position

• if share price rises in initial trading, Piper Jaffray will exercise the Greenshoe to prevent losses that syndicate would incur in covering short position above issue price

Stabilisation

Pre-marketing

Roadshow

Bookbuilding

Pricing/Allocation/

ClosingStabilisationDue

Diligence

Preparation of offering materials

Research

40

Aftermarket support

• Aftermarket support is provided at Piper Jaffray by the Corporate Broking team• Continuing research coverage

– regular reports– ad hoc reports on newsflow

Roadshow management and investor targeting

Co-ordination of institutional company visits/meetings undertaken to build and maintain investor relationships, including for• Results• Site visits• Lunches• Corporate activity

Selective investor targeting for effective use of management timeFeedback exercise undertaken and provided to client

APPENDIX BLiquidity Case Study

41

0

20

40

60

80

100

120

140

Jul-0

4

Aug

-04

Sep-

04

Oct

-04

Nov

-04

Dec

-04

Jan-

05

Feb-

05

Mar

-05

Apr

-05

May

-05

Jun-

05

Jul-0

5

Aug

-05

Sep-

05

Oct

-05

Nov

-05

Dec

-05

Jan-

06

Feb-

06

Mar

-06

Apr

-06

May

-06

Jun-

06

Jul-0

6

Aug

-06

Six month lock-upexpiry

Market cap onadmission of £60m,

£20m raised

First development phase of Gyrohaler completed

Interim results to30 Sep-04 announced

$375m licensing agreementsigned with Novartis forAD237, $15m up front

Final results to 31 Mar-05

Interim results to 30 Sep-05 announced

Collaborative agreement signed for VR315,

EUR23m in milestones anddevelopment funding

Collaboration agreementsigned with Boehringer

Ingelheim to developbranded DPI, €15m

investment in cash andshares

Final results toMarch 2006

£45m fundraising announced

11m VC shares placed

2m VC shares placed

3m VC shares placed

3m VC shares placed

6m VC shares placed

Sha

re p

rice

(pen

ce)

Liquidity case study: Vectura Group Plc

25m+ VC shares placed

Liquidity case study: Vectura Group Plc (cont’d)

• UK emerging pharmaceutical company developing a range of inhaled drugs for the treatment of lung diseases and other conditions where delivery via the lungs can provide significant benefits

• Raised £20m ($38m) new money through an AiM IPO in June 2004 - £60m ($114m) market cap

• Immediately after IPO, pre-IPO shareholders comprised approximately 55% of the share register–- locked-up (hard) for 6 months with a further 6 month orderly market agreement

• Diverse group of key pre-IPO shareholders, including a number of “classic” VC investors, founding shareholders (several private individuals and a university) and former directors

• Imperative that the placing of VC stock in the market is carried out in a co-ordinated way to capitalise fully on liquidity opportunities

• As each pre-IPO shareholder had different intentions and exit strategies following the IPO, essential that close proactive contact was maintained by the NOMAD with each party in the lead-up to, and throughout, the sell-down process

–- allow fast reaction to liquidity opportunities –- ensure all pre-IPO shareholders are treated on an equitable basis –- avoid “breaking of ranks”

• Since IPO lock-up expiry, over 25 million Vectura shares have been placed in the market by the Piper Jaffray teamon behalf of pre-IPO shareholders

42

Liquidity case study: Vectura Group Plc (cont’d)

• Shares placed in a co-ordinated fashion, to capitalise on positive company news flow and successful investor road shows

• Larger blocks of VC stock targeted at particularly liquid and receptive periods in the market, generally on the back of positive company news flow - ensure such large stock placements did not negatively impact the share price

• From 55% at IPO in June 2004, Vectura’s VC shareholding was below 10% by April 2006 with those VCs remaining shareholders doing so through choice

• In June 2006, Piper Jaffray lead-managed a £45 million ($86m) fundraising for Vectura, the largest secondaryfundraising ever for an AiM-listed biotechnology company

• Conclusion: Liquidity is not a function of AiM vs. LSE or NASDAQ but instead a function of:– quality of company– quality of management team– company newsflow & delivery on expectations– business plan and track record– size of free float– quality of NOMAD

• AiM now represents a highly credible option for VCs seeking timely liquidity opportunities from high growth, quality newsflow-rich companies

APPENDIX COverview of Piper Jaffray

43

- leading sector focused middle market investment bank

Key factsKey facts

• 10 offices worldwide• More than 1,000 employees• Publicly listed in New York• $1.0bn market capitalisation• Over 350 growth companies covered • Focus on 6 core sectors

• 10 offices worldwide• More than 1,000 employees• Publicly listed in New York• $1.0bn market capitalisation• Over 350 growth companies covered • Focus on 6 core sectors

*Securities and products are offered in the United Kingdom through Piper Jaffray Ltd., which is authorized and regulated by the Financial Services Authority

• Client-focused, independent, publicly held securities firm founded in 1895

• Leading growth-oriented, middle market investment bank

• Top ranked middle market M&A adviser

• Ranked No.1 in IPOs completed in our focus sectors

• Lead manager on the top performing IPOs in the industry in recent years

• NOMAD and broker to leading growth companies

• Full service capabilities and unparalleled transaction execution

• Client-focused, independent, publicly held securities firm founded in 1895

• Leading growth-oriented, middle market investment bank

• Top ranked middle market M&A adviser

• Ranked No.1 in IPOs completed in our focus sectors

• Lead manager on the top performing IPOs in the industry in recent years

• NOMAD and broker to leading growth companies

• Full service capabilities and unparalleled transaction execution

Piper JaffrayPiper Jaffray

Minneapolis (HQ)

Chicago BostonNew York

London*

Shanghai

San Francisco

Palo Alto

Hong Kong

Beijing

70+ employees in Europe focussed on Technology, CleanTech, Healthcare and ConsumerAcquisition of Goldbond Capital holdings, Hong Kong based investment bank with 70 employee

Growth sector focus, integrated approach

TechnologyTechnology

Clean TechClean Tech

ConsumerConsumer

Financial InstitutionsFinancial Institutions

HealthcareHealthcare

Industrial GrowthIndustrial Growth

Investment Banking

Institutional Equity Sales

Equity Trading

Equity & Debt

Capital Markets

Convertible Securities

High-Yield &

AcquisitionFinance

Equity & Fixed

Income Research

Piper Jaffray offers the advantage of scale without sacrificing impartiality of advice or client focus

Sectors Global presence Products

Inte

grat

ed a

ppro

ach

44

• Highly experienced investment banking team with considerable expertise in LSE Official List and AiM equity offerings (IPOs, secondary offerings & block trades) as well as cross-border mergers and acquisitions – 21 equity offerings ($1.25bn) executed since the beginning of 2006

• Top ranked M&A advisor – 21 M&A engagements (>US$5bn) since the start of 2006

Piper Jaffray – leading NOMAD & broker in the UK

Piper Jaffray is an

established, highly

regarded, NOMAD and

broker focusing on

premier growth

companies

Piper Jaffray provides a

genuine global

small/mid-cap growth

company broking, equity

sales & trading,

corporate finance and

M&A advisory service

Investment

Banking

Regulatory

• Member of the London Stock Exchange and approved Broker• Authorised and regulated by the UK Financial Services Authority• NOMAD and approved Sponsor

Sales & Trading

Research

• 20 European specialist sales & trading professionals located in London and Brussels

• Strong relationships with small/mid-cap generalist and specialist institutional accounts throughout the UK and Continental Europe

• Good access to European long-only hedge funds• Highly experienced sales force - average tenure of UK sales force is 22

years • Market maker in 70 UK quoted stocks, committing our capital

• Seasoned team of UK, US and Continental European research analysts• It is normal for an equity research analyst to provide independent research

on companies to which we are retained broker and financial adviser• Research made available to all fund managers and buy-side analysts• Piper Jaffray’s European research is also published in the US

AiM investors rate

Piper Jaffray at the top

of UK brokers and #1

among U.S.-based

NOMADs

Strong reputation among UK institutional investors

Source: Investor Chronicles’ 2006 Annual Top 30 AiM Brokers

I would invest in I make time to read I would meet I get updates after Generally, I respect Overallits IPOs its research companies it floats I've invested this broker Score

Broker Country (max score: 5) (max score: 5) (max score: 5) (max score: 5) (max score: 5) (max score: 5)

Investec South Africa 4.2 4.8 4.7 4.3 4.5 4.50ABN Amro Netherlands 4.0 4.5 4.5 4.5 4.8 4.46Brewin Dolphin United Kingdom 4.2 4.2 4.4 4.4 4.2 4.28Panmure Gordon United Kingdom 3.8 4.2 4.2 4.0 4.3 4.10Bridgewell Securities United Kingdom 3.5 4.4 4.2 4.2 4.2 4.10Piper Jaffray United States 4.0 4.0 4.3 4.0 4.0 4.06KBC Peel Hunt Belgium 4.0 4.0 4.2 3.8 3.8 3.96Arden Partners United Kingdom 3.6 4.3 3.8 4.0 3.8 3.90Altium Capital United Kingdom 3.2 4.0 3.6 4.0 3.7 3.70Code Securities United Kingdom 3.6 4.0 3.8 3.4 3.4 3.64Oriel Securities United Kingdom 3.3 3.6 3.3 3.5 3.5 3.44Numis Securities United Kingdom 3.2 3.7 3.5 3.2 3.2 3.36Collins Stewart United Kingdom 3.7 3.0 3.5 3.3 3.0 3.30Noble & Co United Kingdom 3.3 2.2 3.3 3.3 3.3 3.08Shore Capital 3.0 3.8 3.0 2.8 2.8 3.08Rowan Dartington United Kingdom 2.6 3.2 3.4 3.0 3.0 3.04Arbuthnot Securities United Kingdom 2.4 3.2 2.8 3.3 2.8 2.90Williams de Broe United Kingdom 2.4 2.8 3.0 3.0 2.8 2.80Evolution Securities United Kingdom 2.8 2.7 3.2 2.5 2.7 2.78Canaccord Adams Canada 3.0 2.8 2.8 2.5 2.5 2.72Seymour Pierce United Kingdom 2.7 3.0 3.0 2.3 2.5 2.70Cenkos Securities United Kingdom 3.3 1.7 3.0 2.7 2.7 2.68Teather & Greenwood Iceland 2.8 2.8 2.8 2.4 2.6 2.68WH Ireland United Kingdom 2.3 3.3 2.0 2.3 3.0 2.58

Charles Stanley United Kingdom 2.7 2.5 2.6 2.5 2.2 2.50Corporate Synergy United Kingdom 2.0 2.5 2.5 2.7 2.3 2.40Ambrian Partners United Kingdom 1.7 2.0 2.0 3.0 3.0 2.34Libertas Capital United Kingdom 2.3 2.3 2.7 2.3 2.0 2.32Daniel Stewart & Co United Kingdom 1.8 1.7 2.0 2.3 1.7 1.90JM Finn United Kingdom 1.5 2.3 1.8 1.5 1.5 1.72

2006 Annual Top 30 AiM Brokers

United Kingdom

45

Retained corporate advisory/broking clients

*As of 26 Sept, 2007

Company Listing Mkt. Cap*

AGI Therapeutics AIM £103m

Alizyme Full £155m

Antisoma Full £155m

Ardana Full £60m

Ark Therapeutics Full £198m

Axis-Shield Full £136m

Biocompatibles Full £66m

BTG Full £150m

Corin Group Full £258m

Genetix Group AIM £42m

Inion Full £30m

Intercytex Group AIM £44m

Macro 4 Full £44m

ProStrakan Group Full £136m

Protherics Full £159m

Sinclair Pharma Full £78m

SkyePharma Full £143m

Spacelabs AIM £53m

Vectura Group Full £224m

Vernalis Full £134m

xG Technology AiM £1,010m

Leading execution capabilities in Europe*

US $25,800,000

acquired Applied Imaging Corp.

November 2006

US $9,000,000

has acquiredproducts from

Cellegy Pharma

November 2006

£11,000,000

Vendor Placing &Open Offer

September 2006

CHF 88,500,000

Initial Public Offering

November 2006

US $25,000,000

has acquiredMacroMed

December 2006

CHF 370,000,000

Rights Issue

March 2007

£12,000,000

Vendor Placing

May 2007

£120,000,000

Transfer to Full List

April 2007

CHF 136,875,000

Initial Public Offering

May 2007

£14,500,000

Vendor Placing

December 2006

£26,300,000

Vendor Placing

December 2006

£38,200,000

Vendor Placing &Open Offer

December 2006

Undisclosed

has soldmajority stake to

January 2007

€129,700,000

Rights Issue

February 2007

EUR 40,000,000

Initial Public Offering

March 2007

£131,000,000

has acquired

January 2007

DKK 64,000,000

Cash Placing

February 2007

NOMAD and Financial Advisor

Sept 2007

€655,000,000Value N/D

Disposable of it Subsidiary

February 2006

£231,000,000

April 2006

Recommended offer by Golden Gate Capital

Management buy out and sale to Carlyle Group

May 2006

Acquisition Of

Value N/D

January 2006

£11,300,000

Vendor Placing

July 2006

£11,300,000

Vendor Placing

July 2006

£11,300,000

Vendor Placing

July 2006

£11,300,000

Vendor Placing

July 2006

£11,300,000

Vendor Placing

July 2006

Since the start of

2006, we have

completed 21 capital

raisings, amounting

to over US$1.25bn

In the same period,

our European team

has also been

engaged in executing

21 M&A deals,

amounting to c.$5bn

* Based on deals completed by European Investment Banking team members

46

www.abchurch-group.com100 Cannon Street, London, EC4N 6EU Tel: 020 7398 7700 Fax: 020 7398 7799

West One, Wellington Street, Leeds LS1 1BA Tel: 0113 203 1340 Fax: 0870 762 7015

Heather Salmond, Director

An IPO is a one-off opportunity to raise significant funds and also to

really put your business on the map

47

Recent IPOs & Placings

IPO1 June 2007£25m Placing

£110m mkt cap

IPO13 Dec 2006

US$40m PlacingUS$120m mkt cap

IPO30 March 2006£120m Placing£321m mkt cap

IPO06 Aug 2007

£7.5m Placing£27.6m mkt cap

IPO07 Sept 2006£3.8m Placing£20m mkt cap

IPO26 Oct 2006£7m Placing

£29.5m mkt cap

IPO05 Dec 2006

£1.5m Placing£13.55m mkt cap

IPO06 Dec 2006

£0.5m Placing£25m mkt cap

IPO28 March 2007£7.5m Placing

£17.6m mkt cap

IPO21 June 2007£32m Placing

£171m mkt cap

IPO13 Aug 2007£75m Placing

£204m mkt cap

10 May 2007£279m Placing

N.B. Market caps shown are at time of Listing

IPO01 Nov 2006

£2.5m Placing£31.7m mkt cap

4 April 2007£43.7m Placing

IPO12 Dec 2006

£600,000 Placing£10m mkt cap

48

Communication objective

Investment in PR / IR & marketing

Retail & institutional

demand

Greater awareness

More partners & customers

Share price reflects true

value

Investor interest

Commercial benefits

Increased revenues

Your target audiences

Analysts

Media

Customers

Employees

Trade partners

RetailInvestors

InstitutionalInvestors

Private ClientBrokers

Company

49

Photo shoot Website content

Presentation preparation

IPO communications process

Comms tool kit

Announcement weekend

Monday media coverage

Release and Pathfinder prospectus

Follow up in trade and B2B

Marketing

Information infrastructure

Analyst meetings

10 day announcement

(AIM only)

Pricing / impact day release (Official List only)

First day of dealings

LSE Welcome

After market

Target profiling

Market columns

Private client broker meetings

Corporate and financial PR

IR

B2B and trade PR

Q&As FAQs

spokes-persons

notes to editors

photojournalism

commstraining

issues-management

key messages descriptor

define audiences

Preparation

50

Photojournalism

Quality CoverageCity AM

Daily Express

Independent

Daily Telegraph

Shares

51

Photo shoot Website content

Presentation preparation

IPO communications process

Comms tool kit

Announcement weekend

Monday media coverage

Release and Pathfinder prospectus

Follow up in trade and B2B

Marketing

Information infrastructure

Analyst meetings

10 day announcement

(AIM only)

Pricing / impact day release (Official List only)

First day of dealings

LSE Welcome

After market

Target profiling

Market columns

Private client broker meetings

Corporate and financial PR

IR

B2B and trade PR

Business broadcast

52

An IPO is just the beginning…

Maintain momentum

Refresh Communications Tool KitUpdate Report Medicsight/Abchurch meeting

Media interviews surrounding announcement

One-on-one analyst meetings (w/c 3 December)

Shareholder register analysis report

Trading update

December

Update Report

Medicsight/Abchurch meeting

Media site vistShareholder register analysis report

Website reviewNovember

Medicsight at China CCR annual (Oct)

Medicsight/ Toshiba CTC training day at JDDW (Oct)

Medicsight ColonCAD/ clinical presentation at Boston (Oct)

Update Report Medicsight/Abchurch meeting

Media interviews surrounding announcement

Shareholder register analysis report

Peer Group analysis

Ongoing updates to IR website

Private Client Broker meeting

Contract announcement

Q3 Results

October

Update Report

Medicsight/Abchurch meeting

Analyst feedback report

Analyst site visit

Analyst feedback reportSeptember

Features:•Pharma – Medical DevicesEvents:•National Pharmacist Day - USA

Update Report

Medicsight/Abchurch meeting

Results preparation

Results evaluation report

Media briefings at results

Shareholder register analysis report

Website Review

Notice of results

Interim results

August

CPR / Speaking OpsClient managementFinancial PR/ Media Relations

Investor RelationsFinancial Calendar / RNS

53

Ongoing PR

£15M contract win

SharesInvestors Chronicle

Shares

Interims

Shares and Investors Chronicle

£50M

contract win

Bloomberg: stocks towatch in

2005

IPO of the Year

Award

Samsung contract win

DailyMail

£8M contract win

£25M contract win

AGM

AIM & Ofex

Investing for Growth

Hyundai contract win

£29M, two contracts

Interims

Site Visit£20M contract win DSME

Share price performance for Hamworthy

£13M contract win

£15M contract win

Acquisition of Serck

£15M contract win

Interims

Issuesmanagement

Comprehensive investor relations offering

B2B & T&T PR

Contribution to full

marketing mix

Major transaction/ M&A capability

Value add

International reach, IPREX

/ Northern region

Core corporate

& financial

programme

54

www.abchurch-group.com100 Cannon Street, London, EC4N 6EU Tel: 020 7398 7700 Fax: 020 7398 7799

West One, Wellington Street, Leeds LS1 1BA Tel: 0113 203 1340 Fax: 0870 762 7015

4 October 2007 London Bridge Capital

London Bridge Capital

Corporate Finance AdvisoryFund managementTrading / Brokerage servicesNot a NomAd / Broker

4 October 2007 London Bridge Capital 108

We exclusively offer financial and strategic advice to companies operating in the cleantech sector.

Our Advisers have brought 5 major West Coast companies to market:Gatekeeper (CA)HaloSource (WA)Libra Natural Resources (WA)Prometheus Energy (WA)Solar Integrated Technologies (CA)

55

4 October 2007 London Bridge Capital4 October 2007 London Bridge Capital 109

The London Edge - a ‘cluster’

London / UK plc – the place to do business

Government and trade body support for your business, whether UK-based planning to go global, or outside the UK wanting to invest here

World’s leading capital markets

The London Stock Exchange markets –providing the financial platform that supports your strategic ambitions

A specialist financial network

Corporate finance, lawyers, fund managers, investor & public relations, accountancy

London continues to hold the deepest pool of Europe’s capital.

4 October 2007 London Bridge Capital4 October 2007 London Bridge Capital 110

The London IPO: Money and Study

In 2006:541 companies joined our markets raising £28bn

Main Market £20bn; AIM £8bn346 IPOs took place

More than all of Western Europe combinedMore than NASDAQ, NYSE and Hong Kong combined

The overall cost of Capital on London’s Public markets is considerably less than in the US

33% more efficient IPO pricing (less discounting)

Underwriting fees are some 50% less

56

4 October 2007 London Bridge Capital4 October 2007 London Bridge Capital 111

Your IPO

The directors of the issuer

Major shareholders

Sponsor / Nominated Adviser

Broker

Research Analyst

Lawyers – for company and

underwriters

Experts

Reporting accountants

Public relations adviser

With all that’s going on for your IPO, it can seem pretty daunting...

Our US/Canadian clientele want someone to manage, to negotiate, and to facilitate the process on site and in situ.

4 October 2007 London Bridge Capital4 October 2007 London Bridge Capital 112

Determining your valueBottom-up: business fundamentalsMarket characteristics (size, growth, etc)Risk factors

Discounted Cash FlowApplication

Combine assumptions with well known valuation tools:

Peer GroupEV/Sales, EV/EBITDA, P/ELast VC round Invested capital to date

Valuation Remember…Be realistic Have a contingency

plan

57

4 October 2007 London Bridge Capital4 October 2007 London Bridge Capital 113

Current Market ConditionsInvestors are:

More selectiveSome are closed off to early -stage companies

What you need:Revenues, contracts – an order bookAttractive valuation (risk/return)Market cap and liquidity cannot be overstated enough

This has raised the bar for IPOs

But deals are still getting doneGreen IPOs so far in 2007 raising at least £20m of new money

Applied Intellectual Capital Modern WaterPlanticTechnologiesPV CrystaloxSolarVECTRIX

Success for unique or establishedbusiness models at realisticvaluations

4 October 2007 London Bridge Capital

Corporate Finance

Contacts:

Peter Greensmith, CEO; pg@lbc.uk.netRichard Finston, MD; rf@lbc.uk.netAlexander Munro, Senior VP; am@lbc.uk.net

London Bridge CapitalLevel 2 - City Tower40 Basinghall StreetLondon, UKEC2V 5DE+44 (0) 207 877 5040

4 October 2007 London Bridge Capital 114

58

4 October 2007 London Bridge Capital4 October 2007 London Bridge Capital 115

APPENDIX 1: Environmental industries - the energy case

£ Millions raised at IPO combined AiM & Main for Alternative Energy Companies.

Questions and Answers

Richard Webster-Smith is responsible for the London Stock Exchange’s International Business Development activities in the USA and Canada. He plays an integral role in building and maintaining the Exchange’s profile and presence in the adviser communities in London and the finance centres of North America, focusing on attracting international companies to the London markets. Richard was previously in charge of media relations for the Exchange’s AIM market, and has also worked in the Exchange’s Public Affairs team where he worked on both UK and EU public policy issues. He joined the Exchange in 2000. +44 (0)20 7797 1058 rwebstersmith@londonstockexchange.com The London Stock Exchange is one of the world’s oldest stock exchanges and can trace its history back more than 300 years. Starting life in the coffee houses of 17th century London, the Exchange quickly grew to become the City’s most important financial institution. Today, The London Stock Exchange is at the heart of global financial markets and is home to some of the best companies in the world. The aim of the exchange is to compete in the global market for financial transaction services to become the supplier of choice – providing customers with the most efficient, trusted and reliable services, and shareholders with the most successful exchange business.

Jeremy Landau is a partner in the firm’s Corporate, Private Equity, AIM, and Telecom, Media and Technology practice groups. He has particular experience in advising both public and private companies on their corporate and commercial transactions and requirements in a broad range of sectors, with particular emphasis on the Technology and Telecommunications, Life Sciences, Leisure and Retail sectors, including dealing with domestic and cross border mergers & acquisitions, disposals, private equity and corporate finance transactions. In particular, Mr. Landau has a wealth of experience of advising companies (both domestic and international), as well as investment banks on IPOs and fundraisings on the London Stock Exchanges' Full List and AIM markets. Mr. Landau is also listed in Chambers Guide to the Legal Profession as a leading lawyer in relation to Technology/Telecoms transactions. +44 (0)20 7360 8114 jeremy.landau@klgates.com K&L Gates comprises approximately 1,400 lawyers located in 22 offices on three continents. The firm represents capital markets participants and leading global corporations, growth and middle-market companies, and entrepreneurs in every major industry group as well as public sector entities, educational institutions and philanthropic organizations. The firm’s practice is at once regional, national and international in scope, cutting edge, complex, and dynamic. K&L Gates lawyers are experienced in serving clients’ corporate legal needs, from general business planning to highly specialized and critical emergency matters. The firm serves as general or special legal advisors to many public and privately-held companies, as well as partnerships, formal and informal strategic alliances and joint ventures. In providing a full range of corporate services, K&L Gates is focused on working with clients to solve problems and achieve their objectives in the most efficient, effective and time-sensitive manner. The firm’s practice expertise includes corporate governance, transactions, with all of the ancillary practice capabilities, finance, real estate, bankruptcy and restructuring, securities and private equity and venture capital.

Alex Gibson is an associate in the firm’s Corporate practice group. He practices in the area of general corporate law, with a focus on mergers and acquisitions, corporate finance and joint ventures. +44 (0)20 7360 8245 alex.gibson@klgates.com K&L Gates comprises approximately 1,400 lawyers located in 22 offices on three continents. The firm represents capital markets participants and leading global corporations, growth and middle-market companies, and entrepreneurs in every major industry group as well as public sector entities, educational institutions and philanthropic organizations. The firm’s practice is at once regional, national and international in scope, cutting edge, complex, and dynamic. K&L Gates lawyers are experienced in serving clients’ corporate legal needs, from general business planning to highly specialized and critical emergency matters. The firm serves as general or special legal advisors to many public and privately-held companies, as well as partnerships, formal and informal strategic alliances and joint ventures. In providing a full range of corporate services, K&L Gates is focused on working with clients to solve problems and achieve their objectives in the most efficient, effective and time-sensitive manner. The firm’s practice expertise includes corporate governance, transactions, with all of the ancillary practice capabilities, finance, real estate, bankruptcy and restructuring, securities and private equity and venture capital.

Steve Smith is a partner in Ernst & Young’s transaction support team where his prime focus is assisting companies with stock exchange or private equity transactions. As UK North Region IPO Leader he advises companies of the pros and cons of different transaction structures and helps prepare them in the build up to a transaction. Steve has experience of helping companies float on all UK markets. His flotation credentials include: LSL Property Services (full list), Optos (full list), Clean Air Power (AIM), BNS Telecom (AIM), Powerleague (AIM) and Ascribe (AIM). He is also a member of the Stock Exchange Regional Advisory Group. +44 161 333 2667 ssmith@uk.ey.com Ernst & Young is a US$21 billion global business, drawing on the strength of some 130,000 employees across seven global Areas and 140 countries. Its people pursue the highest levels of integrity, quality and professionalism in providing a range of sophisticated services centered on the core competencies of auditing, accounting, tax and transactions.

Nigel Daly is a Principal in Piper Jaffray’s Technology Investment Banking Group based in the London office. He is responsible for originating and executing M&A transactions and public and private equity financings for European Technology companies and giving general corporate finance and strategic advice. Nigel has over 15 years of European M&A and capital markets experience, including many M&A transactions, IPOs and other capital raisings not only in the Technology sector but also, broadly, across a number of other sectors, including Alternative Energy, Real Estate and Retail, and regions, including the Far East and Central & Eastern Europe as well as the UK and the rest of Western Europe. +44 (0)20 3142 8722 nigel.r.daly@pjc.com Piper Jaffray & Co. is a leading, international middle-market investment bank and institutional securities firm, founded in 1895. Piper Jaffray serves the needs of middle-market corporations, private equity groups, public entities, nonprofit clients and institutional investors. It has 10 offices worldwide, over 1,000 employees and focuses on 6 core sectors covering over 350 growth companies. It is publicly listed with a market capitalization of $1.0bn.

Heather Salmond is co-founder and Director of Abchurch Communications. She is a corporate and financial communications specialist with more than ten years' international PR experience. She has worked in the New York and London offices of Shandwick Consultants, predominantly advising venture capital companies, including Arts Alliance and 3i on communicating their TMT investments. In 2000 Heather joined New York based start up SkyScout as Manager of Corporate Communications before setting up her own PR consultancy in Edinburgh, Scotland. Heather graduated from the University of St Andrews with MA Honours in Modern Languages (Spanish and French). She regularly speaks on the role of Financial PR in the IPO-LSE roadshows. +44 (0) 20 7398 7704 heather.salmond@abchurch-group.com Abchurch is one of the UK’s leading financial, investor and corporate communications consultancies, advising more than 75 clients, over 60 of which are Listed on the London Stock Exchange. The aggregate market capitalisation of its client base is in excess of £3.2 billion. Abchurch was voted Financial PR Company of the Year in the 2007 Growth Company Investor Awards, voted for by CEOs of listed companies. Abchurch is recognised as a specialist in IPOs, advising both domestic and overseas companies on successful communications surrounding a UK Listing and the aftermarket. Abchurch also has extensive experience of advising companies on mergers and acquisitions. In addition to financial communications and investor relations advice, Abchurch has a well established corporate, trade & technical, and business-to-business practice, enabling it to provide companies with a total communications solution.

Alex Munro moved to London Bridge Capital Limited from Fortis Bank, for which he worked as an International Associate in the development and growth of new offices and energy portfolios for its Global Energy Group. His specialisations in this capacity were structured, corporate, and project finance in the areas of renewable energies and alternative fuels. Prior work experience includes renewable energy strategy consulting for the BOC Group, hydrogen infrastructure and business development, and environmental management systems and consulting. Alex holds a BSc in Environmental Science from the University of Western Ontario (Canada), and an MBA from the Rotterdam School of Management (Netherlands) and the University of California, Berkeley (USA). +44 (0) 77 7572 5269 am@lbc.uk.net London Bridge Capital provides niche investment banking services to companies active in the environmentally oriented clean technology sector and in "clean technology" generally. LBC’s goal is to provide niche services to those small and medium enterprises seeking advice in relation to corporate structure, funding, pre-IPO funding and entry to any of the UK markets, with particular emphasis on AIM and PLUS Market listings.

Stephan Coonrod is a partner in K&L Gates’ Seattle office. He has a domestic and international business practice centering on acquisitions, venture capital and other equity investments, transborder transactions, trade issues and technology transfers. In addition, Mr. Coonrod handles general corporate matters for the firm’s clients. Mr. Coonrod is fluent in French. He also spent two years in Japan working with a law firm handling international financings, U.S. investment in Japan, and joint ventures, licensing and distributorship agreements. 206 370 8316 stephan.coonrod@klgates.com K&L Gates comprises approximately 1,400 lawyers located in 22 offices on three continents. The firm represents capital markets participants and leading global corporations, growth and middle-market companies, and entrepreneurs in every major industry group as well as public sector entities, educational institutions and philanthropic organizations. The firm’s practice is at once regional, national and international in scope, cutting edge, complex, and dynamic. K&L Gates lawyers are experienced in serving clients’ corporate legal needs, from general business planning to highly specialized and critical emergency matters. The firm serves as general or special legal advisors to many public and privately-held companies, as well as partnerships, formal and informal strategic alliances and joint ventures. In providing a full range of corporate services, K&L Gates is focused on working with clients to solve problems and achieve their objectives in the most efficient, effective and time-sensitive manner. The firm’s practice expertise includes corporate governance, transactions, with all of the ancillary practice capabilities, finance, real estate, bankruptcy and restructuring, securities and private equity and venture capital.

Introduction to AIM

IntroductionThe AIM Market was opened in 1995 by

the London Stock Exchange plc (the

"LLSSEE") for the purpose of providing

companies for which the requirements of

the Official List of the UK Listing

Authority (the "UUKKLLAA") were not

appropriate, with a means of raising

capital and having access to a public

market for their securities. AIM is

operated, regulated and promoted by the

LSE.

Companies traded on AIM span the

entire spectrum of business sectors and

encompass both growing companies as

well as mature companies. In addition,

UK incorporated as well as companies

incorporated in any other country world

wide can be admitted to AIM.

The total number of admissions to AIM

from its inception to the end of

December 2005 stood at 2,202 of which

274 were non-UK companies.

At the end of December 2005 there were

1,399 companies trading on AIM with

total market capitalisation in excess of

£56 billion and individual market

capitalisations ranging from less than £2

million to more than £1 billion.

K&L Gates advises both companies

admitted to AIM and the professional

advisers specialising in AIM companies.

The purpose of this guide is to provide a

brief introduction to AIM and an

overview of the admission process.

Benefits of an AIM ListingThere are a number of advantages in a

company being admitted to AIM:

� GGiivveess sshhaarreess ooff tthhee ccoommppaannyy

""ttrraaddaabbiilliittyy" thereby broadening the

company’s investor base (for example,

with institutional investors who may

not be mandated to invest in

unquoted companies) and enabling

existing shareholders to realise some

of their investment;

� TTaaxx aaddvvaannttaaggeess including the

availability of tax reliefs to investors in

the form of the Enterprise Investment

Scheme and the Venture Capital Trust

Scheme which are not available in

respect of companies on the Official

List;

� MMoottiivvaatteess eemmppllooyyeeeess by improving

the attractiveness of employee share

schemes as shares are now tradable

and by providing proof of their

organisation's success;

� EEnnhhaanncceess ccoommppaannyy''ss pprrooffiillee aanndd

vviissiibbiilliittyy as a result of increased press

coverage and analysts' reports which in

turn will facilitate the continued

liquidity of the company's shares;

� OObbjjeeccttiivvee vvaalluuee ooff hhoollddiinnggss ffoorr

sshhaarreehhoollddeerrss in contrast to a

shareholder in an unquoted company

“The K&L Gates AIM team provides the full spectrum of services your company needs to float on

AIM and to meet your requirements after admission.”

Whatever your company's size or industry sector our AIM team

has the experience to provide a seamless service.

who will often find it difficult to assess

the value of their holding;

� OOffffeerrss aa mmeeaannss ooff ggaaiinniinngg ffiirrsstt

eexxppeerriieennccee ooff aa ppuubblliicc mmaarrkkeett and

enables a company, who intends to do

so, to progress towards satisfying the

eligibility criteria required for entry

onto the Official List, for example by

increasing the number of shares held

in public hands;

� FFlleexxiibbiilliittyy in areas such as making

acquisitions as the company will have

access to currency in the form of

quoted shares and the rules governing

acquisitions by AIM companies are

less stringent than the rules governing

acquisitions by companies on the

Official List;

� AAcccceessss ttoo aa wwiiddee ppooooll ooff iinnvveessttmmeenntt

ccaappiittaall for growth affording

opportunities to a company to raise

finance both on admission and

afterwards; and

� IImmpprroovveess aa ccoommppaannyy''ss ssttaattuuss with both

customers and suppliers as a company

admitted to trading on AIM has to

comply with regulatory standards.

Advantages to listing on AIM asopposed to the Official List � No required minimum of shares to be

held by the public. For the Official

List, at least 25 per cent of shares must

be held by the public.

� No requirement for a trading record.

For the Official List, a three year

trading record is usually required.

� Admission documents are not vetted

by the LSE nor by the UKLA in most

circumstances. The UKLA will only

vet an AIM admission document

where it is also a prospectus under the

FSA's rules relating to prospectuses

(implementing the EU's Prospectus

Directive) (the "PPrroossppeeccttuuss RRuulleess").

For the Official List, the UKLA will

always pre-vet admission documents.

� No minimum market capitalisation

requirement. For the Official List, a

market capitalisation of at least

£700,000 of shares is required.

� Acquisitions and disposals are less

stringently regulated on AIM than on

the Official List and, other than for a

reverse takeover, an acquisition that

does not involve offering shares to the

public does not require shareholder

consent unlike the Official List.

Other important factors Other factors will come into play when

deciding whether to admit a company to

AIM. These include:

“AIM’s success is built on a simplified regulatory environment which has been specifically

designed for the needs of smaller companies.”

The London Stock Exchange

� Regulatory requirements and the

continuing obligations of being an AIM

listed company will result in some

additional administration for a

company;

� Closer scrutiny of the company, in

particular its directors, its finances and

its business strategy and performance;

� The interests of outside shareholders

will affect decisions to a greater degree;

and

� Uncertain market conditions which

may be outside the control of the

company may have an effect on the

company's share price.

The key requirements for admission The key requirements for admission to

AIM are straightforward.

� The company must be capable of

offering its shares to the public.

� The company must appoint and retain

a nominated adviser and broker at all

times.

� There must be no restrictions on the

transferability of the company's shares

although there are limited exceptions

where a countries' securities laws

require restrictions to be imposed.

� The securities to be admitted must be

eligible for electronic settlement. The

principal electronic settlement in the

UK is CREST. While foreign

securities are not eligible for settlement

directly in CREST, in practice

arrangements can usually be made with

CRESTCo or a UK registrar to act as a

depository for the issued securities and

a form of CREST-eligible depositary

interest in the underlying foreign

security can instead be electronically

traded through CREST.

� All securities within a particular class

must be admitted and not part only of

that class.

� The company must comply with any

special conditions imposed by the LSE.

� The company must ensure that if its

business has not been independent and

earning revenue for at least two years,

related parties and applicable

employees enter into an agreement not

to dispose of any interests in the

securities for one year from the date of

admission of the securities (a "lock-in").

Related parties include directors of the

company or any group company,

shareholders owning ten per cent or

more of the class of security to be

admitted or ten per cent or more of the

voting rights relating to the company,

and their respective families.

Applicable employees are (a) those

employees holding 0.5 per cent or more

of the class of security to be admitted

and (b) those employees in possession of

price sensitive information because of

their employment, regardless of their

interest or holding in the shares.

� LLaawwyyeerrss

The lawyers to the company will

advise on issues such as the legal

aspects of preparing the company for

admission to AIM including any

restructuring required (for example,

the re-registration of the company as a

plc). The lawyers will also undertake a

legal review of the company (covering

matters such as any litigation, terms of

employment contracts and the

corporate structure of the company) on

behalf of Nomad so that the Nomad is

able to ascertain the suitability of the

company for admission to AIM. The

lawyers, will, in addition, verify the

statements made in the admission

document or prospectus and advise the

board of the company on its legal

duties and responsibilities in relation

to any admission.

� RReeppoorrttiinngg AAccccoouunnttaannttss

The reporting accountants will

conduct an independent review of the

company's financial records and assist

in preparing any financial information

required to be published.

� FFiinnaanncciiaall PPRR CCoonnssuullttaannttss

The financial PR consultants will

manage the flow of information

concerning the admission of the

company and generate positive

publicity and press interest.

� SSppeecciiaalliisstt aaddvviisseerrss

Depending on the company's business,

advisers may also need to be appointed

e.g. property surveyors, actuaries and

independent experts.

Procedure for admissionThe admission process for AIM generally

takes approximately three months.

However, the actual length of time will

depend upon (a) the type of company, (b)

the speed with which accurate

information can be provided for

incorporation in the prospectus or

admission document and (c) whether it is

a prospectus or an admission document

that needs to be prepared (as a prospectus

must be vetted and approved by the FSA

prior to publication).

� PPrreeppaarraattiioonn ooff aann aaddmmiissssiioonn ddooccuummeenntt

oorr pprroossppeeccttuuss A prospectus rather than an admission

document will be required where an

issuer is making an offer of transferable

securities to the public and where an

issuer is seeking admission to a

regulated market. The information

required to be included in such a

prospectus is set out in the Prospectus

Rules and the prospectus is required to

be pre-vetted by the UKLA.

AIM ceased to be a regulated market

on 12 October 2004 becoming an

The Admission Team� NNoommaadd

An AIM company must appoint and

retain a nominated adviser ("NNoommaadd")

at all times. The LSE approves, and

maintains a list of, firms who are

qualified to act as Nomads.

The Nomad will judge whether the

company is suitable for admission to

AIM, as well as explain the AIM Rules

to the directors and ensure that they

understand their responsibilities and

obligations. Once the company has

been admitted to AIM, the Nomad will

continue to give advice and guidance

on the AIM Rules to the company.

To highlight the importance of the

Nomad, the AIM Rules provide that if

a company ceases to have a Nomad,

the LSE may suspend trading in its

securities. If within one month the

company has failed to appoint a

replacement Nomad the company's

quote may be cancelled.

� BBrrookkeerr

An AIM company must appoint and

retain a broker at all times. A broker

must be a securities house which is a

member of the LSE. In practice this

role is often combined with that of the

Nomad. The broker is responsible for

dealings in the company's shares.

“Leading City lawyers who know and understand the

UK markets - Official List, AIM and OFEX.”

CBI 2004

"exchange regulated market" instead.

As a result, an AIM admission

document will only be required to be a

prospectus and approved by the UKLA

when an "offer to the public" is also

being made. An AIM float effected via

a placing will not normally entail an

"offer to the public" for these purposes

and instead, a straightforward

admission document would need to be

produced. Nevertheless, in

determining the minimum content

requirements for an admission

document, the LSE has used the

requirements set out in the Prospectus

Rules as a starting point. However,

certain of the more onerous disclosure

requirements of the Prospectus Rules

have been carved out or left to the

discretion of the Nomad.

� TTeenn ddaayy aannnnoouunncceemmeenntt

The applicant must provide to the

LSE, at least ten business days before

the expected date of admission to

AIM, certain information including the

company's name, address and country

of incorporation, a description of the

company's business and the name and

address of the nominated adviser and

broker. On the same day, the LSE will

make an announcement that an

application has been received from the

company for its securities to be

admitted to trading on AIM.

� AApppplliiccaattiioonn ddooccuummeennttss

At least three business days before the

expected date of admission and in

addition to a cheque for the admission

fees, the company must submit to the

LSE an electronic version of the

admission document together with a

completed application form which

includes confirmation that the

company will comply with the AIM

rules and a declaration by the Nomad

which includes confirmation that the

company is suitable for AIM.

� AAddmmiissssiioonn ttoo AAIIMM

Admission becomes effective when the

LSE issues a dealing notice to that

effect.

Fast track to AIM� The LSE has introduced a fast track

admission route to AIM whereby

companies already listed on one of the

"designated markets" and which have

been trading on a designated market

for at least 18 months can use their

existing annual report and accounts as

a basis for admission to trading on AIM

rather than having to prepare an

admission document.

Designated markets include the

following markets:

(a) Australian Stock Exchange;

(b) Euronext;

(c) Deutsche Börse;

(d) Johannesburg Stock Exchange;

(e) NASDAQ;

(f) New York Stock Exchange;

(g) Stockholmbörsen;

(h) Swiss Exchange;

(i) Toronto Stock Exchange; and

(j) UK Official List.

Continuing obligationsOnce a company has been admitted to

AIM, it is subject to continuing

obligations in order to maintain its quote.

Such obligations include:

� RReessttrriiccttiioonnss oonn ddeeaalliinnggss bbyy ddiirreeccttoorrss

Neither directors nor applicable

employees may deal in any of the

company's securities during certain

periods prior to publication of results

and when the company is in

possession of unpublished price

sensitive information;

� GGeenneerraall oobblliiggaattiioonnss ooff ddiisscclloossuurree

The company must issue a notification

without delay of any new

developments which are not public

knowledge concerning a change in:

(a) its financial condition;

(b) its sphere of activity;

(c) the performance of its business; or

(d) its expectation of its performance.

“Experts say AIM is attractive to overseas companies because the fundraising

firepower in London is substantial, they can get their message across to a wider

audience (including the American market) and listing is relatively cheap and quick.”

“Taking AIM: Annual Survey 2005”

� NNoottiiffiiccaattiioonnss ooff cceerrttaaiinn ttrraannssaaccttiioonnss

The Company must notify the

Exchange without delay as soon as the

terms of any of the following

transactions are agreed:

� SSuubbssttaannttiiaall TTrraannssaaccttiioonnss

These are defined as transactions

which exceed ten per cent in any of

the class tests. Class tests involve a

percentage comparison between the

size of the transaction with the AIM

company (for example the turnover

of the company);

� RReellaatteedd PPaarrttyy TTrraannssaaccttiioonnss

A related party transaction is any

transaction made between the

company and amongst others, (a) a

director, (b) a shareholder with a

holding of more than three per cent

of the Company's securities, or (c)

the family or a trustee of (a) or (b)

which exceeds five per cent in any

of the class tests; and

� AA rreevveerrssee ttaakkee--oovveerr

A reverse takeover is a transaction

where any of the ratios relating to

class tests exceed 100 per cent or

where there is a fundamental

change in business, board or voting

control. A reverse takeover requires

shareholder approval, following

which trading in the company's

shares on AIM will be cancelled and

the company must apply for re-

admission.

“A clear understanding of AIM, its players and your objectives.”

Clients First

We believe in the power of partnership. In whatever area of law you seek counsel, we will partner with you to evaluate risk and

recommend a course of action based on your business priorities. We want to hear what you have to say, whether you're a longtime

client or a new one, an innovator with one great idea, or a global corporation with many. We pride ourselves on getting close to our

clients, and understanding the commercial and industry issues critical to the legal advice we provide.

At K&L Gates,we believe that to practice law effectively, we must first understand our clients. We actively recruit professionals

whose business and life experiences reflect the diversity of our clients and the communities in which we work and live. As a firm

whose own people represent the people we serve, we are better equipped to approach capably our clients' issues and needs.

For more information about our AIM practice group please contact

“This firm enjoys a reputation for commerciality, strength,

depth and commitment… the team also maintains a track

record in AIM-related work.”

Chambers 2004 – Corporate Finance

Owen Waft

email: owen.waft@klgates.com

tel: +44 (0)20 7360 8132

Jeremy Landau

email: jeremy.landau@klgates.com

tel: +44 (0)20 7360 8114

Martin Lane

email: martin.lane@klgates.com

tel: +44 (0)20 7360 8117

K&L Gates comprises approximately 1,400 lawyers in 22 offices located in North America, Europe and Asia, and represents capital markets participants,entrepreneurs, growth and middle market companies, leading FORTUNE 100 and FTSE 100 global corporations and public sector entities. For moreinformation, please visit www.klgates.com.

K&L Gates comprises multiple affiliated partnerships: a limited liability partnership with the full name Kirkpatrick & Lockhart Preston Gates Ellis LLPqualified in Delaware and maintaining offices throughout the U.S., in Berlin, and in Beijing (Kirkpatrick & Lockhart Preston Gates Ellis LLP BeijingRepresentative Office); a limited liability partnership (also named Kirkpatrick & Lockhart Preston Gates Ellis LLP) incorporated in England and maintainingour London office; a Taiwan general partnership (Kirkpatrick & Lockhart Preston Gates Ellis) which practices from our Taipei office; and a Hong Konggeneral partnership (Kirkpatrick & Lockhart Preston Gates Ellis, Solicitors) which practices from our Hong Kong office. K&L Gates maintains appropriateregistrations in the jurisdictions in which its offices are located. A list of the partners in each entity is available for inspection at any K&L Gates office.

This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or reliedupon in regard to any particular facts or circumstances without first consulting a lawyer.

Data Protection Act 1998 - We may contact you from time to time with information on Kirkpatrick & Lockhart Preston Gates Ellis LLP seminars and withour regular newsletters, which may be of interest to you. We will not provide your details to any third parties. Please e-mail london@klgates.com if youwould prefer not to receive this information.

©1996-2007 Kirkpatrick & Lockhart Preston Gates Ellis LLP. All Rights Reserved. www.klgates.com

Our Guide to AIM

We know the playersWhether you are a company coming to the

market for the first time, a Nominated

Adviser or a Broker, you will need a team

of lawyers who know the players and the

financial markets in which they operate.

Your legal advisers should have a wealth

of experience on AIM in order to guide

you through and facilitate the flotation

process. The AIM Team at K&L Gates

has such experience. We do not create

obstacles or re-invent the wheel and we

are pro-active in overcoming difficulties.

Having acted for a number of Brokers on

their own admissions to AIM and by

regularly acting for Nominated Advisors

and Brokers generally, our AIM Team can

boast that K&L Gates is a law firm of

choice for Nomads and Brokers.

Whether you are a company looking for

institutional funding, a management team

looking to build a future exit, or a venture

capitalist wanting to make your exit now,

we have the right experience to help.

We have great experience of successfully

bringing to AIM not only UK based

companies but US and other international

companies. We have the experience to

identify and understand the issues that

US and international companies may face

in coming to AIM. Our 22 offices across

the US, Europe and Asia enable us to

provide a seamless service.

We are a wholehearted supporter of the

Quoted Companies Alliance (QCA), the

only organisation dedicated to promoting

and pursuing the interests and concerns of

smaller quoted companies. Our AIM

Team is represented on the QCA Board

of Directors and on the QCA Share

Schemes Committee.

We understand the processVerification? Placing? Open Offer? Due

diligence? Responsibility Statements?

PIPES? RTOs? SPACs? Our AIM Team

will help you cut through the jargon and

manage the flotation so that you can keep

your eye on the most important issue -

running your business. From inception

through to the time when the proceeds of

the fundraising are received and beyond,

we will identify issues in advance, help

you avoid pitfalls, keep costs down and

make the whole process as straightforward

as possible.

Onwards and upwardsWhen a company's shares are admitted to

AIM it has a new currency to make

acquisitions and the flexibility to return to

the market to raise more money. We have

acted for many AIM companies on

mergers and acquisitions funded by

further issues of shares. Our AIM Team

has vast experience in the merger and

acquisition market that will help your

company grow to meet the expectations of

your new shareholders and the challenges

set by your company's management. The

company also has much greater flexibility

to utilise its share capital to incentivise

employees in a tax effective way.

A clear understanding of AIM, its players and your objectives

“Leading City lawyers who know and understand the UK

markets - Official List, AIM and OFEX” CBI

We know your businessTo ensure the success of your AIM float

and your business, your legal team must

know more than just their way around the

markets and the applicable rules and

regulations - they will need to understand

your business, how admission to AIM will

affect your business and the commercial

drivers that make AIM the right market

for your company.

n Natural Resources

n Pharmaceuticals & Biotechnology

n Telecommunications, Media and

Technology

n Real Estate

n Asset Management and Financial

Services

n Real Estate & Construction

n Manufacturing & Engineering

n Support Services

Our lawyers have specialised in these

industry sectors for many years and bring

with them considerable know-how,

industry connections and working

experience. We provide a value added

service and have up to date specialist

knowledge.

members of :

Companies� SSppaacceellaabbss HHeeaalltthhccaarree IInncc::

£15m placing and admission to

AIM - the first ever spin out of a

set of businesses from NASDAQ

onto the AIM market (U.S.)

� xxGG TTeecchhnnoollooggyy,, IInncc..::

$544m admission to AIM - the first

ever US company to use the LSE's

SIS electronic trading system.

� GGaallaahhaadd CCaappiittaall ppllcc::

£107m reverse takeover of

Shambhala Gold and re-admission

to AIM (Africa)

� CCaalleeddoonn RReessoouurrcceess::

re-admission of AIM listed

company, capital reorganisation,

acquisition, placing and open offer

(China)

� SShhaarriiaahh CCaappiittaall IInncc..::

Placing and admission to AIM of

this Shariah compliant financial

services company.

� NNaattiioonnwwiiddee AAcccciiddeenntt RReeppaaiirr

SSeerrvviicceess PPllcc::

£17.5m placing and admission to

AIM.

� NNiippssoonn DDiiggiittaall PPrriinnttiinngg SSoolluuttiioonnss

ppllcc

£10m placing and admission;

£12.5m vendor placing and

secondary offering (Israel/France)

� MMuullttii GGrroouupp ppllcc::

reverse takeover of Berry

Recruitment Holdings Limited

and readmission to AIM and

reverse takeover of Global Medics

Limited and readmission to AIM

� AAffrreenn ppllcc::

£10m placing and admission to

AIM (Africa)

� TTeelliitt CCoommmmuunniiccaattiioonnss ppllcc::

£23m placing and admission to

AIM (Israel/Italy)

� CCiittyy ooff LLoonnddoonn IInnvveessttmmeenntt GGrroouupp

ppllcc::

placing and admission to AIM of

£2.7 billion fund management

business

� VVeellttii PPllcc

£10M placing and admission to

AIM - the first ever Greek based

company to list on AIM (Greece)

� IInnoovvaa HHoollddiinngg ppllcc

£10m placing and admission to

AIM - (Germany/Austria)

� HHAACCAASS GGrroouupp PPllcc::

£45m recommended offer by

Tribal Group Plc

� SSeeccuurree DDeessiiggnn KKKK::

advised Secure Design KK, the

first ever Japanese company to be

admitted onto AIM

� IIBB DDaaiiwwaa CCoorrppoorraattiioonn::

acting on its £109m recommended

takeover of Lodore Resources Inc

the first time a JASDAQ listed

company has extended an all-share

offer to acquire a company listed

on AIM (Japan)

� SSoouutthh AAffrriiccaann PPrrooppeerrttyy

OOppppoorrttuunniittiieess ppllcc::

£30m placing and admission to

AIM - the first ever publicly

quoted fund specialising in South

African real estate assets

Nomads and Brokers � WWHH IIrreellaanndd::

acting on numerous transactions

including placing and admission of

Palladex plc (Kyrgygstan); placing

and admission of River Diamonds

(Brazil) and reverse takeover and

re-admission of Eleksen Group

� SSeeyymmoouurr PPiieerrccee::

acting on numerous transactions

including the placing and

admission to AIM of Et-china.com

Holdings Ltd

� BBrreewwiinn DDoollpphhiinn SSeeccuurriittiieess::

Placing and AIM admission of

Sabien Technology Group.

� NNaabbaarrrroo WWeellllss && CCoo::

Reverse takeover by Irvine Energy

plc of Halcyon Investment Co Pry

Ltd and Wattle Energy

Corporation and re-admission to

AIM.

� TTeeaatthheerr && GGrreeeennwwoooodd::

Placing and admission to AIM of

Net Dimensions Ltd.

OOtthheerr NNoommaaddss//BBrrookkeerrss wwee aacctt ffoorr

iinncclluuddee::

Nomura Code Securities

Kaupthing Singer & Friedlander

Oriel Securities

Investec

Fox-Pitt Kelton

Fairfax I.S. plc

Blue Oar Securities

Grant Thornton Corporate Finance

Shore Capital

Daniel Stewart; and

Lewis Charles Securities

Areas of Experience

GeneralOur AIM Team has advised on a wide range of AIM transactions advising companies, Nomads and

Brokers. Some recent examples of our AIM Team's experience includes:

"a cost effective, responsive and commercial legal service driven by the needs of its clients…"

Legal 500

"…a user friendly, solid operation with strength in the core areas of Mergers & Acquisitions,

AIM, Private Equity…" Chambers

K&L Gates comprises approximately 1,400 lawyers in 22 offices located in North America, Europe and Asia, and represents capital markets participants,entrepreneurs, growth and middle market companies, leading FORTUNE 100 and FTSE 100 global corporations and public sector entities. For moreinformation, please visit www.klgates.com.

K&L Gates comprises multiple affiliated partnerships: a limited liability partnership with the full name Kirkpatrick & Lockhart Preston Gates Ellis LLP qualified inDelaware and maintaining offices throughout the U.S., in Berlin, and in Beijing (Kirkpatrick & Lockhart Preston Gates Ellis LLP Beijing Representative Office); alimited liability partnership (also named Kirkpatrick & Lockhart Preston Gates Ellis LLP) incorporated in England and maintaining our London office; a Taiwangeneral partnership (Kirkpatrick & Lockhart Preston Gates Ellis) which practices from our Taipei office; and a Hong Kong general partnership (Kirkpatrick &Lockhart Preston Gates Ellis, Solicitors) which practices from our Hong Kong office. K&L Gates maintains appropriate registrations in the jurisdictions in whichits offices are located. A list of the partners in each entity is available for inspection at any K&L Gates office.

This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or reliedupon in regard to any particular facts or circumstances without first consulting a lawyer.

Data Protection Act 1998 - We may contact you from time to time with information on Kirkpatrick & Lockhart Preston Gates Ellis LLP seminars and with ourregular newsletters, which may be of interest to you. We will not provide your details to any third parties. Please e-mail london@klgates.com if you wouldprefer not to receive this information.

©1996-2007 Kirkpatrick & Lockhart Preston Gates Ellis LLP. All Rights Reserved.

Clients FirstWe believe in the power of partnership. In whatever area of law you seek advice, we will partner with you to evaluate risk and

recommend a course of action based on your business priorities. We want to hear what you have to say, whether you're a

longtime client or a new one, an innovator with one great idea, or a global corporation with many. We pride ourselves on getting

close to our clients, and understanding the commercial and industry issues critical to the legal advice we provide.

At K&L Gates, we believe that to practise law effectively, we must first understand our clients. We actively recruit professionals

whose business and life experiences reflect the diversity of our clients and the communities in which we work and live. As a firm

whose own people represent the people we serve, we are better equipped to approach our clients' issues and needs.

For more information about our AIM practice group please contact

Owen Waft

email: owen.waft@klgates.com

tel: +44 (0)20 7360 8132

Jeremy Landau

email: jeremy.landau@klgates.com

tel: +44 (0)20 7360 8114

Martin Lane

email: martin.lane@klgates.com

tel: +44 (0)20 7360 8117

“This firm enjoys a reputation for commerciality, strength,

depth and commitment… the team also maintains a track

record in AIM-related work.”

Chambers – Corporate Finance

www.klgates.com

Comparison between AIM

and Nasdaq Markets

AIM Nasdaq

Market Size Over 1,650 companies - average company size of $80-90m (largest market cap company on AIM: over $2.5bn)

3,200 companies - average company over $100m market cap

Industry Areas All industry areas All industry areas

Regulation Exchange-regulated market AIM Regulations administered by LSE - low regulation, giving a more flexible regulatory environment.

Nasdaq is subject to SEC regulation SOX compliance added regulatory burden

Tax Benefits CGT and VCT tax benefits make for easier exit routes for private equity houses and venture capitalists Tax benefits applying to qualifying unquoted companies Corporate Venturing Schemes

N/A

International Dimension

Many international companies on AIM as well as international investors, in particular US investors 330 international companies listed (value of £36.6bn ($73.5bn)) (Note: international companies listed as UK TopCo are counted in LSE statistics as domestic) Over 70 US companies now listed on AIM (value of £2.9bn ($5.8bn)) More companies now list on AIM each year than Nasdaq

Many international companies on Nasdaq 452 international companies (market value: $7.1tr)

Company Requirements and Listing Process

No minimum market value No minimum assets or revenue No minimum amount of tradable shares No minimum offering price No minimum amount of shares to be held in public hands No minimum number of market makers No trading record requirement In most cases, no prior shareholder approval required for transactions

Minimum market cap of $75m Minimum assets and revenue of $75m Minimum 1.1m shares available for trading with minimum value of $20m Minimum offering price of $5m Public shares must be held by 400 shareholders Minimum of 4 market makers In business for minimum of 1 year or market value of $7m and complete governance board SEC must review prospectus - Registration

Summer 2007

UK Listing Authority does not review admission document where document offered to less than 100 people Nominated Adviser confirms admission document complies with AIM Rules

Statement including preliminary prospectus ("Red Herring") made to SEC Completed registration statement is filed with the SEC, appropriate state securities agencies (Blue Sky reviewers) and the National Association of Securities Dealers, Inc. (NASD).

Fees £4,340 ($8,980) listing fee £4,340 ($8,980) annual fee

$100,000-$150,000 listing fee $21,225-$60,000 annual fee

Post Listing Annual Accounts and half yearly reports pursuant to UK GAAP, US GAAP or IFRS.

Annual Accounts and Reports pursuant to US GAAP or IFRS Ongoing costs to comply with SOX

Typical Annual Cost: D&O Insurance Directors Fees & Expenses Annual Audit Accounting Fees 404 Compliance Legal Fees Internal Costs for SEC & Exchange Compliance SEC Filing Expenses & Listing Fees Nomad Expenses Other (Investor Relations, Mailing, Printing, Trvl, etc) Total Aprx Cost

$100,000 $150,000 $150,000 N/A $10,000 N/A N/A $60,000 $100,000 $570,000

$500,000 $150,000 $300,000 $500,000 $300,000 $300,000 $35,000 N/A $250,000 $2,335,000

Typical Cost to Execute a $50m Placing and IPO: Registration Fee Filing Fee Listing Fee Printing Expenses Legal Fees Accounting Fees Blue Sky Fees Transfer Agent & Registrar Fees Corporate Finance Retainer Underwriting Discount/Step-up Miscellaneous Total Aprx Cost

N/A N/A $8,980 $30,000 $450,000 $400,000 N/A $14,000 $150,000 $2,500,000 $50,000 $3,602,000

$9,000 $9,000 $100,000 $220,000 $750,000 $490,000 $10,000 $10,000 N/A $3,500,000 $75,000 $5,173,000

Other Still no credible alternative small company markets; other secondary exchanges are still at a fledgling stage If a US incorporated AIM company has no more than 500 registered shareholders it is possible to bypass both SEC registration and periodic filing requirements, significantly reducing the time and costs involved in an IPO and maintenance of a listing. Sarbanes-Oxley accounting and certification requirements will also not apply, avoiding both costs and the risk of personal liability for directors and officers.

SOX legislation has made listing in US prohibitively expensive for many growth companies

For more information Jeremy Landau Owen Waft Martin Lane Email: jeremy.landau@klng.com Email: owen.waft@klgates.com Email: martin.lane@klng.com Tel: +44(0)20 7360 8114 Tel: +44(0)20 7360 8132 Tel: +44(0)20 7360 8117

K&L Gates comprises approximately 1,400 lawyers in 22 offices located in North America, Europe and Asia, and represents capital markets participants, entrepreneurs, growth and middle market companies, leading FORTUNE 100 and FTSE 100 global corporations and public sector entities. For more information, please visit www.klgates.com. K&L Gates comprises multiple affiliated partnerships: a limited liability partnership with the full name Kirkpatrick & Lockhart Preston Gates Ellis LLP qualified in Delaware and maintaining offices throughout the U.S., in Berlin, and in Beijing (Kirkpatrick & Lockhart Preston Gates Ellis LLP Beijing Representative Office); a limited liability partnership (also named Kirkpatrick & Lockhart Preston Gates Ellis LLP) incorporated in England and maintaining our London office; a Taiwan general partnership (Kirkpatrick & Lockhart Preston Gates Ellis) which practices from our Taipei office; and a Hong Kong general partnership (Kirkpatrick & Lockhart Preston Gates Ellis, Solicitors) which practices from our Hong Kong office. K&L Gates maintains appropriate registrations in the jurisdictions in which its offices are located. A list of the partners in each entity is available for inspection at any K&L Gates office. This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. Data Protection Act 1998—We may contact you from time to time with information on Kirkpatrick & Lockhart Preston Gates Ellis LLP seminars and with our regular newsletters, which may be of interest to you. We will not provide your details to any third parties. Please e-mail london@klgates.com if you would prefer not to receive this information. ©1996-2007 Kirkpatrick & Lockhart Preston Gates Ellis LLP. All Rights Reserved.