Firestone Diamonds Offer For Kopane Diamond -13-

21st Jul 2010 11:55

(e) there is or is reasonably likely to be any liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of or controlled by any past or present member of the Wider Kopane Group or any controlled waters under any environmental legislation, regulation, notice, circular or order of any Relevant Authority or third party or otherwise in any jurisdiction, in each case to an extent which is material in the context of the Wider Kopane Group taken as a whole; (f) circumstances exist (whether as a result of the Acquisition of otherwise) which might reasonably be expected to lead to any Relevant Authority instituting, or any member of the Wider Kopane Group might reasonably be expected to be required to institute, an environmental audit or take any other steps which in any such case might reasonably be expected to result in any actual or contingent liability to improve or install new plant or equipment or make good, repair, reinstate or clean up any land or other asset now or previously owned, occupied or made use of or controlled by any member of the Wider Kopane Group, which in each case, are material in the context of the Wider Kopane Group taken as a whole; or (g) circumstances exist whereby a person or class of persons might reasonably be expected to have any claim or claims in respect of any product or process of manufacture or materials used therein now or previously manufactured, sold or carried out by any past or present member of the Wider Kopane Group which in each such case, are material in the context of the Wider Kopane Group taken as a whole. Part B: Waiver of Conditions and further terms of the Acquisition 3. Firestone reserves the right to waive, in whole or in part, all or any of Conditions 2.3 to 2.9 (inclusive). Firestone shall be under no obligation to waive or treat as satisfied any of such Conditions by a date earlier than the date specified above for the satisfaction thereof notwithstanding that the other Conditions of the Acquisition may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any such Conditions may not be capable of fulfilment. 4. If Firestone is required by the Panel to make an offer for Kopane Shares under the provisions of Rule 9 of the Code, Firestone may make such alterations to any of the above Conditions as are necessary to comply with the provisions of that Rule. 5. The Acquisition will lapse and the Scheme will not proceed if the European Commission initiates proceedings under Article 6(1)(c) of the EC Merger Regulation or the Acquisition is referred to the Competition Commission before the date of the Court Meeting. Part C: Certain further terms of the Acquisition 6. Firestone reserves the right, with the consent of the Panel and the consent (such consent not to be unreasonably withheld or delayed) of Kopane, to elect to implement the Acquisition by way of a takeover offer. In such event, such offer will be implemented on the same terms (subject to appropriate amendments including (without limitation) an acceptance condition set at 90 per cent. (or such lesser percentage (being more than 50 per cent.) as Firestone may decide) of the shares to which such offer relates and of the voting rights carried by those shares) so far as applicable, as those which would apply to the Scheme. 7. The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about any applicable requirements. 8. If the Scheme is effected, the New Kopane Shares to be issued pursuant to the Scheme will be acquired by Firestone fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the effective date of the Scheme. Under the terms of the Acquisition, each Kopane Shareholder will forego all rights to any future dividend or undeclared dividends or other returns of capital of Kopane. This document and any rights or liabilities arising hereunder, together with the Acquisition and the Scheme, will be governed by English law and will be subject to the jurisdiction of the English courts. The AIM Rules and the rules contained in the Code, so far as they are appropriate, will apply to the Acquisition. Appendix II Sources and Bases Save as otherwise stated, the following constitute the bases and sources of certain information referred to in this Announcement: 1. Historic financial information relating to Kopane has been extracted without material adjustment from the relevant published audited reports and accounts of Kopane. 2. Historic financial information relating to Firestone has been extracted without material adjustment from the relevant published audited reports and accounts of Firestone. 3. Reference to the Kopane Fully Diluted Share Capital assumes: (a) 301,511,651 Kopane Shares in issue; and (b) the vesting of all awards and exercise of all options (where such options have an exercise price of not more than 17 pence) issued and outstanding over Kopane Shares, representing 8,276,981 Kopane Shares in aggregate; and (c) the Kopane Warrants have been excluded in view of the fact that they will lapse on the Effective Date, in each case as at 20 July 2010 (being the Business Day prior to the date of this Announcement). 4. Unless otherwise stated, all prices quoted for shares are Closing Prices. 5. The percentage ownership of the Enlarged Group held by former Kopane Shareholders and existing Firestone Shareholders is based on the enlarged issued share capital of Firestone following the Acquisition, being the aggregate of 127,891,637 Firestone Shares in issue on 20 July 2010 (source: Firestone registrar) and approximately 140,413,465 million New Firestone Shares to be issued pursuant to the Offer. 6. The calculation of the 140,413,465 New Firestone Shares to be issued as the consideration payable for the Acquisition is based upon Kopane's undiluted share capital of 301,511,651 ordinary shares on 20 July 2010 and the Exchange Ratio. Appendix III Irrevocable Undertakings None of the Kopane Directors hold any Kopane Shares, although all the Kopane Directors have given irrevocable undertakings to Firestone and Kopane as described in paragraph 4 of this Announcement in respect of any Kopane Shares acquired by them prior to the completion of the Scheme. In addition to the Kopane Directors, the following persons have given irrevocable undertakings to vote in favour of the Kopane Resolution at the Kopane GM and in favour of the resolution to be proposed at the Court Meeting in respect of the number of Kopane Shares set out below: +---------------+--------------------------------------------+ | Name | Number of Kopane Shares | | | | +---------------+--------------------------------------------+ | Obtala* | 48,695,000 | +---------------+--------------------------------------------+ | Lanstead** | 30,000,000 | +---------------+--------------------------------------------+ | JP Morgan | 29,049,367 | | Fleming | | +---------------+--------------------------------------------+ Notes: *32,200,000 shares are registered in the name of Corporate Services TD (Waterhouse) Nominees Ltd and 16,495,000 shares are registered in the name of Pershing Nominees Limited ** registered in the name of KAS Bank NV These undertakings will continue to be binding in the event that the Acquisition is implemented by way of a Takeover Offer. The undertaking from Obtala remains binding in the event of a higher Competing Proposal being made in relation to Kopane unless the Acquisition lapses or is withdrawn. The undertaking from Lanstead will cease to be binding in the event that an alternative offer for Kopane is announced pursuant to rule 2.5 of the Code ("Alternative Offer"), and the valuation of the consideration payable pursuant to the Alternative Offer represents an improvement in the reasonable opinion of finnCap of not less than 10 per cent. over the value of the Acquisition. The undertaking from JP Morgan Fleming will cease to be binding in the event that a third party announces an intention to make a general offer to acquire the issued share capital of Firestone which is recommended by the Firestone Directors, or a third party announce an intention to make a general offer to acquire the issued share capital of Kopane which is recommended by the Kopane Directors. The following Firestone Directors have given irrevocable undertakings to vote in favour of the Firestone Resolutions at the Firestone GM in respect of the number of Firestone Shares set out below: +---------------+--------------------------------------------+ | Name | Number of Firestone Shares | | | | (MORE TO FOLLOW) Dow Jones Newswires July 21, 2010 06:55 ET (10:55 GMT)