Imagination Technologies plc -- Placement Announcement

Placing of new ordinary shares

November 17, 2010 -- Imagination Technologies Group plc (LSE: IMG, "Imagination" or "the Group"), a leading multimedia, communications and embedded processor technology company, today announces its intention to place (the Placing") up to 12,208,950 new ordinary shares of 10 pence each in the capital of Imagination (the "Placing Shares") with new and existing shareholders.

The Group has also today announced an agreement to acquire HelloSoft, a leading provider of global Video and Voice over Internet Protocol ("V.VoIP") and wireless LAN technologies, for a maximum of $47.1 million ("the Acquisition") and an update on current trading – see separate statements.

Highlights

Placing of up to 12,208,950 new ordinary shares – represents up to 5.0% of Imagination’s ordinary share capital (total current issued ordinary shares of 245,308,029)
Proceeds will be used to fund certain complementary and strategic technology acquisitions, including the Acquisition of HelloSoft
The Placing is being conducted through an accelerated bookbuild process which will be launched immediately. J.P.Morgan Cazenove ("JPMC") is acting as sole bookrunner for the Placing

Hossein Yassaie, Imagination's CEO, said:

"We have a number of opportunities to synergistically widen our capabilities and enhance our offering by acquiring important strategic intellectual property in certain key areas. The first of these is HelloSoft which will significantly enhance our position in the Video and Voice over Internet Protocol and Wi-Fi connectivity areas.

"The remaining funds will provide us with the financial flexibility to carry out other complementary and strategic technology acquisitions in relation to our visual and graphics intellectual property business area.

"HelloSoft has exciting technology. which together with our market leading multimedia and processing technologies. will enable us to deliver media (audio, video, voice and graphics) to connected devices whether mobile, within homes or across enterprises.

"The HelloSoft and other acquisitions are part of our overall plans to continue to drive the Group’s development and growth. Our goals are consistent with developing Imagination as a top tier and globally influential technology provider in complementary silicon and software Intellectual Property areas that underpin current and future technological trends in mobile, consumer, enterprise and automotive segments"

Background to and reasons for the Placing

Imagination is an international leader in the creation and licensing of semiconductor System-on-Chip Intellectual Property ("SoC IP") and in the development and manufacture of DAB digital and connected radios.

Imagination has two highly-complementary divisions: its Technology division is an IP licensing business which provides market-leading multimedia capabilities for complex SoC devices; its PURE Digital division uses Imagination's technologies as a key differentiator in its consumer products.

The net proceeds from the placing will be used

to fund the approximately £23.5 million maximum cash payment for the Acquisition. However, the Placing is not conditional on the completion of the Acquisition.
to provide Imagination with the financial flexibility to execute one or more acquisitions of exciting bolt-on technologies which it has already identified to complement Imagination’s graphics and visual IP capabilities.

The number of Placing Shares and the price at which the Placing Shares are to be placed will be determined at the close of the bookbuild and will be announced shortly thereafter.

Details of the Placing

The Placing is being conducted through an accelerated book-building process to be carried out by J.P. Morgan Securities Ltd ("JPMC" or "J.P. Morgan Cazenove"), who is acting as sole bookrunner (the "Bookrunner").

The timing of the closing of the book, pricing and allocations are at the discretion of Imagination and JPMC. The number of Placing Shares and the price at which the Placing Shares are to be placed (the "Placing Price") are subject to agreement between Imagination and JPMC at the close of the book-building process. Details of the number of Placing Shares and the Placing Price will be announced as soon as practicable after the close of the book-building process.

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

Enquiries

Imagination Technologies

Hossein Yassaie, CEO

Trevor Selby, CFO

Tel: 01923 260511

College Hill Associates

Adrian Duffield/Carl Franklin

Tel: 020 7457 2020

J.P. Morgan Cazenove

Rupert Sadler/Shona Graham

Tel: 020 7588 2828

This announcement, including the Appendix and the terms and conditions set out therein (together the "Announcement"), and the information contained herein is not for publication, release or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan, or South Africa or any other jurisdiction in which the same would be unlawful. Subject to certain exceptions, this Announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in the United States, Australia, Canada, Japan, or South Africa or any other jurisdiction in which such an offer or solicitation is unlawful. The shares in the Company referred to in this Announcement (the "Placing Shares") have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. Any offering to be made in the United States will be made to a limited number of "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act ("QIBs") pursuant to an exemption from registration under the Securities Act in a transaction not involving any public offering. No money, securities or other consideration is being solicited and, if sent in response to the information contained in the Announcement, will not be accepted. There will be no public offer of Ordinary Shares in the United States, the United Kingdom or elsewhere.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by JPMC or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

J.P. Morgan Securities Ltd, which is authorised and regulated by the Financial Services Authority, is acting for the Company in connection with the Placing and no-one else and will not be responsible to anyone other than the Company (whether or not a recipient of this Announcement) for providing the protections afforded to clients of J.P. Morgan Securities Ltd nor for providing advice in relation to the Placing.

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

Certain statements in this Announcement are forward-looking statements which are based on the Company’s, expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and neither the Company nor JPMC assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

Any indication in this Announcement of the price at which ordinary shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

J.P. Morgan Securities Ltd. carries on its UK investment banking business as J.P. Morgan Cazenove.

APPENDIX: TERMS AND CONDITIONS OF THE PLACING

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX (TOGETHER, "THIS ANNOUNCEMENT") AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFULIMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE INFORMATION IN IT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS ("QUALIFIED INVESTORS") AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, ("FSMA") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) ARE INVESTMENT PROFESSIONALS WITHIN THE MEANING OF ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS IN (A) AND (B) TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED UPON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT AND THE INFORMATION IN IT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISORS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES.

Persons who are invited to and who choose to participate in the Placing, by making an oral or written offer to acquire Placing Shares (the "Placees"), will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular each such Placee represents, warrants and acknowledges that

it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive: (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of J.P. Morgan Cazenove has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the European Economic Area other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and
(a) (i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States, unless in the case of this clause (ii), acting with investment discretion for such person or, if such person is a corporation or partnership, the person agreeing to purchase the Placing Shares is an employee of such person authorised to make such purchase; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-U.S. person (other than an estate or trust) in reliance on Regulation S; (c) it is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act; or (d) it is a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) (a "QIB") and it has duly executed an investor letter in a form provided to it and delivered the same to J.P. Morgan Cazenove or its affiliates.

The Company and J.P. Morgan Cazenove will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

This Announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Australia, Canada, Japan or Australia or in any other jurisdiction in which such publication or distribution is unlawful. No public offer of securities of the Company is being made in the United Kingdom, United States or elsewhere.

In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold outside the United States in accordance with Regulation S. Any offering to be made in the United States will be made to a limited number of QIBs pursuant to an exemption from registration under the Securities Act in a transaction not involving any public offering.

The Placing Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the announcement of which it forms part should seek appropriate advice before taking any action.

In this Appendix, unless the context otherwise requires, "Placee" means a person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares has been given.

Details of the Placing Agreement and the Placing Shares

J.P. Morgan Cazenove has entered into a Placing Agreement (the "Placing Agreement") with the Company under which J.P. Morgan Cazenove has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours to procure subscribers for the Placing Shares.

The Placing Price (as defined below) will be determined following completion of the Bookbuild (as defined below) as set out in this Announcement and the Placing Agreement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares in the capital of the Company ("Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares.

The Company, subject to certain exceptions, has agreed not to allot, issue or grant any rights in respect of any of its Ordinary Shares in the period from the date of this Announcement until 90 days after Admission without J.P. Morgan Cazenove’s prior consent.

Applications for listing and admission to trading

Applications will be made to the Financial Services Authority (the "FSA") for admission of the Placing Shares to the premium listing segment of the Official List of the UK Listing Authority (the "Official List") and to London Stock Exchange plc for admission to trading of the Placing Shares on its main market for listed securities (together, "Admission"). It is expected that Admission will become effective on or around 22 November 2010 and that dealings in the Placing Shares will commence at that time.Bookbuild

J.P. Morgan Cazenove will today commence the bookbuilding process in respect to the Placing (the "Bookbuild") to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

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

Participation in, and principal terms of, the Placing

J.P. Morgan Cazenove is arranging the Placing as sole bookrunner and agent of the Company.
Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by J.P. Morgan Cazenove. J.P. Morgan Cazenove and its affiliates are entitled to enter bids in the Bookbuild as principal.
The Bookbuild will establish a single price payable to J.P. Morgan Cazenove by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the number of Placing Shares to be issued will be agreed between J.P. Morgan Cazenove and the Company following completion of the Bookbuild and any discount to the market price of the Ordinary Shares will be determined in accordance with the Listing Rules of the FSA. The Placing Price and number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild (the "Pricing Announcement").
To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at J.P. Morgan Cazenove. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price which is ultimately established by the Company and J.P. Morgan Cazenove or at prices up to a price limit specified in its bid. Bids may be scaled down by J.P. Morgan Cazenove on the basis referred to paragraph 8 below.
The Bookbuild is expected to close no later than 4.30p.m. (BST) on 22 November 2010 but may be closed earlier or later at the discretion of J.P. Morgan Cazenove. J.P. Morgan Cazenove may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.
Each Placee's allocation will be confirmed to Placees orally by J.P. Morgan Cazenove following the close of the Bookbuild and a trade confirmation will be dispatched as soon as possible thereafter. J.P. Morgan Cazenove’s oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of J.P. Morgan Cazenove and the Company, under which it agrees to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's Articles of Association.
The Company will make a further announcement following the close of the Bookbuild detailing the number of Placing Shares to be issued and the price at which Placing Shares have been placed.
Subject to paragraphs 4 and 5 above, J.P. Morgan Cazenove may choose to accept bids, either in whole or in part, on the basis of allocations determined at their discretion (in agreement with the Company) and may scale down any bids for this purpose on such basis as it may determine. J.P. Morgan Cazenove may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.
A bid in the Bookbuild will be made on the terms and subject to the conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and except with J.P. Morgan Cazenove’s consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to J.P. Morgan Cazenove, to pay it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe. Each Placee’s obligations will be owed to J.P. Morgan Cazenove.
Except as required by law or regulation, no press release or other announcement will be made by J.P. Morgan Cazenove or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee’s prior written consent.
Irrespective of the time at which a Placee’s allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".
All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".
By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
To the fullest extent permissible by law, neither J.P. Morgan Cazenove nor any of its affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither J.P. Morgan Cazenove nor any of its affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of J.P. Morgan Cazenove’s conduct of the Bookbuild or of such alternative method of effecting the Placing as J.P. Morgan Cazenove and the Company may agree.

Conditions of the Placing

J.P. Morgan Cazenove's obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:

(a) none of the warranties contained in the Placing Agreement being untrue, inaccurate or misleading which in the opinion of J.P. Morgan Cazenove is material in the context of the Placing, at the date of the Placing Agreement and the date of Admission as though they had been given and made on such dates (by reference to the facts and circumstances existing at such dates);

(b) the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement; and

(c) Admission taking place not later than 8.00 a.m. on 22 November 2010 or such later date as the Company and J.P. Morgan Cazenove may otherwise agree but not being later than close of business on 29 November 2010.

The Placing Agreement, and therefore the Placing, are not conditional on the Acquisition. The Company has entered into a binding sale and purchase agreement in respect of the proposed Acquisition as described in the separate announcement relating to the proposed Acquisition published by the Company today (the "Acquisition Announcement"). However, no assurance can be given that the proposed Acquisition will be completed or completed on the terms described in the Acquisition Announcement.

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by J.P. Morgan Cazenove by the respective time or date where specified (or such later time or date as the Company and J.P. Morgan Cazenove may agree), (ii) any of such conditions becomes incapable of being fulfilled or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing in relation to the Placing Shares will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

J.P. Morgan Cazenove may, at its discretion and upon such terms as it thinks fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to certain of the conditions in the Placing Agreement save that the above condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

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

Right to terminate under the Placing Agreement

J.P. Morgan Cazenove is entitled, at any time before Admission, to terminate the Placing Agreement in relation to its obligations in respect of the Placing Shares by giving notice to the Company in certain circumstances, including the occurrence of a force majeure event which in the opinion of J.P. Morgan Cazenove acting in good faith, is material in the context of the Placing.

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

No Prospectus

No offering document or prospectus has been or will be submitted to be approved by the FSA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix), the Acquisition Announcement and the Exchange Information (as defined further below). Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement and the Acquisition Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or J.P. Morgan Cazenove or any other person and neither J.P. Morgan Cazenove nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB0009303123) following Admission will take place within the CREST system, subject to certain exceptions, J.P. Morgan Cazenove reserves the right to require settlement for, and delivery of, the Placing Shares to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within the system administered by Euroclear UK & Ireland Limited ("CREST") within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Following close of the Bookbuild, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with J.P. Morgan Cazenove, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to J.P. Morgan Cazenove and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with J.P. Morgan Cazenove.

It is expected that settlement will be on 22 November 2010 on a T+3 basis in accordance with the instructions set out in the trade confirmation.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by J.P. Morgan Cazenove.

Each Placee is deemed to agree that, if it does not comply with these obligations, J.P. Morgan Cazenove may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for J.P. Morgan Cazenove's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on J.P. Morgan Cazenove all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which J.P. Morgan Cazenove lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to United Kingdom stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

By participating in the Placing each Placee (and any person acting on such Placee's behalf):

represents and warrants that it has read this Announcement, including the Appendix, in its entirety and that its acquisition of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;
acknowledges that no offering document or prospectus has been prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus or other offering document in connection therewith;
acknowledges that the Ordinary Shares are listed on the Official List of the FSA, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FSA (collectively "Exchange Information"), which includes a description of the nature of the Company’s business and the Company’s most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;
acknowledges that neither J.P. Morgan Cazenove nor the Company nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Placing Shares or the Company other than this Announcement and the Acquisition Announcement; nor has it requested any of J.P. Morgan Cazenove, the Company, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;
acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither J.P. Morgan Cazenove, its affiliates nor any person acting on its or their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of J.P. Morgan Cazenove or the Company and neither J.P. Morgan Cazenove nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;
represents and warrants that it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting this invitation to participate in the Placing;
acknowledges that neither J.P. Morgan Cazenove nor any person acting on behalf of it nor any of its affiliates has or shall have any liability for any publicly available or filed information or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
acknowledges that any sales in the United States will be to QIBs in reliance on an exemption from, or in a transaction not subject to, registration under the Securities Act and that any sales outside the United States are being made in "offshore transactions" (as defined in Regulation S under the Securities Act) in accordance with Regulation S under the Securities Act;
if the Placing Shares were offered to it in the United States, represents and warrants that in making its investment decision: (i) it has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally and the U.S. Employee Retirement Income Security Act of 1974, the U.S. Investment Company Act of 1940, as amended and the Securities Act; (ii) it has received all information (including the business, financial condition, prospects, creditworthiness, status and affairs of the Company, the Placing and the Placing Shares, as well as the opportunity to ask questions) concerning the Company, the Placing and the Placing Shares that it believes is necessary or appropriate in order to make an investment decision in respect of the Company and the Placing Shares; (iii) it has extensive knowledge and experience in financial and business matters and it is aware and understands that an investment in the Placing Shares involves a considerable degree of risk and no U.S. federal or state or non-U.S. agency has made any finding or determination as to the fairness for investment or any recommendation or endorsement of the Placing Shares; and (iv) it and any accounts for which it is acting are able to bear the economic risk of an investment in the Placing Shares, is able to sustain a complete loss of the investment in the Placing Shares and has no need for liquidity with respect to its investment in the Placing Shares;
represents and warrants that: (a) (i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States, unless in the case of this clause (ii), it is acting with investment discretion for such person or, if such person is a corporation or partnership, the person agreeing to purchase the Placing Shares is an employee of such person authorised to make such purchase; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-U.S. person (other than an estate or trust) in reliance on Regulation S under the Securities Act; (c) it is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act; or (d) it is a QIB and it has duly executed an investor letter in a form provided to it and delivered the same to J.P. Morgan Cazenove or its affiliates;
acknowledges that it is acquiring the Placing Shares for its own account or for one or more accounts as to each of which it exercises sole investment discretion and each of which (if in the United States) is a QIB, for investment purposes and not with a view to any distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States and that it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;
acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;
acknowledges that the Placing Shares offered and sold in the United States are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and, so long as the Placing Shares are "restricted securities", it will not deposit the Placing Shares into any unrestricted depositary receipt facility maintained by any depositary bank in respect of the Company's Ordinary Shares and understands that the Placing Shares will not settle or trade through the facilities of the Depository Trust Corporation, the NYSE, NASDAQ or any other U.S. exchange or clearing system;
represents and warrants that it will not reoffer, sell, pledge or otherwise transfer the Placing Shares except: (i) in an "offshore transaction" in accordance with Regulation S under the Securities Act; (ii) in the United States to QIBs pursuant to Rule 144A under the Securities Act; (iii) pursuant to Rule 144 under the Securities Act (if available); or (iv) pursuant to an effective registration statement under the Securities Act and that, in each such case, such offer, sale, pledge, or transfer will be made in accordance with any applicable securities laws of any state of the United States;
represents and warrants that it is not a "benefit plan investor" (within the meaning of the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or other employee benefit plan subject to any U.S. federal, state, local or other law or regulation that is substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the U.S. Internal Revenue Code of 1986, as amended, and that it will not sell or otherwise transfer any Placing Shares or any interest therein unless the transferee makes or is deemed to make the representations and warranties set forth in this section (14), and the purchaser acknowledges and agrees that any purported transfer of Placing Shares or any interest therein that does not comply with this section (14) will not be effective and will not be recognised by the Company;
acknowledges and agrees that the Placing Shares will, to the extent they are delivered in certificated form, bear a legend to the following effect unless agreed otherwise with the Company: "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT: (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT; (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT; OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. EACH HOLDER, BY ITS ACCEPTANCE OF THESE SHARES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.";
unless otherwise specifically agreed in writing with J.P. Morgan Cazenove, represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of Australia, Canada, Japan or South Africa;
acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of Australia, Canada, Japan or South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;
represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;
represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2003 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;
if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of J.P. Morgan Cazenove has been given to the offer or resale;
represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA;
represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any Member State of the European Economic Area);
represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;
represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;
if in a Member State of the European Economic Area, unless otherwise specifically agreed with J.P. Morgan Cazenove in writing, represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Directive;
if in the United Kingdom, represents and warrants that it is a person (i) who is an investment professional having professional experience in matters relating to investments falling with Article 19(1) of the Order; (ii) falling within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order; or (iii) to whom this Announcement may otherwise be lawfully communicated;
represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;
undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as J.P. Morgan Cazenove may in its sole discretion determine and without liability to such Placee;
acknowledges that none of J.P. Morgan Cazenove, nor any of its affiliates, nor any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placees and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of J.P. Morgan Cazenove and that J.P. Morgan Cazenove has no duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither J.P. Morgan Cazenove nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and J.P. Morgan Cazenove in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of J.P. Morgan Cazenove who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;
acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract (including any non-contractual claim, dispute or matter), except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or J.P. Morgan Cazenove in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;
agrees that the Company, J.P. Morgan Cazenove and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to J.P. Morgan Cazenove on its own behalf and on behalf of the Company and are irrevocable;
agrees to indemnify on an after tax basis and hold the Company, J.P. Morgan Cazenove and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;
acknowledges that no action has been or will be taken by any of the Company, J.P. Morgan Cazenove or any person acting on behalf of the Company or J.P. Morgan Cazenove that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;
acknowledges that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and are able to sustain a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved; and
acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the trade confirmation will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to J.P. Morgan Cazenove for itself and on behalf of the Company and are irrevocable.

The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, United Kingdom stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor J.P. Morgan Cazenove will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such United Kingdom stamp duty or stamp duty reserve tax undertakes to pay such United Kingdom stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and J.P. Morgan Cazenove in the event that any of the Company and/or J.P. Morgan Cazenove has incurred any such liability to United Kingdom stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify J.P. Morgan Cazenove accordingly.

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

Each Placee, and any person acting on behalf of the Placee, acknowledges that J.P. Morgan Cazenove does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

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

When a Placee or person acting on behalf of the Placee is dealing with J.P. Morgan Cazenove, any money held in an account with J.P. Morgan Cazenove on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from J.P. Morgan Cazenove's money in accordance with the client money rules and will be used by J.P. Morgan Cazenove in the course of its own business and the Placee will rank only as a general creditor of J.P. Morgan Cazenove.

All times and dates in this Announcement may be subject to amendment.

Imagination Technologies plc -- Placement Announcement

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