Public Companies Update October 2004

4 THE FREIVERKEHR/BERLIN-BREMEN BOURSE

An increasing number of companies who are listed on the Official List, NASDAQ or AIM are finding that their securities are also being admitted to trading on the Berlin-Bremen Stock Exchange Freiverkehr or Berlin-Bremen Bourse, as it is sometimes known, without the Company being informed. This article sets out a brief summary of this market and what steps a company could take if it wishes to have its securities de-listed.

4.1 What is the Freiverkehr?
The market Freiverkehr (Free Market) in Germany is an unregulated market within the meaning of the EU-directive. It exists at each of the 6 stock exchanges in Germany, one of which is the Berlin-Bremen Stock Exchange Freiverkehr.

4.2 How are Securities Admitted?
The listing and delisting of securities to the Freiverkehr are regulated by the Rules for the Regulated Unofficial Market (Freiverkehrsrichtlinien) as private law regulations. It is important to note that the Berlin-Bremen Stock Exchange Freiverkehr does not require the consent of the companies whose stock is to be traded.

Any admitted enterprise (e.g. a broker) at the Berlin-Bremen stock exchange can apply for the inclusion of any company's securities in the Freiverkehr.

The company has to be informed about the inclusion of its securities but any objections of the company are irrelevant, if its securities are listed on a regulated market elsewhere.

4.3 What obligations does a company incur by having its securities admitted
Due to the fact that it is an unregulated market, no prospectus or public-law admission is required. The inclusion of a company's securities does not trigger any specific obligation of the company (e.g. reporting or announcements), but any insider trading on the market will be enforced by the federal supervisory authority, the Bundesanstalt für Finanzdienstleistungsaufsicht ("BAFin"). It is possible for a company to ask the BAFin to investigate if there is suspicion of any illegal trading in the stock, including market manipulation.

4.4 Can a company have its securities de-listed from the Freiverkehr?
In order to request a delisting, a company first needs to know who applied for the inclusion of its securities to the Freiverkehr.

Once this is known, a company can object to the inclusion of its securities on the market or formally apply for a delisting, depending on the date of listing/trading on other markets and the trading volume at the Berlin-Bremen Stock Exchange Freiverkehr.

It may be possible to petition for the securities to be delisted but, ultimately, it is a decision which the Berlin-Bremen stock exchange makes in its absolute discretion. However, in certain circumstances it maybe possible to make a legal appeal of this decision.

If you require further information on any matter covered in this note, please contact your principal contact at Charles Russell or Simon Gilbert, Katy Knight, Clive Hopewell or Alexander Keepin (London), Francis Rundall or Richard Norton (Cheltenham) or Catherine Drew or Geoff Sparks (Guildford) on 0207 203 5000.

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Please note that the summaries above are a general indicative guide only. They are not exhaustive. This information has been prepared by the firm as a service to our clients. As it is a general guide, we recommend that you seek professional advice before taking action. No liability can be accepted by the firm for any action taken or not taken as a result of this information. The firm is not authorised under the Financial Services and Markets Act 2000 but we are able in certain circumstances to offer a limited range of investment services to clients because we are members of the Law Society. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide.