Otium Ventures - Posting of Admission Document re CEL

Posting of Admission Document re CEL

Summary of Transaction

The Directors of Hertford International Group Plc ('Hertford') are pleased to inform you that Hertford has conditionally agreed to acquire the whole of the issued share capital of Cheque Exchange Limited ('CEL'). CEL is a private company ultimately owned by Provident Financial plc. The consideration for the acquisition of CEL is £3,000,000 cash minus any amount payable by CEL under Section 75 or Section 75A of the Pensions Act 1995 (Section 75 Debt) payable as to £1,250,000 minus the Section 75 Debt on completion, a further £1,250,000 on 31 July 2009 and £250,000 on each of the first and second anniversaries of completion. Further details are set out in a shareholder circular that has been posted to shareholders today (the "Circular").

Funding for the proposed acquisition has been secured by Hertford through a combination of issuance of shares in an underwritten placing (£850,000) and convertible loan notes (£2,250,000) for a total of £3,100,00. The Placing has been underwritten and the convertible Loan Agreements have been entered into by Dexapoint, currently a significant shareholder. The independent directors consider, having consulted with the Company's nominated adviser, that the terms of the transaction are fair and reasonable insofar as its shareholders are concerned. Further details of the convertible loan notes and the underwriting agreement can be found below.

The Directors intend to, market conditions permitting, raise further equity in order to reduce the reliance on the Loan Agreements, reduce the overall leverage of the Company and for additional working capital.

CEL provides two main products: third party cheque cashing facilities through approximately four hundred and twenty outlets throughout the United Kingdom, Northern Ireland, and the Channel Islands and MoneyGram® money transfer facilities through over five hundred outlets nationwide. Detailed information on CEL is set out below.

The Acquisition is treated as a reverse takeover for the purposes of the AIM Rules and, as such, requires the consent of the Company's shareholders which is to be sought at the Annual General Meeting due to be held at 11 a.m. on 22 December 2008.

Completion of the Acquisition is conditional upon the following being satisfied:

(i) The Company’s shareholders passing the Resolutions without amendment;

(ii) The London Stock Exchange agreeing unconditionally to Admission becoming effective in accordance with the AIM Rules;

(iii) the Vendor delivering to the Company the written consent of the banks with which CEL has facilities (and whose terms and conditions contain a prohibition on change of control of CEL without the prior written consent of the relevant bank) to the Company gaining control of CEL; and

(iv) the Vendor delivering to the Company a letter from MoneyGram® to CEL giving its consent to without qualification other than as to the provision of a bank guarantee of not more than £300,000 to the Company the Company gaining control of CEL. MoneyGram® has agreed in principle that it will issue such a letter provided that a bank guarantee has been procured.

Notice of Annual General Meeting

Your attention is drawn to a seperate announcement released this morning notifying shareholders of the Annual General Meeting of the Company to be held at 11 a.m. on 22 December 2008 at The Space, 57-61 Mortimer Street, London W1W 8HS. A copy of the notice can also be found below.

Action to be Taken

Shareholders will find enclosed with the Circular a Form of Proxy for use at the Annual General Meeting. Whether or not you intend to be present at the meeting, you are requested to complete, sign and return your Form of Proxy to the Company's registrars, SLC Registrars, Thames House, Portsmouth Road, Esher, Surrey, KT10 9AD as soon as possible but, in any event, so as to arrive no later than 11 a.m. on 19 December 2008. The completion and return of a Form of Proxy will not preclude shareholders from attending the meeting and voting in person should they wish to do so.

Shareholders should note that completion of the Acquisition is conditional upon the passing of all the Resolutions.

Lifting of Suspension from Trading

A request has been made to the stock exchange to lift the suspension from trading as of 7:30 a.m. on 26 November 2008.

Expected Timetable of Principal Events

Admission and dealings in the Existing Ordinary Shares to commence	23 December 2008
Admission and dealings in the Placing Shares to commence on AIM	latest 30 January 2009
Expected date of delivery of the Placing Shares into CREST (where applicable)	latest 2 February 2009
Despatch of definitive share certificates in respect of the latest Placing Shares	13 February 2009

FUNDRAISING STATISTICS

Placing price per Ordinary Share	no less than 13 pence
Number of Ordinary Shares currently in issue	42,675,000
Number of Placing Shares to be issued	up to 6,538,462
Number of Ordinary Shares in issue immediately following Placing Shares Admission	up to 49,213,462
Placing Shares as a percentage of the Enlarged Issued Share Capital	up to 13.29%
Market capitalisation of Enlarged Share Capital at a Placing Price of 13p	£6,397,750.06
Market capitalisation of Enlarged Share Capital at a Placing Price of 15p	£7,251,249.90
Approximate net proceeds of the Fundraising received by the Company	£2.5m
TIDM code	HIG
ISIN number	GB00B29KF658

Further information

Proposed acquisition of Cheque Exchange Limited, Placing to raise £850,000, before expenses (the "Placing"), Admission of the Enlarged Issued Share Capital to trading on AIM and convertible loans from Dexapoint

Introduction

CEL is a private company ultimately owned by Provident Financial plc. The consideration for the acquisition of CEL is £3,000,000 cash minus any amount payable by CEL under Section 75 or Section 75A of the Pensions Act 1995 (Section 75 Debt) payable as to £1,250,000 minus the Section 75 Debt on completion, a further £1,250,000 on 31 July 2009 and £250,000 on each of the first and second anniversaries of completion. Further details are set out in the Circular.

Completion of the Acquisition is conditional upon the following being satisfied:

(i) The Company’s shareholders passing the Resolutions without amendment;

(ii) The London Stock Exchange agreeing unconditionally to Admission becoming effective in accordance with the AIM Rules;

(iv) the Vendor delivering to the Company a letter from MoneyGram®to CEL giving its consent to without qualification other than as to the provision of a bank guarantee of not more than £300,000 to the Company the Company gaining control of CEL. MoneyGram®has agreed in principle that it will issue such a letter provided that a bank guarantee has been procured.

2. Admission to AIM and Dealings

An application will be made for the Existing Ordinary Shares to be admitted to trading on AIM and it is anticipated that Admission will become effective on the first trading day following the Annual General Meeting, being 23 December 2008.

A separate application will be made for the Placing Shares to be admitted to trading on AIM and it is anticipated that Placing Shares Admission will become effective no later than 30 January 2009.

3. Background and Reasons for the Acquisition

Hertford was incorporated on 12 July 2006 and its share capital, following a placing to raise around £2 million, was admitted to trading on AIM on 24 December 2007. The purpose of the admission was to allow the Company access to development capital and provide the Directors with the ability to make strategic acquisitions.

Hertford owns 100 per cent. of the issued share capital of CCN. CCN was incorporated on 27 April 2006 to be a marketer of pre-paid debit card programmes targeted at a number of high growth niche markets.

CCN has delayed the marketing of its current pre-paid card offering, although there has been some limited trading since incorporation. This decision to delay was taken following a review of the product, competing products and of the pre-paid debit card market since the original admission to AIM on 24 December 2007 and most importantly the changing compliance backdrop, including the introduction and implementation by the Treasury of the Third EU Money Laundering Directive. The limited trading to date has given CCN the opportunity to improve and develop its systems, and have actual statistics of client use and behaviour to refine the financial assumptions for all our budgets and projections.

CCN concentrated on enhancing the product offering in order to ensure a more effective full scale launch for this winter rather than in March 2008 as originally intended.

The core product originally offered by CCN is being re-shaped to not only enhance the offering but also to cater for a larger consumer market without the need to make further modifications to the basic offering. Such changes are intended to allow CCN customers to be better serviced at more affordable rates. This includes proposed new relationships with established brands, such as the Post Office which should expand the cash loading network by approximately 30,000 locations nationwide such as supermarkets, convenience stores and retailers.

The increased compliance requirements as well as the inability to verify electronically a large percentage of applicants' identities proved to be a challenge for CCN that required addressing. To offset this, CCN is developing a pre-paid debit card product that allows such applicants to obtain a card more easily which can be upgraded at any point during the lifetime of the card thus helping to maximize customer use and reduce the cost of customer acquisition.

The reasons for the Acquisition are to acquire an established infrastructure and distribution network, which would give access to over 750 retail outlets. Another reason for the Acquisition is to allow the creation of a branded retail network covering in excess of 400 outlets. The Directors also believe that the Acquisition will allow Hertford to acquire a solid demographic customer base. The Directors believe that the services offered by CEL will become attractive to an increasing number of people in time of economic difficulty. Furthermore, the Directors intend to capitalise, wherever possible, on cross related opportunities between the customer bases of the Company's subsidiaries. This will require the consent of MoneyGram® in relation to money remittance products that are intended to be marketed through the MoneyGram® network. The consent of MoneyGram® is also required for the change of control of CEL and MoneyGram® has agreed in principle to give its consent. The Directors note that there were over 400,000 over the counter customer transactions through CEL's network in 2007, including repeat customers, transactions representing cheque cashing, money transfer and pay day loans. The Directors believe that, with this level of counter customer transactions, there may be scope for appropriate cross selling.

Furthermore, the Directors believe that the target client base for the products offered by CEL and CCN are similar, and the target client base for cheque cashing, pre-paid credit cards and the money remittance includes immigrants, migrant workers, and lower income workers and families, a proportion of whom are Unbanked. The Directors also believe that the effect of the current "credit crunch" may continue well into 2009 and beyond, and this may increase the number of people using pre-paid debit cards. Furthermore, the Directors believe that the current "banking crisis" may have reduced people's confidence in the banking system.

4. Benefits of CEL Acquisition

The Directors believe that the addition of CEL to the Enlarged Group will increase the Enlarged Group's cash flow due to CEL's current performance. The Directors believe that the Acquisition, together with the launch of the new CCN products will mean Hertford will have a range of products which will give it a competitive advantage over competitors. Accordingly, the Directors believe that Hertford is well placed to compete successfully with other consumer oriented financial businesses.

The Directors believe that the addition of a retail network whose retailers are supported by CEL's team of existing BDMs should help CCN to maximise customer acquisition and increase revenue. In addition to the distribution platform providing an enhanced retail presence, the Directors believe that the Acquisition may provide the Enlarged Group with an opportunity to bring in house services currently outsourced.

In the light of the Acquisition, the Directors have established the following business strategy:

Expand the CEL agent network by increasing the number and improving the incentivisation of the sales team.
Expand the CEL agent network through strategic partnerships with suitable high street brands such as chains of mini super markets and off-licences.
Market pre-paid cards through the CEL network and other key distribution networks.
Look to market cheque-cashing services through other agent networks, similar to that currently being discussed with Provident Financial plc.
Create a brand for the CEL agent's shops that will be recognisable by consumers to create loyalty and increase footfall through national advertising opportunities.
Look to acquire other cheque cashing and money remittance networks achieving substantial savings in central costs and increased margins.
Look to launch a cheque-cashing MasterCard to reduce levels of cash-handling as well as expanding number of cards in use.
Look to develop an international calling service, CrewCall, looking to achieve rapid growth through state of the art innovation.

5. Information on CEL

CEL was incorporated in 1994 with the purpose of enabling Unbanked persons to cash cheques issued to them as payee following legislation that made cheque cashing more regulated. CEL is a founder member of the British Cheque Cashers Association, which was formed to introduce codes of practice in order to encourage banks to offer these facilities. The business model is the provision of simple financial solutions through a nationwide agency network. The principal business was TPCC (supported by some FPCC). In January 2000 CEL took on the UK super agency for MoneyGram® and has grown a nationwide agency network of around 750 agents of which approximately 500 outlets currently support MoneyGram® and approximately 420 support TPCC, with some agents doing both.

It had been agreed that prior to the completion of the Acquisition, Provident Financial plc would procure that surplus cash is paid out of CEL so that the purchase is of a company with net assets of not less than £1.00 and not the net assets as set out in Part V of the Circular. This payment has now occurred. The Directors believe this payment will not adversely affect the working capital requirement of CEL and consequently will not affect CEL's ability to continue trading.

For more details please refer to paragraph 5.22 of Part V Section B of the Circular.

In addition, CEL has recently signed agreements with two subsidiaries of Provident Financial plc to offer CEL's cheque cashing services on an exclusive basis through its network of over 11,000 agents, who serve over 1.65m customers. Whilst implementation of the agreements require completion of the Acquisition, and the successful completion of a pilot project currently underway, the Directors are confident that these agreements offer scope for an expansion of CEL's cheque cashing revenues, if the pilot project was rolled out to all of the 11,000 plus agents.

The Directors understand that at present 13.6 per cent. of CEL's third party cheque cashing customers are also Provident Financial plc customers.

6. Current Trading and Trends

Included in Part V (A) of the Circular are the audited results for the Company for the period ended 30 September 2007 together with the unaudited interim results for the six months ended 31 March 2008.

Included in Part V (B) of the Circular are the audited results for CEL for the three years ended 31 December 2007.

Hertford's first six months of operations as a public company have resulted in a limited element of trading as we wished to ensure that our suite of products were both compliant from a financial and regulatory standpoint whilst being user-friendly from a potential customer's point of view.

Our business strategy is to seek potential partners or synergous acquisitions to strengthen and enhance the value of our customer proposition. Your Directors believe that CEL meet the criteria of providing a significant prospect to grow shareholder value.

7. Directors and Senior Management

The Board:

Paul Phillip Marks, aged 59 - Non-Executive Chairman

Paul has extensive experience in mortgage and financial services. Paul was a significant founder shareholder of Chase De Vere, a UK mortgage broker, established in 1982 and was managing director until 1995 when he became non-executive chairman. In 1991 Chase De Vere was sold to Sun Alliance Plc where Paul became a director until 1994 when a company of which he was a significant shareholder bought the mortgage brokerage business back. In 1996 Paul became the executive chairman of The Mortgage Operation, the UK's largest independent intermediary network servicing the needs of over 7,000 specialist mortgage brokers. Paul has also been chairman of Mortgages Plc, of which he was a founding shareholder, and the executive chairman of Creditweb. In 2006 Paul was appointed as non executive director to Crown Mortgage Management Limited and Convex Conveyancing Limited, positions he still holds.

Lewis Charles Findlay, aged 47 - Chief Executive Officer

Lewis Findlay became the CEO of Hertford in April 2008. Before that he was with Cantor Index Ltd. where he was the founding Managing Director of the various retail businesses of Cantor Fitzgerald, having previously been the Head of Financial Spread Betting at City Index Ltd., part of ICAP. Other prior senior roles include Head of Eurobond Trading at Tokai Bank Europe, Global Head of ECU Trading at J.P Morgan & Cie S.A. (Paris) and Head of ECU Trading for J.P. Morgan Securities Limited in London. Lewis gained his B.A. Hons. in Economics from Leeds University. He also studied at Hertford College, Oxford University, where he gained his Master of Philosophy in Economics.

Paul Michael Seakens, aged 47 - Finance Director

Paul Seakens has worked with HIG from its inception. Paul has held a number of senior positions in financial services organisations over a career spanning thirty years. He was Head of Group Operations at SG Hambros Bank and Trust Limited, and Head of Operations and Head of Risk Management at KasBank UK. More recently he has been involved in running his own consultancy company, working with companies such as Barclays Bank and the London Clearing House on finance, compliance and management related projects.

Alexander Charles Lubin, aged 27 - Director of Card Services

Alex started his career working with Williams de Broe in early 2000. In mid 2005 Alex was involved with Altair through his close relationship with the founding shareholders, and in early 2006 he joined Altair. He played a major role in establishing key business relationships with various international banks as well as direct relationships with MasterCard® and Visa™. In 2006 Alex helped define the Crewcard proposition. In late 2007 Alex joined CCN as a full time employee.

Damian Mifsud, aged 38 - Non-Executive Director

Damian has been involved in the card payments industry since 1998, in the UK, Ireland, Belgium and Malta for a variety of organisations including a software vendor, a third party processor, an acquirer, an issuer, and also at scheme level. This has covered both domestic and multi-currency/regional environments in high level consultant/project management roles at Barclaycard Merchant Services, First Data Merchant Services (Omnipay), MBNA, and MasterCard®. Damian was one of the early members of Altair where he established both the Operational and Business Development functions.

Prior to this Damian was a consultant to the Office of the Prime Minister (Malta) leading a number of public service reform initiatives. Damian is a graduate (B.Sc) of the University of Buckingham.

It is the intention of the Directors to appoint an independent non-executive director as soon as practicable following the Admission.

Key Employees:

Richard Fancourt, aged 38 - Sales and Marketing

Richard joined CCN after a year of consultancy with various money transfer and telecoms companies, including Travelex Money Transfer and Aphelia Telecom. During January 2002 to May 2006 Richard worked at MoneyGram® as Country Manager for the UK & Ireland, and was responsible for the development of that region. Richard and his team were responsible for marketing to over 65 different ethnic minorities sited in both the UK and overseas. Richard's role involved addressing legal regulatory and compliance issues, including managing the implications of any legislative changes. Richard has significant start-up experience with Travelex Money Transfer, GCS London and Two Way Logistics.

Peter McOwen, aged 52 - General Manager

Peter commenced his accountancy studies in 1974, with Armitage & Norton, Chartered Accountants, where he obtained the ACA Part I qualification and broad company auditing experience. In 1987, he joined Halifax Insurance Co. Ltd., being responsible for accounting, treasury and payroll management.

In 1989, Halifax Insurance was acquired by Provident Financial plc ("Provident"). Thereafter he undertook various management roles within Provident including Business Process Re-engineering, user project management, accident claims management, and IT project management. He moved to CEL in 2001 following its purchase in that year by Provident, to work with the Managing Director to assess and address weaknesses.

In 2005 Peter became the General Manager of CEL. Heading a senior management team, he is responsible for strategic development, risk and compliance management, affinities management, and budgetary control. From 2005, Peter has been the company's Money Laundering Reporting Officer and the Treasurer of the British Cheque Cashing Association. Following the completion of the Acquisition, Peter will continue to be employed by CEL on a full time basis.

Shaun Brown, aged 33 - Operations Manager

Shaun studied accounting, acquiring a BTEC National Diploma in Business and Finance. Shaun was awarded membership of the Association of Chartered Certified Accountants in 2002 and was granted his Fellowship in March 2007.

He was initially employed with Greenwood Barton & Co., Chartered Accountants, where he was involved in planning and conducting audits, preparing VAT returns, and payroll production.

Shaun joined CEL in 1997 during which time it was the subject of an MBO before it was bought by Provident. He became Operations Manager in 2001 and since then has been closely involved in all aspects of the running of the business. He has particular responsibility for accounting and debt recovery whilst at the same time contributing to strategic and tactical planning.

The total number of employees of Hertford and CCN, including the Executive Directors, at the date of this document is 13. CEL employs approximately 60 staff which will bring the number of employees of the Enlarged Group to approximately 73.

8. Intellectual Property

The Enlarged Group will use copyrights, trademarks, websites, domain names and confidential information in carrying on its business from time to time.

Other than registered trademarks and domain names neither Hertford nor CCN has any material intellectual property of its own, which is consistent with CCN's business model. CCN is therefore dependent on the intellectual property, software and processing facilities to be provided to it by Altair.

CCN intends to develop intellectual property rights in marketing and branding materials it produces and commissions as time goes on.

Four registered trademarks, currently in the name of Provident Financial plc, will be acquired by CEL as part of completion of the proposed Acquisition of CEL, namely N&N®, Simple Finance Solutions®, JustCash® and JCash®. Other than this CEL does not have any material intellectual property.

9. Reasons for Fundraising, Details of the Fundraising and Use of Proceeds

The Directors believe that the Company has benefited from the higher profile resulting from its AIM admission, and that this will continue to enhance its commercial relationships. The funds raised are intended to be used to fund the Acquisition.

The Company has conditionally raised a minimum of £850,000 (before expenses) through the placing of up to 6,538,462 new Ordinary Shares at no less than 13p pence per share. The Placing Shares will represent up to 13.29 per cent. of the Enlarged Issued Share Capital. The Placing Shares will rank pari passu with the Existing Ordinary Shares.

A summary of the principal terms and conditions of the Placing Agreement is set out in paragraph 13 of Part VII of the Circular.

Dexapoint, which at the date of this document is interested in 10.91 per cent. of the Company's Ordinary Shares, has underwritten the Placing up to £850,000. If Dexapoint were to take up its maximum obligation, its number of Placing Shares would take Dexapoint's aggregate shareholding in the Company, to 21.65 per cent. (on the assumption £850,000 was raised). Details of the relevant underwriting agreement are set out at paragraph 12.10 of Part VII of the Circular. As consideration for the underwriting Dexapoint have been issued with warrants to subscribe for 1,888,889 shares at 15 pence plus one additional share for each six shares underwritten but limited to a further maximum number of 944,445 shares. Dexapoint has also agreed to loan the Company an aggregate of £2,250,000 under the Loan Agreements.

Under Loan I Dexapoint has agreed to lend the Company up to £1,000,000. As consideration for the loan Dexapoint has been issued with warrants over (i) 500,000 shares at a price of 20 pence per share, (ii) 1,666,667 shares at a price of 15 pence per share, and (iii) one share for every four shares converted pursuant to Loan 1 at a price of 15 pence per share, but limited to a maximum number of 1,923,077 shares.

Under Loan II Dexapoint has agreed to lend the Company up to £1,250,000. As consideration for the loan Dexapoint has been issued with warrants over (i) 500,000 shares at a price of 20 pence per share, and (ii) 2,083,333 shares at a price of 15 pence per share, and (iii) one share for every four shares converted pursuant to Loan 2 at price of 15 pence per share, but limited to a maximum number of 2,403,846 shares. Details of the relevant loan agreements are set out at paragraphs 12.11 and 12.12 of Part VII of the Circular.

In addition to signing the agreements referred to in Part VII, paragraphs 12.10 to 12.12 Dexapoint has also given an undertaking to the Company not to exercise any rights to acquire shares under any of these agreements, if as a result of such acquisition and/or relevant allotment of shares in the capital of the Company it, together with persons acting in concert with it, as defined in the City Code, would hold 30 per cent. or more of the entire issued share capital of the Company unless the issue of the said shares has received prior approval by a vote of independent shareholders at a general meeting in the manner as described in paragraph 3 of Note 10 to Rule 9 of the City Code.

10. Risk Factors

Your attention is drawn to the risk factors set out in Part IV of the Circular.

11. Lock-ins and Orderly Market Arrangements

At the time of Hertford's original admission to AIM and in accordance with Rule 7 of the AIM Rules for Companies each of the Directors (other than Lewis Findlay who was not a director of the Company at that time), certain Shareholders and applicable employees agreed, subject to certain limited exceptions (as permitted by the AIM Rules), not to dispose of any of their interests in Ordinary Shares for a period of twelve months from December 24 2007. They also agreed for the period between 24 December 2008 and 24 December 2009 only to dispose of any interest in Ordinary Shares held by them through the Company's broker(s) in a manner which maintains an orderly market in the Ordinary Shares. Lewis Findlay, who has purchased shares in the Company, will sign a similar lock-in and orderly market agreement to run from Admission.

Further details of these arrangements are set out in paragraph 14 of Part VII of the Circular.

12. Dividend Policy

The Directors do not intend that the Company will pay a dividend in the foreseeable future but they will consider the payment of future dividends as and when the growth and profits of the Company available for distribution allow.

13. Employee and Director Share Options

The Directors consider that share options are an important part of the Company's remuneration policy. Accordingly, the Company established the Share Option Scheme, further details of which are set out in paragraphs 10.2 and 10.3 of Part VII of the Circular. Options under the Share Option Scheme have been granted to Directors and employees totaling 11.72 per cent. of the Enlarged Issued Share Capital assuming the issue of 6,538,462 Ordinary Shares in the Placing at the date of Admission, and the Directors intend and will have authority (subject to the passing of the Resolutions) to increase this in due course to up to 20 per cent. of the Enlarged Issue Share Capital at the date of Placing Shares Admission.

14. Corporate Governance

Although the Company is not obliged to comply with the Combined Code, the Directors, in recognising the importance of sound corporate governance, intend to comply with the main provisions of the QCA Guidelines for AIM companies in such respects as are appropriate to the Company's size, nature and stage of development. Accordingly, the Company has established an audit committee, a remuneration committee and a nomination committee, with formally delegated duties and responsibilities.

The audit committee comprises Paul Marks and Damian Misfud and is chaired by Paul Marks. It meets at least three times a year and is responsible for ensuring the financial performance, position and prospects of the Company are properly monitored and reported on and for meeting the auditors and reviewing their reports relating to accounts and internal controls.

The remuneration committee comprises Paul Marks and Damian Misfud and is chaired by Paul Marks. It meets at least three times a year and reviews the performance of executive directors and sets their remuneration and the payment of bonuses to executive directors and considers the future allocation of share options to directors and employees.

The nomination committee comprises Paul Marks and Damian Mifsud and is chaired by Paul Marks. It meets at least three times a year and considers the selection and re-appointment of Directors. It identifies and nominates candidates to fill board vacancies and reviews regularly the structure, size and composition (including the skills, knowledge and experience) of the Board and makes recommendations to the Board with regard to any changes.

The Company has adopted the Share Dealing Code for the Directors and senior employees and will take steps to ensure compliance by the Directors and any relevant employees with the terms of this code.

15. CREST

CREST is a paperless settlement enabling securities to be evidenced otherwise than by certificate and transferred otherwise than by written instrument in accordance with the Regulations. The Company's articles of association permit the Company's shares to be evidenced in uncertificated form in accordance with the Regulations. Accordingly, settlement of transactions in the Ordinary Shares following Admission may take place within the CREST system if the relevant shareholders so wish. CREST is a voluntary system and holders of Ordinary Shares who wish to receive and retain share certificates will be able to do so.

16. Settlement and Dealing Arrangements

Monies received from placees in respect of the Placing Shares will be held in accordance with the terms of the placing letters issued to such placees by Hythe Securities Limited until such time as the Placing Agreement becomes unconditional in all respects. If the Placing Agreement does not become unconditional in all respects by 22 January 2007, or such later date as the Company and ZAI may agree, being no later than 30 January 2009, monies received from placees will be returned to placees at the relevant placees' sole risk without interest.

Following Placing Shares Admission, share certificates representing the Placing Shares are expected to be dispatched by post to placees who do not wish to receive shares in uncertificated form, by no later than 13 February 2009, at the relevant placees' sole risk. No temporary documents of title will be issued in connection with the Placing. Pending the dispatch of definitive share certificates, instruments of transfer will be certified against the register of members of the Company. The CREST accounts of placees who have duly elected to receive their Ordinary Shares in uncertificated form are expected to be credited to the designated CREST account by no later than 2 February, 2009.

17. Taxation

General information regarding UK taxation in relation to Admission and the Placing is set out in paragraph 18 of Part VII of the Circular. If investors are in any doubt as to their tax position, they should consult an independent financial adviser immediately.

18. Annual General Meeting

You will find at the end of this document a notice convening an Annual General Meeting of the Company to be held at the offices of the Company at The Space, 57-61 Mortimer Street, London W1W 8HS at 11 a.m. on 22 December 2008. At the meeting (in addition to ordinary

business) the following resolutions will be proposed to shareholders:

Approve the Acquisition for the purpose of Rule 14 of the AIM Rules for Companies;
Authorise the Directors to allot up to 70,000,000 New Ordinary Shares, in accordance with section 80 of the Companies Act 1985; and
To dis-apply the pre-emption provisions of the Acts in relation thereto.
To shorten the length of time to call general meetings to 14 days as permitted by Companies Act 2006

19. Action to be Taken

Shareholders will find enclosed with the Circular a Form of Proxy for use at the Annual General

Meeting. Whether or not you intend to be present at the meeting, you are requested to complete, sign and return your Form of Proxy to the Company's registrars, SLC Registrars, Thames House, Portsmouth Road, Esher, Surrey, KT10 9AD as soon as possible but, in any event, so as to arrive no later than 11 a.m. on 19 December 2008. The completion and return of a Form of Proxy will not preclude shareholders from attending the meeting and voting in person should they wish to do so.

Shareholders should note that completion of the Acquisition is conditional upon the passing of all the Resolutions.

20. Additional information

Your attention is also drawn to the information contained in Parts II to VII (inclusive) of the Circular.

21. Recommendation

The Directors consider that the terms of the Acquisition, Admission and the Placing are fair and reasonable and in the best interests of the Company and its shareholders as a whole. Accordingly the Directors unanimously recommend that shareholders vote in favor of the Resolutions at the Annual General Meeting.

INFORMATION ON CHEQUE EXCHANGE LIMITED

Introduction

CEL was incorporated in 1994 with the purpose of enabling Unbanked persons to cash cheques issued to them as payee following legislation that made cheque-cashing more regulated. CEL is a founder member of the British Cheque Cashers Association to introduce codes of practice in order to encourage banks to offer these facilities. CEL's business is the provision of simple financial solutions through a nationwide agency network. The principal business was initially TPCC (supported by some FPCC). In January 2000 CEL took on the UK super agency for MoneyGram® and has grown a nationwide agency network of around 750 agents of which approximately 500 outlets currently support MoneyGram® and approximately 420 support TPCC, with some agents doing both. CEL is registered with HM Revenue & Customs as a Money Service Bureau.

Business Strategy

CEL employs a team of seven full time BDMs covering TPCC and MoneyGram® products. The primary function of a BDM is to gain new business on product ranges by signing new retail outlets into the CEL agent network, as well as to manage existing relationships. CEL use Lodge Services Limited to carry out independent audits on the CEL agent network to enable BDMs to focus on agent recruitment and product sales.

Based on CEL's business experience, CEL & BDMs focus on:

targeting those areas where volumes are traditionally good and margins reasonable;
providing agents with prominent fascia signage;
providing agents with day to day operational support;
providing certain agents with modern remote on-line software which aims to provide a higher level of customer service and minimise call centre effort; and providing certain agents with a pre-paid card product and other products and services as they become available.

Existing products

CEL provides two main products;

TPCC through approximately 450 outlets nationwide and MoneyGram® money transfer super agency through approximately 500 outlets nationwide.
CEL has recently contracted with 2 multi-store chains to offer multiple CEL products in their stores. CEL believes that the stores are in prime cheque cashing areas, and, if successful, offer a future in-store model for other store chains.

MoneyGram®

MoneyGram® is primarily a person to person money transfer service that allows consumers to send or receive cash around the world in minutes. This is achieved in the UK via a network of agents who allow the collection or receiving of funds, so remittances travel point to point to be sent or collected by the consumer. There are over 152,000 locations worldwide and MoneyGram® operates in over 180 countries. MoneyGram® is one of the largest money remittance companies in the world.

MoneyGram® customers are primarily ethnic minorities and economic migrants transferring funds back to their state of origin to support family or friends. Secondary customers are travellers in distress who need a rapid transfer of funds due to theft, loss of possessions, delayed baggage etc. This often involves family at home arranging a transfer to help fund emergency living expenses.

CEL has been a UK super agent for MoneyGram® since March 2000. There are approximately 500 agents including internet cafes, newsagents and ethnic food shops. CEL's money transfers are heavily biased towards send transactions as would be expected.

MoneyGram® and CEL's core remittance product in the UK is a rapid transfer of funds offering a "10 minute service" (subject to opening times). CEL also provides three ancillary products through a small number of agents: loan-till-payday; Travelex foreign exchange; and a JustCash® pre-paid debit card - through over 40 outlets and via the internet.

Loan-till-payday is a short term lending facility of up to £400 on a Running Consumer Credit Agreement account which is currently offered through only 15 CEL outlets. Traavelex® 24hr foreign currency is currently offered through approximately 20 outlets. CEL believes that there is potential for further expansion of this product.

Competition

TPCC market and competition

The UK TPCC market is estimated to be worth approximately £1,200m annually. Based on the 31 December 2007 accounts of CEL, the Directors estimate that CEL accounted for 4.3 per cent. of that market.

Dollar Financial Corp. trading as The Money Shop

Dollar Financial Corp. is a leading international financial retail services company serving customers who choose to conduct their domestic financial affairs away from mainstream banking organisations. Customers are typically lower and middle income individuals who require basic financial services.

The Money Shop provides a range of financial products and services built around the core service of 'On the Spot' Cheque Cashing loans. Dollar Financial Corp. operates a network of over 1100 stores including over 170 standalone stores within the UK of which 20 are fully franchised all trading under the brand The Money Shop.

The Directors believe that Dollar Financial Corp. is a major player in the UK marketplace for walk in retail financial services.

Other competitors include ClearACheque Limited, Cheque Centres Limited, Cash Convertors (UK) Ltd., Cash Generators Ltd., Albemarle & Bond Holdings Plc and Harvey & Thompson Limited.

FPCC / Payday loan competition

The aggregate amount of payday loans made per annum is estimated at £300m in the UK with internet loan providers taking an increasing share.

Competitors include: Month End Money (CompuCredit Corporation), QuikQuid (Cash America Intl.) and Dollar Financial Corp. of which Month End Money and Quikquid are purely internet loan providers. Competitors listed in the TPCC section also provide payday loans.

Money Transfer competition

It is estimated that in the UK, £2,300m is remitted each year, through over 4,000 money service businesses, which operate from over 30,000 outlets across the UK. Based on the 31st December 2007 accounts of CEL, the Directors estimate that 3.85 per cent. of the amount remitted in the UK in 2007 was remitted through CEL's MoneyGram® network.

In addition to the Hawala market, the competition in the money remittance market can be split into two areas - the traditional money transfer companies and the "pre-paid" card companies of which there are a number on the market. Set out below are details of CEL's principal competitor that the Directors believe are significant in the traditional money transfer market.

Western Union®

Western Union® is a global leader in money transfer services. It is an industry leader with approximately $4 billion in worldwide annual revenue. Its services include offering money transfer and bill payment services and corporate incentives.

Western Union® offers point-to-point wire money transfer services that allow consumers and businesses to send and receive funds in minutes at Western Union® agent locations throughout the world.

Worldwide, Western Union® has over 345,000 locations in over 200 countries. In 2006, Western Union® handled 147 million consumer-to-consumer money transfers and 249 million consumer-to-business transactions.

Principal Markets

The principal markets in which CEL operates are:

money transfer (via CEL's MoneyGram® super agency); and
Cheque Cashing

CEL also operates in certain other markets through ancillary products provided via a small number of its agents, including pre-paid debit cards and foreign exchange.

The breakdown of CEL's total revenues by each of the three categories of activity set out above for each financial year for the period covered by the historical financial information included in Part V, Part B of the Circular is as follows:

£000's	2005	2006	2007
Cheque cashing	1,673	1,494	1,351
Money transfer (MoneyGram®)	604	839	1,092
Other	41	33	76
TOTAL	2,318	2,366	2,519

All of CEL's total revenues for each financial year for the period covered by the historical financial information included in Part V, Part B of the Circular was generated in the UK.

INFORMATION ON CREWCARD NETWORK LIMITED

1.1 History and Shareholding

Hertford owns 100 per cent. of the issued share capital of CCN. CCN was incorporated on 27 April 2006 to set up a number of prepaid debit card programs.

CCN has recently commenced marketing of its pre-paid cards, and there has been some limited but consistent trading since incorporation. The limited trading to date has given CCN the opportunity to improve and develop its systems and have actual statistics of client use and behaviour to refine the financial assumptions for all CCN's budgets and projections. Although it was anticipated that full scale trading would begin before the end of March 2008, general compliance issues, including the introduction and implementation by the Treasury of the Third EU Money Laundering Directive, caused CCN to concentrate on enhancing the product offering in order to ensure a more effective full scale launch, planned for the winter of this year.

CCN has a contract in place with Altair, a subsidiary of Altair Financial Services International Plc, for CCN to market pre-paid debit cards, which are accepted by and processed through the MasterCard® network utilising chip and pin security.

1.2 Business and Structure

CCN was formed to take advantage of the expected rapid growth of the pre-paid card market.

CCN's business model is to develop several complementary brands, develop its own distribution network, and build ongoing relationships with its card users, which should enable it to sell additional products and services.

CCN is supported by Altair which currently manages a range of services including end to end back office administration and programme logistics. Under a five year agreement from 21 November 2007, after two years either party can give one year's notice. Further details are given under "Material Contracts" at paragraph 12 of Part VII of the Circular. Currently CCN's pre-paid cards are issued by Newcastle Building Society and transactions are processed by Symmetrex Inc, which the Directors understand is a subsidiary of Altair Financial Services International Plc, operating over the MasterCard® system.

Since admission to AIM on December 24th 2007, CCN has been evaluating actual consumer behaviour based on cardholder management information made available from Altair.

Using available consumer information, CCN has now tailored a suite of products and value added services which the Directors believe will increase market share and enable CCN to market to entirely new sectors. CCN intends to market its proposed new pre-paid cards directly from its website, and also through agents and selected retail outlets, where it is believed there will be demand for its products.

Although CCN originally identified the payroll and money remittance market as the focus of its activity, the Directors believe that the marketplace has extended for its proposed new products and services into new sectors, such as:

General Spend;
Credit Averse;
Unbanked;
Foreign exchange and travel;
Telecoms; and
Online security

Growth in regular debit card usage has been driven by a number of major trends over the past five years.

European countries and in particular the UK have seen significant growth in migrant workforces, often looking to repatriate money to their relatives in their homelands but not always with access to mainstream banking facilities. There has been increased appetite for online activities requiring payment by card, leading to substantial growth across all forms of electronic payment.

Figures recently released by APACS, the UK payments association, show that in 2007 debit cards account for 62 per cent. of the total plastic card spending during the year. Debit card spending from 2006 to 2007 has increased by 13 per cent. with debit cards accounting for £221 billion of retail spend in 2007.

CCN's business strategy has extended with a view to increasing margins and to offering new, more versatile products that can be marketed in a number of different sectors without the need to make any core changes to each offering. The basic foundation of the re-branded products is a General Spend, one card fully re-loadable pack available on a "pay monthly" or "pay as you go" tariff to suit the customer's needs. The customer can use this, for example, for shopping and on-line shopping, managing his or her money without a bank account or withdrawing cash from ATMs. It is intended that customers will be able to add additional value added products or services on application or during the lifespan of the card.

Cardholders wishing to remit funds can apply for a secondary card which will be personalised with the secondary cardholders' name. Value added services may take the form of Credit Builder (aimed at helping customers improve and rebuild their credit rating), CrewCall which is a low cost telephony calling account (offering a range of services automatically available for each card account) and an affiliate shopping portal (providing discounts and loyalty rewards such as "cash-backs" throughout a participating group of merchants). It is intended that the cards can be loaded by bank transfer, debit card load or cash.The one card pack is intended to be branded "air" and the secondary card pack with the name "gemini".

The limited trading to date has given CCN the opportunity to improve and develop its systems, and have actual statistics of client use and behaviour to refine the financial assumptions for all our budgets and projections. Most importantly the increased regulatory requirement of "know your customer" information together with difficulties of verifying the identities of migrants entering the UK (and in some cases UK nationals born before 1984) significantly reduced CCN's ability to approve and acquire new customers. The approach to failed applicants was to route them via a manual application process which further reduced the acquisition rate primarily because this method was perceived as laborious by customers. To counteract this problem CCN is developing a product which requires limited due diligence which is intended to have annual parameter restrictions as this eases the compliance burden. The funds which can be loaded and spent/redeemed over the course of a year onto the card are limited and therefore less compliance is required for a 'limited' load card. It is intended that these cards will bear the MasterCard® badge but will be available to all applicants subject to their right to reside in the UK.

The Directors believe that this new offering will allow customers with limited electronic presence in the UK an opportunity to access financial products and services including real-time SMS transfer capability between linked pre-paid debit cards. Once customers receive their cards, they can upgrade at any time (subject to usual compliance requirements) to receive a non-restricted card. It is believed that such an offering will help to increase materially CCN's rate of customer acquisition. All of CCN's UK debit card products are intended to be used wherever MasterCard® is accepted, such as shops, restaurants, online, or for ATM cash withdrawals. It is proposed that the cards will be available for purchase in stores or on-line. The cards can be used in the many different locations across the world where MasterCard® is accepted.

Additional proposed activity CrewCall

One of the complementary brands/value added services is offering a telecoms solution to the CCN customer base. Also, the Directors believe that the size of the international telephone calling market justifies offering a telecom solution as a stand-alone product not limited to CCN MasterCard® cardholders alone.

CrewCall is a proposed Voice over Internet Protocol (VoIP) application. VoIP is a technology that allows telephone calls to be made over computer networks like the Internet. Crew Call is a proposed low cost calling telephony service operating through a wholesale minutes exchange platform designed to give customers' access to low cost international calling facilities accessible online as well as offline. Right from the initial stages of development the proposition has been designed for ease of use and seamless customer experience as well as high calling quality. One of the main principles of the platform was to bring together offline and online low cost calling solutions into one centralised solution. Customers should be able to access the service offline through a range of options including via free phone access or local number access.

The proposed platform is intended to operate on a pay as you go basis where customers can open an account for free and then deposit funds in Euros, GBP or USD into a prepaid account in order to benefit from the low cost calling service. Upon loading of funds into the account the customer should be able to make calls from his or her registered phone - landline and/or mobile or PC to any other number/a telephone-enabled PC anywhere in the world at the CrewCall rate.

In addition the Directors also wish to market a CrewCall scratchcard. CCN is developing this retail telephony offering (international low cost calling scratch card) and it is designed to acquire customers in similar consumer groups targeted by the retail pre-paid debit card offering.

The Directors believe the CrewCall payment scratch card (which is intended to be marketed through the existing CCN distribution network) can be used as an additional retail tool to increase customer acquisition and cross-selling opportunities and provide an excellent opportunity to up-sell to a more permanent telephony solution in the form of a pre-paid CCN MasterCard®. The Directors believe scratch cards can also be distributed without compliance procedures and controls typically associated with payment cards.

Hertford formed CrewCall Network Limited in March 2008 as a wholly owned subsidiary, in order to conduct the telephony business, as described above.

Competitive Strengths

The Directors believe that the proposed large range of functionality and value added services of CCN'sproposed products coupled with access to the full MasterCard® network and the real-time transfer of funds may place its products ahead of its competitors.

In addition to the functionality of the proposed products the Directors believe its products will be priced attractively in comparison with most competitor products, not only on a transactional basis, but also through its initial purchase price.

Not only is it intended that the products present an opportunity to save money when transferring funds for the end user but also to offer much of the technological functionality demanded by the market and not largely seen in traditional money transfer.

In addition to the above, the Directors believe that the proposed additional value added services automatically available to cardholders at no extra initial cost will distinguish the cards over and above the main competition. The Directors believe that by offering additional components the value of the customer to CCN can in some cases be significantly increased or at the very least become more stable and consistent. Where a drop in transactional activity becomes apparent, this may be offset by continued usage of value added services. The Directors believe that the introduction of value added services will help increase customer acquisition, decrease customer attrition and improve retention.

Competitors

In addition to the Hawala market, the competition in the money remittance market can be split into two areas: the traditional money transfer companies and the "pre-paid" card companies of which there are a number on the market. Set out below are details of two companies that the Directors believe are significant in the traditional money transfer market followed by the details of three companies operating in the "pre-paid" card sector, and four in telephony.

Traditional Money Transfer

Western Union®

Western Union® is a global leader in money transfer services with approximately $4 billion in worldwide annual revenue. Its services include offering money transfer and bill payment services and corporate incentives. Western Union® offers point-to-point wire money transfer services that allow consumers and businesses to send and receive funds in minutes at Western Union® agent locations throughout the world. Currently Western Union® has over 345,000 locations in over 200 countries around the world. In 2006, Western Union® handled 147 million consumer-to-consumer money transfers and 249 million consumer-to-business transactions.

MoneyGram®

MoneyGram® offers a wide variety of payment products and services, from the traditional money order and official cheque services to electronic bill payment and money transfer services. Another segment of MoneyGram® International provides financial institutions with payment processing services, primarily of official cheque outsourcing services and money orders for sale to their customers. MoneyGram®'s products are currently available at more than 152,000 locations worldwide across 180 countries. In 2006 MoneyGram® earned over $1.16 billion in revenue. MoneyGram® and Western Union® money transfers are used predominantly by people without traditional banking relationships and people who are living/working in a country away from their family but who send money back to their home country. Additionally, they are also used by traditional banking customers in need of emergency money transfer services, tourists without local bank accounts and businesses that need rapid and economical money transfer services.

Pre-paid Card Sector

Tuxedo

The Tuxedo card is a MasterCard® product available to buy online as a one card pack. It is marketed for use as a general spend card in addition to money share. The product enables customers to load money onto the card which can then be spent over the MasterCard® network.

Cashplus

The Cashplus gold card is a pre-paid MasterCard® issued in the UK. The card is a reloadable pre-paid debit card and offers value added services such as money share and credit builder. Cards are sold through the mycashplus website, www.mycashplus.co.uk

Virgin

The Virgin pre-paid MasterCard® can be reloaded with cash for free at the Post Office. It also has no monthly fee and provides an extensive volume of discounts off other Virgin products. Whilst there is no monthly fee, a cardholder is charged a 2.95 per cent. fee on all retail and cash transactions made in the UK.

Telephony Competitors

Rebtel

Rebtel is a mobile VoIP company based in Stockholm, Sweden, with offices in the UK and US. Rebtel offers a range of international mobile telephony services at local rates.

Jajah

Jajah is a VoIP service that gives customers lower long distance rates by bridging standard phone lines with a cheaper VoIP alternative.

Sipgate

Sipgate is a VoIP service provider based in Germany and also operating in Austria and the United Kingdom. Their service offers free calls to other IP phones, chargeable calls to landlines and mobiles and free geographical and non-geographical incoming phone numbers.

Trueroots

Trueroots international calling service is part of the Tata Group, one of India's largest business conglomerates. Trueroots aims at the South Asian community living abroad. Trueroots can be used to call India, Pakistan, Sri Lanka and Bangladesh as well as to over 240 other countries and territories across the world from anywhere in the U.K., U.S. and Canada.

The Directors believe this table illustrates CCN's competitive pricing on the most common type of card transaction.

Transaction type	CrewCard	Virgin	Cashplus	Tuxedo
Point of sale - UK	£0.49	2.95%	£0.99	2.95% - (min £0.50, max £1.50)
POS - International	£0.49	2.95% + 0.55%	£1.00	2.95% - (min £0.50, max £1.50)
ATM - UK	£1.50	2.95%	£2.00	1.5% (Min £0.99 max £1.50)
ATM - International	£1.50	2.95% + 0.55%	£3.00	£2.25

Figures are based on pay as you go tariff as of 30 September 2008

1.3 The Market

The worldwide market for pre-paid cards has continued to grow and the Directors believe that Hertford is well positioned to take advantage of that growth.

The Directors believe that the European market has emerged as an attractive market for pre-paid cards given its high levels of projected growth.

By 2010 Europeans are expected to spend €75bn (£59bn) using prepaid cards, in 2.3 billion transactions every year. By 2010, around 5 per cent of all card transactions are expected to be through 360 million pre-paid cards, according to payment technology consultants PSE.

According to one financial services website, fairinvestment.co.uk, as many as 2.3 million people in the UK are prepaid credit card holders, and they predict a market of up to 7 million by 2010. This would represent an average annual growth of approximately 100 per cent. of today's market over the next two years.

The Directors believe that it is likely that more consumers are interested in prepaid credit cards during the current economic downturn to get the convenience of a credit card without the risks of credit card borrowing.

The UK prepaid market is dominated by Mastercard and Maestro, and prepaid card users can use their cards anywhere that displays the Maestro / MasterCard acceptance marks.

The Directors believe that there are over 35 different individual prepaid card products available in the UK market today.

The principal market in which CCN has to date operated is the UK pre-paid debit card market.

The total revenue for the activity set out above for each financial year for the period covered by the historical financial information included in Part V of the Circular is as follows:

£000's

2007

2008

(Interims)

Pre-paid debit cards

All of CCN's total revenues for each financial year for the period covered by the historical financial information included in Part V(A) of the Circular was generated in the UK.

Crewcall Network Limited and Aquirestar Limited are non-trading dormant companies.

NOTICE OF ANNUAL GENERAL MEETING

HERTFORD INTERNATIONAL GROUP PLC

Company number 5874310

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at The Space, 57-61 Mortimer Street, London, W 1 W 8HS on 22 December 2008 at 11 am for the following purposes:

ORDINARY BUSINESS

1. To re-elect Mr Paul Marks as a director of the Company

2. To re-elect Mr Lewis Findlay as a director of the Company

3. To re-elect Mr Alex Lubin as a director of the Company

4. To re-elect Mr Paul Seakens as a director of the Company

5. To re-elect Mr Damian Mifsud as a director of the Company

6. To reappoint Clarkson Hyde LLP as auditors of the Company to hold office until the conclusion of the next Annual General Meeting of the Company and to authorise the Directors to fix their remuneration.

SPECIAL BUSINESS

To consider, and if thought fit, to pass the following as Ordinary Resolutions

THAT the proposed acquisition by the Company of Cheque Exchange Limited on the terms and subject to the conditions of the sale and purchase agreement dated 19 November 2008 between the Company and N&N Cheque Encashment Limited (the "Agreement") as described in the admission document ("Admission Document") sent to the Company's shareholders dated 25 November 2008 be and is hereby approved and the directors of the Company (or a duly constituted and authorised committee thereof) be and are hereby authorised to take all such action as they may deem necessary, expedient or appropriate in relation thereto and to conclude and implement the same and to carry the same into effect and to agree such modifications, variations, revisions, extensions, amendments and waivers of any terms and conditions of the Agreement or any documents relating thereto (provided such modifications, variations, revisions, extensions, amendments and waivers are not in the opinion of the directors of the Company or any such committee of a material nature) as they may in their absolute discretion think fit.
THAT the directors be and are hereby generally and unconditionally authorised (in substitution for all subsisting authorities to the extent unused, other than in respect of any allotments made pursuant to offers or agreements made prior to the passing of this resolution) for the purposes of section 80 of the Companies Act 1985 (the "Act") to exercise all the powers of the Company to allot relevant securities up to an aggregate nominal amount of £700,000 provided that this authority shall expire at the conclusion of the Company's next annual general meeting or, if earlier, on the date which is 15 months after the date of this resolution save that the Company may, before such expiry, make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in pursuance of such offer or agreement as if this authority had not so expired. In this resolution the expression "relevant securities" and references to allotment of relevant securities shall have the same respective meanings as in section 80 of the Act.

To consider, and if thought fit, to pass the following resolutions as Special Resolutions

3. THAT, subject to the passing of the previous resolution, the directors be and are hereby empowered pursuant to section 95(1) of the Act (in substitution for all subsisting powers to the extent unused, other than in respect of any allotments made pursuant to offers or agreements made prior to the passing of this resolution) to allot equity securities for cash pursuant to the authority conferred by the previous resolution as if section 89(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities:

(a) in connection with an offer of equity securities by way of rights (or any other offer on a pre-emptive basis) where the equity securities are offered to the holders of ordinary shares in proportion to their respective holdings of ordinary shares on a fixed record date and (where applicable) to other holders of equity securities in accordance with the rights attaching to such equity securities, but subject, in each case, to such exclusions or other arrangements as the directors may deem to be necessary or expedient in relation to fractional entitlements or any legal or practical problems under the laws of any territory or the requirements of any regulatory body or stock exchange;

(b) in connection with the placing described in the Admission Document;

(c) in satisfaction of existing obligations of the Company under outstanding convertible loans made to the Company prior to the date hereof, up to an aggregate nominal amount of £34,252.55;

(d) in satisfaction of existing obligations of the Company under outstanding warrants issued prior to the date hereof, up to an aggregate nominal amount of £23,658.28;

(e) in satisfaction of existing obligations of the Company under share options granted to employees and directors prior to the date hereof, up to an aggregate nominal amount of £70,750.00;

(f) in satisfaction of obligations of the Company under any share options granted to employees and directors after the date hereof, up to an aggregate nominal amount of £27,676.92;

(g) otherwise than pursuant to paragraphs (a) to (f) above, up to an aggregate nominal amount of £186,098.14,

and shall expire at the conclusion of the Company's next annual general meeting or, if earlier, the date which is 15 months after the date of this resolution, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if this power had not so expired. In this resolution the expression "equity securities" and references to allotment of equity securities shall have the same respective meanings as in section 94 of the Act.

4. THAT the Company's Articles of Association be amended so that Article 51 be deleted and replaced with the following:

"51. Unless consent to short notice is obtained in accordance with the provisions of the Acts, an annual general meeting or an extraordinary general meeting shall be called by at least fourteen clear days notice. Subject to the provisions of these Articles and to any restrictions imposed on any shares, every notice of meeting shall be given to all the members, all other persons who are at the date of the notice entitled to receive notices from the Company and to the Directors and Auditors."

Date: 25 November 2008

By Order of the Board

Notes:

A member entitled to attend the meeting is entitled to appoint another person as his proxy to exercise all or any of his rights to attend and to speak and, on a Poll, vote at the meeting. A proxy need not be a member of the Company. A member may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by the member. A member wishing to appoint more than one proxy should contact the Company's registrars, SLC Registrars of Thames House, Portsmouth Road, Esher, Surrey, KT 10 9AD.
A form of proxy for use in relation to the meeting is enclosed. To be valid, the form of proxy and any power of attorney or other authority under which it is signed (or a notarially certified copy of such power or authority) must be deposited with the Company's registrars, SLC Registrars, not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting. Completion and return of the form of proxy will not prevent a member from attending and voting at the meeting in person.
To be entitled to attend and vote at the meeting (and for the purpose of the determination by the Company of the number of votes that may be cast), ordinary shareholders must be entered in the register of members of the Company at 6.00 p.m. on 19 December 2008 (or, if the meeting is adjourned, at 6.00 p.m. on the day which is two days before the date fixed for the adjourned meeting). Changes to the register of members after the relevant deadline will be disregarded in determining the rights of any person to attend and/or vote at the meeting.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting to be held on l 2008 and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members and those CREST members who have appointed a voting service provider should refer to their CREST sponsor or voting service provider, who will be able to take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CRESTservice to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it relates to the appointment of a proxy, the revocation of a proxy appointment or an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted so as to be received by the issuer's Agent by the latest time(s) for receipt of proxy appointments specified in this notice of meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer's Agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to a proxy appointed through CREST should be communicated to the appointee by other means.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider take) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

5. Any person to whom this notice is sent who is not a member of the Company but who has been nominated by a member of theCompany under section 146 of the Companies Act 2006 to enjoy information rights (a“nominated person”)may have a rightunder an agreement between him and the member by whom he was nominated to be appointed, or to have someone else appointed, as a proxy for the meeting. Alternatively, if a nominated person has no such right or does not wish to exercise it, he may have a right under such an agreement to give instructions to the member as to the exercise of voting rights.
The statement of the rights of members in relation to the appointment of proxies in notes 1 to 4 above does not apply to nominated persons. The rights described in these paragraphs can only be exercised by ordinary shareholders of the Company.

In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the meeting so that (i) if a corporaate shareholder has appointed the chairman of the meeting as its corporate representative with instructions to vote on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the meeting, then on a poll those corporate representatives will give voting directions to the chairman and the chairman will vote (or withhold a vote) as corporate representative in accordance with those directions; and (ii) if more than one corporate representative for the same corporate shareholder attends the meeting but the corporate shareholder has not appointed the chairman of the meeting as its corporate representative, a designated corporate representative will be nominated, from those corporate representatives who attend, who will vote on a poll and the other corporate representatives will give voting directions to that designated corporate representative. Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives (www.icsa.org.uk) for further details of this procedure. The guidance includes a sample form of representation letter if the chairman is being appointed as described in (i) above.

Definitions

"Acquisition''	the proposed acquisition by the Company of the entire issued share capital of Cheque Exchange Limited
"Acts''	the Companies Act 1985 and the Companies Act 2006 (as applicable)
"Admission''	the re-admission of the Existing Ordinary Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules for Companies
"Admission Document''	this admission document
"AIM"	the market of that name operated by the London Stock Exchange
"AIM Rules"	the AIM Rules for Companies and the AIM Rules for Nominated Advisers together
"Altair"	Altair Financial Services Limited, a company registered in England and Wales with number 5331608, with its registered office at Thames House, Portsmouth Road, Esher, Surrey KT10 9AD
"Annual General Meeting''	the annual general meeting of the Company convened for 11 a. m. on 22 December 2008, notice of which is set out at the end of this document
"Audit Committee"	the audit committee of the Board
"BDM''	a business development manager
"Board" or "Directors"	The directors of the Company being Paul Marks, Lewis Findlay, Paul Seakens, Alex Lubin and Damian Mifsud
"CCN"	Crewcard Network Limited, a company registered in England and Wales with number 05798452, with its registered office at Thames House, Portsmouth Road, Esher, Surrey, KT10 9AD
"Cheque Exchange'' or "CEL''	Cheque Exchange Limited, a company registered in England and Wales with number 2927947, with its registered office at Colonnade, Sunbridge Road, Bradford, BD 1 2LQ
"City Code"	the City Code on Takeovers and Mergers
"Combined Code"	the code of best practice, including the principles of good governance, as set out in the Combined Code on Corporate Governance published in July 2003 and updated in June 2006 by the Financial Reporting Council
"Company" or "HIG"	Hertford International Group Plc, a company registered in England and Wales with number 05874310, with its registered office at Thames House, Portsmouth Road, Esher, Surrey KT10 9AD
"Credit Averse"	people who prefer to not borrow on credit
"Credit Builder"	a proposed service of CCN aimed at allowing persons with poor credit ratings to improve them
"CREST"	the computer based system and procedures which enable title to securities to be evidenced and transferred without a written instrument and which is operated by Euroclear UK & Ireland Limited (formerly known as CRESTCo Limited)
"CrewCall scratch card"	pre-loaded card for paying for telephone calls
"CTNs"	Confectioner, Tobacconist, and Newsagent
"Dexapoint"	Dexapoint United Corporation, a Panamanian registered company, a substantial shareholder and underwriter to the proposed Placing
"Enlarged Group"	the Company, CCN, CEL, CrewCall Network Limited and Aquirestar Limited
"Enlarged Issued Share Capital"	together the Existing Ordinary Shares and the Placing Shares
"Existing Ordinary Shares"	the Ordinary Shares in issue at the date of this document
"Form of Proxy''	a form of proxy for use at the Annual General Meeting which is enclosed with this document
"FPCC"	First Party Cheque Cashing - the exchange of a cheque drawn on a person's own account for cash
"FSA"	the Financial Services Authority
"FSMA"	the Financial Services and Markets Act, 2000, including any regulation made pursuant thereto
"Fundraising"	the proposed raising of funds for the Company through the Placing, Loan I and Loan II as described in paragraphs 12.10 to 12.12 of Part VII of this document
"General Spend"	the use of a debit or credit card for general spending purposes
"Group"	the Company and its subsidiaries
"Hawala"	an informal money transfer system from the developed world to countries primarily located in the Middle East, Africa and Asia
"Hythe"	the Company's brokers, Hythe Securities Limited
"Loan I"	the £1 million convertible loan agreement between the Company and Dexapoint as described in paragraph 12.11 of Part VII of this document
"Loan II"	the £1.25 million convertible loan agreement between the Company and Dexapoint as described in paragraph 12.12 of Part VII of this document
"Loan Agreements"	Loan I and Loan II
"London Stock Exchange" or "LSE"	London Stock Exchange Plc
"Money Service Business"	Business activities: •acting as a bureau de change; •transmitting money or any representation of money by any means (including businesses issued with a small e-money issuers exemption certificate issued by the Financial Services Authority); •cashing cheques payable to a customer; which require registration with HMRC, unless already supervised by the Financial Services Authority for the purposes of the Money Laundering Regulations 2007.
"Nominated Adviser" or "NOMAD"	the Company's Nominated Adviser, Zimmerman Adams International Limited
"Nomination Committee"	the nomination committee of the Board
"MoneyGram®" "Money Share"	MoneyGram® Payment Services Inc.
"Ordinary Shares"	the use of a credit or debit card to transfer funds between people, normally being members of the same family but in different countries
"Placing"	the conditional placing by Hythe Securities Limited on behalf of the Company of the Placing Shares pursuant to the Placing Agreement
"Placing Agreement"	the conditional agreement dated 25 November 2008 between the Company (1), the Directors (2), ZAI (3) and Hythe (4) relating to the Placing, details of which are set out in paragraph 13 of Part VII of this document
"Placing Price"	no less than 13 pence per Placing Share
"Placing Shares Admission"	admission of the Placing Shares to trading on AIM becoming effective in accordance with Rule 6 of the AIM Rules for Companies
"Placing Shares"	up to 6,538,462 new Ordinary Shares to be issued pursuant to the Placing
"Pre-paid debit card''	a debit card accepted on the traditional payment network for financial transactions which is not a credit card but is pre-loaded with funds
"Prospectus Directive" or "PD"	Directive No 2003/71/EC of the European Parliament and of the Council passed on 4 November 2003 and relating to the prospectus to be published when securities are offered to the public or admitted to trading
"Regulations"	the Uncertificated Securities Regulations 2001 (SI2001/3755), as amended, and any applicable rules made under those regulations
"Related Party"	has the meaning given to that term by the AIM Rules for Companies
"Remuneration Committee"	the remuneration committee of the Board
"Resolutions''	the resolutions set out in the notice of Annual General Meeting
"Reverse take-over"	the acquisition or acquisitions under the AIM Rule 14 for Companies
"SEDOL"	Stock Exchange Daily Official List
"Share Dealing Code''	the employee share schemes adopted by the Company, further details of which are set out at paragraph 10 of Part VII of this document
"Share Option Scheme"	the employee share schemes adopted by the Company, further details of which are set out at paragraph 10 of Part VII of this document
"SME"	a small to medium sized enterprise
"Third EU Money Laundering Directive"	Directive 2005/60EC of the European Parliament and of the Council of Ministers of the European Union of 26th October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing
"TPCC"	Third Party Cheque Cashing - the exchange of a check drawn on a third party for cash
"Unbanked"	people who do not have bank accounts
"Vendor''	N&N Cheque Encashment Limited, being the sole shareholder of Cheque Exchange immediately prior to the Acquisition
"Western Union®"	Western Union Holdings Inc.
"ZAI"	Zimmerman Adams International Limited, nominated adviser to the Company
"£" and "p"	United Kingdom pound sterling and "p" denotes pence

Unless specifically referred to, words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include companies.

Any reference in this document to any provisions of the statutes, rules, regulations or rules of any stock exchange shall (where the context admits), be construed as a reference to provisions of such statutes, rules, regulations or rules of any stock exchange (as the case may be) as modified by any written law or (if applicable) amendments to the statutes, rules, regulations or rules of any stock exchange for the time being in force.

Any reference to a time of day in this document shall be a reference to UK time, unless otherwise stated.