Acquisition of remaining 60.30% of BMi Research Proprietary Limited COGNITION HOLDINGS LIMITED Incorporated in the Republic of South Africa (Registration number 1997/010640/06) Share code: CGN ISIN: ZAE000197042 (“Cognition” or “the Company”) ACQUISITION OF REMAINING 60.30% OF BMi RESEARCH PROPRIETARY LIMITED 1. Introduction Cognition has concluded an agreement for the acquisition of the remaining 60.30% of the shares in BMi Research Proprietary Limited (“BMi Research”) that it does not already own (“the Sale Shares”) from the three shareholders namely The Tandem Trust, Gareth Pearson and Dana Braithwaite (“the Sellers”). 2. Overview of BMi Research BMi Research is a research house specialising in consumer and industrial research in various sectors, including the retail sector/market. BMi Research has experience across a wide range of methodologies and markets and provides research into a number of sectors and industries including Apparel, Automotive, Consumer Packaged Goods (CPG), Financial, Foodservices, Information Technology & Communication, Manufacturing, Packaging, Raw Materials, Retail and Wholesale. 3. Terms and effective date of the acquisition The effective date of the acquisition is 1 July 2015. The consideration comprises an initial purchase consideration and an additional purchase consideration. The initial purchase consideration is an amount of R11 000 000 payable partly in cash and partly by way of Cognition shares on the 7th business day after the fulfilment or waiver of all the conditions precedent (“Completion date”). The cash portion of the initial purchase consideration amounts to R3 683 263.38. The remainder of the initial purchase consideration of R7 316 915.42 is payable by way of the issue of Cognition shares. The Cognition shares will be issued at the higher of R2.00 per share or the 30 day VWAP less 10% as at the Completion date. The additional purchase consideration is dependent on BMi Research achieving or exceeding a combined audited profit after tax for the three years commencing on 1 March 2015 and ending on 28 February 2018 (“combined PAT”) of R8 million. The additional purchase consideration is payable in cash on a sliding scale to the Sellers in the Sellers' proportions as follows: a. If the three year combined PAT equals or exceeds R8 million, an additional amount of R4 million is payable; b. If the three year combined PAT equals or exceeds R7.2 million but is less than R8 million, the additional amount payable is R2 million; or c. If the three year combined PAT exceeds R6.5 million but is less than R7.2 million, the additional amount payable is R1 million. The Sellers will, in terms of the agreement, be required to repay in their respective Sellers’ proportions, a portion of the cash component of the initial purchase consideration in the event that BMi Research does not achieve an audited profit after tax of at least R6 million for the three year period. The amount repayable is based on a sliding scale to the Sellers in the Sellers' proportions as follows: a. R1 million of the initial purchase consideration becomes repayable if the three year combined PAT is less than R6 million but more than R5 million. b. R2 million of the initial purchase consideration becomes repayable if the three year combined PAT is equal to or less than R5 million. 4. Conditions precedent The agreement is subject to the fulfilment or waiver of the following conditions precedent by 30 November 2015: 4.1. The board of directors of BMi Research approving the transfer of the Sale Shares in terms of the agreement; 4.2. Dana Braithwaite and BMi Research concluding a written agreement in terms of which Dana Braithwaite will continue to provide her services to the Company for a minimum period of 24 months. 4.3. Gareth Pearson and BMi Research concluding a contract of employment in terms of which Gareth Pearson will remain employed by the Company for a minimum period of 36 months. 4.4. Cognition not giving written notice to the Sellers indicating that Cognition does not wish to proceed with the acquisition contemplated in this agreement as a result of one or more facts or circumstances discovered during the due diligence investigation contemplated in terms of the agreement. 5. Financial information The audited tangible net asset value and profits attributable to the tangible net assets of BMi Research for the last year end being 28 February 2015 was R5 609 781 and R2 846 649 respectively. 6. Rationale for the acquisition of BMi Research Cognition currently holds 39.70% of the issued shares in BMi Research. These shares were acquired in two separate transactions. In July 2014, Cognition acquired 35% of the issued shares in BMi Research and in August 2015 Cognition acquired a further 4.70% of the issued shares in BMi Research from an exiting minority shareholder. The acquisition of the remaining BMi Research shares will further complement and enhance the strategic objectives that Cognition has embarked on. BMi Research will contribute tremendous value to the Company’s Knowledge 350 degrees consultancy by assisting clients in better understanding customer needs, perceptions and realities. Knowledge 350 degrees, which incorporates both Organisations and Individuals methodologies of collecting, storing and using information, forms an important strategic direction for the Company particularly in light of the Protection of Personal Information Act, 2013 (Act 4 of 2013). This strategy will be driven using a 15 step roadmap incorporating strategic consulting and the implementation of technical solutions to execute the chosen business process outcomes. BMI Research will leverage an important element of Knowledge 350 degrees which assists companies to “self-create” intangible assets, through its roadmap of tracking data through to knowledge. 7. Classification of the acquisition The acquisition constitutes a category two transaction in terms of the JSE Listings Requirements and accordingly does not require approval by Cognition shareholders. Subsequent to the acquisition, the Memorandum of Incorporation of BMi Research will be reviewed to ensure that it does not prevent Cognition from complying with its obligations in terms of the JSE Listings Requirements. Johannesburg 22 October 2015 Sponsor Merchantec Capital Date: 22/10/2015 03:00:00 Produced by the JSE SENS Department. 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