LB Icon and Framfab to merge - Creating Europe’s leading digital group

The Boards of Directors of LB Icon AB (“LB Icon”) and Framfab AB (“Framfab”) propose that the companies merge. The new company will be the leading European digital design, marketing and communications, branding and technology firm. The two companies have virtually no customer overlap and the combined group will be in a strong position to respond to the clients increasing demand for digital services. With a combined market capitalisation of around SEK 3 billion (EUR 323 [1]) million, run rate revenues of more than SEK 1.5 billion (EUR 161 million[1]) and unquestioned industrial and financial logic driving the merger, the combined entity offers an attractive investment case for current and future investors. Moreover, the combined group with over 1,200 employees in 10 countries will offer attractive career opportunities for professionals wanting to develop a career at a truly international company. The intention is that a new name will be chosen for the listed parent company.

? The Boards have unanimously agreed the form of merger in a joint merger plan. The merger will be implemented by Framfab absorbing LB Icon. Each LB Icon share will be exchanged for 50 new shares in Framfab[2]. ? LB Icon’s and Framfab’s Boards believe that a merger is beneficial for each company and its shareholders. They further believe the exchange ratio is fair and each Board therefore unanimously recommends the merger to the shareholders of each company and urge them to approve the merger plan at Framfab’s Extraordinary General Meeting and LB Icon’s Annual General Meeting respectively, both expected to be held mid May, 2006. ? The Boards’ recommendations are supported by fairness opinions by SEB Enskilda and Handelsbanken Capital Markets. ? The Board of the combined group is proposed to be composed of Mrs. Katarina Bonde, Mr. Michiel Mol, Mr. Fred Mulder, Mr. Robert Pickering and Mr. Sven Skarendahl. Mr. Sven Skarendahl is proposed as Chairman of the new Board. ? The executive management of the combined group will be composed of Mr. Robert Pickering - CEO, Mr. Jan Norman - CFO, Mr. Theo Cordesius - EVP and Mr. Jesper Andersen – EVP. Steve Callaghan will continue to serve as CEO of Framfab until the merger is completed. Additionally he will work with country managing directors to both plan the integration in geographies where both entities are represented and he will facilitate the collaboration of UK/US businesses. ? The merger is expected to give annual synergy effects of approximately SEK 20 million (EUR 2.1 million[1]) per annum with full effect in 2007. ? LB Icon is listed on the O-list of the Stockholm Stock Exchange and on the Euronext in Amsterdam. Framfab is listed on the O-list of the Stockholm Stock Exchange and will seek a Euronext listing. The shares of the merged company will hence be traded on the O-list of the Stockholm Exchange and on the Euronext. Framfab will execute a reverse split at a ratio of 50:1 following the EGM. LB Icon and Framfab’s Boards of Directors and executive management expect to close the merger by the end of July 2006, at the earliest. [1] Using an EUR/SEK exchange rate of 9.30 [2] Calculated before a 50:1 reverse split in Framfab. Following the reverse split each LB Icon share will be exchanged for 1 new share in Framfab Detailed information on the merger Background and history Framfab and LB Icon have been facilitators of the development of the internet consulting industry since its inception. Over time, the companies, together with customer demand, have evolved into leading digital design, marketing and communications, branding and technology firms. A brief review of the companies’ histories gives an insight into the rationale of the merger. During the period from 1995 to 2000, Framfab and LB Icon (at that time known as two separate companies; Lost Boys and Icon Medialab) swiftly developed from local, to regional, and finally, to European internet consultant companies with global aspirations. The companies were highly focused on rapid growth in order to establish a significant footprint from which to harvest profitability. However, towards the end of 2000, customer demand decelerated and the supply of internet consultants in the market far outstripped demand. The unfavourable supply and demand situation combined with the ensuing global recession, resulted in the need for both Framfab and Icon Medialab to undertake significant restructuring during the period from 2001 through to 2003 and to refocus the business in terms of strategy, staff and geographies. During this period, Framfab focused its operations on Denmark, Sweden, Germany, Switzerland, the UK and the Netherlands. Icon Medialab, on the other hand, merged with Lost Boys, the Dutch based internet consultancy, creating the current entity known as LB Icon. LB Icon withdrew from the Nordic countries and refocused its operations on the Netherlands, Germany, Italy, Spain, Portugal and the US. Both companies focused their strategy on nourishing fewer, yet stronger, and more enduring customer relationships with multinational entities. The core service offering focused on digital marketing and e-commerce services. With the aid of several capital injections from shareholders and more cost efficient operations, Framfab and LB Icon weathered the market downturn and as the economic climate improved towards the end of 2003, the companies were well positioned to capitalise on market growth. 2004 represented a turn around year in terms of operations with both companies achieving positive EBITDA performance for the full year. Moreover, through selective merger activity each company grew its business significantly, especially in the UK where both companies undertook acquisitions in 2003, 2004 and 2005. Throughout 2005, both Framfab and LB Icon continued to grow organically and through acquisitions. Reasons for the merger After several years of declining revenues after 2000, the digital marketing and e-business segment of the IT Industry has reversed its fortunes and returned to growth. This is largely a result of the growing importance of the Internet as a sales and communication channel and the consequential growing demand for web services in market communications and e-commerce. Framfab and LB Icon have both benefited from this trend, though predominantly in different geographical markets and mainly by way of different customers. The continuing shift in advertising expenditure from offline to online channels is a trend which continues to benefit both companies. The consolidation trend within the Internet consultancy industry has been driven partly by the quest for footprint and sales growth but also by a demand shift in the market. Blue chip customers have increasingly begun demanding more extensive geographical capabilities as well as more profound web consultancy and systems integration skills. In addition these customers are also focusing on using fewer suppliers of these services. This increases the pressure on internet consultants to achieve critical mass on both a service level and a geographic level. The change in customer requirements and the fact that Framfab and LB Icon generally cover complementary geographies have created a natural platform for discussions regarding a merger. A merger between Framfab and LB Icon creates a group with a greater critical mass and stronger strategic position in relation to both customers and capital markets. Post merger, the combined group will be the leading European digital design, marketing and communications, branding and technology firm. In terms of sales the combined group will be 4 times larger than any other Pan-European competitor, have a market capitalisation of around SEK 3 billion (EUR 3231million), run rate revenues of more than SEK 1.5 billion (EUR 1611 million) and approximately 1,200 employees. The UK will represent the largest geographic area of the combined group with 32% of sales followed by Germany (21%), Benelux (16%), the Nordic countries (14%), the US (9%), Spain (5%) and Italy (3%) Operational reasons A merger between the companies will enable the new entity to meet customer demand for greater geographical reach. The joint entity will be the market leader in six key European markets – the UK, Denmark, Sweden, Germany, Belgium, and the Netherlands. A key competitive advantage in a consultancy business is the ability to find and retain talented individuals. Framfab and LB Icon both have a strong reputation in the market but it is fair to assume that the merged entity will be an even more attractive employer for current and new talent on the back of increased scale and scope of the operations. The joint entity will also benefit from cost as well as revenue synergies which the management teams of the two entities believe are extractable, both in the short and the long term. The combination will allow for a reduction in listing, audit, premises, advisor and other parent company related costs. These savings should amount to approximately SEK 20 million (EUR 2.11 million) per annum commencing in 2007. Some portion of these savings will also be realized in 2006. The merger will also allow for an improvement of the corporate tax structure. Finally, it is expected that certain client activities may be increased and/or will result in higher profitability for the combined group. LB Icon and Framfab are of the opinion that the merger will be EPS (excluding amortisation of intangibles) enhancing already 2007. Capital market reasons The Boards of Directors of the two companies believe that the internet consultancy industry is ready for further consolidation. Through its dual listing, greater liquidity and larger market capitalisation, the merged entity will be well positioned to use its equity as currency in order to drive further consolidation in the industry. The merged company’s shares will be traded on the O-list of the Stockholm Exchange as well on the Euronext in Amsterdam. As the largest and clear European leader in its industry, it is expected that the group will attract interest from a larger investor community. Based on the above, the Boards of Directors of Framfab and LB Icon believe that a merger between the two companies will create a larger critical mass and a stronger strategic position in the capital and internet consulting markets, as well as provide benefits for the companies and their shareholders. The new company Operations The new group will continue to focus on the current product offering of digital design, marketing and communications, branding and technology. The individual country operations will remain as subsidiaries but common geographic consolidation will be undertaken, specifically in the UK, Germany, and the Netherlands. The head office, responsible for central administration and financial functions, will continue to be located in Stockholm. Organization and new company name The parent company of the group will be Framfab. The intention is that a new name for the new group will be resolved upon at the Extraordinary General Meeting of Framfab, expected to be held mid May, 2006. Mr. Sven Skarendahl, current Chairman of Framfab, is proposed for the position of Chairman of the combined group. In addition to Mr Skarendahl, the new Board is proposed to be composed of Mrs. Katarina Bonde, Mr. Michiel Mol, Mr. Fred Mulder and Mr. Robert Pickering. Such proposal will be subject to the appropriate involvement of the nomination committee. Mr. Robert Pickering, current CEO of LB Icon, is proposed as the new CEO of the combined group. Mr. Jan Norman, current CFO of Framfab, is proposed as CFO. Mr Jesper Andersen, current EVP of Framfab, and Mr Theo Cordesius current COO of LB Icon, are proposed as EVPs. Mr. Jesper Andersen will assume responsibility for the Nordic countries, and Mr. Theo Cordesius will assume responsibility for all other countries. LB Icon and Framfab have agreed to set up an integration committee charged with the task of managing the process of integrating the business of the two companies. The integration committee will consist of Steve Callaghan, Jan Norman, Robert Pickering, Sven Skarendahl and Fred Mulder. Taking into consideration the statutory period of notification for the known and unknown creditors, the merger is expected to be completed by the end of July 2006, at the earliest. Until such time, Framfab and LB Icon will continue to operate as two independent listed companies with the current Boards and managements in place. Pro forma ownership structure The ownership information in the case of LB Icon is based on data from SIS Ägarservice from December 2005 and has been adjusted for known information and in the case of Framfab the information is based on data from VPC from December 2005. The number of shares is based on the number of shares outstanding as reported by the respective companies on December 31, 2005 and adjusted for the items detailed hereafter. In the case of LB Icon, the ownership structure has been adjusted for 3,897,727 new LB Icon shares to be issued for a convertible loan which is expected to be converted during April 2006. It has also been adjusted for 522,243 new shares to be issued in respect of an earn out payment for the acquisition of Wheel in the UK. In the case of Framfab, the number of shares has been adjusted for 44,004,632 new Framfab shares to be issued in respect of an earn out payment for the acquisition of Oyster in the UK, payable in April 2006 as well as 500 000 outstanding options which will be exercised in relation to the merger. Finally, LB Icon currently owns 236 million shares in Framfab, corresponding to 19.7% of the unadjusted outstanding capital and votes in Framfab. 111.7 million of these shares will be used to repay a loan to Red Valley Ltd. and the remaining 124.3 million shares will be sold at market prices to Red Valley Ltd. prior to the merger being completed, which, together with the adjustments above, will result in the proforma ownership structure shown below. [For the proforma ownership structure table, please open attached PDF] Preliminary pro forma financial information The unaudited pro forma accounts presented below have been prepared to illustrate the merged group’s financial position and earnings after completion of the merger. The pro forma balance sheet has been prepared as if the merger was completed on December 31, 2005, and the pro forma income statement for 2005 has been prepared by combining the actual income statements for the two groups in 2005. The merger will be carried out in accordance with the purchase method and LB Icon has been identified as the acquiring company, applying the reverse merger principle. The reverse merger principle is applied because LB Icon shareholders will post merger have the majority in respect of ownership and board composition. The preliminary acquisition value is based on LB Icon’s volume weighted average share price on March 17, 2006, of SEK 53.016. In preparing consolidated accounts for the merged group, LB Icon will establish new acquisition values for Framfab’s assets and liabilities. In these pro forma accounts, preliminary valuation of the book value of Framfab’s client contracts, trademarks etc, has not yet been made. It is assessed that these altered accounting principles and the final acquisition analysis could lead to considerable changes in the financial statements of the companies and the new group. Adjustments for synergy gains, cost-savings or costs in conjunction with the merger have not been included. No amortisation has been calculated on other intangible assets resulting from the transaction. The merged company intends to report consolidated accounts for the merged group as from July 2006, at the earliest. The information stated below, accordingly, does not necessarily reflect the result or the financial position that Framfab and LB Icon would have had in combination if they had conducted their operations as a single unit over the same periods. Nor does the information necessarily provide any indication of the merged group’s future earnings. Proforma income statement and balance sheet January - December 2005 [For proforma income statement and balance sheet January - December 2005, please open the attached PDF] Adjustments have been made for convertible loans. Share issues for payment of earn-outs in 2006 have been included. At the date of merger, LB Icon is anticipated not to hold any shares in Framfab. Choice of merger method The Boards of Directors of the two companies are of the opinion that the merger should be implemented by means of a statutory merger in accordance with the Swedish Companies Act, whereby the companies’ shareholders are given the opportunity to approve the merger at their respective shareholders’ meetings. The Boards are of the opinion that a statutory merger is an appropriate manner for two companies to merge, as the intention is that the terms of the merger shall not generally imply any transfer of value from one company to the other company or between the companies’ shareholder groups. The Boards of Directors of the companies propose that the merger is implemented by LB Icon being absorbed by and merged into Framfab. Financial advisor Framfab and LB Icon have jointly commissioned SEB Enskilda as financial advisor to analyze the financial aspects of the merger and to assist in the preparation of requisite information to shareholders. Framfab reverse split 50:1 and the Euronext listing LB Icon is listed on the O-list of the Stockholm Stock Exchange and on the Euronext in Amsterdam. Framfab is listed on Attract 40 on the O-list of the Stockholm Stock Exchange and will seek a Euronext listing. The shares of the merged company will hence be traded on the O-list of the Stockholm Exchange and on the Euronext. Framfab will execute a reverse split at a ratio of 50:1 following the EGM. Share Exchange ratio Shares in LB Icon will be exchanged for new shares in Framfab. Before the merger is executed, Framfab will as stated above undertake a reverse split at a ratio of 50:1. Each LB Icon share will, following the reverse split, be exchanged for 1 new share in Framfab. Framfab´s share capital, after payment of the Oyster earn-out, amounts to SEK 62.2 million (EUR 6.71 million), and will as a result of the merger be increased by not more than SEK 87.6 million (EUR 9.41 million) to SEK 149.8 million (EUR 16.11 million) through the issue of not more than 35 036 791 shares (calculated after a reverse split of 50:1) . Determining the exchange ratio In determining a fair exchange ratio for both Framfab’s and LB Icon’s shareholders, the Boards of the two companies have taken a number of factors into consideration. The Boards have primarily considered the share prices for the companies during the period prior to announcement of the merger, expected sales and earnings growth, and the earnings potential of the two companies. The Boards of Framfab and LB Icon believe that the merger is beneficial for each respective company and its shareholders. Supported by expert fairness opinions, both Boards believe that the exchange ratio is fair. The Board of LB Icon commissioned a fairness opinion on the exchange ratio from SEB Enskilda and Framfab’s Board commissioned a fairness opinion from Handelsbanken Capital Markets. In its opinion for LB Icon, SEB Enskilda concludes that the exchange ratio is fair for LB Icon’s shareholders from a financial perspective. Handelsbanken Capital Markets concludes in its opinion for Framfab’s Board that the exchange ratio is fair for Framfab’s shareholders from a financial perspective. The average closing price for Framfab’s share for the past 25 trading days up to and including March 17, 2006 was SEK 0.997. The average closing price for LB Icon’s shares on the Stockholm Stock Exchange for the past 25 trading days up to and including March 17, 2006 was SEK 54.77. The established exchange ratio for the merger of 50 Framfab shares for each LB Icon share, implies a value for the Framfab shares that exceeds the average closing price for the past 25 trading days up to and including March 17, 2006 with approximately 10%. Conversely, the established exchange ratio implies a value for the LB Icon shares that is approximately 9% below the average closing price during the same period. Pre-merger undertakings LB Icon and Framfab shall during the period from this day and until the day of the registration of the merger, carry on the business of the respective company in the ordinary course of business and shall not, other than as publicly announced at the date hereof, without the prior written consent of the other party, take any of the following actions: (a) pay any dividend or other distribution to shareholders; (b) issue or create shares or securities (or rights to call for the issue or transfer of shares or securities) other than: (i) upon the exercise of share options or warrants existing at the date hereof; (ii) upon the conversion of convertible bonds existing at the date hereof; or (iii) in accordance with earn-out arrangements existing at the date hereof; or (c) acquire or agree to acquire or dispose of or agree to dispose of any material shareholdings, businesses, assets or stock or enter into or amend any material contract or arrangement or incur any material additional indebtedness other than in the ordinary course of operating its business. The parties undertake to, in consultation with each other, take all necessary actions in order to complete the merger on the terms set out herein. The submission by Framfab of the notification to the Swedish Companies Register for registration of the merger is subject to LB Icon’s prior approval, such approval not to be unreasonably withheld or denied. Conditions for the merger The completion of the merger is conditional upon the following; 1. That a shareholders’ meeting in Framfab approves the merger plan and decides on the appointment of new directors as set out in the merger plan, the issue of the consideration shares for the merger and the changes in the articles of association of Framfab that are required for such issuance. 2. That a shareholders’ meeting in LB Icon approves the merger plan. 3. That all permits and approvals of the authorities that are necessary for the merger have been obtained on terms that are acceptable for Framfab and LB Icon , respectively, in the opinion of each respective Board of Directors. 4. That the merger is not in whole or in part made impossible or materially impeded as a result of legislation, court rulings, decisions by public authorities or anything similar. 5. That the pre-merger undertakings made by Framfab and LB Icon as set out in (a) and (b) above are not breached before the day of the registration of the merger and that the pre-merger undertakings made by Framfab and LB Icon as set out in (c) above are not, before the day of the registration of the merger, breached in any such way which would result in a material adverse effect on the merger or the new group created by the merger. General Meeting and implementation of the merger Final decisions on the merger will be passed by a qualified majority (2/3 of votes cast and of the shares represented) at the Extraordinary General Meeting of Framfab and the Annual General Meeting of LB Icon. The Extraordinary and Annual General Meetings of Framfab and LB Icon respectively are expected to be held in mid May, 2006. Framfab’s Extraordinary General Meeting will also resolve on the issue of the merger consideration, the appointment of new directors for the new group, a reverse split, and approval of the changes of the company’s capital limits and related provisions in the articles of association and potentially the new name for the combined group. When the two general meetings have approved the merger plan, certain creditor-related procedures in accordance with the Swedish Companies Act must be completed. The merger process is scheduled for completion by the end of July 2006, at the earliest. After the merger has been registered, LB Icon’s shareholders will, without further action, receive newly issued shares in Framfab. This means that LB Icon’s shares will continue to be listed until the registration of the merger. Subsequently, LB Icon’s shares will be exchanged for shares in Framfab and LB Icon shares will be delisted. LB Icon will be dissolved and its assets and liabilities transferred to Framfab when the Swedish Companies Registration Office (Sw: Bolagsverket) finally registers the merger. This is expected to occur not earlier than July 2006. The companies will, as early as possible, announce the date on which the Swedish Companies Registration Office will register the merger. The final day for trading in LB Icon’s shares on the Stockholm Stock Exchange is expected to be the day that falls three trading days prior to the Swedish Companies Registration Office’s registration of the merger and the first day of trading in the shares issued as merger consideration in Framfab is scheduled as the next trading day following the registration of the merger. For technical reasons relating to registration, LB Icon shareholders will be prevented from trading with their shareholding for three trading days when the exchange of shares in LB Icon to shares in Framfab is effected. The new shares in Framfab, that are issued as merger consideration, will entitle the holders to dividends for the first time on the record date that occurs immediately following registration of the merger by the Swedish Companies Registration Office. Information to shareholders and merger plan The Boards of LB Icon and Framfab have prepared a joint merger plan that the auditors of both companies will review and issue statements regarding the merger plan in accordance with the Swedish Companies Act. The merger plan includes a report about the merger’s appropriateness for the companies and how the merger consideration was determined. Copies of the merger plan, with enclosures and the auditors’ statements will be available at the companies’ offices towards early April 2006, and can from such time be obtained free-of-charge from LB Icon, Tel: +46 5223 9000 / +31 20 460 4500 or Framfab, Tel: +46 410 010 00 These will also be available on the companies’ websites: www.lbicon.com and www.framfab.com, An information document will be distributed to the shareholders of Framfab and LB Icon not later than two weeks prior to the Extraordinary General Meeting of Framfab and the Annual General Meeting of LB Icon. This document will be prepared jointly by the respective Boards. The document is intended as a basis for decision-making by the respective shareholders of Framfab and LB Icon prior to the Extraordinary and Annual General Meetings that will resolve on approval of the merger plan. Preliminary timetable Early April, 2006 The merger plan is announced and made available to the companies’ shareholders Early May, 2006 The merger document made public Mid May, 2006 Extraordinary General Meeting of Framfab Annual General Meeting of LB Icon End of July, 2006, at the earliest The Swedish Companies Registration Office registers the merger Stockholm, March 21, 2006 Stockholm, March 21, 20006 Framfab AB (publ) LB Icon AB (publ) Board of Directors Board of Directors For further information, please contact: Sven Skarendahl, Chairman of Framfab Tel +44 7712760318 Steve Callaghan, CEO of Framfab Tel +44 7771 921210 Fred Mulder, Chairman of LB Icon Tel +31 20 460 29 86 Robert Pickering, CEO of LB Icon Tel +31 20 460 29 80 Theo Cordesius, COO of LB Icon Tel +31 20 460 29 86 The Framfab shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or under any of the relevant securities laws of any state or other jurisdiction of the United States. Neither the U.S. Securities and Exchange Commission nor any U.S. state securities commission has approved of the Framfab shares or determined if this document is accurate or complete. The merger in the United States is being made pursuant to an exemption from the U.S. tender offer rules provided by Rule 14d-1(c) under the U.S. Securities Exchange Act of 1934, as amended, and pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933 provided by Rule 802 thereunder. This merger is made for the securities of a foreign company. The offer is subject to disclosure requirements of a foreign country that are different from those of the United States. Financial statements included in the document, if any, have been prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies. It may be difficult for you to enforce your rights and any claim you may have arising under the federal securities laws, since the issuer is located in a foreign country, and some or all of its officers and directors may be residents of a foreign country. You may not be able to sue a foreign company or its officers or directors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreign company and its affiliates to subject themselves to a U.S. court's judgment. The Framfab shares are being offered to holders resident in the United States pursuant to the exemption from the registration requirements of the Securities Act provided by Rule 802 thereunder. The Framfab shares may not be offered or sold in the United States except pursuant to an exemption from the Securities Act or in a transaction not subject to the registration requirements of the Securities Act.