Placing and Acquisition

Zoo Digital Group PLC
30 July 2007

                                                                    CONFIDENTIAL


Not for release, publication or distribution in or into the United States,
Australia, Canada, the Republic of Ireland, the Republic of South Africa or
Japan. This release is not an offer for sale of securities in the United States.
Securities may not be offered or sold in the United States absent registration
or an exemption from registration under the U.S. Securities Act of 1933, as
amended.  The issuer of the shares has not registered, and does not intend to
register, any portion of the offering in the United States and does not intend
to conduct a public offering of its securities in the United States.


                             ZOO DIGITAL GROUP PLC
                            ('ZOO' or the 'Company')

            PLACING AND ACQUISITION OF CERTAIN ASSETS OF SCOPE SEVEN

ZOO Digital Group plc (AIM:ZOO), the digital media technology company, today
announces the proposed acquisition of certain assets of Scope Seven, the
associated equity fundraising by way of Placing and its preliminary results for
the 12 month period to 31 March 2007.

Financial Highlights of Acquisition

•               Conditionally agreed to acquire certain assets and contracts of
Scope Seven for a total consideration of up to £2.45 million, of which up to
£1.4 million is payable at completion of the Acquisition, £0.3 million is
payable in quarterly instalments over 3 years and the remainder may become
payable as Deferred Consideration

•               The Deferred Consideration may become payable, depending on the
profitability achieved by the Scope Seven Division over a three year period,
and, capped at a maximum of £0.75 million,  is to be satisfied in cash and/or
Ordinary Shares entirely at ZOO's discretion

Operational Highlights of Acquisition

•               Scope Seven is one of the key independent compression and
authoring service providers in the Hollywood digital media production market.
It has developed an internet-accessible collaboration system, currently in use
by Warner Brothers, that is compatible with ZOO's products and which will be
included in the ZOO portfolio and offered to other customers to secure
incremental revenues

•               The Acquisition will allow ZOO to resume sales discussions with
studios and publishers where ZOO's lack of service capability had previously
delayed progress

•               The Board believes that following the Acquisition the Group will
be able to offer a unique proposition within the current market, consisting of
first class services based upon exclusive use of proprietary, innovative
technology

•               This offering can then be marketed directly to the studios,
rights holders and publishers and can be shown to have significant benefits when
compared to competing service providers

Highlights of Preliminary Results

•               Group turnover for the year to 31 March 2007 of £3.75 million
(2006: £9.16 million)

•               The loss before interest, tax, depreciation and amortisation was
reduced significantly to £1.42 million (2006: £3.61 million restated loss)

•               As at 31 March 2007 the Group had net current assets of £1.94
million (2006: net current liabilities of £0.415 million) including a bank
balance of £2.03 million (2006: overdraft of £0.317 million)

Details of the Placing

•               ZOO is seeking to raise £3 million through a placing of shares
with management and institutional investors

Certain definitions apply throughout this announcement and your attention is
drawn to the table at the end of this announcement where such definitions are
set out in full.


Commenting on the Acquisition, Stuart Green, CEO of ZOO Digital Group plc, said:

'The Board believes that the acquisition of the Scope Seven assets creates a
broader offering that is unique within the current market and will enable the
Company to penetrate the market more effectively and to unlock a significant
revenue potential. By augmenting its current offering ZOO will be able to
deliver directly to studios, rights holders and publishers a proposition and
pricing model, based on utilisation as opposed to time and materials, unlike any
other that is currently available.

'The Directors believe that the acquisition of Scope Seven has persuasive
strategic and financial logic and represents an attractive opportunity for the
Company to broaden its offering, acquire a second major Hollywood studio as a
customer and accelerate its growth.'

Enquiries

Stuart Green                                          Nick Dibden/Charlie Hooper
CEO, ZOO Digital Group plc                            Weber Shandwick Financial
0114 241 3700                                         020 7067 0700

Richard Kauffer/James Bryce
KBC Peel Hunt Ltd
020 7418 8900


Notes to Editors

About ZOO Digital Group plc

ZOO is an innovative software solutions company that helps video publishers and
rights owners maximise revenues and profits by exploiting their content across
multiple platforms, languages and territories. ZOO has a portfolio of over 60
patents (granted or pending) and a depth of knowledge in digital media processes
which has few rivals.

ZOO's key products include:

Interactive DVD software - world leading tool for creating interactive DVDs.
Most of the interactive titles played on any household DVD player are made with
ZOO's software. Notable titles include 'Who Wants to be a Millionaire?',
'Question of Sport' and 'Madagascar - Animal Trivia Game'.

Linear DVD production software - technology to automate the production of linear
(movies & TV shows) digital media. With this automation comes a significant
reduction in time-to-value for the intellectual property, as well as radically
changing the economies of publishing back catalogues.

Multi-language production software - technology to 'localise' text that appears
in digital media. This software automates the localisation process for video
publishers. Previously, highly-skilled technicians were required to manipulate
graphical data. Now, with ZOO's software, text that needs translation is
extracted and replaced with corresponding translations - reducing time, errors
and labour costs.

Template Authoring System (TAS) - TAS has been designed to accommodate current
and future video-based technologies. By defining templates for different
platforms, alternative versions of the titles - such as HD DVD and Blu-ray Disc
can be quickly and easily created using the same system but different asset
data.

Introduction

ZOO today announces that it has conditionally agreed to acquire certain assets
and contracts of Scope Seven for a total consideration of up to a maximum of
£2.45 million, of which up to £1.4 million is payable at completion of the
Acquisition, £0.3 million is payable in quarterly installments over three years
and the remainder is payable as Deferred Consideration. The Deferred
Consideration may become payable, depending on the profitability achieved by the
Scope Seven Division over a three year period, and, capped at a maximum of £0.75
million, is to be satisfied in cash and/or Ordinary Shares entirely at ZOO's
discretion.

Scope Seven is an independent company providing compression and authoring (i.e.
DVD production) services to a number of video publishers including certain
Hollywood studios, most notably Warner Brothers.  Scope Seven is affiliated to a
Warner Brothers subsidiary - GDMX - that operates as an internal facility for
digital media production, and through this relationship Scope Seven enjoys
significant work on behalf of the Warner Brothers studios.  Scope Seven's other
customers include 20th Century Fox, New Line Cinema, the BBC, DIRECTV, Hasbro
and Mattel.

The Board believes that the Acquisition will benefit the Group as it will
directly align the Group with the interests of ZOO's underlying clients - the
studios - offering them reduced costs, improved efficiencies and a shortening of
the time it takes for the studios to prepare their products for the market. This
is distinct from other DVD production companies that are remunerated on a time
and materials basis.

ZOO also announces today proposals for a capital raising by way of the Placing
to provide it with the funds, inter alia, to further enhance the development of
its business. The Placing will raise approximately £3 million which will be used
to fund the cash element of the initial consideration of up to £1.4 million due
under the terms of the Asset Purchase Agreement, with the balance being used to
augment the Company's working capital and defray the costs of the Placing and
the Acquisition.

The Company has also announced today its preliminary results for the year ended
31 March 2007. A copy of the Annual Report and Accounts will be sent to
Shareholders as soon as possible.

KBC Peel Hunt has agreed, as agent for the Company, to use its reasonable
endeavours to procure subscribers for all the Placing Shares at the Placing
Price under the terms of the Placing. The Placing is not being underwritten.

The Placing Shares are not being offered to Shareholders on a pre-emptive basis
because the Board has concluded, having taken appropriate advice, that it is not
in the best interests of the Company to make such a pre-emptive offer due to the
time and cost involved and the necessity to complete the Acquisition
successfully in a timely manner.

This announcement sets out the background to and reasons for the Acquisition and
the Placing and explains why the Directors believe that the proposals are in the
best interests of the Company and its Shareholders. The Acquisition and the
Placing are conditional upon the passing of certain Resolutions by the
Shareholders at the AGM. A notice convening the AGM, which includes resolutions
to dis-apply Shareholders' statutory pre-emption rights, required in order to
effect the Placing, is included within the Circular.  The Acquisition and the
Placing are also conditional on Admission of the Placing Shares to trading on
AIM.

The Company has received irrevocable undertakings from all of the Directors,
holding a total of 1,493,680 Ordinary Shares, to vote in favour of the
Resolutions, representing approximately 25.26 per cent. of the Existing Ordinary
Shares.

Information on ZOO and background to the Acquisition

ZOO has operated as a software developer and licensor and has created a number
of professional software products that are targeted at the digital media
production industry.  These products are innovative in the market, being based
around a number of proprietary algorithms for which ZOO holds several granted
and pending patents in the UK, United States and other territories.  The
products provide clear advantages and benefits to the production process since
they automate and centralise functions that are otherwise performed by highly
skilled manual labour, thereby substantially reducing the time and cost it takes
to prepare consumer products for market.

In the past, ZOO has sought to license its software products to production
facilities that in turn provide services to studios and video publishers.  The
Company has begun to broaden its offering to include certain production services
so that it can contract directly with studios, rights holders and video
publishers.

ZOO has for some time been in communication directly with studios, rights
holders and publishers to better educate the market on the benefit of its
products.  These organisations are the ultimate beneficiaries of ZOO's
technology and have much to gain by its adoption by way of reduced costs,
improved efficiencies and a shortening of the time it takes to prepare products
for the market.  Faced with the resistance of its suppliers to adopt ZOO's
products, one major Hollywood studio was convinced enough to embrace the
technology directly rather than via intermediaries.  That studio now operates
the tools internally where they are used in the creation of its worldwide DVD
title releases and have been demonstrated to deliver substantial savings of time
and cost.

The Board believes that the Group's broadened offering consisting of digital
media production services based around ZOO's software tools is unique within the
current market and will enable the Company to penetrate the market more
effectively and to unlock a significant revenue potential. By augmenting its
current offering ZOO will be able to deliver directly to studios, rights holders
and publishers a proposition and pricing model, based on utilisation as opposed
to time and materials, unlike any other that is currently available.

The Board believes that the Acquisition is key to building critical mass in
service delivery, because it provides established facilities and resources and
strong customer relationships in Hollywood, which represents a significant share
of the available market for digital media production.

Information on Scope Seven

Scope Seven is one of the key independent compression and authoring service
providers in the Hollywood digital media production market. Both the company and
its President, Duncan Wain, are highly respected within the market.

In the year ended 28 February 2007, the assets of Scope Seven being acquired are
estimated to have generated revenues of approximately £3.78 million and to have
made a profit before tax of £0.23 million.  As at 28 February 2007, Scope Seven
had net assets of £2.12 million of which ZOO is acquiring assets with a net book
value of £1.07 million. Scope Seven is based in Los Angeles; 65 staff will
transfer to the Group as part of the Acquisition.

Reasons for the Acquisition

The Directors believe that the Acquisition has persuasive strategic and
financial logic and represents an attractive opportunity for ZOO to broaden its
offering, acquire a second major Hollywood studio as a customer and accelerate
its growth.

•   New Service Offerings

The Board believes the Acquisition will allow ZOO to offer a unique proposition
within the current market consisting of first class services based upon
exclusive use of proprietary, innovative technology.  This offering can be
marketed directly to the studios, rights holders and publishers and can be shown
to have significant benefits when compared to competing service providers.
ZOO's combined service and technology proposition is aligned with the interests
of the studios, offering services at better value, flexibility to use internal
resources where appropriate to reduce costs, and shorten the time it takes to
prepare products for the market.  This is clearly differentiated from the
offerings of competing companies which are unable to apply ZOO's technology to
reduce their cost of sale.  The Board believes that ZOO will be seen as a more
trusted vendor since its interests are aligned with those of the studios, and
this can be expected to lead to closer and more productive working
relationships.

The Board believes the control of Scope Seven's production services which are
being acquired and the associated use of ZOO's tools will enable ZOO to
accelerate its penetration of the Hollywood digital media production market.

•  Relationship with Warner Brothers

Scope Seven's affiliation with GDMX will provide ZOO with the opportunity to
supply its technologies for use in conjunction with the production of video
titles for Warner Brothers.  Scope Seven's relationship with Warner Brothers as
the sole US affiliate of GDMX means it receives a significant number of projects
commissioned by Warner Brothers.

In 2006 Warner Brothers was the single largest publisher of DVD-Video titles
into North America with a 4 per cent. market share by number of new titles
(source: www.hometheaterinfo.com).  The Board believes that it should be
possible to secure significant technology licensing business with Warner
Brothers through the Scope Seven Division.

•   Sales Opportunities

The Acquisition will enable ZOO to resume sales discussions with several major
Hollywood studios and other publishers where ZOO's lack of service capability
has previously delayed progress. ZOO has already approached these potential
customers to explore the reception of a combined proposition from ZOO and Scope
Seven through the Scope Seven Division and this has been received favourably by
a number of studios.

•   Incremental Revenue from Existing Customers

It is believed that incremental revenue can be secured from some of ZOO's
existing customers who are currently outsourcing certain production work (such
as video and audio compression) to third parties and who would be prepared to
reallocate such work to the enlarged ZOO business.

•   Interactive DVD Development

     Scope Seven provides interactive DVD ('iDVD') development services for a
number of companies in the United States including Mattel and Warner Brothers.
These services are provided based on ZOO's DVD-EXTRA STUDIO product; Scope Seven
was one of the first companies to license this system for iDVD production.
Through its use of ZOO's technology Scope Seven has established itself as one of
the leading iDVD developers in the United States, and has undertaken projects
for Mattel, Hasbro, Warner Brothers, SnapTV and bEqual.

     The inclusion of such iDVD development services in conjunction with ZOO's
current technology licensing proposition will enhance the Company's ability to
secure high margin royalty income in the United States.

•   Collaboration Software

   Scope Seven has developed an internet-accessible collaboration system,
currently in use by Warner Brothers, that is compatible with ZOO's products and
which will be included in the ZOO portfolio and offered to other customers to
secure incremental revenues.

Terms of the Asset Purchase Agreement

Under the terms of the Asset Purchase Agreement ZOO (through certain Group
undertakings) will acquire the assets and properties used by Scope Seven in both
its 'Entertainment Group' (which includes the compression and authoring
business) and its 'Interactive Media Group' (which includes the iDVD games
development business). These assets (which are subject to the assumption of
certain liabilities) include certain employees, contracts and commitments and
proprietary rights over the names 'Scope Seven', 'Comchoice', 'ChoiceProjects'
and 'ChoiceUpdates'. Assets used exclusively in Scope Seven's 'Education Group'
are not being acquired. The Acquisition is conditional, inter alia, on Admission
occurring.

The maximum consideration payable under the terms of the Asset Purchase
Agreement will not exceed £2.45 million. On completion of the Acquisition ZOO
shall pay the sum of up to £1.4 million to Scope Seven, which comprises the
following sums: a consideration payment of £0.3 million; up to £0.85 million
owed by Scope Seven under the terms of a credit facility entered into with First
Regional Bank; and the repayment of up to £0.25 million of Officers' Loans owed
to certain individuals and officers by Scope Seven. In addition ZOO will issue a
subordinated promissory note for a principal amount of £0.3 million bearing a
rate of interest of ten per cent. per annum, in respect of the balance of the
Officers' Loans.

Further Deferred Consideration may become payable subsequently, depending on the
profitability achieved by the Scope Seven Division over a three year period,
capped at a maximum of £0.75 million.

The amount of Deferred Consideration will be calculated at 20 per cent. of
earnings before interest, tax, depreciation and amortisation, subject to a total
£0.75 million cap, for each of the periods ending 29 February 2008, 28 February
2009 and 28 February 2010 and will be payable within 60 days of the end of the
relevant period.

At least 50 per cent. of any Deferred Consideration that becomes payable shall
be satisfied in cash and the remainder, at the sole discretion of ZOO, either in
cash and/or by the issue of Consideration Shares. In the event that any amount
of the Deferred Consideration is to be satisfied by the issue of Consideration
Shares then the Company will issue sufficient number of Consideration Shares as
are equivalent to the value of that proportion of the Deferred Consideration,
based on the average closing price of the Ordinary Shares during the 20 trading
days immediately preceding the date of issue of the Consideration Shares (after
having deducted the three highest and three lowest of such 20 sample closing
prices from the calculation), but in any event the Consideration Shares shall
not be issued at less than 15 pence per share (being the par value of the
Ordinary Shares).

Under the terms of the Asset Purchase Agreement, it has been agreed that the
Consideration Shares shall only be sold or disposed of prior to or on 30
September 2008, in limited circumstances; and, at any time, only on a best
execution basis through such stockbroker as may from time to time act as the
broker to the Company, so long as the number of shares sold in any calendar
quarter shall not exceed the greater of (i) 1 per cent. of all outstanding
Ordinary Shares in issue at such time, or (ii) 1 per cent. of the average weekly
volume of Ordinary Shares traded during the 4 weeks immediately preceding such
disposal.

Statement of Preliminary Results

The preliminary results of the Group announced today show that, following the
reorganisation of the Group, turnover for the year to 31 March 2007 fell to
£3.75 million (2006: £9.16 million).  The loss before interest, tax,
depreciation and amortisation was reduced significantly to £1.42 million (2006:
£3.61 million restated loss). As at 31 March 2007 the Group had net current
assets of £1.94 million (2006: net current liabilities of £0.415 million)
including a bank balance of £2.03 million (2006: overdraft of £0.317 million).

The Board anticipates substantial growth in revenues due to the licensing of new
and existing digital media technologies and services, and further growth in the
interactive DVD market. The Board anticipates that ZOO's technologies will play
an increasingly significant role in the digital media production market.

Reasons for and details of the Placing and use of proceeds

The Placing, assuming that it completes, will raise approximately £3 million
(before expenses). Of these proceeds, up to £1.4 million will be used to fund
the cash element of the consideration due under the terms of the Acquisition,
with the balance being used to defray the costs of the Placing and the
Acquisition and to add to the Company's cash reserves for working capital
purposes.

Under the terms of the Placing Agreement, KBC Peel Hunt, as agent for ZOO, has
agreed conditionally to use its reasonable endeavours to procure subscribers for
the Placing Shares at 25 pence per share. The complete terms and conditions of
the Placing are set out at the Appendix to this announcement. The Placing
Agreement is conditional, inter alia, upon Admission occurring and completion of
the Acquisition.

The Placing Price of 25 pence per Placing Share is at a discount of 28.6 per
cent. to the closing middle market price of 35 pence per Ordinary Share on 27
July 2007, being the last business day before the date of this announcement,
which the Directors consider to be fair and reasonable given, inter alia, the
size of the Placing.

The Placing Shares are not being offered to Shareholders on a pre-emptive basis
because the Board has concluded, having taken appropriate advice, that it is not
in the best interests of the Company to make such a pre-emptive offer due to the
time and cost involved and the need to complete the Acquisition successfully in
a timely manner.

Since certain of the Directors and their related parties will be issued with a
total of 6,340,000 Placing Shares, representing 107 per cent. of the Company's
Existing Ordinary Shares, this issue is a 'Related Party Transaction' under rule
13 of the AIM Rules. The Directors (with the exception of Stuart Green in
respect of his subscription for 2,540,000 Placing Shares, Ian Stewart in respect
of his subscription for 800,000 Placing Shares and Matt Taylor in respect of the
subscription for 3,000,000 Placing Shares by associated parties), having
consulted with KBC Peel Hunt, the Company's Nominated Adviser, consider that the
terms of the transaction are fair and reasonable insofar as the Company's
Shareholders are concerned. In providing advice to the Board, KBC Peel Hunt has
taken into account the Board's commercial assessments.

Enterprise Investment Scheme and Venture Capital Trusts

The Directors believe that the Company will continue to be a qualifying company
for the purposes of the EIS and VCT legislation, however they can offer no
certainty in this regard.

On 20 June 2007, confirmation was sought from Her Majesty's Revenue and Customs
('HMRC') that:

•         the Company is a qualifying company for the purposes of the EIS and
for investment by a VCT; and

•         the Ordinary Shares of the Company are eligible shares.


On 6 July 2007, the Company received confirmation of both of the above points
from HMRC. This authorises the Company to issue certificates under Section 204
(1) Income Tax Act 2007 in respect of the shares to be issued, confirming the
eligibility of the Ordinary Shares for the purposes of the EIS scheme.

The continuing availability of EIS relief and the status of the relevant Placing
Shares as a qualifying holding for VCT purposes will be conditional, inter alia,
on the Company continuing to satisfy the requirements for a qualifying company
throughout the period of three years from the date of the investor making his
investment (under EIS), and, for VCT purposes, throughout the period the
Ordinary Shares are held as a 'qualifying holding'. Neither the Company nor the
Directors make any warranty or give any undertaking that relief will be
available in respect of any investment in the Placing Shares, nor do they
warrant or undertake that the Company will keep its qualifying status throughout
the relevant period or that, once given, such relief will not be withdrawn.

Investors considering taking advantage of any of the relief under the EIS or
relief available to VCTs should seek their own professional advice in order that
they may fully understand how the rules apply in their individual circumstances.

Settlement and dealings

Application will be made to London Stock Exchange plc for the Placing Shares to
be admitted to trading on AIM. It is expected that, subject to the passing of
the relevant Resolutions at the AGM, Admission will become effective on 28th
August 2007.

The Placing Shares will, when issued, rank pari passu in all respects with the
Existing Ordinary Shares including the right to receive dividends and other
distributions declared following Admission.

Interests of Directors following the Placing

Immediately following the Placing, the Directors' interests in the Company will
be as follows:

Director                          Number of        Number of      Nominal     Number of    Percentage
                                   existing   Placing Shares    amount of   shares held   interest in
                                     shares       subscribed CULS held (£)    following  the Enlarged
                                                                            the Placing  Share Capital

Dr Christopher Honeyborne             1,333              Nil        4,0001        1,333          0.01
(Chairman)

Dr Stuart Green (Chief              206,502        2,540,000       342,000    2,746,502         15.33
Executive Officer)

Helen Gilder  (Group Finance            226              Nil           Nil          226          0.01
Director)

Matt Taylor (Non-Executive          410,254        3,000,000     1,800,000    3,410,254         19.04
Director) 2                                 (subscription by
                                               funds managed
                                              and advised by
                                                   Foresight
                                                     Venture
                                                   Partners)
Ian Stewart (Non-Executive          875,365          800,000       270,000    1,675,365          9.35
Director)

1 Christopher Honeyborne's interest in CULS is held by virtue of him being a
director of Brockhill Ltd.

2 By virtue of Matt Taylor being a partner at VCF LLP (trading as Foresight
Venture Partners), he is deemed to be interested in Ordinary Shares and CULS
held by funds managed and advised by Foresight Venture Partners


Circular

The Circular containing information, inter alia, in relation to the Acquisition
and the Placing and a notice of AGM is expected to be posted to shareholders
today. A copy of the Circular can be downloaded from http://
www.zoodigitalgroup.com and copies are available for at least one month from the
date of this announcement at the offices of DLA Piper UK LLP at 1 St.Paul's
Place, Sheffield S1 2JX.

Statistics

• Placing Price per Placing Share : 25 pence
• Number of Placing Shares being placed on behalf of the Company : 12,000,000
• Number of Placing Shares as a percentage of the Existing Ordinary 
  Shares : 202.94%
• Number of Placing Shares as a percentage of the Enlarged Share Capital : 66.99%
• Number of Ordinary Shares in issue following Admission of the Placing
  Shares : 17,913,088
• Proceeds of the Placing available to the Company : £3,000,000

Expected Timetable

• Latest time and date for receipt of Forms of Proxy 10.00 a.m. on 22 August
  2007
• Annual General Meeting : 10.00 a.m. on 24 August 2007
• Admission and commencement of dealings in the Placing Shares : 8 a.m. on
  28 August 2007


Exchange Rate

The exchange rate used for the purposes of this announcement is (unless
otherwise stated): £1.00 : US$2.00.

FORWARD LOOKING STATEMENTS

This announcement may contain forward-looking statements, including, without
limitation, statements containing the words 'believes', 'anticipates', 'expects
', and similar expressions. Such forward-looking statements involve unknown
risks, uncertainties and other factors which may cause the actual results,
financial condition, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Given
these uncertainties, prospective investors are cautioned not to place any undue
reliance on such forward-looking statements. Save as required by law or by the
AIM Rules or by the Disclosure Rules, the Company disclaims any obligation to
update any such forward-looking statements in this announcement to reflect
future events or developments.


                                    APPENDIX

                      TERMS AND CONDITIONS OF THE PLACING
                For invited Placees only - Important Information

This Appendix gives details of the terms and conditions of, and the mechanics of
participation in, the Placing.

1.            Eligible Participants

This Appendix, including the terms and conditions of the Placing set out below,
is directed only at persons who are FSMA Qualified Investors and who fall within
the category of persons set out in Article 19 of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order') or are high net
worth companies within the meaning set out in Article 49 of the Order or are
otherwise permitted to receive it.

In this Appendix 'you' or 'Placee' means any person who is or becomes committed
to subscribe for Placing Shares under the Placing.

Members of the public are not eligible to take part in the Placing.

2.            Overseas jurisdictions

The distribution of this announcement and the Placing and/or issue of Ordinary
Shares in certain other jurisdictions may be restricted by law. No action has
been taken by the Company or KBC Peel Hunt that would permit an offer of
Ordinary Shares or possession or distribution of this announcement or any other
offering or publicity material relating to such Ordinary Shares in any
jurisdiction where action for that purpose is required. FSMA Qualified Investors
who seek to participate in the Placing must inform themselves about and observe
any such restrictions. In particular, this announcement does not constitute an
offer to sell or issue or the solicitation of an offer to buy or subscribe for
Ordinary Shares in the United States, Canada, Japan, the Republic of South
Africa, the Republic of Ireland or Australia or in any other jurisdiction in
which such offer or solicitation is or would be unlawful. The Placing Shares
have not been and will not be registered under the US Securities Act or under
the securities laws of any state or other jurisdiction of the United States,
and, subject to certain exceptions, may not be offered or sold, resold or
delivered, directly or indirectly in or into the United States, or to, or for
the account or benefit of, any US persons (as defined in Regulation S under the
US Securities Act). No public offering of the Placing Shares is being made in
the United States. No money, securities or other consideration from any person
inside the United States is being solicited pursuant to this announcement or the
Placing.

3.            Placing

KBC Peel Hunt will arrange the Placing as agent for and on behalf of the
Company. KBC Peel Hunt will determine in its absolute discretion the extent of
each Placee's participation in the Placing, which will not necessarily be the
same for each Placee. No commissions will be paid to or by Placees in respect of
their agreement to subscribe for any Placing Shares.

Each Placee will be required to pay to KBC Peel Hunt, on the Company's behalf,
the Placing Price as the subscription sum for each Placing Share agreed to be
subscribed by it under the Placing in accordance with the terms set out in this
Appendix. Each Placee's obligation to subscribe and pay for Placing Shares under
the Placing will be owed to each of the Company and KBC Peel Hunt. Each Placee
will be deemed to have read this announcement in its entirety. To the fullest
extent permitted by law and applicable FSA rules, neither KBC Peel Hunt nor any
other KBC Person shall have any liability to Placees or to any person other than
the Company in respect of the Placing.

4.            Participation and settlement

Participation in the Placing is only available to persons who are invited to
participate in it by KBC Peel Hunt.

A Placee's commitment to subscribe for a fixed number of Placing Shares under
the Placing will be agreed orally with KBC Peel Hunt. Such agreement will
constitute a legally binding commitment on your part to subscribe for that
number of Placing Shares at the Placing Price on the terms and conditions set
out or referred to in this Appendix and subject to the Company's memorandum and
articles of association. After such agreement is entered into a written
confirmation will be dispatched to you by KBC Peel Hunt confirming the number of
Placing Shares that you have agreed to subscribe for, the aggregate amount you
will be required to pay for those Placing Shares and settlement instructions. It
is expected that such written confirmations will be despatched on the date of
this announcement, that the 'trade date' for settlement purposes for the Placing
Shares will be 2 August 2007.

A form of confirmation will accompany each written confirmation and, on receipt,
should be completed and returned to Jamie Reynolds at KBC Peel Hunt by fax on
020 7972 0112 by 3.00 p.m. on 1 August 2007.

Settlement of transactions in the Placing Shares (ISIN:GB00B1FQDL10) will take
place within the CREST system, subject to certain exceptions, on a 'delivery
versus payment' (or 'DVP') basis. You should settle against CREST ID: 546. KBC
Peel Hunt reserves the right to require settlement for and delivery of any
Placing Shares to any Placees by such other means that it deems appropriate if
delivery or settlement is not possible or practicable within the CREST system
within the timetable set out in this announcement or would not be consistent
with the regulatory requirements in any Placee's jurisdiction.

If Placing Shares are to be delivered to a custodian or settlement agent, please
ensure that the written confirmation is copied and delivered immediately to the
appropriate person within that organisation.

5.            No Prospectus

No prospectus (in accordance with FSMA or the UK Prospectus Rules) has been or
will be submitted for approval by the FSA in relation to the Placing or the
Placing Shares. Placees' commitments in respect of Placing Shares will be made
solely on the basis of the information contained in this announcement and on the
terms contained in it.

6.            Placing Shares

The Placing Shares will, when issued, be fully paid and will rank pari passu in
all respects with the Existing Ordinary Shares.

Applications will be made for the admission of the Placing Shares to trading on
AIM. It is expected that Admission will take place, and dealings in the Placing
Shares will commence, on 28 August 2007.

7.            Placing Agreement

KBC Peel Hunt has today entered into the Placing Agreement with the Company
under which KBC Peel Hunt has, on the terms and subject to the conditions set
out in the Placing Agreement, agreed to use its reasonable endeavours as agent
of the Company to procure subscribers for Placing Shares at the Placing Price.
The Placing is not being underwritten by KBC Peel Hunt or any other person.

8.            Placing conditions

The Placing is conditional, inter alia, on (a) the passing of the Resolutions,
(b) the Placing Agreement not being terminated in accordance with its terms
prior Admission and (c) Admission taking place not later than 8.00 a.m. on 30
September 2007 (or such later date and time as the Company and KBC Peel Hunt may
agree).

KBC Peel Hunt reserves the right (with the agreement of the Company) to waive or
extend the time and or date for the fulfilment of any of the conditions in the
Placing Agreement applicable to the Placing to a time no later than 8.00 am on
the Long Stop Date.

If any condition in the Placing Agreement is not fulfilled or waived by KBC Peel
Hunt by the relevant time, the Placing will lapse and your rights and
obligations pursuant to the Placing shall cease and terminate at such time.

The Placing Agreement may be terminated by KBC Peel Hunt at any time prior to
Admission in certain circumstances including, inter alia, following a material
breach of the Placing Agreement by the Company or the occurrence of certain
force majeure events. The exercise of any right of termination pursuant to the
Placing Agreement, any waiver of any condition in the Placing Agreement and any
decision by KBC Peel Hunt whether or not to extend the time for satisfaction of
any condition to the Placing Agreement or otherwise in respect of the Placing
shall be within KBC Peel Hunt's absolute discretion. KBC Peel Hunt shall have no
liability to you in the event of any such termination, waiver or extension or in
respect of any decision whether to exercise any such right of termination,
waiver or extension.

9.            Payment default

Your entitlement to receive any Placing Shares will be conditional on KBC Peel
Hunt's receipt of payment by the relevant time(s) to be stated in the written
confirmation referred to above, or by such later time and date as KBC Peel Hunt
may in its absolute discretion determine. KBC Peel Hunt may, in its absolute
discretion, waive such condition, and shall not be liable to you in the event of
it deciding whether to waive or not to waive such condition.

If you fail to make such payment by the required time for any Placing Shares (1)
the Company may release itself (if it decides, at its absolute discretion, to do
so) and will be released from all obligations it may have to allot and/or issue
any such Placing Shares to you or at your direction which are then unallotted
and/or unissued, (2) the Company may exercise all rights of lien, forfeiture and
set-off over and in respect of any such Placing Shares to the fullest extent
permitted under its articles of association or otherwise by law and to the
extent that you then have any interest in or rights in respect of any such
shares, (3) the Company or, as applicable, KBC Peel Hunt may sell (and each of
them is irrevocably authorised by you to do so) all or any of such shares on
your behalf and then retain from the proceeds, for the account and benefit of
the Company or, where applicable, KBC Peel Hunt (i) any amount up to the total
amount due to it as, or in respect of, subscription monies, or as interest on
such monies, for any Placing Shares, (ii) any amount required to cover any stamp
duty or stamp duty reserve tax arising on the sale, and (iii) any amount
required to cover dealing costs and/or commissions necessarily or reasonably
incurred by it in respect of such sale, and (4) you shall remain liable to the
Company and to KBC Peel Hunt for any loss which either of them may suffer as a
result of (i) it not receiving payment in full for such Placing Shares by the
required time, and/or (ii) the amount received (net of any costs and expenses as
are referred to in (3)(ii) and (3)(iii) above) from the sale of any such Placing
Shares to any other person at whatever price and on whatever terms are actually
obtained for such sale by or for it being less than receiving payment in full
for such Placing Shares by the required time. Interest may be charged in respect
of payments not received by KBC Peel Hunt for value by the required time
referred to above at the rate of two percentage points above the base rate of
Barclays Bank plc.

10.          Placees' warranties and undertakings to the Company and KBC Peel
Hunt

By agreeing with KBC Peel Hunt to subscribe for Placing Shares under the Placing
you irrevocably acknowledge and confirm and warrant and undertake to, and agree
with, each of the Company and KBC Peel Hunt (in its capacity as placing agent),
in each case as a fundamental term of your application for Placing Shares and of
the Company's obligation to allot and/or issue any Placing Shares to you or at
your direction, that:

(a)           you agree to and accept all the terms set out in this
announcement;

(b)           your rights and obligations in respect of the Placing will
terminate only in the circumstances described in this announcement and will not
be capable of rescission or termination by you in any circumstances;

(c)           this announcement, which has been issued by the Company, is the
sole responsibility of the Company;

(d)           you have not been, and will not be, given any warranty or
representation in relation to any Placing Shares or to the Company or to any
other member of its Group in connection with the Placing, other than by the
Company as included in this announcement;

(e)           you have not relied on any representation or warranty in reaching
your decision to subscribe for Placing Shares under the Placing, save as given
or made by the Company as referred to in the previous paragraph;

(f)            you are not a customer of KBC Peel Hunt in relation to the
Placing and KBC Peel Hunt is not acting for you in connection with the Placing
and will not be responsible to you in respect of the Placing for providing
protections afforded to its customers;

(g)           you will pay the full subscription amount as and when required in
respect of all Placing Shares allocated to you in accordance with such terms and
will do all things necessary on your part to ensure that payment for such shares
and their delivery to you or at your direction is completed in accordance with
the standing CREST instructions (or, where applicable, standing certificated
settlement instructions) that you have in place with KBC Peel Hunt or put in
place with KBC Peel Hunt with its agreement;

(h)           you are entitled to subscribe for Placing Shares under the laws of
all relevant jurisdictions which apply to you and you have complied, and will
fully comply, with all such laws (including where applicable, the
Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002, and
the Money Laundering Regulations 2003) and have obtained all governmental and
other consents (if any) which may be required for the purpose of, or as a
consequence of, such subscription, and you will provide promptly to KBC Peel
Hunt such evidence, if any, as to the identity of any person which it may
request from you (for the purpose of its complying with such Regulations or
otherwise in connection with your participation in the Placing) in the form and
manner requested by KBC Peel Hunt on the basis that any failure by you to do so
may result in the number of Placing Shares that are to be allotted and issued to
you or at your direction pursuant to the Placing being reduced to such number,
or to nil, as KBC Peel Hunt may decide at its sole discretion;

(i)            you have complied and will comply with all applicable provisions
of the FSMA with respect to anything done or to be done by you in relation to
any Placing Shares in, from or otherwise involving the United Kingdom and you
have not made or communicated or caused to be made or communicated, and you will
not make or communicate or cause to be made or communicated, any 'financial
promotion' in relation to Placing Shares in contravention of section 21 of FSMA;

(j)            you are a FSMA Qualified Investor and you are a person at or to
whom any communication relating to the Company that is a 'financial promotion',
as referred to in FSMA, may lawfully be issued, directed or otherwise
communicated without the need for such communication to be approved, made or
directed by an 'authorised person' as referred to in FSMA;

(k)           you are acting as principal only in respect of the Placing or, if
you are acting for any other person in respect of the Placing (1) you are both
an 'authorised person' for the purposes of FSMA and a 'qualified investor' as
defined at Article 2.1(e)(i) of Directive 2003/71/EC (known as the Prospectus
Directive) acting as agent for such person, and (2) such person is either (i) a
FSMA Qualified Investor or (ii) a 'client' (as defined in section 86(2) of FSMA)
of yours that has engaged you to act as his agent on terms which enable you to
make decisions concerning the Placing or any other offers of transferable
securities on his behalf without reference to him;

(l)            nothing has been done or will be done by you in relation to the
Placing or to any Placing Shares that has resulted or will result in any person
being required to publish a prospectus in relation to the Company or to any
Ordinary Shares in accordance with FSMA or the UK Prospectus Rules or in
accordance with any other laws applicable in any part of the European Union or
the European Economic Area;

(m)          you are not, and are not acting in relation to the Placing as
nominee or agent for, a person who is or may be liable to stamp duty or stamp
duty reserve tax in respect of any agreement to acquire (or any acquisition of)
shares or other securities at a rate in excess of 0.5 per cent. (including,
without limitation, under sections 67, 70, 93 or 96 of the Finance Act 1986
concerning depositary receipts and clearance services), and the allocation,
allotment, issue and/or delivery to you, or any person specified by you for
registration as holder, of Placing Shares will not give rise to a liability
under any such section;

(n)           you will not treat any Placing Shares in any manner that would
contravene any legislation applicable in any territory or jurisdiction and no
aspect of your participation in the Placing will contravene any legislation
applicable in any territory or jurisdiction in any respect or cause the Company
or KBC Peel Hunt to contravene any such legislation in any respect;

(o)           (applicable terms and expressions used in this paragraph have the
meanings that they have in Regulation S made under the US Securities Act) (1)
none of the Placing Shares has been or will be registered under the US
Securities Act, (2) none of the Placing Shares may be offered, sold, taken up or
delivered, directly or indirectly, into or within the United States except
pursuant to an exemption from, or in transactions not subject to, the
registration requirements of the US Securities Act, (3) you are not within the
United States and (unless you will be subscribing Placing Shares pursuant to an
exemption referred to above in this paragraph) you are not a US person, (4) you
have not offered, sold or delivered and will not offer sell or deliver any of
the Placing Shares to persons within the United States, directly or indirectly,
(5) neither you, your affiliates, nor any persons acting on your behalf, have
engaged or will engage in any directed selling efforts with respect to the
Placing Shares, (6) you will not be subscribing Placing Shares with a view to
resale in or into the United States, and (7) you will not distribute any
offering material relating to Placing Shares, directly or indirectly, in or into
the United States or to any persons resident in the United States;

(p)           KBC Peel Hunt may (at its absolute discretion) satisfy its
obligations to procure Placees by itself agreeing to become a Placee in respect
of some or all of the Placing Shares or by nominating any other KBC Person or
any person associated with any KBC Person to do so or by allowing officers of
the Company and/or employees of Group companies to subscribe Placing Shares
under the Placing at the Placing Price;

(q)           time is of the essence as regards your obligations under this
Appendix;

(r)           you shall indemnify and hold each of the Company and KBC Peel Hunt
harmless, on an after tax basis, from any and all costs, claims, liabilities and
expenses (including legal fees and expenses) arising out of or in connection
with any breach by you of the terms in this Appendix;

(s)           none of your rights or obligations in respect of the Placing is
conditional on any other person agreeing to subscribe any Placing Shares under
the Placing and no failure by any other Placee to meet any of its obligations in
respect of the Placing shall effect any of your obligations in respect of the
Placing;

(t)           this Appendix and any contract which may be entered into between
you and KBC Peel Hunt and/or the Company pursuant to it or the Placing shall be
governed by and construed in accordance with the laws of England, for which
purpose you submit to the exclusive jurisdiction of the courts of England and
Wales as regards any claim, dispute, or matter arising out of or relating to
this Appendix or such contract, except that each of the Company and KBC Peel
Hunt shall have the right to bring enforcement proceedings in respect of any
judgement obtained against you in the courts of England and Wales in the courts
of any other relevant jurisdiction; and

(u)           nothing in this Appendix shall exclude any liability of any person
for fraud on its part. All times and dates in this announcement are subject to
amendment at the discretion of KBC Peel Hunt, except that in no circumstances
will the date scheduled for Admission be later than the Long Stop Date.



                                  Definitions

The following definitions apply throughout this announcement and the Appendix
unless the context requires otherwise:

'Acquisition'                the proposed acquisition of certain assets and contracts of Scope Seven
                             (subject to the assumption of certain liabilities) pursuant to the Asset
                             Purchase Agreement
'Admission'                  the admission of the Placing Shares to trading on AIM and such admission
                             becoming effective in accordance with rule 6 of the AIM Rules
'AGM' or 'Annual General     the seventh annual general meeting of the Company to be held at the
Meeting'                     offices of DLA Piper UK LLP at 1 St.Paul's Place, Sheffield S1 2JX
                             convened for 10.00 a.m. on 24 August 2007, notice of which is set out at
                             the end of the Circular
'AIM'                        AIM, a market operated by London Stock Exchange plc
'AIM Rules'                  the current version of the London Stock Exchange plc's rules for companies
                             relating to AIM, entitled 'AIM Rules for Companies'
'Annual Report and Accounts' the annual report and accounts in respect of the Company for the financial
                             year ended 31 March  2007
'Asset Purchase Agreement'   the conditional agreement entered into between Scope Seven, LLC, the
                             Company, ZOO Interactive Video Limited and Scope Seven relating to the
                             Acquisition
'Board'                      the board of directors of the Company
'Circular'                   a circular expected to be sent to Shareholders on the date of this
                             announcement
'Company' or 'ZOO'           Zoo Digital Group plc, a company registered in England and Wales under
                             company number 03858881, whose registered office is at 20 Furnival Street,
                             Sheffield, South Yorkshire S1 4QT
'Consideration Shares'       the new Ordinary Shares which may be issued in accordance with the terms
                             of the Asset Purchase Agreement in connection with the Acquisition
'CREST'                      the system for paperless settlement of trades and holdings of
                             uncertificated shares administered and operated by Euroclear UK & Ireland
                             Limited
'CULS'                       the £3,541,000 6 per cent. unsecured convertible redeemable loan stock
                             2011 issued by the Company on 27 September 2006
'Deferred Consideration'     the conditional consideration which may be payable pursuant to the Asset
                             Purchase Agreement
'Directors'                  the directors of the Company
'Disclosure Rules'           the Disclosure Rules and Transparency Rules of the FSA
'EIS'                        Enterprise Investment Scheme
'EIS Placing Shares'         those new Ordinary Shares which are the subject of the Placing which
                             qualify for EIS tax relief

'Enlarged Share Capital'     the Company's issued share capital immediately after Admission
'Existing Ordinary Shares'   the Ordinary Shares in issue on the date of this announcement
'FSA'                        the Financial Services Authority
'FSMA'                       the Financial Services and Markets Act 2000
'FSMA Qualified Investor'    a person who is a 'qualified investor' as referred to at section 86(7) of
                             FSMA and at or to whom any private communication relating to the Company
                             that is a 'financial promotion' (as such term is used in relation to FSMA)
                             may lawfully be issued, directed or otherwise communicated without the
                             need for it to be approved, made or directed by an 'authorised person' as
                             referred to in FSMA
'Group'                      the Company and its subsidiaries
'KBC Peel Hunt'              KBC Peel Hunt Ltd
'KBC Person'                 any person being (i) KBC Peel Hunt, (ii) an undertaking which is a
                             subsidiary undertaking of KBC Peel Hunt, (iii) a parent undertaking of KBC
                             Peel Hunt or (other than KBC Peel Hunt) a subsidiary undertaking of any
                             such parent undertaking, or (iv) a director, officer, agent or employee of
                             any such person
'Long Stop Date'             30 September 2007
'Nominated Adviser'          a nominated adviser pursuant to the AIM Rules
'Non-Qualifying Placing      those new Ordinary Shares which are the subject of the Placing which are
Shares'                      not EIS Placing Shares or VCT Placing Shares
'Officers' Loans'            loans made to Scope Seven by its officers and certain other individuals
                             totalling £0.55 million
'Ordinary Shares'            ordinary shares of 15 pence each in the capital of the Company
'Placee'                     any person who is or becomes committed to subscribe for Placing Shares
                             under the Placing
'Placing'                    the placing by KBC Peel Hunt of the Placing Shares pursuant to the Placing
                             Agreement
'Placing Agreement'          the conditional agreement dated 30 July 2007 entered into between the
                             Company and KBC Peel Hunt relating to the Placing
'Placing Price'              25 pence per Placing Share
'Placing Shares'             the EIS Placing Shares, the VCT Placing Shares and the Non-Qualifying
                             Placing Shares
'Resolutions'                the resolutions set out in the notice of AGM dated 31 July 2007
'Scope Seven'                Scope Seven, Inc., a Californian corporation
'Scope Seven Division'       a new operating division of the Group to be formed following the
                             Acquisition consisting of the acquired assets and contracts, and employees
                             of Scope Seven
'Shareholders'               the persons who are registered as holders of Ordinary Shares from time to
                             time
'UK' or 'United Kingdom'     the United Kingdom of Great Britain and Northern Ireland
'UK Prospectus Rules'        the prospectus rules made under Part VI of FSMA
'United States'              the United States of America, its territories and possessions, any State
                             of the United States and the District of Columbia
'US Securities Act'          the US Securities Act of 1933
'VCT'                        venture capital trust
'VCT Placing Shares'         those new Ordinary Shares which are the subject of the Placing and qualify
                               for VCT tax relief and which are to be allotted to Placees who qualify
                             for VCT status under the pre-March 2006 VCT rules






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            The company news service from the London Stock Exchange