THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000, as amended ("FSMA") if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

If you sell or have sold or otherwise transferred all of your Existing Shares, you should send this document, together with the accompanying Application Form and Form of Proxy, as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for delivery to the purchaser or the transferee, except that such documents should not be forwarded or transmitted into the United States, any other Excluded Territory or any other jurisdiction where doing so may constitute a violation of the registration or other local securities laws or regulations. If you have sold or otherwise transferred part of your certificated holding of Existing Shares prior to 23 May 2017 (the date when the Existing Shares are expected to be marked "ex-entitlement" by the London Stock Exchange), please consult the stockbroker, bank or other agent through whom the sale or transfer was effected and refer to the instructions regarding split applications set out in the Application Form. If your registered holding of Existing Shares which were sold or transferred were held in uncertificated form and were sold or transferred before 23 May 2017, a claim transaction will automatically be generated by CREST which, on settlement, will transfer the appropriate number of Open Offer Entitlements to the purchaser or transferee.

The distribution of this document and the accompanying documents, and/or the transfer of the Open Offer Entitlements through CREST, into jurisdictions other than the United Kingdom may be restricted by law. Therefore, persons into whose possession this document and any accompanying documents come should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, subject to certain exceptions, such documents should not be distributed or forwarded to, or transmitted in or into, the United States or any other Excluded Territory. The attention of Overseas Shareholders and any other person (including, without limitation, stockbrokers, banks and other agents) who has a contractual or other legal obligation to forward this document into a jurisdiction other than the United Kingdom is drawn to paragraph 6 of Appendix 2 of this document.

This document, which comprises: (i) a circular prepared in compliance with Chapter 13 of the Listing Rules; and (ii) a prospectus relating to the Capital Raising Shares prepared in accordance with the Prospectus Rules of the UK Listing Authority under section 73A of FSMA, has been approved by the FCA in accordance with section 87A of FSMA and made available to the public in accordance with Rule 3.2.1 of the Prospectus Rules.

The Company and the Directors whose names appear on page 36 of this document accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and contains no omission likely to affect its import.

The Capital Raising Shares have not been, and will not be, registered under the US Securities Act or qualified for sale under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into, in or within the United States except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offering in the United States. Subject to certain exceptions, this document and the Application Form should not be distributed or forwarded to, or transmitted in or into, the United States or any other Excluded Territory.

The Existing Shares are listed on the Official List maintained by the UK Listing Authority and are traded on the London Stock Exchange's main market for listed securities. Application has been made to the UK Listing Authority and to the London Stock Exchange for the Capital Raising Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities respectively. It is expected that Admission will become effective, and that dealings on the London Stock Exchange's main market for listed securities in the Capital Raising Shares will commence, at 8.00 a.m. on 9 June 2017.

IP Group plc

(Incorporated in England and Wales with registered no. 04204490)

Launch of IP2IPO Australia with commercialisation agreements with nine leading Australian and New Zealand research universities

Proposed Firm Placing of 96,428,566 Capital Raising Shares and proposed Placing, Open Offer and Offer for Subscription of up to 46,428,570 Capital Raising Shares with the ability to increase the size of the Issue by up to 47,571,428 additional Capital Raising Shares, each at an Issue Price of 140 pence per Share

Application for admission of up to 190,428,564 Capital Raising Shares in connection with the Capital Raising to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities and Notice of General Meeting

Sponsor, Broker, Underwriter and Joint Financial Adviser

Numis Securities Limited

Joint Financial Adviser

Rothschild

Your attention is drawn to the letter from the Chairman of the Company which is set out in Part I of this document. You should read the whole of this document and any documents incorporated herein by reference. Shareholders, and any other persons considering whether or not to make an application pursuant to the Open Offer or in connection with an investment in the Capital Raising Shares, should review the section of this document entitled "Risk Factors" for a discussion of certain factors that should be considered when deciding on what action to take in relation to the Open Offer and in deciding whether or not to make an application pursuant to the Open Offer or invest in the Capital Raising Shares.

The latest time and date for acceptance and payment in full under the Open Offer is 11.00 a.m. on 7 June 2017. The procedure for acceptance and payment is set out in Appendix 2 of this document and, where relevant, in the Application Form. Qualifying CREST Shareholders should refer to paragraph 4.2 of Appendix 2 of this document. The latest time and date for acceptance and payment in full for the Offer for Subscription Shares under the Offer for Subscription is 1.00 p.m. on 7 June 2017 and the procedures for application and payment are set out in Appendix 4 of this document and, where relevant, in the Subscription Form. Notice of the General Meeting of the Company, to be held at the offices of the Company at The Walbrook Building, 25 Walbrook, London, EC4N 8AF at 10.00 a.m on 8 June 2017, is set out in Part VIII of this document. Shareholders will find enclosed a Form of Proxy for use at the General Meeting. Shareholders are requested to complete and return the Form of Proxy whether or not they intend to be present at the General Meeting. To be valid, Forms of Proxy should be completed and signed in accordance with the instructions printed thereon and returned by hand only so as to reach Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and, in any event, not later than 11.00 a.m. on 6 June 2017 or in accordance with the reply paid details. The completion and return of a Form of Proxy will not preclude a Shareholder from attending and voting at the General Meeting.

This document, the Application Form, the Open Offer Entitlements and the Excess CREST Open Offer Entitlements and the Subscription Form, do not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to acquire, Capital Raising Shares by any person in any jurisdiction in which such an offer or solicitation is unlawful.

Each of Numis and Rothschild, which are authorised and regulated in the UK by the FCA, are acting exclusively for the Company and no-one else in connection with the Capital Raising or Admission and will not regard any other person (whether or not a recipient of this document) as its client in relation to the Capital Raising or Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or providing advice in connection with the Capital Raising or Admission or any other matter referred to in this document.

Investors should only rely on the information contained in this document. No person has been authorised to give any information or make any representations in relation to the Capital Raising or Admission other than those contained in this document and, if given or made, such information or representation must not be relied upon as having been authorised by the Company, the Directors, Numis or Rothschild.

Apart from the responsibilities and liabilities, if any, which may be imposed on Numis by FSMA, Numis does not accept any responsibility whatsoever or make any representation or warranty, express or implied, for or in respect of the contents of this document, including its accuracy, completeness or verification, or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Open Offer Entitlements, the Excess CREST Open Offer Entitlements, the Offer for Subscription or the Capital Raising or Admission and nothing in this document is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Numis accordingly disclaims all and any liability, whether arising in tort, contract or otherwise, which it might otherwise be found to have in respect of this document or any such statement. Without prejudice to any legal or regulatory obligation on the Company to publish a supplementary prospectus pursuant to section 87G of FSMA and paragraph 3.4 of the Prospectus Rules, neither the delivery of this document nor Admission shall under any circumstances create any implication that there has been no change in the business or affairs of the Group taken as a whole since the date of this document or that the information in it is correct as of any time after the date of this document.

The Capital Raising Shares will, on Admission, rank in full for all dividends and other distributions declared, made or paid on the Shares after Admission and otherwise will rank pari passu in all respects with the Existing Shares.

Qualifying Non-CREST Shareholders will receive an Application Form. Qualifying CREST Shareholders (who will not receive an Application Form) will receive a credit to their stock accounts in CREST in respect of the Open Offer Entitlements which will be enabled for settlement on 24 May 2017. Applications under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim arising out of a sale or transfer of Existing Shares prior to the date on which the Shares were marked "ex" the entitlement by the London Stock Exchange.

If the Open Offer Entitlements are for any reason not enabled by 8.00 a.m. on 24 May 2017 or such later time and/or date as the Company and Numis may decide, an Application Form will be sent to each Qualifying CREST Shareholder in substitution for the Open Offer Entitlements credited to its stock account in CREST. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Open Offer. The Application Form is personal to Qualifying Shareholders and cannot be transferred, sold or assigned except to satisfy bona fide market claims.

Shareholders should note that Excess Open Offer Entitlements will not be subject to Euroclear's market claims process. Qualifying CREST Shareholders claiming Excess Open Offer Entitlements by virtue of a bona fide market claim are advised to contact the Receiving Agent to request a credit of the appropriate number of entitlements to their CREST account.

NOTICE TO OVERSEAS SHAREHOLDERS

The Capital Raising Shares are being offered and sold outside the US to non-US Persons (as defined in Regulation S under the US Securities Act) in reliance on Regulation S under the US Securities Act and within the US to a limited number of persons reasonably believed to be both (i) (a) QIBs or (b) Accredited Investors and (ii) Qualified Purchasers in private placement transactions not subject to the registration requirements of the US Securities Act. The Capital Raising Shares may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into, in or within the US except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. For a description of the restrictions on offers, sales and transfers of the Capital Raising Shares and the distribution of this document, please see paragraph 6 of Appendix 2 of this document. By accepting this document, you shall be deemed to have represented that (a) you and any customers you represent are a non-US Person that is located outside the US (within the meaning of Regulation S) or (b) you are a QIB or an Accredited Investor that in either case is also a Qualified Purchaser acquiring the securities referred to in this document for your own account and/or for another QIB or an Accredited Investor that in either case is also a Qualified Purchaser.

The Capital Raising Shares, the Application Form, Open Offer Entitlements, Excess CREST Open Offer Entitlements and the Subscription Form and this document have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the US or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Capital Raising Shares or the accuracy or adequacy of the Application Form, Open Offer Entitlements, Excess CREST Open Offer Entitlements and the Subscription Form or this document. Any representation to the contrary is a criminal offence in the US.

Except pursuant to an applicable exemption, this document and the Application Form do not constitute an offer of the Capital Raising Shares to any person with a registered address, or who is resident or located, in the US or any of the other Excluded Territories. The Capital Raising Shares have not been, and will not be, registered under the US Securities Act or any state securities laws in the United States or under the relevant laws of any other Excluded Territory or of any state, province or territory of any other Excluded Territory and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into, in or within the US or any other Excluded Territory except pursuant to an applicable exemption from, or in a transaction not subject to, applicable registration or qualification requirements. Resales of Capital Raising Shares may only be made (i) outside the US in offshore transactions to non-US Persons as defined in, and in reliance on Regulation S or (ii) within the US to investors that are both QIBs and Qualified Purchasers. The Company will require the provision of a letter by investors in the US and any transferees in the US containing representations as to status under the US Securities Act and the Investment Company Act. The Company will refuse to issue or transfer Capital Raising Shares to investors that do not meet the foregoing requirements. There will be no public offering of the Capital Raising Shares in the US. The Company is not and does not intend to become an "investment company" under the US Investment Company Act and is not engaged and does not propose to engage in the business of investing, reinvesting, owning, holding or trading in securities. Accordingly, the Company has not been and will not be registered under the US Investment Company Act, and investors will not be entitled to the benefits of that Act.

All Overseas Shareholders and any other person (including, without limitation, a nominee, custodian or trustee) who has a contractual or other legal obligation to forward this document or any Application Form, if and when received, or other document to a jurisdiction outside the UK, should read paragraph 6 of Appendix 2 of this document.

In addition, until 40 days after the commencement of the Capital Raising, an offer, sale or transfer of the Capital Raising Shares within the US by a dealer (whether or not participating in the Capital Raising) may violate the registration requirements of the US Securities Act, if such offer or sale is made otherwise than in accordance with an applicable exemption from registration under the US Securities Act.

Any offer or sale, or invitation for subscription or purchase, of the Capital Raising Shares is made in reliance on the exemptions under sections 274 and 275 of the Securities and Futures Act, chapter 289 of Singapore (the "SFA"). It is not made in or accompanied by a prospectus that is registered with the Monetary Authority of Singapore.

Any offer or sale, or invitation for subscription or purchase, of the Capital Raising Shares shall not be sold to any person, unless the offer resulting in such subsequent sale is made (a) in compliance with Subdivisions (2) and (3) of the SFA, Part XIII Offers of Investments, Division 1 – Shares and Debentures; (b) in reliance of section 276(2) or any other exemption under any provision of Subdivision 4 of Division 1 of Part XIII of the SFA; or (c) where at least six months have elapsed from the date the securities were acquired under the initial offer or sale, or invitation for subscription or purchase, of the Capital Raising Shares.

For the avoidance of doubt, this document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Capital Raising Shares may not be circulated or distributed, nor may the Capital Raising Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under section 274 of the SFA in accordance with the conditions set out in section 276 of the SFA, (ii) to an accredited investor pursuant to section 275 (1) of the SFA in accordance with the conditions set out in section 276 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provisions of the SFA.

The Company's securities may not be offered, sold or delivered to any entity incorporated in the People's Republic of China ("PRC") or any national or citizen of the PRC that has not obtained all approvals, permits, registrations, filings or authorizations as required for buying the Company's securities under the applicable PRC laws and regulations

The offer of Placed Shares under the Firm Placing and the Placing is being made to Australian resident investors to whom an offer of shares for issue may lawfully be made without disclosure under Part 6D.2 of the Corporations Act 2001 because of sections 708(8) to 708(11) of that act.

This document is not a disclosure document regulated by the Corporations Act and has not been and will not be lodged with the Australian Securities and Investments Commission (ASIC). ASIC takes no responsibility for the contents of this document. Accordingly, this document may not contain all the information that a prospective investor may require to make a decision whether to subscribe for Placed Shares and it does not contain all of the information which would otherwise be required by Australian law to be disclosed in a disclosure document regulated by the Corporations Act 2001.

SUMMARY		Page 5

RISK FACTORS		19
	EXPECTED TIMETABLE OF PRINCIPAL EVENTS	33
	CAPITAL RAISING STATISTICS	35
	DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS	36
	IMPORTANT INFORMATION	38
PART I	LETTER FROM THE CHAIRMAN OF IP GROUP	43
PART II	INFORMATION ON THE GROUP	62
PART III	OPERATING AND FINANCIAL REVIEW OF THE GROUP	82
PART IV	HISTORICAL FINANCIAL INFORMATION	96
PART V	ADDITIONAL INFORMATION	98
PART VI	DOCUMENTS INCORPORATED BY REFERENCE	203
PART VII	DEFINITIONS AND GLOSSARY	206
PART VIII	NOTICE OF GENERAL MEETING	217
APPENDIX 1	QUESTIONS AND ANSWERS ABOUT THE FIRM PLACING AND PLACING AND OPEN OFFER	220
APPENDIX 2	TERMS AND CONDITIONS OF THE OPEN OFFER	228
APPENDIX 3	TERMS AND CONDITIONS OF THE FIRM PLACING AND THE PLACING	256
APPENDIX 4	TERMS AND CONDITIONS OF THE OFFER FOR SUBSCRIPTION	262

SUMMARY

Summaries are made up of disclosure requirements known as 'Elements'. These elements are numbered in Sections A – E (A.1 – E.7).

This summary contains all the Elements required to be included in a summary for this type of securities and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of 'not applicable'.

	SECTION A – INTRODUCTIONS AND WARNINGS
A.1 Introduction and Warnings		WARNING: THIS SUMMARY SHOULD BE READ AS AN INTRODUCTION TO THE PROSPECTUS; ANY DECISION TO INVEST IN THE SECURITIES SHOULD BE BASED ON CONSIDERATION OF THIS DOCUMENT AS A WHOLE BY THE INVESTOR; Where a claim relating to the information contained in this document is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating this document before the legal proceedings are initiated; and Civil liability attaches only to those persons who have tabled this summary, including any translation of this summary, but only if
		this summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus, or it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities.
A.2	Consent for intermediaries	Not applicable, as no consent has been given by the Company or any person responsible for drawing up this document to the use of this document for subsequent resale or final placement of securities by financial intermediaries.

	SECTION B – THE ISSUER
B.1	Legal & commercial name	IP Group plc The Company's legal and commercial name is IP Group plc.
B.2	Domicile/Legal form/ Legislation/Country of incorporation	The Company was incorporated with limited liability in England and Wales under the Companies Act 1985 on 24 April 2001 and is domiciled in the United Kingdom. The principal legislation under which the Company operates is the Companies Act and the regulations made thereunder. The Company is subject to the City Code.

The Group's Business	The Group was established to commercialise scientific and technical innovation developed in leading research institutions. The Group's business model is to form, or assist in the formation of, start-up companies based on disruptive scientific and technical innovation created in those institutions, to take a significant minority equity stake in those companies and then to grow the value of that equity over time through active participation in the development of such companies. The Group's strategy has been to build significant minority equity stakes in a diversified portfolio of companies falling within its four main sectors of Biotech, Cleantech, Healthcare and Technology designed to achieve strong equity returns over the medium to long term.
	An important aspect of the Group's strategy is its ability to access a wide range of leading scientific research. This has been achieved primarily through long-term partnerships with a number of leading research universities in the UK and the US. The Group entered into its first long term partnership with the University of Oxford's Chemistry Department in 2000 and now has direct arrangements covering thirteen of the UK's and five of the US's leading research universities as well as three DOE Laboratories through FedIMPACT.
	The Group has started a strategic holding in Cambridge Innovation Capital which supports the growth of innovative businesses located in the "Cambridge Cluster". The Company and Cambridge Innovation Capital have also entered into a memorandum of understanding to share information on investment and co-investment opportunities. The Group has also a strategic investment in Oxford Sciences Innovation plc, which entered into a framework agreement with the University of Oxford in March 2015 under which it is the contractually preferred intellectual property partner of the University of Oxford for the provision of capital to and development of spin-out companies based on research from the University of Oxford's Medical Sciences Division and its Mathematical, Physical and Life Sciences Division.
	The Company was admitted to AIM in October 2003 and moved to the Official List in June 2006. On and subsequent to its admission to AIM, the Group has raised approximately £390 million of net proceeds from equity investors, predominantly to build its portfolio of spin-out companies.
	In March 2014, the Company completed the acquisition of Fusion IP, an AIM listed company with complementary arrangements with universities and research institutions.
	As at 31 December 2016, the Group had equity and debt holdings in a portfolio of 90 companies, three holdings in multi-sector platforms (OSI, CIC and Frontier IP Group plc) and 20 de minimis holdings in which its combined stake was valued at £614.0 million (calculated by reference to the values attributed to the Group's investments in such portfolio companies in the audited consolidated accounts for the year ended 31 December 2016).

		As announced on 23 May 2017, the Company was obliged to inform shareholders that it recently made an approach to the Touchstone Board regarding a possible combination with Touchstone. The Touchstone Board rejected the proposed combination. Touchstone (formerly Imperial Innovations Group plc) creates, builds and invests in pioneering technology companies and licensing opportunities developed from research from the 'Golden Triangle', the geographical region broadly bounded by London, Cambridge and Oxford. The terms of the Possible Offer would comprise the issue of 2.1490 Shares for each Touchstone share, subject to certain adjustments. Assuming the Capital Raising raises £200 million (before expenses) and is fully subscribed then, before any adjustment to the proposed exchange ratio as referred to in the Company's announcement earlier today, Touchstone shareholders would receive in aggregate approximately 32.9 per cent. of the issued share capital of the Company as enlarged by both the Capital Raising and the shares to be issued by way of consideration on completion of the Possible Offer and Shareholders holdings would be diluted accordingly. The precise figures will not be determined until any announcement of a firm offer for Touchstone (if any) is made under Rule 2.7 of the Code.
B.4a	Recent trends	The industry in which the Group operates, the funding and development of intellectual property based businesses, continues to show signs of increasing maturity. Within the Group during 2016, this was reflected in the maturing of many of the Group's most valuable portfolio companies, evidenced by their achieving major commercial developments and completing significant fundraisings, in which the Group was a participant, as well as the Group recording its second largest exit to date, Tracsis plc. The Group's recent acquisition of Parkwalk Advisors Ltd, the UK's leading university spin-out focused Enterprise Investment Scheme fund manager, in January 2017, has further reinforced the Group's commitment to investment in this sector.
		External to the Group, the number of companies and organisations seeking to commercialise intellectual property, and/or provide capital to spin-out companies from universities and research intensive institutions, has increased in recent years, with a number of such organisations raising capital on the UK's public markets for the first time. A recent analyst's report estimates that the combined market capitalisation of so-called IP commercialisation companies was in excess of £4bn in early 2017. IP Group continues to employ its differentiated approach to value creation through its long-term partnership model, the active support of its portfolio companies, including access to early-stage business building expertise, interim executive support, technical and commercial networks and senior team recruitment and development in addition to the provision of capital.

		The Group is now seeking access to intellectual property emanating from research carried out in Australia and New Zealand through agreements with the Go9 Universities.
B.5	Group Structure	The Company is the parent company of the Group. The following table contains a list of the principal subsidiaries of the Company (which are owned, directly or indirectly, by the Company) as at the date of this document:
			Percentage of
		Name of subsidiary	capital held
		Biofusion Licensing (Sheffield) Limited	100
		Fusion IP Cardiff Limited	100
		Fusion IP Nottingham Limited	100
		Fusion IP plc	100
		Fusion IP Sheffield Limited	100
		Fusion IP Two Limited	100
		IP Assist Services Limited1	100
		IP Capital Limited	100
		IP Group Inc.	90
		IP Industry Partners Limited	100
		IP Venture Fund (GP) Limited	100
		IP Ventures (Scotland) Limited	100
		IP2IPO	100
		IP2IPO Americas Limited	100
		IP2IPO Asia Pacific Limited	100
		IP2IPO Australia Pty Limited	100
		IP2IPO Carry Partner Limited IP2IPO (Europe) Limited	100 100
		IP2IPO FI Limited	100
		IP2IPO Guarantee Limited	100
		IP2IPO Management Limited	100
		IP2IPO Management II Limited	100
		IP2IPO Management III Limited	100
		IP2IPO Management IV Limited	100
		IP2IPO Management VI Limited	100
		IP2IPO Management VII Limited	100
		IP2IPO Management VIII Limited	100
		IP2IPO Nominees Limited	100
		IP2IPO Portfolio (GP) Limited	100
		IP2IPO Services Limited	100
		IP2IPO US Partners Limited	100
		LifeUK (IP2IPO) Limited	100
		MBS Director Limited	63
		MBS Secretarial Limited	63
		Modern Biosciences Nominees Limited	63
		Modern Biosciences plc North East Technology (GP) Limited	63 100
		Parkwalk Advisors Limited	100
		PIMCO 2664 Limited	63
		Top Technology Ventures Limited	100
		Union Life Sciences Limited	100

¹ formerly Techtran Group Limited

B.6	Notifiable interests/Voting	Major shareholders and other interests
	rights	The interests of the Directors, and (so far as is known to the Directors having made appropriate enquiries) of all such persons connected within the meaning of section 252 of the Companies Act with the Directors in the issued share capital of the Company are as follows:
		Name	Number of Shares	Percentage of Existing Shares
		Mike Humphrey	80,000	0.01
		Alan John Aubrey	2,490,651	0.44
		Michael Charles Nettleton Townend	1,103,825	0.20
		Gregory Simon Smith	260,989	0.05
		David Graham Baynes	226,066	0.04
		Douglas Brian Liversidge	75,297	0.01
		Jonathan Brooks	60,000	0.01
		Prof. Lynn Faith Gladden	–	–
		Dr Elaine Sullivan	–	–
		As at 22 May 2017 (being the latest practicable date prior to the publication of this document), the Directors were aware of the following persons who, in addition to the Directors set out above, directly or indirectly, were interested in three per cent. or more of the Company's share capital or voting rights:
				Percentage of
		Name		Existing Shares
		Invesco Asset Management Limited		25.37
		Woodford Investment Management LLP		14.23
		Lansdowne Partners Limited		12.23
		Baillie Gifford & Co Oppenheimer Funds, Inc. (Massachusetts		8.72
		Mutual Life Insurance Company)		3.68
		Legal & General Investment Management		3.53
		Sand Aire Limited		3.34
		None of the Shareholders has voting rights differing from those of any other Shareholder, nor is the Company directly or indirectly owned or controlled by any person.
B.7	Key financial information	The table below sets out the summary financial information of the Group for the three financial years ended 31 December 2014, 2015 and 2016 which has been extracted without material adjustment from the annual report and accounts of the Company for the financial periods ended 31 December 2014, 31 December 2015 and 31 December 2016:

		Key consolidated statement of comprehensive income data
			Audited	Audited	Audited
			Year ended	Year ended	Year ended
			2016	31 December 31 December 31 December 2015	2014
			£ million	£ million	£ million
		Portfolio return and revenue
		Change in fair value of equity and debt investments	7.0	86.4	20.7
		(Loss)/profit on disposal of equity investments	(0.5)	(0.2)	1.6
		Change in fair value of limited and limited liability partnership interests	(0.3)	0.4	0.5
		Change in fair value of contingent value right	(1.4)	–	–
		Other portfolio income	–	0.2	0.2
		Licensing income	0.2	8.1	3.0
		Revenue from services and other income	2.6 –––––––	3.4 –––––––	2.4 –––––––
		Administrative expenses	7.6	98.3	28.4
		Research and development costs	(1.0)	(2.0)	(1.5)
		Share-based payment charge	(1.5)	(1.5)	(0.9)
		Change in fair value of Oxford Equity Rights asset	—	(1.3)	(1.8)
		Amortisation of intangible assets	(5.6)	(6.0)	(4.9)
		Acquisition costs Other administrative expenses	(0.4) (14.5)	– (13.7)	(1.1) (9.3)
			––––––– (23.0)	––––––– (24.5)	––––––– (19.5)
		Operating (loss)/profit	(15.4)	73.8	8.9
		Finance income – interest receivable	1.1	1.3	0.6
		Finance costs – interest payable	(0.5) –––––––	– –––––––	– –––––––
		(Loss)/profit before taxation	(14.8)	75.1	9.5
		Taxation	– –––––––	– –––––––	– –––––––
		(Loss)/profit for the year	(14.8) –––––––	75.1 –––––––	9.5 –––––––
		Other comprehensive income
		Exchange differences on translating foreign operations	0.1	0.1	–
		Total comprehensive (loss)/income for the period	(14.7) –––––––	75.2 –––––––	9.5 –––––––
		Attributable to: Equity holders of the parent	(13.5)	73.9	9.1
		Non-controlling interest	(1.2)	1.3	0.4
			–––––––	–––––––	–––––––
		Earnings per share	(14.7)	75.2	9.5
		Basic (p)	(2.39)	13.66	1.97
		Diluted (p)	(2.39)	13.63	1.96
		Investment portfolio	––––––– 614.0	––––––– 552.2	––––––– 349.9
		Cash and short-term deposits	112.3	178.8	97.3
		Total assets	795.5	807.8	533.1
		Total liabilities	26.8 –––––––	25.9 –––––––	6.9 –––––––
		Net assets	768.7 –––––––	781.9 –––––––	526.2 –––––––
		The following events took place during or subsequent to, the period covered by the historical key financial information of the Group and constitute a significant change to the financial condition and operating results of the Group:
		In January 2017, the Company completed the acquisition of the entire issued share capital of Parkwalk Advisors Ltd. for a maximum total consideration of £20 million.
		Save as set out above, there has been no significant change to the Group's financial condition and operating results during or after the period covered by the historical key financial information on the Group set out in this Element.
B.8	Pro-forma information	Not applicable. No pro-forma information is included within this document.
B.9	Profit forecast	Not applicable. No profit forecasts or estimates are included within this document.

B.10	Audit report qualifications	Not applicable. None of the Company's annual audit reports on the historical financial information included in this document contain any qualifications by the Company's auditors.
B.11	Working capital insufficiency	Not applicable. The Company is of the opinion that the working capital available to it is sufficient for the present requirements of the Group, that is, for at least twelve months from the date of this document.

	SECTION C –SECURITIES
C.1	Description of Securities	The Company is proposing to issue up to 142,857,136 Capital Raising Shares pursuant to the Capital Raising. The Directors have the ability to increase the size of the Issue by up to a further 47,571,428 Capital Raising Shares should there be sufficient demand.
		The ISIN of the Capital Raising Shares is GB00B128J450 and the SEDOL of the Capital Raising Shares is B128J45.
		The ISIN of the Open Offer Entitlement is GB00BZ3T5702.
		The ISIN of the Excess CREST Open Offer Entitlement is GB00BZ3T5926.
C.2	Currency of the Issue	The Shares are denominated in sterling and the Issue Price is payable in sterling.
C.3	Issued Shares	The Company has 565,221,967 Shares of 2 pence each in issue, each of which are fully paid or credited as fully paid.
C.4	Rights attaching to securities	The rights attaching to the Shares are uniform in all respects and they form a single class for all purposes. Holders of Shares have one vote on a show of hands and, on a poll, one vote for every such Share held. Distributions of income or capital are to be distributed amongst the holders of Shares according to the nominal amounts (excluding any premium) paid up on the Shares held by them at any time.
C.5	Restrictions on transferability	The Board may decline to register a transfer of any Share which is not fully paid, provided that any such refusal will not prevent dealings in the Shares from taking place on an open and proper basis.
		There are no restrictions on the free transferability of the Capital Raising Shares, save that the Capital Raising Shares have not been, and will not be, registered under the US Securities Act or any state securities laws in the United States or under applicable securities laws of Australia, Canada, Japan, New Zealand or the Republic of South Africa and, except pursuant to an applicable exemption from registration, or in a transaction not subject to registration, the Capital Raising Shares may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within, into or in the United States or to, or for the account or benefit of, US Persons (as defined in Regulation S), Australia, Canada, Japan, New Zealand or the Republic of South Africa, or any other jurisdiction where such offer or sale would violate the relevant securities laws of such jurisdiction. Notwithstanding the

		foregoing, no Capital Raising Shares may be assigned or otherwise transferred (i) to a "benefit plan investor" (within the meaning of Section 3(42) of ERISA) or (ii) if such transfer would cause all or any portion of the assets of the Company or any other member of the Group to constitute "plan assets" for purposes of ERISA or Section 4975 of the US Code.
C.6	Application for admission	Application has been made to the UK Listing Authority and to the London Stock Exchange for the Capital Raising Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities respectively. It is expected that Admission will become effective, and that dealings on the London Stock Exchange's main market for listed securities in the Capital Raising Shares will commence, at 8.00 a.m. on 9 June 2017.
C.7	Dividend policy	The Board's current intention is to retain the Group's earnings in the foreseeable future to finance growth and expansion. It is, however, the Directors' intention to pay dividends when, in the view of the Directors, the Company has sufficient cash for this purpose.

SECTION D – RISKS
D.1 Key information on the key risks relating to the Company and the Company's business	• The Group's operations, and the operations of the majority of its portfolio companies, are based primarily in the UK. Accordingly, the performance of the Group is influenced by the general economic climate and trading conditions in the UK. On 23 June 2016, UK citizens voted in favour of leaving the EU. On 29 March 2017 the UK government triggered Article 50 and launched the formal process for negotiating the UK's exit from the EU with other EU member states. The implications of this decision are not known at the date of this document and the Group faces a period of uncertainty including the possibility of a prolonged period of recession. This may lead to a lack of potential co-investors with the Group and it might take longer to secure funding for the on-going and further development and commercialisation of IP. Further, the decision might have an impact on the free movement of EU nationals from member states to the UK, which may deter high quality researchers from taking up positions in the UK. As a result, the Group and its portfolio companies may take longer, or find it more difficult, to secure funding to finance their on-going and future development and the commercialisation of their IP. Political uncertainty and the impact of the UK leaving the EU could result in a material reduction in the level of funding available for research and development at investment and research institutions which could have a material impact on the Group. • The Group is exposed to market risks, principally equity securities price risk, as a result of its equity investments in publicly traded companies, private companies and investments in limited partnerships. The market price of the Group's investments in portfolio companies could be

affected by a number of factors including a change in sentiment in the market regarding the portfolio companies, the market's appetite for specific asset classes and the financial or operational performance of the portfolio companies. In addition, the Company has a significant interest in Oxford Nanopore Technologies Limited and if its products were not adopted by the market or it was made to raise additional working capital, this could have a material adverse impact on the Group's balance sheet and the appetite of investors to invest in the Company. There may also be a lack of liquidity in investments in the Group's portfolio companies. The Group is also exposed to foreign exchange risk, as its businesses in the US and Australia are denominated in US\$ and AU\$ respectively.

The Group's business is partially dependent upon the continuation of the Partnerships and the other collaborative arrangements which the Group has secured with universities, research intensive institutions and commercial partners pursuant to which it has access to technology and scientific innovation. If any of these arrangements were to be terminated or expire at the end of their term and not be renewed, then the Group would lose any exclusive rights that it has to act as the private sector partner in the commercialisation of IP being generated by such universities or other research intensive institutions.
There are a number of competitors seeking to provide commercialisation services to universities and research intensive institutions. In addition, certain universities and other institutions may in the future become increasingly proactive at seeking to raise private sector funding to support their in-house technology commercialisation activities. Further, other universities, research institutions and companies may create IP that competes, directly or indirectly, with that generated by the Group's portfolio companies.
Investments made by the Group in portfolio companies are generally made at an early stage of development when the portfolio company's technology is materially unproven. Such investments are subject to the following risks typically associated with early stage investments: (a) early stage portfolio companies may not be able to secure subsequent rounds of funding which may restrict their ability to fund on-going research and the development and commercialisation of their IP; (b) portfolio companies may not be able to source and/or retain appropriately skilled personnel; (c) competing technologies may enter the market which may adversely affect the portfolio companies' ability to commercialise their IP or the portfolio companies may not have been able to adequately protect their IP; (d) the portfolio companies may not be able to develop their IP into commercially viable products or technologies or into products or technologies with sufficiently compelling benefits for customers; and (e) there is no certainty that the

		portfolio companies will generate any, or any significant returns for their shareholders or that the Group will be able to secure a profitable exit in any or all of the portfolio companies.
	•	The Group has a portfolio of equity and debt interests in companies and there is a high risk that certain of the Group's current and future investments in portfolio companies may fail, resulting in an impairment on the Group's value and profitability. In addition, failure of companies within the Group's portfolio may make it more difficult for other companies within the Group's portfolio to raise additional capital.
	•	The Group has recently commenced operations in the US and is in the early stages of establishing its operations in Australia and New Zealand. As a relatively new entrant to these markets, the Group may face challenges competing against established companies and other financial providers in the relevant regions for commercialisation opportunities.
	•	The scope of patent protection is dependent upon the relevant invention being kept confidential before the patent application is filed. Where inventions are published by a university or other research intensive institution before a patent has been obtained, this could have a material adverse effect on the business and prospects of the Group. There is no assurance that the portfolio companies will be successful in applying for patent protection for their IP or, if granted, will have sufficient financial resources to enforce its rights against infringing third parties. Alternatively, the Group's portfolio companies may be subject to claims that they are infringing the IP rights of a third party. Making or defending any such claim could result in a portfolio company incurring significant costs and expenses and could materially divert the focus and energies of such company's technical and management personnel. An adverse outcome for a portfolio company in any such claim could lead to such portfolio company having to pay substantial damages (and/or legal costs) and/or being required to cease the manufacture, use or sale of infringing IP and/or to develop or use non-infringing technology.
	•	It is the Group's policy generally to maintain a significant minority interest (i.e. an interest of less than 50 per cent.) in its portfolio companies. Where the Group maintains such a minority interest in a portfolio company, it will not typically be able to exercise control over any of the affairs of that company. Further, if a portfolio company raises capital by way of an issue of shares, the Group may face dilution if it does not participate in such financing and/or be required to become subject to provisions which could force the Group to exit from that portfolio company at a time and/or price determined by other investor(s) (for example, by the exercise of drag-along rights). There may also be restrictions on the transfer of shares (e.g. pre-emption rights) which mean that

		the Group will not be able to freely transfer its interest in a portfolio company. • While it is not possible to predict when and whether any significant policy changes may occur, changes in regulatory, geopolitical, social, economic or monetary policies and other factors, as a result of the outcome of the 2016 U.S. presidential election and the forthcoming general election in the UK, may have a material adverse effect on the Group's business, results of operations and financial condition.
D.3	Key information on the key risks specific to the securities	• The Capital Raising Shares have not been, and will not be, registered under the US Securities Act or any state securities laws in the United States, and, except pursuant to an applicable exemption from registration, or in a transaction not subject to registration, the Capital Raising Shares may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within, into or in the United States, or any other jurisdiction where such offer or sale would violate the relevant securities laws of such jurisdiction. There are additional restrictions on the resale of the Capital Raising Shares by Shareholders who are in the United States and on the resale of the Capital Raising Shares by any Shareholder to any person who is in the United States. These restrictions could make it more difficult to resell the Capital Raising Shares in many instances and this could have an adverse effect on the market value of the Shares. • This document has not been and will not be lodged with the Australian Securities and Investments Commission and does not contain all of the information which would otherwise be required by Australian law to be disclosed in a disclosure document regulated by the Corporations Act 2001. Subject to certain exceptions, there are additional restrictions on the resale of the Capital Raising Shares in Australia for a period of 12 months after Admission. These restrictions could make it more difficult to resell the Capital Raising Shares in many instances and this could have an adverse effect on the market value of the Capital Raising Shares.

	SECTION E – THE CAPITAL RAISING
E.1	Net proceeds and expenses	The Company intends to raise gross proceeds of approximately £200 million through the Capital Raising, assuming the Resolutions are duly passed by the Shareholders and the maximum number of Capital Raising Shares are issued pursuant to the Firm Placing, Placing, Open Offer and Offer for Subscription. The Board has the ability to increase the size of the Issue by up to a further 47,571,428 Capital Raising Shares, so that gross proceeds would be approximately £266,600,000 should there be sufficient demand.
		The total expenses incurred (or to be incurred) by the Company in connection with the Capital Raising are estimated to be £4.3 million and accordingly the maximum net proceeds of the Capital Raising are expected to be approximately £195.7 million.

		If the Directors exercise their discretion to increase the size of the Issue by up to a further 47,571,428 Capital Raising Shares, the total expenses incurred (or to be incurred) by the Company in connection with the Capital Raising are estimated to be £5.7 million and accordingly the maximum net proceeds are expected to be approximately £260.9 million.
E.2a	Reasons for the Offer and Use of Proceeds	It is the Board's opinion that the Capital Raising will strengthen the financial position of the Group to allow the successful launch and development of IP2IPO Australia and to deploy capital into new and existing commercialisation opportunities.
		The Company is proposing to use the net proceeds to fund the launch and subsequent development of IP2IPO Australia with the balance being used to fund the continued growth of the Group's developing US business and its existing UK business including future investments in the Group's existing portfolio companies with high potential. The Board currently anticipates that the Group will invest approximately £30 million in the period to the end of 2019 to develop IP2IPO Australia.
		In the event that the Board exercises its right to increase the size of the Capital Raising, the Board currently anticipates that it will utilise (subject, amongst other things, to the individual circumstances of, and rate of realisations obtained from, its portfolio companies) the additional aggregate net proceeds of up to £65.2 million to invest in the Group's existing UK portfolio companies with high potential to accelerate their development and to accelerate the development of the Group's US business.
E.3	Terms and conditions	Up to 142,857,136 Capital Raising Shares will be issued pursuant to the Firm Placing and the Placing, Open Offer and Offer for Subscription. The Directors have the ability to increase the size of the Issue by up to £66.6 million through the issue of up to £47,571,428 additional Capital Raising Shares, such that the gross proceeds would be approximately £266.6 million (approximately £260.9 million net of expenses) should there be sufficient demand. The actual number of Capital Raising Shares to be issued pursuant to the Capital Raising will be notified by the Company via a Regulatory Information Service announcement prior to Admission.
		All the Capital Raising Shares to be issued in connection with the Capital Raising will be issued at the Issue Price of 140 pence per Share. The Issue Price represents a discount of 3 pence (being approximately 2.1 per cent.) to the closing middle-market price (as derived from the Daily Official List) of 143 pence per Share on 22 May 2017 (being the last Business Day prior to the announcement of the Capital Raising).
		Open Offer Shares will be allocated to Qualifying Shareholders under the Open Offer on a pre-emptive basis.
		The Capital Raising is conditional, inter alia, upon:
		• the passing of the Resolutions at the General Meeting;
		• the Placing Agreement having become unconditional in all respects save for the condition as to Admission and not

		Capital Raising Shares on a private placement basis to applicants in other jurisdictions.
		Ability to increase the Capital Raising The Directors have the ability to increase the size of the Capital Raising from approximately £200 million to up to £266.6 million. The Directors may allocate any Capital Raising Shares relating to such increase to and between the Excess Application Facility, the Placing and/or the Offer for Subscription as they deem fit. Numis has not agreed to underwrite any additional Capital Raising.
		Admission It is expected that Admission will become effective and that dealings on the London Stock Exchange in the Capital Raising Shares will commence at 8.00 a.m. on 9 June 2017. No application is currently intended to be made for the Existing Shares or the Capital Raising Shares to be admitted to listing or dealing on any other exchange.
E.4	Material interests	Not applicable – no interest is material to the Capital Raising.
E.5	Lock-up arrangements	No lock-up arrangements are being entered into in connection with the Capital Raising.
E.6	Interests and dilution	If a Shareholder does not have or does not take up his Open Offer Entitlements such Shareholder's holding will be diluted by approximately 20.18 per cent. as a result of the Capital Raising (assuming that such Shareholder does not receive any other Capital Raising Shares pursuant to the Capital Raising and that 142,857,136 Capital Raising Shares are issued through the Firm Placing, the Placing, Open Offer and Offer for Subscription. If the Directors exercise their ability to increase the Capital Raising from £200 million to £266.6 million the dilution would increase to approximately 25.20 per cent.) Furthermore, a Qualifying Shareholder who does take up his Open
		Offer Entitlements in full in respect of the Open Offer (and does not receive any other Capital Raising Shares pursuant to the Capital Raising) will suffer dilution of approximately 14 per cent. to his shareholding in the Company as a result of the Capital Raising. If the Directors exercise their ability to increase the Capital Raising from £200 million to £266.6 million the dilution would increase to approximately 19.4 per cent.
E.7	Expenses charged to investor	Not applicable. No expenses will be charged to investors by the Company in connection with the Capital Raising.

RISK FACTORS

An investment in the Company and the Capital Raising Shares is subject to a number of risks. Accordingly, prior to subscribing for any Capital Raising Shares, Shareholders and other prospective investors should consider carefully all of the information set out in this document (including the information incorporated by reference) and the risks attaching to an investment in the Company. The following risks are those material risks of which the Directors are aware. Additional risks and uncertainties not presently known to the Directors, or that the Directors currently consider to be immaterial, may also have an adverse effect on the Group.

The business, financial condition in the longer term and/or results of operations of the Group could be materially and adversely affected by any of the risks described below. In such case, the market price of the Shares and Capital Raising Shares may decline and Shareholders and other prospective investors may lose all or part of their investment. Shareholders and other prospective investors should consider carefully whether an investment in the Company is suitable for them in the light of the information in this document (including the information incorporated by reference) and the financial reserves available to them.

This section describes the risk factors considered by the Directors to be material in relation to the Group.

RISKS RELATING TO THE GROUP

General economic climate and trading conditions in the UK, including the outcome of the referendum on the UK's membership of the EU and the impact on free movement of workers

The operations of the Group, as well as the operations of the majority of its portfolio companies, are currently based primarily in the UK. Consequently, the performance of the Group is influenced by the general economic climate and trading conditions in the UK. On 23 June 2016, UK citizens voted in favour of the UK leaving the EU and on 29 March 2017, the UK government triggered Article 50 and launched the formal process for negotiating the UK's exit from the EU with other EU member states. The outcomes of such negotiations are not known as at the date of this document. The Group accordingly faces a period of uncertainty regarding aspects of the UK economy including the possibility of a prolonged period of recession. These factors may contribute to a lack of potential co-investors in early stage technology businesses as investors find it difficult to raise new capital and/or to exit their existing investments in order to realise capital. As a result, the Group and portfolio companies may take longer, or find it difficult, to secure funding to finance their on-going and future development and the commercialisation of their respective IP. In addition, this uncertainty may lead to a reduction in the funding of research and development at universities and other research institutions.

In addition, it is possible that following the United Kingdom's exit from the EU, the current system which provides for the free movement of EU nationals between EU member states and the United Kingdom will be abolished or significantly restricted. Universities and research institutions in the United Kingdom attract a significant proportion of talent in the way of high quality researchers from other EU member states. The imposition of barriers to entry following the United Kingdom's exit from the EU, or the perception that such barriers exist or may come into force, may deter high quality researchers and other academic universities and research institution staff from taking up posts in the United Kingdom and/or may result in EU nationals currently based at university or research institutions in the United Kingdom leaving the United Kingdom. This in turn could have a material adverse effect on the overall quality and performance of the Group's current investments, and on the number and quality of new investments available to the Group in future.

Political uncertainty and the impact of the United Kingdom leaving the EU could result in a material reduction in the level of funding available for research and development at universities and research institutions which could have a material impact on the Group.

Furthermore, the United Kingdom leaving the EU could potentially result in the United Kingdom not being able to participate in the Unified Patent Court which could have a crucial impact for effective protection of innovation in the United Kingdom, which in turn could lead to research being conducted outside the United Kingdom. This could result in a reduction in the levels of IP created by the universities and research institutions in the United Kingdom and accordingly the opportunities for the Group in the United Kingdom. (See risk factor on page 23 of this document entitled "Changes in legislation, government policy and levels of research funding").

The Group may be subject to foreign exchange and investment risks

The Group's results are reported in GBP. The Group's activities in the US are carried on principally by the Group's US subsidiary IP Group, Inc., the business of which is conducted and denominated in US\$. The Directors anticipate that the Group's activities in Australia and New Zealand will be principally carried out by IP2IPO Australia, the business of which will be conducted and denominated in AU\$. As such, the Group is exposed to foreign exchange risk. In particular, when consolidating a business that has functional currencies other than GBP, the Group is required to translate, inter alia, the balance sheet and operational results in to GBP and, as such, changes in exchange rates between GBP and the functional currency of the acquired entity could lead to significant changes in the Group's reported financial results from period to period. Any procedures implemented by the Company may not be adequate in eliminating all foreign exchange risk and thus changes in currency values may have a material adverse effect on the Group's economic interests.

The Group is exposed to market risks, principally equity securities price risk, as a result of its equity holdings and holdings in limited partnerships. The Group has equity holdings in a number of quoted companies which are publicly traded on AIM and also in private companies whose shares are not traded on a public market. The market price of the Group's investments in portfolio companies could be affected by a number of factors including, but not limited to, a change in sentiment in the market regarding the portfolio companies, the market's appetite for specific asset classes and the financial or operational performance of the portfolio companies. There may also be a lack of liquidity in investments in the Group's portfolio companies.

Each of these factors could adversely affect the value of the Group's portfolio companies and, consequently, the business, financial condition, results of operations and prospects of the Group.

The Company has a 19.6 per cent. undiluted interest in the capital of Oxford Nanopore Technologies Limited ("ONT") the fair value of which as at 31 December 2016 was £246.3 million. In the event that ONT was subject to litigation or its products were not adopted by the market or it was unable to raise additional working capital as may be required then this could have a material adverse impact upon the Group's balance sheet and potentially on the appetite of investors to invest in Company or the Group's portfolio companies. If ONT were to be admitted to a recognised stock exchange or to be sold then the Company would need to consider whether to hold any proceeds for investment in other companies or to distribute to shareholders. Any distribution to shareholders would result in a reduction in the Company's balance sheet and its net asset value. Given that the Group's investment in ONT is the largest by value and investment size the Group's success is, to a certain extent, aligned with that of ONT.

Loss of key personnel from the Group

The industry in which the Group operates is a specialised area and the Group requires highly qualified and experienced employees. Further, given the relatively small size of the Group's team, the Group's operations are reliant on a small number of key individuals including the Chief Executive Officer, the other executive Directors, the heads of each of the Group's five divisions (Biotech, Cleantech, Healthcare, Technology and New Business and Partnerships) and the Director of IP Exec, there is a risk that the Group's employees could be approached and solicited by competitors of the Group or other technology based companies or organisations or could otherwise choose to leave the Group. The loss of key employees of the Group could have an adverse effect on the Group's business, financial condition, results of operations and/or prospects.

Termination of the Partnerships and collaborations and/or the Group's fund management arrangements

The Group's business, results of operations and prospects are partially dependent upon the continuation of the Partnerships pursuant to which it has direct or indirect access to technology and scientific innovation. Whilst as at the date of this document the Directors are not aware of any matters that could cause these arrangements to be terminated, if such arrangements were to be terminated (for example, as a result of the Group's failure to perform certain contractual obligations under the relevant contracts) or expire at the end of their term and not be renewed, then the Group would lose any rights that it has to act as the private sector partner in the commercialisation of IP being generated by such universities or other research intensive institutions. This could potentially have a material adverse effect on the Group's business, results of operations, performance and prospects. A number of the Group's Partnerships either have expired or are due to expire. If these cannot be extended or renewed the Group's business could be adversely affected as the Group may not be able to participate in future potential returns from spin-out companies from the relevant universities.

Certain of the above arrangements (including some of the Partnerships) contain provisions which entitle the counterparty to terminate such arrangements in the event of a change in control of the Company or other members of the Group. This could make an offer for the Company less attractive to a potential bidder as such bidder would need to secure the consent of each such counterparty to the proposed change of control in order to give it certainty that the counterparties will not exercise their right to terminate their arrangements with the Group in the event that any takeover offer is successful.

Availability of future partnerships/collaborative arrangements

The Group's ability to expand its business through the entering into of further partnerships and/or other collaborative arrangements with universities, research intensive institutions and other commercial partners will depend on the willingness of organisations of suitable quality to enter into such arrangements on terms acceptable to the Group (including, without limitation, as to exclusivity and duration).

Availability to the Group of the substantial shareholdings exemption

The substantial shareholdings exemption regime provides that a gain on a disposal by a company of shares (or an interest in shares or certain assets related to shares) will not be a chargeable gain for corporation tax purposes provided that three conditions are met. Broadly, these conditions are: (i) the "investing company requirement" (i.e. the company or group making the disposal meet certain "trading" conditions); (ii) the "investee company requirement" (i.e. the company whose shares are being disposed of must meet similar "trading" conditions); and (iii) the "investing company" must have held the shares in the "investee company" in such number, and for such time, so as to satisfy the "substantial shareholding requirement".

Shareholders and other prospective investors should note that if, in the future, HM Revenue & Customs determined that the Group ceased to meet the "investing company requirement" referred to above, then the substantial shareholdings exemption would no longer be available to the Group. This would mean that any gains made by the Group on subsequent disposals of shares (or an interest in shares or certain assets related to shares) in its portfolio companies would not benefit from the relief from corporation tax afforded by the substantial shareholdings exemption and the Group would be liable for corporation tax on any such gains at the then prevailing rate.

In addition, if, in the future, any of the Group's portfolio companies does not meet (or is determined by HM Revenue & Customs not to meet) the "investee company requirement" or the shares held in the portfolio company do not satisfy the "substantial shareholding requirement" at the time that the Group disposes of any shares (or an interest in shares or certain assets related to shares) in such portfolio company, then the substantial shareholdings exemption would not be available to the Group in relation to that disposal and the Group would be liable for corporation tax on any gain on such disposal at the then prevailing rates of corporation tax (currently 19 per cent.).

Future revenue from the Group's fund management business

The Group manages third party funds via Top Technology Ventures and Parkwalk Advisors which specialise in providing equity funding for early stage technology based growth companies. Additional funds broaden the source of financing potentially available to the Group's portfolio companies in circumstances where such investment is aligned with the relevant fund's investment mandate. The Group's fund management activities also leverage the Group's existing competencies to provide additional recurring revenue for the Group and, potentially, performance related fees.

The Group's ability to manage funds and to raise further funds in future will depend in part upon the performance of the third party funds that the Group currently manages, future investor appetite for funds investing in early stage companies and the continued authorisations from the Financial Conduct Authority for Top Technology Ventures and Parkwalk Advisors to manage such funds. If the Group is unable to continue to manage third party funds and/or raise further funds in future, this would lead to a reduction in the Group's recurring revenue.

The Group may face increased competition, including from organisations with access to greater capital than the Group

Other universities, research institutions and companies may create IP that competes, directly or indirectly, with that generated by the Group's portfolio companies.

There are a number of other companies and other organisations seeking to commercialise intellectual property and/or provide capital to spin-out companies from universities and research intensive institutions in the UK. These operate a variety of business models and include Arix, Cambridge Innovation Capital plc, Epidarex, Frontier IP plc, Touchstone Innovations Group plc, Imprimatur Capital, Invoke Capital, Mercia Technologies plc, NetScientific plc, Oxford Sciences Innovation plc, Rock Spring Ventures, Spark Ventures, regional development authorities (e.g. Finance Wales, Finance Yorkshire and Scottish Enterprise), the technology transfer offices of certain universities, certain institutional investors and angel investors. In addition, certain universities and other research intensive institutions may in the future become increasingly proactive themselves at seeking to raise private sector funding to support their in-house technology commercialisation activities. Furthermore, there are a number of companies and other organisations seeking to commercialise intellectual property and/or provide capital to spin-out companies in other jurisdictions in which the Group currently operates or may operate, including, for example, strategic investments by corporations, private venture capital companies, and other publicly traded venture capital firms. Examples may include Allied Minds plc, Osage Partners, PureTech and Safeguard Scientific, Inc. in the United States. In Australia there are also a number of other companies and organisations seeking to commercialise intellectual property through joint ventures and other relationships with Australian universities, including with a number of the Australian universities with which the Company and IP2IPO Australia have entered into commercialisation agreements. These companies and organisations could be in competition with the business proposed to be conducted in Australia by IP2IPO Australia. Examples in Australia may include Brandon Capital, Powerhouse Ventures Limited (PVL), Biomedical Translation Fund, OnInnovation, Blackbird Ventures, Square Peg Capital and M.H. Carnegie & Co. As a result, the Group may face significant competition (including competition from organisations which have much greater capital resources than the Group). There is no assurance that the Group will in future be able to compete successfully in such a marketplace.

Need for further investment in the Group

Whilst the Company has sufficient capital to execute its strategy for at least the twelve months following the date of this document, the Company is of the opinion that the Group may thereafter require additional capital for expansion activity, business development and/or further investment in its current portfolio companies, whether from equity realisations from its portfolio companies or new equity or debt sources. If the Group's equity realisations from its portfolio companies are not sufficient and/or if the Group is unable to obtain additional capital on acceptable terms, or at all, it may be forced to curtail or abandon such planned expansion activity, further investment in its portfolio companies and/or business development, which may have a material adverse effect on the business, financial condition or results of operations and prospects of the Group. Further, in the event the Group issues equity to raise such additional capital in the future, such further issue of Shares may be dilutive to Shareholders (see risk factor on page 29 entitled "Further Issuances of Shares may be dilutive to current Shareholders").

Changes in legislation, government policy and levels of research funding

Each of the jurisdictions in which the Group currently operates or intends to operate (including Australia) requires compliance with a significant number of laws, regulations, administrative requirements and policies, which relate to, among other matters, national, local and other laws, IP regulation and protection, securities laws, taxation and employment. Changes in legislation (including tax legislation) and government policy may occur which may adversely affect the Group, its business and/or the position of the Shareholders and which may reduce the return that Shareholders receive on their investment in the Group.

Specifically, any change to law and/or regulation relating to the funding and resources available to universities and other research intensive institutions could adversely affect the ability of such organisations to carry out research and therefore result in a reduction in the quantity and quality of IP in which the Group may have the opportunity to invest. Any such changes to law and/or regulation may also result in such institutions being unable, or it not being commercially viable for them, to own, develop, exploit and/or protect the IP that they generate.

Furthermore, although the UK government announced as part of its comprehensive spending review in October 2010 that government's investment in science and research will be "ring-fenced" (i.e. that it will not be subject to reductions or cuts), it may decide (or a future government may decide) to cease or reduce its funding of technology. A reduction in funding in the UK and/or the US and/or Australia or New Zealand could also lead to a reduction in the research carried out by universities and other research intensive organisations. In addition, changes to the funding of technology may adversely impact the development activities carried out by portfolio companies by, for example, increasing the costs incurred by a portfolio company in carrying out its business and/or may result in a portfolio company needing to alter the way in which it conducts its business. Any such event may have a material adverse effect on the value of a portfolio company and therefore on the business, financial condition, results of operations and prospects of the Group.

Furthermore, the withdrawal of the UK from the EU may lead to a reduction in the funding of research and development at universities and other research institutions. Although the UK government has given a public commitment to guarantee certain funding to universities in the short-term which would otherwise have come from the EU (including a commitment relating to Horizon2020), if this commitment were to change or the relevant funding were to be withdrawn or if the UK government's funding is less that lost by reason of the UK's leaving the EU, it could lead to a reduction in the funding of research and development at universities and other research institutions which could have a material impact on the Group.

The Australian government released the "National Innovation and Science Agenda" in December 2015, which contains measures to encourage research and commercialisation. The measures include a tax incentive under Australian law for qualifying research and development ("R&D Tax Incentive"). The expenditure of Australian portfolio companies on certain research activities may qualify for the R&D Tax Incentive. There can be no assurance that a company's activities and the related expenditure will satisfy the eligibility and other criteria required to successfully qualify for the R&D Tax Incentive in the future. Also, the tax legislation regulating the R&D Tax Incentive changed recently to reduce the benefit available to an eligible company. There can be no assurance that the tax legislation on which the R&D Tax Incentive is based will not change in the future resulting in a portfolio company not being able to claim the R&D Tax Incentive.

Closure of technology transfer offices and/or spin-out equity management offices at universities and other research intensive institutions

One or more of the universities or other research intensive institutions with which the Group has a Partnership or other collaborative relationship may choose to close its technology transfer office and/or spin-out equity management offices (i.e. those parts of the university which are dedicated to identifying research which has potential commercial interest, identifying strategies for how to exploit such research and managing the university or other institution's holdings of spin-out equity).

The technology transfer offices and/or spin-out equity management offices will act as the link between the Group and the universities and other research intensive organisations and, consequently, the closure of such an office would make it more difficult for the Group to identify and source opportunities emanating from that university or other organisation.

RISKS RELATING TO THE GROUP'S INVESTMENTS IN PORTFOLIO COMPANIES

Investments are generally into companies at an early stage of their development

Investments made by the Group in portfolio companies are generally made at an early stage of a portfolio company's development when the portfolio company's technology is materially unproven. Such investments are subject to the following risks typically associated with early stage investments:

(a) early stage portfolio companies may not be able to secure subsequent rounds of funding which may restrict their ability to fund on-going research and the development and commercialisation of their IP. Any such lack of funding could, in some cases, result in a portfolio company being forced to sell off its assets or in the sale of the portfolio company as a whole or the insolvency of the portfolio company;
(b) portfolio companies may not be able to source and/or retain appropriately skilled personnel. In particular, they may not have the financial resources to compete with the salary and other incentivisation packages offered by their competitors or other technology-based companies or organisations;
(c) competing technologies may enter the market which may adversely affect the portfolio companies' ability to commercialise their IP or the portfolio companies may not have been able to adequately protect their IP (whether due to lack of financial resource or otherwise) or patent applications made by the portfolio companies may not proceed through to grant or third parties may be able to defeat the portfolio company's claims to IP;
(d) the technology developed by any portfolio company may fail and/or the portfolio companies may not be able to develop their IP into commercially viable products or technologies or into products which offer sufficiently compelling benefits to customers. The success of portfolio companies may depend upon regulatory approval for certain clinical trials being granted and there is no certainty that such regulatory approval will be forthcoming; and
(e) there is no certainty that the portfolio companies will generate any, or any significant, returns for their shareholders or that the Group will be able to secure a profitable exit from its investment in any or all of the portfolio companies.

The occurrence of any of these risks or a combination of these risks may adversely affect the development and value of the portfolio companies and, consequently, the business, financial condition, results of operations and prospects of the Group.

Appetite for investment and ability to realise equity shareholdings

Some of the Group's portfolio companies may have significant funding requirements in the future. The success of these portfolio companies may be influenced by the market's appetite for investment in early stage companies, which may be insufficient to meet the funding demands of the relevant portfolio companies. As a result, it may take longer than anticipated to develop the business of a portfolio company or it may not be able to develop its business at all.

Consequently, it may take longer for the Group to realise value from its equity investments in portfolio companies which have significant funding requirements and the consideration received by the Group on any sale or other disposal of its investments may include shares and/or deferred cash consideration (the value of which may depend upon the future performance of the relevant portfolio company). Alternatively, the Group may not realise value from such investments at all.

Companies within the Group's portfolio, that may be dominated by one or a limited number of companies, may fail, lose value or fail to generate the anticipated level of returns

There is a high risk that certain of the Group's current and future investments in portfolio companies may fail or not succeed as anticipated, resulting in an impairment on the Group's value and profitability. In addition, failure of companies within the Group's portfolio may make it more difficult for other companies within the Group's portfolio to raise additional capital given the impact such failure(s) may have on the reputation and track record of, and therefore investor confidence in, the Group, its management team and/or its portfolio companies.

At any time, a large proportion of the aggregate value of the Group's holdings in portfolio companies may be accounted for by one, or very few, companies which could exacerbate the impact on the Group if one or more of such companies were to fail. As at 31 December 2016, the Group's 90 portfolio companies included 19 Focus businesses (of which 8 were quoted), 32 businesses at the Development stage, 39 businesses at the Early-stage, the Group also had three holdings in multi-sector platforms (OSI, CIC and Frontier IP Group plc), in addition to 20 de minimis holdings. Of the 90 companies (excluding the Group's holdings in OSI, CIC, Frontier IP Group plc and the 20 de minimis holdings) in the Group's portfolio, 76 per cent. of the fair value resides in the ten most valuable companies. Further details on these ten companies, including a description of their businesses, amounts invested and realised by the Group during the twelve months ended 31 December 2016 and the values of the Group's holdings as at 31 December 2016 are set out in paragraph 30 of Part II of this document. As at 31 December 2016, the Group's holding in Oxford Nanopore Technologies Limited accounted for a significant proportion, approximately 40.11 per cent. of the aggregate value of the Group's portfolio as at such date.

As equity realisations from the Group's portfolio companies are expected to be achieved through liquidity events, including trade sales and initial public offerings, the total cash received from these sources could vary significantly from year to year.

The Group has recently commenced operations in the United States and is in the early stages of establishing its operations in Australia and New Zealand and may find it difficult to compete in these new markets

The Group is relatively new to the United States market, having launched in the United States in 2013, and the Group is in the process of commencing its operations in Australia and New Zealand. As a recent entrant to the United States market the Group is in the early stages of establishing a reputation in the market and developing a network of contacts at universities and research institutions. Similarly, as a new entrant in the Australian and New Zealand market, although the Group has entered into 9 commercialisation agreements, the Group's network and reputation in the region is not yet established. Therefore in the United States, Australia and New Zealand the Group may face challenges in competing against established companies, universities and research institutions for new commercialisation opportunities. In the event that the Group is unable to successfully compete with other companies, research institutions or universities in identifying and entering into commercialisation arrangements, or to develop its network within the regions, this could have a material adverse effect on the value of the Group's US, Australian and New Zealand companies, and could in turn have a material adverse effect on the business, financial condition, results of operations and prospects of the Group.

Protection of IP developed by the Group's portfolio companies

The Group is subject to the normal risks experienced by companies and organisations with investments in portfolio companies operating in technology and IP based industries.

The technology transfer market is based on the principles of identification and protection of IP and its subsequent transfer to commercial partners where appropriate. The scope of patent protection is dependent upon the relevant invention being kept confidential before the patent application is filed. The Group has no contractual right to prevent the universities and other research intensive institutions with which it has collaborative relationships (including those with which it has Partnerships) from publishing their inventions before the point at which the IP is transferred to a spin-out company in which the Group has a direct or indirect equity or debt investment. Where inventions are published before a patent has been obtained, this could have a material adverse effect on the business and prospects of the Group.

There is no assurance that, in the event that the portfolio companies apply for patent or other IP protections, such protections will be granted to the portfolio companies by the relevant regulatory authorities.

Notwithstanding the grant of any such protections, unauthorised third parties may infringe the IP rights of the portfolio companies. It is likely to be difficult for the portfolio companies to police such infringement of their IP rights and, even if they become aware of any such infringement, they may not have the financial resources to enforce their IP rights against such infringing third parties.

Alternatively, the Group's portfolio companies may be subject to claims that they are infringing the IP rights of a third party. Making or defending any such claim could result in a portfolio company incurring significant costs and expenses (including legal and other professional costs) and could materially divert the focus and energies of such company's technical and management personnel. An adverse outcome for a portfolio company in any such claim or subsequent litigation could lead to such portfolio company having to pay substantial damages (and/or legal costs) and/or being required to cease the manufacture, use or sale of infringing IP and/or to develop or use non-infringing technology.

Under both English and Australian law, IP generated by employees of a company or other organisation in the course of their normal duties would typically be owned by the company or other organisation although certain exceptions may apply in the case of Australian inventions. Under US law, the precise terms of IP ownership must be addressed in an employee's employment contract or terms of employment. Employee inventors may, in some cases, receive compensation which could be substantial. Should the relevant legislation in the countries in which the Group operates or may operate change so as to allow employees rights to own or exploit IP which they have generated themselves, or to give employees a material share of resulting revenue, the universities and other research intensive institutions with which the Group has Partnerships or other collaborative arrangements and the portfolio companies of the Group may be required to implement such changes and this may have an adverse impact on the value of the IP available for the portfolio companies and, indirectly, the Group.

Furthermore, there is no assurance that other companies and organisations will not independently develop similar or competing technologies which do not infringe the portfolio companies' IP rights, but which adversely affect the commercial viability and/or results of operations of the portfolio companies and therefore, indirectly, the Group.

The influence and control of the Group over its portfolio companies may be limited and interests may not align

Whilst the size of the Group's equity investment in each portfolio company will vary between portfolio companies, it is the Group's policy generally to maintain a significant minority voting interest (i.e. a voting interest of less than 50 per cent.), although it may have majority holdings in some companies from time to time.

Where the Group maintains such a minority voting interest in a portfolio company, it will not typically be able to exercise control over any of the affairs of that company. Further, if a portfolio company raises capital by way of an issue of shares, the Group may face dilution if it does not participate in such financing and/or be required to become subject to provisions which could force the Group to exit from that portfolio company at a time and/or price determined by other investor(s) (for example, by the exercise of drag-along rights). There may also be restrictions on the transfer of shares (e.g. pre-emption rights) which mean that the Group will not be able to freely transfer its interest in a portfolio company. In addition, many portfolio companies will have, or are entitled to put in place, employee share plans which may dilute the Group's interest in a portfolio company.

If the business or other affairs of one or more of the Group's portfolio companies is conducted in a manner that is detrimental to the interests or intentions of the Group, or the Group is forced to exit its investment in a portfolio company, is unable to realise its investment, or suffers a dilution of its interest in a portfolio company, this may have a material adverse effect on the business, financial condition, results of operations or prospects of the Group.

Controlled Group Risks

Under ERISA, members of certain "controlled groups" of "trades or businesses" may be jointly and severally liable for contributions required under any member's tax-qualified defined benefit pension plan and under certain other benefit plans. Further, if any member's tax-qualified defined benefit pension plan were to terminate, underfunding at termination would be the joint and several responsibility of all controlled group members, including members whose employees did not participate in the terminated plan. Similarly, joint and several liability may be imposed for certain pension plan related obligations in connection with the complete or partial withdrawal by an employer from a multiemployer pension plan. Depending on a number of factors, including the level of ownership held by the Group and other co-investors in a particular portfolio company, the Group (or a member thereof) may be considered to be a member of the "controlled group" of one or more portfolio companies for this purpose.

Changes in regulatory, geopolitical, social, economic or monetary policies and other factors, as a result of the outcome of the 2016 U.S. presidential election or the forthcoming general election in the UK, if any, may have a material adverse effect on the Group's business in the future.

The Presidential election result in the United States and/or the forthcoming general election in the UK could result in significant changes, or uncertainty, in governmental policies, regulatory environments and many other factors and conditions, some of which could adversely impact the Group's operations. The President has significant influence, including a role in appointing federal officials of various agencies that could have an impact on the industry in which the Group operates. In addition to the result of the Presidential election, the results of the congressional elections and elections at the local level may also have an impact. While it is not possible to predict when and whether significant policy changes, if any, may occur, the Presidential election and congressional elections result in the United States and/or the result of the forthcoming general election in the UK could increase the risk of new legislation and changes in, or new interpretations of, existing laws, regulations, standards or policies, that could materially and adversely impact the Group's business, results of operations and financial condition.

RISKS RELATING TO SHARES AND SHARE ISSUES

A limited number of Shareholders own a significant percentage of the Group and are likely to continue to do so following the Capital Raising. This concentration of ownership could adversely affect the trading price of the Shares

The six largest Shareholders, by the number of Shares in which they are interested, own over 65 per cent. of the Existing Share Capital.

These Shareholders may be in a position to exert significant influence on the Group. If any of these Shareholders were to act in concert with each other, such Shareholders could have the ability to influence the outcome of matters requiring shareholder approval, including appointments to the Board and significant corporate transactions, such as an acquisition or other change of control of the Group, and, to a lesser extent, matters requiring the approval of the Board, including the election of Directors, significant corporate transactions and payment of dividends. While the Directors believe that these Shareholders are supportive of the Capital Raising and the Group's strategy, these Shareholders may not remain supportive of the Group generally or any of its specific initiatives. The interests of these Shareholders, moreover, may be different from the interests of the Group or other Shareholders.

Furthermore, this significant concentration of share ownership may adversely affect the market value of the Enlarged Share Capital if investors believe that there are disadvantages in owning shares in companies with significant shareholder concentration and, also, may reduce the liquidity of the Enlarged Share Capital if these principal Shareholders retain or increase their holdings. Any such decrease in liquidity could have a material adverse effect on the trading price of the Enlarged Share Capital. The concentration of ownership may also deter a third party from making a takeover offer for the Group.

Shareholders will experience dilution in their ownership of IP Group as a result of the Firm Placing and Shareholders who do not acquire Capital Raising Shares in the Open Offer will experience further dilution in their ownership of IP Group

Qualifying Shareholders who do not participate in the Firm Placing will suffer an immediate dilution in their proportion of ownership and voting interests in the Enlarged Share Capital following the issue of Capital Raising Shares pursuant to the Firm Placing. Qualifying Shareholders who do not take up their Open Offer Entitlements in full pursuant to the Open Offer will suffer an immediate further dilution in their proportionate ownership and voting interests in the Enlarged Share Capital following the issue of the Capital Raising Shares pursuant to the Placing, Open Offer and Offer for Subscription. In addition Qualifying Shareholders who take up the Open Offer Entitlements may still suffer dilution by reason of the Placing, Open Offer and Offer for Subscription.

If the Directors exercise their discretion to increase the Capital Raising by up to £66.6 million, such dilution will be exacerbated. The Possible Offer would be effected by way of share exchange and accordingly Shareholders would also be diluted following the issue of Shares if the Possible Offer becomes Effective.

The Group's share price may fluctuate significantly in response to a number of factors, some of which may be outside of the Group's control

The market price of the Shares could be subject to significant fluctuations due to a change in sentiment in the market regarding the Shares or in response to a variety of factors including, but not limited to, the financial performance of the Group, speculation about the business of the Group or its portfolio companies in the press, media or the investment community, changes to the Group's revenues or profit estimates, the availability and use of debt finance by the Group, regulatory changes affecting the business of the Group and/or its portfolio companies, the publication of research reports by analysts, the Group's ability or decision to pay dividends in accordance with its dividend policy, current affairs and general market conditions.

General fluctuations in stock markets may have an adverse impact on the market price of the Shares, even though such fluctuations are unrelated to the Group's operating performance or prospects. There are a relatively small number of companies with comparable business models to that of the Group. Accordingly, any event which detrimentally affects the companies in this comparator group may adversely affect the value of the Group and the value of the Shares. Furthermore, the operating results and prospects from time to time of the Group may be below the expectations of market analysts and Shareholders. Any of these events could result in a decline in the market price of the Shares.

Suitability of the Shares as an investment

The Shares may not be a suitable investment for all the recipients of this document. Before making a final decision, Shareholders and other prospective investors are advised to consult an appropriate independent financial adviser authorised under FSMA if such Shareholder or other prospective investor is resident in the UK or, if not, from another appropriately authorised independent financial adviser who specialises in advising on acquisitions of shares and other securities.

The value of the Shares, and the income received from them, can go down as well as up and Shareholders may receive less than their original investment.

In the event of a winding-up of the Company, the Shares will rank behind any liabilities of the Company and therefore any return for Shareholders will depend on the Company's assets being sufficient to meet the prior entitlements of creditors.

The Board may apply the proceeds of the Capital Raising to uses that the Shareholders may not agree with and may make investments that fail to produce income or capital growth or that lose value

The Board will have considerable discretion in the application of the net proceeds of the Capital Raising and Shareholders must rely on the judgement of the Board regarding the application of such proceeds. The net proceeds may be placed in investments that fail to produce income or capital growth or that lose value which, in any such case, may affect the business, financial condition, results of operations and/or prospects of the Group.

The Company's ability to pay dividends in the future is not certain

The ability of the Company to pay dividends is dependent upon it having sufficient cash resources and, where necessary, sufficient distributable reserves out of which any proposed dividend may be paid, which, in the main, is dependent upon the receipt by it of dividends and other distributions from its subsidiaries and realisations made by the Company on its investments in its portfolio companies. The Company can give no assurance that it will be able to pay a dividend on the Shares in the future (whether in cash or any other form, including Shares) or in respect of the amount of any dividend. The dividend policy of the Company is described in paragraph 36 of Part II of this document.

A disposal of Shares by major Shareholders could adversely affect the market price of the Shares

Sales of a substantial number of Shares in the market after the Capital Raising, whether from Shareholders who acquired Capital Raising Shares in the Firm Placing, the Placing and/or Open Offer and/or Offer for Subscription or from pre-existing Shareholders, or the perception that these sales might occur, could depress the market price of the Shares.

Further issuances of Shares may be dilutive to current Shareholders

It is possible that the Company may decide to offer additional Shares in the longer term, either to raise capital or for other purposes. If the Company decides to issue further Shares, certain Shareholders located outside of the UK may not be able to participate in such future offerings, and the securities laws of certain jurisdictions may restrict the Company's ability to allow participation by Shareholders in such jurisdictions in any future offering of Shares carried out by the Company. If Shareholders do not take up such an offer of Shares, or are not eligible to participate in such an offering, their proportionate ownership and voting interests in the Company will be reduced and the percentage that their Shares will represent of the total issued share capital of the Company will be reduced accordingly. An additional offering could have a material adverse effect on the market price of Shares as a whole.

Shareholders and other prospective investors outside the UK may not be able to subscribe for or receive Capital Raising Shares pursuant to the Capital Raising, or may find it difficult to resell their Capital Raising Shares

The securities laws of certain jurisdictions may restrict the Company's ability to allow participation by Shareholders and other prospective investors in such jurisdictions in the offering of Capital Raising Shares and other issues of Shares. The Capital Raising Shares have not been and will not be registered under the US Securities Act or any state securities laws in the United States or under applicable securities laws of Australia, Canada, Japan, New Zealand or the Republic of South Africa and, except pursuant to an applicable exemption from registration, or in a transaction not subject to registration, the Capital Raising Shares may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within, into or in the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa, or any other jurisdiction where such offer or sale would violate the relevant securities laws of such jurisdiction.

In addition, securities laws of certain jurisdictions may restrict the Company's ability to allow participation by Shareholders or other prospective investors in such jurisdictions in any future issue of Shares carried out by the Company. The holdings of Qualifying Shareholders located outside the UK who are not able to receive Open Offer Shares may be diluted by any such offering of Open Offer Shares. Qualifying Shareholders who have registered addresses outside the UK or who are citizens of, or resident or located in, countries other than the UK (including, without limitation, the US or any of the other Excluded Territories) should consult their professional advisers as to whether they require any governmental or other consent or need to observe any other formalities in order to enable them to take up their Open Offer Entitlements.

Further, this document has not been and will not be lodged with the Australian Securities and Investments Commission and does not contain all of the information which would otherwise be required by Australian law to be disclosed in a disclosure document regulated by the Corporations Act 2001. Subject to certain exceptions, there are additional restrictions on the resale of the Capital Raising Shares in Australia for a period of 12 months after Admission. These restrictions could make it more difficult to resell the Capital Raising Shares in many instances and this could have an adverse effect on the market value of the Capital Raising Shares.

Restrictions relating to Non-Qualified Holders and information request

The Capital Raising Shares have not been, and will not be, registered under the US Securities Act or any state securities laws in the United States or under applicable securities laws of any other Excluded Territory or of any state, province or territory of any other Excluded Territory, and are subject to restrictions on transfer contained in such laws. Moreover, the Capital Raising Shares are only being offered and sold (i) outside the United States to non-US Persons (as defined in Regulation S under the US Securities Act) in reliance on Regulation S under the US Securities Act and (ii) within the United States to a limited number of persons reasonably believed to be (a) "qualified institutional buyers" (as the term is defined in Rule 144A under the US Securities Act) or (b) "accredited investors" (as defined in Rule 501 of Regulation D under the US Securities Act) that are also, in the case of (ii)(a) or (ii)(b) "qualified purchasers" (within the meaning of Section 2(a)(51) of the US Investment Company Act), in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act.

The Board may refuse to register a transfer of the Capital Raising Shares if the transfer is in favour of any person, as determined by the Directors, to whom a sale or transfer of the Capital Raising Shares, or whose direct, indirect or beneficial ownership of the Capital Raising Shares, would or might (i) cause the Company to be required to register as an "investment company" under the US Investment Company Act (including because the Shareholder of the Capital Raising Shares is not a "qualified purchaser" as defined in the US Investment Company Act) or to lose an exemption or status thereunder to which it might otherwise be entitled; (ii) cause the Company to be required to register under the US Commodity Exchange Act; (iii) cause the Company to be required to register its securities under the US Exchange Act or any similar legislation; (iv) cause the Company not to be considered a "foreign private issuer" as such term is defined in Rule 3b-4(c) under the US Exchange Act; (v) result in any Capital Raising Shares being owned, directly or indirectly, by a "benefit plan investor" (within the meaning of as such term is defined in Section 3(42) of ERISA) or in all or any portion of the assets of the Company or any other member of the Group constituting "plan assets" for purposes of ERISA or section 4975 of the US Code; (vi) cause the Company to be a "controlled foreign corporation" for the purposes of the US Code; (vii) result in withholding obligations on payments to such person in connection with the Foreign Account Tax Compliance Act ("FATCA") or otherwise prevent the Company from qualifying as, or complying with any obligations or requirements imposed on, a "participating FFI" within the meaning of US Treasury Regulation Section 1.1471-1(b)(91) or a "deemed-compliant FFI" within the meaning of US Treasury Regulation Section 1.1471-5(f); or (viii) cause the Company to be in violation of the US Investment Company Act, the US Exchange Act, the US Commodity Exchange Act, ERISA, the US Code or any applicable federal, state, local, non-US or other laws or regulations that are substantially similar to Section 406 of ERISA or Section 4975 of the US Code (any such person a "Non-Qualified Holder").

The Directors may, by notice to a Shareholder, at any time request a Shareholder to furnish a declaration, in a form satisfactory to the Directors, as to his place of residence, citizenship or domicile and any such information as may be reasonably required by the Directors to satisfy themselves that such person is not a Non-Qualified Holder or is otherwise qualified to hold the Capital Raising Shares, or any such information as the Directors determine is necessary or appropriate to permit the Company to satisfy applicable United States tax withholding, reporting or filing requirements arising with respect to the Shareholder's ownership interest in the Company under the US Code or FATCA.

The Company is not, and does not intend to become, regulated as an investment company under the US Investment Company Act and related rules

Accordingly, the Company will not be subject to the vast majority of the provisions of the US Investment Company Act, including provisions that: (a) require the oversight of independent directors; (b) impose qualifications as to who may serve as custodian for the Company's assets; and (c) limit the ability of the Company to utilise leverage in connection with effecting purchases and sales of the Company's investments.

However, if the Company were to become subject to the US Investment Company Act because of a change of law or otherwise, the various restrictions imposed by the US Investment Company Act, and the substantial costs and burdens of compliance therewith, could adversely affect the operating results and financial performance of the Company. Moreover, parties to a contract with an entity that has improperly failed to register as an investment company under the US Investment Company Act may be entitled to cancel or otherwise void their contracts with the unregistered entity and shareholders in that entity may be entitled to withdraw their investment. In order to ensure compliance with exemptions that permit the Company to avoid being required to register as an investment company under the US Investment Company Act and related rules, the Company has implemented restrictions on the ownership and transfer of Shares, which may materially affect an investor's ability to hold or transfer Shares and may in certain circumstances require the investor to transfer or sell its Shares.

The ability of Overseas Shareholders to bring actions or enforce judgments against the Company or the Directors may be limited

The ability of an Overseas Shareholder to bring an action against the Company may be limited under law. IP Group is a public limited company incorporated in England and Wales. The rights of holders of Shares are governed by the laws of England and by the Articles. These rights differ from the rights of shareholders in typical US corporations and some other non-UK corporations. An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors or other executive officers of the Company. All of the Directors and executive officers are residents of the UK. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and executive officers within the Overseas Shareholder's country of residence or to enforce against the Directors and executive officers judgments of courts of the Overseas Shareholder's country of residence based on civil liabilities under that country's securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgment in any civil and commercial matter, or any judgment under the securities laws of countries other than the UK, against the Directors or executive officers who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors or executive officers in any original action based solely on foreign securities laws brought against the Company or the Directors or the executive officers in a court of competent jurisdiction in England or other countries.

The Company believes that it likely was a "passive foreign investment company" for US federal income tax purposes for its 2015 and 2016 taxable years and expects to be a "passive foreign investment company" for the current year, which status may result in adverse US federal income tax consequences to US investors

The Company believes that it likely was a passive foreign investment company ("PFIC") for US federal income tax purposes for its 2015 and 2016 taxable years, expects to be a PFIC for the current year and may, depending on the circumstances, be classified as a PFIC in future taxable years.

Unless a US investor makes a valid "mark-to-market" election as described under "United States Taxation—United States Federal Income Taxation—Passive Foreign Investment Company" with respect to the Company which may or may not be available depending on circumstances not entirely within the Company's or such US investor's control, such US investor who holds the Capital Raising Shares (either directly or indirectly) will be subject to certain adverse US federal income tax rules with respect to any "excess distribution" made by the Company (generally distributions that exceed 125% of the average amount of distributions to shareholders during the preceding three years), and any gain realised by a US investor upon disposition of Capital Raising Shares would be characterised as an "excess distribution". The tax payable by a US investor on an excess distribution will be determined by allocating such excess distribution rateably over the US investor's holding period for the Capital Raising Shares. Such gain or income is taxable as ordinary income and dividends paid by the Company will not be eligible for the reduced rates of taxation that are available for certain qualifying dividends. A non-deductible interest charge applicable to underpayments of tax generally will be imposed as if such income tax liabilities had been due with respect to each prior year to which such gain or income is allocated. Partial redemptions generally would also be treated as excess distributions. It is unclear whether a mark-to-market election with respect to the Company would protect a US investor from adverse consequences with respect to an excess distribution paid by a subsidiary of the Company that is treated as a PFIC, or with respect to any gain on a sale or exchange by the Company of the stock of such a subsidiary. The Company does not intend to prepare and provide information necessary for a "qualified electing fund" election (a QEF Election) with respect to the Company or its subsidiaries and makes no representation as to the availability of mark-to-market elections that may mitigate the consequences of the Company being a PFIC to any US investor. Prospective US Holders should consult their own tax advisers regarding the potential application of the PFIC rules and the availability and advisability of making a mark-to-market election in their particular circumstances. For more information on the US federal income tax consequences of the Capital Raising Shares being treated as stock of a PFIC, see "United States Taxation—United States Federal Income Taxation—Passive Foreign Investment Company."

Certain ERISA risks

In order to prevent the assets of the Company from constituting "plan assets" for purposes of ERISA and Section 4975 of the US Code, Capital Raising Shares may not be directly or indirectly acquired by, or assigned or otherwise transferred to, a "benefit plan investor" (within the meaning of Section 3(42) of ERISA). Accordingly, each investor acquiring Capital Raising Shares or any interest therein (including any subsequent transferee) will be deemed to have represented and warranted that it is not, and is not acting on behalf of, a "benefit plan investor" (within the meaning of Section 3(42) of ERISA) and that no portion of the assets used to acquire its Capital Raising Shares or any interest therein constitutes or will constitute "plan assets" (within the meaning of Section 3(42) of ERISA). Nonetheless, no assurance can be given that the assets of the Company will not constitute "plan assets" (within the meaning of Section 3(42) of ERISA). If the Company's assets were deemed to be "plan assets" for purposes of ERISA, this would result, among other things, in (a) the application of the prudence and other fiduciary responsibility standards of ERISA and the prohibited transaction restrictions of ERISA and Section 4975 of the US Code to the operation of, and investments made by, the Company and possibly other members of the Group, and (b) the possibility that certain transactions that the Company, the Group or their respective subsidiaries might enter into, or may have entered into, in the ordinary course of business, constituting or resulting in non-exempt "prohibited transactions" under ERISA and/or Section 4975 of the US Code that might have to be rescinded. A non-exempt "prohibited transaction", in addition to imposing potential liability upon fiduciaries with respect to the "plan assets" involved in the transaction, may also result in the imposition of an excise tax under the US Code upon a "party in interest" (as defined in ERISA), or "disqualified person" (as defined in the US Code), involved in such transaction.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Event	Time/Date
Record Date for entitlement under the Open Offer	5.30 p.m. on 19 May 2017
Announcement of the Capital Raising	23 May 2017
Ex-entitlement date for the Open Offer	23 May 2017
Publication and posting of the Prospectus, Form of Proxy and Application Form	23 May 2017
Open Offer Entitlements credited to stock account of Qualifying CREST Shareholders in CREST	as soon as possible after 8.00 a.m. on 24 May 2017
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 1 June 2017
Latest time and date for depositing Open Offer Entitlements into CREST	3.00 p.m. on 2 June 2017
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 5 June 2017
Latest time and date for receipt of Forms of Proxy and receipt of electronic proxy appointments via the CREST system	11.00 a.m. on 6 June 2017
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions	11.00 a.m. on 7 June 2017
Latest time and date for receipt of completed Subscription Forms and payment in full under the Offer for Subscription or settlement of relevant CREST instructions	1.00 p.m. on 7 June 2017
Latest time and date for receipt of Placing commitments	11.00 a.m. on 7 June 2017
General Meeting	10.00 a.m. on 8 June 2017
Expected date of announcement of results of the General Meeting and the Capital Raising through a Regulatory Information Service	8 June 2017
Expected date of Admission and commencement of dealings in Capital Raising Shares	8.00 a.m. on 9 June 2017
Capital Raising Shares in uncertificated form expected to be credited to accounts as soon as practicable in CREST	9 June 2017
Expected date of despatch of definitive share certificates for Capital Raising Shares in certificated form	week commencing 12 June 2017

General notes:

All references to time in this document are to London time unless otherwise stated.
The times and dates set out in the expected timetable of principal events above and mentioned throughout this document may be adjusted by IP Group, in which event details of the new times and dates will be notified to a Regulatory Information Service and, where appropriate, Qualifying Shareholders. In particular, in the event that withdrawal rights arise under section 87Q of FSMA prior to Admission, IP Group and Numis may agree to defer Admission until such time as such withdrawal rights no longer apply.
1. Different deadlines and procedures for return of forms may apply in certain cases.
1. If you have any queries on the procedure for acceptance and payment, you should refer to the Appendices to this document which answers some of the questions most frequently asked by shareholders about placings and open offers or, alternatively, you should contact the Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

CAPITAL RAISING STATISTICS

Issue Price per Capital Raising Share	140 pence
Open Offer Entitlements under the Open Offer	1 Open Offer Share for every 13 Record Date Shares
Number of Shares in issue as at the date of this document	565,221,967
Number of Capital Raising Shares expected to be issued by the Company pursuant to the Firm Placing	96,428,566
Maximum number of Capital Raising Shares that may be issued by the Company pursuant to the Open Offer1	43,478,612
Maximum number of Capital Raising Shares that may be issued pursuant to the Capital Raising1	142,857,136
Enlarged Share Capital following completion of the Capital Raising1	708,079,103
Maximum number of Capital Raising Shares as a percentage of the Enlarged Share Capital1	25.3 per cent.
Estimated net proceeds receivable by the Company after deducting the expenses of the Capital Raising1	£195.7 million
Estimated expenses of the Capital Raising1	£4.3 million
Maximum number of Capital Raising Shares that may be issued pursuant to the Capital Raising2	190,428,564
Enlarged Share Capital following completion of the Capital Raising2	755,650,531
Maximum number of Capital Raising Shares as a percentage of the Enlarged Share Capital2	25.2 per cent.
Estimated net proceeds receivable by the Company after deducting the expenses of the Capital Raising2	£260.9 million
Estimated expenses of the Capital Raising2	£5.7 million

Notes:

1 Calculated on the basis that the Capital Raising is £200 million and the Company does not elect to increase the size of the Capital Raising

2 Calculated on the basis that the Company elects to increase the size of the Capital Raising from £200 million to £266.6 million

DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

Directors:	Mike Humphrey (Non-Executive Chairman) Alan John Aubrey (Chief Executive Officer) Michael Charles Nettleton Townend (Chief Investment Officer) Gregory Simon Smith (Chief Financial Officer) David Graham Baynes (Chief Operating Officer) Douglas Brian Liversidge (Senior Non-Executive Director) Jonathan Brooks (Non-Executive Director) Prof. Lynn Faith Gladden (Non-Executive Director) Dr Elaine Sullivan (Non-Executive Director) all of:
Registered office:	The Walbrook Building 25 Walbrook London EC4N 8AF
Company secretary:	Angela Leach
Sponsor, broker, underwriter and joint financial adviser:	Numis Securities Limited The London Stock Exchange Building Paternoster Square London EC4M 7LT
Joint financial adviser:	N M Rothschild & Sons Limited New Court St Swithin's Lane London EC4N 8AL
Auditors:	KPMG LLP 15 Canada Square London E14 5GL
Reporting accountant:	BDO LLP 55 Baker Street London W1U 7EU
Legal advisers to the Company as to English law:	Pinsent Masons LLP 30 Crown Place Earl Street London EC2A 4ES
Legal advisers to the Company as to US law:	Proskauer Rose LLP 110 Bishopsgate London EC2N 4AY

Legal advisers to the Company as to Australian law:	Corrs Chambers Westgarth Level 17 8 Chifley 8-12 Chifley Square Sydney NSW 2000
Legal advisers to Numis as to English and US law:	Travers Smith LLP 10 Snow Hill London EC1A 2AL
Registrar:	Capita Asset Services The Registry 34 Beckenham Road Beckenham Kent BR3 4TU
Receiving agent:	Capita Asset Services Corporate Actions The Registry 34 Beckenham Road Beckenham Kent BR3 4TU

IMPORTANT INFORMATION

PRESENTATION OF FINANCIAL INFORMATION

The Company publishes its financial statements in pounds sterling ("£" or "sterling"). The abbreviations "£m" or "£ million" represent millions of pounds sterling and references to "pence" and "p" represent pence sterling.

The financial information presented in a number of tables in this document has been rounded to the nearest whole number or the nearest decimal place. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded number.

INTERNATIONAL FINANCIAL REPORTING STANDARDS

As required by the Companies Act and Article 4 of the European Union IAS Regulation, the consolidated financial statements of the Company are prepared in accordance with IFRS and IAS issued by the IASB and interpretations issued by the International Financial Reporting Interpretations Committee of the IASB, as adopted by the European Union.

FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements which may refer to one or more of the following: the Company's or its portfolio companies' financial condition, results of operations, dividends, financing plans, business strategies, budgets, capital and other expenditures, competitive positions, potential growth opportunities, plans and objectives of the Directors and other management and other matters. Statements in this document that are not historical facts are hereby identified as "forward-looking statements". Such forward-looking statements, including, without limitation, those relating to future business prospects, revenue, capital needs, interest costs and income, in each case relating to the Group or its portfolio companies, wherever they occur in this document, are necessarily based on assumptions reflecting the views of the Group and involve a number of known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Such forward-looking statements should therefore be considered in light of various important factors. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation: economic and business cycles, earnings, financial position, returns on capital, anticipated investments and capital expenditure, competition in the Company's or its portfolio companies' principal markets, acquisitions or disposals of interests in portfolio companies and trends in the Company's or its portfolio companies' principal industry sectors.

These forward-looking statements are further qualified by the risk factors disclosed, or incorporated by reference, in this document that could cause actual results to differ materially from those in the forward-looking statements. For further details, please see the section of this document entitled "Risk Factors".

These forward-looking statements speak only as at the date of this document. Except as required by the Listing Rules, the Disclosure Guidance and Transparency Rules, the Prospectus Rules and any other law or regulation, the Company does not have any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, further events or otherwise. Except as required by the Listing Rules, the Disclosure Guidance and Transparency Rules, the Prospectus Rules and any other law or regulation, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained in this document to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document might not occur. Shareholders and other prospective investors should specifically consider the factors identified in this document which could cause actual results to differ before making an investment decision.

Nothing in the preceding paragraphs should be taken as limiting the working capital statement in paragraph 11 of Part V of this document.

No statement in this document is intended as a profit forecast or a profit estimate and no statement in this document should be interpreted to mean that earnings per Share for the current or future financial years would necessarily match or exceed the historical published earnings per Share.

NOTICE TO US SHAREHOLDERS AND SHAREHOLDERS IN EXCLUDED TERRITORIES

There will be no public offer of the Capital Raising Shares in the US. The Company is not and does not intend to become an "investment company" under the US Investment Company Act and is not engaged and does not propose to engage in the business of investing, reinvesting, owning, holding or trading in securities. Accordingly, the Company has not been and will not be registered under the US Investment Company Act, and investors will not be entitled to the benefits of that Act. Any representation to the contrary is a criminal offence in the US.

Except pursuant to an applicable exemption, this document does not constitute an offer of the Capital Raising Shares to any person with a registered address, or who is resident or located, in the US or any other Excluded Territory. The Capital Raising Shares have not been, and will not be, registered under the US Securities Act or any state securities laws in the United States or under the relevant laws of any other Excluded Territory or of any state, province or territory of any other Excluded Territory, and may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into, in or within the US or any other Excluded Territory except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of such jurisdiction.

Each person to whom the Capital Raising Shares are distributed, offered or sold outside the US will be deemed by its subscription for, or purchase of, the Capital Raising Shares to have represented and agreed, on its behalf and on behalf of any investor accounts for which it is subscribing for or purchasing the Capital Raising Shares, that:

(a) it is acquiring the Capital Raising Shares from the Company or Numis in an "offshore transaction" as defined in Regulation S;
(b) the Capital Raising Shares have not been offered to it by the Company, Numis or any other person by means of any "directed selling efforts" as defined in Regulation S;
(c) it is not a US Person (as defined in Regulation S under the US Securities Act) and is not acquiring Capital Raising Shares for the account or benefit of a US Person; and
(d) it is not a "benefit plan investor" (within the meaning of Section 3(42) of ERISA) or acquiring Capital Raising Shares for the account or benefit of a "benefit plan investor" (within the meaning of Section 3(42) of ERISA).

Each person to whom the Capital Raising Shares are distributed, offered or sold inside the US will be deemed by its subscription for, or purchase of, the Capital Raising Shares to have represented and agreed, on its behalf and on behalf of any investor accounts for which it is subscribing for or purchasing the Capital Raising Shares, that:

(a) it is either a QIB that is also a Qualified Purchaser or an Accredited Investor that is also a Qualified Purchaser acquiring the Capital Raising Shares for its own account or for the account of either a QIB that is also a Qualified Purchaser or an Accredited Investor that is also a Qualified Purchaser;
(b) the Capital Raising Shares have not been offered to it by the Company, Numis or any other person by means of any form of any "general solicitation" or "general advertising" (as such terms are defined in Regulation D); and

(c) it is not a "benefit plan investor" (within the meaning of Section 3(42) of ERISA) or acquiring Capital Raising Shares for the account or benefit of a "benefit plan investor" (within the meaning of Section 3(42) of ERISA).

The Capital Raising Shares will be "restricted securities" within the meaning of Rule 144(a)(3) under the US Securities Act. Resales of Capital Raising Shares may only be made (i) outside the US in offshore transactions to non-US Persons as defined in, and in reliance on, Regulation S in reliance on Regulation S or (ii) within the US to investors that are both QIBs and Qualified Purchasers. The Company will require the provision of a letter by investors in the US and any transferees in the US containing representations as to status under the US Securities Act and the Investment Company Act. The Company will refuse to issue or transfer Capital Raising Shares to investors that do not meet the foregoing requirements.

NOTICE TO AUSTRALIAN SHAREHOLDERS

This document is not a disclosure document regulated by the Corporations Act 2001 and has not been and will not be lodged with the Australian Securities and Investments Commission (the "ASIC"). ASIC takes no responsibility for the contents of this document. Accordingly, this document may not contain all the information that a prospective investor may require to make a decision whether to subscribe for Capital Raising Shares and it does not contain all of the information which would otherwise be required by Australian law to be disclosed in a disclosure document regulated by the Corporations Act 2001.

NOTICE TO EEA SHAREHOLDERS

In relation to each member state of the EEA which has implemented the Prospectus Directive (each, a "relevant member state") (except for the UK), with effect from and including the date on which the Prospectus Directive was implemented in that relevant member state (the "relevant implementation date") no Capital Raising Shares have been offered or will be offered pursuant to the Capital Raising to the public in that relevant member state prior to the publication of a prospectus in relation to the Capital Raising Shares which has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state, all in accordance with the Prospectus Directive, except that with effect from and including the relevant implementation date, offers of Capital Raising Shares may be made to the public in that relevant member state at any time:

(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;
(b) to any legal entity which has two or more of: (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than €43 million; and (iii) an annual turnover of more than €50 million, as shown in its last annual or consolidated accounts; or
(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Capital Raising Shares shall result in a requirement for the publication by the Company or Numis of a prospectus pursuant to Article 3 of the Prospectus Directive.

The expression an "offer of any Capital Raising Shares to the public" in relation to any Capital Raising Shares in any relevant member state means the communication in any form, and by any means, of sufficient information on the terms of the Capital Raising and any Capital Raising Shares to be offered so as to enable an investor to decide to purchase any Capital Raising Shares, as the same may be varied in that relevant member state by any measure implementing the Prospectus Directive in that relevant member state, and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each relevant member state.

In the case of any Capital Raising Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the Capital Raising Shares acquired by it in the Capital Raising have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Capital Raising Shares to the public other than their offer or resale in a relevant member state to qualified investors as so defined or in circumstances in which the prior consent of the Company or Numis has been obtained to each such proposed offer or resale. Each of the Company and Numis and their respective affiliates, and others, will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement.

NOTICE TO OVERSEAS SHAREHOLDERS

All Overseas Shareholders and any person (including, without limitation, a nominee, custodian or trustee) who has a contractual or other legal obligation to forward this document or any Application Form, if and when received, or other document to a jurisdiction outside the UK, should read paragraph 6 of Appendix 2 of this document.

ENFORCEMENT OF CIVIL LIABILITIES

An Overseas Shareholder may not be able to enforce a judgment against some or all of the Directors and executive officers of the Company. All of the Directors and executive officers are residents of the UK. Consequently, it may not be possible for an Overseas Shareholder to effect service of process upon the Directors and executive officers within the Overseas Shareholder's country of residence or to enforce against the Directors and executive officers judgments of courts of the Overseas Shareholder's country of residence based on civil liabilities under that country's securities laws. There can be no assurance that an Overseas Shareholder will be able to enforce any judgments in civil and commercial matters or any judgments under the securities laws of countries other than the UK against the Directors or executive officers who are residents of the UK or countries other than those in which judgment is made. In addition, English or other courts may not impose civil liability on the Directors or executive officers in any original action based solely on the foreign securities laws brought against the Company or the Directors or the executive officers in a court of competent jurisdiction in England or other countries.

NOTICE TO ALL SHAREHOLDERS

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information contained in this document for any purpose other than considering an investment in the Capital Raising Shares is prohibited. By accepting delivery of this document, each offeree of the Capital Raising Shares agrees to the foregoing.

The distribution of this document and/or the Application Form and/or the Subscription Form into jurisdictions other than the UK may be restricted by law. Persons into whose possession these documents come should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, subject to certain exceptions, such documents should not be distributed or forwarded to, or transmitted in or into, the US or the Excluded Territories or into any other jurisdiction where the extension or availability of the Capital Raising would breach any applicable law. For further information on the manner of distribution of the Capital Raising Shares, and transfer restrictions to which they are subject, please see paragraph 6 of Appendix 2 of this document.

No action has been taken by the Company or by Numis that would permit an offer of the Capital Raising Shares, or possession or distribution of this document or any other offering or publicity material, in any jurisdiction where action for that purpose is required other than in the UK.

In connection with the Capital Raising, Numis and any of its affiliates, acting as investors on their own accounts, may take up Capital Raising Shares and in that capacity may retain, purchase or sell for their own account such Capital Raising Shares or related investments otherwise than in connection with the Capital Raising. Accordingly, references in this document to Capital Raising Shares being offered or placed should be read as including any offering or placement of Capital Raising Shares to Numis or any of its affiliates acting in such capacity. Numis does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

The contents of this document should not be construed as legal, business or tax advice. Each prospective investor should consult his, her or its legal adviser, financial adviser or tax adviser for advice. Neither the Company, Numis nor any of their respective directors, employees or representatives is making any representation to any offeree or purchaser or acquirer of the Capital Raising Shares regarding the legality of an investment in the Capital Raising Shares by such offeree or purchaser or acquirer under the laws applicable to such offeree or purchaser or acquirer.

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information herein for any purpose other than in considering an investment in the Capital Raising Shares offered or otherwise made available hereby is prohibited. By accepting delivery of this document, each offeree of the Capital Raising Shares agrees to the foregoing.

Recipients of this document acknowledge that: (i) they have not relied on Numis or any of its affiliates in connection with any investigation of the accuracy of any information contained in, or incorporated by reference into, this document or their investment decision; and (ii) they have relied only on the information contained in, or incorporated by reference into, this document. In making an investment decision, each prospective investor must rely on its own examination, analysis and enquiry of the Group and the terms of the Firm Placing, the Placing, the Open Offer and Offer for Subscription, including the merits and risks involved.

REFERENCES TO DEFINED TERMS

Capitalised terms have the meanings ascribed to them in Part VII of this document.

GENERAL NOTICE

Nothing contained in this document is intended to constitute investment, legal, tax, accounting or other professional advice. This document is for your information only and nothing in this document is intended to endorse or recommend a particular course of action. You should consult with an appropriate professional for specific advice rendered on the basis of your situation.

NO INCORPORATION OF WEBSITE INFORMATION

The contents of the websites of the Company and its portfolio companies do not form part of this document.

PART I

LETTER FROM THE CHAIRMAN OF IP GROUP

(incorporated in England and Wales with registered number 04204490)

Registered Office: The Walbrook Building 25 Walbrook London, EC4N 8AF United Kingdom

23 May 2017

Dear Shareholder

Launch of IP2IPO Australia with commercialisation agreements with nine leading Australian and New Zealand research universities

Proposed Firm Placing of 96,428,566 Capital Raising Shares and proposed Placing, Open Offer and Offer for Subscription of up to 46,428,570 Capital Raising Shares, with the ability to increase the size of the Issue by up to 47,571,428 additional Capital Raising Shares, each at an Issue Price of 140 pence per Share

Application for admission of up to 190,428,564 Capital Raising Shares in IP Group in connection with the Capital Raising to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities

and

Notice of General Meeting

1. INTRODUCTION

The Company announced today that it is launching IP2IPO Australia, a wholly-owned private company incorporated in the State of Victoria, Australia, focused on the creation and support of world changing companies in Australia and New Zealand. The Company and IP2IPO Australia have entered into commercialisation agreements with the Go9 Universities under which the Group intends to form spin-out companies based on disruptive IP developed in such universities. As a result, through its existing Partnerships and these new agreements with the Go9 Universities, the Group will have unrivalled access to commercialisable IP from universities whose academic staff have published 14.9 per cent. of the world's Top Research2. The Directors believe that following the launch of IP2IPO Australia, and the completion of the Capital Raising, the Group will be the international market leader in the emerging university IP commercialisation sector.

The Company also announced today that it intends to raise gross proceeds up to approximately £200 million (approximately 195.7 million net of Capital Raising costs and expenses) in the Capital Raising by way of a Firm Placing and a Placing, Open Offer and Offer for Subscription, consisting of the issue of up to 142,857,136 Capital Raising Shares in aggregate at an issue price of 140 pence per Capital Raising Share. 96,428,566 Capital Raising Shares will be issued through the Firm Placing and up to 46,428,570 Capital Raising Shares will be issued through the Placing, Open Offer and Offer for Subscription. The Board has the ability to increase the size of the Issue by up to £66.6 million by the issue of up to a further 47,571,428 Capital Raising Shares, so that gross proceeds would be approximately £266.6 million (approximately

^{2 &}quot;Top Research" classified as the top 10 per cent. of publications cited globally. Based on the top 200 universities' volume of Top Research during 2012-2015. Based on data from the Leiden University Rankings 2017.

£260.9 million net of all Capital Raising costs and expenses) should there be sufficient demand. New shareholders including Temasek and Telstra and existing shareholders including Invesco, Woodford and Lansdowne participated in the Firm Placing which is fully underwritten by Numis.

The Capital Raising is conditional upon, amongst other things, the passing of the Resolutions by Shareholders at the General Meeting, the Placing Agreement becoming unconditional in all respects and not having been terminated, and Admission. Accordingly, Shareholders will be asked to approve the Resolutions at the General Meeting which has been convened for 10.00 a.m. on 8 June 2017 at the Company's offices at The Walbrook Building, 25 Walbrook, London, EC4N 8AF. Details of the Resolutions are set out in paragraph 8 of Part I of this document and the Notice of General Meeting is set out in Part VIII of this document.

The purpose of this document is to set out the background to, and reasons for, the Capital Raising, the business opportunity for IP2IPO Australia, and:

to explain the Resolutions to be put to Shareholders at the General Meeting; and
to recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

It is the Board's opinion that the Capital Raising will strengthen the financial position of the Group and will both provide the necessary capital to successfully launch and develop IP2IPO Australia and enable it to deploy further capital into new and existing commercialisation opportunities both in the UK and the US. The Board therefore considers the launch of IP2IPO Australia and the Capital Raising to be in the best interests of the Company and Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the Resolutions.

The Company also announced earlier today that it recently made an approach to the Board of Touchstone regarding a possible combination with Touchstone (the "Combination"). The Board of Touchstone rejected the proposed Combination. Touchstone (formerly Imperial Innovations Group plc) creates, builds and invests in pioneering technology companies and licensing opportunities developed from research from the 'Golden Triangle', the geographical region broadly bounded by London, Cambridge and Oxford. Touchstone supports scientists and entrepreneurs in the commercialisation of their ideas through protecting and licensing out intellectual property (through its technology transfer subsidiary, Imperial Innovations Limited), by leading the formation of new companies, by recruiting high calibre management teams and by providing investment and encouraging co-investment.

The Directors consider that the Combination would create an international leader in IP commercialisation and an enlarged business with substantial capabilities that would be greater than the sum of the two parts. The Combination would allow both IP Group and Touchstone shareholders to participate in the future value generation opportunity through an enlarged and more diversified portfolio.

The possible all-share offer for Touchstone is being considered on the basis of the terms set out below (the "Possible Offer"). IP Group has received support for the Possible Offer from Touchstone shareholders representing, in aggregate, 74,3 per cent of Touchstone's issued share capital.

Background to and reasons for the Possible Offer

The Directors consider that the combination of Touchstone and IP Group would create an international leader in IP commercialisation and a combined business with substantial capabilities that is greater than the sum of the two parts.

Specifically, the Directors believe that a combination with Touchstone would provide the combined group with the following key benefits:

an enlarged platform for growth and investment;
a larger portfolio with diversification across sectors and maturity of assets;
an experienced team with complementary industry backgrounds; and
access to IP developed at Imperial College London and University College London adding to IP Group's existing partnerships with other leading UK research universities.

The Possible Offer

The terms of the Possible Offer would comprise the issue of 2.1490 Shares for each Touchstone share, subject to adjustment as set out below (the "Exchange Ratio") which, prior to the Capital Raise:

would result in Touchstone shareholders owning approximately 38 per cent. of the enlarged share capital of IP Group; and
implies an offer value of 307 pence per Touchstone share, based on IP Group's closing share price of 143 pence on 22 May 2017.

The Exchange Ratio will be adjusted:

1. following Admission and settlement of the Shares issued pursuant to the Capital Raising, to take into account the scale of the Capital Raising and the 2.1 per cent. discount offered on IP Group shares offered as part of the Capital Raising. For example, if the amount raised by the Capital Raising is £200 million at 140 pence per IP Group share:
the Exchange Ratio would increase to 2.1581;
Touchstone shareholders would own approximately 33 per cent. of the enlarged share capital of IP Group; and
on the basis of the closing IP Group share price on 22 May 2017, the implied offer value would remain 307 pence per Touchstone share,
1. if, as a result of an increase in the IP Group share price, the implied offer value per Touchstone share were to become worth more than 320 pence (the "Offer Cap"). In such event, the number of IP Group shares to be issued per Touchstone share will be reduced such that the implied offer value per Touchstone share remains at 320 pence. The IP Group share price used for this adjustment will be calculated by reference to the volume weighted average price of an IP Group share over a set period.

The mechanics for the amendment of the Exchange Ratio under adjustment (2) above (including the date when it will be made) will be described fully in any announcement of a firm offer for Touchstone made under Rule 2.7 of the City Code, if and when made. The Offer Cap is not a no increase statement and should not be taken to mean that the Exchange Ratio or Offer Cap cannot be increased in any announcement of a firm intention to make an offer pursuant to Rule 2.7 of the Code.

General and reservations to the Possible Offer

Under Rule 2.6(a) of the City Code, IP Group must, by 5.00 p.m. on 20 June 2017, either announce a firm intention to make an offer in accordance with Rule 2.7 of the City Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the City Code applies. This deadline will only be extended with the consent of the Panel in accordance with Rule 2.6(c) of the City Code.

IP Group reserves the right to make an offer on less favourable terms than those set out in this announcement in the event that:

i. an agreement or recommendation in respect of such terms is reached with the Touchstone Board; or
ii. an offer or possible offer for Touchstone is announced by a third party.

In the event Touchstone announces, declares, pays or makes any dividend or distribution to Touchstone shareholders at any time, IP Group reserves the right to make an equivalent reduction in the terms of the Possible Offer.

In addition, IP Group reserves the right to introduce other forms of consideration and/or vary the proposed mix of consideration in any offer.

2. INFORMATION ON THE GROUP

The Group's business of commercialising scientific and technical innovation developed in leading research institutions was established in 2000. The Group's business model is to form, or assist in the formation of, start-up companies based on disruptive scientific and technical innovation developed from within those institutions, to take a significant minority equity stake in these companies and then to grow the value of that equity over time through taking an active role in the development of these companies. The Group's strategy has been to build significant minority equity stakes across a diversified portfolio of companies falling within its four main sectors of Biotech, Cleantech, Healthcare and Technology designed to achieve strong equity returns over the medium to long term.

2.1 Partnerships and other collaborative arrangements with universities and research intensive institutions

An important aspect of the Group's strategy is its ability to access a wide range of leading scientific research through its arrangements (both exclusive and non-exclusive) with leading research intensive institutions details of these arrangements are set out below.

UK arrangements

In the UK the access has been achieved primarily through long-term partnerships with a number of leading research universities. The Group entered into its first long term partnership in 2000. Since this time, the Group has entered into further partnerships and now has direct arrangements covering thirteen of the UK's leading universities.

In addition to these direct contractual arrangements, the Group also has two strategic holdings in Oxford Sciences Innovation plc and Cambridge Innovation Capital plc. Oxford Sciences Innovation plc is the contractually preferred partner of the University of Oxford and provides capital to and develops spin-out companies based on research from the University's Mathematical, Physical and Life Sciences Division and its Medical Sciences Division. Cambridge Innovation Capital plc supports the growth of innovative businesses located in the "Cambridge Cluster" and is supported by the University of Cambridge's commercialisation office, Cambridge Enterprise. The Group and Cambridge Innovation Capital have also entered into a memorandum of understanding to share information on investment and co-investment opportunities. The Group also is in discussion with other universities in the UK.

The Group leverages the capabilities of its in-house sourcing team to identify and pursue compelling commercialisation opportunities arising from universities. This New Business and Partnerships team works with the Group's partners to identify promising research and novel disruptive IP on which to create and build new businesses. The Group, through the work of that team, utilises its proprietary hypothesis-based methodologies to assess new opportunities and decide which to progress. These techniques are also used to monitor progress and shape the evolving strategy of the opportunities throughout their life cycle.

The most recent Research Excellence Framework (the "REF"), the results of which were published in December 2014, assessed the quality of research in UK higher education institutions ("HEIs"), replacing the Research Assessments Exercise last carried out in 2008. One output of the REF was an overall quality profile for each HEI showing the proportion of research activity judged to have met each of four starred quality levels, and generated a measure of research power based on this assessment of research quality and the number of staff engaged to undertake research at each HEI.

The Group currently has access, either through a direct contractual relationship or its relationship with Cambridge Innovation Capital plc and Oxford Sciences Innovation plc, to 11 of the top 20 HEIs by this measure. The Directors believe that no other organisation seeking to provide commercialisation services to UK HEIs has such immediate access to high quality research in the UK.

Further details on each of the UK Partnerships are set out in paragraphs 14.1 to 14.20 of Part V of this document.

US arrangements

The Group has access to intellectual property emanating from research carried out in the United States through its IP commercialisation agreements with five distinguished research universities, including three Ivy League universities.

During 2013 and 2014 the Group entered into several pilot phase projects under collaboration agreements with Columbia University, University of Pennsylvania and Upstart, and Princeton University. Each collaboration agreement had an initial pilot phase of eighteen months and focused on the identification and potential commercialisation of early stage, proof of principle opportunities based on intellectual property developed at each university. Each pilot phase was subsequently extended during the course of 2015 and 2016 and the agreements varied to enable the parties to reflect the advancement of their working relationships. The extended agreements are not time limited and continue on a rolling renewal basis subject to their terms.

In addition, in November 2014, the Group launched a commercialisation initiative with FedIMPACT to identify and develop early stage technologies from a distinct group of US Department of Energy National Laboratories. The Group's current relationships through FedIMPACT are with Pacific Northwest National Laboratory, Argonne National Laboratory and The National Renewable Energy Laboratory. The Group recently entered into pilot agreements with a further two leading US research universities and is currently assessing the first potential spin-out opportunities therefrom.

Further details on each of these agreements and initiatives are set out in paragraphs 14.21 to 14.24 of Part V of this document.

Australia, New Zealand and the wider Asia-Pacific region

Subject to completion of the Capital Raising, the Group now has access to intellectual property emanating from research carried out in Australia and New Zealand through its agreements with the Go9 Universities. The Go9 Universities are Monash University, The Australia National University, the University of Adelaide, the University of Melbourne, the University of Queensland, the University of Sydney, the University of Western Australia, UNSW Australia and the University of Auckland. The Australian universities (together called the Go8) comprise Australia's premier group of universities and has educated every Nobel prize winner who attended at an Australian university. Each year the Go8 spends some AU\$ 6 billion on research.

Ninety nine per cent. of Go8 research is ranked as world class and the QS World University rankings has six Go8 universities in its top 100.

The University of Auckland is the largest university in New Zealand and is New Zealand's leading world-ranked university and is in the top 100 in the QS World University rankings.

Further details of the arrangements with the Go9 Universities are set out in paragraph 14.25 of Part V of this document.

In addition to its new partnerships in Australia and New Zealand, the Group has been engaging with potential research and funding partners in Singapore and is currently evaluating whether a presence could strengthen the establishment of the Group's position in the wider Asia-Pacific region. The

³ Typically, those companies which either do not progress beyond the incubation stage within three years of the Group's initial funding and/or whose value has subsequently fallen to below £0.1m but remain as an operating business are classed as de minimis holdings.

⁴ Calculated by reference to the values attributed to the Group's investments in such portfolio companies in the Group's audited results for the year ended 31 December 2016.

⁵ Calculated by reference to the values attributed to the Group's investments in such portfolio companies in the audited results of the Group for the year ended 31 December 2016 grossed up to reflect the overall value of such portfolio companies.

Directors consider that Singapore represents a potential opportunity for the Group to be a global partner to a fast-growing technology ecosystem with leading research institutions and an established network of institutional co-investors. In addition, the Group has had initial exploratory conversations with potential financing partners in China.

2.2 The Group's portfolio

IP Group was quoted on AIM in October 2003 and moved to the Official List in June 2006. On and subsequent to its admission to AIM, IP Group has raised approximately £390 million of net proceeds from equity investors, predominantly to build its portfolio of companies.

The Group works with its university partners and other collaborators to identify promising intellectual property and to create and build world-changing businesses around this intellectual property. The Group utilises the relationships it builds with these partners to create, build and maintain a pipeline of compelling intellectual property based opportunities. The Group's extensive and multi-faceted expertise in sourcing leading scientific ideas, combined with its extensive knowledge of both industry and finance, has enabled it to create a strong and diverse portfolio with exposure to four main sectors: Biotech, Cleantech, Healthcare and Technology.

As at 31 December 2016, the Group had a portfolio of 90 companies, three holdings in multi-sector platform companies (OSI, CIC and Frontier IP Group plc) and 20 de minimis holdings3 in which its combined stake was valued at approximately £614.0 million4 . Of the 90 companies (excluding the Group's holdings in OSI, CIC, Frontier IP Group plc and the 20 de minimis holdings) in the Group's portfolio, 76 per cent. of the fair value resides in the ten most valuable companies (by value), many of which have made significant progress in the last twelve months towards achieving key milestones and commercial validation. In 2016, the Group invested a total of £30.1 million in its top ten businesses within the Focus stage (by value) representing approximately 51.2 per cent. of the £58.8 million aggregate annual investment into the portfolio, which excludes £10.9m invested into the Group's strategic holdings in OSI and CIC. As at 31 December 2016, the aggregate value of the portfolio companies in which the Group had an investment (excluding multi-sector platforms and de minimis holdings), calculated by reference to the Group's holding in such companies and grossed up to reflect their total value exceeded £2.7 billion5 or approximately £3.3 billion including the Group's three holdings in multi-sector platform companies (OSI, CIC and Frontier IP Group plc).

The Group's current portfolio falls broadly into the following three categories:

Early-stage: these comprise both incubation and seed opportunities. Incubation opportunities comprise businesses or pre-incorporation projects that are generally at a very early stage of development, at most within three years since the Group's first financing, and have received at least one stage of funding. Opportunities at this stage usually involve capital of less than £0.2 million from the Group, predominantly allowing for proof of concept work to be carried out. Seed businesses are those that have typically received financing of up to £1.0 million in total, primarily from the Group, in order to continue to progress towards agreed commercial and technology milestones and to enable the recruitment of management teams and early commercial engagement;
Development stage: these comprise businesses to which the Group has typically provided in excess of £0.5 million as principal investor, or in excess of £1.0 million of funding in conjunction with other significant investors. Although each business can vary significantly in its rate and manner of development, such additional funding is generally used to progress towards key milestones and commercial validation, to build senior level capability in the business and to attract experienced non-executive directors to their boards; and
Focus stage: portfolio companies which are classed as being in the focus stage are those portfolio companies (excluding multi-sector platform companies) in which the Group's holdings have a fair value in excess of £4.0 million.

Over the last 16 years, the Group has developed a rigorous and proprietary opportunity evaluation and appraisal process that is designed to enable the assessment and development of technology businesses, initially with low levels of cash investment. The primary interface between the Group and its partner universities is through its New Business and Partnerships team which focuses on 'mining' and evaluating very early stage opportunities and helping to develop and shape these into incubation opportunities. The decision to progress an opportunity to the pre-seed, or in some cases direct to seed stage, is undertaken in conjunction with the Group's specialists in the relevant sector. During these early development phases, the Group works closely with the opportunity or business to help shape its strategic direction, occasionally taking an interim management role until such time as the business reaches a sufficient stage of maturity and has the resources to recruit an external leadership team. Through this approach, the Group seeks to progressively eliminate risk, to monitor progress against milestones and to revise strategic direction based on commercial feedback, whilst minimising capital deployed at the earlier stages of such a business' development, with a view to building a robust portfolio of successful focus stage companies.

At the appropriate stage, the Group will utilise its in-house executive search consultancy, IP Exec, to recruit experienced and high calibre individuals to lead its developing businesses alongside founders and the Group team members, who continue to provide strategic guidance in an executive or non-executive capacity. This support function is central to the Group's business building methodology allowing the Group the unique opportunity to shape the development of a company's leadership capability, providing continuity as advisors and to be able to share a wealth of experience at critical stages of a company's evolution.

Further, the Group, through its in-house professional development function, IP Impact, has developed a series of innovative programmes that, by working with the CEOs and CTOs and boards of portfolio companies, seek to help accelerate company growth. In addition, the Group's in-house capital markets function may assist the Group's portfolio companies, primarily those at the focus stage, by providing corporate finance advice in connection with fundraisings and/or exits, including facilitating introductions to co-investors. The Group also provides operational, legal, business and company secretarial support to its companies with a view to minimising the most common administrative factors that can contribute to early-stage company failure.

As at 31 December 2016, the Group's portfolio of 90 companies consisted of 39 Early-stage businesses, 32 Development stage businesses and 19 Focus stage businesses of which 8 were quoted. Of the 90 companies in the Group's portfolio, 76 per cent. of the fair value resides in the ten most valuable companies (excluding the Group's holdings in OSI, CIC and Frontier IP Group plc or the 20 de minimis holdings). Further details on these ten companies, including a description of their businesses, amounts invested and realised by the Group during the year ended 31 December 2016 and the values of the Group's holdings as at 31 December 2016 are set out in paragraph 31 of Part II of this document.

2.3 Fund management

The Group also manages certain third-party funds where the Directors believe such funds provide strategic benefits to the Group's core business. These funds broaden the sources of financing potentially available to the Group's existing portfolio companies and also provide high net worth individuals and specialist limited partner investors with access to opportunities in the Group's existing portfolio and enable them to benefit from the Group's expertise in IP sourcing and business building. Fund management also leverages the Group's existing competencies to provide additional recurring income and, potentially, performance-related fees.

Through Parkwalk Advisors and Top Technology Ventures, the Group's FCA-authorised subsidiaries, the Group currently manages over £200 million of third party funds including:

• A number of university spin-out focused EIS funds, such as the £70 million Parkwalk Opportunities Fund and a series of earlier-stage EIS funds in conjunction with some of the world's most highly regarded research institutes, including the University of Cambridge Enterprise Funds, the University of Oxford Innovation Funds, and the University of Bristol Enterprise Funds; and

• Three traditional LP funds, the £31 million IP Venture Fund, the £30 million IP Venture Fund II and the £37 million North East Technology Fund.

IP Venture Fund and The North East Technology Fund are no longer making investments. IP Venture Fund II no longer invests in new companies, however it will continue to invest alongside the Group in the 27 existing portfolio companies from its UK university partnerships and other collaborations that it has invested in to date, with an investment ratio of 70:30 (Group excluding IP Venture Fund II: IP Venture Fund II).

2.4 Modern Biosciences plc ("MBS")

In 2006, the Company established Modern Biosciences plc, a subsidiary company, for the purposes of in-licensing and developing intellectual property relating to new therapeutic treatments. In November 2014, MBS entered into an R&D alliance and global option and license agreement with Janssen Biotech, Inc., a division of Johnson & Johnson, in relation to MBS' novel bone-protective compounds for the treatment of rheumatoid arthritis ("RA"). Current treatments for RA include the anti-TNF class of drugs which had sales in excess of \$30 billion in 2015. The goal of the collaboration, facilitated by the Johnson & Johnson Innovation Centre in London, is to develop new drugs for the treatment of RA.

Under the terms of the exclusivity agreement, MBS received an up-front payment and is eligible to receive regulatory and commercialisation milestone payments up to a potential total of £176 million. In addition, MBS will receive royalties on future sales of any products that may result from the alliance upon successful launch and commercialisation.

The most advanced of MBS' compounds is currently anticipated to enter Phase 2 clinical studies in 2017.

2.5 The Directors and management team

The Group is led by an experienced board which currently comprises a Non-executive Chairman, Chief Executive Officer, Chief Investment Officer, Chief Financial Officer, Chief Operating Officer and five additional Non-executive Directors. The Board collectively possesses considerable investment, commercial and financial experience, with particular expertise in the development of technology-based businesses.

The Board is supported by an experienced management team, including the New Business and Partnerships team, who has primary responsibility for sourcing, evaluating and building new and early-stage opportunities (comprising incubation and seed). The Group's management team includes four independently managed divisions, each with specialist expertise in a particular technology area: Biotech, Cleantech, Healthcare and Technology. In addition, the Group leverages its extensive network of highly experienced individuals with expertise spanning financial, technical, industry and academic specialisms, as well as its own in-house recruitment capability, to build and strengthen the boards of the Group's portfolio companies.

3. BACKGROUND TO, AND REASONS FOR, THE CAPITAL RAISING

The Group has built a platform for the systematic commercialisation of intellectual property which has primarily been sourced from within UK, and more recently US, universities or other research intensive institutions with which the Group has Partnerships or other collaborative arrangements.

^{6 &}quot;Top Research" classified as the top 10 per cent. of publications cited globally. Based on the top 200 universities' volume of Top Research during 2012-2015. Based on data from the Leiden University Rankings 2017.

^{7 &}quot;Top Research" classified as the top 10 per cent. of publications cited globally. Based on the top 200 universities' volume of Top Research during 2012-2015. Based on data from the Leiden University Rankings 2017.

The Board believes that the formation of IP2IPO Australia provides the Group with the opportunity to obtain access to a significant source of world-leading academic research via the Go9 Agreements. Through these agreements the Group will seek to create and maintain a pipeline of compelling intellectual property based opportunities and develop and support these opportunities into a diversified portfolio of robust businesses. In so forming spin-out companies based on the intellectual property developed in such universities, the Group seeks to evolve great ideas into world-changing businesses.

The Board believes that the Go9 Universities represent a significant source of potentially world-class and disruptive IP. Academic staff at the Go9 Universities have published a total of 4 per cent. of the world's Top Research6. The Go9 Agreements that the Company and IP2IPO Australia have entered into with the Go9 Universities mean that the Group will have access to commercialisable intellectual property from universities whose academic staff have published 14.9 per cent. of the world's Top Research7.

The Group considers that IP Group's business model, which it has deployed successfully in the UK and more recently in the US, is well suited to the Australian and New Zealand markets. The Directors believe that the development of spin-out companies based on IP originating from the Go9 Universities represents a significant commercial opportunity.

In addition to the opportunity presented by the launch of IP2IPO Australia, the Board believes that there is a significant opportunity to accelerate the growth of the Group by increasing its overall rate of investment in both its current portfolio and in new pipeline opportunities in the UK and the US, whilst preserving the returns that it has historically been able to achieve. As companies within the Group's portfolio mature, they generally require an increased level of investment, commensurate with their advancing stage of development, in order to achieve their technical, commercial and strategic objectives. The Board considers that, where such companies continue to make progress towards achieving these objectives, there can be advantages for the Group in maintaining significant minority equity stakes in these companies in order to seek to maximise its level of returns.

The Board considers that the Group is in a highly advantageous position to assess the merits of further investments in its focus stage portfolio companies, given its well-established and in-depth understanding of the relevant company in each case. These investment opportunities are typically more mature (in that technology proof of concept has generally been achieved and demonstrated) and additional capital is required to bring the technology to, or towards, commercial validation. The Capital Raising will enable the Group to continue to have flexibility to lead these subsequent investment rounds in both existing and future focus-stage companies, decreasing its reliance on external capital and allowing it to maintain significant minority equity stakes with a view to continuing to generate strong equity returns.

The Group established an original presence on the east coast of the US in 2013 and has since been growing and developing its operations in the US. The Group now has partnerships with three of the US's leading research universities (being University of Pennsylvania, Princeton University and Columbia University) and has recently entered into pilot agreements with a further two leading US research universities. The Group announced the formation of its first US university spin-out company in December 2014 and it now has holdings in a total of 10 companies based on IP developed in the US universities and DOE Laboratories with whom it has commercial collaboration agreements.

The Directors believe that the US offers a profusion of opportunities to develop potentially world-class IP into spin-out companies and that it has seen only limited systematic commercialisation efforts from third parties to date. The Directors believe that the increased strength of the Group's balance sheet following completion of the Capital Raising will enable the Group to continue to build upon and strengthen its relationships with the US universities and other research institutions with whom it has commercial agreements, in order to deploy capital into commercialisation opportunities based on potentially world class intellectual property arising from the same, and to further augment its reputation in the US marketplace.

The Group will continue to seek to identify disruptive and compelling IP-based opportunities arising from its current UK Partnerships and its current agreements and initiatives within the US, as well as the agreements that it has entered into with the Go9 Universities. In addition, the Group may source further opportunities from or with other leading international research intensive institutions.

The Directors believe that the increased strength of the Group's balance sheet following completion of the Capital Raising, combined with its expanded geographic footprint arising from the launch of IP2IPO Australia, will enhance the Group's profile internationally and therefore further its ability to:

attract new early stage commercialisation opportunities from, and collaborations with, research intensive institutions in the UK, the US, Australia and New Zealand;
attract and retain high quality talent within the Group; and
attract experienced management teams and co-investment partners, as appropriate, into portfolio companies as they develop.

The Board has given careful consideration to the structure of the proposed fundraising and has concluded that the most appropriate structure for the Company and its Shareholders at this time is the Capital Raising, comprising the Firm Placing to raise gross proceeds of £135 million and the Placing, Open Offer and Offer for Subscription to raise gross proceeds of up to £65 million. Shareholders holding in aggregate approximately 70.5 per cent. of the Existing Shares have been approached and given the opportunity to participate in the Firm Placing. The Open Offer provides an opportunity for Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Open Offer Entitlements and by subscribing for Excess Shares under the Excess Application Facility. The Open Offer Shares constitute approximately 30.4 per cent. of the maximum number of Capital Raising Shares made available pursuant to the Capital Raising (assuming that the Company does not elect to increase the size of the Capital Raising) and the Open Offer Shares constitute approximately 22.8 per cent. of the maximum number of Capital Raising Shares made available pursuant to the Capital Raising (assuming that the Company does elect to increase the size of the Capital Raising). The Board considers the Open Offer to be primarily of benefit to those smaller Shareholders who have not been approached to participate in the Firm Placing. Those Shareholders who have agreed to take up Firm Placed Shares (and who together hold 57.5 per cent. of the Existing Shares as at 22 May 2017 (being the latest practicable date prior to the publication of this document)) have agreed not to apply for any of their Open Offer Entitlements or for any Excess Shares through the Excess Application Facility. Accordingly, the Board expects that a substantial proportion of the Open Offer Shares will be available to satisfy applications under the Excess Application Facility, should the Directors not exercise their discretion to allocate Excess Shares to the Placing or the Offer for Subscription. The allocation of Excess Shares is to be determined by the Board in its absolute discretion. In determining such allocation, the Board intends to favour Qualifying Shareholders who validly apply under the Excess Application Facility and who have not been given the opportunity to participate in the Firm Placing or the Placing. However, no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full or in part or at all.

The Capital Raising is conditional, inter alia, upon Shareholders passing the Resolutions at the General Meeting. The Capital Raising and the Possible Offer are not interconditional and neither is contingent on the other.

4. USE OF PROCEEDS

The Company is proposing to raise up to approximately £200 million (before expenses) via the Capital Raising, with the net proceeds being used to provide capital to fund:

the launch and subsequent development of IP2IPO Australia including providing capital to spin-out companies based on IP developed in the Go9 Universities;
the continued growth of the Group's developing US business, building upon, strengthening and potentially adding to its existing university relationships and its initiative with FedIMPACT and the DOE Laboratories, primarily providing capital to spin-out companies from such universities and institutions; and
the Group's existing UK business including the formation of new spin-out companies and to maintain or increase its stakes through subsequent financing rounds in those development and focus stage

investment opportunities which the Board considers to be the most promising, including those in the Touchstone portfolio if the Possible Offer becomes Effective.

In addition, the Group may explore further opportunities to expand its access to, and provide capital to enable the development of, IP originating from leading international universities and other research intensive institutions. No such opportunity has been sufficiently progressed as at the date of this document to merit a specific use of proceeds.

The Company is proposing to use the net proceeds to fund the launch and subsequent development of IP2IPO Australia with the balance being used to fund the continued growth of the Group's developing US business and its existing UK business including future investments in the Group's existing portfolio companies with high potential. The Board currently anticipates that the Group will invest approximately £30 million in the period to the end of 2019 to develop IP2IPO Australia.

In the event that the Board exercises its right to increase the size of the Capital Raising, the Board currently anticipates that it will utilise (subject, amongst other things, to the individual circumstances of, and rate of realisations obtained from, its portfolio companies) the additional aggregate net proceeds of up to £65.2 million to invest in the Group's existing UK portfolio companies with high potential to accelerate their development and to accelerate the development of the Group's US business.

5. CURRENT TRADING AND PROSPECTS

Portfolio update

The Group's portfolio now comprises holdings in 50 intellectual property based companies categorised within the Focus or Development stage, a further 41 Early stage companies and 3 multi-sector platform holdings. The Group has deployed capital totalling £8.8m to 14 portfolio companies and opportunities.

Significant developments in the Group's portfolio companies since 31 December 2016 include:

Ultrahaptics Ltd recently announced that it had completed a fundraising of £17.9m to support its global expansion and entry into virtual and augmented reality markets. The funding was supported by both existing shareholders, including IP Group and Woodford Investment Management, and new investors, Cornes Technology Investments Limited and Dolby Family Ventures;
Actual Experience plc announced it had raised a total of £17.5m (before expenses) by means of a conditional placing in March. The proceeds of the placing will enable Actual Experience to put in place the resources to support its channel partners as they commence the deployment of its technology into their global enterprise customer base.
Xeros Technology Group plc announced the launch of Symphony Project, providing manufacturers of conventional commercial washing machines with 'open source' access to Xeros' innovative polymer technology. Xeros has developed a simple retrofit pedestal that integrates Xeros' cleaning system into conventional machinery whilst causing minimal disruption to the manufacturing process. This provides a gateway for the incorporation of Xeros' technology into any commercial washing machine.
Avacta Group plc announced that an evaluation of its Affimer technology by a large, global diagnostics developer had successfully concluded and that the third party had taken exclusive rights to several Affimer reagents for an undisclosed sum. This is the first such evaluation to conclude and it has led to an agreement to provide exclusivity for certain Affimers which are relevant in a large diagnostic market. This is an important commercial step and a validation of the significant potential of the licensing business model.
In the US, the Group's first two portfolio companies from US university partners, Exyn Technologies and Uniformity Labs, raised a combined £5.4m in new post seed financing rounds via private placement of ordinary shares.

Outlook

While it is clear that the UK and its economy are facing a period of uncertainty following the outcome of the UK's referendum on its membership of the EU, which may impact on specific funding rounds for companies, it is important to stress that the Group is seeing positive progress across the portfolio, has a strong balance sheet and operations in both the UK and the US. The Group is now commencing operations in Australia and New Zealand building upon the Go9 Agreements. Through diversifying internationally the Company is reducing any Brexit risk.

The Group was founded on the belief that modern economies need to support innovation in science and technology and to commercially leverage such innovation, and the Directors believe that this remains the case. Further, the Board believes that the fundamentals of the Group's business are strong and that the need for the commercialisation of science remains key. The Board is excited at the prospect of the Possible Offer which it considers potentially represents an opportunity to create a stronger UK commercialisation company with greater capabilities.

6. PRINCIPAL TERMS AND CONDITIONS OF THE CAPITAL RAISING

The Company is proposing to raise gross proceeds of up to approximately £200 million (approximately £195.7 million net of costs and expenses) by the issue of up to 142,857,136 Capital Raising Shares by way of the Firm Placing and the Placing, Open Offer and Offer for Subscription at 140 pence per Share, although the Directors have the ability to increase the size of the Issue by up to 47,571,428 Capital Raising Shares such that the gross proceeds would be approximately £266.6 million (approximately £260.9 million net of all costs and expenses) should there be sufficient demand. The Firm Placing is underwritten by Numis. Assuming that the Capital Raising is up to £200 million, 96,428,566 Capital Raising Shares will be issued through the Firm Placing and up to 46,428,570 Capital Raising Shares will be issued through the Placing, Open Offer and Offer for Subscription.

The Board considers the Firm Placing and the Placing, Open Offer and Offer for Subscription to be a suitable fundraising structure as it will allow access to a variety of new institutional investors to broaden the Company's shareholder base whilst providing existing Shareholders with the opportunity to participate in the fundraising to an extent through the Firm Placing or the Open Offer and the Excess Application Facility.

Qualifying Shareholders are being offered the right to subscribe for Open Offer Shares in accordance with the terms of the Open Offer. Qualifying Shareholders applying for their Open Offer Entitlements may also apply, under the Excess Application Facility, for Excess Shares in excess of their Open Offer Entitlements as described below. The Company is also seeking to place Placing Shares through the Placing and making the Offer for Subscription as described below.

All elements of the Capital Raising have the same Issue Price. The Issue Price was set having regard to the prevailing market conditions and the size of the Issue and represents a discount of approximately 2.1 per cent. to the Closing Price of 143 pence per Share on 22 May 2017 (being the last Business Day before the announcement of the Capital Raising). The Board believes that both the Issue Price and the discount are appropriate.

The Capital Raising Shares, when issued and fully paid, will rank in full for all dividends or distributions made, paid or declared after Admission and otherwise pari passu in all respects with the Existing Shares. 142,857,136 Capital Raising Shares are to be issued pursuant to the Capital Raising (representing 25.3 per cent. of the existing issued share capital) assuming that it is fully subscribed. On the basis that the Capital Raising size is increased to a maximum of £266.6 million, the Capital Raising is expected to result in 190,428,564 Capital Raising Shares being issued (representing approximately 33.7 per cent. of the existing issued share capital).

As noted above the Directors will have the discretion to increase the size of the Capital Raising from £200 million to up to £266.6 million. The Directors may allocate any increase to and between the Excess Application Facility, the Placing and/or the Offer for Subscription as they deem fit.

Some questions and answers in relation to the Open Offer, together with details of the further terms and conditions of the Open Offer, including the procedure for application and payment and the procedure in respect of entitlements not taken up, are set out in Appendix 1 and Appendix 2 to this document and, where relevant, are set out in the Application Form.

Details of the further terms and conditions of the Offer for Subscription, including the procedure for application and payment, are set out in Appendix 4 of this document and, where relevant, are set out in the Subscription Form. The Subscription Form is contained in Appendix 4 of this document and will be available at the Company's website www.ipgroupplc.com.

Firm Placing

The Firm Placees have conditionally agreed to subscribe for 96,428,566 Capital Raising Shares in aggregate at the Issue Price (representing gross proceeds of £135 million). The Firm Placed Shares are not subject to clawback to satisfy the valid applications by Qualifying Shareholders under the Open Offer and the Excess Application Facility and are not part of the Placing, Open Offer or Offer for Subscription. The Firm Placing is underwritten by Numis. The terms and conditions of the Firm Placing and Placing are set out in Appendix 3 to this document.

Open Offer

The Directors recognise the importance of pre-emption rights to Shareholders and consequently 43,478,612 Capital Raising Shares are being offered to existing Shareholders by way of the Open Offer. The Open Offer provides an opportunity for Qualifying Shareholders to participate in the Capital Raising by both subscribing for their respective Open Offer Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability.

To the extent that valid applications are not received in respect of Open Offer Shares under the Open Offer, such Open Offer Shares may be allocated to Qualifying Shareholders to meet any valid applications under the Excess Application Facility and/or allocated to the Placing and/or Offer for Subscription.

Open Offer Entitlements

Qualifying Shareholders are being given the opportunity on, and subject to, the terms and conditions of the Open Offer to apply for Open Offer Shares at the Issue Price, pro rata to their holdings of Shares on the Record Date on the basis of:

1 Open Offer Share for every 13 Record Date Shares

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will not be allocated but will be aggregated and made available under the Excess Application Facility and/or the Placing and/or the Offer for Subscription.

If you have sold or otherwise transferred all of your Existing Ordinary Shares before the ex-entitlement date, you are not entitled to participate in the Open Offer.

Qualifying Shareholders are also being offered the opportunity to subscribe for Excess Shares in excess of their Open Offer Entitlements pursuant to the Excess Application Facility as described below.

Excess Application Facility

Qualifying Shareholders may apply to subscribe for Excess Shares using the Excess Application Facility, should they wish. Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares may do so by completing the relevant sections on the Application Form. Qualifying CREST Shareholders who wish to apply to subscribe for more than their Open Offer Entitlements will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to paragraphs 2, 4.1.4 and 4.2.3 of Appendix 2 of this document for information on how to apply for Excess Shares pursuant to the Excess Application Facility.

The Excess Application Facility will comprise Open Offer Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Open Offer Entitlements and may include Capital Raising Shares not taken up under the Placing or the Offer for Subscription.

The maximum amount of Capital Raising Shares to be issued under the Excess Application Facility (the "Maximum Excess Application Number") will be limited to: (a) the maximum size of the Issue (as it may be increased by the Directors by up to 47,571,428 Capital Raising Shares); less (b) the aggregate of the Firm Placed Shares, the Capital Raising Shares issued under the Open Offer pursuant to Qualifying Shareholders' Open Offer Entitlements and any Capital Raising Shares that the Directors determine to issue under the Placing and/or the Offer for Subscription. Excess Applications will therefore only be satisfied to the extent that:

(a) other Qualifying Shareholders do not apply for their Open Offer Entitlements in full;
(b) where fractional entitlements have been aggregated and made available under the Excess Application Facility;
(c) the Directors do not exercise their discretion to allocate Excess Shares to the Placing and/or the Offer for Subscription; and/or
(d) the Directors exercise their discretion to increase the size of the Issue and allocate any further Capital Raising Shares to the Excess Application Facility.

Qualifying Shareholders can apply for up to the Maximum Excess Application Number of Capital Raising Shares under the Excess Application Facility, although if applications exceed the maximum number available, the applications will be scaled back. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable thereafter by way of cheque or CREST payment, as appropriate.

Placing

To the extent that either (a) the Directors exercise their discretion to increase the size of the Issue and allocate any of such increase to the Placing and/or (b) any Capital Raising Shares are unallocated via the Excess Application Facility and have not been allocated to the Offer for Subscription, such Capital Raising Shares will be allocated and made available under the Placing. Shares will be allocated to Non-Firm Placees pursuant to, and in accordance with, the Placing Agreement. The Placing will not be underwritten by Numis and may be scaled back in favour of the Offer for Subscription and/or the Excess Application Facility. The terms and conditions of the Placing are contained in Appendix 3.

Offer for Subscription

To the extent that either (a) the Directors exercise their discretion to increase the size of the Issue and allocate any of such increase to the Offer for Subscription and/or (b) any Capital Raising Shares are unallocated via the Excess Application Facility and have not been allocated to the Placing, such Capital Raising Shares will be allocated to and made available under the Offer for Subscription. The Offer for Subscription may be scaled back in favour of the Placing and/or the Excess Application Facility.

The Offer for Subscription is only being made in the UK but, subject to applicable law, the Company may allot Capital Raising Shares on a private placement basis to applicants in other jurisdictions. The terms and conditions of application under the Offer for Subscription are set out in Appendix 4 of this document and, where relevant, in the Subscription Form. These terms and conditions should be read carefully before an application is made. Investors should consult their stockbroker, bank manager, solicitor, accountant or other financial adviser if they are in doubt.

Dilution

A Qualifying Shareholder who takes up his Open Offer Entitlements in respect of the Open Offer (and does not receive any other Capital Raising Shares pursuant to the Capital Raising, including the Excess Application Facility) will suffer dilution of approximately 14 per cent. to his shareholding in the Company as a result of the Capital Raising (assuming that 46,428,570 Capital Raising Shares are issued through the Placing, Open Offer and Offer for Subscription). If a Qualifying Shareholder does not take up his Open Offer Entitlements, such Qualifying Shareholder's holding will be diluted by approximately 20.18 per cent. as a result of the Capital Raising (assuming that such Qualifying Shareholder does not receive any Capital Raising Shares).

If the Directors increase the Capital Raising by £66.6 million through the issue of an additional 47,571,428 Capital Raising Shares at the Issue Price, the size of the Capital Raising will be approximately £266.6 million and if a Qualifying Shareholder does not take up his Open Offer Entitlements, such Qualifying Shareholder's holding will be diluted by approximately 20.18 per cent. as a result of the Capital Raising if subscribed in full. Furthermore, a Qualifying Shareholder who takes up his Open Offer Entitlements in full in respect of the Open Offer (but does not receive for any other Capital Raising Shares under the Excess Application Facility or any other element of the Capital Raising) will suffer dilution of approximately 14 per cent. to his shareholding in the Company as a result of the Capital Raising.

Assuming the Capital Raising raises £200 million (before expenses) and is fully subscribed then, before any adjustment to the proposed exchange ratio as referred to in the Company's announcement earlier today, Touchstone shareholders would receive in aggregate approximately 33 per cent. of the issued share capital of the Company as enlarged by both the Capital Raising and the shares to be issued by way of consideration on completion of the Possible Offer and Shareholders holdings would be diluted accordingly. The precise figures will not be determined until any announcement of a firm offer for Touchstone (if any) is made under Rule 2.7 of the City Code.

Fractions

Fractions of Open Offer Shares will not be allocated to Qualifying Shareholders in the Open Offer and fractional entitlements under the Open Offer will be aggregated and made available under the Excess Application Facility and/or the Placing and/or the Offer for Subscription.

Basis of allocation under the Capital Raising

The Placing may be scaled back in favour of the Offer for Subscription and/or the Excess Application Facility and the Offer for Subscription may be scaled back in favour of the Placing and/or the Excess Application Facility. The Open Offer is being made on a pre-emptive basis to Qualifying Shareholders and is not subject to scaling back in favour of either the Placing or the Offer for Subscription. Any Capital Raising Shares that are available under the Open Offer and are not taken up by Qualifying Shareholders pursuant to their Open Offer Entitlements or allocated under the Excess Application Facility will be reallocated to the Placing and/or the Offer for Subscription and made available thereunder.

The Directors have the discretion to determine the basis of any scaling back or reallocation of Excess Shares to the Placing and/or the Offer for Subscription. In exercising this discretion, the Directors generally intend to give priority to existing Shareholders over prospective new Shareholders, although the Directors will seek to balance the benefits to the Company of allowing existing Shareholders to maintain or increase the size of their relative Shareholdings with expanding the shareholder base of the Company.

Conditionality

The Capital Raising is conditional, inter alia, upon:

the passing of the Resolutions without amendment to be proposed at the General Meeting to be held on 8 June 2017;
the Placing Agreement having become unconditional in all respects save for the condition relating to Admission and not being terminated in accordance with its terms before Admission occurs; and
Admission occurring by not later than 8.00 a.m. on 9 June 2017 (or such later time and date as the Company and Numis may agree, being not later than 8.00 a.m. on 23 June 2017).

The Capital Raising is not conditional upon the Possible Offer.

Prior to Admission, Numis may terminate the Placing Agreement in certain defined circumstances. Following Admission, the Placing Agreement cannot be terminated.

If the conditions of the Placing Agreement are not fulfilled on or before 8.00 a.m. on 23 June 2017, application monies will be returned to applicants (at the applicant's risk) without interest as soon as possible thereafter.

Important notice

The Capital Raising Shares are not being made available in whole or in part to the public except under the terms of the Open Offer and the Offer for Subscription. The Open Offer and the Offer for Subscription are not being made to persons in the United States or in any jurisdiction in which such an offer or solicitation would be unlawful. The Offer for Subscription is solely available in the United Kingdom save as provided in Appendix 4. Accordingly, Application Forms are not (subject to certain exceptions) being sent to, and Open Offer Entitlements and Excess CREST Open Offer Entitlements are not being credited to, Overseas Shareholders. The attention of Overseas Shareholders is drawn to paragraph 6 of Appendix 2 of this document and the attention of Overseas Applicants is drawn to paragraph 4 of Appendix 4 of this document.

The Open Offer is not a rights issue. Invitations to apply under the Open Offer are not transferable unless to satisfy bona fide market claims and the Application Form is not a document of title and cannot be traded. Qualifying Shareholders should be aware that, in the Open Offer, unlike in the case of a rights issue, any Open Offer Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders, but will be taken up under the Excess Application Facility and/or the Placing and/or the Offer for Subscription, with the proceeds retained for the benefit of the Company.

To be valid, completed Application Forms and payment in full must be received by Capita Asset Services no later than 11.00 a.m. on 7 June 2017. Further information on the Open Offer, including the procedure for application and payment, is set out in Appendix 2 of this document and, where applicable, the Application Form.

7. FINANCIAL IMPACT OF THE CAPITAL RAISING

The Capital Raising will result in an increase in cash and other short term funds of approximately £195.7 million (assuming the Capital Raising of a size of approximately £200 million is fully subscribed) with a corresponding increase in the net assets of the Group.

8. PROPOSALS TO BE VOTED ON AT THE GENERAL MEETING

Part VIII of this document contains a notice convening a general meeting of the Company which is to be held at the Company's offices at The Walbrook Building, 25 Walbrook, London, EC4N 8AF at 10.00 a.m. on 8 June 2017. The full text of the Resolutions is set out in the Notice of General Meeting.

Resolution 1 – Approval of Capital Raising

Resolution 1 is an ordinary resolution to approve the terms of the Firm Placing and the Placing, Open Offer (including the Excess Application Facility) and Offer for Subscription and to direct the Directors to implement the Capital Raising and authorise the exercise of the powers conferred by this Resolution and all the powers of the Company to the extent that the Directors (or a duly appointed committee thereof) determine it necessary or desirable to implement the Capital Raising.

Resolution 2 – Authority to allot Capital Raising Shares

Resolution 2 is an ordinary resolution as required by section 551 Companies Act which will, if passed, authorise the Directors to allot the Capital Raising Shares pursuant to the Capital Raising. Resolution 2 is subject to the passing of Resolution 1.

Resolution 3 – Disapplication of pre-emption rights for the issue of the Capital Raising Shares

Resolution 3 is a special resolution as required by section 570 of the Companies Act and is conditional upon the passing of Resolution 2. If passed, this Resolution will disapply statutory pre-emption rights in relation to the allotment of equity securities pursuant to the Capital Raising. The maximum amount of equity securities to which the disapplication will apply is 190,428,564 Capital Raising Shares, being the maximum number of Capital Raising Shares that could be allotted even if the Directors exercised their discretion to increase the size of the Capital Raising from £200 million to £266.6 million.

9. OVERSEAS SHAREHOLDERS

The attention of Overseas Shareholders who have registered addresses outside the United Kingdom, or who are citizens of, or residents or located in, countries other than the United Kingdom, or who are holding Existing Shares for the benefit of such persons (including, without limitation, nominees, custodians and trustees), or have a contractual or legal obligation to forward this document, the Form of Proxy or the Application Form to such persons, is drawn to the information on the cover of this document and which appears in paragraph 6 of Appendix 2 of this document.

In particular, Qualifying Shareholders who have registered addresses outside the UK, or who are citizens of, or resident or located in, countries other than the UK (including, without limitation, the US or any of the Excluded Territories) should consult their professional advisers as to whether they require any governmental or other consent or need to observe any other formalities to enable them to take up their entitlements in the Open Offer.

10. TAXATION

Certain information about UK and US taxation in relation to the Firm Placing, Placing, Open Offer and Offer for Subscription is set out in paragraph 13 of Part V of this document. If you are in any doubt as to your tax position, or you are subject to tax in a jurisdiction other than the United Kingdom or the US, you should consult your own independent tax adviser without delay.

11. ACTION TO BE TAKEN

11.1 General Meeting

You will find enclosed with this document a Form of Proxy for use at the General Meeting or any adjournment thereof. Whether or not you propose to attend the General Meeting in person, it is important that you complete and sign the Form of Proxy in accordance with the instructions printed on it and return it by post or by hand (during normal business hours) to Capita Asset Services, PXS The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or in accordance with the reply paid details, as soon as possible and, in any event, so as to be received not later than 11.00 a.m. on 6 June 2017. The completion and return of a Form of Proxy (or the electronic appointment of a proxy) will not preclude you from attending the General Meeting and voting in person, if you so wish.

Qualifying Non-CREST Shareholders (i.e. holders of Existing Shares who hold their Existing Shares in certificated form)

If you are a Qualifying Non-CREST Shareholder you will receive an Application Form which gives details of your maximum entitlement under the Open Offer (as shown by the number of Open Offer Entitlements set out in Box 4). Under the Excess Application Facility, provided you are a Qualifying Non-CREST Shareholder and have agreed to take up your Open Offer Entitlements in full, you may apply for more than the amount of your Open Offer Entitlements should you wish to do so. If you wish to apply for Open Offer Shares under the Open Offer or the Excess Application Facility, you should complete the Application Form in accordance with the procedure for application set out in paragraph 4.1 of Appendix 2 of this document and on the Application Form itself. Completed Application Forms, accompanied by full payment in accordance with the instructions in paragraph 4.1 of Appendix 2 of this document, should be posted in the accompanying pre-paid envelope or returned by post or by hand (and, if by hand, during normal business hours only) to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to arrive as soon as possible and, in any event, so as to be received by no later than 11.00 a.m. on 7 June 2017. If you do not wish to apply for any Open Offer Shares under the Open Offer, you should not complete or return the Application Form.

11.2 Open Offer

Qualifying CREST Shareholders

If you are a Qualifying CREST Shareholder no Application Form will be sent to you and you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer and also Excess CREST Open Offer Entitlements for use in connection with the Excess Application Facility. You should refer to the procedure for application set out in Appendix 2 of this document.

The latest time for applications under the Open Offer to be received whether from Qualifying Non-CREST Shareholders or from Qualifying CREST Shareholders is 11.00 a.m. on 7 June 2017. The procedure for application and payment depends on whether, at the time at which the application and payment is made, you have an Application Form in respect of your entitlement under the Open Offer or have your Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to your stock account in CREST in respect of such entitlements. The procedures for application and payment are set out in Appendix 2 of this document. Further details also appear in the Application Form which has been sent to Qualifying Non-CREST Shareholders.

Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this document and the Open Offer.

The attention of Overseas Shareholders is drawn to paragraph 6 of Appendix 2 of this document.

If you are in any doubt as to the action you should take, you should immediately seek your own personal financial advice from an independent professional adviser authorised under FSMA, if you are in the United Kingdom or, if you are not, from another appropriately authorised independent professional adviser.

11.3 Offer for Subscription

The terms and conditions of application under the Offer for Subscription are set out in Appendix 4 of this document and, where applicable, the Subscription Form. These terms and conditions should be read carefully before an application is made. The Subscription Form is contained in Appendix 4 of this document and will, subject to applicable restrictions, be available on the Company's website.

The latest time for applications under the Offer for Subscription is 1.00 p.m. on 7 June 2017.

If you are in any doubt as to what action you should take, you are recommended to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under FSMA immediately if you are in the United Kingdom or, if you are not, from another appropriately authorised independent professional adviser.

12. FURTHER INFORMATION AND RISK FACTORS

Your attention is drawn to the further information set out in Parts II to VIII of this document. In addition, your attention is drawn to the section entitled "Risk Factors" at the front of this document after the section entitled "Summary". You are advised to read the whole of this document, and the documents incorporated by reference, and not to rely solely on the information contained in this letter.

13. DIRECTORS' INTERESTS

Information on the Directors' interests can be found in paragraph 9.4 of Part V of this document.

14. RECOMMENDATION

The Board considers the Capital Raising and the passing of each of the Resolutions to be in the best interests of the Company and the Shareholders as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour of each of the Resolutions to be put to the General Meeting as they intend to do, or procure, in respect of their own beneficial holdings, amounting in aggregate to 4,713,446 Shares, representing approximately 0.83 per cent. of the Existing Shares.

Yours sincerely

Mike Humphrey Chairman

PART II

INFORMATION ON THE GROUP

1. INTRODUCTION

1.1 IP Group was established in 2000 to commercialise scientific innovation developed in the UK's leading research institutions.
1.2 IP Group's business model is to form, or assist in the formation of, spin-out companies based on that innovation, to take a significant minority equity stake in these spin-out companies and then to grow the value of that equity over time by taking an active role in the development of such spin-out companies. IP Group's strategy has been to build significant minority equity stakes across a diversified portfolio of companies within its four main sectors with a view to achieving strong equity returns over the medium to long term.

United Kingdom

1.3 An important aspect of the Group's strategy is its ability to access a wide range of leading scientific research. In the UK this has been achieved primarily through long-term partnerships with a number of leading research universities and strategic stakes in university-specific commercialisation vehicles. The Group entered into its first long term partnership in 2000. Since that time, the Group has entered into further partnerships and now has direct arrangements covering thirteen of the UK's leading universities.

In addition to these direct contractual arrangements, the Group also has two strategic holdings in Cambridge Innovation Capital plc and Oxford Sciences Innovation plc. Cambridge Innovation Capital plc supports the growth of innovative businesses located in the "Cambridge Cluster" and is supported by the University of Cambridge's commercialisation office, Cambridge Enterprise. The Group and Cambridge Innovation Capital have also entered into a memorandum of understanding to share information on investment and co-investment opportunities. Oxford Sciences Innovation plc is the contractually preferred partner of the University of Oxford and provides capital to and develops spin-out companies based on research from the University's Mathematical, Physical and Life Sciences Division and its Medical Sciences Division.

The Group is in discussion with other universities in the UK and it leverages the capabilities of its in-house sourcing team to identify and pursue compelling standalone opportunities arising from such universities. This New Business and Partnerships team works with the Group's partners to identify promising research and to create and build businesses around this research. The Group, through the work of that team, utilises its proprietary hypothesis based methodologies to assess new opportunities and decide which to progress. These techniques are also used to monitor progress and shape the evolving strategy of the opportunities throughout their life cycle.

In addition, the Group has two FCA regulated subsidiaries: (1) Top Technology Ventures, which specialises in providing equity funding for early stage technology based growth companies and currently manages three funds, the £31 million IP Venture Fund, the £37 million North East Technology Fund and the £30 million IP Venture Fund II and (2) Parkwalk Advisors, a leading university spin-out focused EIS fund manager which has raised over £100 million to date with the majority of funds coming from leading private wealth platforms and has backed over 60 companies across its managed funds since inception.

United States

1.4 The Group has access to intellectual property emanating from research carried out in the United States through its IP commercialisation agreements with each of the following:
Columbia Technology Ventures, the technology transfer office of Columbia University;
University of Pennsylvania and University of Pennsylvania's Center for Technology Transfer's UPstart company formation programme ("UPstart"); and
Princeton University.

During 2013 and 2014 the Group entered into several pilot phase projects under collaboration agreements with Columbia University, University of Pennsylvania and UPstart, and Princeton University. Each collaboration agreement had an initial pilot phase of eighteen months and focused on the identification and potential commercialisation of early stage, proof of principle opportunities based on intellectual property developed at each university. Each pilot phase was subsequently extended during the course of 2015 and 2016 and the agreements varied to enable the parties to reflect the advancement of their working relationships. The extended agreements are not time limited and continue on a rolling renewal basis subject to their terms. The Group recently entered into pilot agreements with a further two leading US research universities and is currently assessing the first potential spin-out opportunities therefrom.

In addition, in November 2014, the Group launched a commercialisation initiative with FedIMPACT to identify and develop early stage technologies from a distinct group of US Department of Energy National Laboratories, including Pacific Northwest National Laboratory and The National Renewable Energy Laboratory. The Group and FedIMPACT, LLC also added a commercialization initiative with another US Department of Energy National Laboratory being Argonne National Laboratory in February 2016 to further identify and develop early stage technologies.

As at 31 December 2016, the Group had a portfolio of 90 companies and three holdings in multisector platforms (OSI, CIC and Frontier IP Group plc), in addition to 20 de minimis holdings in which its combined stake was valued at approximately £614.0 million8 . Of the 90 companies (excluding the Group's holdings in OSI, CIC, Frontier IP Group plc and the 20 de minimis holdings) in the Group's portfolio, 76 per cent. of the fair value resides in the ten most valuable companies. The total value of the Group's 90 portfolio companies (excluding multi-sector platforms and de minimis holdings) calculated by reference to the Group's holding in such companies and grossed up to reflect their total value exceeded £2.7 billion9 or approximately £3.3 billion including the Group's three holdings in multi-sector platform companies (OSI, CIC and Frontier IP Group plc).

Australia and New Zealand

1.5 The Group has entered or proposes to enter into long-term commercialisation agreements with each of the Go9 Universities in relation to the sourcing and commercialisation of IP where such IP has been acquired by the university as result of its intellectual property policy, through contracts of employment or engagement, through agreements or arrangements with academic staff or students or which has been otherwise obtained under the statute relating to the relevant university. Further details of these agreements are set out in paragraph 14.25 of Part V of this document.
1.6 The Go9 Agreements commit the Group to invest at least AU\$200 million in aggregate under the Go9 Agreements over a ten-year period to fund investments in spin-out companies based on the IP of the Go9 Universities and the on-going operations of IP2IPO Australia. The Go9 Agreements are for an initial twenty-year term (with break options at both ten and fifteen years) with formal review processes.
1.7 The obligations of the parties under the Go9 Agreements are conditional upon, among other things (i) the Company raising not less than AU\$100m under the Capital Raising for the non-exclusive purpose of funding IP2IPO Australia to meet its obligations under the Go9 Agreements and (ii) IP2IPO Australia and the Company having entered into a Go9 Agreement with each of the Go9

⁸ Calculated by reference to the values attributed to the Group's investments in such portfolio companies in the Group's audited results for the year ended 31 December 2016.

⁹ Calculated by reference to the values attributed to the Group's investments in such portfolio companies in the audited results of the Group for the year ended 31 December 2016 grossed up to reflect the overall value of such portfolio companies.

Universities and none of such agreements having been breached or terminated, in each case within eight months of the date of the Go9 Agreement.

1.8 In the event that the Group has not invested AU\$200 million in aggregate within the first ten years then each Go9 University is entitled to terminate its Go9 Agreement. After the first ten years the Group is generally committed to use reasonable endeavours to deploy additional capital that would be adequate to maintain at least the same level of economic activity undertaken by IP2IPO Australia during such period.
1.9 Subject to certain exceptions the Group has agreed not to enter into any agreement with any research institution, university or third party in Australia or New Zealand (other than the Go9 Universities) to develop and commercialise IP of that third party during the first ten years (with an extension to this exclusivity commitment to be discussed as part of a 10 year review under the agreement). Each of the Go9 Universities has committed, subject to certain exceptions, not to enter into any agreement which would or could give rise to a conflict with the terms of the relevant Go9 Agreement during the first ten years of the agreement, without the prior written consent of the Group (with an extension to this exclusivity commitment to be discussed as part of a ten year review under the agreement).

2. BACKGROUND TO THE GROUP

2.1 In December 2000, Evolution Beeson Gregory (then known as Beeson Gregory Limited) entered into the University of Oxford Partnership (the first of its kind) and formed a separate company to manage this venture. In August 2001, Beeson Gregory Group plc (subsequently acquired by Evolution in July 2002) made the decision to transfer this company to a separate holding company, IP Group.
2.2 IP Group was quoted on AIM in October 2003 and moved to the Official List in June 2006. Subsequent to its admission to AIM, IP Group has raised approximately £390 million of net proceeds from equity investors, predominantly to build its portfolio of companies.
2.3 The Group works with its university partners and other collaborators to identify promising intellectual property and to create and build world-changing businesses around this intellectual property. The Group utilises the relationships it builds with these partners to create, build and maintain a pipeline of compelling intellectual property based opportunities. The Group's extensive and multi-faceted expertise in sourcing leading scientific ideas, combined with its extensive knowledge of both industry and finance, has enabled it to create a strong and diverse portfolio with exposure to four main sectors: Biotech, Cleantech, Healthcare and Technology.
2.4 The New Business and Partnerships team was established in July 2015 and has primary responsibility for sourcing, evaluating and building new and early-stage opportunities (comprising pre-seed and seed) and works with the Group's partners to identify promising research and to create and build businesses around this research.
2.5 As at 31 December, the Group had a portfolio of 90 companies, three multi-sector platforms (OSI, CIC and Frontier IP Group plc) and 20 de minimis holdings in which its combined stake was valued at approximately £614.0 million10. Of the 90 companies (excluding the Group's holdings in OSI, CIC, Frontier IP Group plc and the 20 de minimis holdings) in the Group's portfolio, 76 per cent. of the fair value resides in the ten most valuable companies, many of which have made significant progress in the last twelve months towards achieving key milestones and commercial validation. In 2016, the Group invested a total of £30.1 million in its top ten businesses within the Focus stage (by value as at 31 December 2016) representing approximately 51.2 per cent. of the £58.8m aggregate annual investment into the portfolio, which excludes £10.9m invested into the Group's strategic holdings in OSI and CIC. As at 31 December 2016, the aggregate value of the portfolio companies in which the

¹⁰ Calculated by reference to the values attributed to the Group's investments in such portfolio companies in the Group's audited results for the year ended 31 December 2016.

¹¹ Calculated by reference to the values attributed to the Group's investments in such portfolio companies in the audited results of the Group for the year ended 31 December 2016 grossed up to reflect the overall value of such portfolio companies.

Group had an investment (excluding multi-sector platforms and de minimis holdings), calculated by reference to the Group's holding in such companies and grossed up to reflect their total value exceeded £2.7 billion11 or approximately £3.3billion including the Group's three holdings in multisector platform companies (OSI, CIC and Frontier IP Group plc).

2.6 The Group's current portfolio falls broadly into the following three categories:
2.6.1 Early-stage: these comprise both incubation and seed opportunities. Incubation opportunities comprise businesses or pre-incorporation projects that are generally at a very early stage of development, at most within three years since the Group's first financing, and have received at least one stage of funding. Opportunities at this stage usually involve capital of less than £0.2 million from the Group, predominantly allowing for proof of concept work to be carried out. Seed businesses are those that have typically received financing of up to £1.0 million in total, primarily from the Group, in order to continue to progress towards agreed commercial and technology milestones and to enable the recruitment of management teams and early commercial engagement;
2.6.2 Development stage: these comprise businesses to which the Group has provided in excess of £0.5 million as principal investor, or in excess of £1.0 million of funding in conjunction with other significant investors. Although each business can vary significantly in its rate and manner of development, such additional funding is generally used to progress towards key milestones and commercial validation, to build senior level capability in the business and to attract experienced non-executive directors to their boards; and
2.6.3 Focus stage: portfolio companies which are classed as being in the focus stage are those portfolio companies (excluding multi-sector platform companies) in which the Group's holdings have a fair value in excess of £4.0 million.
2.7 In addition, the Group also has a number of de minimis legacy holdings where the aggregate holding value amounts to less than £1.0 million.
2.8 As at 31 December 2016, the Group's portfolio of 90 companies consisted of 39 Early-stage businesses, 32 Development stage businesses, 19 Focus stage businesses of which 8 were quoted. The Group's holdings in Early-stage and Development stage businesses were valued at approximately £77.3 million (in aggregate) at 31 December 2016 and its holdings in Focus stage businesses at approximately £473.3 million (in aggregate)12. Of the 90 companies in the Group's portfolio (excluding the Group's holdings in OSI, CIC and Frontier IP Group plc and the 20 de minimis holdings), 76 per cent. of the fair value resides in the ten most valuable companies. Further details on these ten companies, including a description of their businesses, amounts invested and realised by the Group during the year ended 31 December 2016 and the values of the Company's holdings as at 31 December 2016, are set out in paragraph 31 of this Part II.
2.9 The experienced Board currently comprises a Non-executive Chairman, Chief Executive Officer, Chief Investment Officer, Chief Financial Officer, Chief Operating Officer and four additional Non-Executive Directors. The Board collectively possesses considerable investment, commercial and financial experience, with particular expertise in the development of technology-based businesses.
2.10 The Board is supported by an experienced management team, including the New Business and Partnership team. This team works collaboratively with the Group's four independently managed divisions, each with specialist expertise in a particular technology area: Biotech, Cleantech, Healthcare and Technology. In addition, the Group leverages its extensive network of highly experienced individuals with expertise spanning financial, technical, industry and academic specialisms, as well as its own in-house recruitment capability, to build and strengthen the boards of the Group's spin-out companies.

¹² Calculated by reference to the values attributed to the Group's investments in the audited results of the Company for the year ended 31 December 2016.

2.11 As at 31 December 2016, the Group employed 76 staff (including the Executive Directors) and operates principally from offices at The Walbrook Building, 25 Walbrook, London, EC4N 8AF with smaller regional offices in Oxford, Leeds, Newcastle, Sheffield, Cardiff and Nottingham.

3. PARTNERSHIPS AND OTHER COLLABORATIVE ARRANGEMENTS

3.1 The Group's core business is the creation of value for its shareholders and partners through the commercialisation of IP, and the provision of capital and expertise to, spin-out companies originating from its partner universities and other research intensive institutions.
3.2 Through its Partnerships and collaborations, the Group seeks to:
3.2.1 be a party to mid to long-term arrangements with universities under which the Group has access to potentially world class IP and may receive a significant minority interest in spin-out companies formed on the basis of, and/or income derived from the licensing of, such IP;
3.2.2 gain access to potentially world class IP from additional universities and research intensive institutions, both in the UK and in the US, and to commercialisation and investment opportunities in spin-out companies based on such IP;
3.2.3 work with those universities and research institutions concerned to develop and improve the processes by which they seek to commercialise the IP that they generate through the creation of spin-out companies;
3.2.4 work closely with spin-out companies from those universities and research institutions in which the Group has an interest with a view to improving their prospects of success through operational, commercial, technical and strategic guidance; and
3.2.5 realise value from its portfolio of spin-out companies through the creation of exit opportunities whether by way of trade sales, initial public offerings or the creation of profitable businesses paying dividends to shareholders (including the Company).
3.3 The Group has entered into mid to long term Partnerships with thirteen universities in the UK and through its strategic stakes in Cambridge Innovation Capital plc and Oxford Sciences Innovation plc participates in funding IP from those two universities. Further the Group currently has access to IP created at five universities in the US. Through its initiative with FedIMPACT, the Group also has access to the IP created at a select group of 3 Department of Energy National Laboratories. A description of each of these arrangements, including the ways in which the Group generates income for itself and its partners and other collaborators through the commercialisation of the IP generated by such universities, institutes, initiatives and arrangements through spin-out companies, is set out below and in paragraph 14 of Part V.

4. UNIVERSITY OF OXFORD

4.1 In January 2011, the Group acquired a strategic stake in Technikos LLP, a venture capital fund specialising in early-stage medical technology which has a long-term commercialisation agreement with the University of Oxford's Institute of Biomedical Engineering ("IBME"). The Group now provides access to its commercialisation, capital markets and scientific expertise and works alongside the Technikos team to assist with the creation of new spin-outs based on science generated by the IBME. For further details of the Group's arrangements with Technikos, please see paragraph 21 below.
4.2 In the summer of 2015, the Company acquired a strategic stake in Oxford Sciences Innovation plc ("OSI"). OSI entered into a framework agreement with the University of Oxford in March 2015 under which it is the contractually preferred intellectual property partner of the University of Oxford for the provision of capital to and development of spin-out companies based on research from the University of Oxford's Medical Sciences Division and its Mathematical, Physical and Life Sciences Division. The Group has invested in 2 companies alongside OSI.

5. UNIVERSITY OF SOUTHAMPTON PARTNERSHIP

5.1 Under the terms of the University of Southampton Partnership, IP2IPO committed, subject to the quality and quantity of the potential investment opportunities, to make available to its subsidiary, IP2IPO Management Limited, the £5m Southampton Fund for investment in spin-out companies based on IP created at the University of Southampton. The terms of the University of Southampton Partnership provide that IP2IPO is entitled to:
5.1.1 a direct equity shareholding in spin-out companies based on IP created at the University of Southampton as a result of investments made by IP2IPO Management Limited out of the £5m Southampton Fund; and
5.1.2 an indirect interest in such spin-out companies by virtue of IP2IPO's 20 per cent. shareholding in Southampton Asset Management Limited. Southampton Asset Management Limited is a company that has been set up to own the University of Southampton's equity interests in spin-out companies (after the allocation of shares in the spin-out company to its academic founders) acquired during the term of the University of Southampton Partnership.

The remaining 80 per cent. of Southampton Asset Management Limited is owned by the University of Southampton.

5.2 In practice, the Group and the University of Southampton have agreed that, rather than holding its 'indirect interest' entitlement through Southampton Asset Management Limited (as described above), IP2IPO holds this directly through a subsidiary of the Company.
5.3 The University of Southampton Partnership commenced in March 2002 and has a term of at least 25 years, subject to earlier termination in certain limited circumstances.
5.4 As at 22 May 2017, being the latest practicable date prior to publication of this document, approximately £3.6m of the Southampton Fund had been invested or committed.
5.5 The Company and the University of Southampton are currently in negotiations with regard to improving and amending the partnership.
5.6 Please refer to paragraph 14.1 of Part V for further information.

6. KING'S COLLEGE LONDON PARTNERSHIP

6.1 Under the terms of the original Partnership with King's College London entered into in 2003, IP2IPO committed to make available to its subsidiary, IP2IPO Management II Limited, the £5 million King's College Fund for seed capital investment in spin-out companies based on IP created at King's College London.
6.2 The terms of the King's College London Partnership were revised in 2009 and under the revised agreement IP2IPO agreed to target investing the remaining £3.2 million of the £5m King's Fund over a three year period which commenced on 12 November 2009. This target was dependent on the quality and quantity of the investment opportunities that came through the Partnership. King's College London cannot require IP2IPO to make any additional funds available to the extent that this amount is fully invested. Notwithstanding that the investment term of the revised agreement has expired, the parties continue to operate on the basis of the agreed arrangements.
6.3 The terms of the King's College London Partnership provide that IP2IPO is entitled to a direct equity shareholding in spin-out companies based on IP created at King's College London as a result of investments made out of the £5m King's Fund.
6.4 The King's College London Partnership commenced in November 2009 and will terminate on 14 May 2028, subject to earlier termination in certain limited circumstances.
6.5 As at 22 May 2017, being the latest practicable date prior to publication of this document, approximately £1.8 million of the £5m King's Fund had been invested.

6.6 Please refer to paragraph 14.3 of Part V for further information.

7. CENTRE FOR NOVEL AGRICULTURAL PRODUCTS ("CNAP") PARTNERSHIP

7.1 Pursuant to the terms of the CNAP Partnership entered into in 2003, IP2IPO has invested £1.15 million in Amaethon Limited, a technology commercialisation company formed to commercialise CNAP's IP. Initially, the University of York owns CNAP's IP, but Amaethon Limited has the right to manage this IP and to call for its transfer to itself or its nominee.
7.2 The terms of the CNAP Partnership provide that IP2IPO:
7.2.1 is entitled to a direct equity shareholding in spin-out companies based on CNAP's IP acquired as a result of IP2IPO's investment; and
7.2.2 is entitled to a 40 per cent. interest in Amaethon Limited (which in turn owns the University of York's interest in spin-out companies and licences based on CNAP's IP), with the balance being owned by the University of York.
7.3 IP2IPO committed, subject to the quality and quantity of the potential investment opportunities, to invest up to a total of £750,000 over three years, commencing in September 2003, in spin-out companies based on CNAP's IP and this amount may be extended at IP2IPO's option. Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.
7.4 As at 22 May 2017, being the last practicable date prior to publication of this document, approximately £0.2 million had been invested under the CNAP Partnership.
7.5 Please refer to paragraph 14.2 of Part V for further information.

8. UNIVERSITY OF YORK PARTNERSHIP

8.1 IP2IPO entered into a wider partnership to cover the entire University of York in March 2006 which was varied in March 2009. IP2IPO committed to invest the £5m York Fund in spin-out companies based on IP created at the University of York (excluding the CNAP Partnership). IP2IPO's investments in spin-out companies from the £5m York Fund are directly owned by IP2IPO. The University of York Partnership provides that the £5m York Fund would, subject to the quality and quantity of the potential investment opportunities, be invested over a 7 year period commencing in March 2006. Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.
8.2 The terms of the University of York Partnership (as varied) provide that IP2IPO is entitled to:
8.2.1 a direct equity shareholding in spin-out companies based on IP created at the University of York as a result of investments made out of the £5m York Fund; and
8.2.2 an "automatic" interest in the University of York's spin-out companies by virtue of IP2IPO's entitlement to a 25 per cent. shareholding in any spin-out company formed from the University of York whilst the Partnership continues (prior to any investment from the £5m York Fund) in the event that IP2IPO proposes, and the University of York agrees, that the commercialisation opportunity is progressed and the Fund invests in the spin-out company and a 5 per cent. shareholding in the spin-out company in certain other circumstances in the event that the Fund does not invest.
8.3 The University of York Partnership commenced in March 2006 and has a term of 25 years, subject to earlier termination in certain limited circumstances. IP2IPO has the right, but not the obligation, to extend the £5m York Fund. In the event that IP2IPO does not extend the £5m York Fund, the Partnership will terminate.
8.4 As at 22 May 2017, being the latest practicable date prior to publication of this document, approximately £0.2 million had been invested from the £5m York Fund.
8.5 The Company and the University of York are currently in discussions to review and streamline the operational processes governing the relationship.
8.6 Please refer to paragraph 14.8 of Part V for further information.

9. UNIVERSITY OF LEEDS PARTNERSHIP

9.1 Under the terms of the original partnership with the University of Leeds entered into on 15 July 2005 (the "Original Agreement"), the Company committed to invest the £5m Leeds Fund in spin-out companies based on IP created at the University of Leeds. The Original Agreement provided that the £5m Leeds Fund would, subject to the quantity and quality of investment opportunities, be invested over a period of 5 years commencing on 15 July 2005. The entire £5m Leeds Fund has now been invested.
9.2 Pursuant to a variation agreement dated 17 March 2011 (the "Variation Agreement"), the parties agreed certain variations, clarifications and supplemental terms to the Original Agreement.
9.3 Under the Variation Agreement, the parties agreed that, they will work together with the University of Leeds to, subject to the quality and quantity of the investment opportunities, seek to attain the following investment targets: (i) a base-line of grub fund investments of £200,000 per annum in aggregate; and (ii) a base-line of seed fund investments of £500,000 per annum in aggregate. The parties intend that such targets will be the subject of on-going review.
9.4 The terms of the University of Leeds Partnership provide that the Company is entitled to:
9.4.1 a direct equity shareholding in spin-out companies based on IP created at the University of Leeds as a result of seed fund investments made by the Company;
9.4.2 subject to certain exceptions an "automatic" interest, amounting to a 30 per cent. shareholding, in any spin-out company formed from the University of Leeds whilst the Partnership continues (prior to any investment by the Company); and
9.4.3 30 per cent. of the net revenues received by the University of Leeds in respect of out-licensing in certain limited circumstances (i.e. where such licensing opportunity is managed by the Company and either (i) the opportunity results from the conversion of a Company incubated company or (ii) the Company has otherwise had significant input (including finding the potential licensee and negotiating the commercial heads of terms with such licensee) in relation to such opportunity).
9.5 The University of Leeds Partnership continues until midnight on 19 December 2027. The parties are in discussions to further develop and improve the partnership procedures.
9.6 Please refer to paragraph 14.5 of Part V for further information.

10. UNIVERSITY OF BRISTOL PARTNERSHIP

10.1 Under the terms of the University of Bristol Partnership, IP2IPO committed to provide expertise and assistance to the University of Bristol in respect of its technology transfer activities. IP2IPO committed to invest the £5m Bristol Fund in spin-out companies based on IP created at the University of Bristol. The University of Bristol Partnership provides that the £5m Bristol Fund would, subject to the quality and quantity of the potential investment opportunities, be invested over a period of 5 years commencing in December 2005. Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.

10.2 The terms of the University of Bristol Partnership provide that IP2IPO is entitled to:
10.2.1 a direct equity shareholding in spin-out companies based on IP created at the University of Bristol as a result of investments made out of the £5m Bristol Fund; and
10.2.2 an "automatic" interest in the University of Bristol's spin-out companies by virtue of IP2IPO's entitlement to a 13.3 per cent. shareholding in any spin-out company formed from the University of Bristol whilst the Partnership continues.
10.3 The University of Bristol Partnership commenced in December 2005 and has a term of at least 25 years, subject to earlier termination in certain limited circumstances. IP2IPO has the right, but not the obligation, to extend the £5m Bristol Fund.
10.4 As at 22 May 2017, being the latest practicable date prior to publication of this document, approximately £1.1 million of the £5m Bristol Fund had been invested.
10.5 Please refer to paragraph 14.6 of Part V for further information.

11. UNIVERSITY OF SURREY PARTNERSHIP

11.1 Under the terms of the University of Surrey Partnership, IP2IPO committed to provide expertise and assistance to the University of Surrey in respect of its technology transfer activities. IP2IPO committed to invest the £5m Surrey Fund in spin-out companies based on IP created at the University of Surrey. The University of Surrey Partnership provides that the Surrey Fund would, subject to the quality and quantity of the potential investment opportunities, be invested over a period of 7 years commencing in February 2006. Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.
11.2 The terms of the University of Surrey Partnership provide that IP2IPO is entitled to:
11.2.1 a direct equity shareholding in spin-out companies based on IP created at the University of Surrey as a result of investments made out of the £5m Surrey Fund; and
11.2.2 an "automatic" interest in the University of Surrey's spin-out companies by virtue of IP2IPO's entitlement to a 13.3 per cent. shareholding in any spin-out company formed from the University of Surrey whilst the Partnership continues.
11.3 The University of Surrey Partnership commenced in February 2006 and has a term of at least 25 years, subject to earlier termination in certain limited circumstances. IP2IPO has the right, but not the obligation, to extend the £5m Surrey Fund.
11.4 As at 22 May 2017, being the latest practicable date prior to publication of this document, approximately £0.5 million of the £5m Surrey Fund has been invested.
11.5 The Company and the University of Surrey are currently in negotiations in respect of a variation to the existing agreement.
11.6 Please refer to paragraph 14.7 of Part V for further information.

12. UNIVERSITY OF BATH PARTNERSHIP

12.1 Under the terms of the University of Bath Partnership, IP2IPO committed to provide expertise and assistance to the University of Bath with a view to creating value from the IP of the University of Bath. IP2IPO committed to invest the £5m Bath Fund in spin-out companies based on IP created at the University of Bath. The University of Bath Partnership provides that the £5m Bath Fund would, subject to the quality and quantity of the potential investment opportunities, be invested over a period of 7 years commencing in September 2006. Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.

12.2 The terms of the University of Bath Partnership (as amended in 2007, 2009, 2010 and 2015) provide that the Group (together with FP Venture Fund II in respect of up to 30 per cent. of the total seed capital requirement of any relevant spin-out company) is entitled to:
12.2.1 a direct equity shareholding in spin-out companies based on IP created at the University of Bath as a result of investments made out of the £5m Bath Fund;
12.2.2 an interest amounting to the greater of: (i) 20 per cent. of the shareholding of the University of Bath in any spin-out company; and (ii) 10 per cent. of the initial equity in that spin-out company or joint venture spin-out (prior to any investment from the £5m Bath Fund) formed under the Partnership in circumstances where IP2IPO has been actively engaged on the opportunity;
12.2.3 in the event that the University of Bath, during the term of the Partnership, licences or assigns IP to a company which is not a spin-out company, then IP2IPO is entitled to 20 per cent. of the shareholding to which the University of Bath is entitled in circumstances where it has been actively engaged on the opportunity (and 10 per cent. of the shareholding where it has not been actively engaged); and
12.2.4 an interest in licence fees generated by the University of Bath from its IP not commercialised through spin-out companies.
12.3 The University of Bath Partnership commenced in September 2006 and has a term of at least 25 years, subject to earlier termination in certain limited circumstances. IP2IPO has the right, but not the obligation, to extend the £5m Bath Fund.
12.4 As at 22 May 2017, being the latest practicable date prior to publication of this document, approximately £0.2 million of the £5m Bath Fund has been invested.
12.5 Please refer to paragraph 14.11 of Part V for further information.

13. UNIVERSITY OF GLASGOW PARTNERSHIP

13.1 Under the terms of the University of Glasgow Partnership, IP2IPO committed to identifying and progressing spin-out company opportunities within the University of Glasgow with a view to creating value from the IP of the University of Glasgow. IP2IPO committed to invest the £5m Glasgow Fund in spin-out companies based on IP created at the University of Glasgow. The University of Glasgow Partnership provides that the £5m Glasgow Fund would, subject to the quantity and quality of the potential investment opportunities, be invested over a period of 5 years commencing in October 2006. Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.
13.2 The terms of the University of Glasgow Partnership provide that IP2IPO is entitled to:
13.2.1 an "automatic" interest, amounting to a 12 per cent. shareholding, in each spin-out company or joint venture spin-out based on IP created by the University of Glasgow formed during the term of the Partnership (prior to any investment from the £5m Glasgow Fund); and
13.2.2 in the event that the University of Glasgow, during the term of the Partnership, licences or assigns IP to a company which is not a spin-out company, then IP2IPO is entitled to 10 per cent. of the revenue received by the University of Glasgow as a result of the disposal of its shareholding in such company.
13.3 The University of Glasgow Partnership commenced in October 2006 and has a term of at least 25 years, subject to earlier termination in certain limited circumstances. IP2IPO has the right, but not the obligation, to extend the £5m Glasgow Fund.
13.4 As at 22 May 2017, being the latest practicable date prior to publication of this document, approximately £1.6 million of the £5m Glasgow Fund had been invested.

13.5 Please refer to the paragraph 14.12 of Part V for further information.

14. QUEEN MARY PARTNERSHIP

14.1 Under the terms of the Queen Mary Partnership (the "Original Agreement"), IP2IPO is committed to taking an active role in identifying and progressing such commercialisation opportunities as are envisaged by QMUL, with a view to creating value from IP created by QMUL.
14.2 IP2IPO committed to invest the initial amount of £3 million in spin-out companies based on IP created at QMUL. The Queen Mary Partnership provides that the initial amount of £3 million would, subject to the quantity and quality of the potential investment opportunities, be invested over a period of 7 years commencing in October 2006, and will be increased to £5 million upon full investment of the £3 million or earlier at the discretion of IP2IPO. Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.
14.3 The terms of the Queen Mary Partnership initially provide that IP2IPO is entitled to:
14.3.1 10 per cent. of all licence fees, after deducting all patent costs incurred by the University of London in relation to the relevant IP;
14.3.2 an "automatic" interest, amounting to a 13.3 per cent. shareholding, in each spin-out company formed during the term of the Partnership (prior to any investment from the £5m QMUL Fund) which is replaced, pursuant to the terms and conditions of the QMUL Variation Agreement (such as set out below, with a warrant over an equivalent amount of shares exercisable at seed; and
14.3.3 in the event that QMUL, during the term of the Partnership, licences or assigns IP to a company which is not a spin-out company in return for equity, then IP2IPO is entitled to 10 per cent. of each class of equity (or capital) to which QMUL.
14.4 Pursuant to a variation agreement dated 23 January 2014 (the "QMUL Variation Agreement"), the parties agreed certain variations, clarifications and supplemental terms to the Original Agreement.
14.5 Under the QMUL Variation Agreement, the parties agreed that IP2IPO's right to a share of licensing fees (as referred to in paragraph 15.3.3 above) shall be removed save where (a) there is the conversion of an IP2IPO incubated company into an out-licensing opportunity, (b) IP2IPO establish a company as a licensing vehicle for platform technology, and/or (c) IP2IPO has otherwise had significant input in respect of the relevant out licensing opportunity (which would include both finding the potential licensee and undertaking negotiation of the commercial head of terms with such party). In addition, pursuant to the QMUL Variation Agreement, IP2IPO's initial founder equity right (as described in paragraph 15.3.2 above) has been removed and replaced with a right to receive a warrant to subscribe for an equivalent amount of shares in the relevant spin-out company exercisable at the seed investment stage. However, in situations where (i) IP2IPO has expended efforts at an early stage to work up the relevant commercialisation opportunity to the stage where it is presented to the investment committee of IP2IPO; (ii) that relevant opportunity is declined for investment from IP2IPO; and (iii) as a consequence, the relevant spin-out company subsequently raises money from a third party and or achieves an Exit Event (as defined in the relevant warrant instrument), then QMUL shall, until such time as an Exit Event is achieved, hold such number of equity shares in the relevant spin-out company as is equal to the proportion of initial equity that IP2IPO would have been entitled to under the Original Agreement, being 13.3 per cent. of the initial equity, on bare trust for IP2IPO.
14.6 The Queen Mary Partnership commenced in July 2006 and has a term of at least 25 years, subject to earlier termination in certain limited circumstances. IP2IPO has the right, but not the obligation, to extend the £5m QMUL Fund.
14.7 As at 22 May 2017, being the latest practicable date prior to publication of this document, approximately £0.7 million of the £5m QMUL Fund had been invested.
14.8 Please refer to paragraph 14.10 of Part V for further information.

15. UNIVERSITY OF SHEFFIELD

Non-medical IP

15.1 Under the terms of original agreement with the University of Sheffield entered into on 26 January 2005, Fusion IP committed to invest funds in the University of Sheffield in exchange for the exclusive rights to commercialise any university-owned medical life science IP, through either licensing or the creation of spin-out companies. In addition, Fusion IP agreed that it will invest £8,750 per month for the provision of services by the University of Sheffield to enable Fusion IP Sheffield to identify and patent the University of Sheffield's IP.
15.2 The terms of this agreement were revised on 7 July 2008 and under the revised agreement, the parties agreed to add all physical sciences to the original agreement, such that Fusion IP has the right to acquire all the IP owned by the University of Sheffield, through either licensing or the creation of spin-out companies. Fusion IP's exclusive rights to acquire all physical sciences IP owned by the University of Sheffield expire on 17 July 2018 and Fusion IP's exclusive rights to acquire all IP with a medical application pursuant to the revised agreement expired on 16 February 2015, however, a new agreement was entered into between IP2IPO and the University of Sheffield in relation to medical IP on 23 November 2015, details of which are set out below.

Medical IP

15.3 Under the terms of an agreement with the University of Sheffield entered into on 23 November 2015, IP2IPO committed to provide up to £2.5m for spin-out companies developing IP that is derived from any research with respect to one or more biological or chemical formulations, medical devices, clinical diagnostics, in each case having medical applications ("Medical IP"), from the University of Sheffield. The original rights in relation to medical IP expired on 16 February 2015 under the terms of the agreement set out above. The effective date for the new agreement relating to medical IP was 16 February 2015 and the agreement will expire on 17 July 2018.
15.4 The terms of the agreement provide that IP2IPO and any funds managed by the Company will provide spin-out companies formed with pre-seed funding of up to £150,000 and seed funding of typically up to £1m. IP2IPO is also entitled to receive 'work-up equity' in each new spin-out company formed of up to 10% of the initial shareholding.
15.5 Please refer to paragraph 14.4 of Part V for further information.

16. CARDIFF UNIVERSITY

16.1 The Cardiff University Partnership which commenced in 2007 had a term of 10 years and expired on 16 January 2017. Under the terms of the Cardiff University Partnership, Fusion IP had committed to invest funds in Cardiff University in exchange for the exclusive rights to commercialise any university-owned IP, through the creation of spin-out companies. In addition, Fusion IP agreed that it would invest £17,500 per month for the provision of services by Cardiff University to enable Fusion IP Cardiff to identify and patent Cardiff University's IP.
16.2 The terms of the Cardiff University Partnership provided that Fusion IP is entitled to direct that all IP created through research at the Cardiff University be licenced to a then existing or newly incorporated company in which the Fusion IP Group will acquire an equity investment for the purposes of undertaking the commercialisation of such IP.
16.3 The Company and the University of Cardiff are currently in negotiations in respect of a potential new agreement which, if entered into, would provide the Group with continued access to IP from Cardiff University. The Company cannot guarantee that Cardiff University will agree to enter into such agreement.

17. THE UNIVERSITY OF NOTTINGHAM

17.1 Under the terms of the Nottingham MOU, Fusion IP committed to work in close partnership with the University of Nottingham's in-house commercial team to identify IP with the most commercial potential and to work with the academic team to turn the original academic research into a fundable business plan.

17.2 The terms of the Nottingham MOU provide that Fusion IP then invests cash and management resources to create a spin-out company, in which it owns a 10 per cent. equity shareholding prior to any investment.
17.3 The Nottingham MOU commenced in 2013 and has a term of 5 years, subject to earlier termination by either party.
17.4 Please refer to paragraph 14.16 of Part V for further information.

18. SWANSEA UNIVERSITY

18.1 Under the terms of the Swansea MOU, Fusion IP committed to work in close partnership with the Swansea University's in-house commercial team to identify IP with the most commercial potential and to work with the academic team to turn the original academic research into a fundable business plan.
18.2 The terms of the Swansea MOU provide that Fusion IP then invests cash and management resources to create a spin-out company, in which it owns a 10 per cent. equity shareholding prior to any investment.
18.3 The Swansea MOU commenced in 2013 and has an initial term of 5 years, subject to earlier termination by either party.
18.4 Please refer to paragraph 14.17 of Part V for further information.

19. FINANCE WALES CO-INVESTMENT MOU

19.1 Under the terms of the Finance Wales Co-Investment MOU, the parties committed to continue their co-investment strategy for investing in opportunities arising from Fusion IP's IP pipeline agreements with its portfolio of Welsh universities and to provide Fusion IP with continued access to substantial additional funding for its portfolio of companies.
19.2 The Finance Wales Co-Investment MOU commenced in 2007 and has been renewed in 2013 for a term of 5 years, subject to earlier termination by either party.
19.3 Please refer to paragraph 14.19 of Part V for further information.

20. ARRANGEMENTS WITH TECHNIKOS

20.1 On 13 January 2011, the Company acquired a strategic stake in Technikos. Technikos is a specialist medical technology fund with a long term commercialisation agreement with the University of Oxford's Institute of Biomedical Engineering ("IBME").
20.2 The Company will assist Technikos to spin out companies from the IBME. In addition, the Company will provide the Technikos team with access to its commercialisation, capital markets and scientific expertise.
20.3 To date, Technikos has spun out eleven companies from the IBME, including Eykona Limited and OrganOx Limited.
20.4 Under the terms of its agreement with the University of Oxford (the "IBME Agreement"), Technikos has the right to acquire 50 per cent. of the issued or to be issued share capital held by the University of Oxford in spin-out companies based on IP created at the IBME, 50 per cent. of the University of Oxford's revenue from licences of IP created at the IBME save that, in each case, the percentage share entitlement will be reduced to the extent that all the founder academics to which the relevant IP relates are not based in the IBME.
20.5 The IBME Agreement commenced in June 2006 and shall continue until the date falling 15 years from the date on which the fit-out works on the IBME are completed (being 1 October 2007 and thus an end date of 1 October 2022) subject to earlier termination in certain limited circumstances. At the commencement of the fourteenth year following completion of the fit-out works, the parties will discuss and agree whether or not to extend the term of the agreement for an additional period of three years.
20.6 Please refer to paragraph 14.14 of Part V for further information.

21. UNIVERSITY OF MANCHESTER IP COMMERCIALISATION AGREEMENT

21.1 Under the terms of the Manchester IP commercialisation agreement, the Group has created a Proof of Principle ("PoP") funding facility for the identification and formation of new spin-out companies. The Group agreed to make available an initial facility of up to £5 million to provide capital to new proof of principle projects intended for commercialisation through spin-out companies.
21.2 The terms of the commercialisation agreement provide that IP2IPO is entitled to receive equity stakes in such spin-out companies on pre-agreed terms, and invest further in these companies as they progress.
21.3 The Group will provide access to its relevant experts, business building expertise, mentoring, coaching and co-investing networks, recruitment and business support.
21.4 The agreement, which is a for a minimum term of four years, or five years subject to certain conditions, covers the majority of the areas of materials and clean technology, electronics and communications and all non-therapeutic life, medical and human sciences and information technology.
21.5 Pursuant to a variation agreement dated 23 January 2014 (the "UoM Variation Agreement"), the parties agreed certain variations, clarifications and supplemental terms to the original Manchester IP commercialisation agreement.
21.6 Under the UoM Variation Agreement, the parties agreed to widen the scope of the original POP fund agreement and more particularly the technology areas to include graphene and other 2-D materials. Furthermore, the parties agreed that, given this increase in the scope of the original POP fund agreement, IP2IPO shall attempt to seek to increase its aggregate funding commitment under the original POP funding agreement from £5 million to up to £7.5 million within an agreed time period.
21.7 The Company and the University of Manchester are currently in negotiations in respect of a potential new agreement which, if entered into, will provide the Group with continued access to IP from the University of Manchester.
21.8 Please refer to paragraph 14.15 of Part V for further information.

22. SUMMARY OF ARRANGEMENTS WITH CAMBRIDGE INNOVATION CAPITAL

22.1 Pursuant to a subscription agreement dated 9 October 2013, the Group has completed an investment of £5 million in Cambridge Innovation Capital plc, in return for which the Group has acquired an 8 per cent. stake.
22.2 Pursuant to a subscription agreement dated 18 August 2016, the Group completed a further investment of £3.44 million in Cambridge Innovation Capital plc.
22.3 Cambridge Innovation Capital plc and IP2IPO entered into a subscription agreement dated 18 August 2016 pursuant to which IP2IPO agreed to subscribe for 4,300,000 ordinary shares of £0.0001 each in the capital of Cambridge Innovation Capital plc at a subscription price of £0.80 per share (which gave IP2IPO an aggregate of 4.96 per cent. of the issued share capital of Cambridge Innovation Capital plc).
22.4 In addition, the Group and Cambridge Innovation Capital have entered into a memorandum of understanding to share information on investment and co-investment opportunities in the "Cambridge Cluster" and, where practicable and alongside other co-investors, to provide each other with access to such co-investment opportunities.
22.5 Please refer to paragraph 14.20 of Part V for further information.

23. COMMERCIALISATION AGREEMENT WITH COLUMBIA UNIVERSITY

23.1 Pursuant to a collaboration agreement dated 24 October 2013 and made between the Group and the Trustees of Columbia University in the City of New York, on behalf of Columbia Technology Ventures, the parties agreed certain arrangements with regard to an IP commercialisation partnership in connection with the commercialisation of early-stage, proof of principle opportunities based on intellectual property developed at Columbia University and geared towards the formation of spin-out companies.
23.2 Please refer to paragraph 14.21 of Part V for further information.

24. COMMERCIALISATION AGREEMENT WITH UNIVERSITY OF PENNSYLVANIA

24.1 Pursuant to the terms of a collaboration agreement entered into between the Group and The Trustees of University of Pennsylvania ("Penn"), the parties agreed certain arrangements with regard to an IP commercialisation partnership in connection with early-stage, proof of principle opportunities for the Group to invest in technologies and companies based on Penn IP through Upstart (the UPstart company formation program of Penn's Centre for Technology Transfer). Broadly summarised, these arrangements give the Group, at its sole discretion and determination, access to fund proof of principle opportunities for an indefinite period until otherwise terminated.
24.2 Please refer to paragraph 14.22 of Part V for further information.

25. COMMERCIALISATION AGREEMENT WITH PRINCETON UNIVERSITY

25.1 Pursuant to the terms of a collaboration agreement entered into between the Group and The Trustees of Princeton University, the parties agreed certain arrangements with regard to an IP commercialisation partnership in connection with early-stage, proof of principle opportunities for the Group to invest in technologies and companies based on Princeton IP. Broadly summarised, these arrangements give the Group, at its sole discretion and determination, access to fund proof of principle opportunities for an indefinite period until otherwise terminated.
25.2 Please refer to paragraph 14.23 of Part V for further information.

26. COMMERCIALISATION WITH OTHER US UNIVERSITIES

The Group recently entered into pilot agreements with a further two leading US research universities and is currently assessing the first potential spin-out opportunities therefrom.

27. FEDIMPACT, LLC OPERATING AGREEMENT

27.1 Under the terms of an operating agreement, TNT Management, LLC, IP2IPO FI Limited and IP Group, Inc. agreed to establish a limited liability company in the State of Delaware under the name FedIMPACT, LLC to carry on the business of identifying, funding, developing and commercialising promising technologies sourced from an initial group of US Department of Energy National Laboratories being Pacific Northwest National Laboratory, Argonne National Laboratory and National Renewable Energy Laboratory pursuant to a pilot engagement with such laboratories over a period of 18 months from the date of the agreement. The pilot engagements with National Renewable Energy Laboratory and Pacific Northwest National Laboratory have been subsequently extended for a five year period with additional five year renewals pursuant to the written agreement of FedIMPACT, LLC and the relevant US Department of Energy National Laboratory. The term of the initial pilot of Argonne National Laboratory has not expired and has therefore not come up for renewal as yet.

27.2 Please refer to paragraph 14.24 of Part V for further information.

28. Go9 AGREEMENTS

28.1 The Group has entered or proposes to enter into long-term commercialisation agreements with each of the Go9 Universities in relation to the sourcing and commercialisation of IP where such IP has been acquired by the University as result of its intellectual property policy, through contracts of employment or engagement, through agreements or arrangements with academic staff or students or which has been otherwise obtained under the statute relating to the relevant University.
28.2 Further details of these agreements are set out in paragraph 14.25 of Part V of this document.

29. OTHER UNIVERSITY PARTNERSHIPS

IP Group will continue to assess further opportunities, and to enter into partnerships or other collaborative arrangements with leading research universities, on a selective basis where it identifies institutions which the Directors believe have sufficient breadth and depth of research and the right innovative culture to build a diversified portfolio of high growth spin-out companies over the lifetime of the partnership or other collaborative arrangement. In addition and consistent with its belief in a partnership approach to the sourcing of intellectual property commercialisation opportunities, the Group will also continue to explore other relationships or collaborations that seek to enable or preserve access to research emanating from premier UK and US based universities in such a manner that allows it to manage its capital risk, such as through participation in captive university funds, whether structured as special purpose vehicles or otherwise.

30. CURRENT PORTFOLIO

30.1 As at 31 December 2016, IP Group had a portfolio of 90 companies of which 39 were Early-stage businesses, 32 were Development stage businesses and 19 were Focus stage businesses of which 8 were quoted. Of the 90 companies in the Group's portfolio, 76 per cent. of the fair value resides in the ten most valuable companies (excluding the Group's holdings in OSI, CIC and Frontier IP Group plc or the 20 de minimis holdings). Further details on these ten companies, including a description of their businesses, amounts invested and realised by the Group during the year ended 31 December 2016 and the values of the Group's holdings as at 31 December 2016 is set out in paragraph 31.2 of Part II of this document.
30.2 The following table sets out the Group's equity interests in its top ten Focus stage businesses by value as at 31 December 2016. The information below is extracted from IP Group's audited results for the year ended 31 December 2016:

Company name	Description	Group stake at 31 December 2016 %	Fair value of Group holding at 2016 £m	31 December Net investment/ (divestment) £m	Fair value movement £m	Fair value of Group holding at 31 December 2016 £m
Oxford Nanopore Technologies Limited	Enabling the analysis of any living thing, by any person, in any environment. Developer of the portable, real time, long-read, low cost MinION nanopore DNA/RNA sequencer	19.6%	193.0	19.5	33.8	246.3

		Group stake at 31 December	Fair value of Group holding at	31 December Net investment/	Fair value	Fair value of Group holding at 31 December
Company name	Description	2016 %	2016 £m	(divestment) £m	movement £m	2016 £m
Diurnal Group plc	Novel treatments of hormone deficiency	45.0%	39.6	–	(10.3)	29.3
Actual Experience plc	Optimising the human experience of networked applications	24.9%	23.8	–	(0.4)	23.4
hVIVO plc	World leader in human models of viral disease	16.7%	29.0	–	(7.2)	21.8
Tissue Regenix Group plc	Regenerative dCELL® soft tissue body parts	13.6%	15.5	–	5.2	20.7
Xeros Technology Group plc	Polymer bead, nearwaterless cleaning for commercial laundry	11.5%	23.4	–	(3.2)	20.2
Ceres Power Holdings plc	World leading developer of next generation fuel cell technology	25.5%	12.2	6.6	(0.8)	18.0
First Light Fusion Limited	New methodology for achieving extreme intensity cavity collapse	34.9%	13.9	–	–	13.9
Mirriad Advertising Limited	Native in-video advertising allowing post-production ad placement	38.9%	4.5	4.0	4.9	13.4
Avacta Group plc	Bio-therapeutic affimer technology	23.1%	21.1	–	(9.9)	11.2

31. FUND MANAGEMENT BUSINESS

31.1 IP Group acquired Top Technology Ventures, an FCA-regulated venture capital fund management company which specialises in providing equity funding for early stage technology based growth companies, in June 2004. Top Technology Ventures was founded in 1986 and has earned a reputation for significant expertise in the early stage UK technology sector. Top Technology Ventures now trades as IP Capital.
31.2 IP Capital currently manages:
31.2.1 IP Venture Fund, a £31 million venture capital fund which was established in July 2006 in partnership with the European Investment Fund. IP Venture Fund's primary investment objective is to provide up to 25 per cent. of the capital invested or to be invested in post-seed financing rounds of the Group's portfolio companies; IP Venture Fund is no longer making investments in new portfolio companies;
31.2.2 IP Venture Fund II, a £30 million venture capital fund which was established in May 2013 in partnership with the European Investment Fund. IP Venture Fund II invests alongside IP Group in new spin-out companies, from incubation stage through seed and post-seed stage, from the Group's university partnerships and other collaborations, with an investment ratio of 30:70 (IP Venture Fund II : the Group excluding IP Venture Fund II); and
31.2.3 The North East Technology Fund, a £37 million, ten year venture capital fund which was set up to invest in technology companies in the North East region of England from seed through to the growth stages of development (including opportunities from the leading research universities based in the region). In August 2014, the investment period of the North East Technology Fund was extended by a period of one year and the amount available to invest from the Fund has now increased to a total of £37 million.
31.3 Top Technology Ventures is a member of the British Venture Capital Association and is authorised and regulated by the FCA.
31.4 The Directors believe that the management of third party funds brings a number of benefits to the Group as specified in paragraph 2.3 of Part I of this document.
31.5 Top Technology Ventures also earns fees and commissions through providing corporate finance services to the Group's portfolio companies both quoted and private.

32. ACQUISITION OF PARKWALK ADVISORS LTD

32.1 On 15 December 2016, the Company entered into a share purchase agreement with the shareholders of Parkwalk Advisors Ltd pursuant to which the Company agreed to acquire the entire issued share capital of Parkwalk Advisors Ltd, a university spin-out focused enterprise investment scheme fund manager. Completion occurred on 31 January 2017.
32.2 The total maximum consideration payable to the sellers pursuant to the share purchase agreement is £20 million (on a debt free/cash free basis) over a three-year period. The initial consideration comprised £5 million and was paid in cash on the date of completion. A further payment of £2.5 million is payable by 31 October 2017 which will be satisfied by either a cash payment of £2.5 million or the allotment of such number of Shares that have an aggregate value of £2.5 million (at the election of the Company). There is a further £2.5 million of cash payable in two equal tranches on 31 January 2018 and 31 January 2019, subject to certain conditions. The remaining £10 million consideration is payable as £5 million in cash and £5 million in Shares over a three-year period from the date of completion, subject to Parkwalk Advisors Ltd achieving certain business performance targets.
32.3 The share purchase agreement contained customary warranties in favour of the Company.

33. THE COMPETITIVE ENVIRONMENT

33.1 IP Group's revenue and increases in net assets are principally derived from the Group's core business of commercialising IP and providing capital and expertise to spin-out companies originating from universities and other research intensive institutions.
33.2 There are a number of companies and other organisations which are seeking to commercialise intellectual property and/or provide capital to spin-out companies arising from universities and other research institutions in the UK. These include Cambridge Innovation Capital plc, Epidarex, Frontier IP plc, Touchstone Innovations Group plc, Imprimatur Capital, Invoke Capital, Mercia Technologies plc, NetScientific plc, Oxford Sciences Innovation plc, Rock Spring Ventures and Spark Ventures. As a result of its Partnerships, the Group has direct contractual arrangements with thirteen universities in the UK and accordingly has preferred access to provide capital and expertise to spin-out companies arising from such universities. In addition, there are a number of companies and other organisations seeking to commercialise intellectual property and/or provide capital to spin-out companies in other

jurisdictions in which the Group operates or may operate, including, for example, Allied Minds, Inc., Osage Partners, PureTech and Safeguard Scientific, Inc. in the United States.

33.3 However, where the Group does not have preferred access to invest in the spin-out companies arising from a university or other research institutions through a direct contractual arrangement and that university, research institution, their technology transfer office and/or individual spin-out companies are prepared to work with a number of different person or entities, then the Group will be competing with those other commercialisation organisations, regional development authorities, venture capital funds, certain institutional investors and angel investors to provide capital to the spin-out companies created by such university or research institution.
33.4 Further, the technology transfer offices of certain universities or research institutions may themselves seek to commercialise the IP that they generate which could reduce the number of commercialisation opportunities available to the Group.
33.5 The Group's portfolio companies may now, or in future, be competing with other technologies in the market. They also compete with other companies and organisations for funding, appropriately skilled personnel and industry attention (including, for example, interest from potential development partners, customers and potential acquirers or investors). Such competition is not limited to companies or organisations operating within the same industry sector as the Group's portfolio companies and the portfolio companies may compete with early stage businesses in other sectors and markets.
33.6 IP Group may need additional capital in future for expansion activity and/or business development, whether from equity or debt sources. If there is a lack of funding in the market, then IP Group will be competing with other businesses to secure this funding. Competing businesses may also be looking to recruit highly qualified and experienced employees similar to those of IP Group, which may lead to competition in the recruitment and retention of employees of the desired calibre.
33.7 The Directors believe that IP Group is in a strong competitive position relative to other companies and organisations that are seeking to provide commercialisation services to universities and other research institutions in the UK for the following reasons:
33.7.1 the Group has secured access to a wide range of leading scientific innovation through its Partnerships, which have resulted in it having arrangements covering thirteen of the UK's and five of the US's leading research institutes and universities and now eight Australian and one New Zealand university;
33.7.2 the Group also has good working relationships with a number of other universities and research intensive institutions;
33.7.3 the rigorous opportunity appraisal process developed by, and proprietary to, the Group means that it is well placed to assess early stage technology businesses with a view to identifying and developing the most promising opportunities;
33.7.4 the Board collectively possesses considerable investment, commercial and financial experience, with particular expertise in the development of IP-based businesses. The Board is supported by an experienced management team, including highly qualified teams specialising in four sectors: Biotech, Cleantech, Healthcare and Technology;
33.7.5 IP Group is able to leverage its extensive network of highly experienced individuals with expertise spanning financial, technical, industry and academic specialisms, as well as its own in-house recruitment capability, to build and strengthen the boards of its portfolio companies; and
33.7.6 IP Group will have a strong cash position as a result of the Capital Raising and, in addition, the third party funds which the Group manages broadens the sources of finance potentially available to its portfolio companies in circumstances where the investment is aligned with the relevant fund's investment mandate.

34. DIVIDEND POLICY

The Board's current intention is to retain IP Group's earnings in the foreseeable future to finance growth and expansion. It is, however, the Directors' intention to pay dividends when, in the view of the Directors, the Company has sufficient cash for this purpose.

PART III

OPERATING AND FINANCIAL REVIEW OF THE GROUP

1. INTRODUCTION

Some of the information contained in this review and elsewhere in this document includes forward-looking statements that involve risks and uncertainties. See "Forward-looking statements" on page 38 for a discussion of important factors that could cause actual results to differ materially from the results described in the forward-looking statements contained in this document.

This review should be read in conjunction with: (i) the Group's audited annual report and accounts for the three years ended 31 December 2016 and (ii) the notes thereto explaining such annual report and accounts, each of which are incorporated by reference into this document as explained in Part VI of this document.

Unless otherwise indicated, the selected financial information included in this Part IV has been extracted without material adjustment from the Group's audited annual report and accounts for the three years ended 31 December 2016. The financial information set out in this Part III does not constitute statutory accounts for any company within the meaning of section 435 of the Companies Act.

Each Shareholder and other person contemplating a purchase of Capital Raising Shares should read the whole of this document and the documents incorporated herein by reference and should not rely solely on the summary operating and financial information set out in this Part III.

2. SIGNIFICANT FACTORS AFFECTING THE GROUP'S RESULTS OF OPERATIONS AND OUTLOOK

2.1 Overview

As described more fully in Part I of this document, the Group was established in 2000 to commercialise scientific innovation developed in leading international universities primarily through the creation and development of spin-out companies. The Group also manages a number of venture capital and EIS funds through its FCA-regulated subsidiaries, Top Technology Ventures and Parkwalk Advisors, and allocates capital to the in-licensing and development of early-stage drug-discovery opportunities through certain of its subsidiary companies.

Success of the Group's operations depends on a number of factors and set out below are those factors that the Directors consider have affected the Group's results of operations to date or could do so in the future.

2.2 Commercialisation activities

2.2.1 Sourcing and evaluation of new commercialisation opportunities

The Directors consider that one of the key differentiators of the Group's business model is its ability to access a wide range of leading scientific research. This has been achieved primarily through long-term partnerships with a number of leading research universities. In the UK the Group has direct arrangements covering thirteen of the UK's leading universities, in the US it has arrangements with five universities and in Australia and New Zealand it has recently entered into arrangements covering nine leading research universities.

In addition to these direct contractual arrangements, the Group also has two strategic holdings in Oxford Sciences Innovation plc and Cambridge Innovation Capital plc and. Oxford Sciences Innovation plc is the contractually preferred partner of the University of Oxford and provides capital to and develops spin-out companies based on research from the University's Mathematical, Physical and Life Sciences Division and its Medical Sciences Division. Cambridge Innovation Capital plc supports the growth of innovative businesses located in the "Cambridge Cluster" and is supported by the University of Cambridge's commercialisation office, Cambridge Enterprise. The Group and Cambridge Innovation Capital have also entered into a memorandum of understanding to share information on investment and co-investment opportunities.

In addition, in November 2014, the Group launched a commercialisation initiative with FedIMPACT to identify and develop early stage technologies from a select group of US Department of Energy National Laboratories being Pacific Northwest National Laboratory and The National Renewable Energy Laboratory.

The Group also has informal arrangements with other universities in the UK and elsewhere and it leverages the capabilities of its in-house sourcing team to identify and pursue compelling standalone opportunities arising from such universities.

Further details on each of these agreements and initiatives are set out in paragraphs 14.21 to 14.25 of Part V of this document.

Although each commercialisation opportunity can vary significantly in its rate and manner of development, the Group has developed a rigorous investment appraisal process which is designed to enable the assessment and development of early stage (comprising incubation and seed) technology businesses, initially with low levels of cash investment. During this early stage development phase, members of the Group's in-house sourcing team work closely with the businesses to shape the strategic direction of the opportunity, frequently taking an interim management role (typically at no additional cost to the relevant spin-out company) until such time as the business is sufficiently developed and has the resources to recruit an external management team. The Directors intend to continue to apply this methodology with a view to creating new investment opportunities.

The Group's commercialisation activities are reliant on its ability to source, evaluate, allocate capital to and develop new technologies arising from research carried out in universities and other research institutions. Consequently the Group's on-going ability to successfully identify and to create spin-out companies is dependent on the ability of research-intensive universities and similar institutions to produce scientific research of sufficient quality and with sufficient commercial potential and for the Group to be able access such research.

2.2.2 Portfolio performance

The Group's results are impacted significantly by the performance of its holdings in portfolio companies. Progress in the portfolio can be assessed most immediately by the movement in the fair value of the Group's holdings from one period to the next. However, market volatility can mean that this does not always give an accurate or fair reflection of the progress made by individual companies.

The overall economic backdrop has a significant bearing on the Group's ability to pursue its strategic objectives. In the shorter term, financial market volatility and investor risk appetite impacts the Group's ability to access capital for the development of its spin-out companies, could affect the likelihood of achieving exits and impacts the periodic valuations of its holdings in portfolio companies. Over the longer-term, government spending on fundamental R&D and indeed policy support towards the commercialisation of generated IP are key areas affecting the Group's business model.

In this context, it is worth noting that these are, of course, very uncertain times both economically and politically, particularly following events such as the UK launching the formal process for negotiating the UK's exit from the EU with other EU member states and the outcome of the US presidential election. Over the longer term, however, the Directors believe that the successful attainment of commercial and technical milestones in portfolio companies should continue to result in an increase in the fair value of such companies either through subsequent financing rounds or through a sale of the Group's holding.

Once a portfolio company progresses beyond seed stage, additional funding is generally sought and this is used to progress towards key milestones and commercial validation (potentially including the launching of products or services or the securing of licensing arrangements), to build the senior level capability in the business and to attract experienced non-executive directors to its board. Historically, the Group has provided some level of this post-seed capital and leveraged further capital from a number of sources, including industrial partners, venture capital financiers (including the Group's managed funds where appropriate), public markets and angels and high net worth individuals. While it is envisaged that capital from third-party sources will continue to be an important factor in the development of the Group's portfolio companies, it is intended that a proportion of the aggregate proceeds from the Capital Raising will be used to enable the Group to provide a significant proportion of the capital required by portfolio companies at this stage of development, where the Group considers this to be appropriate.

Through the approach described above, the Group seeks to progressively eliminate risk, to monitor progress against milestones and to revise strategic direction based on commercial feedback, whilst minimising capital deployed at the earlier stages of such a business' development, with a view to building a robust portfolio of successful post-seed companies whose fair values will increase over time.

2.2.3 Realisations

Investment realisations arise from the sale of the Group's stakes in its portfolio companies to industrial purchasers or financial investors. Realisations generate cash proceeds for the Group and, if a sale is completed at a value above or below the relevant investment's holding value in the Group's financial statements, a fair value gain or loss is realised which impacts the Group's financial results.

Since its formation in 2000 the Group has generated cash realisations in excess of £65 million including the disposal of its holding in Tracsis plc in March 2016 which resulted in net cash proceeds of £13.1m bringing total proceeds from Tracsis to date to £14.3m and representing a multiple of approximately 38 times the Group's investment of £0.4m, and the sale of Proximagen Group plc in 2012 for up to £375 million which resulted in an initial cash payment to the Group of £15.4 million, approximately 35 times the Group's total investment of £0.4 million in that company.

As the Group's portfolio businesses continue to mature, management have and will continue to pursue and assess opportunities to realise cash when market conditions and/or specific circumstances make it attractive to do so.

2.3 Operating revenues

The majority of the Group's current operating revenues are currently generated from the following three key sources:

2.3.1 Venture capital and EIS fund management fees

The Group receives recurring fund management fees which are generally earned as a fixed percentage of either total funds under management or the remaining cost of investments in the portfolio of the given fund. In addition, the Group may receive performance related fees as a fixed percentage of the returns of a given fund above a generally fixed level of preferred return.

Through Top Technology Ventures, the Group's FCA-authorised venture capital fund management subsidiary, the Group currently manages three funds for which it receives fees, the £31 million IP Venture Fund, the £30 million IP Venture Fund II and the £37 million North East Technology Fund. It should be noted that, since the Group currently has a 33 per cent. limited partnership interest in IP Venture Fund II, its results are consolidated into those of the Group.

While each of the limited partnership agreements provide that each of IP Venture Fund, IP Venture Fund II and The North East Technology Fund have definitive terms, the underlying fund management agreements contemplate that the Group will continue as fund manager for the foreseeable future. Subject to any extension that may be agreed by its limited partners, the limited partnership with the shortest remaining operating lifespan is IP Venture Fund, which is currently anticipated to reach the end of its term in August 2017.

Through Parkwalk Advisors Ltd., the Group's FCA-authorised EIS growth fund manager focused on university spin-outs, the Group currently manages a number of EIS funds including the Parkwalk Opportunities Fund and funds focused on spin-outs from the Universities of Oxford, Cambridge and Bristol. EIS funds typically have fee-earning life-spans of three to six years.

Factors affecting fund management fee income in the future are expected to include the level of assets held by third-party funds managed by the Group, the investment performance of such third-party funds, the ability of the Group to attract further funds under management in the future and the Group's continued authorisation to do so by the Financial Conduct Authority.

2.3.2 Corporate finance fees

The Group receives a limited level of corporate finance advisory fees and commissions as a result of advising on capital raising activities for certain portfolio companies. These are generally either based on a fixed percentage of funds raised or calculated as a fixed fee. Such fees may be payable in cash, equity or equity-like instruments by portfolio companies. Factors affecting this fee income in the future include the number and size of financings undertaken by portfolio companies, the proportion of such financings advised on by the Group and the terms negotiated by the Group as principal or agent.

2.3.3 Commercialisation, consultancy and business support services

The Group provides a number of commercialisation and consultancy services to its portfolio companies including the provision of executive or non-executive directors, executive search and selection, review of legal documentation and business support services. Such services can result in the Group receiving fees based on the nature and extent of services provided and factors affecting the level of fees include the number of portfolio companies, the proportion of these that require such services and the terms under which the Group may agree to provide them.

In addition to the above, in 2005, the Group established MBS, a subsidiary company that is currently 61.1 per cent. owned, for the purposes of in-licensing and developing intellectual property relating to new therapeutic compounds. As described in Part I of this document, in 2014 MBS entered into an exclusive R&D alliance and global option and license agreement with Janssen Biotech, Inc., a division of Johnson & Johnson, in relation to MBS's novel bone-protective compounds for the treatment of rheumatoid arthritis. Under the terms of this agreement, MBS will receive an up-front payment and is eligible to receive development, regulatory and commercialisation milestone payments all up to a potential total of £176 million. In addition, MBS will receive royalties on future sales of any products that may result from the alliance upon successful launch and commercialisation. The Group may in future receive income from MBS by way of a repayment of inter-company debt or as a dividend.

2.4 Operating and administrative expenses

As a result of its operations, the Group has three significant categories of operating expenditure being staff costs, other expenses and research and development expenditure.

2.4.1 Staff costs

A significant proportion of the Group's operating expenses arise through costs relating to the remuneration of staff and directors. Since the Group operates in a specialised sector, there is a need to attract, motivate and retain employees, the majority of which are required to be highly qualified and experienced. Staff costs include salaries, bonuses, benefits and taxes thereon, as well as accounting charges as a result of certain share-based incentives used by the Group. The factors affecting staff costs include the number of staff and directors employed by the business, the competitive environment and the mix of remuneration offered by the Group.

Staff costs have seen modest increases over the past three years largely as a result of strengthening the Group's team, including the integration of the former Fusion IP plc team in 2014 following its acquisition by the Group in March 2014 and commencing and growing operations in the US, where the Group's headcount is now 15 FTEs. As the scale of the Group's activities continues to increase, including developing the Group's new operations in Australia and New Zealand, and in order to remain competitive in its highly specialised field, the Directors anticipate that it will be necessary to continue to build its employee base and that further increases in staff costs will be seen in 2016 and beyond.

2.4.2 Other expenses

Other expenses consists of general administrative expenditure, including rent on the Group's four leased premises in the UK and US, regulatory fees, legal fees, other professional fees, office administration travel, marketing and insurance. The total of such expenses has increased to a degree in recent years, broadly commensurate with the increase in the level of staff costs, as a result of the Group's operations expanding into the US and growing in the UK. The Group's intended increased activity in Australia and New Zealand, as well as continued growth in the US, may give rise to some level of increase in the cost of the Group's operations and the Directors anticipate that other expenses of this nature will increase broadly in line with increases in the number of staff employed by the Group.

2.4.3 Research and development expenditure

The Group, through one or more subsidiary companies, including MBS currently carries out in-licensing and intellectual property development activities relating to new potential therapeutic compounds. Through this subsidiary, and potentially other existing or new subsidiaries or other vehicles in future, the Group incurs, and intends to continue to incur, research and development expenditure in connection with the development of such new therapeutic compounds.

2.5 Taxation

No corporation tax liability has arisen during any of the Group's most recent three financial years due to an overall tax loss being sustained in those periods or as a result of tax losses carried forward. In each of the years ended 31 December 2016, 2015, 2014, 2013, 2012 and 2011 the Group has also received research and development tax credits as a result of the activities carried out by its drug discovery subsidiary, Modern Biosciences.

The Group seeks to generate capital gains from its holdings in spin-out companies over the longer-term but has historically made annual net operating losses from its operations from a UK tax perspective. Capital gains achieved by the Group would ordinarily be taxed upon realisation of such holdings. However, the Directors continue to believe that the majority of the Group's holdings qualify for the Substantial Shareholdings Exemption ("SSE") which exempts gains or losses arising on the disposal of qualifying holdings from the charge to UK corporation tax, provided certain conditions are met. As such, the Group has continued not to recognise a provision for deferred taxation in respect of uplifts in value on those equity holdings that meet the qualifying criteria. Gains arising on sales of non-qualifying holdings would ordinarily give rise to taxable profits for the Group, to the extent that these exceed the Group's operating losses from time to time. The Group's unrecognised deferred tax assets and liabilities are set out in note 9 to the financial statements.

Finance Bill 2017 (No 2) includes legislation that will simplify the SSE regime significantly for disposals taking place after 1 April 2017. From the Group's perspective, the main changes are to remove the requirement for the investing entity to be a sole trading entity or member of a trading group and extending the minimum 10% holding period to any 12-month period in the six years prior to disposal. The Group welcomed these changes and the directors anticipate that they will have a favourable impact on the Group, giving greater certainty over the exemption of qualifying gains under SSE, and increasing the Group's flexibility over the timing of future portfolio company disposals.

Finance Bill 2017 (No 2) also includes legislation to restrict companies' use of brought forward losses. Under the revised legislation, the amount of profit that can be mitigated by brought forward losses will be restricted to 50% of the amount of profits in excess of £5m. The Directors do not currently consider that these proposed changes will result in the recognition of a deferred tax liability in respect of any unrealised gains that do not qualify for SSE, but note that such liabilities may arise in the future.

At 31 December 2016, deductible temporary differences and unused tax losses for which no deferred tax asset had been recognised totalled £141.7 million. No asset was recognised in the Group's financial statements due to current uncertainties surrounding the reversal of the underlying temporary differences.

3. FINANCIAL REVIEW, RESULTS OF OPERATIONS AND KEY PERFORMANCE INDICATORS

The key information that describes the results of the Group's operations and sets out the key performance indicators for the year ended 31 December 2016 is set out below.

See Part VI of this document for further details of information that has been incorporated by reference into this document.

4. LIQUIDITY AND CAPITAL RESOURCES

4.1 Cash, cash equivalents and deposits

As at 31 December 2016, the Group had cash, cash equivalents and deposits of £112.3 million (2015: £178.8 million; 2014: £97.3 million), consisting of £112.3 million cash and cash equivalents.

The following table analyses the Group's consolidated cash flows for the financial years ended 31 December 2016, 2015 and 2014:

2016 £ million	2015 £ million	2014 £ million
58.6	(37.7)	(31.4)
(55.2)	(114.6)	(35.4)
–	193.7	115.0
		48.2

		19.1
		–
		67.3
–	70.0	30.0 ––––––––
112.3	178.8	97.3 ––––––––
	3.4 108.8 0.1 112.3 –––––––– ––––––––	41.4 67.3 0.1 108.8 –––––––– ––––––––

Net cash outflow from operating activities

The Group's net cash outflow from operating activities for the year ended 31 December 2016 was £58.6 million (2015: net cash outflow of £37.7 million; 2014: net cash outflow of £31.4 million).

Net cash outflow from investing activities

The Group had a £55.2 million net cash outflow from investing activities for the year ended 31 December 2016 (2015: £114.6 million net cash outflow; 2014: £35.4 million net cash outflow). The cash outflow was primarily due to £69.7m of equity and debt investments into portfolio companies during the year. The table below provides an analysis of cash investment.

	2016	2015	2014
	£ million	£ million	£ million
Early stage	9.0	5.2	9.0
Development	10.8	10.7	11.0
Focus	39.0	60.0	26.8
Multi sector platforms	10.9	40.0	–
Total	–––––––– 69.7	–––––––– 115.9	–––––––– 46.8
Proceeds from sales of equity investments	–––––––– 14.7	–––––––– 0.6	–––––––– 9.7

Net cash inflow from financing activities

There were total cash inflows of £nil arising from financing activities for the year ended 31 December 2016 (2015: total cash inflows of £193.7 million; 2014: total cash inflows of £115.0 million).

The Group's strategy is to maintain healthy cash and short-term deposit balances that enable it to participate in all investments ratified by the Group's investment committee, whilst having sufficient cash reserves to meet all working capital requirements in the foreseeable future.

The Group's policy is to place cash which is surplus to near term working capital requirements in low risk treasury funds rated "AA" or above, or on short-term (generally defined as having an original maturity not exceeding 13 months) and overnight deposits with financial institutions that meet the Group's treasury policy criteria.

In 2015 the Group secured a £30m, 8-year debt facility from the European Investment Bank ("the EIB"). The facility is to be disbursed in two tranches, with the first tranche of £15m having been drawn down in December 2015 and the second tranche is anticipated to be drawn in 2017. The facility provides IP Group with an additional source of long-term capital and represents an evolution in the Group's capital structure to support its future growth and development.

Subject to the need to maintain cash for working capital requirements, there are no material legal or economic restrictions on the ability of subsidiary companies to transfer cash funds to the Company in the form of cash dividends, loans or advances. Top Technology Ventures Limited, which is authorised and regulated by the FCA, is required to maintain a minimum level of regulatory capital which is essentially calculated based on the company's overheads. For the year to 31 December 2016, this regulatory capital requirement was £0.4 million. Similarly, Parkwalk Advisors Limited is subject to a minimum regulatory capital requirement of £0.2 million.

At 31 December 2016, the Group had gross cash and short-term deposits of £112.3 million (31 December 2015: £178.8 million.)

4.2 Capital and other commitments

A number of the Group's partnerships with research intensive universities in the UK include certain arrangements to provide seed capital to spin-out companies arising from such universities. As at 31 December 2016, the balances were as follows:

	First year of	Original partnership commitment	Invested	Remaining to date commitment
		£ million	£ million	£ million
Partnership
University of Southampton(i)	2002	5.0	3.6	1.4
King's College of London(ii)	2003	5.0	1.8	3.2
University of York CNAP(iii)	2003	0.8	0.2	0.6
University of Leeds(iv)	2005	4.2	1.1	3.1
University of Bristol(v)	2005	5.0	1.1	3.9
University of Surrey(vii)	2006	5.0	0.5	4.5
University of York(iii)	2006	5.0	0.2	4.8
Queen Mary, University of London(vii)	2006	5.0	0.7	4.3
University of Bath(viii)	2006	5.0	0.2	4.8
University of Glasgow(ix)	2006	5.0	1.6	3.4
University of Manchester(x)	2013	7.5	0.2	7.3

Notes:

(i) Under the terms of an agreement entered into in 2002 between the Group, the University of Southampton and certain of the University of Southampton's subsidiaries, IP2IPO agreed to make £5.0 million available for the purposes of making investments in University of Southampton spin-out companies. The contractual commitment and the basis for investment is currently under review.
(ii) Under the terms of an agreement entered into during 2003 between the Group and King's College London ("KCL") and King's College London Business Limited (formerly KCL Enterprises Limited), the Group agreed to make £5.0 million available for the purposes of making investments in spin-out companies. Under the terms of this agreement, KCL was previously able to require the Company to make a further £5.0 million available for investments in spin-out companies on the tenth anniversary of the partnership. However, the 2003 agreement was terminated and replaced by a revised agreement on 12 November 2009. Under the revised agreement, the Group has agreed to target investing the remaining commitment of £3.2 million over a three-year period. If, and to the extent this amount is fully invested, KCL cannot require the Group to make any additional funds available. Other changes effected by the revised agreement included the removal of the Group's automatic entitlement to initial partner equity in every spin-out company and/or a share of KCL's licensing fees from intellectual property commercialisation and to the termination rights of the parties.
(iii) In 2003 the Group entered into an agreement with the University of York. The agreement relates to a specialist research centre within the University of York; the Centre for Novel Agricultural Products ("CNAP"). The Group has committed to invest up to a total of £0.8 million in spin-out companies based on CNAP's intellectual property. In 2006 the Group extended its partnership with the University of York to cover the entire university. The Group has committed to invest £5.0 million in University of York spin outs over and beyond the £0.8 million commitment as part of the Group's agreement with CNAP. The agreement with York was amended in 2009 so as to alter the process by which the Group evaluates commercialisation opportunities and the level of initial partner equity the Group is entitled to as a result. Further, the Group's automatic entitlement to share in any of York's proceeds from out-licensing has been removed from the agreement.
(iv) The Group extended its partnership with the University of Leeds in July 2005 by securing the right with associated contractual commitment to invest up to £5.0 million in University of Leeds spin-out companies. This agreement was revised in March 2011 so as to provide for a more detailed process by which the Group and the University of Leeds' commercialisation services team evaluate commercialisation opportunities and to remove the Group's entitlement to a share of out-licensing income generated by the University of Leeds except in certain specific circumstances where the Group is involved in the relevant out-licensing opportunity. Under the terms of the variation agreement, subject to quality and quantity of the investment opportunities, the Company, Techtran Group Limited (now IP Assist Services Limited) and the University of Leeds have agreed to target annual investments of at least £0.7 million in aggregate and, subject to earlier termination or the parties otherwise agreeing alternative target, to review this target on 30 April 2017.
(v) In December 2005, the Group entered into an agreement with the University of Bristol. The Group has committed to invest up to a total of £5.0 million in University of Bristol spin-out companies.
(vi) Under the terms of an agreement entered into in 2006 between the Group and the University of Surrey ("Surrey"), the Group has committed to invest up to a total of £5.0 million in spin-out companies based on Surrey's intellectual property.
(vii) In July 2006, the Group entered into an agreement with Queen Mary, University of London ("QM") to invest in QM spin-out companies. The Group has committed to invest up to a total of £5.0 million in QM spin out companies.
(viii)In September 2006, the Group entered into an agreement with the University of Bath ("Bath") to invest in Bath spin-out companies. The Group has committed to invest up to a total of £5.0 million in Bath spin-out companies. The agreement with Bath was amended during 2010 so as to remove the Group's automatic entitlement to a share of the initial equity or licence fees (as applicable) received by Bath from the commercialisation of its intellectual property in the event the Group and its employees have not been actively involved in developing the relevant opportunity.
(ix) In October 2006, the Group entered into an agreement with the University of Glasgow ("Glasgow") to invest in Glasgow spin-out companies. The Group has committed to invest up to a total of £5.0 million in Glasgow spin-out companies.
(x) In February 2013, the Group entered into a commercialisation agreement with the University of Manchester. Initially the Group had agreed to make available an initial facility of up to £5.0m to provide capital to new proof of principle projects (excluding graphene projects) intended for commercialisation through spin-out companies. During January 2014, the Group extended its agreement to include funding for Graphene projects, increased the capital commitment by a further £2.5m, bringing the total to £7.5m, and extended the agreement to 2019.

IP Venture Fund and IP Venture Fund II

IP2IPO has a 10 per cent. limited partnership interest in IP Venture Fund. Pursuant to the terms of the IP Venture Fund limited partnership agreement, IP2IPO has committed to invest up to £3.1 million into the fund and as at 31 December 2016 had invested a total of £3.0 million resulting in an outstanding commitment of £0.1 million.

IP2IPO has a 33.3 per cent. limited partnership interest in IP Venture Fund II. Pursuant to the terms of the IP Venture Fund II limited partnership agreement, IP2IPO has committed to invest up to £10 million into the fund and at 31 December 2016 had invested a total of £4.9 million resulting in an outstanding commitment of £5.1 million.

Off-balance sheet arrangements

Other than operating leases in respect of its leasehold properties, the Group is not a party to any material off-balance sheet arrangements.

5. CAPITALISATION AND INDEBTEDNESS

5.1 Capitalisation

The table below sets forth the Group's total capitalisation as at 31 December 2016, extracted without material adjustment from the Company's audited results for the year ended 31 December 2016 (which are incorporated by reference into this document). This table should be read together with such notes to those results incorporated by reference into this document.

	£ million
Shareholders' equity
Share capital	11.3
Legal reserves	–
Share premium account	504.7
Other reserves	–
Merger reserve	12.8 ––––––––
Total capitalisation as at 31 December 2016	528.8
	––––––––

Total capitalisation excludes retained earnings, which amounted to £239.6 million at 31 December 2016. There has been no material change to the capitalisation of the Group since 31 December 2016.

5.2 Indebtedness

On 8 July 2015 the Group secured a £30m, 8-year debt facility from the European Investment Bank. The facility is to be disbursed in two tranches. The Group will use the proceeds to continue to fund UK university spin-out companies as they develop and mature. A non-utilisation fee of 0.15% is charged over the undrawn element of the facility, which in 2016 was £nil (2015: £nil).

The first tranche of £15.0m was drawn down on 16 December 2015. There were £0.1m of initial transaction costs incurred in the arrangement of the facility. This balance was set against the loan amount and is to be subsequently amortised over the term of the loan.

The drawn down element of the facility bears interest at a fixed rate of 1.98% with an additional variable spread equal to the six month GBP Libor rate as at the first date of each six-month interest period. The first £15.0m tranche was disbursed on 17 December 2015 and the average floating interest rate (including the fixed element) for 2016 was 2.66% (2015: 2.48%). The interest charged in 2016 was £0.4m (2015: £nil).

The Group must ensure that the ratio between the value of the portfolio along with the value of the Group's cash net of any outstanding liabilities, and the outstanding debt facility does not fall below 6:1. The Group must maintain that the amount of unencumbered funds freely available to the Group is not less than £15.0m. The Group is also required to maintain a separate bank account which must at any date maintain a minimum balance equal to that of all payments due to the EIB in the forthcoming six months.

The table below sets out the indebtedness of the Group as at 31 March 2017.

£ million
–
–
–
– ––––––––
– 14.9
–
–
14.9 ––––––––
14.9

The statement of indebtedness is unaudited.

The following table sets out the unaudited net consolidated financial funds of the Group taken from the unaudited consolidated management accounts as at 31 March 2017.

	£ million
Cash	95.5
Cash equivalent	–
Trading securities	– ––––––––
Total liquidity	95.5
Current bank debt
Current portion of non-current debt	–
Other current financial debt	– ––––––––
Current financial debt
Net current financial funds	95.5
Non-current bank debt	(14.9)
Bond issues	–
Other non-current financial indebtedness	– ––––––––
Non-current financial indebtedness	(14.9) ––––––––
Net financial funds	80.6
	––––––––

The Group has no indirect or contingent indebtedness as at 31 March 2017.

6. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT FINANCIAL RISKS

The operations of the Group and the implementation of its objectives and strategy are subject to a number of key risks and uncertainties. Risks are formally reviewed by the Board on an annual basis and appropriate procedures are put in place to monitor and, to the extent possible, mitigate these risks. Were more than one of the risks to occur, the overall impact on the Group may be compounded.

In the course of its normal operations, the Group uses a number of financial instruments including cash, deposits, and equity and debt investments in portfolio companies and is therefore exposed to a number of financial risks, the most significant of which are market, liquidity and credit risks.

(a) Market risk

(i) Price risk

The Group is exposed to equity securities price risk as a result of the equity investments and investments in limited partnerships held by the Group and categorised at fair value through profit or loss. The Group holds investments which are publicly traded on AIM and investments which are not traded on an active market.

The valuation of quoted and unquoted investments depends on a combination of market factors, including investor sentiment and availability of liquidity and appetite for specific asset classes, as well as the specific performance of each underlying company. As a result of the Group's focus on UK-based IP, its portfolio companies tend to be based in, or have significant operations in, the UK and are therefore influenced by the general economic climate, trading and market conditions in the UK.

Whilst to date the majority of the Group's portfolio companies have tended to be based in, or have significant operations in, the UK, the Group does have a growing business in the US. Accordingly, the Directors believe that the proportion of the Group's portfolio companies that are based in, or exposed to, the US, is likely to increase. The Group therefore has a degree of exposure to general economic and market conditions in the US, and the Directors expect this US exposure to increase over time.

The Group seeks to mitigate price risk by having an established investment appraisal process and asset-specific monitoring procedures which are subject to overall review by the Board. In a number of cases these monitoring procedures can include members of the Group's executive team and other staff serving in an advisory capacity to portfolio companies (including secondments and non-executive directorships). The Group has also established capital markets and communications teams dedicated to supporting portfolio companies with fundraising activities and investor relations.

(ii) Interest rate risk

As the Group has no significant borrowings, it has only a limited interest rate risk. The primary impact to the Group is the impact on income and operating cash flow as a result of the interestbearing deposits and cash and cash equivalents held by the Group.

The Group mitigates this risk, in co-ordination with liquidity risk, by managing its proportion of fixed to floating rate financial assets.

The Group has no undrawn committed borrowing facilities.

(b) Liquidity risk

The Group is exposed to liquidity risk arising from the need to have finance available to make investments in portfolio companies and to meet payments for administrative and other costs as they fall due.

The Group seeks to manage its liquidity risk to ensure sufficient cash is available to meet foreseeable needs and to invest cash assets safely and profitably. Accordingly, the Group only places working capital on overnight deposits with clearing banks or in short-term instruments issued by reputable counterparties. The Group continually monitors rolling cash flow forecasts to ensure sufficient cash is available for anticipated cash requirements.

(c) Credit risk

Credit risk arises from the exposure to the risk of loss if counterparty fails to perform its financial obligations to the Group. This could include non-repayment of cash and cash equivalents held with financial institutions or defaults of individual trade debtors. Reasons for counterparty defaults include general economic or sector specific downturns or the failure of an individual financial institution or other entity.

The Group's credit risk is primarily attributable to its deposits, cash and cash equivalents, debt investments and trade receivables. The Group seeks to mitigate its credit risk on cash and cash equivalents by investing in treasury funds with an "AA" credit rating or above managed by institutions, or by making short-term deposits with counterparties. Short-term deposit counterparties are required to have most recently reported total assets in excess of £3 billion and, where applicable, a prime short-term credit rating at the time of investment (ratings are generally determined by Moody's or Standard & Poor's). Moody's prime credit ratings of "P1", "P2" and "P3" indicate respectively that the rating agency considers the counterparty to have a "superior", "strong" or "acceptable" ability to repay short-term debt obligations (generally defined as having an original maturity not exceeding 13 months).

The Group's exposure to credit risk on debt investments is managed in a similar way to equity price risk, as described above, through the Group's investment appraisal processes and asset monitoring procedures which are subject to overall review by the Board.

The maximum exposure to credit risk for debt investments, receivables and other financial assets is represented by their carrying amount.

(c) Capital risk management

The Group's key objective when managing capital is to safeguard the Group's ability to continue as a going concern so that it can continue to provide returns for Shareholders and benefits for other stakeholders. The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of its underlying assets. In order to maintain or adjust the capital structure, the Group may issue new shares, return capital or pay dividends to shareholders, or dispose of interests in selected portfolio companies.

The Group's strategy is to maintain healthy cash and short term deposit balances that enable it to participate in all investments ratified by the Group's investment committee, whilst having sufficient cash reserves to meet all working capital requirements in the foreseeable future.

	2016 £ million	2015 £ million	2014 £ million
Equity rights	–	–	1.3
Equity investments	594.9	543.1	345.9
Debt investments	19.1	9.1	4.0
Other financial assets	–	–	–
Contingent value rights	–	1.4	1.4
Investment in limited partnerships	4.2	4.4	4.6
Trade and other receivables	2.6	3.2	4.8
Deposits	–	70.0	30.0
Cash and cash equivalents	112.3	108.8	67.3
Trade and other payables	(2.1)	(3.9)	(2.1)
Loans from limited partners of consolidated
funds	(9.8)	(7.1)	(4.5)
EIB debt facility	(14.9)	(14.9)	–
Contingent loans from university partners	–	–	(0.3)
Total	–––––––– 706.3	–––––––– 714.1	–––––––– 452.4
	––––––––	––––––––	––––––––

Fair values of financial assets and liabilities

IFRS requires financial assets to be categorised using a fair value hierarchy that reflects the significance of the inputs used in making the related fair value measurements. The level in the fair value hierarchy within which a financial asset is classified is determined on the basis of the lowest level input that is significant to that assets fair value measurement. The fair value hierarchy has the following levels:

Level 1	–	Quoted prices in active markets.
Level 2	–	Inputs other than quoted prices that are observable, such as prices from market transactions.

Level 3 – One or more inputs that are not based on observable market data.

The Group's investment portfolio was categorised as follows as at 31 December 2016:

	Level 1		Level 2	Level 3
			Unquoted
	Equity	Equity	debt	Equity
	investments	investments	investments	investments
		in quoted in unquoted in unquoted in unquoted
	spin-out	spin-out	spin-out	spin-out
	companies	companies	companies	companies	Total
	£ million	£ million	£ million	£ million	£ million
Group
At 1 January 2016	201.3	308.6	9.1	33.2	552.2
Investments during the year	10.9	50.9	6.2	1.7	69.7
Transaction-based
reclassifications
during the year	–	0.7	(0.7)	–	–
Other transfers between
hierarchy levels
during the year	–	(39.8)	6.7	33.1	–
Disposals	(15.0)	(0.2)	(0.1)	–	(15.3)
Fees settled via equity	–	0.4	–	–	0.4
Change in fair value
in the year	(36.1) ––––––––	47.4 ––––––––	(2.1) ––––––––	(2.2) ––––––––	7.0 ––––––––
At 31 December 2016	161.1	368.0	19.1	65.8	614.0
	––––––––	––––––––	––––––––	––––––––	––––––––

Cash, cash equivalents and deposits are considered to be level 1 assets, while the equity rights asset, other financial asset and the investments in limited partnerships are considered to be level 3 assets.

PART IV

HISTORICAL FINANCIAL INFORMATION

The financial statements for each of the financial years ended 31 December 2016, 2015 and 2014, together with the audit reports thereon, are incorporated by reference into this document. KPMG LLP, of 15 Canada Square, London, E14 5GL and a member firm of the Institute of Chartered Accountants in England and Wales, has issued unqualified audit opinions on the consolidated financial statements of the Company and its subsidiaries included in the annual report and accounts of the Company for each of the financial years ended 31 December 2016, 2015 and 2014.

Please refer to Part VI of this document for further details about information that has been incorporated by reference into this document.

2. SELECTED FINANCIAL INFORMATION ON THE GROUP

The financial information for the financial years ended 31 December 2016, 2015 and 2014 as set out below has been extracted without material adjustment from, and should be read together with the Group's audited consolidated financial statements included in its annual report and accounts for each of the financial years ended 31 December 2016, 2015 and 2014, which are each incorporated by reference into this document.

Key consolidated statement of comprehensive income data

	Audited	Audited	Audited
	Year ended	Year ended	Year ended
	31 December	31 December	31 December
	2016	2015	2014
	£ million	£ million	£ million
Portfolio return and revenue
Change in fair value of equity and debt investments	7.0	86.4	20.7
(Loss)/profit on disposal of equity investments	(0.5)	(0.2)	1.6
Change in fair value of limited and limited
liability partnership interests	(0.3)	0.4	0.5
Change in fair value of contingent value right	(1.4)	—	—
Other portfolio income	—	0.2	0.2
Licensing income	0.2	8.1	3.0
Revenue from services and other income	2.6	3.4	2.4
	–––––––– 7.6	–––––––– 98.3	–––––––– 28.4
Administrative expenses
Research and development costs	(1.0)	(2.0)	(1.5)
Share-based payment charge	(1.5)	(1.5)	(0.9)
Change in fair value of Oxford Equity Rights asset	—	(1.3)	(1.8)
Amortisation of intangible assets	(5.6)	(6.0)	(4.9)
Acquisition costs	(0.4)	—	(1.1)
Other administrative expenses	(14.5) ––––––––	(13.7) ––––––––	(9.3) ––––––––
	(23.0)	(24.5)	(19.5)
Operating (loss)/profit	(15.4)	73.8	8.9
Finance income – interest receivable	1.1	1.3	0.6
Finance costs – interest payable	(0.5) ––––––––	— ––––––––	— ––––––––
(Loss)/profit before taxation	(14.8)	75.1	9.5
Taxation	—	—	—
(Loss)/profit for the year	–––––––– (14.8) ––––––––	–––––––– 75.1 ––––––––	–––––––– 9.5 ––––––––

	Audited	Audited	Audited
	Year ended	Year ended	Year ended
	31 December	31 December	31 December
	2016	2015	2014
	£ million	£ million	£ million
Other comprehensive income
Exchange differences on translating foreign operations	0.1 ––––––––	0.1 ––––––––	— ––––––––
Total comprehensive (loss)/income for the period	(14.7) ––––––––	75.2 ––––––––	9.5 ––––––––
Attributable to:
Equity holders of the parent	(13.5)	73.9	9.1
Non-controlling interest	(1.2) ––––––––	1.3 ––––––––	0.4 ––––––––
	(14.7)	75.2	9.5
Earnings per share
Basic (p)	(2.39)	13.66	1.97
Diluted (p)	(2.39)	13.63	1.96
	––––––––	––––––––	––––––––

Key consolidated statement of financial position data

	Audited	Audited	Audited
	Year ended	Year ended	Year ended
	31 December	31 December	31 December
	2016	2015	2014
	£ million	£ million	£ million
Investment portfolio	614.0	552.2	349.9
Cash and short-term deposits	112.3	178.8	97.3
Total assets	795.5	807.8	533.1
Total liabilities	26.8	25.9	6.9
Net assets	–––––––– 768.7	–––––––– 781.9	–––––––– 526.2
	––––––––	––––––––	––––––––

As a result of the issue of the Capital Raising Shares (approximately £195.7 million net of expenses) the Company's net assets will be increased by approximately £195.7 million. The issue of the Capital Raising Shares will have no effect on the Company's earnings, save for interest earned on the net proceeds of the Capital Raising.

PART V

ADDITIONAL INFORMATION

1. RESPONSIBILITY

The Company and the Directors, whose names are set out on page 112 of this document, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and contains no omission likely to affect its import.

2. INCORPORATION

2.1 The Company was incorporated in England and Wales with registered number 04204490 on 24 April 2001 under the Companies Act 1985 as a private company limited by shares with the name De facto 929 Limited. The Company changed its name to IP2IPO on 22 May 2001 and subsequently to IP2IPO Group Limited on 31 July 2001. On 29 September 2003, the Company was re-registered as a public limited company under the Companies Act 1985 and changed its name to IP2IPO Group plc. On 25 April 2006, the Company changed its name to IP Group plc.
2.2 The principal legislation under which the Company operates is the Companies Act and the regulations made thereunder. The Existing Shares are listed on the premium segment of the Official List and admitted to trading on the main market for listed securities of the London Stock Exchange.
2.3 The registered office, and the principal place of business, of the Company is at The Walbrook Building, 25 Walbrook, London, EC4N 8AF, United Kingdom (telephone number +44 (0)845 074 2929), which is also the business address of each of the Directors.

3. SHARE CAPITAL

3.1 As at 22 May 2017 (being the latest practicable date prior to the publication of this document), the issued share capital of the Company was £11,304,439.34 divided into 565,221,967 Shares, each of which are fully paid or credited as fully paid. As at 22 May 2017, (being the latest practicable date prior to the publication of this document), the Company did not hold any Shares in treasury.
3.2 The following changes in the share capital of the Company occurred between 1 January 2014 and 22 May 2017 (being the latest practicable date prior to the publication of this document):
3.2.1 the issued share capital of the Company as at 1 January 2014 was £7,505,177.18 divided into 375,258,859 Shares;
3.2.2 on 14 February 2014, 60,606,060 Shares were issued pursuant to a firm placing, placing, open offer and offer for subscription of the Company;
3.2.3 on 20 March 2014, 39,150,484 Shares were issued as consideration pursuant to the Company's acquisition of Fusion IP;
3.2.4 on 31 March 2014, the Company issued 4,508,994 Shares at nominal value of 2p each in order to settle 2011 LTIP awards which achieved their vesting conditions and consequently became due to the Group's employees;
3.2.5 as at 31 December 2014, the issued share capital of the Company was £9,590,487.94 divided into 479,524,397 Shares;
3.2.6 on 27 March 2015, the Company issued 56,888,888 Shares pursuant to a placing and open offer;
3.2.7 on 31 March 2015, the Company issued 1,552,144 Shares at nominal value of 2p each in order to settle 2012 LTIP awards which achieved their vesting conditions and consequently became due to the Group's employees;
3.2.8 on 19 May 2015, the Company issued 26,500,000 Shares pursuant to a placing;
3.2.9 on 22 May 2015, the Company issued 153,940 Shares at nominal value of 2p each in order to settle a DBSP award which achieved their vesting conditions and consequently became due to the Group's employees;
3.2.10 on 13 October 2015, the Company issued 28,799 Shares at nominal value of 2p each to its Employee Trust as a result of the exercise of options by current and former employees of the Group;
3.2.11 as at 31 December 2015, the issued share capital of the Company was £11,292,963.36 divided into 564,648,168 Shares;
3.2.12 on 1 April 2016, the Company issued 457,877 Shares at nominal value of 2p each in order to settle 2013 LTIP awards which achieved their vesting conditions and consequently became due to the Group's employees;
3.2.13 on 21 April 2016, the Company issued 101,622 Shares at nominal value of 2p each in order to settle 2014 LTIP awards which achieved their vesting conditions and consequently became due to the Group's employees;
3.2.14 on 25 October 2016, the Company issued 14,300 Shares at nominal value of 2p each in order to settle the exercise of an option granted to a former employee of the Group; and
3.2.15 as at 31 December 2016, the issued share capital of the Company was £11,304,439.34 divided into 565,221,967 Shares.
3.3 Immediately following completion of the Firm Placing, the Placing, the Open Offer and Offer for Subscription (and assuming that no further Shares are issued as a result of any provisional awards of Shares under the Share Schemes between the date of the publication of this document and the date of Admission), the issued share capital of the Company will be £14,161,582.06 divided into 708,079,103 Shares. If the Board exercises its right to increase the size of the Capital Raising by £66.6 million and the increased Capital Raising is fully subscribed, the issued share capital of the Company (based on the same assumptions) will then be £15,113,010.62 divided into 755,650,531 Shares. These figures exclude any Shares that may be issued in connection with the Possible Offer if it becomes Effective.
3.4 On 10 May 2017, by or pursuant to resolutions passed by the Shareholders at the annual general meeting of the Company:
(a) the Directors were generally and unconditionally authorised for the purposes of section 551 of the Companies Act to exercise all the powers of the Company to:
- (i) allot shares in the Company and to grant rights to subscribe for or convert any security into such shares in the Company ("Rights") up to an aggregate nominal amount of £3,768,146.44 (being approximately one third of the Company's total ordinary share capital in issue as at 5 April 2017, being the latest practicable date prior to the publication of the notice of such general meeting) (such amount to be reduced by the nominal amount allotted or granted under paragraph (ii) below); and
- (ii) allot equity securities of the Company (as defined in section 560 of the Companies Act) up to a further aggregate nominal amount of £3,768,146.44 (being approximately one third of the Company's total ordinary share capital in issue as at 5 April 2017, being the latest practicable date prior to the publication of the notice of such general meeting) in connection with an offer by way of a rights issue,

provided that: (i) such authorities shall expire on the earlier of the conclusion of the Company's 2018 annual general meeting and 1 August 2018; and (ii) before such expiry the Company may make any offer or agreement which would or might require shares or equity securities to be allotted or Rights to be granted after such expiry and the Directors may allot such shares or equity securities and grant such Rights pursuant to any such offer or agreement as if the authority conferred by the above resolution had not expired. These authorities are in substitution for all other authorities granted to the Directors to allot shares or equity securities and grant Rights.

For the purposes of the above resolution and the resolution referred to in paragraph (b) below, "rights issue" means an offer to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings (and, if applicable, to the holders of any other class of equity security in accordance with the rights attached to such class) to subscribe further securities by means of the issue of a renounceable letter (or other negotiable document) which may be traded for a period before payment for the securities is due, subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractions of such securities, the issue, transfer and/or holding of any securities in certificated form or in uncertificated form, the use of one or more currencies for making payments in respect of such offer, any such shares or other securities being represented by depositary receipts, treasury shares or any legal or practical problems arising under the laws of, or the requirements of any regulatory body or any stock exchange in, any territory;

(b) the Directors were generally empowered pursuant to sections 570 and 573 of the Companies Act to allot equity securities (as defined in section 560 of the Companies Act), payment for which is to be wholly in cash as if section 561(1) did not apply to any such allotment provided that such power shall be limited:
(i) pursuant to the authority conferred on the Directors by paragraph (i) of the resolution referred to in paragraph (a) above:
- (1) to or in connection with any rights issue, open offer or other pre-emptive offer, open for acceptance for a period determined by the Directors, to the holders of Shares on the register on any fixed record date in proportion (as nearly as may be practicable) to their holdings of Shares (and, if applicable, to the holders of any other class of equity security in accordance with the rights attached to such class), subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractions of such securities, the issue, transfer and/or holding of any securities in certificated form or in uncertificated form, the use of one or more currencies for making payments in respect of such offer, any such shares or other securities being represented by depository receipts, treasury shares or any legal or practical problems arising under the laws of, or the requirements of any regulatory body or any stock exchange in, any territory; and
- (2) to the allotment of equity securities (other than pursuant to paragraph (b)(i) (1) above) up to an aggregate nominal amount of £565,221.97, representing less than 5 per cent. of the nominal value of the issued share capital of the Company as at 5 April 2017, being the latest practicable date prior to the publication of the notice of such general meeting; and
(ii) pursuant to the authority conferred on the Directors by paragraph (ii) of the resolution referred to in paragraph (a) above, to the allotment of equity securities in connection with a rights issue.

References in such resolution to the allotment of equity securities include the sale of treasury shares (within the meaning of section 724 of the Companies Act). The authority given by the above resolution expires at such time as the authorities conferred on the Directors by the resolution referred to in paragraph (a) above expire save that, before the expiry of such authority, the Company may make any offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities pursuant to any such offer or agreement as if the power conferred by the resolution referred to in this paragraph (b) had not expired.

(c) the Directors were generally empowered in addition to the resolution to allotment of equity securities pursuant to paragraph (b) above to allot equity securities (as defined in section 560 of the Act) for cash under the authority given by that resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561 of the Act did not apply to any such allotment or sale, provided that such power shall be limited:
(i) pursuant to the authority conferred on the Directors by paragraph (i) of the resolution referred to in paragraph (a) above:
- (1) to the allotment of equity securities or sale of treasury shares up to a nominal amount of £565,221.97, representing approximately 5% of the nominal value of the issued ordinary share capital of the Company as at 5 April 2017, being the last practicable date prior to the publication of such general meeting); and
- (2) used only for the purposes of financing (or refinancing, if the authority was to be used within six months after the original transaction) a transaction which the Directors determine to be an acquisition or other capital investment of a kind contemplated by the "Statement of Principles on Disapplying Pre-Emption Rights" most recently published by the Pre-Emption Group prior to the publication of such general meeting,
(ii) provided that: (i) such authorities shall expire on the date of expiration of the resolution passed in (a) above; and (ii) before such expiry the Company may make any offer or agreement which would or might require shares or equity securities to be allotted (and treasury shares to be sold) after such expiry and the Directors may allot such shares or equity securities (and sell treasury shares) pursuant to any such offer or agreement as if the authority conferred by the above resolution referred to in this paragraph (c) had not expired.
3.5 The Capital Raising Shares will be allotted and issued pursuant to the authorities to be granted under the Resolutions, which are set out in the Notice of General Meeting that is to be found in Part VIII of this document. It is proposed that the Resolutions will be voted on at the General Meeting to be held on 8 June 2017 for the purpose of implementing the Capital Raising by:
(1) approving the terms of the Capital Raising and directing the Directors to implement it;
(2) authorising the Directors for the purpose of section 551 of the Companies Act to exercise all the power of the Company to allot equity securities (as defined in section 560 of the Companies Act) in the Company up to an aggregate nominal amount of £3,808,571.28 pursuant to the Capital Raising (being approximately 33.7 per cent. of the Shares in issue as at 22 May 2017, being the latest practicable date prior to the publication of this document) such authority to expire on the date three months after passing of the Resolution and before such expiry the Company may make any offer or agreement which would or might require shares to be allotted after such expiry and the Directors may allot such shares pursuant to any such offer or agreement as if the authority conferred by this Resolution had not expired; and
(3) empowering the Directors pursuant to section 570 of the Companies Act to allot equity securities (as defined in section 560 of the Companies Act) for cash pursuant to the foregoing resolution, as if section 560(1) of the Companies Act did not apply to such allotment up to an aggregate nominal amount of £3,808,571.28 pursuant to the Capital Raising (being approximately 33.7 per cent. of the Shares in issue as at 22 May 2017, being the latest practicable date prior to the publication of this document). The authority given by this resolution shall expire at such time as the authority conferred by the foregoing resolution shall expire save that, before the expiry of this power, the Company may make any offer or

agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities pursuant to such offer or agreement as if the power conferred hereby had not expired.

These authorities are in addition, and without prejudice, to all existing authorities granted to the Directors to allot shares or equity securities and grant rights to subscribe for or to convert any security into such shares in the Company and disapplying section 560 of the Companies Act.

3.6 The ISIN in respect of the Existing Shares is GB00B128J450 and the SEDOL of the Capital Raising Shares is B128J45. The Existing Shares are created and issued pursuant to the laws of England and Wales and are denominated in pounds sterling, being the lawful currency of England and Wales.
3.7 The Existing Shares are admitted to CREST. Accordingly, settlement of transactions in the Shares may take place within CREST if individual Shareholders so wish. CREST is a voluntary system and holders of Shares who wish to receive and retain share certificates are able to do so.
3.8 None of the shares in the capital of the Company are held by or on behalf of the Company itself or by any subsidiary of the Company.
3.9 Save as set out in paragraph 6 of this Part V, the Company does not have outstanding any convertible or exchangeable securities or securities with warrants.
3.10 Details of the Company's significant subsidiaries are set out in paragraph 17 of this Part V.

4. SUMMARY OF THE COMPANY'S ARTICLES

4.1 The objects of the Company are unlimited. The Companies Act abolished the requirement for a company to have an authorised share capital, and the Articles (which were adopted on 27 April 2010) reflect this. The Articles contain, amongst other things, provisions to the following effect:

4.1.1 Rights attaching to Shares

(a) Income

The profits of the Company which may be distributed in respect of any financial year or other period shall be distributed pari passu among the holders of the Shares according to the nominal amounts (excluding any premium) paid up on the Shares held by them respectively.

(b) Capital

On a distribution of assets on liquidation or otherwise, the surplus assets of the Company remaining after payment of its liabilities shall be distributed amongst the holders of Shares according to the nominal amounts (excluding any premium) paid up on the Shares held by them respectively.

Subject to any special rights or restrictions as to voting attached to any shares by or in accordance with the Articles and or any resolution authorising the creation of such shares, on a show of hands every member who is present in person or by proxy shall have one vote and, on a poll, every member who is present in person or by proxy shall have one vote for every share held by him.

4.1.2 Variation of class rights

(a) Subject to the Companies Act, all or any of the rights and restrictions attached to any class of shares may from time to time be altered, added to or abrogated with the sanction of a special resolution passed at a separate general meeting of the holders of such shares.
(b) At any such separate general meeting all the provisions of the Articles relating to general meetings shall apply, mutatis mutandis, but so that the necessary quorum shall be two or

more persons holding or representing by proxy not less than one-third in nominal value of the issued shares of the relevant class, that every holder of shares of the class present or represented by proxy shall be entitled to one vote on a show of hands and on a poll to one vote for every such share held by him, that any holder of shares of the class present in person or by proxy may demand a poll and that at any adjourned meeting of such holders one holder present in person or by proxy (whatever the number of shares held by them) shall be a quorum.

(c) The rights conferred upon the holders of any class of shares shall be deemed to be varied or abrogated by the reduction of the capital paid up on such shares or by the allotment of further shares ranking in priority thereto for payment of a dividend or repayment of capital but shall not, unless otherwise expressly provided in the Articles, be deemed to be altered by the creation or issue of further shares ranking pari passu therewith or subsequent thereto or by a purchase by the Company of its own shares.

4.1.3 Transfers of Shares

(a) Any member may, subject to the Articles, transfer all or any of his shares in the case of certificated shares by an instrument of transfer in the usual common form or in any other manner (whether or not by written instrument) which the Board may approve. Any written instrument of transfer of a share shall be signed by or on behalf of the transferor (and, in the case of a partly paid share by or on behalf of the transferee) and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register in respect thereof. In the case of uncertified shares any member may, subject to the Articles, transfer all or any of his shares in CREST.
(b) The Board may, without giving any reason, decline to register a transfer of any share which is not fully paid, providing that any such refusal will not prevent dealings in the shares from taking place on an open and proper basis.
(c) The Board may refuse to register any transfer in favour of a person known to be a minor, bankrupt or person who is mentally disordered or a patient for the purpose of any statute relating to mental health.
(d) The Board may decline to register any transfer unless any written instrument of transfer, duly stamped, is lodged with the Company, accompanied by the relevant certificate and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer, the instrument is in respect of only one class of share and, in the case of a transfer to joint holders, the number of joint holders does not exceed four.
(e) There are no provisions in the Company's Articles that would have the effect of delaying, deferring or preventing a change in control of the Company.

4.1.4 Section 793 of the Companies Act

Where any registered holder of any shares in the Company, or any named person in respect of any shares in the Company, fails to comply with any notice (a "statutory notice") given by the Board under section 793 of the Companies Act requiring him to give particulars of any interest in respect of shares in the Company, the Company may, no earlier than fourteen days after the service of the statutory notice, give the registered holder of such shares a notice (a "restriction notice") stating, or to the effect, that the shares in respect of which the default has occurred ("default shares") are subject to certain sanctions for so long as the default continues and (unless the Board otherwise determines) seven days thereafter but may be cancelled by the Board at any time.

For a shareholding of less than 0.25 per cent. of the relevant class, the only sanction is that the member may be prohibited from attending and voting at meetings (either in person or by proxy); for a shareholding of 0.25 per cent. or more of the relevant class, the Articles also provide for the withholding of the payment of dividends (including shares issued in lieu of dividends) on the default shares and, subject to those limitations being approved by the London Stock Exchange, restrictions on the transfer of the default shares.

4.1.5 General meetings

(a) The Board shall convene and the Company shall hold general meetings and annual general meetings in accordance with the requirements of the Companies Act at such times and places as the Board shall appoint.
(b) The Board may, whenever it thinks fit, convene a general meeting and general meetings shall be convened on such requisition or in default may be convened by such requisition as is provided by the Companies Act. If there are not within the UK sufficient directors to call a general meeting, any director or member may call the meeting.
(c) Save as provided for in paragraph 4.1.4 above, all members of the Company are entitled to attend a general meeting.

4.1.6 Directors

(a) Unless and until the Company in general meeting shall otherwise determine, the number of directors shall not be less than two.
(b) Subject to the Companies Act and the Articles, no director shall be disqualified by his office from entering into any contract or arrangement with the Company either with regard to his tenure of any office or employment or as a vendor, purchaser or otherwise. Nor shall any such contract be liable to be avoided. Nor shall any director so contracting be liable to account to the Company for any remuneration, profit or other benefit realised by any such contract or arrangement by reason of such director holding that office or of the fiduciary relationship thereby established, but such director shall declare the nature of his interest in accordance with the Companies Act.

4.1.7 Restrictions on voting by directors

(a) Save as otherwise provided by the Articles, a director shall not vote (nor be counted in the quorum) on any resolution of the Board concerning his own appointment as the holder of any office or place of profit with the Company or any other company in which the Company is interested.
(b) Save as otherwise provided in the Articles, a director shall not vote at a meeting of directors or of a committee of directors on any resolution concerning a matter in which he has, directly or indirectly, an interest or duty which is material and which conflicts with the interests of the Company unless his interest or duty arises only because the case falls within one or more of the following paragraphs:
(i) the giving to him of a guarantee, security or indemnity in respect of money lent or an obligation incurred by him for the benefit of the Company or any of its subsidiaries;
(ii) the giving of a guarantee, security or indemnity to a third party in respect of an obligation of the Company or any of its subsidiaries for which the director has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security;
(iii) his interest arises by virtue of his subscribing or agreeing to subscribe for any shares, debentures or other securities of the Company or any of its subsidiaries, or by virtue of his being, or intending to become, a participant in the underwriting

or sub-underwriting of an offer of any such shares, debentures, or other securities by the Company or any of its subsidiaries for subscription, purchase or exchange;

(iv) any proposal concerning a retirement, death or disability benefits scheme or a share option scheme, share incentive scheme or profit-sharing scheme which either relates to both employees and directors of the Company and/or directors of any subsidiary and does not provide any director of the Company as such with any privilege or advantage not accorded to the employees to whom such scheme or fund relates or has been approved by, or is conditional on approval by, HM Revenue & Customs for tax purposes; and/or
(v) any proposal concerning an insurance which the Company is empowered to purchase and/or maintain for the benefit of, and against any liability incurred by, any directors or persons who include the directors of the Company.
4.1.8 Remuneration of directors
(a) The remuneration (whether by way of salary, commission, participation in profits or otherwise) of any executive director shall be such as the Board may determine, and shall be either in addition to, or in lieu of, his remuneration as a director.
(b) Each of the directors may be paid a fee at such rates as may from time to time be determined by the Board provided that the aggregate of all such fees so paid to directors (excluding amounts payable under any other Article) shall not exceed £250,000 per annum or such larger amount as may from time to time be determined by ordinary resolution of the Company.
(c) Each director may be paid all reasonable travelling, hotel and incidental expenses of attending and returning from meetings of the Board or committees of the Board or general meetings or meetings of the holders of any class of shares or of debentures of the Company or otherwise in connection with the business of the Company or the discharge of his duties as a director. Any director who, by request, goes to reside abroad for any purposes of the Company or who performs services which in the opinion of the directors go beyond the ordinary duties of a director may be paid such extra remuneration (whether by way of salary, commission, participation in profit or otherwise) as the Board may determine and such extra remuneration shall be in addition to any remuneration provided for by, or pursuant to, any other Article.
4.1.9 Appointments to office
(a) Subject to the Companies Act, the Company may by ordinary resolution elect any person to be a director, either to fill a vacancy or as an addition to the existing Board. The Board shall have power at any time and from time to time to appoint any person to be a director.
(b) The Company may by special resolution, or by ordinary resolution, of which special notice has been given in accordance with the Companies Act, remove any director before the expiration of his period of office. No person other than a director retiring at the meeting shall, unless recommended by the Board, be eligible for election to the office of director at any general meeting unless, not less than seven days and not more than twenty-eight clear days before the day appointed for the meeting, there has been given notice in writing by some member entitled to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also notice in writing signed by the person to be proposed of his willingness to be elected.

4.1.10 Retirement of directors

(a) At every annual general meeting any director:
(i) who has been appointed by the Board since the last annual general meeting; or
(ii) who held office at the time of the two preceding annual general meetings and who did not retire at either of them; or
(iii) who has held office with the Company, other than employment or executive office, for a continuous period of nine years or more at the date of the meeting shall retire from office and may offer himself for re-appointment by the members.
(b) A director who retires at the annual general meeting shall be eligible for re-election. If he is not reappointed he shall retain office until the meeting appoints someone in his place or, if it does not do so, until the end of the meeting.

4.1.11 Borrowing Powers

(a) Subject to the Articles and the Companies Act, the Board may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets (present or future) and uncalled capital or any part thereof and (subject to section 551 of the Companies Act) to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.
(b) The Board shall restrict the borrowings of the Company and exercise all other rights, powers of control or rights of influence exercisable by the Company in relation to its subsidiaries so as to secure that the aggregate amount for the time being remaining outstanding of all monies borrowed by the Group shall not at any time exceed an amount equal to four times the Adjusted Capital and Reserves (as defined by the Articles) without the previous sanction of any ordinary resolution of the Company in general meeting.

4.1.12 Pensions, gratuities etc.

The directors may, subject to the provisions of the Companies Act, exercise all the powers of the Company to grant pensions, annuities or other allowances and benefits in favour of any person including any director or former director or the relations, connections or dependants of any director or former director, provided that no pension, annuity or other allowance or benefit (except such as may be provided for by the Articles) shall be granted to a director or former director who has not been an executive director or held any other office or place of profit under the Company or any of its subsidiaries or to a person who has no claim on the Company except as a relation, connection or dependant of such a director or former director without the approval of an ordinary resolution of the Company.

4.1.13 Dividends

(a) Subject to the Companies Act, the Company in general meeting may from time to time declare dividends to be paid to members according to their rights and interests in the profits available for distribution, but no dividend shall be declared in excess of the amount recommended by the Board.
(b) Except in so far as the rights attaching to, or the terms of issue of, any share otherwise provides, all dividends shall be declared and paid according to the amounts paid up on the shares (but no amount paid up on a share in advance of calls shall be treated for this purpose as paid up on such share), and shall be apportioned and paid pro rota to the amounts paid up on the shares during any portion of the period in respect of which the dividend is paid.
(c) The Board may pay to the members such interim dividends as appear to the Board to be justified by the profits of the Company and, in particular, if at any time the share capital of the Company is divided into different classes, the Board may pay such interim dividends in respect of those shares in the capital of the Company which confer on the

holders thereof deferred or non preferential rights (as well as in respect of those shares which confer on the holders thereof preferential rights with regard to dividend), but no interim dividend shall be paid on shares carrying deferred or non- preferential rights if at the time of payment any preferential dividend is in arrears.

(d) No dividend shall be paid otherwise than out of profits available for distribution in accordance with the Companies Act.

4.1.14 Unclaimed dividends

Any dividend unclaimed for a period of twelve years from the date such dividend becomes due for payment shall be forfeited and shall revert to the Company and the payment by the Board of any unclaimed dividend, interest or other sum payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof.

4.1.15 Untraced shareholders

(a) When the registered address of any member appears to the Board to be incorrect or out of date such member may, if the Board so resolves, be treated as if he had no registered address and thereafter the Company will not obliged to send cheques, warrants or notices of meetings to such member. No such resolution shall be proposed unless cheques or warrants sent to the registered address of such member have been returned by the Post Office or left uncashed on at least two consecutive occasions or, following one such occasion, reasonable enquiries have failed to establish any new address of such member.
(b) If, for a period of twelve years, at least three dividends have become payable and not been cashed and no communication has been received from the member (or any person entitled to the member's shares by transmission), the Company shall be entitled to sell such shares at the best obtainable price if, after giving notice in a leading newspaper and a newspaper circulating in the region of the member's registered address, it has not had any communication from the member (or anyone entitled to his shares by transmission) within three months.

5. OTHER RELEVANT LAWS AND REGULATIONS

5.1 The City Code applies to the Company. Under the City Code, if an acquisition of the Shares were to increase the aggregate holding of the acquirer and any parties acting in concert with it to Shares carrying 30 per cent. or more of the voting rights in the Company, the acquirer and, depending on the circumstances, its concert parties (if any) would be required (except with the consent of the Panel) to make a cash offer for the Shares not already owned by the acquirer and its concert parties (if any) at a price not less than the highest price paid for the Shares by the acquirer or its concert parties (if any) during the previous 12 months. A similar obligation to make such a mandatory cash offer would also arise on the acquisition of Shares by a person holding (together with its concert parties, if any) Shares carrying at least 30 per cent. but not more than 50 per cent. of the voting rights in the Company if the effect of such acquisition were to increase the percentage of the aggregate voting rights held by the acquirer and its concert parties (if any).
5.2 Under the Companies Act, if a person who has made a general offer to acquire the Shares (the "offeror") were to acquire, or unconditionally contract to acquire, 90 per cent. of the shares to which the offer relates and 90 per cent. of the voting rights attached to the Shares within three months of the last day on which its offer can be accepted, the offeror could then compulsorily acquire the remaining 10 per cent. The offeror would do so by sending a notice to outstanding Shareholders telling them that the offeror will compulsorily acquire their Shares and then, six weeks later, executing a transfer of the outstanding Shares in the offeror's favour and paying the consideration to the Company, which would hold the consideration on trust for outstanding Shareholders. The consideration offered to those Shareholders whose Shares are compulsorily acquired under the Companies Act must, in general, be the same as the consideration that was available under the general offer.
5.3 The Companies Act gives minority Shareholders a right to be bought out in certain circumstances by a person who has made a general offer. If a takeover offer related to all the Shares and, at any time before the end of the period within which the general offer can be accepted, the offeror holds or has agreed to acquire not less than 90 per cent. of the shares to which the offer relates, any holder of the Shares to which the general offer relates who has not accepted the general offer can, by a written communication to the offeror, require it to acquire that holder's Shares.
5.4 The offeror is required to give each Shareholder notice of his right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of minority Shareholders to be bought out, but that period cannot end less than three months after the end of the acceptance period. If a Shareholder exercises his rights, the offeror is entitled and bound to acquire those Shares on the terms of the offer or on such other terms as may be agreed.
5.5 No public takeover bid has been made in relation to the Company during the last financial year or the current financial year.
5.6 The Disclosure Guidance and Transparency Rules apply to the Company and require that, subject to certain exemptions, a person is required to notify the Company of the percentage of voting rights in the Company it holds, or is deemed to hold through its direct or indirect holding of certain financial instruments, if the percentage of those voting rights reach, exceed or fall below 3%, 4%, 5%, 6%, 7%, 8%, 9%, 10% and each 1% threshold thereafter up to 100%.

6. EMPLOYEE SHARE PLANS

6.1 The Company's Long Term Incentive Plan (the "LTIP")

The Company currently operates the LTIP under which eligible employees may, to the extent that relevant performance conditions are met, acquire (or, if appropriate, not forfeit) Shares. All employees, including full-time executive directors, employed by any one or more companies within the Group are eligible to participate in the LTIP at the discretion of the Remuneration Committee. Awards may be granted under the LTIP to US eligible employees, subject to certain additional provisions to ensure compliance with relevant US legislation.

The LTIP provides for two forms of award – conditional awards and split interest share awards. Awards under the LTIP generally take the form of a conditional award over Shares. Conditional awards will vest to the extent that objective performance conditions measured over a prescribed performance period, imposed by the Remuneration Committee on the grant of the awards have been met, such conditions taking account of the views of the Company's larger institutional investors from time to time.

LTIP awards vest on the notification to participants by the Remuneration Committee of its determination, following the end of the relevant performance period, of the extent to which the performance conditions attaching to the LTIP awards have been satisfied.

In 2014, LTIP awards were granted over an aggregate 2,140,180 Shares. The performance conditions attaching to LTIP awards granted in 2014 are based on the performance of the Group's net asset value, excluding intangible assets and the equity rights asset ("NAV") over a period of three financial years ending on 31 December 2016 (31 December 2015, in the case of LTIP awards granted in 2014 to take account of LTIP awards which the Company was not able to grant in 2013 due to prohibited periods (the "2013 LTIP Awards")) and total shareholder return ("TSR") from March 2014 to March 2017 (March 2013 to March 2016, in the case of the 2013 LTIP Awards). The total LTIP awards are subject to an underpin based on the relative performance of the Group's TSR to that of the FTSE 250 Index which can reduce the LTIP awards by up to 50 per cent ("TSR Underpin").

In 2015, LTIP awards were granted over an aggregate 1,320,122 Shares and in 2016, LTIP awards were granted over an aggregate 3,188,078 Shares. As for the LTIP awards granted in 2014, the performance conditions attaching to LTIP awards granted in 2015 and 2016 are based on the performance of the Group's NAV over a period of three financial years ending on 31 December 2017 and 31 December 2018, respectively and TSR from May 2015 to March 2018 and March 2016 to March 2019, respectively. Each of the total LTIP awards granted in 2015 and 2016 is subject to the TSR Underpin.

The LTIP awards will vest in full (prior to the application of the underpin) in the event of both NAV and TSR increasing by 15 per cent. per year on a cumulative basis over the relevant three-year period, for TSR using an industry-standard average price period at the beginning and end of the performance period. 30 per cent. of the LTIP awards shall vest (again prior to the application of the underpin) if the cumulative increase is 8 per cent. per annum for both measures over their respective performance periods. A straight line sliding scale is applied for performance between the distinct vesting targets. Malus and clawback may be applied in respect of the LTIP awards. The LTIP awards are subject to a two year holding period following the end of the performance period (one year, in the case of the 2013 LTIP Awards).

LTIP awards are currently satisfied by the Company issuing Shares to the Employee Trust which transfers the Shares to the relevant employees. On 31 March 2014, the Company issued 4,508,994 Shares following the vesting of LTIP awards made in 2011. On 31 March 2015, the Company issued 1,552,144 Shares following the vesting of LTIP awards made in 2012. On 1 April 2016, the Company issued 457,877 Shares following the vesting of the 2013 LTIP awards. LTIP awards as at 22 May 2017 (the latest practicable date prior to publication of this document) subsisted over the following Shares:

			Number of
			Shares awards	Number of
Plan	Issue Date	Vesting Date	granted over	Shares vested
2013 LTIP	30 May 2014	31 March 2016		793,001 457,877 (56.7%)
			27,401 (US)
2014 LTIP	30 May 2014	31 March 2017	1,249,509	nil
			70,269 (US)
2015 LTIP	21 May 2015	31 March 2018	1,320,122	nil
2016 LTIP	12 May 2016	31 March 2019	3,188,078	nil

6.2 The Company's Annual Incentive Scheme (the "AIS")

All staff employed by the Group on 1 January each year, including executive directors, are eligible to receive a potential award under the AIS subject to their continued employment with the Group, the achievement of performance targets and the overall discretion of the Remuneration Committee.

The maximum level of an individual's potential award for a given year is expressed as a percentage of his or her base salary (as pro-rated for any part-time working).

The level of the actual awards pool (the "Awards Pool") in respect of any financial year is determined by reference to the Company's profitability, as measured by the growth in the Company's NAV, during the relevant financial year. AIS awards may also be subject to individual performance targets. Clawback may be applied in respect of AIS awards.

6.3 The Company's Deferred Bonus Share Plan (the "DBSP")

The DBSP provides for deferral in Shares of a specified percentage of AIS awards, as determined by the Remuneration Committee. DBSP awards, which are in the form of deferred nil cost option awards are granted, at the discretion of the Remuneration Committee, to employees who have participated in the AIS (or other bonus plan of the Company) for the preceding financial year (the "Relevant Year") whose bonus plan outcome for the Relevant Year, calculated in accordance with the applicable performance targets ("Bonus Plan Outcome"), is at or above a specified monetary value. Awards may also be granted under the DBSP to US eligible employees, subject to certain additional provisions to ensure compliance with relevant US legislation.

The first DBSP awards were granted, over an aggregate 362,608 Shares, in 2014, to employees, including executive directors, whose Bonus Plan Outcome was equal to or above £20,000. In 2015, no DBSP awards were granted and in 2016, DBSP awards were granted over an aggregate 781,148 Shares to employees, including executive directors, whose Bonus Plan Outcome was equal to or above £20,000. Each of the DBSP awards was granted over such number of Shares as had an aggregate market value at the date of grant of the DBSP awards equivalent to 50 per cent. of the AIS Plan Outcome, rounded up to the nearest whole Share. Alternative percentages of the AIS Plan Outcome may be specified for the making of subsequent DBSP awards.

DBSP awards are normally exercisable over some or all of the Shares over which the awards were made ("DBSP Award Shares") on or after one or more vesting dates, each as determined by the Remuneration Committee in its discretion. 50 per cent. of the DBSP Award Shares will normally vest and become exercisable on the first anniversary of the DBSP awards date and 50 per cent. on the second anniversary of the DBSP awards date, each generally subject to continued employment with the Group. Malus may be applied in respect of AIS awards.

DBSP awards are currently satisfied by the Company issuing Shares to the Employee Trust which transfers the Shares to the relevant employees. On 22 May 2015, the Company issued 153,940 Shares following the exercise of certain of the 2014 DBSP awards. On 21 April 2016, the Company issued 101,622 Shares following the exercise of certain of the 2014 DBSP awards. DBSP awards as at 22 May 2017 (the latest practicable date prior to publication of this document) subsisted over an aggregate 837,995 Shares.

6.4 The Company's Sharesave Plan

Under the rules of the Sharesave Plan, eligible employees, including executive directors, who enter into an approved savings contract for a period of three or five years are granted options to acquire Shares at the end of that period using the proceeds of their savings contract (and, if applicable, any bonus or interest payable in relation to the savings contract). The exercise price of an option is fixed by the Remuneration Committee at the time the invitation to apply for an option is issued and will not be less than 80% of the market value of a Share at that time.

The first Sharesave options were granted, over an aggregate 125,587 Shares, in 2014. In 2015, Sharesave options were granted over an aggregate 71,909 Shares. The Company currently intends to satisfy the Sharesave options, on exercise, by issuing Shares to the relevant employees. Sharesave options as at 22 May 2017 (the latest practicable date prior to publication of this document) subsisted over an aggregate 130,043 Shares.

6.5 The Company's US Employee Stock Purchase Plan (the "ESPP")

Under the US ESPP, an eligible US employee who enters into an approved savings contract for a maximum period of 24 months will be granted an option to acquire Shares at the end of that period using, normally, only the proceeds of his savings contract. The exercise price of an option is fixed by the Remuneration Committee at the date of grant of an option and will not be less than 85 per cent. of the market value of a Share at that time.

The Directors' participations in the Group's LTIP, Sharesave Plan and DBSP as at 22 May 2017 (the latest practicable date prior to publication of this document) are set out in paragraph 9.4.2 of this Part V.

6.6 The Company's Long Term Incentive Carry Scheme ("LTICS")

All eligible staff employed by the Group (excluding executive directors, US employees, employees of Parkwalk Advisors Ltd. and staff engaged by the North East Technology Fund L.P.) are entitled to participate in the Group's LTICS ("Eligible Employees"). The Group provides Eligible Employees with the opportunity to acquire an assigned economic interest in IP2IPO Portfolio L.P., an English limited partnership. Participation in the LTICS is not mandatory or automatic.

The Group currently offers the opportunity to participate in the LTICS to Eligible Employees on a biennial basis by the creation of new vintage pools within the LTICS ("Vintages"). The period for each Vintage begins on 1 January of any given year and will comprise those companies to which the Group has provided capital for the first time during the period of that Vintage. Any subsequent investment into such companies will also be included in the relevant Vintage.

Eligible Employees who elect to participate in any given Vintage may receive an eventual return. The return that an Eligible Employee may receive will be a proportion of any excess following repayment of the original capital invested by the Group in companies in that particular Vintage and after payment of an annualised hurdle return and the costs of the LTICS (including the priority profit share of the general partner of IP2IPO Portfolio L.P.). Malus and clawback may be applied in respect of a financial return and the economic interest in the LTICS acquired by an Eligible Employee is subject to leaver provisions.

As at 22 May 2017 (the latest practicable date prior to publication of this document), the Group has established three Vintages: the 2011-2013 Vintage, the 2014-2015 Vintage and the 2016-2017 Vintage. It is intended that the next Vintage will be for the period 2018-2019 and it is intended that Eligible Employees will be offered the opportunity to participate in the 2018-2019 Vintage in early 2018.

6.7 IP Group, Inc. Equity Incentive Plan

In order to promote the success of the Group's US business and to incentivise its US employees, on 19 December 2016 the board of IP Group, Inc. approved an equity incentive plan pursuant to which awards of restricted stock representing up to ten per cent. of the stock of IP US may be issued to employees of IP Group, Inc. Awards in respect of restricted stock have been made in respect of 9.2 per cent. of the stock of IP US. The relevant shares are legended as restricted stock and are restricted as to their disposal during the restricted period specified in the relevant restricted stock agreement. During this restricted period the holder has the right to receive dividends from and to vote such shares but the shares may be forfeited as set out in the relevant stock agreement which may include termination of employment by reason of death, disability or other cause. Unless otherwise stated in the relevant stock agreement the restricted period is three years from the date of the relevant award with respect of 33 per cent. of the shares subject to the award, four years from the date of the relevant award with respect of 33 per cent. of the shares subject to the award and five years from the date of the relevant award for the balance. It is the Company's intention to establish, subject to shareholder approval, a mechanism under which the Company can acquire such shares from the relevant employee and the relevant employee can sell such shares to the Company in exchange for shares in the Company.

7. EMPLOYEES

The table below sets out the average number of persons employed by the Group during each of the financial periods referred to below. All of the Group's employees are involved in management and administration activities and are either based in the UK or the United States.

	Average number of persons,
	including executive directors,
Financial year ended 31 December	employed by the Group
2016	71.5
2015	63.5
2014	55.5

8. CORPORATE GOVERNANCE AND COMMITTEES

The Company is committed to high standards of corporate governance. Corporate governance can be defined as the high level system by which an organisation is directed and controlled to enable it to achieve its business objectives in a manner which is responsible and in accordance with highest standards of integrity, transparency and accountability.

The Group has been in compliance with all relevant requirements of the Corporate Governance Code published by the Financial Reporting Council in April 2016.

The Company has the following commitments:

	Chairman	Members
Nomination Committee	Mike Humphrey	Mike Humphrey, Jonathan Brooks, Lynn Gladden, Douglas Liversidge and Elaine Sullivan
Remuneration Committee	Jonathan Brooks	Mike Humphrey, Lynn Gladden, Douglas Liversidge and Elaine Sullivan
Audit Committee	Jonathan Brooks	Jonathan Brooks, Lynn Gladden, Douglas Liversidge and Elaine Sullivan

From time to time, separate committees may be set up by the Board to consider specific issues when the need arises. Each of these committees operates under terms of reference which have been established by the Board.

8.1 The Nomination Committee

The Nomination Committee assists the Board in discharging its responsibilities relating to the composition of the Board. The Nomination Committee considers the appointment of both executive and non-executive directors. It also advises the Board on matters generally relating to senior appointments.

8.2 The Remuneration Committee

The Remuneration Committee's objective is to develop remuneration packages for executive directors that enable the Group to attract, retain and motivate executives of the appropriate calibre without paying more than is necessary. No director is involved in deciding his or her own remuneration. The Board's policies on executive remuneration, and the details of executive directors' individual remuneration packages, are fixed by the Remuneration Committee or the Board. It is the Group's policy to take into account the pay and employment conditions of employees throughout the Group when determining directors' remuneration.

8.3 The Audit Committee

The Audit Committee examines and reviews internal controls, together with accounting policies and practices, the form and context of financial reports and statements and general matters raised by the auditor. It reviews the interim financial information and annual accounts before they are submitted to the Board and makes recommendations to the Board in connection with their submission. In addition, the Audit Committee makes recommendations to the Board regarding the appointment of the external auditor, reviews its independence and objectivity and monitors the scope and results of the audit. The Audit Committee is also responsible for agreeing the level of audit fees and monitoring the provision of non-audit services provided by the Group auditor. The Audit Committee assesses the likely impact on the auditor's independence and objectivity before awarding it any material contract for additional services. The Board has identified Jonathan Brooks, a fellow of the Chartered Institute of Management Accountants, as having recent and relevant financial experience. The Board considers that collectively the members have the requisite financial literacy, skills and attributes to enable the Audit Committee to properly discharge its responsibilities.

9. DIRECTORS

Details of the Directors, their business addresses and functions in the Company are set out on page 112 of this document and in paragraphs 9.1 and 9.2 of this Part V.

9.1 Executive Directors

9.1.1 Alan John Aubrey – Chief Executive Officer

Alan Aubrey (aged 55) co-founded Techtran Group Limited (now IP Assist Services Limited) in 2002 and was its CEO when the business was acquired by IP Group in January 2005. Previously, he was a partner in KPMG where he specialised in corporate finance advice to technology based fast growth businesses and has significant experience in helping them raise money and prepare for sale or flotation. Alan joined the Board in January 2005, becoming Chief Executive Officer on 1 January 2006.

9.1.2 Michael Charles Nettleton Townend – Chief Investment Officer

Mike Townend (aged 54) was formerly managing director within the European Equities business of Lehman Brothers with responsibility for equity sales to hedge funds. Mike has over 17 years of experience in all aspects of equity capital markets. Mike was appointed a director of the Company in March 2007.

9.1.3 Gregory Simon Smith – Chief Financial Officer

Greg Smith (aged 38) joined IP Group as Group Financial Controller in January 2008 and was appointed Chief Financial Officer in June 2011. Prior to IP Group, Greg worked at Tarchon Capital Management, a multi-billion dollar fund of hedge funds business where he built and managed the operations and accounting team and the operational due diligence process for investee hedge funds. Greg originally trained as an accountant in KPMG's London Financial Services practice working with asset management, insurance and banking clients. Greg is a Fellow of the ICAEW and holds a degree in Mathematics from the University of Warwick.

9.1.4 David Graham Baynes – Chief Operating Officer

David Baynes (aged 53) was appointed as a Director in March 2014, following the Company's acquisition of Fusion IP. David was Chief Executive Officer and one of the founders of Fusion IP, having been a director of Fusion IP since 2004. David previously worked at: Celsis International plc from its incorporation to its flotation on the main market of the London Stock Exchange in July 1993; Toad plc (now 21st Century Technology PLC), which he co-founded and was responsible for taking the company from start-up to a full listing on the London Stock Exchange in 1995; Whereonearth Limited and Codemasters Limited.

9.2 Non-Executive Directors

9.2.1 Mike Humphrey – Non-executive Chairman

Mike Humphrey (aged 66) Mike is the former CEO of Croda International plc. He was appointed to the Board of Croda in 1995 and became Chief Executive of its group at the beginning of 1999. He joined Croda in 1969 as a management trainee and was appointed Managing Director of Croda Singapore in 1988, Croda Application Chemicals in 1990 and Croda Chemicals in 1991. Mike joined IP Group's Board in October 2011 and retired from Croda at the end of 2011. Mike is Chairman of the Group's Remuneration Committee.

9.2.2 Jonathan Brooks – Non-executive Director

Jonathan Brooks (aged 61) Jonathan was the Chief Financial Officer of ARM Holdings plc from 1995 until 2002 where he was responsible for finance, investor relations, legal, and IT, and where he managed the dual-listed IPO process of ARM on the London Stock Exchange and Nasdaq in 1998. He is a non-executive director of NCC Group Plc, a global expert in cyber security and risk mitigation. Jonathan joined IP Group's Board in August 2011 and is also Chairman of the Group's Audit & Risk and Remuneration Committees.

9.2.3 Prof. Lynn Faith Gladden – Non-executive Director

Lynn Gladden (aged 56) was appointed as a Director in March 2014. Lynn is the Shell Professor of Chemical Engineering at the University of Cambridge and has previously served as the Pro-Vice-Chancellor for Research and Head of the Department of Chemical Engineering and Biotechnology. Lynn is a Fellow of the Royal Society, the Royal Academy of Engineering, the Institution of Chemical Engineers, the Royal Society of Chemistry and the Institute of Physics, is a member of the Shell Science Council and is a chartered engineer and chartered chemist. In 2009, she was awarded a CBE for services to chemical engineering following an OBE for services to chemistry awarded in 2001.

9.2.4 Dr Elaine Sullivan – Senior Non-executive Director

Elaine Sullivan (aged 56) was appointed as a Director in July 2015. From 2011 to 2015, she was the Vice President of Global External Research & Development in the US for Eli Lilly, where she led a global workforce delivering access to business critical external innovation. Global External R&D included the search and evaluation function and Chorus, the virtual early phase drug development arm. She was also a member of the Investment Committees of Lilly Ventures and Lilly Asian Ventures and a member of the Steering Committees of Lilly's Capital Fund Partners. In June 2015, Elaine was appointed to the Supervisory Board of Evotec AG, a drug discovery solutions company. In 2015, she also founded a specialist oncology company, Carrick Therapeutics, and holds the position of Chief Executive.

9.2.5 Douglas Brian Liversidge – Senior Non-executive Director

Douglas Liversidge (aged 77) was appointed as a Director upon the Company's acquisition of Fusion in March 2014. Mr Liversidge was employed for 21 years at British Steel, before moving to GW Thornton Limited as Managing Director and subsequently Chief Executive and guided the company through its flotation on the full list of the London Stock Exchange in March 1987. In 1991 he was awarded South Yorkshire Businessman of the Year. Douglas acts as a Senior Industrial Advisor to the University of Sheffield and was awarded the CBE in the 2000 New Year's Honours List for services to industry.

9.3 Directors' Service Agreements and Letters of Appointment

Executive Directors

Alan Aubrey has a service contract with IP2IPO which commenced on 20 January 2005 and contains a contractual notice period of six months by either party. Mike Townend has a service contract with IP2IPO which commenced on 5 March 2007 and contains a contractual notice period of six months by either party. David Baynes has a service contract with IP2IPO dated 22 January 2014 which commenced on 20 March 2014 and contains a contractual notice period of six months by either party. Gregory Smith has a service contract which commenced on 5 June 2011 and contains a contractual notice period of six months by either party.

The contracts for the Executive Directors do not provide any predetermined amounts of compensation in the event of early termination. In the event that early termination occurs, payments for loss of office would be determined by the Remuneration Committee taking account of the particular circumstances of each case, including the unexpired term of the service contract.

Executive Directors may accept other outside non-executive appointments. Where an Executive Director accepts an appointment to the board of directors of a company in which the Group is a shareholder, the Group generally retains the related fees. In the limited circumstances where the Executive Directors receive such fees directly, such sums are deducted from their base salary. Fees earned for directorships of companies in which the Group does not have a shareholding are normally retained by the Director.

Non-Executive Directors

Jonathan Brooks has a letter of appointment dated 30 August 2011 which commenced on 31 August 2011. Douglas Liversidge has a letter of appointment dated 22 January 2014 which commenced on 20 March 2014. Lynn Gladden has a letter of appointment dated 3 March 2014 which commenced on 26 March 2014. Mike Humphrey has a letter of appointment dated 9 March 2015 which commenced on 24 March 2015 in relation to his appointment as Chairman. Dr. Elaine Sullivan has a letter of appointment which is dated and commenced on 30 July 2015.

Each Non-Executive Directors' appointment is for an initial term of three years, renewable for a further three years. The appointment is terminable on three months' notice by either party.

Save as referred to in this paragraph 9.3 of this Part V, there are no service agreements between any Director and any member of the Group, other than agreements, expiring or determinable by the employing company without payment of compensation (other than statutory compensation) and no such contracts are proposed. There are no benefits payable upon termination of such service agreements.

The aggregate remuneration (including salaries, fees, pension contributions, bonus payments and benefits in kind) payable to directors of the Company who served the Group during the financial year ended on 31 December 2016 amounted to £1,442,000, further details of which are provided below:

All £'000s	Base salary/fees	Benefits	Pension13
Executive Directors
Alan Aubrey	232	4	29
David Baynes	254	17	25
Mike Townend	254	7	23
Greg Smith	232	5	23
Non-executive directors
Mike Humphrey	150	3	–
Jonathan Brooks	55	–	–
Doug Liversidge	47	1	–
Lynn Gladden	40	–	–
Elaine Sullivan14	40	1	–
Total	–––––––– 1,304	–––––––– 38	–––––––– 100
	––––––––	––––––––	––––––––

9.4 Directors' interests

9.4.1 As at 22 May 2017 (being the latest practicable date prior to the publication of this document) and immediately following Admission, the interests of the Directors, and (so far as is known to the Directors having made appropriate enquiries) of all such persons connected with the Directors (which expression shall be construed in accordance with section 252 of the Companies Act), in the issued share capital of the Company are set out in the table below:

			Percentage of
	Number of	Percentage of	Enlarged
Name		Shares Existing Shares	Share Capital
Alan Aubrey	2,490,651	0.44	0.35
Mike Townend	1,103,825	0.20	0.16
Greg Smith	260,989	0.05	0.04
David Baynes	226,066	0.04	0.03
Jonathan Brooks	60,000	0.01	0.01
Mike Humphrey	80,000	0.01	0.01
Doug Liversidge	75,297	0.01	0.01
Lynn Gladden	–	–	–
Elaine Sullivan	–	–	–

¹³ Notes: Pension includes payments made to defined benefit schemes on behalf of the Directors or the value of any cash equivalent if applicable.

¹⁴ Elaine Sullivan was appointed to the Board with effect from 30 July 2015

9.4.2 The Directors' participations in the Group's LTIP, Sharesave Plan and DBSP as at 22 May 2017 (the latest practicable date prior to publication of this document) are set out in the table below:

	Potential	Share price
		conditional at grant date of
	interest in	conditional –	Earliest
	Shares	award (p)	vesting date
Alan Aubrey
2012 LTIP	302,695	135.5	21.03.15
2013 LTIP	143,239	179	31.03.16
2014 LTIP	147,042	179	31.03.17
2015 LTIP	124,751	213.4	31.03.18
2016 LTIP	664,313	155.8	31.03.19
	–––––––– 1,382,040
	––––––––
Mike Townend
2012 LTIP	230,625	135.5	31.03.15
2013 LTIP	114,592	179	31.03.16
2014 LTIP	117,634	179	31.03.17
2015 LTIP	99,801	213.4	31.03.18
2016 LTIP	327,342 ––––––––	155.8	31.03.19
	889,994
Gregory Smith	––––––––
2012 LTIP	142,768	135.5	31.03.15
2013 LTIP	81,127	179	31.03.16
2014 LTIP	94,310	179	31.03.17
2015 LTIP	89,409	213.4	31.03.18
2016 LTIP	306,803	155.8	31.03.19
	–––––––– 714,417
David Baynes*	––––––––
2014 LTIP	117,634	179	31.03.17
2014 LTIP (Fusion)	446,000	N/A	31.12.17
2015 LTIP	99,801	213.4	31.03.18
2016 LTIP	327,342	155.8	31.03.19
	–––––––– 990,777
Total	–––––––– 3,977,228
	––––––––

Notes:

* David Baynes joined the Board with effect from 20 March 2014. As part of the acquisition of Fusion, his Fusion IP LTIPs were converted into LTIPs over 446,000 Shares at the equivalent value of his Fusion IP LTIP interests.

		Potential	Share price
		conditional	at grant date
		interest in	of grant of	Exercise
		Shares	option (p)	period
Gregory Smith
Sharesave Plan 2014		4,105	198.5	01.08.2017 –

				01.02.2018
David Baynes
Sharesave Plan 2014		4,975	198.5	01.08.2017 –
		––––––––		01.02.2018
Total		9,080
		––––––––

		Share price
	Number of	at date of		Earliest
	Shares	option (p)		exercise date
Directors
Alan Aubrey
DBSP 2014	66,074	192.4		50% on 15.04.2015
				and 50% on 15.04.2016
Mike Townend
DBSP 2014	44,048	192.4		50% on 15.04.2015
				and 50% on 15.04.2016
Gregory Smith	1	1		1
DBSP 2014	31,186	192.4		50% on 15.04.2015
				and 50% on 15.04.2016
	––––––––	––––––––		––––––––
Total	141,308	1		1
	––––––––	––––––––		––––––––

9.5 Directors' current and previous directorships

The Directors hold or have held directorships of the companies (excluding the Company and its subsidiaries) and/or are or were partners of the partnerships specified opposite their respective names below within the past five years prior to the date of this document.

	Current directorships	Previous directorships
Director	and partnerships	and partnerships
Alan J. Aubrey	Avacta Group plc Ceres Power Holdings plc Ceres Power Intermediate Holdings Limited Eureka! The National Children's Museum Oxford Nanopore Technologies Limited Oxford Sciences Innovation plc Proactis Holdings plc The Northern Entrepreneurs Fund LLP	Axiomlab (dissolved 20.08.13) Axiomlab Group Limited (dissolved on 27.01.16) Axiomlab Investments Limited (dissolved on 27.10.15) Biz 2 Bizz Investments Limited (dissolved 27.10.15) Flowgroup plc INHOCO 2835 Limited (dissolved on 27.10.15) Scissor Search Limited (dissolved on 27.08.13) Proactis Group Limited Techtran Corporate Finance Limited (dissolved 08.11.16) Techtran Investments Limited (dissolved 08.11.16) Techtran Limited (dissolved 08.11.16) Techtran Services Limited (dissolved 08.11.16) The Northern Entrepreneurs Fund LLP (dissolved 21.06.16) Tissue Regenix Group plc TTV IV G.P. Limited (dissolved 03.02.15)
Michael C. N. Townend	Applied Graphene Materials plc Green Urban Transport Limited Modern Water plc Revolymer Plc	Gunsynd plc
Gregory S. Smith		Techtran Corporate Finance Limited (dissolved 08.11.16) Techtran Investments Limited (dissolved 08.11.16) Techtran Limited (dissolved 08.11.16) Techtran Services Limited (dissolved 08.11.16) TTV IV G.P. Limited (dissolved 03.02.15)

	Current directorships	Previous directorships
Director	and partnerships	and partnerships
David G. Baynes	Demasq Limited Medaphor Group plc Medaphor Limited Morvus Technology Limited Nick Baynes Property Consulting Limited Out Of The Blue Consulting Limited Top Technology Ventures Limited	Absynth Biologics Limited Arthurian Life Sciences Limited Biohydrogen Limited (dissolved 20.09.16) Diurnal Limited Celltran Limited (dissolved 08.07.11) Magnomatics Limited Medella Therapeutics Limited Medipex Limited Mesuro Limited Lifestyle Choices Limited (dissolved 27.09.16) Mantelum Limited (dissolved 20.09.16) Perlemax Limited Phase Focus Limited Proflu Limited (dissolved 27.09.16) Rhedyn Limited (dissolved 20.09.16) Rheometrix Microsystems Limited (dissolved 27.09.16) TTV IV G.P. Limited (dissolved 03.02.15) Wound Genetics Prognostics Limited (dissolved 20.09.16) Wound Genetics Therapeutics Limited (dissolved 20.09.16) Wound Genetics Limited (dissolved 20.09.16)
Lynn F. Gladden	British Land Company Public Limited Company (The)	Cambridge Enterprise Limited Cambridge Network Limited Cambridge University Technical Services Ltd Cambridge Centre for Advanced Research in Energy Efficiency in Singapore Ltd
Jonathan Brooks		Aveva Group Plc Aveva Solutions Limited FDM Group (Holdings) plc Clearly So Limited Picochip, Inc. Xyratex Limited
Mike Humphrey	Arras Restaurants Limited Moorland Close Property Management Co Limited SK Spice Holdings S.A.R.L. AEB Spa	Croda International Public Company Limited Croda Europe Limited Croda Overseas Holdings Limited Croda Polymers International Limited Croda World Traders Limited Croda Colloids Limited Croda Chemicals Limited Croda Leek Limited Croda Universal Limited

Director	Current directorships and partnerships	Previous directorships and partnerships
Douglas B.	Medis Diagnostics Ltd	SLW Architectural Aluminium
Liversidge	Quest Investments Limited	Limited (dissolved 17.07.12)
	U-PAC Containers Limited	Surgical Innovations Group plc
		Wakeco (237) Limited
		Tool & Steel Products Limited

Elaine Sullivan Carrick Therapeutics Limited

9.6 Miscellaneous

At the date of this document, no Director has:

(a) any unspent convictions in relation to fraudulent offences;
(b) been declared bankrupt or been subject to any individual voluntary arrangement;
(c) been a director of any company which has been placed in receivership, compulsory liquidation, creditors' voluntary liquidation, administration, company voluntary arrangement or any composition or arrangement with its creditors generally or any class of its creditors whilst he was a director of that company or within 12 months after he ceased to be a director of that company;
(d) been a partner in any partnership which has been placed in compulsory liquidation, administration or partnership voluntary arrangement whilst he was a partner of that partnership or within 12 months after he ceased to be a partner in that partnership;
(e) been the owner of any asset or been a partner in any partnership which had an asset placed in receivership whilst he was a partner of that partnership or within the 12 months after he ceased to be a partner of that partnership; or
(f) been subject to any public criticisms by any statutory or regulatory authorities (including authorised professional bodies) or been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of any company.
9.7 There are no outstanding loans granted by any member of the Group to any of the Directors and there are no guarantees provided by any member of the Group for the benefit of any of the Directors.
9.8 Certain of the Directors are directors of, and/or shareholders in, one or more of the Group's portfolio companies. These directorships and shareholdings potentially give rise to a conflict of interest between the relevant Directors' duties to the Company and their duties to, or interests in, the relevant portfolio company.

For example, if the Group has offered to provide capital to one of its portfolio companies on which one of its Directors sits on the board, that Director owes certain duties to the portfolio company in his or her capacity as a director when that company considers such offer, such as the duty to avoid conflicts of interest, to exercise independent judgement and to promote the success of the company for the benefit of its members as a whole. It may be that in seeking to exercise such duties, this conflicts with the same duties that Director owes to the Company. In such circumstances, the Director will ensure that he declares all such conflicts in accordance with the Companies Act and may be required to abstain from taking part in the discussions and/or voting on any decisions to be taken in respect thereof. In the same way, if a Director is a shareholder in a portfolio company to which the Group is considering providing capital, it may be that his personal interests are potentially in conflict with the duties that Director owes to the Company in considering the merits of the provision of such capital. Again, such Director will fully declare all such conflicts of interest in accordance with the Companies Act and may be required to abstain from taking part in the discussions and/or voting on any decisions to be taken in respect thereof.

9.9 Save as referred to in paragraph 9.8 above, there are no potential conflicts of interest between the Directors' duties to the Company and their private interests and other duties.

10. SIGNIFICANT SHAREHOLDINGS

10.1 As at 22 May 2017 (being the latest practicable date prior to the publication of this document), the Directors were aware of the following persons who, directly or indirectly, were interested in three per cent. or more of the Company's capital or voting rights:

	Percentage of
Name	Existing Shares
Invesco Asset Management Limited	25.37
Woodford Investment Management LLP	14.23
Lansdowne Partners Limited	12.23
Baillie Gifford & Co	8.72
Oppenheimer Funds, Inc. (Massachusetts Mutual Life Insurance Company)	3.68
Legal & General Investment Management	3.53
Sand Aire Limited	3.34

10.2 None of the above persons has voting rights differing from those of any other Shareholder. The Company is not aware that it is directly or indirectly controlled by any person or persons acting in concert. The Company is not controlled directly or indirectly by any Shareholder, nor is it aware of any arrangement which may at a subsequent date result in a change of control of the Company.

11. WORKING CAPITAL

The Company is of the opinion that the working capital available to it is sufficient for the present requirements of the Group, that is, for at least twelve months from the date of this document.

12. DIVIDENDS

No dividends have been paid by IP Group in respect of the financial years ended 31 December 2016, 31 December 2015 and 31 December 2014.

13. TAXATION

13.1 United Kingdom Taxation

The following statements do not constitute tax advice and are intended as a general guide to certain UK tax considerations only and do not purport to be an analysis of all potential UK tax consequences of subscribing for, holding or disposing of Placing and Open Offer Shares. The following statements are based on current UK legislation and published HM Revenue & Customs practice as at the date of this document, both of which are subject to change at any time, possibly with retrospective effect.

The following statements deal only with the position of Shareholders who are resident (and, in the case of individuals only, resident and domiciled) solely in the UK for tax purposes (except where the position of a non-UK tax resident is expressly referred to) and who hold their Existing Shares as an investment and who are the absolute beneficial owners of the Existing Shares and of all dividends of any kind paid in respect of them. The statement are not addressed to: (i) special class of Shareholders such as, for example, dealers in securities, broker-dealers, insurance companies and collective investment schemes; (ii) Shareholders who hold Placing and Open Offer Shares as part of hedging or conversion transactions; and (iii) Shareholders who have (or are deemed to have) acquired their Existing Shares by virtue of a right or opportunity available to them in consequence of an office or employment.

Shareholders who are in any doubt as to their tax position regarding the acquisition, ownership or disposal of their Placing and Open Offer Shares or are subject to tax in a jurisdiction other than the UK, and Shareholders who are not resident for tax purposes in the UK, should consult their own independent tax advisers before taking any action.

13.1.1 Dividend

Under current UK tax legislation, no tax is withheld from dividends paid by the Company.

With effect from 1 April 2016 UK resident individuals are subject to a dividend tax where the dividends received exceed the dividend allowance (currently £5k and reducing to £2k with effect from April 2018) in the tax year. The 2016/17 tax rate for dividends in excess of the dividend allowance is:

7.5% on dividend income within the basic rate band
32.5% on dividend income within the higher rate band
38.1% on dividend income within the additional rate band

Dividends within the dividend allowance count towards the basic or higher rate bands, and may therefore affect the rate of tax due on dividends, and other income, received in excess of the dividend allowance.

UK tax resident corporate Shareholders will not normally be liable to UK corporation tax in respect of any dividend received from the Company.

A non-UK resident Shareholder may not be subject to UK tax on dividends but may be subject to foreign taxation on dividend income dependent on their circumstances. Therefore, non-UK resident Shareholders and Shareholders subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser concerning their liabilities to tax on dividends received.

13.1.2 Taxation of Chargeable Gains

Any disposal of Shares by a Shareholder resident for tax purposes in the UK or a non-UK resident Shareholder who carries on a trade, profession or vocation in the UK through a branch or agency and has used, held or acquired the Shares for the purposes of such trade, profession or vocation or such branch or agency may, depending on the Shareholder's circumstances, and subject to any available exemptions, allowances or reliefs, give rise to a chargeable gain or an allowable loss for the purposes of UK capital gains tax (or for companies, corporation tax on chargeable gains).

Special rules apply to disposals by individuals at a time when they are temporarily not resident in the UK and therefore individuals in this position should seek appropriate advice.

13.1.3 UK Inheritance Tax

The Shares will be assets situated in the UK for the purposes of UK inheritance tax. A gift of such assets by, or on the death of, an individual holder of such assets may (subject to certain exemptions and reliefs) give rise to a liability to UK inheritance tax. This is regardless of whether or not the individual holder is domiciled or deemed to be domiciled in the UK and whether or not the holder is resident in the UK for tax purposes. For inheritance tax purposes, a transfer of assets at less than full market value may be treated as a gift and particular rules apply where the donor reserves or retains some interest or benefit in the property being transferred.

If an individual is resident in the UK but not domiciled in the UK, professional advice should be sought.

Special rules apply to trustees of settlements who hold Shares bringing them within the charge to UK inheritance tax.

13.1.4 Stamp Duty and Stamp Duty Reserve Tax ("SDRT")

Any transfer or sale of Shares will generally give rise to a liability on the purchaser to ad valorem stamp duty currently at a rate equivalent to 50p for every £100 or part of £100 of the consideration paid. An unconditional agreement to transfer such Shares will be subject to SDRT at a rate of 0.5 per cent., of the amount or value of the consideration. However, when an instrument of transfer is executed and duly stamped before the expiry of a period of six years beginning with the date of that agreement, a claim can normally be made to cancel or obtain repayment of the SDRT liability. Special rules apply to the agreements made by market makers in the ordinary course of their business, brokers, dealers and certain other persons. Agreements and instruments of transfer relating to the transfer of Shares to charities will not give rise to SDRT or stamp duty.

The information in this paragraph is intended as a general summary of certain elements of the UK tax position and should not be construed as constituting advice. Potential investors should obtain advice from their own investment or taxation adviser.

13.2 United States Taxation

United States Federal Income Taxation

The following discussion is a general summary under present law of certain US federal income tax considerations relevant to the acquisition, ownership and disposition of the Capital Raising Shares. The summary is not a complete description of all tax considerations that may be relevant. It applies only to US Holders (as defined below) that acquire Capital Raising Shares in the Capital Raising, hold the Capital Raising Shares as capital assets within the meaning of Section 1221 of the US Code and that use the US dollar as their functional currency. It does not address the tax treatment of persons subject to special rules, such as financial institutions, dealers or traders, insurance companies, tax exempt entities, partnerships or other entities or arrangements treated as partnerships for US federal income tax purposes, real estate investment trusts or regulated investment companies, US expatriates and certain former citizens or long-term residents of the United States, persons subject to the alternative minimum tax, persons owning 10 per cent. or more of the Company's share capital, persons holding Capital Raising Shares as part of a hedge, straddle, conversion or constructive sale transaction or persons holding Capital Raising Shares in connection with a permanent establishment in the United Kingdom. It also does not address US state and local tax considerations.

EACH PROSPECTIVE PURCHASER SHOULD SEEK ADVICE FROM AN INDEPENDENT TAX ADVISOR ABOUT THE TAX CONSEQUENCES UNDER ITS OWN PARTICULAR CIRCUMSTANCES OF INVESTING IN CAPITAL RAISING SHARES UNDER THE LAWS OF THE UNITED KINGDOM, THE UNITED STATES AND ITS CONSTITUENT JURISDICTIONS, AND ANY OTHER JURISDICTIONS WHERE THE PURCHASER MAY BE SUBJECT TO TAXATION.

As used in this section, "US Holder" means a beneficial owner of Capital Raising Shares that for US federal income tax purposes, is (i) a US citizen or individual resident of the United States, (ii) a corporation or other business entity treated as a corporation created or organised under the laws of the United States or its political subdivisions, (iii) a trust subject to the control of a US person and the primary supervision of a US court or (iv) an estate the income of which is subject to US federal income tax without regard to its source. This summary does not address the US federal tax consequences to the beneficial owner of a US Holder.

Passive Foreign Investment Company

In general, the Company will be considered a passive foreign investment company ("PFIC") for any taxable year in which: (i) 75 per cent. or more of its gross income for a taxable year is passive income; or (ii) 50 per cent. or more of its assets in any taxable year (generally based on a quarterly average of the value of its assets) that produce, or are held for the production of, passive income. For the purposes of the above calculations, if the Company, directly or indirectly, owns at least 25 per cent. by value of the stock of another corporation, then the Company would be treated as owning a proportionate share of the assets of such other corporation and as receiving directly its proportionate share of such other corporation's income. For purposes of the PFIC rules, passive income generally includes dividends, interest, rents, royalties (other than certain rents and royalties derived in the active conduct of a trade or business), annuities and gains from assets that produce passive income. There are no minimum stock ownership requirements for PFICs. The Company believes that it likely was a PFIC for US federal income tax purposes for its 2015 and 2016 taxable years and expects to be a PFIC for the current year. Additionally, it is likely that the Company will continue to be a PFIC for subsequent taxable years.

If the Company is a PFIC, US Holders will be deemed to own their proportionate share of any direct or indirect subsidiary of the Company that is a PFIC (a Lower-tier PFIC), and will be subject to US federal income tax on: (i) certain distributions on the shares of a Lower-tier PFIC; and (ii) a disposition of shares of a Lower-tier PFIC, both as if the holder directly held the shares of such Lowertier PFIC. If the Company is a PFIC for any taxable year during which a US Holder holds its Capital Raising Shares or is deemed to hold an interest in a Lower-tier PFIC, such US Holder will be subject to significant adverse US federal income tax rules. Unless a holder makes a timely "mark-to-market" election, described below, any "excess distribution" that the Company makes to the US Holder, of a Lower-tier PFIC makes, or any gain recognised upon a disposition (including a partial redemption and, under certain circumstances, a pledge) of Capital Raising Shares by such US Holder, or upon an indirect disposition of shares of a Lower-tier PFIC, will be allocated rateably over the US Holder's holding period for such Shares. An "excess distribution" is generally any distribution during a single taxable year that is greater than 125 per cent. of the average annual distributions received by a US Holder in respect of the Capital Raising Shares during the three preceding taxable years or, if shorter, the US Holder's holding period for the Capital Raising Shares. The amount allocated to the taxable year in which the US Holder realises the gain or excess distribution will be taxed as ordinary income. For gain and excess distributions allocated to a prior year, (1) the applicable tax rate will be the highest in effect for such taxable year and (2) the tax will be imposed as though payable in such prior year and generally computed without regard to offsets from deductions, losses and expenses. US Holders will also be subject to an interest charge for any deferred tax in respect of the tax attributable to each such prior year. No portion of this ordinary income will be eligible for the preferential tax rate applicable to "qualified dividend income" for individual US persons. Any loss recognised on the disposition of Capital Raising Shares by such US Holder will be capital loss, the deductibility of which is subject to limitations. A mark-to-market election with respect to the Company may not avoid adverse tax consequences with respect to any Lower-tier PFIC.

If the Company, or subsidiary of the Company, is a PFIC for any taxable year during which a US Holder holds Capital Raising Shares, the Company and that subsidiary will continue to be treated as a PFIC with respect to the US Holder for all succeeding years during which the US Holder holds Capital Raising Shares, regardless of whether the Company or the subsidiary actually continues to be a PFIC. If the Company is treated as a PFIC for any taxable year with respect to a US Holder, and a valid mark-to-market election is not in effect, such US Holder may be able to make a deemed sale election if the Company ceases to be treated as a PFIC in subsequent taxable years. The effect of the deemed sale election, if available, is generally to "purge" the Company's stock of its characterisation as stock of a PFIC, and thereafter, such Company stock generally would not be treated as stock of a PFIC with respect to such US Holder, provided that the Company does not become a PFIC again in a subsequent taxable year. Upon making a deemed sale election with respect to the Company's stock, generally such electing US Holder would be treated as having sold all of such US Holder's Capital Raising Shares for its fair market value on the last day of the Company's last taxable year during which the Company was treated as a PFIC, and such deemed sale generally would be treated as a taxable disposition that is subject to the PFIC tax rules (including the "excess distribution" regime) described above. The US Holder's holding period in the Capital Raising Shares upon a deemed sale election is treated as beginning on the day following such deemed sale for purposes of the PFIC provisions. The Company does not believe that the information necessary to make a deemed sale election with respect to a Lower-tier PFIC is likely to be available, and therefore US Holders will not be able to make deemed sale elections with respect to Lower-tier PFICs. Accordingly, any Lower-tier PFICs will likely be treated as PFICs for a US Holder's entire holding period, even if the Lower-tier PFIC would otherwise no longer be treated as a PFIC. US Holders should consult their own tax advisers regarding the availability and advisability of making a deemed sale election in their particular circumstances.

If the Company, or subsidiary of the Company, is a PFIC in the taxable year in which a US Holder who holds Capital Raising Shares dies, the heirs of the US Holder will not be entitled to a "steppedup" basis with respect to the Capital Raising Shares or the shares in the Lower-tier subsidiary.

Qualified Electing Fund Election ("QEF Election")

The Company does not intend to provide US Holders with the information as may be required to make a QEF election with respect to the Company or its Lower-tier PFICs.

Mark-to-Market Election

A US Holder may be able to make a mark-to-market election with respect to the Capital Raising Shares if the Capital Raising Shares are "regularly traded" on a "qualified exchange". In general, the Capital Raising Shares will be treated as "regularly traded" in any calendar year in which more than a de minimis quantity of Capital Raising Shares are traded on a qualified exchange on at least 15 days during each calendar quarter. The Company believes the London Stock Exchange is a qualified exchange for these purposes. However, the Company can make no assurance that the Capital Raising Shares will be listed on a "qualified exchange" or that there will be sufficient trading activity for the Capital Raising Shares to be treated as "regularly traded" and makes no representation as to the availability of mark-to-market elections. Accordingly, US Holders should consult their own tax advisers as to whether the Capital Raising Shares would qualify for the mark-to-market election.

If a US Holder makes the mark-to-market election, for each year in which the Company is a PFIC, such US Holder will generally include as ordinary income each year the excess, if any, of the fair market value of the Capital Raising Shares at the end of the taxable year over their adjusted tax basis in such US Holder's Capital Raising Shares. These amounts of ordinary income will not be eligible for the preferential tax rates applicable to qualified dividend income or long-term capital gains. Such US Holder also will be permitted to take an ordinary loss in respect of the excess, if any, of the adjusted tax basis of the Capital Raising Shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of previously included income as a result of the markto-market election). Gains from an actual sale or other disposition of the Capital Raising Shares will be treated as ordinary income, and any losses incurred on a sale or other disposition of the Capital Raising Shares will be treated as an ordinary loss to the extent of any net mark-to-market gains previously included. Any remaining loss on the sale of Capital Raising Shares will be treated as capital loss. A US Holder's tax basis in the Capital Raising Shares will be adjusted to reflect any such income or loss amounts. For purposes of this rule, if a US Holder makes a mark-to-market election with respect to its Capital Raising Shares, it will be treated as having a new holding period in its Capital Raising Shares beginning on the first day of the first taxable year beginning after the last taxable year for which the mark-to-market election applies.

A mark-to-market election applies to the taxable year in which the election is made and to each subsequent year. Once made, the election cannot be revoked without the consent of the IRS unless the Capital Raising Shares cease to be marketable. If a mark-to-market election is not made for the first year in which a US Holder owns Capital Raising Shares and the Company is a PFIC, the interest charge described above under "—Passive Foreign Investment Company" will apply to any mark-tomarket gain recognised in the later year that the election is first made.

A mark-to-market election under the PFIC rules with respect to the Capital Raising Shares would not apply to a Lower-tier PFIC, and a US Holder would not be able to make such a mark-to-market election in respect of its indirect ownership interest in any Lower-tier PFIC. Consequently, US Holders of Capital Raising Shares could be subject to the PFIC rules with respect to income of any Lower-tier PFIC. US Holders should consult their own tax advisers regarding the availability and advisability of making a mark-to-market election in their particular circumstances, particularly given that the Company may have Lower-tier PFICs for which such election is not available.

The rules dealing with PFICs, QEF Elections, deemed sale elections and mark-to-market elections are complex and affected by various factors in addition to those described above. As a result, US Holders should consult their own tax advisers concerning the Company's PFIC status and the tax considerations relevant to an investment in a PFIC including the availability of and the merits of making QEF Elections (including the timing thereof), deemed sale elections, or mark-to-market elections.

Consequences of Not Being a PFIC – Dividends

If, contrary to expectations, the Company is not treated as a PFIC, dividends on the Capital Raising Shares (including the amount of tax withheld, if any) should be included in a US Holder's gross income as ordinary income from foreign sources when actually or constructively received. Such dividends will not be eligible for the dividends-received deduction generally available to US corporations in respect of dividends received from other United States corporations. Dividends received by eligible non-corporate US Holders, however, might be taxable at the preferential rate allowed for qualified dividend income if the Company were eligible for the benefits of the income tax treaty between the United States and the United Kingdom and the US Holder met applicable holding period requirements. The Company expects to be eligible for such treaty benefits as long as the Company's principal class of shares continues to be listed on the London Stock Exchange and is regularly traded. A US Holder will not be eligible for this preferential rate if the Company is treated as a PFIC in the taxable year in which the distribution is received or in the preceding taxable year. As discussed above, the Company may be treated as a PFIC. US Holders should consult their own tax advisers as to the qualification of dividends paid by the Company as qualified dividend income.

Dividends paid in a currency other than US dollars will be includable in income in a US dollar amount based on the exchange rate in effect on the date of receipt whether or not the payment is converted into US dollars at that time. A US Holder's tax basis in the non-US currency will equal the US dollar amount included in income. Any gain or loss on a subsequent conversion of the non-US currency into US dollars for a different amount generally will be US source ordinary income or loss, will not be eligible for the special tax rate applicable to qualified dividend income, and will be income or loss from US sources for foreign tax credit limitation purposes.

Subject to certain limitations, US Holders may claim a deduction or a foreign tax credit for non-US tax withheld at the appropriate rate. In computing a non-corporate US Holder's foreign tax credit limitation, only a portion of any dividend taxed at the reduced rate for qualified dividend income will be treated as income from foreign sources. Dividends received by certain individuals, trusts or estates may constitute "net investment income" subject to additional tax. The rules governing foreign tax credits are complex and, therefore, US Holders should consult with their own tax advisers as to the application of relevant US tax rules relating to foreign tax credits and the sourcing of dividend income.

Consequences of Not Being a PFIC – Dispositions

If, contrary to expectations, the Company is not treated as a PFIC, a US Holder will recognize capital gain or loss on the sale or other disposition of Capital Raising Shares in an amount equal to the difference between the US Holder's adjusted tax basis in the Capital Raising Shares and the US dollar value of the amount realised from the disposition. Any gain or loss realised by a US Holder generally will be treated as arising from US sources. It will be long-term capital gain or loss if the holder has held Capital Raising Shares for more than one year. Deductions for capital losses are subject to significant limitations.

A US Holder that receives a currency other than US dollars on the disposition of Capital Raising Shares will realize an amount equal to the US dollar value of the currency received at the spot rate on the date of sale (or, in the case of cash basis and electing accrual basis US Holders, the settlement date). An accrual basis US Holder that does not elect to determine the amount realised using the spot rate on the settlement date will recognize foreign currency gain or loss equal to the difference between the US dollar value of the amount received based on the spot exchange rates in effect on the date of sale or other disposition and the settlement date. A US Holder will have a tax basis in the currency received equal to the US dollar value of the currency received on the settlement date. Any gain or loss on a subsequent disposition or conversion of the currency will be US source ordinary income or loss. Gain on the disposition of the Capital Raising Shares by certain individuals, trusts or estates may constitute "net investment income" subject to additional tax.

Information reporting and backup withholding

Under US federal income tax laws, certain categories of US Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation (including IRS Forms 926). Penalties for failure to file certain of these information returns are severe. For any year in which the Company is a PFIC, each US Holder will be required to file an information statement on IRS Form 8621 regarding such US Holder's ownership interest in the Company. US Holders of Capital Raising Shares should consult with their own tax advisers regarding the requirements of filing information returns and QEF and mark-to-market elections.

Dividends on and proceeds from the sale or other disposition of the Capital Raising Shares generally will be reported to the IRS unless the US Holder is a corporation or otherwise establishes a basis for exemption. Backup withholding may apply to amounts subject to reporting if the holder fails to provide an accurate taxpayer identification number or otherwise fails to comply with applicable certification requirements. Backup withholding is not an additional tax. A US Holder can claim a credit against its US federal income tax liability for amounts withheld under the backup withholding rules, and can claim a refund of amounts in excess of its tax liability by providing the appropriate information to the IRS.

Certain US Holders may be required to report information with respect to investments in the Capital Raising Shares not held through an account with a financial institution annually with their tax returns including, among others, IRS Form 8938 (Statement of Foreign Financial Assets). Investors who fail to report required information could become subject to substantial penalties. Potential investors are encouraged to consult with their own tax advisors about these and any other reporting obligations arising from their investment in the Capital Raising Shares.

Foreign Account Tax Compliance Act (FATCA)

Withholding taxes may be imposed under the provisions of the law generally known as the Foreign Account Tax Compliance Act, or FATCA, on certain types of payments made to non-US financial institutions and certain other non-US entities. Specifically, a 30% withholding tax may be imposed on dividends on, or gross proceeds from the sale or other disposition of, Capital Raising Shares paid to a "foreign financial institution" or a "non-financial foreign entity" (each as defined in the US Code), unless (i) the foreign financial institution undertakes certain diligence and reporting obligations, (ii) the non-financial foreign entity either certifies it does not have any "substantial US owners" (as defined in the US Code) or furnishes identifying information regarding each substantial US owner, or (iii) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (i) above, it must enter into an agreement with the US Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain "specified US persons" or "US-owned foreign entities" (each as defined in the US Code), annually report certain information about such accounts and withhold 30% on payments to non-compliant foreign financial institutions and certain other account holders. An intergovernmental agreement between the United States and an applicable foreign country, or future Treasury Regulations or other guidance, may modify these requirements. Accordingly, the entity through which Capital Raising Shares is held will affect the determination of whether such withholding is required.

Under the applicable Treasury Regulations and recent guidance from the IRS, withholding under FATCA generally applies to payments of dividends on Capital Raising Shares, and will apply to payments of gross proceeds from the sale or other disposition of Capital Raising Shares on or after January 1, 2019, and to certain "pass thru" payments made on or after the later of January 1, 2019 and the date final Treasury Regulations are issued defining such pass thru payments. The FATCA withholding tax will apply to all withholdable payments without regard to whether the beneficial owner of the payment would otherwise be entitled to an exemption from imposition of withholding tax pursuant to an applicable tax treaty with the United States or US domestic law. The Company (or its agents) are authorised to withhold amounts otherwise distributable to the holder and will not pay additional amounts to the holder of Capital Raising Shares in respect of any such amounts withheld.

Potential investors should consult their own tax advisors regarding the potential application of withholding under FATCA to their investment in Capital Raising Shares.

THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES OF AN INVESTMENT IN CAPITAL RAISING SHARES IN LIGHT OF THE INVESTOR'S OWN CIRCUMSTANCES.

14. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by members of the Group within the two years immediately preceding the date of this document and/or have been entered into by members of the Group and contain provision under which any member of the Group has any obligation or entitlement which is material to the Group as at the date of this document:

14.1 Summary of the agreements relating to the University of Southampton Partnership

14.1.1 Framework Agreement

Pursuant to a framework agreement dated 20 March 2002 and made between (1) the University of Southampton, (2) University of Southampton Holdings Limited, a wholly owned subsidiary of the University of Southampton ("USHL"), (3) IP2IPO, (4) IML and (5) Southampton Asset Management Limited ("SAM"), the parties agreed certain arrangements with regard to the commercialisation of IP created by the University of Southampton's academic staff, students and third parties which vests in the University of Southampton ("University of Southampton IP"). Broadly summarised, these arrangements entitle IP2IPO to a 20 per cent. interest in SAM (which holds the University of Southampton's interest in any company established with a view to the commercialisation of University of Southampton IP (each a "University of Southampton Spin-Out Company")), a 20 per cent. interest in the University of Southampton's interest in shares acquired as a result of the University's licensing activities (other than Out-Licensing as defined in sub-paragraph (iv) below) and an interest, through IML, in investments from the £5m Southampton Fund in University of Southampton Spin-Out Companies. The parties are in the process of agreeing agreed that rather than holding its "indirect" interest through SAM IP2IPO holds such interest directly through another entity held by IP Group.

The principal provisions of the framework agreement are as follows:

(i) IP2IPO will make the £5m Southampton Fund available to IML so as to enable IML to make seed capital investments in University of Southampton Spin-Out Companies made in accordance with the investment protocol set out in the framework agreement and in companies formed to commercialise University of Southampton IP which is partially owned by the University of Southampton and partially owned by third parties;
(ii) that the University of Southampton IP policy and certain other contracts grant the University of Southampton ownership of University of Southampton IP and that the University of Southampton has agreed that it will not amend the IP policy (other than by

reason of any change of law) with the objective of materially diminishing any interest which IP2IPO may have in University of Southampton Spin-Out Companies;

(iii) subject to the provisions of sub-paragraph (iv) below, the University of Southampton will use all reasonable endeavours and act in good faith to procure that during the term of the framework agreement all commercialisation opportunities relating to the creation of University of Southampton Spin-Out Companies will be channelled through SAM. As from the date of the framework agreement, SAM owns outright the equity in University of Southampton Spin Out Companies corresponding to the University of Southampton's interest in that company;
(iv) whilst generally University of Southampton IP will be commercialised by the University of Southampton licensing or assigning the relevant IP to a University of Southampton Spin-Out Company, in some instances greater benefit may be derived by the University of Southampton licensing the relevant University of Southampton IP to a company which may be regarded as "established" (i.e. it is not "early stage" or "developmental") in return for cash or deferred cash consideration ("Out-Licensing"). Under the framework agreement the parties acknowledge that IP2IPO has a vested interest in the creation of University of Southampton Spin-Out Companies but no such interest in Out-Licensing and they agree, that, where such alternative commercialisation routes present themselves the presumption as between the parties is that the preferred route is the formation of a University of Southampton Spin-Out Company where the arguments in favour of such formation outweigh the arguments in favour of Out-Licensing. However, subject to the University of Southampton acting in good faith and giving due consideration to the views of the steering committee (as referred to in sub-paragraph (x) below), the University of Southampton's decision with respect to the selection of the preferred commercialisation route is final;
(v) investment decisions in relation to University of Southampton Spin-Out Companies will be made by the investment committee (other than in relation to certain de minimis investments, being investments: (i) of less than £50,000 made prior to the formation of a University of Southampton Spin-Out Company with the unanimous consent of the investment committee; and (ii) of less than £20,000 provided that not more than five of such investments are made in any one year). The investment committee comprises the director of the University of Southampton's Centre for Enterprise and Innovation, the chief executive officer of IP2IPO (who is to be chairman with a second and casting vote), the non-executive directors of SAM (excluding non-executive directors who are University of Southampton Academic Staff (as defined in sub-paragraph (vii) below) or full time employees of the University of Southampton or IP2IPO) and two persons nominated by IP2IPO. Any investment decision requires the affirmative vote of the chief executive officer of IP2IPO. If such affirmation is not given, the matter is to be referred to the steering committee (see sub-paragraph (x) below);
(vi) investments in University of Southampton Spin-Out Companies are made on the basis of a pre-money valuation of £750,000. It is intended that IML has the right of first access to University of Southampton Spin-Out Companies in order to supply IML with opportunities to invest the £5m Southampton Fund and the parties to the framework agreement are obliged to use reasonable endeavours to ensure, whenever possible, that IML is placed in a position where it has the first opportunity to invest in any University of Southampton Spin-Out Company. Whilst it is the intention that IML shall have first access to each University of Southampton Spin-Out Company, in certain cases other sources of finance closely associated with the University of Southampton will have coinvestment rights;
(vii) the division of equity in a University of Southampton Spin-Out Company (prior to any £5m Southampton Fund investment by IML and any third party investment and prior to

the issue of shares or options to University of Southampton Spin-Out Company management (other than academic staff employed by the University of Southampton ("University of Southampton Academic Staff")) shall, as between the University of Southampton and the relevant University of Southampton Academic Staff, be assessed on a case by case basis. However, the University of Southampton has given assurances that it is reasonable for the parties to assume that in most cases, SAM will be entitled to hold not less than 50 per cent. of the equity in a University of Southampton spin-Out Company prior to any investment in that company (and excluding any shares issued to management who are not University of Southampton Academic Staff);

(viii) IML is obliged to make the £5m Southampton Fund available for the purposes of investing in University of Southampton Spin-Out Companies over four years (i.e. at £1.25 million per annum before charges) although any monies not invested in any given year are rolled into the following year's allocation of £1.25 million. With the unanimous consent of the investment committee, IML is entitled to make investments exceeding £1.25 million in any year. It is envisaged that the average investment will be of the order of £250,000 but no single investment greater than £500,000 can be made without the unanimous consent of the investment committee and the board of directors of IML. The £5m Southampton Fund may also be invested in a small number of cases on a pre-incorporation basis (not to exceed £50,000 in any case) for the purpose of enabling an identifiable project to progress to the point where formation of a University of Southampton Spin-Out Company becomes practicable;
(ix) IP2IPO is entitled to charge, and IML shall pay, a fee chargeable against the £5m Southampton Fund of 2 per cent. per annum (that is 2 per cent. of £5 million). The fee is payable annually in arrears. No fee is payable once the £5m Southampton Fund is fully invested;
(x) a steering committee (comprising three representatives of IP2IPO, two representatives of the University of Southampton and one representative of SAM (being one SAM non-executive director)) shall be established to conduct those activities set out in the framework agreement, including, monitoring and reviewing the activities of the parties in relation to the framework agreement with a view to maximising the benefits of the parties, suggesting improvements and changes to the arrangements contained in the framework agreement and considering and suggesting solutions in relation to any issue arising between the parties in relation to the framework agreement;
(xi) the University of Southampton acknowledges that IP2IPO may wish to supply business development services to any University of Southampton Spin Out Company and it shall not object to the same being so provided;
(xii) IP2IPO is also obliged to provide certain other services to the University of Southampton and SAM, including the provision of a secondee to work with the University's Centre for Enterprise and Innovation, subject to IP2IPO indemnifying the University of Southampton in respect of certain acts of the same;
(xiii) the University of Southampton undertakes not to enter into any similar agreement or arrangement with third parties during the term of the framework agreement without the consent of IP2IPO;
(xiv) an acknowledgement that in some cases it may be beneficial for IP2IPO to hold its indirect interest in a University of Southampton Spin-Out Company (that is, the interest in a spin-out company to which IP2IPO is entitled by virtue of its holding of 20 per cent. of the issued share capital of SAM) directly rather than indirectly through its shareholding in SAM. Provided that the University of Southampton and SAM are each satisfied that neither of them shall be prejudiced or disadvantaged in any way, IP2IPO is entitled to require those shares in that University of Southampton Spin-Out Company

which correspond to its 20 per cent. of the interest held by SAM to be issued to it. In such a case, IP2IPO shall have no further rights in respect of the shares in that University of Southampton Spin-Out Company which are held by SAM and the articles of association of SAM give effect to that requirement;

(xv) IP2IPO and IML each warrant to the University of Southampton and SAM that each of them has the capacity and authority to enter into and perform the framework agreement and that the framework agreement has been duly executed by each of them;
(xvi) upon the full utilisation of the £5m Southampton Fund, or the expiry of eight years from 20 March 2002, then the provisions of the framework agreement in relation to the £5m Southampton Fund will cease to have effect but the parties will enter into good faith negotiations as to the establishment of a further fund on similar terms;
(xvii) the framework agreement may be terminated as follows:
(1) broadly, after the twenty-fifth anniversary of the term of the framework agreement if the University of Southampton decides that it is not in the best interests of the University of Southampton to continue with the framework agreement;
(2) immediately by notice in writing given either by the University of Southampton or by IP2IPO if: (aa) either party or any member of that party's group are in material, continuing or irremediable breach of any of its obligations under the framework agreement and, in relation to breaches capable of being remedied, fails to remedy the same within a period of 30 days after written notice of the breach; or (bb) that party is suffering some form of insolvency (as more particularly described in the framework agreement);
(3) if during the term of the framework agreement there has been a significant change of control (defined as any person other than The Evolution Group plc or any member of its group) acquiring control (within the meaning of section 840 Income and Corporation Taxes Act 1988) of IP2IPO or IML;
(4) if the chief executive officer of IP2IPO fails to affirm in any twelve month period three or more decisions of the investment committee (ignoring any failures to affirm which the steering committee decides were justified);
(5) if IP2IPO ceases to be actively engaged in the commercialisation of IP of universities or other public sector research institutions either after the £5m Southampton Fund has been fully utilised (ignoring any sum of less than £20,000) or on the expiry of 8 years from the date of the framework agreement; or
(6) IP2IPO may terminate the framework agreement if there has been a change of law or tax change which results in it no longer being economic for IML to invest in University of Southampton Spin-Out Companies or there being a fundamental and drastic shortage of investment opportunities available to IML (for example no formal proposals being received by the investment committee for a two year period) or the University of Southampton or SAM ceases to own IP created at the University of Southampton.

The Company and the University of Southampton are currently in negotiations with regard to improving and amending the Partnership.

14.1.2 Subscription and Shareholders Agreement

Pursuant to a subscription and shareholders agreement dated 20 March 2002 and made between (1) USHL, (2) IP2IPO and (3) SAM, USHL agreed to subscribe at par for 78 A ordinary shares of £1 each in SAM (which, when aggregated with USHL's existing holding of 2 A ordinary shares, gave USHL 80 per cent. of the issued share capital of SAM) and IP2IPO agreed to subscribe at par for 20 "B" ordinary shares of £1 each in SAM (which gave IP2IPO 20 per cent. of the issued share capital of SAM).

The principal provisions of the subscription and shareholders' agreement are as follows:

(a) SAM gave warranties in respect of its post incorporation status to each of USHL and IP2IPO;
(b) IP2IPO has the right to appoint one director to the board of directors of SAM and the right to remove or replace any such director from time to time. Pending any such appointment, IP2IPO has the right to appoint, remove and replace an observer who shall be entitled to attend and speak, but not vote, at meetings of the board of directors of SAM. Any director appointed by IP2IPO may report back to the Company in relation to the proceedings of the board of directors of SAM and at each meeting of such board of directors may represent the position of the Company. IP2IPO shall be responsible for and shall indemnify USHL and SAM against any claim made by any director or observer appointed and subsequently removed by it;
(c) until IP2IPO ceases to hold in aggregate 20 per cent. of the entire issued share capital of SAM, the parties to the agreement have agreed that certain minority protection rights in favour of IP2IPO shall apply, including the following prohibitions without the prior written consent of IP2IPO: the issue of new shares in SAM; the alteration of the memorandum and articles of association of SAM; the borrowing of any money by SAM; the disposal of any of its business or undertaking; and any change in the nature and scope of the business of SAM;
(d) no transfer of shares in the share capital of SAM by a shareholder in SAM is allowed unless the transfer is in accordance with the permitted transfer provisions of the articles of association of SAM or with the prior written consent of the other shareholder; and
(e) the subscription and shareholders' agreement shall continue unless and until the earlier of: (a) IP2IPO or USHL ceasing to hold any shares in SAM; (b) a resolution is passed or an order is made to wind-up SAM; (c) a listing of SAM's share capital is achieved; or (d) the parties agree that such agreement should terminate.
14.1.3 Articles of Association of SAM

The articles of association adopted by SAM under the terms of the subscription and shareholders' agreement provide that:

(a) the A ordinary shares and B ordinary shares rank equally but the holders of B ordinary shares (held by IP2IPO) have the right to appoint one director;
(b) no shareholder may transfer, create or dispose of any interest in any share other than to members of its group or to a bare nominee or, in the case of a holder of B ordinary shares, to any investment fund or trustee, nominee or custodian; and

give effect to the arrangement specified in sub-paragraph (xiv) of paragraph 14.1.1 above.

14.2 Summary of the agreements relating to the CNAP Partnership

14.2.1 Framework Agreement
(a) Pursuant to a framework agreement dated 19 September 2003 and made between (1) the University of York, (2) IP2IPO, and (3) Amaethon Limited ("AL") (as amended on 16 March 2005), the parties agreed certain arrangements with regard to the exploitation of IP created or owned by certain persons based at the Centre of Novel Agricultural Products within the Biology Department of the University of York ("CNAP IP"). Broadly

summarised, these arrangements entitle IP2IPO to a 40 per cent. interest, through AL, in: (i) any company established with a view to the commercialisation of CNAP IP (each a "CNAP Spin-Out Company"), and (ii) benefits (including licence fees) arising from the licensing or assignment of CNAP IP (other than to a CNAP Spin-Out Company). IP2IPO will also be entitled to shares in CNAP Spin-Out Companies following an investment from the CNAP Fund (as defined in sub-paragraph (b) (vi) below).

(b) The principal provisions of the framework agreement are as follows:
(i) AL is owned as to 60 per cent. by the University of York and 40 per cent. by IP2IPO;
(ii) both the University of York and, subject to the University of York exercising such right, IP2IPO have the option at any time thirty days before AL raises capital by way of an issue of equity shares or the admission to a recognised investment exchange of AL or any equity shares in AL, to a certain percentage of AL's income thereafter received subject to a proportion of its shares in AL being converted into deferred shares which carry no right or entitlement;
(iii) the University of York agrees for the duration of the framework agreement to make all CNAP IP exclusively (subject to certain limited exceptions) available to AL and AL may call for CNAP IP to be transferred either to itself or to whomever it may direct. AL shall seek to exploit CNAP IP through the formation of CNAP Spin-Out Companies or through licensing agreements (entered into during the term of the framework agreement) under which AL licences out CNAP IP to a third party in return for a fee;
(iv) AL shall be the sole and exclusive IP commercialisation company for CNAP IP and shall be responsible for the exploitation of CNAP IP;
(v) the University of York and AL each undertake not to enter into any similar agreement or arrangement with third parties during the term of the framework agreement in respect of CNAP IP without the consent of IP2IPO. However, if the CNAP Fund is not extended beyond the initial term of three years, then AL may enter into arrangements with third parties in relation to the provision of seed capital;
(vi) IP2IPO will make a fund (the "CNAP Fund"), initially in the amount of £750,000, available to enable seed capital investments in CNAP Spin-Out Companies to be made. Investments in any CNAP Spin-Out Company are to made in accordance with the investment protocol set out in the framework agreement. In addition, IP2IPO will also be able to invest the CNAP Fund in companies formed to commercialise CNAP IP that is partially owned by AL and partially owned by third parties;
(vii) the objective is that the CNAP Fund is invested over three years. Once the CNAP Fund has been fully invested, IP2IPO shall have the right to extend the CNAP Fund;
(viii) IP2IPO will invest the CNAP Fund on the basis of a standard valuation for all CNAP Spin-Out Companies, namely a pre-money valuation of £500,000 at the point at which the investment is made. This valuation assumes that the CNAP Spin-Out Company will already have issued shares to AL and the relevant academic staff of the University of York or CNAP Research Centre staff who generated the relevant CNAP IP ("Inventors"), and, where relevant, the CNAP Spin-Out Company's initial management and any third party with a prior interest in the relevant IP. Investment in any CNAP Spin-Out Company shall not exceed £300,000 unless the members of the investment committee unanimously agree;
(ix) IP2IPO may also invest the CNAP Fund, subject to certain financial limits, in projects which are close to the point of commercialisation and require a relatively small amount of funding specifically for the purposes of advancing the project to the point where it is possible to form a CNAP Spin-Out Company or enter into a licence of the relevant CNAP IP;
(x) investment decisions in relation to CNAP Spin-Out Companies will be made by an investment committee. The investment committee comprises the chief executive of AL and three persons nominated by the University of York, the chief executive officer of IP2IPO (who shall be chairman with a second and casting vote) and two persons nominated by IP2IPO. IP2IPO is only entitled or obliged to make an investment from the CNAP Fund if the investment committee is satisfied that IP2IPO has sufficient control over its investment;
(xi) the framework agreement specifies how any licence fees on out-licensing shall be allocated between the inventors of the relevant CNAP IP and AL. In addition, the framework agreement provides that the Inventors' pre-money share in the relevant CNAP Spin-Out Companies will be 28 per cent., with the remaining 72 per cent., being held by AL;
(xii) IP2IPO was obliged to provide AL with working capital of up to £1,000,000. Thereafter, the working capital was to be provided by IP2IPO in three tranches as follows. Once the framework agreement became unconditional, IP2IPO made a payment to AL of £333,333 in subscription for 333,333 B shares of £1 each in AL (such B shares carry no right or entitlement). On AL meeting the target of completing the seed funding of one or more CNAP Spin-Out Companies and entering into two or more out licences by the first anniversary of the date upon which the framework agreement becomes effective, IP2IPO became obliged to provide an additional £333,333 to AL in subscription for a further 333,333 B shares. Finally, once certain minimum performance targets as set by the board of directors of AL (which shall be no less than the target above) were achieved in the period between the first and second anniversaries of the date on which the framework agreement became effective, IP2IPO become obliged to provide a final payment of £333,334 to AL in subscription for a further 333,334 B shares. In 2005, the parties subsequently agreed to the amendment of this agreement such that IP2IPO subscribed for the second and third tranches of B shares without the milestone conditions having been satisfied in full and the Group shareholding in AL was increased to 40 per cent.;
(xiii) to enable AL to hire an additional member of staff, IP2IPO will over a three year period pay AL £50,000 each year in subscription at par for 50,000 B shares;
(xiv) the parties acknowledged that an exit for AL is desirable and that they would work together in good faith to realise value for the shareholders in AL;
(xv) IP2IPO will provide services and assistance to AL including attracting new investors and providing advice with respect to commercialisation projects and IP2IPO will be entitled to sell its corporate development services to CNAP Spin-Out Companies;
(xvi) the parties gave certain limited warranties to each other;
(xvii) the framework agreement may be terminated as follows:
(1) immediately by notice in writing given either by the University of York or by IP2IPO: if (aa) either party or any member of that party's group are in material, continuing or irremediable breach of any of its obligations under the framework agreement and, in any such case (in relation to breaches

capable of being remedied), fails to remedy the same within a period of 30 days after written notice of the breach; or (bb) that party is suffering some form of insolvency (as more particularly described in the framework agreement); and

(2) IP2IPO may terminate the framework agreement if there has been, in summary, a change of law or tax change which results in it no longer being economic for AL to invest in CNAP Spin-Out Companies or there being a fundamental and drastic shortage of investment opportunities available in relation to CNAP IP (for example no formal proposals being received by the investment committee for a two year period) or the University of York or AL ceasing to own CNAP IP (other than anticipated under the framework agreement) which, in any such case, cannot be rectified or, as the case may be, rectified after notice;
(xviii) if AL suffers from some form of insolvency (as more particularly described in the framework agreement) then, subject to the University of York not intentionally causing such event to occur or materially contributing to it occurring and/or rejecting an offer of finance which would enable AL to return to solvency, then the University of York may notify the other parties that all future CNAP IP will cease to be available to AL;
(xix) the framework agreement commenced on 19 September 2003 and subsists for a period of 25 years from the date upon which the agreement becomes effective; and
(xx) on the date that the framework agreement came into effect the parties entered into the subscription and shareholders' agreement referred to below.

Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.

14.2.2 Subscription and Shareholders' Agreement

(a) Pursuant to a subscription and shareholders' agreement entered into on 31 October 2003 between (1) the University of York, (2) IP2IPO and (3) AL, the University of York agreed to subscribe at par for 6,566 ordinary shares of 1 pence each in AL (which when aggregated with the University's existing holding of 100 ordinary shares of 1 pence each in AL gave the University of York two-thirds of the issued share capital of AL) and IP2IPO agreed to subscribe at par for 3,333 A ordinary shares of 1 pence each in AL (which gave IP2IPO one-third of the issued share capital of AL).
(b) The principal provisions of the subscription and shareholders' agreement are as follows:
(i) AL gave warranties in respect of its post incorporation status to each of the University of York and IP2IPO;
(ii) the University of York has the right to appoint up to four directors to the board of directors of AL and IP2IPO has the right to appoint up to two directors to the board of directors of AL, together with the right to remove or replace any such director from time to time. Any director appointed by IP2IPO may report back to the Company in relation to the proceedings of the board of directors of AL and at each meeting of such board of directors may represent the position of the Company. IP2IPO shall be responsible for, and shall indemnify the University of York and AL against, any claim made by any director appointed and subsequently removed by it;
(iii) until IP2IPO ceases to hold in aggregate 20 per cent. of the entire issued share capital of AL, the parties to the agreement have agreed that certain minority protection rights in favour of IP2IPO shall apply, including the following prohibitions without the prior written consent of IP2IPO; the issue of new shares in AL; any alteration to the memorandum and articles of association of AL; the disposal of any of its business or undertaking; the transfer of any shares in AL; and the disposal of any IP otherwise than in the ordinary course of business or in a manner consistent with the framework agreement;
(iv) AL will, provided it has sufficient working capital, distribute its distributable profits at least annually provided that no such distributions shall be made within two years of the date of the subscription and shareholders' agreement;
(v) upon signature of the subscription and shareholders' agreement, AL was obliged to deliver a warrant to IP2IPO entitling it, if AL issues shares (subject to certain exceptions) at a price of less than £1, to subscribe at par for such further A ordinary shares of 1 pence each as is equal to the number of A ordinary shares it then holds; and
(vi) the subscription and shareholders' agreement shall continue unless and until the earlier of (a) IP2IPO or the University of York ceasing to hold any shares in AL; a resolution is passed or an order is made to wind-up AL; (c) the admission of AL's share capital to any recognised investment exchange; or (d) the parties agree that such agreement should terminate.

14.2.3 Articles of Association of AL

The articles of association adopted by AL under the terms of the subscription and shareholders' agreement provide that:

(a) the ordinary shares and A ordinary shares rank equally but the holders of ordinary shares have the right to appoint up to four directors and to remove, substitute or replace any of such directors and the holders of A ordinary shares have the right to appoint up to two A directors and to remove, substitute or replace any of such directors;
(b) the B shares of £1 each carry no right or entitlement;
(c) no shareholder may transfer, create or dispose of any interest in any share other than to members of its group or to a bare nominee or in the case of a holder of A ordinary shares or B shares to any investment fund or trustee, nominee or custodian provided that beneficial ownership does not vest in anyone who is not a member of the same group as that shareholder; and
(d) on a take-over or admission of the share capital of AL to any recognised investment exchange the holders of ordinary shares and A ordinary shares shall be entitled to such proportion of the proceeds as the number of ordinary and A ordinary shares held by them bears to the total of ordinary and A ordinary shares then in issue.

14.3 Summary of the agreement relating to the King's College London Partnership

14.3.1 Commercialisation Agreement

Pursuant to a commercialisation agreement dated 12 November 2009 and made between (1) King's College London, (2) King's College London Business Limited ("KB") and (3) IP2IPO, the parties agreed certain arrangements with regard to the commercialisation of IP created by King's College London's academic staff, students and third parties which vests in King's College London ("KCL IP"), including by way of companies established in conjunction with, or with the consent of, King's College London with a view to the commercialisation of KCL IP (each a "KCL Spin-Out Company"). Broadly summarised, these arrangements entitle IP2IPO to invest in KCL Spin-Out Companies a sum of £3,200,000 (being the balance of the original £5m King's Fund not utilised at the date of the commercialisation agreement) in approximately equal tranches of £1,000,000 over a period of three years from the date of the agreement.

The principal provisions of the commercialisation agreement are as follows:

(a) IP2IPO shall make a designated employee experienced in commercialising IP via spin-out companies (the "Account Manager") available to KB to advise KB on the commercialisation of KCL IP. The Account Manager shall spend approximately 50 per cent. of the hours of a full time employee on this role;
(b) KB may at its sole discretion submit to the Account Manager for review a proposal for IP2IPO to invest in a KCL Spin-Out Company or a proposed KCL Spin-Out Company. IP2IPO shall review the proposal in detail and shall respond to KB in writing within one month of its receipt of KB's proposal, attaching a plan (if relevant) setting out how IP2IPO proposes to progress with regard to the relevant KCL Spin-Out Company;
(c) IP2IPO's right to invest in a KCL Spin-Out Company will expire if it fails to meet any of the relevant deadlines prescribed in the agreement or if it has not subscribed for shares in the relevant KCL Spin-Out Company within seven months of its receipt of KB's proposal in respect thereof;
(d) the initial objective is for IP2IPO to invest a sum of £3,200,000 over a three year period in approximately equal tranches of £1,000,000 per year in KCL Spin-Out Companies (and proposed KCL Spin-Out Companies), although this will depend on the quantity and quality of investment opportunities. In circumstances where it may be more appropriate for IP2IPO to invest a lesser amount, such an investment would be made in the form of an unsecured interest free convertible loan and would generally be of an amount of up to £50,000. Investments in KCL Spin-Out Companies are made on the basis of a pre-money valuation of £750,000 in the case of seed funding. This valuation assumes that, prior to the Group's investment, the spin-out company will already have issued equity to KCL and the relevant founders of the spin-out company and, where relevant, the spin-out companies initial management team;
(e) IP2IPO agrees not to unreasonably withhold its consent to a third party seed capital investment in KCL Spin-Out Companies on the same terms as those made available to IP2IPO;
(f) King's College London and KB jointly and severally agree that they will not during the term of the agreement enter into an agreement with any third party whereby KB may systematically offer a third party the opportunity to make investments in KCL Spin-Out Companies. However, this does not prevent King's College London or KB from offering to third parties on an ad hoc basis the opportunity to make seed capital or other investments in KCL Spin-Out Companies;
(g) the agreement shall terminate on 14 May 2028 unless terminated earlier as follows:
(i) the agreement may be terminated by any party without cause on the seventh anniversary of the date of the agreement by giving the other parties at least sixty days' prior written notice. If notice is not served, the parties' right to terminate shall lapse; and
(ii) the agreement may be terminated by any party immediately by written notice to the others if: (1) another party commits a material breach of the agreement which it does not remedy within thirty days of receiving written notice of the breach; or (2) an interim order is applied for or made, or a voluntary arrangement approved, or a petition for a bankruptcy order is presented, or any circumstances arise which

entitle the court or a creditor or the company or its directors to appoint a receiver, administrative receiver or administrator; and

(h) the agreement shall not automatically terminate in the event of a merger. In the event of a merger by King's College London, IP2IPO will enter into a consultation phase with King's College London and the university with which King's College London proposes to merge to ascertain whether and how IP2IPO can become involved in the commercialisation of the merged entity's IP on similar terms to those set out in the commercialisation agreement.

14.4 Summary of the agreements relating to the University of Sheffield Partnership

Non-medical IP

Pursuant to an agreement dated 26 January 2005 and made between (1) Fusion IP, (2) Fusion IP Trading Limited (now Fusion IP Sheffield Limited) ("Fusion IP Sheffield"), (3) Sheffield University Enterprises Limited ("SUEL") and (4) the University of Sheffield, the parties agreed certain arrangements with regard to the commercialisation of the University of Sheffield's application of knowledge about chemistry, living organisms, and their components or molecules or techniques that affect their behaviour ("Medical Life Science IP").

Pursuant to a variation agreement dated 7 July 2008, the parties agreed to amend and restate the original agreement and also agreed certain arrangements with respect to certain "life sciences" intellectual property developed by the University of Sheffield pursuant to which Fusion IP Group's (through its wholly owned subsidiary, Fusion IP Sheffield) entitlement under the original agreement extends to all IP created by the University of Sheffield, save for IP arising or developed on behalf of or in association with the Advanced Manufacturing and Research Centre.

The principal provisions of the amended and restated agreements are as follows:

(a) Fusion IP is entitled to direct that all IP be assigned (or, if it so chooses, licensed), at market value, to a then existing or newly incorporated company in which the Fusion IP Group will acquire an equity investment;
(b) Fusion IP Sheffield is also entitled, subject to approval by the University of Sheffield, to licence such IP to a third party on behalf of the University of Sheffield and, in return for the implementation, administration and management of such licences, Fusion IP Sheffield is entitled to 50 per cent. of the net income from such licences. Such entitlement is to last for ten years in relation to IP other than Medical Life Science IP, and until February 2015 in relation to Medical Life Science IP (being the ten year period provided for in the University of Sheffield Partnership);
(c) Fusion IP Sheffield's entitlement is subject to the terms of financing and third party collaborative research agreements into which the University of Sheffield enters into in the ordinary course as follows:
(i) if Fusion IP Sheffield has not elected, within eighteen months following the relevant IP first being brought to the attention of Fusion IP Sheffield, for it to be assigned or licensed to a portfolio company and no written plan is prepared for the commercialisation in the following twelve months or Fusion IP Sheffield does not adhere to any plan so prepared, the University of Sheffield may exclude the relevant IP from this entitlement;
(ii) if IP that has been assigned or licensed to a portfolio company of Sheffield and has not had third party funding of £50,000, or more or the consideration for which IP has not been paid in full, and is not used by such portfolio company for a continuous period of 18 months, the University of Sheffield is entitled to recover ownership of it or to terminate any licence granted to such portfolio company where a written business plan for the commercialisation of the IP is not adhered to by Fusion IP Sheffield;
(iii) this 18 month period is shortened to 12 months if the University of Sheffield demonstrates to Fusion IP Sheffield that it can commercialise the IP itself, if Fusion IP Sheffield elects not to do so on that proposed basis and if a member of the group is already using IP for the same purpose;
(iv) if Fusion IP Sheffield's current account balance falls below £500,000 or it remains in unremedied breach of the University of Sheffield Partnership or the Sheffield Portfolio Sheffield Loan Notes (referred to below) for 30 days or more, the University of Sheffield can suspend this entitlement;
(d) the consideration payable by Fusion IP Sheffield pursuant to the University of Sheffield Partnership comprises:
(i) the allotment and issue to the University of Sheffield of up to 4,347,826 Fusion IP shares; this has been amended in 2008 to reflect that such Fusion IP shares were only issued to the University of Sheffield to the extent that following such issue the University of Sheffield does not hold more than 3.5 per cent. of the issued share capital of Fusion IP than is held by Cardiff University. Therefore, the University of Sheffield was issued 3,140,000 Fusion IP shares. The parties agreed that the remaining 1,207,826 Fusion IP shares will be issued to the University of Sheffield if and when and to the extent that by reason of a dilution of the Fusion IP share holdings of the University of Sheffield and Cardiff University, such Fusion IP shares can be issued to the University of Sheffield without giving rise to the University of Sheffield's current Fusion IP share holding representing more than 3.5 per cent. of the issued share capital more than Cardiff University's current Fusion IP shareholding;
(ii) any reasonable transaction costs incurred by the University of Sheffield up to a maximum of £40,000;
(iii) an amount equal to 2.5 per cent. of any future funds raised by Fusion IP to be paid by Fusion IP to the University of Sheffield which are to be used in investing in Non-Life Science IP generated at the University of Sheffield subject to a maximum payment of £100,000;
(iv) a monthly payment of £8,750 by Fusion IP Sheffield to the University of Sheffield for the provision of services by the University of Sheffield to enable Fusion IP Sheffield to identify and patent the University of Sheffield's IP;
(e) either Fusion IP Sheffield or the University of Sheffield had an option, exercisable on or prior to the third anniversary of completion of the amended and restated University of Sheffield Partnership, to call for the transfer by the University of Sheffield to Fusion IP Sheffield of shares in certain existing spin-out companies that have already been established to commercialise the University of Sheffield-generated IP, being Blastech Limited, Conteque Limited, Limited State Limited, Material State Limited, Vulcan Solutions Limited and Webelements Limited:
(i) on the exercise of such option, the shares have been paid for by loan notes issued by Fusion IP Sheffield to the University of Sheffield (the "Sheffield Loan Notes") secured against the shares in question by a fixed charge over those shares;
(ii) the Sheffield Loan Notes carry a floating rate of interest being 1.5 per cent. above LIBOR for six months deposits, calculated every six months, and will be repayable on the tenth anniversary of the issue of the loan note, but only to the extent that Fusion IP Sheffield realises value from the relevant shares by way of receiving a dividend or sale or listing of the shares; and
(f) the University of Sheffield Partnership is subject to earlier termination if Fusion IP Sheffield becomes insolvent or ceases to be wholly owned by the Fusion IP Group.

Medical IP

Pursuant to an agreement dated 23 November 2015 and made between (1) IP2IPO Limited and (2) the University of Sheffield, the parties agreed certain arrangements with regard to the continued commercialisation of IP that is derived from any research with respect to one or more biological or chemical formulations, medical devices, clinical diagnostics, in each case having medical applications ("Medical IP"), the rights to which had expired on 16 February 2015 under the terms of the agreement set out above. Under the terms of the new agreement, the parties agreed a mechanism whereby new rights to Medical IP were granted to IP2IPO, effective from 16 February 2015.

The principal provisions of the agreement are as follows:

(g) the University of Sheffield and IP2IPO shall work together to encourage a pipeline of initial commercial enquiries ("ICEs") relating in whole or in part to Medical IP. The University of Sheffield shall promote IP2IPO as its preferred commercialisation partner for Medical IP, however, it shall not be obliged to disclose Medial IP which is:
(i) essential to allow the university to procure funding or enter into strategic relationships;
(ii) Medical IP where a funder has the right to exploit the IP;
(iii) created from a collaborative project and the collaborator is leading on the exploitation;
(iv) Medical IP where the University of Sheffield has a 'ready-made customer';
(v) any project bringing revenue share to the University of Sheffield;
(vi) funded by specific bodies where it is a requirement of the funding that the IP will not fall within an IP2IPO commercialisation agreement or otherwise be available to IP2IPO;
(vii) already encumbered by third parties; or
(viii) otherwise subject to rights or restrictions in favour of third parties under an arrangement with any third party for research undertaken by staff at the University of Sheffield;
(h) where the University of Sheffield considers that an ICE may be a Medical ICE, it will ensure that such Medical ICEs are formally disclosed to IP2IPO's relationship manager, together with a brief outline of the Medical IP ("Disclosed ICEs"). The parties will consider the terms of the Disclosed ICE at a meeting of the initial Commercialisation Assessment Group to determine whether the Disclosed ICE should be moved forward to become a commercial opportunity disclosure ("COD");
(i) in the event that IP2IPO nominates a COD to become a spin out it shall have the first and exclusive right to provide Pre-Seed Funding (up to £150,000) and Seed Funding (up to £1m) to the Spin Out Opportunity;
(j) IP2IPO shall provide support to spin out companies in the form of Business Services, a Non-Executive Director, Executive Search, Business Building/IP impact and Capital Markets support;
(k) prior to 17 July 2018, IP2IPO will aim to commit up to £2.5m in aggregate funding for spin out opportunities; and
(l) the parties shall review the operation of the agreement on the first anniversary of the agreement and make recommendations on the same. No later than 12 months prior to 17 July 2018, the parties shall meet to discuss whether the agreement should be extended and whether the extension should incorporate non-medical IP. In the event that the parties extend the agreement and incorporate non-medical IP, it is the parties' intention that the agreement shall be "evergreen", incorporating a 2 year rolling notice period.

14.5 Summary of the agreements relating to the University of Leeds Partnership

14.5.1 Agreement for the Provision of Technology Transfer Services

Pursuant to an agreement for the provision of technology transfer services dated 15 July 2005 made between (1) the University of Leeds, (2) Techtran Group Limited (now IP Assist Services Limited) and (3) the Company, the parties agreed certain arrangements with regard to the commercialisation of IP created by the University of Leeds' academic staff which vests in the University of Leeds (the "Leeds IP").

Broadly summarised, these arrangements entitle the Group to an approximate 30 per cent. interest in the shares in any company established with a view to the commercialisation of Leeds IP (each a "Leeds Spin-Out Company") where it has been recommended that the relevant Leeds IP be exploited (which is approved by the IPEC (as defined below)) and an interest in investments from the £5 million Leeds Fund in Leeds Spin-Out Companies.

The principal provisions of the agreement are as follows:

(a) the relationship between the Company and the University of Leeds (including the process of reviewing new opportunities, monitoring the portfolio of investments and relationship management) is conducted through the following four committees:
(i) the Intellectual Property Executive Committee (the "IPEC") this comprises one person nominated by the Company and two persons nominated by the University of Leeds. The role of the IPEC is to set and monitor strategy in relation to the protection of Leeds IP, including encouraging inventors to give the Company formal notification of all new opportunities to commercialise Leeds IP. The IPEC is required to meet as necessary, but at least six times a year;
(ii) the Investment Committee the role of the investment committee is to review the merits of investment proposals on a case by case basis and to reject, clarify or approve such proposals and to review the pipeline of potential forthcoming opportunities. The investment committee comprises three persons nominated by the University of Leeds and two persons nominated by the Company and meets as required, but not less once every three months. Meetings of the investment committee are chaired by a person nominated by the Company. The chairman of the investment committee may veto what would have been an affirmative decision of the investment committee, however such a veto can only be exercised once in any twelve month period and only on commercial grounds;
(iii) Portfolio Monitoring Committee this comprises four members, two nominated by each of the University of Leeds and the Company. The primary responsibility of the committee is the on-going review of the performance of the portfolio of Leeds IP managed by the Company or in which the Company has an economic interest. This committee meets as required, but at least three times a year; and
(iv) Relationship Management Committee this comprises at least two persons nominated by each of the University of Leeds and the Company and meets every six months to conduct an on-going review into operational matters to accommodate the need to establish a transparent, accountable, efficient and cost effective process and to review the level of service offered by the Company;
(b) the Company agreed to pay the University of Leeds £1.4 million in consideration of the transfer of 50 per cent. of the University of Leeds' holdings in three companies to the Company;
(c) any proceeds (net of tax) received by the University of Leeds from a sale of the whole or part of their shareholding in a Portfolio Company (as defined in the agreement but including those companies referred to in paragraph (b) above, certain other specified

companies ("Innovations Companies") and Leeds Spin-Out Companies formed or acquired to commercialise Leeds IP under the agreement (or an earlier agreement entered into in 2002) in which the Company is entitled to a stake) are to be divided, subject to certain limited qualifications, such that the University of Leeds receives the value of its interest in 2002 as specified in the agreement (if any) and thereafter in the proportions 25:75 as between the University of Leeds and the Company until such time as the Company has received £1.4 million in aggregate. Thereafter, the parties will retain any proceeds from the sale of their respective shares, save where the University of Leeds sells an Innovations Company in which it holds shares on behalf of the Company in which case the balance of the sale proceeds will be divided equally;

(d) the Company has agreed to provide such assistance in relation to the commercialisation of Leeds IP as the parties agree from time to time, it being the intention that the Company will usually be involved in: (i) identifying IP with the assistance of the University of Leeds, inventors, students and employees; (ii) assisting in the incorporation of Leeds Spin-Out Companies; (iii) marketing, negotiating and agreeing Leeds IP licensing agreements; (iv) providing assistance to Leeds Spin-Out Companies in their commercial development; (v) advising on the most effective method of commercialising Leeds IP; and (vi) acting as a focal point for the commercialisation of Leeds IP. The Company has agreed to ensure that an average of not less than four full time staff with due experience are exclusively dedicated to delivering the services;
(e) the University of Leeds will promote the Company as its technology transfer partner in the process of the commercialisation of Leeds IP;
(f) if, following notification of the Company's recommendation to commercialise Leeds IP (as provided in the agreement) the University of Leeds chooses to commercialise Leeds IP through licensing, the Company is entitled to 30 per cent. of the net revenue and is responsible for the sourcing of the licensee;
(g) the Company may provide commercialisation services to Leeds Spin-Out Companies;
(h) the Company will make the £5 million Leeds Fund available with the initial objective of investing the initial £5 million over a period of 5 years from the date of the agreement in approximately equal tranches of £1 million a year. No investment in a single opportunity of greater than £300,000 may be made without the consent of the investment committee. The Company has the right, but not the obligation, to extend the £5 million Leeds Fund;
(i) the parties agree that they shall use their voting rights in respect of any Leeds Spin-Out Company to endeavour to ensure that the £5m Leeds Fund has the first right to make seed fund investments in Leeds Spin-Out Companies. The agreement recognises that there may be circumstances where the founder of a Leeds Spin-Out Company may not want to accept seed capital from the £5m Leeds Fund and in such a case the University of Leeds will not be in breach of its obligations under the agreement. There are a number of other sources of seed capital finance who have the right to invest on terms no less favourable than those available to the £5 million Leeds Fund up to one half of the total aggregate being invested in the Leeds Spin-Out Company by the £5 million Leeds Fund;
(j) the £5 million Leeds Fund is divided into two elements being £4.5 million (the "Seed Fund") and £0.5 million. The Seed Fund will invest on the basis of a standard valuation for all Leeds Spin-Out Companies, namely a pre-money valuation of £750,000 at the point when the Seed Fund invests. This valuation assumes that the Leeds Spin-Out Company will have already issued shares to the University of Leeds and the staff of the University of Leeds who made a valuable contribution to the development of the relevant Leeds IP and, where relevant, the initial management team of the Leeds Spin-Out Company. The £0.5 million fund will make small "proof of concept" investments

through unsecured non-interest bearing debt instruments converting at the time of Seed Fund investment at the pre-money valuation of £750,000;

(k) the £5 million Leeds Fund shall not be entitled to make investments in any Leeds Spin-Out Company in any subsequent fund raising rounds without the consent of the investment committee;
(l) if the IPEC does not approve the exploitation of Leeds IP which IP Group has recommended, or if Company is not given access to Leeds IP to assess it, then IP Group is entitled to such number of shares in the relevant Leeds Spin-Out Company as is equal to 5/95ths of the then fully diluted equity share capital issued to the University of Leeds and staff who made a valuable contribution to the development of the relevant Leeds IP;
(m) the University of Leeds has confirmed that, during the period that the £5 million Fund is available, it will not enter into arrangements with a third party to make available a fund or funds of a similar nature to exploit Leeds IP;
(n) the agreement continues until midnight on 19 December 2027. The term of the agreement is divided into the period ending on 30 April 2010 (the "First Period") and each subsequent period (a "Subsequent Period") is of a duration which the parties agree (which in each case shall not be less than seven years);
(o) within 30 days following the end of the First Period, the Company is required to submit a statement certified by an independent accountant setting out the "Aggregate Value" and "Realisable Value" as at the end of the First Period. IP Group must ensure that as at that date the "Aggregate Value" (as defined in the agreement) is at least £7 million and the "Realisable Value" (as defined in the agreement) included within the Aggregate Value is at least £3 million in each case. If IP Group has not met these targets, then the University of Leeds may terminate the agreement within a specified period, failing which its right to terminate lapses. The parties are then required to seek to negotiate new targets for the next Subsequent Period, failing which the University of Leeds may ultimately terminate the agreement. The same process is applied in respect of each Subsequent Period; and
(p) the agreement may be terminated as follows:
(i) by the University of Leeds on six months' notice if IP Group is in breach of its commitments under the agreement and has failed following three months' written notice to remedy such breach;
(ii) by either party if the other is suffering from insolvency (as more particularly described in the agreement); and
(iii) by IP Group if the Leeds' Socially Responsible Investment Policy is changed and IP Group reasonably believes that as a result it is unable to substantially continue with its commitment with regard to commercialisation services pursuant to the agreement and the University of Leeds has been unable to offer a satisfactory solution following 28 days notice of such concern.

14.5.2 Variation Agreement

Pursuant to a variation agreement dated 17 March 2011 between (1) the University of Leeds, (2) Techtran Group Limited (now IP Assist Services Limited) and (3) IP Group the parties agreed certain variations, clarifications and supplemental terms to the agreement for the provision of technology transfer services dated 15 July 2005 (the "Original Agreement") which, in the event of a direct conflict, shall prevail over the terms of the Original Agreement. The principal provisions of the variation agreement are as follows:

(a) the parties shall work together to ensure the provision of a healthy pipeline of initial opportunity descriptions ("IODs") and to ensure that the Company receives a healthy stream of opportunities for its review;
(b) a revised process of IOD selection will apply from the date of the variation agreement to ensure that all IODs are logged, tagged and disclosed by the University of Leeds' Commercialisation Services Team (the "CS Team") to the Company. The parties expect that 65 IODs per annum will be disclosed to the Company under this revised process of IOD selection, although this is not a fixed target;
(c) under the revised process of IOD selection "tags" will be attributed to those IODs which are determined in accordance with the terms of the variation agreement to be:
(i) "social enterprises", being not-for-profit enterprises;
(ii) "knowledge based businesses", being potential businesses that: (i) do not own and/or are not based on patentable IP or are unlikely to generate patentable IP; and (ii) which are primarily reliant on know-how and copyright;
(iii) "licensing opportunities" (see further paragraph (d) below);
(iv) "lower value businesses", being companies which are anticipated to have a maximum potential value of no more than £5 million; and
(v) "vetoed opportunities", being commercial opportunities which would otherwise have been available for the parties to exploit together but in respect of which the relevant inventor is unwilling to work with the Company.

The Company will have no right to subscribe or otherwise acquire equity in such tagged IODs or to receive any percentage of the net revenue generated by licensing the IP the subject of the tagged IODs.

(d) however, in relation to IODs which are tagged because they are "licensing opportunities" and where:
(i) such licensing opportunity results from the conversion of a Group incubated company;
(ii) the Company establishes a company as a licensing vehicle for platform technology; and/or
(iii) the Company has otherwise had significant input (including finding the potential licensee and negotiating the commercial heads of terms with such licensee);

then those IODs will be managed by the Company and, in respect of (i) and (iii) above, the Company will be entitled to receive 30 per cent. of the net revenues received directly by the University of Leeds in respect thereof;

(e) the Company agrees that, in the three years from the date of the variation agreement (the "Initial Period"), it will work with the University of Leeds to seek to attain the following investment targets: (i) a base-line of grub fund investments of £200,000 per annum in aggregate; and (ii) a base-line of seed fund investments of £500,000 per annum in aggregate. Failure of the Company to attain these targets during the Initial Period will neither constitute a breach of the variation agreement nor entitle the University of Leeds to exercise the rights referred to in paragraph (f) below;
(f) the investment targets referred to in paragraph (e) above will be continually assessed during the Initial Period and alternative targets (which may be higher or lower) may be

agreed by the parties following the Initial Period. Failure to attain investment at the levels specified after the Initial Period shall entitle the University of Leeds to:

(i) place a moratorium on the payment of its share of profits from equity sales under the Original Agreement to the Company until the Company has attained investment at the levels specified; or
(ii) terminate or suspend the Company's exclusive right to disclosure of IODs as envisaged in the variation agreement;
(g) the parties will establish guidelines for managing the expectations of the University of Leeds' inventors as to the likely failure rate of grub funded projects, the likely causes for failure and potential strategies for mitigating any failures, as well as establishing agreed protocols for clean wind-ups of Leeds Spin-Out Companies which are not progressing from grub funding to seed investment or have otherwise failed;
(h) the Company will work with the University of Leeds to unlock approximately £200,000 per annum of external "proof of concept" funding via grants and other forms of investment;
(i) new valuation targets will apply as follows:
(i) Part One: a valuation component that captures the fair value of the equity portfolio as at 30 April 2010, which shall be subject to growth parameters at least in line with the fair value anticipated by the Company. However, should the growth of the value of the University of Leeds' equity holdings not outperform the FTSE 250 Index percentage growth performance by 10 per cent. per annum, then the University of Leeds shall have the right to terminate the agreement on 30 April 2017; and
(ii) Part Two: a valuation target for newly created ventures generated via this agreement from 17 March 2011 onwards. This target is in line with the target and experience from the date of the Original Agreement to the date of the variation agreement, being a target to achieve additional market capital valuation on top of that referred to in paragraph (i) above. This new valuation target will also be subject to an anticipated annual growth rate of 10 per cent. per annum over and above the FTSE 250 Index percentage growth performance (which shall be measured in respect of each new Leeds Spin-Out Company from the date of commitment of seed investment by the Company);
(j) provision for the University of Leeds to charge royalties on net sales (of not less than 1 per cent. but not greater than 2 per cent.) in the IP licences that it enters into with Leeds Spin-Out Companies formed after 17 March 2011. Formerly, IP was licensed to the Leeds Spin-Out Companies on a royalty-free basis. However, such royalties will only be charged:
(i) after the relevant business venture is generating profit;
(ii) after the date which is 24 months following the date of incorporation of the relevant Leeds Spin-Out Company;
(iii) where the annual financial statements of the relevant Leeds Spin-Out Company report EBIT in excess of £25,000 per annum for at least two concurrent years; and
(iv) after the University of Leeds' equity stake in the relevant Leeds Spin-Out Company has fallen below 5 per cent. on a fully diluted basis.

In the event that the Company is not applying the royalty model referred to above on a consistent basis, the University of Leeds shall have the rights referred to in paragraph (f) above.

(k) a party may terminate the variation agreement and the Original Agreement on 17 March 2014 (the "Break Date") by serving twelve months' notice in writing on the other parties at any time within the period of 30 days prior to the Break Date. If no such notice of termination is served, the next formal review of the variation agreement and the Original Agreement shall occur on 30 April 2017; and
(l) the activities of the University of Leeds under, and the operational management of, the Original Agreement and variation agreement, together with the on-going relationship between the parties shall, with effect from the date of the variation agreement, lie within the remit of three committees: the Intellectual Property Executive Committee, the Partnerships Operations Group and the Partnership Review Group, the purpose, methodology and membership of each is as detailed further in the variation agreement.

14.6 Summary of the agreement relating to the University of Bristol Partnership

14.6.1 Pursuant to a framework agreement dated 4 December 2005 and made between (1) the University of Bristol and (2) IP2IPO, the parties agreed certain arrangements with regard to the commercialisation of the IP created by the University of Bristol academic staff, students and third parties which vests in the University of Bristol ("Bristol IP"). Broadly summarised, these arrangements entitle IP2IPO to a 13.3 per cent. interest in the shares in any company established with a view to the commercialisation of Bristol IP (a "Bristol Spin-Out Company"), and an interest in investments from the £5m Bristol Fund in Bristol Spin-Out Companies.

The principal provisions of the framework agreement are as follows:

(a) IP2IPO will make the £5m Bristol Fund available to make seed capital investments in any Bristol Spin-Out Company made in accordance with the investment protocol set out in the framework agreement. IP2IPO is also able to invest the £5m Bristol Fund in companies formed to commercialise Bristol IP that is partially owned by the University of Bristol and partially owned by third parties;
(b) the University of Bristol has agreed that it will not amend its IP policy (other than by reason of any change of law) with the objective of fundamentally avoiding or materially diminishing any interest which IP2IPO may have in Bristol Spin-Out Companies and/or which IP2IPO have under the framework agreement;
(c) IP2IPO has the first right to make seed capital investments in Bristol Spin-Out Companies. The framework agreement recognises that there may be some circumstances where the founder of a Bristol Spin-Out Company may not want to accept seed capital from the £5m Bristol Fund and in such a case the University of Bristol will not be in breach of its obligations under the framework agreement. There are a number of other sources of seed capital finance (including a university challenge fund) who have a co-investment right alongside IP2IPO but IP2IPO has the right to invest a minimum of 60 per cent. of the total seed capital invested in the Bristol Spin-Out Company;
(d) once the £5m Bristol Fund has been fully invested, IP2IPO has the right but not the obligation to extend the £5m Bristol Fund;
(e) investment decisions in relation to Bristol Spin-Out Companies will be made by an investment committee. The investment committee comprises the Director of Enterprise at the University of Bristol, three persons nominated by the University of Bristol, a director of IP2IPO (who shall be chairman of the meeting) and two persons nominated by IP2IPO. The chairman of the investment committee may veto what would have been

an affirmative decision of the investment committee, however such veto can only be exercised once in any twelve month period;

(f) the £5m Bristol Fund shall not be entitled to make investments in any Bristol Spin-Out Company in any subsequent fund raising rounds;
(g) the £5m Bristol Fund will invest on the basis of a standard valuation for all Bristol Spin-Out Companies, namely a pre-money valuation of £750,000 at the point at which the £5m Bristol Fund invests. This valuation assumes that the Bristol Spin-Out Company will have already issued shares to the University of Bristol and academic staff employed by the University of Bristol who were substantially involved in the generation of the Bristol IP relative to that Bristol Spin-Out Company and, as appropriate, the Bristol Spin-Out Company initial management team;
(h) it is envisaged that the £5m Bristol Fund would be invested over a period of about five years at a rate of about £1 million per annum;
(i) IP2IPO is also obliged to provide certain services to the University of Bristol, including the provision of a secondee to work with the University of Bristol on technology transfer and the commercialisation of Bristol IP;
(j) the University of Bristol recognises that IP2IPO may wish to supply business development services to any Bristol Spin-Out Company and it shall not object to the same being so provided;
(k) the University of Bristol undertakes not to enter any similar agreement or arrangement with third parties during the term of this framework agreement without the consent of IP2IPO;
(l) a steering committee (comprising three representatives of IP2IPO and three representatives of the University of Bristol) shall be established to conduct those activities set out in the framework agreement, including, monitoring the progression of the relationship between the parties, identifying areas for improvement and suggesting and agreeing improvements and changes to the arrangements contained in the framework agreement and considering and suggesting solutions in relation to any issue arising between the parties in relation to the framework agreement;
(m) IP2IPO warrants to the University of Bristol that it has the capacity and authority to enter into and perform the framework agreement and that the framework agreement has been duly executed;
(n) the framework agreement commenced on 4 December 2005 and subsists for a period of 25 years from that date, subject to the rights to terminate earlier as set out immediately below;
(o) the framework agreement may be terminated as follows:
(i) immediately by notice in writing given either by the University of Bristol or by IP2IPO if: (aa) either party or any member of that party's group are in material breach of any of its obligations under the framework agreement and (in relation to breaches capable of being remedied), fails to remedy the same within a period of 30 days after written notice of the breach and the breach is both material and has been "finally determined" (as defined in the framework agreement); or (bb) that party is suffering some form of insolvency (as more particularly described in the framework agreement);
(ii) IP2IPO may terminate the framework agreement if there has been, in summary, a change of law or tax change which results in it no longer being economic for IP2IPO to invest in Bristol Spin-Out Companies or there being a fundamental and

drastic shortage of investment opportunities available to IP2IPO (for example no formal proposals being received by the investment committee for a two year period) or the University of Bristol ceases to own IP created at the University of Bristol which, in any such case, cannot be rectified or, as the case may be, rectified after notice;

(iii) the University of Bristol may terminate the framework agreement if during the term:
(1) the £5m Bristol Fund has not invested at least £250,000 in any consecutive twelve month period (subject to the Investment Committee having received reasonably complete formal proposals for the same) and seed capital investment of not less than £250,000 in aggregate having been made in not less than two Bristol Spin-out Companies based or largely based on Bristol IP by third parties in that period and formal proposals having been made in respect of such opportunities to the Investment Committee in that period; or
(2) the Company having materially failed to meet its performance obligations and, in relation to breaches which are remediable, the Company having failed to remedy the same within a period of 30 days after written notice of the breach by the University of Bristol, and any such breach (whether remediable or not) continuing notwithstanding that the matter has been referred to and considered by the Steering Committee (but such referral shall not give rise to an automatic commitment to follow the further dispute resolution procedures); or
(3) the Company having lost more than 50 per cent. of its "Key Personnel" which they have not been able to replace within a period of twelve months, save where the business need for the skills of such person are no longer required in the performance of the services under the agreement.

For these purposes "Key Personnel" means the Board as at 31 December each year; or

(4) a material change of law or change in taxation policy or practice which results in it no longer being economic for the University of Bristol (in its reasonable opinion) to commercialise IP through Spin-out Companies; or
(5) any person (other than a Group Company acquiring control (within the meaning of section 840 Income and Corporation Taxes Act 1988) of IP2IPO.

Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.

14.7 Summary of the agreement relating to the University of Surrey Partnership

14.7.1 Pursuant to a framework agreement dated 9 February 2006 and made between (1) the University of Surrey and (2) IP2IPO, the parties agreed certain arrangements with regard to the commercialisation of the IP created by the University of Surrey academic staff, students and third parties which vests in the University of Surrey ("Surrey IP"). Broadly summarised, these arrangements entitle IP2IPO to a 13.3 per cent. interest in the shares in any company established with a view to the commercialisation of Surrey IP (a "Surrey Spin-Out Company"), and an interest in investments from the £5m Surrey Fund in Surrey Spin-Out Companies.

The principal provisions of the framework agreement are as follows:

(a) IP2IPO will make the £5m Surrey Fund available to make seed capital investments in any Surrey Spin-Out Company made in accordance with the investment protocol set out in the framework agreement. IP2IPO is also able to invest the £5m Surrey Fund in companies formed to commercialise Surrey IP that is partially owned by the University of Surrey and partially owned by third parties;
(b) the University of Surrey has agreed that it will not amend its IP policy (other than by reason of any change of law) with the objective of fundamentally avoiding or materially diminishing any interest which IP2IPO may have in Surrey Spin-Out Companies and/or which IP2IPO have under the framework agreement;
(c) IP2IPO has the first right to make seed capital investments in Surrey Spin-Out Companies. The framework agreement recognises that there may be some circumstances where the founder of a Surrey Spin-Out Company may not want to accept seed capital from the £5m Surrey Fund and in such a case the University of Surrey will not be in breach of its obligations under the framework agreement. There are a number of other sources of seed capital finance (including a university challenge fund) who have a co-investment right alongside IP2IPO but IP2IPO has the right to invest a minimum of 60 per cent. of the total seed capital invested in the Surrey Spin-Out Company;
(d) once the £5m Surrey Fund has been fully invested, IP2IPO has the right but not the obligation to extend the £5m Surrey Fund;
(e) investment decisions in relation to Surrey Spin-Out Companies will be made by an investment committee. The investment committee comprises the Director of Enterprise at the University of Surrey, three persons nominated by the University of Surrey, a director of IP2IPO (who shall be chairman of the meeting) and two persons nominated by IP2IPO. The chairman of the investment committee may veto what would have been an affirmative decision of the investment committee, however such veto can only be exercised once in any twelve month period;
(f) the £5m Surrey Fund shall not be entitled to make investments in any Surrey Spin-Out Company in any subsequent fund raising rounds;
(g) the £5m Surrey Fund will invest on the basis of a standard valuation for all Surrey Spin-Out Companies, namely a pre-money valuation of £750,000 at the point at which the £5m Surrey Fund invests. This valuation assumes that the Surrey Spin-Out Company will have already issued shares to the University of Surrey and academic staff employed by the University of Surrey who were substantially involved in the generation of the Surrey IP relative to that Surrey Spin-Out Company and, as appropriate, the Surrey Spin-Out Company initial management team;
(h) it is envisaged that the £5m Surrey Fund will be invested over a period of about seven years at a rate of about £0.7 million per annum;
(i) IP2IPO is also obliged to provide certain services to the University of Surrey, including the provision of a secondee to work with the University of Surrey on technology transfer and the commercialisation of Surrey IP;
(j) the University of Surrey recognises that IP2IPO may wish to supply business development services to any Surrey Spin-Out Company and it shall not object to the same being so provided;
(k) the University of Surrey undertakes not to enter any similar agreement or arrangement with third parties during the term of this framework agreement without the consent of IP2IPO;
(l) a steering committee (comprising three representatives of IP2IPO and three representatives of the University of Surrey) shall be established to conduct those activities set out in the framework agreement, including, monitoring the progression of the relationship between the parties, identifying areas for improvement and suggesting and agreeing improvements and changes to the arrangements contained in the framework agreement and to consider and suggest solutions in relation to any issue arising between the parties in relation to the framework agreement;
(m) IP2IPO warrants to the University of Surrey that it has the capacity and authority to enter into and perform the framework agreement and that the framework agreement has been duly executed;
(n) the framework agreement commenced on 9 February 2006 and subsists for a period of 25 years from that date, subject to the rights to terminate earlier as set out immediately below;
(o) the framework agreement may be terminated as follows:
(i) immediately by notice in writing given either by the University of Surrey or by IP2IPO if: (a) either party or any member of that party's group are in material breach of any of its obligations under the framework agreement and (in relation to breaches capable of being remedied), fails to remedy the same within a period of 30 days after written notice of the breach and the breach is both material and has been "finally determined" (as defined in the framework agreement); or (b) that party is suffering some form of insolvency (as more particularly described in the framework agreement); and
(ii) IP2IPO may terminate the framework agreement if there has been, in summary, a change of law or tax change which results in it no longer being economic for IP2IPO to invest in Surrey Spin-Out Companies or there being a fundamental and drastic shortage of investment opportunities available to IP2IPO (for example no formal proposals being received by the investment committee for a two year period) or the University of Surrey ceases to own IP created at the University of Surrey which, in any such case, cannot be rectified or, as the case may be, rectified after notice;
(p) the University of Surrey may terminate the framework agreement if during the term:
(i) the £5m Surrey Fund has not invested at least £250,000 in any consecutive twelve month period (subject to the investment committee having received reasonably complete formal proposals for same) and seed capital investment of not less than £250,000 in aggregate having been made in not less than two Surrey Spin-out Companies based or largely based on Surrey IP by third parties in that period and formal proposals having been made in respect of such opportunities to the investment committee in that period;
(ii) IP2IPO having materially failed to meet its performance obligations and, in relation to breaches which are remediable, IP2IPO having failed to remedy the same within a period of 30 days after written notice of the breach by the University of Surrey, and any such breach (whether remediable or not) continuing notwithstanding that the matter has been referred to and considered by the steering committee (but such referral shall not give rise to an automatic commitment to follow the further dispute resolution procedures set out in the agreement);
(iii) a material change of law or change in taxation policy or practice which results in it no longer being economic for the University of Surrey (in its reasonable opinion) to commercialise IP through Surrey Spin-Out Companies; or

(iv) any person (other than a Group company acquiring control (within the meaning of section 840 Income and Corporation Taxes Act 1988) of IP2IPO.

Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements. The Company and the University of Surrey are currently in negotiations in respect of a variation to the existing agreement.

14.8 Summary of the agreements relating to the University of York Partnership

14.8.1 Framework Agreement

Pursuant to a framework agreement dated 10 March 2006 and made between (1) the University of York and (2) IP2IPO, the parties agreed certain arrangements with regard to the commercialisation of the IP created by the University of York academic staff and others which vests in the University of York (but excluding CNAP IP) ("York IP"). Broadly summarised, these arrangements entitle IP2IPO to a 15 per cent. interest in the shares in any company established with a view to the commercialisation of York IP (a "York Spin-Out Company"), and an interest in investments from the £5m York Fund in York Spin-Out Companies. The initial 15 per cent. interest in York Spin-Out Companies rises to 25 per cent. if the £5m York Fund makes an investment in that Spin-Out Company.

The principal provisions of the framework agreement are as follows:

(a) IP2IPO Limited will make the £5m York Fund available to make seed capital investments in any York Spin-Out Company made in accordance with the investment protocol set out in the framework agreement. IP2IPO is also able to invest the £5m York Fund in companies formed to commercialise York IP that is partially owned by the University of York and partially owned by third parties;
(b) the University of York has agreed that it will not amend its IP policy (other than by reason of any change of law) with the objective or effect of fundamentally avoiding or materially diminishing any interest which IP2IPO may have in York Spin-Out Companies and/or which IP2IPO has under the framework agreement;
(c) IP2IPO has the first right to make seed capital investments in York Spin-Out Companies. The framework agreement recognises that there may be some circumstances where the founder of a York Spin-Out Company may not want to accept seed capital from the £5m York Fund and in such a case University of York will not be in breach of its obligations under the framework agreement. There are a number of other sources of seed capital finance who have a co-investment right alongside IP2IPO but IP2IPO has the right to invest a minimum of 60 per cent. of the total seed capital invested in the York Spin-Out Company;
(d) once the £5m York Fund has been fully invested, IP2IPO has the right but not the obligation to extend the £5m York Fund;
(e) investment decisions in relation to York Spin-Out Companies will be made by an investment committee. The investment committee comprises a senior officer of the University of York, two other persons nominated by the University of York, a director of IP2IPO and two persons nominated by IP2IPO. Meetings of the investment committee are to be chaired by the senior officer of the University of York or his nominee. The parties may veto what would have been an affirmative decision of the investment committee, however such veto can only be exercised once in any twelve month period;
(f) the £5m York Fund shall not be entitled to make investments in any York Spin-Out Company in any subsequent fund raising rounds;
(g) the £5m York Fund will invest on the basis of a standard valuation for all York Spin- Out Companies, namely a pre-money valuation of £750,000 at the point at which the £5m

York Fund invests. This valuation assumes that the York Spin-Out Company will have already issued shares to the University of York and academic staff employed by the University of York who were substantially involved in the generation of the York IP relative to that York Spin-Out Company and, as appropriate, the York Spin-Out Company initial management team. The parties will review the standard pre-money valuation following each seventh year of the agreement by reference to the pre-money valuations at which other funds are invested at the relevant time by IP2IPO in other university collaborations;

(h) it is envisaged that the £5m York Fund will be invested over a period of about seven years at a rate of about £0.7 million per annum;
(i) IP2IPO is also obliged to provide certain services to the University of York, including the provision of personnel equivalent to not less than two full time persons to work with the University of York on technology transfer and the commercialisation of York IP;
(j) the University of York recognises that IP2IPO may wish to supply business development services to any York Spin-Out Company and it shall not object to the same being so provided;
(k) the University of York undertakes not to enter any agreement or arrangement with third parties during the term of this framework agreement which gives rise to a material conflict with the intent and objectives of this agreement without the consent of IP2IPO;
(l) a steering committee (comprising an equal number of senior representatives of each of the University of York and IP2IPO) shall be established to conduct those activities set out in the framework agreement, including, monitoring the progression of the relationship between the parties, identifying areas for improvement and suggesting and agreeing improvements and changes to the arrangements contained in the framework agreement and to consider and suggest solutions in relation to any issue arising between the parties in relation to the framework agreement;
(m) IP2IPO warrants to the University of York that it has the capacity and authority to enter into and perform the framework agreement and that the framework agreement has been duly executed;
(n) the framework agreement commenced on 10 March 2006 and subsists for a period of 25 years from that date, subject to the rights to terminate earlier as set out immediately below;
(o) the framework agreement may be terminated as follows:
(i) immediately by notice in writing given either by the University of York or by IP2IPO if: (a) either party or any member of that party's group are in material breach of any of its obligations under the framework agreement and (in relation to breaches capable of being remedied), fails to remedy the same within a period of 30 days after written notice of the breach and the breach is both material and, save in certain limited circumstances, has been "finally determined" (as defined in the framework agreement); or (b) that party is suffering some form of insolvency (as more particularly described in the framework agreement);
(ii) P2IPO may terminate the framework agreement if there has been, in summary, a change of law or tax change which results in it no longer being economic for IP2IPO to invest in York Spin-Out Companies or there being a fundamental and drastic shortage of investment opportunities available to IP2IPO (for example no formal proposals being received by the investment committee for a two year period) or the University of York ceases to own IP created at the University of York or the merger of the University of York with another institution of equivalent

size and scale which, in any such case, cannot be rectified or, as the case may be, rectified after notice;

(iii) the University of York may terminate the framework agreement if during the term IP2IPO has failed to provide monies from the £5m York Fund within a reasonable period after the investment committee has approved an investment proposal, or there has been a material change in law which results in it no longer being economic for the University of York to commercialise York IP through York Spin-Out Companies, or IP2IPO has failed to reasonably satisfy the University of York that it has the funds to meet the obligations of the £5m York Fund such that the University of York in good faith considers that IP2IPO may not be in a position to meet the obligations in relation to the £5m York Fund as and when they fall due; and
(iv) by either party once the £5m York Fund has been fully invested if the collaboration between the parties has been proceeding with a reasonable pipeline of IP and York Spin-Out Company opportunities and IP2IPO does not extend the £5m York Fund.

14.8.2 Side Agreement to the Framework Agreement

Pursuant to a side agreement to the framework agreement dated 27 March 2009 between (1) the University of York and (2) IP2IPO, the parties agreed to certain changes to the rights and obligations under the framework agreement. Broadly summarised, the changes provide that IP2IPO no longer has the obligation to provide any one or more full time employees and shall instead provide the University of York with assistance and resource on an "as and when needed" basis or in response to the University of York's reasonable request.

The principal provisions of the side agreement are as follows:

(a) where IP2IPO is informed of any new opportunity it shall have one month to evaluate such opportunity and to request that such opportunity be granted Opportunity Evaluation Status ("OES");
(b) IP2IPO shall have a further five months from the date on which OES is granted to evaluate the opportunity and to request that such opportunity is granted Active Opportunity Status ("AOS") by providing the University of York with a written proposal setting out proposals for the commercialisation of the relevant York IP by way of a York Spin-Out Company;
(c) if the University of York opts to move the opportunity to AOS and proceed with the creation of a York Spin-Out Company or an element of grub funding, IP2IPO agrees to provide business building assistance to develop the early proposition and onwards towards securing and completing see and follow on venture capital funding;
(d) in respect of each York Spin-Out Company which obtains AOS, IP2IPO shall subscribe for 25 per cent. of the initial equity in cash at par;
(e) in respect of each York Spin-Out Company which does not obtain AOS but which IP2IPO recommended should proceed to AOS, IP2IPO will subscribe (in each case on or before the University of York assigns or licences the relevant York IP to the York Spin-Out Company) for 5 per cent. of the initial equity in cash at par;
(f) IP2IPO shall have no right or entitlement in respect of "Out Licensing" and/or to any "Licence Fees" (as defined in the framework agreement); and
(g) the term of the side agreement was for a period of 12 months, and the parties agreed that at least 30 days prior to the expiry of this period the steering committee shall formally review the relationship following which they shall commence negotiations to agree

appropriate permanent amendments to the framework agreement. To the extent that the parties cannot agree on the amendments, the provisions of the framework agreement shall automatically be reinstated on an unamended basis.

Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements. The Company and the University of York are currently in discussions to review and streamline the operational processes governing the relationship.

14.9 Summary of agreements relating to the IP Venture Fund

14.9.1 Management Agreement

Pursuant to a management agreement dated 6 July 2006 between (1) IP Venture Fund (GP) Limited (the "General Partner") and (2) Top Technology Ventures Limited (the "Manager"), the parties agreed that the Manager will act as a discretionary manager of the IP Venture Fund so as to enable the General Partner to fulfil its obligations under the limited partnership agreement as detailed above.

The Manager's responsibilities under the agreement include sourcing, evaluating and negotiating investment opportunities, monitoring investments and participating in the management of the businesses in which the IP Venture Fund had invested and arranging for the realisation of investments.

Under the agreement, the Manager is required to exercise such degree of care and diligence as a prudent investment manager would reasonably be expected to exercise in the selection and management of the IP Venture Fund's portfolio of investments.

The management agreement may be terminated with immediate effect by either party by written notice to the other provided that the Manager shall not be entitled to terminate the agreement while the General Partner is the general partner of the IP Venture Fund. The agreement shall terminate on the happening of any of the following events:

(a) the termination of the IP Venture Fund;
(b) the removal or withdrawal of the General Partner as general partner of the IP Venture Fund unless the General Partner is replaces by an associate;
(c) the Manager ceasing to be authorised under FSMA to manage or operate the IP Venture Fund or to act as manager of the IP Venture Fund's investment portfolio;
(d) the Manager committing a material breach of its obligations (including if the breach is capable of being remedied and the Manager fails to remedy the same within 20 business days after service of notice); or
(e) the insolvency, dissolution of liquidation of the Manager.

The Manager shall be entitled to be paid by the General Partner 100 per cent. of the amounts the General Partner receives from the IP Venture Fund. In addition, the Manager shall be entitled to accept and retain all syndication fees, corporate finance fees, any other transaction fees, directors' fees and management fees earned and received by it from the company in which the IP Venture Fund has invested or from third party investors.

The Manager shall be free to render similar services to third parties, subject to the provision of services to the IP Venture Fund not being materially adversely affected thereby.

14.9.2 Limited Partnership Agreement

Pursuant to a limited partnership agreement dated 1 August 2007 between (1) IP Venture Fund (GP) Limited (the "General Partner") and (2) IP Venture Fund (FP) Limited Partnership (the "Founding Partner"), the parties agreed certain changes to the IP Venture Fund which was established on 21 June 2006 by an agreement between the General Partner and Magnus Goodlad. Pursuant to a supplemental limited partnership agreement dated 5 July 2006 Magnus Goodlad transferred his entire interest as a limited partner to the Founding Partner. The Founding Partner has made a capital contribution of £772,475 to the IP Venture Fund. The Company has subscribed for 3.09 participations in the IP Venture Fund, amounting to a total of £3,090,000. Each of the investors in the IP Venture Fund is required to advance loans pro rata their number of participations held up to an aggregate amount of £999,990 in respect of each participation subscribed by it.

IP Venture Fund was established by Top Technology Ventures Limited ("TTVL") on 21 June 2006 to carry on the business of identifying, making, monitoring and realising investments in venture capital opportunities. The 2007 agreement amends and supersedes the original 2006 agreement such that the purpose of the IP Venture Fund is to carry on the business of an investor and to identify, research and negotiate investment opportunities and make and monitor the progress of and arrange the sale of investments (which include, but are not limited to, the purchase, acquisition, sale and disposal of ordinary shares, preference shares of venture capital transactions) with the principal objective of providing investors (as limited partners in the IP Venture Fund) with a high overall rate of return by means of both income and capital. The IP Venture Fund will not make any investment in venture capital or private equity funds or any other pooled investment vehicle.

The responsibility for the operation of the IP Venture Fund is vested exclusively in the General Partner, who may appoint a manager to operate the IP Venture Fund and manage its investment portfolio on a discretionary basis. All of the income of the partners will be distributed to them at such times as the General Partner in its discretion decides. Distributions of a capital nature shall be made as soon as practicable after the relevant amount becomes available for distribution and in any event no later than two months after receipt by the IP Venture Fund.

The term of the IP Venture Fund shall continue until the earlier of the expiration of ten years from the final closing date (as defined in the agreement) or 18 December 2017 although the life of the IP Venture Fund may be extended at any time prior to these dates by the election of the General Partner and unanimous written consent of all investors, by a period or consecutive periods not exceeding two years in aggregate.

The General Partner may not resign during the term of the IP Venture Fund unless the investors provide their consent. The limited partnership agreement shall terminate upon the happening of any of the following events:

(a) the bankruptcy, insolvency, dissolution or liquidation of the General Partner (save where the Partnership may be reconstituted pursuant to the agreement);
(b) the agreement to such termination of the General Partner and investors;
(c) the resignation or removal of the General Partner (save where the limited partnership may be reconstituted pursuant to the agreement);
(d) the limited partnership ceasing to be fiscally transparent in the UK or the General Partner determining that it is illegal for the limited partnership to continue; or
(e) all the assets of the limited partnership are disposed of and there is no ability to make new investments.

14.10 Summary of the agreements relating to the Queen Mary Partnership

14.10.1 Framework Agreement

Pursuant to a framework agreement dated 20 July 2006 and made between (1) Queen Mary and Westfield College, University of London ("QMUL") and (2) IP2IPO, the parties agreed certain arrangements with regard to the commercialisation of the IP created by QMUL academic staff, students and third parties which vests in QMUL ("QMUL IP"). Broadly summarised, these arrangements entitle IP2IPO to a 10 per cent. of all licence fees and a 13.3 per cent. interest in the shares in any company established with a view to the commercialisation of QMUL IP (a "QMUL Spin-Out Company").

The principal provisions of the framework agreement are as follows:

(a) IP2IPO will make the £5m QMUL Fund available to make seed capital investments in any QMUL Spin-Out Company made in accordance with the investment protocol set out in the framework agreement. IP2IPO is also able to invest the £5m QMUL Fund in companies formed to commercialise QMUL IP that is partially owned by QMUL and partially owned by third parties;
(b) QMUL has agreed that it will not amend its IP policy (other than by reason of any change of law) with the objective of fundamentally avoiding or materially diminishing any interest which IP2IPO may have in QMUL Spin-Out Companies and/or which IP2IPO have under the framework agreement;
(c) IP2IPO has the first right to make seed capital investments in QMUL Spin-Out Companies. The framework agreement recognises that there may be some circumstances where the founder of a QMUL Spin-Out Company may not want to accept seed capital from the £5m QMUL Fund and in such a case QMUL will not be in breach of its obligations under the framework agreement. There are a number of other sources of seed capital finance which have a co-investment right alongside IP2IPO;
(d) once the £5m QMUL Fund has been fully invested, IP2IPO has the right but not the obligation to extend the £5m QMUL Fund;
(e) investment decisions in relation to QMUL Spin-Out Companies will be made by an investment committee. The investment committee comprises the Director of the Innovation & Enterprise division of QMUL, three persons nominated by QMUL, a director of IP2IPO (who shall be chairman of the meeting) and two persons nominated by IP2IPO. The chairman of the investment committee may veto what would have been an affirmative decision of the investment committee, however such veto can only be exercised once in any twelve month period;
(f) the £5m QMUL Fund will be invested on the basis of a standard valuation for all QMUL Spin-Out Companies, namely a pre-money valuation of £750,000 at the point at which the £5m QMUL Fund invests. This valuation assumes that the QMUL Spin-Out Company will have already issued shares to QMUL and academic staff employed by QMUL who were substantially involved in the generation of the QMUL IP relative to that QMUL Spin-Out Company and, as appropriate, the QMUL Spin-Out Company initial management team;
(g) it is envisaged that the £5m QMUL Fund will be invested over a period of about seven years at a rate of about £0.4 million per annum to £0.7 million per annum;
(h) IP2IPO is also obliged to provide certain services to QMUL, including the provision of personnel equivalent to one full time employee to be fully integrated into QMUL Innovation & Enterprise to work with QMUL on commercialisation of QMUL IP;
(i) QMUL recognises that IP2IPO may wish to provide business development and other services to any QMUL Spin-Out Company and it shall not object to the same being so provided;
(j) QMUL undertakes not to enter any similar agreement or arrangement with third parties during the term of this framework agreement without the consent of IP2IPO;
(k) a steering committee (comprising three representatives of IP2IPO and three representatives of QMUL) shall be established to conduct those activities set out in the framework agreement, including, monitoring the progression of the relationship between the parties, identifying areas for improvement and suggesting and agreeing improvements and changes to the arrangements contained in the framework agreement and to discuss and resolve areas of conflict or other problems on an informal basis as well as providing part of a formal dispute resolution process in relation to any issue arising between the parties in relation to the framework agreement;
(l) IP2IPO warrants to QMUL that it has the capacity and authority to enter into and perform the framework agreement and that the framework agreement has been duly executed;
(m) the framework agreement commenced on 20 July 2006 and subsists for a period of 25 years from that date, subject to the rights to terminate earlier as set out immediately below;
(n) the framework agreement may be terminated as follows:
(i) immediately by notice in writing given either by QMUL or by IP2IPO if: (a) either party or any member of that party's group are in material breach of any of its obligations under the framework agreement and (in relation to breaches capable of being remedied), fails to remedy the same within a period of 90 days after written notice of the breach; or (b) that party is suffering some form of insolvency (as more particularly described in the framework agreement); and
(ii) IP2IPO may terminate the framework agreement if there has been, in summary: (a) a change of law or tax change which results in it no longer being economic for IP2IPO to invest in QMUL Spin-Out Companies; or (b) there being a fundamental and drastic shortage of investment opportunities available to IP2IPO (for example no formal proposals being received by the investment committee for a three year period); (c) QMUL ceasing to own all or substantially all of the IP which would otherwise vest in QMUL; or (d) the merger of QMUL with another institution of equivalent size and scale; and
(o) QMUL may terminate the framework agreement if during the term:
(i) IP2IPO has not invested in a QMUL Spin-Out Company within a reasonable period following a validly constituted investment committee approval of an investment proposal submitted and bindingly approved in accordance with the investment protocol;
(ii) IP2IPO has materially failed to meet its performance obligations, giving rise to a persistent and continuing failure to service the requirements of potential QMUL Spin-Out Companies which has a profound and materially adverse affect on the ability to launch QMUL Spin-Out Companies;
(iii) a material change of law or change in taxation policy or practice which results in it no longer being economic for QMUL (in its reasonable opinion) to commercialise IP through QMUL Spin-Out Companies;
(iv) any person (other than a Group company) acquiring control (within the meaning of section 840 Income and Corporation Taxes Act 1988) of IP2IPO; or
(v) IP2IPO has not extended the £5m QMUL Fund by the tenth anniversary of the date of the framework agreement by an additional £3 million where the arrangements between the parties are proceeding positively with a pipeline of University IP and QMUL Spin-Out Company opportunities being generated.

14.10.2 Variation Agreement

Pursuant to a variation agreement dated 23 January 2014 (the "Variation Agreement"), the parties agreed certain variations, clarifications and supplemental terms to the Original Agreement which, in the event of a direct conflict, prevail over the terms of the Original Agreement.

The principal provisions of the variation agreement are as follows:

(a) the Company's obligation of providing a full time employee, "FTE" to QMLU (such as this term is defined in the Original Agreement), is removed and replaced with an IP2IPO Representative;
(b) a revised and constructive way in which the IP2IPO Representative (and members of IP2IPO's client sourcing team) will work with Queen Mary Innovation Limited ("QMI") on the ground to identify commercialisation opportunities is suggested;
(c) the parties agreed that IP2IPO's right to a share of licensing fees (as described in the first paragraph of paragraph 14.10.1 above) shall be removed save where (a) there is the conversion of an IP2IPO incubated company into an out-licensing opportunity, (b) IP2IPO establish a company as a licensing vehicle for platform technology, and/or (c) IP2IPO has otherwise had significant input in respect of the relevant Out Licensing opportunity (which would include both finding the potential licensee and undertaking negotiation of the commercial head of terms with such party);
(d) IP2IPO initial founder equity right (as described in the first paragraph of paragraph 14.10.1 above) shall be removed and replaced with a warrant over an equivalent amount of shares in the relevant spin-out company exercisable at seed investment stage, save in situations whereby IP2IPO shall have expended efforts at an early stage to work up the relevant commercialisation opportunity to the stage where it is presented to the investment committee of IP2IPO but that the relevant opportunity is declined for investment from IP2IPO and as a consequence the relevant spin-out company goes onto raise money form a third party and or achieve an exit event (as defined in the relevant warrant instrument), then QMUL shall, until such time as an exit event is achieved, hold such number of equity shares in the relevant spin-out company as is equal to the proportion of Initial Equity that IP2IPO would have been entitled under the Original Agreement, being 13.3 per cent. of the initial equity, on bare trust for IP2IPO; in the even that QMUL is unable to hold such equity shares on bare trust for IP2IPO, QMUL agrees and undertakes to ensure that IP2IPO receives an equivalent proportion of its share of any realisation proceeds generated by the exit event and actually received by QMUL in respect thereof.
(e) more regular reviews of the agreement between the parties are set down.

Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.

14.11 Summary of the agreements relating to the University of Bath Partnership

14.11.1 Framework Agreement

Pursuant to a framework agreement dated 7 September 2006 and made between (1) the University of Bath, (2) IP2IPO and (3) IP Group, the parties agreed certain arrangements with regard to the commercialisation of the IP created by the University of Bath academic staff, students and third parties which vests in the University of Bath ("Bath IP"). Broadly summarised, these arrangements entitle IP2IPO to a 20 per cent. interest in the shares in any company established with a view to the commercialisation of Bath IP (a "Bath Spin-Out Company"), a 20 per cent. interest in the licence fees of the University of Bath and an interest in investments from the £5m Bath Fund in Bath Spin-Out Companies. As noted in paragraph 14.11.3 below, the Group's entitlements do not arise in the event that the Group or its employees have not been actively involved in developing the relevant opportunity.

The principal provisions of the framework agreement are as follows:

(a) IP2IPO will make the £5m Bath Fund available to make seed capital investments in any Bath Spin-Out Company made in accordance with the investment protocol set out in the framework agreement. IP2IPO is also able to invest the £5m Bath Fund in companies formed to commercialise Bath IP that is partially owned by the University of Bath and partially owned by third parties;
(b) the University of Bath has agreed that it will not amend its IP policy (other than by reason of any change of law) with the objective of fundamentally avoiding or materially diminishing any interest which IP2IPO may have in Bath Spin-Out Companies and/or which IP2IPO have under the framework agreement;
(c) IP2IPO has the first right to make seed capital investments in Bath Spin-Out Companies. The framework agreement recognises that there may be some circumstances where the founder of a Bath Spin-Out Company may not want to accept seed capital from the £5m Bath Fund and in such a case the University of Bath will not be in breach of its obligations under the framework agreement. There are a number of other sources of seed capital finance (including the Sulis Seedcorn Fund) who have a co-investment right alongside IP2IPO but IP2IPO has the right to invest a minimum of 60 per cent. of the total seed capital invested in the Bath Spin Out Company;
(d) once the £5m Bath Fund has been fully invested, IP2IPO has the right but not the obligation to extend the £5m Bath Fund;
(e) investment decisions in relation to Bath Spin-Out Companies will be made by an investment committee. The investment committee comprises the Director of the Research and Innovation Services division of the University of Bath, three persons nominated by the University of Bath, a director of IP2IPO (who shall be chairman of the meeting) and two persons nominated by IP2IPO. The chairman of the investment committee may veto what would have been an affirmative decision of the investment committee, however such veto can only be exercised once in any twelve month period;
(f) the £5m Bath Fund will invest on the basis of a standard valuation for all Bath Spin-Out Companies, namely a pre-money valuation of £750,000 at the point at which the £5m Bath Fund invests. This valuation assumes that the Bath Spin-Out Company will have already issued shares to the University of Bath and academic staff employed by the University of Bath who were substantially involved in the generation of the Bath IP relative to that Bath Spin-Out Company and, as appropriate, the Bath Spin-Out Company initial management team;
(g) it is envisaged that the £5m Bath Fund will be invested over a period of about seven years at a rate of about £0.7 million per annum;
(h) IP2IPO is also obliged to provide certain services to the University of Bath, including the provision of a secondee to work with the University of Bath on technology transfer and the commercialisation of Bath IP;
(i) the University of Bath recognises that IP2IPO may wish to supply advisory services to any Bath Spin-Out Company and it shall not object to the same being so provided;
(j) the University of Bath undertakes not to enter any similar agreement or arrangement with third parties during the term of this framework agreement without the consent of IP2IPO;
(k) a steering committee (comprising three representatives of IP2IPO and three representatives of the University of Bath) shall be established to conduct those activities set out in the framework agreement, including, monitoring the progression of the relationship between the parties, identifying areas for improvement and suggesting and agreeing improvements and changes to the arrangements contained in the framework agreement and to discuss and resolve areas of conflict or other problems on an informal basis as well as providing part of a formal dispute resolution process in relation to any issue arising between the parties in relation to the framework agreement;
(l) IP2IPO warrants to the University of Bath that it has the capacity and authority to enter into and perform the framework agreement and that the framework agreement has been duly executed;
(m) the framework agreement commenced on 7 September 2006 and subsists for a period of 25 years from that date, subject to the rights to terminate earlier as set out immediately below;
(n) the framework agreement may be terminated as follows:
(i) immediately by notice in writing given either by the University of Bath or by IP2IPO if: (a) either party or any member of that party's group are in material breach of any of its obligations under the framework agreement and (in relation to breaches capable of being remedied), fails to remedy the same within a period of 90 days after written notice of the breach; or (b) that party is suffering some form of insolvency (as more particularly described in the framework agreement); and
(ii) IP2IPO may terminate the framework agreement if there has been, in summary: (a) a change of law or tax change which results in it no longer being economic for IP2IPO to invest in Bath Spin-Out Companies; or (b) there being a fundamental and drastic shortage of investment opportunities available to IP2IPO (for example no formal proposals being received by the investment committee for a three year period) or (c) the University of Bath ceases to own IP created at the University of Bath;
(o) the University of Bath may terminate the framework agreement if during the term:
(i) the £5m Bath Fund has not invested cash for equity in accordance with a decision of the investment committee within 20 working days of such decision being made (unless otherwise agreed);
(ii) the £5m Bath Fund has not invested at least £250,000 in any consecutive twelve month period (subject to the investment committee having received reasonably complete formal proposals for same) and seed capital investment of not less than £250,000 in aggregate having been made in not less than two Bath Spin-out Companies based or largely based on Bath IP by third parties in that period and formal proposals having been made in respect of such opportunities to the investment committee in that period;
(iii) IP2IPO having materially failed to meet its performance obligations and, in relation to breaches which are remediable, IP2IPO having failed to remedy the same within a period of 90 days after written notice of the breach by the University of Bath, and any such breach (whether remediable or not) continuing;
(iv) IP2IPO having lost more than 50 per cent. of its key personnel which they have not been able to replace within a period of 12 months;
(v) a material change of law or change in taxation policy or practice which results in it no longer being economic for the University of Bath (in its reasonable opinion) to commercialise IP through Bath Spin-Out Companies; or
(vi) any person (other than a Group company) acquiring control (within the meaning of section 840 Income and Corporation Taxes Act 1988) of IP2IPO.

14.11.2 Amendment to framework agreement relating to use of IP2IPO fund for Pre- Incorporation Investment

Pursuant to the agreement dated 13 December 2007 between (1) the University of Bath, (2) IP2IPO and (3) the Company, the parties agreed to establish sufficient legal and other safeguards to protect the Pre-Incorporation Investment (as defined in the University of Bath Partnership) on the formation of a Bath Spin-Out Company. Broadly summarised, the agreement substitutes the terms of schedule 1 of the framework agreement dated 7 September 2006 and provides that the Pre Incorporation Investment shall not exceed £50,000 without the unanimous approval of the Investment Committee.

Where following the making of Pre-Incorporation Investment, the University of Bath elects to form a Bath Spin-Out Company, the amount of the Pre-Incorporation Investment shall be treated as a loan from IP2IPO, used to purchase shares in the relevant Bath Spin-Out Company at the same price per share as any other cash investment in the first seed round of funding.

IP2IPO will be granted a fully paid up irrevocable option to subscribe from the £5m Bath Fund for shares in a Bath Spin-Out Company formed in respect of the identifiable project in which the Pre-Incorporation Investment was made. The maximum seed investment of IP2IPO from the £5m Bath Fund in any Bath Spin-Out Company is £500,000, calculated in accordance with the framework agreement.

The Sulis Seedcorn Fund shall have the right to invest up to 40 per cent. of the total seed capital requirement of a Bath Spin-Out Company (in which it is agreed the £5m Bath Fund will invest) provided that the £5m Bath Fund shall have the right to invest a minimum of 60 per cent. of the total seed capital requirements on terms which are no less favourable to those available to Sulis. IP2IPO and Sulis shall be entitled to invest further seed capital requirements of the relevant Bath Spin-Out Company on the basis that IP2IPO may invest up to 60 per cent. and Sulis may invest up to 40 per cent. of the cash requirement of the relevant Bath Spin-Out Company.

Where, following the making of the Pre-Incorporation Investment, the identifiable project does not lead to a Bath Spin-Out Company but does progress to an Out Licence (as defined), an amount equal to the Pre-Incorporation Investment shall be repaid to the £5m Bath Fund out of the licence proceeds prior to any other use or distribution of the same by or to the University of Bath. Where, following the making of the Pre-Incorporation Investment, the identifiable project does not lead to the establishment of a Bath Spin-Out Company or an Out Licence, the loan from the Fund to the University of Bath in respect of the Pre Incorporation Investment shall be written off in full.

14.11.3 Side Agreement to the Commercialisation of IP Framework Agreement

Pursuant to the side agreement dated 24 March 2010 between (1) the University of Bath, (2) IP2IPO and (3) the Company, the parties agreed certain changes to the framework agreement dated 7 September 2006.

Broadly summarised, this agreement terminated and replaced a previous side agreement (dated 2 March 2009). It provided that the Group's entitlements under the University of Bath Partnership in respect of licence fees and its "automatic" interest in equity would not arise if the Group or its employees had not been actively involved in working up the relevant commercialisation opportunity and provides that IP2IPO is not obliged to procure that there be a single dedicated member of IP2IPO staff working on the University's commercialisation projects on a substantially full time basis. Instead IP2IPO shall appoint a principal point of contact in respect of the relationship between the parties, who shall engage with the Bath ventures team on a day-to-day basis.

The parties further agreed that any reference to the Sulis Fund in the framework agreement should be replaced by a reference to the University of Bath Crescent Seedcorn Fund, which is held exclusively by the University of Bath.

14.11.4 Further Side Agreement to the Commercialisation of IP Framework Agreement

Pursuant to the side agreement dated 6 February 2015 between, the University of Bath, IP2IPO and the Company, the parties agreed to vary the terms of the framework agreement dated 7 September 2006 to enable IP Venture Fund II to co-invest alongside IP2IPO in respect of up to 30 per cent. of the total seed capital requirement of the relevant spin-out company on terms no less favourable than those applicable to IP2IPO's investment, where such investments are made at the same time.

Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.

14.12 Summary of agreements relating to the University of Glasgow Partnership

14.12.1 Framework Agreement

Pursuant to a framework agreement dated 10 October 2006 and made between (1) the University Court of the University of Glasgow (the "University of Glasgow") and (2) IP2IPO, the parties agreed certain arrangements with regard to the commercialisation of the IP created by the University of Glasgow academic staff, students and third parties which vests in the University of Glasgow ("Glasgow IP"). Broadly summarised, these arrangements entitle IP2IPO to a 12 per cent. interest in the shares in any company established with a view to the commercialisation of Glasgow IP (a "Glasgow Spin-Out Company").

The principal provisions of the framework agreement are as follows:

(a) IP2IPO will make the £5m Glasgow Fund available to make seed capital investments in any Glasgow Spin-Out Company made in accordance with the investment protocol set out in the framework agreement. IP2IPO is also able to invest the £5m Glasgow Fund in companies formed to commercialise Glasgow IP that is partially owned by the University of Glasgow and partially owned by third parties;
(b) the University of Glasgow has agreed that it will not amend its IP policy (other than by reason of any change of law) with the objective of fundamentally avoiding or materially diminishing any interest which IP2IPO may have in Glasgow Spin-Out Companies and/or which IP2IPO have under the framework agreement;
(c) IP2IPO has the first right to make seed capital investments in Glasgow Spin-Out Companies. The framework agreement recognises that there may be some circumstances where the founder of a Glasgow Spin-Out Company may not want to accept seed capital from the £5m Glasgow Fund and in such a case the University of Glasgow will not be in breach of its obligations under the framework agreement. There are a number of other sources of seed capital finance who have a co-investment right alongside IP2IPO (including a university challenge fund known as the Synergy Fund) but IP2IPO has the right to invest up to 75 per cent. of the total seed capital invested in the Glasgow Spin-Out Company;
(d) once the £5m Glasgow Fund has been fully invested, IP2IPO has the right but not the obligation to extend the £5m Glasgow Fund;
(e) investment decisions in relation to Glasgow Spin-Out Companies will be made by an investment committee. The investment committee comprises the Director of the Research and Enterprise division of the University of Glasgow, three persons nominated by the University of Glasgow, a director of IP2IPO (who shall be chairman of the meeting) and two persons nominated by IP2IPO. The chairman of the investment committee may veto what would have been an affirmative decision of the investment committee, however such veto can only be exercised once in any twelve month period;
(f) the £5m Glasgow Fund will be invested on the basis of a standard valuation for all Glasgow Spin-Out Companies, namely a pre-money valuation of £750,000 at the point at which the £5m Glasgow Fund invests. This valuation assumes that the Glasgow Spin-Out Company will have already issued shares to the University of Glasgow and academic staff employed by the University of Glasgow who were substantially involved in the generation of the Glasgow IP relative to that Glasgow Spin-Out Company and, as appropriate, the Glasgow Spin-Out Company initial management team;
(g) it is envisaged that the £5m Glasgow Fund will be invested over a period of about five years at a rate of about £1 million per annum;
(h) IP2IPO is also obliged to provide certain services to the University of Glasgow, including the provision of personnel equivalent to one full time employee to be fully integrated into the University of Glasgow's Research and Enterprise division to work with the University of Glasgow on commercialisation of Glasgow IP;
(i) the University of Glasgow recognises that IP2IPO may wish to provide business development and other services to any Glasgow Spin-Out Company and it shall not object to the same being so provided;
(j) the University of Glasgow undertakes not to enter any similar agreement or arrangement with third parties during the term of this framework agreement without the consent of IP2IPO;
(k) a steering committee (comprising three representatives of IP2IPO and three representatives of the University of Glasgow) shall be established to conduct those activities set out in the framework agreement, including, monitoring the progression of the relationship between the parties, identifying areas for improvement and suggesting and agreeing improvements and changes to the arrangements contained in the framework agreement and to discuss and resolve areas of conflict or other problems on an informal basis as well as providing part of a formal dispute resolution process in relation to any issue arising between the parties in relation to the framework agreement;
(l) IP2IPO warrants to the University of Glasgow that it has the capacity and authority to enter into and perform the framework agreement and that the framework agreement has been duly executed;
(m) the framework agreement commenced on 10 October 2006 and subsists for a period of 25 years from that date, subject to the rights to terminate earlier as set out immediately below;
(n) the framework agreement may be terminated as follows:
(i) immediately by notice in writing given either by the University of Glasgow or by IP2IPO if: (a) either party or any member of that party's group are in material breach of any of its obligations under the framework agreement and (in relation to breaches capable of being remedied), fails to remedy the same within a period of 90 days after written notice of the breach; or (b) that party is suffering some

form of insolvency (as more particularly described in the framework agreement); and

(ii) IP2IPO may terminate the framework agreement if there has been, in summary: (a) a change of law or tax change which results in it no longer being economic for IP2IPO to invest in Glasgow Spin-Out Companies; or (b) there being a fundamental and drastic shortage of investment opportunities available to IP2IPO (for example no formal proposals being received by the investment committee for a three year period); or (c) the University of Glasgow ceasing to own all or substantially all of the IP which would otherwise vest in the University of Glasgow; (d) the merger of the University of Glasgow with another institution of equivalent size and scale; or (e) the University of Glasgow failing to provide additional resource or to permit IP2IPO to provide a second employee within a reasonable period following a determination by the steering committee that it agrees with IP2IPO;
(o) the University of Glasgow may terminate the framework agreement if during the term:
(i) IP2IPO has not provided monies from the Fund at the relevant time to the relevant Glasgow Spin-Out Company in accordance with the relevant investment proposal after a validly constituted investment committee has approved the investment;
(ii) IP2IPO has failed to submit any investment proposals in any rolling twelve month period;
(iii) IP2IPO has failed to invest at least £500,000 in one or more Glasgow Spin-Out Companies in any rolling 24 month period;
(iv) there is a repeated failure to attend meetings of the investment committee by all Group representatives;
(v) there is a failure to recruit the full time employee (see above) within four months of the date of entry into of the framework agreement or to terminate or replace such employee within a reasonable period at the University of Glasgow's request;
(vi) there is a failure to extend the £5m Glasgow Fund beyond the initial £5 million once the £5m Glasgow Fund has been fully invested;
(vii) IP2IPO brings the University of Glasgow into disrepute;
(viii) the £5m Glasgow Fund is restructured such that it in any way causes pecuniary loss to or otherwise materially prejudices or damages the interest of the University of Glasgow; and
(ix) IP2IPO fails to meet the performance targets further detailed in the framework agreement in relation to the amount of the £5m Glasgow Fund which has been invested or the cash/tradable equity levels within any review period;

provided that if such breach is remedied within a 30 day period then the notice of termination shall be null and void and shall have no effect.

Notwithstanding that the investment term has expired, the parties continue to operate on the basis of the agreed arrangements.

14.13 Summary of agreements relating to The North East Technology Fund L.P.

14.13.1 Limited Partnership Agreement (22 December 2009)

Pursuant to a limited partnership agreement dated 22 December 2009 between (1) IP Europe (GP) Limited (the "General Partner") and (2) Magnus Goodlad ("MG"), the parties agreed to form The North East Technology Fund L.P. to carry on the business of making investments, with a view to producing profits for distribution.

Pursuant to the terms of the agreement, the partnership shall continue in existence, notwithstanding any change in its composition and further persons may be admitted as limited partners at any time with the prior written consent of the General Partner.

The General Partner and MG agreed to contribute £1.00 each to the capital of the partnership and any further persons admitted as limited partners will contribute such amount of capital as the General Partner specifies on the date of their admission to the partnership.

The General Partner is responsible, pursuant to the terms of the agreement, for ensuring that the partnership is always managed and operated by a person who is authorised under Part IV of FSMA. The limited partner, MG, shall take no part in the operation of the partnership or the management or control of its business and affairs.

The profits of the partnership are distributed in the following order:

(a) payment of expenses and liabilities of the partnership;
(b) payment of £1,000 annually to the General Partner as a priority profit share; and
(c) the balance, if any, shall be allocated to the limited partners pro rata in proportion to their capital contributions.

The partnership shall terminate upon the happening of any of the following events:

(d) if all partners unanimously agree in writing that the partnership should so terminate; or
(e) if an order is made by the courts, or an effective resolution is passed for, the liquidation, winding-up or administration of the General Partner.

The limited partner is not permitted to sell, assign, transfer, exchange, pledge, encumber or otherwise dispose of all or any part of its interest in the partnership unless it has obtained prior written approval of the General Partner and the transferee first agrees to be bound by the terms of the agreement.

14.13.2 Limited Partnership Agreement (6 January 2010)

Pursuant to a limited partnership agreement dated 6 January 2010 between (1) IP Ventures (Scotland) Limited (the "General Partner") and (2) Magnus Goodlad ("MG"), the parties agreed to establish the North East Technology (FP) L.P. (the "FP Partnership") to carry on the business of participating in other limited partnerships and making investments, with a view to producing profits for distribution.

Pursuant to the terms of the agreement, the FP Partnership shall continue in existence, notwithstanding any change in its composition and further persons may be admitted as limited partners at any time with the prior written consent of the General Partner.

The General Partner and MG agreed to contribute £1.00 each to the capital of the FP Partnership and any further persons admitted as limited partners will contribute such amount of capital as the General Partner specifies on the date of their admission to the FP Partnership.

The General Partner is responsible, under the agreement, for ensuring that the FP Partnership is always managed and operated in accordance with Scots law. The limited partners, including the initial limited partner MG, shall take no part in the operation of the FP Partnership or the management or control of its business and affairs nor engage in any transactions on behalf of the FP Partnership. No limited partner shall have the right to:

(a) withdraw or reduce its capital contribution;
(b) bring an action for partition against the FP Partnership; or
(c) cause the termination of the FP Partnership; except as otherwise stated in the partnership agreement.

The profits of the FP Partnership are distributed in the following order:

(d) payment of expenses and liabilities of the FP Partnership;
(e) payment to the General Partner the lower of: (i) £100 per annum; and (ii) five per cent. of the profits of the FP Partnership (and any other sums available for distribution per annum) as a priority profit share; and
(f) the balance, if any, shall be allocated to the limited partners pro rata in proportion to their capital contributions.

The FP Partnership shall terminate upon the happening of any of the following events:

(g) if all partners unanimously agree in writing that the FP Partnership should so terminate; or
(h) if an order is made by the courts, or an effective resolution is passed for, the liquidation, winding-up or administration of the General Partner.

The limited partner is not permitted to sell, assign, transfer, exchange, pledge, encumber or otherwise dispose of all or any part of its interest in the FP Partnership unless it has obtained prior written approval of the General Partner and the transferee first agrees to be bound by the terms of the partnership agreement.

14.13.3 Limited Partnership Agreement – North East Technology Fund

Pursuant to a limited partnership agreement ("LPA") dated 31 March 2010 (as amended on 22 August 2014 and 29 March 2016) between (1) North East Technology (GP) Limited ("General Partner"), (2) the North East Technology Fund (FP) L.P. ("Carried Interest Partner") and (3) North East Finance (Holdco) Limited ("Investor"), the parties agreed to form a limited partnership, the North East Technology Fund L.P. (the "NETF"), to carry on the business of identifying, negotiating, making, monitoring and realising investments.

The Carried Interest Partner contributed £20 and the Investor contributed £80 to the capital of the NETF, which shall only be repaid on the termination or liquidation of the NETF. The maximum size of the NETF is £35 million and its purpose is to invest in the general technology sector, with particular focus on energy, process technologies, health sciences and healthcare.

The investment targets for the NETF under the LPA included the following:

(a) to invest in at least 60 companies in the period to 31 December 2015, with the average investment size of NETF to be approximately £415,000; and
(b) to generate at least the following annual cash receipts from investments:
(i) Year 1: £0;
(ii) Year 2: £700,000;
(iii) Year 3: £1,000,000;
(iv) Year 4: £1,350,000;
(v) Year 5: £3,000,000;
(vi) Year 6: £5,000,000; and
(vii) Year 7: £3,000,000.

The output targets for the NETF under the LPA included the following:

(a) 900 new jobs created;
(b) 550 jobs safeguarded;
(c) £35 million private sector funds leveraged by NETF in total;
(d) 9 new start-up Small and Medium sized Enterprises ("SMEs") assisted; and
(e) 51 existing SMEs assisted.

The manager of the NETF is Top Technology Ventures ("TTV" or the "Manager"). The investment period under the LPA was scheduled to end on 31 December 2015 ("Investment Period") although it could be extended with the Investor's consent. The Manager is responsible for the management and operation of the partnership and manages all investments, money, assets or borrowings of the partnership on a discretionary basis.

All net income of the NETF and all realisations of capital in respect of each investment are to be applied in the following order of priority:

(a) in repaying the investment loan (up to £25,000,000), which was made available to NETF by the Investor pursuant to the LPA ("Investment Loan"), to the Investor;
(b) in repaying the management loan (up to £4,065,000), which was made available to NETF by the Investor pursuant to the LPA, to the Investor;
(c) in repaying the General Partner's Share (as set out in the LPA), any interest- free loan and any repayment of contributions;
(d) in paying the preferred return (as defined in the LPA) to the Investor;
(e) in paying the Carried Interest Partner an amount equal to 25 per cent. of the preferred return;
(f) in paying any further sums to the Investor and the Carried Interest Partner such that the balance on their respective income accounts after such payments are pro rata to their respective capital contributions; and
(g) finally in repaying the capital contribution accounts of the Investor and the Carried Interest Partner.

The General Partner may not resign as a general partner during the period of 12 months from the date of the LPA and thereafter may not resign without the approval of the Investor and by giving 12 months' notice in writing to each limited partner.

The partnership shall not be terminated by the death, bankruptcy, insolvency, dissolution or liquidation of a limited partner or Carried Interest Partner. The partnership shall terminate on the tenth anniversary of the date of the LPA or upon the happening of any of the following events:

(a) bankruptcy, insolvency, dissolution or liquidation of the General Partner (save that the partnership may be reconstituted pursuant to the LPA);

(b) the agreement as to such termination of the General Partner and of the Investors;
(c) the resignation or removal of the General Partner (save that the partnership may be reconstituted pursuant to the LPA);
(d) the Investor determining that the partnership should be terminated;
(e) notice sent by the General Partner to the limited partners or by the Investor to the General Partner following any change in the law as a result of which the continuation of the partnership becomes unlawful or impracticable or inadvisable; or
(f) the partnership ceasing to be fiscally transparent in the UK.

Pursuant to the terms of the LPA, the life of the partnership could be extended at any time prior to the tenth anniversary of the date of the LPA by the election of the General Partner and the Investor by a period (or consecutive periods) not exceeding two years in aggregate (having been already extended by one year pursuant to the amendments made on 22 August 2014, as detailed below). If the partnership is terminated, it may be reconstituted and its business continued pursuant to the unanimous written consent of all Limited Partners electing to continue the partnership and electing a new General Partner.

The LPA includes certain indemnities for the General Partner and the Manager as well as investment and operational guidelines.

14.13.4 Fund Management Agreement – North East Technology Fund

Pursuant to a fund management agreement ("FMA") dated 31 March 2010 (as amended on 22 August 2014 and 29 March 2016 by a deed of amendment between the parties set out below and North East Finance (Holdco) Limited) between (1) the North East Technology Fund L.P. ("NETF") and (2) Top Technology Ventures Limited ("TTV"), TTV was appointed as the investment manager of the NETF to identify, negotiate and make investments and to monitor and dispose of or otherwise realise investments and to act as operator of the NETF under the terms of the FMA. TTV was also appointed to carry on the regulated activity of operating an unregulated collective investment scheme in respect of the NETF. TTV provided standard warranties under the FMA, which also includes certain indemnities.

The objective of the NETF is to invest in technology companies at any stage of their development or maturity. The NETF is expected to make equity investments and to seek to maximise co-investment with privately funded co-investors, to stimulate interest among business angel investors and privately funded venture capital institutions in the investment opportunities in the North East region. The manager is required to use its reasonable endeavours to invest the aggregate amount available for drawdown and investments by the NETF, but with the ability to be increased at the discretion of North East Finance (Holdco) Limited to achieve the objectives of the NETF and outputs specified in the LPA as detailed in paragraph 14.13.3 above and the NETF business plan.

TTV is required to devote such time and have all necessary competent personnel and equipment as may be required to enable it to carry out its obligations properly and efficiently, with a view to:

(a) maximising the returns while minimising the operational costs and the costs to investee companies and businesses;
(b) maximising the additional investment made by private sector co-investors into investee companies and businesses;
(c) managing the investment portfolio to add value to investee companies and businesses and achieving profitable exists for the NETF;
(d) encouraging further expansion in the North East region of indigenous SMEs;
(e) attracting new SMEs to the North East region;
(f) creating an environment to encourage more start-ups;
(g) assisting the development of new products and processes through to commercial exploitation;
(h) assisting businesses in achieving world-class company status; and
(i) supporting and encouraging management of existing SMEs.

TTV shall be entitled to be paid such fee as may (from time to time) be agreed between the General Partner and the Manager, not exceeding the General Partner's share. The General Partner's share is 3.25 per cent. per annum of the maximum amount available for drawdown by the partnership from time to time ("General Partner's Share").

The provision of services by TTV under the FMA is not exclusive and TTV shall be free to render the same or similar services to others. The NETF may engage other persons to provide it with services similar to those provided by TTV.

TTV shall at all times act in the best interests of the NETF, so far as is practicable having regard to its obligations to other clients. Where a proposed transaction by the NETF represents a material conflict of interest between the interests of TTV, its associates or their other clients and the interests of NETF, TTV shall disclose such conflict to NETF.

Under the FMA, the Manager is eligible to participate in a discretionary bonus scheme introduced to incentivise the Manager to exceed the mandatory outputs and target outputs of the NETF as further detailed in the LPA.

Either party may terminate the FMA on six months' prior written notice to the other. The NETF may terminate the FMA by notice to TTV in certain circumstances, including if:

(a) TTV commits a material breach of the FMA which cannot be remedied;
(b) TTV commits a breach of the FMA which can be remedied but fails to remedy the breach within 20 business days or receipt of written notice;
(c) TTV has a receiver, administrator or provisional liquidator appointed or passes a resolution for its winding up;
(d) TTV ceases or threatens to cease to trade;
(e) TTV experiences a change in control which has not been approved in writing by the North East Finance (Holdco) Limited; or
(f) North East Finance (Holdco) Limited notifies NETF that it has reasonable grounds for suspecting fraud or dishonesty on the part of TTV or any of its officers, employees, agents or sub-contractors.

The FMA and the appointment of TTV shall terminate immediately on the happening of any of the following events:

(a) termination of TTV's appointment by mutual agreement between the NETF and TTV;
(b) the General Partner ceasing for any reason to be a general partner of the NETF;
(c) the termination of the NETF; or
(d) upon the written notice issued by North East Finance (Holdco) Limited to TTV confirming the termination of the FMA.

14.13.5 Deed of Amendment in relation to the FMA ("2014 FMA Deed of Amendment") relating to the Finance for Business North East Technology Fund for the purposes of the operation of a follow on investment facility and the allocation of new grant funding by North East Finance (Holdco) Limited ("Holdco") dated 22 August 2014.

The 2014 FMA Deed of Amendment served to extend the facility which was available for TTV to invest on behalf of NETF and set out the basis upon which funds may be made available to TTV for investment on behalf of NETF, which consisted of an extra facility of £2,000,000 in firm funds and a further £1,000,000 in contingent funds ("2015 Grant") further details of which are set out below, and of which a maximum aggregate of £500,000 could be used for follow-on investments in companies which had already received investment from NETF (the "Follow-On Facility"). The confirmed allocation was made available from 10 March 2015 and the further capital allocations from the £1,000,000 contingent facility were available from the date on which each investment was made utilising the contingent capital facility.

Allocations from the Follow-On Facility were to be made by Holdco on an "investment by investment" basis at the discretion of Holdco i.e. there was no committed amount allocated to NETF at the outset. If TTV wished to access funds from the Follow-On Facility in relation to an investment opportunity, it was required to apply for funding in accordance with the Follow-On Facility process specified in the 2014 FMA Deed of Amendment.

14.13.6 Follow on Facility

Funding from the Follow-On Facility became committed (and added to the Investment Loan under the LPA) on completion of the investment to which that funding related. The latest date for applications for funding from the Follow-On Facility was 30 June 2015. The 2014 FMA Deed of Amendment outlined the process which must be complied with by TTV when applying for funds from the Follow-On Facility, namely:

(a) submission of an Expression of Interest Form at any time (but no later than 31 April 2015);
(b) submission of a Request for Capital Form ("RFC") upon agreeing Heads of Terms for the investment (but no later than 30 June 2015);
(c) submission of a notice requesting drawdown of fund ("Drawdown Notice") and company information and declaration form – within 30 days of the anticipated completion date for the investment;
(d) submission of draft investment agreement at least 10 business days before the anticipated completion date for the investment; and
(e) completion of the investment within two months of Holdco's approval of the RFC. Holdco had to be supplied with a certified copy of the relevant investment agreement following completion of the investment and the NETF size (and consequently TTV's management fees) would be increased only once this has been submitted.

14.13.7 The 2015 Grant

The 2014 FMA Deed of Amendment provided that Holdco would notify NETF and/or TTV of its allocation from the 2015 Grant, which would consist of:

(a) a confirmed allocation which, once allocated, would increase the amount of the Investment Loan which is available for draw down under the LPA; and
(b) a contingent allocation which would be made available (at the discretion of Holdco) once the Investment Loan (as increased by the committed allocation referred to above) had been fully drawn down. Funding from the contingent allocation was to be accessed on an "investment by investment" basis by the submission to Holdco of a Drawdown

Notice under the LPA, and would only become committed (and added to the Investment Loan under the LPA) on completion of the investment to which that funding related. The contingent allocation could be withdrawn or amended by Holdco until completion had taken place.

The 2014 FMA Deed of Amendment did not contain any fixed timescales for notification by Holdco to NETF/TTV of its confirmed and contingent allocations from the 2015 Grant, or of the amounts to be allocated. The form of allocation notice (which is attached to the 2014 FMA Deed of Amendment) included details of the investment profile and quarterly investment targets (returns, jobs created, jobs safeguarded etc) ("Investment Profile") applicable to both the confirmed and contingent grant allocations. Funds allocated from the 2015 Grant had to be invested by 31 December 2015.

The 2014 FMA Deed of Amendment introduced a number of amendments to the investment and operational guidelines ("IOGs") contained within the FMA. The IOGs (as amended) applied to all investments made from NETF after the effective date of the 2014 FMA Deed of Amendment (i.e. regardless of whether they are investments made out of existing funds or from funds accessed from the Follow-On Facility or the 2015 Grant). The key IOG changes were:

(a) Mandatory Outputs an annual cash generation target of £5,000,000 was included for Years 6 and 7;
(b) Constraints pure debt investments had to be charged at the prevailing UK Reference Rate (as defined therein) plus the appropriate margin (as determined in accordance with the applicable Communication from the European Commission (EC2008/C14/02). The IOGs previously prescribed a fixed minimum rate of 6.5% above the UK Reference Rate;
(c) Constraints all investments had to comply with applicable State Aid laws in effect from time to time and each Drawdown Notice (as defined therein) submitted to Holdco had to state the basis of State Aid compliance for each investment. The bases upon which investments may be completed so as to comply with State Aid laws were set out in the amended IOGs.

The 2014 FMA Deed of Amendment also amended the provisions relating to the operation of NETF's bank accounts by the addition of a requirement to set up and operate an additional dedicated bank account for the purposes of receiving returns from the 2015 Grant.

14.13.8 Deed of Amendment in relation to the Limited Partnership Agreement governing the North East Technology Fund L.P dated 22 August 2014

On 22 August 2014 each of (1) North East Technology (GP) Limited ("the General Partner"), (2) The North East Technology (FP) L.P acting by its general partner IP Ventures (Scotland) Limited ("the Carried Interest Partner") and (3) North East Finance (Holdco) Limited entered into a deed of amendment ("the 2014 LPA Deed of Amendment") relating to the Limited Partnership Agreement entered into by those same parties on 31 March 2010.

Pursuant to the terms of the 2014 LPA Deed of Amendment a small number of consequential changes to the LPA were made, reflecting the new funding arrangements covered by the 2014 FMA Deed of Amendment, details of which are set out in paragraph 14.13.5 above. In summary, those consequential changes were:

(a) extension of the Investment Period to end on 31 December 2015;
(b) provision for the amount of the Investment Loan, the investment and operational guidelines relevant to the NETF ("IOGs") and the Investment Profile (as defined

therein) to be amended in the line with the arrangements for allocation of the Follow-On Facility and the 2015 Grant under the 2014 FMA Deed of Amendment;

(c) amendments to the IOGs (as summarised in paragraph 14.13.7 above); and
(d) amendments to the form of the Drawdown Notice (as defined therein) requiring the NETF and/or TTV, in relation to each investment to be made by NETF:
(i) to make certain confirmations in relation to State Aid compliance (as defined in Article 107 of the Treaty on the Functioning of the European Union (TFEU)); and
(ii) to identify the State Aid basis on which the investment was being made.
14.13.9 Deed of Amendment in relation to the Limited Partnership Agreement ("the 2016 LPA Deed of Amendment") governing the North East Technology Fund L.P dated 29 March 2016 and Deed of Amendment in relation to NETF Management Agreement ("the 2016 FMA Deed of Amendment") relating to the Finance for Business North East Technology Fund for the purposes of the operation of a follow on investment facility and the allocation of new grant funding by North East Finance (Holdco) Limited dated 29 March 2016
(a) 2016 FMA Deed of Amendment

The 2016 FMA Deed of Amendment served to further extend the original capital facility by the provision of a capital allocation of £4,000,000, effective from 29 March 2016. The allocation was made on the terms set out in the 2016 FMA Deed of Amendment and the 2016 LPA Deed of Amendment (as further detailed below). This additional capital allocation was split as follows: (i) £2,000,000 was to be used for Follow-on Investments and (ii) £2,000,000 was to be used to complete new investments. This further extension brought the total capital under management to £32,000,000. The 2016 allotment of £4,000,000 was subsequently reduced. The effective date for the subsequent reduction was 18 December 2016 to £1,405,756 bringing the total capital under management to £30,594,244.

Under the 2016 FMA Deed of Amendment funds were to be made available by Holdco to TTV for investment on behalf of the NETF as follows:

(i) a 2016 allocation of up to 2,000,000 ("2016 Allocation"); The 2016 Allocation is an amount notified by Holdco to NETF pursuant to a (pro forma) 2016 Allocation Notice, the form of which comprises Schedule 2 to the 2016 FMA Deed of Amendment. The General Partner (on behalf of NETF) and TTV would accept the 2016 Allocation by executing a 2016 Allocation Notice.
(ii) an additional 2016 allocation of up to 2,000,000 ("Additional 2016 Allocation"): Any Additional 2016 Allocation will be notified by Holdco by NETF pursuant to an Additional 2016 Allocation Notice in a similar form to the 2016 Allocation Notice. The General Partner (on behalf of NETF) and TTV would accept the Additional 2016 Allocation by acknowledgment of the Additional 2016 Allocation Notice.

The 2016 Allocation and any Additional 2016 Allocation increases the Investment Loan. The Available Amounts (for drawdown and investment) and Size of Fund (both as defined in the 2016 FMA Deed of Amendment) are increased by the relevant amount(s). Any consequential changes to the Investment Profile and IOG's were to be notified by Holdco to the General Partner and TTV in the 2016 Allocation Notice or Additional 2016 Allocation Notice (as applicable). Under the terms of the arrangements, Holdco may, without assigning a reason, decrease or cancel all or any part of the 2016 Allocation or Additional 2016 Allocation and alter or revoke any of the applicable terms The changes made within the 2016 Deed of Amendment can be summarised as follows:

The amendment to the General Partner's Share is as follows:

(iii) for the period 2010 to 2015, the General Partner's Share is unchanged at 3.25% per annum of the total amount of Investment Loan available for drawdown by the partnership (pro-rated for 2010); and
(iv) for the year of 2016 the General Partner's Share shall be varied to be;
(1) 3.5% per annum of the Acquisition Cost (being the investment acquisition cost together with any costs, duties fees and expenses etc. related to the acquisition) of all Investments (as defined therein) made or acquired (or to be made or acquired) by the NETF using the pre-2016 investment loan capital being the amount of £28,489,989 ("Investment Loan Capital") after deduction of the Acquisition Cost of investments sold or disposed of and all amounts by which the Acquisition Cost of investments not sold or disposed of have been written down or written off in accordance with valuation procedures; plus
(2) 3.25% per annum of the 2016 Allocation available for drawdown by the partnership (pro-rated from NETF's acknowledgement of the 2016 Allocation (as detailed above); plus
(3) 3.25% per annum of any Additional 2016 Allocation available for drawdown by NETF (pro-rated from NETF's acknowledgement of the Additional 2016 Allocation (as detailed above);
(v) for the year of 2017 and thereafter
(1) during 2017 and 2018, 3.5%;
(2) during 2019 and any subsequent years, 5.5%

per annum of the Acquisition Cost of the Investments (as defined therein) made or acquired using the pre-2016 Investment Loan Capital, the 2016 Allocation and any Additional 2016 Allocation after deduction of the Acquisition Cost of such Investments sold or disposed of and all amounts by which the Acquisition Cost of Investments not sold or disposed of have been written down or written off in accordance with Valuation Procedures.

The IOG's were amended and Investments (as defined therein) made following the date of the 2016 FMA Deed of Amendment need to comply with the amended guidelines which can be summarised as follows:

(vi) Mandatory Outputs a cash return output of £3,000,000 was introduced for Year 8 with a cumulative target to 31 December 2017 of £19,050,000. The mandatory outputs were treated as key outputs under the LPA, and pursuant to the LPA, failure to achieve them may:
(1) represent a breach of contract entitling the Holding Fund to terminate the FMA with immediate effect;
(2) result in Holdco reducing the size of NETF and, consequently, the fees payable under the FMA; and/or
(3) exclude TTV from receiving any discretionary, performance related payment from the Holding Fund.

The amendments made to the constraints within the FMA can be summarised as follows:

(vii) the 2016 Extension Capital was taken into the constraints introduced by the 2014 FMA Deed of Amendment whereby Investments completed with capital not derived from the 2015 Grant or Follow On Facility or the 2016 Extension Capital must be completed in accordance with the 2008 General Block Exemption Regulation (Commission Regulation (EC) No 800/2008 of 6 August 2008). Furthermore, the Constraints for Investments (as defined therein) completed with capital from the 2015 Grant also include 2016 Extension Capital and certain amendments were made to those constraints;
(1) the market economy operator test introduced by the 2014 FMA Deed of Amendment was extended to detail when a transaction is presumed to be under the same terms and what amounts to an economically significant investment;
(2) the constraint concerning pure debt investments being charged at the prevailing UK Reference Rate (as defined therein) was s deleted and replaced with a provision for senior debt investments which must be charged at the prevailing UK Reference Rate plus a minimum of the appropriate margin (based on credit rating and available collateral) determined in accordance with the applicable Reference Rate Communication from the European Commission (EC 2008/C14/02) (Reference Rate Communication);
(viii) a new constraint was added for subordinated debt Investments where the investee is obliged to repay capital and interest due within an agreed period. It must be charged at the prevailing UK Reference Rate and appropriate margin including consideration of the additional risk entailed by a subordinated debt as against senior debt determined in accordance with the "Reference Rate Communication" and the "Brandenburg methodology" (as defined in the Reference Rate Communication from the European Commission (EC 2008/C14/02) (Reference Rate Communication)) in combination with a one level reduction in the investee's credit rating. Additional guidance was provided in relation to borrowers without a credit history, on rating systems and on how normal collateral should be understood;
(ix) a new constraint was added stating that care is necessary where the rate achieved for either senior debt or subordinated debt investment is demonstrably below the applicable market rates. In such cases market rates should be used. TTV is required to keep an audit trail to evidence market rate; and
(x) the existing constraint for investments of €200,000 or less being completed in accordance with the De Minimis Regulation (EC 1407/2013) was replaced. The same provision applies for investments of €200,000 or less in total and it was clarified that this will require compliance in full with the De Minimis Regulation (EC 1407/2013) including those relating to the obtaining of the required declaration prior to the grant of any de minimis aid, cumulation and exempted sectors.

Only those clauses relating to amendment of and compliance with the IOG's and the amendment of the schedule concerning the operation of NETF's bank accounts will continue to apply from the 2014 FMA Deed of Amendment in respect of such allocations of capital.

(b) 2016 LPA Deed of Amendment

The 2016 LPA Deed of Amendment made a small number of consequential changes to the LPA, reflecting the new arrangements covered by the 2016 FMA Deed of Amendment. These were:

(i) extension of the Investment Period to 31 December 2016;
(ii) amendment of General Partner's Share and drawings by the General Partner;
(iii) provision for the IOG's to be amended as summarised above; and provision for the amount of the Investment Loan, the IOG's and Investment Profile (as defined therein) to be amended in line with the variations under the 2016 FMA Deed of Amendment and there shall be an adjustment to the amount of General Partner's Share to reflect the adjustment to the amount of the Investment Loan.

14.14 Summary of Limited Liability Partnership Agreement relating to Technikos

Pursuant to a limited liability partnership agreement dated 16 June 2006 between (1) Technikos, (2) SRPE LLP and (3) persons listed in the agreement ("Members"), the parties entered into the agreement to govern the mutual rights and duties of Technikos and the present, and future, Members from time to time. On 13 January 2011, the Company acquired an A membership share in Technikos from an outgoing limited partner and, accordingly, became a Member for the purposes of the limited liability partnership agreement and the rights accruing to each of the limited partners thereunder.

The principal purpose of Technikos is the carrying on of the business of negotiating, making, monitoring and realising investments in accordance with the investment policy. The commercial intention of the Members was that shares in Technikos or another corporate entity to which all or substantially all of the investments are transferred are to be listed on the London Stock Exchange, AIM or another recognised exchange by 2009.

SRPE LLP agreed to act as Managing Member and operator of Technikos so long as it is appropriately authorised by the FCA. After the second anniversary of the final closing date (as defined in the agreement) Members holding at least 75 per cent. of the voting interests of all members may, by written resolution, remove the Managing Member as a member of Technikos and terminate its appointment as Managing Member. In such circumstances, the Managing Member shall be entitled to compensation for termination of its appointment as set out in the agreement. The Managing Member may be removed at any time without compensation for termination of office if such termination is as a result of the Managing Member's gross negligence, fraud, wilful misconduct, bad faith or reckless disregards of its obligations and duties as managing member of Technikos. In August 2010, the relevant proportion of the Members approved the appointment of Burnahyll LLP as Managing Member in place of SRPE LLP.

Cash representing profits of Technikos shall be distributed in the following order of priority (after payment of all expenses and liabilities of Technikos):

(a) first, in payment of any C Member's share;
(b) second, in payment of any amounts as may have been agreed to be paid to any Member by way of drawings;
(c) third, to the Members in repayment of their drawn commitments in the relevant proportions; and
(d) fourth, as to the remaining balance 8 per cent. to the B Members in the proportions allocated to each B Member and as to 92 per cent. to the investors in their commitment proportions.

Technikos shall terminate on the twentieth anniversary of the final closing date or shall terminate prior to such date upon the happening of any of the following events:

(a) the agreement to such termination by the unanimous written consent of all the Members who are investors; or
(b) the completion of sale of all of the investments and distributions to Members of profits and capital in accordance with the LLP agreement.

The life of Technikos may be extended prior to twentieth anniversary of the final closing date by a Members' resolution of 60 per cent. of the voting interests of the founder Members (acting on the recommendation of Technikos) by up to two one year periods to such later date not exceeding 22 years from the final closing date. Technikos may be terminated at any time prior to the twentieth anniversary of the final closing date and at yearly intervals thereafter (acting on the recommendation of Technikos) by Members' written resolution of 60 per cent. of the voting interests of the founder Members.

If Technikos is terminated, it may be reconstituted and its business continued pursuant to the unanimous written consent of Members who are investors electing to continue Technikos.

14.15 Summary of agreements relating to the University of Manchester

14.15.1 Summary of the proof of principle fund agreement relating to the University of Manchester

Pursuant to an agreement relating to a proof of principle fund dated 25 February 2013 and made between (1) The University of Manchester ("UOM"), (2) The University of Manchester 13 Limited ("UMI3") and (3) IP2IPO, the parties agreed certain arrangements with regard to the creation and operation of a proof of principle fund. Broadly summarised, these arrangements entitle IP2IPO to fund proof of principle projects (the "UOM Projects") offered by UOM and/or UMI3 in specific technology areas such as set out below. IP2IPO will be entitled to an equity share in each spin-out company formed by UOM and/or UMI3 from a UOM Project funded by IP2IPO.

The principal provisions of the agreement are as follows:

(a) IP2IPO shall provide funding for UOM Projects offered by UOM and/or UMI3 in the following technology areas:
(i) materials and clean technology;
(ii) all non-therapeutic life, medical and human sciences technologies and information technology;
(iii) electronics and communications; and
(iv) any other areas agreed by the parties in writing.

Whilst the agreement provided that IP2IPO shall have no right to fund any UOM Projects in the area of graphene technology (all matters relating to graphene and other so termed 2-D materials technology) unless UOM elects to discuss any such project with IP2IPO, it was subsequently expanded to include graphene pursuant to the Variation Agreement summarised in paragraph 14.15.2 below.

(b) IP2IPO has agreed to invest the following amounts in UOM Projects (other than in the area of graphene technology):
(1) IP2IPO has agreed to fund UOM Projects up to an aggregate funding commitment of £5,000,000 to be applied over a maximum period of 5 years from the effective date (being 25 September 2013) and with a maximum amount to be committed towards UOM Projects on a per annum basis of £1,000,000;
(2) IP2IPO is entitled to reduce its funding commitment by up to £2,500,000, to no less than £2,500,000, in the event that IP2IPO sources a matching funder or funders which are acceptable to UOM and agree to fund such amount; and
(3) UOM is entitled to continue to seek an additional third party funder or funders (subject to certain restrictions) to provide funding of up to a maximum of £2,500,000 for a period of up to 5 years, in which event such funder(s) would fund UOM Projects on an equal basis with IP2IPO;
(c) Subject to the investment committee's prior approval, UOM is entitled to fund in cash either itself or through a non-commercial funder, up to fifty per cent. of the required funding for each UOM Project, provided that such entitlement may be reduced by the investment committee in the event that UOM has secured wider matched funding from third parties;
(d) Investment decisions in relation to funding UOM Projects will be made by the investment committee by a simple majority vote. The investment committee comprises two persons nominated by IP2IPO, one person nominated by UOM, one person nominated by UMI3 and an independent chairperson appointed unanimously by the other members of the investment committee. All members shall have one vote with the chairperson having no second or casting vote. It has been agreed that no UOM Project shall be put forward for formal approval at the investment committee for funding unless it has first been considered by IP2IPO's investment committee;
(e) IP2IPO is entitled to an equity stake in each spin-out company funded by it on such terms as are agreed between the parties and in accordance with UOM's IP policy from time to time. The UOM policy as at the effective date provides that funders contributing £95,000 (or less) would be entitled to receive 15 per cent. of the equity and funders contributing £140,000 (or greater) would be entitled to receive 30 per cent. of the equity, in the relevant spin-out company, with a sliding scale in between;
(f) IP2IPO has an option, but is not obliged, to provide further funding to a spin-out company beyond initial proof of principle funding, to act as the lead investor, and (subject to agreement of terms), arranger, of extended proof of principle funding. Any such funding is to be made at a valuation for the relevant spin-out company to be agreed amongst the parties and the relevant spin-out company at the relevant time, Where no such agreement is reached, third party funding may be sought, provided that such third party funding shall be on no less favourable terms than those which were offered by IP2IPO; or (ii) before accepting any third party funding where the terms are more favourable than those which were offered by IP2IPO, IP2IPO shall be given the opportunity for a defined period to invest on such more favourable terms;
(g) A steering committee that comprise two representatives of each of the parties at a senior level shall be established and maintained in order to review the proper operation of the agreement and to recommend any modifications and amendments to it;
(h) Subject to certain specified exceptions, UOM and UMI3 each undertake to IP2IPO that they will not enter into any agreement or arrangement with any third party regarding the provision of proof of principle funding for spin-out company propositions which gives rise to a material conflict with the intent and objectives of this agreement;
(i) The agreement may be terminated:
(i) on the date falling one month after IP2IPO shall have made its final cash commitment to a UOM Project, provided that such agreement has not been renewed;
(ii) immediately by notice in writing by either party if:
- (1) the parties agree to do so; or
- (2) either party or any member of that party's group are in material irremediable breach of any of its obligations under the agreement and, in any such case (in relation to any breach which is capable of being remedied), fails to remedy the same within a period of 90 days after written notice of the breach; or
(3) that party is subject to an insolvency event;
(iii) by six months' notice served by either party if, by not earlier than third anniversary of the effective date and not later than 30 days thereafter in the event that by the third anniversary of the effective date:
(1) the investment committee of IP2IPO has not approved at least fifteen UOM Projects for funding by IP2IPO under the agreement; or
(2) IP2IPO has not deployed at least half of the funds it has committed to UOM Projects either annually against the applicable annual targets in each of the first three years or in aggregate as required during the said three year period.
(j) Each party has agreed to indemnify the other against all and any costs, claims liabilities or proceedings brought by any third party, or incurred, as a result of a breach of this agreement or the default, negligence or breach of duty or responsibility by that party, subject to certain financial limitations.

14.15.2 Summary of the variation agreement regarding proof of principle fund agreement relating to the University of Manchester

(a) Pursuant to a variation agreement dated 23 January 2014 (the "Variation Agreement"), the parties agreed certain variations, clarifications and supplemental terms to the original Manchester IP commercialisation agreement which, in the event of a direct conflict, prevail over the terms of the original agreement with effect from the date of the Variation Agreement.
(b) The principal provisions of the Variation Agreement are as follows:
(i) the scope of the original POP fund agreement is widened to include graphene and other 2-D materials; IP2IPO shall provide funding in the following technology areas: (1) clean/environmental technology, (2) all non-therapeutic life, medical and human sciences technologies and information technology, (3) electronics and communications, (4) advanced materials including, without limitation, graphene and other two dimensional and/or nanoscale materials; and (5) any other areas agreed by the parties in writing;
(ii) parties agree that graphene projects may be sourced by UMI3 both from within UOM and beyond and that each such graphene project shall be offered to IP2IPO for investment as follows:
- (1) during the regional growth fund period commencing on 11 July 2013 and ending on 31 May 2015 and only after the party appointed to manage the investment from the Regional Grow Fund Round 4, presently Greater Manchester Combined Authority (GMCA), has received its grant from the Regional Grow Fund Round 4 (if at all), IP2IPO shall be offered the right to co-invest on a pari passu basis alongside the regional growth fund managed fund in graphene projects which have already been approved for investment by UMI3 and/or by a spin-out panel constituted by UMI3 for this purpose; in the event the grant as aforementioned is never received, IP2IPO shall be offered the right to invest in all graphene projects in accordance with the proof of principle agreement described in paragraph 14.15.1 above; and
- (2) during the period on and from the end of the regional growth fund funding period and ending on the date which is 5 years from the date of the Variation Agreement, all graphene projects shall be offered to IP2IPO

for investment in accordance with the provisions of the proof of principle agreement as described in 14.15.1 above.

(iii) given this increase in the scope of the original POP fund agreement, IP2IPO shall attempt to seek to increase its aggregate funding commitment under the original POP funding agreement from £5 million to up to £7.5 million within an agreed time period.
(iv) in case the additional commitment is not made by the 30 June 2014, UMI3 shall be entitled to, upon service of at least 60 days written notice by UMI3 on IP2IPO not later than 30 days after the 30 June 2014, require that the Technology Areas clause be amended so as to remove any rights which IP2IPO may have under the variation agreement to fund graphene projects. This right shall be without prejudice to (i) any graphene project that has been funded prior to the receipt of such notice in respect of which the provisions of the agreement will continue to apply and (ii) the remaining provisions of the agreement which shall continue to be in full force and effect save where the same require variation to give effect to the terms of the notice.

The Company and the University of Manchester are currently in negotiations in respect of a variation to the agreement which, if entered into, will provide the Group with more broad access to IP from the University of Manchester.

14.16 Memorandum of understanding with the University of Nottingham

Pursuant to a memorandum of understanding dated 28 February 2013 and made between (1) Fusion IP and (2) the University of Nottingham, the parties agreed certain arrangements in connection with identifying and creating new spin-out companies to hold intellectual property created by research conducted at the University of Nottingham.

The principal provisions of the Nottingham MOU are as follows:

(a) Fusion IP will, among other things, provide the services of the equivalent of one full time employee to work at the University of Nottingham, which may be fulfilled by one or more person. The role of the employee(s) will be to assist the University of Nottingham to identify and develop its business opportunities in connection with the creation of new spin-out companies to hold intellectual property created by research conducted at the University of Nottingham;
(b) if such opportunities are identified, Fusion IP may elect to assist the University of Nottingham develop such opportunity (a "Project") by the creation of a new company to hold the intellectual property rights relating to the Project or the licencing of the Project;
(c) on incorporation of a new company, Fusion IP shall be issued with up to 10 per cent. of the share capital of such new company, whilst the remaining share capital shall be issued to the University of Nottingham and those persons who created the intellectual property relating to the Project and held by the new company (in accordance with the university's internal policies);
(d) thereafter, Fusion IP and the University of Nottingham may invest, in aggregate, up to £750,000 (or such other amount as the parties agree) in the new company (in equal proportions). Prior to such new investment, the new company's deemed value shall be £500,000;
(e) each party may arrange for their proportion to be funded by their associate or a co-investor. To the extent Fusion IP or the University of Nottingham do not take up their right to make such investment in the new company (in whole or in part) after the date which is six months from the date of incorporation of the new company, the other party may make an additional investment in the new company in respect of the investment opportunity not so taken up;
(f) Fusion IP shall assist the new company to identify potential third party funders, including the Company;
(g) if a new company is not established in connection with a Project, Fusion IP and the University of Nottingham agree that any net revenue received by the University of Nottingham in connection with licencing the Project will be shared equally between Fusion IP and the University of Nottingham until such time as Fusion IP has received its cash investment in the Project and, thereafter, Fusion IP shall receive 10 per cent. of any such net revenue; and
(h) the Nottingham MOU shall be in place for an initial period of five years, to be reviewed annually, and may be terminated by either party at any time.

14.17 Memorandum of understanding with Swansea University

Pursuant to a memorandum of understanding dated 17 March 2013 and made between (1) Fusion IP and (2) the University of Swansea, the parties agreed certain arrangements in connection with identifying and creating new spin-out companies to hold intellectual property created by research conducted at the Swansea University.

The principal provisions of the Swansea MOU are as follows:

(a) pursuant to the terms of the Swansea MOU, Fusion IP will provide the services of its employees to Swansea University to assist in identifying and developing its business opportunities in connection with the creation of new spin-out companies to hold intellectual property created by research conducted at Swansea University;
(b) if such opportunities are identified, Fusion IP may elect to assist Swansea University to develop such opportunity (a "Project") by the creation of a new company to hold the intellectual property rights relating to the Project or the licencing of the Project;
(c) on incorporation of a new company, Fusion IP shall be issued with up to 10 per cent. of the share capital of such new company, whilst the remaining share capital of the new company shall be issued to Swansea University and those persons who created the intellectual property relating to the Project and held by the new company (in accordance with the university's internal policies);
(d) thereafter, Fusion IP and Swansea University may invest, in aggregate, up to £750,000 (or such other amount as the parties agree) in the new company (in equal proportions). Prior to such new investment, the deemed value of such new company shall be £500,000;
(e) each party may arrange for their proportion to be funded by their associate or a co-investor. To the extent Fusion IP or Swansea University do not take up their right to make such investment in the new company (in whole or in part) after the date which is six months from the date of incorporation of the new company, the other party may make an additional investment in such new company in respect of the investment opportunity not so taken up;
(f) Fusion IP shall assist the new company to identify potential third party funders, including the Company;
(g) if a new company is not established in connection with a Project, Fusion IP and Swansea University agree that any net revenue received by Swansea University in connection with licencing the Project will be shared equally between Fusion IP and Swansea University until such time as Fusion IP has received its cash investment in the Project and, thereafter, Fusion IP shall receive 10 per cent. of any such net revenue; and
(h) the Swansea MOU shall be in place for an initial period of five years, to be reviewed annually thereafter, and may be terminated by either party at any time.

14.18 Summary of agreements relating to IP Venture Fund II

14.18.1 Limited Partnership Agreement

Pursuant to a limited partnership agreement (the "LPA") dated 21 May 2013 between (1) IP Venture Fund II (GP) LLP (the "General Partner") and (2) IP2IPO (the "Initial Limited Partner"), the parties agreed certain changes to IP Venture Fund II which was established on 1 May 2013 by an original agreement between the General Partner and the Initial Limited Partner.

IP Venture Fund II was established by Top Technology Ventures on 1 May 2013 to carry on the business of identifying, making, monitoring and realising investments in venture capital opportunities. The 21 May 2013 agreement amends and supersedes the original 1 May 2013 agreement such that the purpose of IP Venture Fund II is to carry on the business of an investor and in particular but without limitation to identify, research and negotiate investment opportunities and make and monitor the progress of and arrange the sale of investments (which include, but are not limited to, the purchase, acquisition, sale and disposal of ordinary shares, preference shares and subordinated loan stocks of venture capital transactions) with the principal objective of providing investors with a high overall rate of return by means of both income and capital. It is agreed that no more than 15 per cent. of the total commitments can be used to acquire investments in any one investee company (including any follow-on investments) and that IP Venture Fund II is not allowed to make loans to portfolio companies in an aggregate amount at any time greater than 20 per cent. of total commitments (excluding loans to portfolio companies which are linked to equity funding of an investee company or which take the form of convertible loan stock or similar instruments which are convertible to equity share capital in accordance with their terms of issue). It is also agreed that IP Venture Fund II will not make any investment in venture capital or private equity funds or any other pooled investment vehicle.

The Company (or any associate thereof) agreed to subscribe on the date on which the first investor is admitted as a limited partner to IP Venture Fund II for a commitment of £10,000,000. Any further persons admitted as limited partners and investors must subscribe for a minimum commitment of £1,000,000 (or such lesser amount as the General Partner may agree). Each investor agreed to contribute 0.001 per cent. of its commitment to the capital of IP Venture Fund II. Each of the investors in IP Venture Fund II are required to advance loans to IP Venture Fund II pro rata to the commitment held by it up to an aggregate amount equal to 99.999 per cent. of the commitment subscribed by it.

The responsibility for the operation of IP Venture Fund II is vested exclusively in the General Partner, who ensures that IP Venture Fund II is always managed and operated, and that its investment portfolio is always managed on a discretionary basis under the supervision and authority of the General Partner, by an entity who is authorised to do so under FSMA. The General Partner may appoint a manager to operate IP Venture Fund II and manage its investment portfolio on a discretionary basis. The limited partners shall take no part in the operation of IP Venture Fund II or the management or control of its business and affairs.

All net income of IP Venture Fund II and all realisations of capital in respect of each investment shall be applied in the following order of priority:

(a) in repaying on-going expenses (as defined in the LPA); and
(b) in the repayment of the General Partner's share (as set out in the LPA), any interestfree loan and any repayment of contributions;

Thereafter, all cash and any Partnership assets distributed in specie shall be applied:

(c) in repaying the loan (or tranches thereof) to the investors pro rata to the amount of such loans (or tranche(s)) outstanding to such investors;

(d) in paying any further sums to the investors such that the balance on their respective current accounts after such payments are pro rata to their respective capital contributions; and
(e) finally in repayment of the capital contribution accounts of the investor on termination or liquidation of IP Venture Fund II.

Subject to these provisions, all of the income of the General Partner and/or all or any of the limited partners, as the case may require, will be distributed to them at such times as the General Partner in its discretion decides. Distributions of a capital nature shall be made as soon as practicable after the relevant amount becomes available for distribution and in any event no later than two months after receipt by IP Venture Fund II.

The General Partner may not resign as a general partner during the term of IP Venture Fund II unless first consented to by an investor's special consent.

IP Venture Fund II shall not be terminated by the death, bankruptcy, insolvency, dissolution or liquidation of a limited partner. The term of IP Venture Fund II shall continue until the expiration of ten years from the final closing date (as defined in the LPA) although the life of IP Venture Fund II may be extended at any time prior to this date by the election of the General Partner and the Investors acting by an Investors' Special Consent (as defined in the LPA) by a period or consecutive periods not exceeding two years in aggregate.

IP Venture Fund II shall terminate upon the happening of any of the following events:

(f) the bankruptcy, insolvency, dissolution or liquidation of the General Partner (save where IP Venture Fund II may be reconstituted pursuant to the LPA);
(g) the agreement to such termination of the General Partner and investors;
(h) the resignation or removal of the General Partner (save where the limited partnership may be reconstituted pursuant to the LPA);
(i) the limited partnership ceasing to be fiscally transparent in the UK or the General Partner determining that it is illegal for the limited partnership to continue; or
(j) all the assets of IP Venture Fund II are disposed of and there is no ability to make new investments.

The General Partner shall not sell, assign, transfer, exchange, pledge, encumber or otherwise dispose of all or any part of its rights and obligations as a general partner, or voluntarily withdraw as the General Partner of IP Venture Fund II without the sanction of an Investors' special consent except that the General Partner may transfer its rights and obligations in IP Venture Fund II to an associate (as defined in the LPA) without requiring such consent.

No transfer of any investor's interest in IP Venture Fund II is valid or effective except with the consent of the General Partner which may be withheld if specific conditions such as set out in the LPA are not met.

The LPA includes certain indemnities for the General Partner and the manager as well as investment and operational guidelines.

If IP Venture Fund II is terminated, it may be reconstituted and its business continued pursuant to an investor's special consent electing to continue IP Venture Fund II and electing a new General Partner.

Pursuant to a side letter dated 1 May 2013 between (1) IP Venture Fund II (GP) LLP, (2) Top Technology Ventures and (3) European Investment Fund, the LPA has been amended (such as set out below) with respect to the commitment of European Investment Fund as limited partner and investor of IP Venture Fund II.

14.18.2 Subscription Agreement for IP Venture Fund II L.P.

Pursuant to a subscription agreement dated 22 May 2013 between (1) IP Venture Fund II (GP) LLP and (2) European Investment Fund (the "EIF"), the parties agreed that EIF will subscribe for a commitment of £20,000,000 and become a limited partner and investor under the LPA of IP Venture Fund II, subject to the provisions of the side letter dated 1 May 2013 between (1) IP Venture Fund II (GP) LLP, (2) Top Technology Ventures and (3) EIF (as set out below).

14.18.3 Side Letter regarding the European Investment Fund investment

Pursuant to a side letter dated 1 May 2013 and made between (1) IP Venture Fund II (GP) LLP, (2) Top Technology Ventures and (3) European Investment Fund ("EIF"), the parties agreed the following principal points:

(a) EIF's commitment is due at a time when (i) the total commitments of the investors in IP Venture Fund II equal at least £30,000,000 and (ii) all registrations, licences, approvals and consents that are necessary for the establishment and carrying on the business of IP Venture Fund II have been obtained;
(b) EIF is entitled to appoint one person to the investors' advisory committee of IP Venture Fund II, such seat being maintained for as long as EIF remains an investor in the IP Venture Fund II;
(c) EIF is authorised to transfer its commitment or interest in IP Venture Fund II to the European Investment Bank and the General Partner will not withhold its consent to the transfer. This transfer is not subject to a right of first refusal by the other investors provided that any transfer complies with all applicable anti-money laundering requirements that are in place;
(d) EIF's investment shall rank pari passu with market oriented investors investing in IP Venture Fund II and such pari passu rank is to be reflected in the LPA;
(e) Confirmation by IP Venture Fund II (GP) Limited that the majority of the capital being invested in portfolio companies under the co-investment arrangements between IP Group and IP Venture Fund II Limited is provided by an entity operating in circumstances corresponding to the market economy investor principle;
(f) IP Venture Fund II (GP) Limited undertakes that EIF's indirect participation in any portfolio company shall not exceed 25 per cent. of the total shareholding in any such portfolio company;
(g) No distribution in specie will be made to EIF without prior notice; and
(h) No changes to the investment policy of IP Venture Fund II shall be made without prior written consent of EIF.

The parties further agree that the provisions of this letter will prevail in the event of conflict between the provisions of the LPA and/or Subscription Agreement and the provisions of this letter.

14.18.4 Management Agreement

Pursuant to a management agreement dated 21 May 2013 between (1) IP Venture Fund II (GP) LLP (the "General Partner") and (2) Top Technology Ventures (the "Manager") the parties agreed that the Manager will act as a discretionary manager of IP Venture Fund II so as to enable the General Partner to fulfil its obligations under the LPA as detailed above.

The Manager's responsibilities under the agreement include sourcing, evaluating and negotiating investment opportunities, monitoring investments, evaluating, negotiating and arranging for the realisation of investments and preparing the reports and accounts of IP Venture Fund II in accordance with the provisions of the LPA.

Neither the Manager nor its officers, directors, shareholders, agents, partners or employees shall have any liability for any loss to IP Venture Fund II or the partners arising in connection with the services to be performed, save in respect of any matter resulting from such person's fraud, wilful misconduct, bad faith or reckless disregard for its obligations and duties in relation to IP Venture Fund II, or its gross negligence, or, in the case of the Manager, for any breach of any rules of the FCA or any provision of FSMA binding upon it.

The management agreement may be terminated with immediate effect by either party by written notice to the other. The agreement shall terminate on the happening of any of the following events:

(a) the removal or withdrawal of the General Partner as general partner of IP Venture Fund II unless the General Partner is replaced by an associate (as this term is defined under the LPA);
(b) the termination of IP Venture Fund II;
(c) the Manager ceasing to be authorised under FSMA to manage or operate IP Venture Fund II or to act as Manager of IP Venture Fund's II investment portfolio;
(d) the insolvency, dissolution of liquidation of the Manager; or
(e) the General Partner deciding, on behalf of IP Venture Fund II, to terminate the management agreement and notifying the Manager of such decision.

The Manager shall be entitled to be paid by the General Partner such fee as may from time to time be agreed between the General Partner and the Manager.

The Manager shall be free to render similar services to third parties, subject to the provision of services to IP Venture Fund II not being materially adversely affected thereby.

14.18.5 Deed of variation of the LPA

Pursuant to a deed of variation dated 21 November 2013 between (1) IP Venture Fund II (GP) LLP (the "General Partner") and (2) IP2IPO (the "Initial Limited Partner"), the parties agreed certain variations, clarifications and supplemental terms to the limited partnership agreement (the "LPA") dated 21 May 2013 (the "Original Agreement").

The principal provisions of the deed of variation are as follows:

(a) an additional possibility of drawings by the General Partner is introduced entitling the General Partner to make drawings out of IP Venture Fund II (i) on the date of submission of the first drawdown notice in respect of an investment to be made in a Relevant Investee Company (the "Agreed Fee Drawdown Date"), on account of fifty per cent. (50 per cent.) of the Agreed Fee; and (ii) on the date which is the earlier of (i) 6 months from the Agreed Fee Drawdown Date or (ii) the Last Completion Date, on account of the remaining fifty per cent. (50 per cent.) of the Agreed Fee not drawn down pursuant to (i) above;
(i) "Agreed Fee" meaning £402,739.73, being the amount equivalent to what the General Partner's share of Net Income and Capital Gains (as defined in the LPA as varied) would have been under Clause 6.3.1 assuming the same had been accruing during the Agreed Period;
(ii) "Agreed Period" means the period commencing on the Effective Date and ending on the First Closing Date (being 22 May 2013);
(iii) "Effective Date" means 1 August 2012;
(iv) "Last Completion Date" means the date of legal completion of the last transfer of a Relevant Investee Company to the Fund (excluding, for these purposes, any Relevant Investee Company or Companies which, despite all reasonable efforts, the Group and/or its associates are unable to procure the transfer to the Fund of the same as a result of circumstances beyond their control); and
(v) "Relevant Investee Companies" means those companies which have been first invested in by the Initial Limited Partner (whether by way of convertible loan or subscription for equity) during the Agreed Period and which, immediately prior to such first investment, would have fallen within the investment policy of the Fund, being Medaphor Limited, Cryptographiq Limited, Clyde Biosciences Limited, Azuri Technologies Limited, Magnomatics Limited, Oxehealth Limited, Magnetometer Limited, Ubiquigent Limited, Leeds Label Free Detection Limited and Fault Current Limited; and
(b) one of the investment policies set out in Schedule III of the LPA regarding the fact that the Fund shall only invest in Investee Companies which are not companies in which IP Group, IP Venture Fund I ("IPVF I") or any of their associates have invested in, at the time of the First Closing Date, shall not apply in Relevant Investee Companies is allowed.
14.18.6 Investors' Special Consent

Investors' special consent and General Partner consent letters have been granted in respect of the deed of variation of the LPA on 21 November 2013.

14.18.7 Supplemental Limited Partnership Agreement
14.18.8 On 27 July 2016 a supplemental limited partnership agreement ("Supplemental LPA") was entered into between each of (i) IP Venture Fund II (GP) LLP (in its capacity as general partner of IP Venture Fund II) and IP2IPO in its capacity as the initial limited partners of IP Venture Fund II.
14.18.9 Pursuant to that Supplemental LPA certain amendments were made in order to clarify the calculation of certain management fees payable pursuant to the LPA following the commercial agreement of those terms by the parties thereto. The Supplemental LPA varied clauses 6.3.1.1 and 6.3.1.2 of the LPA with effect from the Effective Date of the LPA (being 1 August 2012).

An Investors' special consent was granted in respect of the Supplemental LPA 27 July 2016.

14.19 Summary relating to the Finance Wales Co-Investment MOU

Further to their initial 2007 agreement, the parties agreed, pursuant to a memorandum of understanding dated 25 June 2013 and made between (1) Fusion IP and (2) Finance Wales, certain arrangements in connection with their co-investment strategy for investing in opportunities arising from Fusion IP's IP pipeline agreements with its portfolio of Welsh universities.

The principal provisions of the Finance Wales Co-Investment MOU are as follows:

(a) Finance Wales will provide Fusion IP with continued access to substantial additional funding for its portfolio of companies;

(b) Finance Wales proposed a tiered approach, including:
(i) initial seed investment for technology development and market validation purposes;
(ii) a series A round investment to fund product/business development and a move toward full commercialisation; and
(iii) a capital growth round as businesses move towards IPO or exit;
(c) the parties will share due diligence costs and seek to mirror investment structure to facilitate such co-investments;
(d) each party has the right to declined to invest on a deal by deal basis and round by round basis; and
(e) the Finance Wales Co-Investment MOU shall be in place until April 2018 and may be terminated by either party at any time.

14.20 Summary of Cambridge Innovation Capital Agreements

14.20.1 Subscription Agreement and Shareholders' Agreement 2013

Pursuant to a subscription agreement entered into on 9 October 2013 between (1) Cambridge Innovation Capital plc ("CIC") and (2) IP2IPO and a shareholders' agreement entered into on 16 July 2013 between (1) The Chancellor, Masters, and Scholars of the University of Cambridge (the "University of Cambridge"), (2) RBC CEES Trustee Limited, (3) CIC and (4) Cambridge Innovation Capital (Jersey) Limited ("Subsidiary"), IP2IPO agreed to subscribe for 4,000,000 B shares of £1 each in the capital of CIC at a subscription price of £1.25 per share (which gave IP2IPO an 8 per cent. of the issued share capital of CIC).

14.20.2 Reorganisation Deed

Pursuant to a reorganisation deed entered into on 18 August 2016 between (1) CIC and (2) its shareholders, the parties agreed (i) to terminate the shareholders' agreement dated 16 July 2013 and (ii) to reorganise the share capital of CIC.

As a result of the reorganisation, the separate classes of A shares, B shares and B1 shares cease to exist and were all re-designated as ordinary shares of £0.0001 each.

14.20.3 Subscription Agreement 2016

Further to the 2016 reorganisation, CIC and IP2IPO entered into a subscription agreement dated 18 August 2016 pursuant to which IP2IPO agreed to subscribe for 4,300,000 ordinary shares of £0.0001 each in the capital of CIC at a subscription price of £0.80 per share (which gave IP2IPO an aggregate of 4.96 per cent. of the issued share capital of CIC).

14.20.4 Memorandum of understanding

CIC and IP2IPO entered into a memorandum of understanding on 9 October 2013, which sets out the principles upon which the parties work together to facilitate access to co-investment opportunities for the next generation of technology companies from the "Cambridge Cluster". IP2IPO initially invested £5,000,000 by way of a subscription for B ordinary shares in the capital of CIC on the date of the agreement. Such shares were subsequently re-designated as ordinary shares in 2016 and IP2IPO invested another £3,440,000 in August 2016 by way of a subscription for ordinary shares in the capital of CIC.

The terms of the memorandum set out that the chief executive officer of CIC (or another representative) and a representative of IP2IPO shall meet at least ten times each year for update meetings. During these meetings:

(a) the representative of CIC shall provide the following information to the IP2IPO representative:
(i) an update of the pipeline of opportunities being considered for investment by any CIC group company;
(ii) an update on CIC investment committees held during the period from the last update meeting and the outcome(s); and
(iii) an update on CIC's investee companies in which a CIC group company has made an investment, including information on milestones achieved, the current holding value for that investee company and its basis, any recent developments, fundraising outlook and any exist opportunities; and
(b) the representative of IP2IPO shall provide the following information to CIC's representative:
(i) an update of the pipeline of opportunities in the "Cambridge Cluster" being considered by IP2IPO or IP Group and its subsidiaries;
(ii) an update on investment opportunities of IP2IPO or the Company held during the period from the last update meeting and the outcome(s); and
(iii) save where information is or may be of a price sensitive nature to IP Group, an update on the target companies in which and group company of IP2IPO has made an investment, including information on milestones achieved, the current holding value for that investee company and its basis, any recent developments, fundraising outlook and any exit opportunities.

Under the terms of the memorandum of understanding, IP2IPO and CIC acknowledge they have similar and complementary investment policies and so far as reasonably practical, CIC shall seek to make available to IP2IPO and other investors in CIC who have requested co-investment opportunities, the opportunity to co-invest with the relevant CIC group company on the same terms that such CIC group company and third party co-investor is proposing to make its investment, and IP2IPO shall (subject to each IP2IPO group company investing the full amount that it wishes to invest) seek to make available to CIC or CIC Jersey and other investors in IP2IPO group companies who have requested co-investment opportunities, the opportunity to co-invest with such IP2IPO group company on the same terms that IP2IPO group company and any third party co-investor is proposing to make.

These provisions do not preclude any CIC group company or IP2IPO group company form offering co-investment opportunities to other third parties. Neither party shall be required to reduce the size of its intended investment in order to offer any co-investment opportunities to the other.

The parties agree that they will use reasonable endeavours to procure that any confidentiality undertaking(s) they enter into in respect or any pipeline opportunities, approved opportunities or any investees company shall, so far as practicable, include a carve out to enable information to be shared between parties.

14.21 Summary of the agreements relating to Columbia University

14.21.1 Collaboration Agreement relating to the IP Commercialisation Partnership

Pursuant to a collaboration agreement dated 24 October 2013 and made between (1) IP Group, Inc., (2) IP2IPO Americas Limited (together "IPG") and (3) The Trustees of Columbia University in the City of New York, on behalf of Columbia Technology Ventures (the "Columbia University"), the parties agreed certain arrangements with regard to an IP commercialisation partnership in connection with the commercialisation of early-stage, proof of principle opportunities based on intellectual property developed at Columbia University and geared towards the formation of spin-out companies. Broadly summarised, these arrangements entitle IPG, at its sole discretion and determination, to fund proof of principle ("POP") opportunities up to an aggregate level of \$500,000 over a period of 18 months from the date of the agreement (the "Pilot Term").

During the Pilot Term, IPG shall support and work in co-operation with the University in its identification of potential commercialisation opportunities in or relating to technologies developed within the University.

14.21.2 Extension of the Collaboration Agreement

Pursuant to an agreement (the "Columbia Extension") made between the parties on 4 June 2015 it was agreed that the Pilot Term be extended with effect from 23 April 2015 to subsist for an indefinite period until otherwise terminated in accordance with the provisions of the Columbia Extension itself.

Pursuant to the provisions of the Columbia Extension all other terms of the collaboration agreement remain in full force and effect with the Columbia Extension providing additional detail in its terms with regards the way in which the parties would work together in identifying and developing commercialisation opportunities. The Columbia Extension provides that where the relevant opportunity identified by IPG is moved forward to investment stage either by way of (i) pre-seed, proof of principle investment of typically up to \$100,000 in the form of a convertible loan (or other suitable or equivalent structure) ("POP Funding"), or (ii) early stage, seed capital investment of up to \$750,000 ("Seed Funding"), then the parties shall work together in good faith during an agreed 4 month period ("Investment Execution Period") to reach formal legal execution of the contemplated investment prior to expiry of that Investment Execution Period.

Where IPG elects to invest by way of POP Funding, Columbia University will use reasonable endeavours to procure the right of first refusal for IPG in relation to any subsequent Seed Funding.

14.22 Summary of the agreements relating to University of Pennsylvania

14.22.1 Collaboration Agreement relating to the IP Commercialisation Partnership

Pursuant to a collaboration agreement dated 11 November 2013 and made between (1) IP Group, Inc., (2) IP2IPO Americas Limited (together "IPG") and (3) The Trustees of the University of Pennsylvania ("Penn"), the parties agreed certain arrangements with regard to an IP commercialisation partnership in connection with early-stage, proof of principle opportunities for IPG to invest in technologies and companies based on Penn IP through

Upstart (the UPstart company formation program of Penn's Centre for Technology Transfer). Broadly summarised, these arrangements entitle IPG, at its sole discretion and determination, to fund proof of principle ("POP") opportunities up to an aggregate level of US \$500,000 over a period of 18 months from the date of the agreement (the "Pilot Term").

During the Pilot Term, IPG shall support and work in co-operation with Penn in its identification of potential commercialisation opportunities in or relating to technologies designated by Upstart.

14.22.2 Extension of the Collaboration Agreement

Pursuant to an agreement (the "Penn Extension") made between the parties on 26 August 2015 it was agreed that the Pilot Term be extended with effect from 11 May 2015 to subsist for an indefinite period until otherwise terminated in accordance with the provisions of the Penn Extension itself.

Pursuant to the provisions of the Penn Extension all other terms of the collaboration agreement remain in full force and effect with the Penn Extension providing confirmatory and additional detail in its terms with regards the way in which the parties would work together in identifying and developing commercialisation opportunities. The parties agreed, pursuant to the terms of the Penn Extension that where proof of principle funding had been advanced by IPG in relation to an investment opportunity, that IPG shall have a first right to participate in any subsequent seed round of funding.

14.23 Summary of the agreements relating to Princeton University

14.23.1 Collaboration Agreement relating to the IP Commercialisation Agreement

Pursuant to a collaboration agreement dated 28 March 2014 and made between (1) IP Group, Inc., (2) IP2IPO Americas Limited (together "IPG") and (3) The Trustees of Princeton University, the parties agreed certain arrangements with regard to an IP commercialisation partnership in connection with the commercialisation of early-stage, proof of principle opportunities based on intellectual property developed at Princeton University and geared towards the formation of spin-out companies. Broadly summarised, these arrangements entitle IPG, at its sole discretion and determination, to fund proof of principle ("POP") opportunities up to an aggregate level of US \$500,000 over a period of 18 months from the date of the agreement (the "Pilot Term").

14.23.2 Extension of the Collaboration Agreement

Pursuant to an agreement (the "Princeton Extension") made between the parties on 14 April 2016 it was agreed that the Pilot Term be extended with effect from 28 September 2015 to subsist for an indefinite period until otherwise terminated in accordance with the provisions of the Princeton Extension itself.

Pursuant to the provisions of the Princeton Extension all other terms of the collaboration agreement remain in full force and effect with the Princeton Extension providing additional detail in its terms with regards the way in which the parties would work together in identifying and developing commercialisation opportunities. The Princeton Extension provides that where the relevant opportunity identified by IPG Americas is moved forward to investment stage either by way of (i) pre-seed, proof of principle investment of typically up to \$100,000 in the form of a convertible loan (or other suitable or equivalent structure) ("POP Funding"), or (ii) early stage, seed capital investment of up to \$750,000 ("Seed Funding"), then the parties shall work together in good faith during an agreed 4 month period ("Investment Execution Period") to reach formal legal execution of the contemplated investment prior to expiry of that Investment Execution Period

Where IPG Americas elects to invest by way of POP Funding, Princeton University will use reasonable endeavours to procure the right of first refusal for IPG Americas in relation to any subsequent Seed Funding.

14.24 Summary of the FedIMPACT, LLC Operating Agreement

Pursuant to an operating agreement dated 3 October 2014 (as amended on 3 April 2016) between (1) TNT Management, LLC ("TNT") and (2) IP2IPO FI Limited and IP Group, Inc. (together "IPG Group"), the parties agreed to establish a limited liability company in the State of Delaware under the name FedIMPACT, LLC ("FedIMPACT" or the "LLC") to carry on the business of identifying, funding, developing and commercialising promising technologies sourced from an initial group of US Department of Energy National Laboratories being Pacific Northwest National Laboratory, Argonne National Laboratory and National Renewable Energy Laboratory (together the "DOE Laboratories") pursuant to an engagement with such laboratories (the "DOE Engagement").

The principal provisions of the operating agreement are as follows:

(a) IPG Group contributed \$75,000 to the capital of the LLC and agreed to contribute, prior to the first day of each fiscal quarter, additional capital contributions to the LLC in the amount equal to the LLC's operating budget contained in such operating plan;
(b) the "Class A Interests" (held by TNT) shall be voting, participating interests and the "Class B Interests" (held by IPG Group) shall be non-voting, participating interests;
(c) the board of managers consists of three members, one of whom IPG Group shall have the right to appoint one of whom TNT shall have the right to appoint and one of whom shall be appointed jointly by IP Group and TNT;
(d) the board of managers shall not have the right to take certain actions without the prior written approval of both IPG Group and TNT including but not limited to:
(i) any amendment or change to the formation documents;
(ii) redemptions or repurchases of interests, issuance of interests or recapitalisations of any type or any changes including in capital structure;
(iii) the sale, licence, assignment, transfer, lease, sublease, mortgage, pledge, disposal etc. of all or substantially all of the LLC's assets;
(iv) approving the operating plan and expenditures over and above the budget included in the operating plan;
(v) dissolution or liquidation of the LLC or any subsidiary of the LLC;
(vi) entering into joint-venture agreements, formal strategic alliance or other partnership type arrangement or collaboration, etc.;
(vii) declaration or payment of dividends, distributions, special payments or reimbursements etc.;
(viii) changing the composition of the board of managers;
(ix) adding or removing any laboratory from the DOE Engagement or changing the scope of the DOE Engagement;
(x) investing any POC Funding or Seed Funding (as defined below);
(xi) entering into any technology licensing agreements with any of the DOE Laboratories; or
(xii) entering into any management or consultancy agreements, except as otherwise stated in the operating agreement;
(e) the LLC will be responsible for delivering the objectives of the DOE Engagement and will be the primary interface during the DOE Engagement with the DOE Laboratories;
(f) in coordination with the IPG Group, the LLC will select technologies sourced from the DOE Laboratories as being suitable for investment, either through proof of concept funding with additional technical development to be performed at the DOE Laboratory ("POC Funding") or through more mature seed investments made directly into independent spin-out companies ("Seed Funding");
(g) for POC Funding, the LLC will in addition to the POC Funding provide program management services under a sponsored research agreement with the relevant DOE Laboratory and enter into an option to licence the proof of concept technology ("Technology Option");
(h) for Seed Funding resulting out of a POC Funding ("Type A Seed Technologies"), it is anticipated that, subject to agreement by the relevant DOE Laboratory, 55% of the equity in

each new company ("NewCo") formed to develop the Type A Seed Technology will be issued to the LLC in exchange for contribution by the LLC to the NewCo of the Technology Option rights, technology and know-how; it is further anticipated that, subject to agreement by the relevant DOE Laboratory, the NewCo enter into a license agreement with the relevant DOE Laboratory to obtain the exclusive rights to the Type A Seed Technology in exchange for a combination of 45% NewCo equity issued to the relevant DOE Laboratory and royalties payable to the DOE Laboratory;

(i) for Seed technologies not requiring any prior POC Funding ("Type B Seed Technologies"), it is anticipated that, subject to agreement by the relevant DOE Laboratory, 33% of the equity in each NewCo formed to develop the Type B Seed Technology will be issued to the LLC; it is further anticipated that, subject to agreement by the relevant DOE Laboratory, the NewCo enter into a license agreement with the relevant DOE Laboratory to obtain the exclusive rights to the Type B Seed Technology in exchange for a combination of 67% NewCo equity issued to the relevant DOE Laboratory and royalties payable to the DOE Laboratory;
(j) concurrent with the Seed Funding and in consideration of the capital contributions made by IPG Group to the LLC under the operating agreement, the LLC will make a distribution of the NewCo equity held by the LLC to TNT (10%) and IPG Group (90%), unless otherwise provided for under the operating agreement;
(k) IPG Group has the option, but not the obligation, to purchase all of the Class A Interests held by TNT, subject to distributing any NewCo equity in accordance with the terms of the operating agreement;
(l) the operating agreement shall terminate at any time upon the mutual written agreement of IPG Group and TNT unless IPG Group has exercised its option to purchase all the Class A Interests held by TNT. Upon the exercise of such option, IPG Group will be a sole member of the LLC.

14.25 Summary of the Go9 Agreements

14.25.1 Pursuant to the Go9 Agreements made or to be made in each case between (1) the relevant Go9 University, (2) the Company, (3) IP2IPO Australia and (4) IP2IPO Asia-Pacific Limited ("IP2IPO APAC"), the parties have agreed certain arrangements with regards to the sourcing and commercialisation of the IP created by the relevant Go9 Universities (subject in each case to certain exclusions) and the creation of businesses based on such IP. IP2IPO APAC is a wholly owned subsidiary of the Company and will be the investing entity for the purposes of the Go9 Agreements.
14.25.2 The principal provisions of the Go9 Agreements, subject to bespoke procedural and administrative variations agreed with each of the Go9 Universities which do not have a material commercial impact upon, or materially alter, the terms of the Go9 Agreements or the overall commercial arrangements reached with the Go9 Universities, are as follows:
(a) the obligations of the parties under the Go9 Agreements are conditional upon, among other things (i) the Company raising not less than AU\$100m under the Capital Raising for the non-exclusive purpose of funding IP2IPO Australia to meet its obligations under the Go9 Agreements and (ii) IP2IPO Australia and the Company having entered into the relevant Go9 Agreements with each of the Universities and none of such agreements having been breached or terminated, in each case within 8 months of the date of the Go9 Agreement. The date on which the last of the conditions is satisfied or waived (in whole or in part) will be the "Completion Date".
(b) the Group has committed to invest at least AU\$200 million (the "Committed Funds") in aggregate over the first ten years of the Agreement (the "Initial Period"); after the first ten years the Group is generally committed to use reasonable endeavours to deploy additional capital that would be adequate to maintain at least the same level of economic activity undertaken by IP2IPO Australia during the Initial Period;
(c) the initial term of each of the Go9 Agreements is a period of twenty years from the date which is 90 days after the Completion Date, or such later date as may be agreed (the "Effective Date") unless terminated earlier by any party pursuant to the terms of the relevant Go9 Agreement;
(d) each Go9 Agreement may be terminated as follows:
(i) by either party by giving 30 days notice in writing if: (a) either party is in material breach of any of its obligations under the Go9 Agreement and (in relation to breaches capable of being remedied), fails to remedy the same within a period of 30 days after written notice of the breach; or (b) that party is suffering some form of insolvency;
(ii) by the Go9 University, in the event that the Group has not invested AU\$200 million in aggregate within the first ten years;
(iii) by IP2IPO Australia without liability upon providing 6 months' written notice to the Go9 University if the policies of the Go9 University governing the arrangements relevant to the ownership, use and commercialisation of its intellectual property is changed to the material detriment of IP2IPO Australia;
(e) mutual exclusivity has been agreed as follows:
(i) subject to certain limited exceptions (as set out below), the Group and IP2IPO Australia have agreed not to enter into any agreement with any research institution, university or third party in Australia or New Zealand (other than the Go9 Universities) to develop and commercialise IP of that third party during the Initial Period (with an extension to this exclusivity commitment to be discussed as part of the ten year review referred to below). The exceptions to this exclusivity commitment include:
- (1) termination by a Go9 University of its Go9 Agreement at any time during the Initial Period, in which case IP2IPO Australia and the Group may enter into equivalent agreements with other Australian or New Zealand institutions having equivalent research capabilities;
- (2) termination by the Group or IP2IPO Australia of the relevant Go9 Agreements because of a fundamental breach of contract by the Go9 University or insolvency of the Go9 University, in which case IP2IPO Australia and the Group may enter into equivalent agreements with other Australian or New Zealand institutions having equivalent research capabilities;
- (3) investment decision made by the Group and IP2IPO Australia in non-Go9 University intellectual property for economic reasons (enhancing its value and portfolio), in which case the Group and IP2IPO Australia can proceed with the investment provided that the agreement entered into is not similar to the Go9 Agreements, and any capital expenditure on such investments shall be additional to, and not comprise any of, the Committed Funds;
- (4) investment by the Group and IP2IPO Australia in intellectual property of the Go9 University which existed prior to entering into the Go9 Agreement subject to any capital expenditure on such investments being additional to, and not comprising any of, the Committed Funds; and
- (5) authority for the Group and IP2IPO Australia to enter into agreements (equivalent to the Go9 Agreements or otherwise) with certain other commercial entities listed in the Go9 Agreements subject to any capital expenditure on such investments being additional to, and not comprising any of, the Committed Funds;
(ii) subject to certain limited exceptions (as set out below) each of the Go9 Universities has committed not, without the prior written consent of IP2IPO Australia and the Group or except as specifically contemplated by the relevant Go9 Agreement, to enter into any agreement which would or could give rise to a conflict with the terms of the relevant Go9 Agreement during the Initial Period (with an extension to this exclusivity commitment to be discussed as part of the ten year review referred to below). The exceptions to this exclusivity commitment are in relation to:
(1) consultancy or collaboration or agreement for the funding or research and development undertaken by or at the Go9 University, in either case entered into in the ordinary course of the Go9 University's business but excluding any agreement with the object to pipeline intellectual property;
(2) arrangements which have been established for the purposes of accessing funds from specific government agencies or funds;
(3) arrangements which have been established for the purposes of accessing funds from specific not-for-profit institutions; and
(4) where there are any other arrangements which are operated on a 'not-forprofit basis;
(f) the relevant Technology Transfer Office of each Go9 University (or any equivalent body within the Go9 University) will be in charge of determining the ownership and validity of the IP and decide whether the potential invention, idea or concept whether solely or jointly owned (the "Disclosure") can be qualified as having the merit of potentially having commercial benefit (the "Qualified Disclosure");
(g) the Go9 Universities have agreed not to present Disclosures to third parties for the purposes of securing investment during the period when the Go9 University is evaluating the Disclosure to determine whether it is a Qualified Disclosure, unless it has existing obligations to share Disclosures with any specifically designated investors (as set out in each Go9 Agreements, the "Designated Investors");
(h) once a Disclosure has been qualified as a Qualified Disclosure, IP2IPO Australia has a period to determine whether it wishes to develop an investment case;
(i) nothing in the Go9 Agreements prevents the Go9 Universities from presenting a Qualified Disclosure to its Designated Investors or specifically agreed allied university funds at the same time as it is submitted to IP2IPO Australia;
(j) IP2IPO Australia's right to Qualified Disclosures ceases if IP2IPO Australia refuses to develop an investment case or does not notify the University within the prescribed period of its intention to develop an investment case;
(k) where IP is jointly owned with a third party that is not a Go9 University, the Go9 University shall use reasonable endeavours:
(i) to obtain permission from the joint owner(s) to present the Disclosure or Qualified Disclosure to IP2IPO Australia; and
(ii) to introduce IP2IPO Australia to the joint owners of the IP.

IP2IPO Australia and the third party owner of the IP may discuss and negotiate appropriate terms and any capital committed by IP2IPO Australia shall be deemed to have been made from the Committed Funds;

(l) where a Designated Investor has expressed an interest in developing a Disclosure or Qualified Disclosure, IP2IPO Australia will offer to meet the Designated Investor to determine how to invest in and develop the underlying project. If the Go9 University, the Designated Investor and the Group agree to pursue the development, the relevant parties shall agree a plan to develop the opportunity into an investment case and shall use all reasonable endeavours to agree an investment position on terms that are consistent with those prescribed in the relevant Go9 Agreement (unless the parties cannot agree in which case the Go9 University will determine which of the parties shall be entitled to invest in or develop the relevant Disclosure or Qualified Disclosure);

(m) if IP2IPO Australia wishes to develop an investment case, it shall serve a notice on the Go9 University within a prescribed period whereupon it shall have the co-exclusive right (along with the Designated Investors, if any) to further evaluate the Qualified Disclosure. If it fails to do so it loses the right to the Qualified Disclosure. The Go9 Agreements specify the process to be followed to agree the manner and method and delineation of responsibilities for the preparation of the investment case in relation to, amongst other things, technology, strategies, business models, funding and the optimal structure of any spin-out company;
(n) IP2IPO Australia and the Go9 University will agree the level of equity in any spin-out company to which IP2IPO APAC shall be entitled (if any) which will not be greater than 10 per cent. of the initial equity in the spin-out company. In the event that the Go9 University or any Designated Investor undertakes all of the initial work in relation to the investment case, IP2IPO APAC shall not be entitled to any equity;
(o) if IP2IPO Australia has prepared an investment case, it will present that investment case at a meeting of its investment committee and shall notify the Go9 University of the decision of the investment committee. If the investment case is approved by the investment committee, the parties shall proceed to establish a structure to invest in the Qualified Disclosure, subject to any conditions which are agreed. In the event that the investment case is not approved, IP2IPO Australia will cease to have any rights in respect of the Qualified Disclosure.
(p) once an investment case has been approved, IP2IPO APAC shall, at incorporation of a Spin-out company, invest up to AU\$300,000 (or such other amount as may be agreed) in the form of a loan, whereupon the spin-out company will enter into an agreed form pre-seed loan agreement. At seed round investment stage, each spin-out company shall have an agreed pre-money valuation of AU\$1.3 million ("Pre-Money Valuation"). The Go9 University is entitled to capitalise the amount of certain expended costs by the Go9 University into equity at seed level;
(q) the initial shareholders of each spin-out company shall be the Go9 University (or relevant Go9 University fund/entity), IP2IPO APAC and any Designated Investor (and any other parties as agreed at seed stage). The parties have agreed standard documentation to be entered into by the spin-out company, comprising a pre-seed loan agreement and a subscription and shareholders' agreement and have agreed a constitution to be adopted by the spin-out company. The Go9 University has a right of veto in relation to the creation of any spin-out company where such an opportunity is not considered to be consistent with its charitable status and/or in line with the provisions of the Go9 University statute;
(r) the University and any allied university fund can elect to provide funding to a spin-out company on equivalent commercial terms to those on which IP2IPO APAC provides such funding and if the amount of funding proposed by each investor exceeds the funding required for that stage of the project, the amount of funding shall be scaled back on a pro-rata basis;
(s) if an investment case in respect of a Qualified Disclosure or an updated investment case in respect of a spin-out company that has already received a pre-seed loan has been

approved by IP2IPO Australia's investment committee, IP2IPO APAC may elect to provide seed funding to the spin-out company at the Pre-Money Valuation. Any amounts advanced under a pre-Seed loan shall convert into equity at 85% of the Pre-Money Valuation. Any post-seed investments fall outside the scope of the Go9 Agreements. The provisions relating to funding under the Go9 Agreements are subject at all times to a veto by an academic or student of the Go9 University;

(t) each Go9 University agrees to license the Go9 University IP comprising the relevant Qualified Disclosure to each spin-out company on an exclusive basis. The University will receive a nominal amount by way of consideration and the licence will be royalty and milestone free. No other payments will be due other than registration and prosecution fees. The licence will be assigned to the spin-out company in certain specified circumstances;
(u) a Go9 University may, during the Initial Period, nominate up to 10 Disclosures or Qualified Disclosures that it considers are likely to command a pre-money valuation of over AU\$3 million ("Exceptional Projects") with further allowance to be agreed by the Company following expiry of the Initial Period. Following the disclosure of the Exceptional Project to IP2IPO Australia (and to other parties if the Go9 University wishes), IP2IPO Australia may decide to enter into negotiations with the Go9 University or any other parties in relation to an investment in the Exceptional Project. If IP2IPO Australia elects to enter into negotiations in relation to the Exceptional Project, it shall be entitled to undertake reasonable due diligence and the preliminary terms of any investment shall be set out in a term sheet to be provided by IP2IPO Australia prior to commencement of due diligence;
(v) the Go9 Agreements contain annual reporting and review provisions, an operational and markets review in the fifth year of the term, and 10 year and 15 year reviews where representatives of the Go9 University and IP2IPO Australia shall meet to discuss the investment performance of investments made by IP2IPO Australia, the status of commercialisation activity at the Go9 University, regional and national levels and potential amendments to the Go9 Agreement, including the proposed number of Disclosures or Qualified Disclosures that the Go9 University may nominate as Exceptional Projects for the next 10 year period; and
(w) representations and warranties typical to each arrangement are given by IP2IPO Australia, IP2IPO APAC and the Company to the Universities and from the Universities to IP2IPO Australia and IP Group.

14.26 EIB Debt Facility

The Company has entered into a £30 million, 8-year debt facility with the European Investment Bank on 9 July 2015.

The facility will be disbursed in two tranches of not less than £10 million each. The facility is unsecured and is repayable over a period of 8 years. The facility provides the Company with an additional source of long-term capital to support its future growth and development. The Company has drawn down £15 million of the facility to date.

14.27 Other Material Contracts

14.27.1 The Placing Agreement

On 23 May 2017, the Company entered into the Placing Agreement with Numis in respect of the Firm Placing and Placing, Open Offer and Offer for Subscription.

Pursuant to the terms and conditions contained in the Placing Agreement, the Company appointed Numis as (i) sponsor in connection with Admission; (ii) its agent for the purpose of publishing the Open Offer and Offer for Subscription; (iii) its agent for implementing the Placing, in relation to which Numis agreed to use its reasonable endeavours to procure Non-Firm Placees for the Placing Shares; and (iv) its agent for implementing the Firm Placing, in relation to which Numis agreed to its reasonable endeavours to procure Firm Placees for all of the Firm Placed Shares and, to the extent that Numis fails to procure such Firm Placees, Numis shall subscribe as principal for any Firm Placed Shares not taken up at the Issue Price as underwriter of the Firm Placing. Numis has not agreed to underwrite the Placing, the Open Offer or the Offer for Subscription.

In consideration of Numis' services under the Placing Agreement, the Company agreed to pay to Numis, subject to and conditional upon Admission, a placing fee of between 1 and 3 per cent. of the total aggregate gross proceeds of the Capital Raising and all properly incurred costs or expenses of, or in connection with the Firm Placing, the Placing and Open Offer, Admission and the Placing Agreement.

The obligations of Numis under the Placing Agreement are subject to certain conditions being satisfied.

The Company gave certain customary warranties and indemnities to Numis. The liabilities of the Company under those warranties and indemnities are unlimited as to time and amount.

14.27.2 Acquisition of Parkwalk Advisors Ltd

On 15 December 2016, the Company entered into a share purchase agreement with the shareholders of Parkwalk Advisors Ltd pursuant to which the Company agreed to acquire the entire issued share capital of Parkwalk Advisors Ltd, a university spin-out focused enterprise investment scheme fund manager. Completion occurred on 31 January 2017.

The total maximum consideration payable to the sellers pursuant to the share purchase agreement is £20 million (on a debt free/cash free basis) over a three year period. The initial consideration comprised £5 million and was paid in cash on the date of completion. A further payment of £2.5 million is payable by 31 October 2017 which will be satisfied by either a cash payment of £2.5 million or the allotment of such number of Shares that have an aggregate value of £2.5 million (at the election of the Company). There is a further £2.5 million of cash payable in two equal tranches on 31 January 2018 and 31 January 2019, subject to certain conditions. The remaining £10 million consideration is payable as £5 million in cash and £5 million in Shares over a three-year period from the date of completion, subject to Parkwalk Advisors Ltd achieving certain business performance targets.

The share purchase agreement contained customary warranties in favour of the Company.

14.27.3 Engagement of DealGlobe Information Consulting Co. Limited

On 19 May 2017 the Company entered into a letter agreement with DealGlobe Information Consulting Co. Limited ("DealGlobe") pursuant to which the Company appointed DealGlobe as its financial adviser in the People's Republic of China solely in relation to an agreed list of potential investors in connection with the Capital Raising. In consideration of DealGlobe's services the Company will pay DealGlobe a fee equal to between 1 and 2 per cent. of the funds raised from the identified list of potential investors. In the Company's absolute discretion and where no fee is otherwise payable to DealGlobe the Company may pay DealGlobe a discretionary fee of up to £250,000 in the event that the Company determines that DealGlobe's performance warrants it. The Company is obliged to costs and expenses incurred in connection with the services provided by DealGlobe.

15. LITIGATION

There are no, and have been no, governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) during the period of twelve months immediately preceding the date of this document which may have, or have had in the recent past, significant effects on the Company's financial position or profitability.

16. PENSIONS

IP Group operates a group pension scheme for which all employees are eligible. The assets of the scheme are held separately from those of IP Group in an independently administered fund. The Company makes contributions at an agreed level on behalf of each of its employees (including the Executive Directors) to either this scheme or to a personal pension scheme which has been nominated by the relevant employee for such purpose. The Group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expenses when they are due.

17. SIGNIFICANT SUBSIDIARIES

The following table contains a list of the principal subsidiaries of the Company as at 22 May 2017 (being the latest practicable date prior to the publication of this document), each of which is considered by the Company to be likely to have a significant effect on the assessment of the assets and liabilities, the principal position and/or the profits and losses of the Company.

		Proportion of	Proportion of
		ownership	voting power
Name of subsidiary	Country of incorporation	interest (%)	held (%)
Biofusion Licensing (Sheffield) Limited	England and Wales	100	100
Fusion IP Cardiff Limited	England and Wales	100	100
Fusion IP Nottingham Limited	England and Wales	100	100
Fusion IP plc	England and Wales	100	100
Fusion IP Sheffield Limited	England and Wales	100	100
Fusion IP Two Limited	England and Wales	100	100
IP Assist Services Limited15	England and Wales	100	100
IP Capital Limited	England and Wales	100	100
IP Group Inc.	United States of America	90	90
IP Industry Partners Limited	England and Wales	100	100
IP Venture Fund (GP) Limited	England and Wales	100	100
IP Ventures (Scotland) Limited	England and Wales	100	100
IP2IPO Limited	England and Wales	100	100
IP2IPO Americas Limited	England and Wales	100	100
IP2IPO Asia Pacific Limited	England and Wales	100	100
IP2IPO Australia Pty Limited	Australia	100	100
IP2IPO Carry Partner Limited	England and Wales	100	100
IP2IPO (Europe) Limited	England and Wales	100	100
IP2IPO FI Limited	England and Wales	100	100
IP2IPO Guarantee Limited	England and Wales	100	100
IP2IPO Management Limited	England and Wales	100	100
IP2IPO Management II Limited	England and Wales	100	100
IP2IPO Management III Limited	England and Wales	100	100
IP2IPO Management IV Limited	England and Wales	100	100
IP2IPO Management VI Limited	England and Wales	100	100
IP2IPO Management VII Limited	England and Wales	100	100
IP2IPO Management VIII Limited	England and Wales	100	100
IP2IPO Nominees Limited	England and Wales	100	100
IP2IPO Portfolio (GP) Limited	England and Wales	100	100
IP2IPO Services Limited	England and Wales	100	100
IP2IPO US Partners Limited	England and Wales	100	100
LifeUK (IP2IPO) Limited	England and Wales	100	100
MBS Director Limited	England and Wales	63	74,9
MBS Secretarial Limited	England and Wales	63	74,9
Modern Biosciences plc	England and Wales	63	74,9

15 formerly Techtran Group Limited

		Proportion of	Proportion of
		ownership	voting power
Name of subsidiary	Country of incorporation	interest (%)	held (%)
North East Technology (GP) Limited	England and Wales	100	100
Parkwalk Advisors Limited	England and Wales	100	100
PIMCO 2664 Limited	England and Wales	63	74,9
Top Technology Ventures Limited	England and Wales	100	100
Union Life Sciences Limited	England and Wales	100	100

18. PROPERTY, PLANT AND EQUIPMENT

As at 31 December 2016, the net book value of property, plant and equipment held by IP Group was £0.2 million. There have been no material changes in the net book value of the property, plant and equipment held by the Company since that date.

19. SIGNIFICANT CHANGE

There has been no significant change in the financial or trading position of the Group since 31 December 2016, being the date to which the latest audited financial statements of the Company were prepared.

20. RELATED PARTY TRANSACTIONS

20.1 Save as set out in paragraph 20.2 below or disclosed no member of the Group has entered into a related party transaction during the period commencing on 1 January 2014 and ending on 22 May 2017 (being the latest practicable date prior to the publication of this document).
20.2 Details of all related party transactions that have been entered into by a member of the Group during the period commencing on 1 January 2013 and ending on 22 May 2017 (being the latest practicable date prior to the publication of this document) are set out below:

20.2.1 Limited partnerships

The Group manages a number of investment funds structured as limited partnerships. Group entities have a limited partnership interest and act as the general partners of these limited partnerships. The Company therefore has power to exert significant influence over these limited partnerships. The following amounts in respect of these limited partnerships are included within the Company's accounting records as at 31 December 2016:

Period to 31 December 2016
£m
0.9
As at 31 December 2016
£m
2.8
0.2

20.2.2 Director transactions

The Directors had beneficial interests in shares in the following portfolio companies in which the Group is interested as at 22 May 2017 (the latest practicable date prior to publication of this document):

		Number of
		shares
Director	Company name	held at	%
Mike Humphrey	–	–	–
Alan Aubrey	Accelercomm Limited	333	0.30
	Alesi Surgical Limited	18	0,20
	Amaethon Limited — A Shares	104	3,10
	Amaethon Limited — B Shares	11 966	1,00
	Amaethon Limited — Ordinary shares	21	0,30
	Avacta Group plc	202 761	0,30
	Boxarr Limited	1 732	0,30
	Capsant Neurotechnologies Limited	11 631	0,80
	Cloud Sustainability Limited	26	0,40
	Crysalin Limited	1 447	0,10
	Diurnal Group plc	15 000	<0.1
	EmDot Limited	15	0,90
	Empiricom Technologies Limited	119 965 724	17,30
	Getech Group plc	15 000	<0.1
	Gunsynd plc	767 310	<0.1
	hVivo plc	37 160	<0.1
	Ilika plc	69 290	<0.1
	Karus Therapeutics Limited	223	<0.1
	Microbiotica Limited	3 750	<0.1
	Mirriad Advertising Limited	33 333	<0.1
	MDL 2016 Limited — Ordinary shares	3 226	0,40
	MDL 2016 Limited — A shares	229	0,50
	Modern Biosciences plc	1 185 150	1,70
	Modern Water plc	519 269	0,70
	Cronin Group plc	2 172 809	0,40
	Oxford Nanopore Technologies Limited	101 208	0,40
	Oxtox Limited	–	0,00
	Perachem Holdings plc	128,067	0.30
	Revolymer plc	88 890	0,10
	Salunda Limited	53 639	<0.1
	Structure Vision Limited	212	1,00
	Surrey Nanosystems Limited	453	0,30
	Tissue Regenix Group plc	2 389 259	0,30
	Xeros Technology Group plc	40 166	<0.1
	Zeetta Networks Limited	424	<0.1

		Number of
		shares
Director	Company name	held at	%
Mike Townend	Amaethon Limited — A Shares	104	3,10
	Amaethon Limited — B Shares	11 966	1,00
	Amaethon Limited — Ordinary shares	21	0,30
	Applied Graphene Materials plc	7 619	<0.1
	Avacta Group plc	20 001	<0.1
	Capsant Neurotechnologies Limited	11 282	0,80
	Cloud Sustainability Limited	25	0,40
	Creavo Technologies Limited	117	<0.1
	Crysalin Limited	1 286	0,10
	Diurnal Group plc	15 000	<0.1
	EmDot Limited	14	0,80
	Getech Group plc	20 000	<0.1
	hVivo plc	37 160	<0.1
	Ilika plc	10 000	<0.1
	Mirriad Advertising Limited	25 000	<0.1
	Mode Diagnostics Limited	1 756	0,10
	Modern Biosciences plc	1 185 150	1,70
	Modern Water plc	575 000	0,70
	Cronin Group plc	932 944	0,20
	Oxford Advanced Surfaces Limited	5 000	0,20
	Oxford Nanopore Technologies Limited	30 967	0,10
	Oxtox Limited	–	0,00
	Perachem Holdings plc	113 222	0,80
	Revolymer plc	64 940	<0.1
	Structure Vision Limited	212	1,00
	Surrey Nanosystems Limited	404	0,20
	Tissue Regenix Group plc	1 950 862	0,30
	Tracsis plc	–	0,00
	Ultrahaptics Holdings Limited	11 000	<0.1
	Xeros Technology Group plc	35 499	<0.1
Greg Smith	Alesi Surgical Limited	2	<0.1
	Avacta Group plc	3 904	<0.1
	Capsant Neurotechnologies Limited	896	<0.1
	Cloud Sustainability Limited	8	0,10
	Crysalin Limited	149	<0.1
	Diurnal Group plc	15 000	<0.1
	EmDot Limited	4	0,20
	Encos Limited	5 671	0,30
	Getech Group plc	8 000	<0.1
	hVivo plc	61 340	<0.1
	Perachem Holdings plc	4 830	<0.1
	Mirriad Advertising Limited	16 667	<0.1
	MDL 2016 Limited — Ordinary shares	361	<0.1
	MDL 2016 Limited — A shares	28	<0.1
	Modern Biosciences plc	313 425	0,50
	Modern Water plc	7 250	<0.1
	Oxford Nanopore Technologies Limited	1 581	<0.1
	Revolymer plc	4 500	<0.1
	Summit Therapeutics plc	798	<0.1
	Surrey Nanosystems Limited	88	<0.1
	Tissue Regenix Group plc	50 000	<0.1
	Xeros Technology Group plc	1 392	<0.1

		Number of
		shares
Director	Company name	held at	%
David Baynes	Alesi Surgical Limited	4	<0.1
	Arkivum Limited	377	<0.1
	Creavo Technologies Limited	46	<0.1
	Diurnal Group plc	73 000	0,10
	Mirriad Advertising Limited	16 667	<0.1
	Oxford Nanopore Technologies Limited	174	<0.1
	Ultrahaptics Holdings Limited	2 600	<0.1
	Zeetta Networks Limited	424	<0.1
Douglas Liversidge	–	–	–
Jonathan Brooks	–	–	–
Lynn Gladden	–	–	–
Elaine Sullivan	–	–	–

20.2.3 Portfolio companies

The Group earns fees from the provision of business support services and corporate finance advisory to portfolio companies in which IP Group has an equity stake. The following amounts in respect of these fees are included within IP Group's accounting records as at 31 December 2016:

	Period to 31 December 2016
Statement of comprehensive income	£m
Revenue from services	1.6
	As at 31 December 2016
Statement of financial position	£m
Trade receivables	0.7

20.2.4 Subsidiary companies

Subsidiary companies which are not 100% owned either directly or indirectly by the parent company have intercompany balances with other Group companies totalling as follows:

	As at 31 December 2016
	£m
Intercompany balances with other Group Companies	10.7

These intercompany balances represent funding loans provided by Group companies that are interest free, repayable on demand and unsecured.

21. MISCELLANEOUS

21.1 The total cost and expenses of, and incidental to, the Capital Raising payable by the Company are estimated to amount to approximately £4.3 million. If the Directors exercise their discretion to increase the size of the Capital Raising to £266.6 million, the total costs and expenses of, and incidental to, the Capital Raising payable by the Company are estimated to be approximately £5.7 million (excluding VAT).
21.2 The Company's Registrar is Capita Asset Services, whose address is at The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.
21.3 Numis has given, and has not withdrawn, its written consent to the issue of this document with the inclusion herein of its name and references to it in the form and context in which they appear.
21.4 Rothschild has given, and has not withdrawn, its written consent to the issue of this document with the inclusion herein of its name and references to it in the form and context in which they appear.
21.5 Statutory accounts of the Company for each of the financial years ended 31 December 2013, 31 December 2014 and 31 December 2015 have been delivered to the Registrar of Companies and the Company's auditors have made a report under section 495 of the Companies Act in respect of each of those statutory accounts and each such report was an unqualified report and did not contain a statement under section 498(2) or (3) of the Companies Act.
21.6 The Existing Shares are in registered form, are capable of being held in uncertificated form and are admitted to the premium segment of the Official List and are traded only on the main market for listed securities of the London Stock Exchange. Application for trading of the Capital Raising Shares is not being, and will not be, sought on any other stock exchange other than the main market for listed securities of the London Stock Exchange. The Capital Raising Shares will be admitted with the ISIN GB00B128J450.
21.7 The Capital Raising Shares will be in registered form and, subject to the provisions of the Regulations, the Directors may permit the holding of shares of any class in uncertificated form and title to such shares may be transferred by means of a relevant system (as defined in the Regulations). Where shares are held in certificated form, share certificates will be sent to the registered members by first class post. Where shares are held in CREST, the relevant CREST stock account of the registered members will be credited.
21.8 The Capital Raising Shares will be issued at 140 pence per Share. The Issue Price represents a 2.1 per cent. discount to the closing middle-market price of 143 pence per Share on 22 May 2017 (being the latest practicable date before the announcement of the terms of the Capital Raising).
21.9 Save in respect of the Open Offer and/or Offer for Subscription, none of the Capital Raising Shares have been marketed or are available to the public in conjunction with the application for the Capital Raising Shares to be admitted to the premium segment of the Official List.
21.10 The Company will make an appropriate announcement to a Regulatory Information Service giving details of the results of the Capital Raising in accordance with the Listing Rules. The Company will also make appropriate announcements for the Possible Offer if and as it proceeds.
21.11 The Company confirms that where information in this document has been sourced from a third party, the source of this information has been provided, the information has been accurately reproduced and, as far as the Company is aware and is able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

22. DOCUMENTS AVAILABLE FOR INSPECTION

22.1 Copies of the following documents will be available for inspection at the offices of Pinsent Masons LLP, 30 Crown Place, Earl Street, London EC2A 4ES and at the registered office of the Company during usual business hours on any day (except Saturdays, Sundays and public holidays) from and including the date of this document until Admission and will also be available at the General Meeting for at least 15 minutes prior to, and during, the meeting:
22.1.1 the memorandum of association of the Company and the Articles;
22.1.2 the annual report and accounts of the Company for the three financial years ended 31 December 2016, 2015 and 2014;
22.1.3 the written consents referred to in paragraphs 21.3 and 21.4 of this Part V of this document;
22.1.4 the Directors' service contracts and letters of appointment referred to in paragraph 9.3 of this Part V of this document;
22.1.5 the Placing Agreement; and
22.1.6 this document.
22.2 In addition, copies of this document are available on the Company's website, www.ipgroupplc.com, or via the National Storage Mechanism (NSM) website located at www.morningstar.co.uk/uk/nsm.
23 May 2017

PART VI

DOCUMENTS INCORPORATED BY REFERENCE

The annual report and accounts of the Company for the financial years ended 31 December 2016, 31 December 2015 and 31 December 2014 are available for inspection in accordance with paragraph 22.1 of Part V of this document and contain information which is relevant to the Capital Raising. These documents are also available on IP Group's website at www.ipgroupplc.com.

The table below sets out the various sections of such documents which are incorporated by reference into this document, so as to provide the information required under the Prospectus Rules and to ensure that Shareholders and others are aware of all information which, according to the particular nature of the Company and of the Capital Raising Shares, is necessary to enable Shareholders and others to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Company. It should be noted that other sections of such documents that are not incorporated by reference are either not relevant to Shareholders and others or are covered elsewhere in this Document.

Document	Section	Page numbers in such document
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Operational review	16 to 17 inclusive
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Director's report	79 to 80 inclusive
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Independent auditor's report	84 to 86 inclusive
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Consolidated statement of comprehensive income	87
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Consolidated statement of financial position	88
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Consolidated statement of cash flows	89
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Consolidated Statement of changes in equity	90
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Notes to the consolidated financial statements	91 to 116 inclusive

Document	Section	Page numbers in such document
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Company balance sheet	117
Annual report and accounts for the financial year ended 31 December 2014, together with the audit report thereon	Notes to the financial statements	118 to 120 inclusive
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Operational review	16 to 17 inclusive
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Director's report	91 to 92 inclusive
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Independent auditor's report	96 to 98 inclusive
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Consolidated statement of comprehensive income	99
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Consolidated statement of financial position	100
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Consolidated statement of cash flows	101
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Consolidated Statement of changes in equity	102
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Notes to the consolidated financial statements	103 to 134 inclusive
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Company balance sheet	135
Annual report and accounts for the financial year ended 31 December 2015, together with the audit report thereon	Notes to the financial statements	137 to 145 inclusive

Document	Section	Page numbers in such document
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Chairman's statement	6 to 7 inclusive
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Operational review	18 to 19 inclusive
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Director's report	93 to 94 inclusive
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Independent auditor's report	98 to 100 inclusive
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Consolidated statement of comprehensive income	101
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Consolidated statement of financial position	102
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Consolidated statement of cash flows	103
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Consolidated Statement of changes in equity	104
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Notes to the consolidated financial statements	105 to 137 inclusive
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Company balance sheet	138
Annual report and accounts for the financial year ended 31 December 2016, together with the audit report thereon	Notes to the financial statements	140 to 146 inclusive

PART VII

DEFINITIONS AND GLOSSARY

The following definitions apply throughout this document, unless the context otherwise requires:

"£5m Bath Fund"	the fund of £5 million which the Group has committed towards making seed capital investments in the University of Bath spin-out companies pursuant to the terms of the University of Bath Partnership
"£5m Bristol Fund"	the fund of £5 million which the Group has committed towards making seed capital investments in the University of Bristol spin-out companies pursuant to the terms of the University of Bristol Partnership
"£5m Glasgow Fund"	the fund of £5 million which the Group has committed towards making seed capital investments in the University of Glasgow spin-out companies pursuant to the terms of the University of Glasgow Partnership
"£5m King's Fund"	the fund of £5 million which the Group has committed towards making seed capital investments in King's College London spin-out companies pursuant to the terms of the King's College London Partnership
"£5m Leeds Fund"	the fund of £5 million which the Group has committed towards making seed capital investments in the University of Leeds spin-out companies pursuant to the terms of the University of Leeds Partnership
"£5m Southampton Fund"	the fund of £5 million which the Group has committed towards making seed capital investments in the University of Southampton spin-out companies pursuant to the terms of the University of Southampton Partnership
"£5m Surrey Fund"	the fund of up to £5 million which the Group has committed towards making seed capital investments in the University of Surrey spin-out companies pursuant to the terms of the University of Surrey Partnership
"£5m QMUL Fund"	the fund of up to £5 million which the Group has committed towards making seed capital investments in QMUL spin-out companies pursuant to the terms of the Queen Mary Partnership
"£5m York Fund"	the fund of £5 million which the Group has committed towards making seed capital investments in the University of York spin-out companies pursuant to the terms of the University of York Partnership
"Accredited Investor"	an "accredited investor" as defined in Section 501 of Regulation D under the US Securities Act
"Admission"	the admission of the Capital Raising Shares (i) to the premium segment of the Official List and (ii) to trading on the London Stock Exchange's main market for listed securities, becoming effective in accordance, respectively, with LR 3.2.7G of the Listing Rules and paragraph 2.1 of the Admission and Disclosure Standards

"Admission and Disclosure Standards"	the requirements contained in the publication "Admission and Disclosure Standards" containing, amongst other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities
"AIM"	the market of that name operated by the London Stock Exchange
"AIS"	the Group's Annual Incentive Scheme
"Application Form"	the personalised application form on which Qualifying Non-CREST Shareholders who are registered on the register of members of the Company at the Record Date may apply for Open Offer Shares under the Open Offer
"Articles"	the articles of association of the Company, summary details of which are set out in paragraph 4 of Part V of this document
"Audit Committee"	the audit committee established by the Board
"Board" or "Directors"	the board of directors of the Company
"Business Day"	any day (excluding Saturdays, Sundays and public holidays) on which banks are open in London for the transaction of normal banking business
"Cambridge Innovation Capital Agreements"	the arrangements entered into on 9 October 2013 between (1) Cambridge Innovation Capital plc and (2) IP2IPO and (1) the University of Cambridge (2) RBC CEES Trustee Limited (3) Cambridge Innovation Capital plc and (4) Cambridge Innovation Capital (Jersey) Limited and the memorandum of understanding between Cambridge Innovation Capital plc and IP2IPO dated 9 October 2013, further details of which are set out in paragraph 14.20 of Part V of this document
"Capita Asset Services"	a trading name of Capita Registrars Limited
"Capital Raising"	the Firm Placing and the Placing, the Open Offer and the Offer for Subscription
"Capital Raising Shares"	the Firm Placed Shares, the Placing Shares, the Open Offer Shares (including the Excess Shares) and the Offer for Subscription Shares to be allotted and issued by the Company pursuant to the Capital Raising
"Cardiff University Partnership"	means the arrangements entered into on 29 November 2006 between (1) Fusion IP, (2) Fusion IP Cardiff Limited, (3) Cardiff University, (4) University College Cardiff Consultants Limited and (5) Cardiff Partnership Fund
"certificated" or "in certificated form"	a share or security which is not in uncertificated form
"CIC"	Cambridge Innovation Capital plc
"City Code"	the City Code on Takeovers and Mergers issued by the Panel
"Closing Price"	the closing middle-market price of a Share as derived from the Daily Official List

"CNAP Partnership"	the arrangements entered into on 19 September 2003 between (1) the University of York, (2) IP2IPO and (3) Amaethon Limited (as subsequently amended on 16 March 2005), further details of which are set out in paragraph 14.2 of Part V of this document
"Companies Act"	the Companies Act 2006, as amended
"Company" or "IP Group"	IP Group plc, a company incorporated in England and Wales with registered number 04204490
"CREST"	the relevant system, as defined in the CREST Regulations, for the holding of shares in uncertificated form in respect of which Euroclear is the operator (as defined in the CREST Regulations)
"CREST Manual"	the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedures and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended since)
"CREST member"	a person who has been admitted to Euroclear as a system member (as defined in the CREST Regulations)
"CREST participant"	a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations)
"CREST Regulations" or "Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 no. 3755), as amended
"CREST sponsor"	a CREST participant admitted to CREST as a CREST sponsor
"CREST sponsored member"	a CREST member admitted to CREST as a sponsored member
"Daily Official List"	the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange
"Deferred Bonus Share Plan" or "DBSP"	the Company's Deferred Bonus Share Plan approved by shareholders of the Company by ordinary resolution passed on 13 May 2014, and as subsequently amended by the Remuneration Committee on 18 July 2014 and 27 July 2016
"Disclosure Guidance and Transparency Rules"	the Disclosure Guidance and Transparency Rules of the FCA, as amended from time to time
"DOE Laboratories"	Pacific Northwest National Laboratory, Argonne National Laboratory and National Renewable Energy Laboratory
"EEA"	the European Economic Area
"Effective"	means in the context of the Possible Offer, an offer having been declared or become unconditional, or as the case may be, a scheme of arrangement having become effective, in either case, in all respects in accordance with the requirement of the City Code
"Employee Trust"	the Company's Employee Share Ownership Trust established by a trust deed executed on 22 May 2007

"Enlarged Share Capital"	the issued ordinary share capital of the Company following completion of the Capital Raising (assuming, unless otherwise provided, that no provisional awards of Shares vest under the LTIP between the date of posting of this document and the completion of the Capital Raising)) and that the Board does not exercise its entitlement to increase the size of the Issue from £200 million to £266.6 million
"ERISA"	the US Employment Retirement Income Security Act of 1974 as amended
"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for Capital Raising Shares in excess of their Open Offer Entitlements provided they have agreed to take up their Open Offer Entitlements in full as set out in this document and, in the case of Qualifying Non-CREST Shareholders, the Application Form
"Excess CREST Open Offer Entitlement"	in respect of each Qualifying CREST Shareholder, the entitlement (in addition to his Open Offer Entitlements) to apply for Excess Shares, credited to his stock account in CREST, pursuant to the Excess Application Facility, which is conditional on such Qualifying CREST Shareholder agreeing to take up his Open Offer Entitlements in full as set out in this document
"Excess Shares"	the Capital Raising Shares for which Qualifying Shareholders may apply under the Excess Application Facility
"Excluded Territory" or "Excluded Territories"	Australia, Canada, Japan, New Zealand, the Republic of South Africa and the United States
"Existing Shares"	the Shares in issue as at the date of this document
"FCA"	the Financial Conduct Authority of the United Kingdom
"FedIMPACT"	FedIMPACT, LLC, a limited liability company incorporated in the State of Delaware
"FedIMPACT LLC Operating Agreement"	the operating agreement entered into on 3 October 2014 between (1) TNT Management, LLC and (2) IP2IPO FI Limited and IP Group Inc., further details of which are set out in paragraph 14.24 of Part V of this document
"Firm Placed Shares"	the 96,428,566 new Shares to be allotted and issued by the Company pursuant to the Firm Placing
"Firm Placees"	any persons who have agreed to subscribe for Firm Placed Shares pursuant to the Firm Placing
"Firm Placing"	the conditional placing by Numis, on behalf of the Company, of the Firm Placed Shares pursuant to the Placing Agreement
"Finance Wales"	Finance Wales Investment Limited, a company incorporated in England and Wales with registered number 01833687
"Finance Wales Co-Investment MOU"	means the non-binding agreement entered into on 25 June 2013 between (1) Fusion IP and (2) Finance Wales, further details of which are set out in paragraph 14.19 of Part V of this document

"Form of Proxy"	the form of proxy accompanying this document for use by Shareholders in relation to the General Meeting
"FSMA"	the Financial Services and Markets Act 2000, as amended
"Fusion IP"	Fusion IP plc, a company incorporated in England and Wales with registered number 05275732, being a wholly owned subsidiary of the Company
"General Meeting"	the general meeting of the Company convened for 10.00 a.m. on 8 June 2017, notice of which is set out in Part VIII of this document, and including any adjournment thereof
"Go9 Agreements"	the commercialisation agreements entered into between IP2IPO Australia, IP Group plc, IP2IPO Asia-Pacific Limited and each of the Go9 Universities
"Go9 Universities"	Monash University, the Australian National University, the University of Adelaide, the University of Melbourne, the University of Queensland, the University of Sydney, the University of Western Australia, UNSW Australia and the University of Auckland or the relevant commercial entity of each such Go9 University and "Go9 University" shall mean any one of them
"Group"	IP Group and its subsidiary undertakings
"IAS"	International Accounting Standards
"IASB"	International Accounting Standards Board
"IFRS"	International Financial Reporting Standards
"Intellectual Property" or "IP"	means any and all patents, trade marks, rights in designs, get-up trade, business or domain names, copyrights, and topography rights, (whether registered or not and any applications to register or rights to apply for registration of any of the foregoing), rights in inventions, know-how, trade secrets and other confidential information, rights in databases and all other intellectual property rights of a similar or corresponding character which may now or in the future subsist in any part of the world
"IP Capital"	IP Capital being the trading name of Top Technology Ventures
"IP Group, Inc."	means the Group's US operational subsidiary
"IP2IPO"	IP2IPO, a company incorporated in England and Wales with registered number 04072979, being a wholly owned subsidiary of the Company
"IP2IPO Australia"	IP2IPO Australia Pty Ltd, a company incorporated in Australia with registered number A.C.N. 617 966 695, being a wholly owned subsidiary of the Company
"IP2IPO Management Limited" or "IML"	IP2IPO Management Limited, a company incorporated in England and Wales with registered number 04368104, being a wholly owned subsidiary of the Company
"IP Exec"	the Group's captive executive search and talent management capability to support the development of the Group's portfolio companies

"IP Venture Fund II"	IP Venture Fund II L.P., a limited partnership in which IP2IPO and the European Investment Fund are each limited partners
"Issue"	the issue of Capital Raising Shares pursuant to the Capital Raising
"Issue Price"	140 pence per Capital Raising Share
"KB"	King's College London Business Limited, a company incorporated in England and Wales with registered number 02714181, being a wholly owned subsidiary of King's College London
"King's College London" or "KCL"	King's College London, a body corporate incorporated by Royal Charter
"King's College London Partnership"	the arrangements entered into on 12 November 2009 between (1) King's College London, (2) KB and (3) IP2IPO, further details of which are set out in paragraph 14.3 of Part V of this document
"Listing Rules"	the listing rules made by the FCA under Part VI of FSMA, as amended from time to time
"London Stock Exchange"	London Stock Exchange plc
"LTIP"	the Company's Long-Term Incentive Plan, approved by shareholders of the Company by ordinary resolution passed on 21 June 2011, and as subsequently amended by the Remuneration Committee on 20 May 2014, 18 July 2014 and 27 July 2016
"Member account ID"	the identification code or number attached to any member account in CREST
"Modern Biosciences" or "MBS"	Modern Biosciences plc, a company incorporated in England and Wales with registered number 0544023, being a subsidiary of the Company
"Money Laundering Regulations"	the Money Laundering Regulations 2007 (SI 2007/2157), as amended from time to time
"Nomination Committee"	the nomination committee established by the Board
"Non-Firm Placees"	any persons who have agreed or shall agree to subscribe for Placing Shares pursuant to the Placing
"Notice of General Meeting"	the notice of General Meeting set out in Part VIII of this document
"Nottingham MOU"	the memorandum of understanding entered into on 28 February 2013 between (1) Fusion IP and (2) the University of Nottingham, further details of which are set out in paragraph 14.16 of Part V
"Numis"	Numis Securities Limited of The London Stock Exchange Building 10 Paternoster Square, London EC4M 7LT, acting as sponsor, underwriter, broker and joint financial adviser
"Offer for Subscription"	the offer for subscription to the public in the UK of Capital Raising Shares on the terms set out in this document and subject to the conditions and (where applicable) the Subscription Form
"Offer for Subscription Shares"	the Capital Raising Shares to be allotted and issued by the Company pursuant to the Offer for Subscription as the same may be increased or decreased at the discretion of the Directors as set out in this document

"Official List"	the Official List of the FCA pursuant to Part VI of FSMA
"Open Offer"	the offer to Qualifying Shareholders, constituting an invitation to apply for Open Offer Shares and Excess Shares pursuant to the Excess Application Facility as the same may be increased or decreased at the discretion of the Directors as set out in this document, on the terms and subject to the conditions set out in this document and, in the case of Qualifying Non-CREST Shareholders, in the Application Form
"Open Offer Entitlement"	the pro rata entitlement of each Qualifying Shareholders on the Record Date to apply for Open Offer Shares pursuant to the Open Offer
"Open Offer Shares"	the 43,478,612 Capital Raising Shares to be offered to Qualifying Shareholders under the Open Offer
"Overseas Applicants"	persons who apply for Capital Raising Shares under the Offer for Subscription with a registered address outside the UK or who are citizens or residents of countries outside the UK
"Overseas Shareholders"	Shareholders with a registered addresses outside the UK or who are citizens or residents of, or located in, countries outside the UK
"OSI"	Oxford Sciences Innovation plc
"ONT"	Oxford Nanopore Technologies Limited
"Panel"	the Panel on Takeovers and Mergers
"participant ID"	the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant
"Partnerships"	a long-term arrangement made by the Group with a university or other research intensive institution, including (where relevant), the University of Southampton Partnership, the King's College London Partnership, the University of Leeds Partnership, the University of Surrey Partnership, the University of Bristol Partnership, the CNAP Partnership, the University of York Partnership, the Queen Mary Partnership, the University of Bath Partnership, the University of Glasgow Partnership, the University of Sheffield Partnership, the Cardiff University Partnership, the University of Manchester Partnership, the Finance Wales Co-Investment MOU, the memorandum of understanding with each of the University of Nottingham, Swansea University and the Cambridge Innovation Capital Agreements, the arrangements between the Group and each of Columbia University, University of Pennsylvania and Princeton University, and the initiative with FedIMPACT, LLC
"Placed Shares"	the Firm Placed Shares and those Placing Shares allotted by the Company to Non-Firm Placees pursuant to the Placing
"Placees"	the Firm Placees and the Non-Firm Placees
"Placing"	the conditional subscription by the Non-Firm Placees for the Placing Shares which is subject to scale back as set out in this document

"Placing Agreement"	the placing agreement dated 23 May 2017 between (1) the Company and (2) Numis, further details of which are set out in paragraph 14.27.1 of Part V of this document
"Placing Shares"	the new Shares to be allotted and issued by the Company to Non-Firm Placees pursuant to the Placing as the same may be increased or decreased at the discretion of the Directors as set out in this document
"Possible Offer"	the possible acquisition by the Company of the entire issued and to be issued share capital of Touchstone
"Prospectus Rules"	the prospectus rules of the UK Listing Authority made in accordance with section 73A of FSMA, as amended from time to time
"Qualified Purchaser"	qualified purchaser, as defined in section 2(a)(51) of the US Investment Company Act
"QMUL"	Queen Mary and Westfield College University of London, a body incorporated by Royal Charter
"QIB"	qualified institutional buyers, as defined in Rule 144A under the US Securities Act
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Shares in uncertificated form in CREST
"Qualifying Non-CREST Shareholders"	Qualifying Shareholders holding Shares in certificated form
"Qualifying Shareholders"	Shareholders on the register of members of the Company at the Record Date with the exclusion (subject to certain exceptions) of persons with a registered address or located or resident in the US or any other Excluded Territory
"Queen Mary Partnership"	the arrangements entered into on 20 July 2006 between (1) QMUL and (2) IP2IPO as amended, further details of which are set out in paragraph 14.10 of Part V of this document
"Receiving Agent"	Capita Asset Services of Corporate Actions, The Registry, 34 Beckenham Road Beckenham, Kent BR3 4TU
"Record Date"	5.30 p.m. on 19 May 2017
"Record Date Shares"	the Shares in issue as at the Record Date
"Registrar"	Capita Asset Services of The Registry, 34 Beckenham Road Beckenham, Kent BR3 4TU
"Registrar of Companies"	the Registrar of Companies in England and Wales
"Regulation D"	Regulation D under the US Securities Act
"Regulation S"	Regulation S under the US Securities Act
"Regulatory Information Service"	one of the regulatory information services authorised by the UK Listing Authority to receive, process and disseminate regulatory information in respect of listed companies

"Remuneration Committee"	the remuneration committee of the Board or a duly authorised committee of non-executive Directors established by the Board
"Resolutions"	the resolutions to be proposed at the General Meeting (and set out in the Notice of General Meeting) being (1) an ordinary resolution to approve the Capital Raising, (2) an ordinary resolution to authorise the Directors to allot Capital Raising Shares pursuant to the Capital Raising and (3) a special resolution to disapply statutory pre-emption rights in relation to the allotment of equity securities pursuant to the Capital Raising
"Rothschild"	N.M. Rothschild & Sons Limited, New Court St Swithin's Lane, London, EC4N 8AL, acting as joint financial adviser
"Share"	an ordinary share of 2 pence in the capital of the Company and "Shares" shall be construed accordingly
"Share Schemes"	the LTIP, the Sharesave Plan, the Deferred Bonus Share Plan and the AIS
"Shareholders" and each a "Shareholder"	holders of Shares
"Sharesave Plan"	the Company's Sharesave Plan approved by shareholders of the Company by ordinary resolution passed on 13 May 2014, and as subsequently amended by the Remuneration Committee on 27 July 2016
"stock account"	an account within a member account in CREST in which a holding of a particular share or other security in CREST is admitted
"Subscription Form"	the application form in Appendix 4 to this document for use in connection with the Offer for Subscription
"Swansea MOU"	means the memorandum of understanding entered into on 17 March 2013 between (1) Fusion IP and (2) Swansea University, further details of which are set out in paragraph 14.17 of Part V of this document
"Technikos"	Technikos LLP, a limited liability partnership registered in England and Wales with number OC319725
"Touchstone"	Touchstone Innovations plc, a company incorporated in England and Wales with registered number 05796766
"Touchstone Directors or Touchstone Board"	the directors of Touchstone
"Top Technology Ventures"	Top Technology Ventures Limited, a company incorporated in England and Wales with registered number 1977742, being the venture capital fund management subsidiary of the Company
"UK Listing Authority" or "UKLA"	the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland
"United States" or "US"	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia

"University of Bath Partnership"	the arrangements entered into on 13 December 2007 between (1) the University of Bath, (2) IP2IPO and (3) the Company, further details of which are set out in paragraph 14.11 of Part V of this document
"University of Bristol Partnership"	the arrangements entered into on 4 December 2005 between (1) the University of Bristol and (2) IP2IPO, further details of which are set out in paragraph 14.6 of Part V of this document
"University of Cambridge"	the Chancellor, Masters and Scholars of the University of Cambridge
"University of Glasgow Partnership"	the arrangements entered into on 10 October 2006 between (1) the University Court of the University of Glasgow and (2) IP2IPO, further details of which are set out in paragraph 14.12 of Part V of this document
"University of Leeds Partnership"	the arrangements entered into on 15 July 2005 (as varied by a supplemental agreement dated 17 March 2011) between (1) the University of Leeds, (2) Techtran Group Limited (now IP Assist Services Limited) and (3) the Company, further details of which are set out in paragraph 14.5 of Part V of this document
"University of Manchester Partnership"	the arrangements entered into on 25 February 2013 between the University of Manchester (2) the University of Manchester 13 Limited and (3) IP2IPO, as subsequently varied, further details of which are set out in paragraph 14.15 of Part V of this document
"University of Oxford"	the Chancellor, Masters and Scholars of the University of Oxford
"University of Sheffield Partnership"	means the arrangements entered into on 26 January 2005 and made between (1) Fusion IP, (2) Fusion IP Trading Limited (now Fusion IP Sheffield Limited), (3) Sheffield University Enterprises Limited and (4) the University of Sheffield, as subsequently varied and the arrangements relating to medial IP entered into on 23 November 2015 between (1) IP2IPO Limited and (2) the University of Sheffield, further details of which are set out in paragraph 14.4 of Part V of this document
"University of Southampton Partnership"	the arrangements entered into on 20 March 2002, between (1) the University of Southampton, (2) University of Southampton Holdings Limited, (3) IP2IPO, (4) IML and (5) Southampton Asset Management Limited, as subsequently varied, further details of which are set out in paragraph 14.1 of Part V of this document
"University of Surrey Partnership"	the arrangements entered into on 9 February 2006 between (1) the University of Surrey and (2) IP2IPO, further details of which are set out in paragraph 14.7 of Part V of this document
"University of York Partnership"	the arrangements entered into on 10 March 2006 (as supplemented by a side agreement dated 27 March 2009) between (1) the University of York and (2) IP2IPO, further details of which are set out in paragraph 14.8 of Part V of this document
"USE"	Unmatched Stock Event
"USE Instruction"	a USE instruction sent to Euroclear by Qualifying CREST Shareholders

"US Code"	the US Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder
"US Commodity Exchange Act"	the US Commodity Exchange Act of 1936, as amended
"US ESPP"	the Company's US Employee Stock Purchase Plan, approved by shareholders of the Company by ordinary resolution passed on 12 May 2015, and as subsequently amended by the Remuneration Committee on 27 July 2016
"US Exchange Act"	the US Securities and Exchange Act of 1934, as amended
"US Investment Company Act"	the US Investment Company Act of 1940, as amended
"US Securities Act"	the US Securities Act of 1933, as amended
"US Securities and Exchange Commission"	the US government agency having primary responsibility for enforcing the federal securities laws and regulating the securities industry/stock market

All references to "GBP", "pounds", "pounds sterling", "sterling", "£", "pence" and "p" are to the lawful currency of the UK.

All references to "US dollars" and "US\$", are to the lawful currency of the United States.

All references to "AU\$", are to the lawful currency of Australia.

All references in this document to times are, unless the context otherwise requires, references to the time in London, UK.

NOTICE OF GENERAL MEETING

IP Group plc Incorporated in England and Wales with registered number 04204490

NOTICE IS HEREBY GIVEN that a GENERAL MEETING of IP Group plc (the "Company") will be held at the offices of the Company at The Walbrook Building, 25 Walbrook, London, EC4N 8AF at 10.00 a.m. on 8 June 2017 for the purposes of considering and, if thought fit, passing the following resolutions of which resolutions 1 and 2 will be proposed as ordinary resolutions and resolution 3 will be proposed as a special resolution.

Unless expressly stated otherwise, terms defined in the prospectus of the Company dated 23 May 2017 (the "Prospectus") shall have the same meaning when used in this Notice of General Meeting.

RESOLUTION 1 – APPROVAL OF CAPITAL RAISING The terms of the Firm Placing, the Placing and/or the Open Offer (including the Excess Application Facility) and the Offer for Subscription (the "Capital Raising") as set out in the Prospectus be and are approved and the directors of the Company be and are hereby directed to implement the Capital Raising and generally and unconditionally authorised to exercise the powers conferred by this Resolution and all the powers of the Company to the extent that the directors of the Company (or a duly appointed committee thereof) determine it necessary or desirable to implement the Capital Raising.

RESOLUTION 2 – AUTHORITY TO ALLOT CAPITAL RAISING SHARES IN CONNECTION

WITH THE CAPITAL RAISING Subject to the passing of resolution 1, the directors of the Company be and are hereby generally and unconditionally authorised for the purposes of section 551 of the Companies Act 2006 (the "Companies Act") to exercise all the powers of the Company to allot equity securities (as defined in section 560(1) of the Companies Act) up to an aggregate nominal amount of £3,808,571.28 in connection with the Capital Raising, such authority to expire on the date three months after the passing of this resolution (save that the Company may before such expiry make any offer or agreement which would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity securities pursuant to any such offer or agreement as if the authority had not expired). This authority is in addition to any existing such authority.

RESOLUTION 3 – DISAPPLICATION OF PRE-EMPTION RIGHTS FOR ISSUE OF CAPITAL

RAISING SHARES Subject to the passing of resolutions 1 and 2, the directors of the Company be and are hereby empowered pursuant to section 570 of the Companies Act and the authority conferred on the directors of the Company by resolution 2 to allot equity securities (within the meaning of section 560 of that Act) as if section 561(1) of that Act did not apply to such allotment up to an aggregate nominal amount of £3,808,571.28 in connection with the Capital Raising, such authority to expire on the date three months after the passing of this resolution (save that the Company may before such expiry make any offer or agreement which would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity securities pursuant to any such offer or agreement as if the authority had not expired). This authority is in addition to any existing such authority.

By order of the Board

Angela Leach Company Secretary

1. Members are entitled to appoint a proxy to exercise all or any of their rights to attend, speak and vote on their behalf at the meeting. A shareholder may appoint more than one proxy in relation to the General Meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. A proxy need not be a shareholder of the Company but must attend the General Meeting to represent you. A proxy form which may be used to make such appointment and give proxy instructions accompanies this notice. If you do not have a proxy form and believe that you should have one, or if you require additional forms, please contact Capita Asset Services on 0371 664 0300 from within the UK or on +44 371 664 0300 if calling from outside the UK. Calls to the 0371 664 0321 number cost 12 pence per minute plus your phone company's access charge. Lines are open 9.00 a.m. to 5.30 p.m. (London time) Monday to Friday. Calls to the helpline from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. The helpline cannot provide advice on the merits of the Capital Raising nor give any financial, legal or tax advice.
1. To be valid, the proxy form must be completed and lodged, together with the power of attorney or other authority (if any) under which it is signed, or a duly certified copy of such power or authority, with the Company's registrar, by hand only to Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or in accordance with the reply paid details, not less than 48 hours before the time appointed for holding the General Meeting.
1. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described in paragraph 8 below) will not prevent a shareholder attending the General Meeting and voting in person if he/she wishes to do so.
1. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act to enjoy information rights (a "Nominated Person") may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights. Such persons should direct any communications and enquiries to the registered holder of the shares by whom they were nominated and not to the Company or its registrars.
1. The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 and 2 above does not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of the Company.
1. To be entitled to attend and vote at the General Meeting (and for the purpose of the determination by the Company of the votes they may cast), shareholders must be registered in the register of members of the Company at the close of business on 2 June 2017 (or, if the General Meeting is adjourned, at the close of business on the date which is two business days before the start of the adjourned meeting). Changes to the register of members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the General Meeting.
1. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
1. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual (available via www.euroclear.com/CREST). The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer's agent (CREST ID No. RA10) by 11.00 a.m. on 6 June 2017. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
1. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
1. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
1. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided they do not do so in relation to the same shares.
1. In conjunction with its registrar, the Company has in place a facility to allow each shareholder to register proxy votes electronically. Detailed information of how to do this is set out on the form of proxy. A shareholder can register proxy votes electronically by either logging on to the registrar's website, www.capitashareportal.com and following the instructions, or, CREST members may register proxy votes following the procedures set out in the CREST Manual. To use the registrar's website www.signalshares.com, you will need to log in to your Share Portal account or register for the Share Portal if you have not already done so. To register for the Share Portal you will need your investor code. Once registered you will immediately be able to vote.
1. Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if: (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is undesirable in the interests of the Company or the good order of the meeting for the question to be answered.
1. A copy of this notice, and other information required by section 311A of the Companies Act, can be found at www.ipgroupplc.com/reports.
1. You may not use any electronic address provided either in the notice of General Meeting or any related documents (including the Chairman's letter and proxy form) to communicate for any purposes other than those expressly stated.
1. Mobile telephones may not be used in the meeting room and cameras, tapes and video recorders are not allowed in the meeting room.
1. Your personal data includes all data provided by you, or on your behalf, which relates to you as a shareholder, including your name and contact details, the votes you cast and your reference number (as attributed to you by the Company or its registrar). The Company determines the purposes for which, and the manner in which, your personal data is to be processed. The Company and any third party to whom it discloses the data (including the Company's registrar) may process your personal data for the purposes of compiling and updating the Company's records, fulfilling its legal obligations and processing the shareholder rights you exercise.
1. As at 22 May 2017 (being the last business day prior to the publication of this Notice) the Company's issued share capital consists of 565,221,967 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 22 May 2017 are 565,221,967.

APPENDIX 1 QUESTIONS AND ANSWERS ABOUT THE FIRM PLACING AND PLACING AND OPEN OFFER

The questions and answers set out in this Appendix 1 are intended to be in general terms only and, as such, you should read Appendices 2 and 3 to this document for full details of what action to take. If you are in any doubt as to the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank, fund manager, solicitor, accountant or other appropriate independent financial adviser who is authorised under FSMA if you are resident in the United Kingdom, or, if not, from another appropriately authorised independent financial adviser.

This Appendix 1 deals with general questions relating to the Firm Placing, Placing and Open Offer and more specific questions relating principally to persons resident in the United Kingdom who hold their Shares in certificated form only. If you are an Overseas Shareholder, you should read paragraph 6 of Appendix 2 to this document and you should take professional advice as to whether you are eligible and/or you need to observe any formalities to enable you to take up your Open Offer Entitlements or apply for Excess Shares pursuant to the Excess Application Facility. If you hold your Existing Shares in uncertificated form (that is, through CREST) you should read Appendix 2 to this document for full details of what action you should take. If you are a CREST sponsored member, you should also consult your CREST sponsor. If you do not know whether your Existing Shares are in certificated or uncertificated form, please call Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

The contents of this document should not be construed as legal, business, accounting, tax, investment or other professional advice. Each prospective investor should consult his, her or its own appropriate professional advisers for advice. This document is for your information only and nothing in this document is intended to endorse or recommend a particular course of action.

1. WHAT IS AN OPEN OFFER?

An open offer is a way for companies to raise money. Companies do this by giving their existing shareholders a right to acquire further shares at a fixed price in proportion to their existing shareholdings.

The Open Offer is an invitation by IP Group to Qualifying Shareholders to apply to subscribe for 43,478,612 Open Offer Shares at a price of 140 pence per Open Offer Share. If you held Shares on the Record Date or have a bona fide market claim (other than, subject to certain exceptions, where you are a Shareholder with a registered address in, or are located or resident in, the United States or any other Excluded Territory) you will be entitled to subscribe for Open Offer Shares under the Open Offer. If you hold Shares in certificated form, your entitlement will be set out in your Application Form.

The Open Offer is being made on the basis of 1 Open Offer Share for every 13 Record Date Shares held by Qualifying Shareholders. If your entitlement to Open Offer Shares is not a whole number, you will not be entitled to subscribe for any fraction of an Open Offer Share and your entitlement will be rounded down to the nearest whole number.

Open Offer Shares are being offered to Qualifying Shareholders in the Open Offer at a discount; the issue price of 140 pence per Open Offer Share represents a 2.1 per cent. discount to the closing middle-market price quotation as derived from the Daily Official List of 143 pence per Share on 22 May 2017 (being the last dealing day before details of the Capital Raising were announced).

An Open Offer is not a rights issue and, therefore, if you are a Qualifying Shareholder and you do not wish to subscribe for Open Offer Shares to which you are entitled you will not be able to sell or transfer your entitlement to those Open Offer Shares.

Qualifying Shareholders are also being given the opportunity, provided they take up their Open Offer Entitlements in full, to apply, under the Excess Application Facility, for Excess Shares in excess of their Open Offer Entitlements. If applications under the Excess Application Facility are received for more than the maximum number of Shares available, then such applications will be scaled back pro rata to the number of Excess Shares applied for.

Valid applications by Qualifying Shareholders will be satisfied in full up to the amount of their individual Open Offer Entitlements (excluding any Capital Raising Shares applied for through the Excess Application Facility).

2. WHAT IS A FIRM PLACING?

A firm placing is where specific institutional investors agree to subscribe for shares and the number of shares subject to the placing are fixed and are not subject to clawback or re-allocation to a different element of the capital raising. A firm placing provides a company with an opportunity to introduce new institutional investors to its share register.

The Company proposes to issue 142,857,136 Capital Raising Shares at a price of 140 pence per Capital Raising Share under the Firm Placing. The Capital Raising Shares under the Firm Placing do not form part of the Open Offer and are not subject to clawback or re-allocation to the Placing, Open Offer or Excess Application Facility or the Offer for Subscription. Unless you are a Firm Placee, you will not participate in the Firm Placing.

3. WHAT IS A PLACING? AM I ELIGIBLE TO PARTICIPATE IN THE PLACING?

A placing is where certain existing institutional and other new investors conditionally agree to subscribe for a number of shares, but the number of shares to be allocated to each such investor is not fixed. Capital Raising Shares allocated under the Placing are subject to scaling back to the extent that Qualifying Shareholders take up Open Offer Entitlements or successfully apply under the Excess Application Facility or successful applications are made under the Offer for Subscription. The number of Placing Shares to be allocated and issued under the Placing may therefore be reduced to the extent that valid applications are received from Qualifying Shareholders under the Open Offer and, if the Directors so determine, the Excess Application Facility or applications made under the Offer for Subscription. Unless you are a Placee, you will not participate in the Placing.

4. I HOLD MY EXISTING SHARES IN CERTIFICATED FORM. HOW DO I KNOW I AM ELIGIBLE TO PARTICIPATE IN THE OPEN OFFER?

If you receive an Application Form and, subject to certain exceptions, are not a holder with a registered address in, or located or resident in, the United States or any other Excluded Territory, then you should be eligible to participate in the Open Offer as long as you have not sold all of your Existing Shares before 23 May 2017 (the time when the Existing Shares are expected to be marked "ex-entitlement" by the London Stock Exchange).

5. I HOLD MY EXISTING SHARES IN CERTIFICATED FORM. HOW DO I KNOW HOW MANY OPEN OFFER SHARES I AM ENTITLED TO TAKE UP?

If you hold your Existing Shares in certificated form and, subject to certain exceptions, do not have a registered address in, and are not located or resident in, the United States or any other Excluded Territory, you will be sent an Application Form that shows:

5.1 how many Existing Shares you held on the Record Date;
5.2 how many Open Offer Shares are comprised in your Open Offer Entitlements; and

5.3 how much you need to pay if you want to take up in full your entitlement to Open Offer Shares.

If you are an Overseas Shareholder, subject to certain exceptions, you will not have received and will not receive an Application Form.

If you would like to apply for any or all of the Open Offer Shares, you should complete the Application Form in accordance with the instructions printed on it and the information provided in this document. Completed Application Forms should be returned, along with a cheque or banker's draft drawn in the appropriate form in the accompanying pre-paid envelope or returned by post to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or by hand (during normal office hours only) so as to be received by Capita Asset Services by no later than 11.00 on 7 June 2017, after which time Application Forms will not be valid. Please allow at least four Business Days for delivery if sent by first class post from within the UK.

6. I HOLD MY EXISTING SHARES IN CERTIFICATED FORM AND AM ELIGIBLE TO RECEIVE AN APPLICATION FORM. WHAT ARE MY CHOICES IN RELATION TO THE OPEN OFFER?

6.1 If you do not want to take up your Open Offer Entitlements

If you do not want to take up the Open Offer Shares to which you are entitled, you do not need to do anything. In these circumstances, you will not receive any Open Offer Shares. You will also not receive any money when the Open Offer Shares you could have taken up are sold, as would happen under a rights issue. You cannot sell your Application Form or your Open Offer Entitlements to anyone else.

If you do not take up your Open Offer Entitlements and assuming that you are not a Firm Placee and/or a Placee, then following the issue of the Open Offer Shares pursuant to the Open Offer, your interest in the Company will be diluted by approximately 20.18 per cent assuming 142,857,136 Capital Raising Shares are issued through the Firm Placing, the Placing, Open Offer and Offer for Subscription.

6.2 If you want to take up some, but not all, of your Open Offer Entitlements

If you want to take up some, but not all, of the Open Offer Shares to which you are entitled, you should write the number of Open Offer Shares you want to take up in Box 6 of your Application Form. For example, if you are entitled to take up 100 shares but you only want to take up 50 shares, then you should write "50" in Box 6. To work out how much you need to pay for the Open Offer Shares, you need to multiply the number of Open Offer Shares you want (in this example, "50") by 140 pence, which is the price in pence of each Open Offer Share (giving you an amount of £70 in this example). You should write this amount in Box 9 and this should be the amount that your cheque or banker's draft made payable to "Capita Registrars Limited re: IP Group plc Open Offer" and crossed "A/C payee only" is made out for. You should then sign the Application Form (ensuring that all joint holders sign (if applicable)) and return the completed Application Form, together with a cheque or banker's draft for the relevant amount, in the accompanying pre-paid envelope by post to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or by hand (during normal office hours only) so as to be received by Capita Asset Services by no later than 11.00 a.m. on 7 June 2017, after which time Application Forms will not be valid. If you post your Application Form by first-class post, you should allow at least four Business Days for delivery if sent by first class post from within the UK.

6.3 If you want to take up all of your Open Offer Entitlements

If you want to take up all of the Open Offer Shares to which you are entitled, all you need to do is sign the Application Form (ensuring that all joint holders sign (if applicable)) and send the Application Form, together with your cheque or banker's draft for the amount (as indicated in Box 5 of your Application Form) made payable to "Capita Registrars Limited re: IP Group plc Open Offer" and crossed "A/C payee only", in the accompanying pre-paid envelope by post to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or by hand (during normal office hours only) so as to be received by Capita Asset Services by no later than 11.00 a.m. on 7 June 2017, after which time Application Forms will not be valid. If you post your Application Form by first-class post, you should allow at least four Business Days for delivery if sent by first class post from within the UK.

6.4 If you want to apply for more than your Open Offer Entitlements

Provided that you have agreed to take up your Open Offer Entitlements in full, you can apply for further Capital Raising Shares using the Excess Application Facility. You should write the number of Capital Raising Shares that you wish to take up, including those for which you are applying under the Excess Application Facility in Box 8 in addition to completing the remainder of and signing the Application Form.

Please note that applications for Excess Shares will only be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Entitlements and/or that Shares are scaled back under the Placing or the Offer for Subscription and and/or the Directors decide to increase the size of the Capital Raising and allocate part of that increase to the Excess Application Facility. If applications under the Excess Application Facility are received for more than the maximum number of Shares available, then such applications may be scaled back pro rata to the number of Excess Shares applied for.

6.5 How do I pay

All payments must be in pounds sterling and made by cheque or banker's draft made payable to "Capita Registrars Limited re: IP Group plc Open Offer" and crossed "A/C payee only". Cheques must be drawn on the personal account of the individual investor, which must have sole or joint title to the funds. Cheques or banker's drafts must be drawn in pounds sterling on a bank or building society or branch of a bank or building society in the United Kingdom or Channel Islands which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques and banker's drafts to be cleared through the facilities provided by any of those companies or committees and must bear the appropriate sort code in the top right hand corner and must be for the full amount payable for the application. Third party cheques will not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder and the number of an account held in the applicant name at the building society or bank by stamping or endorsing the cheque or draft to such effect. The account name should be the same as that shown on the Application Form. Post-dated cheques will not be accepted. Third party cheques (other than building society cheques or banker's drafts where the building society or bank has confirmed that the relevant Qualifying Shareholder has title to the underlying funds) will be subject to the Money Laundering Regulations which will delay Shareholders receiving their Open Offer Shares.

Cheques or banker's drafts will be presented for payment upon receipt. The Company reserves the right to instruct Capita Asset Services, as receiving agent, to seek special clearance of cheques and banker's drafts to allow the Company to obtain value for remittances at the earliest opportunity. No interest will be paid on payments made before they are due. It is a term of the Open Offer that cheques shall be honoured on first presentation and the Company may elect to treat as invalid acceptances in respect of which cheques are not so honoured. All documents, cheques and banker's drafts sent through the post will be sent at the risk of the sender. Payments via CHAPS, BACS or electronic transfer will not be accepted.

A definitive share certificate will then be sent to you for the Open Offer Shares that you take up. Your definitive share certificate for Open Offer Shares is expected to be despatched to you in the week commencing 12 June 2017.

7. I HOLD MY EXISTING ORDINARY SHARES IN UNCERTIFICATED FORM IN CREST. WHAT DO I NEED TO DO IN RELATION TO THE OPEN OFFER?

CREST members should follow the instructions set out in Part I of this document. Persons who hold Existing Shares through a CREST member should be informed by the CREST member through which they hold their Existing Shares of the number of Open Offer Shares which they are entitled to take up or apply for under their Open Offer Entitlements and their Excess CREST Open Offer Entitlements respectively, and should contact them if they do not receive this information.

8. I ACQUIRED MY EXISTING SHARES PRIOR TO THE RECORD DATE AND HOLD MY EXISTING SHARES IN CERTIFICATED FORM. WHAT IF I DO NOT RECEIVE AN APPLICATION FORM OR I HAVE LOST MY APPLICATION FORM?

If you do not receive an Application Form but hold your Existing Shares in certificated form, this probably means that you are not eligible to participate in the Open Offer. Some Qualifying Non-CREST Shareholders, however, will not receive an Application Form but may still be eligible to participate in the Open Offer, namely:

8.1 Qualifying CREST Shareholders who held their Existing Shares in uncertificated form on 19 May 2017 and who have converted them to certificated form;
8.2 Qualifying Non-CREST Shareholders who bought Existing Shares before 8.00 a.m. on 23 May 2017 but were not registered as the holders of those shares at the close of business on 19 May 2017; and
8.3 certain Overseas Shareholders.

If you do not receive an Application Form but think that you should have received one, or you have lost your Application Form, please contact Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

9. I AM A QUALIFYING SHAREHOLDER, DO I HAVE TO APPLY FOR ALL THE OPEN OFFER SHARES I AM ENTITLED TO APPLY FOR?

You can take up any number of the Open Offer Shares allocated to you under your Open Offer Entitlements. Your maximum Open Offer Entitlements is shown on your Application Form. Any applications by a Qualifying Shareholder for a number of Open Offer Shares which is equal to or less than that person's Open Offer Entitlements will be satisfied, subject to the Open Offer becoming unconditional. If you decide not to take up all of the Open Offer Shares comprised in your Open Offer Entitlements, then your proportion of the ownership and voting interest in IP Group will be reduced. Please refer to the answer to questions 6 and 14 for further information.

Qualifying Shareholders should be aware that the Open Offer is not a rights issue. As such, Qualifying Non-CREST Shareholders should note that their Application Forms are not negotiable documents and cannot be traded. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST, they will have limited settlement capabilities (for the purposes of market claims only), the Open Offer Entitlements will not be tradable or listed and applications in respect of the Open Offer may only be made by the Qualifying Shareholders originally entitled or by a person entitled by virtue of a bona fide market claim. Open Offer Shares for which application has not been made under the Open Offer will not be sold in the market for the benefit of those who do not apply under the Open Offer and Qualifying Shareholders who do not apply to take up their Open Offer Entitlements will have no rights under the Open Offer or receive any proceeds from it. Shareholders should note that Excess Open Offer Entitlements will not be subject to Euroclear's market claims process. Qualifying CREST Shareholders claiming Excess Open Offer Entitlements by virtue of a bona fide market claim are advised to contact the Receiving Agent to request a credit of the appropriate number of entitlements to their CREST account.

10. WHAT IF I CHANGE MY MIND?

If you are a Qualifying Non-CREST Shareholder, once you have sent your Application Form and payment to the Receiving Agent you cannot withdraw your application or change the number of Open Offer Shares for which you have applied, except in the very limited circumstances which are set out in Appendix 2 of this document.

11. WHAT IF THE NUMBER OF OPEN OFFER SHARES TO WHICH I AM ENTITLED IS NOT A WHOLE NUMBER? AM I ENTITLED TO FRACTIONS OF OPEN OFFER SHARES?

If the number is not a whole number, you will not receive a fraction of an Open Offer Share and your entitlement will be rounded down to the nearest whole number. The resulting fractions of Open Offer Shares will be aggregated and made available in the Excess Application Facility, the Placing or the Offer for Subscription for the benefit of the Company.

12. I HOLD MY EXISTING SHARES IN CERTIFICATED FORM. WHAT SHOULD I DO IF I WANT TO SPEND MORE OR LESS THAN THE AMOUNT SET OUT IN BOX 5 OF THE APPLICATION FORM?

If you want to spend less than the amount set out in Box 5, you should divide the amount you want to spend by £1.40, (being the price of each Open Offer Share under the Open Offer). This will give you the number of Open Offer Shares you should apply for. You can only apply for a whole number of Open Offer Shares. For example, if you want to spend £100 you should divide £100 by £1.40. You should round that down to the nearest whole number to give you the number of shares you want to take up and write that number in Box 6 and in Box 8. To then get an accurate amount to put on your cheque or banker's draft, you should multiply the whole number of Open Offer Shares you want to apply for by £1.40 and then fill in that amount in Box 9 and on your cheque or banker's draft accordingly.

Under the Excess Application Facility, provided that you are a Qualifying Non-CREST Shareholder and you have agreed to take up your Open Offer Entitlements in full, you may apply for more than the amount of your Open Offer Entitlements should you wish to do so.

You should note that the number of available Capital Raising Shares under the Excess Application Facility is dependant on the level of take up of Open Offer Entitlements and under the Placing and the Offer for Subscription and the Directors deciding to allocate any remaining Shares to the Excess Application Facility and/or the Directors deciding to increase the size of the Capital Raising and to allocate part of that increase to the Excess Application Facility. If applications under the Excess Application Facility are received for more than the maximum number of Shares available, then such applications will be scaled back pro rata to the number of Excess Shares applied for. Qualifying Non-CREST Shareholders whose applications under the Excess Application Facility are scaled back will receive a pounds sterling amount equal to the number of Excess Shares applied and paid for, but not allocated to them, under the Excess Application Facility multiplied by the Issue Price. Monies will be returned as soon as reasonably practicable, but within 14 days, thereafter, without payment of interest and at the applicant's sole risk.

13. I HOLD MY EXISTING SHARES IN CERTIFICATED FORM. WHAT SHOULD I DO IF I HAVE SOLD SOME OR ALL OF MY EXISTING SHARES?

If you hold Shares in the Company directly, and you have sold or sell some or all of your Existing Shares before 5.30 p.m. on 19 May 2017, you should contact the buyer or the person/company through whom you sold your Shares. The buyer may be entitled to apply for Open Offer Shares under the Open Offer. If you sell any of your Existing Shares on or after 5.30 p.m. on 19 May 2017, you may still take up and apply for the Open Offer Shares as set out on your Application Form.

14. WILL THE EXISTING SHARES THAT I HOLD NOW BE AFFECTED BY THE OPEN OFFER?

If you decide not to apply for any of the Open Offer Shares to which you are otherwise entitled under the Open Offer, or you only apply for some of your entitlement, your proportionate ownership and voting interest in the Company will be reduced.

15. I HOLD MY EXISTING SHARES IN CERTIFICATED FORM. WHEN DO I HAVE TO DECIDE IF I WANT TO APPLY FOR OPEN OFFER SHARES?

Capita Asset Services must receive the Application Form by no later than 11.00 a.m. on 7 June 2017, after which time Application Forms will not be valid. If an Application Form is being sent by first-class post in the UK, Qualifying Shareholders are recommended to allow at least four Business Days for delivery.

16. I HOLD MY EXISTING SHARES IN CERTIFICATED FORM. WHEN WILL I RECEIVE MY NEW SHARE CERTIFICATE?

It is expected that the Receiving Agent will post all new share certificates in the week commencing 12 June 2017.

17. HOW DO I TRANSFER MY ENTITLEMENTS INTO THE CREST SYSTEM?

If you are a Qualifying Non-CREST Shareholder, but are a CREST member and want your Open Offer Shares to be in uncertificated form, you should complete the CREST deposit form (contained in the Application Form) and ensure it is delivered to the Crest Courier and Sorting Service ("CCSS") in accordance with the instructions in the Application Form. CREST sponsored members should arrange for their CREST sponsors to do this.

18. IF I BUY EXISTING SHARES AFTER THE RECORD DATE, WILL I BE ELIGIBLE TO PARTICIPATE IN THE OPEN OFFER?

If you bought your Existing Shares after the Record Date, you are unlikely to be able to participate in the Open Offer in respect of such Existing Shares. If you are in any doubt, please consult your stockbroker, bank manager or other appropriate financial adviser.

19. WILL THE PLACING AND OPEN OFFER AFFECT DIVIDENDS ON THE EXISTING SHARES?

The Capital Raising Shares will, when issued and fully paid, rank equally in all respects with the Existing Shares, including with regard to the right to receive all dividends or other distributions made, paid or declared, if any, by reference to a record date after the date of their issue.

20. WILL I BE TAXED IF I TAKE UP MY ENTITLEMENTS?

Information on taxation with regard to the Open Offer is set out in paragraph 13 of Part V of this document. This information is intended as a general guide only and Shareholders who are in any doubt as to their tax position should consult an appropriate professional adviser immediately.

21. WHAT SHOULD I DO IF I LIVE OUTSIDE THE UNITED KINGDOM?

Your ability to apply to acquire Open Offer Shares may be affected by the laws of the country in which you live and you should take professional advice as to whether you require any governmental or other consents or need to observe any other formalities to enable you to take up your Open Offer Entitlements. Shareholders with registered addresses in, or who are located or resident in, the United States or any other Excluded Territory are, subject to certain exceptions, not eligible to participate in the Open Offer. Your attention is drawn to the information in paragraph 6 of Appendix 2 of this document.

22. FURTHER ASSISTANCE

Should you require further assistance, please call Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

23. BONA FIDE MARKET CLAIMS

APPENDIX 2 TERMS AND CONDITIONS OF THE OPEN OFFER

1. INTRODUCTION

As explained in Part I of this document, the Company is proposing to issue up to 142,857,136 Capital Raising Shares to raise approximately £200 million (before expenses) through the Firm Placing and the Placing, Open Offer and Offer for Subscription with the ability for the Board to increase the size of the Capital Raising by £66.6 million to approximately £266.6 million through the issue of a further 47,571,428 Capital Raising Shares.

Of the Capital Raising Shares being issued, 96,428,566 will be issued through the Firm Placing and, assuming a Capital Raising size of £200 million, up to a further 46,428,570 Capital Raising Shares will be issued through the Placing, Open Offer and Offer for Subscription.

Qualifying Shareholders are being offered the right to subscribe for Open Offer Shares in accordance with the terms of the Open Offer. Save for certain institutional Shareholders, Qualifying Shareholders are not being offered the right to subscribe for the Firm Placed Shares or the Placing Shares.

This Appendix 2 and, for certificated Shareholders, the accompanying Application Form, contain the formal terms and conditions of the Open Offer. Your attention is drawn to the letter from the Chairman in Part I of this document which sets out the background to and reasons for the Capital Raising.

Upon completion of the Capital Raising and assuming a Capital Raising size of £200 million, the Capital Raising Shares will represent approximately 25.3 per cent. of the Enlarged Share Capital and the Record Date Shares will represent approximately 7.7 per cent. of the Enlarged Share Capital. Assuming a Capital Raising size of £200 million, Capital Raising Shares issued as part of the Firm Placing will account for approximately 13.6 per cent. of the Enlarged Share Capital and the Placing Shares, Open Offer Shares and Offer for Subscription Shares will account for approximately 6.6 per cent. of the Enlarged Share Capital.

The Open Offer is an opportunity for Qualifying Shareholders to apply for, in aggregate, 43,478,612 Open Offer Shares pro rata to their holdings on the Record Date and, pursuant to the Excess Application Facility, to apply for Excess Shares, at the issue price of 140 pence per Capital Raising Share in accordance with the terms of the Open Offer.

The Record Date for entitlements under the Open Offer for Qualifying CREST Shareholders and Qualifying Non-CREST Shareholders is 5.30 p.m. on 19 May 2017. Application Forms for Qualifying Non-CREST Shareholders accompany this document and Open Offer Entitlements and Excess CREST Open Offer Entitlements are expected to be credited to stock accounts of Qualifying CREST Shareholders in CREST as soon as practicable after 8.00 a.m. on 24 May 2017. The latest time and date for receipt of completed Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate) is expected to be 11.00 a.m. on 7 June 2017 with Admission and commencement of dealings in Open Offer Shares expected to take place at 8.00 a.m. on 9 June 2017.

The Capital Raising is conditional on the Resolutions being duly passed at the General Meeting.

This document and, for Qualifying Non-CREST Shareholders only, the Application Form contains the formal terms and conditions of the Open Offer. Your attention is drawn to paragraph 2 of this Appendix 2, which gives details of the procedure for application and payment for the Open Offer Shares including any Excess Shares applied for pursuant to the Excess Application Facility. The attention of Overseas Shareholders is drawn to paragraph 6 of this Appendix 2 below.

The Placing, Open Offer and Offer for Subscription are not underwritten.

Any Qualifying Shareholder who has sold or transferred all or part of his/her registered holding(s) of Existing Shares prior to 5.30 p.m. on 19 May 2017 is advised to consult his or her stockbroker, bank or other agent through or to whom the sale or transfer was effected as soon as possible since the invitation to apply for Open Offer Shares under the Open Offer may be a benefit which may be claimed from him/her by the purchaser(s) under the rules of the London Stock Exchange.

Application has been made to the UK Listing Authority for the Capital Raising Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Open Offer Shares to be admitted to trading on the London Stock Exchange's main market for listed securities.

2. THE OPEN OFFER

Subject to the terms and conditions set out below (and, in the case of Qualifying Non-CREST Shareholders, in the Application Form), Qualifying Shareholders are being given the opportunity to apply for any number of Open Offer Shares at the Issue Price (payable in full on application and free of all expenses) up to a maximum of their pro rata entitlement which shall be calculated on the basis of:

1 Open Offer Share for every 13 Record Date Shares

registered in the name of each Qualifying Shareholder on the Record Date and so in proportion for any greater or lesser number of Existing Shares then held.

The Open Offer Shares, when issued and fully paid, will be identical to and rank in full for all dividends or other distributions declared, made or paid after Admission and otherwise will rank equally with the Existing Shares. The Open Offer Shares are not being made available in whole or in part to the public except under the terms of the Open Offer.

Fractions of Open Offer Shares will not be offered to Qualifying Shareholders. Entitlements will be rounded down to the nearest whole number of Open Offer Shares and any fractional entitlements to Open Offer Shares that would otherwise have arisen will be aggregated and made available in the Excess Application Facility or the Placing or the Offer for Subscription as the Directors (in consultation with Numis) determine.

Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlements in full, to apply for Excess Shares through the Excess Application Facility. Please note that applications for Excess Shares will only be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Entitlements, Shares are scaled back from the Placing and/or the Offer for Subscription and/or the Directors decide to exercise their discretion to increase the size of the Issue and allocate some or all of the additional new Capital Raising Shares to the Excess Application Facility. If applications under the Excess Application Facility are received for more than the maximum number of Shares available, then such applications will be scaled back pro rata to the number of Excess Shares applied for.

Valid applications by Qualifying Shareholders will be satisfied in full up to the maximum amount of their individual Open Offer Entitlements (excluding any Excess Shares applied for through the Excess Application Facility).

Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer, as will holdings under different designations and in different accounts.

If you are a Qualifying Non-CREST Shareholder, the Application Form shows the number of Existing Shares registered in your name on the Record Date (in Box 3) and also shows the maximum number of Shares for which you are entitled to apply if you take up your Open Offer Entitlements in full (in Box 4).

Qualifying CREST Shareholders will have Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to their stock accounts in CREST and should refer to paragraph 4.2 of this Appendix 2 and also to the CREST Manual for further information on the relevant CREST procedures.

Qualifying Shareholders may apply for any number of Open Offer Shares up to the maximum to which they are entitled under the Open Offer and may apply for any number of Excess Shares pursuant to the Excess Application Facility, save that the maximum amount of Capital Raising Shares to be allotted under the Excess Application Facility will be limited by the maximum size of the Capital Raising (as may be increased by the Directors by up to £66.6 million to approximately £266.6 million as set out in this document) less the aggregate of the Firm Placed Shares, the Capital Raising Shares issued under the Open Offer pursuant to Qualifying Shareholders' Open Offer Entitlements and any Capital Raising Shares that the Directors determine to issue under the Placing and/or the Offer for Subscription.

If applications under the Excess Application Facility are received for more than the maximum number of Shares available, then such applications will be scaled back pro rata to the number of Excess Shares applied for.

Excess applications may be allocated in such manner as the Directors may determine in their absolute discretion and no assurance can be given that excess applications by Qualifying Shareholders will be met in full or in part or at all.

If a Qualifying Shareholder does not take up his Open Offer Entitlements in full, such Qualifying Shareholder's holding will be diluted by approximately 20.18 per cent. as a result of the Capital Raising (assuming that such Qualifying Shareholder does not acquire any other Capital Raising Shares and a Capital Raising size of £200 million). Furthermore, a Qualifying Shareholder who takes up his Open Offer Entitlements in full in respect of the Open Offer (and does not receive any other Capital Raising Shares pursuant to the Capital Raising) will suffer dilution of approximately 14 per cent. to his shareholding in the Company as a result of the Capital Raising assuming a Capital Raising size of £200 million.

If the Directors increase the Capital Raising by £66.6 million through the issue of a further 47,571,428 Capital Raising Shares at the Issue Price, the size of the Capital Raising will be approximately £266.6 million and if a Qualifying Shareholder does not take up his Open Offer Entitlements in full, such Qualifying Shareholder's holding will be diluted by up to approximately 25.2 per cent. as a result of the Capital Raising. Furthermore, a Qualifying Shareholder who takes up his Open Offer Entitlements in full in respect of the Open Offer (and does not receive any other Capital Raising Shares pursuant to the Capital Raising) will suffer dilution of approximately 19.4 per cent. to his shareholding in the Company.

Any Open Offer Shares not applied for under the Open Offer may be allocated by the Directors to the Excess Application Facility, the Placing and/or the Offer for Subscription and the net proceeds held for the benefit of the Company.

The Open Offer will remain open for acceptance until 11.00 a.m. on 7 June 2017.

Any Qualifying Shareholder who validly completes and returns an Application Form or requests registration of the Open Offer Shares comprised therein, or who is a CREST member or CREST sponsored member who makes or is treated as making a valid acceptance in accordance with the procedures set out in this Appendix 2 will be deemed to make the representations and warranties to the Company contained in paragraph 4.1.5 of this Appendix 2.

The attention of Overseas Shareholders or any person (including, without limitation, a custodian, nominee or trustee) who has a contractual or other legal obligation to forward this document into a jurisdiction other than the UK is drawn to paragraph 6 of this Appendix 2. Subject to certain limited exceptions, the Placing and Open Offer will not be made into certain territories. Subject to the provisions of paragraph 6, Shareholders with a registered address in the US or any other Excluded Territory will not be sent an Application Form.

Qualifying Shareholders should be aware that the Open Offer is not a rights issue. Qualifying Non-CREST Shareholders should also note that their Application Forms are not negotiable documents and cannot be traded. Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be credited to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Open Offer Shares not applied for under the Open Offer will not be sold in the market for the benefit of those who do not apply under the Open Offer and Qualifying Shareholders who do not apply to take up Open Offer Shares will have no rights under the Open Offer.

The Existing Shares are already admitted to CREST. No further application for admission to CREST is accordingly required for the Capital Raising Shares. All Shares, when issued and fully paid, may be held and transferred by means of CREST.

Application has been made for the Open Offer Entitlements and the Excess CREST Open Offer Entitlements to be credited to Qualifying CREST Shareholders' CREST accounts. The Open Offer Entitlements and the Excess CREST Open Offer Entitlements are expected to be credited to CREST accounts on 9 June 2017.

3. CONDITIONS AND FURTHER TERMS OF THE OPEN OFFER

The Open Offer is conditional, inter alia, upon:

3.1 the passing, without amendment, of the Resolutions at the General Meeting;
3.2 Admission taking place by no later than 8.00 a.m. on 9 June 2017 (or such later time and date as the Company and Numis may agree); and
3.3 the Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms.

Accordingly, if these and the other conditions to the Open Offer are not satisfied or waived (where capable of waiver) by 9 June 2017, the Capital Raising will not proceed and any applications made by Qualifying Shareholders will be rejected. In such circumstances, application monies received by the Receiving Agent in respect of the Open Offer will be returned (at the applicant's sole risk), without payment of interest, as soon as practicable, but within 14 days, thereafter. The Capital Raising will not be revoked after Admission.

No temporary documents of title will be issued in respect of Open Offer Shares held in uncertificated form. Definitive certificates in respect of Open Offer Shares taken up are expected to be posted to those Qualifying Shareholders who have validly elected to hold their Open Offer Shares in certificated form in the week commencing 12 June 2017. In respect of those Qualifying Shareholders who have validly elected to hold their Open Offer Shares in uncertificated form, the Open Offer Shares are expected to be credited to their stock accounts maintained in CREST by 8.00 a.m. 9 June 2017.

Applications will be made to the UKLA for the Capital Raising Shares to be listed on the premium segment of the Official List and to the London Stock Exchange for the Capital Raising Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. Admission is expected to occur on 9 June 2017, when dealings in the Capital Raising Shares are expected to begin.

All monies received by the Receiving Agent in respect of Open Offer Shares will be placed on deposit in a non-interest bearing account by the Receiving Agent.

If for any reason it becomes necessary to adjust the expected timetable as set out in this document, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates.

4. PROCEDURE FOR APPLICATION AND PAYMENT

If you are in any doubt as to the action you should take, or the contents of this document, you should immediately seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other independent adviser duly authorised under FSMA if you are in the UK or if not another appropriate independent professional adviser who specialises in advising on the acquisition of shares and other securities.

The action to be taken by Qualifying Shareholders in respect of the Open Offer depends on whether, at the relevant time, such Qualifying Shareholder has an Application Form in respect of his or her entitlement under the Open Offer, including the Excess Application Facility, or has had Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to his or her CREST stock account in respect of such entitlement.

Qualifying Shareholders who have validly elected to hold their Existing Shares in certificated form and who hold such shares on the Record Date will, save as provided in paragraph 6 of this Appendix 2, receive an Application Form. Qualifying Shareholders who have validly elected to hold Existing Shares in uncertificated form will not receive an Application Form but will receive a credit to their stock account in CREST of their Open Offer Entitlements equal to the maximum number of Open Offer Shares for which they are entitled to apply under the Open Offer.

CREST sponsored members should refer to their CREST sponsor as only their CREST sponsor will be able to take the necessary action specified below to apply under the Open Offer in respect of the Open Offer Entitlements and Excess CREST Open Offer Entitlements of such members held in CREST. CREST members who wish to apply under the Open Offer in respect of their Open Offer Entitlements and Excess CREST Open Offer Entitlements in CREST should refer to the CREST Manual for further information on the CREST procedures referred to below.

Qualifying Shareholders who do not want to apply for the Open Offer Shares under the Open Offer should take no action and should not complete or return the Application Form. Qualifying Shareholders are, however, encouraged to vote at the General Meeting by attending in person or by completing and returning the Form of Proxy enclosed with this document.

4.1 If you have an Application Form in respect of your entitlement under the Open Offer

4.1.1 General

Save as provided in paragraph 6 of this Appendix 2 in relation to certain Overseas Shareholders, Qualifying Non-CREST Shareholders will receive an Application Form. The Application Form shows the number of Existing Shares registered in their name on the Record Date in Box 3. It also shows the maximum number of Open Offer Shares for which they are entitled to apply under the Open Offer, as shown by the total number of Open Offer Entitlements allocated to them set out in Box 4. Box 5 shows how much they would need to pay if they wish to take up their Open Offer Entitlements in full. Qualifying Non-CREST Shareholders may apply for less than their Open Offer Entitlements should they wish to do so. Qualifying Non-CREST Shareholders may also hold such an Application Form by virtue of a bona fide market claim.

Under the Excess Application Facility, provided they have agreed to take up their Open Offer Entitlements in full, Qualifying Shareholders may apply for more than the amount of their Open Offer Entitlements should they wish to do so. If you are in any doubt as to the action you should take, or the contents of this document, you should immediately seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other independent adviser duly authorised under FSMA if you are in the UK or if not another appropriate independent professional adviser who specialises in advising on the acquisition of shares and other securities.

The instructions and other terms set out in the Application Form, form part of the terms of the Open Offer in relation to Qualifying Non-CREST Shareholders.

4.1.2 Bona fide market claims

Applications to acquire Open Offer Shares may only be made on the Application Form and may only be made by the Qualifying Non-CREST Shareholder named in it or by a person entitled by virtue of a bona fide market claim in relation to a purchase of Existing Shares through the market prior to the date upon which the Existing Shares will be marked "ex" the entitlement to participate in the Open Offer. Application Forms may not be assigned, transferred or split, except to satisfy bona fide market claims the latest time for which is 3.00 p.m. on 5 June 2017. The Application Form is not a negotiable document and cannot be separately traded. A Qualifying Non-CREST Shareholder who has sold or otherwise transferred all or part of his or her holding of Existing Shares prior to the date upon which the Existing Shares were marked "ex" the entitlement to participate in the Open Offer, should consult his broker or other professional adviser as soon as possible as the invitation to acquire Open Offer Shares under the Open Offer may be a benefit which may be claimed by the transferee. Qualifying Non-CREST Shareholders who have sold or otherwise transferred all of their registered holdings should, if the market claim is to be settled outside CREST, complete Box 10 on the Application Form and immediately send it (together with this document) to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee in accordance with the instructions set out in the Application Form. Qualifying Non CREST Shareholders who have sold or otherwise transferred some only of the Existing Shares shown in Box 3 on the Application Form prior to 19 May 2017, should contact the stockbroker, bank or other agent through whom the sale or transfer was effected to arrange for split Application Forms to be obtained. Subject to certain exceptions, the Application Form should not, however, be forwarded to, or transmitted in or into, the United States or any other Excluded Territory. If the market claim is to be settled outside CREST, the beneficiary of the claim should follow the procedures set out in the accompanying Application Form. If the market claim is to be settled in CREST, the beneficiary of the claim should follow the procedure set out in paragraph 4.2 of this Appendix 2 below.

4.1.3 Application procedures

Qualifying Non-CREST Shareholders wishing to apply to acquire all or any of the Open Offer Shares in respect of their Open Offer Entitlements (or any Excess Shares under the Excess Application Facility) should complete the Application Form in accordance with the instructions printed on it.

Qualifying Non-CREST Shareholders may only apply for Excess Shares under the Excess Application Facility if they have agreed to take up their Open Offer Entitlements in full. The total number of Open Offer Shares is fixed and will not be increased save under the Excess Application Facility to the extent that Shares are scaled back from the Placing, the Offer for Subscription and/or the Directors increase the size of the Capital Raising and allocate part of that increase to the Excess Application Facility. Applications for Excess Shares will be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Entitlements, Shares are scaled back from the Placing, the Offer for Subscription and/or to the extent that the Directors increase the size of the Capital Raising and allocate further new Shares to the Excess Application Facility. If applications under the Excess Application Facility are received for more than the maximum number of Shares available, then such applications will be scaled back pro rata to the number of Excess Shares applied for. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable thereafter by way of cheque.

Completed Application Forms should be posted in the accompanying pre-paid envelope by post to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or by hand (during normal business hours only) to Capita Asset Services so as to be received by no later than 11.00 a.m. on 7 June 2017, after which time Application Forms will not be valid (subject to certain exceptions described below). Application Forms delivered by hand will not be checked and no receipt will be provided. Qualifying Non-CREST Shareholders should note that applications, once made, will be irrevocable and receipt thereof will not be acknowledged. If an Application Form is being sent by first-class post in the UK, Qualifying Shareholders are recommended to allow at least four Business Days for delivery.

All payments must be in pounds sterling and made by cheque or banker's draft made payable to "Capita Registrars Limited re: IP Group plc Open Offer" and crossed "A/C Payee Only". Cheques must be drawn on the personal account of the individual investor who must have sole or joint title to the funds. Cheques or banker's drafts must be drawn in pounds sterling and on a bank or building society or branch of a bank or building society in the United Kingdom or Channel Islands which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which has arranged for its cheques and banker's drafts to be cleared through the facilities provided by any of those companies or committees and must bear the appropriate sort code in the top right hand corner and must be for the full amount payable on application. Third party cheques will not be accepted with the exception of building society cheques or banker's drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the cheque or draft to such effect. The account name should be the same as that shown on the application. Post-dated cheques will not be accepted. Third party cheques (other than building society cheques or banker's drafts where the building society or bank has confirmed that the relevant Qualifying Shareholder has title to the underlying funds) will be subject to the Money Laundering Regulations which would delay Shareholders receiving their Open Offer Shares (please see paragraph 5 below).

Cheques or banker's drafts will be presented for payment upon receipt. The Company reserves the right to instruct Capita Asset Services, as receiving agent to seek special clearance of cheques and banker's drafts to allow the Company to obtain value for remittances at the earliest opportunity. No interest will be paid on payments made before they are due. It is a term of the Open Offer that cheques shall be honoured on first presentation and the Company may elect to treat as invalid acceptances in respect of which cheques are not so honoured. All documents, cheques and banker's drafts sent through the post will be sent at the risk of the sender. Payments via CHAPS, BACS or electronic transfer will not be accepted.

If cheques or banker's drafts are presented for payment before all of the conditions of the Capital Raising are fulfilled, the application monies will be kept in a separate non-interest bearing bank account. If the Capital Raising does not become unconditional, no Open Offer Shares will be issued and all monies will be returned (at the applicant's sole risk), without payment of interest, to applicants as soon as practicable, but within 14 days, following the lapse of the Capital Raising.

The Company may in its sole discretion, but with the prior consent of Numis, treat an Application Form as valid and binding on the person by whom or on whose behalf it is lodged, even if not completed in accordance with the relevant instructions or not accompanied by a valid power of attorney where required, or if it otherwise does not strictly comply with the terms and conditions of the Open Offer. The Company further reserves the right (but shall not be obliged), with the prior consent of Numis to accept either:

(a) Application Forms received after 11.00 a.m. on 7 June 2017; or
(b) applications in respect of which remittances are received before 11.00 a.m. on 5 June 2017 from authorised persons (as defined in FSMA) specifying the Open Offer Shares

applied for and undertaking to lodge the Application Form in due course but, in any event, within two Business Days.

Multiple applications will not be accepted. All documents and remittances sent by post by or to an applicant (or as the applicant may direct) will be sent at the applicant's own risk.

If Open Offer Shares have already been allotted to a Qualifying Non-CREST Shareholder and such Qualifying Non-CREST Shareholder's cheque or banker's draft is not honoured upon first presentation or such Qualifying Non-CREST Shareholder's application is subsequently otherwise deemed to be invalid, the Registrar shall be authorised (in its absolute discretion as to manner, timing and terms) to make arrangements, on behalf of the Company, for the sale of such Qualifying Non-CREST Shareholder's Open Offer Shares and for the proceeds of sale (which for these purposes shall be deemed to be payments in respect of successful applications) to be paid to and retained by the Company. None of the Registrar, Numis or the Company, nor any other person, shall be responsible, or have any liability, for any loss, expense or damage suffered by such Qualifying Non-CREST Shareholder as a result.

4.1.4 Excess Application Facility

Provided Qualifying Non-CREST Shareholders choose to take up their Open Offer Entitlements in full, the Excess Application Facility enables a Qualifying Non-CREST Shareholder to apply for Excess Shares.

The total number of Open Offer Shares is fixed and will not be increased. Applications for Excess Shares will be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Entitlements and Capital Raising Shares are not allocated pursuant to the Firm Placing, the Placing and/or the Offer for Subscription, subject to the maximum of the Capital Raising Shares to be issued. If applications under the Excess Application Facility are received for more than the maximum number of Capital Raising Shares available, then such applications will be scaled back pro rata to the number of Excess Shares applied for. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable, but within 14 days, thereafter by way of cheque.

Qualifying Non-CREST Shareholders who wish to apply for Open Offer Shares in excess of their Open Offer Entitlements must complete the Application Form in accordance with the instructions set out on the Application Form.

Qualifying Non-CREST Shareholders who make applications for Excess Shares under the Excess Application Facility which are not met in full and from whom payment in full has been made will receive a pounds sterling amount equal to the number of Excess Shares applied and paid for, but not allocated to, the relevant Qualifying Non-CREST Shareholder, multiplied by the Issue Price. Monies will be returned as soon as reasonably practicable thereafter, without payment of interest and at the applicant's sole risk.

Fractions of Excess Shares will not be issued under the Excess Application Facility and fractions of Excess Shares will be round down to the nearest whole number.

4.1.5 Effect of application

By completing and delivering an Application Form, the applicant:

(a) represents and warrants to the Company and Numis that he has the right, power and authority, and has taken all action necessary, to make the application under the Open Offer and the Excess Application Facility and to execute, deliver and exercise his rights and perform his obligations under any contracts resulting therefrom and that he is not a person otherwise prevented by legal or regulatory restrictions from applying for Open Offer Shares or Excess Shares or acting on behalf of any such person on a nondiscretionary basis;

(b) agrees with the Company and Numis that all applications under the Open Offer and the Excess Application Facility and any contracts or non-contractual obligations resulting therefrom shall be governed by, and construed in accordance with, the laws of England;
(c) confirms to the Company and Numis that in making the application he is not relying on any information or representation in relation to the Group other than that contained in (or incorporated by reference in) this document and the applicant accordingly agrees that no person responsible solely or jointly for this document or any part thereof, or involved in the preparation thereof, shall have any liability for any such information or representation not so contained and further agrees that, having had the opportunity to read this document, he will be deemed to have had notice of all information in relation to the Group contained (or incorporated by reference) in this document;
(d) confirms to the Company and Numis that no person has been authorised to give any information or to make any representation concerning the Group and/or the Capital Raising Shares (other than as expressly contained in this document) and, if given or made, any such other information or representation should not be, and has not been, relied upon as having been authorised by the Company or Numis;
(e) represents and warrants to the Company and Numis that he is the Qualifying Shareholder originally entitled to the Open Offer Entitlements or that he received such Open Offer Entitlements by virtue of a bona fide market claim;
(f) represents and warrants to the Company and Numis that if he has received some or all of his Open Offer Entitlements from a person other than the Company he is entitled to apply under the Open Offer in relation to such Open Offer Entitlements by virtue of a bona fide market claim;
(g) requests that the Open Offer Shares to which he will become entitled, be issued to him on the terms set out in this document and the Application Form and subject to the Articles;
(h) represents and warrants to the Company and Numis that he is not, nor is he applying on behalf of any person who is, in the United States or is a citizen or resident, or which is a corporation, partnership or other entity created or organised in or under any laws, of the United States or any other Excluded Territory or any jurisdiction in which the application for Open Offer Shares is prevented by law and he is not applying with a view to re-offering, re-selling, transferring or delivering any of the Open Offer Shares which are the subject of his application in the United States or to, or for the benefit of, a person who is a citizen or resident, or which is a corporation, partnership or other entity created or organised in or under any laws, of the United States or any other Excluded Territory or any jurisdiction in which the application for Open Offer Shares is prevented by law (except where proof satisfactory to the Company has been provided to the Company that he is able to accept the invitation by the Company free of any requirement which it (in its absolute discretion) regards as unduly burdensome), nor acting on behalf of any such person on a non discretionary basis nor person(s) otherwise prevented by legal or regulatory restrictions from applying for Open Offer Shares under the Open Offer or Excess Shares under the Excess Application Facility;
(i) represents and warrants to the Company and Numis that he is not, and nor is he applying as a nominee or agent for, a person who is a Placee;
(j) represents and warrants to the Company and Numis that he is not, and nor is he applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates

referred to in section 93 (depository receipts) or section 96 (clearance services) of the Finance Act 1986; and

(k) confirms to the Company and Numis that in making the application, he is not relying and has not relied on Numis or any person affiliated with Numis in connection with any investigation of the accuracy of any information contained in this document or his investment decision.

All enquiries in connection with the procedure for application and completion of the Application Form should be made to Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Qualifying Non-CREST Shareholders who do not want to take up or apply for the Open Offer Shares under the Open Offer should take no action and should not complete or return the Application Form. Qualifying Non-CREST Shareholders are, however, encouraged to vote at the General Meeting by attending in person or by completing and returning the Form of Proxy enclosed with this document.

4.2 If you have Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to your stock account in CREST in respect of your entitlement under the Open Offer

4.2.1 General

Save as provided in paragraph 6 of this Appendix 2 in relation to certain Overseas Shareholders, each Qualifying CREST Shareholder will receive a credit to his stock account in CREST of his Open Offer Entitlements equal to the maximum number of Open Offer Shares for which he is entitled to apply to acquire under the Open Offer and also Excess CREST Open Offer Entitlements (see paragraph 4.2.3 below for further details).

The CREST stock account to be credited will be the account under the participant ID and member account ID which applies to the Existing Shares held on the Record Date by the Qualifying CREST Shareholder in respect of which the Open Offer Entitlements and Excess CREST Open Offer Entitlements have been allocated.

If for any reason the Open Offer Entitlements and/or Excess CREST Open Offer Entitlements cannot be admitted to CREST by, or the stock accounts of Qualifying CREST Shareholders cannot be credited by 3.00 p.m. on 24 May 2017, or such later time and/or date as the Company and Numis may decide, the Application Form will be sent to each Qualifying CREST Shareholder in substitution for the Open Offer Entitlements and Excess CREST Open Offer Entitlements which should have been credited to his stock account in CREST. In these circumstances the expected timetable as set out in this document will be adjusted as appropriate and the provisions of this document applicable to Qualifying Non-CREST Shareholders with Application Forms will apply to Qualifying CREST Shareholders who receive such Application Forms.

CREST members who wish to apply to acquire some or all of their entitlements to Open Offer Shares and Excess CREST Open Offer Entitlements should refer to the CREST Manual for further information on the CREST procedures referred to below. Should you need advice with regard to these procedures, please contact Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. If you are a CREST sponsored member you should consult your CREST sponsor if you wish to apply for Open Offer Shares as only your CREST sponsor will be able to take the necessary action to make this application in CREST.

4.2.2 Bona fide Market claims

Each of the Open Offer Entitlements and the Excess CREST Open Offer Entitlements will constitute a separate security for the purposes of CREST. Although Open Offer Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of Open Offer Entitlements and Excess CREST Open Offer Entitlements may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim transaction.

4.2.3 Excess Application Facility

Provided Qualifying CREST Shareholders choose to take up their Open Offer Entitlements in full, the Excess Application Facility enables Qualifying CREST Shareholders to apply for Capital Raising Shares in excess of their Open Offer Entitlements.

There is no limit on the amount of Capital Raising Shares that can be applied for under the Excess Application Facility, save that the maximum amount of Capital Raising Shares to be allotted under the Excess Application Facility (the "Maximum Excess Application Number") will be limited by the maximum size of the Capital Raising less the aggregate of the Firm Placed Shares, the Capital Raising Shares issued under the Open Offer pursuant to Qualifying Shareholders' Open Offer Entitlements and any Capital Raising Shares that the Directors determine to issue under the Placing and/or the Offer for Subscription save to the extent that the Directors exercise their discretion to increase the size of the Capital Raising and allocate part of that increase to the Excess Application Facility. Applications for Excess Shares will be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Shares, such Excess Shares are not allocated pursuant to the Placing and/or the Offer for Subscription and/or to the extent that the Directors increase the size of the Capital Raising and allocate further new Shares to the Excess Application Facility. If applications under the Excess Application Facility are received for more than the maximum number of Shares available, then such applications will be scaled back pro rata to the number of Excess Shares applied for. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable, but within 14 days, thereafter by way of cheque.

Each Qualifying CREST Shareholder will initially be credited with Excess CREST Open Offer Entitlements equal to ten times its Open Offer Entitlement. If a Qualifying CREST Shareholder would like to apply for Excess Shares over and above the number of Excess CREST Open Offer Entitlements which have been credited, such Qualifying CREST Shareholder should contact Capita Asset Services to request that further Excess CREST Open Offer Entitlements be credited, subject at all times to the Maximum Excess Application Number.

All enquiries in connection with the procedure for application for Excess CREST Open Offer Entitlements should be made to Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

Excess CREST Open Offer Entitlements may not be sold or otherwise transferred. Save as provided in paragraph 6 of this Appendix 2 in relation to certain Overseas Shareholders, the CREST accounts of Qualifying CREST Shareholders will be credited with Excess CREST Open Offer Entitlements in order for any applications for Excess Shares to be settled through CREST. The credit of such Excess CREST Open Offer Entitlements does not in any way give Qualifying CREST Shareholders a right to the Open Offer Shares attributable to the Excess CREST Open Offer Entitlements as Excess CREST Open Offer Entitlements are subject to scaling back in accordance with the terms of this document.

To apply for Excess Shares pursuant to the Open Offer, Qualifying CREST Shareholders should follow the instructions above and must not return a paper form and cheque.

Should a transaction be identified by the CREST Claims Processing Unit as "cum" the Open Offer Entitlements and the relevant Open Offer Entitlements be transferred, the Excess CREST Open Offer Entitlements will not transfer with the Open Offer Entitlements claim, but will be transferred as a separate claim. Should a Qualifying CREST Shareholder cease to hold all of his or her Existing Shares as a result or one or more bona fide market claims, the Excess CREST Open Offer Entitlements credited to CREST, and allocated to the relevant Qualifying Shareholder, will be transferred to the purchaser. Please note that an additional USE Instruction must be sent in respect of any application by a Qualifying CREST Shareholder under the Excess Application Facility.

A Qualifying CREST Shareholder who has made a valid application for Excess Shares under the Excess Application Facility which is not met in full, and from whom payment in full for Excess Shares has been received, will receive a pounds sterling amount equal to the number of Excess Shares applied and paid for, but not allocated to, the relevant Qualifying CREST Shareholder, multiplied by the Issue Price. Monies will be returned as soon as reasonably practicable thereafter, without payment of interest and at the applicant's sole risk.

Fractions of Excess Shares will not be issued under the Excess Application Facility and fractions of Excess Shares will be rounded down to the nearest whole number.

4.2.4 USE instructions

Qualifying CREST Shareholders who are CREST members and who want to apply for Open Offer Shares in respect of all or some of their Open Offer Entitlements in CREST must send (or if they are CREST sponsored members, procure that their CREST sponsor sends) an Unmatched Stock Event ("USE") instruction ("USE Instruction") to Euroclear which, on its settlement, will have the following effect:

(a) the crediting of a stock account of the Receiving Agent under the participant ID and member account ID specified below, with a number of Open Offer Entitlements corresponding to the number of Open Offer Shares applied for; and
(b) the creation of a CREST payment, in accordance with the CREST payment arrangements in favour of the payment bank of the Registrar in respect of the amount specified in the USE Instruction which must be the full amount payable on application for the number of Open Offer Shares referred to in paragraph 4.2.4(a) above.

4.2.5 Content of USE instruction in respect of Open Offer Entitlements

The USE Instruction must be properly authenticated in accordance with Euroclear's specifications and must contain, in addition to the other information that is required for settlement in CREST, the following details:

(a) the number of Open Offer Shares for which application is being made (and hence the number of the Open Offer Entitlements being delivered to the Registrar);
(b) the ISIN of the Open Offer Entitlements. This is GB00BZ3T5702;
(c) the CREST participant ID of the accepting CREST member;
(d) the CREST member account ID of the accepting CREST member from which the Open Offer Entitlements are to be debited;
(e) the participant ID of the Receiving Agent in its capacity as a CREST receiving agent. This is 7RA33;
(f) the member account ID of the Receiving Agent in its capacity as a CREST receiving agent. This is 29100IPG;
(g) the amount payable by means of a CREST payment on settlement of the USE Instruction. This must be the full amount payable on application for the number of Open Offer Shares referred to in paragraph 4.2.5(a) above;
(h) the intended settlement date. This must be on or before 11.00 a.m. on 7 June 2017; and
(i) the Corporate Action Number for the Open Offer. This will be available by viewing the relevant corporate action details in CREST.

In order for an application under the Open Offer to be valid, the USE Instruction must comply with the requirements as to authentication and contents set out above and must settle on or before 11.00 a.m. on 7 June 2017.

In order to assist prompt settlement of the USE Instruction, CREST members (or their sponsors, where applicable) may consider adding the following non-mandatory fields to the USE Instruction:

(i) a contact name and telephone number (in the free format shared note field); and
(ii) a priority of at least 80.

CREST members and, in the case of CREST sponsored members, their CREST sponsors, should note that the last time at which a USE Instruction may settle on 7 June 2017 in order to be valid is 11.00 a.m. on that day.

In the event that the Capital Raising does not become unconditional by 8.00 a.m. on 9 June 2017 or such later time and date as the Company and Numis determine (being no later than 8.00 a.m. on 23 June 2017), the Capital Raising will lapse, the Open Offer Entitlements admitted to CREST will be disabled and the Receiving Agent will refund the amount paid by a Qualifying CREST Shareholder by way of a CREST payment, without interest, as soon as practicable thereafter.

4.2.6 USE Instructions

Qualifying CREST Shareholders who are CREST members and who want to apply for Excess Shares in respect of all or some of their Excess CREST Open Offer Entitlements in CREST must send (or, if they are CREST sponsored members, procure that their CREST sponsor sends) a USE Instruction to Euroclear which, on its settlement, will have the following effect:

(a) the crediting of a stock account of the Receiving Agent under the participant ID and member account ID specified below, with a number of Excess CREST Open Offer Entitlements corresponding to the number of Excess Shares applied for; and
(b) the creation of a CREST payment, in accordance with the CREST payment arrangements in favour of the payment bank of the Receiving Agent in respect of the amount specified in the USE Instruction which must be the full amount payable on application for the number of Excess Shares referred to in paragraph 4.2.6(a) above.

4.2.7 Content of USE Instruction in respect of Excess CREST Open Offer Entitlements

(a) the number of Excess Shares for which application is being made (and hence the number of the Excess CREST Open Offer Entitlements being delivered to the Registrar);
(b) the ISIN of the Excess CREST Open Offer Entitlements. This is GB00BZ3T5926;
(c) the CREST participant ID of the accepting CREST member;
(d) the CREST member account ID of the accepting CREST member from which the Excess CREST Open Offer Entitlements are to be debited;
(e) the participant ID of the Receiving Agent in its capacity as a CREST receiving agent. This is 7RA33;
(f) the member account ID of the Receiving Agent in its capacity as a CREST receiving agent. This is 29100IPG;
(g) the amount payable by means of a CREST payment on settlement of the USE Instruction. This must be the full amount payable on application for the number of Open Offer Shares referred to in paragraph 4.2.7(a) above;
(h) the intended settlement date. This must be on or before 11.00 a.m. on 7 June 2017; and
(i) the Corporate Action Number for the Open Offer. This will be available by viewing the relevant corporate action details in CREST.

In order to assist prompt settlement of the USE Instruction, CREST members (or their sponsors, where applicable) may consider adding the following non-mandatory fields to the USE Instruction:

(i) a contact name and telephone number (in the free format shared note field); and
(ii) a priority of at least 80.

In the event that the Capital Raising does not become unconditional by 8.00 a.m. on 9 June 2017 or such later time and date as the Company and Numis determine (being no later than 8.00 a.m. on 23 June 2017), the Capital Raising will lapse, the Excess CREST Open Offer Entitlements admitted to CREST will be disabled and the Receiving Agent will refund the amount paid by a Qualifying CREST Shareholder by way of a CREST payment, without interest, as soon as practicable thereafter.

4.2.8 Deposit of Open Offer Entitlements and Excess CREST Open Offer Entitlements into, and withdrawal from, CREST

A Qualifying Non-CREST Shareholder's entitlement under the Open Offer, as shown by the number of Open Offer Entitlements set out in his Application Form in Box 4, including the entitlement to apply under the Excess Application Facility may be deposited into CREST (either into the account of the Qualifying Shareholder named in the Application Form or into the name of a person entitled by virtue of a bona fide market claim). Similarly, Open Offer Entitlements and Excess CREST Open Offer Entitlements held in CREST may be withdrawn from CREST so that the entitlement under the Open Offer and entitlements to apply under Excess Application Facility is reflected in an Application Form. Normal CREST procedures (including timings) apply in relation to any such deposit or withdrawal, subject (in the case of a deposit into CREST) as set out in the Application Form.

A holder of an Application Form who is proposing to deposit the entitlements set out in such form into CREST (in accordance with the instructions contained in the Application Form) is recommended to ensure that the deposit procedures are implemented in sufficient time to enable the person holding or acquiring the Open Offer Entitlements and the entitlement to apply under the Excess Application Facility following their deposit into CREST to take all necessary steps in connection with taking up the entitlement prior to 11.00 a.m. on 7 June 2017. After depositing their Open Offer Entitlements into their CREST account, CREST holders will shortly thereafter receive a credit for their Excess CREST Open Offer Entitlements, which will be managed by the Receiving Agent. CREST holders inputting the withdrawal of their Open Offer Entitlements from their CREST account must ensure that they withdraw both their Open Offer Entitlement and their Excess CREST Open Offer Entitlements.

In particular, having regard to normal processing times in CREST and on the part of the Receiving Agent, the recommended latest time for depositing an Application Form with the CREST Courier and Sorting Service, where the person entitled wishes to hold the entitlement under the Open Offer set out in such Application Form as Open Offer Entitlements and Excess CREST Open Offer Entitlements in CREST, is 3.00 p.m. on 2 June 2017 and the recommended latest time for receipt by Euroclear of a dematerialised instruction requesting withdrawal of Open Offer Entitlements or Excess CREST Open Offer Entitlements from CREST is 4.30 p.m. on 1 June 2017 in either case so as to enable the person acquiring or (as appropriate) holding the Open Offer Entitlements and the entitlement to apply under the Excess Application Facility or an Excess CREST Open Offer Entitlements following the deposit or withdrawal (whether as shown in an Application Form or held in CREST) to take all necessary steps in connection with applying in respect of the Open Offer Entitlements and under the Excess Application Facility or in respect of the Excess CREST Open Offer Entitlements, as the case may be, prior to 11.00 a.m. on 7 June 2017.

Delivery of an Application Form with the CREST deposit form duly completed whether in respect of a deposit into the account of the Qualifying Shareholder named in the Application Form or into the name of another person, shall constitute a representation and warranty to the Company and the Receiving Agent by the relevant CREST member(s) that it/they is/are not in breach of the provisions of the notes under the paragraph headed "Instructions for depositing entitlements under the Open Offer into CREST" on page 3 of the Application Form, and a declaration to the Company and the Registrar and the Receiving Agent from the relevant CREST member(s) that it/they is/are not citizen(s) or resident(s) of the US, any other Excluded Territory or any other jurisdiction in which the application for Open Offer Shares is prevented by law and, where such deposit is made by a beneficiary of a market claim, a representation and warranty that the relevant CREST member(s) is/are entitled to apply under the Open Offer by virtue of a bona fide market claim.

4.2.9 Validity of application

A USE Instruction complying with the requirements as to authentication and contents set out above which settles by no later than 11.00 a.m. on 7 June 2017 will constitute a valid application under the Open Offer.

4.2.10 CREST procedures and timings

CREST members and (where applicable) their CREST sponsors should note that Euroclear does not make available special procedures in CREST for any particular corporate action. Normal system timings and limitations will therefore apply in relation to the input of a USE Instruction and its settlement in connection with the Open Offer. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST sponsored member, to procure that his CREST sponsor takes) such action as shall be necessary to ensure that a valid application is made as stated above by 11.00 a.m. on 7 June 2017. In this connection CREST members and (where applicable) their CREST sponsors are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

4.2.11 Incorrect or incomplete applications

If a USE Instruction includes a CREST payment for an incorrect sum, the Company, through the Receiving Agent, reserves the right:

(a) to reject the application in full and refund the payment to the CREST member in question (without interest);
(b) in the case that an insufficient sum is paid, to treat the application as a valid application for such lesser whole number of Open Offer Shares as would be able to be applied for with that payment at the Issue Price, refunding any unutilised sum to the CREST member in question (without interest); and
(c) in the case that an excess sum is paid, to treat the application as a valid application for all the Open Offer Shares referred to in the USE Instruction, refunding any unutilised sum to the CREST member in question (without interest).

4.2.12 Effect of valid application

A CREST member or CREST sponsored member who makes or is treated as making a valid application in accordance with the above procedures thereby:

(a) represents and warrants to the Company and Numis that he has the right, power and authority, and has taken all action necessary, to make the application under the Open Offer and to execute, deliver and exercise his rights, and perform his obligations, under any contracts resulting therefrom and that he is not a person otherwise prevented by legal or regulatory restrictions from applying for Open Offer Shares or acting on behalf of any such person on a non-discretionary basis;
(b) agrees to pay the amount payable on application in accordance with the above procedures by means of a CREST payment in accordance with the CREST payment arrangements (it being acknowledged that the payment to the Registrar's payment bank in accordance with the CREST payment arrangements shall, to the extent of the payment, discharge in full the obligation of the CREST member to pay to the Company the amount payable on application);
(c) agrees with the Company and Numis that all applications and any contracts or non-contractual obligations resulting therefrom under the Open Offer shall be governed by, and construed in accordance with, the laws of England;
(d) confirms to the Company and Numis that in making the application he is not relying on any information or representation in relation to the Group other than that contained in (or incorporated by reference in) this document, and the applicant accordingly agrees that no person responsible solely or jointly for this document or any part thereof, or involved in the preparation thereof, shall have any liability for any such information or representation not so contained and further agrees that, having had the opportunity to read this document, he will be deemed to have had notice of all the information in relation to the Group contained in this document (including information incorporated by reference);
(e) confirms to the Company and Numis that no person has been authorised to give any information or to make any representation concerning the Group and/or the Capital Raising Shares (other than as contained in this document) and, if given or made, any such other information or representation should not be, and has not been, relied upon as having been authorised by the Company or Numis;
(f) represents and warrants to the Company and Numis that he is the Qualifying Shareholder originally entitled to the Open Offer Entitlements and Excess CREST Open Offer Entitlements or that he has received such Open Offer Entitlements and Excess CREST Open Offer Entitlements by virtue of a bona fide market claim;
(g) represents and warrants to the Company and Numis that if he has received some or all of his Open Offer Entitlements and Excess CREST Open Offer Entitlements from a person other than the Company, he is entitled to apply under the Open Offer in relation to such Open Offer Entitlements and Excess CREST Open Offer Entitlements by virtue of a bona fide market claim;
(h) requests that the Open Offer Shares to which he will become entitled be issued to him on the terms set out in this document, subject to the Articles;
(i) represents and warrants to the Company and Numis that he is not, nor is he applying on behalf of any person who is, in the United States or is a citizen or resident, or which is a corporation, partnership or other entity created or organised in or under any laws, of the US or any other Excluded Territory or any jurisdiction in which the application for Open Offer Shares is prevented by law and he is not applying with a view to re-offering, re-selling, transferring or delivering any of the Open Offer Shares which are the subject of his application in the United States or to, or for the benefit of, a person who is a citizen or resident or which is a corporation, partnership or other entity created or organised in or under any laws of any other Excluded Territory or any jurisdiction in which the application for Open Offer Shares is prevented by law (except where proof satisfactory to the Company has been provided to the Company that he is able to accept the invitation by the Company free of any requirement which it (in its absolute discretion) regards as unduly burdensome), nor acting on behalf of any such person on a non-discretionary basis nor (a) person(s) otherwise prevented by legal or regulatory restrictions from applying for Open Offer Shares under the Open Offer;
(j) represents and warrants to the Company and Numis that he is not, and nor is he applying as a nominee or agent for, a person who is a Placee;
(k) represents and warrants to the Company and Numis that he is not, and nor is he applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 93 (depository receipts) or section 96 (clearance services) of the Finance Act 1986; and
(l) confirms to the Company and Numis that in making the application he is not relying and has not relied on Numis or any person affiliated with Numis in connection with any investigation of the accuracy of any information contained in this document or his investment decision.

4.2.13 Company's discretion as to the rejection and validity of applications

The Company may in its sole discretion but with the prior consent of Numis:

(a) treat as valid (and binding on the CREST member concerned) an application which does not comply in all respects with the requirements as to validity set out or referred to in this Appendix 2;

(b) accept an alternative properly authenticated dematerialised instruction from a CREST member or (where applicable) a CREST sponsor as constituting a valid application in substitution for or in addition to a USE Instruction and subject to such further terms and conditions as the Company may determine;
(c) treat a properly authenticated dematerialised instruction (in this paragraph the "first instruction") as not constituting a valid application if, at the time at which the Registrar receives a properly authenticated dematerialised instruction giving details of the first instruction or thereafter, either the Company or the Registrar has received actual notice from Euroclear of any of the matters specified in Regulation 35(5)(a) of the CREST Regulations in relation to the first instruction. These matters include notice that any information contained in the first instruction was incorrect or notice of lack of authority to send the first instruction; and
(d) accept an alternative instruction or notification from a CREST member or CREST sponsored member or (where applicable) a CREST sponsor, or extend the time for settlement of a USE Instruction or any alternative instruction or notification, in the event that, for reasons or due to circumstances outside the control of any CREST member or CREST sponsored member or (where applicable) CREST sponsor, the CREST member or CREST sponsored member is unable validly to apply for Open Offer Shares by means of the above procedures. In normal circumstances, this discretion is only likely to be exercised in the event of any interruption, failure or breakdown of CREST (or any part of CREST) or on the part of the facilities and/or systems operated by the Receiving Agent in connection with CREST.
4.2.14 Lapse of the Open Offer

In the event that the Capital Raising does not become unconditional by 8.00 a.m. on 9 June 2017 or such later time and date as the Company and Numis may agree, the Capital Raising will lapse, the Open Offer Entitlements and Excess CREST Open Offer Entitlements admitted to CREST will be disabled and the Receiving Agent will refund the amount paid by a Qualifying CREST Shareholder by way of a CREST payment, without interest, as soon as practicable thereafter.

5. MONEY LAUNDERING REGULATIONS

5.1 Holders of Application Forms

To ensure compliance with the Money Laundering Regulations, the Receiving Agent may require, at its absolute discretion, verification of the identity of the person by whom or on whose behalf the Application Form is lodged with payment (which requirements are referred to below as the "verification of identity requirements"). If the Application Form is submitted by a UK regulated broker or intermediary acting as agent and which is itself subject to the Money Laundering Regulations, any verification of identity requirements are the responsibility of such broker or intermediary and not of the Receiving Agent. In such case, the lodging agent's stamp should be inserted on the Application Form.

The person lodging the Application Form with payment and in accordance with the other terms as described above (the "acceptor"), including any person who appears to the Receiving Agent to be acting on behalf of some other person, accepts the Open Offer in respect of such number of Open Offer Shares as is referred to therein (for the purposes of this paragraph 5.1 the "relevant Open Offer Shares") shall thereby be deemed to agree to provide the Registrar with such information and other evidence as the Receiving Agent may require to satisfy the verification of identity requirements.

If the Receiving Agent determines that the verification of identity requirements apply to any acceptor or application, the relevant Open Offer Shares (notwithstanding any other term of the Open Offer) will not be issued to the relevant acceptor unless and until the verification of identity requirements have been satisfied in respect of that acceptor or application. The Receiving Agent is entitled, in its absolute discretion, to determine whether the verification of identity requirements apply to any acceptor or application and whether such requirements have been satisfied, and neither the Receiving Agent nor the Company will be liable to any person for any loss or damage suffered or incurred (or alleged), directly or indirectly, as a result of the exercise of such discretion.

If the verification of identity requirements apply, failure to provide the necessary evidence of identity within a reasonable time may result in delays in the despatch of share certificates or in crediting CREST accounts. If, within a reasonable time following a request for verification of identity, the Receiving Agent has not received evidence satisfactory to it as aforesaid, the Company may, in its absolute discretion, treat the relevant application as invalid, in which event the monies payable on acceptance of the Open Offer will be returned (at the acceptor's risk) without interest to the account of the bank or building society on which the relevant cheque or banker's draft was drawn. This is without prejudice to the right of the Company to take proceedings to recover any loss suffered by it as a result of failure to provide satisfactory advice.

Submission of an Application Form with the appropriate remittance will constitute a warranty to each of the Company, the Receiving Agent and Numis from the applicant that the Money Laundering Regulations will not be breached by application of such remittance.

The verification of identity requirements will not usually apply:

(a) if the applicant is an organisation required to comply with the Money Laundering Directive (2005/60/EC of the European Parliament and of the EC Council of 26 October on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing); or
(b) if the acceptor is a regulated United Kingdom broker or intermediary acting as agent and is itself subject to the Money Laundering Regulations; or
(c) if the applicant (not being an applicant who delivers his application in person) makes payment by way of a cheque drawn on an account in the applicant's name; or
(d) if the aggregate subscription price for the Open Offer Shares is less than €15,000 (approximately £12,970).

In other cases the verification of identity requirements may apply. Satisfaction of these requirements may be facilitated in the following ways:

(i) if payment is made by cheque or banker's draft in sterling drawn on a branch in the United Kingdom of a bank or building society which bears a UK bank sort code number in the top right hand corner the following applies. Cheques, should be made payable to "Capita Registrars Limited re: IP Group plc Open Offer" in respect of an application by a Qualifying Shareholder and crossed "A/C Payee Only". Cheques should be drawn on the personal account of the individual investor to which they have sole or joint title to the funds. Third party cheques may not be accepted with the exception of building society cheques or bankers' drafts where the building society or bank has confirmed the name of the account holder by stamping or endorsing the cheque/bankers' draft to such effect. However, third party cheques will be subject to the Money Laundering Regulations which would delay Shareholders receiving their Open Offer Shares. The account name should be the same as that shown on the Application Form; or
(ii) if the Application Form is lodged with payment by an agent which is an organisation of the kind referred to in (a) above or which is subject to anti-money laundering regulation in a country which is a member of the Financial Action Task Force (the non-European Union members of which are Argentina, Australia, Brazil, Canada, China, Gibraltar, Hong Kong, Iceland, Japan, Mexico, New Zealand, Norway, Russian Federation, Singapore, South Africa, Switzerland, Turkey, UK Crown Dependencies and the US and, by virtue of their membership of the Gulf Cooperation Council, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates), the agent should provide with the Application Form written confirmation that

it has that status and a written assurance that it has obtained and recorded evidence of the identity of the person for whom it acts and that it will on demand make such evidence available to the Receiving Agent. If the agent is not such an organisation, it should contact Capita Registrars on Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

To confirm the acceptability of any written assurance referred to in (b) above, or in any other case, the acceptors should contact Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

If the Application Form is in respect of Open Offer Shares with an aggregate subscription price of €15,000 (approximately £12,970) or more and is/are lodged by hand by the acceptor in person, or if the Application Form in respect of Open Offer Shares is/are lodged by hand by the acceptor and the accompanying payment is not the acceptor's own cheque, he or she should ensure that he or she has with him or her evidence of identity bearing his or her photograph (for example, his or her passport) and separate evidence of his or her address.

If, within a reasonable period of time following a request for verification of identity, and in any case by no later than 11.00 a.m. on 7 June 2017, the Receiving Agent has not received evidence satisfactory to it as aforesaid, the Receiving Agent may, at its discretion, as agent of the Company, reject the relevant application, in which event the monies submitted in respect of that application will be returned without interest to the account at the drawee bank from which such monies were originally debited (without prejudice to the rights of the Company to undertake proceedings to recover monies in respect of the loss suffered by it as a result of the failure to produce satisfactory evidence as aforesaid).

5.2 Open Offer Entitlements in CREST

If you hold your Open Offer Entitlements in CREST and apply for Open Offer Shares in respect of all or some of your Open Offer Entitlements as agent for one or more persons and you are not a UK or EU regulated person or institution (e.g. a UK financial institution), then, irrespective of the value of the application, the Receiving Agent is obliged to take reasonable measures to establish the identity of the person or persons on whose behalf you are making the application. You must therefore contact the Receiving Agent before sending any USE Instruction or other instruction so that appropriate measures may be taken.

Submission of a USE Instruction which on its settlement constitutes a valid application as described above constitutes a warranty and undertaking by the applicant to provide promptly to the Receiving Agent such information as may be specified by the Receiving Agent as being required for the purposes of the Money Laundering Regulations. Pending the provision of evidence satisfactory to the Receiving Agent as to identity, the Receiving Agent may in its absolute discretion take, or omit to take, such action as it may determine to prevent or delay issue of the Open Offer Shares concerned. If satisfactory evidence of identity has not been provided within a reasonable time, then the application for the Open Offer Shares represented by the USE Instruction will not be valid. This is without prejudice to the right of the Company to take proceedings to recover any loss suffered by it as a result of failure to provide satisfactory evidence.

6. OVERSEAS SHAREHOLDERS

This document has been approved by the FCA, being the competent authority in the United Kingdom. Accordingly, the making of the Open Offer to persons resident in, or who are citizens of, or who have a registered address in, countries other than the United Kingdom may be affected by the law or regulatory requirements of the relevant jurisdiction. The comments set out in this paragraph 6 are intended as a general guide only and any Overseas Shareholders who are in any doubt as to their position should consult their professional advisers without delay.

6.1 General

The distribution of this document and the Application Form and the making of the Open Offer to persons who have registered addresses in, or who are resident or ordinarily resident in, or citizens of, or which are corporations, partnerships or other entities created or organised under the laws of countries other than the United Kingdom or to persons who are nominees of or custodians, trustees or guardians for citizens, residents in or nationals of, countries other than the United Kingdom may be affected by the laws or regulatory requirements of the relevant jurisdictions. Those persons should consult their professional advisers as to whether they require any governmental or other consents or need to observe any applicable legal requirement or other formalities to enable them to apply for Open Offer Shares under the Open Offer.

No action has been or will be taken by the Company, Numis or any other person to permit a public offering or distribution of this document (or any other offering or publicity materials or application form(s) relating to the Open Offer Shares) in any jurisdiction where action for that purpose may be required, other than in the United Kingdom.

Receipt of this document and/or an Application Form and/or a credit of Open Offer Entitlements to a stock account in CREST will not constitute an invitation or offer of securities for subscription, sale or purchase in those jurisdictions in which it would be illegal to make such an invitation or offer and, in those circumstances, this document and/or the Application Form must be treated as sent for information only and should not be copied or redistributed.

Application Forms will not be sent to, and Open Offer Entitlements and Excess Open Offer Entitlements will not be credited to stock accounts in CREST of, persons with registered addresses in the United States or any other Excluded Territory or their agent or intermediary, except where the Company is satisfied that such action would not result in the contravention of any registration or other legal requirement in any jurisdiction.

No person receiving a copy of this document and/or an Application Form and/or a credit of Open Offer Entitlements and Excess Open Offer Entitlements to a stock account in CREST in any territory other than the United Kingdom may treat the same as constituting an invitation or offer to him or her, nor should he or she in any event use any such Application Form and/or credit of Open Offer Entitlements to a stock account in CREST unless, in the relevant territory, such an invitation or offer could lawfully be made to him or her and such Application Form and/or credit of Open Offer Entitlements to a stock account in CREST could lawfully be used, and any transaction resulting from such use could be effected, without contravention of any registration or other legal or regulatory requirements. In circumstances where an invitation or offer would contravene any registration or other legal or regulatory requirements, this document and/or the Application Form must be treated as sent for information only and should not be copied or redistributed.

It is the responsibility of any person (including, without limitation, custodians, agents, nominees and trustees) outside the United Kingdom wishing to apply for Open Offer Shares under the Open Offer to satisfy himself or herself as to the full observance of the laws of any relevant territory in connection therewith, including obtaining any governmental or other consents that may be required, observing any other formalities required to be observed in such territory and paying any issue, transfer or other taxes due in such territory.

Neither the Company, Numis, nor any of their respective directors, employees or representatives, is making any representation to any offeree or purchaser of the Capital Raising Shares regarding the legality of an investment in the Capital Raising Shares by such offeree or purchaser under the laws applicable to such offeree or purchaser.

Persons (including, without limitation, custodians, agents, nominees and trustees) receiving a copy of this document and/or an Application Form and/or a credit of Open Offer Entitlements to a stock account in CREST, in connection with the Open Offer or otherwise, should not distribute or send either of those documents nor transfer Open Offer Entitlements in or into any jurisdiction where to do so would or might contravene local securities laws or regulations. If a copy of this document and/or an Application Form and/or a credit of Open Offer Entitlements to a stock account in CREST is received by any person in any such territory, or by his or her custodian, agent, nominee or trustee, he or she must not seek to apply for Open Offer Shares in respect of the Open Offer unless the Company and Numis determine that such action would not violate applicable legal or regulatory requirements. Any person (including, without limitation, custodians, agents, nominees and trustees) who does forward a copy of this document and/or an Application Form and/or transfers Open Offer Entitlements into any such territory, whether pursuant to a contractual or legal obligation or otherwise, should draw the attention of the recipient to the contents of this Appendix 2 and specifically the contents of this paragraph 6.

Subject to paragraphs 6.2 to 6.6 below, any person (including, without limitation, custodians, agents, nominees and trustees) outside the United Kingdom wishing to apply for Open Offer Shares in respect of the Open Offer must satisfy himself or herself as to the full observance of the applicable laws of any relevant territory, including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such territories.

The Company reserves the right to treat as invalid any application or purported application for Open Offer Shares that appears to the Company or its agents to have been executed, effected or dispatched from the United States or any other Excluded Territory or in a manner that may involve a breach of the laws or regulations of any jurisdiction or if the Company or its agents believe that the same may violate applicable legal or regulatory requirements or if it provides an address for delivery of the share certificates of Open Offer Shares or in the case of a credit of Open Offer Entitlements to a stock account in CREST, to a CREST member whose registered address would be, in the United States or any other Excluded Territory or any other jurisdiction outside the United Kingdom in which it would be unlawful to deliver such share certificates or make such a credit.

The attention of Overseas Shareholders is drawn to paragraphs 6.2 to 6.6 below.

Notwithstanding any other provision of this document or the Application Form, the Company reserves the right to permit any person to apply for Open Offer Shares in respect of the Open Offer if the Company, in its sole and absolute discretion, is satisfied that the transaction in question is exempt from, or not subject to, the legislation or regulations giving rise to the restrictions in question.

Overseas Shareholders who wish, and are permitted, to apply for Open Offer Shares should note that payment must be made in sterling denominated cheques or bankers' drafts or where such Overseas Shareholder is a Qualifying CREST Shareholder, through CREST.

Due to restrictions under the securities laws of the United States and the other Excluded Territories, and subject to certain exceptions, Qualifying Shareholders in the United States or who have registered addresses in, or who are resident or ordinarily resident in, or citizens of, the US or any other Excluded Territory will not qualify to participate in the Open Offer and will not be sent an Application Form nor will their stock accounts in CREST be credited with Open Offer Entitlements.

The Open Offer Shares have not been and will not be registered under the relevant laws of the United States or any other Excluded Territory or any state, province or territory thereof and may not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, in or into the United States or any other Excluded Territory or to, or for the account or benefit of, any person with a registered address in, or who is resident or ordinarily resident in, or a citizen of, the US or any other Excluded Territory except pursuant to an applicable exemption.

No public offer of Open Offer Shares is being made by virtue of this document or the Application Forms into the United States or any other Excluded Territory. Receipt of this document and/or an Application Form and/or a credit of Open Offer Entitlements to a stock account in CREST will not constitute an invitation or offer of securities for subscription, sale or purchase in those jurisdictions in which it would be illegal to make such an invitation or offer and, in those circumstances, this document and/or the Application Form must be treated as sent for information only and should not be copied or redistributed.

6.2 United States

The Company is not and does not intend to become an "investment company" within the meaning of the US Investment Company Act, and is not engaged and does not propose to engage in the business of investing, reinvesting, owning, holding or trading in securities. Accordingly, the Company has not been and will not be registered in the United States as an investment company under the US Investment Company Act. The US Investment Company Act provides certain protections to investors and imposes certain restrictions on companies that are registered as investment companies. As the Company is not so registered and does not plan to be so registered, none of these protections or restrictions is or will be applicable to the Company. As a result, restrictions on the ownership and transfer of the Open Offer Shares may materially affect certain Shareholders' ability to transfer the Open Offer Shares.

The Capital Raising Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and, accordingly, may not be offered, sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into, in or within the United States or to, or for the account or benefit of, US Persons (as defined in Regulation S), except in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offering of the Capital Raising Shares in the United States.

The Capital Raising Shares are being offered or sold only: (a) outside the United States to non-US Persons (as defined in Regulation S under the US Securities Act) in offshore transactions within the meaning of, and in accordance with, the safe harbour from the registration requirements provided by Regulation S; and (b) within, into or in the United States to persons reasonably believed to be either (a) QIBs or (b) Accredited Investors and that, in either case, are Qualified Purchasers, solely in private placement transactions not involving any public offering in reliance on the exemption from the registration requirements of Section 5 of the US Securities Act provided by Section 4(a)(2) under the US Securities Act.

Accordingly, the Company is not extending the Open Offer into the US unless an exemption from the registration requirements of the US Securities Act is available and, subject to certain exceptions, neither this document nor the Application Form constitutes or will constitute an offer or an invitation to apply for or an offer or an invitation to acquire any Capital Raising Shares in the US. Subject to certain exceptions, neither this document nor an Application Form will be sent to, and no Capital Raising Shares will be credited to a stock account in CREST of, any Qualifying Shareholder with a registered address in the US. Subject to certain exceptions, Application Forms sent from or post-marked in the US will be deemed to be invalid.

Subject to certain exceptions, any person who acquires Capital Raising Shares will be deemed to have declared, warranted and agreed, by accepting delivery of this document or the Application Form and delivery of the Capital Raising Shares, that they are not, and that at the time of acquiring the Capital Raising Shares they will not be, in the US and are not a US Person (as defined in Regulation S) or acting on behalf of, or for the account or benefit of a US Person (as defined in Regulation S).

The Company and Numis reserve the right to treat as invalid any Application Form that: (i) appears to the Company and Numis or their respective agents to have been executed in, or despatched from, the US, or that provides an address in the US for the receipt of Capital Raising Shares, or (ii) which does not make the warranty set out in the Application Form to the effect that the person accepting the Application Form does not have a registered address and is not otherwise located in the US and is not acquiring the Capital Raising Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Capital Raising Shares in the US or (iii) where the Company believes acceptance of such Application Form may infringe applicable legal or regulatory requirements. The Company will not be bound to allot (on a non-provisional basis) or issue any Capital Raising Shares to any person with an address in, or who is otherwise located in, the US in whose favour a Application Form or any Capital Raising Shares may be transferred. In addition, the Company, and/or Numis reserve the right to reject any USE Instruction sent by or on behalf of any CREST member with a registered address in the US in respect of the Capital Raising Shares.

Notwithstanding the foregoing, Capital Raising Shares may be offered to and acquired by Shareholders in the United States pursuant to an available exemption from registration under the US Securities Act. Any Shareholder to whom Capital Raising Shares are offered and by whom Capital Raising Shares are acquired will be required, among other things, to warrant, to undertake or to acknowledge certain information and/or obligations, as the case may be, in order to participate in the transaction. Such warranties will include, among others, warranties as to the fact that: (a) the Shareholder is (i) either (x) a QIB or (y) an Accredited Investor and (ii) a Qualified Purchaser; (b) the Shareholder did not become aware of nor were the Capital Raising Shares offered to the Shareholder by any form of any "general solicitation" or "general advertising" (as such terms are defined in Regulation D); (c) the Shareholder is acquiring the Capital Raising Shares as principal for its own account or for the account of either a QIB or an Accredited Investor that is in either case a Qualified Purchaser and such Shareholder and any such transferee of such Shareholder is not acquiring the Capital Raising Shares with a view to or for distributing or reselling such Capital Raising Shares or any portion thereof, without prejudice, however, to its right at all times to sell or otherwise dispose of all or any part of such Capital Raising Shares in compliance with applicable United States federal and state securities laws; and (d) the Capital Raising Shares were offered to the Shareholder solely by means of the Prospectus and by direct contact between the investor and the Company.

Each Shareholder acknowledges that the Capital Raising Shares are "restricted securities" within the meaning of Rule 144(a)(3) of the US Securities Act and it represents that it will not resell the Capital Raising Shares absent registration or an available exemption or safe harbour from registration under the US Securities Act. Resales of Capital Raising Shares may only be made (i) outside the US in offshore transactions to non-US Persons as defined in, and in reliance on, Regulation S or (ii) within the US to investors that are both QIBs and Qualified Purchasers. The Company will require the provision of a letter by investors in the US and any transferees in the US containing representations as to status under the US Securities Act and the Investment Company Act. The Company will refuse to issue or transfer Capital Raising Shares to investors that do not meet the foregoing requirements.

In addition, until 40 days after the commencement of the Capital Raising, an offer, sale or transfer of the Capital Raising Shares within the US by a dealer (whether or not participating in the Placing and Open Offer) may violate the registration requirements of the US Securities Act if such offer or sale is made otherwise than in accordance with an applicable exemption from registration under the US Securities Act.

Notwithstanding the foregoing, no Capital Raising Shares may be directly or indirectly acquired by, or assigned or otherwise transferred to a "benefit plan investor" (within the meaning of Section 3(42) of ERISA).

6.3 Excluded Territories

Due to restrictions under the securities laws of the Excluded Territories and subject to certain exemptions, Shareholders who have registered addresses in, or who are resident or ordinarily resident in, or citizens of, any of the Excluded Territories will not qualify to participate in the Open Offer and will not be sent an Application Form nor will their stock accounts in CREST be credited with any Open Offer Entitlement or any Excess CREST Open Offer Entitlement.

The Open Offer Shares have not been and will not be registered under the relevant laws of any Excluded Territory or any state, province or territory thereof and may not be offered, sold, resold, delivered or distributed, directly or indirectly, in or into any Excluded Territory or to, or for the account or benefit of, any person with a registered address in, or who is resident or ordinarily resident in, or a citizen of, any Excluded Territory except pursuant to an applicable exemption.

No offer of Open Offer Shares is being made by virtue of this document or the Application Forms into any Excluded Territory.

6.4 Other overseas territories

Application Forms will be sent to Qualifying Non-CREST Shareholders and Open Offer Entitlements and Excess CREST Open Offer Entitlements will be credited to the stock account in CREST of Qualifying CREST Shareholders. Qualifying Shareholders in jurisdictions other than the United States or any other Excluded Territory may, subject to the laws of their relevant jurisdiction, take up Open Offer Shares under the Open Offer in accordance with the instructions set out in this document and the Application Form.

Qualifying Shareholders who have registered addresses in, or who are resident or ordinarily resident in, or citizens of, countries other than the United Kingdom should consult appropriate professional advisers as to whether they require any governmental or other consents or need to observe any further formalities to enable them to apply for any Capital Raising Shares in respect of the Open Offer.

Each person to whom the Capital Raising Shares or the Application Forms are distributed, offered or sold outside the US will be deemed by its subscription for, or purchase of, the Capital Raising Shares to have represented and agreed, on its behalf and on behalf of any investor accounts for which it is subscribing for or purchasing the Capital Raising Shares, as the case may be, that:

6.4.1 it is acquiring the Capital Raising Shares from the Company or Numis in an "offshore transaction" as defined in Regulation S; and
6.4.2 the Capital Raising Shares have not been offered to it by the Company or Numis by means of any "directed selling efforts" as defined in Regulation S.

6.5 Representations and warranties relating to Overseas Shareholders

6.5.1 Qualifying Non-CREST Shareholders

Any person completing and returning an Application Form or requesting registration of the Open Offer Shares comprised therein represents and warrants to the Company, Numis and the Receiving Agent that, except where proof has been provided to the Company's satisfaction (in its absolute discretion) that such person's completion of an Application Form or request for registration of the Open Offer Shares comprised therein will not result in the contravention of any applicable legal requirements in any jurisdiction: (i) such person is not requesting registration of the relevant Open Offer Shares from within the United States or any other Excluded Territory; (ii) such person is not in any territory in which it is unlawful to make or accept an offer to acquire Open Offer Shares in respect of the Open Offer or to use the Application Form in any manner in which such person has used or will use it; (iii) such person is not acting on a non-discretionary basis for a person located within the United States, any other Excluded Territory (or any territory referred to in (ii) above) at the time the instruction to accept was given (except as otherwise expressly agreed with the Company); and (iv) such person is not acquiring Open Offer Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Open Offer Shares into any of the above territories. The Company, Numis and/or the Receiving Agent in consultation with Numis may treat as invalid any acceptance or purported acceptance of the allotment of Open Offer Shares comprised in an Application Form if it: (i) appears to the Company and/or Numis or their respective agents to have been executed, effected or dispatched from the United States or any other Excluded Territory or in a manner that may involve breach of the laws or regulations of any jurisdiction or if the Company or its agents believe that the same may violate applicable legal or regulatory requirements; or (ii) provides an address in the United States or any other Excluded Territory for delivery of the share certificates of Open Offer Shares (or any other jurisdiction outside the United Kingdom in which it would be unlawful to deliver such share certificates); or (iii) purports to exclude the representation and warranty required by this paragraph 6.5.

6.5.2 Qualifying CREST Shareholders

A CREST member or CREST sponsored member who makes a valid acceptance in accordance with the procedures set out in Appendix 2 represents and warrants to the Company, Numis and the Receiving Agent that, except where proof has been provided to the Company's satisfaction (in its absolute discretion) that such person's acceptance will not result in the contravention of any applicable legal requirement in any jurisdiction: (i) neither it nor its client is within the United States or any other Excluded Territory; (ii) neither it nor its client is in any territory in which it is unlawful to make or accept an offer to acquire Open Offer Shares; (iii) it is not accepting on a non-discretionary basis for a person located within any Excluded Territory (except as otherwise expressly agreed with the Company) or any territory referred to in (ii) above at the time the instruction to accept was given; and (iv) neither it nor its client is acquiring any Open Offer Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Open Offer Shares into any of the above territories.

6.6 Waiver

The provisions of this paragraph 6 and of any other terms of the Open Offer relating to Overseas Shareholders may be waived, varied or modified as regards specific persons or on a general basis by the Company and Numis in their absolute discretion. Subject to this, the provisions of this paragraph 6 supersede any terms of the Open Offer inconsistent herewith. References in this paragraph 6 to the Shareholders shall include references to the person or persons executing an Application Form and, in the event of more than one person executing an Application Form, the provisions of this paragraph 6 shall apply to them jointly and to each of them.

7. WITHDRAWAL RIGHTS

Persons wishing to exercise or direct the exercise of statutory withdrawal rights pursuant to section 87Q(4) of FSMA after the issue by the Company of a prospectus supplementing this document must do so by despatching a written notice of withdrawal within two Business Days commencing on the Business Day after the date on which the supplementary prospectus is published. The withdrawal notice must include the full name and address of the person wishing to exercise statutory withdrawal rights and, if such person is a CREST member, the participant ID and the member account ID of such CREST member. The notice of withdrawal must be either deposited by hand (during normal business hours only) or by post with the Registrar at Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU or by email to [email protected] so as to be received before the end of the withdrawal period. Notice of withdrawal given by any other means or which is deposited with the Registrar after the expiry of such period will not constitute a valid withdrawal, provided that the Company will not permit the exercise of withdrawal rights after payment by the relevant person for the Open Offer Shares applied for in full and the allotment of such Open Offer Shares to such person becoming unconditional save to the extent required by statute. In such event, Shareholders are advised to seek independent legal advice.

If you have any queries please call Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

8. ADMISSION, SETTLEMENT AND DEALINGS

The result of the Open Offer is expected to be announced on 8 June 2017. Applications will be made to the UKLA for the Capital Raising Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Capital Raising Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective, and that dealings in the Capital Raising Shares, fully paid, will commence at 8.00 a.m. on 9 June 2017.

The Existing Shares are already admitted to CREST. No further application for admission to CREST is accordingly required for the Capital Raising Shares. All such shares, when issued and fully paid, may be held and transferred by means of CREST.

Open Offer Entitlements and Excess CREST Open Offer Entitlements held in CREST are expected to be disabled in all respects after 11.00 a.m. on 7 June 2017 (being the latest time and date for applications under the Open Offer). If the condition(s) to the Open Offer described above are satisfied, Capital Raising Shares will be issued in uncertificated form to those persons who submitted a valid application by utilising the CREST application procedures and whose applications have been accepted by the Company. On 9 June 2017, the Receiving Agent will instruct Euroclear to credit the appropriate stock accounts of such persons with such persons' Capital Raising Shares with effect from Admission (expected to be 9 June 2017). The stock accounts to be credited will be accounts under the same CREST participant IDs and CREST member account IDs in respect of which the USE Instruction was given.

Notwithstanding any other provision of this document, the Company reserves the right, with the prior written consent of Numis, to send Qualifying CREST Shareholders an Application Form instead of crediting the relevant stock account with Open Offer Entitlements and Excess CREST Open Offer Entitlements, and to allot and/or issue any Open Offer Shares in certificated form. In normal circumstances, this right is only likely to be exercised in the event of any interruption, failure or breakdown of CREST (or of any part of CREST) or on the part of the facilities and/or systems operated by the Registrar in connection with CREST.

For Qualifying Non-CREST Shareholders who have applied by using an Application Form, share certificates in respect of the Capital Raising Shares validly taken up and any Excess Shares successfully applied for under the Excess Application Facility are expected to be despatched by post in the week commencing 12 June 2017. No temporary documents of title will be issued and, pending the issue of definitive certificates, transfers will be certified against the UK share register of the Company. All documents or remittances sent by or to applicants, or as they may direct, will be sent through the post at their own risk. For more information as to the procedure for application, Qualifying Non-CREST Shareholders are referred to paragraph 4.1 of this Appendix 2 and their respective Application Form.

9. TIMES AND DATES

The Company shall, in agreement with Numis and after consultation with its financial and legal advisers, be entitled to amend the dates that Application Forms are despatched or amend or extend the latest date for acceptance under the Open Offer and all related dates set out in this document and in such circumstances shall notify the UKLA, and make an announcement on a Regulatory Information Service and, if appropriate, to Shareholders but Qualifying Shareholders may not receive any further written communication.

If a supplementary prospectus is issued by the Company two or fewer Business Days prior to the latest time and date for acceptance and payment in full under the Open Offer specified in this document, the latest date for acceptance under the Open Offer shall be extended to the date that is three Business Days after the date of issue of the supplementary prospectus (and the dates and times of principal events due to take place following such date shall be extended accordingly).

10. TAXATION

Certain statements regarding United Kingdom and United States taxation in respect of the Capital Raising Shares and the Open Offer are set out in paragraph 13 of Part V of this document. Shareholders who are in any doubt as to their tax position in relation to taking up their entitlements under the Open Offer, or who are subject to tax in any jurisdiction other than the United Kingdom, should immediately consult a suitable professional adviser.

11. FURTHER INFORMATION

Your attention is drawn to the further information set out in this document and also, in the case of Qualifying Non-CREST Shareholders and other Qualifying Shareholders to whom the Company has sent Application Forms, to the terms, conditions and other information printed on the accompanying Application Form.

12. GOVERNING LAW AND JURISDICTION

The terms and conditions of the Open Offer as set out in this document, the Application Form and any non-contractual obligations related thereto shall be governed by, and construed in accordance with, the laws of England and Wales. The courts of England and Wales are to have exclusive jurisdiction to settle any dispute which may arise out of, or in connection with, the Open Offer, this document or the Application Form including, without limitation, disputes relating to any non-contractual obligations arising out of, or in connection with, the Open Offer, this document or the Application Form. By taking up Open Offer Shares, whether by way of their Open Offer Entitlements alone or also through the Excess Application Facility, in accordance with the instructions set out in this document and, where applicable, the Application Form, Qualifying Shareholders irrevocably submit to the jurisdiction of the courts of England and Wales and waive any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

APPENDIX 3 TERMS AND CONDITIONS OF THE FIRM PLACING AND THE PLACING

1. Introduction

Participation in the Firm Placing and/or the Placing is only available to persons who are invited to participate by Numis. These terms and conditions apply to persons making an offer to subscribe for Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing. The Placee hereby agrees with Numis and the Company to be bound by these terms and conditions as being the terms and conditions upon which Firm Placed Shares will be sold under the Firm Placing and Placing Shares will be sold under the Placing. A Placee shall, without limitation, become so bound if Numis confirms its allocation of Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable) to such Placee.

Upon being notified of its allocation of Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing through receipt of a contract note, a Placee shall, subject to the provisions of paragraph 5 of this Appendix 3 with respect to the Placed Shares, be contractually committed to acquire the number of Firm Placed Shares and/or Placing Shares allocated to them (subject in the case of the Placing Shares to scaling back in whole or part to satisfy applications under the Excess Application Facility or the Offer for Subscription and/or as determined by the Directors in consultation with Numis) at the Issue Price and to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment. Dealing may not begin before any notification is made.

2. Agreement to acquire Firm Placed Shares and Placing Shares

Each of the Firm Placing and the Placing is conditional upon the following conditions:

(i) the Resolutions being passed at the General Meeting;
(ii) the Placing Agreement having become unconditional in all respects save for the condition relating to Admission, and not being terminated in accordance with its terms before Admission becomes effective; and
(iii) Admission becoming effective by not later than 8.00 a.m. on 9 June 2017 (or such later time and/or date as the Company and Numis may agree (being no later than 23 June 2017) in accordance with the terms of the Placing Agreement).

Subject to the above conditions, a Placee agrees to become a Shareholder and agrees to acquire Firm Placed Shares and/or Placing Shares (as applicable) at the Issue Price. The number of Firm Placed Shares issued to such Placee under the Firm Placing and/or Placing Shares issued to such Placee under the Placing shall be in accordance with the arrangements described above, subject to the provisions of paragraph 6 of this Appendix with respect to the Placing Shares.

3. Payment for Firm Placed Shares and Placing Shares

Each Placee undertakes to pay the Issue Price for each Firm Placed Share and Placing Share issued to such Placee in such manner as shall be directed by Numis. In the event of any failure by a Placee to pay as so directed by Numis, the relevant Placee shall be deemed hereby to have appointed Numis or any nominee of Numis to sell (in one or more transactions) any or all of the Firm Placed Shares and Placing Shares in respect of which payment shall not have been made as so directed and to have agreed to indemnify on demand Numis in respect of any liability for UK stamp duty and/or stamp duty reserve tax arising in respect of any such sale or sales.

4. Representations and Warranties

By receiving this document, each Placee and, in the case of paragraph 4.15 of this Appendix 3, any person confirming his agreement to subscribe for Firm Placed Shares and/or Placing Shares on behalf of a Placee or authorising Numis to notify a Placee's name to the Registrars, is deemed to acknowledge, agree, undertake, represent and warrant to each of Numis, the Registrars and the Company that:

4.1 the Placee has read this document in its entirety and acknowledges that its participation in the Firm Placing and/or the Placing (as applicable) shall be made solely on the terms and subject to the conditions set out in these terms and conditions, the Placing Agreement and the Articles. Such Placee agrees that these terms and conditions and the contract note issued by Numis to such Placee represents the whole and only agreement between the Placee, Numis and the Company in relation to the Placee's participation in the Firm Placing and/or the Placing and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of these terms and conditions. Such Placee agrees that neither the Company, Numis nor any of their respective officers or directors will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;
4.2 the Placee has the right, power and authority and has taken all action necessary to subscribe for the Placing Shares under the Placing and/or the Firm Placed Shares under the Firm Placing (as applicable) and to execute and deliver all documents necessary for such subscription and to perform any obligations under any contracts resulting therefrom and that the Placee is not otherwise prevented by legal or regulatory restrictions from subscribing for the Placing Shares under the Placing or the Firm Placed Shares under the Firm Placing or acting on behalf of any such person on a non-discretionary basis;
4.3 neither Numis nor any person affiliated with Numis or acting on its behalf is responsible for or shall have any liability for any information, representation or statement contained in this document or any information previously published by or on behalf of the Company or any member of the Group and will not be liable for any decision by a Placee to participate in the Firm Placing and/or the Placing based on any information, representation or statement contained in this document or otherwise;
4.4 the Placee acknowledges that the Capital Raising Shares will be admitted to the Official List, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that the Placee is able to obtain or access such Exchange Information without undue difficulty and is able to obtain access to such information or comparable information concerning any other publicly traded company whose securities are admitted to the Official List without undue difficulty;
4.5 the Placee acknowledges that neither Numis, nor any person affiliated with Numis, nor any person acting on its behalf is making any recommendations to it or advising it regarding the suitability or merits of any transaction it may enter into in connection with the Firm Placing and/or the Placing, and that participation in the Firm Placing and/or the Placing is on the basis that it is not and will not be a client of Numis for the purposes of the Firm Placing and/or the Placing (as applicable) and the Placee acknowledges that neither Numis, nor any person affiliated with Numis, nor any person acting on its behalf has any duties or responsibilities to the Placee for providing the protections afforded to its clients or for providing advice in relation to the Firm Placing and/or the Placing (as applicable) or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of Numis's rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;
4.6 the Placee has not relied on Numis or any person affiliated with Numis in connection with any investigation of the accuracy of any information contained in this document or its investment decision

and the Placee has relied on its own investigation with respect to the Firm Placed Shares and/or the Placing Shares (as applicable) and the Company in connection with its investment decision;

4.7 in agreeing to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable), the Placee is only relying on this document and/or any supplementary prospectus issued by the Company in connection with the Capital Raising (as the case may be) or any regulatory announcement that may be issued by the Company and not on any other information or representation concerning the Group, the Firm Placing, the Placing, the Firm Placed Shares or the Placing Shares;
4.8 save in the event of fraud on its part (and to the extent permitted by the rules of the FCA), neither Numis nor any of its directors or employees shall be liable to a Placee for any matter arising out of the role of Numis as the Company's adviser and broker or otherwise, and that where any such liability nevertheless arises as a matter of law each Placee will immediately waive any claim against Numis and any of its directors and employees which a Placee may have in respect thereof;
4.9 the Placee has complied with all such laws and such Placee will not infringe any applicable law as a result of such Placee's agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing and/or acceptance thereof or any actions arising from such Placee's rights and obligations under their agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable) and/or acceptance thereof or under the Articles;
4.10 the Placee has accepted that its application is irrevocable and if for any reason it becomes necessary to adjust the expected timetable as set out in this document, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates. In particular, the Company shall, in agreement with Numis, be entitled to extend the last time and/or date for applications under the Firm Placing and/or the Placing, and any such extension will not affect applications already made, which will continue to be irrevocable;
4.11 to the fullest extent permitted by law, the Placee acknowledges and agrees to the disclaimers contained in this document and acknowledges and agrees to comply with the selling restrictions set out in this document;
4.12 the Shares have not been and will not be registered under the US Securities Act, or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United Sates or under the applicable securities laws of any other Excluded Territories or where to do so may contravene local securities laws or regulations;
4.13 the Placee is either: (i) located outside the United States and is not a US person as defined in Regulation S and is subscribing for Firm Placed Shares and/or Placing Shares only in "offshore transactions" as defined in and pursuant to Regulation S; or (ii) either (a) a QIB or (b) an Accredited Investor and that is, in the case of either (ii) (a) or (ii) (b), a Qualified Purchaser subscribing for Firm Placed Shares and/or Placing Shares in a private placement transaction falling within the exemption from registration provided by Section 4(a)(2) under the US Securities Act;
4.14 the Placee is not subscribing for Firm Placed Shares and/or Placing Shares as a result of any "directed selling efforts" as defined in Regulation S or by means of any form of "general solicitation" or "general advertising" as such terms are defined in Regulation D under the US Securities Act;
4.15 other than in relation to Placees that fall within 4.15 below, the Placee is not a resident of the United States or any other Excluded Territory, in the case of 4.13(i) above, and acknowledges that the Firm Placed Shares and the Placing Shares have not been and will not be registered nor will a prospectus be prepared in respect of the Firm Placed Shares and the Placing Shares under the securities legislation of the United States or any other Excluded Territory or, subject to certain exceptions, may not be offered or sold, directly or indirectly, in or into those jurisdictions;
4.16 if the Placee is in Australia, the Placee is a person to whom an offer of shares for issue may be lawfully made without disclosure under Part 6D.2 of the Corporations Act 2001 (Cth) because of sections 708(8) to 708(11) of that act;
4.17 if the Placee is in Singapore, (a) the Placee is an "accredited investor" or "institutional investor" within the meaning of the term as defined in section 4A of the Securities and Futures Act, Chapter 289 of Singapore ("SFA"); and (b) the Placee will not sell the Capital Raising Shares within six (6) months from the date of acquisition of the Capital Raising Shares, except to any "relevant person" (as defined in Part XIII Division 1 Subdivision 4 of the SFA) or "institutional investor" (as defined in Part I of the SFA) or person pursuant to an offer referred to in Section 275(1A) of the SFA and if the Capital Raising Shares are sold within six (6) months or from the date of acquisition of the Capital Raising Shares, the Placee shall procure the purchaser of such Capital Raising Shares to undertake to comply with such on-selling restrictions for the relevant duration;
4.18 if the Placee is in the People's Republic of China ("PRC"), the Placee is entitled to subscribe for the Capital Raising Shares under the laws of PRC and that the Placee has fully observed such laws and obtained all governmental approvals, permits, registrations, filings or authorizations and other consents which may be required to be observed and obtained by the Placee under such laws and complied with all necessary formalities as required for our entering into and performing our obligations hereunder and, to the Placee's knowledge (having made due and careful enquiry of any nominee), the Placee has not taken any action or omitted to take any action which could result in the Company or any of its advisers, officers, directors, agents or employees acting in breach of any applicable law or regulatory requirement of the PRC in connection with the Capital Raising;
4.19 the Placee does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Firm Placed Shares or Placing Shares and it is not acting on a non-discretionary basis for any such person;
4.20 the Placee has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this document or any other offering materials concerning the Firm Placing or the Placing to any persons within the United States or any other Excluded Territory, nor will it do any of the foregoing;
4.21 the Placee accepts that if either or both of the Placing or the Firm Placing does not proceed or the conditions to the Placing Agreement are not satisfied or the Placing Shares or Firm Placed Shares for which valid applications are received and accepted are not admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities for any reason whatsoever then none of Numis or the Company, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;
4.22 in the case of a person who confirms to Numis on behalf of a Placee an agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing and/or who authorises Numis to notify such Placee's name to the Registrars, that person represents and warrants that he has authority to do so on behalf of the Placee;
4.23 the Placee has complied with its obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Anti-Terrorism Crime and Security Act 2001 and the Money Laundering Regulations and undertakes to provide satisfactory evidence of its identity within such reasonable time (in each case to be determined in the absolute discretion of Numis) to ensure compliance with the Money Laundering Regulations and that if it is making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Money Laundering Regulations;
4.24 the Placee is not, and is not applying as nominee or agent for, a person to whom the issue would give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depository receipts

and clearance services) and that the Firm Placed Shares and/or the Placing Shares (as applicable) are not being acquired in connection with arrangements to issue depository receipts or to issue or transfer Firm Placed Shares and/or Placing Shares (as applicable) into a clearing system;

4.25 if you are a resident in the EEA, you are a "qualified investor" within the meaning of the law in the Relevant Member State implementing Article 2(1)(e)(i), (ii) or (iii) of the Prospectus Directive (Directive 2003/71/EC);
4.26 the Placee has not offered or sold and will not offer or sell any Firm Placed Shares and/or Placing Shares (as applicable) to persons in the UK prior to Admission except to "qualified investors" as defined in Article 2(1)(e) of the Prospectus Directive;
4.27 the Placee is (a) a person falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FPO") or (b) a person falling within article 49(2)(a) to (d) of the FPO and undertakes that it will acquire, hold, manage or dispose of any Firm Placed Shares and/or Placing Shares that are allocated to it for the purposes of its business and/or (c) a person to whom this document may otherwise be lawfully communicated;
4.28 the Placee has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Firm Placed Shares or the Placed Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;
4.29 the exercise by Numis of any rights or discretions under the Placing Agreement shall be within its absolute discretion and Numis need not have any reference to any Placee and shall have no liability to any Placee whatsoever in connection with any decision to exercise or not to exercise any such right and each Placee agrees that it shall have no rights against Numis or its directors or employees under the Placing Agreement;
4.30 the Placee acknowledges that any money held in an account with Numis on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA. The Placee further acknowledges that the money will not be subject to the protections conferred by the client money rules. As a consequence, this money will not be segregated from Numis' money in accordance with the client money rules and will be used by Numis in the course of its own business and the Placee will rank only as a general creditor of Numis;
4.31 the Placee accepts that the allocation of Placing Shares and/or Firm Placed Shares shall be determined by Numis in its absolute discretion but in consultation with the Company and that Numis may scale down any commitments for this purpose on such basis as it may determine; and
4.32 time shall be of the essence as regards its obligations to settle payment for the Placing Shares and/or the Firm Placed Shares and to comply with its other obligations under the Placing or Firm Placing.

The Placee acknowledges and understands that the Company and Numis will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, acknowledgements and undertakings.

The Placee indemnifies on an after-tax basis and agrees to hold harmless the Company and Numis and each person affiliated with the Company or Numis and any person acting on their behalf from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix 3 of this document and further agrees that the provisions of this Appendix 3 of this document shall survive after completion of the Firm Placing and the Placing.

5. Scaling back of the Placing Shares

The Placing Shares to be issued under the Placing are subject to scaling back in whole or part, at the discretion of the Directors (in consultation with Numis), to satisfy applications under the Excess Application Facility and/or the Offer for Subscription.

6. Miscellaneous

The rights and remedies of Numis, the Registrars and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

On application, each Placee may be asked to disclose, in writing or orally to Numis:

(i) if he is an individual, his nationality; or
(ii) if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

All documents will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified to Numis.

The provisions of these terms and conditions of the Firm Placing and the Placing may be waived, varied or modified as regards specific Placees or on a general basis by Numis in its sole discretion with the consent of the Company.

The contract to subscribe for Firm Placed Shares and/or Placing Shares and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, the laws of England. For the exclusive benefit of Numis, the Company and the Registrars, each Placee irrevocably submits to the exclusive jurisdiction of the courts of England in respect of these matters. This does not prevent an action being taken against a Placee in any other jurisdiction. Each Placee waives any objection to proceedings in the courts of England on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

In the case of a joint agreement to subscribe for Firm Placed Shares and/or Placing Shares, references to a "Placee" in these terms and conditions are to each of such Placees and such joint Placees' liability is joint and several.

In addition to the provisions of paragraph 4 of this Appendix 3, Numis and the Company each expressly reserve the right to modify the Firm Placing and/or the Placing (including, without limitation, its timetable and settlement) at any time before allocations of Firm Placed Shares under the Firm Placing and/or of Placing Shares under the Placing are determined.

APPENDIX 4 TERMS AND CONDITIONS OF THE OFFER FOR SUBSCRIPTION

Introduction

As explained in the letter from the Chairman set out in Part I of this document, the Company is proposing to raise approximately £200 million (approximately £195.7 million net of expenses) by way of the Capital Raising. Assuming a Capital Raising size of £200 and that the Capital Raising is taken up in full, 96,428,566 of the Capital Raising Shares will be issued through the Firm Placing and up to 46,428,570 of the Capital Raising Shares will be issued through the Placing, Open Offer and Offer for Subscription. The Board has the ability to increase the size of the Issue by up to £66.6 million to approximately £266.6 million (before expenses) through the issue of a further 47,571,428 Capital Raising Shares.

This Appendix 4 and, where applicable, the accompanying Subscription Form, contain the formal terms and conditions of the Offer for Subscription. The Offer for Subscription is only being made in the UK but, subject to applicable law, the Company may allot Offer for Subscription Shares on a private placement basis to applicants in other jurisdictions. Such selected applicants in non-UK jurisdictions will be invited in writing by Numis. All other recipients of this document or a Subscription Form in non-UK jurisdictions should consider them as sent for information only. Your attention is drawn to the letter from the Chairman in Part I of this document, which sets out the background to and reasons for the Capital Raising.

The Capital Raising and the contract created under the Offer for Subscription by the acceptance of a Subscription Application (as defined below), in the case of a Subscription Applicant (as defined below) will be conditional on:

the passing of the Resolutions without amendment to be proposed at the General Meeting to be held on 8 June 2017;
the Placing Agreement having become unconditional in all respects save for the condition relating to Admission and not being terminated in accordance with its terms before Admission becomes effective; and
Admission becoming effective by not later than 8.00 a.m. on 9 June 2017 (or such later time and date as the Company and Numis may agree, but in any event no later than 8.00 a.m. on 23 June 2017) in accordance with the terms of the Placing Agreement.

In the case of a joint application, references to you in these terms and conditions of application are to each of you, and your liability is joint and several.

The Company reserves the right to reject in whole or part or to scale back or limit any application under the Offer for Subscription.

Unless otherwise defined herein, defined terms in this document of which this is Appendix 4 shall have the same meaning in these terms and conditions and in the notes on how to complete the Subscription Form, and:

"Subscription Applicant" means a person or persons (in the case of joint applicants) whose name(s) appear(s) on the registration details (Box 2A) of a Subscription Form;

"Subscription Application" means the offer made by a Subscription Applicant by completing a Subscription Form and posting (or delivering) it to the Receiving Agent as specified in this document; and

1. Terms and conditions for all applicants

1.1 Procedure for application and withdrawal rights

If you are in any doubt as to the action you should take, or the contents of this document, you should immediately seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other independent adviser duly authorised under FSMA who specialises in advising on the acquisition of shares and other securities.

1.1.1 General

(a) Application procedures

Persons wishing to apply for Offer for Subscription Shares pursuant to the Offer for Subscription should complete and sign the enclosed Subscription Form in accordance with the instructions thereon and send or deliver it, either by post or by hand (during normal business hours only) at Capita Asset Services, Corporate Actions, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to arrive as soon as possible and, in any event, so as to arrive no later than 1.00 p.m. on 7 June 2017, at which time the Offer for Subscription will close. Subscription Forms received after this time will not be accepted. Subscription Applications, once made, will be irrevocable (save for any statutory withdrawal rights arising after the publication of a prospectus supplementing this document) and will not be acknowledged. Multiple applications will not be accepted.

Numis and the Company reserve the right (but shall not be obliged) to treat a Subscription Form as valid and binding on the person(s) by whom or for whose benefit it is lodged even if such a Subscription Form is not completed in accordance with the relevant instructions or not accompanied by a valid power of attorney where required or which otherwise does not strictly comply with the terms and conditions of the Offer for Subscription. Numis and the Company further reserve the right (but shall not be obliged) to accept the Subscription Forms received after 1.00 p.m. on 2 June 2017 but not later than 1.00 p.m. on 7 June 2017. Please allow at least four Business Days for delivery if sent by first class post from within the UK.

(b) Payments

Cheque/Banker's draft

All payments by cheque or banker's draft must accompany your application and be for the exact amount inserted in Box 1 of Subscription Application. The cheque or banker's draft must be made payable to "Capita Registrars Limited re: IP Group PLC – Offer for Subscription A/C" in respect of a Subscription Application and crossed "A/C Payee Only". Subscription Applications accompanied by a post-dated cheque will not be accepted.

Cheques or banker's drafts must be drawn on an account where the Subscription Applicant has sole or joint-title to the funds and on an account at a branch of a bank or building society in the United Kingdom, the Channel Islands or the Isle of Man, which is either a settlement member of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limited or which is a member of either of the Committees of Scottish or Belfast clearing houses or which has arranged for its cheques and banker's drafts to be cleared through the facilities provided by any of those companies or committees and must bear the appropriate sort code in the top right hand corner.

Third party cheques may not be accepted, with the exception of building society cheques or banker's drafts where the building society or bank has inserted the full name of the building society or bank account holder and have added the building society or bank branch stamp. The name of the building society or bank account holder must be the same as the name of the current shareholder or prospective investor. Please do not send cash. Cheques or banker's drafts will be presented for payment upon receipt. The Company reserves the right to instruct the Receiving Agent to seek special clearance of cheques and banker's drafts to allow the Company to obtain value for remittances at the earliest opportunity.

CREST settlement

The Company will apply for the Offer for Subscription Shares issued pursuant to the Offer for Subscription in uncertificated form to be enabled for CREST transfer and settlement with effect from Admission (the "Relevant Settlement Date"). Accordingly, settlement of transactions in the Offer for Subscription Shares will normally take place within the CREST system.

The Subscription Application contains details of the information which the Company's registrars, Capita Asset Services, will require from you in order to settle your application within CREST, if you so choose. If you do not provide any CREST details or if you provide insufficient CREST details for Capita Asset Services to match to your CREST account, Capita Asset Services will deliver its Offer for Subscription Shares in certificated form provided payment has been made in terms satisfactory to the Company.

The right is reserved to issue the Offer for Subscription Shares in certificated form should the Company, having consulted with Capita Asset Services, consider this to be necessary or desirable. This right is only likely to be exercised in the event of any interruption, failure or breakdown of CREST or any part of CREST or on the part of the facilities and/or system operated by Capita Asset Services in connection with CREST.

The person named for registration purposes in the Subscription Application must be: (a) the person procured by the Subscription Applicant to subscribe for or acquire the Offer for Subscription Shares; or (b) the Subscription Applicant; or (c) a nominee of any such person or the Subscription Applicant, as the case may be. Neither Capita Asset Services nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. The Subscription Applicant will need to input the delivery versus payment ("DVP") instructions into the CREST system in accordance with its application. The input returned by Capita Asset Services of a matching or acceptance instruction to their CREST input will then allow the delivery of the Offer for Subscription Shares to the CREST account against payment of the Issue Price through the CREST system upon the Relevant Settlement Date.

By returning your Application Form you agree that you will do all things necessary to ensure that you or your settlement agent/custodian's CREST account allows for the delivery and acceptance of Ordinary Shares to be made prior to 1.00 p.m. on 7 June 2017 against payment of the Issue Price. Failure by the Subscription Applicant to do so will result in it being charged interest at the rate of two percentage points above the then published bank base rate of a clearing bank selected by Capita Asset Services.

To ensure that the Subscription Applicant fulfil this requirement it is essential that it or its settlement agent/custodian follow the CREST matching criteria set out below:

Trade Date:	23 May 2017
Settlement Date:	9 June 2017
Company:	IP Group PLC
Security Description:	Ordinary Shares
SEDOL:	B128J45

Should the Subscription Applicant wish to settle DVP, it will need to input its instructions to Capita Asset Services' Participant account RA06 by no later than 1.00 p.m. on 7 June 2017.

The Subscription Applicant must also ensure that it or its settlement agent/custodian has a sufficient "debit cap" within the CREST system to facilitate settlement in addition to it/its own daily trading and settlement requirements.

In the event of late CREST settlement, the Company, after having consulted with Capita Asset Services, reserves the right to deliver Offer for Subscription Shares outside CREST in certificated form provided payment has been made in terms satisfactory to the Company and all other conditions in relation to the Offer for Subscription have been satisfied.

Any application which does not comply with these requirements will be treated as invalid.

Cheques or banker's drafts should be made payable to "Capita Registrars Limited – re: IP Group PLC – Offer for Subscription A/C" and crossed "A/C payee only".

Any person returning a Subscription Form with a remittance in the form of a cheque thereby warrants that the cheque will be honoured on first presentation. If cheques or banker's drafts are presented for payment before the conditions of the Offer for Subscription are satisfied, the monies will be kept in a separate bank account until the conditions are fully met. In the event that the Capital Raising does not become unconditional by 8.00 a.m. on 9 June 2017 (or such later time and/or date, being not later than 8.00 a.m. on 23 June 2017, as Numis may agree), the Offer for Subscription will lapse and all application monies will be returned without interest (at the Subscription Applicant's sole risk) to Subscription Applicants as soon as practicable thereafter, but within 14 days. If any cheque is not honoured on first presentation, the relevant application may be deemed to be invalid.

All documents and remittances sent by post by or to a Subscription Applicant (or as the Subscription Applicant may direct) will be sent at the Subscription Applicant's own risk. By completing and delivering a Subscription Form, you (as the Subscription Applicant(s)) acknowledge, agree, undertake, represent and warrant to each of the Company, Numis and the Registrars that:

(i) all applications under the Offer for Subscription, and contracts resulting therefrom, and any non-constitutional obligations related thereto, shall be governed by, and construed in accordance with, the laws of England;
(ii) you have read this document in its entirety and acknowledge that your application in respect of the Offer for Subscription shall be made solely on the terms and subject to the conditions set out in these terms and conditions and the Articles. You agree that these terms and conditions and the Subscription Form represent the whole and only agreement between you, Numis and the Company in relation to your participation in the Offer for Subscription and supersedes any previous agreement between Numis, you and the Company in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of these terms and conditions. You agree that neither the Company, Numis nor any of their respective officers or directors will have any liability for any such other information or representation and irrevocably and unconditionally waive any rights you may have in respect of any such other information or representation;
(iii) in making the application you are not relying on any information or representation other than that contained in this document, and you accordingly agree that no person responsible solely or jointly for this document or any part thereof, or involved in the preparation thereof, shall have any liability for any such information or representation not so contained and you further agree that, having had the opportunity to read this document, you will be deemed to have

had notice of all the information concerning the Company contained herein (including information incorporate by reference);

(iv) you have the right, power and authority, and have taken all action necessary, to make the application under the Offer for Subscription and to execute, deliver and exercise your rights, and perform your obligations under any contract resulting therefrom and that you are not a person otherwise prevented by legal or regulatory restrictions from applying for Offer for Subscription Shares or acting on behalf of any such person on a non-discretionary basis;
(v) no person has been authorised to give any information or make any representation concerning the Company or the Group or the Capital Raising Shares (other than as contained in this document) and if given or made any such information or representation should not be relied upon as having been authorised by the Company or Numis;
(vi) neither Numis nor any person affiliated with Numis or acting on its behalf is responsible for or shall have any liability for any information, representation or statement contained in this document or any information previously published by or on behalf of the Company or any member of the Group and will not be liable for any decision by a Subscription Applicant to participate in the Offer for Subscription based on any information, representation or statement contained in this document or otherwise;
(vii) you acknowledge that the Capital Raising Shares will be admitted to the Official List, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that you are able to obtain or access such Exchange Information without undue difficulty and are able to obtain access to such information or comparable information concerning any other publicly traded company whose securities are admitted to the Official List without undue difficulty;
(viii) you acknowledge that neither Numis, nor any person affiliated with Numis, nor any person acting on its behalf is making any recommendations to you or advising you regarding the suitability or merits of any transaction you may enter into in connection with the Offer for Subscription, and that participation in the Offer for Subscription is on the basis that you are not and will not be a client of Numis for the purposes of the Offer for Subscription and you acknowledge that neither Numis, nor any person affiliated with Numis, nor any person acting on its behalf has any duties or responsibilities to you for providing the protections afforded to its clients or for providing advice in relation to the Offer for Subscription or for the exercise or performance of any of Numis's rights and obligations under the Placing Agreement, including any right to waive or vary any condition or exercise any termination right contained therein which it may in its absolute discretion exercise as it wishes;
(ix) you have not relied on Numis or any person affiliated with Numis in connection with any investigation of the accuracy of any information contained in this document or your investment decision and you have relied on your own investigation with respect to the Offer for Subscription and the Company in connection with your investment decision;
(x) in agreeing to apply for Offer for Subscription Shares, you are only relying on this document and/or any supplementary prospectus issued by the Company in

connection with the Capital Raising (as the case may be) or any regulatory announcement that may be issued by the Company and not on any other information or representation concerning the Group, the Offer for Subscription or the Offer for Subscription Shares;

(xi) save in the event of fraud on its part (and to the extent permitted by the rules of the FCA), neither Numis nor any of its directors or employees shall be liable to you for any matter arising out of the role of Numis as the Company's adviser and broker or otherwise, and that where any such liability nevertheless arises as a matter of law you will immediately waive any claim against Numis and any of its directors and employees which you may have in respect thereof;
(xii) you have complied with all such laws and you will not infringe any applicable law as a result of your application for Offer for Subscription Shares under the Offer for Subscription and/or acceptance thereof or any actions arising from your rights and obligations under your agreement to acquire Offer for Subscription Shares under the Offer for Subscription and/or acceptance thereof or under the Articles;
(xiii) you have accepted that your application is irrevocable and if for any reason it becomes necessary to adjust the expected timetable as set out in this document, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates. In particular, the Company shall, in agreement with Numis, be entitled to extend the last time and/or date for applications under the Offer for Subscription, and any such extension will not affect applications already made, which will continue to be irrevocable;
(xiv) to the fullest extent permitted by law, you acknowledge and agree to the disclaimers contained in this document and acknowledge and agree to comply with the selling restrictions set out in this document;
(xv) the Shares have not been and will not be registered under the US Securities Act, or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United Sates or under the applicable securities laws of any other Excluded Territories or where to do so may contravene local securities laws or regulations;
(xvi) the Offer for Subscription Shares to which you will become entitled be issued to you on the terms set out in this document and the Subscription Form and subject to the Articles;
(xvii) you are not, and you are not applying on behalf of any person who is, a citizen or resident or which is a corporation, partnership or other entity created or organised in or under any laws of any jurisdiction outside the United Kingdom and you are not applying with a view to reoffering, reselling, transferring or delivering any of the Offer for Subscription Shares which are the subject of this application to, or for the benefit of, a person who is a citizen or resident or which is a corporation, partnership or other entity created or organised in or under any laws of any jurisdiction outside the United Kingdom (in each case except where proof satisfactory to the Company and Numis has been provided to the Company that you are able to accept the invitation by the Company free of any requirement which the Company and Numis, in their absolute discretion, regard as unduly burdensome) nor are you acting on behalf of any such person on a non-discretionary basis;
(xviii) you have not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this document or any other offering materials concerning the Capital Raising to any persons within the United States or any other Excluded Territory, nor will you do any of the foregoing;
(xix) you accept that if the Offer for Subscription does not proceed or the conditions to the Placing Agreement are not satisfied or the Offer for Subscription Shares for which valid applications are received and accepted are not admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities for any reason whatsoever then none of Numis or the Company, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;
(xx) you have complied with your obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Anti-Terrorism Crime and Security Act 2001 and the Money Laundering Regulations and undertake to provide satisfactory evidence of your identity within such reasonable time (in each case to be determined in the absolute discretion of Numis) to ensure compliance with the Money Laundering Regulations and that if you are making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by you to verify the identity of the third party as required by the Money Laundering Regulations;
(xxi) you have not, and are not applying as nominee or agent for, a person to whom the issue would give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depository receipts and clearance services) and that the Offer for Subscription Shares are not being acquired in connection with arrangements to issue depository receipts or to issue or transfer Offer for Subscription Shares into a clearing system;
(xxii) you are not offered or sold and will not offer or sell any Offer for Subscription Shares to persons in the UK prior to Admission except to "qualified investors" as defined in Article 2(1)(e) of the Prospectus Directive;
(xxiii) you are (a) a person falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FPO") or (b) a person falling within article 49(2)(a) to (d) of the FPO and undertake that you will acquire, hold, manage or dispose of any Offer for Subscription Shares that are allocated to you for the purposes of your business and/or (c) a person to whom this document may otherwise be lawfully communicated;
(xxiv) you have only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Offer for Subscription Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;
(xxv) you are not and nor are you applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 93 (depository receipts) or section 96 (clearance services) of the Finance Act 1986;
(xxvi) if you are an individual, you are not under the age of 18;
(xxvii) you are either: (i) located outside the United States and not a US person as defined in Regulation S and are subscribing for Offer for Subscription Shares only in "offshore transactions" as defined in and pursuant to Regulation S; or (ii) either (a) a QIB or (b) an Accredited Investor and that you are, in the case of either (ii) (a) or (ii) (b), a Qualified Purchaser subscribing for Offer for Subscription Shares in a private placement transaction falling within the exemption from registration provided by Section 4(a)(2) under the US Securities Act;
(xxiii) you are not subscribing for Offer for Subscription Shares as a result of any "directed selling efforts" as defined in Regulation S or by means of any form of "general solicitation" or "general advertising" as such terms are defined in Regulation D under the US Securities Act;
(xxix) other than in relation to Subscription Applicant that fall within the paragraph below, you are not a resident of the United States or any other Excluded Territory, in the case of (xxviii) (i) above, and acknowledge that the Offer for Subscription Shares have not been and will not be registered nor will a prospectus be prepared in respect of the Offer for Subscription Shares under the securities legislation of the United States or any other Excluded Territory or, subject to certain exceptions, may not be offered or sold, directly or indirectly, in or into those jurisdictions;
(xxx) if you are in Australia, you are a person to whom an offer of shares for issue may be lawfully made without disclosure under Part 6D.2 of the Corporations Act 2001 (Cth) because of sections 708(8) to 708(11) of that act;
(xxxi) if you are in Singapore, (a) you are an "accredited investor" or "institutional investor" within the meaning of the term as defined in section 4A of the Securities and Futures Act, Chapter 289 of Singapore ("SFA"); and (b) you will not sell the Capital Raising Shares within six (6) months from the date of acquisition of the Capital Raising Shares, except to any "relevant person" (as defined in Part XIII Division 1 Subdivision 4 of the SFA) or "institutional investor" (as defined in Part I of the SFA) or person pursuant to an offer referred to in Section 275(1A) of the SFA and if the Capital Raising Shares are sold within six (6) months or from the date of acquisition of the Capital Raising Shares, you shall procure the purchaser of such Capital Raising Shares to undertake to comply with such on-selling restrictions for the relevant duration;
(xxxii) if you are in the People's Republic of China ("PRC"), you are entitled to subscribe for the Capital Raising Shares under the laws of PRC and that you have fully observed such laws and obtained all governmental approvals, permits, registrations, filings or authorizations and other consents which may be required to be observed and obtained by you under such laws and complied with all necessary formalities as required for our entering into and performing our obligations hereunder and, to your knowledge (having made due and careful enquiry of any nominee), you have not taken any action or omitted to take any action which could result in the Company or any of its advisers, officers, directors, agents or employees acting in breach of any applicable law or regulatory requirement of the PRC in connection with the Capital Raising;
(xxxiii) you do not have a registered address in, and are not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer

of the Offer for Subscription Shares and you are not acting on a non-discretionary basis for any such person;

(xxxiv) if you are a resident in the EEA, you are a "qualified investor" within the meaning of the law in the Relevant Member State implementing Article 2(1)(e)(i), (ii) or (iii) of the Prospectus Directive (Directive 2003/71/EC);
(xxxv) the exercise by Numis of any rights or discretions under the Placing Agreement shall be within its absolute discretion and Numis need not have any reference to any Subscription Applicant and shall have no liability to any Subscription Applicant whatsoever in connection with any decision to exercise or not to exercise any such right and each Subscription Applicant agrees that it shall have no rights against Numis or its directors or employees under the Placing Agreement;
(xxxvi) you acknowledge that any money held in an account with Numis on behalf of the Subscription Applicant and/or any person acting on behalf of the Subscription Applicant will not be treated as client money within the meaning of the rules and regulations of the FCA. You further acknowledge that the money will not be subject to the protections conferred by the client money rules. As a consequence, this money will not be segregated from Numis' money in accordance with the client money rules and will be used by Numis in the course of its own business and the Placee will rank only as a general creditor of Numis;
(xxxvii) you accept that the allocation of Offer for Subscription Shares shall be determined by the Company in its absolute discretion but after consultation with Numis and that the Company may scale down any commitments for this purpose or to satisfy applications under the Excess Application Facility and/or the Placing on such basis as it may determine;
(xxxviii) time shall be of the essence as regards your obligations to settle payment for the Offer for Subscription Shares and to comply with your other obligations under the Offer for Subscription; and
(xxxix) you irrevocably authorise the Company or any person authorised by it to do all things necessary to effect registration of any Offer for Subscription Shares subscribed by or issued to you into your name(s) or into the name(s) of any person(s) in whose favour the entitlement to any such Offer for Subscription Shares has been transferred and authorise any representative of the Company to execute any document required.

You acknowledge and understand that the Company, Numis and the Registrar will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, acknowledgements and undertakings.

You indemnify on an after-tax basis and agree to hold harmless the Company, Numis and the Registrar and each person affiliated with any of them and any person acting on their behalf from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix 4 of this document and further agree that the provisions of this Appendix 4 of this document shall survive after completion of the Offer for Subscription.

All enquiries in connection with the procedure for application and completion of the Subscription Form should be addressed to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU. Please note the Receiving Agent cannot provide financial advice on the merits of the Offer for Subscription.

1.1.2 Withdrawal rights

Persons wishing to exercise statutory withdrawal rights pursuant to section 87Q(4) of FSMA after the publication by the Company of a prospectus supplementing this document must do so by lodging a written notice of withdrawal (which shall include a notice sent by any form of electronic communication) with Capita Asset Services, by post to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU so as to be sent, not later than two Business Days commencing on the Business Day after the date on which the supplementary prospectus is published. Notice of withdrawal given by any other means or which is deposited with or received by the Receiving Agent after expiry of such period will not constitute a valid withdrawal.

2. Money Laundering

2.1 Holders of Subscription Forms

The verification of identity requirements of the Money Laundering Regulations will apply and verification of the identity of the Subscription Applicants for Capital Raising Shares may be required. If a Subscription Form is submitted by a UK regulated broker or intermediary acting as agent and which is itself subject to the Money Laundering Regulations, any verification of identity requirements are the responsibility of such broker or intermediary and not of the Receiving Agent. In such case, the lodging agent's stamp should be inserted in the Subscription Form. If the value at the Issue Price of the Capital Raising Shares for which you are applying does not exceed fifteen thousand euros (€15,000) (or the sterling equivalent) (and is not one of a series of linked applications, the aggregate value of which exceeds that amount), you will not be required to satisfy the verification of identity requirements described below. However, if such a value exceeds that amount, then failure to provide the necessary evidence of identity may result in your application being treated as invalid or in delaying acceptance of your application. In order to avoid this, all payments should be made by means of a cheque drawn by the person named in the Subscription Form (or one of such persons). If this is not practicable and you use a cheque drawn by a third party (for example, a building society cheque or banker's draft), you should:

(a) write the name, address and date of birth of the person named on the Subscription Form (or one of such persons) on the back of the cheque, building society cheque or banker's draft;
(b) if a building society cheque or banker's draft is used, ask the building society or bank to endorse the name and account number of the person whose building society or bank account is being debited on the cheque or banker's draft; and
(c) if you are making the application as agent for one or more persons, indicate on the Subscription Form whether you are a UK or EC regulated person or institution (e.g. a bank or broker) and specify your status. If you are not a UK or EC regulated person or institution, you should contact Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.

If you deliver your Subscription Form personally by hand, you should ensure that you have with you evidence of your identity bearing your photograph (e.g. your passport). In any event, if it appears to Capita Asset Services that a Subscription Applicant is acting on behalf of some other person, further verification of the identity of any person on whose behalf the Subscription Applicant appears to be acting may be required. In relation to any application in respect of which the necessary verification of the identity of the Subscription Applicant or the person on whose behalf the Subscription Applicant appears to be acting has not been received on or before 1.00 p.m. on 7 June 2017 the Company may, in their absolute discretion, elect to treat the relevant application as invalid and/or delay the allotment of the relevant number of Offer for Subscription Shares until the necessary verification has been provided. If a Subscription Form is treated as invalid the money paid in respect of the application will be returned (at the Subscription Applicants' risk and without interest).

By lodging a Subscription Form, each Subscription Applicant undertakes to provide such evidence of its identity at the time of lodging the Subscription Form or, at the absolute discretion of the Company and Numis, at such specified time thereafter as may be requested to ensure compliance with the Money Laundering Regulations.

Capita Asset Services is entitled, in its absolute discretion, to determine whether verification of identity requirements apply to any Subscription Applicant and whether such requirements have been satisfied. Neither Capita Asset Services, nor the Company nor Numis shall be responsible or liable to any person for any loss or damage suffered as a result of the exercise of their discretion hereunder.

If the verification of identity requirements apply, failure to provide the necessary evidence of identity within a reasonable time may result in delays in the despatch of share certificates or in crediting CREST accounts. If, within a reasonable time following a request for verification of identity, Capita Asset Services has not received evidence satisfactory to it as aforesaid, the Company or Numis may treat the relevant application as invalid, in which event the monies payable on acceptance of the Offer for Subscription will be returned (at the acceptor's risk) without interest to the account of the bank or building society on which the relevant cheque or banker's draft was drawn.

Submission of a Subscription Form with the appropriate remittance will constitute a warranty to each of the Company, Capita Asset Services and Numis from the applicant that the Money Laundering Regulations will not be breached by application of such remittance.

3. Taxation

Your attention is drawn to the section headed "UK Taxation" set out in paragraph 13 of Part V of this document.

4. Overseas Applicants

The document has been approved by the FCA, being the competent authority in the United Kingdom, in accordance with section 85 of FSMA.

4.1 General

The Offer for Subscription is only made in the UK but, subject to applicable law, the Company may allot Capital Raising Shares on a private placement basis to applicants in other jurisdictions. Such selected applicants in non-UK jurisdictions will be invited in writing by Numis. All other recipients of this document or a Subscription Form in non-UK jurisdictions should consider them as sent for information only.

The making of or acceptance of the Offer for Subscription to or by persons who have registered addresses outside the United Kingdom, or who are resident in countries outside the United Kingdom, may be affected by the laws of the relevant jurisdiction. Those persons should consult their professional advisers as to whether they require any governmental or other consent or need to observe any other formalities to enable them to take up their rights.

It is also the responsibility of all persons (including, without limitation, custodians, nominees, agents and trustees) outside the United Kingdom wishing to take up Capital Raising Shares to satisfy themselves as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental or other consents which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such jurisdiction. The comments set out in this paragraph 4.1 are intended as a general guide only and any persons who are in doubt as to their position should consult their professional adviser without delay.

Receipt of this document and/or any Subscription Form will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, this document and/or a Subscription Form must be treated as sent for information only and should not be copied or redistributed.

No person receiving a copy of this document and/or a Subscription Form in any jurisdiction other than the United Kingdom may treat the same as constituting an invitation or offer to him nor should he in any event use the Subscription Form unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to him or the Subscription Form could lawfully be used or dealt with without contravention of any registration or other legal requirements. In such circumstances, this document and the Subscription Form are to be treated as sent for information only and should not be copied or redistributed.

Persons (including, without limitation, custodians, nominees and trustees) receiving a copy of this document and/or a Subscription Form should not distribute or send the same in or into any jurisdiction where to do so would or might contravene applicable security laws or regulations. If a Subscription Form is received by any person in any such jurisdiction, or by his agent or nominee, he must not seek to take up Offer for Subscription Shares referred to in the Subscription Form or in this document unless the Company and Numis (at their absolute discretion) determine that such actions would not violate applicable registration or other legal or regulatory requirements. Any person (including, without limitation, custodians, nominees and trustees) who does forward this document or a Subscription Form into any such jurisdictions (whether pursuant to a contractual or legal obligation or otherwise) should draw the recipient's attention to the contents of this paragraph 4.

Subject to paragraphs 4.2 and 4.3 below, any person (including, without limitation, agents, nominees and trustees) outside the United Kingdom wishing to participate in the Offer for Subscription must satisfy himself as to full observance of the applicable laws of any relevant jurisdiction, including obtaining any requisite governmental or other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such jurisdictions. The comments set out in this paragraph 5 are intended as a general guide only and any Overseas Applicants who are in any doubt as to their position should consult their professional advisers without delay.

The Company and Numis reserve the right to treat as invalid and will not be bound to allot or issue any Offer for Subscription Shares in respect of any acceptance or purported acceptance of the offer of Offer for Subscription Shares which:

(a) appears to the Company or its agents to have been executed, effected or despatched from outside the United Kingdom unless the Company and Numis are satisfied that such action would not result in the contravention of any registration or other legal requirement; or
(b) in the case of a Subscription Form, provides an address for delivery of the share certificates in or, in the case of a credit of Offer for Subscription Shares in CREST, to a CREST Member or CREST sponsored member whose registered address would be in any jurisdiction outside the United Kingdom in which it would be unlawful to deliver such share certificates or make such a credit unless the Company is satisfied that such action would not result in the contravention of any registration or other legal requirement.

Despite any other provision of this document or the Subscription Form, the Company and Numis reserve the right to permit any person to take up Offer for Subscription Shares under the Offer for Subscription if the Company and Numis in their sole and absolute discretion are satisfied that the transaction in question is exempt from or not subject to the registration or other legal or regulatory requirements giving rise to the restrictions in question.

All subscription monies must be in pounds sterling by cheque or banker's draft and should be drawn on a bank in the UK, made payable to "Capita Registrars – re: IP Group PLC – Offer for Subscription A/C" and crossed "A/C payee only" or settled within CREST as specified in paragraph 1.1.1(b).

4.2 Representations and warranties relating to Overseas Applicants

The attention of Overseas Applicants is drawn to the statements, confirmations, agreements, representations and warranties set out in paragraphs 1.1.1 and 2.1.7 of this Appendix 4.

4.3 Further information

Your attention is drawn to the further information set out in this document and to the terms, conditions and other information printed on the accompanying Subscription Form.

4.4 Waiver

The provisions of this paragraph 4 and of any other terms of the Offer for Subscription relating to Overseas Applicants may be waived, varied or modified as regards specific applicants or on a general basis by the Company and Numis in their absolute discretion. Subject to this, the provisions of this paragraph 4 supersede any terms of the Offer for Subscription inconsistent herewith. References in this paragraph 4 to Shareholders shall include references to the person or persons executing a Subscription Form and in the event of more than one person executing a Subscription Form, the provisions of this paragraph 4 shall apply to them jointly and to each of them.

6. Times and dates

The Company shall, in agreement with Numis and after consultation with its financial and legal advisers, be entitled to amend the dates that Subscription Forms are despatched or amend or extend the latest date for acceptance under the Offer for Subscription and all related dates set out in this document and in such circumstances notify the Financial Conduct Authority, and make an announcement on a Regulatory Information Service.

If a supplementary prospectus is issued by the Company two or fewer Business Days prior to the latest time and date for acceptance and payment in full under the Offer for Subscription specified in this document, the latest date for acceptance under the Offer for Subscription shall be extended to the date that is three Business Days after the date of issue of the supplementary prospectus (and the dates and times of principal events due to take place following such date shall be extended accordingly).

If for any reason it becomes necessary to adjust the expected timetable as set out in the Prospectus, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates. In particular, the Directors have the discretion to extend the last time and/or date for Applications.

7. Scaling back

The number of Offer for Subscription Shares to be issued under the Offer for Subscription may be scaled back in whole or part at the discretion of the Directors (in consultation with Numis) in favour of the Placing and/or the Excess Application Facility.

8. Governing law

The terms and conditions of the Offer for Subscription as set out in this Appendix 4 and the Subscription Form shall be governed by, and construed in accordance with, English law. The courts of England are to have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Offer for Subscription, this document and the Subscription Form.

Persons who take up Offer for Subscription Shares in accordance with this Appendix 4 and the Subscription Form irrevocably submit to the jurisdiction of the courts of England and waive any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient form.

NOTES ON HOW TO COMPLETE THE SUBSCRIPTION FORM

If you are a Qualifying Shareholder you should first read the Terms and Conditions of the Offer for Subscription in the Prospectus.

Applications should be returned so as to be received by Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU by no later than 1.00 p.m. on 7 June 2017.

HELP DESK: If you have any questions relating to the completion and return of the Subscription Form, please telephone Capita Asset Services on +44 (0)371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9 am – 5.30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

1. Application

Fill in (in figures) in Box 1 the amount you wish to subscribe for. Applications should be for a minimum of £1,000 and thereafter in multiples of £1,000. Financial intermediaries who are investing on behalf of clients should make separate applications for each client. Please also tick to confirm if payment will be made by cheque or CREST settlement.

2A. Holder details

Fill in (in block capitals) the full name and address of the first holder and the names only of any joint holders. Applications may only be made by persons aged 18 or over. In the case of joint holders only the first named may bear a designation reference. A maximum of four joint holders is permitted. All holders named must sign the Subscription Form at section 3.

2B. CREST

If you wish your Offer for Subscription Shares to be deposited in a CREST Account in the name of the holders given in section 2A, enter in section 2B the details of that CREST Account.

3. Signature

All holders named in section 2A must sign section 3 and insert the date. The Subscription Form may be signed by another person on behalf of each holder if that person is duly authorised to do so under a power of attorney. The power of attorney (or a copy duly certified by a solicitor or a bank) must be enclosed for inspection (which originals will be returned by post at the addressee's risk). A corporation should sign under the hand of a duly authorised official whose representative capacity should be stated and a copy of a notice issued by the corporation authorising such person to sign should accompany the Subscription Form.

4. Payment details

(a) Cheque/Banker's Draft

If the Subscription Applicant is subscribing for Offer for Subscription Shares and paying by cheque or banker's draft pin or staple to this form its cheque or banker's draft for the exact amount shown in Box 2 made payable to "Capita Registrars Limited Re: IP Group plc – Offer for Subscription A/C". Cheques and banker's drafts must be drawn on an account at a branch of a bank or building society in the United Kingdom, the Channel Islands or the Isle of Man and must bear the appropriate sort code in the top right hand corner.

(b) CREST Settlement

If the Subscription Applicant chooses to settle its application within CREST, that is DVP, it or its settlement agent/custodian's CREST account must allow for the delivery and acceptance of the Offer for Subscription Shares to be made against payment of the Issue Price, following the CREST matching criteria set out below:

Trade Date:	23 May 2017
Settlement Date:	7 June 2017
Company:	IP Group plc
Security Description:	Ordinary Shares
SEDOL:	B128J45

Should the Subscription Applicant wish to settle DVP, it will need to input its instructions to Capita Asset Services' Participant account RA06 by no later than 1.00 p.m. on 7 June 2017.

The Subscription Applicant must also ensure that it or its settlement agent/custodian has a sufficient "debit cap" within the CREST system to facilitate settlement in addition to its/its own daily trading and settlement requirements.

4. Reliable introducer declaration

Applications with a value greater than fifteen thousand euros (€15,000) (or the sterling equivalent) will be subject to the United Kingdom's verification of identity requirements. This will involve you providing the verification of identity documents listed below UNLESS you can have the declaration provided at section 5 of the Subscription Form given and signed by a firm acceptable to the Company. In order to ensure your application is processed in time and efficiently all applicants are strongly advised to have the declaration provided in section 5 of the Subscription Form completed and signed by a suitable firm.

If the declaration in section 5 cannot be completed and the value of the application is greater than fifteen thousand euros (€15,000) (or the sterling equivalent), in accordance with internationally recognised standards for the prevention of money laundering, the documents listed below must be provided with the completed Subscription Form as appropriate. Notwithstanding that the declaration in section 5 has been completed and signed, the Receiving Agent and the Company reserves the right to request of you the identity documents listed below and/or to seek verification of identity of each holder and payor (if necessary) from you or their bankers or from another reputable institution, agency or professional adviser in the applicable country of residence. If satisfactory evidence of identity has not been obtained within a reasonable time, your application may be rejected or revoked.

Where certified copies of documents are requested below, such copy documents should be certified by a senior signatory of a firm which is either a government approved bank, stockbroker, investment firm, financial services firm or an established law firm or accountancy firm which is itself subject to regulation in the conduct of its business in its own country of operation, and the name of the firm should be clearly identified on each document certified.

A. For each holder being an individual enclose:

(1) a certified clear photocopy of one of the following identification documents which bear both a photograph and the signature of the person: current passport, government or Armed Forces identity card, driving licence; and
(2) certified copies of at least two of the following documents which purport to confirm that the address given in section 2 is that person's residential address: a recent gas, electricity, water or telephone (not mobile) bill, a recent bank statement, a council rates bill, or similar document issued by a recognised authority; and
(3) if none of the above documents show the date and place of birth of the Applicant enclose a note of such information; and

(4) details of the name and address of their personal bankers from which the Receiving Agent may request a reference, if necessary.

B. For each holder being a company (a "Holder Company") enclose:

(1) a certified copy of the certificate of incorporation of the Holder Company; and
(2) the name and address of the Holder Company's principal bankers from which the Receiving Agent may request a reference, if necessary; and
(3) a statement as to the nature of the Holder Company's business, signed by a director; and
(4) a list of the names and residential addresses of each director of the Holder Company; and
(5) for each director provide documents and information similar to that mentioned in A above; and
(6) a copy of the authorised signatory list for the Holder Company; and
(7) a list of the names and residential/registered address of each ultimate beneficial owner interested in more than 5 per cent, of the issued share capital of the Holder Company and, where a person is named, also complete C below and, if another company is named (hereinafter a "beneficiary company"), also complete D below.

If the beneficial owner(s) named do not directly own the Holder Company but do so indirectly via nominee(s) or intermediary entities, provide details of the relationship between the beneficial owner(s) and the Holder Company.

C. For each person named in B(7) as a beneficial owner of a Holder Company enclose for each such person documents and information similar to that mentioned in A(1) to (4)

D. For each beneficiary company named in B(7) as a beneficial owner of a Holder Company enclose:
(1) a certified copy of the certificate of incorporation of that beneficiary company; and
(2) a statement as to the nature of that beneficiary company's business signed by a director; and
(3) the name and address of that beneficiary company's principal bankers from which the Receiving Agent may request a reference, if necessary; and
(4) enclose a list of the names and residential/registered address of each beneficial owner owning more than 5 per cent., of the issued share capital of that beneficiary company.

E. If the payor is not the Applicant and is not a bank providing its own cheque or banker's payment on the reverse of which is shown details of the account being debited with such payment (see note 4 on how to complete this form) enclose:

(1) if the payor is a person, for that person the documents mentioned in A(1) to (4); or
(2) if the payor is a company, for that company the documents mentioned in B(1) to (7); and

an explanation of the relationship between the payor and the holder(s). The Receiving Agent reserves the right to ask for additional documents and information.

6. Contact details

To ensure the efficient and timely processing of your Subscription Form, please provide contact details of a person that Receiving Agent may contact with all enquiries concerning your application. Ordinarily this contact person should be the person signing in section 3 on behalf of the first named holder. If no details are entered here and the Receiving Agent requires further information, any delay in obtaining that additional information may result in your application being rejected or revoked.

(This page has intentionally been left blank)

SUBSCRIPTION FORM

Instructions for Delivery of Completed Subscription Forms

Completed Subscription Forms should be returned, by post or by hand (during normal business hours only), to Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, so as to be received no later than 1.00 p.m. on 7 June 2017, together in each case with payment in full in respect of the application. If you post your Subscription Form, you are recommended to use first class post and to allow at least four Business Days for delivery. Subscription Forms received after this date may be returned.

For Office Use Only Log No.

Important: Before completing this form, you should read the accompanying notes. if you are a Qualifying Shareholder you should first read the terms and conditions of the Open Offer in the Prospectus.

To: Capita Asset Services, acting as receiving agent for IP Group PLC

1. Application

I/We the person(s) detailed in section 2A below offer to subscribe the amount shown in Box 1 for Offer for Subscription Shares subject to the Terms and Conditions set out in the Prospectus dated 23 May 2017 and subject to the memorandum and articles of association of the Company.

Box 1 Subscription monies

(minimum subscription of £1,000 and then in multiples of £1,000.)

Payment Method: Cheque CREST Settlement

2A. Details of holder(s) in whose name(s) shares will be issued (block capitals)

Mr, Mrs., Miss or Title
Forenames (in full)
Surname/Company Name:
Address (in Full)
Designation (if any)
Mr, Mrs., Miss or Title
Forenames (in full)
Surname/Company
Mr, Mrs. Miss or Title
Forenames (in full)
Surname/Company Name
Mr, Mrs., Miss or Title
Forenames (in full)
Surname/Company Name

2B. CREST details

(Only complete this section if Offer for Subscription Shares allotted are to be deposited in a CREST Account which must be in the same name as the holder(s) given in section 2A).

CREST participant ID
CREST member account ID

3. Signature(s) all holders must sign

Second holder signature:
Name (Print)
Dated:
Fourth holder signature:
Name (Print)
Dated:

4. Reliable introducer declaration

Completion and signing of this declaration by a suitable person or institution may avoid presentation being requested of the identity documents detailed in section 5 of the notes on how to complete this Subscription Form.

The declaration below may only be signed by a person or institution (such as a government approved bank, stockbroker or investment firm, financial services firm or an established law firm or accountancy firm) (the "firm") which is itself subject in its own country to operation of "customer due diligence" and anti-money laundering regulations no less stringent than those which prevail in the United Kingdom. Acceptable countries include Austria, Belgium, Canada, Denmark, Finland, France, Germany, Gibraltar, Greece, Hong Kong, Iceland, Ireland, Isle of Man, Italy, Japan, Jersey, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, the UK and the United States of America.

Declaration: To the Company, Numis Securities Limited and the Receiving Agent

With reference to the holder(s) detailed in section 2A, all persons signing at section 3 and the payor identified in section 6 if not also the Applicant (collectively the "subjects") WE HEREBY DECLARE:

1. we operate in one of the above mentioned countries and our firm is subject to money laundering regulations under the laws of that country which, to the best of our knowledge, are no less stringent than those which prevail in the United Kingdom;
1. we are regulated in the conduct of our business and in the prevention of money laundering by the regulatory authority identified below;
1. each of the subjects is known to us in a business capacity and we hold valid identity documentation on each of them and we undertake to immediately provide to you copies thereof on demand;
1. we confirm the accuracy of the names and residential/business address(es) of the holder(s) given at section 2A and if a CREST Account is cited at section 2B that the owner thereof is named in section 2A;
1. having regard to all local money laundering regulations we are, after enquiry, satisfied as to the source and legitimacy of the monies being used to subscribe for the Offer for Subscription Shares mentioned; and
1. where the payor and holder(s) are different persons we are satisfied as to the relationship between them and reason for the payor being different to the holder(s).

The above information is given in strict confidence for your own use only and without any guarantee, responsibility or liability on the part of this firm or its officials.

Signed .................................................................................................................................................................

having authority to bind the firm

Name of regulatory authority .............................................................................................................................

Firm's Licence number:......................................................................................................................................

Website address or telephone number of regulatory authority: STAMP of firm giving full name and business address

5. Contact details

To ensure the efficient and timely processing of this application please enter below the contact details of a person the Receiving Agent may contact with all enquiries concerning this application. Ordinarily this contact person should be the (or one of the) person(s) signing in section 3. If no details are entered here and the Receiving Agent requires further information, any delay in obtaining that additional information may result in your application being rejected or revoked.

Contact name
E-Mail Address
Address
Telephone Number
Fax Number

AI assistant

IP Group PLC — Regulatory Filings 2017

4852_prs_2017-05-23_812c522b-a597-40c0-84d0-c3575bc6cc22.pdf

IP Group plc

Launch of IP2IPO Australia with commercialisation agreements with nine leading Australian and New Zealand research universities

Numis Securities Limited

Rothschild

NOTICE TO OVERSEAS SHAREHOLDERS

CONTENTS

SUMMARY

RISK FACTORS

RISKS RELATING TO THE GROUP

General economic climate and trading conditions in the UK, including the outcome of the referendum on the UK's membership of the EU and the impact on free movement of workers

The Group may be subject to foreign exchange and investment risks

Loss of key personnel from the Group

Termination of the Partnerships and collaborations and/or the Group's fund management arrangements

Availability of future partnerships/collaborative arrangements

Availability to the Group of the substantial shareholdings exemption

Future revenue from the Group's fund management business

The Group may face increased competition, including from organisations with access to greater capital than the Group

Need for further investment in the Group

Changes in legislation, government policy and levels of research funding

Closure of technology transfer offices and/or spin-out equity management offices at universities and other research intensive institutions

RISKS RELATING TO THE GROUP'S INVESTMENTS IN PORTFOLIO COMPANIES

Investments are generally into companies at an early stage of their development

Appetite for investment and ability to realise equity shareholdings

Companies within the Group's portfolio, that may be dominated by one or a limited number of companies, may fail, lose value or fail to generate the anticipated level of returns

The Group has recently commenced operations in the United States and is in the early stages of establishing its operations in Australia and New Zealand and may find it difficult to compete in these new markets

Protection of IP developed by the Group's portfolio companies

The influence and control of the Group over its portfolio companies may be limited and interests may not align

Controlled Group Risks

Changes in regulatory, geopolitical, social, economic or monetary policies and other factors, as a result of the outcome of the 2016 U.S. presidential election or the forthcoming general election in the UK, if any, may have a material adverse effect on the Group's business in the future.

RISKS RELATING TO SHARES AND SHARE ISSUES

A limited number of Shareholders own a significant percentage of the Group and are likely to continue to do so following the Capital Raising. This concentration of ownership could adversely affect the trading price of the Shares

Shareholders will experience dilution in their ownership of IP Group as a result of the Firm Placing and Shareholders who do not acquire Capital Raising Shares in the Open Offer will experience further dilution in their ownership of IP Group

The Group's share price may fluctuate significantly in response to a number of factors, some of which may be outside of the Group's control

Suitability of the Shares as an investment

The Board may apply the proceeds of the Capital Raising to uses that the Shareholders may not agree with and may make investments that fail to produce income or capital growth or that lose value

The Company's ability to pay dividends in the future is not certain

A disposal of Shares by major Shareholders could adversely affect the market price of the Shares

Further issuances of Shares may be dilutive to current Shareholders

Shareholders and other prospective investors outside the UK may not be able to subscribe for or receive Capital Raising Shares pursuant to the Capital Raising, or may find it difficult to resell their Capital Raising Shares

Restrictions relating to Non-Qualified Holders and information request

The Company is not, and does not intend to become, regulated as an investment company under the US Investment Company Act and related rules

The ability of Overseas Shareholders to bring actions or enforce judgments against the Company or the Directors may be limited

Certain ERISA risks

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

General notes:

CAPITAL RAISING STATISTICS

Notes:

DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

IMPORTANT INFORMATION

PRESENTATION OF FINANCIAL INFORMATION

INTERNATIONAL FINANCIAL REPORTING STANDARDS

FORWARD-LOOKING STATEMENTS

NOTICE TO US SHAREHOLDERS AND SHAREHOLDERS IN EXCLUDED TERRITORIES

NOTICE TO AUSTRALIAN SHAREHOLDERS

NOTICE TO EEA SHAREHOLDERS

NOTICE TO OVERSEAS SHAREHOLDERS

ENFORCEMENT OF CIVIL LIABILITIES

NOTICE TO ALL SHAREHOLDERS

REFERENCES TO DEFINED TERMS

GENERAL NOTICE

NO INCORPORATION OF WEBSITE INFORMATION

PART I

LETTER FROM THE CHAIRMAN OF IP GROUP

Notice of General Meeting

1. INTRODUCTION

Background to and reasons for the Possible Offer

The Possible Offer

General and reservations to the Possible Offer

2. INFORMATION ON THE GROUP

2.1 Partnerships and other collaborative arrangements with universities and research intensive institutions

UK arrangements

US arrangements

Australia, New Zealand and the wider Asia-Pacific region

2.2 The Group's portfolio

2.3 Fund management

2.4 Modern Biosciences plc ("MBS")

2.5 The Directors and management team

IP Group PLC Regulatory Filings 2017