NORTHERN 2 VCT PLC — Capital/Financing Update 2013

Jan 10, 2013

NorthernVentureTrustPLC Northern 2VCTPLC

Offer Document (including Application Form) Offers for subscription in 2012/13 and 2013/14 tax years

Contents		Page
Risk factors
Letter from the Chairmen		2
Part I	– The Companies
	Introduction	3
	Income	3
	Taxation benefits to Investors	3
	Track record of the Companies	4
	Investment policy	5
	Share buyback policy	5
	Tender offers	5
	Directors	5
	Promoter	5
	Costs	6
	Other information	6
Part II	– The Manager: NVM Private Equity Limited	8
Part III	– Taxation	10
Part IV	– Definitions	11
Part V	– Terms and conditions of application	13
Notes on Application Form

Application Form

Key information about the Offers
Maximum amount to be raised	£8,000,000
Minimum investment (across both Companies)	£5,000
Maximum investment on which VCT Tax Reliefs are available per tax year	£200,000
Offers open	10 January 2013
Offers close* – 2012/13 tax year	5 April 2013
– 2013/14 tax year	15 April 2013
*unless fully subscribed at an earlier date or previously extended

Loyalty Bonus

Shareholders (including Spouses) in the Northern VCTs who submit Application Forms which are received and accepted by 5.00pm on 15 February 2013 will benefit from the Offer costs being reduced by 1% of the amount subscribed under the Offers (met by Downing through an equivalent reduction of its Promoter's Fee).

Financial calendar for Northern Venture Trust

Financial calendar for Northern 2 VCT

Financial year end	30 September
Annual results announcement and annual report published	November
Annual general meeting	December
Dividends paid (first dividend in respect of the Offer Shares expected June 2013)	June and December
Half‐yearly results announcement and half‐yearly report published	May

Financial year end	31 March
Annual results announcement and annual report published	May
Annual general meeting	July
Dividends paid (first dividend in respect of the Offer Shares expected July 2013)	January and July
Half‐yearly results announcement and half‐yearly report published	November

This document, which constitutes a financial promotion for the purposes of Section 21 of the FSMA, has been approved, for the purposes of that section only, by Downing LLP which is an authorised person within the meaning of the FSMA (FSA number 545025) and whose registered office is at 10 Lower Grosvenor Place, London SW1W 0EN. This document does not constitute a prospectus, as defined in the glossary of the FSA Handbook, and has not been prepared in accordance with the requirements of the FSMA, the Prospectus Regulation or the Prospectus Rules. Downing does not offer investment or tax advice or make recommendations regarding investments. Downing is acting for the Companies and no one else in connection with the Offers and will not be responsible to anyone other than the Companies for providing the protections afforded to customers of Downing. Downing has given, and has not withdrawn, its consent to the inclusion of its name in the form and context in which it is included.

Northern Venture Trust PLC

(Incorporated in England and Wales under the Companies Act 1985 with registered number 03090163)

Northern 2 VCT PLC

(Incorporated in England and Wales under the Companies Act 1985 with registered number 03695071)

Offers for subscription in 2012/13 and 2013/14 tax years to raise up to £4,000,000 for each of Northern Venture Trust and Northern 2 VCT

The Offers will open on 10 January 2013 and may close at any time thereafter but not later than 5.00pm on 5 April 2013 for the 2012/13 tax year and 5.00pm on 15 April 2013 for the 2013/14 tax year, unless previously extended by the Directors. The terms and conditions of application are set out on pages 13 and 14 of this document and are followed by an Application Form for use in connection with the Offers. There is no minimum subscription for the Offers to proceed and they are not underwritten.

Important notice

There is no guarantee that the investment objectives of either of the Companies will be achieved. The levels and bases of reliefs from taxation described in this document are those currently available. These may change and their value depends on an Investor's individual circumstances.

Your attention is drawn to the risk factors set out on page 1 of this document. An investment in the Companies is only suitable for Investors who are capable of evaluating the risks and merits of such an investment and who have sufficient resources to bear any loss that might arise. If you are in any doubt as to the action you should take then you are advised to obtain advice from an Intermediary who specialises in advising on the acquisition of shares.

Further copies of this document may be obtained from:

Downing LLP	NVM Private Equity Limited
10 Lower Grosvenor Place	Northumberland House
London	Princess Square
SW1W 0EN	Newcastle upon Tyne
	NE1 8ER

Telephone: 020 7416 7780 0191 244 6000 Email: vct@downing.co.uk vct@nvm.co.uk

Risk factors

Prospective Investors should carefully consider the following risk factors in addition to the other information presented in this document. If any of the risks described below were to materialise, they could have a material effect on the respective businesses, financial condition, results or operations of the Companies. The risks and uncertainties described below are not the only ones that the Companies or the Investors in the Offer Shares may face. Additional risks which are not currently known to the Companies or the Boards, or that the Companies or the Boards currently believe are not material, may also adversely affect the respective business, financial condition and results or operations of the Companies. The value of the Offer Shares could decline due to any of these risk factors. Investors who are in any doubt as to the action that they should take are advised to obtain advice from an Intermediary who specialises in advising on the acquisition of shares. The attention of prospective Investors is drawn to the following risks.

• Investment in smaller and unquoted companies, such as those in which the Companies will invest, involves a higher degree of risk than investment in larger listed companies because they generally have limited product lines, markets and financial resources and may be more dependent on their management or key individuals. The securities of smaller companies in which the Companies invest are typically unlisted, making them illiquid, and this may cause difficulties in valuing and disposing of the securities.
• The value of the Offer Shares and the income derived from them can fluctuate and Investors could lose all or part of their investment. Investment in the Companies should be seen as a long term investment.
• The past performance of investments made by the Companies or other funds managed by the Manager should not be regarded as an indication of the future performance of investments made by the Companies.
• There can be no guarantee that suitable investment opportunities will be identified in order to meet the Companies' objectives. Additionally, the Companies' ability to obtain maximum value from their investments may be limited by the requirements of the relevant VCT Rules in order to maintain the VCT status of the Companies (such as the obligation to have at least 70% by value of their investments in Qualifying Investments).
• Although the Offer Shares will be admitted to the Official List of the UK Listing Authority and traded on the London Stock Exchange's market for listed securities, it is unlikely that there will be a liquid market as there is a limited secondary market for shares in VCTs and Investors may find it difficult to realise their investments. The market price of the Offer Shares may not fully reflect, and will usually be at a discount to, their underlying Net Asset Values. Such a discount may be exacerbated if the Companies lack sufficient cash reserves, and during prohibited periods when the Companies are unable to purchase their own Shares.
• While it is the intention of the Directors that the Companies will be managed so as to continue to qualify as VCTs, there can be no guarantee that this status will be maintained. A failure to continue meeting the qualifying requirements could result in the loss of VCT Tax Relief.
• The information, including tax rules, contained in this document is based on the existing VCT Rules. The tax rules or their interpretation in relation to an investment in the Companies and/or the rates of tax, or other statutory provisions to which the Companies are subject, may change during the life of the Companies and such changes could be retrospective.
• Investors who subscribe for Offer Shares and subsequently dispose of them within five years are likely to be subject to claw back by HM Revenue & Customs of any income tax relief obtained on subscription.
• The Offer Shares are being issued at a price, calculated by a formula, based on the latest published NAV of each Company. The most recent published NAV of the Companies was as at 31 December 2012. Investors should be aware that if a revised NAV is published during the course of the Offers then Investors may receive a different allocation of Offer Shares from that anticipated.

Letter from the Chairmen

Northern Venture Trust PLC Northern 2 VCT PLC

Incorporated in England and Wales with registered number 03090163 Incorporated in England and Wales with registered number 03695071

Northumberland House, Princess Square Newcastle upon Tyne NE1 8ER Telephone: 0191 244 6000 Email: vct@nvm.co.uk

10 January 2013

Dear Investor

The Boards of Northern Venture Trust and Northern 2 VCT have each decided to raise up to £4 million to provide additional funds for investment in smaller UK companies with high growth potential. Investors will gain an immediate exposure to a mature and diverse portfolio of private equity investments. Each of the Companies will issue new ordinary shares at a price linked to the latest published Net Asset Value, adjusted to reflect the costs of the Offers. Investors have the option to invest in either or both of the Companies. The key points of the Offers are set out below.

Over 9% target tax‐free dividend yield: based on each Company's stated dividend policy and Initial Offer Price net of 30% income tax relief. It should be noted that dividend levels are not guaranteed and may fall.

VCT Tax Relief: under the VCT Rules, 30% income tax relief will be available on the value of the Offer Shares subscribed for, providing that they are held for at least five years, and dividends and gains from VCTs are tax‐free. It should be noted that a breach of the VCT Rules may result in the withdrawal of VCT Tax Relief, which is subject to change, and the value of the VCT Tax Reliefs to Investors is dependent on their personal circumstances.

Significant diversification: as at 30 September 2012, the Companies each held 40 investments in a range of different industry sectors. Investors will acquire an immediate exposure to these holdings, which should diversify risk and provide the potential for earlier growth than some newly launched VCTs.

Experienced Manager: the Manager has been investing in unlisted growing UK companies for over 28 years, was one of the first three managers to enter the VCT market in 1995 and has over £200 million under management. The Manager believes that investment prospects and deal flow are currently strong. In particular, the Manager is benefitting from additional investment opportunities because of the reluctance of banks to lend to small companies.

Share buyback policy: each of the Companies has a policy of buying back its Shares in the market at a discount of 10% to the latest published Net Asset Value, subject to market conditions.

Award winning VCTs: Northern Venture Trust won the Best Venture Capital Trust award in the What Investment Investment Trust Awards 2012. Northern Venture Trust and Northern 2 VCT (together with Northern 3 VCT PLC) won "VCT of the Year" at the Investment Week Investment Company of the Year Awards 2012.

Next steps: in order to invest, please read this Offer Document and then complete the Application Form, which is set out at the end of this document. If Investors have any questions regarding this investment they should contact their own Intermediary. Investors' attention is drawn to the risk factors set out on page 1 of this document. For questions relating to an application, please telephone NVM on 0191 244 6000. Investors should note that their capital is at risk if they invest in the Companies and they may lose some or all of their investment. No investment advice can be given by NVM.

Yours sincerely

John Hustler Chairman, Northern Venture Trust PLC

David Gravells Chairman, Northern 2 VCT PLC

Part I – The Companies

Introduction

Investors who subscribe for Offer Shares will benefit from an immediate exposure to the Companies' mature venture capital portfolios. As at 30 September 2012, each Company held 40 venture capital investments, valued at £42 million in the case of Northern Venture Trust and at £36 million in the case of Northern 2 VCT. 35 venture capital investments valued at £72 million (representing 88% by number of investments) were common across both Companies.

Income

VCTs are permitted to distribute realised capital gains as well as income by way of tax‐free dividends to their investors. Each of the Companies has established a targeted minimum level of annual dividend (6.0p per share in the case of Northern Venture Trust and 5.5p per share in the case of Northern 2 VCT), with the objective of enabling Shareholders to benefit from a strong and consistent flow of tax‐free income whilst at least maintaining the Company's net asset value per share in the medium term. Each of the Companies has paid dividends at or above its current target level in each of the last eight financial years. However the dividend payable in respect of any financial year cannot be guaranteed and will be subject to the availability of distributable reserves and cash resources and to applicable regulations.

Set out below is a table illustrating the income yields to Shareholders on Offer Shares assuming the target annual dividends are paid. These yields are based on the Initial Offer Price net of 30% income tax relief and the Promoter's Fee but before any Adviser Charges or Loyalty Bonus. Investors should note that the target annual dividends are objectives and are not guaranteed.

Illustrative yield per Offer Share (after 30% income tax relief)
Company	Initial Offer Price after 30% tax relief1	Target annual dividends	Tax‐free yield	Gross equivalent yield 40% taxpayer2	45% taxpayer2
Northern Venture Trust	63.98p	6.0p	9.4% p.a.	12.5% p.a.	13.5% p.a.
Northern 2 VCT	57.45p	5.5p	9.6% p.a.	12.7% p.a.	13.7% p.a.

¹ The returns listed are based on an Initial Offer Price of 91.4p for Northern Venture Trust and 82.1p for Northern 2 VCT, multiplied by 70%, to reflect initial income tax relief of 30%. Investors should note that they will be required to pay the full offer price and claim the income tax relief separately.

² The gross equivalent yield is the yield on a non‐VCT UK dividend that would result in a net yield of 9.4% for Northern Venture Trust and 9.6% for Northern 2 VCT (being a 6.0p dividend divided by 63.98p for Northern Venture Trust and a 5.5p dividend divided by 57.45p for Northern 2 VCT, in both cases the Initial Offer Price less 30% to reflect the initial income tax relief), assuming a 40% taxpayer and 45% taxpayer respectively.

Investors will be eligible for the next dividend payments from the Companies after their Shares have been allotted, which are expected to be paid in June 2013 in respect of Northern Venture Trust and July 2013 in respect of Northern 2 VCT. Both Companies intend to pay dividends bi‐annually, usually in June and December in respect of Northern Venture Trust and January and July in respect of Northern 2 VCT.

Taxation benefits to Investors (see Part III for further details)

The principal UK tax reliefs, which are available on a maximum investment of £200,000 per individual in the 2012/13 and 2013/14 tax years, are set out below:

• income tax relief at 30% of the amount subscribed provided that the Offer Shares are held for at least five years. Income tax relief is restricted to the amount which reduces the Investor's income tax liability to nil;
• tax‐free dividends, which may include capital distributions, from a VCT; and
• capital gains tax exemption on the disposal of ordinary shares in a VCT.

The table below shows the effect of the initial 30% income tax relief (based on a notional investment of £10,000).

Illustration of the effect of the initial income tax relief
	£
Illustrative cost of investment
Gross investment	10,000
30% income tax relief	(3,000)
Illustrative net of tax cost of investment	7,000
Illustrative initial value of investment
Gross subscription by Investor	10,000
Promoter's Fee	(350)
Illustrative net assets attributable to investment	9,650

The above table shows that, based on an illustrative investment of £10,000 and income tax relief at 30%, an Investor's net of tax cost of investment is £7,000 and the net assets initially attributable to the investment are £9,650. The table ignores the effect of any Adviser Charges or Loyalty Bonus.

Investors should note that they are required to hold Offer Shares for at least five years in order to retain the income tax relief.

The above is only a very brief summary of the UK tax position of investors in VCTs and is based on the Companies' understanding of current law and practice. Further details are set out in Part III of this document. Potential Investors are advised to consult an Intermediary who specialises in advising on the taxation consequences of investing in a VCT before investing.

Track record of the Companies

Northern Venture Trust was incorporated in 1995 and Northern 2 VCT was incorporated in 1999. Of over 100 VCT share classifications listed on the London Stock Exchange, both of the Companies rank in the top 12 in terms of Total Return since inception (source: The Association of Investment Companies). The financial performance of the Companies over their last five financial periods is summarised below (source: announcements made by the relevant Company through an RIS).

Northern Venture Trust

Year ended	30 September 2012	30 September 2011	30 September 2010	30 September 2009	30 September 2008
Dividends per Share declared in respect of the year	6.0p	6.0p	7.5p	7.5p	7.5p
Cumulative dividends per Share
declared since inception in 1995	105.5p	99.5p	93.5p	86.0p	78.5p
NAV per Share†	85.9p	84.8p	80.7p	80.3p	75.6p
Total Return per Share	191.4p	184.3p	174.2p	166.3p	154.1p
(NAV† plus cumulative dividends declared)

Northern 2 VCT

Period ended	31 March 2012	31 March 2011*	31 January 2010	31 January 2009	31 January 2008
Dividends per Share	5.5p	6.5p	5.5p	5.5p	6.0p
declared in respect of the period
Cumulative dividends per Share
declared since inception in 1999	62.4p	56.9p	50.4p	44.9p	39.4p
NAV per Share†	76.8p	75.0p	74.4p	66.3p	85.1p
Total Return per Share	139.2p	131.9p	124.8p	111.2p	124.5p
(NAV† plus cumulative dividends declared)

† The NAV per Share has been adjusted to reflect dividends declared in respect of the relevant period but paid after the period end.

* The results to 31 March 2011 comprised a fourteen month period.

The most recently published NAV per Share at 31 December 2012 (unaudited), which was calculated on a basis consistent with the tables above, was 88.2p for Northern Venture Trust and 79.2p for Northern 2 VCT.

Investment policy

The net proceeds of the Offers will be invested by the Companies in accordance with their respective stated investment policies, initially in a portfolio of cash and a range of other securities. The Companies' objectives are to provide high, long‐ term, tax‐free returns to their Shareholders through a combination of dividend yield and capital growth.

The Companies are Venture Capital Trusts approved by HM Revenue & Customs and their respective Boards intend to conduct the affairs of the Companies so that the conditions for approval as VCTs will continue to be satisfied. The Directors of each Company intend that the long‐term disposition of their Company's assets will be approximately 80% in a portfolio of mainly VCT‐qualifying unquoted and AIM‐quoted investments and 20% in other investments (including listed equity and fixed‐interest securities), to provide a reserve of liquidity which will maximise the flexibility as to the timing of investment acquisitions and disposals, dividend payments and share buybacks.

The Directors consider that the ability to invest jointly with other funds managed by the Manager is desirable because it will enable the Companies to participate in larger investments than those which it could undertake using only its own resources. It has been agreed that where a joint investment opportunity arises between the Companies and other funds managed by the Manager, an investment allocation will be offered to each party pro rata to their respective net assets at the time of investment. Any costs associated with any such investment which are payable by funds managed by the Manager will be borne by the relevant fund pro rata to its respective investment. The expected approximate size range for VCT‐qualifying Investments by the three Northern VCTs is from £3 million to £5 million in aggregate.

The full investment policy for each Company can be found in its latest annual report, which is available on the NVM website (www.nvm.co.uk) or on request from NVM by telephoning 0191 244 6000.

Share buyback policy

The Companies wish to ensure that there is liquidity in their Shares and, accordingly, each of the Companies intends to pursue an active discount management policy. Each Company will endeavour to buy back those Shares which its Shareholders wish to sell, currently at a discount of 10% to the latest published NAV, subject to applicable legislation governing the relevant Company, authority from Shareholders (currently each Company has authority to repurchase up to 10% of its issued share capital annually), market conditions at the time and the relevant Company having both cash resources and distributable reserves available for the purpose. Shares which are bought back by either of the Companies may be cancelled or held in treasury and later sold in the market. The buyback policy of each of the Companies aims to support the share price of that Company by limiting the discount to the NAV at which its Shares trade. The making and timing of any share buybacks will remain at the absolute discretion of the Board of each Company.

Tender offers

The Companies have previously carried out tender offers to provide Shareholders with the opportunity to dispose of their Shares at narrow discounts to the underlying NAV and without incurring dealing costs. Northern Venture Trust carried out tender offers in April 2005 at a 5% discount to its NAV and in December 2010 at a 3% discount to its NAV. Northern 2 VCT carried out a tender offer in January 2012 at a 3% discount to its NAV. In each case, the tender offers were in respect of the purchase of up to 10% of the issued share capital of the relevant Company.

The Directors of each of the Companies envisage that similar tender offers will be made periodically in the future, subject to the availability of cash resources and distributable reserves.

Directors

Profiles of the Directors for each Company can be found in its latest annual report, which is available on the NVM website (www.nvm.co.uk) or on request from NVM by telephoning 0191 244 6000.

Promoter

Downing LLP has been appointed by the Companies to co‐ordinate and promote the Offers. Downing is an experienced VCT promoter and manager, having worked in the industry for over 15 years. Downing has successfully promoted a number of previous share offers for the Northern VCTs, the first of which was Northern 2 VCT's initial share offer in 1998/99. Downing is authorised and regulated by the FSA.

Costs

Offer costs

Downing will charge the Companies an initial Promoter's Fee of 3.5% of the monies subscribed plus an annual Promoter's Fee (payable for five years) of 0.25% of the proceeds received under the Offers. Out of its Promoter's Fees, Downing will be responsible for paying all of the costs of the Offers, including initial and trail commission (as described under the paragraph headed "Commission" overleaf) to Intermediaries, where permissible.

Management and administration costs

The Manager will receive, from each Company, an annual management fee, payable quarterly in advance, at the rate of 2.06% of net assets, calculated at half‐yearly intervals. The Manager also provides secretarial and administration services to each of the Companies for annual fees of £60,000 and £49,000 for Northern Venture Trust and Northern 2 VCT respectively (rising annually with the movement in the UK Index of Retail Prices).

The Manager is also entitled to receive a performance‐related management fee from Northern 2 VCT equal to 9.5% of the amount, if any, by which the Total Return in each financial year (expressed as a percentage of opening NAV) exceeds a performance hurdle. The hurdle is a composite rate based on 7% on average long‐term investments and base rate on average cash and near‐cash investments during the year. Following a year in which net assets decline, a "high water mark" will apply to the calculation of the performance‐related fee, but will then be adjusted downwards to the extent that a positive return is achieved in the following year. The performance‐related fee payable by Northern 2 VCT is subject to an overall cap of 2.25% of net assets.

The Annual Running Costs of Northern Venture Trust and Northern 2 VCT (excluding performance‐related management fees) are capped at 2.9% and 3.0% respectively of the Net Asset Value of their Shares, with any excess being borne by the Manager by way of a reduction of its fees.

Each of the Companies has established a management performance incentive scheme under which the Manager's executives are required to invest personally in the ordinary share capital of investee companies in which the Companies invest, on the same terms as the Companies and other funds managed by the Manager. The Directors review the operation of the scheme annually.

Other information

The Offers and minimum and maximum subscription

Applicants are encouraged to submit their Application Forms early in order to be confident that their applications will be successful, as Offer Shares will generally be allotted on a "first come first served" basis, subject to the absolute discretion of the Boards of the Companies.

Share certificates (where applicable) and certificates to enable a claim for income tax relief to be made in respect of Offer Shares will be posted to Shareholders within 30 days of each allotment. No notification will be made to successful applicants prior to despatch of definitive share certificates. Prior to despatch of definitive share certificates (where applicable), transfers (if any) will be certified against the register of members of the Companies.

The minimum individual subscription for Offer Shares under the Offers is £5,000. The maximum subscription for Offer Shares under the Offers is £200,000 per tax year.

Allocation of Offer Shares

In accordance with the information contained in the Application Form, subscription monies received under the Offers will be allocated to the Company which the Applicant wishes to invest in. In the event that a particular Company's Offer is fully subscribed, and providing that the Applicant has provided authorisation by ticking box 3 on the Application Form, the subscription monies will be allocated to the other Company's Offer in respect of the tax year in which the Applicant wishes to be allotted Offer Shares. If the Company's Offer in which the Applicant wishes to invest is fully subscribed, and box 3 is not ticked, then the application monies will be returned to the Applicant.

The Offers are being made to Shareholders and the general public on a "first come first served" basis. Fractions of Offer Shares will not be issued and will be rounded down to the nearest whole number.

Adviser Charges

Commission is not permitted to be paid to Intermediaries who provide a personal recommendation to UK retail clients on investments in VCTs after 30 December 2012. Instead of commission being paid by the VCT, a fee will usually be agreed between the Intermediary and Investor for the advice ("Adviser Charge"). This fee can either be paid directly by the Investor to the Intermediary or, if it is an initial one‐off fee, the payment of such fee may be facilitated by Northern Venture Trust or Northern 2 VCT out of the Investor's funds received by the Company. Ongoing fees to Intermediaries will not be facilitated by the Companies. If the payment of the Adviser Charge is to be facilitated by the Companies, then the Investor is required to specify the amount of the charge in box 4 of the Application Form. The Investor will be issued fewer Offer Shares (to the equivalent value of the Adviser Charge) through the Pricing Formula set out below. The Adviser Charge is inclusive of VAT, where applicable.

Pricing of the Offers

The number of Offer Shares to be issued to each Applicant will be calculated based on the following Pricing Formula (rounded down to the nearest whole Offer Share):

Number of Offer Shares	=	Amount subscribed, less: (i) initial Promoter's Fee (3.5%)1 and (ii) Adviser Charge (if any)	÷	Latest published NAV per Offer Share2
------------------------	---	----------------------------------------------------------------------------------------------------	---	------------------------------------------

¹ less any reduction for the Loyalty Bonus and/or commission waived by Intermediaries (where applicable) ² after deducting (if not already deducted), in the case of Northern Venture Trust, the final dividend of 3p per Share in respect of the year ended ³⁰ September 2012 and, in the case of Northern 2 VCT, the interim dividend of 2p per Share in respect of the year ending 31 March 2013

Illustrative examples (based on a subscription under the Offers of £10,000 in Northern Venture Trust and a NAV per Offer Share of 88.2p)

• (i) Initial Promoter's Fee of 3.5% minus 1% as a Loyalty Bonus (see the inside cover of this document for details) = £250 Example Adviser Charge = nil (fee being paid directly by the Investor to his/her Intermediary or no Intermediary used) Number of Offer Shares = (10,000 – 250 – 0) ÷ 0.882 = 11,054
• (ii) Initial Promoter's Fee of 3.5% = £350 Example Adviser Charge = £225 Number of Offer Shares = (10,000 – 350 – 225) ÷ 0.882 = 10,685
• (iii) Initial Promoter's Fee of 3.5% = £350 Example Adviser Charge = £400 Number of Offer Shares = (10,000 – 350 – 400) ÷ 0.882 = 10,487
• (iv) Initial Promoter's Fee of 3.5% minus 2% (1% Loyalty Bonus and 1% commission waived by Intermediary) = £150 Example Adviser Charge = nil Number of Offer Shares = (10,000 – 150 – 0) ÷ 0.882 = 11,167

It should be noted that the example Adviser Charges set out above have been provided to illustrate the pricing of the Offers and should not be considered as a recommendation as to the appropriate levels of an Adviser Charge.

Income tax relief should be available on the total amount subscribed, subject to VCT Rules and personal circumstances, which in the above examples would be £3,000 (£10,000 at 30%).

Commission

Commission may be payable where there is an Execution‐only Transaction and no advice has been provided by the Intermediary to the Investor or where the Investor is a professional client of the Intermediary. Commission is payable by Downing out of its fees. Those Intermediaries who are permitted to receive commission will usually receive an initial commission of 1% of the amount invested by their clients under the Offers. Any commission waived by Intermediaries in favour of their clients will be reflected in the Pricing Formula, as illustrated in example (iv) above. Additionally, provided that the Intermediary continues to act for the Investor and the Investor continues to be the beneficial owner of the Offer Shares, and subject to applicable regulations, the Intermediary will usually be paid an annual trail commission of 0.25% of their client Investors' gross subscriptions for five years. Trail commission will be paid annually in April (commencing in 2014). The annual trail commission will be payable by Downing out of its fees.

Part II – The Manager: NVM Private Equity Limited

Introduction

The Companies' venture capital investment portfolios are managed by the Manager, who specialises in investing in smaller UK companies of the type qualifying under the VCT Rules. The Manager was established in 1988 by the executive team previously employed directly by Northern Investors Company PLC and currently manages funds in excess of £200 million through its offices in Newcastle upon Tyne, Reading and Manchester.

The Manager's 11 investment executives have together a total of almost 180 years' experience in the venture capital industry. The Manager is authorised and regulated by the Financial Services Authority and is a member of the British Private Equity and Venture Capital Association. The Manager's team of investment professionals aims to ensure that the Companies gain access to some of the best opportunities available to the industry and, by carrying out extensive due diligence procedures, seeks to identify those companies which potentially offer the best possible risk/return scenarios. The Manager typically generates 200 investment opportunities a year and approximately 2% of these opportunities are invested in by the Companies and the other funds managed by the Manager.

Track record of the Manager

NVM manages the three Northern VCTs. The respective returns of these companies to investors who subscribed at launch are as follows:

Track record of the Northern VCTs
	Tax year of launch	Net cost1	Total Return to date2	Increase over net cost (%)
Northern Venture Trust	1995/96	80p	193.7p	+142.1%
Northern 2 VCT	1998/99	80p	143.6p	+79.5%
Northern 3 VCT	2001/02	80p	136.5p	+70.6%

¹ Net cost is the initial offer price of 100p per share less income tax relief of 20% available to investors in each of the VCTs at that time.

² Total Return is cumulative dividends declared (including the tax credits where reclaimable) plus the most recently announced Net Asset Value for each VCT in pence per share (as at 31 December 2012).

(Source: announcements made by the relevant VCT through an RIS)

Please note that the past performance of the Manager and of the funds it manages may not be repeated and is not a guide to the future performance of the Companies and no projection is implied or should be inferred.

Deal flow

The Boards consider a strong deal flow to be of vital importance to the future performance of the Companies. The Manager's credentials are as follows:

• since 1 January 2005, funds managed by NVM have invested a total of over £160 million in VCT‐qualifying companies;
• an average of £5 million has been invested in each unquoted VCT‐qualifying later‐stage deal since 1 January 2005 across all funds managed by the Manager; and
• the Manager has a regional network of 11 executives based in major business centres across the UK.

Award winning VCTs

Northern Venture Trust won the Best Venture Capital Trust award in the What Investment Investment Trust Awards 2012. Northern Venture Trust and Northern 2 VCT (together with Northern 3 VCT PLC) won "VCT of the Year" at the Investment Week Investment Company of the Year Awards 2012.

Recent substantial investments

Set out below are some examples of recent substantial investments made by the Northern VCTs.

In March 2012, NVM funds invested £6 million in Volumatic (Northern Venture Trust and Northern 2 VCT each invested £2.1 million). Volumatic is the UK's leading provider of intelligent cash handling products to the UK and international markets. NVM's investment is funding the management buyout of the company and provides the capital to ensure that it continues to be at the forefront of developments in the sector, as well as allowing it to broaden its footprint and capability.
In August 2012, NVM funds invested £6 million in Silverwing (Northern Venture Trust invested £1.8 million and Northern 2 VCT invested £1.4 million). Silverwing develops and manufactures a wide range of non destructive testing solutions which inspect storage tanks, vessels and pipework for corrosion and wall loss, specifically for the petrochemical industry. NVM's investment is funding the management buyout of the company and provides capital to allow the company to provide a wider range of products for a more diverse customer base.
In November 2012, NVM funds invested £3.5 million in Haystack Dryers (Northern Venture Trust invested £1.3 million and Northern 2 VCT invested £1.2 million). Haystack Dryers is a designer and manufacturer of purpose built people dryers for theme parks, water parks, swimming pools and spas worldwide. NVM's investment will be used to provide expansion capital to allow the company to take advantage of the rapid growth of theme parks in the Far East and also to support expansion into new sectors.
In December 2012, NVM funds invested £7 million in Intuitive (Northern Venture Trust invested £1.7 million and Northern 2 VCT invested £1.5 million). Intuitive provides software and related services to the travel industry. NVM's investment will be used to expand the company's presence in the international online travel sector.

(Source: NVM)

Part III – Taxation

VCTs: Summary of the applicable legislation in respect of investors

1. Taxation of a VCT

VCTs are exempt from corporation tax on chargeable gains. There is no restriction on the distribution of realised capital gains by a VCT, subject to the requirements of company law. The Companies will be subject to corporation tax on their income (excluding dividends received from UK companies) after deduction of attributable expenses.

2. Tax reliefs for individual investors

The Offer Shares are eligible VCT shares for the purposes of this document. Individuals who subscribe for eligible shares in a VCT must be aged 18 or over to qualify for the tax reliefs outlined below.

Relief from income tax

An investor subscribing up to £200,000 in the 2012/13 or 2013/14 tax years for eligible shares in a VCT will be entitled to claim income tax relief, at the rate of 30%, although this relief will be withdrawn if either the shares are sold within five years or the investor takes out a loan which would not have been made, or would not have been made on the same terms, save for the acquisition of such shares. Relief is restricted to the amount which reduces the investor's income tax liability to nil. However, tax credits on dividends are notional and cannot be repaid and, therefore, Investors should take this into account when calculating the value of the income tax relief.

Dividend relief

An investor who subscribes for or acquires eligible shares in a VCT (up to a maximum of £200,000 in each of the 2012/13 and 2013/14 tax years) will not be liable for UK income tax on dividends paid by the VCT. The income received by the VCT will usually constitute either interest (on which the VCT may be subject to tax) or a dividend from a UK company (on which the VCT would not be subject to tax). The VCT's income, reduced by the payment of tax (if applicable), can then be distributed tax‐free to investors who benefit from this dividend relief. There is no withholding tax on dividends paid by a UK company and consequently the Companies do not assume responsibility for the withholding of tax at source. Dividends carry a tax credit at the rate of one‐ninth of the net dividend which is not repayable and which cannot be utilised in any other way.

Capital gains tax relief

A disposal by an individual investor of eligible shares in a VCT will neither give rise to a chargeable gain nor an allowable loss for the purposes of UK capital gains tax. This relief is also limited to disposals of shares acquired within the £200,000 limit described above.

Loss of tax reliefs

• (i) If a company which has been granted approval or provisional approval as a VCT subsequently fails to comply with the conditions for approval, VCT status may be withdrawn or treated as never having been given. The exemptions from corporation tax on capital gains will not apply to any gain realised after VCT status is lost (and on any gain realised by the VCT if approval is deemed never to have been given).
• (ii) For investors, the withdrawal of VCT status may (depending upon the timing of such withdrawal) result in:
• a. repayment of the 30% income tax relief on subscription for new VCT shares;
• b. income tax becoming payable on subsequent payments of dividends by the company; and
• c. a liability to tax on capital gains being suffered in the normal way on the disposal of shares in the company, except that any part of the gain attributable to the period for which the VCT was approved would be exempt.

3. Consequences of an investor dying or a transfer of shares between spouses

(i) Initial income tax relief

If an investor dies at any time after making an investment in a VCT, the transfer of shares on death is not treated as a disposal and, therefore, the initial income tax relief is not withdrawn. However, the shares will become part of the deceased's estate for inheritance tax purposes.

• (ii) Tax implications for the beneficiary Provided a number of conditions are met, the beneficiary of any VCT shares will be entitled to tax‐free dividends and will not pay capital gains tax on any disposal, but will not be entitled to any initial income tax relief.
• (iii) Transfer of shares between spouses

A transfer of shares in a VCT between spouses is not deemed to be a disposal and therefore all tax reliefs will be retained.

4. General

(i) Investors who are not resident in the UK

Non‐resident investors, or investors who may become non‐resident, should seek their own professional advice as to the consequences of making an investment in the Companies, because they may be subject to tax in other jurisdictions.

(ii) Stamp duty and stamp duty reserve tax

No stamp duty or (unless shares in a VCT are issued to a nominee for a clearing system or a provider of depository receipts) stamp duty reserve tax will be payable on the issue of such shares. The transfer on the sale of shares would normally be subject to ad valorem stamp duty or (if an unconditional agreement to transfer such shares is not completed by a duly stamped transfer within two months) stamp duty reserve tax generally, in each case at the rate of 50p for every £100 or part of £100 of the consideration paid where the total consideration exceeds £1,000 or if it forms part of a series of transactions where the total consideration exceeds £1,000. Such duties would be payable by a person who purchases such shares from the original subscriber.

(iii) Purchases in the market after listing

Any subsequent purchaser of existing VCT shares, as opposed to a subscriber for new VCT shares, will not qualify for income tax relief on investment but may, subject to the annual acquisition limit described above, benefit from dividend relief and from capital gains tax relief on the disposal of his/her VCT shares.

(iv) The VCT Regulations 2004

The VCT Regulations came into force on 17 October 2004. Under the VCT Regulations, monies raised by any further issue of shares by an existing VCT must be applied by that VCT for qualifying purposes. If any of the money raised (except for amounts which HM Revenue & Customs agrees are insignificant in the context of the whole issued ordinary share capital of the VCT) is used by the VCT to purchase its own shares then the funds may be deemed to not have been used for a qualifying purpose.

The above is only a summary of the tax position of individual investors in VCTs and is based on the Companies' understanding of current law and practice. Investors are recommended to consult a professional adviser as to the taxation consequences of their investing in a VCT. All tax reliefs referred to in this document are UK tax reliefs.

Part IV – Definitions

Where used in this document the following words and expressions will, unless the context otherwise requires, have the following meanings:

"Adviser Charge"	fee agreed between an Investor and his/her Intermediary for the provision of a personal recommendation and/or related services in relation to an investment in the Offer Shares;
"AIM"	London Stock Exchange's international market for smaller growing companies;
"Annual Running Costs"	annual costs and expenses incurred, in the ordinary course of business (including irrecoverable VAT), by the Companies;
"Applicant(s)"	person(s) who applies for Offer Shares under the terms of the Offers;
"Application Form"	application form for Offer Shares under the terms of the Offers;
"Articles"	articles of association of Northern Venture Trust and/or Northern 2 VCT (as the context dictates);
"Board(s)"	board of directors of Northern Venture Trust and/or Northern 2 VCT (as the context dictates);
"Company/Companies"	Northern Venture Trust PLC (registered number 03090163) and/or Northern 2 VCT PLC (registered number 03695071) (as the context dictates);
"CREST"	relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)) for the paperless settlement of transfers and the holding of shares in uncertificated form which is administered by Euroclear UK & Ireland Limited;
"Directors"	directors of Northern Venture Trust and/or Northern 2 VCT (as the context dictates);
"Downing"	Downing LLP, which is authorised and regulated by the FSA (registered number OC341575; FSA number 545025);
"Execution‐only Transaction"	transaction executed by an FSA authorised firm upon the specific instructions of a client where the firm does not give advice or make a personal recommendation;
"FSA"	Financial Services Authority or its successor;
"FSA Handbook"	handbook of rules made by the FSA from time to time;
"FSMA"	Financial Services and Markets Act 2000;
"Index of UK Retail Prices"	Retail Prices Index, being a measure of inflation published by the Office of National Statistics;
"Initial Offer Price"	91.4p per Offer Share in Northern Venture Trust and 82.1p per Offer Share in Northern 2 VCT, being the latest published NAV of a Share (adjusted for dividends declared, but not yet paid) grossed up to reflect offer costs of 3.5%;
"Intermediary/Intermediaries"	firms authorised under the FSMA;
"Investor(s)"	subscriber/subscribers for Offer Shares under the terms of the Offers;
"ITA"	Income Tax Act 2007 (as amended);
"London Stock Exchange"	London Stock Exchange plc (registered number 02075721);
"Loyalty Bonus"	1% reduction in offer charges (on the amount subscribed) to Shareholders (including Spouses) in the Northern VCTs if they submit Application Forms which are received and accepted before 5.00pm on 15 February 2013;
"Manager" or "NVM"	NVM Private Equity Limited which is authorised and regulated by the Financial Services Authority (registered number 02201762; FSA number 141943);
"ML Regulations"	Money Laundering Regulations 2007 (as amended);
"NAV" or "Net Asset Value"	most recently published net asset value attributable to a Share calculated in accordance with each Company's normal accounting policies in force at the date of calculation subject to any adjustments deemed necessary by the Directors;
"Northern 2 VCT"	Northern 2 VCT PLC (registered number 03695071);
"Northern 2 VCT Offer"	offer for the subscription of up to £4,000,000 of Shares in the capital of

Northern 2 VCT under the terms of this document;

"Northern VCTs"	Northern Venture Trust, Northern 2 VCT and Northern 3 VCT PLC (registered number 04280530);
"Northern Venture Trust"	Northern Venture Trust PLC (registered number 03090163);
"Northern Venture Trust Offer"	offer for the subscription of up to £4,000,000 of Shares in the capital of Northern Venture Trust under the terms of this document;
"Offer Document"	this document dated 10 January 2013, together with the Application Form;
"Offer Shares"	ordinary shares of 25p each in the capital of Northern Venture Trust (ISIN: GB0006450703) or ordinary shares of 5p each in the capital of Northern 2 VCT (ISIN: GB0005356430) subscribed for under the terms of the Northern Venture Trust Offer or the Northern 2 VCT Offer (as the context dictates);
"Offer(s)"	Northern Venture Trust Offer and/or Northern 2 VCT Offer (as the context dictates);
"Official List"	official list of the UK Listing Authority;
"Pricing Formula"	mechanism by which the pricing of the Offers may be adjusted according to the latest published NAV, the level of adviser charges, commission waived and Loyalty Bonus, as described on page 7 of this document;
"Promoter"	Downing;
"Promoter's Fee"	the fee to be charged to the Companies by the Promoter as explained on page 6 of this document;
"Prospectus Regulation"	regulation number 809/2004 of the European Commission;
"Prospectus Rules"	prospectus rules contained in the FSA Handbook;
"Qualifying Investments"	investment in an unquoted trading company, which comprises a qualifying holding for a VCT as defined in Chapter 4 Part 6 of the ITA;
"Registrar"	Equiniti Limited (registered number 06226088);
"RIS"	regulatory information service;
"Shareholders"	holders of Shares;
"Share(s)"	ordinary shares of 25p each in the capital of Northern Venture Trust in issue as at the date of this document (ISIN: GB0006450703) and/or ordinary shares of 5p each in the capital of Northern 2 VCT in issue as at the date of this document (ISIN: GB0005356430) (as the context dictates);
"Spouse"	spouse or civil partner
"Total Return"	sum of the NAV and the cumulative dividends paid to Shareholders per Share;
"UK Listing Authority"	FSA acting in its capacity as the competent authority for the purposes of Part VI of the FSMA;
"VCT" or "Venture Capital Trust"	venture capital trust as defined in Section 259 of the ITA;
"VCT Tax Relief(s)"	reliefs from taxation described in the VCT Rules; and
"VCT Rules"	legislation, rules and HM Revenue & Customs interpretation and practice regulating the establishment and operation of VCTs.

Part V – Terms and conditions of application

• 1. In these terms and conditions of application, the expression "Offer Document" means this document. The expression "Application Form" means the application form for use in accordance with these terms and conditions of application. Save where the context otherwise requires, the terms used in the Application Form bear the same meaning as in the Offer Document.
• 1. The right is reserved to reject any application or to accept any application in part only. Multiple applications are permitted. If any application is not accepted, if any contract created by acceptance does not become unconditional, or if any application is scaled back or if, in any other circumstances, there is an excess payment in relation to an application, the application monies or the balance of the amount paid or the excess paid on application will be returned without interest by post at the risk of the Applicant. In the meantime, application monies will be retained in the Northern Venture Trust bank account with Bank of Scotland PLC or the Northern 2 VCT bank account with Barclays Bank PLC depending on which Company the monies were to be invested in.
• 1. You may pay for your application for Offer Shares by cheque(s) or bankers' draft(s) submitted with the Application Form.
• 1. The contract created by the acceptance of applications under the Offers will be unconditional.
• 1. By completing and delivering an Application Form, you:
• (a) offer to subscribe for the amount specified on your Application Form or any smaller amount for which such application is accepted at a price as determined by the Pricing Formula subject to the Offer Document, these Terms and conditions of application, and the Articles of each of the Companies;
• (b) authorise your Intermediary, or whoever he or she may direct, the Registrar or the Companies to send documents of title for the number of Offer Shares for which your application is accepted, and/or a crossed cheque for any monies returnable, by post at your risk to your address as set out on your Application Form. An Investor applying for Offer Shares under the Offers may subsequently hold Shares in CREST by making arrangements with a system‐member (as defined in the CREST regulations) in relation to converting their shareholding represented by a share certificate into CREST;
• (c) in consideration of the Companies agreeing that they will not, prior to the Offers closing, offer any Offer Shares for subscription to any persons other than as set out in the Offer Document, agree that your application may not be revoked and that this paragraph constitutes a collateral contract between you and the Companies which will become binding upon despatch by post or delivery of your duly completed Application Form to the Companies or to your financial adviser;
• (d) warrant that your remittance will be honoured on first presentation and agree that, if such remittance is not so honoured, you will not be entitled to receive share certificates or to enjoy or receive any rights or distributions in respect of the Offer Shares for which you applied unless and until you make payment in cleared funds for such Offer Shares and such payment is accepted by the Companies (which acceptance shall be in their absolute discretion and may be on the basis that you indemnify each Company against all costs, damages, losses, expenses and liabilities arising out of or in connection with the failure of your remittance to be honoured on first presentation) and that at any time prior to unconditional acceptance by the Companies of such late payment in respect of such Offer Shares, the Companies may (without prejudice to their other rights) treat the agreement to allot such Offer Shares as void and may allot such Offer Shares to some other person, in which case you will not be entitled to any refund or payment in respect of such Offer Shares (other than return of such late payment at your risk and without interest);
• (e) agree that all cheques and bankers' drafts may be presented for payment on the due dates and any definitive documents of title and any monies returnable to you may be retained pending clearance of your remittance and the completion of any verification of identity required by the ML Regulations and that such monies will not bear interest;
• (f) undertake to provide satisfactory evidence of identity within such reasonable time (in each case to be determined in the absolute discretion of the Companies) to ensure compliance with the ML Regulations;
• (g) agree that, in respect of those Offer Shares for which your application has been received and processed and not rejected,

acceptance of your application shall be constituted by the Companies instructing the Registrar or the relevant company secretary to enter your name on the register of members of the relevant Company;

• (h) agree that all documents in connection with the Offers and any returned monies will be sent at your risk and may be sent to you at your address as set out in the Application Form;
• (i) agree that, having had the opportunity to read the Offer Document, you shall be deemed to have had notice of all information and representations including the risk factors and investment considerations contained therein;
• (j) confirm that (save for advice received from your financial adviser) in making such application you are not relying on any information and representation other than those contained in the Offer Document and you accordingly agree that (save in the event of fraud by that person) no person responsible solely or jointly for the Offer Document or any part thereof or involved in the preparation thereof will have any liability for any such other information or representation;
• (k) agree that all applications, acceptances of applications and contracts resulting therefrom under the Offers shall be governed by and construed in accordance with English law and that you submit to the jurisdiction of the English courts and agree that nothing shall limit the right of the Companies to bring any action, suit or proceedings arising out of or in connection with any such applications, acceptances of applications and contracts in any other manner permitted by law or in any court of competent jurisdiction;
• (l) irrevocably authorise the Companies, the Registrar, the Manager or any other person authorised by any of them, as your agent, to do all things necessary to effect registration of any Offer Shares subscribed by or issued to you in your name and authorise any representatives of the Companies, the Registrar or the Manager to execute any documents required therefore and to enter your name on the registers of members of the Companies;
• (m) agree to provide the Companies with any information which either of them may request in connection with your application or to comply with the VCT Rules (as amended from time to time) including without limitation satisfactory evidence of identity to ensure compliance with the ML Regulations;
• (n) warrant that, in connection with your application, you have observed the laws of all requisite territories, obtained any requisite governmental or other consents, complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with your application in any territory and that you have not taken any action which will or may result in the Companies, the Manager or Downing acting in breach of the regulatory or legal requirements of any territory in connection with the Offers or your application;
• (o) confirm that you have read and complied with paragraph 6 below;
• (p) confirm that you have reviewed the restrictions contained in paragraph 7 below;
• (q) warrant that you are not under the age of 18 years;
• (r) if the laws of any territory or jurisdiction outside the United Kingdom are applicable to your application, warrant that you have complied with all such laws and none of the Companies, the Manager or Downing or any of their respective agents will infringe any laws of any such territory or jurisdiction directly or indirectly as a result or in consequence of any acceptance of your application;
• (s) agree that the Manager and Downing are acting for the Companies in connection with the Offers and for no one else and that they will not treat you as their customer by virtue of such application being accepted or owe you any duties or responsibilities concerning the price of Offer Shares or concerning the suitability of Offer Shares for you or be responsible to you for the protections afforded to their customers;
• (t) warrant that if you sign the Application Form on behalf of somebody else or yourself and another or others jointly or a corporation you have the requisite power to make such investments as well as the authority to do so and such person will also be bound accordingly and will be deemed also to have given the confirmations, warranties and undertakings contained in these terms and conditions of application and undertake (save in the case of signature by an authorised financial adviser on behalf of the Investor) to enclose a power of attorney or a copy thereof duly certified by a solicitor with the Application Form;
• (u) warrant that you are not subscribing for the Offer Shares using a loan which would not have been given to you or any associate, or not given to you on such favourable terms, if you had not been proposing to subscribe for the Offer Shares;

• (v) warrant that the Offer Shares are being acquired by you for bona fide investment purposes and not as part of a scheme or arrangement the main purpose of which, or one of the main purposes of which, is the avoidance of tax. Obtaining tax reliefs given under the applicable VCT legislation is not of itself tax avoidance;

• (w) warrant that you are not a "US person" as defined in the United States Securities Act of 1933 (as amended) nor a resident of Canada and that you are not applying for any Offer Shares on behalf of or with a view to their offer, sale or delivery, directly or indirectly, to or for the benefit of any US person or resident of Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan;

• (x) warrant that the information contained in the Application Form is accurate; and
• (y) agree that if you request that Offer Shares are issued to you on a date other than the date on which the Offer Shares are issued to you that none of the Companies, their respective agents or Directors will have any liability to you arising from the issue of such Offer Shares on a different date.
• 1. No person receiving a copy of the Offer Document or an Application Form 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 such Application Form unless, in the relevant territory, such an invitation or offer could lawfully be made to him or her or such Application Form could lawfully be used without contravention of any registration or other legal requirements. It is the responsibility of any person outside the United Kingdom wishing to make an application hereunder to satisfy himself or herself as to the full observance of the laws of any relevant territory in connection therewith, including obtaining any requisite governmental or other consents, observing any of the formalities requiring to be observed in such territory and paying any issue, transfer or other taxes required to be paid in such territory.
• 1. The Offer Shares have not been and will not be registered under the United States Securities Act 1933, as amended, or under the securities laws of any state or other political subdivision of the United States, and may not be offered or sold in the United States of America, its territories or possessions or other areas subject to its jurisdiction (the "USA"). In addition, the Companies have not been and will not be registered under the United States Investment Company Act of 1940, as amended. The Manager will not be registered under the United States Investment Adviser Act of 1940 (as amended). No application will be accepted if it bears an address in the USA.
• 1. The application is addressed to the Companies. The rights and remedies of the Companies under these terms and conditions of application are in addition to any rights and remedies which would otherwise be available to either of them, and the exercise or partial exercise of one will not prevent the exercise of others.
• 1. The dates and times referred to in these terms and conditions of application may be altered by the Companies.
• 1. Intermediaries who have not provided personal recommendations or advice to UK retail clients on the Offer Shares and who, acting on behalf of their clients, return valid Application Forms bearing their stamp and FSA number may be entitled to commission on the amount payable in respect of the Offer Shares allocated for each such Application Form at the rates specified in the paragraph headed "Other information" in Part I of this document. Intermediaries may agree to waive part or all of their initial commission in respect of an application. If this is the case, then the offer charges will be adjusted, in accordance with the Pricing Formula. Intermediaries should keep a record of Application Forms submitted bearing their stamp to substantiate any claim for their commission.
• 1. The section headed "Notes on Application Form" forms part of these terms and conditions of application.
• 1. Intermediaries whose clients have agreed Adviser Charges and requested the Companies to facilitate the payment of such Adviser Charges and who return valid Application Forms bearing their stamp and FSA number will be entitled to the payment of the Adviser Charges specified on the Application Form. Intermediaries should keep a record of Application Forms submitted bearing their stamp to substantiate any claim for their Adviser Charges.
• 1. It is a condition of the Offers to ensure compliance with the ML Regulations. The Manager is therefore entitled to require, at its absolute discretion, verification of identity from any Applicant including, without limitation, any person who either (i) tenders payment by way of a cheque or bankers' draft drawn on an account in the name of a person or persons other than the Applicant; or (ii) appears to the Manager to be acting on behalf of some other person. Pending the provision of evidence satisfactory to the Manager as to the identity of the Applicant and/or any person on whose behalf the Applicant appears to be acting, the Manager may, in its absolute discretion, retain an Application Form lodged by an Applicant and/or the cheque or other remittance relating thereto and/or the Registrar may not enter the Applicant on the register of members or issue any share certificates in respect of such application. If verification of identity is required, this may result in delay in dealing with an application and in rejection of the application. The Companies reserve the right, in their absolute discretion, for them or the Manager to reject any application in respect of which the Manager considers that, having requested verification of identity, it has not received evidence of such identity satisfactory to it by such time as was specified in the request for verification of identity or in any event within a reasonable period. In the event of an application being rejected in any such circumstances, the Companies reserve the right in their absolute discretion, but shall have no obligation, to terminate any contract of allotment relating to or constituted by such Application Form (in which event the money payable or paid in respect of the application will be returned (without interest) to the account of the drawee bank from which such sums were originally debited) and/or to endeavour to procure other subscribers for the Offer Shares in question (but in each case without prejudice to any rights the Companies may have to take proceedings to recover in respect of loss or damage suffered or incurred by them as a result of the failure to produce satisfactory evidence as aforesaid). The submission of an Application Form will constitute an undertaking by the Applicant to provide promptly to the Manager such information as may be specified by it as being required for the purpose of the ML Regulations.
• 1. The right is also reserved to treat as valid and binding any application not complying fully with these Terms and Conditions of Application or not in all respects complying with the Notes on Application Form. In particular, but without limitation, the Companies may accept applications made otherwise than by completion of an Application Form where the Applicant has agreed in some other manner acceptable to the Companies to apply in accordance with these terms and conditions of application.

Notes on Application Form

Before making an application to acquire Offer Shares you are strongly recommended to consult and obtain advice from an appropriate Intermediary. It is essential that you complete all parts of the Application Form in accordance with the instructions in these notes. Please send the completed Application Form together with your cheque(s) or bankers' draft(s) by post, or deliver it by hand, to NVM Private Equity Limited, Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER. If you have any questions on how to complete the Application Form please contact NVM on 0191 244 6000 or your Intermediary.

The following notes should be read in conjunction with the Application Form and the terms and conditions of application.

Using BLOCK CAPITALS, insert your full name, permanent address (including postcode), daytime and evening telephone numbers, date of birth, national insurance number and email address. Joint applications are not permitted.

Please also indicate at the top right whether you or your Spouse is an existing shareholder in a VCT managed by NVM.

2

1

Insert (in figures) in Column A the total amount you wish to invest under the Offers in respect of the 2012/13 tax year for each Company (state nil if appropriate). Insert (in figures) in Column B the amount you wish to invest under the Offers in respect of the 2013/14 tax year for each Company (state nil if appropriate). Insert (in figures) the total of Columns A and B in Column C. This is the total amount you are applying for under the Offers.

Please note that the minimum investment for Offer Shares is a combined total of £5,000 across both Companies. The maximum investment on which tax reliefs on investments in VCTs is available is £200,000 in each of the 2012/13 and 2013/14 tax years.

Attach your cheque(s) or bankers' draft(s) to the Application Form for the exact amount(s) shown in Column C. Your cheque(s) or bankers' draft(s) must be made payable to "Northern Venture Trust PLC" in respect of subscriptions in Northern Venture Trust PLC and/or "Northern 2 VCT PLC" in respect of subscriptions in Northern 2 VCT PLC, and crossed "A/C Payee only". Your payment must relate solely to this application.

No money laundering verification is required to be enclosed if the application is for less than £12,000 or if payment is by means of a cheque drawn on an account in the name of the Applicant (provided that (a) the cheque includes details of the Applicant's bank account or building society account (as applicable) and (b) the cheque is drawn on a UK or European Union authorised bank or credit institution). Please note, however, that NVM may, in its absolute discretion, require money laundering verification and that money laundering verification will be required by introducing Intermediaries.

Money Laundering

If the application is for more than £12,000 and payment is not by means of a cheque drawn on an account in the name of the Applicant, please supply:

• (a) an identity verification certificate from your Intermediary; OR
• (b)(i) a copy of your passport or driving licence certified by a bank or solicitor stating that it is a "true copy of the original and a true likeness of the client" followed by your name; AND
• (b)(ii) a recent (no more than three months old) original bank or building society statement, or utility bill, or recent tax bill, in your name.

Tick the box if you wish to transfer your application from Northern Venture Trust to Northern 2 VCT or vice versa in the event that the Offer you have applied for is fully subscribed. The tax year of application will remain unchanged. If you do not tick this box and the Offer for which you have applied is fully subscribed then the relevant cheque(s) or bankers' draft(s) will be returned to you.

Intermediaries are entitled to the payment of Adviser Charges agreed with their clients. Please insert the agreed fee in this box (either as a sum of money or a percentage of the amount invested in Column C above). The number of Offer Shares issued to the Applicant will be reduced by the amount of the Adviser Charge as well as the Promoter's Fee as set out in the Pricing Formula on page 7. This payment is inclusive of VAT, if applicable.

Read the declaration, sign where indicated and enter the date. If someone other than the Applicant named in Section 1 signs on the Applicant's behalf, such signatory must ensure that the declaration given on behalf of such Applicant is correct.

Leave blank if you wish to receive a share certificate in respect of your investment. If you require your shares to be issued electronically to a CREST account, please complete the boxes.

Intermediaries who are entitled to receive commission or an Adviser Charge should stamp and complete this box, giving their full name and address, telephone number and details of their authorisation under the FSMA. The right is reserved to withhold payment of commission or the Adviser Charge if the Companies are not, in their sole discretion, satisfied that the agent is so authorised and entitled.

Northern Venture Trust PLC and Northern 2 VCT PLC Please pin or staple your

cheque(s) here

1

2

Application Form

The closing date for the 2012/13 Offers will be 5.00pm on Friday 5 April 2013 and for the 2013/14 Offers will be 5.00pm on Monday 15 April 2013 (unless extended or fully subscribed earlier)

Make your cheque(s) or bankers' draft(s) payable to "Northern Venture Trust PLC" if you are investing in Northern Venture Trust PLC and/or "Northern 2 VCT PLC" if you are investing in Northern 2 VCT PLC and return this form as soon as possible to NVM Private Equity Limited, Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER.

						Existing Shareholder in a VCT managed by NVM? (Y/N)
Title and full name
	Permanent address
	Postcode	Email address
	Tel (day)						Tel (evening)
	Date of birth					National Insurance no.

I am applying for Offer Shares as follows:

	Column A 2012/13 tax year	Column B 2013/14 tax year	Column C Total
Northern Venture Trust PLC	£	£	£
Northern 2 VCT PLC	£	£	£
TOTAL	£	£	£ Min £5,000

or such lesser sum for which this application may be accepted on the terms and conditions of application set out in Part V of this document. Please send me a certificate(s) confirming my entitlement to VCT Tax Reliefs.

4

5

Tick this box if you wish to transfer your application from Northern Venture Trust to Northern 2 VCT or vice versa in the event that the Offer you have applied for is fully subscribed.

Adviser Charge

If you have agreed an Adviser Charge with your Intermediary and request that the Companies pay
that fee, please insert the fee amount in this box. Please note that the number of Offer Shares
issued to you will be reduced by the Adviser Charge. This payment is inclusive of VAT, if applicable.

State as either a sum of money in £ or as a % of the total amount invested in column C above.

(9)

BY SIGNING THIS FORM I HEREBY DECLARE THAT: (i) I have read the enclosed Terms and conditions of application of the Offer Document dated 10 January 2013 and agree to be bound by them; (ii) I will be the beneficial owner of the Offer Shares in Northern Venture Trust PLC and/or Northern 2 VCT PLC issued to me pursuant to this application; and (iii) to the best of my knowledge and belief, the particulars I have given to Northern Venture Trust PLC and/or Northern 2 VCT PLC are correct.

If this form is completed and signed by an Intermediary or any other person apart from the Investor: By signing this form on behalf of the individual whose details are shown above, I make a declaration (on behalf of such individual) on the terms of sub‐paragraphs (i) to (iii) above.

HM Revenue & Customs may inspect this application form. It is a serious offence to make a false declaration.

Signature / / Date
-----------------------------

Northern Venture Trust PLC and Northern 2 VCT PLC Application Form

6

CREST Complete this box only if you require your Shares to be issued electronically to a CREST account.

CREST Participant ID:
CREST Member Account ID:
Participant name:
Participant address:
Participant postcode:
Contact name for CREST queries:
Contact telephone:
Signed:

The Companies and NVM do not accept responsibility if any details provided by you are incorrect.

7

TO BE COMPLETED BY FSA AUTHORISED INTERMEDIARIES ONLY
Contact name: (for administration)
Intermediary name:
Firm name:
Address:
Postcode:				Tel:
FSA No:				Email:
Tick this box if you are permitted to receive commission in respect of this application in compliance with COBS 6.1A of the FSA Handbook.						Reason:
Tick this box if the Adviser Charge stated in box 4 has been agreed with your client and complies with COBS 6.1A of the FSA Handbook. (9)
Please provide details of your bank or building society account so that commission or the Adviser Charge (as applicable) can be paid via BACS.
Name of bank/building society:
Branch:
Account name:
Sort code:					Account number: (please quote all digits and zeros)
Email address for commission statements:
Signed:								Position:
The Companies and NVM do not accept responsibility if any details provided by you are incorrect.

Northern Venture Trust PLC Northern 2 VCT PLC

Northumberland House Princess Square Newcastle upon Tyne NE1 8ER

T 0191 244 6000 F 0191 244 6001 E vct@nvm.co.uk

www.nvm.co.uk