NORTHERN 2 VCT PLC — Proxy Solicitation & Information Statement 2011

Oct 28, 2011

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult an appropriate independent financial adviser authorised under the Financial Services and Markets Act 2000 immediately. If you have sold or transferred all your Shares in the Company, please forward this Circular together with the Form of Proxy to the purchaser, transferee, stockbroker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee.

Notice of a General Meeting of the Company to be held at Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER at 11.00am on Wednesday 23 November 2011 is set out on pages 4 and 5 of the Circular. A Form of Proxy for use at the meeting is enclosed. To be valid, Forms of Proxy should be completed and returned in accordance with the notes to the notice of the General Meeting and the Form of Proxy itself.

Northern 2 VCT PLC

Northumberland House Princess Square Newcastle upon Tyne NE1 8ER

T 0191 244 6000 F 0191 244 6001 E n2vct@nvm.co.uk

Registered in England no 3695071

Directors (all non-executive): 28 October 2011 David Gravells, Chairman Alastair Conn Michael Denny Christopher Fletcher Frank Neale

Dear Shareholder

Proposed reduction in the share premium account of the Company

Introduction

On 23 September 2011, I wrote to Shareholders in relation to proposals for a Tender Offer, a proposed issue of Shares and proposals for the extension of the life of the Company. I am pleased to inform you that resolutions giving effect to these proposals were passed at the general meeting of the Company held on 20 October 2011.

Your Board is now seeking the approval of Shareholders for a reduction in the Company's share premium account. As a result of previous share issues, the amount standing to the credit of the share premium account in the Company's unaudited balance sheet as at 30 September 2011 was approximately £35 million. The Directors intend to seek Court consent to reduce the share premium account by £25 million, whereupon a corresponding amount will be credited to a distributable reserve which will, together with the Company's existing distributable reserves, be available to be used by the Company inter alia to re-purchase Shares for cancellation (including those proposed to be re-purchased in the Tender Offer) and to pay dividends to Shareholders. The result of the proposal, if implemented, will be to effect a transfer between two categories of reserves in the Company's balance sheet and there will be no impact on the assets and liabilities of the Company.

The proposed reduction of the share premium account requires approval by a special resolution of Shareholders. If the resolution is not approved by Shareholders, the Company's ability to complete the Tender Offer whilst maintaining ample distributable reserves for future share buy-backs and dividend payments may be impaired, which could have adverse implications for the Company and for Shareholders.

Action to be taken by Shareholders

Pages 4 and 5 of this Circular contain a notice convening a General Meeting of the Company to be held at 11.00am on Wednesday 23 November 2011 at Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER where a special resolution will be proposed that the share premium account of the Company be reduced by £25 million.

Once Shareholders have approved the reduction of the Company's share premium account, it will be necessary for the Company to apply to the High Court to seek its confirmation of the reduction. In considering whether to confirm the reduction of the Company's share premium account, the Court will have regard to the position of the Company's creditors. Accordingly, appropriate arrangements will be made by the Company with the approval of the High Court to protect the interests of creditors of the Company whose debts remain outstanding as at the effective date of the reduction. It is expected that the Court order confirming the reduction of the Company's share premium account will be made in December 2011. The reduction will take effect only when an office copy of the Court order and a revised statement of capital are duly registered with the Registrar of Companies.

It is important that you complete the Form of Proxy and return it to the Company's registrars, Equiniti Limited, at Aspect House, Spencer Road, Lancing BN99 6ZR by no later than 11.00am on Monday 21 November 2011. Completion and return of the Form of Proxy will not preclude you from attending the General Meeting and voting in person should you so wish.

Recommendation

Your Board considers that the reduction in the share premium account of the Company by £25 million is in the best interests of the Company and its Shareholders as a whole and unanimously recommends Shareholders to vote in favour of the special resolution to be proposed at the General Meeting, as your Directors intend to do in respect of their own beneficial holdings which, in aggregate, amount to 534,719 Shares representing approximately 0.93% of the issued share capital of the Company.

Yours sincerely

DAVID GRAVELLS Chairman

Definitions

In this Circular, unless the context otherwise requires, the following expressions bear the following meanings:

Circular	this document dated 28 October 2011, addressed to the Shareholders
Company	Northern 2 VCT PLC
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 or Board	the directors of the Company, whose names are set out on page 1 of this Circular
Form of Proxy	the form of proxy for use at the General Meeting
General Meeting	the general meeting of the Company to be held at Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER at 11.00am on Wednesday 23 November 2011
Shareholders	holders of Shares
Shares	ordinary shares of 5p each in the capital of the Company
Tender Offer	the tender offer enabling Shareholders to apply for the Company to acquire up to 10% of the issued share capital of the Company on and subject to the terms and conditions to be set out in a Circular relating specifically to the tender offer

Northern 2 VCT PLC

Notice of General Meeting

Notice is hereby given that a general meeting of the Company will be held at Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER at 11.00am on Wednesday 23 November 2011 to consider and, if thought fit, to pass the following resolution which will be proposed as a special resolution.

SPECIAL RESOLUTION

That the share premium account of the Company be reduced by £25 million.

By order of the Board

C D MELLOR

Secretary Northumberland House Princess Square Newcastle upon Tyne NE1 8ER 28 October 2011

NOTES

• 1 A member entitled to attend and vote at this meeting is entitled to appoint another person as his or her proxy to exercise all or any of his or her rights to attend, to speak and, both on a show of hands and on a poll, to vote in his or her stead at the meeting. A proxy need not be a member of the company. The appointment of a proxy does not preclude a member from attending and voting in person at the meeting should he or she subsequently decide to do so. A form of proxy which may be used is set out on page 7.
• 2 A member may appoint more than one proxy in relation to a meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by him or her.
• 3 To be valid, a form of proxy together with, if applicable, the power of attorney or other authority under which it is signed, or a certified copy thereof, must be received by Equiniti Limited at Aspect House, Spencer Road, Lancing BN99 6ZR not later than 11.00am on Monday 21 November 2011.
• 4 The company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those shareholders registered in the register of members of the company as at 6.00pm on Monday 21 November 2011 shall be entitled to attend or vote (whether on a show of hands or on a poll) at the meeting in respect of the number of shares registered in their name at the time. Changes to entries on the register after 6.00pm on Monday 21 November 2011 (or after 6.00pm on the day which is two days before any adjourned meeting) shall be disregarded in determining the rights of any person to attend or vote at the meeting.
• 5 As at 27 October 2011 (being the last business day prior to the date of this notice), the company's issued share capital consisted of 57,468,342 ordinary shares each carrying one vote per share. Accordingly the total number of voting rights in the company as at 27 October 2011 was 57,468,342.
• 6 CREST members who wish to appoint a proxy or proxies for the meeting or any adjournment thereof by utilising the CREST electronic proxy appointment service may do so by following the procedures described in the CREST Manual (www.euroclear.com/CREST). CREST personal members or other CREST sponsored members and those CREST members who have appointed a voting 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.

In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's (EUI) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or 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 (ID RA19) by the latest time(s) for receipt of proxy appointments specified in this notice. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp 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.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI 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(s), 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 service provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

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.

• 7 The above statement as to proxy rights does not apply to a person who receives this notice of general meeting as a person nominated to enjoy "information rights" under Section 146 of the Companies Act 2006. If you have been sent this notice of meeting because you are such a nominated person, the following statements apply: (a) you may have a right under an agreement between you and the member of the company by whom you were nominated to be appointed or to have someone else appointed as a proxy for this general meeting; and (b) if you have no such right or do not wish to exercise it, you may have a right under such an agreement to give instructions to that member as to the exercise of voting rights.
• 8 A copy of this notice, and the other information required by Section 311A of the Companies Act 2006, can be found at www.nvm.co.uk/n2vctgmnov2011.
• 9 Any member attending the meeting has the right to ask questions.
• 10 You may not use any electronic address provided either in this notice or any related documents (including the form of proxy) to communicate with the company for any purposes other than those expressly stated.

Northern 2 VCT PLC

Form of Proxy for the General Meeting on 23 November 2011

I/We ………………………………………………………………………………………………………………………………………………………………… (block capitals please) of ……………………………………………………………………………………………………………………………………………………………………. being a member of Northern 2 VCT PLC, hereby appoint (see notes 1 and 2) ………………………………………………………………………………………………………………………………………………………………………. or failing him/her the chairman of the meeting to be my/our proxy and exercise all or any of my/our rights to attend, speak and vote for me/us in respect of my/our voting entitlement on my/our behalf at the general meeting of the company to be held on 23 November 2011, notice of which was sent to shareholders on 28 October 2011, and at any adjournment thereof. The proxy will vote as indicated below in respect of the resolutions set out in the notice of meeting: Resolution For Against Vote withheld That the share premium account of the Company be reduced by £25 million. Please indicate by placing an X in this box if this proxy appointment is one of multiple appointments being made (see note 2 below) Signed: ……………………………………………………………………………….. Date: ………………………………………………..2011 NOTES 1 Every member has the right to appoint some other person(s) of his/her choice, who need not be a member, as his/her proxy to exercise all or any of his/her rights to attend, speak or vote on his/her behalf at the meeting. A member wishing to appoint a person other than the chairman of the meeting as proxy should insert the name of such person in the space provided. If the proxy is being appointed in relation to less than your full voting entitlement, please enter alongside the proxy holder's name the number of shares in relation to which they are authorised to act as your proxy. If left blank your proxy will be deemed to be authorised in respect of your full voting entitlement (or if this proxy form has been issued in respect of a designated account for a shareholder, the full voting entitlement for that designated account). Any alteration or deletion must be signed or initialled. 2 A member may appoint more than one proxy in relation to a meeting, provided that the proxy is appointed to exercise the rights

• attached to a different share or shares held by him/her. To appoint more than one proxy, please contact Equiniti Limited at Aspect House, Spencer Road, Lancing BN99 6ZR for (an) additional form(s), or you may photocopy this form. Please indicate alongside the proxy holder's name the number of shares in relation to which the proxy holder is authorised to act as your proxy. Please also indicate by placing an X in the box provided if the proxy instruction is one of multiple instructions being given. All forms must be signed and returned together in the same envelope.
• 3 Use of the form of proxy does not preclude a member from attending and voting in person.
• 4 Where the form of proxy is executed by an individual it must be signed by that individual or his or her attorney.
• 5 Where the form of proxy is executed by joint shareholders it may be signed by any of the members, but the vote of the member whose name stands first in the register of members of the company will be accepted to the exclusion of the votes of the other joint holders.
• 6 Where the form of proxy is executed by a corporation it must be either under its seal or under the hand of an officer or attorney duly authorised.
• 7 If the form of proxy is signed and returned without any indication as to how the proxy shall vote, the proxy will exercise his/her discretion as to whether and how he/she votes, as he/she will on any other matters to arise at the meeting.
• 8 To be valid, the form of proxy, together with, if applicable, the power of attorney or other authority under which it is signed, or a certified copy thereof, must be received by Equiniti Limited at Aspect House, Spencer Road, Lancing BN99 6ZR not later than 11.00am on Monday 21 November 2011.
• 9 The "vote withheld" option is provided to enable a member to abstain from voting on the resolution; however, it should be noted that a "vote withheld" is not a vote in law and will not be counted in the calculation of the proportion of the votes "for" and "against" the resolution.