Realm Therapeutics plc (Form: F-1, Received: 05/23/2018 06:06:57)

Warrants

Outstanding

Exercise

Price

Maturity

Date

Issued in December 2013

49 pence (66 cents)

December 3, 2018

Issued in October 2017

58 pence (78 cents)

April 10, 2020

As filed with the United States Securities and Exchange Commission on May 22, 2018.

Registration Statement No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________

Form F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

______________________________________________

Realm Therapeutics plc

(Exact name of registrant as specified in its charter)

______________________________________________



England and Wales	2834	Not applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

______________________________________________

267 Great Valley Parkway

Malvern, PA 19355

United States of America

Tel: +1 484 321 2700

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

______________________________________________

Realm Therapeutics, Inc.

267 Great Valley Parkway

Malvern, PA 19355

United States of America

Tel: +1 484 321 2700

(Name, address, including zip code, and telephone number, including area code, of agent for service)

______________________________________________

Copies to:



Joshua A. Kaufman Jeffrey P. Libson Divakar Gupta Cooley LLP 1114 Avenue of the Americas New York, New York 10036 +1 212 479 6000		Ed Lukins Ed Dyson Cooley (UK) LLP Dashwood 69 Old Broad Street London EC2M 1QS United Kingdom +44 20 7785 9355

______________________________________________

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after this registration statement is declared effective.

______________________________________________

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. þ

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act. Emerging growth company þ

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. þ


†	The term “new or revised financial accounting standards” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.



Title of Each Class of Securities to be Registered		Amount to be Registered	Proposed Maximum Offering Price Per Unit ⁽²⁾	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Ordinary shares, nominal value of £0.10 per share ⁽¹⁾		126,857,901	$0.5261	$66,739,942	$8,309.12
(1)	The registrant is filing this registration statement in part in respect of its obligations under a Registration Rights Agreement, dated September 21, 2017, concerning an aggregate of 66,396,485 ordinary shares (of which the registrant is hereby registering 66,254,529 of such ordinary shares) that it privately placed with investors on October 12, 2017 and an aggregate of 26,558,600 ordinary shares issuable upon the exercise of warrants issued on the same date to such investors. The registrant is also registering hereby an aggregate of 34,044,772 ordinary shares held by other shareholders identified herein. All ordinary shares offered and sold in the United States will be in the form of American Depositary Shares, or ADSs, with each ADS representing 25 ordinary shares. ADSs issuable upon deposit of the ordinary shares registered hereby will be registered pursuant to a separate registration statement on Form F-6.
(2)	Calculated pursuant to Rule 457(c) based on the average of the high and low trading prices on AIM, a market operated by the London Stock Exchange plc, of the registrant’s ordinary shares on May 18, 2018, converted into U.S. dollars at the exchange rate in effect on such date.

The information contained in this preliminary prospectus is not complete and may be changed. No securities may be sold pursuant to this prospectus until the registration statement filed with the Securities and Exchange Commission with respect to such securities has been declared effective thereby. This preliminary prospectus is not an offer to sell these securities and no offers to buy these securities are being solicited in any jurisdiction where their offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 22, 2018

PRELIMINARY PROSPECTUS

126,857,901 Ordinary Shares

Represented by American Depositary Shares

Realm Therapeutics plc intends to apply to list American Depositary Shares, or ADSs, on the Nasdaq Global Market, or Nasdaq, under the symbol “RLM”, with each ADS representing 25 of our ordinary shares. We expect ADSs representing our ordinary shares to begin trading on Nasdaq on or about , 2018. Our ordinary shares are currently traded on AIM, a market operated by the London Stock Exchange, under the ticker symbol “RLM”. The closing price of our ordinary shares on such market on , 2018 was £ . We have appointed Citibank, N.A. to act as the depositary for the ADSs representing our ordinary shares, including the Registered Shares, as defined below. Upon the effectiveness of the registration statement of which this prospectus forms a part, holders of ordinary shares are expected to be able to deposit such shares with the depositary in exchange for ADSs representing such shares at the ratio referred to in the first sentence of this paragraph. ADSs representing the ordinary shares registered hereby, as well as all of our other outstanding ordinary shares, will be freely tradeable on the effective date of the registration statement of which this prospectus forms a part.

We are filing the registration statement of which this prospectus forms a part in part in respect of its obligations under a Registration Rights Agreement, dated September 21, 2017, concerning an aggregate of 66,396,485 ordinary shares (of which the registrant is hereby registering 66,254,529 of such ordinary shares) that it privately placed with investors on October 12, 2017 and an aggregate of 26,558,600 ordinary shares issuable upon the exercise of warrants issued on the same date to such investors. The registrant is also registering pursuant to such registration statement an aggregate of 34,044,772 ordinary shares held by other shareholders identified herein. All such shareholders are identified in this prospectus and referred to as the Registered Holders. We refer to the aggregate 126,857,901 ordinary shares registered hereby as the Registered Shares. Any Registered Shares offered and sold in the United States by the Registered Holders will be in the form of ADSs. The Registered Holders are also permitted to sell ordinary shares not represented by ADSs in private transactions, including on AIM, a market operated by the London Stock Exchange, which resales are not covered by this prospectus. Unlike an initial public offering, any disposition by the Registered Holders of the Registered Shares represented by ADSs is not being underwritten by any investment bank. The Registered Holders may, or may not, elect to dispose of Registered Shares represented by ADSs as and to the extent that they may individually determine. Such dispositions, if any, will be made through brokerage transactions on Nasdaq or other securities exchanges in the United States at prevailing market prices. See the section entitled “Plan of Distribution.” We will not receive proceeds from any disposition of Registered Shares in the form of ADSs by Registered Holders.

We are an “emerging growth company” as defined under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See the section entitled “Prospectus Summary — Implications of Being an Emerging Growth Company and a Foreign Private Issuer” for additional information.

Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Investing in ADSs representing our ordinary shares involves a high degree of risk. Before buying any ADSs representing our ordinary shares you should carefully read the discussion of material risks of investing in such securities in “ Risk Factors ” beginning on page 9 of this prospectus.

TABLE OF CONTENTS



	Page
MARKET, INDUSTRY AND OTHER DATA	iii
ABOUT THIS PROSPECTUS	iii
PRESENTATION OF FINANCIAL INFORMATION	iii
PROSPECTUS SUMMARY	1
THE REGISTERED SHARES	7
SUMMARY CONSOLIDATED FINANCIAL DATA	8
RISK FACTORS	9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	35
USE OF PROCEEDS	37
DIVIDEND POLICY	38
PRICE RANGE OF OUR ORDINARY SHARES	39
SELECTED CONSOLIDATED FINANCIAL DATA	40
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	41
BUSINESS	52
MANAGEMENT	83
RELATED PARTY TRANSACTIONS	91
PRINCIPAL AND REGISTERED HOLDERS	93
DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION	97
DESCRIPTION OF AMERICAN DEPOSITARY SHARES	115
SHARES AND ADSS ELIGIBLE FOR FUTURE SALE	127
MATERIAL INCOME TAX CONSIDERATIONS	129
PLAN OF DISTRIBUTION	139
EXPENSES OF THIS OFFERING	142
LEGAL MATTERS	143
EXPERTS	144
SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES	145
WHERE YOU CAN FIND ADDITIONAL INFORMATION	147
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

We are responsible for the information contained in this prospectus and any free writing prospectus that we may prepare or authorize. We have not authorized anyone to provide you with different or additional information, and we do not take any responsibility for any other information that others may give you. We are not making an offer to sell ADSs representing our ordinary shares in any jurisdiction where the offer or sale thereof is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or the sale of any ADSs representing our ordinary shares.

For investors outside the United States: Neither we nor the Registered Holders have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction other than the United States where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus outside the United States.

We are incorporated under the laws of England and Wales. Under the rules of the U.S. Securities and Exchange Commission, we are currently eligible for treatment as a “foreign private issuer.” As a foreign private issuer, we will not be required to file periodic reports and financial statements with the U.S. Securities and Exchange Commission as frequently or as promptly as domestic registrants whose securities are registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

MARKET, INDUSTRY AND OTHER DATA

This prospectus contains estimates, projections and other information concerning our industry, our business and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies and similar data prepared by market research firms and other third parties such as investment banking analysts, industry, medical and general publications, government data and similar sources. In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors.” These and other factors could cause our future performance to differ materially from our assumptions and estimates. See the section entitled “Special Note Regarding Forward-Looking Statements.”

ABOUT THIS PROSPECTUS

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to the terms “Realm,” “Realm Therapeutics,” “Realm Therapeutics plc,” “the company,” “we,” “us” and “our” refer to Realm Therapeutics plc together with its subsidiaries.

We own various trademark registrations and applications, and unregistered trademarks. All other trade names, trademarks and service marks of other companies appearing in this prospectus are the property of their respective holders. Solely for convenience, the trademarks and trade names in this prospectus may be referred to without the ^® and ^™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend to use or display other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

PRESENTATION OF FINANCIAL INFORMATION

Our reporting currency is the U.S. dollar given the majority of our operations are located in the United States and transactions are denominated in U.S. dollars. The functional currency of Realm Therapeutics plc, the registrant, is pounds sterling, and its assets and liabilities are translated at the rate of exchange at year-end, while the statements of operations are translated at the average exchange rates in effect during the year. The net effect of these translation adjustments is shown as a component of accumulated other comprehensive income (loss). In this prospectus, we present our consolidated financial statements in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, as issued by the Financial Accounting Standards Board, or FASB.

We are a public limited company incorporated and domiciled in the United Kingdom, and registered in England and Wales, with our shares publicly traded on the Alternative Investment Market of the London Stock Exchange, or AIM. As required by AIM, we also prepare and issue annual and interim financial statements in accordance with International Financial Reporting Standards, or IFRS, as adopted by the European Union. Readers of this prospectus should note that there may be certain differences between the presentation of our financial position, results of operations and cash flows under IFRS and U.S. GAAP accounting standards.

iii

PROSPECTUS SUMMARY

The following summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in ADSs representing our ordinary shares. You should read the entire prospectus carefully, including “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and the related notes included in this prospectus before making an investment decision.

Overview

We are a clinical-stage biopharmaceutical company focused on developing novel therapeutics for immune-mediated diseases in adults and children. We are using our proprietary immunomodulatory platform technology — a high concentration, stabilized formulation of hypochlorous acid, or HOCl — to develop prescription, topical drugs for the treatment of Atopic Dermatitis, or AD, and other dermatological indications, including Acne Vulgaris, or common Acne, Psoriasis and certain additional indications. Our lead product candidate, PR022, is a non-alcohol based topical gel containing the active ingredient HOCl for the treatment of AD that is in a Phase 2 clinical trial, from which we expect to report top-line data in the third quarter of 2018. Our platform technology, as demonstrated by pre-clinical studies, has the ability to modulate key cytokines that are implicated in multiple dermatological conditions. Cytokines are small protein molecules that aid cell communication in immune responses. This modulation leads us to believe that our platform technology may have broad-spectrum immunomodulatory properties that impact both the innate and adaptive immune system. We are also evaluating, for acquisition or in-licensing, other novel therapeutics for the treatment of immune-mediated diseases with significant unmet medical needs.

Immunity is the equilibrium between immune activation and suppression that permits the body to function in a normal and healthy way. Cytokines, including interleukins, or ILs, provide the signaling pathways that orchestrate the complex immune responses of the body. Immune dysregulation occurs when the body fails to activate or inactivate the immune system appropriately. We believe that cytokines may represent an important frontier in medicine. There are many ways in which immunomodulatory drugs can ameliorate a dysregulated immune response by impacting cytokines. Specifically, cytokines are being investigated in the fields of inflammation and immunology, including diseases such as AD, for the purpose of identifying those to be targeted in the development of drugs.

We believe that HOCl formulations developed with our proprietary technology have the potential to be first in class immunomodulatory treatments. HOCl is known as an anti-microbial molecule that is produced naturally in the body as part of the oxidative burst process, an innate immune response to infectious microbial agents. We have demonstrated that HOCl at higher concentrations acts as an immunomodulatory agent, capable of downregulating many key cytokines associated with inflammation and disease. Our proprietary technology includes a specialized method for manufacturing high purity HOCl, which yields high concentration formulations that are stabilized for certain periods of time within specific pH ranges. We have ongoing development efforts to enhance the period of time over which HOCl is stabilized in a certain concentration. We possess significant know-how based in part on the four members of our research and development team who are experts in HOCl technology, with an average of 21 years of experience working with HOCl. We possess patents granted to us in the United States for composition of matter for the stabilized formulation of HOCl, methods of use and methods of manufacturing, as well as international patent protection and in-licensed HOCl technology related to our manufacturing process.

for moderate to severe AD. We expect these products will comprise a large portion of the market at the time that our product is anticipated to be approved (if it is in fact approved), and therefore we view the prospective launch of PR022 as taking market share from these products at that point in time (if PR022 is approved for marketing). Symptoms of AD can include rashes; dry, scaly, red skin; open, crusty and weepy sores, which can become infected; and severe and persistent pruritus, which is commonly known as itch. The current standard of care, when emollients and moisturizers no longer adequately control AD, is the use of topical steroids or injectable monoclonal antibodies for more severe cases. Steroids are known to have potentially harmful side effects. Additionally, we believe that our product candidate, which is formulated for topical application, may provide a more convenient solution than injectables. PR022 is currently in a Phase 2 clinical trial, from which we expect to report top-line data in the third quarter of 2018.

PR022’s clinical development is supported by pre-clinical studies that have shown downregulation of key cytokines associated with multiple dermatological conditions and that supported initiation of human drug clinical trials. In pre-clinical studies of PR022 in mouse models of AD, various high concentrations of HOCl have demonstrated the ability to both prevent and treat inflammatory lesions and reduce associated scratching bouts, similar to the effect of betamethasone, a high potency steroid. Importantly, the mice treated with HOCl topical gel did not demonstrate the same level of skin thinning or weight-loss, which are common immunosuppressive side effects of steroids. In-vitro pre-clinical studies have shown that HOCl results in a dose-dependent decrease of IL-8 and TSLP pro-inflammatory cytokine levels in keratinocytes cells and TNF-α and IL-12 pro-inflammatory cytokine levels in dendritic cells.

We previously marketed an FDA-cleared 510(k) medical device product called Aurstat, which was manufactured at 0.045% HOCl. Aurstat is indicated for the management of itch, pain and burning experienced with AD and other dermatoses. Aurstat has a similar formulation to PR022. Clinical data published by an investigator found that approximately 73.7% of subjects with mild to moderate AD treated with Aurstat experienced reduced pruritis on Day 1 and through the full treatment period of the three-day study as compared to 30.0% of the subjects in the untreated group. Approximately 20,000 prescriptions were written for Aurstat while it was marketed by a third party in the United States. We decided to remove Aurstat from the market to develop HOCl as an FDA approved prescription drug. Based on this and other supporting pre-clinical data, we believe that PR022 may have utility for the treatment of AD generally, and pruritus specifically. Unlike an FDA-cleared 510(k) medical device that demonstrates substantial equivalence to a marketed device, an FDA approved prescription drug passes through a more rigorous application process in a New Drug Application. From a business perspective, we believe that the potential safety and efficacy claims that we may be able to make regarding a prescription drug upon approval by the FDA (if and when obtained) versus a 510(k) medical device would allow for better acceptance and use by physicians, improved marketability to patients and potentially greater insurance reimbursements from third party payors.

The second indication we are pursuing is Acne Vulgaris, or common Acne. We plan to initiate a clinical study in Acne in the first quarter of 2019, using a topical formulation based on our proprietary platform technology, following submission of an investigational new drug, or IND, application in the fourth quarter of 2018. Acne is the most common chronic skin condition in the United States, affecting approximately 45 million people, or 14% of the population, and is characterized by the formation of lesions on the face and neck but also extending to other parts of the body. Analysts value the prescription market for Acne at close to $4 billion in the United States in 2017, with continued growth expected. We are developing a new product candidate, RLM023, a topical formulation of HOCl that is optimized for Acne. We believe that a formulation based upon our proprietary HOCl technology may offer a promising treatment for Acne due to HOCl’s anti-inflammatory and anti-microbial properties. Pre-clinical in vivo and in vitro studies using our HOCl formulation have demonstrated a reduction in the expression of pro-inflammatory cytokines such as TNF-α, IL 1β, IL-8 and IL-12, which have been reported to be key cytokines associated with Acne pathogenesis.

In addition, we are evaluating the use of our platform technology for the treatment of Psoriasis, a common skin disorder characterized by the formation of inflamed, raised plaques that shed scales derived from excessive growth of skin epithelial cells. Psoriasis is the largest indication in dermatology with, according to analyst estimates, approximately $6 billion in sales in the United States in 2017, which can largely be attributed to biologics. Research has identified key cellular and molecular pathways of inflammation that contribute to disease pathogenesis of Psoriasis. Formulations of our proprietary platform technology have been shown in vitro and in vivo to downmodulate pro-inflammatory cytokines TNF-α, IL-6, and IL-12, which have been reported at elevated levels in patients with Psoriasis and correlated to disease severity. Our ongoing in vitro pre-clinical studies and research coupled with the results of our AD study will inform the next steps in our development of a potential treatment of Psoriasis.

AD, Acne, Psoriasis and other dermatological conditions have been increasingly recognized as serious diseases, many of which are associated with chronic pruritus, which has a significant impact on quality of life including severe sleep disturbance for numerous patients. As demonstrated in the study of Aurstat in AD, as well as our in vivo and in vitro pre-clinical studies, our platform technology has the potential to deliver anti-pruritic, or itch reduction, effects.

We have a highly experienced and well-regarded management team that has gained significant industry know-how through experience at leading biopharmaceutical companies, including GSK, Johnson & Johnson, Novartis and Intercept. Additionally, our Chief Medical Officer is an immunologist with significant experience in studying immune-mediating diseases in various therapeutic areas (including oncology and hematological diseases) and has advanced several drug candidates from pre-clinical development through approval and commercialization.

Recent Developments

In March 2018, we announced that in a Phase 2 clinical trial for Allergic Conjunctivitis, or AC, an ophthalmic disease, PR013, a topical solution containing HOCl as its active ingredient, did not demonstrate efficacy. As a result, we are no longer pursuing the clinical development of PR013. AC and AD have different disease pathologies . AC is caused by an allergen-induced rapid inflammatory response in which allergens interact. In contrast, AD is a complex inflammatory cutaneous disorder characterized by immune-mediated inflammation and epidermal barrier dysfunction. The design of our Phase 2 clinical trials for AC and AD were also materially different. In the AC trial, the response to the drug was measured at multiple points, all within 20 minutes of treatment, and in the AD trial, the response is measured after 28 days.

Corporate Information

We were initially formed as a private limited company under the laws of England and Wales in April 2006 under the name PuriCore plc. In December 2016, we changed our name to Realm Therapeutics plc to more accurately reflect our strategic focus and direction. Our ordinary shares were initially listed on the main market of the London Stock Exchange in June 2006. The listing was transferred to AIM, a market operated by the London Stock Exchange, in December 2014 and the ordinary shares currently trade thereon under the symbol “RLM”.

Our corporate headquarters are located at 267 Great Valley Parkway, Malvern, PA 19355, United States of America, where the telephone number is +1 484 321 2700. Our registered office is located at c/o CMS Cameron McKenna LLP, Cannon Place, 78 Cannon Street London EC4N 6AF, United Kingdom, where the telephone number is +44.207.367.3000. Our website address is www.realmtx.com . The information contained on, or that can be accessed from, our website does not form part of this prospectus. Our agent for service of process in the United States is Realm Therapeutics, Inc., 267 Great Valley Parkway, Malvern, PA 19355, United States of America.

On October 12, 2017, we announced that we completed a private placement of £19.3 million, comprising 66,396,485 ordinary shares and warrants to purchase an aggregate of 26,558,600 shares with

U.S. and U.K. healthcare specialist funds including OrbiMed, BVF Partners, RA Capital Management, Abingworth BioEquities and Polar Capital, as well as certain existing investors. The placement included a registration rights agreement requiring us to register the resale of the shares representing the ordinary shares acquired in the private placement as well as the shares issuable upon exercise of warrants sold in conjunction therewith following the initial listing of our ordinary shares (in the form of ADSs) on a U.S. securities exchange. The registration statement of which this prospectus forms a part is being filed in part pursuant to such registration rights agreement.

Risks Associated with Our Business

Our business is subject to a number of risks of which you should be aware before making an investment decision. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth in the section titled “Risk Factors” before deciding whether to invest in ADSs representing our ordinary shares. These important risks include, but are not limited to, the following:


•	Clinical product development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.


•	We have incurred significant losses and negative cash flow since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability.


•	We will be required to raise additional capital to support our drug development strategy, which may cause dilution to or adversely affect the rights of holders of ADSs representing our ordinary shares and our ordinary shares, restrict our operations or require us to relinquish rights to our technologies or product candidates. Additionally, we may not be able to access capital on favorable terms.

•

All of our current product candidates contain the same active pharmaceutical ingredient, or API, which was also the API in our former product candidate for the treatment of Allergic Conjunctivitis, or AC, which did not demonstrate efficacy in its Phase 2 clinical trial. Additionally, given they contain the same API, we may not be able to develop products for our target indications that are sufficiently differentiated in their formulations.


•	HOCl is inherently unstable, which may affect the marketability of our product candidates.


•	We only have one product candidate, PR022, in clinical trials at this time.


•	We are subject to significant competition in the indications which we are pursuing and also with respect to our underlying HOCl platform technology.


•	If we are unable to obtain or protect intellectual property rights related to any of our product candidates, we may not be able to compete effectively in our markets.


•	We are dependent on third parties to support our drug development efforts.


•	To date, there has been no public market for ADSs representing our ordinary shares, and an active market may not develop in which investors can resell such ADSs.


•	If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of ADSs representing our ordinary shares or our ordinary shares and the trading volume thereof could decline.

•

We currently qualify as a foreign private issuer and an emerging growth company. As a result, we will not be subject to the same level of reporting and corporate governance obligations applicable a U.S. domestic public company that is not an emerging growth company. We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and Nasdaq’s corporate governance requirements applicable to a domestic issuer, and cause us to incur significant incremental legal, accounting and other expenses.


•	We believe that we will likely be classified as a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for the taxable year ended December 31, 2017, and we expect to continue to be a PFIC for our current taxable year resulting in potential adverse consequences to U.S. holders of ADSs representing our ordinary shares or our ordinary shares.

Implications of Being an Emerging Growth Company and a Foreign Private Issuer

Emerging Growth Company

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As such, we may take advantage of certain exemptions from various reporting requirements that are applicable to other publicly traded entities that are not emerging growth companies. These exemptions include:


•	the option to present only two years of audited financial statements and related discussion in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus;


•	not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002;


•	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);


•	not being required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “say-on-golden parachutes;” and


•	not being required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, for complying with new or revised accounting standards. As a result, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosing to irrevocably opt out of this extended transition period and will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Under federal securities laws, our decision to opt out of the extended transition period is irrevocable.

We will remain an emerging growth company until the earliest of: (1) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion; (2) the last day of 2023; (3) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur on the last day of any fiscal year that the aggregate worldwide market value of our common equity held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second

fiscal quarter; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during any three year period.

Foreign Private Issuer

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will report under the Exchange Act as a non-U.S. company with foreign private issuer status. Even after we no longer qualify as an emerging growth company, as long as we qualify as a foreign private issuer under the Exchange Act we will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:


•	the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;


•	the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and


•	the rules under the Exchange Act requiring the filing with the U.S. Securities and Exchange Commission, or the SEC, of quarterly reports on Form 10-Q containing unaudited financial and other specific information, and current reports on Form 8-K upon the occurrence of specified significant events.

Foreign private issuers are also are exempt from certain more stringent executive compensation disclosure rules. Thus, even if we no longer qualify as an emerging growth company, but remain a foreign private issuer, we will continue to be exempt from the more stringent compensation disclosures required of companies that are neither an emerging growth company nor a foreign private issuer.

THE REGISTERED SHARES



Proposed Nasdaq Global Market listing		We have applied to list ADSs representing our ordinary shares on the Nasdaq Global Market under the symbol “RLM”.

AIM trading symbol for our ordinary shares		“RLM”.

Registered Shares being registered on behalf of the Registered Holders		126,857,901 ordinary shares, represented by an aggregate of approximately 5,074,316 ADSs.

Ordinary shares issued and outstanding immediately before and after the effectiveness of the registration statement of which this prospectus forms a part		116,561,917 ordinary shares.

American Depositary Shares		Each ADS represents 25 ordinary shares, nominal value £0.10 per share. Holders of ADSs have the rights of an ADS holder or beneficial owner (as applicable) as provided in the deposit agreement amongst us, the depositary and holders and beneficial owners of ADSs from time to time. To better understand the terms of ADSs representing our ordinary shares, see the section entitled “Description of American Depositary Shares.” We also encourage you to read the deposit agreement, the form of which is filed as an exhibit to the registration statement of which this prospectus forms a part.

Depositary		Citibank, N.A.

Use of proceeds		We will not receive proceeds from the disposition, if any, of Registered Shares in the form of ADSs by the Registered Holders.

Risk factors		See the section entitled “Risk Factors” and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in ADSs representing our ordinary shares.

Unless otherwise stated in this prospectus, the number of our ordinary shares set forth herein is as of March 31, 2018 and is based on 116,561,917 ordinary shares issued and outstanding but excludes: 26,917,173 ordinary shares reserved for issuance pursuant to the terms of outstanding warrants, and 11,264,808 ordinary shares reserved for issuance upon the exercise of outstanding options under our Equity Incentive Plan.

SUMMARY CONSOLIDATED FINANCIAL DATA

The following tables set forth, for the periods and as of the dates indicated, our summary consolidated financial data. The consolidated statements of operations data for the years ended December 31, 2016 and 2017 and the consolidated balance sheet data as of December 31, 2017 is derived from our audited consolidated financial statements appearing elsewhere in this prospectus. Our audited consolidated financial statements included in this prospectus have been prepared in accordance with U.S. GAAP as issued by the Financial Accounting Standards Board, or FASB. You should read this data together with our consolidated financial statements and related notes included elsewhere in this prospectus and the information under the captions “Selected Consolidated Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our historical results are not necessarily indicative of our future results.



	Years Ended December 31,
(in thousands except share and per share data)	2016			2017
Consolidated statement of operations data:
Revenues	$	867		$	1,121
Cost of revenues	121			—
	746			1,121
Operating expenses:
Research and development	4,805			8,189
General and administrative	3,248			3,622
	8,053			11,811
Loss from operations	(7,307		)	(10,690		)
Interest income	3			58
Loss from continuing operations before income taxes	(7,304		)	(10,632		)
Income tax benefit	2,230			108
Net loss from continuing operations	(5,074		)	(10,524		)
Net income from discontinued operations, net of tax expense	5,156			—
Net income (loss)	$	82		$	(10,524	)

Net income (loss) per ordinary share - basic and diluted:
Loss from continuing operations	$	(0.10	)	$	(0.16	)
Income from discontinued operations	0.10			—
Net income (loss) per ordinary share	$	0.00		$	(0.16	)

Weighted average ordinary shares - basic and diluted	50,139,121			65,081,903



	As of December 31, 2017
(in thousands)
Consolidated balance sheet data:
Cash, cash equivalents and marketable securities	$	33,853
Working capital	$	31,631
Total liabilities	$	2,911
Total shareholders’ equity	$	32,197

RISK FACTORS

Investing in ADSs representing our ordinary shares involves a high degree of risk. Before deciding whether to invest, you should carefully consider the risks described below, and all other information contained in this prospectus, including our consolidated financial statements and the related notes included elsewhere in this prospectus. The occurrence of any of the events or developments described below could harm our business, financial condition, results of operations and growth prospects. In such an event, the market price of ADSs representing our ordinary shares or our ordinary shares could decline and you may lose all or part of your investment.

Risks Relating to Our Business and Drug Development Strategy

We have incurred significant losses and negative cash flow since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability.

We are a clinical stage drug development company. Since inception, we have incurred significant net losses and negative cash flows from operations. We incurred net losses from continuing operations of $5.1 million and $10.5 million and negative cash flows from continuing operations of $6.7 million and $9.5 for the years ended December 31, 2016 and 2017, respectively. As of December 31, 2017, we had an accumulated deficit of $189.8 million. We have no pharmaceutical products approved for commercialization from which to generate revenue, and our only source of revenue is the royalty stream from Vashe, which in 2017 was $1.1 million. We expect to continue to incur significant expenses and operating losses over the next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially as we:


•	continue our ongoing clinical trials evaluating PR022 for the treatment of Atopic Dermatitis, or AD, as well as initiate and complete additional clinical trials, as needed;


•	continue development of and pursue regulatory approvals for our product candidates for the treatment of Acne and Psoriasis;


•	seek to develop additional product candidates based upon our proprietary technology;


•	ultimately establish a commercialization infrastructure and scale up external manufacturing and distribution capabilities to commercialize any product candidates for which we may obtain regulatory approval;


•	seek to in-license or acquire additional product candidates for development;


•	adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;


•	maintain, expand and protect our intellectual property portfolio;


•	hire additional clinical, manufacturing, scientific, operational, financial, information technology and other personnel; and


•	incur additional legal, accounting and other expenses in operating as a U.S. public company in the United States and the United Kingdom.

To become and remain profitable, we must succeed in developing and eventually commercializing product candidates that generate significant revenue. This will require us to be successful in a range of challenging activities, including completing pre-clinical testing and clinical trials of our product candidates, obtaining regulatory approval, and manufacturing, marketing and selling any product candidates for which we may obtain regulatory approval, as well as discovering, developing and / or acquiring additional

product candidates. We may never succeed in these activities and, even if we do, may never generate revenue that is significant enough to achieve profitability.

In cases where we are successful in obtaining regulatory approval to market one or more of our product candidates, our revenue will be dependent, in part, upon the size of the markets in the territories for which we gain regulatory approval, the accepted price for the product, the ability to obtain coverage and reimbursement, our label claims, and whether we own the commercial rights for that territory. If the number of our addressable patients is not as significant as we estimate, the indication approved by regulatory authorities is narrower than we expect, or the treatment population is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of such products, even if approved.

Because of the numerous risks and uncertainties associated with product development, we are unable to accurately predict the timing or amount of expenses or when, or if, we will be able to achieve profitability. If we are required by regulatory authorities to perform studies in addition to those expected, or if there are any delays in the initiation and completion of our clinical trials or the development of any of our product candidates, our expenses could increase.

Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to raise capital, expand our business, maintain our development efforts, obtain product approvals, diversify our offerings or continue our operations. A decline in the value of our company could also cause you to lose all or part of your investment in our ordinary shares and ADSs.

We will be required to raise additional capital to support our drug development strategy, which may cause dilution to or adversely affect the rights of holders of ADSs representing our ordinary shares and our ordinary shares, restrict our operations or require us to relinquish rights to our technologies or product candidates.

We had cash, cash equivalents and marketable securities of $33.9 million at December 31, 2017. The costs associated with developing, testing and obtaining regulatory approval for drugs are significant, and the timelines for obtaining regulatory approvals for drugs are lengthy and uncertain. We expect to continue to incur significant expenses and operating losses over the next several years associated to support our clinical development program, the costs of which are subject to the factors set forth in the preceding risk factor. The following factors, among others, may cause our future funding requirements to be greater than anticipated or to accelerate the need for funds:


•	unforeseen developments during pre-clinical trials, including toxicology studies;


•	unfavorable or unexpected events related to or the outcomes of clinical trials, including delays in enrollment;


•	delays in the timing of receipt of required regulatory approvals or clearances for next phases of clinical trials;


•	broader than anticipated safety or efficacy trials imposed by regulators;


•	unanticipated expenses in research and development;


•	unanticipated expenses or delays in the manufacture of clinical trial material;


•	the success or failure of existing or potential new therapies for the treatment of diseases being targeted by us;


•	unanticipated expenses in defending or fortifying intellectual property rights;


•	lack of financial resources to adequately support operations;


•	the need to respond to technological changes and competition;


•	unforeseen problems in attracting and retaining qualified personnel;


•	claims that might be brought in excess of our insurance coverage;


•	warranty claims related to the sale of our Supermarket Retail business in October 2016; or


•	imposition of penalties for failure to comply with regulatory guidelines.

Until such time, if ever, as we can generate substantial product revenues, we may finance our cash needs through securities offerings, debt financings, license and collaboration agreements, or other capital raising transactions. If we raise capital through equity securities offerings, your equity interest ownership in our company will be diluted, and the terms of the securities that we issue in such transaction may include liquidation or other preferences that adversely affect your rights as a holder of ADSs representing our ordinary shares or of our ordinary shares. Debt financing, if available, could result in fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, to acquire, sell or license intellectual property rights, to make capital expenditures, to declare dividends, or other operating restrictions. If we raise additional funds through collaboration or licensing agreements, we may have to relinquish valuable rights to our technologies, future revenue streams, or product candidates or grant licenses on terms that may not be favorable to us. In addition, we could also be required to seek funds through arrangements with collaborators or others at an earlier stage than otherwise would be desirable. Raising additional capital through any of these or other means could adversely affect our business and the holdings or rights of our security holders, and may cause the market price of ADSs representing our ordinary shares or our ordinary shares to decline.

Hypochlorous acid, or HOCl, based on our proprietary platform technology is the API in all of our current product candidates. Since our current pipeline does not contain product candidates other than those with HOCl as the API, we may be limited in our future product development efforts unless we in-license or acquire additional product candidates, products or technologies, which in any such case could be costly and / or unsuccessful. In March 2018, we announced that our Phase 2 clinical trial of PR013, a product candidate designed as a topical solution for AC, an ophthalmic disease, did not demonstrate efficacy. As a result, we are no longer pursing the clinical development of PR013. While we believe that there are significant differences between our Phase 2 clinical trials in AC and AD, PR013 contains the same API, as the other product candidates in our pipeline. There could be an actual or perceived impact on the likelihood of our other product candidates to be successful in their clinical trials. If the failure of our AC Phase 2 clinical trial is indicative of an underlying inefficacy of HOCl for indications other than AC, it could have a material adverse effect on the other product candidates in our pipeline and on our business, more generally.

HOCl is inherently unstable, which may affect the marketability of our product candidates.

HOCl is formed from the dissolution of chlorine in water. The form of chlorine changes from Cl ₂ to HOCl to OCL ^- depending on the pH of its environment. HOCl is the form in which chlorine predominantly exists at a pH range of 4.0 to 6.5. This presents a challenge to the stability, and therefore the marketability, of our product candidates. While we have been granted patents regarding the stabilization of HOCl, there can be no assurance that we will be able to develop and manufacture one or more formulations of HOCl that provide a sufficient shelf-life for the commercialization of product candidates based on such technology. To achieve a commercially viable shelf-life for such product candidates may

require a significant investment of money and resources, as well as time to develop, test and potentially patent, new formulations and packaging designs. Cold-chain maintenance may also be required to be instituted in the drug supply chain in order to maintain the necessary shelf life in order for our product candidates, if and when approved, to be competitive in the marketplace. Additionally, we may not be able to achieve a shelf-life comparable to the products of our competitors, which could result in higher costs to manufacture and distribute our products.

We only have one product candidate, PR022, in clinical trials at this time.

Our lead product candidate, PR022, is currently undergoing a Phase 2 clinical trial, from which we expect to report top-line data in the third quarter of 2018. Unsuccessful trial results would have a material adverse effect on the potential viability of PR022 as a product for the treatment of AD. In addition, given this concentration of clinical development risk in a single product candidate, unsuccessful trial results could also have a material adverse effect on the trading value of our ordinary shares and ADSs and our potential to develop the other product candidates in our pipeline due to the actual or perceived impact on the likelihood of our other product candidates being successful in prospective clinical trials.

Our current product candidate pipeline is focused solely on dermatological indications.

All of the candidates currently in our clinical development pipeline are targeted topical treatments for dermatological conditions. This focus on a particular subset of indications may not be sufficiently diversified to manage the risk that the failure of any specific clinical trial may implicate the prospective viability of the other product candidates in our clinical development pipeline. Furthermore, we may not be able to identify other therapeutic areas for which our platform technology has potential utility. If our efforts to develop our HOCl platform technology in dermatology are unsuccessful, and we are not able to pursue alternate indications, our business will be materially adversely affected.

In addition, we are aware of recent high profile failures of products in clinical trials for AD and Acne, which could negatively influence investor confidence in the ability of companies to develop new drugs for these indications and, therefore, their willingness to further invest in products being developed to treat AD or Acne.

It is not uncommon in any trial, but particularly in dermatology trials, for the placebo to demonstrate some level of efficacy, making it more difficult to demonstrate a clinically meaningful or statistically significant difference between the drug and placebo response, which is one of the key measures for determining success in a clinical trial. If we are not able to determine clinically meaningful or statistically significant responses in clinical trials of our product candidates, it will have a material adverse effect on our ability to obtain regulatory approvals to market our product candidates.

Clinical product development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.

In clinical development, the risk of failure for product candidates is high. It is impossible to predict when or if any of our product candidates will prove effective or safe in humans or will receive regulatory approval. Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete pre-clinical testing and then conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans.

The results of pre-clinical studies and early-stage clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through pre-clinical studies and initial clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Our future clinical trial results may not be successful.

Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of pre-clinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, pre-clinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in pre-clinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.

We have not completed all clinical trials required for the approval of any of our product candidates and we cannot assure you that any clinical trial that we are conducting, or may conduct in the future, will demonstrate adequate efficacy and safety to obtain regulatory approval to market our product candidates. We may experience numerous unforeseen events during or as a result of clinical trials that could delay or prevent our ability to receive marketing approval or commercialize our product candidates, including:


•	regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;


•	we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites or prospective contract research organizations, or CROs, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;


•	clinical trials of our product candidates may produce negative or inconclusive results, including failure to demonstrate statistical significance, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;


•	the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials or fail to return for post-treatment follow-up at a higher rate than we anticipate;


•	our product candidates may have undesirable side effects, cause adverse events, or AEs, or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the trials and in the case of AEs for us to incur losses as a result of claims, actions or settlements;


•	our current or future third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;


•	regulators or institutional review boards may require that we or our investigators suspend or terminate clinical development for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks;


•	the cost of clinical trials of our product candidates may be greater than we anticipate; and


•	the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient, delayed or inadequate.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the institutional review boards of the institutions in which such trials are being conducted, by the data safety monitoring board for such trial or by the FDA or other regulatory authorities. Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold,

unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. If we experience delays in the completion of, or termination of, any clinical trial of our product candidates, the commercial prospects of our product candidates will be harmed, and our ability to generate product revenues from any of these product candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may harm our business, financial condition and prospects significantly.

There are also a number of factors particular to the clinical development of our product candidate pipeline that could affect the timing and cost of development of our product candidates. The toxicology studies necessary to support the submission of an NDA for all of our product candidates have not yet been conducted and there is no certainty as to the outcome of these studies. In addition, the toxicology studies necessary to support the submission of an IND for our product candidates in development for the treatment of Acne or Psoriasis have not been completed and there is no certainty as to the outcome of these studies. In determining that we could complete a proof-of-concept study in Acne based on our currently available cash resources, we have made the key assumption that the FDA will permit us to skip a Phase 1 trial based on the fact that the intended product candidate for the Acne study contains the same active pharmaceutical ingredient, or API, that is used in the PR022 candidate used in our AD trial, and we were permitted by the FDA to go directly into a Phase 2 trial for AD. If it is necessary for us to conduct a Phase 1 trial for RLM023 for the treatment of Acne, then it will take longer and cost more than we currently expect to spend on the clinical development of this product candidate, and we may not have sufficient resources to complete the proof-of-concept study. Finally, many of the therapeutic areas being targeted by our pipeline candidates have a significant pediatric patient population. Clinical trials and commercialization of products involving a pediatric population carry a higher degree of risk than they otherwise would, given the potential liability associated with AEs involving children.

In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we are unable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not favorable or if there are safety concerns, we may:


•	be delayed in obtaining marketing approval for our product candidates;


•	not obtain marketing approval at all;


•	obtain approval for indications or patient populations that are not as broad as intended or desired;


•	obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;


•	be subject to additional post-marketing testing requirements; or


•	have the product removed from the market after obtaining marketing approval.

Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any of our pre-clinical studies or clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant pre-clinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize, or receive approval for, our product candidates.

Even if any of our product candidates receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, third party payors and others in the medical community necessary for commercial success.

If any of our product candidates receive marketing approval, they may nonetheless fail to gain sufficient market acceptance by physicians, patients, third party payors and others in the medical community. If our product candidates do not achieve an adequate level of acceptance, we may not generate significant revenue and we may not become profitable. The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including:


•	the efficacy, safety and potential advantages of any of our product candidates compared to alternative treatments;


•	our ability to offer our products for sale at competitive prices;


•	the stability, shelf life, convenience and ease of storage and administration compared to alternative treatments;


•	the willingness of the target patient population to try new treatments and of physicians to prescribe these treatments;


•	our ability to hire and retain a sales force in the United States, or to engage one or more third party distributors for our products;


•	the strength of marketing and distribution support;


•	the availability of third party coverage and adequate reimbursement for PR022 and any other product candidates;


•	the prevalence and severity of any side effects; and


•	any restrictions on the use of our products together with other medications.

If we are unable to establish sales, marketing and distribution capabilities for PR022 or any other product candidate that may receive regulatory approval, we may not be successful in commercializing those product candidates if and when they are approved.

We do not have sales or marketing infrastructure. To achieve commercial success for PR022 and any other product candidate for which we may obtain marketing approval, we will need to establish a sales and marketing organization or to engage one or more third party distributors for our products. In the future, we expect to build a focused sales and marketing infrastructure to market or co-promote some of our product candidates in the United States, if and when they are approved. There are risks involved with establishing our own sales, marketing and distribution capabilities. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch. If the commercial launch of a product candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. If we are unable to establish our own sales, marketing and distribution capabilities and are forced to enter into arrangements with, and rely on, third parties to perform these services, our revenue and our profitability, if any, are likely to be lower than if we had developed such capabilities ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively.

If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.

Even if we obtain regulatory approval for PR022 or any other product candidates, such product candidates will remain subject to ongoing regulatory oversight.

Even if we obtain any regulatory approval for PR022 or any other product candidates, such product candidates will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping and submission of safety and other post-market information. Any regulatory approvals that we receive for PR022 or any other product candidates may also be subject to Risk Evaluation and Mitigation Strategies, or REMS, limitations on the approved indicated uses for which the drug may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 trials, and surveillance to monitor the quality, safety and efficacy of the drug.

In addition, drug manufacturers and their facilities are subject to payment of user fees and continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements and adherence to commitments made in the NDA or foreign marketing application. If we, or a regulatory authority, discover previously unknown problems with a drug, such as AEs of unanticipated severity or frequency, or problems with the facility where the drug is manufactured or if a regulatory authority disagrees with the promotion, marketing or labeling of that drug, a regulatory authority may impose restrictions relative to that drug, the manufacturing facility or us, including requesting a recall or requiring withdrawal of the drug from the market or suspension of manufacturing.

If we fail to comply with applicable regulatory requirements following approval of PR022 or any other product candidates, a regulatory authority may:


•	issue an untitled letter or warning letter asserting that we are in violation of the law;


•	seek an injunction or impose administrative, civil or criminal penalties or monetary fines;


•	suspend or withdraw regulatory approval;


•	suspend any ongoing clinical trials;


•	refuse to approve a pending NDA or comparable foreign marketing application (or any supplements thereto) submitted by us or our strategic partners;


•	restrict the marketing or manufacturing of the drug;


•	seize or detain the drug or otherwise require the withdrawal of the drug from the market;


•	refuse to permit the import or export of product candidates; or


•	refuse to allow us to enter into supply contracts, including government contracts.

Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. The occurrence of any event or penalty described above may inhibit our ability to commercialize PR022 or any other product candidates and harm our business, financial condition, results of operations and prospects.

We may not be successful in our efforts to increase our pipeline, including by pursuing additional indications for our current product candidates, identifying additional indications for our proprietary platform technology or in-licensing or acquiring additional product candidates for dermatological or other indications.

A key element of our strategy is to build and expand our pipeline of product candidates, including by developing our HOCl platform technology for the treatment of additional indications. In addition, we intend to in-license or acquire additional product candidates for dermatological and other indications. We may not be able to develop or identify product candidates that are safe, tolerable and effective. Even if we are successful in continuing to build our pipeline, the potential product candidates that we identify, in-license or acquire may not be suitable for clinical development, including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval and achieve market acceptance.

The success of PR022 and our other product candidates will depend significantly on adequate reimbursement.

Our product candidates have neither been approved for reimbursement, nor have reimbursement rates for our product candidates been determined by commercial or government payors in the United States or elsewhere, since all of our product candidates remain in clinical development. Our success will depend in part on adequate reimbursement by such payors for PR022 for the treatment AD and of our other product candidates for their respective indications. Third party payors determine which treatments they will cover and establish reimbursement levels. Even if a third party payor covers a particular treatment, the reimbursement rate therefor may not be adequate. Reimbursement by a third party payor may depend upon a number of factors including whether a treatment is appropriate for the specific patient; is cost-effective; is supported by peer-reviewed medical journals; and is included in clinical practice guidelines. In addition, since we are pursuing clinical development of product candidates in AD, Acne and Psoriasis and given that low-cost, and often generic, steroids are one of the standards of care in each of the these three indications, payors could require step-through therapy with steroids before reimbursing a patient for our product candidates, if and when they are approved for marketing, or the low price point of these alternative steroid treatments could result in pricing pressure on our product candidates, which would have a material adverse effect on our business and financial results. Furthermore, the payor reimbursement, competition and pricing in these three indications are different. Since our product candidates are all based on the same API, we may not be able to develop products for the three different indications that are sufficiently differentiated in their formulation such that we would be able to market and price them differently or, even if we did, that clinicians won’t prescribe the least-cost formulation for their patients among these different indications. This could result in price pressures across our planned portfolio of products, which would have a material adverse effect on our business and financial results.

Healthcare legislative reform measures may have a negative impact on our business and results of operations.

In the United States, there have been, and continue to be, legislative and regulatory developments regarding the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any product candidates for which we obtain marketing approval. Additionally, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. While any proposed measures will require authorization through additional legislation to become effective, Congress and the Trump administration have each indicated that they will continue to seek new legislative and / or administrative measures to control drug costs. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including

price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or successfully commercialize our drugs.

We are subject to significant competition in the indications that we are pursuing and also with respect to our underlying HOCl platform technology.

We currently rely on our HOCl technology platform as the source of the product candidates in our clinical development pipeline. Our HOCl technology platform is subject to competition from other companies whose technology may offer advantages in terms of safety, efficacy or cost. Competitors may also precede us in commercializing, developing and receiving regulatory approval for products developed based on such technology. As a result, our products may not be competitive or available in the market in a timely manner, which could have a material adverse effect on our business by limiting the potential for sales of our products or creating pricing pressure for our products, if and when they are approved for marketing.

We face competition with respect to our current product candidates, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from many different sources, including major pharmaceutical and specialty pharmaceutical companies, academic institutions and governmental agencies and public and private research institutions. We are aware of a significant number of commercialized products as well as products in development in each of the three therapeutic areas that we target in our clinical development pipeline, which could result in a significantly greater field of competition by the time our products are approved and thereafter commercialized. We consider PR022’s prospective competitors for the treatment of AD to be topical steroids; Eucrisa, a topical PDE-4 inhibitor; and Dupixent, an injectable IL-4 and IL-13 inhibitor for moderate to severe AD. Certain calcineurin inhibitors, such as Elidel, are also prescribed for the treatment of AD. Standard treatments for Acne include antibiotics, antibacterials, retinoids and oral contraceptives. There are a number of treatments for Psoriasis on the market, including biologics, topical therapies such as corticosteroids or vitamin D, as well as systemic immunosuppressive drugs, or phototherapy.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than PR022 or any other product that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for our product, which could result in our competitors establishing a strong market position before we are able to enter the market or could result in the approval of our product being delayed until the expiration of any new chemical entity exclusivity or other regulatory exclusivity received by such competitor.

We are also aware of other companies that manufacture, market and / or sell HOCl or chlorine based products at different concentrations and formulations and for different indications than we target. Some of these products are sold over-the-counter, or OTC. If we demonstrate clinical efficacy in our trials with our HOCl based products, these other companies could use our results to promote their products as having the same or similar efficacy as our products. If successful, they may offer their products at a lower cost for the same indications, or they may seek to convince clinicians, patients or payors that their products are a good alternative to our products. If these OTC companies are successful in such efforts, our ability to market our products, if and when approved, may be limited.

Many of the companies against which we are competing, or against which we may compete in the future, have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our

competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or that may be necessary for, our programs.

We are dependent on third parties to support our drug development efforts.

We currently utilize one contract manufacturer for our API and a separate contract manufacturer PR022. We do not have long-term supply agreements in place with these contract manufacturers. These contract manufacturers may not be able to scale-up sufficiently to meet our requirements for material needed for our pre-clinical studies and clinical trials and potentially for commercialization of PR022 and our other product candidates, and they may not be have the capacity, ability or willingness to manufacture multiple product candidates within our required timeframe. In addition, like many development stage drug companies with small internal teams, we have partnered with third parties in relation to development efforts, clinical trial material manufacturing, pre-clinical / safety studies, analytical studies and regulatory support. As such, we are dependent on a few key partners to deliver equipment, services and products on specified timelines and costs in order to meet our development plans. In some cases, it may be necessary to dual source goods and services in order to meet timelines or other requirements, resulting in additional costs.

We rely on a small team of key management and scientists to execute our business strategy.

We rely on small management and research and development teams. In particular, we rely on the efforts of our Chief Executive Officer, Alex Martin, our Chief Financial Officer and Chief Operating Officer, Marella Thorell, and our Chief Medical Officer, Christian Peters. While we have entered into employment agreements with these executive officers, each of them may currently terminate their employment with us at any time. We do not maintain “key person” insurance for either of these executive officers. Our scientific staff, including our Chief Medical Officer, possesses a significant amount of unregistered intellectual property or know-how regarding chlorine in general and our product candidates specifically which, if these team members were to leave our company, could take a significant amount of time and money to re-build. The loss of key members of either our management or research and development teams could result in a delay of our business and strategic plans and operations or require us to incur additional costs to recruit and / or train replacements, any of which could have a material adverse effect on our business.

We may become subject to claims in connection with past asset dispositions.

We sold our Supermarket Retail business in October 2016. In connection with this transaction, we provided customary representations, warranties and covenants and related indemnities to counterparties. Although we are not aware of any outstanding matters that would reasonably form a basis for a claim under this agreement, circumstances may arise that could result in a claim against us by counterparties to such agreement pursuant to our indemnification obligations thereunder and the underlying representations, warranties and covenants. If we become subject to liability based upon such contractual obligations or otherwise and we are required to indemnify the counterparties, it could have a material adverse effect on our business and financial position.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an even greater risk if we commercially sell any products that we may develop. If we cannot successfully defend ourselves against claims that our product candidates or drugs caused injuries, we will incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in:


•	decreased demand for any product candidates or drugs that we may develop;


•	injury to our reputation and significant negative media attention;


•	withdrawal of clinical trial participants;


•	significant costs to defend the related litigation;


•	substantial monetary awards paid to trial participants or patients;


•	loss of revenue;


•	reduced resources of our management to pursue our business strategy; and


•	the inability to commercialize any products that we may develop.

We currently hold $10 million in product liability insurance coverage in the aggregate, with a per incident limit of $10 million, which may not be adequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commence commercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

Our business and operations would suffer in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity.

Despite the implementation of security measures, our internal computer systems, and those of third parties on which we rely, are vulnerable to damage from computer viruses, malware, natural disasters, terrorism, war, telecommunication and electrical failures, cyberattacks or cyber intrusions over the Internet, attachments to emails, persons inside our organization, or persons with access to systems inside our organization. The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our product development programs. For example, the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach was to result in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur material legal claims and liability, damage to our reputation, and the further development of our product candidates could be delayed.

Risks Relating to Intellectual Property Matters

If we are unable to obtain or protect intellectual property rights related to any of our product candidates, we may not be able to compete effectively in our markets.

We rely upon a combination of patents, trade secret protection, and confidentiality agreements to protect the intellectual property related to our product candidates. The issuance, scope, validity, enforceability, strength and commercial value of patents in the pharmaceutical field involves complex legal and scientific questions and can be uncertain. Some patent applications that we own may fail to result in issued patents with claims that cover the product candidates in the United States or in foreign jurisdictions. If this were to occur, early generic competition could be expected against our product candidates in development. There may be relevant prior art relating to our current or future patents and patent applications which could invalidate a patent or prevent a patent from issuing based on a pending patent application.

We have in-licensed certain intellectual property, including patents, from Dr. Vitold Bakhir relating to electrochemical cell devices for production of HOCl. While our licenses are exclusive at least within our field and require cooperation from the licensor to enforce the licensed patents, there is no guarantee that these patents will be successfully enforced against competitors, or that the licensor will fully comply with the terms of the license, including obligations relating to patent enforcement and defense of the patents. Further, we have sublicensed certain intellectual property licensed from Dr. Bakhir to Chemstar Corp. for certain unrelated fields, including rights to enforce this intellectual property in these fields. Enforcement of the intellectual property in the sublicensed fields could compromise or result in invalidation of some or all of the intellectual property sublicensed to Chemstar Corp.

The patent prosecution process is expensive and time consuming. We may not be able to prepare, file, and prosecute all necessary or desirable patent applications for a commercially reasonable cost or in a timely manner or in all jurisdictions. It is also possible that we may fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. Further, there are other companies pursuing HOCl related technologies. These third parties may file patent applications or disclose concepts relevant to our technology before we are able to file our patent applications, and thus these third party patents and disclosures may constitute prior art against our patents and applications. Moreover, depending on the terms of any future in licenses to which we may become a party, we may not have the right to control the preparation, filing, and prosecution of patent applications, or to maintain or enforce the patents, covering technology in licensed from third parties. Therefore, these patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.

In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how, information, or technology that is not patentable or is difficult to patent, including processes and information relating to our manufacturing and drug development programs for which patents are difficult to enforce or would not provide a competitive advantage in our market. Although we generally require all of our employees to assign their inventions to us, and all of our employees, consultants, advisors, and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreements have been duly executed, or that our trade secrets and other confidential proprietary information will not be disclosed, or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements, or security measures may be breached, and we may not have adequate remedies for any breach. Also, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. In addition, others may independently discover our trade secrets and proprietary information. For example, the FDA is considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future. Furthermore, we have sold certain of our businesses over the past few years, pursuant to which licenses were granted to the acquirers of such businesses to utilize certain of our intellectual property rights, including rights to produce and market HOCl for particular purposes. We have also out-licensed our intellectual property to certain third parties. If the licensees do not respect the terms of such agreements, including limitations as to the field of use, then we could be adversely affected due to the loss of potential business opportunities outside the scope of those granted to the licensees, or we could be subject to non-contractual disclosure of such information. If we are unable to prevent material disclosure of the non-patented intellectual property related to our technologies to third parties, and there is no guarantee that we will have any such enforceable trade secret protection, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, results of operations and financial condition.

We may enjoy only limited geographical protection with respect to certain patents and we may not be able to protect our intellectual property rights throughout the world.

Filing and prosecuting patent applications and defending patents covering our product candidates in all countries throughout the world would be prohibitively expensive. While we have filed patent applications in jurisdictions that we believe are important to our business, our patent position in these jurisdiction may not be the same as our position in the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, but enforcement rights are not as strong as those in the United States or Europe. These products may compete with our product candidates, and our future patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

In addition, we may decide to abandon national and regional patent applications before grant. The examination of each national or regional patent application is an independent proceeding. As a result, patent applications in the same family may issue as patents in some jurisdictions, such as in the United States, but may issue as patents with claims of different scope or may even be refused in other jurisdictions. It is also quite common that depending on the country, the scope of patent protection may vary for the same product candidate or technology.

While we intend to protect our intellectual property rights in our expected significant markets, we cannot ensure that we will be able to initiate or maintain similar efforts in all jurisdictions in which we may wish to market our product candidates. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate, which may have an adverse effect on our ability to successfully commercialize our product candidates in all of our expected significant foreign markets. If we encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished, and we may face additional competition from others in those jurisdictions.

The laws of some jurisdictions do not protect intellectual property rights to the same extent as the laws or rules and regulations in the United States and Europe, and many companies have encountered significant difficulties in protecting and defending such rights in such jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property rights, which could make it difficult for us to stop the infringement of our future patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in other jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our future patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing as patents, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

Some countries also have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, some countries limit the enforceability of patents against government agencies or government contractors. In those countries, the patent owner may have limited remedies, which could materially diminish the value of such patents. If we are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired.

Patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our future patents.

Our ability to obtain patents is highly uncertain because, to date, some legal principles remain

unresolved, there has not been a consistent policy regarding the breadth or interpretation of claims allowed in patents in the United States and the specific content of patents and patent applications that are necessary to support and interpret patent claims is highly uncertain due to the complex nature of the relevant legal, scientific, and factual issues. Changes in either patent laws or interpretations of patent laws in the United States and other jurisdictions or countries may diminish the value of our intellectual property or narrow the scope of our patent protection.

Depending on actions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we have owned or licensed or that we might obtain in the future. An inability to obtain, enforce, and defend patents covering our proprietary technologies would materially and adversely affect our business prospects and financial condition.

Similarly, changes in patent laws and regulations in other countries or jurisdictions or changes in the governmental bodies that enforce them or changes in how the relevant governmental authority enforces patent laws or regulations may weaken our ability to obtain new patents or to enforce patents that we may obtain in the future. Further, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. For example, if the issuance to us, in a given country, of a patent covering an invention is not followed by the issuance, in other countries, of patents covering the same invention, or if any judicial interpretation of the validity, enforceability, or scope of the claims, or the written description or enablement, in a patent issued in one country is not similar to the interpretation given to the corresponding patent issued in another country, our ability to protect our intellectual property in those countries may be limited. Changes in either patent laws or in interpretations of patent laws in the United States and other jurisdictions or countries may materially diminish the value of our intellectual property or narrow the scope of our patent protection.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees, and various other government fees on patents and / or applications, including certain in-licensed patents, will be due to be paid to the USPTO and various government patent agencies outside of the United States over the lifetime of our patents and / or applications and patent rights we may obtain or apply for in the future. We rely on our outside counsel to coordinate payment of these fees. The USPTO and various non-U.S. government patent agencies require compliance with several procedural, documentary, fee payment, and other similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply with procedural and formal requirements relating to our patents. In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment or lapse of the patents or patent applications, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the market, and this circumstance could harm our business.

We may be involved in lawsuits to protect or enforce our patents, which could be expensive, time consuming and unsuccessful.

Competitors may infringe our patents. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. If we initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product or product candidate is invalid and / or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and / or

unenforceability are common, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. In an infringement proceeding, a court may decide that a patent of ours is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post grant review, inter partes review, or IPR, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could be more expeditious or cost-effective for plaintiffs than a standard court proceeding, and could result in revocation of or amendment to our patents in such a way that they no longer cover our product candidates or similar products of our competitors. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel, and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and / or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly, could put our patent applications at risk of not issuing and could have a material adverse effect on our business.

Interference or derivation proceedings provoked by third parties or brought by us may be necessary to determine the priority of inventions with respect to our patent applications. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Our defense of litigation or interference or derivation proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees. We may not be able to prevent misappropriation of our intellectual property rights, particularly in countries where the laws may not protect those rights as fully as in the United States.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our ordinary shares and ADSs.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which could have a material adverse effect on our business.

As our current and future product candidates progress toward commercialization, the possibility of a patent infringement claim against us increases. There can be no assurance that our current and future product candidates do not infringe other parties’ patents or other proprietary rights, and competitors or other parties may assert that we infringe their proprietary rights in any event. For instance, we are aware of a significant patent estate around HOCl. We may become party to, or threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our current and future product candidates, including interference or derivation proceedings before the USPTO. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. There are third parties that hold significant patent estates relating to HOCl. While we do not believe these third party patent estates cover any of our technology, if we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue commercializing our product candidates. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if a license can be obtained on acceptable terms, the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights licensed to us. If we fail to obtain a required license, we may be unable to effectively market product candidates based on our technology, which could limit our ability to generate revenue or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations. Alternatively, we may need to redesign our infringing products, which may be impossible or require substantial time and monetary expenditure. Under certain circumstances, we could be forced,

including by court orders, to cease commercializing our product candidates. In addition, in any such proceeding or litigation, we could be found liable for substantial monetary damages, potentially including treble damages and attorneys’ fees, if we are found to have willfully infringed. A finding of infringement could prevent us from commercializing our product candidates or force us to cease some of our business operations, which could harm our business. Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar negative impact on our business.

The cost to us in defending or initiating any litigation or other proceeding relating to patent or other proprietary rights, even if resolved in our favor, could be substantial, and litigation would divert our management’s attention. Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could delay our research and development efforts and limit our ability to continue our operations.

We may be subject to claims challenging the inventorship or ownership of our future patents and other intellectual property.

We may also be subject to claims that former employees, collaborators, or other third parties have an ownership interest in our patent applications, our future patents or other intellectual property. We may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Risks Relating to our Nasdaq Listing and our ADSs and Ordinary Shares

The price of ADSs representing our ordinary shares or our ordinary shares may be volatile and may fluctuate due to factors beyond our control.

The trading market for publicly traded clinical stage drug development companies has been highly volatile and is likely to remain highly volatile in the future. The market price of ADSs representing our ordinary shares or our ordinary shares may fluctuate significantly due to a variety of factors, including:


•	positive or negative results from, or delays in, testing or clinical trials conducted by us or our competitors;


•	technological innovations or commercial product introductions by us or competitors;


•	changes in U.S. and international government regulations;


•	developments concerning proprietary rights, including patents and litigation matters;


•	public concern relating to the commercial value or safety of our product candidates;


•	financing events, or our inability to obtain financing, or other corporate transactions;


•	publication of research reports or comments by securities or industry analysts;


•	general market conditions in the biopharmaceutical and pharmaceutical industries or in the economy as a whole;


•	the loss of any of our key scientific or senior management personnel;


•	sales of ADSs representing our ordinary shares or our ordinary shares by us, our senior management and board members, or other holders of such securities in the future; or


•	other events and factors, many of which are beyond our control.

In addition, we cannot assure investors that our ordinary shares will continue to be traded on AIM. If such trading were to cease, certain investors may decide to sell their ordinary shares, which could have an adverse impact on the price of the ordinary shares and the ADSs. For so long as our ordinary shares are traded on AIM and Nasdaq, it is possible that relatively small trades on AIM could disproportionately affect the trading price of our ordinary shares on AIM and of ADSs representing our ordinary shares on Nasdaq due to the current limited trading volume of our ordinary shares on AIM.

These and other market and industry factors may cause the market price and demand for ADSs representing our ordinary shares or our ordinary shares to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their ADSs or ordinary shares and may otherwise negatively affect the liquidity of ADSs representing our ordinary shares or our ordinary shares. In addition, the U.S. and U.K. stock markets in general, and the equities of emerging companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. In the past in the United States, when the market price of a security has been volatile, holders of that security have sometimes instituted securities class action litigation against the issuer. If any of the holders of ADSs representing our ordinary shares or our ordinary shares were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our senior management would be diverted from the operation of our business. Any adverse determination in litigation could also subject us to significant liabilities.

We will incur increased costs as a result of operating as a company with securities listed in the United States in addition to the United Kingdom, and our senior management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a company with securities listed in the United States in addition to the United Kingdom, and particularly after we no longer qualify as an emerging growth company, we will incur significant legal, accounting, and other expenses that we did not incur previously. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations impose various requirements on non-U.S. reporting public companies, including the establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our senior management and other personnel will need to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we will be required to furnish a report by our senior management on our internal control over financial reporting beginning with our second annual report to be filed with the U.S. Securities and Exchange Commission, or SEC. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To prepare for eventual compliance with Section 404, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting. We anticipate that the process to document and evaluate our internal control over financial reporting will be both costly and challenging.

To date, there has been no public market for ADSs representing our ordinary shares, and an active market may not develop in which investors can resell such ADSs.

To date, there has been no public market for ADSs representing our ordinary shares although our ordinary shares have traded on AIM since 2014 and prior to that on the main market of the London Stock Exchange since 2006. We cannot predict the extent to which an active market for ADSs representing our ordinary shares will develop or be sustained after the listing of such securities on Nasdaq, or how the development of such a market might affect the market price for our ordinary shares on AIM. The price at which ADSs representing our ordinary shares trade on Nasdaq may or may not be correlated with the price at which our ordinary shares trade on AIM.

Fluctuations in the exchange rate between the U.S. dollar and the pound sterling may increase the risk of holding the ADSs.

Our share price is quoted on AIM in pounds sterling, while the ADSs will trade on Nasdaq in U.S. dollars. Fluctuations in the exchange rate between the U.S. dollar and the pound sterling may result in temporary differences between the value of the ADSs and the value of our ordinary shares, which may result in heavy trading by investors seeking to exploit such differences. In addition, as a result of fluctuations in the exchange rate between the U.S. dollar and the pound sterling, the U.S. dollar equivalent of the proceeds that a holder of the ADSs would receive upon the sale in the United Kingdom of any shares withdrawn from the depositary receipts facility, and the U.S. dollar equivalent of any cash dividends paid in pounds sterling on our ordinary shares represented by the ADSs, could also decline.

Future sales, or the possibility of future sales, of a substantial number of ADSs representing our ordinary shares or our ordinary shares could adversely affect the price of such securities.

Future sales of a substantial number of ADSs representing our ordinary shares or our ordinary shares, or the perception that such sales will occur, could cause a decline in the market price of ADSs representing our ordinary shares and our ordinary shares. As of March 31, 2018, we had 116,561,917 ordinary shares issued and outstanding. There were no ADSs representing our ordinary shares outstanding as of such date. All of our ordinary shares are freely tradeable on AIM. Upon the effectiveness of the registration statement of which this prospectus forms a part, holders of all of our ordinary shares are expected to be able to deposit such ordinary shares with the depositary in exchange for ADSs representing such shares at the ratio referred to on the cover page of this prospectus, which ADSs will be freely tradeable.

If holders sell substantial amounts of ADSs or ordinary shares in the respective public markets therefor, or if the market perceives that such sales may occur, the market price of ADSs representing our ordinary shares and our ordinary shares and our ability to raise capital through an issue of equity securities in the future could be adversely affected.

Because we do not anticipate paying any cash dividends on our ordinary shares which underlie our ADSs in the foreseeable future, capital appreciation, if any, will be the sole source of gains on such securities and you may never receive a return on your investment.

Under the laws of England and Wales, a company’s accumulated realized profits must exceed its accumulated realized losses on a non-consolidated basis before dividends can be paid. Therefore, we must have distributable profits before issuing a dividend. We have not paid dividends in the past on our ordinary shares. We intend to retain earnings, if any, for use in our business and do not anticipate paying any cash dividends in the foreseeable future. As a result, capital appreciation, if any, on ADSs representing our ordinary shares or our ordinary shares are expected to be the sole source of gains on such securities for the foreseeable future.

Securities traded on AIM may carry a higher risk than securities traded on certain other exchanges, which may impact the value of your investment.

Our ordinary shares are currently traded on AIM. Investment in equities traded on AIM is sometimes perceived to carry a higher risk than an investment in equities quoted on exchanges with more stringent

listing requirements, such as the main market for listed securities of the London Stock Exchange. This is because AIM imposes less stringent corporate governance and ongoing reporting requirements than these other exchanges. In addition, AIM requires only half-yearly financial reporting, rather than the quarterly financial reporting required for U.S.-listed companies that are domestic registrants. You should be aware that the value of our ordinary shares may be influenced by many factors, some of which may be specific to us and some of which may affect AIM-quoted companies generally, including the depth and liquidity of the market, our performance, a large or small volume of trading in our ordinary shares, legislative changes, and general economic, political, or regulatory conditions, and that prices may be volatile and subject to significant fluctuations. Therefore, the market price of ADSs representing our ordinary shares and our ordinary shares may not reflect the underlying value of our company.

Holders of ADSs may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise their right to vote.

Except as described in this prospectus, holders of ADSs representing our ordinary shares will not be able to exercise voting rights attaching to the underlying ordinary shares on an individual basis. Holders of ADSs representing our ordinary shares will appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the ordinary shares underlying such ADSs. Holders of ADSs representing our ordinary shares may not receive voting materials in time to instruct the depositary to vote, and it is possible that they, or persons who hold such ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. Furthermore, the depositary may not be liable for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, holders of ADSs representing our ordinary shares may not be able to exercise voting rights and may lack recourse if such ADSs are not voted as requested. In addition, holders of ADSs representing our ordinary shares will not be able to call a shareholders’ meeting.

Holders of ADSs representing our ordinary shares may not receive distributions on our ordinary shares underlying our ADSs or any value for them if it is illegal or impractical to make them available to such holders.

The depositary for ADSs representing our ordinary shares has agreed to pay to holders of such ADSs cash dividends or other distributions that it or the custodian receives on our ordinary shares after deducting its fees and expenses. Holders of ADSs representing our ordinary shares will receive these distributions in proportion to the number of our ordinary shares underlying their ADSs. However, in accordance with the limitations set forth in the deposit agreement, it may be unlawful or impractical for the depositary to make a distribution available to holders of ADSs representing our ordinary shares. We have no obligation to take any other action to permit the distribution of ADSs representing our ordinary shares, ordinary shares themselves, rights or anything else to holders of ADSs representing our ordinary shares. This means that holders of ADSs representing our ordinary shares may not receive any distributions that we make on our ordinary shares or any value from them if it is unlawful or impractical to make such distributions available to holders. These restrictions may negatively impact the trading value of ADSs representing our ordinary shares.

Holders of ADSs may be subject to limitations on transfer of their ADSs.

ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer, or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the deposit agreement.

The rights accruing to holders of our ordinary shares may differ from the rights typically accruing to shareholders of a U.S. corporation.

We are incorporated under the law of England and Wales. The rights of holders of ordinary shares are governed by the laws of England and Wales, including the provisions of the U.K. Companies Act 2006, and by our Articles of Association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations. See the sections entitled “Description of Share Capital and Articles of Association — Differences in Corporate Law” and “Description of Share Capital and Articles of Association — Articles of Association — Other U.K. Law Considerations — City Code on Takeovers and Mergers” in this prospectus for a description of the principal differences between the provisions of the U.K. Companies Act 2006 applicable to us and, for example, the Delaware General Corporation Law relating to shareholders’ rights and protections.

Claims of U.S. civil liabilities may not be enforceable against us.

We are incorporated under the law of England and Wales. Certain of our directors reside outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce judgments obtained in U.S. courts against them or us, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. The United States and the United Kingdom do not currently have a treaty providing for recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters. Consequently, a final judgment for payment given by a court in the United States, whether or not predicated solely upon U.S. securities laws, would not automatically be recognized or enforceable in the United Kingdom. In addition, uncertainty exists as to whether English courts would entertain original actions brought in the United Kingdom against us or our directors predicated upon the securities laws of the United States or any state in the United States. Any final and conclusive monetary judgment for a definite sum obtained against us in U.S. courts would be treated by the courts of the United Kingdom as a cause of action in itself and sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that certain requirements are met. Whether these requirements are met in respect of a judgment based upon the civil liability provisions of the U.S. securities laws, including whether the award of monetary damages under such laws would constitute a penalty, is an issue for the court making such decision. If an English court gives judgment for the sum payable under a U.S. judgment, the English judgment will be enforceable by methods generally available for this purpose. These methods generally permit the English court discretion to prescribe the manner of enforcement. As a result, U.S. investors may not be able to enforce against us or our certain of our directors, or certain experts named herein who are residents of the United Kingdom or countries other than the United States, any judgments obtained in U.S. courts in civil and commercial matters, including judgments under the U.S. federal securities laws.

We currently qualify as a foreign private issuer and, as a result, we will not be subject to U.S. proxy rules and will be subject to reporting obligations under the Exchange Act, that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will report under the Exchange Act, as a non-U.S. company with foreign private issuer status. Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information or current reports on Form 8-K, upon the occurrence of specified significant events. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers also are exempt from Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material

information. As a result of the above, you may not have the same protections afforded to shareholders of companies that are not foreign private issuers.

As a foreign private issuer and as permitted by the listing requirements of Nasdaq, we may follow U.K. corporate governance rules instead of certain corporate governance requirements of Nasdaq.

As a foreign private issuer, we may follow our home country corporate governance rules instead of certain corporate governance requirements of Nasdaq. For example, we are exempt from Nasdaq regulations that require a listed U.S. company to:


▪	have a majority of the board of directors consist of independent directors as such term is defined by Nasdaq;


▪	promptly disclose any waivers of the code for directors or executive officers that should address certain specified items;


▪	have a nominating committee that is fully independent, as defined by Nasdaq;


▪	solicit proxies and provide proxy statements for all shareholder meetings; and


▪	seek shareholder approval for the implementation of certain equity compensation plans and issuances of ordinary shares.

For an overview of our corporate governance principles, including those which comply with certain of the requirements above, see the section entitled “Description of Share Capital and Articles of Association — Articles of Association.”

In accordance with our Nasdaq listing, our Audit Committee is required to comply with the provisions of Section 301 of the Sarbanes-Oxley Act of 2002 and Rule 10A-3 of the Exchange Act, both of which also are applicable to Nasdaq-listed U.S. companies. Because we are a foreign private issuer, however, our Audit Committee is not subject to additional Nasdaq requirements applicable to listed U.S. companies, including an affirmative determination that all members of the Audit Committee are “independent” using more stringent criteria than those applicable to us as a foreign private issuer.

To the extent we determine to follow U.K. corporate governance practices instead of Nasdaq governance requirements, you may not have the same protections afforded to shareholders of companies that are subject to these Nasdaq requirements.

We may lose our foreign private issuer status, which would then require us to comply with the Exchange Act’s domestic reporting regime and Nasdaq’s corporate governance requirements applicable to a domestic issuer, and cause us to incur significant incremental legal, accounting and other expenses.

A significant portion of our shares are owned by U.S. residents and, following the effectiveness of the registration statement of which this prospectus forms a part, an increased number of ordinary shares are expected to be beneficially owned by U.S. residents. Although we currently qualify as a foreign private issuer, in order to maintain this status, either (a) a majority of our ordinary shares, including ordinary shares represented by ADSs, must be either directly or indirectly owned of record by non-residents of the United States or (b)(i) a majority of our executive officers or directors must not be U.S. citizens or residents, (ii) more than 50 percent of our assets must be located outside of the United States and (iii) our business must be administered principally outside of the United States. If we lose our status as a foreign private issuer, we would be required to comply with the Exchange Act reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We would also be required to make changes in our corporate governance

practices in accordance with various SEC and Nasdaq rules. The regulatory and compliance costs to us under U.S. securities laws if we are required to comply with the reporting requirements applicable to a U.S. domestic issuer will be significantly higher than the costs that we would incur as a foreign private issuer. As a result, we expect that the loss of foreign private issuer status would increase our legal and financial compliance costs and would make some activities highly time consuming and costly.

We are an “emerging growth company,” and we cannot be certain if the reduced reporting requirements applicable to “emerging growth companies” will make ADSs representing our ordinary shares or our ordinary shares less attractive to investors.

We are an “emerging growth company” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404, exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As an emerging growth company, we are required to report only two years of financial results and selected financial data in this prospectus compared to three and five years, respectively, for comparable data reported by other public companies. We may take advantage of these exemptions until we are no longer an emerging growth company. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the aggregate market value of ADSs representing our ordinary shares and our ordinary shares held by non-affiliates exceeds $700 million as of any June 30 (the end of our second fiscal quarter) before that time, in which case we would no longer be an emerging growth company as of the following December 31 (our fiscal year-end). We cannot predict if investors will find ADSs representing our ordinary shares or our ordinary shares less attractive because we may rely on these exemptions. If some investors find such securities less attractive as a result, there may be a less active trading market for ADSs representing our ordinary shares or our ordinary shares and the price of such securities may be more volatile.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of ADSs representing our ordinary shares or our ordinary shares.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of ADSs representing our ordinary shares or our ordinary shares.

Management will be required to assess the effectiveness of our internal controls annually. However, for as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404. An independent assessment of the effectiveness of our internal controls could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements requiring us to incur the expense of remediation and could also result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of ADSs representing our ordinary shares or our ordinary shares and the trading volume thereof could decline.

The trading market for ADSs representing our ordinary shares and our ordinary shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Since we have not undertaken an initial public offering of ADSs representing our ordinary shares in connection with the listing of ADSs on Nasdaq, we do not anticipate that many or any industry analysts in the United States will publish such research and reports in the United States about our ordinary shares or ADSs. If no or too few securities or industry analysts commence or continue coverage on us, the trading price for ADSs representing our ordinary shares and our ordinary shares could be affected. If one or more of the analysts who cover us downgrade such ADSs or ordinary shares or publish inaccurate or unfavorable research about our business, the trading price of ADSs representing our ordinary shares or our ordinary shares would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for ADSs representing our ordinary shares or our ordinary shares could decrease, which might cause the price of such securities and the trading volume thereof to decline.

Changes to tax laws could materially adversely affect our company.

On December 22, 2017 new legislation was signed into law (H.R. 1 "An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018," or the Tax Cuts and Jobs Act) that significantly revised the U.S. Internal Revenue Code of 1986, as amended, or the Code. The Tax Cuts and Jobs Act, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses), implementation of a “base erosion anti-abuse tax” which requires U.S. corporations to make an alternative determination of taxable income without regard to tax deductions for certain payments to affiliates, taxation of certain non-U.S. corporations’ earnings considered to be “global intangible low taxed income,” or GILTI, repeal of the alternative minimum tax, or AMT, for corporations and changes to a taxpayer’s ability to either utilize or refund the AMT credits previously generated, changes to the limitation on deductions for certain executive compensation particularly with respect to the removal of the previously allowed performance based compensation exception, changes in the attribution rules relating to shareholders of certain “controlled foreign corporations,” limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits. Notwithstanding the reduction in the U.S. corporate income tax rate, the overall impact of the Tax Cuts and Jobs Act is uncertain and our business and financial condition could be adversely affected. The impact of the Tax Cuts and Jobs Act on holders of our ordinary shares or ADSs representing our ordinary shares is also uncertain and could be adverse. For example, recent changes in U.S. federal income tax law resulting in additional taxes owed by U.S. Holders (as defined below under “Material Income Tax Considerations — Material U.S. Federal Income Tax Considerations for U.S. Holders”) under the new GILTI tax rules or related to “controlled foreign corporations” may discourage U.S. investors from owning or acquiring 10% or greater of our outstanding ordinary shares (directly or in the form of ADSs representing our ordinary shares), which other shareholders may have viewed as beneficial or may otherwise negatively impact the trading price of our ordinary shares or ADSs representing our ordinary shares.

The tax treatment of the company is subject to changes in tax laws, regulations and treaties, or the interpretation thereof, tax policy initiatives and reforms under consideration and the practices of tax authorities in jurisdictions in which we operate, as well as tax policy initiatives and reforms related to the Organisation for Economic Co-Operation and Development’s, or OECD, Base Erosion and Profit Shifting, or BEPS, Project, the European Commission’s state aid investigations and other initiatives. Such changes

may include (but are not limited to) the taxation of operating income, investment income, dividends received or (in the specific context of withholding tax) dividends paid.

We are unable to predict what tax reform may be proposed or enacted in the future or what effect such changes would have on our business, but such changes, to the extent they are brought into tax legislation, regulations, policies or practices, could affect our effective tax rates in the future in countries where we have operations and have an adverse effect on our overall tax rate in the future, along with increasing the complexity, burden and cost of tax compliance. We urge our shareholders to consult with their legal and tax advisors with respect to this legislation and the potential tax consequences of investing in or holding our ordinary shares or ADSs representing our ordinary shares.

If we are a passive foreign investment company, or PFIC, for U.S. federal income tax purposes, the consequences to U.S. holders of ADSs representing our ordinary shares or our ordinary shares may be adverse.

Based on our analysis of our income, assets, activities and market capitalization, we believe that we will likely be classified as a "passive foreign investment company," or PFIC, for the taxable year ended December 31, 2017, and we expect to continue to be a PFIC for our current taxable year. Under the Code, a non-U.S. company will be considered a PFIC for any taxable year in which (1) 75% or more of its gross income consists of passive income or (2) 50% or more of the average quarterly value of its assets consists of assets that produce, or are held for the production of, passive income. For purposes of these tests, passive income includes dividends, interest, gains from the sale or exchange of investment property and certain rents and royalties. In addition, for purposes of the above calculations, a non-U.S. corporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets and received directly its proportionate share of the income of such other corporation. If we are a PFIC for any taxable year during which a U.S. Holder (as defined below under “Material Income Tax Considerations — Material U.S. Federal Income Tax Considerations for U.S. Holders”) holds our ordinary shares or ADSs representing our ordinary shares, we will continue to be treated as a PFIC with respect to such U.S. Holder in all succeeding years during which the U.S. Holder owns the ordinary shares or ADSs representing our ordinary shares, regardless of whether we continue to meet the PFIC test described above, unless the U.S. Holder makes a specified election once we cease to be a PFIC. If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares or ADSs representing our ordinary shares, the U.S. Holder may be subject to adverse tax consequences regardless of whether we continue to qualify as a PFIC, including ineligibility for any preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and additional reporting requirements. For further discussion of the PFIC rules and the adverse U.S. federal income tax consequences in the event we are classified as a PFIC, see the section entitled “Material Income Tax Considerations — Material U.S. Federal Income Tax Considerations For U.S. Holders.”

If a United States person is treated as owning at least 10% of our ordinary shares, such holder may be subject to adverse U.S. federal income tax consequences.

If a U.S. Holder is treated as owning, directly, indirectly or constructively, at least 10% of the value or voting power of our ordinary shares (directly or in the form of ADSs representing our ordinary shares), such U.S. Holder may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our corporate group, if any. If such group includes one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated as controlled foreign corporations, regardless of whether we are treated as a controlled foreign corporation. A United States shareholder of a controlled foreign corporation may be required to annually report and include in its U.S. taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in U.S. property by controlled foreign corporations, regardless of whether we make any distributions. An individual that is a United States shareholder with respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a United States shareholder that is a U.S. corporation. Failure to comply with these reporting obligations may subject a United States shareholder to

significant monetary penalties and may prevent the statute of limitations with respect to such shareholder's U.S. federal income tax return for the year for which reporting was due from starting. We cannot provide any assurances that we will assist our investors in determining whether any of our non-U.S. subsidiaries are treated as a controlled foreign corporation or whether such investor is treated as a United States shareholder with respect to any of such controlled foreign corporations. Further, we cannot provide any assurances that we will furnish to any United States shareholder information that may be necessary to comply with the reporting and tax paying obligations described in this risk factor. U.S. Holders should consult their tax advisors regarding the potential application of these rules to their investment in our ordinary shares or ADSs representing our ordinary shares.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. The forward-looking statements and opinions contained in this prospectus are based upon information available to us as of the date of this prospectus and, while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Forward-looking statements include statements about:


•	the development of PR022 and our other product candidates, including statements regarding the timing of initiation, completion and the outcome of clinical studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs;


•	our ability to obtain and maintain regulatory approval of our product candidates, including PR022, in the indications for which we plan to develop them, and any related restrictions, limitations or warnings in the label of an approved drug or therapy;


•	our plans to research, develop, manufacture and commercialize our product candidates;


•	the timing of our regulatory filings for our product candidates;


•	the size and growth potential of the markets for our product candidates;


•	our ability to raise additional capital;


•	our commercialization, marketing and manufacturing capabilities and strategy;


•	our expectations regarding our ability to obtain and maintain intellectual property protection;


•	our ability to attract and retain qualified employees and key personnel;


•	our ability to contract with third party suppliers and manufacturers and their ability to perform adequately;


•	our estimates regarding future revenue, expenses and needs for additional financing;


•	our belief that our existing cash, cash equivalents and marketable securities as of December 31, 2017 will be sufficient to fund our operating expenses and capital expenditure requirements for at least the twelve months following the date of issuance of the financial statements included in this prospectus; and


•	regulatory developments in the United States, European Union and other jurisdictions.

You should refer to the section entitled “Risk Factors” for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this

prospectus will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

USE OF PROCEEDS

We will not receive proceeds from the disposition, if any, of Registered Shares in the form of ADSs by Registered Holders.

DIVIDEND POLICY

We have never declared or paid a dividend, and we do not anticipate declaring or paying dividends in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. Under the laws of England and Wales, among other things, we may only pay dividends if we have sufficient distributable reserves (on a non-consolidated basis), which are our accumulated realized profits that have not been previously distributed or capitalized less our accumulated realized losses, so far as such losses have not been previously written off in a reduction or reorganization of capital. There are provisions under the laws of England and Wales that could provide us with the ability to pay a dividend upon completion of recapitalization. However, we do not anticipate utilizing such provisions.

PRICE RANGE OF OUR ORDINARY SHARES

Our ordinary shares have been trading on AIM under the symbol “RLM” since December 23, 2014. The following table presents, for the periods indicated, the reported high and low sale prices, including intra-day sales, of our ordinary shares on AIM in pounds sterling and U.S. dollars. For the convenience of the reader, we have translated pound sterling amounts in the table below into U.S. dollars at the rate of £1.00 to $1.3529, which was the noon buying rate of the Federal Reserve Bank of New York on December 29, 2017, the last business day of the year ended December 31, 2017. On May 18, 2018, the last reported sale price of our ordinary shares on AIM was £0.38 per ordinary share ($0.52 per ordinary share based on the exchange rate set forth above).



	Price Per Ordinary Share (£)				Price Per Ordinary Share ($)
	High		Low		High		Low
Year Ended December 31:
2014 (beginning December 23)	£	0.33	£	0.32	$	0.45	$	0.43
2015	0.39		0.17		0.53		0.23
2016	0.31		0.19		0.42		0.26
2017	0.45		0.27		0.61		0.37
Quarterly:
First Quarter 2016	0.29		0.20		0.39		0.27
Second Quarter 2016	0.26		0.20		0.35		0.27
Third Quarter 2016	0.31		0.19		0.42		0.26
Fourth Quarter 2016	0.31		0.25		0.42		0.34
First Quarter 2017	0.37		0.29		0.50		0.40
Second Quarter 2017	0.33		0.30		0.44		0.40
Third Quarter 2017	0.33		0.27		0.44		0.37
Fourth Quarter 2017	0.45		0.30		0.61		0.41
First Quarter 2018	0.49		0.33		0.66		0.45
Second Quarter 2018 (through May 18, 2018)	0.40		0.33		0.54		0.45
Most Recent Six Months:
November 2017	0.45		0.36		0.61		0.49
December 2017	0.39		0.35		0.53		0.47
January 2018	0.43		0.37		0.58		0.50
February 2018	0.49		0.42		0.66		0.57
March 2018	0.48		0.33		0.66		0.45
April 2018	0.35		0.33		0.47		0.45
May 2018 (through May 18, 2018)	0.40		0.33		0.54		0.45

SELECTED CONSOLIDATED FINANCIAL DATA

This section should be read together with our consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this prospectus. We derived the selected consolidated statements of operations data for the years ended December 31, 2016 and 2017 and the consolidated balance sheet data as of December 31, 2016 and 2017 from our audited consolidated financial statements included elsewhere in this prospectus. Our audited consolidated financial statements included in this prospectus have been prepared in accordance with U.S. GAAP as issued by the FASB. Our historical results are not necessarily indicative of the results that may be expected in the future.



	Years Ended December 31,
(in thousands except share and per share data)	2016			2017
Consolidated statement of operations data:
Revenues	$	867		$	1,121
Cost of revenues	121			—
	746			1,121
Operating expenses:
Research and development	4,805			8,189
General and administrative	3,248			3,622
	8,053			11,811
Loss from operations	(7,307		)	(10,690		)
Interest income	3			58
Loss from continuing operations before income taxes	(7,304		)	(10,632		)
Income tax benefit	2,230			108
Net loss from continuing operations	(5,074		)	(10,524		)
Net income from discontinued operations, net of tax expense	5,156			—
Net income (loss)	$	82		$	(10,524	)

Net income (loss) per ordinary share - basic and diluted:
Loss from continuing operations	$	(0.10	)	$	(0.16	)
Income from discontinued operations	0.10			—
Net income (loss) per ordinary share	$	0.00		$	(0.16	)

Weighted average ordinary shares - basic and diluted	50,139,121			65,081,903



	As of December 31,
(in thousands)	2016		2017
Consolidated balance sheet data:
Cash, cash equivalents and marketable securities	$	21,430	$	33,853
Working capital	18,587		31,631
Total liabilities	3,198		2,911
Total shareholders’ equity	19,049		32,197

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the ‘‘Risk Factors’’ section of this prospectus for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

HOCl is an anti-microbial molecule produced naturally in the body as part of the oxidative burst innate immune response to infectious microbial agents. We believe that HOCl formulations developed with our proprietary technology have the potential to be first in class immunomodulatory treatments due to their high concentration, stabilized formulation and high purity and their safety profile versus alternative treatments for the indications that we are currently investigating. Our proprietary technology includes a specialized method for manufacturing high purity HOCl, which results in high concentration formulations that are stabilized within specific pH ranges for certain periods of time. Our technology incorporates significant know-how as four members our research and development team are leading experts in HOCl technology, having an average of 21 years of experience working with HOCl. We also possess patents granted to us in the United States for composition of matter for the stabilized formulation of HOCl, methods of use and methods of manufacturing, as well as other international patent protection and in-licenses of certain other HOCl technology applications related to the manufacturing process.

In October 2016, we sold our Supermarket Retail business, as it was no longer relevant to our strategic focus and have classified the related results of operations and cash flows as discontinued operations. Unless indicated otherwise, the information within this discussion and analysis of financial condition and results of operations relate to our continuing operations.

We entered into, and subsequently amended, a licensing arrangement with an independent distributor to manufacture, market and distribute Vashe, as a 510(k)-cleared medical device, for use in cleansing and debriding acute and chronic wounds. Pursuant to the terms of the agreement, we assigned all right and title of the Vashe trademark and the distributor retains sole responsibility and liability in connection with the manufacturing, marketing and distribution of Vashe. We receive royalties that are tiered and based upon net sales. We are entitled to receive minimum royalties of approximately $900,000 per each contract year, based upon annual net sales thresholds through March 2021.

In addition, in 2016 we earned revenues for various products and services that we no longer offer after 2016.

Historically, we have incurred net losses and expect to continue to incur significant losses for the foreseeable future. As a development-stage biopharmaceutical company, we expect to continue to incur significant expenses, increasing operating losses and negative cash flow for the foreseeable future. We anticipate that our expenses will increase significantly in connection with our ongoing activities as we:


•	continue the ongoing and planned clinical development of PR022 and RLM023;


•	initiate pre-clinical studies (including toxicology) and clinical trials for any future product candidates that we may pursue;


•	build a portfolio of product candidates through the potential acquisition or in-license of products or product candidates and technologies;


•	develop, maintain, expand and protect our intellectual property portfolio;


•	manufacture, or have manufactured, clinical and ultimately commercial supplies of our product candidates;


•	seek marketing approvals for our current and future product candidates that successfully complete clinical trials;


•	establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain marketing approval;


•	hire additional administrative, clinical, regulatory and scientific personnel; and


•	incur additional costs associated with operating as a dually listed public company in the United States and the United Kingdom following the effectiveness of the registration statement of which this prospectus forms a part .

At December 31, 2017, we had cash, cash equivalents and marketable securities of $33.9 million, working capital of $31.6 million, and an accumulated deficit of $189.8 million. We have not generated any product revenues in relation to our drug development business and have not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and pre-clinical testing, and commercialization of our products will require significant additional capital.

In March 2018, we announced that in a Phase 2 clinical trial for Allergic Conjunctivitis, or AC, an ophthalmic disease, our product candidate PR013, a topical solution, did not demonstrate efficacy. As a result, we are no longer pursing the clinical development of PR013 and other than the costs of completing the trial in 2018 and closing out the program, we do not intend to make any additional investments in this program.

Financial Operations Overview

Revenues

We earn royalty income related to our license and distribution agreement for Vashe. We receive royalty payments from our distributor within 30 days after the end of each quarter. As such, the royalty revenues reported are based upon actual royalty revenues earned, including contract minimums.

Cost of Revenues

Cost of revenues represent the manufacturing costs in connection with the products and services that we no longer offer after 2016.

Research and Development Expenses

We are organized and record expenses by functional department and our employees spend time on all of our development projects. Additionally, due to the platform nature of our technology, some of the efforts and expenses are attributable across multiple projects or candidates. Where practical, we capture candidate specific expenses. We our research and development expenses by category and by product candidate, as shown below (in thousands).



	Years Ended December 31,
	2016		2017
PR022	$	1,945	$	1,864
RLM023	—		315
PR013	584		2,915
Other research and development	442		702
Personnel related including share-based compensation	1,834		2,393
Total research and development expenses	$	4,805	$	8,189


•	expenses incurred under agreements with contract research organizations, or CROs, contract manufacturing organizations, or CMOs, laboratories who perform toxicology and analytical work, as well as investigative sites and consultants that conduct our clinical and pre-clinical studies and other scientific development services ;


•	manufacturing scale-up expenses and the cost of acquiring, manufacturing and labeling pre-clinical study and clinical trial materials ;


•	employee-related expenses, including salaries and related costs, travel and share-based compensation expense for employees engaged in research and development and quality assurance functions;


•	costs related to compliance with regulatory requirements; and


•	facilities costs, depreciati on and other expenses, which include rent and utilities.

We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers.

General and Administrative Expenses

General and administrative expenses consist principally of salaries and related costs for personnel in executive, administrative, and finance functions, including share-based compensation, travel expenses and recruiting expenses. Other general and administrative expenses include facility related costs, patent filing, maintenance and prosecution costs and professional fees for legal, auditing, tax and business development services, and insurance costs. Additionally, general and administrative expenses include the cost of maintaining a listing on AIM, a market operated by the London Stock Exchange in the United

Kingdom, which includes directors compensation and travel, including share-based compensation, insurance and other professional fees such as legal, accounting, tax and other advisory services.

We anticipate that our general and administrative expenses will increase as a result of increased payroll, expanded infrastructure and higher consulting, legal, auditing and tax-related services associated with maintaining compliance with Nasdaq listing and U.S. Securities and Exchange Commission, or SEC, requirements, accounting and investor relations costs, and director and officer insurance premiums associated with being a public company in the United States and dually listed in the United Kingdom. We also anticipate that our general and administrative expenses will increase in support of our clinical trials as we expand and progress our development programs and seek to expand our patent protections. Additionally, if and when we believe a regulatory approval of PR022, RLM023 or another product candidate appears likely, we anticipate an increase in payroll and expense as a result of our preparation for commercial operations, particularly as it relates to the sales and marketing of our products.

Interest Income

Interest income consists of interest earned on our cash and cash equivalents held with banks and our marketable securities.

Income Taxes

We have not recorded any income tax benefits for the net losses we have incurred due to the uncertainty of realizing a benefit from those losses. Our tax benefit during 2017 represents the realization of U.S. alternative minimum tax credits that are refundable under the Tax Cuts and Jobs Act that was enacted in December 2017. Our tax benefit recognized in 2016 corresponds with an offsetting tax expense resulting from the gain on sale of the discontinued operations.

Income from Discontinued Operations

Income from discontinued operations represent our Supermarket Retail business that was sold in October 2016. Income from discontinued operations is presented net of related income taxes.

Consolidated Results of Operations

Comparison of Years Ended December 31, 2016 and 2017

The following table sets forth our results of operations for the years ended December 31, 2016 and 2017:



	Years Ended December 31,
(in thousands)	2016			2017			Change
Revenues	$	867		$	1,121		$	254
Cost of revenues	121			—			(121		)
	746			1,121			375
Operating expenses:
Research and development	4,805			8,189			3,384
General and administrative	3,248			3,622			374
	8,053			11,811			3,758
Loss from operations	(7,307		)	(10,690		)	(3,383		)
Interest income	3			58			55
Loss from continuing operations before income taxes	(7,304		)	(10,632		)	(3,328		)
Income tax benefit	2,230			108			(2,122		)
Net loss from continuing operations	(5,074		)	(10,524		)	(5,450		)
Net income from discontinued operations, net of tax	5,156			—			(5,156		)
Net income (loss)	$	82		$	(10,524	)	$	(10,606	)

Revenues

Revenues increased by $0.3 million, or 29%, from $0.9 million for the year ended December 31, 2016 to $1.1 million for the year ended December 31, 2017. The increase was primarily attributable to an increase in Steadmed Medical’s net sales of Vashe and the corresponding royalty payments due to us under our license and distribution agreement, including minimums. These increases were offset by a decrease in revenues upon the cessation of other products and services in 2016.

Cost of Revenues

Cost of revenues decreased as we are no longer offered for sale in 2017 the products and services that we offered for sale in 2016.

Research and Development Expenses

Research and development expenses increased by $3.4 million, or 70%, from $4.8 million for the year ended December 31, 2016 to $8.2 million for the year ended December 31, 2017. The increase was primarily due to net increases of $2.6 million in our pre-clinical and clinical development cost, toxicology studies and regulatory support of as we filed two INDs and thereafter initiated Phase 2 clinical trials for PR022 and PR013 during 2017. As announced in March 2018, we are no longer pursuing the clinical development of PR013. We also had increases in consulting and compensation costs of $0.3 million as a result of our increase in consultants and headcount to support our clinical development efforts and a $0.2 million increase in share-based compensation as we issued additional share options in 2017. We also had increases in facility and related costs of $0.3 million, primarily due to the increase of usage of facilities for the purpose of research and development activities.

General and Administrative Expenses

General and administrative expenses increased $0.4 million or 12%, from $3.2 million for the year ended December 31, 2016 to $3.6 million for the year ended December 31, 2017. The increase was due

primarily to the fact that $1.0 million of costs, primarily associated with headcount and related, were allocated to the discontinued operations (Supermarket Retail business) in 2016 with none being allocated in 2017. There was an overall decline of $0.3 million in headcount and related cost in connection with a reduction in staff following the sale of the Supermarket business. There was a $0.1 million increase in share-based compensation and related benefits as we issued additional share options in 2017. We also had an increase in professional fees including legal and patent costs of $0.3 million. These increases were offset by decreases in our facility and related expenses of $0.6 million, primarily due to a move to a smaller facility to focus on research and development activities.

Interest Income

Interest income increased from $3,000 for the year ended December 31, 2016 to $58,000 for the year ended December 31, 2017 as a result of earnings from our cash proceeds from the private placement in October 2017.

Income Taxes

Our tax benefit of $2.2 million recognized in 2016 corresponds with an offsetting tax expense of $2.2 million resulting from the gain on sale of the discontinued operations. Our tax benefit of $0.1 million during 2017 represents the realization of U.S. alternative minimum tax credits that are refundable under the Tax Cuts and Jobs Act that was enacted in December 2017.

Income from Discontinued Operations

We had income from discontinued operations of $7.4 million, before tax impact, and $5.2 million, net of tax, during the year ended December 31, 2016 related to our Supermarket Retail business that was sold in October 2016.

Liquidity and Capital Resources

We have incurred net losses and negative cash flows from operations and expect to continue to incur significant losses for the foreseeable future. Our only source of revenue, since the sale of the Supermarket Retail business in October 2016, is the royalty revenue generated from our marketing agreement for Vashe. We are increasing our investments in research and development and general and administrative expenses in support of our drug development plans. We incurred net losses from continuing operations of $5.1 million and $10.5 million and negative cash flows from continuing operations of $6.7 million and $9.5 million for the years ended December 31, 2016 and 2017, respectively. As of December 31, 2017, we have an accumulated deficit of $189.8 million. We believe that our existing cash, cash equivalents and marketable securities of $33.9 million as of December 31, 2017 will be sufficient to meet our capital requirements and fund our operations for at least twelve months from the date of issuance of the financial statements included in this prospectus.

We will need to raise substantial additional capital to fund our planned future operations, commence and continue clinical trials, receive approval for and commercialize PR022 and RLM023 and advance our business strategy. Please see the section entitled “Cash Flows — Funding Requirements.”

Cash Flows

The following table shows a summary of our cash flows from continuing operations for the periods indicated (in thousands):



	Year Ended December 31,
	2016			2017
Net cash used in operating activities	$	(6,689	)	$	(9,503	)
Net cash used in investing activities	(74		)	(24,527		)
Net cash provided by financing activities	7			23,225

Net Cash Used in Operating Activities

During the year ended December 31, 2016, net cash used in operating activities was $6.7 million and was primarily attributable to our $5.1 million net loss, noncash charges of $1.8 million that was offset by the net change in our operating assets and liabilities of $0.2 million. Noncash charges were primarily related to our income tax benefit offset by depreciation and amortization expense and share-based compensation expense. The change in our operating assets and liabilities was primarily attributable to the increase in accounts payable and accrued expenses due to the timing of when we paid annual bonuses as well as the increase in consulting and professional services.

During the year ended December 31, 2017, net cash used in operating activities was $9.5 million and was primarily attributable to our $10.5 million net loss that was offset by noncash charges of $0.5 million and changes in our operating assets and liabilities $0.5 million.

Net Cash Used in Investing Activities

During the year ended December 31, 2017, net cash used in investing activities was $24.5 million and primarily attributable to the purchase of marketable securities and property and equipment of $29.3 million and $0.2 million, respectively. These decreases in cash were offset by $5.0 in cash proceeds received upon the maturity of our marketable securities.

Net Cash Provided by Financing Activities

During the year ended December 31, 2017, we received gross proceeds of £19.3 million and net cash proceeds of $23.2 million (at an exchange rate of 1.3169, which was the exchange rate in effect on the date of receipt of proceeds) upon completion of a private placement of our ordinary shares and related warrants in October 2017.

Sources of Capital

Private Placement

In October 2017, we completed a private placement and issued 66,396,485 ordinary shares and warrants to purchase 26,558,600 ordinary shares and received $23.2 million in net proceeds. Each warrant carries an exercise price per ordinary share of 58 pence ($0.78 at an exchange rate of 1.3517 as of December 31, 2017) and a term of 2.5 years.

Royalty Revenues

Under our license and distribution agreement with Steadmed for our Vashe product, we receive quarterly royalty payments based on Steadmed’s monthly net sales and contractual minimums.

Funding Requirements

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of, continue or initiate clinical trials of, and seek marketing approval for, our product candidates. We have no products approved for sale and there is no assurance that we will obtain future approvals or, if we do, that we will be able to generate revenues or achieve profitable operations. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to sales, marketing, manufacturing and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators. Furthermore, following the completion of this registration, we expect to incur additional costs associated with operating as a dually listed public company in the United States and the United Kingdom. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

We expect that our cash, cash equivalents and marketable securities as of December 31, 2017 will enable us to fund our planned operating expenses and capital expenditure requirements for at least twelve months from the date of the issuance of the financial statements included in this prospectus. We estimate direct costs to complete the current Phase 2 trial of PR022 in Atopic Dermatitis in 2018 will be approximately $4.0 million. Our future capital requirements will depend on many factors, including:


•	the scope, progress, results and costs of product discovery, pre-clinical studies and clinical trials;


•	the scope, prioritization and number of our research and development programs;


•	the costs, timing and outcome of regulatory review of our product candidates;


•	our ability to establish and maintain potential collaborations on favorable terms, if at all;


•	the ability of our potential collaboration partners to exercise options to extend research and development programs;


•	the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under collaboration agreements, if any;


•	the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;


•	the extent to which we acquire or in-license other product candidates, technologies or products;


•	the costs of securing manufacturing arrangements for pre-clinical, clinical and commercial production; and


•	the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market our product candidates.

Identifying potential product candidates and conducting pre-clinical studies and clinical trials is a time consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of product candidates that we do not expect to be commercially available for many years, if at all. Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.

Adequate additional financing may not be available to us on acceptable terms, or at all. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, investor ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect investor rights as a common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant

rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations at December 31, 2017:



(in thousands)	Payments Due by Period
	Total		Less Than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years
Operating leases ⁽¹⁾	$	1,260	$	173	$	337	$	338	$	412
Total ⁽²⁾	$	1,260	$	173	$	337	$	338	$	412

__________________


(1)	Reflects obligations related to our office and equipment leases in Malvern, Pennsylvania.


(2)	This table does not include contracts that are entered into in the ordinary course of business that are not material in the aggregate in any period presented above and payments under agreements with contract research organizations as such payments are contingent upon services being provided.

Off‑Balance Sheet Arrangements

We did not have arrangements during the periods presented, and we do not currently have, any off‑balance sheet arrangements, as defined in the rules and regulations of the SEC.

Critical Accounting Policies

Our consolidated financial statements in the registration statement of which prospectus forms a part are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reported period. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.

We define our critical accounting policies as those accounting principles that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations, as well as the specific manner in which we apply those principles. While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this prospectus, we believe that the following accounting policies are those most critical to the preparation of our consolidated financial statements.

Research and Development

Research and development expense consists primarily of costs incurred in connection with the development of our product candidates. We expense research and development costs as incurred. At the end of each reporting period, we compare payments made to third party service providers to the estimated progress toward completion of the applicable research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that we estimate has been made as a result of the service provided, we may record net prepaid or accrued expense relating to these costs. As of December 31, 2017, we have not made any material adjustments to our prior estimates of accrued research and development expenses.

Recent Accounting Pronouncements

See Note 3 to our consolidated financial statements beginning on page F-8 of the registration statement of which this prospectus forms a part for a description of recent accounting pronouncements applicable to our consolidated financial statements.

Qualitative and Quantitative Disclosures About Market Risk

Our consolidated financial statements are prepared using the U.S. dollar which is the functional currency of our primary operating subsidiary. The functional currency of our parent company is the pound sterling which is translated into the U.S. dollar for assets and liabilities at the exchange rate at the balance sheet dates and revenue and expenses are translated at the average exchange rates during the reporting period. Translation adjustments are not included in determining net income (loss) but are included in foreign exchange adjustment to accumulated other comprehensive income (loss), a component of shareholders’ equity.

We do not currently engage in currency hedging activities in order to reduce our currency exposure, but we may begin to do so in the future. Instruments that may be used to hedge future risks may include foreign currency forward and swap contracts. These instruments may be used to selectively manage risks, but there can be no assurance that we will be fully protected against material foreign currency fluctuations.

JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act, or the JOBS Act, was enacted. The JOBS Act provides that, among other things, an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. As an emerging growth company, we have irrevocably elected not to take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth public companies.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, we are entitled to rely on certain exemptions as an “emerging growth company,” we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b), (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of this registration or until we no longer meet the requirements of being an emerging growth company, whichever is earlier.

Change of Independent Auditors

On February 2, 2018, Grant Thornton UK LLP, or Grant Thornton, resigned as our independent auditors as we intended to engage new auditors in connection with the listing to which the registration statement of which this prospectus forms a part. Grant Thornton did not audit our consolidated financial statements for any period subsequent to the year ended December 31, 2016.

For the year ended December 31, 2016, no report by Grant Thornton on our consolidated financial statements contained an adverse opinion or a disclaimer of opinion, or was qualified or modified as to uncertainty, audit scope or accounting principles.

During the year ended December 31, 2016, and the subsequent period through February 2, 2018, (1) there were no disagreements (as that term is used in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between us and Grant Thornton on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Grant Thornton, would have caused Grant Thornton to make reference thereto in its report upon on our audited consolidated financial statements for the year ended December 31, 2016, and (2) there were no “reportable events” as such term is defined in Item 304(a)(1)(v) of Regulation S-K.

Newly Appointed Independent Registered Public Accounting Firm

On February 8, 2018, our board of directors completed an audit retender process and appointed KPMG LLP, or KPMG, as our independent registered public accounting firm to audit our consolidated financial statements prepared in accordance with U.S. GAAP for the years ended December 31, 2016 and 2017.

During the years ended December 31, 2016 and 2017, and the subsequent period preceding our engagement of KPMG as our independent registered public accounting firm, we did not consult with KPMG, on matters that involved the application of accounting principles to a specified transaction, the type of audit opinion that might be rendered on our consolidated financial statements or any other matter that was either the subject of a disagreement or reportable event.

BUSINESS

Overview

Our lead product candidate, PR022, is a non-alcohol based topical gel containing the active ingredient HOCl that offers a differentiated mechanism of action for the treatment of AD. PR022 is a topical IL-4/IL-13 inhibitor. AD affects an estimated 20 million people in the United States, including up to 20% of children and up to 3% of adults. Analysts estimate that this market will grow to approximately $5 billion, excluding steroids, in the United States by 2022 driven by recent market approvals of Eucrisa, Pfizer’s topical PDE-4 inhibitor for mild to moderate AD, and Dupixent, an injectable IL-4, IL-13 inhibitor for moderate to severe AD. We expect these products will comprise a large portion of the market at the time that our product is anticipated to be approved (if it is in fact approved), and therefore we view the prospective launch of PR022 as taking market share from these products at that point in time (if PR022 is approved for marketing). Symptoms of AD can include rashes; dry, scaly, red skin; open, crusty and weepy sores, which can become infected; and severe and persistent pruritus, which is commonly known as itch. The current standard of care, when emollients and moisturizers no longer adequately control AD,

is the use of topical steroids or injectable monoclonal antibodies for more severe cases. Steroids are known to have potentially harmful side effects. Additionally, we believe that our product candidate, which is formulated for topical application, may provide a more convenient solution than injectables. PR022 is currently in a Phase 2 clinical trial, from which we expect to report top-line data in the third quarter of 2018.

We may use the PR022 formulation for the initial proof of concept study in Acne to expedite entry into the clinic. See the section entitled “—RLM023 for the Treatment of Acne” for more information.

can largely be attributed to biologics. Research has identified key cellular and molecular pathways of inflammation that contribute to disease pathogenesis of Psoriasis. Formulations of our proprietary platform technology have been shown in vitro and in vivo to downmodulate pro-inflammatory cytokines TNF-α, IL-6, and IL-12, which have been reported at elevated levels in patients with Psoriasis and correlated to disease severity. Our ongoing in vitro pre-clinical studies and research coupled with the results of our AD study will inform the next steps in our development of a potential treatment of Psoriasis.

Recent Developments

Our Pipeline

Our current pipeline of product candidates is summarized in the following chart:

Our Strategy

Our corporate strategy is to develop and commercialize innovative and differentiated product candidates. We are initially focused on developing and commercializing product candidates based on our proprietary technology, currently in dermatological indications and subsequently in other immune-mediated diseases, and we are also seeking to in-license or acquire novel therapeutics to complement our pipeline. The key components of our strategy to achieve this goal are to:

•

Complete clinical development and obtain regulatory approval for our product candidate, PR022, for the treatment of AD. We are initially focused on the clinical development, regulatory approval and potential commercialization of PR022 for the treatment of AD, which is currently in a Phase 2 clinical trial with an expected top-line readout in the third quarter of 2018. Pending our evaluation of the results of such trial, we intend to pursue a Phase 2b clinical trial, including evaluating the safety and efficacy of PR022 for adolescents with AD.

•

Expand our product candidate pipeline based on our proprietary platform technology. We believe that our proprietary platform technology based on high concentrations of HOCl may have broad application in several dermatological indications given its immunomodulatory, anti-inflammatory, anti-pruritic and anti-microbial properties. In the near term, we are focused on developing RLM023, a topical formulation developed for the treatment of Acne, for which we expect to submit an IND in the fourth quarter of 2018 to enter a proof-of-concept study in the first quarter 2019. We are currently evaluating the ability of our topical formulations to treat Psoriasis.

We are also exploring additional indications for our platform technology in dermatology, including Prurigo Nodularis, Epidermolysis Bullosa and Bullous Pemphigoid. Additionally, we are considering potential applications of our proprietary platform technology in non-dermatological immune-mediated diseases, which may include Asthma, Chronic Obstructive Pulmonary Disease, Rheumatoid Arthritis, Multiple Sclerosis, Type I Diabetes, Lupus, Crohn’s and Inflammatory Bowel Disease. We have not yet conducted any research and development and have no product candidates in the pipeline for these additional indications at present.

•

Acquire additional immunomodulatory assets to complement our portfolio. We intend to build a diversified, multi-asset pipeline of immunomodulatory therapies with a strong focus on patient populations with unmet medical needs. We are evaluating, for acquisition or in-licensing, a range of therapeutics for the treatment of immune-mediated diseases. We are looking to leverage our knowledge and experience, particularly in immunology, to identify assets that complement our existing pipeline.

•

Build a specialty sales organization to commercialize and market new products in the United States, if and when approved, and explore partnerships with global pharmaceutical companies to maximize the value of our product candidates outside the United States . If approved by the FDA, we ultimately intend to commercialize our dermatological products by developing our own sales organization to target dermatologists, high prescribing pediatricians, primary care physicians and other practitioners for certain dermatological conditions. Alternatively, we may consider contracting with a third party sales organization in certain circumstances. We are also exploring the licensing of commercialization rights or other forms of collaboration agreements with experienced pharmaceutical companies to commercialize our product candidates in certain key markets outside of the United States, including Japan and emerging markets.

Our Proprietary Platform Technology

Our product candidates contain high concentrations of HOCl based on our proprietary technology. We have received composition of matter patents associated with our stabilizing formulations, as well as method of use patents which cover concentrations of HOCl at which we have observed

immunomodulatory effects. Specifically, in pre-clinical studies, PR022, a topical IL-4/IL-13 inhibitor, had immunomodulatory effects. Our technology incorporates significant know-how as four people on our research and development team are leading experts in HOCl technology having an average of 21 years of experience working with HOCl. We also possess patents granted to us in the United States for composition of matter for the stabilized formulation of HOCl, methods of use and methods of manufacturing, as well as other international patent protection and in-licenses of certain other HOCl technology applications related to the manufacturing process.

The form of chlorine changes from Cl ₂ to HOCl to OCL ^- depending on the pH of its environment. HOCl is the form in which chlorine mainly exists within a certain pH range. As depicted in the figure below, at a higher pH, available free chlorine, or AFC, exists increasingly in the form of hypochlorite ion, or OCl ^- . At a lower pH, AFC exists increasingly in the form of molecular chlorine, or Cl ₂ . Between a pH of 4.0 to 6.5, AFC is present predominantly in the form of HOCl. Our proprietary technology has allowed us to develop formulations of HOCl that endeavor to maintain the pH of HOCl within this specific pH range for certain periods of time. Our HOCl products are manufactured using a proprietary manufacturing process designed to produce formulations that deliver the highest level of pure HOCl. Additionally, through our manufacturing process, we are producing HOCl at a high saturation level at ambient temperature that permits an increased amount of chlorine to be maintained in solution and a low residual salinity level, which are critical to control the stability of HOCl.

Our patented gel formulations of HOCl, manufactured under specified conditions, endeavor to maintain HOCl to be stabilized within a particular pH range for certain periods of time. There are a number of factors that influence the stability duration of chlorine, one of which is concentration. With an increasing concentration of chlorine, it becomes increasingly difficult to maintain HOCl within a specified pH range. Our manufacturing processes allow us to produce formulations which have lower degradation products and minimal elemental impurities, which results in a more stable product. In order to develop our patented stabilizing process and agents, we evaluated many formulations of gels and emulsions with HOCl as the active ingredient to determine excipient compatibility. HOCl is especially sensitive to most organic excipients used for topical drug formulations. We have ongoing development efforts to enhance the period of time over which HOCl is stabilized. Our proprietary buffering technology is able to produce HOCl formulations within a defined pH range where it is pure HOCl with little or no OCl ^- or Cl _2.

Effect of pH on HOCl

Source: Realm Report (NovaChem Laboratories, Inc.)

Immune System and Immune Modulation

The body protects itself against infection through the immune system, which identifies and weakens or destroys pathogens or infectious agents, such as viruses, bacteria, fungi and other parasites. Immunity is the equilibrium between immune activation and suppression that permits the body to function in a normal and healthy way. An immune system that does not respond aggressively enough can be fatal. However, responses that are too aggressive or that are triggered by substances that are not true threats are responsible for an increasing disease burden, inducing common diseases such as AD. Accordingly, there are varieties of ways in which medical intervention can modulate a dysregulated immune response.

The immune system works through two broad phases of protection. In the innate phase, the immune system mounts a broad defense that can work against a wide range of attackers, while beginning to identify specifically what it is attacking. The innate immune system consists of non-specific cells and molecules that constantly surveil and react quickly once the presence of any antigen is detected. Cells of the innate immune system act as a physical barrier to invasion by foreign organisms, inactivate pathogens directly, recruit other immune cells through the production of cytokines and activate the adaptive immune response through antigen presentation. Then the immune system enters the adaptive immunity phase in which it targets the specific attacker and protects the body against the attacker more effectively both during the remainder of the attack and in the future.

All immune cells, including those participating in the innate and adaptive immune response, have evolved to express distinct cell surface receptors and secrete cell signaling molecules that respond to environmental cues. Immune cells consistently monitor the dynamic environmental stimuli through their unique receptors to recognize specific changes. Lymphocytes are the principal active components of the adaptive immune system responsible for engulfing and destroying identified antigens. Once an antigen is presented by a dendritic cell, the adaptive immune system responds by activating specific cellular immunity in the form of T-cells and B-cells, and by releasing cytokines and chemokines. Cytokines are small cell-signaling protein molecules secreted by numerous cells and used extensively in intercellular communication. They provide the signaling pathways that orchestrate the complex immune responses of the body.

Keratinocytes are the predominant cell type in the epidermis, the outermost layer of the skin. Upon activation, keratinocytes express a plethora of cytokines, chemokines (a class of cytokines) and accessory molecules, which can transmit both positive and negative signals to cells of innate and adaptive immunity. Abnormal expression of inflammatory mediators or their receptors in keratinocytes are relevant to the pathogenesis of chronic inflammatory skin diseases such as AD, Psoriasis and Acne.

Dendritic cells are antigen-presenting cells of the immune system. Their main function is to process antigen material and present it on the cell surface to the T-cells of the immune system. Dendritic cells act as messengers between the innate and the adaptive immune systems. Dendritic cells have been shown to play a key role in patients with chronic inflammatory skin diseases, such as AD, Psoriasis and Acne.

Cytokines, such as ILs, affect nearly every biological process, including disease pathogenesis, non-specific response to infections and specific response to antigens. Cytokines have become an important frontier in medicine and hold a vital place as diagnostic, prognostic and therapeutic agents in human disease. Although cytokines are studied today in nearly every biological discipline, cytokine-mediated effects dominate the fields of inflammation and immunology. Some chronic diseases appear to be driven by auto-inflammatory pathways whereas others have classic characteristics of auto-immune mechanisms. The understanding of immune activation has led us to better evaluate the impact of our immunomodulatory agent on relevant cytokine-mediated pathways of AD and other dermatological conditions.

PR022 for the Treatment of Atopic Dermatitis

PR022 is a proprietary, non-alcohol based, topical gel containing the active ingredient HOCl, offering a novel mechanism of action for the treatment of AD. AD is a chronic, relapsing, inflammatory disease characterized by itchy, inflamed skin, which poses a significant burden on patients’ quality of life and on the overall health care system and which is most commonly first diagnosed in childhood. Patients with AD have impaired function of their skin barrier, which, combined with skin damage as a result of the intense itching and scratching associated with the disease, puts them at risk for secondary infections due to colonization with pathogenic bacteria, particularly Staphylococcus aureus , and changes in the skin microbiome. AD is characterized by immune dysregulation. PR022 is a topical IL-4/IL-13 inhibitor that is currently in a Phase 2 clinical trial comparing 0.05% and 0.1% concentrations against the vehicle control gel, which is the product candidate excluding the API.

AD affects an estimated 20 million people in the United States, including up to 20% of children and up to 3% of adults, and prevalence continues to increase. Of those afflicted with AD in the United States, an estimated 37% of those are diagnosed with the disease, and of those diagnosed, an estimated 45% to 50% are actively being treated by a physician. Creams and ointments (including topical corticosteroids) or systemic agents (for more severe cases) are routinely used to treat patients with AD. The U.S. market for AD treatments, excluding steroids, is estimated by analysts to grow to $5 billion by 2022 driven by recent market approvals of Eucrisa, Pfizer’s topical PDE-4 inhibitor for mild to moderate AD, and Dupixent, an injectable IL-4, IL-13 inhibitor for moderate to severe AD. We expect these products will comprise a large portion of the market at the time that our product is anticipated to be approved (if it is in fact approved), and therefore we view the prospective launch of PR022 as taking market share from these products at that point in time (if PR022 is approved for marketing).

Limitations of Current Treatment Options

Current topical treatment options for AD have known safety drawbacks. Adverse effects include skin thinning, folliculitis, contact dermatitis and telangiectasia, which is commonly known as “spider veins”. Long-term use of topical corticosteroids on large body surface areas may lead to adrenal suppression. The increased use of steroid treatments has led to an increase of serious local and systemic side effects. In pediatric patients, a large proportion of AD sufferers, there is the chance for enhanced capacity for absorption and therefore side effects. Low acceptance of steroid treatment among parents of children is well known. Calcineurin inhibitors carry a boxed warning for a possible link to cancer and are therefore

limited in use. Systemic therapies such as antihistamines are used as adjunct therapies to help control pruritus with limited efficacy, antibiotics are sometimes used short term to manage infection, but carry concerns of resistance, and oral corticosteroids or immunosuppressants carry associated side effects and toxicities. In addition, injectable treatments for AD are both inconvenient and costly.

Ongoing Phase 2 Clinical Trial

Our IND for PR022 for AD was submitted to the FDA and took effect in 2017. In December of 2017, the first subject was dosed in our Phase 2 clinical trial of PR022, which is being conducted in the United States. This trial is a randomized, double-blind, vehicle-controlled, multicenter, parallel-group trial to assess the safety and efficacy of PR022 topical gel for the treatment of adults with mild-to-moderate AD with a total affected body surface area, or BSA, of 5% to 20%. Approximately 120 patients from approximately 18 study sites are being randomized 1:1:1 to receive PR022 Topical Gel 0.05% HOCl, PR022 Topical Gel 0.1% HOCl, or vehicle control gel. The primary endpoint measures the percentage change from baseline to Day 29 using the Eczema Area and Severity Index, or EASI. The percentage of subjects who achieve success in Investigator’s Global Assessment, or IGA, scale is also being evaluated. Additionally, secondary endpoints assess pruritus and quality of life on a variety of scales. Pruritus is being measured throughout the study using a variety of tools such as the numeric rating scale, or NRS, and the 5-D itch questionnaire. The secondary endpoints measure the percent change from basline in the numeric rating scale, or NRS; change in the 5 dimensions of itch scale, or 5-D itch, questionnaire; and shifts in the dermatology life quality index, or DLQUI, scores. Top-line data is expected to be reported in the third quarter of 2018. Pending our evaluation of the results of the trial, we intend to pursue a Phase 2b clinical trial, including evaluating the safety and efficacy of PR022 for adolescents with AD.

Pre-clinical Study Results

The NC/Nga mouse model has been widely used for evaluating new therapeutic options of AD as lesions can be induced with a relevant allergen and the phenotype resembles human AD. We conducted pre-clinical preventative and therapeutic treatment studies evaluating the efficacy of PR022 topical gel in the NC/Nga mouse model.

The mice were sensitized with house dust mite allergen, or HDM, and treated topically with PR022 both preventively and therapeutically twice daily against established lesions. In the prevention model, topical application of PR022 delayed the onset of lesions and reduced the severity of lesions. In the treatment model, topical application of PR022 reduced lesions comparable to a potent topical corticosteroid. Additionally, the prevention model demonstrated fewer itching bouts in the mice treated with PR022 compared to vehicle control gel. The reduced skin thinning and absence of weight loss observed in the PR022 treatment group indicates that PR022 does not exhibit the undesired effects often induced by steroids . PR022 reduced levels of cytokines shown to be increased in patients with AD (IL-4, IL-13, TARC) and cytokines described to play a major role in the mediation of pruritis (IL-31, TSLP). Additionally, PR022 reduced the presence of T-cells in the inflammatory lesions and reduced serum Immunoglobulin E, or IgE.

Lesion Formation in Prevention Model

In the prevention model, to determine the efficacy of PR022, NC/Nga mice were treated twice weekly with HDM to induce lesions similar to human AD. Concurrently, vehicle control gel or PR022 was applied. Mice were rated for the presence or absence of skin dryness, skin eruptions, skin edema, and wounding, each on a scale of 0 to 4, where 0 = no symptoms, 1 = mild symptoms, 2 = moderate symptoms, 3 = severe symptoms, and 4 = extreme symptoms. As shown in Figure 1, in the vehicle control gel group, lesion scores gradually increased starting 24 days after the initial HDM application. Topical application of PR022 delayed the onset of lesions and reduced the severity of lesions compared to the vehicle control gel group over 12-weeks. The p-values are shown below the figure. P-value is a conventional statistical method for measuring the statistical significance of clinical results. A p-value of 0.05 or less represents statistical significance, meaning that there is a less than 1-in-20 likelihood that the observed results occurred by chance.

Figure 1 Clinical Lesion Score After Concurrent Treatment With PR022 or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Pruritis Effect in Prevention Model

Pruritus is one of the most persistent symptoms of AD, with a high impact on quality of life. The majority of AD therapies available today focus on restoring skin barrier properties, but do not effectively manage pruritus. Therefore, a treatment that reduces both lesion formation and pruritus would be considered optimal.

As shown in Figure 2, scratching behavior, which is known to be indicative of pruritus, increased throughout the study in the vehicle control gel group, while scratching behavior was significantly reduced by topical administration of PR022.

Figure 2 Changes in Scratching Behavior During Treatment With PR022 or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Treatment of Established Lesions in Therapeutic Model

Our subsequent treatment study focused on the therapeutic effect of PR022 to reduce established

lesions.

In this model, to determine the efficacy of PR022 as compared to a high potency steroid and vehicle control gel, mice were treated twice weekly with HDM until they developed at least moderate lesions . Starting at day 22, the mice were treated with PR022, the high potency steroid, betamethasone or vehicle control gel. The lesions on the mice were rated for the presence or absence of skin dryness, skin eruptions, skin edema, and wounding, each on a scale of 0 to 4, where 0 = no symptoms, 1 = mild symptoms, 2 = moderate symptoms, 3 = severe symptoms, and 4 = extreme symptoms. As shown in Figure 3, there was a steady decrease in lesion severity in the PR022 treatment group as well as in the steroid group.

Figure 3 Comparison of Lesion Severity Scores After Treatment With PR022, Betamethasone or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Effects on Ear Thickness in Therapeutic Model

Sensitization with HDM results in inflammation which is a quantitative measurement of allergic response. Mice were sensitized with HDM on their ears and significant ear swelling was noted by day 22 when the treatment began. As shown in Figure 4, ear thickness was significantly reduced in the PR022 and betamethasone treated ears.

Figure 4 Comparison of Ear Thickness Scores After Treatment With PR022, Betamethasone or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Effects on Body Weight and Skin Thinning in Therapeutic Model

Two of the undesired effects of topical steroid treatment are weight loss and skin thinning. In the therapeutic model, as shown in Figures 5a and 5b, no significant change in body weight was observed in mice treated with PR022, whereas a significant decrease in body weight was observed in the betamethasone treated mice. Significantly greater skin thinning was observed in the betamethasone treated mice compared to the mice treated with PR022.

Figure 5a Comparison of Body Weight After Treatment With PR022, Betamethasone or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Figure 5b Comparison of Skin Thickness After Treatment With PR022, Betamethasone or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Effects on Cytokine Levels in Therapeutic Model

Elevated levels of pro-inflammatory cytokines, observed in patients with AD, result in a coordinated immune response. To characterize this immune response, the levels of cytokines in the back skin of the mice were measured. As shown in Figure 6, levels of all cytokines tested: IL-4, IL-13, IL 1β, IL-6, TNF-α, TARC, IL-31 and TSLP were significantly reduced by treatment with PR022 and betamethasone.

Figure 6 Cytokine Concentration in Back Skin After Treatment With PR022, Betamethasone or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Effects on Dendritic Cells in Therapeutic Model

Dendritic cells act as an important component between the innate and adaptive immune system. Cytokines activate dendritic cells whose primary function is to present antigen material to immature T-cells and B-cells leading to their activation. As shown in Figure 7, PR022 and betamethasone significantly reduced the number of activated dendritic cells present in auricular lymph nodes.

Figure 7 Dendritic Cell Counts After Treatment With PR022, Betamethasone or Vehicle Contro l Gel

* = p < 0.05 and ** = p < 0.01.

Effects on T-Cells and B-Cells in Therapeutic Model

Current thinking is that T-cells and B-cells are involved in the pathophysiology of AD. T-cells are mainly activated by dendritic cells and other antigen presenting cells. T-cells release cytokines and chemokines in response to activation . One subgroup of T-cells is referred to as Naïve CD4+ T-cells, which mature into several types of T-cells (Th1, Th2, Th17, Treg) depending on the cytokines present. Another subgroup of T-cells is referred to as CD4+ T-helper cells, which activate other immune cells generally through the production of cytokines. Another type of lymphocyte is referred to as B-cells, which secrete antibodies.

As shown in Figure 8, both PR022 and betamethasone treated groups displayed significantly lower counts for each type of T-cell. As shown in Figure 9, both PR022 and betamethasone treated groups also displayed significantly lower counts for each type of B-cell .

Figure 8 T-Cell Counts After Treatment With PR022, Betamethasone or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Figure 9 B-Cell Counts After Treatment With PR022, Betamethasone or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

Effects on Serum IgE levels

High serum levels of IgE indicate that there has been an adaptive immune response to repeat exposure to HDMs. As shown in Figure 10 treatment with PR022 and betamethasone significantly reduced the levels of IgE in serum.

F igure 10 Serum IgE Levels After Treatment With PR022, Betamethasone or Vehicle Control Gel

* = p < 0.05 and ** = p < 0.01.

In-vitro Study Results of Effect of Hypochlorous Acid on Cytokine Production in Keratinocytes and Dendritic cells

Studies were performed to evaluate the effect of HOCl on cytokines produced by murine keratinocytes and dendritic cells. Activated cells were pre-incubated with three different concentrations of HOCl (0.00075%, 0.0015% and 0.003%) or vehicle control. As shown in Figure 11, treatment with HOCl produced a dose-dependent decrease of IL-8 and TSLP cytokine levels in keratinocytes and as shown in Figure 12, treatment with HOCl produced a dose-dependent decrease of IL-12 and TNF-α cytokines secretion in dendritic cells.

Figure 11 In-vitro Cytokine Levels in Keratinocyte Cells Treated with HOCl or Vehicle Control

* = p < 0.05 and ** = p < 0.01.

Figure 12 In-vitro Cytokine Levels in Dendritic Cells Treated with HOCl or Vehicle Control

* = p < 0.05 and ** = p < 0.01.

Aurstat Licensing History

In 2013, our HOCl based hydrogel was cleared by the FDA as a medical device for the management and relief of pain, burning and itching experienced with various dermatoses, including AD, allergic contact dermatitis and radiation dermatitis. That same year, we out-licensed this hydrogel to Onset Dermatologics, which launched the product under the tradename Aurstat Anti-Itch Hydrogel. In 2014, Onset Dermatologics, then part of Precision Dermatology, was acquired by Valeant Pharmaceuticals, and we exercised our right to terminate the out-licensing agreement. We subsequently withdrew the product from the market in order to evaluate the potential opportunity to develop an HOCl based topical formulation into a drug, which we now refer to as PR022. While Aurstat and PR022 are similar in formulation, we developed PR022 gel with improved properties, including a higher concentration of HOCl, enhanced physical and chemical stability, more consistent viscosity and an improved manufacturing process which yields higher purity.

Aurstat Initial Clinical Data

In 2013, Dr. Brian Berman initiated a clinical study, sponsored by Onset Dermatologics, which demonstrated that Aurstat manufactured at 0.045% HOCl had a significant effect on pruritis at Day 1 and Day 3 of treatment when applied twice daily or as needed, indicating both rapid onset and sustained anti-pruritic effects. Dr. Berman conducted a blinded, randomized (2:1) study evaluating the effects of Aurstat compared to an untreated control on the pruritis of 30 subjects with mild to moderate AD. Pruritis and tolerability were assessed at baseline through the third day using the VAS scale, which measures pruritis, and investigator and subject assessment of tolerability. Dr. Berman observed that treatment with Aurstat reduced pruritus in subjects with mild to moderate AD as early as the initial day of treatment and lasting through the final day of study treatment. As shown in Figure 13, the group treated with Aurstat experienced significantly reduced itch compared to the untreated group. At Day 3, 73.7% of subjects treated with Aurstat experienced reduced itch (p=0.009) while 70% of subjects in the untreated control group had worse itch. Treatment with Aurstat at least twice daily was well-tolerated by the patient population, and there were no serious adverse events and no treatment-related discontinuations reported in the study.

Figure 13 Itch Response of Patients Treated with Aurstat or Untreated at Day 3

Source: Berman et al. ‘Evaluation of an Anti-Itch Hydrogel Containing 0.045% Hypochlorous Acid (HOCl) versus Untreated Control in the Treatment of Atopic Dermatitis Associated Pruritus’ Presented at the 2013 Fall Clinical Dermatology Conference, Las Vegas, NV.

RLM023 for the Treatment of Acne

Acne Vulgaris, which is common Acne, is the most common chronic skin condition. The disease can range from mild to severe cystic acne and is associated with significant physical and psychosocial effects on quality of life, including permanent scarring, depression and anxiety. The two main factors involved in the development of Acne are clogged pores and / or the presence of bacteria, leading to irritation, lesions and inflammation. Studies have demonstrated a central role of inflammation in the development of Acne lesions and have opened new opportunities for therapeutic intervention that target inflammation. Acne affects approximately 45 million people, or 14% of the population, in the United States. Analysts valued the prescription market for Acne at close to $5 billion in the United States for 2017, including retinoids such as Epiduo and Absorica and antibiotics such as Solodyn and Aczone, with continued growth expected.

Current Limitations of Acne Treatments

Current topical treatment options for Acne have known safety drawbacks. Antibiotics and antibacterials are used to manage infection associated with Acne, but long term use is not indicated due to concerns of resistance. Retinoids, often considered the mainstay therapy, can cause dryness, erythema, irritation photosensitivity and carry a Category C pregnancy risk requiring women of child bearing age to use birth control or other measures to protect against pregnancy. Oral contraceptives are also sometimes used to manage acne, but carry cardiovascular risks and are contraindicated in pediatric and male patients. Recent product introductions in Acne have been combinations of approved antibiotics / antibacterials and retinoids, and therefore carry the compounded risks described above. There have been no new clinically meaningful therapies approved to treat Acne in over a decade.

We believe that an HOCl based formulation may offer a promising treatment for Acne due to HOCl’s anti-inflammatory and anti-microbial properties. In in vitro and in vivo pre-clinical studies, our HOCl formulation demonstrated a reduction in the expression of pro-inflammatory cytokines such as TNF-α, IL 1β, IL-8 and IL-12 (see Figures 6, 11 and 12), which have been reported to be key cytokines associated with Acne pathogenesis.

In the fourth quarter of 2018, we expect to file an IND for a new product candidate, RLM023, a topical formulation of HOCl that is optimized for Acne. This IND is intended to support entry into a Phase 2 clinical trial for the treatment of Acne. We may use the PR022 formulation for the initial proof of concept study in Acne to expedite entry into the clinic. We anticipate initiating this Phase 2 clinical study in the first quarter of 2019, contingent upon clearance by the FDA. The proposed trial design provides for a double-blind, randomized, vehicle-controlled, parallel-group study of the topical gel in adult subjects with moderate to severe facial Acne.

If we use the PR022 formulation in the initial Acne proof of concept trial, we believe that we will be able to file an amendment to our existing IND for PR022 for Atopic Dermatitis, which could result in a quicker submission to the FDA and potentially an earlier allowance by the FDA to proceed into the clinical study. Additionally, we have an established process for manufacturing PR022 formulations and thus we would save time and money in entering clinical studies in Acne if we use this same formulation. Among the changes we are considering in developing RLM023 for Acne are using different concentrations of the API or adding or modifying certain excipients in the formulation. These formulation changes may not require additional toxicology studies or may require a bridging or a full toxicology program in order to permit their use in further clinical studies. Additionally, depending upon the extent of formulation changes made, if any, we may need to perform an additional proof of concept study for Acne. Therefore, using PR022 in the proof of concept study and using a different formulation in later clinical studies could provide benefits but also carries risks and therefore we are considering our plans on an on-going basis.

PR022 for the Treatment of Psoriasis

Psoriasis is a common chronic autoimmune disorder of the skin characterized by focal formation of inflamed, raised plaques that constantly shed scales derived from excessive growth of skin epithelial cells. Research has identified key cellular and molecular pathways of inflammation that contribute to the pathogenesis of Psoriasis. Approximately 12 million people in the United States suffer from Psoriasis, of whom an estimated 7.5 million have been diagnosed with the skin disease, and an estimated 50% to 60% are actively being treated for the disease. Psoriasis is the largest indication in dermatology, which per analysts estimates, it generated approximately $6 billion in sales in the United States in 2017, which can largely be attributed to biologics.

Mild to moderate Psoriasis is typically treated with topical therapies such as corticosteroids or vitamin D analogs. Moderate to severe Psoriasis may be treated with topical therapies, systemic immunosuppressive or immunomodulatory drugs (biologics) or phototherapy. While all of these therapies can help reduce the skin irritation and plaques in patients with Psoriasis, and may also reduce pruritus to some degree, they may not adequately resolve these symptom in patients.

Pre-clinical studies of our HOCl formulation have shown in vitro and in vivo to down modulate pro-inflammatory cytokines TNF-α, IL-6, and IL-12 (see Figures 6 and 12), which have been reported at elevated levels in patients with Psoriasis and correlated to disease severity. We are further evaluating this indication in pre-clinical studies and may develop a new HOCl based formulation to target this disease.

Potential Additional Indications

In addition to the indications discussed above, we are also considering the possible utilization of our proprietary platform technology in Prurigo Nodularis, Epidermolysis Bullosa and Bullous Pemphigoid. We have not yet conducted any research and development and have no product candidates in the pipeline for these indications at present.

Prurigo Nodularis, or PN, is a chronic dermatologic condition, associated with severe pruritus that markedly affects the quality of life in patients. The vicious cycle of repeated itching and scratching leads to formation of raised, inflamed skin nodules that can develop sores or become hard and crusty. To date, no treatment for PN has been approved in the United States. Recently, higher levels of the pruritic cytokine IL-31, which our HOCl formulations have been shown to reduce, were found in the skin of patients with PN than in other pruritic skin diseases.

Epidermolysis bullosa, or EB, is an inherited disorder characterized by blistering of the skin following minor friction or mechanical trauma. Currently there is no effective therapy or cure for EB. The disease is primarily managed with symptomatic therapy. EB is generally caused by abnormalities in the site of attachment of the epidermis to dermis, suggesting that a topical product could be beneficial. Several studies have suggested that EB patients’ skin shows increased signaling and overexpression of IL1β, which our HOCl based formulations have been shown to downregulate.

Bullous Pemphigoid, or BP, is an autoimmune blistering disease. BP is characterized by spontaneous flare-ups and remissions. It classically presents as generalized pruritic plaques and tense sub-epithelial blisters. Steroids and immunosuppressants are used to manage the disease, but long term use of both is linked to negative side effects. IgE, which PR022 has been shown to downregulate, has been implicated in the pathogenesis of BP.

Recently Announced Clinical Results of Discontinued Product Candidate

Disease pathology is one area of significant difference between AC and AD. Seasonal AC is a distinctly different disease state compared to AD. AC is caused by an allergen-induced rapid inflammatory response in which allergens interact with IgE bound to mast cells inducing the allergic symptoms. This immediate clinical response typically lasts approximately 20 to 30 minutes. In contrast, AD is a complex inflammatory cutaneous disorder characterized by immune-mediated inflammation and epidermal barrier dysfunction.

The design of our Phase 2 clinical trials in AC and AD are also different. In the Phase 2 clinical trial in AC, the clinical endpoints of ocular itching and ocular redness were limited to the signs and symptoms of the eye only. The disease state of allergic symptoms was artificially induced by instilling a defined allergic antigen into the eye of a study subject. The endpoints of itching and redness were measured within the 20 minutes following the instillation of the allergen. In our ongoing Phase 2 clinical trial of AD, on the other hand, the disease state is not being artificially induced, as only patients with an established disease participate in the clinical trial. In addition, the clinical endpoints consist of a compressive clinical scoring of the patient’s entire skin after a treatment period of 28 days, resulting in a longer period for the drug candidate to deliver immunomodulatory effects. Clinical efficacy scoring takes into account the extent of skin lesions, and the degree of inflammation as well as quality of life factors, such as itch and sleep.

Competition

such as Elidel, are also prescribed for the treatment of AD. Standard treatments for Acne include antibiotics, antibacterials, retinoids and oral contraceptives. There are a number of treatments for Psoriasis on the market, including biologics, topical therapies such as corticosteroids or vitamin D, as well as systemic immunosuppressive drugs, or phototherapy.

Intellectual Property Summary

We strive to protect and enhance our proprietary technologies and inventions that we believe are important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties. Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection related to our proprietary technologies and inventions, including our product candidates, in the United States and other jurisdictions that we believe are important to the development and implementation of our business.

As of March 23, 2018, our intellectual property portfolio included thirteen issued U.S. patents, eight pending U.S. patent applications, 27 issued foreign patents in countries including Canada, Australia, China and Mexico, and European validations in European Patent Convention member states such as Germany, France, Great Britain and Italy. We also had 33 foreign patent applications pending, as well as one patent pending under the Patent Cooperation Treaty and one U.S. provisional application pending, at such date. Our patents and applications claim methods of treatment with HOCl, as well as stabilized HOCl compositions and uses thereof, and electrochemical methods for making HOCl.

The patent portfolio relating to PR022 includes four patent families. The first patent family was filed in the U.S., and includes one issued patent, an allowed pending application, as well as two continuation applications. The issued U.S. patent claims methods for treating conditions characterized by chronic type 1 or type 4 hypersensitivity with HOCl. The issued U.S. patent has a Patent Term Adjustment of 1150 days putting its expiration at August 10, 2031, not including any patent term extensions that may apply upon product approval.

The second patent family was filed in the United States, United Arab Emirates, Australia, Brazil, Canada, Chile, China, Europe, Hong Kong, Japan, Mexico, and South Africa. This family includes five issued US patents, and patents issued in Australia, China, Hong Kong, Mexico, and South Africa. There are also two patent applications pending in the U.S., including one application that is allowed, with patents also pending in United Arab Emirates, Brazil, Canada, Chile, China, Europe, Japan, and Mexico. Patents in this family expire March 19, 2032, not including patent term extensions that may apply upon product approvals. In particular, U.S. patents in this family include claims to stabilized HOCl solutions or formulations and methods of use, and include claims to methods of treating inflammatory conditions with the stabilized HOCl solution or formulation. The allowed U.S. application claims the composition-of-matter for Realm’s PR022 formulation.

The third patent family was nationalized in 2017 in the U.S., Australia, Canada, China, Europe, Israel, Mexico, Japan, South Korea, and Singapore. This application family discloses dose-dependent anti-inflammatory properties of HOCl, and claims methods of treating various skin inflammatory disorders. Applications in this family are expected to expire December 16, 2034 in the U.S., and December 16, 2035 outside the U.S.

The fourth patent family was also nationalized in 2017 in the U.S., Australia, Canada, China, Europe, Israel, Mexico, Japan, South Korea, and Singapore. This application family discloses dose-dependent anti-inflammatory properties of HOCl, including methods of treating various inflammatory disorders, of the skin and other tissues and organs. Applications in this family are expected to expire March 27, 2035 in the U.S., and March 28, 2036 outside the United States.

In addition, we are the exclusive licensee from Professor Vitold Bakhir of two U.S. patents relating to devices for producing HOCI. We are the licensee of all rights to one U.S. patent which claims an a

ssembly of electrochemical cells for production of HOCl, and which is used for preparing the API in our product candidates. The exclusive license, as last amended on September 2, 2016, includes the right to enforce and sublicense and expires on March 10, 2028. We have sublicensed this patent to Chemstar in connection with our intellectual property license to Chemstar for floral preservative and produce wash fields. Our license to Chemstar further includes an exclusive field-limited license to certain patents relating to our HOCl production technologies and certain patents relating to our stabilized HOCl solution, as well as foreign counterparts relevant to Chemstar’s field. We maintain full control of the first Professor Bakhir patent, with the first right to enforce upon infringement in the field by a third party. We have a license to a second patent from Professor Bakhir effective April 4, 2018, which includes an exclusive license in the field of pharmaceuticals and pharmaceutical development. This patent covers electrochemical cells invented by Professor Bakhir, and which are used for preparing the API in our product candidates, and has a term to February 26, 2030. This second Professor Bakhir patent is not subject to the Chemstar license. We are responsible for maintaining both patents licensed from Professor Bakhir.

Government Regulation and Product Approval

Government authorities in the United States, at the federal, state and local levels, and in other countries, extensively regulate, among other things, the research, development, testing, manufacture, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, import and export of pharmaceutical products, such as those we are developing. The processes for obtaining regulatory approvals in the United States and in foreign countries, along with subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial resources.

United States Government Regulation

In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and its implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable United States requirements at any time during the drug development process, approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the FDA’s refusal to approve pending new drug applications, or NDAs, withdrawal of an approval, imposition of a clinical hold, issuance of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

The process required by the FDA before a drug may be marketed in the United States generally involves:


•	completion of pre-clinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations, including laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess potential safety and efficacy;


•	submission to the FDA of an IND, which must become effective before human clinical trials may begin;


•	approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated;


•	performance of adequate and well-controlled clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug for each indication;


•	submission to the FDA of an NDA;


•	satisfactory completion of an FDA advisory committee review, if applicable;


•	satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements, and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;


•	satisfactory completion of an FDA inspection of selected clinical sites to assure compliance with GCPs and the integrity of the clinical data;


•	payment of user fees; and


•	FDA review and approval of the NDA.

Clinical Trials

We expect that all of our current product candidates will be reviewed by the FDA on a de novo basis, which means that extensive clinical testing will be required. Prior to the initiation of clinical testing, a sponsor must submit to the FDA an investigational new drug, or IND, application to the FDA, including the results of pre-clinical studies, manufacturing information, analytical data and any available clinical data or literature. Some pre-clinical testing may continue even after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must continue to oversee the clinical trial while it is being conducted. Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their ClinicalTrials.gov website.

Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined. In Phase 1, the drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an initial indication of its effectiveness. In Phase 2, the drug typically is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. In Phase 3, the drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the safety and efficacy of the product for approval, to establish the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product.

Progress reports detailing the results of the clinical trials must be submitted, at least annually, to the FDA, and more frequently if serious adverse events occur. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or

terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements, or if the drug has been associated with unexpected serious harm to patients.

Marketing Approva l

Assuming successful completion of the required clinical testing, the results of the pre-clinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. In most cases, the submission of an NDA is subject to a substantial application user fee. Under the Prescription Drug User Fee Act, or PDUFA, guidelines that are currently in effect, the FDA has a goal of ten months from the date of “filing” of a standard NDA for a new molecular entity to review and act on the submission. This review typically takes twelve months from the date the NDA is submitted to the FDA because the FDA has approximately two months to make a “filing” decision.

In addition, under the Pediatric Research Equity Act, certain NDAs or supplements to an NDA must contain data that are adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.

The FDA also may require submission of a risk evaluation and mitigation strategy, or REMS, plan to ensure that the benefits of the drug outweigh its risks. The REMS plan could include medication guides, physician communication plans, assessment plans, and / or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.

The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.

The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCP requirements.

The testing and approval process for an NDA requires substantial time, effort and financial resources, and takes several years to complete. Data obtained from pre-clinical and clinical testing are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval of an NDA on a timely basis, or at all.

After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or pre-clinical testing in order for FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes, and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Orange Book Listing

In seeking approval for a drug through an NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product. Upon approval of an NDA, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, known as the Orange Book. Any applicant who files an Abbreviated New Drug Application, or ANDA, seeking approval of a generic equivalent version of a drug listed in the Orange Book referencing a drug listed in the Orange Book must certify, for each patent listed in the Orange Book for the referenced drug, to the FDA that (1) no patent information on the drug product that is the subject of the application has been submitted to the FDA, (2) such patent has expired, (3) the date on which such patent expires or (4) such patent is invalid or will not be infringed upon by the manufacture, use or sale of the drug product for which the application is submitted. The fourth certification described above is known as a paragraph IV certification. A notice of the paragraph IV certification must be provided to each owner of the patent that is the subject of the certification and to the holder of the approved NDA to which the ANDA. The applicant may also elect to submit a “section viii” statement certifying that its proposed label does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. This section viii statement does not require notice to the patent holder or NDA owner. There might also be no relevant patent certification.

If the reference NDA holder and patent owners assert a patent challenge directed to one of the Orange Book listed patents within 45 days of the receipt of the paragraph IV certification notice, the FDA is prohibited from approving the application until the earlier of 30 months from the receipt of the paragraph IV certification expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the applicant. Even if the 45 days expire, a patent infringement lawsuit can be brought and could delay market entry, but it would not extend the FDA-related 30-month stay of approval.

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new

indications, manufacturing changes or other labeling claims, are subject to further testing requirements and prior FDA review and approval. There also are continuing annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as application fees for supplemental applications with clinical data.

Even if the FDA approves a product, it may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, including a boxed warning, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:


•	restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;


•	fines, warning letters or holds on post-approval clinical trials;


•	refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;


•	product seizure or detention, or refusal to permit the import or export of products; or


•	injunctions or the imposition of civil or criminal penalties.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label, although physicians, in the practice of medicine, may prescribe approved drugs for unapproved indications. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states. Both the

PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

Federal and State Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations

In addition to FDA restrictions on marketing of pharmaceutical products, federal and state healthcare laws and regulations restrict business practices in the biopharmaceutical industry. These laws may impact, among other things, our current and future business operations, including our clinical research activities, and proposed sales, marketing and education programs and constrain the business or financial arrangements and relationships with healthcare providers and other parties through which we market, sell and distribute our products for which we obtain marketing approval. These laws include anti-kickback and false claims laws and regulations, data privacy and security, and transparency laws and regulations, including, without limitation, those laws described below.

The federal Anti-Kickback Statute prohibits, among other things, individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. The federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers and formulary managers on the other hand. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.

The reach of the federal Anti-Kickback Statute was also broadened by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively the ACA, which, among other things, amended the intent requirement of the federal Anti-Kickback Statute such that a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act and the civil monetary penalties statute.

The federal civil and criminal false claims laws, including the False Claims Act, which prohibit, among other things, any individual or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. Several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and thus non-reimbursable, uses.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third party payors and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, impose certain requirements relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization on certain health plans, healthcare clearinghouses and certain healthcare providers, known as covered entities, and their respective business associates, independent contractors that perform certain services involving the use or disclosure of individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions.

The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to payments or other transfers of value made to physicians and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members.

We may also be subject to state and foreign law equivalents of each of the above federal laws; state laws that require manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or that otherwise restrict payments that may be made to healthcare providers; state and local laws that require the registration of pharmaceutical sales representatives; as well as state and foreign laws that govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs. Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, exclusion from participating in government funded healthcare programs, such as Medicare and Medicaid, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm and the curtailment or restructuring of our operations. To the extent that any of our products are sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate compliance programs and reporting of payments or transfers of value to healthcare professionals.

Coverage and Reimbursement

Market acceptance and sales of any drug products depend in part on the extent to which reimbursement for drug products will be available from third party payors, including government health administration authorities, managed care organizations and other private health insurers. third party payors decide which drug products they will pay for and establish reimbursement levels. third party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. However, decisions regarding the extent of coverage and amount of

reimbursement to be provided for drug products are made on a payor-by-payor basis. One payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage, and adequate reimbursement, for the drug product. Additionally, a third party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Each payor determines whether or not it will provide coverage for a drug product, what amount it will pay the manufacturer for the therapy, and on what tier of its formulary it will be placed. The position on a payor’s list of covered drugs, or formulary, generally determines the co-payment that a patient will need to make to obtain the drug product and can strongly influence the adoption of such drug product by patients and physicians. Patients who are prescribed drug products for their conditions and providers prescribing such drug products generally rely on third party payors to reimburse all or part of the associated costs. Patients are unlikely to use a drug product unless coverage is provided and reimbursement is adequate to cover a significant portion of the cost of the drug product.

Reimbursement by a third party payor may depend upon a number of factors, including the third party payor's determination that a drug product is neither experimental nor investigational, safe, effective, and medically necessary, appropriate for the specific patient, cost-effective, supported by peer-reviewed medical journals and included in clinical practice guidelines.

Third party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular drug products. Even if reimbursement is available, the level of reimbursement is unpredictable. Inadequate coverage and reimbursement can impact the demand for, or the price of, drug products. If coverage and adequate reimbursement are not available, or are available only to limited levels, drug products may not be successfully commercialized. Further, adequate third party payor reimbursement may not be available to enable price levels sufficient to realize appropriate returns on investment in drug product development.

In addition, the federal government and state legislatures have continued to implement cost containment programs, including price controls and restrictions on coverage and reimbursement. To contain costs, governmental healthcare programs and third party payors are increasingly challenging the price, scrutinizing the medical necessity and reviewing the cost-effectiveness of drug products.

Impact of Healthcare Reform on our Business

In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of drug product candidates, restrict or regulate post-approval activities, and affect the profitable sale of drug product candidates.

Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and / or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. In March 2010, the ACA was passed, which substantially changed the way healthcare is financed by both the government and private insurers, and significantly impacts the U.S. pharmaceutical industry. The ACA, among other things: (i) increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations; (ii) established an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs; (iii) expanded the availability of lower pricing under the 340B drug pricing program by adding new entities to the program; (iv) increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price, or AMP; (v) expanded the eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility

categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; (vi) established a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% (and 70%, commencing January 1, 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; (vii) created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and (viii) established a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug.

Some of the provisions of the ACA have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of the ACA, as well as recent efforts by the Trump administration to repeal or replace certain aspects of the ACA. Since January 2017, President Trump has signed two Executive Orders and other directives designed to delay the implementation of certain provisions of the ACA or otherwise circumvent some of the requirements for health insurance mandated by the ACA. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the ACA. While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the ACA have been signed into law. On December 22, 2017, new legislation was signed into law (H.R. 1, “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” or the Tax Cuts and Jobs Act) that significantly revised the U.S. Internal Revenue Code of 1986, as amended, or the Code . The Tax Cuts and Jobs Act includes a provision repealing, effective January 1, 2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”. Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Further, the Bipartisan Budget Act of 2018, or the BBA, among other things, amends the ACA, effective January 1, 2019, to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”.

Other legislative changes have been proposed and adopted since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013, and due to subsequent legislative amendments to the statute, including the BBA, will remain in effect through 2027 unless additional Congressional action is taken. The American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding, which could have an adverse effect on customers for our drug candidates, if approved, and, accordingly, our financial operations.

Additionally, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics. Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products. At the federal level, the Trump administration’s budget proposal for fiscal year 2019 contains further drug price control measures that could be enacted during the 2019 budget process or in other future legislation, including, for example, measures to permit Medicare Part D plans to negotiate the price of certain drugs under Medicare Part B, to allow some states to negotiate drug prices under Medicaid, and to eliminate cost sharing for generic drugs for low-income patients. While any proposed measures will require authorization through additional legislation to become effective, Congress

and the Trump administration have each indicated that it will continue to seek new legislative and / or administrative measures to control drug costs. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

Manufacturing and Supply

We outsource the manufacturing of our product candidates to various parties who are responsible for producing API, manufacturing the drug formulations and packaging, and randomizing / labeling the product for clinical trials. We intend to continue to outsource the manufacturing of any product candidates if and when they are approved for marketing and commercialized.

Employees

We had 15 full-time employees as of December 31, 2017. None of our employees are represented by any collective bargaining unit. We believe that we maintain good relations with our employees.

Property and Facilities

Our headquarters are located in Malvern, Pennsylvania, and consist of approximately 7,000 square feet of office and lab space, which houses our in-house R&D function, under a lease that expires in 2025. We may require additional space and facilities as our business expands.

Legal Proceedings

From time to time, we may become involved in litigation or other legal proceedings relating to claims arising from the ordinary course of business. There are currently no claims or actions pending against us that, in the opinion of our management, are likely to have a material adverse effect on our results of operations, financial condition or cash flows.

MANAGEMENT

Executive Officers and Directors

The following table sets forth information regarding our executive officers and directors as of March 31, 2018.



NAME	AGE	POSITION(S)
Executive Officers:
Alex Martin	50	Chief Executive Officer and Director
Marella Thorell	51	Chief Financial Officer, Chief Operating Officer, Company Secretary and Director
Christian Peters, M.D., PhD	56	Chief Medical Officer
Non-Executive Directors:
Charles Spicer	53	Chairman of the Board of Directors and Independent Non-Executive Director
Joseph William Birkett	70	Independent Non-Executive Director
Ivan Gergel, M.D.	57	Independent Non-Executive Director
Balkrishan (Simba) Gill, PhD	53	Independent Non-Executive Director
Sanford (Sandy) Zweifach	62	Independent Non-Executive Director

Executive Officers

Alex Martin joined Realm Therapeutics in June 2015 as Chief Executive Officer (CEO) and Executive Director. He brings more than 25 years of experience having held senior positions in both private and public companies principally in the pharmaceutical and biopharmaceutical industry. He previously served as a CEO of Affectis Pharmaceuticals AG, Chief Operating Officer of Intercept Pharmaceuticals (Nasdaq: ICPT) and Chief Business Officer at Bioxell S.p.A, which was acquired by Cosmo Pharmaceuticals S.A. He began his career at SmithKline Beecham Pharmaceuticals before joining Novartis as Vice President, Global Business Development & Licensing. Prior to Realm, Mr. Martin served as President at moksha8 Pharmaceuticals Inc., a leading Latin American specialty pharmaceutical company. Mr. Martin holds a BA from Cornell University and an MBA from Harvard.

Marella Thorell was appointed Chief Financial Officer and Executive Director in March 2013 and was appointed Chief Operating Officer in October 2014. Previously, she was a key member of the Realm Therapeutics senior leadership team, and has been Company Secretary since October 2011. She offers more than 25 years of experience in finance, operations, and human resources. Previously, she was the President of Thorell Consulting, a business consulting firm. Ms. Thorell worked at Campbell Soup Company (NYSE: CPB), where she held a number of financial and management roles. She began her career and earned her CPA accounting qualification with Ernst & Young LLP. Ms. Thorell holds a BS in Business from Lehigh University.

Christian Peters, MD, PhD joined Realm Therapeutics in April 2016 as the Chief Medical Officer (CMO). He has over 25 years’ experience, including 15 years of successful clinical development and commercialization in a number of senior leadership positions in the pharmaceutical industry, and more than 10 years of clinical and research experience in academic settings. Prior to Realm, Dr. Peters served as CMO of Therakos. He oversaw corporate strategy and execution for Global Clinical Development, Regulatory Affairs, Pharmacoeconomics and Medical/Scientific Affairs. He previously held a number of senior positions at CSL Behring, and its predecessor Aventis Behring LLC, and at Therakos, then owned by Johnson & Johnson. He received his M.D. and Ph.D. in cellular immunology from the Free University Berlin Medical School in Germany

Non-Executive Directors

Charles Spicer joined Realm Therapeutics in June 2013 as an Independent Non-Executive Director and was named Non-Executive Chairman in June 2014. He has more than 20 years of experience working within the healthcare sector and specifically medtech and life sciences segments. Mr. Spicer is a Non-Executive Chairman of IXICO plc (LSE: IXI), Creo Medical Group plc (LSE: CREO) and 11 Health & Technologies Limited and chairs a U.K. Department of Health Invention for Innovation (i4i) Funding Panel. Mr. Spicer has also served as a Non-Executive of Aircraft Medical Limited and Stanmore Implants. Previously he was Chief Executive of MDY Healthcare plc, an AIM-quoted strategic investment company focused on medtech, and prior to that head of healthcare at Numis Securities and Nomura International. Mr. Spicer was awarded an MA in history from Cambridge University.

Joseph William Birkett joined Realm Therapeutics in 1999 as an Independent Non-Executive Director and currently serves as Senior Independent Non-Executive Director and as Chairman of the Audit Committee. Mr. Birkett is an independent consultant and investor who has served on the board of a wide range of companies, both public and private, throughout his career. Following receipt of a BSc in Economics from Sheffield University, he qualified as an FCA with Touche Ross (now Deloitte & Touche LLP) before pursuing a career in finance, global investment banking, and private equity.

Ivan Gergel, M.D . joined Realm Therapeutics in January 2017 as an Independent Non-Executive Director and serves on the Remuneration Committee. Dr. Gergel was Senior Vice President Drug Development and Chief Medical Officer at Nektar Therapeutics. He has more than 25 years of pharmaceutical leadership and drug development experience. Prior to Nektar, Dr. Gergel was Executive Vice President R&D and Chief Scientific Officer at Endo Pharmaceuticals and a Senior Vice President R&D at Forest Laboratories (subsequently acquired by Actavis / Allergan) and he has advanced multiple compounds from research through approval. Dr. Gergel received his M.D. from The Royal Free Medical School of The University of London and an MBA from the Wharton School of the University of Pennsylvania.

Balkrishan (Simba) Gill, Ph.D. joined Realm Therapeutics in 2016 as an Independent Non-Executive Director and serves as Chairman of the Remuneration Committee. He is currently President, CEO and a member of the board of directors of Evelo Biosciences, which he joined in September 2015. He is also the executive Chairman of Blackfynn Inc. Dr. Gill has served as a Venture Partner at Flagship Pioneering, a life sciences innovation enterprise, since 2015. From 2006 to 2015, Dr. Gill served as the President and Chief Executive Officer of moksha8 Pharmaceuticals, Inc . Dr. Gill has an MBA from INSEAD and completed his Ph.D., with a focus on developing humanized antibodies to treat cancer, at King’s College, London.

Sanford (Sandy) Zweifach joined Realm Therapeutics in December 2017 as an Independent Non-Executive Director and serves on the Audit Committee. Mr. Zweifach has over 25 years’ experience in the life sciences industry, with a focus in corporate partnering, business development, operations, private and public investing, and capital raising. He is the Founder and Chief Executive Officer of Nuvelution Pharma, Inc. Previously, Mr. Zweifach was the founder and CEO of Ascendancy Healthcare, Inc. He has also been a Partner at Reedland Capital Partners, CEO of Pathways Diagnostics, Managing Director / CFO of Bay City Capital, and President and CFO of Epoch Biosciences, which was acquired by Nanogen. He currently serves as the Chairman of Lyric Pharmaceuticals Inc. and IMIDomics SL. He received his BA in Biology from UC San Diego and an MS in Human Physiology from UC Davis.

Foreign Private Issuer Exemption

As a “foreign private issuer,” as defined by the SEC, we are permitted to follow home country corporate governance practices, instead of certain corporate governance practices required by Nasdaq for U.S. domestic issuers. While we intend to follow most Nasdaq corporate governance rules, we intend to follow U.K. corporate governance practices in lieu of Nasdaq corporate governance rules as follows:


•	We do not intend to follow Nasdaq Rule 5620(c) regarding quorum requirements applicable to meetings of shareholders. Such quorum requirements are not required under the laws of England and Wales. In accordance with generally accepted business practice, our Articles of Association provide alternative quorum requirements that are generally applicable to meetings of shareholders.

Although we may rely on certain home country corporate governance practices, we must comply with Nasdaq Rule 5640 Notification of Noncompliance and Rule 5640 Voting Rights. Further, we must have an audit committee that satisfies Rule 5605(c)(3), which addresses audit committee responsibilities and authority, and that consists of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii), subject to a transition period for newly public companies.

Because we are a foreign private issuer, our directors and senior management are not subject to short-swing profit and insider trading reporting obligations under Section 16 of the Exchange Act. They will, however, be subject to the obligations to report changes in share ownership under Section 13 of the Exchange Act and related SEC rules.

Composition of Our Board of Directors

Our board of directors is currently composed of seven members. As a foreign private issuer, under the listing requirements and rules of Nasdaq, we are not required to have independent directors on our board of directors, except that our audit committee is required to consist fully of independent directors, subject to certain phase-in schedules. However, our board of directors has determined that Charles Spicer, Joseph William Birkett, Dr. Ivan Gergel, Dr. Balkrishan (Simba) Gill and Sanford (Sandy) Zweifach do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of director and that each of these directors is “independent” as that term is defined under Nasdaq rules. There are no family relationships among any of our directors or senior management.

At every annual general meeting each director shall retire from office who is required to do so in accordance with any corporate governance policy adopted from time to time by the Company, and each director shall in any event retire at that annual general meeting unless he or she was appointed or re-appointed as a director at either of the last two general meetings before that annual general meeting. A director retiring at a meeting shall, if he or she is not re-elected at such meeting, retain office until the conclusion of the meeting or adjourned meeting at which he or she is due to retire. See the section entitled “Description of Share Capital and Articles of Association — Articles of Association — Directors.”

Committees of Our Board of Directors

The audit committee, which consists of Joseph William Birkett, Sanford (Sandy) Zweifach and Alex Martin, assists the board of directors in overseeing our accounting and financial reporting processes. Mr. Birkett serves as chairman of the audit committee. The audit committee consists exclusively of members of our board who are financially literate, and Mr. Birkett and Mr. Zweifach are considered “audit committee financial experts” as defined by applicable SEC rules and has the requisite financial sophistication as defined under the applicable Nasdaq rules and regulations. Under Rule 10A-3 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we are permitted to phase in our compliance with the independent audit committee requirements set forth in Nasdaq Rule 5605(c) and Rule 10A-3 as follows: (1) one independent member at the time of listing; (2) a majority of independent members within 90 days of listing; and (3) all independent members within one year of listing. Our board of directors has determined that each of Mr. Birkett and Mr. Zweifach are independent directors under Nasdaq listing rules

and under Rule 10A-3 under the Exchange Act and we are relying on the independence phase-in with respect to Mr. Martin. The audit committee is governed by a charter that complies with Nasdaq rules. The audit committee’s responsibilities include:


•	recommending the appointment of the independent auditor to shareholders for approval at the general meeting of shareholders;


•	the appointment, compensation, retention and oversight of any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit services;


•	pre-approving the audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render such services;


•	evaluating the independent auditor’s qualifications, performance and independence, and presenting its conclusions to the full board of directors on at least an annual basis;


•	reviewing and discussing with management and our independent registered public accounting firm our financial statements and our financial reporting process; and


•	reviewing procedures for detection of fraud, whistleblowing and prevention of bribery, and reports on systems for internal financial control, financial reporting and risk management.

Remuneration Committee

The remuneration committee, which consists of Dr. Balkrishan (Simba) Gill and Dr. Ivan Gergel, advises the board in determining executive compensation. The remuneration committee’s responsibilities include:


•	identifying, reviewing and proposing policies relevant to the salary, annual incentives equity and other compensation of our directors, executive officers and all other employees;


•	evaluating the performance of each executive officer, the chairman of the board, the company secretary and such members of the executive management as it is designated to consider, in light of such policies and reporting to the board;


•	reviewing the design of all employee share option scheme or equity incentive plans in operation from time to time; and


•	reviewing, approving or ratifying any related party transactions between the company and any director, executive officer or related party.

Code of Business Conduct and Ethics

In connection with our listing on Nasdaq, we will revise our Code of Business Conduct and Ethics applicable to our employees, executive officers and directors.

Compensation of Executive Officers and Directors

For the year ended December 31, 2017, the aggregate compensation accrued or paid to the non-executive members of our board of directors and to our principal executive officer and principal financial officer / principal accounting officer for services in all capacities was $1.8 million.

The following table provides information regarding the compensation awarded to, earned by or paid to our principal executive officer and principal financial officer / principal accounting officer for the year ended December 31, 2017.



Name and Principal Position	Salary ($)		Option Awards ($) ⁽¹⁾⁽²⁾		Non-Equity Incentive Compensation ⁽³⁾		All Other Compensation ⁽⁴⁾		Total ($)
Alex Martin Chief Executive Officer	$	370,000	$	162,681	$	277,500	$	51,419	$	861,601
Marella Thorell Chief Financial Officer and Chief Operating Officer	$	300,000	$	68,601	$	187,500	$	39,280	$	595,381

__________________

(1)

The amounts in this column represent the aggregate grant date fair value of the options granted during 2017 and exclusive of any additional options issued on previous option grants as made under certain antidilution provisions. The grant date fair value of the options was computed in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718. These amounts do not necessarily correspond to the actual value that may be realized by the executive in connection with his or her option awards. The assumptions made in valuing the option awards reported in this column are described in Note 10 to our consolidated financial statements included in this prospectus.

(2)

In December 2017, Mr. Martin and Ms. Thorell were granted 830,000 and 350,000 options, respectively, to purchase ordinary shares at an exercise price of £0.39 per share. Additionally, in October 2017 as a result of our private placement and as permitted under the terms of our equity incentive plan, the number of shares issuable pursuant to options to purchase ordinary shares previously awarded to Mr. Martin and Ms. Thorell was increased by 1,985,326 and 671,747 shares, respectively, such that each of their percentages of our outstanding share capital following the private placement represented by their respective outstanding options was the same as it is had been prior to the private placement. Option exercise prices, vesting terms and expiry dates for these options remained unchanged.


(3)	The amounts in this column represent performance bonuses earned by the named executive officers in the calendar year 2017 based upon the achievement of pre-established performance objectives. See “ Compensation of Executive Officers and Directors — Executive Director Employment Agreements” below.

(4)

Amounts in this column reflect the payment of medical insurance premiums, life and disability insurance premiums, and 401(k) employer contributions. All of these benefits are provided to the named executive officers on the same terms as provided to all of our regular full-time employees. Mr. Martin and Ms. Thorell are entitled to a monthly car allowance of $1,500 and $1,000, respectively, pursuant to their employment agreements.

Executive Director Employment Agreements

Alex Martin

We and our U.S. subsidiary, Realm Therapeutics, Inc., entered into an employment agreement with Mr. Martin in May 2015. This agreement entitles Mr. Martin to receive an initial annual base salary of not less than $370,000 per year and subject to annual adjustments as determined by the remuneration committee. Mr. Martin is eligible to receive an annual bonus of 50% of his base salary, which may be adjusted up or down based on his performance, such bonus amount to be determined in the Company’s sole discretion. Mr. Martin’s agreement also stipulated that he is entitled to receive 1,000,000 options to purchase our ordinary shares. These options were issued in June 2015 with an exercise price of £0.2975 per share ($0.45 per share at an exchange rate of 1.5267). The options vest over a three year period and upon the achievement of performance objectives as defined by our remuneration committee. As of December 31, 2017, Mr. Martin’s options granted in June 2015 were two-thirds vested. During his

employment with us, Mr. Martin is eligible to participate in all of our long term incentive plans, including future equity awards.

Mr. Martin is also entitled to the same fringe benefits that we provide to our other executives from time to time. If Mr. Martin’s employment with the company is terminated without cause, or if he resigns for good reason (as such terms are defined in the agreement), he will also be entitled to receive severance equal to continuation of his base salary and auto allowance, in effect at the time of termination, for twelve months following his date of termination and will be eligible for reimbursement for medical coverage premiums or to remain on our health insurance plans for up to the same period. Mr. Martin is also entitled to a pro rata portion of his annual bonus and based upon the timing of termination. Mr. Martin’s severance benefits are conditioned on, among other things, his execution of our standard separation agreement and a general release of claims in our favor. The agreement provides that if payments and benefits payable to Mr. Martin in connection with a change in control would result in adverse tax consequences under Sections 280G and 499 of the Code, such payments will be cut back to the extent necessary to avoid such adverse tax consequences unless Mr. Martin would be better off on an after-tax basis receiving the full amount of such payments and benefits.

The agreement provides that Mr. Martin’s employment with us is at-will. If required by the company, the agreement further provides that Mr. Martin will resign from his position on our board of directors effective as of the date of his termination for any reason. The agreement, and as further revised in another agreement, contains a twelve month non-competition covenant and a twelve month non-solicitation covenant by Mr. Martin.

Marella Thorell

We and our U.S. subsidiary, Realm Therapeutics, Inc., entered into an employment agreement with Ms. Thorell in March 2013. This agreement entitles Ms. Thorell to receive an initial annual base salary of not less than $250,000 per year and subject to annual adjustments as determined by the remuneration committee. Ms. Thorell is eligible to receive an annual bonus of up to 50% of her base salary, which may be adjusted up or down based on her performance, such bonus amount to be determined in the company’s sole discretion. During her employment with us, Ms. Thorell is eligible to participate in all of our long term incentive plans, including future equity awards.

Ms. Thorell is also entitled to the same fringe benefits that we provide to our other executives from time to time. If Ms. Thorell’s employment with the company is terminated without cause, or if she resigns for good reason (as such terms are defined in the agreement), Ms. Thorell will also be entitled to receive severance equal to continuation of her base salary and auto allowance, in effect at the time of termination, for twelve months following her date of termination and will be eligible for reimbursement for medical coverage premiums or to remain on our health insurance plans for up to the same period. Ms. Thorell is also entitled to a pro rata portion of her annual bonus and based upon the timing of termination. Ms. Thorell’s severance benefits are conditioned on, among other things, her execution of our standard separation agreement and a general release of claims in our favor. The agreement provides that if payments and benefits payable to Ms. Thorell in connection with a change in control would result in adverse tax consequences under Sections 280G and 499 of the Code, such payments will be cut back to the extent necessary to avoid such adverse tax consequences unless Ms. Thorell would be better off on an after-tax basis receiving the full amount of such payments and benefits.

Non-Executive Director Letters of Appointment

Non-executive directors are engaged on letters of appointment that set out their duties and responsibilities. The remuneration of our non-executive directors is determined by our board as a whole, based on a review of current practices in other companies. Fees and other compensation paid to non-executive directors who served during 2017 are set out in the table below. Fees include basic fees, fees paid to committee chairmen and fees paid to our non-executive chairman.



Name	Fees		Option Awards ($) ⁽³⁾		All Other Compensation ⁽⁴⁾		Total ($)
Charles Spicer Chairman of Board of Directors	$	64,408	$	19,600	$	—	$	84,008
Joseph William Birkett Chairman of Audit Committee	$	34,780	$	19,600	$	—	$	54,380
Balkrishan (Simba) Gill, PhD Chairman of the Remuneration Committee	$	34,780	$	19,600	$	36,000	$	90,380
Ivan Gergel, M.D. ⁽¹⁾ Director	$	28,984	$	44,099	$	—	$	73,083
Sanford (Sandy) Zweifach ⁽¹⁾ Director	$	2,415	$	29,400	$	—	$	31,815
Matthew Hammond ⁽²⁾ Director	$	26,568	$	—	$	—	$	26,568
Daniel Hegglin ⁽²⁾ Director	$	—	$	—	$	—	$	—

__________________


(1)	Dr. Gergel and Mr. Zweifach were appointed to our board of directors in January and December of 2017, respectively.


(2)	Mr. Hammond and Mr. Hegglin resigned from our board of directors in November 2017. Mr. Hegglin waived the fees that he would otherwise have been entitled to in his capacity as director, prior to his resignation.

(3)

In December 2017, Mr. Spicer, Mr. Birkett, Dr. Gill and Dr. Gergel were each granted 100,000 options to purchase ordinary shares at an exercise price of £0.39 per share. Upon their appointment in 2017, Dr. Gergel and Mr. Zweifach were granted 65,000 and 150,000 options, respectively, to purchase ordinary shares at an exercise price of £0.30 and £0.39 per share, respectively. Additionally, in October 2017 as a result of our private placement and as permitted under the terms of our equity incentive plan, the number of shares issuable pursuant to options to purchase ordinary shares previously awarded to Mr. Spicer, Mr. Birkett, Dr. Gill and Dr. Gergel was increased by 178,589, 92,649, 132,355 and 86,031, respectively, such that each of their percentages of our outstanding share capital following the private placement represented by their respective outstanding options was the same as it is had been prior to the private placement. Option exercise prices, vesting terms and expiry dates for these options remained unchanged.


(4)	Amounts in this column reflect the payment of a monthly advisory fee of $3,000 pursuant to a consulting agreement with us, which has concluded.

Realm Therapeutics 2016 Executive Omnibus Incentive Plan

We operate the Realm Therapeutics 2016 Executive Omnibus Incentive Plan, or the Plan, an equity compensation plan adopted by our board of directors in June 2016. The Plan provides that a variety of equity instruments can be issued to employees. Since adoption, options to acquire our ordinary shares are the only equity awards that have been granted under the Plan. As of March 31, 2018, there were 11,264,808 options outstanding under the Plan.

Eligibility, Awards and Administration

The Plan is administered by the Remuneration Committee of our board of directors which sets the terms and conditions of all equity awards granted under the Plan. Equity awards are granted at the discretion of the Remuneration Committee. We may grant equity awards to directors, consultants and other non-employees outside the Plan, but such grants are subject to certain terms set out in the Plan.

Vesting, Exercise Price, Term and Exercise

Under the Plan, our Remuneration Committee may determine the vesting schedule of an equity award and whether the vesting of an award will be subject to the satisfaction of a performance condition. Options granted to executive directors must be subject to vesting based on performance conditions. Thus far, only options granted to our executive directors have been made subject to vesting based on performance conditions which are measured over a three year period. Time based vesting options generally vest in equal annual installments over a three year period. All options granted to date under the Plan have exercise prices equal to the fair value of the underlying ordinary shares on the date of the grant . Once an option has vested, it may be exercised until the end of its term, which is either the fifth or tenth anniversary of the date of grant, after which time it will lapse. Options are exercisable in cash or as otherwise determined by the board of directors

Limitation on Awards

Subject to certain exceptions, no eligible employee may be granted options that, at the time they are granted, would cause the market value of shares subject to the options granted to the employee in respect of a financial year to exceed 200% of the employee’s base salary.

Plan Lapse

If a participant ceases to hold office or employment with us as a result of dismissal for gross misconduct, any option the participant holds, whether vested or unvested, will lapse. If a participant ceases to hold office or employment with us for any reason other than dismissal for gross misconduct then: (i) if the option is already vested, it may be exercised within ninety days from the date of cessation of services if such cessation did not occur as a result of the participant’s death, and within twelve months from the date of cessation of services if such cessation occurred as a result of the participant’s death; and (ii) if the option is not already vested, it will vest on the normal vesting date as described above, unless our board of directors determines that the option will vest on the date of cessation of services. Where an option vests in these circumstances, any performance condition will be taken into account and, unless our Remuneration Committee determines otherwise, will be pro-rated for time.

Variation of Share Capital

In the event of any variation of our share capital (including any demerger, capitalization, rights issue, open offer or any consolidation, sub-division or reduction of capital), our Remuneration Committee may make such adjustments as it considers appropriate.

Insurance and Indemnification

To the extent permitted by the U.K. Companies Act 2006, we are empowered to indemnify our directors and executive officers against any liability they incur by reason of their directorship. We maintain directors’ and officers’ insurance to ensure such persons against certain liabilities. We have entered into a deed of indemnity with each of our directors and executive officers prior to the effectiveness of the registration statement of which this prospectus forms a part. Insofar as indemnification of liabilities arising under the Securities Act may be permitted to our board, executive officers or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

RELATED PARTY TRANSACTIONS

The following is a description of related party transactions we have entered into since January 1, 2015 with any members of our board of directors or executive officers and the holders of more than 5% of our ordinary shares.

2017 Private Placement

On October 12, 2017, we issued an aggregate of 66,396,485 units, consisting of 66,396,485 of our ordinary shares and warrants to purchase up to 26,558,600 of our ordinary shares, at a price per unit of £0.29. Each warrant has an exercise price per ordinary share of £0.58 and a term of 2.5 years. We utilized the net proceeds of the private placement of units primarily to advance our drug development programs and for general corporate purposes. The table below summarizes the issuance of such units, with each unit consisting of one of our ordinary shares and one warrant to purchase 0.40 of our ordinary shares, that were issued to members of our board of directors, our executive officers or holders of more than 5% of our voting securities.



5% or Greater Shareholders:	Units Purchased
OrbiMed Private Investments VI, LP	25,537,109
BVF Partners LP	15,322,266
RA Capital Management, LLC	11,491,699
Abingworth Bioequities Master Fund Ltd	6,384,277
Sussex Trading Company Limited	827,586

Executive Officers and Non-Executive Directors:
Charles Spicer	86,207
Alex Martin	148,115

In connection with the foregoing private placement of securities, we entered into a registration rights agreement with the purchasers of the securities, pursuant to which we granted such purchasers the right to have their ordinary shares and ordinary shares issuable upon the exercise of warrants purchased in the private placement registered with the SEC for resale in the United States. The registration statement of which this prospectus forms a part has been filed in part in satisfaction of such purchasers’ rights thereunder.

In connection with the foregoing private placement of securities, we also entered into relationship agreement with OrbiMed Private Investments VI, LP, which together with its affiliates we refer to as OrbiMed, and N+1 Singer Advisory LLP, pursuant to which OrbiMed and we agreed that all transactions, agreements, relationships and arrangements entered into between OrbiMed and us will only be made on an arm’s length basis and on normal commercial terms, and that we will be capable at all times of carrying on our business independently of OrbiMed.

Agreements with Our Executive Officers and Directors

We have entered into employment agreements with certain of our executive officers and service agreements with our non-executive directors. See the section entitled “Management — Compensation of Executive Officers and Directors.”

Deeds of Indemnity

We have entered into a deed of indemnity with each of our directors and executive officers. These agreements and our Articles of Association require us to indemnify our directors and executive officers to

the fullest extent permitted by law. See the section entitled “Management — Compensation of Executive Officers and Directors — Insurance and Indemnification.”

PRINCIPAL AND REGISTERED HOLDERS

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2018, by:


•	each beneficial owner of 5% or more of our outstanding ordinary shares, each of whom is a Registered Holder;


•	each of our directors and executive officers, each of whom is a Registered Holder;


•	all of our directors and executive officers as a group; and


•	each of our other shareholders, in ad dition to the foregoing, who is a Registered Holder hereunder.

Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares that can be acquired within 60 days of March 31, 2018. Percentage ownership calculations are based on 116,561,917 ordinary shares issued and outstanding as of March 31, 2018 plus, consistent with SEC rules on disclosure of beneficial ownership, shares that each security holder has the ability to acquire within 60 days of March 31, 2018, due to outstanding options becoming vested or outstanding warrants being exercisable. The percentage of shares beneficially owned before offering shown on the table reflect these incremental shares that a security holder has the ability to acquire within the time frame noted. To the extent that any Registered Holder sells ADSs representing its ordinary shares following registration, the Registered Holder’s percentage ownership will decrease accordingly. Except as otherwise indicated in the table below, addresses of the directors and executive officers are c/o Realm Therapeutics plc, 267 Great Valley Parkway, Malvern, PA 19355.



	NUMBER OF SHARES BENEFICIALLY OWNED BEFORE OFFERING	PERCENTAGE OF SHARES BENEFICIALLY OWNED BEFORE OFFERING
5% or Greater Shareholders:
OrbiMed Private Investments VI, LP ⁽¹⁾	35,751,953	28.2%
BVF Partners LP ⁽²⁾	21,451,173	17.5%
RA Capital Management, LLC ⁽³⁾	16,088,379	13.3%
Invesco Asset Management Limited ⁽⁴⁾	14,747,027	12.7%
Abingworth Bioequities Master Fund Ltd ⁽⁵⁾	8,937,988	7.5%
Sussex Trading Company Limited ⁽⁶⁾	6,429,915	5.5%
Oracle Management Limited ⁽⁷⁾	6,397,190	5.4%
Daniel Hegglin ⁽⁸⁾	5,909,091	5.1%

Executive Officers and Directors:
Charles Spicer ⁽⁹⁾	467,188	*
Alex Martin ⁽¹⁰⁾	2,243,653	1.9%
Marella Thorell ⁽¹¹⁾	437,258	*
Christian Peters, MD, PhD ⁽¹²⁾	444,258	*
Joseph William Birkett ⁽¹³⁾	143,029	*
Ivan Gergel, MD ⁽¹⁴⁾	50,343	*
Balkrishan (Simba) Gill, PhD ⁽¹⁵⁾	131,667	*
Sanford (Sandy) Zweifach ⁽¹⁶⁾	—	—
All current directors and executive officers as a group (8 persons)	3,917,396	3.4%

Other Registered Holders:
Kanton Services Limited ⁽¹⁷⁾	4,629,196	4.0%
Polar Capital Funds Plc – Biotechnology Fund ⁽¹⁸⁾	4,290,235	3.6%
Killik & Co. ⁽¹⁹⁾	803,794	*
N+1 Singer Advisory LLP ⁽²⁰⁾	56,783	*
Belsize Asset Management ⁽²¹⁾	214,513	*
Cleveland Capital ⁽²²⁾	214,513	*
JSJ International Limited ⁽²³⁾	120,691	*

__________________


*	Represents beneficial ownership of less than one percent.

(1)

Consists of 35,751,953 ordinary shares that are registered hereby, including 25,537,109 ordinary shares and 10,214,844 shares issuable upon exercise of outstanding warrants. OrbiMed Capital GP VI LLC or GP VI is the sole general partner of OrbiMed Private Investments VI, LP or OPI VI. OrbiMed Advisors LLC or OrbiMed Advisors, is the managing member of GP VI. By virtue of such relationships, GP VI and OrbiMed Advisors may be deemed to have voting and investment power with respect to the shares held by OPI VI and as a result may be deemed to have beneficial ownership of such shares. Advisors exercises investment and voting power through a management committee comprised of Carl L. Gordon, Sven H. Borho and Jonathan T. Silverstein. Each of GP VI, OrbiMed Advisors, Carl L. Gordon, Sven H. Borho and Jonathan T. Silverstein disclaims beneficial

ownership of the shares held by OPI VI, except to the extent of its or his pecuniary interest therein if any. The address of these entities is 601 Lexington Avenue, 54th floor, New York, New York 10022.


(2)	Consists of 21,451,173 ordinary shares that are registered hereby, including 15,322,266 ordinary shares and 6,128,907 shares issuable upon exercise of outstanding warrants. The address of BVF Partners LP is One Sansome Street 30 ^th Floor, San Francisco, CA 94949.


(3)	Consists of 16,088,379 ordinary shares that are registered hereby, including 11,491,699 ordinary shares and 4,596,680 shares issuable upon exercise of outstanding warrants. The address of RA Capital Management, LLC is 20 Park Plaza Suite 1200, Boston, MA 02116.


(4)	Consists of 14,747,027 ordinary shares that are registered hereby. The address of Invesco Limited is Perpetual Park, Perpetual Park Drive, Henley on Thames, U.K., RG1 1HH.


(5)	Consists of 8,937,988 ordinary shares that are registered hereby, including 6,384,277 ordinary shares and 2,553,711 shares issuable upon exercise of outstanding warrants. The address of Abingworth Bioequities Master Fund Ltd. is 38 Jermyn Street, London SW1Y 6DN.


(6)	Consists of 6,429,915 ordinary shares that are registered hereby, including 6,098,880 ordinary shares and 331,035 ordinary shares issuable upon the exercise of outstanding warrants.


(7)	Consists of 6,397,190 ordinary shares that are registered hereby, including 5,426,780 ordinary shares and 970,410 ordinary shares issuable upon exercise of outstanding warrants.


(8)	Consists of 5,909,091 ordinary shares that are registered hereby.


(9)	Consists of 308,413 ordinary shares that are registered hereby, including 273,930 ordinary shares and 34,483 ordinary shares issuable upon exercise of outstanding warrants, and 158,775 ordinary shares issuable upon the exercise of outstanding options that are not registered hereby. Does not include 254,904 ordinary shares issuable upon exercise of outstanding options that have not vested.


(10)	Consists of 307,361 ordinary shares that are registered hereby, including 248,115 ordinary shares and 59,246 ordinary shares issuable upon exercise of outstanding warrants, and 1,936,292 ordinary shares issuable upon the exercise of outstanding options that are not registered hereby. Does not include 2,379,034 ordinary shares issuable upon exercise of outstanding options that have not vested.


(11)	Consists of 50,000 ordinary shares that are registered hereby and 387,258 ordinary shares issuable upon exercise of outstanding options that are not registered hereby. Does not include 1,124,517 ordinary shares issuable upon exercise of outstanding options that have not vested.


(12)	Consists of 57,000 ordinary shares that are registered hereby and 387,258 ordinary shares issuable upon exercise of outstanding options that are not registered hereby. Does not include 1,124,517 ordinary shares issuable upon exercise of outstanding options that have not vested.


(13)	Consists of 92,686 ordinary shares that are registered hereby and 50,343 ordinary shares issuable upon exercise of outstanding options that are not registered hereby. Does not include 200,688 ordinary shares issuable upon exercise of outstanding options that have not vested.


(14)	Consists of 50,343 ordinary shares issuable upon exercise of outstanding options that are not registered hereby. Does not include 200,688 ordinary shares issuable upon exercise of outstanding options that have not vested.


(15)	Consists of 131,667 ordinary shares issuable upon exercise of outstanding options that are not registered hereby. Does not include 200,688 ordinary shares issuable upon exercise of outstanding options that have not vested.


(16)	Does not include 150,000 ordinary shares issuable upon exercise of outstanding options that have not vested.


(17)	Consists of 4,629,196 ordinary shares that are registered hereby.


(18)	Consists of 4,290,235 ordinary shares that are registered hereby, including 3,064,453 ordinary shares and 1,225,782 ordinary shares issuable upon exercise of outstanding warrants. The address of Polar Capital Funds Plc – Biotechnology Funds is Hamilton House Block 2, National Technology Park, Plassey, Limerick, V94 YHD 6.

(19) Consists of 803,794 ordinary shares that are registered hereby, including 574,138 ordinary shares and 229,656 ordinary shares issuable upon exercise of outstanding warrants.

(20) Consists of 56,783 ordinary shares issuable upon exercise of outstanding warrants. The address of Nplus1 Singer Advisory LLP is One Bartholomew Lane, London EC2N 2AXM.

(21) Consists of 214,513 ordinary shares that are registered hereby, including 153,223 ordinary shares and 61,290 ordinary shares issuable upon exercise of outstanding warrants.

(22) Consists of 214,513 ordinary shares that are registered hereby, including 153,223 ordinary shares and 61,290 ordinary shares issuable upon exercise of outstanding warrants.

(23) Consists of 120,691 ordinary shares that are registered hereby, including 86,208 ordinary shares and 34,483 ordinary shares issuable upon exercise of outstanding warrants.

DESCRIPTION OF SHARE CAPITAL AND ARTICLES OF ASSOCIATION

The following describes our issued share capital, summarizes the material provisions of our Articles of Association and highlights certain differences in corporate law in the United Kingdom and the United States.

General

We were initially formed as a public limited company with registered number 5789798 under the laws of England and Wales on April 21, 2006 under the name PuriCore plc. On December 7, 2016, we changed our name to Realm Therapeutics plc. Our registered office is c/o CMS Cameron McKenna LLP, Cannon Place, 78 Cannon Street, London EC4N 6AF, United Kingdom. The principal legislation under which we operate and our ordinary shares are issued is the U.K. Companies Act 2006.

Share Capital

As of March 31, 2018, we had 116,656,192 shares outstanding, with a nominal value of £0.10 per share. Each issued ordinary share is fully paid.

Warrants

At a general meeting of the shareholders of the Company held on October 9, 2017, the directors were authorized to issue 26,558,600 warrants entitling the holders to acquire ordinary shares at a price of 58 pence per share, expiring in April 2020. In addition, 358,573 other warrants exist which entitles the holder to acquire ordinary shares at a price of £0.4943 per share, expiring in December 2018. As at March 31, 2018, these warrants remain outstanding.

Ordinary Shares

In accordance with the articles of association, the following summarizes the rights of holders of our ordinary shares:


•	each holder of our ordinary shares is entitled to one vote per ordinary share on all matters to be voted on by shareholders generally;


•	the holders of the ordinary shares shall be entitled to receive notice of, attend, speak and vote at our general meetings; and


•	holders of our ordinary shares are entitled to receive such dividends as are recommended by our directors and declared by our shareholders.

Share Register

We are required by the U.K. Companies Act 2006 to keep a register of our shareholders. Under the laws of England and Wales, the ordinary shares are deemed to be issued when the name of the shareholder is entered in our share register. The share register therefore is prima facie evidence of the identity of our shareholders, and the shares that they hold. The share register generally provides limited, or no, information regarding the ultimate beneficial owners of our ordinary shares. Our share register is maintained by our registrar, Equiniti.

Holders of ADSs representing our ordinary shares will not be treated as our shareholders and their names will therefore not be entered in our share register. The depositary, the custodian or their nominees will be the holder of the shares underlying these ADSs. For discussion of these ADSs and rights of ADS holders, see the section entitled “Description of American Depositary Shares” in this prospectus. Holders of ADSs have a right to receive the ordinary shares underlying their ADSs as discussed in the section entitled “Description of American Depositary Shares” in this prospectus.

Under the U.K. Companies Act 2006, we must enter an allotment of shares in our share register as soon as practicable and in any event within two months of the allotment. We also are required by the U.K. Companies Act 2006 to register a transfer of shares (or give the transferee notice of and reasons for refusal) as soon as practicable and in any event within two months of receiving notice of the transfer.

We, any of our shareholders or any other affected person may apply to the court for rectification of the share register if:


•	the name of any person, without sufficient cause, is wrongly entered in or omitted from our register of shareholders; or


•	there is a default or unnecessary delay in entering on the register the fact of any person having ceased to be a shareholder or on which we have a lien, provided that such refusal does not prevent dealings in the shares taking place on an open and proper basis.

Preemptive Rights

The laws of England and Wales generally provides shareholders with preemptive rights when new shares are issued for cash; however, it is possible for the articles of association, or shareholders in a general meeting, to exclude preemptive rights. Such an exclusion of preemptive rights may be for a maximum period of up to five years from the date of adoption of the articles of association, if the exclusion is contained in the articles of association, or from the date of the shareholder resolution, if the exclusion is by shareholder resolution. In either case, this exclusion would need to be renewed by our shareholders upon its expiration (i.e., at least every five years).

On June 6, 2017, our shareholders approved the exclusion of preemptive rights until the earlier of our next annual general meeting in respect of the allotment of up to a maximum amount of £3,344,362 of ordinary shares of £0.10 each.

Articles of Association

Shares and Rights Attaching to Them

Objects

The objects of our company are unrestricted.

Share Rights

Subject to any special rights attaching to shares already in issue, our shares may be issued with or have attached to them any rights or restrictions as we may resolve by ordinary resolution of the shareholders or, in the absence of any such determination or in so far as such ordinary resolution of the shareholders does not make specific provision, as the board may determine.

Voting Rights

Without prejudice to any special rights, privileges or restrictions as to voting rights attached to any shares forming part of our share capital from time to time, the voting rights attaching to shares are as follows:


•	on a show of hands, every shareholder who (being an individual) is present in person and (being a corporation) is present by a duly authorized representative shall have one vote;


•	on a show of hands, each proxy present in person has one vote for and one vote against a resolution if the proxy has been duly appointed by more than one shareholder and the proxy has been instructed by one or more of those shareholders to vote for the resolution and by one or more other of those shareholders to vote against it;

•

on a show of hands, each proxy present in person has one vote for and one vote against a resolution if the proxy has been duly appointed by more than one shareholder entitled to vote on the resolution and either: (1) the proxy has been instructed by one or more of those shareholders to vote for the resolution and has been given any discretion by one or more other of those shareholders to vote and the proxy exercises that discretion to vote against it; or (2) the proxy has been instructed by one or more of those shareholders to vote against the resolution and has been given any discretion by one or more other of those shareholders to vote and the proxy exercises that discretion to vote for it; and


•	on a poll every shareholder who is present in person or by proxy shall have one vote for each share of which he is the holder.

At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is demanded. Subject to the provisions of the U.K. Companies Act 2006, as described in “Description of Share Capital and Articles of Association — Differences in Corporate Law — Voting Rights” in this prospectus, a poll may be demanded by:


•	the chairman of the meeting;


•	not less than five shareholders or proxies having the right to vote at the meeting;


•	a shareholder or proxy, or shareholders or proxies together, representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or


•	a shareholder or proxy, or shareholder or proxies, holding shares conferring a right to vote at the meeting, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

Restrictions on Voting

No shareholder shall, unless the board otherwise decides, be entitled to vote at any general meeting or at any separate class meeting in respect of any share held by him unless all sums payable by him in respect of that share have been paid.

The board may from time to time make calls upon the shareholders in respect of any money unpaid on their shares and each shareholder shall (subject to at least 14 clear days’ notice specifying the time or times and method of payment) pay at the time or times so specified the amount called on his shares.

Dividends

We may by ordinary resolution of shareholders declare dividends out of profits available for distribution in accordance with the respective rights of shareholders but no such dividend shall exceed the amount recommended by the directors. The board may from time to time pay shareholders such interim dividends as appear to the board to be justified by our financial position but, if at any time, our share capital is divided into different classes the board may not pay such interim dividends in respect of those shares which confer on the holders thereof deferred or non-preferential rights with regard to dividends if, at the time of payment, any preferential dividend is in arrears. Subject to any special rights attaching to or the terms of issue of any share, all dividends shall be declared and paid according to the amounts paid up on the shares and shall be apportioned and paid pro rata according to the amounts paid up on the shares during any part or parts of the period in respect of which the dividend is paid.

No dividend or other monies payable by us on or in respect of any share shall bear interest against us unless otherwise provided by the rights attached to the share or the provisions of another agreement between the shareholder and us. Any dividend unclaimed after a period of twelve years from the date such dividend became due for payment shall be forfeited and cease to remain owing.

Dividends may be declared or paid in any currency and the board may decide the rate of exchange for any currency conversions that may be required, and how any costs involved are to be met, in relation to the currency of any dividend.

Any general meeting declaring a dividend may by ordinary resolution of shareholders, upon the recommendation of the board, direct payment or satisfaction of such dividend wholly or in part by the distribution of non-cash assets of equivalent value, including shares or other securities in any company.

The directors may, if authorized by an ordinary resolution of shareholders, offer any holders of ordinary shares the right to elect to receive in lieu of a dividend, or part of a dividend, an allotment of ordinary shares credited as fully paid up.

Change of Control

There is no specific provision in our articles of association that would have the effect of delaying, deferring or preventing a change of control.

Distributions on Winding Up

If we are wound up the liquidator may, with the sanction of a special resolution of the Board and with any other sanction required law, divide amongst the members in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not) and may for such purpose set such value as he deems fair upon any property to be so divided and may determine how such division shall be carried out as between the members or different classes of members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the members as the liquidator shall think fit. However, no member shall be compelled to accept any shares or other securities on which there is any liability.

The power of sale of a liquidator shall include a power to sell shares wholly or partially for debentures or other obligations of another body corporate, whether already constituted or about to be constituted for the purpose of carrying out the sale.

Variation of Rights

All or any of the rights and restrictions attached to any class of shares issued may be varied or abrogated with the consent in writing of the holders of not less than three‑fourths in nominal value of the issued shares of that class (excluding any shares held as treasury shares) or by special resolution passed at a separate general meeting of the holders of the shares of the class, subject to the U.K. Companies Act 2006 and the terms of their issue. The U.K. Companies Act 2006 provides a right to object to the variation of the share capital by the shareholders who did not vote in favor of the variation. Should an aggregate of 15% of the shareholders of the issued shares in question apply to the court to have the variation cancelled, the variation shall have no effect unless and until it is confirmed by the court.

Alteration to Share Capital

We may, by ordinary resolution of shareholders, consolidate and divide all or any of our share capital into shares of larger amount than our existing shares, or sub‑divide our shares or any of them into shares of a smaller amount. We may, by special resolution of shareholders, confirmed by the court, reduce our share capital or any capital redemption reserve or any share premium account in any manner authorized by the U.K. Companies Act 2006. We may redeem or purchase all or any of our shares as described in the section entitled “Description of Share Capital and Articles of Association — Other U.K. Law Considerations — Purchase of Own Shares.”

Preemption Rights

In certain circumstances, our shareholders may have statutory preemption rights under the U.K. Companies Act 2006 in respect of the allotment of new shares as described in the sections entitled “Description of Share Capital and Articles of Association — Preemptive Rights” and “Description of Share

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Capital and Articles of Association — Differences in Corporate Law — Preemptive Rights” in this prospectus.

Transfer of Shares

Any shareholder may transfer all or any of his shares by an instrument of transfer in the usual common form approved by the board. Any written instrument of transfer shall be signed by or on behalf of the transferor and (in the case of a partly paid share) the transferee.

In the case of uncertificated shares, directors may take such action as they consider appropriate to achieve a transfer. The U.K. Uncertificated Securities Regulations 2001 permit shares to be issued and held in uncertificated form and transferred by means of a computer based system.

The board may decline to register any transfer of any share:


•	which is not a fully paid share;


•	where the transfer is not lodged at our registered office or such other place as the directors have appointed;


•	where the transfer is not accompanied by the share certificate to which it relates, or such other evidence as the board may reasonably require to show the transferor’s right to make the transfer, or evidence of the right of someone other than the transferor to make the transfer on the transferor’s behalf;


•	where the transfer is in respect of more than one class of share; and


•	where the number of joint holders to whom the share is to be transferred exceeds four.

If the board declines to register a transfer it shall, as soon as practicable and in any event within two months after the date on which the transfer is lodged, send to the transferee notice of the refusal, together with reasons for the refusal.

CREST

To be traded on AIM, securities must be able to be transferred and settled through the CREST system. CREST is a computerized paperless share transfer and settlement system, which allows securities to be transferred by electronic means, without the need for a written instrument of transfer. The articles of association are consistent with CREST membership and, amongst other things, allow for the holding and transfer of shares in uncertificated form.

Shareholder Meetings

Annual General Meetings

In accordance with the U.K. Companies Act 2006, we are required in each year to hold an annual general meeting in addition to any other general meetings in that year and to specify the meeting as such in the notice convening it. The annual general meeting shall be convened whenever and wherever the board sees fit, subject to the requirements of the U.K. Companies Act 2006, as described in the sections entitled “Description of Share Capital and Articles of Association — Differences in Corporate Law — Annual General Meeting” and “Description of Share Capital and Articles of Association — Differences in Corporate Law — Notice of General Meetings” in this prospectus.

Notice of General Meetings

The arrangements for the calling of general meetings are described in “Description of Share Capital and Articles of Association — Differences in Corporate Law — Notice of General Meetings” in this prospectus.

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Quorum of General Meetings

No business shall be transacted at any general meeting unless a quorum is present. At least two shareholders present in person or by proxy and entitled to vote shall be a quorum for all purposes.

Class Meetings

The provisions in the articles of association relating to general meetings apply to every separate general meeting of the holders of a class of shares.

Directors

Number of Directors

We may not have less than two directors on the board of directors but shall not be subject to any maximum. We may, by ordinary resolution of the shareholders, vary the minimum and maximum number of directors from time to time.

Appointment of Directors

Subject to the provisions of the articles of association, we may, by ordinary resolution of the shareholders or a decision of the directors, elect any person to be a director, either to fill a casual vacancy or as an addition to the existing board of directors. However, any person that is not a director retiring from the existing board must be recommended by the board of directors or the person must have confirmed in writing to us their willingness to be elected as a director not less than seven days nor more than 42 clear days before the general meeting at which the relevant resolution is proposed.

At every annual general meeting each director shall retire from office who is required to do so in accordance with any corporate governance policy adopted from time to time by the Company, and each director shall in any event retire at that annual general meeting unless he or she was appointed or re-appointed as a director at either of the last two general meetings before that annual general meeting. A director retiring at a meeting shall, if he is not re-elected at such meeting, retain office until the conclusion of the meeting or adjourned meeting at which he is due to retire.

The shareholders may, at the meeting at which a director retires, fill the vacated office by electing a person and in default the retiring director shall, if willing to continue to act, be deemed to have been re‑elected, unless at such meeting it is expressly resolved not to fill such vacated office or unless a resolution for the re‑election of such director shall have been put to the meeting and lost.

Directors’ Interests

If a situation arises in which a director has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with our interests (other than a situation that cannot reasonably be regarded as likely to give rise to a conflict of interest or a conflict of interest arising in relation to a transaction or arrangement with the Company), the board may authorize in accordance with the U.K. Companies Act 2006 the director’s interest and the continuing performance by the relevant director of his duties as a director on such terms as the board may determine.

Subject to the requirements under sections 175, 177 and 182 of the U.K. Companies Act 2006, a director shall declare the nature and extent of such conflicts.

Any such authorization will be effective only if:


•	the meeting at which the matter is considered is quorate without counting the director in question or any other interested director; and


•	the matter was agreed to without the interested director voting or, if the director did vote, would have been passed if their vote was not counted.

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The Board may (whether while authorizing or subsequently) make any such authorization subject to any conditions or limits it expressly imposes but such authorization is otherwise given to the fullest extent permitted. The Board may withdraw or vary such authorization at any time.

A director may participate in the decision-making process and count in the quorum and vote on a proposed decision of the board which is concerned with such director’s interests (subject to any restrictions imposed by the other directors when providing such consent) if such director has declared the nature and extent of any interest of his and provided a majority of the other directors consent, or if one of the following situations applies:


•	the director’s interest arises solely through an interest in shares, debentures or other securities of or otherwise in or through the Company;


•	an ordinary resolution of the Company permits the director to count in the quorum and vote on the proposed decision;


•	the director’s interest cannot reasonably be regarded as likely to give rise to a material conflict of interest;


•	the conflict of interest arises from one of the following:


–	a guarantee, security or indemnity given, or to be given, by or to the director in respect of an obligation incurred by or on behalf of the Company or any of its subsidiary undertakings;


–	a subscription, or agreement to subscribe, for shares or other securities of the Company or any of its subsidiary undertakings, or to underwrite, sub-underwrite or guarantee an offer of any such shares or securities by the Company or any of its subsidiary undertakings for subscription, purchase or exchange;


–	arrangements pursuant to which benefits are made are made available to employees and directors, or former employees and directors, of the Company or any of its subsidiaries which do not provide special benefits for directors or former directors;


–	the purchase or maintenance of insurance which the Company is empowered to purchase or maintain for directors or officers;


–	the giving to the director of an indemnity against liabilities incurred or to be incurred by the director in the execution and discharge of his duties;


–	the provision of funds to the director to meet expenditure incurred or to be incurred by the director in defending criminal or civil proceedings against him or in connection with any application under certain provisions of the U.K. Companies Act 2006 or otherwise enabling him to avoid incurring that expenditure; or

–

proposals concerning another company in which the director is interested directly or indirectly (whether as officer, shareholder or otherwise), if the director and any other persons connected with him do not to his knowledge hold an interest in shares representing 1% or more of the issued shares of any class of the equity share capital of that company (or of any third company through which his or their interest is derived) or of the voting rights available to shareholders of the relevant company.

A director shall not be counted in the quorum present at a meeting in relation to a resolution on which he is not entitled to vote.

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If a question arises at a meeting of the board or of a committee of the board as to the right of a director to vote or be counted in the quorum, and such question is not resolved by his voluntarily agreeing to abstain from voting, the question shall be determined by a resolution of the board or such committee (with such director being excluded from voting on the resolution).

Directors’ Fees and Remuneration

Unless otherwise determined by ordinary resolution of the shareholders, there shall be paid to the directors (other than any director who for the time being holds an executive office or employment with us or a subsidiary of our) such fees for their services in the office of director as the directors may determine, not exceeding £500,000 per annum or such larger amount as the shareholders, by ordinary resolution decide, divided between the directors as they may determine or, failing an agreement, equally.

The emoluments of any director holding executive office for his services as such shall be determined by the board of directors, and may be of any description, including without limitation admission to, or continuance of, membership of any scheme (including any share acquisition scheme) or fund instituted or established or financed or contributed to by us for the provision of pensions, life assurance or other benefits for employees or their dependents, or the payment of a pension or other benefits to him or his dependents on or after retirement or death, apart from membership of any such scheme or fund.

Each director may be paid all expenses reasonably incurred by them in attending board or committees of the board or general meetings or separate meetings of the holders class of shares or of debentures, or otherwise in connection with the exercise of powers and the discharge of responsibilities in relation to us.

Borrowing Powers

The board may exercise all the powers to borrow money, to indemnify, to guarantee and to mortgage or charge our undertaking, property and assets (present or future) and uncalled capital or any part thereof and to issue debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of us or of any third party.

Indemnity

Every director or former director of our group may be indemnified against all liabilities incurred by him in connection with any negligence, default, breach of duty or breach of trust by him in relation to us or in connection with our activities as a trustee of an occupational pension scheme or otherwise as our officer.

Other U.K. Law Considerations

Notification of Voting Rights

A shareholder in a public company incorporated in the United Kingdom whose shares are admitted to trading on AIM is required pursuant to Rule 5 of the Disclosure Guidance and Transparency Rules of the U.K. Financial Conduct Authority to notify us of the percentage of his voting rights if the percentage of voting rights which he holds as a shareholder or through his direct or indirect holding of financial instruments (or a combination of such holdings) reaches, exceeds or falls below 3%, 4%, 5%, and each 1% threshold thereafter up to 100% as a result of an acquisition or disposal of shares or financial instruments.

Mandatory Purchases and Acquisitions

Pursuant to Sections 979 to 991 of the U.K. Companies Act 2006, where a takeover offer has been made for us and the offeror has acquired or unconditionally contracted to acquire not less than 90% in value of the shares to which the offer relates and not less than 90% of the voting rights carried by those shares, the offeror may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he wishes to acquire, and is entitled to so acquire, those shares on the same terms as the general offer. The offeror would do so by sending a notice to the outstanding minority shareholders telling them that it will compulsorily acquire their shares.

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Such notice must be sent within three months of the last day on which the offer can be accepted in the prescribed manner. The squeeze‑out of the minority shareholders can be completed at the end of six weeks from the date the notice has been given, subject to the minority shareholders failing to successfully lodge an application to the court to prevent such squeeze‑out any time prior to the end of those six weeks following which the offeror can execute a transfer of the outstanding shares in its favor and pay the consideration to us, which would hold the consideration on trust for the outstanding minority shareholders. The consideration offered to the outstanding minority shareholders whose shares are compulsorily acquired under the U.K. Companies Act 2006 must, in general, be the same as the consideration that was available under the takeover offer.

Sell Out

The U.K. Companies Act 2006 also gives our minority shareholders a right to be bought out in certain circumstances by an offeror who has made a takeover offer for all of our shares. The holder of shares to which the offer relates, and who has not otherwise accepted the offer, may require the offeror to acquire his shares if, prior to the expiry of the acceptance period for such offer, (1) the offeror has acquired or unconditionally agreed to acquire not less than 90% in value of the voting shares, and (2) not less than 90% of the voting rights carried by those shares. The offeror may impose a time limit on the rights of minority shareholders to be bought out that is not less than three months after the end of the acceptance period. If a shareholder exercises his rights to be bought out, the offeror is required to acquire those shares on the terms of this offer or on such other terms as may be agreed.

Disclosure of Interest in Shares

Pursuant to Part 22 of the U.K. Companies Act 2006, we are empowered by notice in writing to any person whom we know or have reasonable cause to believe to be interested in our shares, or at any time during the three years immediately preceding the date on which the notice is issued has been so interested, within a reasonable time to disclose to us particulars of that person’s interest and (so far as is within his knowledge) particulars of any other interest that subsists or subsisted in those shares.

Purchase of Own Shares

Under the laws of England and Wales, a limited company may only purchase its own shares out of the distributable profits of the company or the proceeds of a fresh issue of shares made for the purpose of financing the purchase, provided that they are not restricted from doing so by their articles. A limited company may not purchase its own shares if, as a result of the purchase, there would no longer be any issued shares of the company other than redeemable shares or shares held as treasury shares. Shares must be fully paid in order to be repurchased.

Subject to the above, we may purchase our own shares in the manner prescribed below. We may make a market purchase of our own fully paid shares pursuant to an ordinary resolution of shareholders. The resolution authorizing the purchase must:


•	specify the maximum number of shares authorized to be acquired;


•	determine the maximum and minimum prices that may be paid for the shares; and


•	specify a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire.

We may purchase our own fully paid shares otherwise than on a recognized investment exchange pursuant to a purchase contract authorized by resolution of shareholders before the purchase takes place. Any authority will not be effective if any shareholder from whom we propose to purchase shares votes on the resolution and the resolution would not have been passed if he had not done so. The resolution authorizing the purchase must specify a date, not being later than five years after the passing of the resolution, on which the authority to purchase is to expire.

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Distributions and Dividends

Under the U.K. Companies Act 2006, before a company can lawfully make a distribution or dividend, it must ensure that it has sufficient distributable reserves (on a non‑consolidated basis). The basic rule is that a company’s profits available for the purpose of making a distribution are its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital duly made. The requirement to have sufficient distributable reserves before a distribution or dividend can be paid applies to us and to each of our subsidiaries that has been incorporated under the laws of England and Wales.

It is not sufficient that we, as a public company, have made a distributable profit for the purpose of making a distribution. An additional capital maintenance requirement is imposed on us to ensure that the net worth of the company is at least equal to the amount of its capital. A public company can only make a distribution:


•	if, at the time that the distribution is made, the amount of its net assets (that is, the total excess of assets over liabilities) is not less than the total of its called up share capital and undistributable reserves; and


•	if, and to the extent that, the distribution itself, at the time that it is made, does not reduce the amount of the net assets to less than that total.

City Code on Takeovers and Mergers

As a public company incorporated in England and Wales with our registered office in England and Wales which has shares admitted to AIM, we are subject to the U.K. City Code on Takeovers and Mergers, or the City Code, which is issued and administered by the U.K. Panel on Takeovers and Mergers, or the Panel. The City Code provides a framework within which takeovers of companies subject to it are conducted. In particular, the City Code contains certain rules in respect of mandatory offers. Under Rule 9 of the City Code, if a person:


•	acquires an interest in our shares which, when taken together with shares in which he or persons acting in concert with him are interested, carries 30% or more of the voting rights of our shares; or

•

who, together with persons acting in concert with him, is interested in shares that in the aggregate carry not less than 30% and not more than 50% of the voting rights of our shares, and such persons, or any person acting in concert with him, acquires additional interests in shares that increase the percentage of shares carrying voting rights in which that person is interested, the acquirer and depending on the circumstances, its concert parties, would be required (except with the consent of the Panel) to make a cash offer for our outstanding shares at a price not less than the highest price paid for any interests in the shares by the acquirer or its concert parties during the previous twelve months.

Exchange Controls

There are no governmental laws, decrees, regulations or other legislation in the United Kingdom that may affect the import or export of capital, including the availability of cash and cash equivalents for use by us, or that may affect the remittance of dividends, interest, or other payments by us to non‑resident holders of our ordinary shares or ADSs representing our ordinary shares, other than withholding tax requirements. There is no limitation imposed by the laws of England and Wales or in the articles of association on the right of non‑residents to hold or vote shares.

Differences in Corporate Law

The applicable provisions of the U.K. Companies Act 2006 differ from laws applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain differences between the provisions of the U.K. Companies Act 2006 applicable to us and the General Corporation Law of the State

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of Delaware relating to shareholders’ rights and protections. This summary is not intended to be a complete discussion of the respective rights and it is qualified in its entirety by reference to Delaware law and the laws of England and Wales.



	England and Wales	Delaware
Number of Directors	Under the U.K. Companies Act 2006, a public limited company must have at least two directors and the number of directors may be fixed by or in the manner provided in a company’s articles of association.	Under Delaware law, a corporation must have at least one director and the number of directors shall be fixed by or in the manner provided in the bylaws.

Removal of Directors	Under the U.K. Companies Act 2006, shareholders may remove a director without cause by an ordinary resolution (which is passed by a simple majority of those voting in person or by proxy at a general meeting) irrespective of any provisions of any service contract the director has with the company, provided 28 clear days’ notice of the resolution has been given to the company and its shareholders. On receipt of notice of an intended resolution to remove a director, the company must forthwith send a copy of the notice to the director concerned. Certain other procedural requirements under the U.K. Companies Act 2006 must also be followed such as allowing the director to make representations against his or her removal either at the meeting or in writing.	Under Delaware law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except (a) unless the certificate of incorporation provides otherwise, in the case of a corporation whose board of directors is classified, shareholders may effect such removal only for cause, or (b) in the case of a corporation having cumulative voting, if less than the entire board of directors is to be removed, no director may be removed without cause if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire board of directors, or, if there are classes of directors, at an election of the class of directors of which he is a part.

Vacancies on the Board of Directors	Under the laws of England and Wales, the procedure by which directors, other than a company’s initial directors, are appointed is generally set out in a company’s articles of association, provided that where two or more persons are appointed as directors of a public limited company by resolution of the shareholders, resolutions appointing each director must be voted on individually.	Under Delaware law, vacancies and newly created directorships may be filled by a majority of the directors then in office (even though less than a quorum) or by a sole remaining director unless (a) otherwise provided in the certificate of incorporation or by-laws of the corporation or (b) the certificate of incorporation directs that a particular class of stock is to elect such director, in which case a majority of the other directors elected by such class, or a sole remaining director elected by such class, will fill such vacancy.

Annual General Meeting	Under the U.K. Companies Act 2006, a public limited company must hold an annual general meeting in each six-month period following our annual accounting reference date.	Under Delaware law, the annual meeting of stockholders shall be held at such place, on such date and at such time as may be designated from time to time by the board of directors or as provided in the certificate of incorporation or by the bylaws.

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	England and Wales	Delaware
General Meeting	Under the U.K. Companies Act 2006, a general meeting of the shareholders of a public limited company may be called by the directors. Shareholders holding at least 5% of the paid-up capital of the company carrying voting rights at general meetings (excluding nay paid up capital held as treasury shares) can require the directors to call a general meeting and, if the directors fail to do so within a certain period, may themselves convene a general meeting.	Under Delaware law, special meetings of the stockholders may be called by the board of directors or by such person or persons as may be authorized by the certificate of incorporation or by the bylaws.

Notice of General Meetings	Under the U.K. Companies Act 2006, 21 clear days’ notice must be given for an annual general meeting and any resolutions to be proposed at the meeting. Subject to a company’s articles of association providing for a longer period, at least 14 clear days’ notice is required for any other general meeting. In addition, certain matters, such as the removal of directors or auditors, require special notice, which is 28 clear days’ notice. The shareholders of a company may in all cases consent to a shorter notice period, the proportion of shareholders’ consent required being 100% of those entitled to attend and vote in the case of an annual general meeting and, in the case of any other general meeting, a majority in number of the members having a right to attend and vote at the meeting, being a majority who together hold not less than 95% in nominal value of the shares giving a right to attend and vote at the meeting.	Under Delaware law, unless otherwise provided in the certificate of incorporation or bylaws, written notice of any meeting of the stockholders must be given to each stockholder entitled to vote at the meeting not less than 10 nor more than 60 days before the date of the meeting and shall specify the place, date, hour, and purpose or purposes of the meeting.

Proxy	Under the U.K. Companies Act 2006, at any meeting of shareholders, a shareholder may designate another person to attend, speak and vote at the meeting on their behalf by proxy.	Under Delaware law, at any meeting of stockholders, a stockholder may designate another person to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A director of a Delaware corporation may not issue a proxy representing the director’s voting rights as a director.

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	England and Wales	Delaware
Pre-emptive Rights	Under the U.K. Companies Act 2006, “equity securities,” being (1) shares in the company other than shares that, with respect to dividends and capital, carry a right to participate only up to a specified amount in a distribution (“ordinary shares”) or (2) rights to subscribe for, or to convert securities into, ordinary shares, proposed to be allotted for cash must be offered first to the existing equity shareholders in the company in proportion to the respective nominal value of their holdings, unless an exception applies or a special resolution to the contrary has been passed by shareholders in a general meeting or the articles of association provide otherwise in each case in accordance with the provisions of the U.K. Companies Act 2006.	Under Delaware law, shareholders have no preemptive rights to subscribe to additional issues of stock or to any security convertible into such stock unless, and except to the extent that, such rights are expressly provided for in the certificate of incorporation.

Authority to Allot	Under the U.K. Companies Act 2006, the directors of a company must not allot shares or grant of rights to subscribe for or to convert any security into shares unless an exception applies or an ordinary resolution to the contrary has been passed by shareholders in a general meeting or the articles of association provide otherwise in each case in accordance with the provisions of the U.K. Companies Act 2006.	Under Delaware law, if the corporation’s charter or certificate of incorporation so provides, the board of directors has the power to authorize the issuance of stock. It may authorize capital stock to be issued for consideration consisting of cash, any tangible or intangible property or any benefit to the corporation or any combination thereof. It may determine the amount of such consideration by approving a formula. In the absence of actual fraud in the transaction, the judgment of the directors as to the value of such consideration is conclusive.

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	England and Wales	Delaware
Liability of Directors and Officers	Under the U.K. Companies Act 2006, any provision, whether contained in a company’s articles of association or any contract or otherwise, that purports to exempt a director of a company, to any extent, from any liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void. Any provision by which a company directly or indirectly provides an indemnity, to any extent, for a director of the company or of an associated company against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director is also void except as permitted by the U.K. Companies Act 2006, which provides exceptions for the company to (a) purchase and maintain insurance against such liability; (b) provide a “qualifying third party indemnity” (being an indemnity against liability incurred by the director to a person other than the company or an associated company or criminal proceedings in which he is convicted); and (c) provide a “qualifying pension scheme indemnity” (being an indemnity against liability incurred in connection with our activities as trustee of an occupational pension plan).	Under Delaware law, a corporation’s certificate of incorporation may include a provision eliminating or limiting the personal liability of a director to the corporation and its stockholders for damages arising from a breach of fiduciary duty as a director. However, no provision can limit the liability of a director for: • any breach of the director’s duty of loyalty to the corporation or its stockholders; • acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; • intentional or negligent payment of unlawful dividends or stock purchases or redemptions; or • any transaction from which the director derives an improper personal benefit.

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	England and Wales	Delaware
Voting Rights	Under the laws of England and Wales, unless a poll is demanded by the shareholders of a company or is required by the chairman of the meeting or our articles of association, shareholders shall vote on all resolutions on a show of hands. Under the U.K. Companies Act 2006, a poll may be demanded by (a) not fewer than five shareholders having the right to vote on the resolution; (b) any shareholder(s) representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding any voting rights attaching to treasury shares); or (c) any shareholder(s) holding shares in the company conferring a right to vote on the resolution (excluding any voting rights attaching to treasury shares) being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right. A company’s articles of association may provide more extensive rights for shareholders to call a poll. Under the laws of England and Wales, an ordinary resolution is passed on a show of hands if it is approved by a simple majority (more than 50%) of the votes cast by shareholders present (in person or by proxy) and entitled to vote. If a poll is demanded, an ordinary resolution is passed if it is approved by holders representing a simple majority of the total voting rights of shareholders present, in person or by proxy, who, being entitled to vote, vote on the resolution. Special resolutions require the affirmative vote of not less than 75% of the votes cast by shareholders present, in person or by proxy, at the meeting.	Delaware law provides that, unless otherwise provided in the certificate of incorporation, each stockholder is entitled to one vote for each share of capital stock held by such stockholder.

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	England and Wales	Delaware
Shareholder Vote on Certain Transactions	The U.K. Companies Act 2006 provides for schemes of arrangement, which are arrangements or compromises between a company and any class of shareholders or creditors and used in certain types of reconstructions, amalgamations, capital reorganizations, or takeovers. These arrangements require: the approval at a shareholders’ or creditors’ meeting convened by order of the court, of a majority in number of shareholders or creditors representing 75% in value of the capital held by, or debt owed to, the class of shareholders or creditors, or class thereof present and voting, either in person or by proxy; and the approval of the court.	Generally, under Delaware law, unless the certificate of incorporation provides for the vote of a larger portion of the stock, completion of a merger, consolidation, sale, lease or exchange of all or substantially all of a corporation’s assets or dissolution requires: • the approval of the board of directors; and • approval by the vote of the holders of a majority of the outstanding stock or, if the certificate of incorporation provides for more or less than one vote per share, a majority of the votes of the outstanding stock of a corporation entitled to vote on the matter.

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	England and Wales	Delaware
Standard of Conduct for Directors	Under the laws of England and Wales, a director owes various statutory and fiduciary duties to the company, including: to act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole; to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly conflicts, with the interests of the company; to act in accordance with our constitution and only exercise his powers for the purposes for which they are conferred; to exercise independent judgment; to exercise reasonable care, skill, and diligence; not to accept benefits from a third party conferred by reason of his being a director or doing, or not doing, anything as a director; and a duty to declare any interest that he has, whether directly or indirectly, in a proposed or existing transaction or arrangement with the company.	Delaware law does not contain specific provisions setting forth the standard of conduct of a director. The scope of the fiduciary duties of directors is generally determined by the courts of the State of Delaware. In general, directors have a duty to act without self-interest, on a well-informed basis and in a manner they reasonably believe to be in the best interest of the stockholders. Directors of a Delaware corporation owe fiduciary duties of care and loyalty to the corporation and to its shareholders. The duty of care generally requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. In general, but subject to certain exceptions, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Delaware courts have also imposed a heightened standard of conduct upon directors of a Delaware corporation who take any action designed to defeat a threatened change in control of the corporation. In addition, under Delaware law, when the board of directors of a Delaware corporation approves the sale or break-up of a corporation, the board of directors may, in certain circumstances, have a duty to obtain the highest value reasonably available to the shareholders.

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	England and Wales	Delaware
Stockholder Suits	Under the laws of England and Wales, generally, the company, rather than its shareholders, is the proper claimant in an action in respect of a wrong done to the company or where there is an irregularity in our internal management. Notwithstanding this general position, the U.K. Companies Act 2006 provides that (1) a court may allow a shareholder to bring a derivative claim (that is, an action in respect of and on behalf of the company) in respect of a cause of action arising from a director’s negligence, default, breach of duty or breach of trust and (2) a shareholder may bring a claim for a court order where our affairs have been or are being conducted in a manner that is unfairly prejudicial to some of its shareholders.	Under Delaware law, a stockholder may initiate a derivative action to enforce a right of a corporation if the corporation fails to enforce the right itself. The complaint must: • state that the plaintiff was a stockholder at the time of the transaction of which the plaintiff complains or that the plaintiffs shares thereafter devolved on the plaintiff by operation of law; and • allege with particularity the efforts made by the plaintiff to obtain the action the plaintiff desires from the directors and the reasons for the plaintiff’s failure to obtain the action; or • state the reasons for not making the effort. Additionally, the plaintiff must remain a stockholder through the duration of the derivative suit. The action will not be dismissed or compromised without the approval of the Delaware Court of Chancery.

Stock Exchange Listing

We have applied to list ADSs representing our ordinary shares on the Nasdaq Global Market under the symbol “RLM”. Our ordinary shares are currently traded on AIM, a market operated by the London Stock Exchange, under the ticker symbol “RLM”.

Registrar of Shares, Depositary for ADSs

Our share register is maintained by Equiniti. The share register reflects only record owners of our ordinary shares. Holders of ADSs representing our ordinary shares will not be treated as our shareholders and their names will therefore not be entered in our share register. Citibank, N.A. has agreed to act as the depositary for the ADSs representing our ordinary shares and the custodian for ordinary shares represented by ADSs is Citibank, N.A., London Branch. Holders of ADSs representing our ordinary shares have a right to receive the ordinary shares underlying such ADSs. For discussion on ADSs representing our ordinary shares and rights of ADS holders, see the section entitled “Description of American Depositary Shares” in this prospectus.

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DESCRIPTION OF AMERICAN DEPOSITARY SHARES

American Depositary Shares

Citibank, N.A., or Citibank, has agreed to act as the depositary for the ADSs representing our ordinary shares. Citibank’s depositary offices are located at 388 Greenwich Street, New York, New York 10013. ADSs represent ownership interests in securities that are on deposit with the depositary. ADSs may be represented by certificates that are commonly known as American Depositary Receipts, or ADRs. The depositary typically appoints a custodian to safekeep the securities on deposit. In this case, the custodian is Citibank, N.A., London Branch.

We have appointed Citibank as depositary pursuant to a deposit agreement. The form of the deposit agreement is on file with the SEC under cover of a registration statement on Form F-6. You may obtain a copy of the deposit agreement from the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 and from the SEC’s website ( www.sec.gov ). Please refer to registration number when retrieving such copy.

We are providing you with a summary description of the material terms of the ADSs and of your material rights as an owner of ADSs. Please remember that summaries by their nature lack the precision of the information summarized and that the rights and obligations of an owner of ADSs will be determined by reference to the terms of the deposit agreement and not by this summary. We urge you to review the deposit agreement in its entirety.

Each ADS represents the right to receive, and to exercise the beneficial ownership interests in, 25 ordinary shares that are on deposit with the depositary or custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property received by the depositary or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practical considerations. We and the depositary may agree to change the ADS-to-share ratio by amending the deposit agreement. This amendment may give rise to, or change, the depositary fees payable by ADS owners. The custodian, the depositary and their respective nominees will hold all deposited property for the benefit of the holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the depositary, the custodian or their nominees. Beneficial ownership in the deposited property will under the terms of the deposit agreement be vested in the beneficial owners of the ADSs. The depositary, the custodian and their respective nominees will be the record holders of the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs. A beneficial owner of ADSs may or may not be the holder of ADSs. Beneficial owners of ADSs will be able to receive, and to exercise beneficial ownership interests in, the deposited property only through the registered holders of the ADSs, the registered holders of the ADSs (on behalf of the applicable ADS owners) only through the depositary, and the depositary (on behalf of the owners of the corresponding ADSs) directly, or indirectly, through the custodian or their respective nominees, in each case upon the terms of the deposit agreement.

If you become an owner of ADSs, you will become a party to the deposit agreement and therefore will be bound to its terms and to the terms of any ADR that represents your ADSs. The deposit agreement and the ADR specify our rights and obligations as well as your rights and obligations as owner of ADSs and those of the depositary. As an ADS holder you appoint the depositary to act on your behalf in certain circumstances. The deposit agreement and the ADRs and ADSs are governed by New York law. However, our obligations to the holders of ordinary shares will continue to be governed by the laws of England and Wales, which may be different from the laws in the United States.

In addition, applicable laws and regulations may require you to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. You are solely responsible for complying with such reporting requirements and obtaining such approvals. Neither the depositary, the custodian, us or any of their or our respective agents or affiliates shall be required to take any actions whatsoever on your behalf

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to satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations. You agree to comply with information requests from us pursuant to applicable laws, stock exchange rules and our Articles of Association. We may restrict transfers of ADSs and take other actions necessary to comply with any applicable ownership restrictions.

The manner in which you own the ADSs (e.g . , in a brokerage account versus as a registered holder, or as a holder of certificated versus uncertificated ADSs) may affect your rights and obligations, and the manner in which, and extent to which, the depositary’s services are made available to you.

As an owner of ADSs, we will not treat you as one of our shareholders and you will not have direct shareholder rights. The depositary will hold on your behalf the shareholder rights attached to the ordinary shares underlying your ADSs. As an owner of ADSs you will be able to exercise the shareholders rights for the ordinary shares represented by your ADSs through the depositary only to the extent contemplated in the deposit agreement. To exercise any shareholder rights not contemplated in the deposit agreement you will, as an ADS owner, need to arrange for the cancellation of your ADSs and become a direct shareholder.

As an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, or through an account established by the depositary in your name reflecting the registration of uncertificated ADSs directly on the books of the depositary (commonly referred to as the direct registration system or DRS). The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the depositary. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the depositary to the holders of the ADSs. The direct registration system includes automated transfers between the depositary and The Depository Trust Company, or DTC, the central book-entry clearing and settlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlement systems such as DTC. The procedures of such clearing and settlement systems may limit your ability to exercise your rights as an owner of ADSs. Please consult with your broker or bank if you have any questions concerning these limitations and procedures. All ADSs held through DTC will be registered in the name of a nominee of DTC, which nominee will be the only “holder” of such ADSs for purposes of the deposit agreement and any applicable ADR. This summary description assumes you have opted to own the ADSs directly by means of an ADS registered in your name and, as such, we will refer to you as the “holder.” When we refer to “you,” we assume the reader owns ADSs and will own ADSs at the relevant time.

The registration of the ordinary shares in the name of the depositary or the custodian shall, to the maximum extent permitted by applicable law, vest in the depositary or the custodian the record ownership in the applicable ordinary shares with the beneficial ownership rights and interests in such ordinary shares being at all times vested with the beneficial owners of the ADSs representing the ordinary shares. The depositary or the custodian shall at all times be entitled to exercise the beneficial ownership rights in all deposited property, in each case only on behalf of the holders and beneficial owners of the ADSs representing the deposited property.

Dividends and Other Distributions

As a holder of ADSs, you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such distributions under the terms of the deposit agreement in proportion to the number of ADSs held as of the specified record date, after deduction the applicable fees, taxes and expenses.

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Distributions of Cash

Whenever we make a cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon receipt of confirmation of the deposit of the requisite funds, the depositary will arrange for the funds received in a currency other than U.S. dollars to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to the laws and regulations of England and Wales. The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The depositary will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.

The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. The depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that the depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.

Distributions of Shares

Whenever we make a free distribution of ordinary shares for the securities on deposit with the custodian, we will deposit the applicable number of ordinary shares with the custodian. Upon receipt of confirmation of such deposit, the depositary will either distribute to holders new ADSs representing the ordinary shares deposited or modify the ADS-to-ordinary shares ratio, in which case each ADS you hold will represent rights and interests in the additional ordinary shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.

The distribution of new ADSs or the modification of the ADS-to-ordinary shares ratio upon a distribution of ordinary shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes or governmental charges, the depositary may sell all or a portion of the new ordinary shares so distributed.

No such distribution of new ADSs will be made if it would violate a law (e.g., the U.S. securities laws) or if it is not operationally practicable. If the depositary does not distribute new ADSs as described above, it may sell the ordinary shares received upon the terms described in the deposit agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.

Distributions of Rights

Whenever we intend to distribute rights to purchase additional ordinary shares, we will give prior notice to the depositary and we will assist the depositary in determining whether it is lawful and reasonably practicable to distribute rights to purchase additional ADSs to holders.

The depositary will establish procedures to distribute rights to purchase additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the deposit agreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to purchase new ordinary shares other than in the form of ADSs.

The depositary will not distribute the rights to you if:


•	we do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or

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•	we fail to deliver satisfactory documents to the depositary; or


•	it is not reasonably practicable to distribute the rights.

The depositary will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the depositary is unable to sell the rights, it will allow the rights to lapse.

Elective Distributions

Whenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior notice thereof to the depositary and will indicate whether we wish the elective distribution to be made available to you. In such case, we will assist the depositary in determining whether such distribution is lawful and reasonably practicable.

The depositary will make the election available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated in the deposit agreement. In such case, the depositary will establish procedures to enable you to elect to receive either cash or additional ADSs, in each case as described in the deposit agreement.

If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a shareholder in England and Wales would receive upon failing to make an election, as more fully described in the deposit agreement.

Other Distributions

Whenever we intend to distribute property other than cash, ordinary shares or rights to purchase additional ordinary shares, we will notify the depositary in advance and will indicate whether we wish such distribution to be made to you. If so, we will assist the depositary in determining whether such distribution to holders is lawful and reasonably practicable.

If it is reasonably practicable to distribute such property to you and if we provide all of the documentation contemplated in the deposit agreement, the depositary will distribute the property to the holders in a manner it deems practicable.

The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes and governmental charges, the depositary may sell all or a portion of the property received.

The depositary will not distribute the property to you and will sell the property if:


•	we do not request that the property be distributed to you or if we ask that the property not be distributed to you; or


•	we do not deliver satisfactory documents to the depositary; or


•	the depositary determines that all or a portion of the dist ribution to you is not reasonably practicable.

The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.

Redemption

Whenever we decide to redeem any of the securities on deposit with the custodian, we will notify the depositary in advance. If it is practicable and if we provide all of the documentation contemplated in the deposit agreement, the depositary will provide notice of the redemption to the holders.

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The custodian will be instructed to surrender the shares being redeemed against payment of the applicable redemption price. The depositary will convert the redemption funds received into U.S. dollars upon the terms of the deposit agreement and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the depositary. You may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as the depositary may determine.

Changes Affecting Ordinary Shares

The ordinary shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value, split-up, cancellation, consolidation or any other reclassification of such ordinary shares or a recapitalization, reorganization, merger, consolidation or sale of assets of our company.

If any such change were to occur, your ADSs would, to the extent permitted by law and the deposit agreement, represent the right to receive the property received or exchanged in respect of the ordinary shares held on deposit. The depositary may in such circumstances deliver new ADSs to you, amend the deposit agreement, the ADRs and the applicable registration statement(s) on Form F-6, call for the exchange of your existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the ordinary shares. If the depositary may not lawfully distribute such property to you, the depositary may sell such property and distribute the net proceeds to you as in the case of a cash distribution.

Issuance of ADSs upon Deposit of Ordinary Shares

Any ordinary shares being offered pursuant to this prospectus will be deposited by the Registered Holders named in this prospectus with the custodian. Upon receipt of confirmation of such deposit, the depositary will issue ADSs to such Registered Holders.

The depositary may also create ADSs on your behalf if you or your broker deposit ordinary shares with the custodian. The depositary will deliver these ADSs to the person you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer of the ordinary shares to the custodian and provide such documentation as may be required pursuant to the deposit agreement. Your ability to deposit ordinary shares and receive ADSs may be limited by U.S. and England and Wales legal considerations applicable at the time of deposit.

The issuance of ADSs may be delayed until the depositary or the custodian receives confirmation that all required approvals have been given and that the ordinary shares have been duly transferred to the custodian. The depositary will only issue ADSs in whole numbers.

When you make a deposit of ordinary shares, you will be responsible for transferring good and valid title to the depositary. As such, you will be deemed to represent and warrant that:


•	the ordinary shares are duly authorized, validly allotted and issued, fully paid, not subject to any call for the payment of further capital and legally obtained;


•	all preemptive (and similar) rights, if any, with respect to such ordinary shares have been validly waived, disapplied or exercised;


•	you are duly authorized to deposit the ordinary shares;


•	the ordinary shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, “restricted securities” (as defined in the deposit agreement); and

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•	the ordinary shares presented f or deposit have not been stripped of any rights or entitlements.

If any of the representations or warranties are incorrect in any way, we and the depositary may, at your cost and expense, take any and all actions necessary to correct the consequences of the misrepresentations.

Transfer, Combination and Split Up of ADRs

As an ADR holder, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you will have to surrender the ADRs to be transferred to the depositary and also must:


•	ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;


•	provide such proof of identity and genuineness of signatures, and of such other matters contemplated in the deposit agreement, as the depositary deems appropriate;


•	comply with applicable laws and regulations, including regulations imposed by us and the depositary consistent with the deposit agreement, the ADR and applicable law;


•	provide any transfer stamps required by the State of New York or the United States; and


•	pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the deposit agreement, upon the transfer of ADRs.

To have your ADRs either combined or split up, you must surrender the ADRs in question to the depositary with your request to have them combined or split up, and you must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the deposit agreement, upon a combination or split up of ADRs.

Withdrawal of Ordinary Shares Upon Cancellation of ADSs

As a holder, you will be entitled to present your ADSs to the depositary for cancellation and then receive the corresponding number of underlying ordinary shares at the custodian’s offices. Your ability to withdraw the ordinary shares held in respect of the ADSs may be limited by U.S. and England and Wales considerations applicable at the time of withdrawal. In order to withdraw the ordinary shares represented by your ADSs, you will be required to pay to the depositary the fees for cancellation of ADSs and any charges and taxes payable upon the transfer of the ordinary shares. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the deposit agreement.

If you hold ADSs registered in your name, the depositary may ask you to provide proof of identity and genuineness of any signature and such other documents as the depositary may deem appropriate before it will cancel your ADSs. The withdrawal of the ordinary shares represented by your ADSs may be delayed until the depositary receives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind that the depositary will only accept ADSs for cancellation that represent a whole number of securities on deposit.

You will have the right to withdraw the securities represented by your ADSs at any time except as a result of:


•	temporary delays that may arise because (i) the transfer books for the ordinary shares or ADSs are closed, or (ii) ordinary shares are immobilized on account of a shareholders’ meeting or a payment of dividends;

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•	obligations to pay fees, taxes and similar charges; or


•	restrictions imposed because of la ws or regulations applicable to ADSs or the withdrawal of securities on deposit.

The deposit agreement may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with mandatory provisions of law.

Voting Rights

As a holder, you generally have the right under the deposit agreement to instruct the depositary to exercise the voting rights for the ordinary shares represented by your ADSs. The voting rights of holders of ordinary shares are described in “Description of Share Capital — Articles of Association” in this prospectus.

At our request, the depositary will distribute to you any notice of shareholders’ meeting received from us together with information explaining how to instruct the depositary to exercise the voting rights of the securities represented by ADSs.

If the depositary timely receives voting instructions from a holder of ADSs, it will endeavor to vote the securities (in person or by proxy) represented by the holder’s ADSs as follows:


•	In the event of voting by show of hands , the depositary will vote (or cause the custodian to vote) all ordinary held on deposit at that time in accordance with the voting instructions received from a majority of holders of ADSs who provide timely voting instructions.


•	In the event of voti ng by poll , the depositary will vote (or cause the custodian to vote) the ordinary shares held on deposit in accordance with the voting instructions received from the holders of ADSs.

The depositary will not join in demanding a vote by poll.

Securities for which no voting instructions have been received will not be voted (except (a) if voting is by show of hands, in which case all the depositary will vote all deposited securities in accordance with voting instructions received from a majority of holders who provided voting instructions, and (b) as otherwise contemplated herein). If voting is by poll and the depositary does not receive timely voting instructions from a holder of ADSs, such holder shall be deemed to have instructed the depositary to give a discretionary proxy to a person designated by us to vote the deposited securities represented by such ADSs in any manner such person wishes, which may not be in your best interests; provided, however, that no such discretionary proxy shall be given with respect to any matter to be voted upon as to which we inform the depositary that (a) we do not wish such proxy to be given, (b) substantial opposition exists, or (c) the rights of holders of deposited securities may be adversely affected. Please note that the ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the depositary in a timely manner.

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Fees and Charges

As an ADS holder, you will be required to pay the following fees under the terms of the deposit agreement:



Service		Fee
Issuance of ADSs (e.g., an issuance of ADS upon a deposit of ordinary shares or upon a change in the ADS(s)-to-ordinary shares ratio, or for any other reason), excluding ADS issuances as a result of distributions of ordinary shares		Up to $0.05 per ADS issued
Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited property or upon a change in the ADS(s)-to-ordinary shares ratio, or for any other reason)		Up to $0.05 per ADS cancelled
Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements)		Up to $0.05 per ADS held
Distribution of ADSs pursuant to (i) share dividends or other distributions, or (ii) exercise of rights to purchase additional ADSs		Up to $0.05 per ADS held
Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., upon a spin-off)		Up to $0.05 per ADS held
ADS services		Up to $0.05 per ADS held on the applicable record date(s) established by the depositary

The normal charge by the Depositary for the issuance of ADS upon deposit of ordinary shares has been waived for a period of six months following the effective date of the Registration Statement of which this prospectus forms a part. As an ADS holder you will also be responsible to pay certain charges such as:


•	taxes (including applicable interest and penalties) and other governmental charges;


•	the registration fees as may from time to time be in effect for the registration of ordinary shares on the share register and applicable to transfers of ordinary shares to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals, respectively;


•	certain cable, telex and facsimile transmission and delivery expenses;


•	the expenses and charges incurred by the depositary in the conversion of foreign currency;


•	the fees and expenses incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to ordinary shares, ADSs and ADRs; and


•	the fees and expenses incurred by the depositary, the custodian, or any nominee in connection with the servicing or delivery of deposited property.

ADS fees and charges payable upon (i) the issuance of ADSs, and (ii) the cancellation of ADSs are charged to the person to whom the ADSs are issued (in the case of ADS issuances) and to the person whose ADSs are cancelled (in the case of ADS cancellations). In the case of ADSs issued by the depositary into DTC, the ADS issuance and cancellation fees and charges may be deducted from distributions made through DTC, and may be charged to the DTC participant(s) receiving the ADSs being issued or the DTC participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account of the applicable

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beneficial owner(s) in accordance with the procedures and practices of the DTC participants as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are charged to the holders as of the applicable ADS record date. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, holders as of the ADS record date will be invoiced for the amount of the ADS fees and charges and such ADS fees and charges may be deducted from distributions made to holders of ADSs. For ADSs held through DTC, the ADS fees and charges for distributions other than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC participants in accordance with the procedures and practices prescribed by DTC and the DTC participants in turn charge the amount of such ADS fees and charges to the beneficial owners for whom they hold ADSs.

In the event of refusal to pay the depositary fees or charges, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees and charges from any distribution to be made to the ADS holder.

The depositary has agreed to waive the fees and charges it would otherwise be due for the issuance of ADSs upon deposit of ordinary shares for the six months following the effective date of the registration statement of which this prospectus forms a part. However, after such initial grace period, the depositary will be entitled to the fees set forth above. Note that the fees and charges you may be required to pay may vary over time and may be changed by us and by the depositary. You will receive prior notice of such changes. The depositary may reimburse us for certain expenses incurred by us in respect of the ADR program, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary agree from time to time.

Amendments and Termination

We may agree with the depositary to modify the deposit agreement at any time without your consent. We undertake to give ADS holders 30 days’ prior notice of any modifications that would materially prejudice any of their substantial rights under the deposit agreement. We will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.

You will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit agreement become effective. The deposit agreement cannot be amended to prevent you from withdrawing the ordinary shares represented by your ADSs (except as permitted by law).

We have the right to direct the depositary to terminate the deposit agreement subject to certain conditions. Similarly, the depositary may in certain circumstances on its own initiative terminate the deposit agreement. In either case, the depositary must give notice to the holders at least 30 days before termination. Until termination, your rights under the deposit agreement will be unaffected.

Termination

After termination, the depositary will continue to collect distributions received (but will not distribute any such property until you request the cancellation of your ADSs) and may sell the securities held on deposit. After the sale, the depositary will hold the proceeds from such sale and any other funds then held for the holders of ADSs in a non-interest bearing account. At that point, the depositary will have no further obligations to ADS holders other than to account for the funds then held for the holders of ADSs still outstanding (after deduction of applicable fees, taxes and expenses).

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In connection with the termination of the deposit agreement, the depositary may, but shall not be obligated to, independently and without the need for any action by us, make available to holders a means to withdraw the ordinary shares and other deposited securities represented by their ADSs and to direct the deposit of such ordinary shares and other deposited securities into an unsponsored American depositary shares program established by the depositary, upon such terms and conditions as the depositary may deem reasonably appropriate, subject however, in each case, to satisfaction of the applicable registration requirements by the unsponsored American depositary shares program under the Securities Act, and to receipt by the depositary of payment of the applicable fees and charges of, and reimbursement of the applicable expenses incurred by, the depositary.

Books of Depositary

The depositary will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the deposit agreement.

The depositary will maintain in New York facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.

Transmission of Notices, Reports and Proxy Soliciting Material

The depositary will make available for your inspection at its office all communications that it receives from us as a holder of deposited securities that we make generally available to holders of deposited securities. Subject to the terms of the deposit agreement, the depositary will send you copies of those communications or otherwise make those communications available to you if we ask it to.

Limitations on Obligations and Liabilities

The deposit agreement limits our obligations and the depositary’s obligations to you. Please note the following:


•	We and the depositary are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad faith.


•	The depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the deposit agreement.

•

The depositary disclaims any liability for any failure to accurately determine the lawfulness or practicality of any action, for the content of any document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in ordinary shares, for the validity or worth of the ordinary shares, for any tax consequences that result from the ownership of ADSs or other deposited property, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the deposit agreement, for the timeliness of any of our notices or for our failure to give notice or for any act or omission of or information provided by DTC or any DTC participant.


•	The depositary shall not be liable for acts or omissions of any successor depositary in connection with any matter arising wholly after the resignation or removal of the depositary.


•	We and the depositary will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement.


•	We and the depositary disclaim any liability if we or the depositary are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or

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performing any act or thing required by the terms of the deposit agreement, by reason of any provision, present or future of any law or regulation, including regulations of any stock exchange or by reason of present or future provisions of our Articles of Association, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond our or the depositary’s control.


•	We and the depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the deposit agreement or in our Articles of Association or in any provisions of or governing the securities on deposit.


•	We and the depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting ordinary shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by either of us in good faith to be competent to give such advice or information.


•	We and the depositary also disclaim liability for the inability by any ADS holder or beneficiary owner to benefit from any distribution, offering, right or other benefit that is made available to holders of ordinary shares but is not, under the terms of the deposit agreement, made available to you.


•	We and the depositary may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties.


•	We and the depositary also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit agreement.


•	We and the depositary disclaim liability arising out of losses, liabilities, taxes, charges or expenses resulting from the manner in which a holder or beneficial owner of ADSs holds ADSs, including resulting from holding ADSs through a brokerage account.


•	No disclaimer of any Securities Act liability is intended by any p rovision of the deposit agreement.

Pre-Release Transactions

Subject to the terms and conditions of the deposit agreement, the depositary may issue to broker / dealers ADSs before receiving a deposit of ordinary shares or release ordinary shares to broker / dealers before receiving ADSs for cancellation. These transactions are commonly referred to as ”pre-release transactions,” and are entered into between the depositary and the applicable broker/dealer. The deposit agreement limits the aggregate size of pre-release transactions (not to exceed 30% of the ordinary shares on deposit in the aggregate, such limit being subject to change or disregard in the depositary’s discretion) and imposes a number of conditions on such transactions (e.g., the need to receive collateral, the type of collateral required, the representations required from brokers, etc.). The depositary may retain the compensation received from the pre-release transactions. The depositary does not intend to authorize pre-release transactions except in extraordinary circumstances.

Taxes

You will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We, the depositary and the custodian may deduct from any distribution the taxes and governmental charges payable by ADS holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by ADS holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.

The depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable ADS holder. The depositary

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and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the depositary and to the custodian proof of taxpayer status and residence and such other information as the depositary and the custodian may require to fulfill legal obligations. You are required to indemnify us, the depositary and the custodian for any claims with respect to taxes based on any tax benefit obtained for you.

Foreign Currency Conversion

The depositary will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute the U.S. dollars in accordance with the terms of the deposit agreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements.

If the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the depositary may take any of the following actions in its discretion:


•	Convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the ADS holders for whom the conversion and distribution is lawful and practical.


•	Distribute the foreign currency to ADS holders for whom the distribution is lawful and practical.


•	Hold the foreig n currency (without liability for interest) for the applicable ADS holders.

Governing Law / Waiver of Jury Trial

The deposit agreement and the ADRs and ADSs will be interpreted in accordance with the laws of the State of New York. The rights of holders of ordinary shares (including ordinary shares represented by ADSs) are governed by the laws of England and Wales.

AS A PARTY TO THE DEPOSIT AGREEMENT, YOU WAIVE IRREVOCABLY YOUR RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF THE DEPOSIT AGREEMENT OR THE ADRs AGAINST U.S. OR THE DEPOSITARY.

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SHARES AND ADSs ELIGIBLE FOR FUTURE SALE

Although our ordinary shares are currently listed for trading on AIM, a market operated by the London Stock Exchange, to date there has not been any market for ADSs representing our ordinary shares. Future sales of substantial amounts of ADSs representing our ordinary shares in the United States or of our ordinary shares in the United Kingdom, or the perception that such sales may occur, could adversely affect prevailing market prices of such ADSs and of our ordinary shares. As of March 31, 2018, we had outstanding 116,561,419 ordinary shares and no ADSs representing our ordinary shares. Upon the effectiveness of the registration statement of which this prospectus forms a part, holders of ordinary shares are expected to be able to deposit such shares with the depositary in exchange for ADSs representing such shares at the ratio referred to on the cover page of this prospectus , which ADSs will be freely tradeable. However, holders of issued but unexercised options will have to comply with one of the exceptions from U.S. registration requirements set forth below in order to exchange any ordinary shares issued upon exercise thereof.

Rule 144

In general, a person who has beneficially owned our unregistered ordinary shares for at least six months would be entitled to sell ADSs representing our ordinary shares pursuant to Rule 144 of the Securities Act, provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale and (2) we are subject to Exchange Act periodic reporting requirements for at least 90 days before the sale. Persons who are our affiliates at the time of, or any time during the 90 days preceding, a sale of ADSs representing such shares, are subject to additional restrictions , as follows:


•	such person may sell within any three month period only a number of ADSs representing our ordinary shares that does not exceed the greater of either of the following:


•	1% of the number of ADS representing our ordinary shares then outstanding (including any ordinary shares issuable upon withdrawal of ADSs), as if all such shares had been deposited in exchange for ADSs; or


•	the average weekly trading volume of ADSs representing our ordinary shares on the Nasdaq Global Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;

provided that, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144 to the extent applicable. Prior to the 90th day following the effective date of the registration statement of which this prospectus forms a part when we become subject to the Exchange Act periodic reporting requirements, non-affiliates who have not been affiliates of ours within the 90 days preceding the sale and who acquired their securities at least one year following their sale by us or our affiliates, may freely resell such securities under Rule 144.

Rule 701

In general, under Rule 701 under the Securities Act, any of our employees, board members, senior management, consultants or advisors who purchases ordinary shares from us in connection with a compensatory share or option plan or other written agreement before the effective date of the registration statement of which this prospectus forms a part, or the effective date, is entitled to resell such shares 90 days after the effective date in reliance on Rule 144, without having to comply with the holding period requirements or other restrictions contained in Rule 701. The SEC has indicated that Rule 701 will apply to typical share options granted by an issuer before it becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options, including exercises after the date of this prospectus. Securities issued in reliance on Rule 701 are restricted securities and,

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beginning 90 days after the date of this prospectus, may be sold by persons other than “affiliates,” as defined in Rule 144, subject only to the manner of sale provisions of Rule 144 and by affiliates under Rule 144 without compliance with the holding period requirement.

Regulation S

Regulation S provides generally that sales made in offshore transactions, as well as the resale of any such securities issued by foreign private issuers (including into the United States), are not subject to the registration or prospectus delivery requirements of the Securities Act.

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MATERIAL INCOME TAX CONSIDERATIONS

The following summary contains a description of material U.K. and U.S. federal income tax consequences of the acquisition, ownership and disposition of our ordinary shares or ADSs representing our ordinary shares. This summary should not be considered a comprehensive description of all the tax considerations that may be relevant to the decision to acquire ADSs representing our ordinary shares.

Material U.S. Federal Income Tax Considerations for U.S. Holders

The following is a description of the material U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of our ordinary shares or ADSs representing our ordinary shares. It is not a comprehensive description of all tax considerations that may be relevant to a particular person’s decision to acquire securities. This discussion applies only to a U.S. Holder that holds our ordinary shares or ADSs representing our ordinary shares as a capital asset for tax purposes (generally, property held for investment). In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including state and local tax consequences, estate tax consequences, alternative minimum tax consequences, the potential application of the Medicare contribution tax, and tax consequences applicable to U.S. Holders subject to special rules, such as:


•	banks, insurance companies, and certain other financial institutions;


•	U.S. expatriates and certain former citizens or long-term residents of the United States;


•	dealers or traders in securities who use a mark-to-market method of tax accounting;


•	persons holding our ordinary shares or ADSs representing our ordinary shares as part of a hedging transaction, “straddle,” wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to our ordinary shares or ADSs representing our ordinary shares;


•	persons whose “functional currency” for U.S. federal income tax purposes is not the U.S. dollar;


•	brokers, dealers or traders in securities, commodities or currencies;


•	tax-exempt entities or government organizations;


•	S corporations, partnerships, or other entities or arrangements classified as partnerships for U.S. federal income tax purposes;


•	regulated investment companies or real estate investment trusts;


•	persons who acquired our ordinary shares or ADSs representing our ordinary shares pursuant to the exercise of any employee stock option or otherwise as compensation;


•	persons required under Section 451(b) of the Code to conform to the timing of income accruals with respect to our ADSs representing our ordinary shares or the ordinary shares represented by such ADSs;


•	persons that own or are deemed to own (including by attribution) ten percent or more of our ordinary shares by voting power or value; and


•	persons holding our ordinary shares or ADSs representing our ordinary shares in connection with a trade or business, permanent establishment, or fixed base outside the United States.

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If an entity that is classified as a partnership for U.S. federal income tax purposes holds our ordinary shares or ADSs representing our ordinary shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding our ordinary shares or ADSs representing our ordinary shares and partners in such partnerships are encouraged to consult their tax advisers as to the particular U.S. federal income tax consequences of holding and disposing of such ordinary shares or ADSs representing our ordinary shares.

The discussion is based on the Internal Revenue Code of 1986, as amended, or the Code, administrative pronouncements, judicial decisions, final, temporary and proposed Treasury Regulations, and the income tax treaty between the United Kingdom and the United States, or the Treaty, all as of the date hereof, changes to any of which may affect the tax consequences described herein — possibly with retroactive effect.

A “U.S. Holder” is a holder who, for U.S. federal income tax purposes, is a beneficial owner of our ordinary shares or ADSs representing our ordinary shares who is eligible for the benefits of the Treaty and is:


i.	a citizen or individual resident of the United States;


ii.	a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia;


iii.	an estate the income of which is subject to U.S. federal income taxation regardless of its source; or


iv.	a trust if (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or (2) the trust has a valid election to be treated as a U.S. person under applicable U.S. Treasury Regulations.

U.S. Holders are encouraged to consult their tax advisers concerning the U.S. federal, state, local and foreign tax consequences of owning and disposing of our ordinary shares or ADSs representing our ordinary shares in their particular circumstances.

The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement will be complied with in accordance with their terms. Generally, a holder of an ADS should be treated for U.S. federal income tax purposes as holding the ordinary shares represented by the ADS. Accordingly, no gain or loss will be recognized upon an exchange of ADSs representing our ordinary shares for ordinary shares. The U.S. Treasury has expressed concerns that intermediaries in the chain of ownership between the holder of an ADS and the issuer of the security underlying the ADS may be taking actions that are inconsistent with the beneficial ownership of the underlying security. Accordingly the creditability of foreign taxes, if any, as described below, could be affected by actions taken by intermediaries in the chain of ownership between the holders of ADSs representing our shares and our company if, as a result of such actions, the holders of ADSs representing our shares are not properly treated as beneficial owners of the underlying ordinary shares.

Passive Foreign Investment Company Rules

Based on our financial statements and the projected composition of our income and valuation of our assets, including goodwill, we believe that we were classified as a passive foreign investment company, or PFIC, for 2017 and we expect to be classified as a PFIC for the current tax year. If we are classified as a PFIC in any taxable year, a U.S. Holder will be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of U.S. federal income tax that a U.S. Holder could derive from investing in a non-U.S. company that does not distribute all of its earnings on a current basis.

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A non-U.S. corporation will be classified as a PFIC for any taxable year in which, after applying certain look-through rules, either:


•	at least 75% of its gross income is passive income; or


•	at least 50% of its gross assets (determined on the basis of a quarterly average) is attributable to assets that produce passive income or are held for the production of passive income.

For this purpose, cash is a passive asset and passive income generally includes dividends, interest, royalties and rents (other than royalties and rents derived in the active conduct of a trade or business and not derived from a related person). We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation, the equity of which we own, directly or indirectly, 25% or more (by value).

The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation. If we are a PFIC for any taxable year during which a U.S. Holder holds our ordinary shares or ADSs representing our ordinary shares, such U.S. Holder will be subject to special tax rules discussed below and could suffer adverse tax consequences.

A separate determination must be made after the close of each taxable year as to whether we are a PFIC for that year. As a result, our PFIC status may change from year to year. The total value of our assets for purposes of the asset test generally will be calculated using the market price of our ordinary shares or ADSs representing our ordinary shares, which may fluctuate considerably. Fluctuations in the market price of the ordinary shares or ADSs representing our ordinary shares may result in our being a PFIC for any taxable year. Because of the uncertainties involved in establishing our PFIC status, our United States tax counsel expresses no opinion regarding our PFIC status.

If we are classified as a PFIC in any year with respect to which a U.S. Holder owns our ordinary shares or ADSs representing our ordinary shares, we will continue to be treated as a PFIC with respect to such U.S. Holder in all succeeding years during which the U.S. Holder owns the ordinary shares or ADSs representing our ordinary shares, regardless of whether we continue to meet the tests described above unless (i) we cease to be a PFIC and the U.S. Holder has made a “deemed sale” election under the PFIC rules, or (ii) the U.S. Holder makes a “QEF Election” (defined below) or is eligible to make and makes a mark-to-market election (as described below), with respect to all taxable years during such U.S. Holder’s holding period in which we are a PFIC. If the “deemed sale” election is made, a U.S. Holder will be deemed to have sold the ordinary shares or ADSs representing our ordinary shares the U.S. Holder holds at their fair market value as of the date of such deemed sale and any gain from such deemed sale would be subject to the rules described below. After the deemed sale election, so long as we do not become a PFIC in a subsequent taxable year, the U.S. Holder’s ordinary shares or ADSs representing our ordinary shares with respect to which such election was made will not be treated as shares in a PFIC and the U.S. Holder will not be subject to the rules described below with respect to any “excess distribution” the U.S. Holder receives from us or any gain from an actual sale or other disposition of the ordinary shares or ADSs representing our ordinary shares. U.S. Holders should consult their tax advisors as to the possibility and consequences of making a deemed sale election if such election becomes available.

For each taxable year we are treated as a PFIC with respect to U.S. Holders, U.S. Holders will be subject to special tax rules with respect to any “excess distribution” such U.S. Holder receives and any gain such U.S. Holder recognizes from a sale or other disposition (including a pledge) of our ordinary shares or ADSs representing our ordinary shares, unless (i) such U.S. Holder makes a QEF Election or (ii) our ordinary shares or ADSs representing our ordinary shares constitute “marketable“ securities, and such U.S. Holder makes a mark-to-market election as discussed below. Distributions a U.S. Holder receives in a taxable year that are greater than 125% of the average annual distributions a U.S. Holder received during the shorter of the three preceding taxable years or the U.S. Holder’s holding period for

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the ordinary shares or ADSs representing our ordinary shares will be treated as an excess distribution. Under these special tax rules:


•	the excess distribution or gain will be allocated ratably over a U.S. Holder’s holding period for the ordinary shares or ADSs representing our ordinary shares;


•	the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income; and


•	the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary shares or ADSs representing our ordinary shares cannot be treated as capital gains, even if a U.S. Holder holds the ordinary shares or ADSs representing our ordinary shares as capital assets.

If we are a PFIC, a U.S. Holder will generally be subject to similar rules with respect to distributions we receive from, and our dispositions of the stock of, any of our direct or indirect subsidiaries that also are PFICs, as if such distributions were indirectly received by, and / or dispositions were indirectly carried out by, such U.S. Holder. U.S. Holders should consult their tax advisors regarding the application of the PFIC rules to our subsidiaries.

U.S. Holders can avoid the interest charge on excess distributions or gain relating to our ordinary shares or ADSs representing our ordinary shares by making a mark-to-market election with respect to the ordinary shares or ADSs representing our ordinary shares, provided that the ordinary shares or ADSs representing our ordinary shares are “marketable.” Ordinary shares or ADSs representing our ordinary shares will be marketable if they are “regularly traded” on certain U.S. stock exchanges or on a foreign stock exchange that meets certain conditions. For these purposes, the ordinary shares or ADSs representing our ordinary shares will be considered regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. Any trades that have as their principal purpose meeting this requirement will be disregarded. Our ADSs representing our ordinary shares will be listed on the Nasdaq Global Market, or Nasdaq, which is a qualified exchange for these purposes. Consequently, if our ADSs representing our ordinary shares remain listed on Nasdaq and are regularly traded, and you are a holder of ADSs representing our ordinary shares, we expect the mark-to-market election would be available to U.S. Holders if we are a PFIC. Each U.S. Holder should consult its tax advisor as to the whether a mark-to-market election is available or advisable with respect to the ordinary shares or ADSs representing our ordinary shares.

A U.S. Holder that makes a mark-to-market election must include in ordinary income for each year an amount equal to the excess, if any, of the fair market value of our ordinary shares or ADSs representing our ordinary shares at the close of the taxable year over the U.S. Holder’s adjusted tax basis in the ordinary shares or ADSs representing our ordinary shares. An electing holder may also claim an ordinary loss deduction for the excess, if any, of the U.S. Holder’s adjusted basis in the ordinary shares or ADSs representing our ordinary shares over the fair market value of the ordinary shares or ADSs representing our ordinary shares at the close of the taxable year, but this deduction is allowable only to the extent of any net mark-to-market gains for prior years. Gains from an actual sale or other disposition of the ordinary shares or ADSs representing our ordinary shares will be treated as ordinary income, and any losses incurred on a sale or other disposition of the shares will be treated as an ordinary loss to the extent of any net mark-to-market gains for prior years. Once made, the election cannot be revoked without the consent of the Internal Revenue Service, or the IRS, unless the ordinary shares or ADSs representing our ordinary shares cease to be marketable.

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However, a mark-to-market election generally cannot be made for equity interests in any lower-tier PFICs that we own, unless shares of such lower-tier PFIC are themselves “marketable.” As a result, even if a U.S. Holder validly makes a mark-to-market election with respect to our ordinary shares or ADSs representing our ordinary shares, the U.S. Holder may continue to be subject to the PFIC rules (described above) with respect to its indirect interest in any of our investments that are treated as an equity interest in a PFIC for U.S. federal income tax purposes. U.S. Holders should consult their tax advisors as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any lower-tier PFICs.

Alternatively, a U.S. Holder can make an election, if we provide the necessary information, to treat us and each lower-tier PFIC as a qualified electing fund, or a QEF Election, in the first taxable year we (and our relevant subsidiaries) are treated as a PFIC with respect to the U.S. Holder. If such election remains in place while we and any lower-tier PFIC subsidiaries are PFICs, we and our subsidiaries will not be treated as PFICs with respect to such U.S. Holder. A U.S. Holder must make the QEF Election for us and for each of our subsidiaries that is a PFIC by attaching a separate properly completed IRS Form 8621 for each such PFIC to the U.S. Holder’s timely filed U.S. federal income tax return. We intend to provide the information necessary for a U.S. Holder to make a QEF Election with respect to us and to cause each lower-tier PFIC which we control to provide such information with respect to such lower-tier PFIC.

If a U.S. Holder makes a QEF Election with respect to a PFIC, the U.S. Holder will be currently taxable on its pro rata share of the PFIC’s ordinary earnings and net capital gain (at ordinary income and capital gain rates, respectively) for each taxable year that the entity is classified as a PFIC. If a U.S. Holder makes a QEF Election with respect to us, any distributions paid by us out of our earnings and profits that were previously included in the U.S. Holder’s income under the QEF Election would not be taxable to the holder. A U.S. Holder will increase its tax basis in its ordinary shares or ADSs representing our ordinary shares by an amount equal to any income included under the QEF Election and will decrease its tax basis by any amount distributed on the ordinary shares or ADSs representing our ordinary shares that is not included in the holder’s income. In addition, a U.S. Holder will recognize capital gain or loss on the disposition of ordinary shares or ADSs representing our ordinary shares in an amount equal to the difference between the amount realized and the holder’s adjusted tax basis in the ordinary shares or ADSs representing our ordinary shares. U.S. Holders should note that if they make QEF Elections with respect to us and lower-tier PFICs, they may be required to pay U.S. federal income tax with respect to their ordinary shares or ADSs representing our ordinary shares for any taxable year significantly in excess of any cash distributions (which may be zero) received on the ordinary shares or ADSs representing our ordinary shares for such taxable year. U.S. Holders should consult their tax advisors regarding making QEF Elections in their particular circumstances.

Unless otherwise provided by the U.S. Treasury, each U.S. shareholder of a PFIC is required to file an annual report containing such information as the U.S. Treasury may require. A U.S. Holder’s failure to file the annual report will cause the statute of limitations for such U.S. Holder’s U.S. federal income tax return to remain open with regard to the items required to be included in such report until three years after the U.S. Holder files the annual report, and, unless such failure is due to reasonable cause and not willful neglect, the statute of limitations for the U.S. Holder’s entire U.S. federal income tax return will remain open during such period. U.S. Holders should consult their tax advisors regarding the requirements of filing such information returns under these rules.

Taxation of Distributions

Subject to the discussion above under “Passive Foreign Investment Company Rules,” distributions paid on our ordinary shares or ADSs representing our ordinary shares, other than certain pro rata distributions of ordinary shares or ADSs representing our ordinary shares , will generally be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we may not calculate our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders may be

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taxable at preferential rates applicable to “qualified dividend income.” However, the qualified dividend income treatment may not apply if we are treated as a PFIC with respect to the U.S. Holder. The amount of the dividend will be treated as foreign-source dividend income to U.S. Holders and will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Dividends will generally be included in a U.S. Holder’s income on the date of the U.S. Holder’s receipt of the dividend. The amount of any dividend income paid in foreign currency will be the U.S. dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt. Such gain or loss would generally be treated as U.S.-source ordinary income or loss. The amount of any distribution of property other than cash (and other than certain pro rata distributions of ordinary shares or ADSs representing our ordinary shares or rights to acquire ordinary shares or ADSs representing our ordinary shares) will be the fair market value of such property on the date of distribution.

For foreign tax credit limitation purposes, our dividends will generally be treated as passive category income. Because no U.K. income taxes will be withheld from dividends on ordinary shares or ADSs representing our ordinary shares, there will be no creditable foreign taxes associated with any dividends that a U.S. Holder will receive. The rules governing foreign tax credits are complex and U.S. Holders should therefore consult their tax advisers regarding the effect of the receipt of dividends for foreign tax credit limitation purposes.

Sale or Other Taxable Disposition of Ordinary Shares and ADSs Representing Our Ordinary Shares

Subject to the discussion above under “ Passive Foreign Investment Company Rules ,” gain or loss realized on the sale or other taxable disposition of our ordinary shares or ADSs representing our ordinary shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the ordinary shares or ADSs representing our ordinary shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the ordinary shares or ADSs representing our ordinary shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

If the consideration received by a U.S. Holder is not paid in U.S. dollars, the amount realized will be the U.S. dollar value of the payment received determined by reference to the spot rate of exchange on the date of the sale or other disposition. However, if the ordinary shares or ADSs representing our ordinary shares are treated as traded on an “established securities market” and you are either a cash basis taxpayer or an accrual basis taxpayer that has made a special election (which must be applied consistently from year to year and cannot be changed without the consent of the IRS), you will determine the U.S. dollar value of the amount realized in a non-U.S. dollar currency by translating the amount received at the spot rate of exchange on the settlement date of the sale. If you are an accrual basis taxpayer that is not eligible to or does not elect to determine the amount realized using the spot rate on the settlement date, you will recognize foreign currency gain or loss to the extent of any difference between the U.S. dollar amount realized on the date of sale or disposition and the U.S. dollar value of the currency received at the spot rate on the settlement date.

WE STRONGLY URGE YOU TO CONSULT YOUR TAX ADVISOR REGARDING THE IMPACT OF OUR PFIC STATUS ON YOUR INVESTMENT IN THE ORDINARY SHARES OR ADSs REPRESENTING OUR ORDINARY SHARES AS WELL AS THE APPLICATION OF THE PFIC RULES TO YOUR INVESTMENT IN THE ORDINARY SHARES OR ADSs.

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Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.

Backup withholding is not an additional tax. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

Information with Respect to Foreign Financial Assets

Certain U.S. Holders who are individuals (and, under regulations, certain entities) may be required to report information relating to our ordinary shares or ADSs representing our ordinary shares, subject to certain exceptions (including an exception for ordinary shares or ADSs representing our ordinary shares held in accounts maintained by certain U.S. financial institutions). Such U.S. Holders who fail to timely furnish the required information may be subject to a penalty. Additionally, if a U.S. Holder does not file the required information, the statute of limitations with respect to tax returns of the U.S. Holder to which the information relates may not close until three years after such information is filed. U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to their ownership and disposition of our ordinary shares or ADSs representing our ordinary shares.

United Kingdom Taxation

The following paragraphs are intended as a general guide to current U.K. tax law and HM Revenue & Customs published practice applying as of the date of this prospectus (both of which are subject to change at any time, possibly with retrospective effect) relating to the holding of ADSs representing our ordinary shares. They do not constitute legal or tax advice and do not purport to be a complete analysis of all U.K. tax considerations relating to the holding of ADSs representing our ordinary shares. Unless otherwise specified, they relate only to persons who are absolute beneficial owners of the ADSs representing our ordinary shares (and where the ADSs representing our ordinary shares are held as investments, and are not held through an Individual Savings Account or a Self Invested Personal Pension) and who are resident (and in the case of individuals, domiciled or deemed domiciled) for tax purposes solely in the United Kingdom and do not have a permanent establishment or fixed base in any other jurisdiction with which the holding of the ADSs representing our ordinary shares is connected, or U.K. Holders. These paragraphs are written on the basis that the Company is and remains solely resident in the United Kingdom for tax purposes.

These paragraphs may not relate to certain classes of U.K. Holders, such as (but not limited to):


•	persons who are connected with the Company;


•	insurance companies;


•	charities;


•	collective investment schemes;


•	pension schemes;


•	brokers or dealers in securities or persons who hold ordinary shares or ADSs representing our ordinary shares otherwise than as an investment;

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•	persons who have (or are deemed to have) acquired their ordinary shares or ADSs representing our ordinary shares by virtue of an office or employment or who are or have been officers or employees of the Company or any of its affiliates; and


•	individuals who are subject to U.K. taxation on a remittance basis.

THESE PARAGRAPHS ARE A SUMMARY OF CERTAIN U.K. TAX CONSIDERATIONS AND ARE INTENDED AS A GENERAL GUIDE ONLY. IT IS RECOMMENDED THAT ALL HOLDERS OF ADSs REPRESENTING OUR ORDINARY SHARES OBTAIN THEIR OWN TAX ADVICE AS TO THE CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSAL OF ADSs REPRESENTING OUR ORDINARY SHARES. IN PARTICULAR, NON‑U.K. RESIDENT OR DOMICILED PERSONS ARE ADVISED TO CONSIDER THE POTENTIAL IMPACT OF ANY RELEVANT DOUBLE TAX AGREEMENTS.

The decision of the First-tier Tribunal (Tax Chamber) in HSBC Holdings PLC and The Bank of New York Mellon Corporation v HMRC (2012) cast some doubt on whether a holder of a depositary receipt is the beneficial owner of the underlying shares. However, based on published HMRC guidance we would expect that HMRC will regard a holder of ADSs representing our ordinary shares as holding the beneficial interest in the underlying shares and therefore these paragraphs assume that a holder of ADSs representing our ordinary shares is the beneficial owner of the underlying ordinary shares and any dividends paid in respect of the underlying ordinary shares (where the dividends are regarded for U.K. purposes as that person’s own income) for U.K. direct tax purposes.

Dividends

Withholding Tax

Dividends paid by the Company will not be subject to any withholding or deduction for or on account of U.K. tax, irrespective of the residence or particular circumstances of the holders of ADSs representing our ordinary shares.

Income Tax

An individual U.K. Holder may, depending on his or her particular circumstances, be subject to U.K. tax on dividends received from the Company. An individual holder of ADSs represnting our ordinary shares who is not resident for tax purposes in the United Kingdom should not be chargeable to U.K. income tax on dividends received from the Company unless he or she carries on (whether solely or in partnership) any trade, profession, or vocation in the United Kingdom through a branch or agency to which the ADSs representing our ordinary shares are attributable (subject to certain exceptions for trading through independent agents, such as some brokers and investment managers).

All individual U.K. Holders will receive a tax-free dividend allowance in the 2018 /2019 tax year of £2,000 per annum. Dividend income in excess of this tax-free allowance will (subject to the availability of any income tax personal allowance) currently be charged at the highest marginal rate of 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers, and 38.1% for additional rate taxpayers. Dividend income is treated as the top slice of the total income chargeable to U.K. income tax.

Corporation Tax

A corporate holder of ADSs representing our ordinary shares who is not resident for tax purposes in the United Kingdom should not be chargeable to U.K. corporation tax on dividends received from the Company unless it carries on (whether solely or in partnership) a trade in the United Kingdom through a permanent establishment to which the ADSs representing our ordinary shares are attributable.

Corporate U.K. Holders should not be subject to U.K. corporation tax on any dividend received from the Company so long as the dividends qualify for exemption, which is likely to be the case, provided the dividends fall within an exempt class and certain conditions are met (including anti-avoidance conditions).

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If the conditions for exemption are not satisfied, or such corporate U.K. Holder elects for an otherwise exempt dividend to be taxable, U.K. corporation tax will be chargeable on the amount of any dividends at the current rate of 19%.

Chargeable Gains

A disposal of ADSs representing our ordinary shares by a U.K. Holder may, depending on the U.K. Holder’s circumstances and subject to any available exemptions or reliefs, give rise to a chargeable gain or an allowable loss for the purposes of U.K. capital gains tax and corporation tax on chargeable gains.

If an individual U.K. Holder who is subject to U.K. income tax at either the higher or the additional rate becomes liable to U.K. capital gains tax on the disposal (or deemed disposal) of ADSs representing our ordinary shares, the current applicable rate would be 20%. For an individual U.K. Holder who is subject to U.K. income tax at the basic rate and liable to U.K. capital gains tax on such disposal, the current applicable rate would be 10%, save to the extent that any capital gains when aggregated with the U.K. Holder’s other taxable income and gains in the relevant tax year exceed the unused basic rate tax band. In that case, the rate currently applicable to the excess would be 20%.

If a corporate U.K. Holder becomes liable to U.K. corporation tax on the disposal (or deemed disposal) of ADSs representing our ordinary shares, the main rate of U.K. corporation tax (currently 19%) would apply. An indexation allowance may be available to such a holder to give an additional deduction based on the indexation of its base cost by reference to the U.K. Retail Price Index for December 2017. An indexation allowance can only reduce a gain on a future disposal, and cannot create a loss. An indexation allowance is not generally available in respect of disposals of assets acquired on or after January 1, 2018.

A holder of ADSs representing our ordinary shares which is not resident for tax purposes in the United Kingdom should not normally be liable to U.K. capital gains tax or corporation tax on chargeable gains on a disposal (or deemed disposal) of ADSs unless they are carrying on a trade, profession or vocation in the United Kingdom through a branch or agency (or, in the case of a corporate holder of ADSs representing our ordinary shares, through a permanent establishment) to with which the ADSs representing our ordinary shares are attributable. However, an individual holder of ADSs representing our ordinary shares who is treated as resident outside the United Kingdom for the purposes of a double tax treaty, or who has ceased to be resident for tax purposes in the United Kingdom for a period of less than five years and who disposes of ADSs representing our ordinary shares during that period may be liable on his or her return to the United Kingdom to U.K. tax on any capital gain realized (subject to any available exemption or relief).

Any gains or losses in respect of currency fluctuations relating to the ADSs representing our ordinary shares would be brought into account on the disposal.

Stamp Duty and Stamp Duty Reserve Tax

The discussion below relates to holders of ordinary shares or ADSs representing our ordinary shares wherever resident.

Issue of Ordinary Shares

No U.K. stamp duty or stamp duty reserve tax, or SDRT, is payable on the issue of the underlying ordinary shares in the Company.

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Transfers of Ordinary Shares

Neither U.K. stamp duty nor SDRT should arise on transfers of the underlying ordinary shares (including instruments transferring ordinary shares and agreements to transfer ordinary shares) on the basis that the ordinary shares are admitted to trading on AIM, provided the following requirements are (and continue to be) met:


•	the ordinary shares are admitted to trading on AIM, but are not listed on any market (with the term “listed” being construed in accordance with section 99A of the Finance Act 1986), and this has been certified to Euroclear; and


•	AIM continues to be accepted as a “recognized growth market” as construed in accordance with section 99A of the Finance Act 1986).

In the event that either of the above requirements is not met, stamp duty or SDRT will apply to transfers of, or agreements to transfer, ordinary shares. Where applicable, the purchaser normally pays the stamp duty or SDRT.

Transfers of ADSs Representing Our Ordinary Shares

No U.K. stamp duty will in practice be payable on a written instrument transferring an ADS representing our ordinary shares or on a written agreement to transfer an ADS representing our ordinary shares, provided that the instrument of transfer or the agreement to transfer is executed and remains at all times outside the U.K. Where these conditions are not met, the transfer of, or agreement to transfer, an ADS representing our ordinary shares could, depending on the circumstances, attract a charge to U.K. stamp duty at the rate of 0.5% (rounded up to the nearest £5) of the value of the consideration.

No SDRT will be payable in respect of a transfer or an agreement to transfer an ADS representing our ordinary shares.

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PLAN OF DISTRIBUTION

The registration statement of which this prospectus forms a part has been filed in part in respect of our obligations under a Registration Rights Agreement, dated September 21, 2017, concerning an aggregate of 66,396,485 ordinary shares (of which the registrant is hereby registering 66,254,529 of such ordinary shares) that it privately placed with investors on October 12, 2017 and an aggregate of 26,558,600 ordinary shares issuable upon the exercise of warrants issued on the same date to such investors, who are identified in this prospectus as the Registered Holders. The registrant is also registering pursuant to such registration statement an aggregate of 34,044,772 ordinary shares held by other shareholders identified herein. We refer to the aggregate 126,857,901 ordinary shares registered pursuant to such registration statement as the Registered Shares. Any Registered Shares offered and sold in the United States by the Registered Holders will be in the form of ADSs. The Registered Holders are also permitted to sell ordinary shares not represented by ADSs in private or offshore transactions, including on AIM, a market operated by the London Stock Exchange, which resales are not covered by this prospectus. Unlike an initial public offering, any resale by the Registered Holders of the Registered Shares represented by ADSs is not being underwritten by any investment bank. The Registered Holders may, or may not, elect to sell Registered Shares represented by ADSs as and to the extent that they may individually determine. Such sales, if any, will be made through brokerage transactions on Nasdaq or other securities exchange in the United States at prevailing market prices.

The Registered Holders may dispose of all or a portion of the ordinary shares owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If ADSs representing our ordinary shares are sold through underwriters or broker-dealers, the Registered Holders will be responsible for any applicable underwriting discounts or commissions or agent's commissions. ADSs representing our ordinary shares may be sold on the Nasdaq Stock Market or any other national securities exchange or quotation service on which the securities may be listed or quoted at the time of disposition, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the disposition, at varying prices determined at the time of disposition, or at negotiated prices. These dispositions may be effected in transactions, which may involve crosses or block transactions. The Registered Holders may use any one or more of the following methods when disposing of shares:


•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;


•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;


•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;


•	an exchange distribution in accordance with the rules of the applicable exchange;


•	privately negotiated transactions and offshore transactions;


•	settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;


•	broker-dealers may agree with the Registered Holders to sell a specified number of such shares at a stipulated price per share;


•	through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;

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•	a combination of any such methods of disposition; and


•	any other method permitted pursuant to applicable law.

The Registered Holders also may resell all or a portion of the shares in offshore transactions or open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or Section 4(a)(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the criteria and conform to the requirements of those provisions.

Broker-dealers engaged by the Registered Holders may arrange for other broker-dealers to participate in dispositions. If the Registered Holders effect such transactions by selling ADSs representing our ordinary shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive applicable commissions in the form of discounts, concessions or commissions from the Registered Holders or commissions from purchasers of ADSs representing our ordinary shares for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with FINRA Rule 2121 and Supplementary Material .01 and Supplementary Material .02 thereto.

In connection with dispositions of ADSs representing our ordinary shares or otherwise, the Registered Holders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of ADSs representing our ordinary shares in the course of hedging in positions they assume. The Registered Holders may also sell ADSs representing our ordinary shares short and if such short sale shall take place after the date that the registration statement of which this prospectus forms a part is declared effective by the Commission, the Registered Holders may deliver ADSs representing our ordinary shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The Registered Holders may also loan or pledge ADSs representing our ordinary shares to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The Registered Holders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the Registered Holders have been advised that they may not use ordinary shares registered on the registration statement of which this prospectus forms a part to cover short sales of our ordinary shares (or ADSs representing ordinary shares) made prior to the date the registration statement of which this prospectus forms a part has been declared effective by the SEC.

The Registered Holders may, from time to time, pledge or grant a security interest in some or all of the warrants or ADSs representing our ordinary shares owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the ADSs representing our ordinary shares from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if necessary, the list of Registered Holders to include the pledgee, transferee or other successors in interest as Registered Holders under this prospectus. The Registered Holders also may transfer and donate the ADSs representing our ordinary shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The Registered Holders and any broker-dealer or agents participating in the distribution of the ADSs representing our ordinary shares may be deemed to be “underwriters” within the meaning of Section 2(a)(11) of the Securities Act in connection with such dispositions. In such event, any commissions paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of

140

the ADSs representing our ordinary shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Registered Holders who are "underwriters" within the meaning of Section 2(a)(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act including Rule 172 thereunder and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Each Registered Holder has informed the Company that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute ADSs representing our ordinary shares. Upon the Company being notified in writing by a Registered Holder that any material arrangement has been entered into with a broker-dealer for the sale of ADSs representing our ordinary shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Registered Holder and of the participating broker-dealer(s), (ii) the number of ADSs representing our ordinary shares involved, (iii) the price at which such ADSs representing our ordinary shares were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction.

Each Registered Holder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of ADSs representing our ordinary shares by the Registered Holder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the ADSs representing our ordinary shares to engage in market-making activities with respect thereto. All of the foregoing may affect the marketability of ADSs representing our ordinary shares and the ability of any person or entity to engage in market-making activities with respect thereto.

We will pay all expenses of the registration of ADSs representing our ordinary shares pursuant to the registration rights agreement with respect thereto, including, without limitation, SEC filing fees and expenses of compliance with state securities or “blue sky” laws, if any; provided , however , that each Registered Holder will pay all underwriting discounts and selling commissions, if any. We have agreed to pay for the legal expenses of one of the Registered Holders up to an aggregate of $50,000. We will indemnify the Registered Holders against certain liabilities, including some liabilities under the Securities Act, in accordance with the Registration Rights Agreement, or the Registered Holders will be entitled to contribution. We may be indemnified by the Registered Holders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the Registered Holders specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.

We are not party to any arrangement with any Registered Holder or any broker-dealer with respect to dispositions of ADSs or ordinary shares, other than the Registration Rights Agreement described in the foregoing paragraph. Therefore, we will not have any input if, when and how any Registered Holder elects to dispose of ADSs representing such Registered Holder’s ordinary shares or the price or prices at which any such disposition may occur, and there can be no assurance that any Registered Holder will exchange its ordinary shares for ADSs or dispose of any or all of the ADSs representing such ordinary shares even if so exchanged pursuant to the deposit agreement. We will not receive proceeds from any disposition of Registered Shares in the form of ADSs by the Registered Holders.

To date, there has not been a public market for ADSs representing our ordinary shares. We offer no assurances that an active trading market for ADSs representing our ordinary shares will develop or, if developed, be maintained.

141

EXPENSES OF THIS OFFERING

Set forth below is an itemization of the total expenses which are expected to be incurred in connection registration of the ordinary shares registered hereby. With the exception of the registration fee payable to the SEC and the Nasdaq listing fee, all amounts are estimates.



EXPENSE	AMOUNT
SEC registration fee	$	8,309
Nasdaq listing fee		125,000
FINRA filing fee		--
Printing expenses		65,000
Legal fees and expenses		750,000
Accounting fees and expenses		500,000
Miscellaneous		100,000
Total	$	1,548,309

142

LEGAL MATTERS

The validity of the ordinary shares registered hereby and certain other matters of the laws of England and Wales will be passed upon for us by Cooley (UK) LLP, London, England and certain matters of U.S. law will be passed on for us by Cooley LLP, New York, New York.

143

EXPERTS

The consolidated financial statements of Realm Therapeutics plc as of December 31, 2016 and 2017 and for the years then ended, have been included in this prospectus and the registration statement, in reliance upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

144

SERVICE OF PROCESS AND ENFORCEMENT OF LIABILITIES

We are incorporated and currently existing under the laws of England and Wales. In addition, certain of our directors and officers reside outside of the United States. As a result, it may be difficult for investors to effect service of process on us or those persons in the United States or to enforce in the United States judgments obtained in United States courts against us or those persons based on the civil liability or other provisions of the United States securities laws or other laws.

In addition, uncertainty exists as to whether the courts of England and Wales would:


•	recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liabilities provisions of the securities laws of the United States or any state in the United States; or


•	entertain original actions brought in England and Wales against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

We have been advised by Cooley LLP that there is currently no treaty between (i) the United States and (ii) England and Wales providing for reciprocal recognition and enforcement of judgments of United States courts in civil and commercial matters (although the United States and the United Kingdom are both parties to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards) and that a final judgment for the payment of money rendered by any general or state court in the United States based on civil liability, whether predicated solely upon the United States securities laws, would not be automatically enforceable in England and Wales. We have also been advised by Cooley LLP that any final and conclusive monetary judgment for a definite sum obtained against us in United States courts would be treated by the courts of England and Wales as a cause of action in itself and sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that:


•	the relevant U.S. court had jurisdiction over the original proceedings according to English conflicts of laws principles at the time when proceedings were initiated;


•	England and Wales courts had jurisdiction over the matter on enforcement and we either submitted to such jurisdiction or were resident or carrying on business within such jurisdiction and were duly served with process;


•	the U.S. judgment was final and conclusive on the merits in the sense of being final and unalterable in the court that pronounced it and being for a definite sum of money;


•	the judgment given by the courts was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations (or otherwise based on a U.S. law that an English court considers to relate to a penal, revenue or other public law);


•	the judgment was not procured by fraud;


•	recognition or enforcement of the judgment in England and Wales would not be contrary to public policy or the Human Rights Act 1998;


•	the proceedings pursuant to which judgment was obtained were not contrary to natural justice;


•	the U.S. judgment was not arrived at by doubling, trebling or otherwise multiplying a sum assessed as compensation for the loss or damages sustained and not being otherwise in breach of Section 5 of the U.K. Protection of Trading Interests Act 1980, or is a judgment based on measures designated by the Secretary of State under Section 1 of that Act;

145


•	there is not a prior decision of an English court or the court of another jurisdiction on the issues in question between the same parties; and


•	the English enforcement proceedings were commenced within the limitation period.

Whether these requirements are met in respect of a judgment based upon the civil liability provisions of the United States securities laws, including whether the award of monetary damages under such laws would constitute a penalty, is an issue for the court making such decision.

Subject to the foregoing, investors may be able to enforce in England and Wales judgments in civil and commercial matters that have been obtained from U.S. federal or state courts. Nevertheless, we cannot assure you that those judgments will be recognized or enforceable in England and Wales.

If an English court gives judgment for the sum payable under a U.S. judgment, the English judgment will be enforceable by methods generally available for this purpose. These methods generally permit the English court discretion to prescribe the manner of enforcement. In addition, it may not be possible to obtain an English judgment or to enforce that judgment if the judgment debtor is or becomes subject to any insolvency or similar proceedings, or if the judgment debtor has any set-off or counterclaim against the judgment creditor. Also note that, in any enforcement proceedings, the judgment debtor may raise any counterclaim that could have been brought if the action had been originally brought in England unless the subject of the counterclaim was in issue and denied in the U.S. proceedings.

146

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the SEC a registration statement on Form F-1 under the Securities Act. A related registration statement on Form F-6 has been filed with the SEC to register the ADSs representing our ordinary shares. This prospectus, which forms a part of the registration statement on Form F-1, does not contain all of the information that is included in such registration statement and the exhibits and schedules thereto. Certain information is omitted and you should refer to such registration statement and its exhibits and schedules for that information. If a document has been filed as an exhibit to such registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.

You may review a copy of our registration statement on Form F-1 as well as the registration statement on Form F-6, including exhibits thereto and any schedules filed therewith, and obtain copies of such materials at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet website ( www.sec.gov ) that contains reports and other information regarding issuers like us that file electronically with the SEC.

Upon the effectiveness of the registration statement of which this prospectus forms a part, we will become subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers. Accordingly, we will be required to file reports and other information with the SEC, including annual reports on Form 20-F and periodic reports on Form 6-K. Those reports may be inspected without charge at the locations described above. As a foreign private issuer, we will be exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of such act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered thereunder.

We maintain a corporate website at www.realmtx.com . Information contained in, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

147

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



	Page
Audited Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2016 and 2017	F-3
Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2016 and 2017	F-4
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2016 and 2017	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2017	F-6
Notes to Consolidated Financial Statements	F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Realm Therapeutics plc:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Realm Therapeutics plc and subsidiaries (the Company) as of December 31, 2016 and 2017, the related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows for the years then ended and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2016 and 2017, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States ) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2018.

Philadelphia, Pennsylvania

April 13, 2018

F-2

Realm Therapeutics plc

Consolidated Balance Sheets

(in thousands, except share and per share data)



	December 31,
	2016			2017
Assets
Current assets:
Cash and cash equivalents	$	21,430		$	9,508
Marketable securities	—			24,345
Royalty receivable	266			444
Prepaid expenses and other assets	89			245
Total current assets	21,785			34,542
Property and equipment, net	139			246
Other assets	323			320
Total assets	$	22,247		$	35,108
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	969		$	1,009
Accrued expenses	2,229			1,902
Total liabilities	3,198			2,911

Commitments (Note 8)

Shareholders’ equity:
Ordinary shares, £0.10 nominal value: 154,897,265 ordinary shares authorized at December 31, 2017: 50,165,432 and 116,561,917 ordinary shares were issued and outstanding at December 31, 2016 and 2017, respectively	15,492			24,259
Additional paid-in capital	182,809			197,722
Accumulated other comprehensive loss	(3		)	(11		)
Accumulated deficit	(179,249		)	(189,773		)
Total shareholders’ equity	19,049			32,197
Total liabilities and shareholders’ equity	$	22,247		$	35,108

See accompanying notes to consolidated financial statements.

F-3

Realm Therapeutics plc

Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except share and per share data)



	Years Ended December 31,
	2016			2017
Revenues	$	867		$	1,121
Cost of revenues	121			—
	746			1,121
Operating expenses:
Research and development	4,805			8,189
General and administrative	3,248			3,622
	8,053			11,811
Loss from operations	(7,307		)	(10,690		)
Interest income	3			58
Loss from continuing operations before income taxes	(7,304		)	(10,632		)
Income tax benefit	2,230			108
Net loss from continuing operations	(5,074		)	(10,524		)
Net income from discontinued operations, net of tax	5,156			—
Net income (loss)	82			(10,524		)
Other comprehensive income (loss):
Unrealized gain on investments	—			13
Foreign exchange translation adjustment	(11		)	(21		)
Total comprehensive income (loss)	$	71		$	(10,532	)

Net income (loss) per ordinary share - basic and diluted:
Loss from continuing operations	$	(0.10	)	$	(0.16	)
Income from discontinued operations	0.10			—
Net income (loss) per ordinary share	$	0.00		$	(0.16	)

Weighted average ordinary shares - basic and diluted	50,139,121			65,081,903

See accompanying notes to consolidated financial statements

F-4

Realm Therapeutics plc

Statements of Changes in Shareholders’ Equity

(in thousands, except shares)



	Ordinary Shares			Additional Paid-in Additional		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Additional		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balance at January 1, 2016	50,135,432	$	15,488	$	182,582	$	8		$	(179,331	)	$	18,747
Exercise of share options	30,000	4		3		—			—			7
Share-based compensation expense	—	—		224		—			—			224
Currency translation adjustments	—	—		—		(11		)	—			(11		)
Net income	—	—		—		—			82			82
Balance at December 31, 2016	50,165,432	15,492		182,809		(3		)	(179,249		)	19,049
Issuance of ordinary shares and warrants, net of insurance costs	66,396,485	8,767		14,458		—			—			23,225
Share-based compensation expense	—	—		455		—			—			455
Unrealized gain on investments	—	—		—		13			—			13
Currency translation adjustments	—	—		—		(21		)	—			(21		)
Net loss	—	—		—		—			(10,524		)	(10,524		)
Balance at December 31, 2017	116,561,917	$	24,259	$	197,722	$	(11	)	$	(189,773	)	$	32,197

See accompanying notes to consolidated financial statements

F-5

Realm Therapeutics plc

Consolidated Statements of Cash Flows

(in thousands)



	Years Ended December 31,
	2016			2017
Cash flows from operating activities:
Net loss from continuing operations	$	(5,074	)	$	(10,524	)
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities
Loss on disposal of property and equipment	39			10
Depreciation and amortization	126			86
Noncash interest income	—			(4		)
Share-based compensation	224			455
Deferred income taxes	(2,230		)	—
Changes in operating assets and liabilities:
Royalty receivable	(190		)	(178		)
Prepaid expenses and other assets	(404		)	(153		)
Accounts payable and accrued expenses	820			805
Net cash used in continuing operating activities	(6,689		)	(9,503		)
Net cash provided by discontinued operating activities	1,750			—
Net cash used in operating activities	(4,939		)	(9,503		)

Cash flows from investing activities:
Purchase of marketable securities	—			(29,324		)
Proceeds from sale of marketable securities	—			5,000
Proceeds from sale of property and equipment	—			5
Purchases of property and equipment	(74		)	(208		)
Net cash used in continuing investing activities	(74		)	(24,527		)
Net cash provided by (used in) discontinued investing activities	11,019			(1,093		)
Net cash provided by (used in) investing activities	10,945			(25,620		)

Cash flows from financing activities:
Proceeds from the issuance of ordinary shares and warrants	—			23,225
Proceeds from exercise of share options	7			—
Net cash provided by continuing financing activities	7			23,225
Net cash provided by discontinued financing activities	—			—
Net cash provided by financing activities	7			23,225

Effect of exchange rate changes on cash	(40		)	(24		)

Net increase (decrease) in cash and cash equivalents	5,973			(11,922		)
Cash and cash equivalents, beginning of year	15,457			21,430
Cash and cash equivalents, end of year	$	21,430		$	9,508

See accompanying notes to consolidated financial statements

F-6

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

1. Organization and description of business

Realm Therapeutics plc (the Company), a company incorporated under the laws of England and Wales, which is domiciled in the United Kingdom (U.K.), is a clinical-stage biopharmaceutical company focused on developing novel therapeutics for immune-mediated diseases in adults and children. The Company is using its proprietary immunomodulatory platform technology, a high concentration, stabilized formulation of hypochlorous acid, or HOCl, to develop prescription, topical drugs for the treatment of Atopic Dermatitis, or AD, and other dermatological indications, including Acne Vulgaris, or common Acne, Psoriasis and certain additional indications. The Company’s lead product candidate, PR022, is an HOCl non-alcohol based topical gel for the treatment of AD that is in a Phase 2 clinical trial.

In March 2018, the Company announced that in a Phase 2 clinical trial for Allergic Conjunctivitis, or AC, an ophthalmic disease, its product candidate, PR013, a topical solution containing HOCl as its active ingredient, did not demonstrate efficacy. As a result, the Company is no longer pursing the clinical development of PR013 and other than the costs of completing the trial in 2018 and closing out the program, the Company does not intend to make any additional investments in this program.

In October 2016, the Company completed the sale of its Supermarket Retail business to facilitate its continued focus on and provide resources in support of its development of novel immunomodulatory therapies as drugs.

2. Liquidity

At December 31, 2017, the Company had cash, cash equivalents and marketable securities of $33.9 million, working capital of $31.6 million, and an accumulated deficit of $189.8 million. The Company has incurred net losses and negative cash flows from operations and expects to continue to incur significant losses for the foreseeable future. The only source of revenue, following the sale of the Supermarket Retail business in October 2016, is the royalty revenue generated from its marketing agreement for Vashe. The Company has no pharmaceutical products approved for sale and there is no assurance that it will obtain future approvals, or if the Company does, it will be able to generate revenues or achieve profitable operations.

The Company is increasing its investments in research and development in support of its drug development plans. Development activities, clinical and pre-clinical testing, and commercialization of the Company’s products will require significant additional capital. Management believes that the Company’s existing cash, cash equivalents and marketable securities are sufficient to fund the Company’s planned operations for at least twelve months from the date of issuance of these financial statements.

The Company anticipates that its expenses will increase significantly in connection with its ongoing activities as it:


•	continue the ongoing and planned clinical development of PR022 and RLM023;


•	initiate pre-clinical studies (including toxicology) and clinical trials for any future product candidates that we may pursue;


•	build a portfolio of product candidates through the potential acquisition or in-license of drugs or product candidates and technologies;


•	develop, maintain, expand and protect the Company’s intellectual property portfolio;


•	manufacture, or have manufactured, clinical and ultimately commercial supplies of the Company’s product candidates;

F-7

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017


•	seek marketing approvals for the Company’s current and future product candidates that successfully complete clinical trials;


•	establish a sales, marketing and distribution infrastructure to commercialize any product candidate for which the Company may obtain marketing approval;


•	hire additional administrative, clinical, regulatory and scientific personnel; and


•	incur additional costs associated with operating as a dually listed public company following the completion of this registration.

3. Basis of presentation and summary of significant accounting policies

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (U.S. GAAP). Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Updates (ASU) of the Financial Accounting Standards Board (FASB).

Principles of consolidation

The consolidated financial statements include the accounts of Realm Therapeutics plc and its wholly‑owned subsidiaries: Realm Therapeutics, Inc., and non-operating entities PuriCore Europe Limited and PuriCore Scientific Limited. All inter‑company balances and transactions have been eliminated in consolidation. For the year ended December 31, 2016, the Company has classified the results of operations and cash flows of its Supermarket Retail business as discontinued operations. Unless indicated otherwise, the information in the notes to the consolidated financial statements relates to the Company’s continuing operations.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may materially vary from these estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary.

Foreign currency translation

The Company’s reporting currency is the U.S. dollar given the majority of its operations are located in the U.S. and transactions are denominated in U.S. dollars. The functional currency of Realm Therapeutics plc, the parent, is the pound sterling and its assets and liabilities are translated at the rate of exchange at year-end, while the statements of operations are translated at the average exchange rates in effect during the year. The net effect of these translation adjustments is shown as a component of accumulated other comprehensive income (loss).

Fair value of financial instruments

At December 31, 2016 and 2017, the Company’s financial instruments included marketable securities, accounts payable and accrued expenses. The carrying amount of accounts payable and accrued expenses approximates fair value due to the short-term maturities of these instruments. The carrying value of marketable securities is the estimated fair value.

F-8

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

Cash and cash equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. As of December 31, 2016 and 2017, cash equivalents consisted of certificates of deposit, U.S Treasuries and government‑backed money market funds.

Marketable securities

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and re-evaluates such determination at each balance sheet date. As of December 31, 2017, all investments are classified as available for sale and carried at their estimated fair value. Unrealized gains and losses are recorded as a component of accumulated other comprehensive income (loss). The Company periodically reviews its investments in equity securities for impairment and adjusts these investments to their fair value when a decline in market value is deemed to be other than temporary. If losses on these securities are considered to be other than temporary, the loss is recognized in earnings.

Property and equipment

Property and equipment are recorded at cost. Depreciation and amortization is determined using the straight-line method over the estimated useful lives ranging from 3 to 7 years. Leasehold improvements are amortized over the life of the lease or the estimated useful life of the assets, whichever is shorter. Expenditures for maintenance and repairs are expensed as incurred while renewals and betterments are capitalized. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in operations.

Impairment of long-lived assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated. Impairment charges are recognized at the amount by which the carrying amount of an asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. The Company has not recognized any impairment of long-lived assets for the years ended December 31, 2016 and 2017.

Revenue recognition

The Company entered into, and subsequently amended, a licensing arrangement with an independent distributor to manufacture, market and distribute Vashe, a wound care product. Pursuant to the terms of the agreement, the Company assigned all right and title of the Vashe trademark and the distributor retains sole responsibility and liability in connection with the manufacturing, marketing and distribution of Vashe. The Company receives royalties that are tiered and based upon net sales. The Company is entitled to receive minimum royalties based upon annual net sales thresholds through March 2021.

Generally, the Company receives royalty payments from its distributor within 30 days after the end of each quarter. As such, the royalty revenues reported are based upon actual royalty revenues earned by the Company, including minimums.

Research and development expenses

Research and development costs are expensed as incurred and consist primarily of funds paid to third parties for the provision of services for product candidate development, clinical and pre-clinical development and related supply and manufacturing costs, and regulatory compliance costs. At the end of the reporting period, the Company compares payments made to third party service providers to the estimated progress toward completion of the research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to

F-9

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company may record net prepaid or accrued expense relating to these costs.

Upfront milestone payments made to third parties who perform research and development services on the Company’s behalf are expensed as services are rendered.

Share-based compensation

The Company measures equity classified share-based awards granted to employees and directors based on the estimated fair value on the date of grant and recognizes compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. The Company recognizes compensation expense for performance based awards when the performance condition is probable of achievement.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model, which is described more fully in Note 10.

Stock-based awards granted to consultants and non-employees are measured based on the fair value of the award on the date on which the related services are completed. Compensation expense is recognized over the period during which services are rendered by such consultants and non-employees until completed. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of the Company’s common stock and updated assumption inputs in the Black-Scholes option-pricing model.

Income taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A reduction in the carrying value of the net deferred tax assets is required when it is not more likely than not that such deferred tax assets are realizable.

Net loss per ordinary share

Basic loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as warrants and options which would result in the issuance of incremental ordinary shares. For the year ended December 31, 2016, the Company reported discontinued operations, and is required to use loss from continuing operations as the “control number” or benchmark to determine whether potential ordinary shares are dilutive or antidilutive. In computing basic and diluted net loss per share, the weighted average number of shares is the same for both calculations due to the fact that a net loss from continuing operations existed for the years ended December 31, 2016 and 2017.

F-10

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

The following potentially dilutive securities outstanding as of December 31, 2016 and 2017 have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:



	Years Ended December 31,
	2016	2017
Share options	4,250,668	11,418,175
Warrants	154,229	26,917,173
	4,404,897	38,335,348

Recent accounting pronouncements

In May 2014, the FASB issued ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606) . This guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about:

Contracts with customers — including revenue and impairments recognized, disaggregation of revenue and information about contract balances and performance obligations (including the transaction price allocated to the remaining performance obligations).

Significant judgments and changes in judgments — determining the timing of satisfaction of performance obligations (over time or at a point in time), and determining the transaction price and amounts allocated to performance obligations.

Certain assets — assets recognized from the costs to obtain or fulfill a contract.

This guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.

The Company has completed its assessment of the impact of the new revenue standard on the Company’s consolidated financial statements. The Company will adopt the new standard and its related amendments effective January 1, 2018 using the modified retrospective method with the impact of the adoption reflected in opening accumulated deficit. The expected impact of the standard relates to the Company’s license and distribution agreement for Vashe, primarily regarding the recognition of the future minimum royalty payments. Under the new standard, minimum royalty payments are included in the transaction price as variable consideration, subject to a constraint. Therefore, the future minimum payments are recognized at a point in time rather than over the future periods. The Company estimates that the cumulative impact of the adoption of Topic 606 will be a decrease of $2.5 million in the opening balance of its accumulated deficit on January 1, 2018 and a corresponding increase in royalty receivables, subject to change based on further analysis and application of the standard. Subsequent to adopting the new standard, the Company will recognize the receipt of royalty payments as a reduction in royalty receivables. Royalties in excess of the estimated future minimum royalty amount will be recognized when they are earned.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), with guidance regarding the accounting for and disclosure of leases. The update requires lessees to recognize all leases, including operating leases, with a term greater than twelve months on the balance sheet. This update also requires lessees and lessors to disclose key information about their leasing transactions. The guidance will be effective for annual and interim periods beginning after December 15, 2018. The Company is currently

F-11

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

evaluating the effect that this guidance will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016‑09, Compensation — Improvements to Employee Share‑Based Payment Accounting , which simplifies several aspects of the accounting for employee share‑based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The new standard is effective for annual reporting periods beginning after December 15, 2017. The adoption of this guidance is not expected to be material to the consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU No. 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the accounting, transition, and disclosure requirements of the standard and its impact on the Company’s consolidated statement of cash flows.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): “Scope of Modification Accounting,” which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The guidance will be effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the effect that this guidance may have on its consolidated financial statements.

F-12

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

4. Discontinued operations

In order to focus exclusively on drug development and to provide resources to advance its business plan, the Company divested its Supermarket Retail business. The sale was completed in October 2016 for net proceeds of $10.7 million. As of December 31, 2016, there were $1.1 million of costs associated with the sale that were accrued, which were paid during the year ended December 31, 2017. The operating results of the discontinued operations only reflect revenues and expenses that are directly attributable to the business that was eliminated from ongoing operations. The key components from discontinued operations were as follows (in thousands, except per share data):



	For the Year Ended December 31, 2016
Revenues	$	14,760
Cost of revenues	8,731
	6,029
Operating expenses:
Selling, general and administrative expenses	3,631
Research and development expenses	1,023
	4,654
Income from operations	1,375
Interest income	174
Gain on sale of discontinued operations	5,863
Income from discontinued operations before income taxes	7,412
Income tax expense	(2,256		)
Net income from discontinued operations	$	5,156
Basic and diluted earnings per share from discontinued operations	$	0.10

5. Fair value and marketable securities

As of December 31, 2017, marketable securities were comprised of the following (in thousands):



	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. government agency	$	20,857	$	14	$	—		$	20,871
Certificates of deposit	3,475		—		(1		)	3,474
	$	24,332	$	14	$	(1	)	$	24,345

The Company follows FASB’s accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis. The guidance requires fair value measurements to be classified and disclosed in one of the following three categories:


•	Level 1 — Quoted prices (unadjusted in active markets for identical assets or liabilities)


•	Level 2 — Inputs other than quoted prices in active markets that are observable either directly or indirectly


•	Level 3 — Unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions

F-13

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

This hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value.

The Company has classified assets and liabilities measured at fair value on a recurring basis as follows (in thousands):



	December 31, 2017
					Fair Value Measurement Based on
	Carrying Amount		Fair Value		Quoted Prices in Active Markets (Level 1)		Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents ⁽¹⁾	$	8,978	$	8,978	$	8,978	$	—	$	—
U.S. government agency	20,871		20,871		—		20,871		—
Certificates of deposit	3,474		3,474		3,474		—		—
	$	33,323	$	33,323	$	12,452	$	20,871	$	—

__________________


(1)	Includes cash sweep accounts, U.S. Treasury money market mutual fund, and bank certificates of deposit and U.S. Treasury bills that have a maturity of three months or less from the original acquisition date.



	December 31, 2016
					Fair Value Measurement Based on
	Carrying Amount		Fair Value		Quoted Prices in Active Markets (Level 1)		Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents ⁽²⁾	$	20,322	$	20,322	$	20,322	$	—	$	—

__________________


(2)	U.S. Treasury money market fund.

6. Property and equipment

Property and equipment, net, consisted of (in thousands):



	December 31,
	2016			2017
Laboratory and other equipment	$	214		$	271
Office equipment	198			68
Computer equipment and software	445			130
Leasehold improvements	697			57
	1,554			526
Less: Accumulated depreciation and amortization	(1,415		)	(280		)
	$	139		$	246

Depreciation and amortization expense from continuing operations was $0.1 million and $0.1 million for the years ended December 31, 2016 and 2017, respectively.

F-14

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

7. Accrued expenses

Accrued expenses consisted of (in thousands):



	December 31,
	2016		2017
Compensation and related benefits	$	1,575	$	994
Consulting and professional fees	325		105
Research and development expenses	90		745
Other	239		58
	$	2,229	$	1,902

8. Commitments

Research and development arrangements

In the course of normal business operations, the Company enters into agreements with contract research organizations (CROs), to assist in the performance of research and development and pre‑clinical activities. Expenditures to CROs may represent a significant cost in pre‑clinical and clinical development for the Company in future periods. The Company can elect to discontinue the work under these agreements at any time but with some termination provisions being applicable. The Company could also enter into collaborative research, contract research, manufacturing, and supplier agreements in the future, which may require upfront payments and even long-term commitments of cash.

Leases

In December 2016, the Company’s existing office lease expired and was extended for a short term. A new 96‑month lease for new office space beginning April 1, 2017 was executed in 2017. The Company recognizes rent expense on a straight-line basis over the lease period and has accrued for rent expense incurred but not yet paid. Landlord allowances for tenant improvements are deferred and recognized as a reduction to rent expense on a straight line basis and over the entire lease term. The Company also leases office equipment with non-cancellable lease terms between five and seven years.

Rent expense under operating leases was $0.2 million and $0.1 million for the years ended December 31, 2016 and 2017, respectively.

Future minimum rental payments under non-cancellable operating leases at December 31, 2017 are as follows (in thousands):



For the years ending December 31,
2018	$	173
2019	168
2020	169
2021	167
2022	171
Thereafter	412
	$	1,260

Employment agreements

The Company has entered into employment agreements with certain key executives, providing for compensation and severance in certain circumstances, as defined in the agreements.

F-15

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

Retirement plans

The Company maintains a defined contribution 401(k) retirement plan, which covers all U.S. employees. Employees are eligible upon their date of hire. Under the 401(k) plan, participating employees may defer up to 100% of their pre‑tax salary but not more than statutory limits. The Company has a safe harbor plan and makes a contribution to employee accounts of 3% of compensation (as defined by the plan), subject to statutory limits, which vest immediately. During the years ended December 31, 2016 and 2017, the Company incurred costs of $0.1 million and $0.1 million respectively, related to the retirement plan.

9. Shareholders’ equity

Ordinary shares

As of December 31, 2017, the Company had 154,897,265 ordinary shares authorized on a fully diluted share capital basis. Each ordinary share entitles the holder to vote on all matters submitted to a vote of the Company’s shareholders. Ordinary shareholders are entitled to receive dividends, as may be declared by the board of directors.

In October 2017, the Company completed a private placement with existing and new investors and issued 66.4 million units for net proceeds after expenses of $23.2 million. Each unit consisted of one ordinary share and one warrant to subscribe for 0.4 ordinary shares at a purchase price of 58 pence ($0.78).

Warrants to purchase ordinary shares

As of December 31, 2017, outstanding warrants to purchase ordinary shares were as follows (at an exchange rate of 1.3517):

10. Share‑based compensation

The Company operates the Realm Therapeutics 2016 Executive Omnibus Incentive Plan (the Plan), an equity compensation plan under which a variety of equity instruments can be issued to employees. As of December 31, 2017, there were 238,017 shares available for future issuance under the Plan.

The amount and terms of grants are determined by the Company’s board of directors. The term of the options may be up to 10 years, and options are exercisable in cash or as otherwise determined by the board of directors. Generally, options vest annually over a three year period or, for certain key executives, vest upon the achievement of performance conditions measured over a three year period.

All options granted have exercise prices equal to the fair value of the underlying ordinary shares on the date of the grant.

F-16

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

The Company recorded share‑based compensation expense in the following expense categories of its consolidated statements of operations for the years ended December 31, 2016 and 2017 (in thousands):



	Years Ended December 31,
	2016		2017
Research and development	$	38	$	209
General and administrative	186		246
	$	224	$	455

The fair value of options is estimated using the Black‑Scholes option pricing model, which takes into account inputs such as the exercise price, the value of the underlying ordinary shares at the grant date, expected term, expected volatility, risk‑free interest rate and dividend yield. The fair value of each grant of options during the year ended December 31, 2016 and 2017 was determined using the methods and assumptions discussed below.

•

The expected term of employee options is determined using the “simplified” method, as prescribed in SEC’s Staff Accounting Bulletin (SAB) No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. The expected term of nonemployee options is equal to the contractual term.


•	The expected volatility is based on historical volatility of the Company’s ordinary shares commensurate with the expected term assumption.


•	The risk‑free interest rate is based on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term.


•	The expected dividend yield is 0% because the Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend on its common stock.

For the years ended December 31, 2016 and 2017, the grant date fair value of all option grants was estimated at the time of grant using the Black‑Scholes option‑pricing model using the following weighted average assumptions:



	Years Ended December 31,
	2016		2017
Expected term (in years)	5.0		3.7
Expected volatility	43.1	%	33.2	%
Risk-free rate	1.6	%	1.8	%
Dividend yield	—		—

F-17

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

The per share weighted average fair value of the options granted during the years ended December 31, 2016 and 2017 was estimated at $0.15 and $0.15 per share, respectively. The following table summarizes the activity related to stock option grants to employees and nonemployees for the years ended December 31, 2016 and 2017:



	Number of Shares under Option		Weighted- average Exercise Price per Option		Weighted- Average Remaining Contractual Life (in years)
Outstanding at January 1, 2016	2,458,168		$	0.67
Granted	2,627,500		0.36
Exercised	(30,000	)	0.22
Expired	(755,000	)	0.41
Forfeited	(50,000	)	0.34
Outstanding at December 31, 2016	4,250,668		0.46
Granted	2,531,000		0.51
Anti-dilution adjustment to number of options	5,087,728		0.42
Expired	(326,196	)	1.21
Forfeited	(125,025	)	0.40
Outstanding at December 31, 2017	11,418,175		$	0.45	4.69
Exercisable at December 31, 2017	4,095,946		$	0.48	2.92
Vested and expected to vest at December 31, 2017	11,418,175		$	0.45	4.69

As of December 31, 2017, there was $0.3 million in unrecognized compensation cost that is expected to be recognized over an estimated weighted‑average amortization period of 1.0 year. The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2017 was $0.9 million and $0.4 million, respectively.

11. Income taxes

Loss from continuing operations before income taxes was as follows (in thousands):



	Years Ended December 31,
	2016			2017
U.K.	$	(928	)	$	(1,297	)
U.S.	(6,376		)	(9,335		)
	$	(7,304	)	$	(10,632	)

F-18

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

Income tax benefit from continuing operations consists of the following (in thousands):



	Years Ended December 31,
	2016		2017
Current tax benefit:
U.K.	$	—	$	—
U.S. federal	—		108
U.S. state and local	—		—
Total current tax benefit	—		108
Deferred tax benefit:
U.K.	—		—
U.S. federal	1,951		—
U.S. state and local	279		—
Total deferred tax benefit	2,230		—
Income tax benefit	$	2,230	$	108

A reconciliation of income tax benefit from continuing operations as reflected in the financial statements was as follows:



	Years Ended December 31,
	2016		2017
Income tax expense at U.K. statutory rate	20.0	%	19.3	%
Foreign rate differential	11.5		11.4
State taxes, net of federal benefit	3.8		5.8
Permanent differences	(0.6	)	(0.1	)
Tax Cuts and Jobs Impact	—		(79.4	)
Change in valuation allowance	(4.2	)	43.5
Other	—		0.5
Effective tax rate	30.5	%	1.0	%

The principal components of the Company’s deferred tax assets and liabilities were as follows (in thousands):



	December 31,
	2016			2017
Deferred income tax assets:
Net operating losses	$	19,434		$	15,261
Property and equipment	232			29
Accrued expenses and other	250			115
Tax credits	741			626
Valuation allowance	(20,657		)	(16,031		)
Deferred income tax assets, net	$	—		$	—

F-19

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

As of December 31, 2017, the Company had net operating loss (NOL) carry forwards of $9.3 million from its operations in the U.K., which are available to reduce certain future U.K. taxable income. As of December 31, 2017, the Company had U.S. federal and state NOLs of $60.9 million and $11.1 million, respectively. The Company has U.S. research and development credits of $0.6 million and U.S. Alternative Minimum Tax credits of $0.1 million that have an indefinite carryforward period. These AMT credits are now refundable under U.S. law resulting in an income tax benefit in 2017. The U.S. NOLs may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three‑year period in excess of 50%. This could limit the amount of NOLs and credits that the Company can utilize annually to offset future U.S. taxable income or tax liabilities, if any. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. While an analysis has not been completed, the Company believes that the private placement completed in October 2017 likely caused an ownership change which would give rise to the limitations on the federal and state NOLs. These federal and state carry forwards will begin to expire in 2020 through 2037

ASC 740, Income Taxes , requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, the Company has recorded a full valuation allowance against its deferred tax assets at December 31, 2016 and 2017 because the Company’s management has determined that is it more likely than not that these assets will not be fully realized. The Company experienced a net decrease in the valuation allowance of $4.6 million for the year ended December 31, 2017, primarily due to a reduction in the U.S. federal tax rate.

The Company files income tax returns in the U.K., the U.S., and various states within the U.S. In the normal course of business, the Company is subject to examination by federal, state and foreign jurisdictions, where applicable. The Company’s tax years in the U.S. are still open under statute from 2014 to present. However, applicable taxing authorities may review and adjust tax credit or NOL carryforwards generated in closed years that are utilized in open years.

The Company’s policy is to record interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2016 and 2017, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statement of operations.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the Tax Act). The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the top U.S. federal corporate tax rate from 35 percent to 21 percent; requiring companies to pay a onetime transition tax on certain un-repatriated earnings of foreign subsidiaries; generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; creating the base erosion anti-abuse tax (BEAT), a new minimum tax; creating a new limitation on deductible interest expense; and changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.

The Tax Act reduces our U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Act, the Company revalued its ending net deferred tax assets and liabilities at December 31, 2017.

F-20

Realm Therapeutics plc

Notes to Consolidated Financial Statements

For the years ended December 31, 2016 and 2017

The Tax Act provided for a one-time transition tax on the deemed repatriation of post-1986 undistributed foreign subsidiary earnings and profits (E&P). The Company has minimal operations at their controlled foreign corporation and, as such, any transition tax would be immaterial.

The global intangible low-taxed income tax and base erosion provisions are effective for taxable years beginning after December 31, 2017. The Company does not currently expect these provisions to have a material impact on its tax rate as there is minimal activity at their controlled foreign corporations and they are currently below the gross receipts threshold for purposes of the base erosion provisions.

Due to the timing of the new tax law and the substantial changes it brings, the Staff of the U.S. Securities and Exchange Commission (the SEC) issued Staff Accounting Bulletin No. 118 (SAB 118), which provides registrants a measurement period to report the impact of the new U.S. tax law. During the measurement period, provisional amounts for the effects of the law are recorded to the extent a reasonable estimate can be made. To the extent that all information necessary is not available, prepared or analyzed, companies may recognize provisional estimated amounts for a period of up to one year following enactment of the Tax Act. The Company recorded amounts as provisional and will continue to monitor for future updates to guidance or interpretations issued by the IRS.

12. Related party transactions

During the year ended December 31, 2017, the Company received net proceeds of $23.2 million upon issuing ordinary shares and warrants for ordinary shares, of which $1.2 million was from existing investors and executives.

In connection with providing scientific and business advisory services, the Company had engaged the consulting services of a director and compensation for services is provided at a fixed fee of $3,000 per month.

13. Subsequent events

The Company has evaluated subsequent events from the balance sheet date through the date at which the consolidated financial statements were available to be issued, and determined there are no other items requiring disclosure beyond those already disclosed.

F-21

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 6. Indemnification of Directors and Officers.

Members of the registrant’s board of directors and its officers have the benefit of the following indemnification provisions in the registrant’s Articles of Association:

Current and former members of the registrant’s board of directors and its officers may be indemnified for:


(a)	any liability incurred by such person in connection with any negligence, default, breach of duty, or breach of trust in relation to the registrant or an associated company;


(b)	any liability incurred by such person in connection with the activities of the registrant or an associated company in its capacity as a trustee of an occupational pension scheme; and


(c)	any other liability incurred by such person as an officer of the registrant or an associated company.

In addition, members of the registrant’s board of directors and its officers who have received payment from the registrant under these indemnification provisions must repay the amount they received in accordance with the Statutes or in any other circumstances that the registrant may prescribe or where the registrant has reserved the right to require repayment.

Item 7. Recent Sales of Unregistered Securities.

Set forth below is information regarding share capital issued by Realm Therapeutics since April 13, 2015:


1.	The registrant issued options to purchase an aggregate of 11,451,232 of its ordinary shares, including options to purchase 6,363,500 ordinary shares for purposes of compensation and options to purchase 5,087,732 ordinary shares for purposes of anti-dilution adjustments to previously outstanding securities following the private placement in October 2017.


2.	On October 12, 2017, the registrant issued an aggregate of 66,396,485 units, consisting of 66,396,485 ordinary shares and warran ts to purchase up to 26,558,600 ordinary shares, at a price per unit of £0.29.

The offers, sales and issuances of the securities described above were exempt from registration (i) under Section 4(a)(2) of the Securities Act in transactions did not involve any public offering, (ii) under Regulation D promulgated under the Securities Act for sales for offers, sales and issuances made to accredited investors, (iii) under Regulation S promulgated under the Securities Act for offers, sales and issuances not made to persons in the United States and as to which no directed selling efforts were made in the United States, or (iv) under Rule 701 promulgated under the Securities Act in transactions under compensatory benefit plans and contracts relating to compensation.

Item 8. Exhibits and Financial Statement Schedules

Exhibits

The exhibits to this registration statement are listed in the exhibit index attached hereto and are incorporated by reference herein.

II-1

Financial Statement Schedules

None. All schedules have been omitted because the information required to be set forth therein is not applicable or has been included in the consolidated financial statements and notes thereto.

Item 9. Undertakings.

The undersigned registrant hereby undertakes:


(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:


(i)	To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;


(iii)	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;


(2)	That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.


(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4)

To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided , that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.

(5)

That, for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of the registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective.


(6)	That, for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-2

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-3

EXHIBIT INDEX



EXHIBIT NUMBER		DESCRIPTION OF EXHIBIT

2.1 †		Asset Purchase Agreement among Chemstar Corp., Realm Therapeutics, Inc. and the Registrant, dated September 19, 2016
3.1		Articles of Association of Realm Therapeutics plc
4.1		Form of Deposit Agreement
4.2		Form of American Depositary Receipt (included in Exhibit 4.1)
4.3		Form of Warrant issued by the Registrant to certain investors on October 12, 2017
5.1		Opinion of Cooley (UK) LLP
10.1		Realm Therapeutics 2016 Executive Omnibus Incentive Plan
10.2 †		Master Services Agreement and Exclusive Patent License between Realm Therapeutics, Inc. and Vitold Mikhailovich Bakhir, dated October 1, 2014, as amended
10.3 †		Technology Transfer Agreement between the Realm Therapeutics, Inc. and Vitold M. Bakhir, dated April 4, 2018
10.4†		Intellectual Property License Agreement between the Realm Therapeutics, Inc. and Chemstar Corp., dated October 7, 2016
10.5		Form of Deed of Indemnity between the Registrant and each of its executive officers and directors
10.6		Relationship Agreement between the Registrant, Nplus1 Singer Advisory LLP and OrbiMed Private Investments VI, LP
10.7		Registration Rights Agreement among the Registrant and certain investors, dated September 21, 2017
16.1		Letter from Grant Thornton
21.1		Subsidiaries of the Registrant
23.1		Consent of independent registered public accounting firm
23.2		Consent of Cooley (UK) LLP (included in Exhibit 5.1)
24.1		Powers of Attorney

__________________


†	Portions of this exhibit (indicated by asterisks) have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Malvern, Commonwealth of Pennsylvania, on the 22nd day of May, 2018.



REALM THERAPEUTICS PLC

By:	/s/ Alex Martin
	Alex Martin
	Chief Executive Officer

Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.



	SIGNATURE	TITLE	DATE

By:	/s/ Alex Martin	Chief Executive Officer and Director (Principal Executive Officer)	May 22, 2018
	Alex Martin		May 22, 2018

By:	/s/ Marella Thorell	Chief Financial Officer, Chief Operating Officer and Director (Principal Financial Officer and Principal Accounting Officer)	May 22, 2018
	Marella Thorell		May 22, 2018

By:	*	Chairman of the Board of Directors	May 22, 2018
	Charles Spicer	Chairman of the Board of Directors	May 22, 2018

By:	*	Director	May 22, 2018
	Joseph William Birkett	Director	May 22, 2018

By:	*	Director	May 22, 2018
	Ivan Gergel	Director	May 22, 2018

By:	*	Director	May 22, 2018
	Balkrishan (Simba) Gill	Director	May 22, 2018

By:	*	Director	May 22, 2018
	Sanford (Sandy) Zweifach	Director	May 22, 2018

	Realm Therapeutics, Inc.
	/s/ Alex Martin	Authorized Representative in the United States	May 22, 2018
	By: Alex Martin Title: Chief Executive Officer	Authorized Representative in the United States	May 22, 2018

*By:	/s/ Marella Thorell
	Marella Thorell
	Attorney-in-fact

Exhibit 2.1

EXECUTION VERSION

ASSET PURCHASE AGREEMENT

by and between

CHEMSTAR CORP.,
(a Florida corporation)

PURICORE, INC.
(a Delaware corporation)

and

PURICORE PLC
(a public limited company incorporated under the laws of England and Wales)

September 19, 2016



Table of Contents

		Page



1.	DEFINITIONS		2
2	SALE AND PURCHASE		12
	2.1	Purchase and Sale of the Purchased Assets; License Rights; Transitional Services	12
	2.2	Excluded Assets	13
	2.3	Assumed Liabilities	14
	2.4	Excluded Liabilities	14
	2.5	Delivery of Funds at the Closing	14
	2.6	Allocation	14
	2.7	Consent of Third Parties	15
	2.8	Working Capital Adjustment	16
	2.9	Property, Sales and Use Taxes	18
3.	CLOSING		20
	3.1	Closing	20
	3.2	Seller Deliveries	20
	3.3	Buyer Deliveries	21
4.	REPRESENTATIONS AND WARRANTIES OF SELLER AND PARENT		21
	4.1	Corporate Status	21
	4.2	Authorization	22
	4.3	Consents and Approvals	22
	4.4	Assets and Properties	22
	4.5	Financial Statements; Undisclosed Liabilities	23
	4.6	Taxes	23
	4.7	Real Property	24
	4.8	Absence of Certain Changes or Events	24
	4.9	Litigation	24
	4.10	Compliance with Law; Governmental Permits	25
	4.11	Material Contracts	26
	4.12	Intellectual Property Matters	27
	4.13	Insurance	28

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

- i -



Table of Contents
(continued)
		Page



	4.14	Employees	28
	4.15	Employee Benefits	29
	4.16	Customers and Suppliers	29
	4.17	Environmental and FDCA Matters	30
	4.18	Finder’s Fees	31
	4.19	Accounts Receivable	31
	4.20	Inventory	31
	4.21	Certain Payments	31
	4.22	Product Warranties; Product Liability; Recalls	31
	4.23	Arrangements with Related Parties	32
	4.24	Disclaimer of Warranties	32
5.	REPRESENTATIONS AND WARRANTIES OF BUYER		33
	5.1	Organizational Status	33
	5.2	Authorization	33
	5.3	Consents and Approvals	33
	5.4	Finder’s Fees	33
	5.5	Litigation and Claims	33
	5.6	Sufficient Funds	33
6.	COVENANTS OF SELLER AND PARENT		34
	6.1	Compliance with AIM Rules	34
	6.2	Seller Transitional Services	35
7.	COVENANTS OF BUYER		35
	7.1	Certain Taxes	35
	7.2	Financing	35
	7.3	Investigation and Evaluation	35
8.	ADDITIONAL COVENANTS		35
	8.1	Certain Covenants	35
	8.2	Employees	37
	8.3	Public Announcements	38
	8.4	Cooperation on Tax Matters	38

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

- ii -



Table of Contents
(continued)
		Page



	8.5	Expenses	38
	8.6	Bulk Sales Laws	38
	8.7	Restrictive Covenants	38
	8.8	Use of Name	42
	8.9	Wrong Pockets	43
	8.10	Access	43
	8.11	No Negotiations	44
	8.12	[*]	44
	8.13	Transfer of Purchased Assets	44
	8.14	[*]	45
9.	CONDITIONS TO CLOSING		45
	9.1	Conditions to Each Party’s Obligations to Effect the Closing	45
	9.2	Conditions to Obligations of Buyer to Effect the Closing	46
	9.3	Conditions to Obligations of Seller to Effect the Closing	46
10.	INDEMNIFICATION		47
	10.1	Compliance with AIM Rules	47
	10.2	Seller Transitional Services	48
	10.3	By Buyer	48
	10.4	Materiality Disregarded	48
	10.5	Limitations on Liability	48
	10.6	Investigation and Evaluation	50
	10.7	Certain Covenants	50
	10.8	Employees	51
11.	GENERAL MATTERS		51
	11.1	Termination	51
	11.2	Contents of Agreement	53
	11.3	Amendment, Parties in Interest, Assignment, Miscellaneous	53
	11.4	Further Assurances	54
	11.5	Interpretation	54
	11.6	Counterparts	54

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

- iii -



Table of Contents
(continued)
		Page



11.7	Negotiated Agreement	55
11.8	Remedies	55
11.9	Notices	55
11.10	Attorneys’ Fees	56
11.11	Specific Performance	56
11.12	Governing Law	57
11.13	Consent to Jurisdiction	57



Exhibits

Exhibit A	Form of Bill of Sale, Assignment and Assumption Agreement
Exhibit B	Form of Intellectual Property License Agreement
Exhibit C	Form of Trademark License Agreement
Exhibit D	Form of Transition Services Agreement
Exhibit E	Sample Calculation of Working Capital Adjustments
Exhibit F	Deposit Agreement
Exhibit G	Debt Agreement
Exhibit H	Form of Intellectual Property Assignment
Exhibit I	Form of UK Counsel Letter

Disclosure Schedule

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

- iv -

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT is made as of September 19, 2016 by and between PuriCore, Inc., a Delaware corporation (“ Seller ”), Chemstar Corp., a Florida corporation (“ Buyer, ” and together with Seller, the “ Parties ”), and, solely for purposes of Sections 4 , 6.1 , 8.7 , 8.8 , 8.11 , 10 and 11 hereof, PuriCore plc, a public limited company incorporated under the laws of England and Wales and the parent entity and sole stockholder of Seller (“ Parent ”).

BACKGROUND

WHEREAS , Seller, through its Sterilox Fresh division, is engaged in the business of (i) the development, marketing, promotion, manufacture, sale and distribution of proprietary, concentrated floral preservative and proprietary produce wash delivered as a concentrate form or through on-site generation devices, (ii) the sale or lease of such on-site generation devices, (iii) the provision of other devices, articles or tools used to apply or deliver such concentrate forms and (iv) the sale of related warranty contracts and repair and maintenance service, in each case in the supermarket retail, food service and specialty fresh fruit arrangements sectors (collectively, the “ Business ”);

WHEREAS , it is currently contemplated that [*] (the Business and all such activities described in the immediately preceding items (i) through (iii) are, collectively, the “ Contemplated Business ”);

WHEREAS , Buyer desires to purchase the Purchased Assets (as defined below) and assume the Assumed Liabilities (as defined below) from Seller, and Seller desires to sell, transfer, and convey the Purchased Assets and transfer the Assumed Liabilities to Buyer, each in accordance with the terms of this Agreement;

WHEREAS , Seller wishes to license certain intellectual property and trademark assets of or relating to the Contemplated Business to the Buyer, and the Buyer wishes to obtain a license for such assets, all on the terms and conditions of this Agreement;

WHEREAS , Buyer wishes for Seller to provide certain services during a transition period after the Closing at agreed upon fees, in accordance with the terms and conditions contained in the transition services agreement contemplated by this Agreement and

WHEREAS , prior to or simultaneously with the execution of this Agreement, Buyer shall deposit the Deposit Amount (as defined below) with the Depository Bank (as defined below), in accordance with the terms of the Deposit Agreement (as defined below).

AGREEMENT

NOW, THEREFORE , in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:


1.	Definitions .

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Certain terms used in this Agreement are listed in alphabetical order and defined or referred to below (such terms as well as any other terms defined elsewhere in this Agreement shall be equally applicable to both the singular and plural forms of the terms defined).

“ Accounts Receivable ” means any trade accounts receivable or operating lease receivable and other rights to payment from customers of the Business.

“ Acquisition Proposal ” is defined in Section 8.11 .

“ Affiliates ” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by, or under common control with such specified Person, provided , that for the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by Contract or otherwise.

“ Agreement ” means this Asset Purchase Agreement, including the Disclosure Schedule and other schedules and exhibits hereto.

“ AIM Rules ” means the AIM Rules for Companies published by The London Stock Exchange plc from time to time.

“ Allocation ” is defined in Section 2.6 .

“ Announcement ” means the announcement of the proposed transactions contemplated by this Agreement, to be made to a Regulatory Information Service pursuant to Rule 15 of the AIM Rules.

“ Applicable Survival Period ” is defined in Section 10.1(d) .

“ Apportioned Obligations ” is defined in Section 2.9(a) .

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

2 .

“ Acquisition Proposal ” is defined in Section 8.11 .

“ Additional Equity Commitment Funds ” is defined in Section 5.6 .

“ Arbitrator ” is defined in Section 2.8(b)(iv) .

“ Assigned Contracts ” is defined in Section 2.1(a)(iv) .

“ Assumed Liabilities ” is defined in Section 2.3 .

“ Balance Sheet ” is defined in Section 4.5(a) .

“ Balance Sheet Date ” is defined in Section 4.5(a) .

“ Base Purchase Price ” means $13,500,000.

“ Bill of Sale, Assignment and Assumption Agreement ” means the instrument by which Seller, at the Closing, sells, assigns, transfers, conveys and delivers to Buyer the Purchased Assets, and Buyer, at the Closing, assumes and agrees to pay, discharge or perform when due the Assumed Liabilities, substantially in the form of Exhibit A .

“ Business ” is defined in the recitals.

“ Business Day ” means any day other than a Saturday, Sunday, or a day on which the banking institutions of New York, New York are authorized or obligated by Law to close.

“ Business Employees ” is defined in Section 4.14(a) .

“ Buyer ” is defined above in the preamble.

“[*] Agreements ” means, collectively, that certain Supply Agreement dated as of July __, 2014, by and between Seller and [*], and the related (Trade Mark Licence) Deed dated June 30, 2014, by and between Puricore International Limited, and related (IP Licence) Deed dated June 30, 2014, by and between Puricore International Limited.

“ Carve Out Method ” is defined in Section 4.5(a) .

“ Charter Documents ” means, with respect to any entity, the certificate of incorporation, the certificate of formation, the articles of incorporation, memorandum of association, by-laws, articles of organization, limited liability company agreement, partnership agreement, formation agreement, joint venture agreement or other similar organizational documents of such entity (in each case, as amended).

“ Circular ” means the document to be sent to shareholders of Parent pursuant to Rule 15 of the AIM Rules, together with notice of the General Meeting and the relevant form of proxy.

“ Closing ” is defined in Section 3.1 .

“ Closing Date ” is defined in Section 3.1 .

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

3 .

“ Closing Working Capital ” means the Current Assets of the Business less the Current Liabilities of the Business as of the Closing Date.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Confidentiality Agreement ” means that certain confidentiality agreement between Seller and Buyer dated April 21, 2016.

“ Contemplated Business ” is defined in the recitals.

“ Contract ” means any written or oral contract, agreement, lease, instrument, or other document or commitment, arrangement, undertaking, practice, or authorization that is binding on any Person or its property under any applicable Law.

“ Court Order ” means any judgment, decree, injunction, order, or ruling of any Governmental Body that is binding on any Person or its property under applicable Law.

“ Current Assets ” means the consolidated current assets of the Business (including Accounts Receivable, less adequate reserves for collectability consistent with past practice, and Inventory, but excluding deferred Tax assets, cash, and cash equivalents), calculated in accordance with GAAP; provided , however , that notwithstanding anything to the contrary, “Current Assets” shall not include any Excluded Asset.

“ Current Liabilities ” means the consolidated current liabilities and accrued expenses (including Tax Liabilities (whether or not accrued or paid as a result of the transactions contemplated by this Agreement) other than deferred Tax Liabilities) of the Business, calculated in accordance with GAAP; provided, however, that notwithstanding anything to the contrary, “Current Liabilities” shall not include any Excluded Liabilities.

“ Debt Agreement ” shall mean that certain Credit and Security Agreement dated as of the date hereof, by and between Buyer and [*], pursuant to which, and subject to the terms and conditions thereof, [*] has committed to lend the amounts set forth therein to Buyer (the provision of such funds as set forth therein, the “ Financing ”) for the purposes set forth therein.

“ Deposit Agreement ” shall mean the deposit agreement entered into among Buyer, Seller and the Depository Bank, attached as Exhibit F .

“ Deposit Amount ” shall mean [*].

“ Depository Bank ” shall mean [*].

“ Disclosure Schedule ” means any of the schedules attached hereto containing information relating to Seller, exceptions to the representations and warranties set forth in Section 4 and information relating to other provisions hereof The Disclosure Schedule has been arranged for purposes of convenience in separately numbered sections corresponding to the sections of this Agreement; however, any matters disclosed in any other section of the Disclosure Schedules shall

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

4 .

qualify other representations and warranties set forth in Section 4 to the extent that the relevance of such matter, fact, or item is reasonably apparent on the face thereof.

“ Disputed Amounts ” is defined in Section 2.8(b).

“ Dispute Notice ” is defined in Section 10.7(a).

“ DOL ” is defined in Section 4.10(a).

“ Employee Benefit Plan ” shall mean each “employee benefit plan” (as defined by Section 3(3) of ERISA (whether or not subject to ERISA)), and any other bonus, incentive compensation, deferred compensation, stock option or other equity-based compensation, stock purchase, fringe benefit, post-retirement, scholarship, sick leave, vacation, individual employment or consulting, severance, retention, change of control, termination or other compensation or benefit plan, program, agreement, policy or arrangement, that is currently in effect or that has been approved for the benefit of Business Employees or with respect to which Seller has any obligation or liability (whether fixed or contingent) on behalf of any Business Employee or a dependent or beneficiary of any Business Employee.

“ Encumbrances ” mean any lien, mortgage, security interest, pledge, restriction on transferability, or other claim, charge, or encumbrance of any nature whatsoever on any property or property interest, including any restriction on the use, voting, transfer, receipt of income, or other exercise of any attributes of ownership.

“ Environmental Law ” means all applicable Laws as enacted and in effect on or prior to the Closing Date concerning (a) Releases or threatened Releases of Hazardous Substances, (b) the sale, distribution, generation, manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Substances, or (c) pollution or protection of human health (as affected or potentially affected by exposure to Hazardous Substances), the environment or natural resources.

“ EPA ” is defined in the recitals.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Estimated Closing Balance Sheet ” is defined in Section 2.8(a) .

“ Estimated Closing Working Capital ” is defined in Section 2.8(a) .

“ Estimated Purchase Price Adjustment ” is defined in Section 2.8(a) .

“ Excluded Assets ” is defined in Section 2.2 .

“ Excluded Business Assets ” is defined in Section 2.2 .

“ Excluded Liabilities ” is defined in Section 2.4 .

“[*]” means [*].

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

5 .

“ FDCA ” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 301 et. seq., as amended, and the regulations adopted by the United States Food and Drug Administration (“ FDA ”) to implement the FDCA.

[*]

“ Final Closing Balance Sheet ” is defined in Section 2.8(c) .

“ Final Purchase Price ” is defined in Section 2.8(c) .

“ Final Purchase Price Adjustment ” is defined in Section 2.8(c) .

“ Financial Statements ” is defined in Section 4.5(a) .

“ Fundamental Representations ” is defined in Section 10.1(b) .

“ GAAP ” means U.S. generally accepted accounting principles, consistently applied.

“ General Meeting ” means the general meeting of Parent’s shareholders convened to consider the Resolution.

“Governmental Body” means any entity or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to United States federal, state, local, or municipal government, foreign, international, multinational or other government, including any department, commission, board, agency, bureau, subdivision, instrumentality, official or other regulatory, administrative or judicial authority thereof, and any nongovernmental regulatory body to the extent that the rules and regulations or orders of such body have the force of Law.

“ Governmental Permits ” means any permits, licenses, registrations, certificates of occupancy, approvals, or other authorizations of any Governmental Body.

“ Hazardous Substances ” means (a) those substances or materials defined in or regulated under the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Toxic Substances Control Act, [*], and their state and local counterparts, as each may be amended from time to time prior to the Closing Date, and all regulations issued thereunder prior to the Closing Date, (b) petroleum and petroleum products, including crude oil and any fractions thereof, (c) natural gas, synthetic gas, and any mixtures thereof, (d) lead, polychlorinated biphenyls, asbestos and radon, (e) any other pollutant or contaminant as defined or regulated under applicable Environmental Laws, and (1) any substance, material or waste regulated as hazardous by any Governmental Body pursuant to any applicable Environmental Law.

“ Indemnified Buyer Party ” is defined in Section 10.2 .

“ Indemnified Seller Party ” is defined in Section 10.3 .

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

6 .

“ Indemnitee ” means any Person that is seeking indemnification from an Indemnitor pursuant to the provisions of this Agreement.

“ Indemnitor ” any party hereto from which any Indemnitee is seeking indemnification pursuant to the provisions of this Agreement.

“ Identified Obligations ” is defined in Section 5.6 .

“ Initial Purchase Price ” means the Base Purchase Price plus or minus, as applicable, the Estimated Purchase Price Adjustment, as determined in accordance with Section 2.8(a) .

“ Intellectual Property ” means all intellectual property and industrial property rights of every kind and description arising under the laws of any jurisdiction throughout the world, including the following: (i) patents, patent applications and invention disclosures, and all related continuations, continuations-in-part, divisionals, reissues, re-examinations, substitutions and extensions thereof (“ Patents ”); (ii) trademarks, service marks, trade dress, corporate and brand names, trade names, logos, slogans, Internet domain names, design rights, and all other designations of source or origin, together with all goodwill associated with each of the foregoing (“ Trademarks ”); (iii) copyrights, copyrightable works and works of authorship, including Software (“ Copyrights ”); (iv) trade secrets in confidential information, ideas, know-how, inventions, proprietary processes, formulae, models, methodologies, research and development information, product roadmaps and customer lists, but excluding any Copyrights or Patents that cover or protect any of the foregoing; and (v) all registrations and applications for any of the foregoing.

“ Intellectual Property Assignment ” means the instrument by which Seller, at the Closing, assigns, transfers, conveys and delivers to Buyer certain of the Seller-Owned Intellectual Property included in the Purchased Assets as set forth therein, substantially in the form of Exhibit H .

“ Intellectual Property License Agreement ” shall mean the intellectual property license agreement to be entered into by and between Seller, as licensor, and Buyer, as licensee at Closing, substantially in the form of Exhibit B .

“ Interim Period ” is defined in Section 8.14 .

“ Inventory ” means all inventory, raw materials, work-in-process, finished goods, supplies, spare parts and other inventories Related to the Business.

“ IRS ” means the U.S. Internal Revenue Service.

“ knowledge of Buyer ” means the knowledge of [*].

“ Law ” means any law, common law, rule, regulations, judgment, injunction, order, decree or other restriction of any court or Governmental Body.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

7 .

“ Legal Proceedings ” means any judicial, administrative or arbitral actions, suits, claims, or proceedings by or before any Governmental Body.

“ Liability ” means any direct or indirect liability, indebtedness, obligation, expense, claim, loss, damage, deficiency, guaranty, or endorsement of or by any Person, absolute or contingent, accrued or unaccrued, due or to become due, liquidated or unliquidated.

“ License Agreements ” means, collectively, the Intellectual Property License Agreement and the Trademark License Agreement.

“ Litigation ” means any lawsuit, action, arbitration, administrative proceeding, quasi-administrative proceeding, criminal prosecution, or Governmental Body’s notice of violation or penalty, investigation or inquiry, whether formal or informal.

“ Losses ” is defined in Section 10.2 .

“ Material Contract ” is defined in Section 4.11(a) .

“ Material Adverse Effect ” means any change, event, circumstance, state of facts, occurrence or effect that (a) is or would reasonably be expected to be materially adverse to the continued operation of the Business in its ordinary course consistent with past practice, or to the financial condition, assets, liabilities, properties or results of operations of the Business, or (b) is or would reasonably be expected to be materially adverse to Seller’s ability to consummate the transactions contemplated by this Agreement or the Transaction Documents; provided , however , that the following shall not constitute, or be taken into account in determining whether there has been or would be, a “Material Adverse Effect”: (i) any change in any Law, accounting standards or regulatory policy after the date hereof; (ii) the effect of any change that generally affects any industry in which the Business operates; (iii) any change in interest rates or general economic conditions; (iv) entry into or announcement of this Agreement or any action required under this Agreement; or (v) any national or international political event or occurrence, including acts of war or terrorism; provided further that in the case of clauses (i) - (iii) and (v), such change, event, circumstance, state of facts, occurrence or effect does not have a disproportionate effect on the Business, as compared to other Persons engaged in the industries and locations in which the Business operates.

“ Notice of Objection ” is defined in Section 2.8(b) .

“ Notice of Satisfaction ” is defined in Section 5.6 .

“ OSHA ” is defined in Section 4.10(a) .

“ Parent ” is defined above in the preamble.

“ Parties ” is defined above in the preamble.

“ Per Claim Threshold ” is defined in Section 10.5(a) .

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

8 .

“ Permitted Encumbrances ” means (a) Encumbrances for current real or personal property Taxes not yet due and payable up to the amount of reserves therefor that are included in the calculation of the Final Closing Balance Sheet and the determination of Closing Working Capital, (b) workers’, carriers’ and mechanics’ or other like Encumbrances incurred in the ordinary course of the Business with respect to which payment is not due and that do not impair the conduct of the Business or the present or proposed use of the affected properly, and (c) those Encumbrances set forth on Section 1.1 of the Disclosure Schedule.

“ Person ” means any natural person, business trust, corporation, partnership, limited liability company, joint stock company, proprietorship, association, trust, joint venture, unincorporated association, or any other legal entity of whatever nature.

[*]

“ Pre-Closing Tax Period ” is any tax period (or portion thereof) ending on or before the Closing Date.

“ Preliminary Closing Balance Sheet ” is defined in Section 2.8(b)(1) .

“ Property Taxes ” is defined in Section 2.9(a) .

“ Purchased Assets ” is defined in Section 2.1 .

“ Purchase Price Adjustment ” means the amount, as determined in accordance with Section 2.8(b) (which may be expressed as a negative number), equal to the Closing Working Capital, less the Target Closing Working Capital; provided, however, that, notwithstanding anything herein to the contrary, if the Closing Working Capital is greater than or less than the Target Closing Working Capital, in each case, by an amount less than [*], then the Purchase Price Adjustment shall be deemed to equal $0 for purposes of this Agreement; and provided further, that if the Closing Working Capital is greater than or less than the Target Closing Working Capital, in each case, by

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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an amount greater than [*], then the Purchase Price Adjustment shall be deemed to equal only the amount in excess of [*] for purposes of this Agreement.

“ PuriCore Marks ” is defined in Section 8.8 .

“ Real Estate Leases ” is defined in Section 4.7 .

“ Real Property ” is defined in Section 4.7 .

“ Registered Intellectual Property ” is defined in Section 4.12(a) .

“ Related Party ” with respect to any specified Person, means (i) any Affiliate of such specified Person, or any director, executive officer, general partner or managing member of such Affiliate, (ii) any Person who serves as a director, executive officer, partner, member or in a similar capacity of such specified Person, or (iii) any immediate family member of a Person described in clause (ii), or (iv) any other Person who holds, individually or together with any Affiliate of such other Person and any member(s) of such Person’s immediate family, more than 25% of the outstanding voting interests of such specified Person.

“ Related to the Business ” or “ Relating to the Business ” means used or held for use primarily in, or relating primarily to, the business, operations or conduct of the Business consistent with past practice.

“ Related to the Contemplated Business ” or “ Relating to the Contemplated Business ” means used or held for use primarily in, or relating primarily to, (i) the business, operations or conduct of the Business consistent with past practice or (ii) the development, planning and preparation for the contemplated business, operations or conduct of the Contemplated Business as currently contemplated by Seller.

“ Release ” has the meaning set forth in Section 101(22) of the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601(22)).

“ Resolution ” means the ordinary resolution of the shareholders of Parent set forth in the notice of General Meeting contained in the Circular to obtain approval of those shareholders to the transactions contemplated by this Agreement pursuant to Rule 15 of the AIM Rules.

“ Sales and Use Taxes ” is defined in Section 2.9(a) .

“ Seller ” is defined in the preamble.

“ Seller Intellectual Property ” means all Seller-Owned Intellectual Property together with any Intellectual Property of a third party that is licensed to Seller and Related to the Contemplated Business as of the Closing Date.

“ Seller’s knowledge, ” “ knowledge of Seller, ” or phrases of similar import mean the actual knowledge of those individuals set forth on Section 1.2 of the Disclosure Schedule , after reasonable inquiry.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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“ Seller-Owned Intellectual Property ” means all Intellectual Property owned or purported to be owned by Seller and Related to the Contemplated Business as of the Closing Date.

“ Straddle Period ” means any taxable period that begins on or before the Closing Date and ends after the Closing Date.

“ Target Closing Working Capital ” means an amount equal to [*].

“ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Taxes ” mean all taxes, duties, charges, fees, levies, or other assessments imposed by any Governmental Body including income, gross receipts, value-added, excise, withholding, personal property, real estate, sale, use, ad valorem, license, lease, service, severance, stamp, transfer, payroll, employment, customs, duties, alternative, add-on minimum, estimated, and franchise taxes (including any interest, penalties, or additions attributable to or imposed on or with respect to any such assessment).

“ Termination Date ” is defined in Section 11.1(a)(ii)(A).

“ Third-Party Claim ” is defined in Section 10.7(a) .

“ Threshold Amount ” is defined in Section 10.5(b) .

“ Trademark License Agreement ” shall mean the trademark license agreement to be entered into by and between Buyer, as licensor, and Seller, as licensee, at Closing, substantially in the form of Exhibit C .

“ Transaction Documents ” means this Agreement, the Bill of Sale, Assignment and Assumption Agreement, the Intellectual Property Assignment, the License Agreements and the Transition Services Agreement.

“ Transferred Employees ” is defined in Section 8.2 .

“ Transitional Services ” is defined in Section 6.2 .

“ Transition Services Agreement ” means a transition services agreement entered into by and between the Parties at the Closing substantially in the form of Exhibit D .

“ U.S. ” means the United States of America.

“ USDA ” is defined in Section 4.10(a) .

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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2.	Sale and Purchase .

2.1 Purchase and Sale of the Purchased Assets; License Rights; Transitional Services .

(a) Upon the terms and subject to the conditions of this Agreement, at the Closing, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase, acquire and accept from Seller, all Seller’s right, title and interest in and to all of the following assets, properties and rights, to the extent Related to the Contemplated Business (except where noted below that a certain item is Related to the Business, in which case such asset, property or right shall only transfer to the extent Related to the Business), but excluding the Excluded Assets (collectively, the “ Purchased Assets ”):

(i) all Accounts Receivable Related to the Business;

(ii) all Inventory, and all inventory, raw materials, work-in-process and finished goods, if any, Related to the Contemplated Business;

(iii) all machinery, materials, equipment, parts, tooling, tools, molds, and all other items of tangible personal property, in each case Related to the Contemplated Business, including those items listed in Section 2.1(a)(iii) of the Disclosure Schedule ;

(iv) all agreements, Contracts, licenses, leases, commitments, arrangements or understandings, written or oral, including any sales order or purchase orders, of Seller Related to the Contemplated Business (“ Assigned Contracts ”), including those items listed in Section 2.1(a)(iv) of the Disclosure Schedule ;

(v) all warranty and shipping records, supplier lists, customer lists, product specifications, product formulations, drawings, engineering, maintenance, operating and production records, advertising and promotional materials, credit records of customers, records related to Transferred Employees and other documents, records and files Relating to the Contemplated Business, including [*] (except for that Seller-Owned Intellectual Property that will be retained by Seller and licensed to Buyer as contemplated by the Intellectual Property License Agreement and any Excluded Asset);

(vi) all Seller-Owned Intellectual Property (except for that Seller-Owned Intellectual Property that will be retained by Seller and licensed to Buyer as contemplated by the Intellectual Property License Agreement and any Excluded Asset), including those items listed in Section 2.1(a)(vi) of the Disclosure Schedule ;

(vii) all of Seller’s rights under all confidentiality agreements, restrictive covenants and other obligations of any employees of Seller, including those items listed in Section 2.1(a)(vii) of the Disclosure Schedule , solely to the extent such rights relate to the Contemplated Business and are assignable;

(viii) all goodwill associated with the Business;

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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(ix) all Governmental Permits and applications for Governmental Permits Related to the Contemplated Business, other than establishment registrations for the Real Property, listed in Section 2.1(a)(ix) of the Disclosure Schedule , to the extent assignable pursuant to applicable Law;

(x) [*]; and

(xi) all of Seller’s claims, security and other deposits, refunds, prepaid expenses, causes of action, choses in action, lights of recovery, warranty rights, rights of set off, rebates, guarantees, indemnities and similar rights relating to the Purchased Assets or the Assumed Liabilities, including those items listed on Section 2.1(a)(xi) of the Disclosure Schedule , but excluding those related to or arising out of Excluded Assets.

(b) At the Closing, Seller shall execute and deliver the License Agreements, which such agreements will (i) grant to Buyer a perpetual, fully-paid, royalty free license to certain technology and related Intellectual Property necessary to make, use, market, promote and sell the products produced by the Contemplated Business and (ii) grant to Seller a license for use of the STERILOX trademark in the United States in connection with certain specified fields, in each case, as further described in the License Agreements.

(c) At the Closing, Seller shall execute and deliver the Transition Services Agreement, pursuant to which Seller will perform certain services on behalf of Buyer following the Closing for the applicable term set forth therein.

2.2 Excluded Assets . The Purchased Assets do not include, and Seller is not selling, assigning, transferring, conveying or delivering, and Buyer is not purchasing, acquiring or accepting from Seller, any assets, properties or rights other than the Purchased Assets specifically referred to in Section 2.1 (all such other assets are, collectively, the “ Excluded Assets ”), including the following: (a) the corporate seals, Charter Documents, minute books, stock books and books of account or other records having to do with the corporate organization of Seller; (b) returns, declarations, reports, claims for refund, or information returns or statements relating to Taxes for Pre-Closing Tax Periods or other Taxes not Relating to the Contemplated Business; (c) the rights which accrue or will accrue to Seller under this Agreement; (d) all cash, cash equivalents and bank accounts of Seller; (e) Seller’s insurance policies and any claims, credits or rights of recovery and set-off with respect thereto under such policies; (f) the Intellectual Property identified on Section 2.2(f) of the Disclosure Schedule (some of which will be licensed to Buyer as contemplated by the Intellectual Property License Agreement); (g) any interest in the Real Estate Leases; (h) all of Seller’s rights under all confidentiality agreements, restrictive covenants and other obligations of any employees of Seller, including those items listed on Section 2.1(a)(vii) of the Disclosure Schedule , except to the extent such rights relate to the Contemplated Business or are not assignable; (i) the [*] Agreements, and (j) the assets set forth in Section 2.2(j) of the Disclosure Schedule , which are used or held for use in the Business but are not included in the Purchased Assets and are not included in clauses (a) through (i) of this Section 2.2 (such assets listed on Section 2.2(j) of the Disclosure Schedule are the “ Excluded Business Assets ”).

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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2.3 Assumed Liabilities . Upon the terms and subject to the conditions of this Agreement, at the Closing Buyer shall assume and agree to pay, discharge or perform when due, as appropriate, only the following Liabilities: (a) all executory Liabilities of Seller under the Assigned Contracts, but only to the extent that such Liabilities thereunder are required to be performed after the Closing Date and do not arise from or in connection with a breach of the terms of the applicable Assigned Contract by Seller on or prior to the Closing Date; (b) accrued expenses, accounts payable and deferred revenue obligations as of the Closing Date to the extent reflected on the Balance Sheet or accrued since the Balance Sheet Date in the ordinary course of business; and (c) all warranty claims arising after the Closing that relate to the pre-Closing period up to the amount of the reserve therefor reflected on the Balance Sheet or accrued since the Balance Sheet Date in the ordinary course of business (such assumed Liabilities, the “ Assumed Liabilities ”). For the avoidance of doubt, Buyer shall be liable for all Liabilities arising from the operation of the Business or the ownership of the Purchased Assets first arising during any period after the Closing and that are, except as included in the Assumed Liabilities, not incurred as a result of or in connection with any action, omission, obligation or liability of Seller or its Affiliates occurring or existing prior to the Closing; provided , however , that notwithstanding anything to the contrary, the foregoing shall in no way limit the rights of Buyer to enforce obligations of the Seller and pursue remedies against the Seller under the Transition Services Agreement in accordance with the terms of the Transition Services Agreement in the event of a breach or default by the Seller of the terms of the Transition Services Agreement.

2.4 Excluded Liabilities . Buyer shall not assume any Liabilities of Seller (such unassumed Liabilities, the “ Excluded Liabilities ”) other than the Assumed Liabilities. For the avoidance of doubt, the Excluded Liabilities shall include (a) all income Taxes of Seller; (b) subject to Section 2.9 , all other Taxes with respect to the Business for any Pre-Closing Tax Period except Sales and Use Taxes reflected on the Balance Sheet or accrued since the Balance Sheet Date in the ordinary course of business; (c) all Liabilities under any Employee Benefit Plan or any other employee benefit plan, program, agreement, policy or arrangement of Seller or any of its Affiliates; (d) all Liabilities under any of the [*] Agreements; and (e) all Liabilities arising out of or incurred in connection with the negotiation, preparation and execution of this Agreement and the consummation of the transactions contemplated hereby.

2.5 Delivery of Funds at the Closing .

(a) At the Closing, Buyer shall pay, or cause to be paid, to Seller the Initial Purchase Price (less the amount of the Deposit Amount released to Seller by the Depository Bank), such payment to be made by wire transfer of immediately available funds to an account designated by Seller in writing to Buyer at least two Business Days prior to the Closing.

(b) At the Closing, Buyer shall direct the Depository Bank to release the Deposit Amount to Seller in accordance with the terms of the Deposit Agreement, such payment to be made by wire transfer of immediately available funds to an account designated by Seller in writing to Buyer at least two Business Days prior to the Closing.

2.6 Allocation . Seller and Buyer agree that the Final Purchase Price (including any Assumed Liabilities that are treated as consideration for the Purchased Assets for federal income tax purposes), as adjusted hereunder, and all other amounts constituting consideration within the

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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meaning of Section 1060 of the Code, shall be allocated among the Purchased Assets in the manner as set forth on Section 2.6 of the Disclosure Schedule , which schedule has been prepared in a manner consistent with Section 1060 of the Code and the regulations promulgated thereunder (the “ Allocation ”). Seller and Buyer agree to (i) be bound by the Allocation, (ii) act in accordance with the Allocation in the preparation and the filing of all Tax Returns (including filing Form 8594 with their United States federal income Tax Return for the taxable year that includes the Closing Date) and in the course of any Tax audit, Tax review or Tax litigation relating thereto, and (iii) take no position and cause their Affiliates to take no position inconsistent with the Allocation for income Tax purposes, including United States federal and state income Tax and foreign income Tax, unless otherwise required pursuant to a “ determination ” within the meaning of Section 1313(a) of the Code. Within ninety (90) days after the Closing Date, Buyer shall prepare and deliver a draft of its IRS Form 8594, completed in a manner consistent with the Allocation, to Seller. Seller shall have fifteen (15) days thereafter to review and raise any objections with respect to such form_ If Seller raises any such objections, the parties shall, for the thirty (30) days thereafter, exercise good faith efforts to resolve those objections.

2.7 Consent of Third Parties . Notwithstanding anything to the contrary in this Agreement, and subject to the provisions of this Section 2.7 , to the extent that the sale, assignment, transfer, conveyance or delivery, or attempted sale, assignment, transfer, conveyance or delivery, to Buyer of any Purchased Asset would result in a violation of applicable Law, or would require the consent, authorization, approval or waiver of a Person who is not a party to this Agreement or an Affiliate of a party to this Agreement (including any Governmental Body), and such consent, authorization, approval or waiver shall not have been obtained prior to the Closing, this Agreement shall not constitute a sale, assignment, transfer, conveyance or delivery, or an attempted sale, assignment, transfer, conveyance or delivery, thereof; provided , however , that, subject to the satisfaction or waiver of the conditions contained in Section 9 , the Closing shall occur notwithstanding the foregoing without any adjustment to the purchase price on account thereof. Following the Closing, Seller and Buyer shall use commercially reasonable efforts, and shall cooperate with each other, to obtain within ninety (90) days any such consent, authorization, approval or waiver, or any release, substitution or amendment, required to (i) transfer and assign all rights of Seller under the Purchased Assets to Buyer, and (ii) novate all Assumed Liabilities under any and Material Contracts included in the Purchased Assets or other liabilities that constitute Assumed Liabilities, or to obtain in writing the unconditional release of all parties to such arrangements, so that, in any case, Buyer shall be solely responsible for such Assumed Liabilities from and after the Closing Date; provided , however , that in either such case, neither Seller nor Buyer shall be required to pay any consideration therefor. Once such consent, authorization, approval, waiver, release, substitution or amendment is obtained, the Seller shall sell, assign, transfer, convey and deliver to Buyer the relevant Purchased Asset to which such consent, authorization, approval, waiver, release, substitution or amendment relates for no additional consideration. Applicable sales, transfer and other similar Taxes in connection with such sale, assignment, transfer, conveyance or license shall be paid by Buyer, provided that Seller shall reimburse Buyer for fifty percent (50%) thereof within five (5) Business Days of receipt of written notice thereof from Buyer.

Until such time as any consent, authorization, approval or waiver described in the immediately preceding paragraph has been obtained, Seller will use its commercially reasonable efforts to (i) provide Buyer with all of the benefits and burdens of the applicable Purchased Asset

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

15 .

or portion of the applicable Purchased Asset, (ii) cooperate in any reasonable and lawful arrangement designed to provide such benefits and burdens to Buyer, including accepting direction as Buyer shall reasonably request of Seller, (iii) keep Buyer reasonably and fully informed in a timely manner as to all developments regarding such consents, authorizations, approvals or waivers and Purchased Assets, including by providing Buyer with copies of all material correspondence, drafts and other material communications regarding same and (iv) enforce, at the request of Buyer, any rights of Seller arising from any such Purchased Asset. With respect to Purchased Assets that cannot be assigned and with respect to which Seller cannot obtain such consent, authorization, approval or waiver, Buyer shall, as agent or subcontractor for Seller, pay, perform and discharge fully the liabilities and obligations of Seller effective as of the Closing, to the extent constituting Assumed Liabilities.

2.8 Working Capital Adjustment .

(a) Estimated Closing Balance Sheet; Preliminary Working Capital Adjustment .

(i) On a date not less than two (2) Business Days nor more than five (5) Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer a preliminary, unaudited balance sheet of the Business containing only Purchased Assets and Assumed Liabilities estimated as of the end of the day immediately prior to the Closing Date (such balance sheet, the “ Estimated Closing Balance Sheet ”). The Estimated Closing Balance Sheet shall be prepared from the books and records of Seller and the Business in accordance with GAAP as to the underlying transactions and consistent with the Carve Out Method as described in Section 4.5 , and shall reflect only Inventory that is Saleable. The Estimated Closing Balance Sheet shall reflect Seller’s reasonable good faith estimate of the Closing Working Capital (the “ Estimated Closing Working Capital ”), which shall be calculated consistent with the methodology set forth in the sample calculation of Closing Net Working Capital set forth in Exhibit E , which sample calculation is prepared for illustration purposes only, assuming a Closing Date of July 31, 2016.

(ii) Subject to the last sentence of this Section 2.8(a)(ii) , the Initial Purchase Price shall be adjusted, on a dollar-for-dollar basis, by the extent to which the Estimated Closing Working Capital as reflected on the Estimated Closing Balance Sheet exceeds or falls short of the Target Closing Working Capital (the “ Estimated Purchase Price Adjustment ”). The absolute value of the Estimated Purchase Price Adjustment will be added to the Initial Purchase Price if it is a positive number (exceeds), or subtracted from the Initial Purchase Price if is a negative number (falls short). Notwithstanding anything to the contrary herein, if the Estimated Closing Working Capital is greater than or less than the Target Closing Working Capital, in each case, by an amount less than [*], then the Estimated Purchase Price Adjustment shall be deemed to equal $0 for purposes of this Section 2.8 , and if the Estimated Closing Working Capital is greater than or less than the Target Closing Working Capital, in each case, by an amount greater than [*], then the Estimated Purchase Price Adjustment shall be deemed to equal only the amount in excess of [*] for purposes of this Section 2.8 .

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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(b) Delivery of the Preliminary Closing Balance Sheet .

(i) Within ninety (90) days after the Closing Date, Buyer shall cause to be prepared and delivered to Seller an unaudited balance sheet of the Business containing only Purchased Assets and Assumed Liabilities as of the end of the day immediately prior to the Closing Date (such balance sheet, the “ Preliminary Closing Balance Sheet ”). The Preliminary Closing Balance Sheet shall be prepared from the books and records of Seller and the Business in accordance with GAAP as to the underlying transactions and consistent with the Carve Out Method as described in Section 4.5 , shall only reflect Inventory that is Saleable, and shall set forth Buyer’s calculation of Closing Working Capital (which, for the avoidance of doubt, shall be calculated consistent with the methodology set forth in the sample calculation of Closing Net Working Capital set forth in Exhibit E ) and the Purchase Price Adjustment.

(ii) If Seller does not object to Buyer’s Preliminary Closing Balance Sheet by written notice of objection (the “ Notice of Objection ”) delivered to Buyer within 30 days after Seller’s receipt of Buyer’s Preliminary Closing Balance Sheet, the calculation of the Purchase Price Adjustment pursuant to Buyer’s Preliminary Closing Balance Sheet shall be deemed final and binding. A Notice of Objection under this Section 2.8(b)(ii) shall set forth in reasonable detail Seller’s alternative calculations of the Closing Working Capital and the Purchase Price Adjustment, in each case calculated based on such amounts.

(iii) If Seller delivers a Notice of Objection to Buyer within the 30 day period referred to in Section 2.8(b)(ii) , then any element of Buyer’s Preliminary Closing Balance Sheet that is not in dispute on the date such Notice of Objection is given shall be treated as final and binding and any dispute (all such amounts, the “ Disputed Amounts ”) shall be resolved as set forth in this Section 2.8(b) :

(iv) Seller and Buyer shall promptly endeavor in good faith to resolve the Disputed Amounts listed in the Notice of Objection. If a written agreement determining the Disputed Amounts has not been reached within ten Business Days (or such longer period as may be agreed by Seller and Buyer) after the date of receipt by Buyer of the Notice of Objection, the resolution of such Disputed Amounts shall be submitted to Ernst & Young LP or, in the event it is then not available or no longer independent, such other independent nationally recognized accounting firm mutually acceptable to Buyer and Seller (the “ Arbitrator ”).

(v) Seller and Buyer shall use their commercially reasonable efforts to cause the Arbitrator to render a decision in accordance with this Section 2.8(b) along with a statement of reasons therefor within 30 days of the submission of the Disputed Amounts, or a reasonable time thereafter, to the Arbitrator. The decision of the Arbitrator shall be final and binding upon each party hereto and the decision of the Arbitrator shall constitute an arbitral award that is final, binding and non-appealable and upon which a judgment may be entered by a court having jurisdiction thereover.

(vi) The Purchase Price Adjustment shall be calculated based on (A) each element of Buyer’s Preliminary Closing Balance Sheet that is not in dispute and (B) the final determination of the Arbitrator with respect to the Disputed Amounts, and the Purchase Price Adjustment, as so calculated, shall be deemed to be final and binding.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

17 .

(vii) If Seller and Buyer submit any Disputed Amounts to the Arbitrator for resolution, Seller and Buyer shall each pay their own costs and expenses incurred under this Section 2.8(b) . Seller shall be responsible for that fraction of the fees and costs of the Arbitrator where (x) the numerator is the absolute value of the difference between Seller’s position with respect to the Purchase Price Adjustment and the Purchase Price Adjustment as calculated based on the Arbitrator’s final determination with respect to the Disputed Amounts and (y) the denominator is the absolute value of the difference between Buyer’s position with respect to the Purchase Price Adjustment and Seller’s position with respect to the Purchase Price Adjustment, and Buyer shall be responsible for the remainder of such fees and costs.

(viii) The Arbitrator shall act as an arbitrator to determine, based on the provisions of this Section 2.8(b) , only the Disputed Amounts and the determination of each amount of the Disputed Amounts shall be made in accordance with the procedures set forth above in this Section 2.8 . In resolving any disputed item, the Arbitrator may not assign a value to any item greater than the highest value for such item claimed by Buyer or Seller or less than the lowest value for such item claimed by Buyer or Seller.

(c) The term “ Final Purchase Price Adjustment ” means the final and binding Purchase Price Adjustment as finally determined pursuant to Section 2.8(b) ; provided , however , that, for the avoidance of doubt, if the Purchase Price Adjustment is deemed to equal $0 (pursuant to the proviso in the definition of Purchase Price Adjustment), then the Final Purchase Price Adjustment shall also be deemed to equal $0. The term “ Final Purchase Price ” means the Base Purchase Price plus the absolute value of the Final Purchase Price Adjustment, if such adjustment amount is a positive number, or minus the absolute value of the Final Purchase Price Adjustment, if such adjustment amount is a negative number. The term “ Final Closing Balance Sheet ” means the Preliminary Closing Balance Sheet either unmodified, if Seller fails to properly object to Disputed Amounts in accordance with Section 2.8(b) , or as modified by resolution of all Disputed Amounts either by written agreement of the Parties or a determination by the Arbitrator as contemplated in Section 2.8(b) , as applicable. The Final Purchase Price Adjustment shall be treated as an adjustment to the purchase price for federal, state, territory, local and foreign income Tax purposes.

(d) If the Final Purchase Price is greater than the Initial Purchase Price, then Buyer shall pay to Seller for the account of Seller the difference between the Final Purchase Price and the Initial Purchase Price within three Business Days of the determination of the Final Purchase Price, such amount to be paid by wire transfer of immediately available funds to an account designated by Seller in writing to Buyer promptly after the final determination of the Final Purchase Price. If the Final Purchase Price is less than the Initial Purchase Price, then Seller shall pay to Buyer for the account of Buyer the difference between the Initial Purchase Price and the Final Purchase Price within three Business Days of the determination of the Final Purchase Price, such amount to be paid by wire transfer of immediately available funds to an account designated by Buyer in writing to Seller promptly after the determination of the Final Purchase Price.

2.9 Property, Sales and Use Taxes .

(a) All real, personal and intangible ad valorem property Taxes and installments of special assessments with respect to the real property used in the Business

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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(collectively, “ Property Taxes ”) and all sales, use, transaction or excise Taxes (collectively “ Sales and Use Taxes ”) incurred in the ordinary course of the Business and due and payable with respect to the Purchased Assets for any Straddle Period (collectively, the “ Apportioned Obligations ”) shall be apportioned between the Pre-Closing Tax Period and the Post-Closing Tax Period as follows: (i) in the case of Property Taxes, the portion allocated to the Pre-Closing Tax Period shall be deemed to be the amount of such Property Tax due and payable for the entire Straddle Period multiplied by a fraction the numerator of which is the number of days in the portion of the Straddle Period ending on the day immediately prior to Closing Date and the denominator of which is the number of days in the entire Straddle Period, and (ii) in the case of Sales and Use Taxes, the portion allocated to the Pre-Closing Tax Period shall be deemed equal to the amount which would be due and payable if the relevant Straddle Period ended on the day immediately prior to the Closing Date. Seller shall be liable for the Apportioned Obligations apportioned to the Pre-Closing Tax Period, and Buyer shall be liable for the Apportioned Obligations apportioned to the Post-Closing Tax Period.

(b) The Apportioned Obligations for the calendar year 2016 shall be apportioned between Seller and Buyer in accordance with Section 2.9(a) as of the Closing Date. If the precise amount of the Apportioned Obligations for the calendar year 2016 cannot be ascertained, the apportionment shall be computed on the basis of Property Taxes and Sales and Use Taxes for the prior calendar year, with known changes in valuation or millage applied. For purposes of determining Closing Working Capital in accordance with Section 2.8 , the liabilities of Seller used to determine Closing Working Capital shall be increased by an amount equal to Seller’s prorated portion of such unpaid Apportioned Obligations, and the prepaid expenses of Sellers used to determine Closing Working Capital shall be increased by the amount of Buyer’s prorated portion of any Apportioned Obligations paid by Seller. On or before the one hundred eightieth (180th) day after the Closing, Buyer shall deliver a written notice to Seller setting forth the actual amount of the Apportioned Obligations paid as of the date of such notice. If the Seller’s actual net share of such Apportioned Obligations is greater than the estimated net amount used in determining the Closing Working Capital in accordance with Section 2.8 , then Seller shall pay cash equal to the amount of such difference to Buyer. If Seller’s net share of such Apportioned Obligations is less than the estimated net amount used in determining the Closing Working Capital in accordance with Section 2.8 , then Buyer shall pay cash equal to the amount of such difference to Seller. Notwithstanding anything to the contrary contained herein, in the event Seller or Buyer has paid amounts in respect of Apportioned Obligations pursuant to either of the two immediately preceding sentences, such party shall have no obligation or liability under Section 10.2 or Section 10.3 , as applicable, with respect to such amounts paid for such Apportioned Obligations. Seller shall be responsible for and shall pay all Taxes (including Property Taxes and Sales and Use Taxes) that are past due or have become due, together with any penalty or interest thereon, with respect to any of the Purchased Assets or the Business before the Closing Date. Notwithstanding anything to the contrary herein, the foregoing obligations of the Parties under this Section 2.9 shall be without duplication of any amounts taken into account in determining the Final Purchase Price Adjustment, and to the extent that the Current Liabilities contain Property Taxes or Sales or Use Taxes payable, no apportionment shall be made pursuant to this Section 2.9(b) with respect to the amount thereof reflected in the Current Liabilities.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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3.	Closing .

3.1 Closing . Unless otherwise mutually agreed in writing between Buyer and Seller, the closing for the transactions contemplated by this Agreement (the “ Closing ”) shall take place via electronic exchange of documents and signatures or at the offices of Morgan, Lewis & Bockius LLP in Philadelphia, Pennsylvania, at 10:00 a.m. (local time) within three Business Days following the day on which the last to be satisfied or waived of the conditions set forth in Section 9 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) shall be satisfied or waived in accordance with this Agreement. The date on which the Closing occurs is referred to herein as the “ Closing Date ”.

3.2 Seller Deliveries . On the Closing Date, Seller will deliver, or cause to be delivered, to Buyer the following:

(a) a counterpart signature page to each Transaction Document to which it is a party;

(b) a certificate executed by Seller’s corporate secretary, certifying as to (i) the articles of incorporation and bylaws of Seller, (ii) the resolutions of the board of directors of Seller and the sole shareholder of Seller authorizing the transactions contemplated hereby and by the Transaction Documents and the execution, delivery and performance by Seller of this Agreement and the Transaction Documents, and (iii) incumbency with respect to the officers executing documents or instruments on behalf of Seller;

(c) a certificate executed by Parent’s corporate secretary, certifying as to (i) the resolutions of the board of directors of Parent, as well as the Resolution, authorizing the transactions contemplated hereby and by the Transaction Documents and the execution, delivery and performance by Parent and Seller of this Agreement and by Seller of the Transaction Documents, and (ii) incumbency with respect to the officers executing documents or instruments on behalf of Parent;

(d) a letter addressed to Buyer, substantially in the form of Exhibit I , executed by counsel to Parent;

(e) releases and termination statements in respect of all Encumbrances, if any, encumbering the Purchased Assets except for the Permitted Encumbrances, all in form and substance reasonably satisfactory to Buyer;

(f) a good standing certificate for Seller, issued by the Secretary of State of the State of Delaware;

(g) a non-foreign affidavit, dated as of the Closing Date, sworn under penalty of perjury and in form and substance required under the Treasury Regulations issued pursuant to Section 1445 of the Code stating that Seller is not a “foreign person” as defined in Section 1445 of the Code;

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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(h) documents related to the transfer of the applicable Governmental Permits [*], as set forth in Section 3.2(h) of the Disclosure Schedule , executed by Seller; and

(i) all other agreements, certificates, consents, approvals and documentary evidence required to be delivered pursuant to Seller’s obligations hereunder.

3.3 Buyer Deliveries . On the Closing Date, Buyer will deliver, or cause to be delivered, the following:

(a) to Seller, the Initial Purchase Price (less the amount of the Deposit Amount released to Seller by the Depository Bank);

(b) to Seller, the Deposit Amount;

(d) a good standing certificate for Seller, issued by the Secretary of State of the State of Florida;

(e) a certificate executed by Buyer’s corporate secretary, certifying as to (i) the articles of incorporation and bylaws of Buyer, (ii) the resolutions of the board of directors of Buyer authorizing the transactions contemplated hereby and by the Transaction Documents and the execution, delivery and performance by Buyer of this Agreement and the Transaction Documents, and (iii) incumbency with respect to the officers executing documents or instruments on behalf of Buyer;

(f) documents related to the transfer of the applicable Governmental Permits [*], as set forth in Section 3.2(h) of the Disclosure Schedule , executed by Buyer where applicable; and

(g) to Seller, all agreements, certificates, consents, approvals and documentary evidence required to be delivered pursuant to Buyer’s obligations hereunder.


4.	Representations and Warranties of Seller and Parent .

Except as set forth in the Disclosure Schedule, Seller and Parent hereby jointly and severally represent and warrant to Buyer, as of the date hereof and as of the Closing, as follows:

4.1 Corporate Status . Parent is a public company with limited liability duly organized and validly existing under the Laws of the United Kingdom. Seller is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Delaware and is duly qualified or licensed to do business as a foreign corporation in each jurisdiction where its conduct of the Business would require it to be so qualified or licensed except where the failure to be so qualified or licensed would not have a Material Adverse Effect.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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4.2 Authorization . Seller has the requisite power and authority to (a) own the Purchased Assets, (b) carry on the Business, (c) execute and deliver the Transaction Documents, and (d) perform the transactions contemplated by this Agreement. Parent has the requisite power and authority to execute and deliver this Agreement and perform its obligations hereunder. The execution, delivery, and performance of the Transaction Documents and the consummation of the transactions contemplated thereby by Seller, and the execution, delivery and performance of this Agreement by Parent, have been duly authorized by all necessary corporate action. Assuming that each of the Transaction Documents constitutes a valid and binding obligation of the other parties thereto, each Transaction Document executed and delivered by Seller constitutes a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, and this Agreement constitutes a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, in each case except as may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or other Laws affecting the enforcement of creditors’ rights in general, and except that the enforceability of the Agreement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity).

4.3 Consents and Approvals . Except for any notices, filings, consents, or approvals specified in Section 4.3 of the Disclosure Schedule : (a) neither the execution and delivery by Seller of the Transaction Documents to which it is a party, nor the performance of the transactions by Seller to be performed by Seller pursuant to the Transaction Documents, requires any notice, filing, consent, renegotiation, or approval, constitutes a default, or causes any payment obligation or Encumbrance to arise under (i) any Law or Court Order to which Seller, the Contemplated Business or any Purchased Asset is subject, (ii) the certificate of incorporation or bylaws of Seller, (iii) any Governmental Permit or (iv) any Material Contract; and (b) neither the execution and delivery by Parent of this Agreement, nor the performance of the obligations by Parent to be performed by it pursuant to this Agreement, requires any notice, filing, consent, renegotiation, or approval under, or constitutes a default or causes an Encumbrance to arise under or with respect to, (i) any Law or Court Order to which Parent or any Purchased Asset is subject, (ii) the organizational documents of Parent, (iii) any Governmental Permit or (iv) any material contract or agreement to which Parent is a party or by which the Purchased Assets are bound.

4.4 Assets and Properties . Seller owns outright and has good, valid and marketable title to all of the Purchased Assets, free and clear of all Encumbrances, except Permitted Encumbrances. The Purchased Assets, together with any Excluded Assets specifically described in the Transition Services Agreement as necessary to provide the Transitional Services, the assets to be supplied pursuant to the Intellectual Property License Agreement and the Excluded Business Assets, constitute all of the assets, properties and rights Relating to the Business, and, subject to the receipt of the consents, authorizations, approvals and waivers specified in Section 4.3 of the Disclosure Schedule , are sufficient to enable Buyer to conduct the Business in the same manner after the Closing as the Business was conducted by Seller immediately prior to the Closing. All Purchased Assets constituting tangible personal property are and on the Closing Date shall be in operable condition.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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4.5 Financial Statements; Undisclosed Liabilities .

(a) Section 4.5(a) of the Disclosure Schedule sets forth true and complete copies of (i) the unaudited balance sheet, representing the portion of the Seller balance sheet determined using the Carve Out Method (“ Carve Out Method ”), described in Section 4.5(a) of the Disclosure Schedule , for identifying all or part of general ledger accounts which are Related to the Business and related income statement as of and for the year ended December 31, 2015 representing that portion of the Seller income statement which is Related to the Business and excluding adjustments for one-off items including those related to transactions costs and excluding any allocation of corporate expenses determined using the Carve Out Method described in Section 4.5(a) of the Disclosure Schedule and (ii) the unaudited balance sheet (the “ Balance Sheet ”), representing the portion of the Seller balance sheet determined using the Carve Out Method described in Section 4.5(a) of the Disclosure Schedule , for identifying all or part of general ledger accounts which are Related to the Business and related income statement as of and for the seven (7) month period ending July 31, 2016 (the “ Balance Sheet Date ”) representing that portion of the Seller income statement which is Related to the Business and excluding adjustments for one-off items including those related to transactions costs and excluding any allocation of corporate expenses determined using the Carve Out Method described in Section 4.5(a) of the Disclosure Schedule (clauses (i) and (ii) collectively, the “ Financial Statements ”). The Financial Statements (A) have been prepared in good faith from the books and records of Seller, (B) have been prepared in accordance with GAAP as to the underlying transactions (except as set forth in Section 4.5(a) of the Disclosure Schedule ) and (C) fairly present in all material respects, the assets and liabilities and results of operations of the Business as of the respective dates thereof and for the respective time periods covered, in each case, in accordance with GAAP as to the underlying transactions (except as set forth in Section 4.5(a) of the Disclosure Schedule ) consistently applied during the period covered thereby.

(b) The system of internal controls over financial reporting with respect to the Business is sufficient in all material respects to provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of the Financial Statements in accordance with GAAP, except as disclosed in Section 4.5(a) of the Disclosure Schedule , and to maintain accountability for the assets of the Business, and (ii) the books and records of the Business accurately and fairly reflect the transactions and dispositions of the assets of the Business.

(c) The Business has no liabilities, obligations or commitments that would be required by GAAP to be reflected on a balance sheet of the Business other than (i) Liabilities disclosed on Section 4.5(c) of the Disclosure Schedule , (ii) Liabilities disclosed in the Financial Statements, (iii) Liabilities for performance under Material Contracts and purchase commitments incurred in the ordinary course of business (excluding any Liability for breach, with or without the giving of notice or lapse of time, or both), or (iv) Current Liabilities incurred in the ordinary course of business since the Balance Sheet Date.

4.6 Taxes . Seller has filed all Tax Returns which are required to be filed by Seller or in respect of the Business or the Purchased Assets and all such Tax Returns are true, correct and complete in all respects. All Taxes due and owing by Seller (whether or not shown on a Tax Return) or in respect of the Business or the Purchased Assets have been fully paid or properly accrued. All Taxes which Seller is obligated to withhold from amounts owing to any employee,

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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creditor or third party have been fully paid or properly accrued. No deficiency or proposed adjustment which has not been paid or resolved for any amount of Tax has been asserted or assessed by any taxing authority against Seller or the Purchased Assets. Seller has not consented to extend the time in which any Tax may be assessed or collected by any taxing authority, which extension is still in effect and which would be binding on Buyer. There are no ongoing or pending Tax audits by any taxing authority against Seller or in respect of the Business or the Purchased Assets. Seller is not a party to or bound by, or has any obligation under any Tax allocation, sharing, indemnity or similar agreement or arrangement or is a member of any group of companies filing a consolidated, combined or unitary Tax return which would be binding on Buyer.

4.7 Real Property . Section 4.7 of the Disclosure Schedule accurately describes all leased real estate Relating to the Business (the “ Real Property ”), and lists any leases under which any such Real Property is possessed (the “ Real Estate Leases ”). In all material respects, the Real Property (a) is usable in the ordinary course of business, is in good operating condition and repair, subject to normal wear and tear and depreciation, and is free from material defects known to Seller and (b) conforms with any applicable Laws relating to its construction, use, and operation. To Seller’s knowledge, (i) each Real Estate Lease is in full force and effect and has not been assigned, modified, supplemented, or amended, (ii) neither landlord nor tenant under any such lease is in default under any such lease, and (iii) no circumstance or set of facts exist which would permit the landlord or tenant to terminate any such lease. Seller owns no Real Property that is Related to the Business.

4.8 Absence of Certain Changes or Events . Since the Balance Sheet Date, and except as set forth in Section 4.8 of the Disclosure Schedule , (a) there has not been, individually or in the aggregate, any material adverse change in the condition (financial or otherwise), operations or results of operations of the Business; (b) Seller has not (i) increased or modified the compensation or benefits payable or to become payable by Seller to any Transferred Employees other than in the ordinary course of business consistent with past practice or as required by contract or applicable law, or (ii) entered into any employment, severance, retention, change of control or termination agreement with any Transferred Employees other than in the ordinary course of business consistent with past practice; (c) Seller has not mortgaged, pledged or subjected to Encumbrances any assets, properties or rights of the Contemplated Business (other than Permitted Encumbrances); (d) Seller has not taken any action with respect to the Business which is outside the ordinary course of the business; (e) Seller has not sold, assigned or transferred any of Purchased Assets, other than sales of Inventory and those made in the ordinary course of business consistent with past practices; (f) Seller has not suffered any damage, destruction or loss, whether or not covered by insurance, materially adversely affecting the Purchased Assets or its other properties, assets and rights relating to the Business; (g) Seller has not made any material changes in its customary methods of operation of the Business, including practices and policies relating to accounting, purchasing, marketing, selling or payment of trade creditors; and (h) Seller has not agreed, whether in writing or otherwise, to do any of the foregoing.

4.9 Litigation .

(a) There is no Legal Proceeding pending or, to Seller’s knowledge, threatened against Seller or any of its Affiliates (i) affecting the Purchased Assets or the Contemplated Business, or (ii) that challenges or seeks to enjoin, alter or materially delay the consummation of

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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the transactions contemplated by this Agreement, or would reasonably be expected to have a material adverse effect on Seller’s ability to consummate the transactions contemplated by this Agreement.

(b) There are no audits or, to Seller’s knowledge, investigations by a Governmental Body or any similar actions, proceedings or disputes pending or, to Seller’s knowledge, threatened against or affecting any of the Purchased Assets or the Contemplated Business.

(c) There are no unpaid judgments, orders, decrees or awards of any kind against or affecting any of the Purchased Assets, the Business or, to Seller’s Knowledge, the Contemplated Business.

(d) Seller is not charged with or, to Seller’s knowledge, threatened with a charge or violation, nor to Seller’s knowledge is Seller under investigation, with respect to any alleged violation of any provision of any Law relating to any aspect of the Contemplated Business or the Purchased Assets.

(e) To the actual knowledge of Seller, no event has occurred within the twenty-four (24) months immediately preceding the date hereof, or circumstance exists as of the date hereof, that would reasonably be expected to give rise to or serve as a basis for the commencement of any Legal Proceeding involving the Purchased Assets or the operation of the Business.

(f) Section 4.9(f) of the Disclosure Schedule sets forth a complete and accurate list and brief description of any and all Legal Proceedings against Seller or any of its Affiliates involving the Purchased Assets or the Contemplated Business that were commenced or outstanding before any Governmental Body, or to Seller’s knowledge that were threatened against Seller or any of its Affiliates, at any time during the thirty-six (36) months prior to the date hereof.

4.10 Compliance with Law; Governmental Permits .

(a) Except as set forth on Section 4.10(a) of the Disclosure Schedule , Seller is and has been at all times in the last thirty-six (36) months in material compliance with all Laws relating to the Business or the ownership of the Purchased Assets, including those promulgated or issued by the United States Department of Agriculture (“ USDA ”), FDA, EPA, Department of Labor (“ DOL ”) and Occupational Safety & Health Administration (“ OSHA ”). Seller is not and has not been at any time in the last thirty-six (36) months in violation of any term of any judgment, writ, decree, injunction, settlement agreement or order entered by any court, arbitrator or Governmental Body and outstanding against Seller with respect to the Business or the Purchased Assets.

(b) Section 4.10(b) of the Disclosure Schedule sets forth a list of all material Governmental Permits required for the conduct of the Business under all Laws (other than such Governmental Permits required under any Environmental Laws or the FDCA). Except as set forth in Section 4.10(b) of the Disclosure Schedule , Seller holds and is in compliance in all material respects with all Governmental Permits required by it in connection with the conduct of the Business under all Laws. No suspension, cancellation, modification, revocation or nonrenewal of any Governmental Permit is pending or, to the knowledge of the Seller, threatened in writing. No

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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Governmental Permit is held in the name of any employee, officer, director, stockholder, agent or otherwise on behalf of Seller.

4.11 Material Contracts .

(a) Except as set forth in Section 4.11 of the Disclosure Schedule (each a “ Material Contract ” and collectively, the “ Material Contracts ”), as of the date hereof, Seller is not a party to any Contract or group of related Contracts with the same party for the sale of products or services with aggregate payments under any such Contract in excess of [*] per annum, other than purchase orders received in the ordinary course of business consistent with past practice, nor is it a party to any of the following Contracts Relating to the Contemplated Business:

(i) any Contract or group of related Contracts with the same party for the purchase of products or services with aggregate payments under any such Contract in excess of [*] per annum, other than purchase orders entered into in the ordinary course of business consistent with past practice;

(ii) any broker, distributor, dealer, manufacturer’s representative, franchise, agency, continuing sales or purchase, sales promotion, market research, marketing, consulting or advertising Contract with aggregate payments under any such Contract in excess of [*] per annum;

(iii) any collective bargaining agreement or Contract with any labor union;

(iv) any Contract for the employment of any officer, individual employee or other person on a full-time or consulting basis;

(v) any lease or agreement under which it is lessee of or permits any third party to hold or operate any property, real or personal, for which the annual rental exceeds [*];

(vi) any Contract with any Related Party of Seller;

(vii) any joint venture or partnership, merger, asset or stock purchase or divestiture Contract;

(viii) any hedging, futures, options or other derivative Contract;

(ix) any Contract for the sale or purchase of any real property;

(x) any Contract (A) pursuant to which a third party grants Seller the right to use any Intellectual Property that is material to the conduct of the Business (excluding off-the-shelf software) or (B) pursuant to which Seller grants to any third party the right to use any Intellectual Property included in the Purchased Assets, other than licenses granted to customers or suppliers in the ordinary course of business;

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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(xi) any Contract containing covenants that would restrict or limit in any material respect the ability of the Contemplated Business after the Closing to compete in any business or with any Person or in any geographic area;

(xii) any Contract with an exclusive supply or requirements obligation binding on the Business;

(xiii) any Contract for the sale of any material Purchased Asset or for the grant to any Person of any option, right of first refusal or preferential or similar right to purchase any such Purchased Assets; or

(xiv) any other Contract entered into outside the ordinary course of business that is material to the Contemplated Business.

(b) Prior to execution of this Agreement, Seller has made available to Buyer true, correct and complete copies of the written Material Contracts, including any and all amendments and modifications thereto or waivers of the terms thereof, and summaries of the terms of all oral Material Contracts. Each of the Material Contracts is in full force and effect and is legal, valid, binding and enforceable in accordance with its respective terms on Seller, and to Seller’s knowledge, on the other parties thereto, except as may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or other Laws affecting the enforcement of creditors’ rights in general, and except that the enforceability of the Material Contracts is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity). Except as described in Section 4.11 of the Disclosure Schedule , neither Seller nor, to the knowledge of Seller, any other party to any of the Material Contracts are in breach of, or in default under, any of the Material Contracts; and no event has occurred or failed to occur which (i) with the giving of notice or lapse of time, or both, would constitute a default by Seller or any other party to any of the Material Contracts thereunder or (ii) gives any other party to any of the Material Contracts the right to terminate such Material Contract. Except as described in Section 4.11 of the Disclosure Schedule , the transactions contemplated by this Agreement will not cause a default under, accelerate Seller’s obligations under or result in the termination of any of the Material Contracts. There are no negotiations pending nor, to Seller’s knowledge, threatened or requested with respect to, nor any outstanding rights to renegotiate, any Material Contracts.

4.12 Intellectual Property Matters .

(a) Section 4.12 of the Disclosure Schedule sets forth a correct and complete list of all (i) issued Patents and Patent applications, (ii) Trademark registrations and applications and material unregistered Trademarks and (iii) Copyright registrations and applications and material unregistered Copyrights, in each case included in the Seller Intellectual Property (other than (x) those Trademarks identified in the Excluded Business Assets or otherwise not included in the Purchased Assets and not subject to the Trademark License Agreement and (y) off-the-shelf software licensed by Seller) (collectively, the “ Registered Intellectual Property ”), and specifies for each such item whether such Registered Intellectual Property will be assigned or licensed to Buyer at the Closing. Except as set forth on Section 4.12 of the Disclosure Schedule (and except for Permitted Encumbrances), Seller is the sole and exclusive beneficial owner of all of the Registered

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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Intellectual Property, and all such Registered Intellectual Property included in the Seller-Owned Intellectual Property is subsisting, valid and, to Seller’s knowledge, enforceable.

(b) Except as set forth on Section 4.12 of the Disclosure Schedule :

(i) Seller owns, or has a valid right to use, all of the material Seller Intellectual Property necessary to conduct the Business as currently conducted, free and clear of all Encumbrances (other than Permitted Encumbrances).

(ii) Seller has not received any written claim from any other Person within the past 12 months that Seller in the conduct of the Business has infringed or misappropriated the Intellectual Property of any such other Person.

(iii) Seller is not currently infringing or misappropriating the Intellectual Property of any other Person; and to Seller’s knowledge, there is no infringement, misappropriation or such other conflict by any other Person involving the Seller-Owned Intellectual Property.

(iv) Each current employee, officer, contractor and consultant of Seller who has been involved in the development of material Seller-Owned Intellectual Property, has been an employee working in the scope of his or her employment or has executed an agreement that includes provisions transferring and/or acknowledging Seller’s ownership of Intellectual Property rights provisions.

(v) No current or former partner, director, stockholder, officer or employee of Seller will, after giving effect to the transactions contemplated hereby, own or retain any proprietary rights in any of the material Seller-Owned Intellectual Property.

4.13 Insurance . All insurance maintained by Seller on the Business is listed in Section 4.13 of the Disclosure Schedule (including insurer and policy number, policy limits and type of coverage). No notice of cancellation or termination has been received with respect to any material insurance policy with respect to the Business which was not replaced on substantially similar terms prior to the date of such cancellation. Set forth on Section 4.13 of the Disclosure Schedule is a true and complete list of all claims made against the insurance policies listed on such schedule during the twelve (12) months prior to the date hereof

4.14 Employees .

(a) Section 4.14 of the Disclosure Schedule sets forth a true, correct and complete list of the employees of the Seller who work primarily in the Business (collectively, the “ Business Employees ”), and their position, annual base wages or hourly rate of pay, annual rate of bonus potential (as a percentage of annual base pay), date of hire, exempt/non-exempt status and whether such individual has executed any non-disclosure, non-solicitation or non-competition agreement with Seller, copies of which agreements Seller has provided to Buyer prior to the date hereof Except as set forth in Section 4.14 of the Disclosure Schedule , Seller does not have any employment agreements with its Business Employees and all such employees are employed on an “at will” basis.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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(b) Seller is not a party to any collective bargaining agreement or letter of understanding with any labor union or organization with respect to the Business. There is no pending, or to Seller’s knowledge threatened, labor dispute, work slowdown, work stoppage, unfair labor practice charge or complaint, strike, administrative, arbitration or court proceeding or order between Seller and any present or former employees of the Business. To Seller’s knowledge, there have been no labor union organizing activities with respect to the Business within the last two years.

4.15 Employee Benefits .

(a) Each Employee Benefit Plan intended to qualify under Section 401(a) of the Code is the subject of a favorable determination letter (or, in the case of a prototype or volume submitter plan, an opinion letter on which Seller may rely) from the U.S. Internal Revenue Service as to its qualified status and, to the knowledge of Seller, no event has occurred and no condition exists that would be reasonably likely to result in the revocation of any such determination or opinion letter. Neither Seller nor any “ ERISA Affiliate ” (defined to include, with respect to Seller, any trade or business, whether or not incorporated, other than Seller, that has employees who are or have been at any date of determination occurring within the preceding six (6) years treated pursuant to Section 4001(a)(14) of ERISA or Section 414 of the Code as employees of a single employer that includes Seller) has maintained or contributed to, or has had an obligation to contribute to, any plan subject to Title IV of ERISA, or the minimum funding standards of Section 302 of ERISA or Section 412 of the Code, during its last six (6) full fiscal years.

(b) Multiple Employer Arrangements . Seller has had no obligation to contribute to or provide benefits pursuant to, or any other liability of any kind (whether fixed or contingent) with respect to, (i) a “multiple employer welfare arrangement” (within the meaning of Section 3(40) of ERISA), (ii) a “multiemployer plan” (within the meaning of Section 3(37) of ERISA), (iii) a “plan maintained by more than one employer” (within the meaning of Section 413(c) of the Code), or (iv) any common law theory of joint, dual or multiemployer liability.

4.16 Customers and Suppliers . Section 4.16 of the Disclosure Schedule specifies for the 12-month period ended June 30, 2016 (a) the names of the customers that were, in the aggregate, the ten largest customers in terms of dollar value of products or services, or both, sold by the Business and (b) the names of the suppliers that were, in the aggregate, the ten largest suppliers in terms of dollar value of products or services, or both, used by the Business. Since January 1, 2015 through the date hereof, Seller has not received any written notice indicating, and to the knowledge of Seller no customer set forth on Section 4.16 of the Disclosure Schedule has threatened, that a customer set forth on Section 4.16 of the Disclosure Schedule has ceased or substantially reduced, or will cease or substantially reduce, use of products or services of the Business, except for in connection with Contracts that will expire in the ordinary course in accordance with their terms. Since January 1, 2015 through the date hereof, Seller has not received any written notice indicating, and to the knowledge of Seller no supplier set forth on Section 4.16 of the Disclosure Schedule has threatened, that a supplier set forth on Section 4.16 of the Disclosure Schedule has ceased or substantially reduced, or will cease or substantially reduce, the supply of products or services to the Business, except in connection with Contracts that will expire in the ordinary course in accordance with their terms.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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4.17 Environmental and FDCA Matters . Except as set forth in Section 4.17 of the Disclosure Schedule :

(a) Seller is, and has been for the last five years, in compliance with all Environmental Laws and the FDCA applicable to (i) its operations related to the Business, (ii) the Purchased Assets, and (iii) the Real Property or the Real Estate Leases, except for any such liability that would not reasonably be expected to result in material liability to Seller or have a Material Adverse Effect on the operation of the Business.

(b) Seller has not during the past five years received written notice from any Governmental Body alleging Seller is or may be in violation of or has liability for investigatory, corrective or remedial obligations under Environmental Laws and the FDCA applicable to its operations related to the Business, the Purchased Assets, the Real Property or the Real Estate Leases except for any such violation or liability that would not reasonably be expected to result in material liability to Seller or have a Material Adverse Effect on the operation of the Business.

(c) Seller is not subject to any current written claim, order, directive or complaint asserting a remedial obligation or liability under Environmental Laws and the FDCA with respect to conditions at any of the real property related to the Business or from any real property related to the Business, nor, to Seller’s knowledge, do any circumstances exist which would reasonably be expected to result in such a claim, order, directive or complaint, other than any such claim, order, directive or complaint that would not reasonably be expected to result in material liability to Seller or have a Material Adverse Effect on the operation of the Business.

(d) Section 4.17(d) of the Disclosure Schedule sets forth a list of all material Governmental Permits possessed by Seller for the conduct of the Business under all Environmental Laws and the FDCA. Seller holds and is in compliance with all Governmental Permits required under Environmental Laws and the FDCA for (i) its operation at and occupancy of the real property related to the Business, and (ii) the manufacture, sale or distribution of concentrated floral preservative or produce wash, devices and other related instruments in connection with the Business, other than any such failure to hold or comply with any such Governmental Permits that would not reasonably be expected to result in material liability to Seller or have a Material Adverse Effect on the operation of the Business.

(e) Seller has provided or otherwise made available to Buyer any and all material environmental studies, audits, and site assessments conducted within the last five years in its possession or control with respect to the Purchased Assets or the real property related to the Business.

(f) To Seller’s knowledge, there have been no Releases of Hazardous Substances to, from, on, under, in or about any real property related to the Business, except for such Releases in compliance with Environmental Laws or that would not reasonably be expected to result in material liability to Seller or have a Material Adverse Effect on the operation of the Business.

The representations and warranties in this Section 4.17 are the sole and exclusive representations and warranties of Seller with respect to environmental matters, including any arising under

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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Environmental Laws, Governmental Permits issued under Environmental Laws, or relating to Hazardous Substances and the FDCA.

4.18 Finder’s Fees . Except as set forth on Section 4.18 of the Disclosure Schedule , whose fees and expenses are the sole responsibility of Seller, no Person retained by Seller or Parent or their respective Affiliates, officers, directors, employees or representatives is or will be entitled to any commission or finder’s or similar fee in connection with the transactions contemplated by this Agreement.

4.19 Accounts Receivable . On that date that is two (2) Business Days prior to the Closing Date, Seller shall deliver to Buyer a copy of Section 4.19 of the Disclosure Schedule , which shall be a true and complete aged list of all Accounts Receivable as of such delivery date, and all such Accounts Receivable listed thereon shall have arisen in the ordinary course of the Business and shall not be subject to any disputes or offsets other than adjustments to invoices in the ordinary course of business.

4.20 Inventory . On that date that is two (2) Business Days prior to the Closing Date, Seller shall deliver to Buyer a copy of Section 4.20 of the Disclosure Schedule , which shall be a true and complete list of all Inventory as of such delivery date. The finished goods included in Inventory reflected on the Estimated Closing Balance Sheet shall consist only of finished goods that are Saleable, and the raw materials and works in progress included in Inventory reflected on the Estimated Closing Balance Sheet shall consist only of raw materials and works in progress that are usable in the ordinary course of Business, in each case subject to the reserve therefor set forth on the Estimated Closing Balance Sheet. For purposes hereof, finished goods Inventory is “Saleable” only if it (including its packaging) is in the physical condition to be sold to customers in the ordinary course of the Business and in accordance with applicable government regulations, including applicable labeling requirements; provided, however, that “Saleable” does not include: (a) any item whose supplier rightfully notifies any of the Parties prior to the Closing Date that such item may not be distributed following the Closing Date; (b) any items that are, pursuant to industry or government standards, out-of-date; or (c) any item that has a defective or damaged label, package or case.

4.21 Certain Payments . Seller has not, nor, to the knowledge of Seller, any director, officer, employee or any other individual associated with or acting for or on behalf of Seller or any Affiliate of Seller, has directly or indirectly and in violation of Law knowingly made any contribution, gift, rebate, payoff influence payment, kickback or other payment to any Person, regardless of form, whether in money, property or services, (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured or (iii) to obtain special concessions or for special concessions already obtained.

4.22 Product Warranties; Product Liability; Recalls . All warranties applicable to any products made or sold by the Business are described in detail on Section 4.22 of the Disclosure Schedule . All generators subject to a manufacturer’s first year warranty that shall be in effect after September 30, 2016 are listed on Section 4.22 of the Disclosure Schedule , indicating for each such generator the specific location thereof and the month and year in which such warranty shall expire. Each product manufactured, sold or delivered by, or service performed by, the Business in the thirty six (36) months prior to the date hereof has complied with and conformed to all Laws,

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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contractual commitments and all applicable warranties in all material respects. Except for customary service of equipment in connection with extended warranty contracts and manufacturer warranties, there have been no material warranty occurrences or any material unreimbursed product replacement requests affecting the Business at any time during the thirty six (36) months prior to the date hereof Except as disclosed on Section 4.22 of the Disclosure Schedule , during the past three years, Seller has not received any written notice relating to any Legal Proceeding or notice of violation relating to or involving any service provided or any product designed, manufactured, serviced, produced, modified, distributed, shipped or sold by or on behalf of the Business resulting from an alleged defect in design, manufacture, materials or workmanship, performance, any alleged hazard or impurity, or any alleged failure to warn, or from any alleged breach of warranties or representations, or any alleged noncompliance with any applicable Laws, requirements, and specifications. There is no Legal Proceeding pending or, to the knowledge of Seller, threatened, recall or investigation of or other Legal Proceeding with respect to any product designed, manufactured, shipped, sold, marketed, distributed and/or otherwise introduced into the stream of commerce by or on behalf of the Business.

4.23 Arrangements with Related Parties . None of Parent, any of its Affiliates or any of their respective directors, officers or employees (a) is indebted to the Business, (b) is a party to any Contract or involved in any business arrangement or relationship with the Business (other than any employment or severance arrangements or other Employee Benefit Plan coverages entered into in the ordinary course of the Business), or (c) owns any property or right, tangible or intangible, which is used by the Contemplated Business.

4.24 Disclaimer of Warranties . EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN ANY WRITTEN CERTIFICATE PROVIDED TO BUYER AS CONTEMPLATED HEREIN IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, (A) NEITHER SELLER, ITS AFFILIATES, NOR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES MAKES OR HAVE MADE ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND, NATURE OR DESCRIPTION, EXPRESS OR IMPLIED, AND (B) SELLER (ON ITS BEHALF AND ON BEHALF OF ITS AFFILIATES AND ANY OF ITS OR ITS AFFILIATES’ OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES) EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES WITH RESPECT TO ANY PROJECTIONS OR FUTURE FINANCIAL OR OPERATIONAL PERFORMANCE OF THE BUSINESS OR AS TO THE CONDITION, VALUE OR QUALITY OF THE BUSINESS OR THE PURCHASED ASSETS, INCLUDING, ANY WARRANTY OF TITLE, MERCHANTABILITY, USAGE, SUITABILITY OR FITNESS OF ANY ASSET FOR A PARTICULAR PURPOSE WITH RESPECT TO SUCH ASSETS, ANY PART THEREOF, THE WORKMANSHIP THEREOF, AND THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT. THE REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN THIS AGREEMENT OR IN ANY WRITTEN CERTIFICATE PROVIDED TO BUYER AS CONTEMPLATED HEREIN IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY ARE THE ONLY REPRESENTATIONS AND WARRANTIES OF SELLER TO BUYER WITH RESPECT TO THE ASSETS AND LIABILITIES OF SELLER, THE BUSINESS, THE SUBJECT MATTER OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY BUYER SHALL RELY ON ITS OWN EXAMINATIONS AND INVESTIGATIONS THEREOF.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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5.	Representations and Warranties of Buyer .

Buyer hereby represents and warrants to Seller as of the date hereof and as of the Closing, as follows:

5.1 Organizational Status . Buyer is a corporation duly organized, validly existing, and in good standing under the Laws of its jurisdiction of its incorporation.

5.2 Authorization . Buyer has the requisite power and authority to execute and deliver the Transaction Documents to which it is a party and to perform the transactions contemplated by this Agreement. Such execution, delivery, and performance by Buyer has been duly authorized by all necessary corporate action. Assuming that each of the Transaction Documents constitutes a valid and binding obligation of the other parties thereto, each Transaction Document executed and delivered by Buyer has been duly executed and delivered by Buyer and constitutes a valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or other Laws affecting the enforcement of creditors’ rights in general, and except that the enforceability of the Agreement is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding at Law or in equity).

5.3 Consents and Approvals . Neither the execution and delivery by Buyer of the Transaction Documents to which it is a party, nor the performance of the transactions contemplated by this Agreement performed or to be performed by Buyer, require any filing, consent, or approval (other than the approvals that have already been obtained), constitute a default or cause any payment obligation to arise under (a) any Law or Court Order to which Buyer is subject, (b) the Charter Documents or bylaws of Buyer, or (c) any Contract, Governmental Permit, or other document to which Buyer is a party to or by which the properties or other assets of Buyer may be subject or bound.

5.4 Finder’s Fees . No Person retained by Buyer or its Affiliates, officers, directors, employees or representatives is or will be entitled to any commission or finder’s or similar fee in connection with the transactions contemplated by this Agreement.

5.5 Litigation and Claims . There is no Legal Proceeding pending or, to the knowledge of Buyer, threatened against Buyer, that (a) challenges or seeks to enjoin, alter or materially delay the consummation of the transactions contemplated by this Agreement, or (b) would reasonably be expected to have a material adverse effect on Buyer’s ability to consummate the transactions contemplated by this Agreement.

5.6 Sufficient Funds . Buyer at Closing will have sufficient funds to pay the Initial Purchase Price and to satisfy all of Buyer’s other payment obligations in connection with the consummation of the transactions contemplated hereby. Attached hereto as Exhibit G is a true and complete copy of the Debt Agreement (including the schedules thereto), and attached hereto as Exhibit H is a true and complete copy of that certain notice of satisfaction of conditions to funding (the “ Notice of Satisfaction ”), which Notice of Satisfaction contains in paragraph 7 certain enumerated events of default, representations and warranties and covenants of the Debt

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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Agreement that are not subject to such satisfaction and must be satisfied in order for funding under the Debt Agreement to occur (“ Identified Obligations ”). The Debt Agreement has not been amended, restated or otherwise modified or waived prior to the execution and delivery of this Agreement, and the commitments contained in the Debt Agreement have not been withdrawn, rescinded, amended, restated or otherwise modified in any respect prior to the execution and delivery of this Agreement. The Notice of Satisfaction has not been rescinded, cancelled or otherwise amended in any respect prior to the execution and delivery of this Agreement. As of the execution and delivery of this Agreement, the Debt Agreement is in full force and effect and constitutes the legal, valid and binding obligation of each of Buyer and the other parties thereto. There are no conditions precedent to the funding of the Financing pursuant to the Debt Agreement, other than as expressly set forth in the Debt Agreement. The Debt Agreement, together with Buyer’s available funds, will provide Buyer at the Closing with sufficient funds to pay all of Buyer’s obligations under this Agreement, including the payment of the Base Purchase Price, and all fees and expenses of Buyer expected to be incurred in connection therewith. As of the date of this Agreement, (i) Buyer has no indebtedness for borrowed money or security interests and other Encumbrances securing the same, other than the indebtedness, security interests and other Encumbrances resulting from Buyer’s execution and delivery of the Debt Agreement, and (ii) Buyer has deposited an amount not less than [*] (the “ Additional Equity Commitment Funds ”) in an account in Buyer’s name with the lender under the Debt Agreement for purposes of satisfying the condition contained in Section 4.18 of the Debt Agreement, which Additional Equity Commitment Funds are separate and in addition to the Deposit Amount. At the time of execution of the Debt Agreement and at the time of funding under the Debt Agreement, (x) each of the representations and warranties contained in the Identified Obligations shall have been true and correct in all respects and, to the actual knowledge of Buyer, no event has occurred within the twenty-four (24) months immediately preceding the date hereof, or circumstance exists as of the date hereof, that would reasonably be expected to give rise to a breach of such representations and warranties, (y) Buyer shall have complied in all respects with each covenant contained in the Identified Obligations and (z) none of the events of default contained in the Identified Obligations shall have occurred.


6.	Covenants of Seller and Parent .

6.1 Compliance with AIM Rules . Seller and Parent shall take such reasonable steps as may be necessary or appropriate to ensure that in accordance with Rule 15 of the AIM Rules:

(a) the Circular is posted to shareholders of Parent promptly (but in any event within three Business Days) after the date of this Agreement;

(b) the statements related to Buyer contained in the Circular shall be in mutually agreeable form;

(c) the General Meeting is duly convened (to consider the Resolution) for the date that is not less than 14 clear days after the date the Circular is posted (or the next Business Day if that day is not a Business Day); and

(d) the Announcement is made by Parent in accordance with Rule 15 of the AIM Rules via a Regulatory Information Service on the day following the date of this Agreement; provided that it is a day (other than a Saturday or Sunday) when banks are open for business in the City of London.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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6.2 Seller Transitional Services . Commencing on the Closing Date, Seller shall provide or cause to be provided to the Business the services set forth in the Transition Services Agreement (the “ Transitional Services ”), in accordance with the terms thereof. Buyer acknowledges that, unless otherwise agreed in writing by the Parties, any services, other than the Transitional Services, provided before the Closing to the Business either by Seller or any of its Affiliates, or on behalf of Seller or any of its Affiliates, will not be provided to Buyer or the Business after the Closing.


7.	Covenants of Buyer .

7.1 Certain Taxes . All transfer, documentary, sales, use recording, value added, goods and services, stamp, registration, and all other such Taxes and fees incurred in connection with this Agreement shall be paid by Buyer when due, and Buyer will, at its own expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration, and all other Taxes and fees, and if required by applicable Law, Seller will, and will cause its Affiliates to, join in the execution of any such Tax Returns and other documentation; provided , however , Seller shall reimburse Buyer for fifty percent (50%) of any such Taxes within five (5) Business Days of Buyer providing written evidence thereof.

7.2 Financing . Subject to the satisfaction at or prior to the Closing Date of each of the conditions set forth in Sections 9.1 and 9.2 of this Agreement, Buyer shall take all actions as may be necessary under the Debt Agreement to consummate the Financing. Prior to the Closing, Buyer (i) shall not incur any indebtedness for borrowed money or Encumbrance except as contemplated or permitted by the Debt Agreement, and (ii) shall not withdraw the Additional Equity Commitment Funds for any purpose other than in connection with satisfying the condition in Section 4.18 of the Debt Agreement. Prior to the Closing, Buyer (i) shall not enter into, without Seller’s prior written consent, any amendment, modification or supplement to the Debt Agreement that would have the effect of amending, modifying or supplementing any of the Identified Obligations and (ii) shall take no actions that would reasonably be expected to cause (A) any of the representations and warranties contained in the Identified Obligations to not be true and correct in all respects, (B) a breach of any of its covenants contained in the Identified Obligations, or (C) a Default (as defined in the Debt Agreement) contained in the Identified Obligations to occur.

7.3 Investigation and Evaluation . Buyer acknowledges and agrees that (a) Buyer is fully capable of evaluating the adequacy and accuracy of the information and material obtained by Buyer in the course of such investigations, and (b) Buyer has not relied on Seller or Parent with respect to any matter in connection with Buyer’s evaluation of the Contemplated Business, the Purchased Assets, and the Assumed Liabilities, other than the representations and warranties of Seller specifically set forth in Section 4 .


8.	Additional Covenants .

8.1 Certain Covenants .

(a) Notices and Consents . From the date hereof until the earliest to occur of the termination of this Agreement, or (ii) nine (9) months following the Closing Date, Seller will give any notices to, make any filings with, and use all commercially reasonable efforts to obtain on a timely basis all authorizations, registrations, consents and approvals of Governmental Bodies and

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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third parties in connection with the matters referred to in Section 4.3 and Section 4.17 of the Disclosure Schedule ; provided , however , that Seller shall not be required to agree to any financial, operational or other concessions or commitments as a condition to obtaining any such authorizations, consents or approvals. Each Party shall cooperate in all reasonable respects with the other Party related to the foregoing and each Party shall bear its own expenses in connection therewith.

(b) Operation of Business . From the date hereof until the Closing Date, except as contemplated by this Agreement, as set forth in Section 8.1(b) of the Disclosure Schedule or as required by Law, or unless Buyer shall otherwise agree in writing, Seller shall conduct the Business only in the ordinary course, consistent with past practice, and shall use commercially reasonable efforts to (i) preserve intact the Contemplated Business in all material respects, (ii) maintain in full force and effect its existing policies of insurance with respect to the Business, and (iii) cause the Contemplated Business to preserve its present relationships with, and to maintain the goodwill of, the Transferred Employees, suppliers, customers, lessors and other persons that have significant business relations with the Contemplated Business. Without limiting the generality of the foregoing, unless this Agreement expressly permits or requires otherwise, Seller will not, without the prior written consent of Buyer (which consent will not be unreasonably withheld or delayed):

(i) sell, transfer or dispose of any material assets of the Contemplated Business, except for dispositions and consumption of inventory, consumption of supplies and other personal property in the ordinary course of business consistent with past practice, including the installation of concentrate delivery systems for new customers utilizing assets and inventory of the Business;

(ii) enter into any Contract that, if entered into prior to the date of this Agreement, would be required to be listed as a Material Contract in Section 4.11 of the Disclosure Schedule , other than customer and vendor orders entered into in the ordinary course of business of the Business consistent with past practice;

(iii) make or authorize any capital expenditures in the aggregate in excess of [*], other than in the ordinary course of business or in connection with the transfer of assets to a contract manufacturing organization;

(iv) incur any material obligation or Liability relating to the Purchased Assets or the operation of the Business except in the ordinary course of business consistent with past practice;

(v) fail to pay or satisfy by its due date for payment (or within the normal payment terms consistent with historical practice) or performance any obligation or Liability arising from the operation of the Business, other than liabilities being contested in good faith and for which adequate reserves have been provided;

(vi) with respect to any Business Employees, except for changes that are made in the ordinary course of business and consistent with past practice, (x) adopt, enter into, terminate, amend, extend or renew any employment, severance, retention, change of control,

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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consulting agreement or similar Contract, or any collective bargaining agreement or similar Contract with a labor organization or similar organization, or amend any Employee Benefit Plan, or (y) increase such Business Employee’s compensation, including wages, commission, salary, bonus or other incentive opportunity, or fringe benefits;

(vii) take any action except in the ordinary course of the Business and in a manner consistent with past practice with respect to its methods of management, purchasing, distribution, marketing, accounting or operating (or practices relating to payment of trade accounts or to other payments or collection of Accounts Receivable); or

(viii) commit to do any of the foregoing.

(c) Notice of Developments . Seller shall promptly notify Buyer of any developments pertaining to the Purchased Assets or the Business that would reasonably be expected to result in a breach or inaccuracy of any representation or warranty of Seller in this Agreement, to the extent that any such breach or inaccuracy would be reasonably expected to have a Material Adverse Effect.

(d) Access to Books, Records, and Employees . Subject to the terms of the Confidentiality Agreement, from and after the date hereof until the Closing (or earlier termination of this Agreement), upon reasonable prior notice, Seller and its employees, agents and representatives shall provide to Buyer, its employees, agents, counsel, accountants and financial consultants reasonable access during normal business hours to the offices, properties, key personnel, records, files, material suppliers and other documents and information of or relating to the Purchased Assets or the Business as Buyer may reasonably request, provided that (i) such access shall not unduly interfere with Seller’s operations (ii) shall only be for the purpose of preparing for the transition of the Business to Buyer or spot checking Inventory for purposes of the preparation and review of calculations of Closing Working Capital, (iii) shall not require the disclosure of any matter or information (including trade secrets and know-how) that Seller reasonably determines to be of a proprietary or highly confidential nature regarding the formulation of the concentrate products manufactured and sold by the Business or key customer strategies, and (iv) Buyer shall not contact Seller’s suppliers or employees (other than Tom Daniel) without Seller’s written consent and such contact shall be coordinated by Seller or its authorized representatives in a manner reasonably designed to maintain the confidentiality of the transactions contemplated by this Agreement.

8.2 Employees . Buyer shall offer employment to all Business Employees set forth on Section 8.2 of the Disclosure Schedule , and Seller shall terminate the employment of all such Business Employees, each effective as of the Closing Date. All eligible Business Employees who accept Buyer’s offer of employment are herein referred to as “ Transferred Employees. ” Buyer’s employment of the Transferred Employees shall be on substantially similar salary or wage level (including annual incentive compensation and commission) as applicable to such employees immediately before Closing (except that overtime shall only be paid in accordance with the then current policies of Buyer) and on terms and conditions (including participation in benefit plans) that are substantially similar to those provided by Buyer to its employees of like rank and job title.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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8.3 Public Announcements . The Parties shall consult with each other before issuing any press release or making any public statement with respect to this Agreement and the transactions contemplated by this Agreement and, except as may be required by applicable Law, neither Party or their representatives shall issue any such press release or make any such public statement without the prior written consent of the other Party. For the avoidance of doubt, Seller and its Affiliates may make any such public announcements or disclosures as are required by applicable AIM Rules or regulations of a national securities exchange, as determined upon advice of legal counsel or other outside regulatory advisors (including AIM nominated advisors), without the consent of Buyer.

8.4 Cooperation on Tax Matters .

(a) Buyer and Seller shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns and any audit, Litigation or other proceeding with respect to Taxes. Such cooperation (i) shall include the retention and (upon the other Party’s request) the provision of records and information which are reasonably relevant to any such audit, Litigation or other proceeding and making employees available on a reasonable and mutually convenient basis to provide additional information and explanation of any material provided hereunder and (ii) shall be for a period not to exceed the statute of limitations with respect to the Tax Return or audit, Litigation or other proceeding to which such requested cooperation relates.

(b) Buyer and Seller shall, upon request, use their commercially reasonable best efforts to obtain any certificate or other document from any Governmental Body or any other Person as may be necessary to mitigate, reduce, or eliminate any Tax that could be imposed upon the other Party or its Affiliates with respect to the transactions contemplated by this Agreement.

8.5 Expenses . Except as otherwise provided herein, the Parties shall each pay all of their respective legal, accounting, and other expenses incurred by such Party in connection with the transactions contemplated by this Agreement.

8.6 Bulk Sales Laws . Buyer and Seller hereby waive compliance by Buyer and Seller with the bulk sales Law and any other similar Laws in any applicable jurisdiction in respect of the transactions contemplated by this Agreement.

8.7 Restrictive Covenants .

(a) Nature of Covenants . The covenants in this Section 8.7 are a material inducement to Buyer to consummate the transactions contemplated in this Agreement, and the amounts payable to Seller under this Agreement are in partial consideration for such covenants. The parties hereto acknowledge and agree that the covenants contained herein are designed to protect the legitimate business interests of Buyer and its Affiliates in the assets being acquired. The parties also acknowledge and agree that (i) the types and periods of restriction imposed in this Section 8.7 are fair and reasonable and are required in order to protect and maintain the Intellectual Property being acquired and other legitimate business interests of Buyer and its Affiliates, and goodwill associated with the Contemplated Business, and (ii) the time, scope, geographic area, and other provisions of this Section 8.7 have been specifically negotiated by sophisticated commercial

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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parties, represented by legal counsel, and are integral parts of the transactions contemplated by this Agreement.

(b) Certain Definitions . For purposes of this Section 8.7 :

(i) “ Competing Business ” means any Person engaged in a business that is competitive with or the same as all or any part of the Contemplated Business.

(ii) “ Confidential Information ” means information (other than information that is a Trade Secret) of Seller or its Affiliates related solely to the Contemplated Business, or information of Buyer or any of its Affiliates, in each case that is not generally known or available to the public or competitors in the trade.

(iii) “ Noncompetition Period ” means [*] from and after the Closing Date.

(iv) “ Territory ” means the United States of America and Canada.

(v) “ Trade Secrets ” means information of Seller or its Affiliates related solely to the Contemplated Business, or information of Buyer or any of its Affiliates, in each case that is not generally known or available to the public or competitors in the trade and that (A) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality and from which Buyer or any of its Affiliates derives economic value from the fact that the information is not generally known to other Persons who can obtain economic value from its disclosure or use or (B) is treated as a trade secret under applicable Law. Trade Secrets may include technical or non-technical data, compilations, programs and methods, drawings, financial data, research, pricing, information as to sales representatives and suppliers, lists of actual customers and potential customers, sales reports, service reports, price lists and methods and procedures relating to products and services provided that such information meets the definition set forth in the immediately preceding sentence.

(i) Seller, Parent and their respective employees and contractors have been entrusted with the knowledge and possession of Trade Secrets and Confidential Information, and the parties hereto agree that by virtue of such Persons’ knowledge of the Contemplated Business, Buyer and its Affiliates may suffer material loss and irreparable injury if Seller or Parent were to disclose or use Trade Secrets or Confidential Information in contravention of this Agreement.

(ii) Neither Seller nor Parent shall at any time communicate or disclose to any Person other than Buyer and its Affiliates, or use for either Seller’s or Parent’s benefit or for the benefit of any Person other than Buyer and its Affiliates, directly or indirectly, any Trade Secrets or Confidential Information; provided, however, that Seller and Parent may disclose such information (A) that is generally known to the public or known by or available to competitors in the trade (other than by virtue of any disclosure by either Seller or Parent in violation of this Agreement), (B) as may be required to enforce rights of Seller or Parent under this Agreement, (C) as may be required in response to any summons or subpoena or in connection with any

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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litigation, or any administrative or other legal proceeding, or (D) as may be required in order to comply with any Law applicable to Seller, Parent or Buyer; and provided further that Seller and Parent shall give Buyer reasonable prior notice, to the extent Seller or Parent has notice sufficiently in advance, of any disclosure under the immediately preceding clauses (B), (C) or (D) in order to permit Buyer or its Affiliates reasonable opportunity to seek an appropriate protective order.

(iii) For purposes of this Section 8.7(c) , the prohibition against the disclosure by Seller or Parent of Confidential Information only shall end at the expiration of the Noncompetition Period, and the prohibition against the disclosure by Seller or Parent of Trade Secrets shall end upon the later of (x) the date on which such information loses its character as a Trade Secret through no fault or action of either Seller Parent (or any Affiliate of Seller or Parent or direct or indirect owner of Seller or Parent or any such Affiliate of Seller or Parent) or (y) the expiration of the Noncompetition Period.

(d) Noncompetition; Non-Solicitation of Customers . During the Noncompetition Period, neither Seller nor Parent shall, and they shall take all action reasonably necessary to ensure that none of their Affiliates shall, unless acting in accordance with Buyer’s prior written consent, directly or indirectly, for their own benefit or on behalf of others:

(i) with respect to the Contemplated Business, but excluding any other matters, own, manage, operate, join, control, finance or participate in the ownership, management, operation, control or financing of, or participate as an investor, owner, partner, manager, joint venturer or otherwise with, or permit its name to be used by or in connection with, any Competing Business anywhere in the Territory; or

(ii) call on or solicit (with respect to the Contemplated Business, but excluding any other matters) or attempt to divert the sales of any Person who or which is at that time, or has been within [*] prior to the Closing Date, a customer of the Contemplated Business.

Notwithstanding the above, the covenants in this Section 8.7(d) shall not be deemed to prohibit Seller or Parent from acquiring not more than five percent of the outstanding voting capital stock of a competing business, whose stock is traded on a national securities exchange or through the automated quotation system of a registered securities association.

(e) Non-Solicitation of Employees .

(i) By Seller or Parent . From the Closing Date until the date [*] thereafter, neither Seller nor Parent shall, and Seller and Parent shall take all action reasonably necessary to ensure that none of their Affiliates shall, unless acting in accordance with Buyer’s prior written consent, directly or indirectly through any Person or contractual arrangement, on their own behalf or on behalf of others, solicit, recruit or hire any person who at any time on or after the Closing Date is a Transferred Employee; provided that the foregoing shall not prohibit (A) a general solicitation to the public of general advertising or similar methods of solicitation by search firms not specifically directed at Business Employees, (B) Seller or Parent from soliciting, recruiting or hiring

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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any Business Employee who has ceased to be employed or retained by Buyer or any of its Affiliates for at least [*] or (C) Seller or Parent from soliciting, recruiting or hiring any Business Employee whose employment has been terminated by Buyer or any of its Affiliates without cause.

(ii) By Buyer . From the Closing Date until the date [*] thereafter, Buyer shall not, and shall take all action reasonably necessary to ensure that none of its Affiliates shall, unless acting in accordance with Seller’s prior written consent, directly or indirectly through any Person or contractual arrangement, on their own behalf or on behalf of others, solicit, recruit or hire any person who at any time on or after the Closing Date is an employee of Seller or its Affiliates; provided that the foregoing shall not prohibit (A) a general solicitation to the public of general advertising or similar methods of solicitation by search firms not specifically directed at employees of Seller or its Affiliates, (B) Buyer from soliciting, recruiting or hiring any employee of Seller or its Affiliates who has ceased to be employed or retained by Seller or any of its Affiliates for at least [*] or (C) Buyer from soliciting, recruiting or hiring any employee of Seller or its Affiliates whose employment has been terminated by Seller or any of its Affiliates without cause.

(f) Remedies . Each of Seller and Parent, on the one hand, and Buyer, on the other hand, acknowledges that (i) any violation of this Section 8.7 will result in irreparable injury to the other Party, and that damages at law would not be reasonable or adequate compensation to the other Party for a violation of this Section 8.7 and (ii) each Party shall be entitled to seek to have the provisions of this Section 8.7 specifically enforced by preliminary and permanent injunctive relief and such ancillary remedies of an equitable nature as a court may deem appropriate, without the necessity of proving “irreparable harm,” and shall be entitled to recover its reasonable attorney’s fees incurred in connection therewith. Such equitable relief shall be in addition to, and the availability of such equitable relief shall not serve to preclude, any legal remedies that might be available to the Parties. In addition to any other form of equitable or legal relief, in the event that a Party or Parent breaches any of the covenants set forth in this Section 8.7 , then the Noncompetition Period with respect to such Party or Parent (and if it is Seller or Parent that has breached, then also with respect to the other) shall be tolled and automatically extended for the period of the breach so that the benefit of the bargain negotiated by the Party suffering such breach may be preserved. Each provision of this Section 8.7 shall be enforceable by the Party receiving the benefit thereof, or any successor or assignee of such Party, against the Party and/or Parent making such covenant, notwithstanding any claim or cause of action asserted by the Party and/or Parent making such covenant against the Party receiving the benefit thereof or any successor of such Party. The existence of any claim, demand, action or cause of action of a Party and/or Parent against the Party benefiting from a covenant contained in this Section 8.7 shall not constitute a defense to the enforcement of any of the covenants contained in this Section 8.7 .

(g) Reformation by Court . In the event that the provisions of this Section 8.7 should ever be deemed to exceed the time, geographic, product or any other limitations permitted by applicable law, then such provisions shall be deemed reformed to the maximum extent permitted by applicable Law.

(h) Jurisdiction . Each of Seller and Parent intends to and does hereby confer jurisdiction to enforce the covenants set forth in this Section 8.7 upon the courts of any jurisdiction within the geographical scope of such covenants. In addition to Section 11.3 and not in limitation thereof, if the courts of any one or more of such jurisdictions hold such covenants unenforceable

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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in whole or in part, it is the intention of the parties hereto that such determination not bar or in any way adversely affect the right of Buyer to seek equitable relief and remedies hereunder in courts of any other jurisdiction as to breaches or violations of this Section 8.7 , such covenants being, for this purpose, severable into diverse and independent covenants.

8.8 Use of Name .

(a) Definitions . For purposes of this Section 8.8 , the following capitalized terms shall have the following meanings:

(i) “ Branded Labels and Packaging Supply ” means the supply of labels and packaging for use with [*] and/or [*] concentrate to be manufactured, sold and distributed to customers of the Business in the ordinary course that include or display one or more of the PuriCore Marks and are included in the Purchased Assets hereunder.

(ii) “ Finished Equipment Inventory ” means on-site generation and other equipment assembled but still in inventory and not yet sold or delivered to customers of the Business.

(iii) “ On-Site Equipment ” means on-site generation devices and other equipment previously sold or leased and delivered prior to the Closing Date to customers of the Business.

(iv) “ PuriCore Marks ” means the name “PuriCore” and/or any service marks, trade names, identifying symbols, logos, emblems, signs, insignia, or other Trademarks related thereto.

(v) “ Replacement Period ” means the period beginning on the Closing Date and ending on, as applicable: (A) with respect to Finished Equipment Inventory and related packaging, the date on which the associated equipment is shipped for distribution to the customer; (B) with respect to On-Site Equipment, the first date following the Closing on which Buyer performs on-site service or repair with respect to such equipment.

(b) Finished Concentrate Labels and Packaging . Seller and Parent hereby acknowledge and agree that labels affixed to finished inventories of [*] and [*] concentrate not yet sold or delivered to customers of the Business, and/or the materials in which such concentrate is packaged, may include or display one or more of the PuriCore Marks, and hereby grant Buyer the right to use such PuriCore Marks for such limited purpose until Buyer’s inventory of such concentrate supplies are fully depleted.

(c) Finished Equipment Labels and Packaging . Seller and Parent hereby acknowledge and agree that labels affixed to Finished Equipment Inventory, and/or the materials in which such Finished Equipment Inventory is packaged, may include or display one or more of the PuriCore Marks, and hereby grant Buyer the right to use such PuriCore Marks for such limited purpose during the applicable Replacement Period with respect thereto. Buyer agrees that it shall remove, strike over or otherwise obliterate all such PuriCore Marks from such Finished Equipment

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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Inventory, labels and/or packaging materials on or prior to the expiration of the applicable Replacement Period.

(d) On-Site Equipment Labels . Seller and Parent hereby acknowledge and agree that labels affixed to On-Site Equipment may include or display one or more of the PuriCore Marks, and hereby grant Buyer all rights necessary for the use of such PuriCore Marks for such limited purpose during the applicable Replacement Period with respect thereto. Buyer agrees that it shall remove, strike over or otherwise obliterate all such PuriCore Marks from such labels on or prior to the expiration of the applicable Replacement Period.

(e) Branded Labels and Packaging Supply . Seller and Parent hereby agree that Buyer may use the Branded Labels and Packaging Supply to affix labels to and package concentrate manufactured, sold and distributed to customers of the Business from and after the Closing Date until such time as the Branded Labels and Packaging Supply is fully depleted, and hereby grant Buyer all rights necessary for the use of such PuriCore Marks for such limited purpose.

(f) No Other Rights . Buyer agrees that it shall have no right to use of the PuriCore Marks except as expressly set forth in this Section 8.8 , and will not at any time hold itself out as having any affiliation with Seller or any of its Affiliates.

8.9 Wrong Pockets . To the extent that it is determined following the Closing that (i) any asset intended hereunder to be a Purchased Asset and to be transferred to Buyer at the Closing was not so transferred, such asset shall promptly be transferred in accordance with the terms of this Agreement, or (ii) any asset intended hereunder to have been an Excluded Asset or otherwise intended not to transfer to Buyer at the Closing was so transferred, Buyer shall promptly re-transfer such asset to Seller. Seller and Buyer shall each attempt in good faith to direct or deliver to the other all incoming mail, telephone or other communications or deliveries which are not received by the appropriate party (that is, Buyer in the case of matters or materials pertaining to the Business or the Purchased Assets or Seller in the case of matters or materials pertaining to any other business of Seller or to Excluded Assets or Excluded Liabilities).

8.10 Access . From and after the Closing, each Party shall, and shall cause its Affiliates to, provide the other Party and its agents with reasonable access (for the purpose of examining and copying), during normal business hours and upon reasonable advance notice, to the books and records which relate to the Purchased Assets and the Business, and reasonable access, during normal business hours and upon reasonable advance notice, to employees of the other Party and its Affiliates for the purpose of understanding such books and records. Unless otherwise consented to in writing by Seller, Buyer shall not, and shall cause its Affiliates not to, for a period of [*] following the Closing Date, destroy, alter or otherwise dispose of any of the books and records which relate to the Purchased Assets or the Contemplated Business without first offering in writing to surrender to Seller such books and records or any portion thereof which Buyer intends to destroy, alter or dispose of. Unless otherwise consented to in writing by Buyer, Seller shall not, and shall cause its Affiliates not to, for a period of [*] following the Closing Date, destroy, alter or otherwise dispose of any records relating to the Purchased Assets or the Business without first offering in writing to surrender to Buyer such books and records or any portion thereof which Seller intends to destroy, alter or dispose of. Notwithstanding anything in this Agreement to the

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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contrary, but subject to the terms and conditions of Section 8.7 and the Confidentiality Agreement, Seller shall be permitted to retain a copy of all books and records related to the Purchased Assets and the Business for archival purposes.

8.11 No Negotiations . Seller and Parent covenant and agree that, subject to the termination provisions contained herein, from and after the date hereof, neither Seller nor Parent, nor any of their respective officers or directors, nor anyone acting on behalf of Seller, Parent or such Persons, shall, directly or indirectly, solicit, engage in discussions or negotiations with, or provide any information to, any Person or group (other than Buyer or its representatives) concerning any merger, sale of substantial assets, purchase or sale of shares of capital stock or other equity or interests or similar transaction involving the Contemplated Business (“ Acquisition Proposal ”). Seller and Parent hereby represent and warrant that they are not engaged in any Acquisition Proposal activities and are not parties to or bound by any agreement or understanding with respect to an Acquisition Proposal other than the sale to Buyer contemplated hereby.

8.12 [*]

8.13 Transfer of Purchased Assets . Seller shall bear all responsibility and costs associated with [*]. Buyer shall bear all other responsibility and costs associated with the transfer of any tangible personal property (including all other [*] other than the one to be transferred by Seller as described in clause (b) of the first sentence of this Section 8.13 ) included in the Purchased Assets (except for such assets required for Seller to perform under the Transition Services Agreement) from Seller’s premises at or following the Closing to another premises including risk of loss, packaging, transportation, shipping and labor associated therewith. Buyer shall retrieve all tangible personal property included in the Purchased Assets (except for the one [*] to be transferred by Seller, which shall be transferred as contemplated described in clause (b) of the first sentence of this Section 8.13 , and such assets required for Seller to perform under the Transition Services Agreement, which shall be governed by the final sentence of this Section 8.13 ) from Seller’s premises within 60 days of the Closing Date, and any such item of tangible personal property not retrieved by Buyer within such 60-day period may be disposed of by Seller, at Buyer’s expense. Buyer shall retrieve all tangible personal property included in the Purchased Assets and required for Seller to perform under the Transition Services Agreement from Seller’s premises within ten (10) days from the date of expiration or earlier termination of the Transition Services Agreement, and any such item of tangible personal property not retrieved by Buyer within such ten-day period may be disposed of by Seller, at Buyer’s expense.

8.14 [*]


9.	Conditions to Closing .

9.1 Conditions to Each Party’s Obligations to Effect the Closing . The respective obligations of each Party to effect the Closing are subject to the satisfaction or waiver at or prior to the Closing Date of each of the following conditions:

(a) No Injunction or Challenge . No court or other Governmental Body of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary or permanent) that is in effect which restrains, enjoins or otherwise prohibits the consummation of the transactions contemplated by this Agreement. There shall not

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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be pending any other Legal Proceedings in which it is sought to restrain or prohibit the sale by Seller or the acquisition by Buyer of the Purchased Assets pursuant to the transactions contemplated by this Agreement or the ability of Buyer or any of its Affiliates to own and operate the Purchased Assets.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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(b) Passing of the Resolution . The Resolution (without material amendment) shall have passed on the date of the General Meeting, as set forth in the Circular.

9.2 Conditions to Obligations of Buyer to Effect the Closing . The obligations of Buyer to effect the Closing are also subject to the satisfaction or waiver by Buyer at or prior to the Closing Date of each of the following conditions:

(a) Representations and Warranties . The representations and warranties of Seller and Parent set forth in this Agreement shall have been true and correct (disregarding all materiality or similar qualifiers contained therein) at and as of the date hereof, and shall be true and correct (disregarding all materiality or similar qualifiers contained therein) at and as of the Closing Date as if made at and as of the Closing Date, except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct (disregarding all materiality or similar qualifiers contained therein) as of such earlier date, except, in each case, to the extent that any such failures to be so true and correct, whether individually or in the aggregate, have not had, and would not be reasonably expected have, a Material Adverse Effect, and Buyer shall have received certificates signed on behalf of each of Seller and Parent by an executive officer thereof to such effect.

(b) Performance of Obligations of Seller . Seller shall have performed in all material respects all obligations and covenants required to be performed by it under this Agreement at or prior to the Closing Date, and Buyer shall have received a certificate signed on behalf of Seller by an executive officer of Seller to such effect.

(c) No Material Adverse Effect . There shall not have occurred a Material Adverse Effect since the date of this Agreement.

(d) Other Approvals . Seller shall have obtained and delivered to Buyer such consents, authorizations, approvals or waivers as set forth on Section 9.2(d) of the Disclosure Schedule , and all of such consents, authorizations, approvals and waivers shall remain in full force and effect at and as of the Closing.

(e) Deliveries . Seller shall have executed (where applicable) and delivered to Buyer each of the items required by Section 3.2 .

9.3 Conditions to Obligations of Seller to Effect the Closing . The obligations of Seller to effect the Closing are also subject to the satisfaction or waiver by Buyer at or prior to the Closing Date of each of the following conditions:

(a) Representations and Warranties . The representations and warranties of Buyer set forth in this Agreement shall have been true and correct (disregarding all materiality or similar qualifiers contained therein) at and as of the date hereof, and shall be true and correct (disregarding all materiality or similar qualifiers contained therein) at and as of the Closing Date as if made at and as of the Closing Date, except to the extent that such representations and warranties refer specifically to an earlier date, in which case such representations and warranties shall have been true and correct (disregarding all materiality or similar qualifiers contained therein) as of such earlier date; except, in each case, to the extent that any such failures to be so true and correct, whether individually or in the aggregate, have not had, and would not be reasonably expected

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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have, a material adverse effect on Buyer’s ability to perform its obligations hereunder, and Seller shall have received a certificate signed on behalf of Buyer by an executive officer of Buyer to such effect.

(b) Performance of Obligations of Buyer . Buyer shall have performed in all material respects all obligations and covenants required to be performed by it under this Agreement at or prior to the Closing Date, and Seller shall have received a certificate signed on behalf of Buyer by an executive officer of Buyer to such effect.

(c) Deliveries . Buyer shall have executed (where applicable) and delivered to Seller each of the items required by Section 3.3 .


10.	Indemnification .

10.1 Survival .

(a) Except as set forth in Section 10.1(b) , all representations and warranties contained in this Agreement shall survive the Closing for a period of eighteen (18) months.

(b) Notwithstanding the foregoing, the representations and warranties of Seller contained in Sections 4.1 (Corporate Status), 4.2 (Authorization) and 4.18 (Finder’s Fees) and in the first sentence of 4.4 (Assets and Properties), and the representations and warranties of Buyer contained in Sections 5.1 (Organizational Status), 5.2 (Authorization) and 5.4 (Finder’s Fees), in each case shall survive the Closing indefinitely, and the representations and warranties contained in Sections 4.6 (Taxes) and, solely to the extent relating to [*] FDCA matters, the representations and warranties contained in Section 4.17 (Environmental and FDCA Matters), shall survive the Closing until ninety (90) days following the expiration of the applicable statutory period of limitations (including any extensions thereof). The representations and warranties described in this Section 10.1(b) are referred to for all purposes of this Agreement as the “ Fundamental Representations ”. Notwithstanding anything to the contrary herein, the representations and warranties of Buyer contained in Section 5.6 (Sufficient Funds) shall not survive the Closing.

(c) The covenants and agreements of the parties set forth in this Agreement which do not contemplated performance after the Closing shall survive the Closing for a period of twenty four (24) months. The covenants and agreements of the parties set forth in this Agreement which by their terms contemplate performance after the Closing shall survive the Closing indefinitely.

(d) The period for which a representation or warranty, covenant or agreement survives the Closing is referred to herein as the “ Applicable Survival Period. ” In the event a notice of claim for indemnification is given within the Applicable Survival Period, the representation or warranty, covenant or agreement that is the subject of such indemnification claim (whether or not formal legal action shall have been commenced based upon such claim) shall survive with respect to such claim until such claim is finally resolved. The Indemnitor shall indemnify the Indemnitee for all Losses (subject to the limitations set forth herein, if applicable) that the Indemnitee may incur in respect of such claim, regardless of when incurred.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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10.2 By Seller and Parent . Subject to the other provisions of this Section 10 , from and after the Closing, Seller and Parent shall, jointly and severally, indemnify, defend, and hold harmless Buyer and its Affiliates and their officers, directors, employees, stockholders and agents (each, an “Indemnified Buyer Party”) from and against any liabilities, claims, demands, judgments, losses, costs, damages, or expenses whatsoever (including reasonable attorneys’ fees and disbursements) of every kind, nature, and description (collectively, “ Losses ”) that such Indemnified Buyer Party may sustain, suffer, or incur and that result from, arise out of, or relate to (a) any breach of any representation or warranty of Seller or Parent contained in this Agreement, (b) any breach of the covenants of Seller or Parent contained in in this Agreement, (c) any Excluded Asset, or (d) any Excluded Liability.

10.3 By Buyer . Subject to the other provisions of this Section 10 , from and after the Closing, Buyer shall indemnify, defend, and hold harmless Seller and its Affiliates and their officers, directors, employees, stockholders and agents (each, an “ Indemnified Seller Party ”) from and against any Losses that such Indemnified Seller Party may sustain, suffer, or incur and that result from, arise out of or relate to (a) any breach of any representation or warranty of Buyer contained in this Agreement, (b) any breach of any covenant or agreement of Buyer contained in this Agreement, (c) any Assumed Liability, or (d) except for any Excluded Liability, any claim or legal action arising out of or relating to the ownership or operation of the Purchased Assets by Buyer from and after the Closing Date and which claim or action first accrues or is based on an event that occurs after the Closing Date; provided, however, that notwithstanding anything to the contrary in this Section 10.3 or Section 2.3 , the amount of any Losses recoverable by Seller pursuant to clauses (c) or (d) of this Section 10.3 shall be reduced as and to the extent such Losses were caused by Seller’s breach or default of the terms of the Transition Services Agreement (whether directly or through its representatives acting of its behalf).

10.4 Materiality Disregarded . All materiality qualifications contained in the representations and warranties of the parties hereto set forth in this Agreement (however they may be phrased and including the term “ Material Adverse Effect ”) shall be taken into account for purposes of this Section 10 solely for purposes of determining whether a breach of, or inaccuracy in, such representation and warranty has occurred and, if such breach or inaccuracy has occurred, all such materiality qualifications shall be ignored and not given any effect for purposes of determining the amount of Losses arising out of or relating to such breach of, or inaccuracy in, such representation and warranty for purposes of this Section 10 .

10.5 Limitations on Liability

(a) Seller and Parent shall not have any obligation to indemnify any Indemnified Buyer Party pursuant to Section 10.2(a) (except for with respect to a breach of a Fundamental Representation) for any individual Loss or group of related Losses unless and until the amount of such Loss or group of Losses exceeds $5,000 (the “ Per Claim Threshold ”), subject to Sections 10.5(b) and (c) , it being understood that any such individual claim or group of related claims for amounts less than the Per Claim Threshold shall be ignored in determining whether the Threshold Amount has been exceeded. Buyer shall not have any obligation to indemnify any Indemnified Seller Party pursuant to Section 10.3(a) (except for with respect to a breach of a Fundamental Representation) for any individual Loss or group of related Losses unless and until the amount of such Loss or group of Losses exceeds the Per Claim Threshold, subject to Sections

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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10.5(b) and (c) , it being understood that any such individual claim or group of related claims for amounts less than the Per Claim Threshold shall be ignored in determining whether the Threshold Amount has been exceeded.

(b) Seller and Parent shall not have any obligation to indemnify any Indemnified Buyer Party pursuant to Section 10.2(a) (except for with respect to a breach of a Fundamental Representation) unless and until the aggregate amount of all Losses incurred or sustained by all Indemnified Buyer Parties with respect to which the Indemnified Buyer Parties would otherwise be entitled to indemnification under Section 10.2(a) (but giving effect to Section 10.5(a) ) exceeds $150,000 (the “ Threshold Amount ”), in which case Seller and Parent will be liable for the amount of all such Losses, subject to Section 10.5(c) . Buyer shall not have any obligation to indemnify any Indemnified Seller Party pursuant to Section 10.3(a) (except for with respect to a breach of a Fundamental Representation) unless and until the aggregate amount of all Losses incurred or sustained by all Indemnified Seller Parties with respect to which the Indemnified Seller Parties would otherwise be entitled to indemnification under Section 10.3(a) (but giving effect to Section 10.5(a) ) exceeds the Threshold Amount, in which case Buyer will be liable for the amount of all such Losses, subject to Section 10.5(c) .

(c) (i) (A) The aggregate liability of Seller and Parent to indemnify the Indemnified Buyer Parties for Losses under Section 10.2(a) (except for with respect to a breach of a Fundamental Representation), shall in no event exceed $2,000,000, and (B) the aggregate liability of Seller and Parent to indemnify the Indemnified Buyer Parties for Losses under Section 10.2 shall in no event exceed the Final Purchase Price, provided that the foregoing limitations shall not apply in the event of the fraud or intentional misrepresentation by Seller. (ii) (A) The aggregate liability of Buyer to indemnify the Indemnified Seller Parties for Losses under Section 10.3(a) (except for with respect to a breach of a Fundamental Representation), shall in no event exceed $2,000,000, and (B) the aggregate liability of Buyer to indemnify the Indemnified Seller Parties for Losses under Section 10.3 shall in no event exceed the Final Purchase Price, provided that the foregoing limitations shall not apply in the event of the fraud or intentional misrepresentation by Buyer.

(d) The amount of Losses payable under this Section 10 by the Indemnitor shall be reduced (i) by any amounts recoverable by the Indemnitee under insurance policies or from any other Person and (ii) to take account of any Tax benefit of the Indemnitee arising from the incurrence or payment of any such indemnified amount that is actually received by the Indemnitee. Buyer shall seek full recovery under all insurance policies and other collateral sources covering any Loss to the same extent as it would if such Loss were not subject to indemnification hereunder; provided that nothing herein shall require Buyer to actually recover any such insurance proceeds prior to recovering from Seller and Parent.

(e) No party hereto shall be obligated to indemnify any other Person with respect to (i) any covenant or condition expressly waived by another party on or prior to the Closing, (ii) any special, incidental or punitive damages or (iii) any Loss with respect to any matter to the extent taken into account in the calculation of the Final Purchase Price. Losses shall be determined without duplication of any other Losses or other amounts payable under this Agreement and no indemnified party shall be entitled to recover more than once for the same Loss or amount paid.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

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(f) Each party hereto shall take all reasonable steps to mitigate its Losses upon and after becoming aware of any event which could reasonably be expected to give rise to any Losses.

10.6 Effect of Investigation . The representations, warranties and covenants of the Indemnitor, and the Indemnitee’s right to indemnification with respect thereto, shall not be affected or deemed waived by reason of any investigation made by or on behalf of the Indemnitee (including by any of its representatives), or by reason of the fact that the Indemnitee or any of its representatives knew or should have known that any such representation or warranty is, was or might be inaccurate.

10.7 Indemnification Procedures for Third Party Claims .

(a) Notice . Upon receipt of notice by an Indemnitee of a pending or threatened claim or demand made by any Person against the Indemnitee (a “ Third-Party Claim ”), such Indemnitee shall notify the Indemnitor in writing, and in reasonable detail, of the Third-Party Claim as promptly as reasonably practicable after receipt by such Indemnitee of notice of the Third-Party Claim; provided that failure to give such notice on a timely basis shall not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually prejudiced as a result of such failure. Such notice by the Indemnitee shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnitee. During the sixty (60) day period described in the first sentence of Section 10.7(b) , the Indemnitor shall be given access to the books and records in the possession or control of the Indemnitee, upon reasonable prior notice and in a manner that does not interfere with the business or operations of the Indemnitee, which the Indemnitor reasonably deems necessary to determine whether it may be liable under this Section 10 for indemnifiable Losses resulting from such Third-Party Claim; provided, however, that the Indemnitor shall not be given access to any documents or records that in the reasonable determination of the Indemnitee’s legal counsel constitute attorney work product or are subject to an attorney-client or similar privilege.

(b) Assumption of the Defense . If a Third-Party Claim is made against an Indemnitee, and only if the Indemnitor acknowledges in writing, within sixty (60) days following receipt of the Indemnitees’ written notification of the Third-Party Claim, that any Losses resulting from the Third-Party Claim are indemnifiable Losses for which the Indemnitee is entitled to indemnification from the Indemnitor pursuant to this Section 10 with respect to such Third-Party Claim, then the Indemnitor shall be entitled to participate in the defense thereof and, if it so chooses, to assume the defense thereof with counsel selected by the Indemnitor and reasonably satisfactory to the Indemnitee. If the Indemnitor assumes such defense, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnitor, it being understood, however, that the Indemnitor shall control such defense. If the Indemnitor chooses to defend any Third-Party Claim, all the parties hereto shall cooperate in the defense or prosecution of such Third-Party Claim. Such cooperation shall include the retention and (upon the Indemnitor’s request) the provision to the Indemnitor of records and information which are reasonably requested and relevant to such Third-Party Claim, and making employees and other representatives and advisors available as reasonably requested on a mutually convenient basis to provide additional information and explanation of any

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

50 .

material provided hereunder. If the Indemnitor assumes the defense of any Third-Party Claim, the Indemnitor shall not, without the prior written consent of the Indemnitee (which consent shall not be unreasonably withheld, conditioned, or delayed), enter into any settlement or compromise or consent to the entry of any judgment with respect to such Third-Party Claim if such settlement, compromise or judgment (i) involves a finding or admission of guilt, (ii) does not include an unconditional written release by the claimant or plaintiff of the Indemnitee from all liability in respect of such Third-Party Claim or (iii) imposes equitable remedies or any obligation on the Indemnitee other than solely the payment of money damages for which the Indemnitee will be indemnified hereunder. The Indemnitee shall not enter into any settlement or compromise or consent to the entry of any judgment with respect to a Third-Party Claim without the prior written consent of the Indemnitor (which consent shall not be unreasonably withheld, conditioned, or delayed).

10.8 Notice of Non-Third Party Claims . The Indemnitee will notify the Indemnitor in writing as promptly as reasonably practicable after the Indemnitee’s discovery of any matter for which the Indemnitor may be liable to the Indemnitee hereunder that does not involve a Third-Party Claim; provided that failure to give such notice on a timely basis shall not affect the indemnification provided hereunder except to the extent the Indemnitor shall have been actually prejudiced as a result of such failure. Such notice shall specify in reasonable detail each individual item of Loss, the basis for any anticipated liability and the nature of the breach of representation, warranty, covenant or agreement to which each such item is related and if determinable the computation of the amount to which the Indemnitee claims to be entitled hereunder.


11.	General Matters .

11.1 Termination .

(a) This Agreement may be terminated at any time prior to Closing:

(i) by mutual written consent of Buyer and Seller;

(ii) by Buyer or Seller if

(A) the Closing does not occur on or before October 31, 2016 (the “ Termination Date ”); provided that the right to terminate this Agreement under this clause (ii)(A) shall not be available to any Party whose breach of a representation, warranty, covenant or agreement under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date; or

(B) a Governmental Body shall have issued an order or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, which order or other action is final and non-appealable;

(iii) by Buyer if

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

51 .

(A) any condition to the obligations of Buyer hereunder becomes incapable of fulfillment other than as a result of a breach by Buyer of any covenant or agreement contained in this Agreement, and such condition is not waived by Buyer;

(B) there has been a breach by Seller of any representation, warranty, covenant or agreement contained in this Agreement, or if any representation or warranty of Seller shall have become untrue, in either case such that the conditions set forth in Section 9.2(a) or 9.2(b) would not be satisfied and, in either case, such breach is not curable, or, if curable, (1) Buyer has given written notice of such breach to Seller, (2) Seller actively pursues a cure, and (3) such breach is not cured prior to the Termination Date; or

(iv) by Seller if

(A) any condition to the obligations of Seller hereunder becomes incapable of fulfillment other than as a result of a breach by Seller of any covenant or agreement contained in this Agreement, and such condition is not waived by Seller;

(B) there has been a breach by Buyer of any representation, warranty, covenant or agreement contained in this Agreement, or if any representation or warranty of Buyer shall have become untrue, in either case such that the conditions set forth in Section 9.3(a) or 9.3(b) would not be satisfied and, in either case, such breach is not curable, or, if curable, (1) Seller has given written notice of such breach to Buyer, (2) Buyer actively pursues a cure, and (3) such breach is not cured prior to the Termination Date; or

(C) (1) all of the conditions set forth in Sections 9.1 , 9.2 and 9.3 have been satisfied or waived in accordance with this Agreement as of the date that the Closing should have been consummated pursuant to Section 3.01 (except for those conditions that by their terms are to be satisfied at the Closing), (2) Buyer causes the Closing to not be consummated on the day that the Closing should have been consummated in accordance with Section 3.01 and (3) Buyer causes the Closing to not be consummated within three (3) Business Days following its receipt of written notice from Seller requesting such consummation; it being understood that, notwithstanding anything to the contrary herein, Buyer shall be deemed to have caused the Closing to not be consummated if all other conditions set forth in Sections 9.1 , 9.2 and 9.3 have been satisfied or waived in accordance with this Agreement and Buyer fails to deliver for any reason any portion of the Initial Purchase Price at the Closing, at the time the Closing should have been consummated in accordance with Section 3.01 or within three (3) Business Days following its receipt of the notice described in clause (3) above.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

52 .

(b) The Party desiring to terminate this Agreement pursuant to clause (ii), (iii) or (iv) shall give written notice of such termination to the other parties hereto.

(c) In the event of termination of this Agreement as provided in Section 11.1(a) , this Agreement shall immediately become null and void and except as provided in Section 11.1(d) there shall be no liability or obligation on the part of Seller, Parent or Buyer or their respective officers, directors, stockholders or Affiliates; provided , however , the provisions of Sections 8.3 , 8.5 , 11.1 , 11.2 , 11.3 , 11.5 , 11.6 , 11.7 , 11.8 , 11.9 , 11.10 , 11.12 and 11.13 and the Confidentiality Agreement shall remain in full force and effect and survive any termination of this Agreement.

(d) Any Party terminating this Agreement pursuant to Section 11.1(a)(iii) or 11.1(a)(iv) shall have the light to recover damages (including reasonable attorney’s fees and other costs and expenses, including with respect to the enforcement of this Section 11.2(d) ) sustained or incurred by such Party as a result of any willful and material breach by the other Party of any representation, warranty, covenant or agreement contained in this Agreement or fraud. In addition to any other remedies possessed by Seller under this Agreement, if Seller terminates this Agreement pursuant to Section 11.1(a)(iv) other than as a result of the condition precedent set forth in Section 9.1(b) not having been met, Seller shall be entitled to a distribution of the Deposit Amount by the Depository Bank to Seller in accordance with a joint written instruction executed by Buyer and Seller or otherwise in accordance with the procedures set forth in the Deposit Agreement. In addition to any other remedies possessed by Buyer under this Agreement, if Buyer terminates this Agreement pursuant to Section 11.1(a)(iii)(A) or Section 11.1(a)(iii)(B) as a result of the condition precedent set forth in Section 9.1(b) not having been met, (x) Buyer shall be entitled to the return of the Deposit Amount from the Depository Bank to Buyer in accordance with a joint written instruction executed by Buyer and Seller or otherwise in accordance with the procedures set forth in the Deposit Agreement, and additionally (y) Buyer shall be entitled to reimbursement by Seller for all out-of-pocket costs and expenses, including legal, accounting and other due diligence costs and expenses, actually incurred by Buyer in connection with the negotiation, execution, delivery, administration, performance and enforcement of this Agreement, and Seller shall reimburse Buyer for all such costs and expenses within five (5) Business Days of Buyer providing written evidence thereof; provided, however, that notwithstanding the foregoing, in no event shall Seller’s costs and expenses reimbursement obligation exceed $300,000.

11.2 Contents of Agreement . This Agreement which includes the Disclosure Schedule, all other schedules hereto and the Exhibits hereto, together with the other Transaction Documents and the Confidentiality Agreement, sets forth the entire understanding of the parties hereto with respect to the transactions contemplated by this Agreement and supersedes all prior Contracts or understandings between the parties hereto regarding those matters.

11.3 Amendment, Parties in Interest, Assignment, Miscellaneous . This Agreement may be amended, modified, or supplemented only by a written instrument duly executed by each of the parties hereto. If any provision of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and permitted assigns of the

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

53 .

parties hereto. Nothing in this Agreement shall confer any rights upon any Person other than the parties hereto and their respective successors and permitted assigns, except as provided in Section 10 . No party hereto shall assign this Agreement or any right, benefit, or obligation hereunder without prior written consent of the other parties; provided , however , that notwithstanding the foregoing, Buyer shall be permitted to assign, convey or transfer any legal or beneficial interest in this Agreement to any of its Affiliates without the consent of the other parties, but no such assignment by Buyer to its Affiliate shall relieve Buyer of its obligations hereunder. Any term or provision of this Agreement may be waived at any time by the party entitled to the benefit thereof by a written instrument duly executed by such party. Neither the failure nor the delay by any party hereto in exercising any right, power, or privilege hereunder shall operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege shall preclude any other or further exercise of any such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable Law, (a) no waiver that may be given by a party hereto shall be applicable except in the specific instance for which it was given and (b) no notice to or demand on one party hereto shall be deemed to be a waiver of any obligation of such party or the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the other Transaction Documents.

11.4 Further Assurances . At and after the Closing, the Parties shall execute and deliver any and all documents and take any and all other actions that may be deemed reasonably necessary by their respective counsel to complete the transactions contemplated by this Agreement.

11.5 Interpretation . Unless the context of this Agreement clearly requires otherwise, (a) references to the plural include the singular, the singular the plural, and the part the whole, (b) references to any gender include all genders, (c) “including” has the inclusive meaning frequently identified with the phrase “but not limited to,” and (d) references to “hereunder” or “herein” relate to this Agreement. The section and other headings contained in this Agreement are for reference purposes only and shall not control or affect the construction of this Agreement or the interpretation thereof in any respect. Section, subsection, Disclosure Schedule, schedule and exhibit references are to this Agreement unless otherwise specified. Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under U.S. generally accepted accounting principles. Any reference to a party’s being satisfied with any particular item or to a party’s determination of a particular item presumes that such standard will not be achieved unless such party shall be satisfied or shall have made such determination in its sole or complete discretion.

11.6 Counterparts . This Agreement may be executed in two or more counterparts (delivery of which may occur via facsimile or email), each of which shall be binding as of the date first written above, and, when delivered, all of which shall constitute one and the same instrument. A facsimile signature or electronically scanned copy of a signature shall constitute and shall be deemed to be sufficient evidence of a party’s execution of this Agreement, without necessity of further proof Each such copy (or facsimile) shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

54 .

11.7 Negotiated Agreement . The parties hereto hereby acknowledge that the terms and language of this Agreement were the result of negotiations between such parties and, as a result, there shall be no presumption that any ambiguities in this Agreement shall be resolved against any particular party. Any controversy over construction of this Agreement shall be decided without regard to events of authorship or negotiation.

11.8 Remedies . Except in the case of fraud or willful breach, the rights of Parties under Section 8.7(1) and of the Parties under Sections 10 and 11.1(d) , are the sole and exclusive rights and remedies that the Parties hereto have at law or in equity or otherwise for any misrepresentation, breach of warranty, or failure to fulfill any agreement or covenant hereunder on the part of any party. Nothing in this Section 11.8 shall limit the rights of the Parties to specific performance of the other parties’ obligations hereunder in accordance with Section 11.11 .

11.9 Notices . Except as otherwise expressly provided herein, all notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered, (b) when transmitted via telecopy (or other facsimile device) to the number set out below or transmitted by electronic mail if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (c) the day following the day (except if not a Business Day, then the next Business Day) on which the same has been delivered prepaid to a reputable national overnight air courier service or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective parties at the address set forth below, or at such other address as such party may specify by written notice to the other parties hereto:

If to Seller:

PuriCore, Inc.
508 Lapp Rd.
Malvern, PA 19355
Attn: Chief Financial Officer
Facsimile- [*]
Email: [*]

with a required copy to (which shall not be considered notice):

Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attn: [*]
Facsimile- [*]
Email: [*]

If to Parent:

c/o PuriCore, Inc.
508 Lapp Rd.

Malvern, PA 19355

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

55 .

Attn: Chief Financial Officer
Facsimile:
Email: [*]

with a required copy to (which shall not be considered notice):

Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
Attn: [*]
Facsimile: [*]
Email: [*]

If to Buyer:

Chemstar Corp.
120 Interstate West Parkway, Suite 100
Lithia Springs, GA 30122
Attn: [*]
Email- [*]

with a required copy to (which shall not be considered notice):

Arnall Golden Gregory LLP
171 17th Street NW
Suite 2100
Atlanta, GA 30363
Attn: [*]
Facsimile- [*]
Email: [*]

11.10 Attorneys’ Fees . Should any litigation be commenced concerning this Agreement or the rights and duties of any party hereto with respect to it, except as otherwise contemplated under Section 8.7(f), Section 10 or Section 11.1(d), each party shall bear its own expenses and costs incurred in connection with such litigation.

11.11 Specific Performance . The Parties acknowledge that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof and that each Party shall be entitled, without having to post any bond (and without the necessity of proving the inadequacy as a remedy of money damages), to specific performance of the terms hereof, in addition to any other remedy at Law or equity. The Parties further agree that (x) by seeking the remedies provided for in this Section 11.11 , a Party shall not in any respect waive its right to seek any other form of relief that may be available to a Party under this Agreement, including monetary damages in the event that this Agreement has been terminated or in the event that the remedies provided for in this Section 11.11 are not available or otherwise are not granted (or, if such remedies are granted, the right to reimbursement of its costs and expenses relating to such enforcement actions) and (y) nothing contained in this Section 11.11 shall require any Party to

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

56 .

institute any proceeding for (or limit any Party’s right to institute any proceeding for) specific performance under this Section 11.11 before exercising any termination right under Section 11.1 (and pursuing damages after such termination) nor shall the commencement of any action pursuant to this Section 11.11 or anything contained in this Section 11.11 restrict or limit any Party’s right to terminate this Agreement in accordance with the terms of Section 11.1 or pursue any other remedies under this Agreement that may be available then or thereafter.

11.12 Governing Law . This Agreement shall be governed by and interpreted and enforced in accordance with the Laws of the State of Delaware, without giving effect to any choice of Law or conflicts of Laws rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the substantive Laws of any jurisdiction other than the State of Delaware.

11.13 Consent to Jurisdiction . Each party hereto, including Parent, irrevocably submits to the exclusive jurisdiction of the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline to accept jurisdiction over a particular matter, in which case, in any Delaware state or federal court within the State of Delaware), for the purposes of any action arising out of this Agreement or the Transaction Documents or any transaction contemplated hereby or thereby, and agrees to commence any such action only in such courts. Each Party further agrees that service of any process, summons, notice or document by registered mail to such Party’s respective address set forth herein shall be effective service of process for any such action, and Parent further hereby agrees that service of any process, summons, notice or document to the Secretary of State of the State of Delaware by any means acceptable under applicable Law shall be effective service of process for any such action. Each party hereto, including Parent, irrevocably and unconditionally waives any objection to the laying of venue of any action arising out of this Agreement, the Transaction Documents or the transactions contemplated hereby or thereby in such courts, and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action brought in any such court has been brought in an inconvenient forum. EACH PARTY HERETO, INCLUDING PARENT, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF AND THEREOF.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

57 .

IN WITNESS WHEREOF , this Agreement has been executed by the Parties hereto as of the date first written above.



SELLER:

PURICORE, INC.

By:	/s/ Marell Thorell
Name:		Marella Thorell
Title:		Chief Operating Officer and Chief Financial Officer



BUYER:

CHEMSTAR CORP.

By:	/s/ Dan Barney
Name:		Dan Barney
Title:		Chief Executive Officer

Solely for purposes of Sections 4 , 6.1 , 8.7 , 8.8 , 8.11 , 10 and 11 :



PARENT:

PURICORE PLC

By:	/s/ Alex Martin
Name:		Alex Martin
Title:		Chief Executive Officer and Executive Director

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Exhibit 3.1

THE COMPANIES ACTS

ARTICLES OF ASSOCIATION REALM THERAPEUTICS PLC

PUBLIC COMPANY LIMITED BY SHARES

Adopted by special resolution passed on 9 October 2017

CMS Cameron McKenna Nabarro Olswang LLP

Cannon Place

78 Cannon Street

London EC4N 6AF

T +44 20 7367 3000

F +44 20 7367 2000

TABLE OF CONTENTS



DEFINITIONS AND INTERPRETATION		1
1.	Definitions and interpretation	1
2.	Limited liability	2
3.	Model articles excluded	3
4.	Form of resolutions	3
SHARE CAPITAL		3
5.	Rights attached to shares	3
6.	Redeemable shares	3
7.	Payment of commissions	3
8.	Trusts not recognised	3
9.	Variation of rights	3
10.	Matters not constituting a variation of rights	3
CERTIFICATES		3
11.	Right to certificates	3
12.	Execution of certificates	4
13.	Replacement certificates	4
14.	Uncertificated securities	4
LIEN		5
15.	Company’s lien	5
16.	Enforcing lien by sale after notice	5
17.	Manner of sale	5
18.	Application of sale proceeds	5
CALLS ON SHARES		5
19.	Calls	5
20.	Time of call	6
21.	Liability of joint holders	6
22.	Interest	6
23.	Sums due on allotment or by way of instalment treated as calls	6
24.	Power to differentiate	6
25.	Advance payment of calls	6
FORFEITURE OF SHARES		6
26.	Notice if call not paid	6
27.	Forfeiture if notice not complied with	7
28.	Notice of forfeiture	7
29.	Sale of forfeited share	7
30.	Arrears to be paid notwithstanding forfeiture	7
31.	Statutory declaration and validity of sale	7
UNTRACED SHAREHOLDERS		8
32.	Power to sell shares of untraced shareholders	8
33.	Manner of sale and creation of debt in respect of net proceeds	8
TRANSFER OF SHARES		9
34.	Form and execution of transfer	9
35.	Right to refuse registration of partly paid share	9
36.	Other rights to refuse registration	9



37.	Notice of refusal	9
38.	No fee for registration	10
39.	Retention of documents	10
40.	Other Registers	10
TRANSMISSION OF SHARES		10
41.	Transmission on death	10
42.	Election by person entitled by transmission	10
43.	Rights in respect of the share	10
ALTERATION OF CAPITAL		10
44.	Fractions	10
PURCHASE OF OWN SHARES		11
45.	Purchase of own shares	11
GENERAL MEETINGS		11
46.	Convening general meetings	11
NOTICE OF GENERAL MEETINGS		11
47.	Length of notice period	11
48.	Contents of notices	11
49.	Omission or non-receipt of notice	11
50.	Change of date, time or place of meeting	12
PROCEEDINGS AT GENERAL MEETINGS		12
51.	Quorum	12
52.	Procedure if quorum not present	12
53.	Chairman of general meeting	12
54.	Directors’ right to attend and speak	12
55.	Meeting at more than one place and/or in a series of rooms	13
56.	Security arrangements	13
57.	Adjournments	13
58.	Notice of adjourned meeting	14
VOTES OF MEMBERS		14
59.	Method of voting	14
60.	Votes of members	14
61.	Votes of joint holders	15
62.	Votes of member suffering incapacity	15
63.	No right to vote where sums overdue on shares	15
64.	Votes on a poll	15
65.	Right to withdraw demand for a poll	15
66.	Procedure if poll demanded	15
67.	When poll to be taken	15
68.	Continuance of other business after poll demanded	16
69.	Proposal or amendment of resolution	16
70.	Amendment of resolution ruled out of order	16
71.	Objections or errors in voting	16
72.	Suspension of rights for non-disclosure of interest	16
PROXIES		18
73.	Execution of an appointment of proxy	18



74.	Times for deposit of an appointment of proxy	18
75.	Form of appointment of proxy	19
76.	Validity of proxy	20
77.	Maximum validity of proxy	20
DIRECTORS		20
78.	Number of Directors	20
79.	No shareholding qualification for Directors	20
REMUNERATION OF DIRECTORS		20
80.	Ordinary remuneration	20
81.	Expenses	20
82.	Extra remuneration	20
ALTERNATE DIRECTORS		21
83.	Appointment, removal and resignation	21
84.	Alternate to be responsible for his own acts and remuneration of alternate	21
EXECUTIVE DIRECTORS		21
85.	Executive Directors	21
POWERS AND DUTIES OF DIRECTORS		22
86.	General powers of the Company vested in the Board	22
DELEGATION OF DIRECTORS’ POWERS		22
87.	Agents	22
88.	Delegation to individual Directors	22
89.	Delegation to committees	22
90.	Power to establish local boards etc	23
SPECIFIC POWERS		23
91.	Provision for employees	23
92.	The Company’s name	23
93.	Borrowing Powers	24
APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS		26
94.	Number to retire by rotation	26
95.	Position of Retiring Director	26
96.	Eligibility for appointment as a Director	27
97.	Power of the Company to appoint Directors	27
98.	Power of the Board to appoint Directors	27
99.	Company’s power to remove a Director and appoint another in his place	27
100.	Vacation of office by Directors	27
DIRECTORS’ INTERESTS		28
101.	Transactions between a Director and the Company or a company in which the Company is interested	28
102.	Conflicts of interest requiring Board authorisation	30
DIRECTORS’ GRATUITIES AND PENSIONS		31
103.	Directors’ gratuities and pensions	31
PROCEEDINGS OF THE BOARD		32
104.	Board meetings	32
105.	Notice of Board meetings	32
106.	Voting	32
107.	Quorum	32



108.	Board vacancies below minimum number	32
109.	Appointment of chairman	32
110.	Competence of the Board	32
111.	Participation in meetings by telephone	33
112.	Written resolutions	33
113.	Company books	33
114.	Validity of acts of the Board or a committee	33
COMPANY SECRETARY		33
115.	Appointment and removal of Company Secretary	33
THE SEAL		34
116.	Use of seal	34
DIVIDENDS		34
117.	Company may declare dividends	34
118.	Board may pay interim dividends and fixed dividends	34
119.	Calculation and currency of dividends	34
120.	Waiver of dividends	34
121.	Non-cash dividends	35
122.	Scrip dividends	35
123.	Enhanced scrip dividends	36
124.	Right to deduct amounts due on shares from dividends	37
125.	No interest on dividends	37
126.	Payment procedure	37
127.	Receipt by joint holders	37
128.	Where payment of dividends need not be made	37
129.	Unclaimed dividends	38
CAPITALISATION OF PROFITS		38
130.	Capitalisation of profits	38
AUTHENTICATION OF DOCUMENTS		39
131.	Authentication of documents	39
RECORD DATES		39
132.	Power to choose record date	39
ACCOUNTS AND OTHER RECORDS		39
133.	Copy of accounts to be sent to members	39
134.	Inspection of records	39
135.	Destruction of documents	40
COMMUNICATIONS		40
136.	Form of communications	40
137.	Communication with joint holders	41
138.	Communication with overseas members	41
139.	Communication with person entitled by transmission	41
140.	When notice deemed served	41
141.	Record date	42
142.	Loss of entitlement to receive communications	42
143.	Notice when post not available	42
WINDING UP		43



144.	Distribution in specie on winding up	43
INDEMNITY		43
145.	Indemnity and provision of funds	43
146.	Power to insure	43

Registered No. 5789798

The Companies Acts

Public Company Limited by Shares

ARTICLES OF ASSOCIATION

REALM THERAPEUTICS PLC

(Adopted in substitution for and to the exclusion of all existing articles by a special resolution passed on October 9, 2017)

DEFINITIONS AND INTERPRETATION


1.	DEFINITIONS AND INTERPRETATION


1.1	In these Articles, the following words and expressions have the meanings indicated below:

“ AIM ”: the market known as AIM operated by the London Stock Exchange

“ AIM Rules ”: the AIM Rules for Companies as published from time to time by the London Stock Exchange

“ these Articles ”: these articles of association as originally adopted or as altered from time to time

“ Auditors ”: the auditors of the Company for the time being or, in the case of joint auditors, any one of them

“ Board ”: the board of Directors from time to time of the Company or those Directors present at a duly convened meeting of the Directors at which a quorum is present

“ cash memorandum account ”: an account so designated in relation to the Company by the Operator

“ clear days ”: in relation to the period of a notice, that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect

“Depositary ”: the holder of a share for the time being held on behalf of another person on the terms of a depositary agreement or a depositary receipt or a similar document

“ Director ”: a director for the time being of the Company

“ holder ”: in relation to shares, the member whose name is entered in the Register as the holder of the shares (but, to the extent that these Articles would otherwise conflict with the Statutes, not including the Company itself in relation to shares held as treasury shares)

“ London Stock Exchange ”: the London Stock Exchange plc

“ member ”: a member of the Company (but, to the extent that these Articles would otherwise conflict with the Statutes, not including the Company itself in relation to shares held as treasury shares)

“ Office ”: the registered office of the Company

“ paid up ”: paid up or credited as paid up

“ Register ”: the register of members of the Company

“ Regulations ”: the Uncertificated Securities Regulations 2001

“ relevant system ”: the computer-based system, and procedures, which enable title to units of a security to be evidenced and transferred without a written instrument, and which facilitate supplementary and incidental matters in accordance with the Regulations

“ Seal ”: the common seal of the Company or any official seal kept by the Company pursuant to the Statutes

“ Secretary ”: the secretary of the Company or any other person appointed to perform the duties of the secretary of the Company, including a joint, assistant or deputy secretary and any person appointed to perform the duties of secretary temporarily or in any particular case

“ Statutes ”: every statute (including any statutory instrument, order, regulation or subordinate legislation made under it) concerning companies that are incorporated in England and Wales to the extent that it is for the time being in force or (where the context requires) was in force at a particular time, including the Companies Act 2006 and the Regulations

“ system ’ s rules ”: the rules, regulations, procedures, facilities and requirements of the relevant system concerned

“Trading Market ”: any of the New York Stock Exchange, the NYSE American, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market

“ transfer instruction ”: a properly authenticated dematerialised instruction on a relevant system in accordance with the Regulations in such form, in such manner and from such person as the Board may determine

“ transmittee ”: a person entitled to a share in consequence of the death or bankruptcy of a member or of any other event giving rise to its transmission by operation of law

“ United Kingdom ”: Great Britain and Northern Ireland


1.2	The expression “ debenture ” includes debenture stock.


1.3	References to writing include any method of reproducing or representing words, symbols or other information in such form (including in electronic form or by making it available on a website) that it can be read or seen with the naked eye and a copy of it can be retained.

1.4

References to the execution of a document (including where execution is implied, such as in the giving of a written consent) include references to its being executed under hand or under seal or by any other method, and, in relation to anything sent or supplied in electronic form, include references to its being executed by such means and incorporating such information as the Board may from time to time stipulate for the purpose of establishing its authenticity and integrity.


1.5	Unless the context otherwise requires, words or expressions used in these Articles that are defined in the Regulations or the Companies Act 2006 bear those meanings in these Articles (but as if the definitions contemplated their use in these Articles as well as in the relevant legislation), except that the word “ company ” shall include any body corporate.

1.6

Except where the contrary is stated or the context otherwise requires, any reference to a statute or statutory provision includes any order, regulation, instrument or other subordinate legislation made under it for the time being in force, and any reference to a statute, statutory provision, order, regulation, instrument or other subordinate legislation includes any amendment, extension, consolidation, re-enactment or replacement of it for the time being in force.


1.7	Words importing the singular number only include the plural and vice versa. Words importing the masculine gender include the feminine and neuter gender. Words importing persons include corporations.


1.8	References to a meeting shall not be taken as requiring more than one person to be present if any quorum requirement can be satisfied by one person.


1.9	References to any security as being in certificated form or uncertificated form refer, respectively, to that security being a certificated unit of a security or an uncertificated unit of a security for the purposes of the Regulations.


1.10	Headings are inserted for convenience only and shall not affect the construction of these Articles.


2.	LIMITED LIABILITY


2.1	The liability of the members is limited to the amount, if any, unpaid on the shares held by them.


3.	MODEL ARTICLES EXCLUDED


3.1	None of the relevant model articles (within the meaning of section 20 of the Companies Act 2006) nor the regulations contained in Table A in the Schedule to the Companies (Tables A to F) Regulations 1985 or any other of the Statutes shall apply as regulations of the Company.


4.	FORM OF RESOLUTIONS


4.1	A special resolution shall be effective for any purpose for which an ordinary resolution is expressed to be required under the Statutes or these Articles.

SHARE CAPITAL


5.	RIGHTS ATTACHED TO SHARES


5.1	Subject to the Statutes and without prejudice to any rights attached to any existing shares, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine (or, in the absence of any such determination or in so far as such ordinary resolution does not make specific provision, as the Board may determine).


6.	REDEEMABLE SHARES


6.1	The Company may issue shares which are to be redeemed, or are liable to be redeemed at the option of the Company or the holder, and the Board may determine the terms, conditions and manner of redemption of any such shares.


7.	PAYMENT OF COMMISSIONS


7.1	The Company may exercise the powers of paying commissions and brokerage conferred or permitted by the Statutes. Subject to the Statutes, any such commission may be satisfied by the payment of cash or by the allotment (or an option to call for the allotment) of fully or partly paid shares or partly in one way and partly the other.


8.	TRUSTS NOT RECOGNISED


8.1	Except as required by law, no person shall be recognised by the Company as holding any share upon any trust and the Company shall not be bound by or recognise (except as otherwise provided by these Articles or by law or under an order of a court of competent jurisdiction) any interest in any share except an absolute right to the whole of the share in the holder.


9.	VARIATION OF RIGHTS


9.1	The provisions of the Statutes as to variation of class rights shall apply to the variation or abrogation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class.


10.	MATTERS NOT CONSTITUTING A VARIATION OF RIGHTS


10.1	The rights attached to any share or class of shares shall not, unless otherwise expressly provided by its terms of issue, be deemed to be varied, abrogated or breached by:


10.1.1	the creation or issue of further shares ranking pari passu with it; or


10.1.2	the purchase or redemption by the Company of any of its own shares (whether of that or any other class) or the sale of any shares (of that class or any other class) held as treasury shares.

CERTIFICATES


11.	RIGHT TO CERTIFICATES


11.1	Except as otherwise provided in these Articles, every person whose name is entered in the Register as a holder of shares in the Company shall be entitled, within the time specified by the Statutes and without

payment, to one certificate for all the shares of each class registered in his name. Upon a transfer of part of the shares of any class registered in his name, every holder shall be entitled without payment to one certificate for the balance in certificated form of his holding. Upon request and upon payment, for every certificate after the first, of such reasonable sum (if any) as the Board may determine, every holder shall be entitled to receive several certificates for certificated shares of one class registered in his name (subject to surrender for cancellation of any existing certificate representing such shares). Every holder shall be entitled to receive one certificate in substitution for several certificates for certificated shares of one class registered in his name upon surrender to the Company of all the share certificates representing such shares.


11.2	Subject as provided in the preceding part of this Article, the Company shall not be bound to issue more than one certificate in respect of certificated shares registered in the names of two or more persons and delivery of a certificate to one joint holder shall be a sufficient delivery to all of them.


12.	EXECUTION OF CERTIFICATES

12.1

Every certificate for share or loan capital or other securities of the Company (other than letters of allotment, scrip certificates or similar documents) shall be issued under the Seal (or in such other manner as the Board, having regard to the terms of issue, the Statutes and the requirements of the the AIM Rules may authorise) and each share certificate shall specify the shares to which it relates, the distinguishing number (if any) of the shares and the amount paid up on the shares. The Board may determine, either generally or in relation to any particular case, that any signature on any certificate need not be autographic but may be applied by some mechanical or other means, or printed on the certificate, or that certificates need not be signed.


13.	REPLACEMENT CERTIFICATES

13.1

If a share certificate for certificated shares is worn out, defaced or damaged then, upon its surrender to the Company, it shall be replaced free of charge. If a share certificate for certificated shares is or is alleged to have been lost or destroyed it may be replaced without fee but on such terms (if any) as to evidence and indemnity and to payment of any exceptional out-of-pocket expenses of the Company in investigating such evidence and preparing such indemnity as the Board thinks fit. The Company shall be entitled to treat an application for a replacement certificate made by one of joint holders as being made on behalf of all the holders concerned.


14.	UNCERTIFICATED SECURITIES


14.1	Unless otherwise determined by the Board and permitted by the Regulations, the Company shall not issue and no person shall be entitled to receive a certificate in respect of any share or other security issued by the Company for so long as it is in uncertificated form.


14.2	Conversion of securities in certificated form into uncertificated form, and vice versa, may be made in such manner as the Board may, in its absolute discretion, think fit (subject always to the Statutes and the facilities and requirements of the relevant system).

14.3

All registers of holders relating to securities issued by the Company will be maintained as required by the Regulations and by the rules of the relevant system and will distinguish between securities held in uncertificated form and securities held in certificated form. Unless the Board shall otherwise determine, holdings of the same holder or joint holders in certificated form shall be treated as separate from the same person or persons’ holdings in uncertificated form, but a class of securities shall not be treated as two classes by virtue only of the fact that it comprises securities in certificated form and securities in uncertificated form (even if, as a result of any provision of these Articles or the Regulations, securities are treated differently according to whether they are in certificated or uncertificated form).


14.4	No certificate will normally be issued in respect of securities held by a financial institution.


14.5	The provisions of these Articles shall not apply to shares of any class which are in uncertificated form to the extent that such Articles are inconsistent with:


14.5.1	the holding of shares of that class in uncertificated form;


14.5.2	the transfer of title to shares of that class by means of a relevant system; or


14.5.3	any provision of the Regulations

but notwithstanding this the Board may require the Operator of a relevant system to convert any share held in uncertificated form into certificated form in order to enable the Company to deal with the share in accordance with these Articles.

LIEN


15.	COMPANY'S LIEN


15.1	The Company shall have a first and paramount lien on every share (not being a fully paid share) for all monies (whether presently payable or not) called or payable at a fixed time in respect of that share. The Company’s lien on a share shall extend to any amount payable in respect of it.


15.2	The Board may at any time resolve that any share shall be wholly or in part exempt from this Article.


16.	ENFORCING LIEN BY SALE AFTER NOTICE


16.1	The Company may sell, in such manner as the Board determines, any shares on which the Company has a lien if a sum in respect of which the lien exists is presently payable and is not paid within 14 clear days after a notice has been given to the holder of the share or the relevant transmittee, demanding payment and indicating that if the notice is not complied with the shares will be sold.


17.	MANNER OF SALE


17.1	To give effect to a sale, the Board may:


17.1.1	in the case of shares held in certificated form, authorise and instruct some person (which may include the holder of shares concerned) to execute an instrument of transfer of the shares sold; and

17.1.2

in the case of shares held in uncertificated form, subject to the system’s rules, require the Operator of a relevant system to convert any such share into certificated form in order to enable the Company to deal with the share in accordance with this Article, and after such conversion authorise and instruct some person to execute an instrument of transfer of the share (and to take such other steps as may be necessary to give effect to the sale);

in each case to, or in accordance with the directions of, the purchaser and the transfer will be valid even if in respect of any of the shares no certificate accompanies the instrument of transfer. The transferee shall not be bound to see to the application of the purchase money and his title to the shares shall not be affected by any irregularity or invalidity of the proceedings in reference to the sale.


18.	APPLICATION OF SALE PROCEEDS

18.1

The net proceeds of the sale, after payment of the costs, shall be applied in or towards payment of so much of the sum for which the lien exists as is presently payable, and any residue shall (in the case of shares held in certificated form, upon surrender to the Company for cancellation of the certificate for the shares sold and in the case of shares held in uncertificated form, within a reasonable time following receipt by the Company of the net proceeds of sale and subject in each such case to a like lien for any monies not presently payable as existed upon the shares before the sale) be paid to the person entitled to the shares immediately before the sale.

CALLS ON SHARES


19.	CALLS

19.1

Subject to the terms of issue, the Board may from time to time make calls upon the members in respect of any money unpaid on their shares (whether in respect of the nominal amount or by way of premium). Each member shall (subject to receiving at least 14 clear days’ notice specifying when and where payment is to be made) pay to the Company as required by the notice the amount called on his shares.

A call may be made payable by instalments. A call may, at any time before receipt by the Company of any sum due under the call, be revoked in whole or in part and payment of a call may be postponed in whole or in part, as the Board may determine.


19.2	A person upon whom a call is made shall remain liable for all calls made upon him notwithstanding the subsequent transfer of the shares in respect of which the call was made.


20.	TIME OF CALL


20.1	A call shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed.


21.	LIABILITY OF JOINT HOLDERS


21.1	The joint holders of a share shall be jointly and severally liable to pay all calls in respect of the share.


22.	INTEREST

22.1

If a call remains unpaid after it has become due and payable, the person from whom it is due and payable shall pay all costs, charges and expenses that the Company may have incurred by reason of such non-payment, together with interest on the amount unpaid from the day it became due and payable until the day it is paid at the rate fixed by the terms of issue of the share or in the notice of the call or, if no rate is fixed, at the appropriate rate (as defined by section 609 of the Companies Act 2006) but the Board may waive payment of the interest wholly or in part.


23.	SUMS DUE ON ALLOTMENT OR BY WAY OF INSTALMENT TREATED AS CALLS


23.1	An amount payable in respect of a share on allotment or at any fixed date, whether in respect of the nominal amount of the share or by way of premium or as an instalment of a call, shall be deemed to be a call and, if it is not paid these Articles shall apply as if that amount had become due and payable by virtue of a call.


24.	POWER TO DIFFERENTIATE


24.1	Subject to the terms of issue, the Board may, on the issue of shares, differentiate between the allottees or holders in the amount of calls to be paid and the times of payment.


25.	ADVANCE PAYMENT OF CALLS

25.1

The Board may, if it thinks fit, receive from any member willing to advance them all or any part of the monies unpaid and uncalled upon the shares held by him and may pay interest upon the monies so advanced (to the extent such monies exceed the amount of the calls due and payable upon the shares in respect of which they have been advanced) at such rate (not exceeding 15 per cent. per annum unless the Company by ordinary resolution otherwise directs) as the Board may determine.


25.2	A payment in advance of calls shall extinguish, to the extent of it, the liability upon the shares in respect of which it is advanced.

FORFEITURE OF SHARES


26.	NOTICE IF CALL NOT PAID

26.1

If a call or instalment of a call remains unpaid after it has become due and payable, the Board may at any time serve a notice on the holder requiring payment of so much of the call or instalment as remains unpaid together with any interest which may have accrued thereon and any costs, charges and expenses incurred by the Company by reason of such non-payment. The notice shall specify a further day (not being less than 14 clear days from the date of the notice) on or before which, and the place where the payment required by the notice is to be made and shall indicate that if the notice is not complied with the shares in respect of which the call was made or instalment is payable will be liable to be forfeited.


26.2	The Board may accept the surrender of any share liable to be forfeited and, in such case, references in these Articles to forfeiture shall include surrender.


27.	FORFEITURE IF NOTICE NOT COMPLIED WITH

27.1

If any notice served under the immediately preceding Article (Notice if call not paid) is not complied with, any share in respect of which the notice was given may, before payment of all calls or instalments and interest due in respect of it is made, be forfeited by (and with effect from the time of the passing of) a resolution of the Board that such share be forfeited. The forfeiture shall include all dividends declared and other monies payable in respect of the forfeited shares and not paid before the forfeiture.


28.	NOTICE OF FORFEITURE

28.1

When any share has been forfeited, notice of the forfeiture shall be served upon the person who was, before the forfeiture, the holder of the share, but a forfeiture shall not be invalidated by any failure to give such notice. An entry of such notice and an entry of the forfeiture with the date thereof shall forthwith be made in the Register in respect of such share. However, no forfeiture shall be invalidated by any omission to make such entries as aforesaid.


29.	SALE OF FORFEITED SHARE


29.1	Until cancelled in accordance with the Statutes, a forfeited share shall be deemed to be the property of the Company and may be sold, re-allotted or otherwise disposed of either to the person who was the holder before the forfeiture or to any other person upon such terms and in such manner as the Board thinks fit. To give effect to a sale or other disposal, the Board may:


29.1.1	in the case of shares held in certificated form, authorise and instruct some person (which may include the holder of shares concerned) to execute an instrument of transfer of the shares; and

29.1.2

to the designated transferee (and the transfer will be valid even if in respect of any of the shares no certificate accompanies the instrument of transfer). The Company may receive any consideration given for the share on its disposal and may register the transferee as holder of the share. At any time before a sale, re-allotment or other disposition, the forfeiture may be cancelled on such terms as the Board thinks fit.


30.	ARREARS TO BE PAID NOTWITHSTANDING FORFEITURE

30.1

A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares and, in the case of shares held in certificated form, shall surrender to the Company for cancellation the certificate for the forfeited shares but in all cases shall remain liable to the Company for all monies which at the date of forfeiture were presently payable by him to the Company in respect of those shares with interest thereon from the date of forfeiture until payment at such rate (not exceeding 15 per cent. per annum) as the Board may determine.


30.2	The Board may waive payment wholly or in part and the Board may enforce payment without any allowance for the value of the shares at the time of forfeiture or for any consideration received on their disposal.


31.	STATUTORY DECLARATION AND VALIDITY OF SALE

31.1

A statutory declaration by a Director or the Secretary that a share has been forfeited on a specified date shall be conclusive evidence of the facts stated in it as against all persons claiming to be entitled to the share. The declaration shall (subject to the completion of any formalities necessary to effect a transfer) constitute a good title to the share and the person to whom the share is disposed of shall be registered as the holder of the share and shall be discharged from all calls made prior to such disposition and shall not be bound to see to the application of the consideration (if any), nor shall his title to the share be

affected by any irregularity in or invalidity of the proceedings in reference to the forfeiture, sale, re-allotment or other disposal of the share.

UNTRACED SHAREHOLDERS


32.	POWER TO SELL SHARES OF UNTRACED SHAREHOLDERS


32.1	Subject to the Regulations, the Company shall be entitled to sell at the best price reasonably obtainable any shares of a holder or transmittee if in respect of those shares:


32.1.1	no cheque, warrant or other financial instrument or payment sent by the Company in the manner authorised by these Articles has been cashed for a period of at least 12 years (the “ qualifying period ”) and in the qualifying period the Company has paid at least three dividends and no dividend has been claimed;

32.1.2

the Company has at the expiration of the qualifying period given notice of its intention to sell such shares by two advertisements, one in a national newspaper published in the United Kingdom and the other in a newspaper circulating in the area in which the last known address of the holder or the address at which service of notices may be effected in the manner authorised by these Articles is located;


32.1.3	so far as the Board is aware, the Company has not during the qualifying period or the period of three months after the date of such advertisements (or the later of the two dates if they are published on different dates) and prior to the exercise of the power of sale received any communication from the holder or transmittee

and where this power has arisen and at the time of its exercise that holder or transmittee holds, or is entitled by transmission to hold, any other shares issued in right of the shares to be sold, this power shall be deemed to have arisen also in relation to those other shares.


33.	MANNER OF SALE AND CREATION OF DEBT IN RESPECT OF NET PROCEEDS


33.1	To give effect to any sale pursuant to the immediately preceding Article, the Board may:


33.1.1	in the case of shares held in certificated form, authorise and instruct some person (which may include the holder of shares concerned) to execute an instrument of transfer of the shares; and

33.1.2

and such instrument of transfer and the taking of such other steps as may be necessary shall be as effective as if they had been executed by the holder or transmittee of the shares. The transfer will be valid even if in respect of any of the shares no certificate accompanies the instrument of transfer. The transferee shall not be bound to see to the application of the purchase money and his title shall not be affected by any irregularity in, or invalidity of, the proceedings relating to the sale.

33.2

The net proceeds of sale shall belong to the Company, which shall be indebted to the former holder or transmittee for an amount equal to such proceeds and shall enter the name of such former member or other person in the books of the Company as a creditor for such amount. No trust shall be created in respect of the debt, no interest shall be payable in respect of it and the Company shall not be required to account for any monies earned on the net proceeds, which may be employed in the business of the Company or otherwise invested as the Board thinks fit.

TRANSFER OF SHARES


34.	FORM AND EXECUTION OF TRANSFER

34.1

Subject to such of the restrictions of these Articles as may be applicable, a member may transfer all or any of his shares, in the case of shares held in certificated form, by an instrument of transfer in any usual form or in any other form which the Board may approve or, in the case of shares held in uncertificated form, in accordance with the Regulations and the system’s rules and otherwise in such manner as the Board in its absolute discretion shall determine. An instrument of transfer shall be executed by or on behalf of the transferor and (unless the share is fully paid) by or on behalf of the transferee. Subject to the Statutes, the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register in respect of it.


34.2	Subject to the Statutes and notwithstanding any other provisions of these Articles, the Board shall have power to implement any arrangements it may think fit to enable:


34.2.1	title to any securities of the Company to be evidenced and transferred without a written instrument in accordance with the Regulations and the facilities and requirements of the relevant system concerned; and


34.2.2	rights attaching to such securities to be exercised notwithstanding that such securities are held in uncertificated form where, in the Board’s opinion, these Articles do not otherwise allow or provide for such exercise.


35.	RIGHT TO REFUSE REGISTRATION OF SHARES


35.1	Subject to the Statutes, the Board may refuse to register the transfer of a certificated share which is not fully paid or on which the Company has a lien provided that, where any such shares are admitted to trading on AIM, such discretion may not be exercised in such a way as to prevent dealings in the shares of that class from taking place on an open and proper basis.


36.	OTHER RIGHTS TO REFUSE REGISTRATION


36.1	Subject to the Statutes, the Board may also refuse to register the transfer of a share:

36.1.1

in the case of shares held in certificated form, if it is not lodged, duly stamped (if necessary), at the Office or at such other place as the Board may appoint and accompanied by the certificate for the shares to which it relates (where a certificate has been issued in respect of the shares and these Articles do not provide for such a transfer to be valid without production of the certificate) and/or such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;


36.1.2	if it is not in respect of one class of share only;


36.1.3	if it is not in favour of four or fewer transferees;


36.1.4	if it is in favour of a minor, bankrupt or person of mental ill health;


36.1.5	without prejudice to the foregoing, in the case of shares held in uncertificated form, in any other circumstances permitted by the Regulations and/or the system’s rules; or


36.1.6	where the Board is obliged or entitled to refuse to do so as a result of any failure to comply with a notice under section 793 of the Companies Act 2006.


37.	NOTICE OF REFUSAL

37.1

If the Board refuses to register a transfer it shall, in the case of shares held in certificated form, within two months after the date on which the transfer was lodged and, in the case of shares held in uncertificated form, within two months after the date on which the relevant Operator-instruction was received by or on behalf of the Company, send to the transferee notice of the refusal together with its reasons for the refusal.


38.	NO FEE FOR REGISTRATION


38.1	No fee shall be charged for the registration of any instrument of transfer or document relating to or affecting the title to any share.


39.	RETENTION OF DOCUMENTS


39.1	Any instrument of transfer which is registered may be retained by the Company, but any instrument of transfer which the Board refuses to register shall be returned to the person lodging it when notice of the refusal is given.


40.	OTHER REGISTERS


40.1	Subject to the Statutes, the Company may keep an overseas, local or other register in any place, and the Board may make and vary such regulations as it may think fit concerning the keeping of that register.

TRANSMISSION OF SHARES


41.	TRANSMISSION

41.1

Where transmission occurs in relation to a share in consequence of the death or bankruptcy of a member or of any other event giving rise to its transmission by operation of law, the survivor or survivors (in the case of death) where he was a joint holder, and the transmittee where he was a sole holder or the only survivor of joint holders shall be the only person recognised by the Company as having any title to his shares; but nothing contained in this Article shall release the estate of a deceased member from any liability in respect of any share solely or jointly held by him.


42.	ELECTION BY TRANSMITTEE

42.1

A transmittee may, upon such evidence being produced as the Board may require and subject (where relevant) to the system’s rules, elect either to become the holder of the share or to have some person nominated by him registered as the transferee. If he elects to become the holder, he shall give notice to the Company to that effect. If he elects to have another person registered, he shall, subject (where relevant) to the system’s rules, effect or procure a transfer of the share in favour of that person. Subject to the Statutes, all the provisions of these Articles relating to the transfer of shares shall apply to the notice or instrument of transfer as if the death or bankruptcy of the member or other event giving rise to the transmission had not occurred and the notice or instrument of transfer was an instrument of transfer executed by the member.


43.	RIGHTS IN RESPECT OF THE SHARE

43.1

A transmittee shall have the same rights to which he would be entitled if he were the holder of the share concerned, except that he shall not be entitled in respect of it to attend or vote at any general meeting of the Company or at any separate meeting of the holders of any class of shares in the Company until he is registered as the holder of the share. The Board may at any time give notice to such person requiring him to elect either to become the holder of the share or to transfer the share and, if the notice is not complied with within 60 clear days from the date of the notice, the Board may withhold payment of all dividends and other monies payable in respect of the share until he complies with the notice.

ALTERATION OF CAPITAL


44.	FRACTIONS

44.1

Whenever as a result of a consolidation, division or sub-division of shares any member would become entitled to fractions of a share, the Board may deal with the fractions as it thinks fit and, in particular, may sell the shares representing the fractions to any person (including, subject to the Statutes, the Company) and may distribute the net proceeds of sale in due proportion among those members except for amounts of £5.00 or less, which shall be retained for the benefit of the Company. To give effect to any such sale, the Board may authorise and instruct a person to take such steps as may be necessary (subject, in the case of shares held in uncertificated form, to the system’s rules) to transfer or deliver

the shares to, or in accordance with the directions of, the purchaser. Subject to the Statutes, where a shareholder holds shares in both certificated and uncertificated form, the Board may for these purposes treat them as separate holdings, and may at its discretion arrange for any shares representing fractions to be entered in the Register as held in certificated or uncertificated form in order to facilitate their sale under this Article. The transferee shall not be bound to see to the application of the purchase money and his title shall not be affected by any irregularity in, or invalidity of, the proceedings relating to the sale.

PURCHASE OF OWN SHARES


45.	PURCHASE OF OWN SHARES


45.1	Subject to the Statutes and to any rights conferred on the holders of any class of shares, the Company may not purchase any of its shares unless the purchase has been sanctioned by a special resolution passed at a separate general meeting (or meetings if there is more than one class) of the holders of any shares which entitle the holders to convert them into equity share capital of the Company.


45.2	On a purchase by the Company of its own shares, neither the Company nor the Board shall be required to select the shares to be purchased rateably or in any particular manner as between the holders of shares of the same class or as between them and the holders of shares of any other class or in accordance with the rights as to dividends or capital attached to any class of shares.

GENERAL MEETINGS


46.	CONVENING GENERAL MEETINGS


46.1	The Board may convene a general meeting whenever it thinks fit and shall do so on requisition in accordance with the Statutes.

NOTICE OF GENERAL MEETINGS


47.	LENGTH OF NOTICE PERIOD


47.1	An annual general meeting shall be convened by at least 21 clear days’ notice. Subject to the Statutes, all other general meetings shall be convened by at least 14 clear days’ notice. Subject to these Articles and to any restrictions imposed on any shares, the notice shall be given to all the members, to all transmittees and to the Directors and Auditors.


48.	CONTENTS OF NOTICES


48.1	Every notice calling a general meeting shall specify:


48.1.1	the place, the day and the time of the meeting and the general nature of the business to be transacted;


48.1.2	(if such is the case) that the meeting is an annual general meeting and, if the notice is given more than six weeks before the annual general meeting, a statement of the right in accordance with the Statutes to require notice of a resolution to be moved or a matter to be included in the business of the meeting;


48.1.3	(if such is the case) that the meeting is convened to pass a special resolution; and


48.1.4	with reasonable prominence that a member is entitled to appoint one or more proxies to exercise all or any of his rights to attend, speak and vote at the meeting, that a proxy need not be a member, and the address or addresses where appointments of proxy are to be deposited, delivered or received insofar as any such address is other than the postal address of the Office.


49.	OMISSION OR NON-RECEIPT OF NOTICE


49.1	No proceedings at any meeting shall be invalidated by any accidental omission to give notice of the meeting, or to send an instrument of proxy, to any person entitled to receive it or, in the case of notice

in electronic form or made available by means of a website, to invite any such person to appoint a proxy, or by reason of any such person not receiving any such notice, instrument or invitation.


50.	CHANGE OF DATE, TIME OR PLACE OF MEETING

50.1

If for any reason the Board considers it impractical or undesirable to hold a meeting on the day, at the time or in the place specified in the notice calling the meeting it can change the date, time and place of the meeting (or whichever it requires), and may do so more than once in relation to the same meeting. References in these Articles to the time of the holding of the meeting shall be construed accordingly. The Board will, insofar as it is practicable, announce by advertisement in at least one newspaper with a national circulation the date, time and place of the meeting as changed, but it shall not be necessary to restate the business of the meeting in that announcement.

PROCEEDINGS AT GENERAL MEETINGS


51.	QUORUM


51.1	No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the choice or appointment of a chairman of the meeting. Except as otherwise provided by these Articles, two members present in person or by proxy and entitled to vote shall be a quorum for all purposes.


52.	PROCEDURE IF QUORUM NOT PRESENT

52.1

If within five minutes (or such longer time not exceeding one hour as the chairman of the meeting may decide to wait) after the time appointed for the commencement of the meeting a quorum is not present, the meeting shall (if requisitioned in accordance with the Statutes) be dissolved or (in any other case) stand adjourned to such other day (not being less than ten clear days nor more than 28 days later) and at such time and place as the chairman of the meeting may decide and at such adjourned meeting one member present in person or by proxy (whatever the number of shares held by him) and entitled to vote shall be a quorum.


52.2	The Company shall give not less than seven clear days’ notice of any meeting adjourned through want of a quorum and the notice shall specify that one member present in person or by proxy (whatever the number of shares held by him) and entitled to vote shall be a quorum.


53.	CHAIRMAN OF GENERAL MEETING

53.1

The chairman (if any) of the Board or, in his absence, the deputy chairman (if any) shall preside as chairman at every general meeting. If there is no such chairman or deputy chairman, or if at any meeting neither the chairman nor a deputy chairman is present within five minutes after the time appointed for the commencement of the meeting, or if neither of them is willing to act as chairman, the Directors present shall choose one of their number to act, or if one Director only is present he shall preside as chairman, if willing to act. If no Director is present, or if each of the Directors present declines to take the chair, the persons present and entitled to vote shall elect one of their number to be chairman.


53.2	The chairman of the meeting may invite any person to attend and speak at any general meeting of the Company whom he considers to be equipped by knowledge or experience of the Company’s business to assist in the deliberations of the meeting.


53.3	The decision of the chairman of the meeting as to points of order, matters of procedure or arising incidentally out of the business of a general meeting shall be conclusive, as shall be his decision, acting in good faith, on whether a point or matter is of this nature.


54.	ATTENDANCE AND SPEAKING AT GENERAL MEETINGS


54.1	A person is able to exercise the right to speak at a general meeting when that person is in a position to communicate to all those attending the meeting, during the meeting, any information or opinions which that person has on the business of the meeting.


54.2	A person is able to exercise the right to vote at a general meeting when:


54.2.1	that person is able to vote, during the meeting, on resolutions put to the vote at the meeting; and


54.2.2	that person’s vote can be taken into account in determining whether or not such resolutions are passed at the same time as the votes of all the other persons attending the meeting.


54.3	The Directors may make whatever arrangements they consider appropriate to enable those attending a general meeting to exercise their rights to speak or vote at it.


54.4	Each Director shall be entitled to attend and to speak at any general meeting of the Company and at any separate general meeting of the holders of any class of shares or debentures in the Company.


55.	MEETING AT MORE THAN ONE PLACE AND/OR IN A SERIES OF ROOMS


55.1	A general meeting or adjourned meeting may be held at more than one place. The notice of meeting will specify the place at which the chairman will be present (the “ Principal Place ”) and a letter accompanying the notice will specify any other place(s) at which the meeting will be held simultaneously (but any failure to do this will not invalidate the notice of meeting).


55.2	A general meeting or adjourned meeting will be held in one room or a series of rooms at the place specified in the notice of meeting or any other place at which the meeting is to be held simultaneously.


55.3	If the meeting is held in more than one place and/or in a series of rooms, it will not be validly held unless all persons entitled to attend and speak at the meeting are able:


55.3.1	if excluded from the Principal Place or the room in which the chairman is present, to attend at one of the other places or rooms; and


55.3.2	to communicate with one another audio-visually throughout the meeting.


55.4	The Board may make such arrangements as it thinks fit for simultaneous attendance and participation at the meeting and may vary any such arrangements or make new arrangements. Arrangements may be notified in advance or at the meeting by whatever means the Board thinks appropriate to the circumstances. Each person entitled to attend the meeting will be bound by the arrangements made by the Board.


55.5	Where a meeting is held in more than one place and/or a series of rooms, then for the purpose of these Articles the meeting shall consist of all those persons entitled to attend and participate in the meeting who attend at any of the places or rooms.


56.	SECURITY ARRANGEMENTS

56.1

The Board may direct that persons entitled to attend any general meeting should submit to such searches or other security arrangements or restrictions as the Board shall consider appropriate in the circumstances and the Board may in its absolute discretion refuse entry to such general meeting to any person who fails to submit to such searches or otherwise to comply with such security arrangements or restrictions. If any person has gained entry to a general meeting and refuses to comply with any such security arrangements or restrictions or disrupts the proper and orderly conduct of the general meeting, the chairman of the meeting may at any time without the consent of the general meeting require such person to leave or be removed from the meeting.


57.	ADJOURNMENTS


57.1	The chairman of the meeting may at any time without the consent of the meeting adjourn any meeting (whether or not it has commenced or a quorum is present) either indefinitely or to such time and place as he may decide if it appears to him that:


57.1.1	the persons entitled to attend cannot be conveniently accommodated in the place appointed for the meeting;


57.1.2	the conduct of persons present prevents, or is likely to prevent, the orderly continuation of business; or


57.1.3	an adjournment is otherwise necessary so that the business of the meeting may be properly conducted.


57.2	In addition, the chairman of the meeting may at any time with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting either indefinitely or to such time and place as he may decide. When a meeting is adjourned indefinitely the time and place for the adjourned meeting shall be fixed by the Board.


57.3	No business shall be transacted at any adjourned meeting except business which might properly have been transacted at the meeting had the adjournment not taken place.


58.	NOTICE OF ADJOURNED MEETING

58.1

If a meeting is adjourned indefinitely or for 30 days or more or for lack of a quorum, at least seven clear days’ notice specifying the place, the day and the time of the adjourned meeting shall be given, but it shall not be necessary to specify in the notice the nature of the business to be transacted at the adjourned meeting. Otherwise, it shall not be necessary to give notice of an adjourned meeting.

VOTES OF MEMBERS


59.	METHOD OF VOTING


59.1	At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless before or on the declaration of the result of the show of hands a poll is duly demanded. Subject to the Statutes, a poll may be demanded by:


59.1.1	the chairman of the meeting;


59.1.2	at least five members or proxies entitled to vote on the resolution;


59.1.3	any member or proxy alone or together with one or more others representing in aggregate at least one-tenth of the total voting rights of all the members having the right to attend and vote on the resolution (excluding any voting rights attached to any shares held as treasury shares); or


59.1.4	any member or proxy alone or together with one or more others holding or having been appointed in respect of shares conferring a right to vote on the resolution, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right (excluding any voting rights attached to any shares held as treasury shares).

59.2

Unless a poll is so demanded and the demand is not withdrawn, a declaration by the chairman of the meeting that a resolution has been carried or carried unanimously or by a particular majority or not carried by a particular majority or lost and an entry to that effect in the minutes of the meeting shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.


60.	VOTES OF MEMBERS

60.1

Subject to the Statutes, to any rights or restrictions attached to any shares and to any other provisions of these Articles, on a show of hands every member who is present in person shall have one vote and on a poll every member shall have one vote for every share of which he is the holder. If the notice of the meeting has specified a time (which is not more than 48 hours, taking no account of any part of a day that is not a working day, before the time fixed for the meeting) by which a person must be entered on the Register in order to have the right to attend and vote at the meeting, no person registered after that time shall be eligible to attend and vote at the meeting by right of that registration, even if present at the meeting. References in these Articles to members present in person shall be construed accordingly.


61.	VOTES OF JOINT HOLDERS


61.1	In the case of joint holders of a share who are entitled to vote the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and seniority shall be determined by the order in which the names of the holders stand in the Register.


62.	VOTES OF MEMBER SUFFERING INCAPACITY

62.1

A member in respect of whom an order has been made by any competent court or official on the ground that he is or may be suffering from mental disorder or is otherwise incapable of managing his affairs may vote, whether on a show of hands or on a poll, by any person authorised in such circumstances to do so on his behalf and that person may vote on a poll by proxy. The vote of such member shall not be valid unless evidence to the satisfaction of the Board of the authority of the person claiming to exercise the right to vote is deposited at the Office, or at such other place as is specified in accordance with these Articles for the deposit of appointments of proxy in hard copy form, not later than the last time at which an appointment of proxy should have been delivered in order to be valid for use at that meeting or on the holding of that poll.


63.	NO RIGHT TO VOTE WHERE SUMS OVERDUE ON SHARES

No member shall, unless the Board otherwise decides, vote at any general meeting or at any separate meeting of holders of any class of shares in the Company, either in person or by proxy, or exercise any other right or privilege as a member in respect of any share in the Company held by him unless all monies presently payable by him in respect of that share have been paid.


64.	VOTES ON A POLL


64.1	On a poll, a member entitled to more than one vote on a poll need not, if he votes, use all his votes or cast all the votes he uses in the same way.


65.	RIGHT TO WITHDRAW DEMAND FOR A POLL

65.1

The demand for a poll may, before the earlier of the close of the meeting and the taking of the poll, be withdrawn but only with the consent of the chairman of the meeting and, if a demand is withdrawn, any other persons entitled to demand a poll may do so. If a demand is withdrawn, it shall not be taken to have invalidated the result of a show of hands declared before the demand was made. If a poll is demanded before the declaration of the result of a show of hands and the demand is duly withdrawn, the chairman of the meeting may give whatever directions he considers necessary to ensure that the business of the meeting proceeds as it would have if the demand had not been made.


66.	PROCEDURE IF POLL DEMANDED


66.1	If a poll is duly demanded, it shall be taken in such manner as the chairman of the meeting directs and he may appoint scrutineers (who need not be persons entitled to vote) and fix a time and place for declaring the result of the poll. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.


67.	WHEN POLL TO BE TAKEN

67.1

A poll demanded on the election of a chairman of the meeting or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken either forthwith or on such date (being not more than 30 days after the poll is demanded) and at such time and place and in such manner or by such means as the chairman of the meeting directs. No notice need be given of a poll not taken immediately if the time and place at which it is to be taken are announced at the meeting at which it is demanded. In any other case, at least seven clear days’ notice shall be given specifying the time and place at which the poll is to be taken. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded.


68.	CONTINUANCE OF OTHER BUSINESS AFTER POLL DEMANDED


68.1	The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll was demanded.


69.	PROPOSAL OR AMENDMENT OF RESOLUTION

69.1

A resolution proposed by the chairman of the meeting does not need to be seconded. In the case of a resolution duly proposed as a special resolution, no amendment to that resolution (other than an amendment to correct an obvious error) may be considered or voted upon. In the case of a resolution duly proposed as an ordinary resolution, no amendment to that resolution (other than an amendment to correct an obvious error) may be considered or voted upon unless at least 48 hours prior to the time appointed for holding the meeting or adjourned meeting at which such ordinary resolution is to be proposed notice of the terms of the amendment and of the intention to move the amendment has been lodged in writing in hard copy form at the Office or received in electronic form at the electronic address at which the Company has or is deemed to have agreed to receive it, or the chairman of the meeting in his absolute discretion decides in good faith that it may be considered and voted upon.


70.	AMENDMENT OF RESOLUTION RULED OUT OF ORDER


70.1	If an amendment is proposed to any resolution under consideration which the chairman of the meeting rules out of order, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling.


71.	OBJECTIONS OR ERRORS IN VOTING


71.1	If:


71.1.1	any objection shall be raised to the qualification of any voter;


71.1.2	any votes have been counted which ought not to have been counted or which might have been rejected; or


71.1.3	any votes are not counted which ought to have been counted

the objection or error shall not vitiate the decision of the meeting or adjourned meeting on any resolution unless it is raised or pointed out at the meeting or, as the case may be, the adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any objection or error shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any resolution if the chairman of the meeting decides that the same may have affected the decision of the meeting. The decision of the chairman of the meeting on such matters shall be conclusive.


72.	SUSPENSION OF RIGHTS FOR NON-DISCLOSURE OF INTEREST

72.1

If a member, or any other person appearing to be interested in shares held by that member, has been duly given a notice under section 793 of the Companies Act 2006 (a “ Disclosure Notice ”) and has failed in relation to any shares (the “ default shares ”) to give the Company the information required by such notice within 14 days of the date of such notice, then (unless the Board shall determine otherwise) from the expiry of that period:


72.1.1	the member shall not be entitled in respect of the default shares to be present or to vote (in person, by proxy or, if it is a corporation, by representative) at any general meeting or at any separate meeting of the holders of any class of shares or on any poll; and


72.1.2	where the default shares represent at least 0.25 per cent. of the issued shares of the Company or the class in question (in either case, calculated exclusive of shares held as treasury shares):


(a)	any dividend (including shares issued in lieu of dividends) or other monies payable in respect of the default shares shall be withheld by the Company, which shall not have any obligation to pay interest on it; and


(b)	no transfer, other than an excepted transfer, of any shares held by the member shall be registered unless the member is not himself in default as regards supplying the

information required and the transfer is of part only of the member’s holding and when lodged for registration is accompanied by a certificate from the member in a form satisfactory to the Board that after due and careful enquiry the member is satisfied that no person in default as regards supplying such information is interested in any of the shares the subject of the transfer.

72.2

Where, on the basis of information obtained from a member in respect of any share held by him or from any other person appearing to be interested in such share, the Company gives a Disclosure Notice to any other person, it shall also send a copy of the notice to that member, but any failure to do so, or the non-receipt of the copy by the member, shall not invalidate or otherwise affect the operation of this Article.


72.3	Where default shares in which a person appears to be interested are held by a Depositary, the provisions of this Article shall be treated as applying only to those shares held by the Depositary in which such person appears to be interested and not (insofar as such person’s apparent interest is concerned) to any other shares held by the Depositary.

72.4

Where the member on which a Disclosure Notice is served is a Depositary acting in its capacity as such, the obligations of the Depositary as a member of the Company shall be limited to disclosing to the Company such information relating to any person appearing to be interested in the shares held by it as has been recorded by it pursuant to the arrangements entered into by the Company or approved by the Board pursuant to which it was appointed as a Depositary.

72.5

Except to the extent that they are default shares by virtue of Article 72.1, any new shares in the Company issued in right of any default share shall be subject to the same restrictions in this Article as apply to the default share and for as long as they so apply. The Board may make any right to an allotment of the new shares subject to such restrictions when those shares are issued (and may for that purpose require the new shares to be issued and held in certificated form).

72.6

Where any restrictions imposed under this Article apply in relation to any shares, they shall cease to have effect if and when, and to the extent that, the Board so determines, except that particular shares shall in any event automatically cease to be subject to any such restrictions seven days after the earlier of (a) receipt by the Board of notice that such shares are the subject of an excepted transfer and (b) due compliance, to the satisfaction of the Board, with the relevant Disclosure Notice. If any or all of the restrictions in this Article shall cease to apply to particular shares, any dividends and other monies withheld by reason of a restriction which then ceases to apply shall be paid without interest to the person who would have been entitled to them if that restriction had not applied, or as he may direct.


72.7	This Article is in addition to, and shall not in any way prejudice or affect, the statutory rights of the Company arising from any failure by any person to give any information required by a Disclosure Notice within the time specified in it. For the purpose of this Article, a Disclosure Notice may require any information to be given before the expiry of 14 days from the date of the notice.


72.8	In this Article:


72.8.1	an “ excepted transfer ” means


(a)	a transfer pursuant to acceptance of a takeover bid;


(b)	a transfer in consequence of a sale of the entire interest in the shares the subject of the transfer on a recognised investment exchange or on any other stock exchange outside the United Kingdom on which shares in the Company of that description are normally traded; or


(c)	a transfer which is shown to the satisfaction of the Board to be made in consequence of a sale of such an entire interest otherwise than on any such stock exchange to a person who is not connected with the relevant member or with a person appearing to be interested in the shares the subject of the transfer;


72.8.2	a “ person appearing to be interested ” in any shares means any person named in a response to a Disclosure Notice as being so interested or shown in any register kept by the Company under the Companies Act 2006 as so interested or, taking into account any response or failure

to respond to such notice or to any other statutory notice or any other relevant information, any person whom the Company has reasonable cause to believe is so interested; and

72.8.3

references to a person having failed to give the Company the information required by a Disclosure Notice, or being in default as regards supplying such information, include (without limitation) (i) references to his having failed or refused to give all or any part of it and (ii) references to his having given information which he knows to be false in a material particular or his having recklessly given information which is false in a material particular.

Notwithstanding anything to the contrary in this Article, no restriction shall apply by virtue of this Article to the extent that applying the restriction would contravene the Regulations, but, subject to the system’s rules, the Board may require the Operator of a relevant system to convert any share held in uncertificated form into certificated form in order to enable the Company to impose restrictions in relation to the share in accordance with this Article.

PROXIES


73.	EXECUTION OF AN APPOINTMENT OF PROXY


73.1	If the appointment of a proxy is:


73.1.1	in hard copy form, it shall be executed under the hand of the appointor or of his attorney authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign it;


73.1.2	in electronic form, it shall be executed by or on behalf of the appointor.


73.2	Subject as provided in this Article, in the case of an appointment of proxy purporting to be executed on behalf of a corporation by an officer of that corporation it shall be assumed, unless the contrary is shown, that such officer was duly authorised to do so on behalf of that corporation without further evidence of that authorisation.


73.3	The Board may (but need not) allow proxy appointments to be made in electronic form, and if it does it may make such appointments subject to such stipulations, conditions or restrictions, and require such evidence of valid execution, as the Board thinks fit.


73.4	A proxy need not be a member of the Company.


74.	TIMES FOR DEPOSIT OF AN APPOINTMENT OF PROXY


74.1	The appointment of a proxy shall:

74.1.1

if in hard copy form, be deposited at the Office (or at such other address within the United Kingdom as is specified for the purpose in the notice convening the meeting or in the instrument) not less than 48 hours, taking no account of any part of a day that is not a working day, before the time of the holding of the meeting or adjourned meeting at which the person named in the appointment proposes to vote, or by such later time as is specified in the notice or instrument; or


74.1.2	if in electronic form, where an address has been specified for the purpose of receiving documents or information by electronic means:


(a)	in the notice convening the meeting, or


(b)	in any instrument of proxy sent out by the Company in relation to the meeting, or


(c)	in any invitation to appoint a proxy by electronic means issued by the Company in relation to the meeting,

be received at such address not less than 48 hours, taking no account of any part of a day that is not a working day, before the time for holding the meeting or adjourned meeting at which the person named in the appointment proposes to vote, or by such later time as is specified in the notice, instrument or invitation;


74.1.3	in the case of a poll taken more than 48 hours after it is demanded, be deposited or received in that manner after the poll has been demanded and not less than 24 hours before the time appointed for the taking of the poll, or by such later time as may be specified for the purpose; or


74.1.4	where the poll is not taken forthwith but is taken not more than 48 hours after it was demanded, be delivered at the meeting at which the poll was demanded to the chairman of the meeting or to any Director,

provided in each case that the power of attorney or other authority (if any) under which it is signed, or a copy of such authority certified notarially or in some other way approved by the Board, has been received in hard copy form (or, to the extent the Directors think fit, in electronic form) at the Office, or at such other address or place within the United Kingdom as is specified for the purpose in the notice convening the meeting or in the instrument, no later than the latest time for receipt of the appointment of proxy. An appointment of proxy that is not deposited, delivered or received in a manner so permitted shall be invalid.

74.2

Except as provided otherwise in any terms and conditions issued, endorsed or adopted by the Board to facilitate the appointment by members of more than one proxy to exercise all or any of the member’s rights at a meeting, when two or more valid but differing appointments of proxy are deposited, delivered or received in respect of the same share for use at the same meeting, the one which is last deposited, delivered or received (regardless of its date or of the date of execution) shall be treated as replacing the others as regards that share; if the Company is unable to determine which was last deposited, delivered or received, none of them shall be treated as valid in respect of that share. The deposit, delivery or receipt of an appointment of a proxy shall not preclude a member from attending and voting in person at the meeting or poll concerned.


75.	FORM OF APPOINTMENT OF PROXY


75.1	The appointment of a proxy shall be in any usual form or any other form that the Board may approve and may relate to more than one meeting. The Board may, if it thinks fit but subject to the Statutes, include with the notice of any meeting forms of appointment of proxy for use at the meeting.


75.2	Appointments of proxies may specify how the proxy appointed under them is to vote (or that the proxy is to abstain from voting) on one or more resolutions, but the Company shall not be obliged to ascertain that any proxy has complied with those or any other instructions given by the appointor and no decision on any resolution shall be vitiated by reason only that any proxy has not done so.

75.3

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. The appointment of a proxy shall be deemed to include all the relevant member’s rights to attend and speak at the meeting and vote in respect of the share or shares concerned (but so that each proxy appointed by that member may vote on a show of hands notwithstanding that the member would only have had one vote if voting in person, and may demand or join in demanding a poll as if the proxy held the share or shares concerned) and, except to the extent that the appointment comprises instructions to vote in a particular way, to permit the proxy to vote or abstain as the proxy thinks fit on any business properly dealt with at the meeting, including a vote on any amendment of a resolution put to the meeting or on any motion to adjourn.


75.4	On a vote on a resolution on a show of hands at a meeting, every proxy present who has been duly appointed by one or more members entitled to vote on the resolution has one vote, except that if the proxy has been duly appointed by more than one member entitled to vote on the resolution and:


75.4.1	has been instructed by one or more of those members to vote for the resolution and by one or more other of those members to vote against it, or


75.4.2	has been instructed to vote the same way (either for or against) on the resolution by all of those members except those who have given the proxy discretion as to how to vote on the resolution

the proxy is entitled to one vote for and one vote against the resolution.


75.5	The appointment shall, unless the contrary is stated in it, be as valid for any adjournment of the meeting as for the meeting to which it relates (regardless of any change of date, time or place effected in accordance with these Articles).


76.	VALIDITY OF PROXY

76.1

Subject to the Statutes, a vote given or poll demanded by proxy shall be valid, notwithstanding the previous determination of the proxy’s authority unless notice of such determination was received by the Company at the Office (or at such other place at which the appointment of proxy was duly deposited or, where the appointment of the proxy was in electronic form, at the address at which such appointment was duly received) not later than the last time at which an appointment of proxy should have been deposited, delivered or received in order to be valid for use at the meeting or on the holding of the poll at which the vote was given or the poll demanded.


77.	MAXIMUM VALIDITY OF PROXY


77.1	A valid appointment of proxy shall cease to be valid after the expiration of 12 months from the date of its execution except that it will remain valid after that for the purposes of a poll or an adjourned meeting if the meeting at which the poll was demanded or the adjournment moved was held within the 12-month period.

DIRECTORS


78.	NUMBER OF DIRECTORS


78.1	Unless otherwise determined by ordinary resolution of the Company, the number of Directors (disregarding alternate directors) shall not be less than two but shall not be subject to any maximum number.


79.	NO SHAREHOLDING QUALIFICATION FOR DIRECTORS


79.1	No shareholding qualification for Directors shall be required.

REMUNERATION OF DIRECTORS


80.	ORDINARY REMUNERATION

80.1

Each of the Directors (other than any Director who for the time being holds an executive office or employment with the Company or a subsidiary of the Company) shall be paid a fee for his services at such rate as may from time to time be determined by the Board or by a committee authorised by the Board provided that the aggregate of such fees (excluding any amounts payable under any other provision of these Articles) shall not exceed £250,000 per annum or such higher amount as the Company by ordinary resolution may determine from time to time. Such fee shall be deemed to accrue from day to day.


81.	EXPENSES

81.1

The Directors may be paid all travelling, hotel and other expenses properly incurred by them in the conduct of the Company’s business performing their duties as Directors including all such expenses incurred in connection with attending and returning from meetings of the Board or any committee of the Board or general meetings or separate meetings of the holders of any class of shares or debentures of the Company or otherwise in connection with the business of the Company.


82.	EXTRA REMUNERATION


82.1	Any Director who is appointed to any executive office or who serves on any committee or who devotes special attention to the business of the Company or goes or resides abroad for any purposes of the Company shall receive such remuneration or extra remuneration by way of salary, commission, participation in profits or otherwise as the Board or any committee authorised by the Board may

determine in addition to or in lieu of any remuneration paid to, or provided for, such Director by or pursuant to any other of these Articles.

ALTERNATE DIRECTORS


83.	APPOINTMENT, REMOVAL AND RESIGNATION

83.1

Any Director (other than an alternate Director) may appoint any person to be his alternate and may revoke any such appointment, in either case by notice in writing delivered to the Secretary at the Office or delivered in any other manner (including by electronic means) approved by the Board. If the alternate Director is not already a Director, the appointment, unless previously approved by the Board, shall have effect only upon and subject to its being so approved. Any appointment of an alternate will only have effect once the person who is to be appointed has consented to act.

83.2

If his appointor so requests, an alternate Director shall (subject to his giving to the Company an address for service within the United Kingdom) be entitled to receive notice of all meetings of the Board or of committees of the Board of which his appointor is a member, to attend and vote and be counted in the quorum as a Director at any such meeting at which his appointor is not personally present, and generally, in the absence of his appointor, at the meeting to exercise and discharge all the functions, powers and duties of his appointor as a Director and for the purposes of the proceedings at the meeting, these Articles shall apply as if he were a Director. A Director present at a meeting of the Board or committee of the Board and appointed alternate for another Director shall have an additional vote for each of his appointors absent from such meeting (but shall count as one only for the purpose of determining whether a quorum is present).


83.3	Execution by an alternate Director of any document (including, without limitation, any deed) on behalf of the Company or any resolution in writing of the Board or a committee of the Board shall, unless the notice of his appointment provides to the contrary, be as effective as execution by his appointor.

83.4

An alternate Director shall cease to be an alternate Director if he resigns or if for any reason his appointment is revoked or if his appointor ceases to be a Director; but, if a Director retires by rotation or otherwise but is reappointed or deemed to have been reappointed at the meeting at which he retires, any appointment of an alternate Director made by him which was in force immediately prior to his retirement shall continue after his reappointment as if he had not retired. The appointment of an alternate Director shall be revoked on the happening of any event that, if he were a Director, would cause him to vacate such office under these Articles.


84.	ALTERNATE TO BE RESPONSIBLE FOR HIS OWN ACTS AND REMUNERATION OF ALTERNATE

84.1

An alternate Director shall be deemed an officer of the Company and shall be subject to these Articles relating to Directors (except as regards power to appoint an alternate and remuneration) and an alternate Director shall not be deemed the agent of his appointor and shall alone be responsible to the Company for his acts and defaults. An alternate Director may be interested in and benefit from contracts, arrangements, transactions and other matters or situations and be paid expenses and indemnified, and accept benefits from third parties, to the same extent as if he were a Director but, except to the extent that his appointor directs the payment to him of part or all of the remuneration which would otherwise be payable to his appointor, he shall not be entitled to any remuneration from the Company for acting in that capacity.

EXECUTIVE DIRECTORS


85.	EXECUTIVE DIRECTORS

85.1

The Board or any committee authorised by the Board may from time to time appoint one or more of its body to hold any employment or executive office with the Company for such period (subject to the Statutes) and on such other terms as the Board or any committee authorised by the Board may decide and may revoke or terminate any appointment so made. Any revocation or termination of the appointment shall be without prejudice to any claim for damages that the Director may have against

the Company or that the Company may have against the Director for any breach of any contract of service between him and the Company. A Director so appointed may be paid such remuneration (whether by way of salary, commission, participation in profits or otherwise) in such manner as the Board or any committee authorised by the Board may decide.

85.2

The Board may from time to time appoint any person to any office or employment having a descriptive designation or title including the word “director” or attach to any existing office or employment with the Company such a designation or title and may at any time determine any such appointment or the use of any such designation or title. The inclusion of the word “director” in the designation or title of any such office or employment with the Company shall not imply that the holder of the office is a director of the Company nor shall such holder thereby be empowered in any respect to act as a director of the Company or be deemed to be a director for any of the purposes of the Statutes or these Articles.

POWERS AND DUTIES OF DIRECTORS


86.	GERNERAL POWERS OF THE COMPANY VESTED IN THE BOARD


86.1	The business of the Company shall be managed by the Board, which, subject to these Articles and any direction given to the Company by special resolution, may exercise all the powers of the Company. No alteration of these Articles and no such direction shall invalidate any prior act of the Board which would have been valid if that alteration had not been made or that direction had not been given.


86.2	The powers given by this Article shall not be limited by any special power given to the Board by any other Article.

DELEGATION OF DIRECTORS’ POWERS


87.	AGENTS

87.1

The Board may, by power of attorney or otherwise, appoint any person to be the agent of the Company on such terms (including terms as to remuneration) and subject to such conditions as it may decide and may delegate to any person so appointed any of its powers, authorities and discretions (with power to sub-delegate). The Board may remove any person so appointed and may revoke or vary the delegation but no person dealing in good faith and without notice of the revocation or variation shall be affected by it.


87.2	The power to delegate contained in this Article shall be effective in relation to the powers, authorities and discretions of the Board generally and shall not be limited by the fact that in certain Articles, but not in others, express reference is made to particular powers, authorities or discretions being exercised by the Board or by committee authorised by the Board.


88.	DELEGATION TO INDIVIDUAL DIRESTORS

88.1

The Board may entrust to and confer upon a Director any of its powers, authorities and discretions (with power to sub-delegate) upon such terms (subject to the Statutes) and subject to such conditions and with such restrictions as it may decide. The Board may from time to time revoke or vary all or any of them but no person dealing in good faith and without notice of the revocation or variation shall be affected by it.


88.2	The power to delegate contained in this Article shall be effective in relation to the powers, authorities and discretions of the Board generally and shall not be limited by the fact that in certain Articles, but not in others, express reference is made to particular powers, authorities or discretions being exercised by the Board or by a committee authorised by the Board.


89.	DELEGATION TO COMMITTEES

89.1

The Board may delegate any of its powers, authorities and discretions (with power to sub-delegate) to any committee consisting of such person or persons as it thinks fit (whether a member or members of its body or not) provided that the majority of the members of the committee are Directors. Subject to any restriction on sub-delegation imposed by the Board, any committee so formed may exercise its

power to sub-delegate by sub-delegating to any person or persons (whether or not a member or members of the Board or of the committee). Subject to any regulations imposed on it by the Board, the proceedings of any committee consisting of two or more members shall be governed by the provisions in these Articles for regulating proceedings of the Board so far as applicable except that no meeting of that committee shall be quorate for the purpose of exercising any of its powers, authorities or discretions unless a majority of the committee present at the meeting are Directors. A member of a committee shall be paid such remuneration (if any) in such manner as the Board may decide, and, in the case of a Director, either in addition to or in place of his ordinary remuneration as a Director.


89.2	The power to delegate contained in this Article shall be effective in relation to the powers, authorities and discretions of the Board generally and shall not be limited by the fact that in certain of these Articles, but not in others, express reference is made to particular powers, authorities or discretions being exercised by the Board or by a committee authorised by the Board.


90.	POWER TO ESTABLISH LOCAL BOARDS ETC


90.1	The Board may:


90.1.1	establish any divisional, departmental, regional, local or area boards, divisions or managing agencies for introducing, conducting or managing all or any of the business or affairs of the Company, either in the United Kingdom or elsewhere;


90.1.2	make regulations for the proceedings and activities of any such establishment (but so that otherwise its proceedings shall be governed by those of these Articles which regulate proceedings of the Board to the extent that they are capable of applying to it);


90.1.3	appoint any persons (whether Directors or not) as regional directors, local directors, divisional directors, area directors, advisory directors, managers or agents or to serve in any other capacity in connection with any such establishment, and may fix their remuneration;


90.1.4	delegate to any such establishment and to any such appointee (including anyone appointed before this Article was adopted) any of the powers, authorities and discretions vested in the Board, with power to sub-delegate;


90.1.5	authorise any such appointees to fill any vacancies in any such establishment and to act notwithstanding vacancies,

provided that any such appointment or delegation shall be made upon such terms and subject to such conditions as the Board may think fit, and the Board may remove any persons so appointed, and may revoke, suspend or vary any such delegation but this shall not affect the position of any person dealing in good faith who has not had notice that the Board has done so. No such appointee shall be a Director as such or be entitled to be present at any meeting of the Board (except at the request of the Board and, if present at such request, he shall not be entitled to vote at that meeting) or have power under the terms of this Article to enter into any contract or transact any business on behalf of the Company except to the extent (if any) specifically authorised by the Board.

SPECIFIC POWERS


91.	PROVISION FOR EMPLOYEES


91.1	The Board may exercise any power conferred by the Statutes to make provision for the benefit of persons employed or formerly employed by the Company or any of its subsidiaries in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the Company or that subsidiary.


92.	THE COMPANY'S NAME


92.1	Subject to the Statutes, the Board may from time to time change the name of the Company to any name considered by the Board to be advantageous, expedient or otherwise desirable.


93.	BORROWING POWERS

93.1

The Board may exercise all the powers of the Company to borrow money, to guarantee, to indemnify and to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and, subject to the Statutes, to issue debentures and other securities, whether outright or as collateral security, for any debt, liability or obligation of the Company or of any third party.

93.2

The Board shall restrict the borrowings of the Company and shall exercise all voting and other rights or powers of control exercisable by the Company in relation to its subsidiary undertakings (if any) so as to procure (but as regards such subsidiary undertakings, only in so far as it can procure by such exercise) that the aggregate principal amount outstanding in respect of all borrowings by the group (exclusive of any borrowings which are owed by one group company to another and after deducting cash deposited) shall not, at any time, without an ordinary resolution of the Company, exceed the greater of (i) £150 million and (ii) an amount equal to three times the adjusted total of capital and reserves.

93.3

No lender or other person dealing with the Company shall be concerned to see or enquire whether the limit imposed by this Article is observed. No debt incurred or security given in respect of borrowings in excess of the limit imposed by this Article shall be invalid or ineffectual, except in the case of express notice to the lender or recipient of the security at the time when the debt was incurred or security given that the limit had been or would be exceeded.

93.4

A report or certificate by the Auditors as to the amount of the adjusted total of capital and reserves and as to the aggregate amount of borrowings for the purposes of this Article, or to the effect that the limit imposed by this Article has not been or will not be exceeded at any particular time or times, shall be conclusive evidence of such amount or fact and binding on all concerned. Nevertheless, for the purposes of this Article, the Board may, at any time, act in reliance on a bona fide estimate of the amount of the adjusted total of capital and reserves, and if, in consequence, the limit on borrowings set out in this Article is inadvertently exceeded, an amount borrowed equal to the excess may be disregarded until the expiration of 90 days after the date on which, by reason of a determination of the Auditors or otherwise, the Board became aware that such a situation has or may have arisen.


93.5	In this Article:


93.5.1	“ adjusted total of capital and reserves ” means a sum equal to the aggregate of;


(a)	the amount paid-up on the allocated or issued share capital of the Company; and


(b)	the amount standing to the credit of the reserves of all group undertakings whether distributable or undistributable, and including any share premium account, capital redemption reserve or property revaluation reserve after adding thereto or deducting therefrom any balance standing to the credit or debit of the profit and loss account,

all as shown in the relevant balance sheet but after:


(c)	making such adjustments as may be appropriate in respect of:

(i)

any variations in the amount of the paid-up share capital, the share premium account or the capital redemption reserve of the Company since the date of the relevant balance sheet and so that for this purpose if any proposed allotment of shares by the Company for cash has been underwritten then such shares shall be deemed to have been allotted and the amount (including any premium) of the subscription monies payable in respect thereof (not being monies payable later than six months after the date of allotment) shall be deemed to have been paid up to the extent so underwritten on the date when the issue of such shares was underwritten (or, if such underwriting was conditional, the date on which it became unconditional);


(ii)	any undertaking which was not a group undertaking at the date of the relevant balance sheet but which would be a group undertaking if group accounts were prepared as at the relevant time (and as if such time were the end of the Company’s financial year) or any undertaking which was a group undertaking but which would no longer be so if group accounts were to be so prepared at the relevant time;


(d)	excluding (so far as not already excluded):


(i)	amounts attributable to the share capital of any undertaking not owned by a group company;


(ii)	any sum set aside for taxation (other than deferred taxation);


(e)	deducting:


(i)	sums equivalent to the book values of goodwill and other intangible assets (other than goodwill arising only on consolidation) shown in the relevant balance sheet (as adjusted pursuant to the foregoing provisions of this paragraph); and


(ii)	the amount of any distribution declared, recommended or made by any group undertaking to a person (other than a group undertaking out of profits accrued up to and including the date of (and not provided for in) the relevant balance sheet); and


(f)	making such other adjustments (if any) as the Auditors may consider appropriate or necessary;

93.5.2

“ cash deposited ” means an amount equal to the aggregate for the time being outstanding of all cash deposits or balances on each current account of the group with any bank (not being a group company), the realisable value of certificates of deposit and securities of governments and companies or other readily realisable deposits owned by any group company which is not a wholly-owned subsidiary; only that portion which is equal to the proportion of that company’s issued and paid-up equity share capital which is owned, directly or indirectly, by a group company shall be taken into account;


93.5.3	“ group ” means the Company and its subsidiaries from time to time;


93.5.4	“ group company ” means any company in the group;


93.5.5	“ group undertaking ” means the Company or any other undertaking included in consolidated group accounts of the Company in which the relevant balance sheet is comprised;


93.5.6	“ monies borrowed ” shall be deemed to include the following except insofar as otherwise taken into account:

(a)

the nominal amount of any issued share capital of any person other than a member of the group and the principal amount of any monies borrowed from any such person, the beneficial interest in which or right to repayment to which is not for the time being owned by a group company but the payment or repayment of which is the subject of a guarantee or indemnity by a group company or is secured on the assets of any group company;


(b)	the outstanding amount raised by acceptances under any acceptance credit opened on behalf of and in favour of any group company by any bank or accepting house, not being acceptances of, or acceptance credits in relation to, trade bills for purchases of goods or services in the ordinary course of business and outstanding for six months or less;


(c)	the principal amount of any loan capital (whether secured or unsecured) of any group company owned otherwise than by any group company;


(d)	the nominal amount of any share capital (not being equity share capital) of any subsidiary not owned beneficially by any group company;


(e)	any fixed or minimum premium payable on final repayment of any borrowing or deemed borrowing (but so that any premium payable on final repayment of an amount not to be taken into account as monies borrowed shall not be taken into account); and


(f)	amounts raised under any transaction (including forward sale or purchase agreements) having the commercial effect of borrowing entered into to enable the finance of operations or capital requirements,

but shall be deemed not to include:


(g)	borrowings made for the purpose of repaying the whole or any part of borrowings falling to be taken into account for the purposes of this Article within six months of being first borrowed, pending their application for such purpose within such period;

(h)

borrowings for the purpose of financing any contract in respect of which any part of the price receivable under such contract is guaranteed or insured by the Export Credits Guarantee Department of the Department for Business, Energy and Industrial Strategy or by any other institution fulfilling a similar function, to the amount not exceeding that part of the price receivable under the contract which is so guaranteed or insured;

(i)

such proportion of the borrowings of any non-wholly-owned subsidiary as that part of its issued and paid-up equity share capital which is not beneficially owned, directly or indirectly, by a group company bears to the whole of its issued and paid-up equity share capital (but an equivalent proportion of monies borrowed from one such non-wholly-owned subsidiary by any other group company which would otherwise fall to be excluded shall nevertheless be included);


(j)	an amount equal to the borrowings of any company outstanding immediately after it becomes a group company;


(k)	the amount of monies borrowed which are for the time being deposited with any governmental authority in any part of the world in connection with import deposits or any similar governmental scheme to the extent that the group company making such deposit retains its interest in such deposit;


(l)	sums which fall to be treated as monies borrowed by any group company by reason only of any current statement of standard accounting practice or other accounting principle or practice; and


93.6	“ balance sheet ” means the consolidated balance sheet dealing with the state of affairs of the Company and its subsidiary undertakings comprised in the latest group accounts prepared and approved by the Board on which the Auditors have made their report pursuant to the Statutes.

APPOINTMENT, RETIREMENT AND REMOVAL OF DIRECTORS


94.	NUMBER TO RETIRE BY ROTATION


94.1	At the annual general meeting each Director shall retire from office who is required to do so in accordance with any corporate governance policy adopted from time to time by the Board, and each Director shall in any event retire at that meeting unless he was appointed or re-appointed as a Director at either of the last two annual general meetings before that meeting.


95.	POSITION OF RETIRING DIRECTOR


95.1	Subject to these Articles, the Company at the meeting at which a Director retires may fill the vacated office and, in default, the retiring Director shall, if willing to act, be deemed to have been reappointed

unless at the meeting it is resolved not to fill the vacancy or unless a resolution for the reappointment of the Director is put to the meeting and lost. If he is not reappointed or deemed to be reappointed, he shall retain office until the meeting appoints someone in his place or, if it does not do so, until the end of the meeting.


96.	ELIGIBILITY FOR APPOINTMENT AS A DIRECTOR


96.1	No person other than a Director retiring, whether by rotation or otherwise, shall be appointed or reappointed a Director at any general meeting unless:


96.1.1	he is recommended by the Board; or

96.1.2

not less than seven nor more than 42 clear days before the day appointed for the meeting, notice executed by a member qualified to vote at the meeting (not being the person to be proposed) has been delivered to the Office (or received in electronic form at the electronic address at which the Company has or is deemed to have agreed to receive it) of the intention to propose that person for appointment or reappointment stating the particulars which would, if he were so appointed or reappointed, be required to be included in the Company’s register of directors together with notice executed by that person of his willingness to be appointed or reappointed.


97.	POWER OF THE COMPANY TO APPOINT DIRECTORS

97.1

Subject to these Articles, the Company may by ordinary resolution appoint any person who is willing to act to be a Director, either to fill a vacancy on or as an addition to the existing Board, but so that the total number of Directors shall not at any time exceed any maximum number fixed by or in accordance with these Articles. A resolution for the appointment of two or more persons as Directors by a single resolution shall be void unless a resolution that it shall be so proposed has first been agreed to by the meeting without any vote being given against it.


98.	POWER OF THE BOARD TO APPOINT DIRECTOS

98.1

Without prejudice to the power of the Company in general meeting under these Articles to appoint any person to be a Director, the Board may appoint a person who is willing to act to be a Director, either to fill a vacancy or as an addition to the existing Board, but so that the total number of Directors shall not at any time exceed any maximum number fixed by or in accordance with these Articles. Any Director so appointed shall hold office only until the conclusion of the next following annual general meeting and, if not reappointed at that meeting, shall vacate office at the conclusion of the meeting.


99.	COMPANY'S POWER TO REMOVE A DIRECTOR AND APPOINT ANOTHER IN HIS PLACE


99.1	In addition to any power conferred by the Statutes, the Company may by an ordinary resolution remove any Director before the expiration of his period of office and may, subject to these Articles, by ordinary resolution appoint another person who is willing to act to be a Director in his place.


100.	VACATION OF OFFICE BY DIRECTORS


100.1	Without prejudice to the provisions for retirement by rotation or otherwise contained in these Articles, the office of a Director shall be vacated as soon as:


100.1.1	notification is received by the Company from the Director that he is resigning from office as Director, and such resignation has taken effect in accordance with its terms;


100.1.2	a bankruptcy order is made against him or he makes any arrangement or composition with his creditors generally in satisfaction of his debts;


100.1.3	a registered medical practitioner who is treating him gives a written opinion to the Company stating that the Director has become physically or mentally incapable of acting as a director and may remain so for more than three months or, by reason of his mental health, a court

makes an order which wholly or partly prevents him from personally exercising any powers or rights that he would otherwise have;


100.1.4	without the permission of the Board, he is absent from meetings of the Board for six consecutive months (whether or not an alternate appointed by him attends) and the Board resolves that his office is vacated;


100.1.5	he ceases to be a Director by virtue of the Statutes or is prohibited by law or (if applicable) the rules of the relevant Trading Market on which the ordinary shares of the Company are listed or quoted for trading on the date in question from being a Director or is removed from office under these Articles;

100.1.6

notice in writing that he is to vacate office executed by or on behalf of all the Directors other than him, or any alternate for him who is not an alternate for another Director or himself a Director, is delivered to the Office or tendered at a meeting of the Board, provided those Directors are not less than three in number. Separate notices in substantially the same form each executed by or on behalf of one or more of those Directors shall together be as effective as a single notice signed by all of them; or


100.1.7	his contract of service or letter of appointment as a Director expires or is terminated without being renewed within 14 days.

DIRECTORS’ INTERESTS


101.	TRANSACTIONS, OFFICES, EMPLOYMENT AND INTERESTS


101.1	Subject to the Statutes and the terms of any authorisation given under Article 102, a Director notwithstanding his office:

101.1.1

may hold any other office or place of profit with the Company (except that of Auditor) in conjunction with the office of Director and may act by himself or through his firm in a professional capacity for the Company (otherwise than as Auditor) and in either such case on such terms as to remuneration (whether by way of salary, commission, participation in profits or otherwise) and otherwise as the Board may determine, and any such remuneration shall be either in addition to or in lieu of any remuneration provided for, by or pursuant to any other Article;


101.1.2	may be a party to, or otherwise interested in, any contract with the Company or in which the Company is otherwise interested;


101.1.3	may be a director or other officer of, or employed by, or a party to any contract with, or otherwise interested in, any undertaking in the same group as the Company or promoted by the Company or by any such undertaking, or in which the Company or any such undertaking is otherwise interested or as regards which the Company or any such undertaking has any powers of appointment;

101.1.4

shall not, by reason of his office, be accountable to the Company for any remuneration or benefit which he derives from any such office or employment or from any such contract or from any interest in such undertaking and no such office, employment or contract shall be liable to be avoided on the ground of any such interest or benefit and nor shall the receipt of such remuneration or benefit constitute a breach of his duty under the Companies Act 2006 not to accept benefits from third parties;


101.1.5	shall not be in breach of his duties as a director by reason only of his excluding himself from the receipt of information, or from participation in decision-making or discussion (whether at meetings of the directors or otherwise), that will or may relate to any such office, employment, contract or interest; and


101.1.6	shall not be required to disclose to the Company, or use in relation to the Company’s affairs, any confidential information obtained by him in connection with any such office, employment, contract or interest if his doing so would result in a breach of a duty or an obligation of confidence owed by him in that connection

provided that he has disclosed to the Board the nature and extent of any material interest of his, but no such disclosure shall be necessary of any office or employment with any subsidiary undertaking of the Company or any interest in a transaction or arrangement that would not be required to be declared by the Director under the Statutes, and a general notice given to the Board that a Director is to be regarded as having an interest of the nature and extent specified in the notice in any transaction or arrangement in which a specified person or class of persons is interested shall be deemed to be a disclosure that the Director has an interest in any such transaction or arrangement of the nature and extent so specified, and for the purposes of this Article an interest of which a Director has no knowledge and of which it is unreasonable to expect him to have knowledge shall not be treated as an interest of his.

101.2

The Board may cause any voting power conferred by the shares in any other company held or owned by the Company or any power of appointment to be exercised in such manner in all respects as it thinks fit, including the exercise of either of such powers in favour of a resolution appointing the Directors, or any of them, to be directors or officers of the other company, or in favour of the payment of remuneration to the directors or officers of the other company.

101.3

Except as otherwise provided by these Articles, a Director shall not vote on, or be counted in the quorum in relation to, any resolution of the Board or of a committee of the Board concerning any matter in which he has to his knowledge, directly or indirectly, an interest (other than his interest in shares or debentures or other securities of, or otherwise in or through, the Company) or duty which (together with any interest of a person connected with him) is material and, if he shall do so, his vote shall not be counted. A Director shall be entitled to vote on and be counted in the quorum in respect of any resolution concerning any of the following matters:


101.3.1	the giving to him of any guarantee, security or indemnity in respect of money lent or obligations incurred by him or by any other person at the request of or for the benefit of, the Company or any of its subsidiary undertakings;


101.3.2	the giving by the Company of any guarantee, security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiary undertakings for which he himself has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security;

101.3.3

his subscribing or agreeing to subscribe for, or purchasing or agreeing to purchase, any shares, debentures or other securities of the Company or any of its subsidiary undertakings as a holder of securities, or his being, or intending to become, a participant in the underwriting or sub-underwriting of an offer of any such shares, debentures, or other securities by the Company or any of its subsidiary undertakings for subscription, purchase or exchange;


101.3.4	any contract concerning any company (not being a company in which the Director owns one per cent. or more (as defined in this Article)) in which he is interested, directly or indirectly, and whether as an officer, shareholder, creditor or otherwise;


101.3.5	any arrangement for the benefit of employees of the Company or any of its subsidiary undertakings under which he benefits in a similar manner as the employees and which does not accord to any Director as such any privilege or advantage not accorded to the employees to whom the arrangement relates;


101.3.6	any contract concerning any insurance which the Company is empowered to purchase or maintain for, or for the benefit of, any Directors or for persons who include Directors; or

101.3.7

any indemnity permitted by these Articles (whether in favour of the Director or others as well) against any costs, charges, expenses, losses and liabilities sustained or incurred by him as a director of the Company or of any of its subsidiary undertakings, or any proposal to provide funds to meet any expenditure incurred or to be incurred by him in defending himself in any criminal or civil proceeding in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to the Company or any of its subsidiary undertakings, or any investigation, or action proposed to be taken, by a regulatory authority in that connection, or for the purposes of any application for relief under the Companies Act 2006, or in order to enable him to avoid incurring such expenditure.

101.4

A Director shall not vote on, or be counted in the quorum in relation to, any resolution of the Board concerning his own appointment, or the settlement or variation of the terms or the termination of his own appointment, as the holder of any office or place of profit with the Company or any company in which the Company is interested but, where proposals are under consideration concerning the appointment, or the settlement or variation of the terms or the termination of the appointment, of two or more Directors to offices or places of profit with the Company or any company in which the Company is interested, a separate resolution may be put in relation to each Director and in that case each of the Directors concerned shall be entitled to vote on and be counted in the quorum in relation to each resolution which does not concern either: (a) his own appointment or the settlement or variation of the terms or the termination of his own appointment; or (b) the appointment of another Director to an office or place of profit with a company in which the Company is interested and in which the Director seeking to vote or be counted in the quorum is interested by virtue of owning of one per cent. or more (as defined in this Article).

101.5

A company shall be deemed to be a company in which a Director owns one per cent. or more if and so long as he is directly or indirectly the holder of or beneficially interested in one per cent. or more of any class of the equity share capital of such company or of the voting rights available to members of such company. For this purpose, there shall be disregarded any shares held by a Director as bare or custodian trustee and in which he has no beneficial interest, any shares comprised in a trust in which the Director’s interest is in reversion or remainder (if and so long as some other person is entitled to receive the income from such trust) and any shares comprised in an authorised unit trust scheme in which the Director is interested only as a unit holder.


101.6	Where a company in which a Director owns one per cent. or more is materially interested in a contract, he shall also be deemed to be materially interested in that contract.


101.7	For the purposes of this Article, an interest of a person who is, for any purpose of the Statutes, connected with a Director shall be treated as an interest of the Director and, in relation to an alternate director, an interest of his appointor shall be treated as an interest of the alternate director without prejudice to any interest which the alternate director has otherwise.


101.8	References in this Article to a contract include references to any proposed contract and to any transaction or arrangement whether or not constituting a contract.

101.9

If any question shall arise at any meeting of the Board as to the materiality of the interest of a Director (other than the chairman of the meeting) or as to the entitlement of any Director (other than the chairman of the meeting) to vote or be counted in the quorum and the question is not resolved by his voluntarily agreeing to abstain from voting or not to be counted in the quorum, the question shall be referred to the chairman of the meeting and his ruling in relation to the Director concerned shall be conclusive except in a case where the nature or extent of his interest (so far as it is known to the Director) has not been fairly disclosed to the Board. If any question shall arise in respect of the chairman of the meeting, the question shall be decided by resolution of the Board (for which purpose the chairman shall be counted in the quorum but shall not vote on the matter) and the resolution shall be conclusive except in a case where the nature or extent of the interest of the chairman of the meeting (so far as it is known to him) has not been fairly disclosed to the Board.


101.10	Subject to the Statutes, the Company may by ordinary resolution suspend or relax the provisions of this Article to any extent or ratify any contract not properly authorised by reason of a contravention of this Article.


102.	CONFLICTS IF INTEREST REQUIRING BOARD AUTHORISATION


102.1	The Board may, provided the quorum and voting requirements set out below are satisfied, authorise any matter that would otherwise involve a Director breaching his duty under section 175 of the Companies Act 2006 to avoid conflicts of interest.


102.2	Any Director (including the Director concerned) may propose that the Director concerned be authorised in relation to any matter the subject of such a conflict. Such proposal and any authority given by the Board shall be effected in the same way that any other matter may be proposed to and resolved upon

by the Board under the provisions of these Articles, except that the Director concerned and any other Director with a similar interest:


102.2.1	shall not count towards the quorum at the meeting at which the conflict is considered;


102.2.2	may, if the other members of the Board so decide, be excluded from any Board meeting while the conflict is under consideration; and


102.2.3	shall not vote on any resolution authorising the conflict except that, if he does vote, the resolution will still be valid if it would have been agreed to if his vote had not been counted.


102.3	Where the Board gives authority in relation to such a conflict:


102.3.1	the Board may (whether at the time of giving the authority or at any time or times subsequently) impose such terms upon the Director concerned as it may determine, including, without limitation, the exclusion of that Director from the receipt of information, or participation in any decision-making or discussion (whether at meetings of the Board or otherwise) related to the conflict;


102.3.2	the Director concerned will be obliged to conduct himself in accordance with any terms imposed by the Board from time to time in relation to the conflict but will not be in breach of his duties as a Director by reason of his doing so;


102.3.3	the authority may provide that, where the Director concerned (otherwise than by virtue of his position as a director of the Company) obtains information that is confidential to a third party, the Director will not be obliged to disclose that information to the Company, or to use the information in relation to the Company’s affairs, where to do so would amount to a breach of that confidence;


102.3.4	the authority may also provide that the Director concerned shall not be accountable to the Company for any benefit that he receives as a result of the conflict;


102.3.5	the receipt by the Director concerned of any remuneration or benefit as a result of the conflict shall not constitute a breach of the duty under the Companies Act 2006 not to accept benefits from third parties;


102.3.6	the terms of the authority shall be recorded in writing (but the authority shall be effective whether or not the terms are so recorded); and


102.3.7	the Board may withdraw the authority at any time.

DIRECTORS’ GRATUITIES AND PENSIONS


103.	DIRECTORS' GRATUITIES AND PENSIONS

103.1

The Board or any committee authorised by the Board may exercise all the powers of the Company to provide benefits, whether by the payment of gratuities, pensions, annuities, allowances, bonuses or by insurance or otherwise, for any Director or former Director who holds or who has held but no longer holds any executive office, other office, place of profit or employment with the Company or with any body corporate which is or has been a subsidiary undertaking of the Company or a predecessor in business of the Company or of any such subsidiary undertaking, and for any member of his family (including a spouse and a former spouse) or any person who is or was dependent on him, and may (as well before as after he ceases to hold such office, place of profit or employment) establish, maintain, support, subscribe to and contribute to any scheme, trust or fund for the benefit of all or any such persons and pay premiums for the purchase or provision of any such benefits. The Board or any committee authorised by the Board may procure any of these matters to be done by the Company either alone or in conjunction with any other person.


103.2	No Director or former Director shall be accountable to the Company or the members for any benefit provided pursuant to this Article and the receipt of any such benefit shall not disqualify any person from being or becoming a Director.

PROCEEDINGS OF THE BOARD


104.	BOARD MEETINGS


104.1	The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it thinks fit. A Director may, and the Secretary on the requisition of a Director shall, convene a meeting of the Board.


105.	NOTICE OF BOARD MEETINGS

105.1

Notice of a Board meeting shall be deemed to be properly given to a Director if it is given to him personally or by word of mouth or sent in writing or in electronic form to him at his last known address or any other address given by him to the Company for this purpose. A Director absent or intending to be absent from the United Kingdom may request the Board that notices of Board meetings shall during his absence be sent to him at an address given by him to the Company for this purpose, but such notices need not be given any earlier than notices given to Directors not so absent and in the absence of any such request it shall not be necessary to give notice of a Board meeting to any Director who is for the time being absent from the United Kingdom.


105.2	Notice of a Board meeting need not be given to Directors who waive their entitlement to notice of that meeting by giving notice to that effect to the Company not more than seven days after the date on which the meeting is held. Where such notice is given after the meeting has been held, that does not affect the validity of the meeting, or of any business conducted at it.


106.	VOTING


106.1	Questions arising at a meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote.


107.	QUORUM


107.1	The quorum necessary for the transaction of the business of the Board may be fixed by the Board and unless so fixed at any other number shall be two provided that, for the purposes of any meeting held pursuant to Article 102 to authorise a Director’s conflict, if there is only one Director besides the Director concerned and Directors with a similar interest, the quorum shall be one.


107.2	Subject to these Articles, any Director who ceases to be a Director at a Board meeting may continue to be present and to act as a Director and be counted in the quorum until the termination of the Board meeting if no other Director objects and if otherwise a quorum of Directors would not be present.


108.	BOARD VACANCIES BELOW MINIMUM NUMBER

108.1

The continuing Directors or a sole continuing Director may act notwithstanding any vacancies on the Board, but, if the number of Directors is less than the minimum number fixed by or in accordance with these Articles, the continuing Directors or Director may act only for the purpose of filling vacancies on the Board or of convening a general meeting of the Company. If there are no Directors or Director able or willing to act, any two members may call a general meeting of the Company for the purpose of appointing Directors.


109.	APPOINTMENT OF CHARIMAN

109.1

The Board may appoint a Director to be the chairman of the Board and may at any time remove him from that office. Unless he is unwilling to do so, the Director so appointed shall preside at every meeting of the Board at which he is present. But if there is no Director holding that office, or if the Director holding it is unwilling to preside or is not present within five minutes after the time appointed for the meeting, the Directors present may appoint one of their number to be chairman of the meeting.


110.	COMPETENCE OF THE BOARD


110.1	A meeting of the Board at which a quorum is present shall be competent to exercise all powers, authorities and discretions for the time being vested in or exercisable by the Board.


111.	PARTICIPATION IN MEETINGS BY TELEPHONE

111.1

All or any of the members of the Board or of any committee of the Board may participate in a meeting of the Board or that committee by means of a conference telephone or any communication equipment that allows all persons participating in the meeting to hear and speak to each other. A person so participating shall be deemed to be present in person at the meeting and shall be entitled to vote or be counted in a quorum accordingly. Such a meeting shall be deemed to take place where the largest group of those participating is assembled, or, if there is no such group, where the chairman of the meeting is and shall be deemed to be a meeting even if there is only one person physically present where it is deemed to take place.


112.	WRITTEN RESOLUTIONS


112.1	A resolution in writing signed by:


112.1.1	all the Directors entitled to receive notice of a meeting of the Board , if that number is sufficient to constitute a quorum; or


112.1.2	by all the members of a committee of the Board

(but excluding any Director whose vote is not to be counted in respect of that particular matter) shall be as valid and effectual as if it had been passed at a meeting of the Board or that committee duly convened and held and may be contained in one document (or in several documents in all substantial respects in like form) each signed by one or more of the Directors or members of that committee. Any such document may be constituted by letter or (provided it is in writing) in electronic form or otherwise as the Board may from time to time approve.


113	COMPANY BOOKS


113.1	The Board shall cause minutes to be made in books kept for the purpose of recording:


113.1.1	all appointments of officers made by the Board;


113.1.2	all proceedings at meetings of the Company, of the holders of any class of shares in the Company and of the Board and of committees of the Board, including the names of the Directors or members of a committee of the Board present at each such meeting.


113.2	Subject to the Statutes, any such minutes, if purporting to be signed by the chairman of the meeting at which the appointments were made or proceedings held or by the chairman of the next succeeding meeting, shall be sufficient evidence of the facts stated in them without any further proof.


114	VALIDITY OF ACTS OF THE BOARD OR A COMMITTEE

114.1

All acts done by the Board or by a committee of the Board, or by a person acting as a Director or member of a committee of the Board shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any Director, member of a committee of the Board, or person acting as a Director, or that any of them were disqualified from holding office, or had vacated office, or were not entitled to vote, be as valid as if each such person had been duly appointed and was qualified and had continued to be a Director or member of the committee and had been entitled to vote.

COMPANY SECRETARY


115	APPOINTMENT AND REMOVAL OF COMPANY SECRETARY


115.1	Subject to the Statutes, the Secretary shall be appointed by the Board at such remuneration and upon such terms as it thinks fit. If thought fit, two or more persons may be appointed as joint Secretaries with the power to act jointly and severally. Any Secretary so appointed may be removed by the Board.


115.2	The Board may from time to time appoint an assistant or deputy secretary who, during such time as there may be no Secretary or no Secretary capable of acting, may act as Secretary and do any act authorised or required by these Articles or by law to be done by the Secretary. The signature of any document as Secretary by such assistant or deputy secretary shall be conclusive evidence (without

invalidating that signature for any purpose) that at the time of signature there was no Secretary or no Secretary capable of acting.

THE SEAL


116.	USE OF SEAL

116.1

The Seal shall only be used by the authority of the Board or of a committee authorised by the Board in that behalf and, unless otherwise decided by the Board or any such committee, any document to which the Seal is applied must also be signed by at least one authorised person in the presence of a witness who attests the signature. For the purposes of this Article, an authorised person is any Director, the Company Secretary or any person authorised by the Board or such committee for the purpose of signing documents to which the Seal is applied.

DIVIDENDS


117.	COMPANY MAY DECLARE DIVIDENDS


117.1	Subject to the Statutes, the Company may by ordinary resolution declare dividends in accordance with the respective rights of the members, but no dividend shall exceed the amount recommended by the Board. Subject to the Statutes, any determination by the Board of the amount of profits at any time available for distribution shall be conclusive.


118.	BOARD MAY PAY INTERIM DIVIDENDS AND FIXED DIVIDENDS

118.1

Subject to the Statutes, the Board may pay interim dividends if it appears to the Board that they are justified by the financial position of the Company. If the share capital of the Company is divided into different classes, the Board may pay interim dividends on shares which confer deferred or non-preferred rights to dividends as well as on shares which confer preferential or special rights to dividends, but no interim dividend shall be paid on shares carrying deferred or non-preferred rights if, at the time of payment, any preferential dividend is in arrears. The Board may also pay at intervals settled by it any dividend payable at a fixed date if it appears to the Board that the financial position of the Company justifies the payment. If the Board acts in good faith, it shall not incur any liability to the holders of shares conferring preferred rights for any loss which they may suffer by reason of the lawful payment of an interim dividend on any shares having deferred or non-preferred rights.


119.	CALCULATIONS AND CURRENCY OF DIVIDENDS


119.1	Except in so far as the rights attaching to any share otherwise provide:


119.1.1	all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid, but (for the purposes of this Article only) no amount paid up on a share in advance of calls shall be treated as paid up on the share;


119.1.2	all dividends shall be apportioned and paid proportionately to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid; but, if any share is issued on terms providing that it shall rank for dividend as from a particular date, that share shall rank for dividend accordingly; and

119.1.3

any dividends or other monies payable on or in respect of any share may be declared in any currency or currencies, and paid in the same currency or currencies or in any other currency or currencies, and subject to such charges to cover the costs of conversion, as the Board may determine, using where required such basis of conversion (including the rate and timing of conversion) as the Board decides.


120.	WAIVER OF DIVIDENDS


120.1	The waiver in whole or in part of any dividend on any share by any document (whether or not under seal) shall be effective only if such document is signed by the relevant member or transmittee and delivered to the Company and if or to the extent that it is accepted as such or acted upon by the Company.


121.	NON-CASH DIVIDENDS

121.1

A general meeting declaring a dividend may, upon the recommendation of the Board, by ordinary resolution direct that it shall be satisfied wholly or partly by the distribution of assets and, in particular, of paid-up shares or debentures of any other company and, where any difficulty arises concerning such distribution, the Board may settle it as the Board thinks expedient and in particular may issue fractional certificates or, subject to the Statutes and, in the case of shares held in uncertificated form, the system’s rules, authorise and instruct any person to sell and transfer any fractions or may ignore fractions altogether, and may fix the value for distribution of any assets and may determine that cash shall be paid to any member upon the basis of the value so fixed in order to secure equality of distribution and may vest any assets to be distributed in trustees as the Board may consider expedient.


122.	SCRIP DIVIDENDS


122.1	Subject to the Statutes, the Board may, if authorised by an ordinary resolution of the Company, offer the holders of ordinary shares the right to elect to receive new ordinary shares, credited as fully paid, instead of cash for all or part (as determined by the Board) of any dividend. The following provisions shall apply:


122.1.1	an ordinary resolution may specify a particular dividend or dividends, or may specify all or any dividends, declared or paid within a specified period, but such period may not end later than the third anniversary of the date of the meeting at which the ordinary resolution is passed;

122.1.2

the basis of allotment to each entitled holder of ordinary shares shall be such number of new ordinary shares credited as fully paid as have a value as nearly as possible equal to (but not greater than) the amount of the dividend (disregarding any tax credit) which he has elected to forgo. For this purpose, the “ value ” of an ordinary share shall be deemed to be whichever is the greater of its nominal value and the average of the middle market quotations for the Company’s ordinary shares on the London Stock Exchange as derived from the Daily Official List, or the middle market quotations of American Depositary Shares on the relevant Trading Market on which the ordinary shares of the Company are listed or quoted for trading on the date in question, on the day on which the shares are first quoted “ex” the relevant dividend and the four subsequent dealing days or in such other manner as may be determined by or in accordance with the ordinary resolution. A certificate or report by the Auditors as to the amount of the value in respect of any dividend shall be conclusive evidence of that amount;

122.1.3

no fraction of an ordinary share shall be allotted and if any holder of ordinary shares would otherwise be entitled to fractions of a share, the Board may deal with the fractions as it thinks fit, including (without limitation) determining that the whole or part of the benefit of fractional entitlements will be disregarded or accrue to the Company or that the value of fractional entitlements will be accumulated on behalf of a member (without entitlement to interest) and applied in paying up new shares in connection with a subsequent offer by the Company of the right to receive shares instead of cash in respect of a future dividend;


122.1.4	the Board shall not proceed with any election unless the Company has sufficient reserves or funds which may be capitalised to give effect to the election following the Board’s determination of the basis of allotment;

122.1.5

on or as soon as practicable after announcing that the Board is to recommend or pay any dividend, the Board, if it intends to offer an election for that dividend, shall also announce that intention and, having determined the basis of allotment, shall notify the entitled holders of ordinary shares (other than any in relation to whom an election mandate in accordance with this Article is subsisting) of the right of election offered to them, and shall send with, or following, such notification, forms of election and shall specify the procedure to be followed and place at which, and the latest date and time by which, duly completed forms of election must be received in order to be effective;


122.1.6	the dividend (or that part of the dividend in respect of which a right of election has been offered) shall not be payable on ordinary shares in respect of which an election has been

duly made (the “ elected shares ”) and instead additional ordinary shares shall be allotted to the holders of the elected shares on the basis of allotment so determined. For such purpose, the Board shall capitalise, out of any amount standing to the credit of any reserve or fund (including the profit and loss account), whether or not it is available for distribution, as the Board may determine, a sum equal to the aggregate nominal amount of the additional ordinary shares to be allotted on that basis and apply it in paying up in full the appropriate number of ordinary shares for allotment and distribution to the holders of the elected shares on that basis;

122.1.7

the additional ordinary shares so allotted shall be allotted as of the record date for the dividend for which the right of election has been offered and shall rank pari passu in all respects with the fully paid ordinary shares then in issue except that they will not rank for the dividend or other distribution entitlement in respect of which they have been issued. Unless the Board otherwise determines (and subject always to the Regulations and the system’s rules), the ordinary shares so allotted shall be issued as shares in certificated form (where the ordinary shares in respect of which they have been allotted were in certificated form at the Scrip Record Time) or as shares in uncertificated form (where the ordinary shares in respect of which they have been allotted were in uncertificated form at the Scrip Record Time) provided that if the Company is unable under the system’s rules to issue ordinary shares in uncertificated form to any person, such shares shall be issued as shares in certificated form. For these purposes, the “ Scrip Record Time ” means such time on the record date for determining the entitlements of members to make elections as described in this Article, or on such other date as the Board may in its absolute discretion determine.


122.2	The Board may establish or vary a procedure for election mandates whereby a holder of ordinary shares may elect concerning future rights of election offered to that holder under this Article until the election mandate is revoked following that procedure.


122.3	The Board may exclude from any offer any holders of ordinary shares if it believes that it is necessary or expedient to do so in relation to any legal or practical problems under the laws of, or the requirements of any regulatory body or stock exchange or other authority in, any territory or that for any other reason the offer should not be made to them.


123.	ENHANCED SCRIP DIVIDENDS

123.1

Subject to the Statutes and without prejudice to the generality of Article 122, the Board may, in respect of any cash dividend or other distribution (or any part thereof) declared or payable in relation to any financial year or period of the Company, offer to each holder of ordinary shares the right to elect to receive new ordinary shares, credited as fully paid, in respect of the whole or part of the ordinary shares held by them instead of such cash dividend, on any basis described in that Article but so that the entitlement of each holder of ordinary shares to such new ordinary shares shall be determined by the Board such that the value (determined on the basis decided on by the Board) of the new ordinary shares concerned may exceed the cash amount that such holders of ordinary shares would otherwise have received by way of dividend and, in respect of such offer, that Article shall take effect subject to this Article. Any offer made under this Article shall be an alternative to any offer made under that Article in respect of a particular cash dividend (but shall form part of any plan which is in operation thereunder).

123.2

Any exercise by the Board of the powers granted to the Board by this Article shall be subject to a special resolution approving the exercise of such powers in respect of the dividend in question or in respect of any dividends or other distributions declared or payable in respect of a specified financial year or period of the Company which include the dividend in question but such year or period may not end later than the conclusion of the annual general meeting next following the date of the meeting at which such resolution is passed. No further sanction shall be required under Article 122 in respect of an exercise of powers by the Board under this Article and any authority granted under this Article shall not preclude the granting to the Board of a separate authority under that Article.


124.	RIGHT TO DEDUCT AMOUNTS DUE ON SHARES FROM DIVIDENDS


124.1	The Board may deduct from any dividend or other monies payable in respect of a share to a member all sums of money (if any) presently payable by him to the Company on account of calls or otherwise in respect of shares of the Company.


125.	NO INTEREST ON DIVIDENDS


125.1	No dividend or other monies payable in respect of a share shall bear interest against the Company unless otherwise provided by the rights attached to the share.


126.	PAYMENT PROCEDURE

126.1

All dividends and interest shall belong and be paid (subject to any lien of the Company) to those entitled members whose names shall be on the Register at the date at which such dividend shall be declared or at the date on which such interest shall be payable respectively, or at such other date as the Company by ordinary resolution or the Board may determine notwithstanding any subsequent transfer or transmission of shares.


126.2	The Company may pay any dividend, interest or other monies payable in cash in respect of shares by direct debit, bank transfer, cheque, dividend warrant, money order or by any other method (including by electronic means) as the Board may consider appropriate.

126.3

Every such cheque, warrant or order shall be made payable to the person to whom it is sent, or to such other person as the holder or the joint holders may in writing direct, and may be sent by post or equivalent means of delivery directed to the registered address of the holder or, in the case of joint holders, to the registered address of the joint holder whose name stands first in the Register, or to such person and to such address as the holder or joint holders may in writing direct.


126.4	Every such payment made by direct debit or bank transfer shall be made to the holder or joint holders or to or through such other person as the holder or joint holders may in writing direct.

126.5

In respect of shares in uncertificated form, where the Company is authorised to do so by or on behalf of the holder or joint holders in such manner as the Board shall from time to time consider sufficient, the Company may pay any such dividend, interest or other monies by means of the relevant system. Every such payment shall be made in such manner as may be consistent with the system’s rules and, without prejudice to the generality of the foregoing, may include the sending by the Company or by any person on its behalf of an instruction to the Operator to credit the cash memorandum account of the holder or joint holders or, if permitted by the Company, of such person as the holder or joint holders may in writing direct.

126.6

The Company shall not be responsible for any loss of any such cheque, warrant or order and any payment made in any manner permitted by these Articles shall be at the sole risk of the holder or joint holders. Without prejudice to the generality of the foregoing, if any such cheque, warrant or order has been, or is alleged to have been, lost, stolen or destroyed, the Board may, on request of the person entitled thereto, issue a replacement cheque, warrant or order subject to compliance with such conditions as to evidence and indemnity and the payment of out of pocket expenses of the Company in connection with the request as the Board may think fit.


126.7	The issue of such cheque, warrant or order, the collection of funds from or transfer of funds by a bank in accordance with such direct debit or bank transfer or, in respect of shares in uncertificated form, the making of payment in accordance with the system’s rules, shall be a good discharge to the Company.


127.	RECEIPT BY JOINT HOLDERS


127.1	If several persons are registered as joint holders of any share, any one of them may give effectual receipts for any dividend or other monies payable in respect of the share.


128.	WHERE PAYMENT OF DIVIDENDS NEED NOT BE MADE


128.1	The Company may cease to send any cheque or warrant through the post or to effect payment by any other means for any dividend or other monies payable in respect of a share which is normally paid in

that manner on that share if in respect of at least two consecutive dividends payable on that share payment, through no fault of the Company, has not been effected (or, following one such occasion, reasonable enquiries have failed to establish any new address of the holder) but, subject to these Articles, the Company shall recommence payments in respect of dividends or other monies payable on that share by that means if the holder or transmittee claims the arrears of dividend and does not instruct the Company to pay future dividends in some other way.


129.	UNCLAIMED DIVIDENDS

129.1

All dividends, interest or other sums payable unclaimed for one year after having become due for payment may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. The retention by the Company of, or payment into a separate account of, any unclaimed dividend or other monies payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect of it. Any dividend, interest or other sum unclaimed after a period of 12 years from the date when it became due for payment shall be forfeited and shall revert to the Company.

CAPITALISATION OF PROFITS


130.	CAPITALISATION OF PROFITS

130.1

Upon the recommendation of the Board, the Company may pass an ordinary resolution to the effect that it is desirable to capitalise all or any part of any undivided profits of the Company not required for paying any preferential dividend (whether or not they are available for distribution) or all or any part of any sum standing to the credit of any reserve or fund (whether or not available for distribution).

130.2

Subject as provided below, the Board may appropriate the sum resolved to be capitalised to the members who would have been entitled to it if it were distributed by way of dividend and in the same proportions and apply such sum on their behalf either in or towards paying up the amounts, if any, for the time being unpaid on any shares held by them respectively, or (subject to approval by ordinary resolution and to any subsisting special rights previously conferred on any shares or class of shares) in paying up in full shares of any class or debentures of the Company of a nominal amount equal to that sum, and allot the shares or debentures credited as fully paid to those members, or as they may direct, in those proportions, or partly in one way and partly in the other provided that:


130.2.1	the Company shall for the purposes of this Article be deemed to be such a member in relation to any shares held as treasury shares which, if not so held, would have ranked for any such distribution by way of dividend, but only insofar as the appropriated sum is to be applied in paying up in full shares of the Company; and


130.2.2	the share premium account, the capital redemption reserve, and any reserve or fund representing profits which are not available for distribution may only be applied in paying up in full shares of the Company.


130.3	The Board may authorise any person to enter on behalf of all the members concerned into an agreement with the Company providing for the allotment to them respectively, credited as fully paid, of any shares or debentures to which they are entitled upon such capitalisation and any matters incidental thereto, any agreement made under such authority being binding on all such members.

130.4

If any difficulty arises concerning any distribution of any capitalised reserve or fund, the Board may subject to the Statutes and, in the case of shares held in uncertificated form, the system’s rules, settle it as the Board considers expedient and in particular may issue fractional certificates, authorise any person to sell and transfer any fractions or resolve that the distribution should be made as nearly as practicable in the correct proportion or may ignore fractions altogether, and may determine that cash payments shall be made to any members in order to adjust the rights of all parties as the Board considers expedient.


130.5	Where, pursuant to an employees’ share scheme, the Company has granted options to subscribe for shares on terms which provide ( inter alia ) for adjustments to the subscription price payable on the exercise of such options or to the number of shares to be allotted upon such exercise in the event of

any increase or reduction in, or other reorganisation of, the Company’s issued share capital and an otherwise appropriate adjustment would result in the subscription price for any share being less than its nominal value, then, subject to and in accordance with the provisions of the Statutes, the Board may, on the exercise of any of the options concerned and payment of the subscription which would have applied had such adjustment been made, capitalise any such profits or other sum as is mentioned in Article 130.1 to the extent necessary to pay up the unpaid balance of the nominal value of the shares which fall to be allotted on the exercise of such options and apply such amount in paying up such balance and allot shares fully paid accordingly. The other provisions of this Article 130 shall apply mutatis mutandis to any such capitalisation except that the authority of an ordinary resolution of the Company shall not be required.

AUTHENTICATION OF DOCUMENTS


131.	AUTHENTICATION OF DOCUMENTS

131.1

Any Director or the Secretary or any person appointed by the Board for the purpose shall have power to authenticate any documents or other information affecting these Articles and any resolutions passed by the Company or the Board or any committee and any books, records, accounts, documents and other communications relating to the business of the Company and to certify copies or extracts as true copies or extracts. Anything purporting to be a copy of a resolution, or an extract from the minutes of a meeting, of the Company, the Board or any committee which is certified as such in accordance with this Article shall be conclusive evidence in favour of all persons dealing with the Company upon the faith of such copy that such resolution has been duly passed or, as the case may be, that such minute or extract is a true and accurate record of proceedings at a duly constituted meeting.

RECORD DATES


132.	POWER TO CHOOSE RECORD DATE


132.1	Notwithstanding any other provision of these Articles, the Company or the Board may fix any date as the record date for any dividend, distribution, allotment or issue and such record date may be on or at any time before or after any date on which the dividend, distribution, allotment or issue is declared, paid or made.

ACCOUNTS AND OTHER RECORDS


133.	COPY OF ACCOUNTS TO BE SENT TO MEMEBRS

133.1

A copy of every profit and loss account and balance sheet, including all documents required by law to be annexed to the balance sheet which is to be laid before the Company in general meeting, together with copies of the Directors’ and of the Auditors’ reports (or such other documents which may be required or permitted by law to be sent in their place) shall not less than 21 clear days before the date of the meeting be sent or supplied in any manner permitted by these Articles to every member (whether or not he is entitled to receive notices of general meetings of the Company), and to every holder of debentures of the Company (whether or not he is so entitled), and to the Auditors provided that if the Company is permitted by law to send or supply to any member, to any holder of debentures of the Company or to the Auditors any strategic report (with prescribed supplemental material) in place of all or any of such profit and loss account and balance sheet or other documents, this Article shall impose no greater obligation on the Company than that imposed by law; but this Article shall not require a copy of those documents to be sent or supplied to any member or holder of debentures of whose address the Company is unaware or to more than one of the joint holders of any shares or debentures.


134.	INSPECTION OF RECORDS


134.1	No member in his capacity as a member shall have any right of inspecting any record, book or document of any description belonging to the Company except as conferred by the Statutes or authorised by the Board or by ordinary resolution of the Company.


135.	DESTRUCTION OF DOCUMENTS


135.1	Subject to compliance with the system’s rules, the Company may destroy:


135.1.1	any instrument of transfer of shares and any other document on the basis of which an entry is made in the Register, at any time after the expiration of six years from the date of registration;


135.1.2	any instruction concerning the payment of dividends or other monies in respect of any share or any notification of change of name or address, at any time after the expiration of two years from the date the instruction or notification was recorded; and


135.1.3	any share certificate which has been cancelled, at any time after the expiration of one year from the date of cancellation;

provided that the Company may destroy any such type of document after such shorter period as the Board may determine if a copy of such document is retained on microfilm or by other similar means and is not destroyed earlier than the original might otherwise have been destroyed in accordance with this Article.

135.2

It shall conclusively be presumed in favour of the Company that every instrument of transfer so destroyed was a valid and effective instrument duly and properly registered and that every share certificate so destroyed was a valid and effective document duly and properly cancelled and that every other document so destroyed was a valid and effective document in accordance with its particulars recorded in the books or records of the Company provided that:


135.2.1	this Article shall apply only to the destruction of a document in good faith and without express notice that its retention was relevant to any claim (regardless of the parties to the claim);


135.2.2	nothing contained in this Article shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than the times referred to in this Article or in any case where the conditions of this Article are not fulfilled; and


135.2.3	references in this Article to the destruction of any document or thing include references to its disposal in any manner.

COMMUNICATIONS


136.	FORM OF COMMUNICATIONS

136.1

Except to the extent that these Articles provide otherwise, and subject to compliance with the Statutes, anything sent or supplied by or to any person, including the Company, under these Articles may be sent or supplied, whether or not because the Statutes require it to be sent or supplied, in any way (including, except in the case of anything supplied to the Company, by making it available on a website) in which documents or information required to be sent or supplied may be sent or supplied by or to that person in accordance with the Companies Act 2006.

136.2

Except insofar as the Statutes require otherwise, the Company shall not be obliged to accept any notice, document or other information sent or supplied to the Company in electronic form unless it satisfies such stipulations, conditions or restrictions (including for the purpose of authentication) as the Board thinks fit, and the Company shall be entitled to require any such notice, document or information to be sent or supplied in hard copy form instead.


136.3	Any notice, document or other communication (including copies of accounts or summary financial statements) to be given to or by any person pursuant to these Articles (other than a notice calling a meeting of Directors) shall be in writing except that, if it is in electronic form, it need not be in writing unless these Articles specifically require it to be.


136.4	Subject to the Statutes, the Board may from time to time issue, endorse or adopt terms and conditions relating to the use of electronic means under these Articles.


136.5	Nothing in these Articles shall prevent the Company from sending or supplying any notice, document or information in hard copy form instead of in electronic form on any occasion.


137.	COMMUNICATION WITH JOINT HOLDERS

137.1

In the case of joint holders of a share, all notices, documents or other information shall be given to the joint holder whose name stands first in the Register in respect of the joint holding and shall be deemed to have been given to all the joint holders. Any agreement by that holder that notices, documents and other information may be sent or supplied in electronic form or by being made available on a website shall be binding on all the joint holders.


138.	COMMUNICATION WITH OVERSEAS MEMBERS

138.1

A member whose registered address is not within the United Kingdom and who notifies the Company of an address within the United Kingdom at which documents or information may be supplied to him shall be entitled to have such things supplied to him at that address, but otherwise no such member shall be entitled to receive any document or information from the Company except to the extent that the Board decides to send a document or information to that member or custodian at a Depositary by electronic means and that member or custodian at the Depositary has consented (or is deemed to have consented) to the sending of that document or information by electronic means and has, where necessary, notified the Company of an address for that purpose.

138.2

The address notified pursuant to this Article may, at the Board’s discretion, be an electronic address, but the Board may at any time without prior notice (and whether or not the Company has previously sent or supplied any documents or information in electronic form to that electronic address) refuse to send or supply any documents or information to that electronic address if it believes that its refusal is necessary or expedient in relation to any legal or practical problems under the laws of, or the requirements of any regulatory body or stock exchange or other authority in, any territory, or that for any other reason it should not send or supply any documents or information to that electronic address.


139.	COMMUNICATIONS AFTER TRANSMISSION

139.1

Any notice, document or other information sent or supplied to any member pursuant to these Articles shall, notwithstanding that the member is then dead or bankrupt or that any other event giving rise to the transmission of the share by operation of law has occurred and whether or not the Company has notice of the death, bankruptcy or other event, be deemed to have been properly sent or supplied in respect of any share registered in the name of that member as sole or joint holder.

139.2

Unless agreed otherwise with the relevant transmittee, the Company may send or supply any notice, document or other information to a transmittee in any manner in which it might have been sent or supplied to the member from whom the transmittee derives title to the relevant share, and as if the transmittee’s address were the same as the member’s address in the Register or the electronic address (if any) specified by the member; but the Company shall not be entitled to assume that the address or electronic address is correct if sending notice to the transmittee under section 793 of the Companies Act 2006.


140.	WHEN NOTICE DEEMED SERVED


140.1	Any notice, document or other information:

140.1.1

if sent by the Company by post or other delivery service shall be deemed to have been received on the day (whether or not it is a working day) following the day (whether or not it was a working day) on which it was put in the post or given to the delivery agent and, in proving that it was duly sent, it shall be sufficient to prove that the notice, document or information was properly addressed, prepaid and put in the post or duly given to the delivery agent;


140.1.2	if sent by the Company by electronic means in accordance with the Statutes shall be deemed to have been received on the same day that it was sent, and proof that it was sent in accordance with guidance issued by the Institute of Chartered Secretaries and Administrators shall be conclusive evidence that it was sent;


140.1.3	if made available on a website in accordance with the Statutes shall be deemed to have been received when notification of its availability on the website is deemed to have been received or, if later, when it is first made available on the website;


140.1.4	not sent by post or other delivery service but delivered personally or left by the Company at the address for that member on the Register shall be deemed to have been received on the day (whether or not it was a working day) and at the time it was so left;


140.1.5	sent or delivered by a relevant system shall be deemed to have been received when the Company (or a sponsoring system-participant acting on its behalf) sends the issuer instructions relating to the notice, document or information;


140.1.6	sent or supplied by the Company by any other means agreed by the member concerned shall be deemed to have been received when the Company has duly performed the action it has agreed to take for that purpose; and


140.1.7	to be given by the Company by advertisement shall be deemed to have been received on the day on which the advertisement appears.


141.	RECORED DATE FOR COMMUNICATIONS

141.1

Any notice, document or information may be sent or supplied by the Company by reference to the Register as it stands at any time not more than 21 days before the day it was sent or supplied. No change in the Register after that time shall invalidate the delivery of that notice, document or information, and every transmittee or other person not on the Register in relation to a particular share at that time who derives any title or interest in the share shall be bound by the notice, document or information without the Company being obliged to send or supply it to that person.


142.	LOSS OF ENTITLEMENT TO RECEIVE COMMUNICATIONS

142.1

If on two consecutive occasions notices, documents or information have been sent to any member at the registered address or his address (including an electronic address) for the service of notices but, through no fault of the Company, have been undelivered, such member shall not from then on be entitled to receive notices, documents or other information from the Company until he has notified to the Company in writing a new address within the United Kingdom to be either his registered address or his address (including an electronic address) for the service of notices.


143.	NOTICE WHEN POST NOT AVAILABLE

143.1

If at any time postal services within the United Kingdom are suspended or curtailed so that the Company is unable effectively to convene a general meeting or a meeting of the holders of any class of shares in its capital by notice sent through the post, the Board may decide that the only members to whom notice of the meeting must be sent are those to whom notice to convene the meeting can validly be sent by electronic means and those to whom notification as to the availability of the notice of meeting on a website can validly be sent by electronic means. In any such case the Company shall also advertise the meeting in at least two national daily newspapers published in the United Kingdom. If at least six clear days prior to the meeting the giving of notices by post to addresses throughout the United Kingdom has, in the Board’s opinion, become practicable, the Company shall send confirmatory copies of the notice by post or such other manner as is permitted under these Articles to the persons entitled to receive them when postal services are running normally.


143.2	At any time that postal services within the United Kingdom are suspended or curtailed, any other notice or information considered by the Board to be capable of being supplied by advertisement shall, if advertised in at least one such newspaper, be deemed to have been notified to all members and transmittees to whom it would otherwise have been supplied in hard copy form.

WINDING UP


144.	DISTRIBUTION IN SPECIE ON WINDING UP

144.1

If the Company is wound up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by law, divide among the members in specie the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members. The liquidator may, with such sanction, vest the whole or any part of the assets in trustees upon such trusts for the benefit of members as the liquidator with such sanction determines, but no member shall be compelled to accept any assets upon which there is a liability.

INDEMNITY


145.	INDEMNITY AND PROVISION OF FUNDS


145.1	Subject to, and to the extent not avoided by, the Statutes but without prejudice to any indemnity to which he may otherwise be entitled:

145.1.1

any person who is or was at any time a director, secretary or other officer (unless the office is or was as auditor) of the Company or of any of its present or former subsidiary undertakings may be indemnified out of the assets of the Company to whatever extent the Board may determine against any costs, charges, expenses, losses and liabilities sustained or incurred by him in the actual or purported execution of his duties or in the exercise or purported exercise of his powers or otherwise in connection with his office, whether or not sustained or incurred in connection with any negligence, default, breach of duty or breach of trust by him in relation to the Company or the relevant undertaking; and

145.1.2

the Board shall have power to provide funds to meet any expenditure incurred or to be incurred by any such person in defending himself in any criminal or civil proceeding in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to the Company or any such undertaking, or any investigation, or action proposed to be taken, by a regulatory authority in that connection, or for the purposes of any application under the Companies Act 2006, or in order to enable him to avoid incurring any such expenditure.


146.	POWER TO INSURE

146.1

The Board may purchase and maintain insurance at the expense of the Company for the benefit of any person who is or was at any time a director or other officer (unless the office is or was as Auditor) or employee of the Company or of any present or former subsidiary undertaking of the Company or of any body corporate in which the Company has or had an interest (whether direct or indirect) or who is or was at any time a trustee of any pension fund or employee benefits trust in which any employee of the Company or of any such undertaking or body corporate is or has been interested, indemnifying such person against any liability which may attach to him, and any loss or expenditure which he may incur, in relation to anything actually or allegedly done or omitted to be done by him as a director, officer, employee or trustee, whether or not it involves any negligence, default, breach of duty or breach of trust by him in relation to the Company or the relevant undertaking, body corporate, fund or trust.

Exhibit 4.1

DEPOSIT AGREEMENT

by and among

REALM THERAPEUTICS PLC

and

CITIBANK, N.A.,

as Depositary,

and

ALL HOLDERS AND BENEFICIAL OWNERS OF

AMERICAN DEPOSITARY SHARES
ISSUED HEREUNDER

Dated as of [date] , 2018

TABLE OF CONTENTS



ARTICLE I

DEFINITIONS		1
Section 1.1	“ADS Record Date”	1
Section 1.2	“Affiliate”	1
Section 1.3	“American Depositary Receipt(s)”, “ADR(s)” and “Receipt(s)”	1
Section 1.4	“American Depositary Share(s)” and “ADS(s)”	1
Section 1.5	“Articles of Association”	1
Section 1.6	“Applicant”	1
Section 1.7	“Beneficial Owner”	1
Section 1.8	“Certificated ADS(s)”	2
Section 1.9	“Citibank”	2
Section 1.10	“Commission”	2
Section 1.11	“Company”	2
Section 1.12	“CREST”	2
Section 1.13	“Custodian”	2
Section 1.14	“Deliver” and “Delivery”	2
Section 1.15	“Deposit Agreement”	2
Section 1.16	“Depositary”	2
Section 1.17	“Deposited Property”	2
Section 1.18	“Deposited Securities”	2
Section 1.19	“Dollars” and “$”	2
Section 1.20	“DTC”	2
Section 1.21	“DTC Participant”	2
Section 1.22	“Exchange Act”	2
Section 1.23	“Foreign Currency”	2
Section 1.24	“Full Entitlement ADR(s)”, “Full Entitlement ADS(s)” and “Full Entitlement Share(s)”	2
Section 1.25	“Holder(s)”	2
Section 1.26	“Partial Entitlement ADR(s)”, “Partial Entitlement ADS(s)” and “Partial Entitlement Share(s)”	2
Section 1.27	“Pounds”, “Pence” and “£”	2
Section 1.28	“Pre-Release Transaction”	2
Section 1.29	“Principal Office”	2
Section 1.30	“Registrar”	2
Section 1.31	“Restricted Securities”	2
Section 1.32	“Restricted ADR(s)”, “Restricted ADS(s)” and “Restricted Shares”	3
Section 1.33	“Securities Act”	3
Section 1.34	“Share Registrar”	3
Section 1.35	“Shares”	3
Section 1.36	“Uncertificated ADS(s)”	3



Section 1.37	“United States” and “U.S.”	3

ARTICLE II

APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS; DEPOSIT OF SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS		4
Section 2.1	Appointment of Depositary	4
Section 2.2	Form and Transferability of ADSs	4
Section 2.3	Deposit of Shares	6
Section 2.4	Registration and Safekeeping of Deposited Securities	7
Section 2.5	Issuance of ADSs	8
Section 2.6	Transfer, Combination and Split-up of ADRs	9
Section 2.7	Surrender of ADSs and Withdrawal of Deposited Securities	10
Section 2.8	Limitations on Execution and Delivery, Transfer, etc. of ADSs; Suspension of Delivery, Transfer, etc	11
Section 2.9	Lost ADRs, etc	11
Section 2.10	Cancellation and Destruction of Surrendered ADRs; Maintenance of Records	12
Section 2.11	Escheatment	13
Section 2.12	Partial Entitlement ADSs	13
Section 2.13	Certificated/Uncertificated ADSs	13
Section 2.14	Restricted ADSs	15

ARTICLE III

CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL OWNERS OF ADSs		16
Section 3.1	Proofs, Certificates and Other Information	17
Section 3.2	Liability for Taxes and Other Charges	17
Section 3.3	Representations and Warranties on Deposit of Shares	18
Section 3.4	Compliance with Information Requests	18
Section 3.5	Ownership Restrictions	18
Section 3.6	Reporting Obligations and Regulatory Approvals	19

ARTICLE IV

THE DEPOSITED SECURITIES		19
Section 4.1	Cash Distributions	20
Section 4.2	Distribution in Shares	20
Section 4.3	Elective Distributions in Cash or Shares	21
Section 4.4	Distribution of Rights to Purchase Additional ADSs	22
Section 4.5	Distributions Other Than Cash, Shares or Rights to Purchase Shares	23
Section 4.6	Distributions with Respect to Deposited Securities in Bearer Form	24
Section 4.7	Redemption	24
Section 4.8	Conversion of Foreign Currency	24
Section 4.9	Fixing of ADS Record Date	25



Section 4.10	Voting of Deposited Securities	26
Section 4.11	Changes Affecting Deposited Securities	28
Section 4.12	Available Information	29
Section 4.13	Reports	29
Section 4.14	List of Holders	29
Section 4.15	Taxation	29

ARTICLE V

THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY		30
Section 5.1	Maintenance of Office and Transfer Books by the Registrar	30
Section 5.2	Exoneration	31
Section 5.3	Standard of Care	32
Section 5.4	Resignation and Removal of the Depositary; Appointment of Successor Depositary	33
Section 5.5	The Custodian	33
Section 5.6	Notices and Reports	34
Section 5.7	Issuance of Additional Shares, ADSs etc	35
Section 5.8	Indemnification	36
Section 5.9	ADS Fees and Charges	37
Section 5.10	Pre-Release Transactions	38
Section 5.11	Restricted Securities Owners	39

ARTICLE VI

AMENDMENT AND TERMINATION		39
Section 6.1	Amendment/Supplement	39
Section 6.2	Termination	40

ARTICLE VII

MISCELLANEOUS		41
Section 7.1	Counterparts	41
Section 7.2	No Third‑Party Beneficiaries/Acknowledgments	41
Section 7.3	Severability	42
Section 7.4	Holders and Beneficial Owners as Parties; Binding Effect	42
Section 7.5	Notices	42
Section 7.6	Governing Law and Jurisdiction	43
Section 7.7	Assignment	45
Section 7.8	Compliance with U.S. Securities Laws	45
Section 7.9	English Law References	45
Section 7.10	Titles and References	45
Section 7.11	Amendment and Restatement	46

iii



EXHIBITS
	Form of ADR.	A-1
	Fee Schedule.	B-1

DEPOSIT AGREEMENT , dated as of ___________, 2018, by and among (i) Realm Therapeutics plc, a public limited company incorporated under the laws of England and Wales, and its successors (the “Company”), (ii) CITIBANK, N.A., a national banking association organized under the laws of the United States of America (“ Citibank ”) acting in its capacity as depositary, and any successor depositary hereunder (Citibank in such capacity, the “Depositary”), and (iii) all Holders and Beneficial Owners of American Depositary Shares issued hereunder (all such capitalized terms as hereinafter defined).

W I T N E S S E T H T H A T :

WHEREAS, the Company desires to establish with the Depositary an ADR facility to provide for the deposit of the Shares (as hereinafter defined) and the creation of American Depositary Shares representing the Shares so deposited and for the execution and Delivery (as hereinafter defined) of American Depositary Receipts (as hereinafter defined) evidencing such American Depositary Shares; and

WHEREAS , the Depositary is willing to act as the Depositary for such ADR facility upon the terms set forth in the Deposit Agreement (as hereinafter defined); and

WHEREAS , any American Depositary Receipts issued pursuant to the terms of the Deposit Agreement are to be substantially in the form of Exhibit A attached hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in the Deposit Agreement; and

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

All capitalized terms used, but not otherwise defined, herein shall have the meanings set forth below, unless otherwise clearly indicated:

Section 1.1 “ ADS Record Date ” shall have the meaning given to such term in Section 4.9.

Section 1.2 “ Affiliate ” shall have the meaning assigned to such term by the Commission (as hereinafter defined) under Regulation C promulgated under the Securities Act (as hereinafter defined), or under any successor regulation thereto.

Section 1.3 “ American Depositary Receipt(s) ”, “ ADR(s) ” and “ Receipt(s) ” shall mean the certificate(s) issued by the Depositary to evidence the American Depositary Shares issued under the terms of the Deposit Agreement in the form of Certificated ADS(s) (as hereinafter defined), as such ADRs may be amended from time to time in accordance with the

provisions of the Deposit Agreement. An ADR may evidence any number of ADSs and may, in the case of ADSs held through a central depository such as DTC, be in the form of a “Balance Certificate.”

Section 1.4 “ American Depositary Share(s) ” and “ ADS(s) ” shall mean the rights and interests in the Deposited Property (as hereinafter defined) granted to the Holders and Beneficial Owners pursuant to the terms and conditions of the Deposit Agreement and, if issued as Certificated ADS(s) (as hereinafter defined), the ADR(s) issued to evidence such ADSs. ADS(s) may be issued under the terms of the Deposit Agreement in the form of (a) Certificated ADS(s) (as hereinafter defined), in which case the ADS(s) are evidenced by ADR(s), or (b) Uncertificated ADS(s) (as hereinafter defined), in which case the ADS(s) are not evidenced by ADR(s) but are reflected on the direct registration system maintained by the Depositary for such purposes under the terms of Section 2.13. Unless otherwise specified in the Deposit Agreement or in any ADR, or unless the context otherwise requires, any reference to ADS(s) shall include Certificated ADS(s) and Uncertificated ADS(s), individually or collectively, as the context may require. Each ADS shall represent the right to receive, and to exercise the beneficial ownership interests in, the number of Shares specified in the form of ADR attached hereto as Exhibit A (as amended from time to time) that are on deposit with the Depositary and/or the Custodian, subject, in each case, to the terms and conditions of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS), until there shall occur a distribution upon Deposited Securities referred to in Section 4.2 or a change in Deposited Securities referred to in Section 4.11 with respect to which additional ADSs are not issued, and thereafter each ADS shall represent the right to receive, and to exercise the beneficial ownership interests in, the applicable Deposited Property on deposit with the Depositary and the Custodian determined in accordance with the terms of such Sections, subject, in each case, to the terms and conditions of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS). In addition, the ADS(s)-to-Share(s) ratio is subject to amendment as provided in Articles IV and VI of the Deposit Agreement (which may give rise to Depositary fees).

Section 1.5 “ Articles of Association ” shall mean the Articles of Association of the Company, as amended and restated from time to time.

Section 1.6 “ Applicant ” shall have the meaning given to such term in Section 5.10.

Section 1.7 “ Beneficial Owner ” shall mean, as to any ADS, any person or entity having a beneficial interest deriving from the ownership of such ADS. Notwithstanding anything else contained in the Deposit Agreement, any ADR(s) or any other instruments or agreements relating to the ADSs and the corresponding Deposited Property, the Depositary, the Custodian and their respective nominees are intended to be, and shall at all times during the term of the Deposit Agreement be, the record holders only of the Deposited Property represented by the ADSs for the benefit of the Holders and Beneficial Owners of the corresponding ADSs. The Depositary, on its own behalf and on behalf of the Custodian and their respective nominees, disclaims any beneficial ownership interest in the Deposited Property held on behalf of the Holders and Beneficial Owners of ADSs. The beneficial ownership interests in the Deposited Property are intended to be, and shall at all times during the term of the Deposit Agreement

continue to be, vested in the Beneficial Owners of the ADSs representing the Deposited Property. The beneficial ownership interests in the Deposited Property shall, unless otherwise agreed by the Depositary, be exercisable by the Beneficial Owners of the ADSs only through the Holders of such ADSs, by the Holders of the ADSs (on behalf of the applicable Beneficial Owners) only through the Depositary, and by the Depositary (on behalf of the Holders and Beneficial Owners of the corresponding ADSs) directly, or indirectly through the Custodian or their respective nominees, in each case upon the terms of the Deposit Agreement and, if applicable, the terms of the ADR(s) evidencing the ADSs. A Beneficial Owner of ADSs may or may not be the Holder of such ADSs. A Beneficial Owner shall be able to exercise any right or receive any benefit hereunder solely through the person who is the Holder of the ADSs owned by such Beneficial Owner. Unless otherwise identified to the Depositary, a Holder shall be deemed to be the Beneficial Owner of all the ADSs registered in his/her/its name. The manner in which a Beneficial Owner holds ADSs (e.g., in a brokerage account vs. as registered holder) may affect the rights and obligations of, the manner in which, and the extent to which, services are made available to, Beneficial Owners pursuant to the terms of the Deposit Agreement.

Section 1.8 “ Certificated ADS(s) ” shall have the meaning set forth in Section 2.13.

Section 1.9 “ Citibank ” shall mean Citibank, N.A., a national banking association organized under the laws of the United States of America, and its successors.

Section 1.10 “ Commission ” shall mean the Securities and Exchange Commission of the United States or any successor governmental agency thereto in the United States.

Section 1.11 “ Company ” shall mean Realm Therapeutics plc, a public company incorporated under the laws of England and Wales, and its successors.

Section 1.12 “ CREST ” shall mean the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear UK & Ireland Limited in accordance with the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended from time to time, or any successor thereto.

Section 1.13 “ Custodian ”

shall mean (i) as of the date hereof, Citibank N.A., London Branch, having its principal office at 25 Canada Square, Canary Wharf, London, E14 5LB, United Kingdom, as the custodian of Deposited Property for the purposes of the Deposit Agreement, (ii) Citibank, N.A., acting as custodian of Deposited Property pursuant to the Deposit Agreement, and (iii) any other entity that may be appointed by the Depositary pursuant to the terms of Section 5.5 as successor, substitute or additional custodian hereunder. The term “Custodian” shall mean any Custodian individually or all Custodians collectively, as the context requires.

Section 1.14 “ Deliver ” and “ Delivery ” shall mean (x) when used in respect of Shares and other Deposited Securities , either (i) the physical delivery of the certificate(s) representing such securities, or (ii) the book-entry transfer and recordation of such securities on the books of the Share Registrar (as hereinafter defined) or in the book-entry settlement of CREST, and (y)

when used in respect of ADSs , either (i) the physical delivery of ADR(s) evidencing the ADSs, or (ii) the book-entry transfer and recordation of ADSs on the books of the Depositary or any book-entry settlement system in which the ADSs are settlement-eligible.

Section 1.15 “ Deposit Agreement ” shall mean this Deposit Agreement and all exhibits hereto, as the same may from time to time be amended and supplemented from time to time in accordance with the terms of the Deposit Agreement.

Section 1.16 “ Depositary ” shall mean Citibank, N.A., a national banking association organized under the laws of the United States, in its capacity as depositary under the terms of the Deposit Agreement, and any successor depositary hereunder.

Section 1.17 “ Deposited Property ” shall mean the Deposited Securities and any cash and other property held on deposit by the Depositary and the Custodian in respect of the ADSs under the terms of the Deposit Agreement, subject, in the case of cash, to the provisions of Section 4.8. All Deposited Property shall be held by the Custodian, the Depositary and their respective nominees for the benefit of the Holders and Beneficial Owners of the ADSs representing the Deposited Property. The Deposited Property is not intended to, and shall not, constitute proprietary assets of the Depositary, the Custodian or their nominees. Beneficial ownership in the Deposited Property is intended to be, and shall at all times during the term of the Deposit Agreement continue to be, vested in the Beneficial Owners of the ADSs representing the Deposited Property. Notwithstanding the foregoing, the collateral delivered in connection with Pre-Release Transactions described in Section 5.10 shall not constitute Deposited Property.

Section 1.18 “ Deposited Securities ” shall mean the Shares and any other securities held on deposit by the Custodian from time to time in respect of the ADSs under the Deposit Agreement and constituting Deposited Property.

Section 1.19 “ Dollars ” and “ $ ” shall refer to the lawful currency of the United States.

Section 1.20 “ DTC ” shall mean The Depository Trust Company, a national clearinghouse and the central book-entry settlement system for securities traded in the United States and, as such, the custodian for the securities of DTC Participants (as hereinafter defined) maintained in DTC, and any successor thereto.

Section 1.21 “ DTC Participant ” shall mean any financial institution (or any nominee of such institution) having one or more participant accounts with DTC for receiving, holding and delivering the securities and cash held in DTC. A DTC Participant may or may not be a Beneficial Owner. If a DTC Participant is not the Beneficial Owner of the ADSs credited to its account at DTC, or of the ADSs in respect of which the DTC Participant is otherwise acting, such DTC Participant shall be deemed, for all purposes hereunder, to have all requisite authority to act on behalf of the Beneficial Owner(s) of the ADSs credited to its account at DTC or in respect of which the DTC Participant is so acting. A DTC Participant, upon acceptance in any one of its DTC accounts of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall (notwithstanding any explicit or implicit disclosure that it may be acting on behalf of another party) be deemed for all purposes to be a

party to, and bound by, the terms of the Deposit Agreement and the applicable ADR(s) to the same extent as, and as if the DTC Participant were, the Holder of such ADSs.

Section 1.22 “ Exchange Act ” shall mean the United States Securities Exchange Act of 1934, as amended from time to time.

Section 1.23 “ Foreign Currency ” shall mean any currency other than Dollars.

Section 1.24 “ Full Entitlement ADR(s) ”, “ Full Entitlement ADS(s) ” and “ Full Entitlement Share(s) ” shall have the respective meanings set forth in Section 2.12.

Section 1.25 “ Holder(s) ” shall mean the person(s) in whose name the ADSs are registered on the books of the Depositary (or the Registrar, if any) maintained for such purpose. A Holder may or may not be a Beneficial Owner. If a Holder is not the Beneficial Owner of the ADS(s) registered in its name, such person shall be deemed, for all purposes hereunder, to have all requisite authority to act on behalf of the Beneficial Owners of the ADSs registered in its name. The manner in which a Holder holds ADSs (e.g., in certificated vs. uncertificated form) may affect the rights and obligations of, and the manner in which, and the extent to which, the services are made available to, Holders pursuant to the terms of the Deposit Agreement.

Section 1.26 “ Partial Entitlement ADR(s) ”, “ Partial Entitlement ADS(s) ” and “ Partial Entitlement Share(s) ” shall have the respective meanings set forth in Section 2.12.

Section 1.27 “ Pounds”, “Pence” and “£” shall have the meaning set forth in Section 5.10.

Section 1.28 “ Pre-Release Transaction ” shall have the meaning set forth in Section 5.10.

Section 1.29 “ Principal Office ” shall mean, when used with respect to the Depositary, the principal office of the Depositary at which at any particular time its depositary receipts business shall be administered, which, at the date of the Deposit Agreement, is located at 388 Greenwich Street, New York, New York 10013, U.S.A.

Section 1.30 “ Registrar ” shall mean the Depositary or any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed by the Depositary to register issuances, transfers and cancellations of ADSs as herein provided, and shall include any co-registrar appointed by the Depositary for such purposes. Registrars (other than the Depositary) may be removed and substitutes appointed by the Depositary. Each Registrar (other than the Depositary) appointed pursuant to the Deposit Agreement shall be required to give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of the Deposit Agreement.

Section 1.31 “ Restricted Securities ” shall mean Shares, Deposited Securities or ADSs which (i) have been acquired directly or indirectly from the Company or any of its Affiliates in a transaction or chain of transactions not involving any public offering and are subject to resale

limitations under the Securities Act or the rules issued thereunder, or (ii) are held by an executive officer or director (or persons performing similar functions) or other Affiliate of the Company, or (iii) are subject to other restrictions on sale or deposit under the laws of the United States, England and Wales, or under a shareholder agreement or the Articles of Association of the Company or under the regulations of an applicable securities exchange unless, in each case, such Shares, Deposited Securities or ADSs are being transferred or sold to persons other than an Affiliate of the Company in a transaction (a) covered by an effective resale registration statement, or (b) exempt from the registration requirements of the Securities Act (as hereinafter defined), and the Shares, Deposited Securities or ADSs are not, when held by such person(s), Restricted Securities.

Section 1.32 “ Restricted ADR(s) ”, “ Restricted ADS(s) ” and “ Restricted Shares ” shall have the respective meanings set forth in Section 2.14.

Section 1.33 “ Securities Act ” shall mean the United States Securities Act of 1933, as amended from time to time.

Section 1.34 “ Share Registrar ” shall mean Equiniti Limited or any other institution organized under the laws of England and Wales appointed by the Company from time to time to carry out the duties of registrar for the Shares, and any successor thereto.

Section 1.35 “ Shares ” shall mean the Company’s ordinary shares, nominal value, £0.10 per share, validly issued and outstanding and fully paid and may, if the Depositary so agrees after consultation with the Company, include evidence of the right to receive Shares; provided that in no event shall Shares include evidence of the right to receive Shares with respect to which the full purchase price has not been paid or Shares as to which preemptive rights have theretofore not been validly waived or exercised; provided further , however , that , if there shall occur any change in nominal value, split‑up, consolidation, reclassification, exchange, conversion or any other event described in Section 4.11 in respect of the Shares of the Company, the term “Shares” shall thereafter, to the maximum extent permitted by law, represent the successor securities resulting from such event.

Section 1.36 “ Uncertificated ADS(s) ” shall have the meaning set forth in Section 2.13.

Section 1.37 “ United States ” and “ U.S. ” shall have the meaning assigned to it in Regulation S as promulgated by the Commission under the Securities Act.

ARTICLE II

MISCELLANEOUS

APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;
DEPOSIT OF SHARES; EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS

Section 2.1 Appointment of Depositary . The Company hereby appoints the Depositary as depositary for the Deposited Property and hereby authorizes and directs the Depositary to act in accordance with the terms and conditions set forth in the Deposit Agreement and the applicable ADRs. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

Section 2.2 Form and Transferability of ADSs .

(a) Form . Certificated ADSs shall be evidenced by definitive ADRs which shall be engraved, printed, lithographed or produced in such other manner as may be agreed upon by the Company and the Depositary. ADRs may be issued under the Deposit Agreement in denominations of any whole number of ADSs. The ADRs shall be substantially in the form set forth in Exhibit A to the Deposit Agreement, with any appropriate insertions, modifications and omissions, in each case as otherwise contemplated in the Deposit Agreement or required by law. ADRs shall be (i) dated, (ii) signed by the manual or facsimile signature of a duly authorized signatory of the Depositary, (iii) countersigned by the manual or facsimile signature of a duly authorized signatory of the Registrar, and (iv) registered in the books maintained by the Registrar for the registration of issuances and transfers of ADSs. No ADR and no Certificated ADS evidenced thereby shall be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company, unless such ADR shall have been so dated, signed, countersigned and registered. ADRs bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly-authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the Delivery of such ADR by the Depositary. The ADRs shall bear a CUSIP number that is different from any CUSIP number that was, is or may be assigned to any depositary receipts previously or subsequently issued pursuant to any other arrangement between the Depositary (or any other depositary) and the Company and which are not ADRs outstanding hereunder.

(b) Legends . The ADRs may be endorsed with, or have incorporated in the text thereof, such legends or recitals not inconsistent with the provisions of the Deposit Agreement as may be (i) necessary to enable the Depositary and the Company to perform their respective obligations hereunder, (ii) required to comply with any applicable laws or regulations, or with the rules and regulations of any securities exchange or market upon which ADSs may be traded, listed or quoted, or to conform with any usage with respect thereto, (iii) necessary to indicate any special limitations or restrictions to which any particular ADRs or ADSs are subject by reason of the date of issuance of the Deposited Securities or otherwise, or (iv) required by any book-entry system in which the ADSs are held. Holders and Beneficial Owners shall be deemed, for all purposes, to have notice of, and to be bound by, the terms and conditions of the legends set forth, in the case of Holders, on the ADR registered in the name of the applicable Holders or, in the case of Beneficial Owners, on the ADR representing the ADSs owned by such Beneficial Owners.

(c) Title . Subject to the limitations contained herein and in the ADR, title to an ADR (and to each Certificated ADS evidenced thereby) shall be transferable upon the same terms as a certificated security under the laws of the State of New York, provided that, in the case of Certificated ADSs, such ADR has been properly endorsed or is accompanied by proper instruments of transfer. Notwithstanding any notice to the contrary, the Depositary and the Company may deem and treat the Holder of an ADS (that is, the person in whose name an ADS is registered on the books of the Depositary) as the absolute owner thereof for all purposes. Neither the Depositary nor the Company shall have any obligation nor be subject to any liability under the Deposit Agreement or any ADR to any holder or any Beneficial Owner unless, in the case of a holder of ADSs, such holder is the Holder registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner, or the Beneficial Owner’s representative, is the Holder registered on the books of the Depositary.

(d) Book‑Entry Systems . The Depositary shall make arrangements for the acceptance of the ADSs into DTC. All ADSs held through DTC will be registered in the name of the nominee for DTC (currently “Cede & Co.”). As such, the nominee for DTC will be the only “Holder” of all ADSs held through DTC. Unless issued by the Depositary as Uncertificated ADSs, the ADSs registered in the name of Cede & Co. will be evidenced by one or more ADR(s) in the form of a “Balance Certificate,” which will provide that it represents the aggregate number of ADSs from time to time indicated in the records of the Depositary as being issued hereunder and that the aggregate number of ADSs represented thereby may from time to time be increased or decreased by making adjustments on such records of the Depositary and of DTC or its nominee as hereinafter provided. Citibank, N.A. (or such other entity as is appointed by DTC or its nominee) may hold the “Balance Certificate” as custodian for DTC. Each Beneficial Owner of ADSs held through DTC must rely upon the procedures of DTC and the DTC Participants to exercise or be entitled to any rights attributable to such ADSs. The DTC Participants shall for all purposes be deemed to have all requisite power and authority to act on behalf of the Beneficial Owners of the ADSs held in the DTC Participants’ respective accounts in DTC and the Depositary shall for all purposes be authorized to rely upon any instructions and information given to it by DTC Participants. So long as ADSs are held through DTC or unless otherwise required by law, ownership of beneficial interests in the ADSs registered in the name of the

nominee for DTC will be shown on, and transfers of such ownership will be effected only through, records maintained by (i) DTC or its nominee (with respect to the interests of DTC Participants), or (ii) DTC Participants or their nominees (with respect to the interests of clients of DTC Participants). Any distributions made, and any notices given, by the Depositary to DTC under the terms of the Deposit Agreement shall (unless otherwise specified by the Depositary) satisfy the Depositary’s obligations under the Deposit Agreement to make such distributions, and give such notices, in respect of the ADSs held in DTC (including, for avoidance of doubt, to the DTC Participants holding the ADSs in their DTC accounts and to the Beneficial Owners of such ADSs).

Section 2.3 Deposit of Shares . Subject to the terms and conditions of the Deposit Agreement and applicable law, Shares or evidence of rights to receive Shares (other than Restricted Securities) may be deposited by any person (including the Depositary in its individual capacity but subject, however, in the case of the Company or any Affiliate of the Company, to Section 5.7) at any time, whether or not the transfer books of the Company or the Share Registrar, if any, are closed, by Delivery of the Shares to the Custodian. Every deposit of Shares shall be accompanied by the following: (A) (i) in the case of Shares represented by certificates issued in registered form , appropriate instruments of transfer or endorsement, in a form satisfactory to the Custodian, (ii) in the case of Shares represented by certificates in bearer form, the requisite coupons and talons pertaining thereto, and (iii) in the case of Shares delivered by book-entry transfer and recordation , confirmation of such book-entry transfer and recordation in the books of the Share Registrar or of CREST, as applicable, to the Custodian or that irrevocable instructions have been given to cause such Shares to be so transferred and recorded, (B) such certifications and payments (including, without limitation, the Depositary’s fees and related charges) and evidence of such payments (including, without limitation, stamping or otherwise marking such Shares by way of receipt) as may be required by the Depositary or the Custodian in accordance with the provisions of the Deposit Agreement and applicable law, (C) if the Depositary so requires, a written order directing the Depositary to issue and deliver to, or upon the written order of, the person(s) stated in such order the number of ADSs representing the Shares so deposited, (D) evidence satisfactory to the Depositary (which may be an opinion of counsel) that all necessary approvals have been granted by, or there has been compliance with the rules and regulations of, any applicable governmental agency in England and Wales, and (E) if the Depositary so requires, (i) an agreement, assignment or instrument satisfactory to the Depositary or the Custodian which provides for the prompt transfer by any person in whose name the Shares are or have been recorded to the Custodian of any distribution, or right to subscribe for additional Shares or to receive other property in respect of any such deposited Shares or, in lieu thereof, such indemnity or other agreement as shall be satisfactory to the Depositary or the Custodian and (ii) if the Shares are registered in the name of the person on whose behalf they are presented for deposit, a proxy or proxies entitling the Custodian to exercise voting rights in respect of the Shares for any and all purposes until the Shares so deposited are registered in the name of the Depositary, the Custodian or any nominee.

Without limiting any other provision of the Deposit Agreement, the Depositary shall instruct the Custodian not to, and the Depositary shall not knowingly, accept for deposit (a) any Restricted Securities (except as contemplated by Section 2.14) nor (b) any fractional Shares or

fractional Deposited Securities nor (c) a number of Shares or Deposited Securities which upon application of the ADS to Shares ratio would give rise to fractional ADSs. No Shares shall be accepted for deposit unless accompanied by evidence, if any is required by the Depositary, that is reasonably satisfactory to the Depositary or the Custodian that all conditions to such deposit have been satisfied by the person depositing such Shares under the laws and regulations of England and Wales and any necessary approval has been granted by any applicable governmental body in England and Wales, if any. The Depositary may issue ADSs against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares. Such evidence of rights shall consist of written blanket or specific guarantees of ownership of Shares furnished by the Company or any such custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares.

Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement (A) any Shares or other securities required to be registered under the provisions of the Securities Act, unless (i) a registration statement is in effect as to such Shares or other securities or (ii) the deposit is made upon terms contemplated in Section 2.14, or (B) any Shares or other securities the deposit of which would violate any provisions of the Articles of Association of the Company. For purposes of the foregoing sentence, the Depositary shall be entitled to rely upon representations and warranties made or deemed made pursuant to the Deposit Agreement and shall not be required to make any further investigation. The Depositary will comply with written instructions of the Company (received by the Depositary reasonably in advance) not to accept for deposit hereunder any Shares identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Company's compliance with the securities laws of the United States.

Section 2.4 Registration and Safekeeping of Deposited Securities . The Depositary shall instruct the Custodian upon each Delivery of registered Shares being deposited hereunder with the Custodian (or other Deposited Securities pursuant to Article IV hereof), together with the other documents above specified, to present such Shares, together with the appropriate instrument(s) of transfer or endorsement, duly stamped, to the Share Registrar for transfer and registration of the Shares (as soon as transfer and registration can be accomplished and at the expense of the person for whom the deposit is made) in the name of the Depositary, the Custodian or a nominee of either. Deposited Securities shall be held by the Depositary, or by a Custodian for the account and to the order of the Depositary or a nominee of the Depositary, in each case, on behalf of the Holders and Beneficial Owners, at such place(s) as the Depositary or the Custodian shall determine. Notwithstanding anything else contained in the Deposit Agreement, any ADR(s), or any other instruments or agreements relating to the ADSs and the corresponding Deposited Property, the registration of the Deposited Securities in the name of the Depositary, the Custodian or any of their respective nominees, shall, to the maximum extent permitted by applicable law, vest in the Depositary, the Custodian or the applicable nominee the record ownership in the applicable Deposited Securities with the beneficial ownership rights and interests in such Deposited Securities being at all times vested with the Beneficial Owners of the

ADSs representing the Deposited Securities. Notwithstanding the foregoing, the Depositary, the Custodian and the applicable nominee shall at all times be entitled to exercise the beneficial ownership rights in all Deposited Property, in each case only on behalf of the Holders and Beneficial Owners of the ADSs representing the Deposited Property, upon the terms set forth in the Deposit Agreement and, if applicable, the ADR(s) representing the ADSs. The Depositary, the Custodian and their respective nominees shall for all purposes be deemed to have all requisite power and authority to act in respect of Deposited Property on behalf of the Holders and Beneficial Owners of ADSs representing the Deposited Property, and upon making payments to, or acting upon instructions from, or information provided by, the Depositary, the Custodian or their respective nominees all persons shall be authorized to rely upon such power and authority.

Section 2.5 Issuance of ADSs. The Depositary has made arrangements with the Custodian for the Custodian to confirm to the Depositary upon receipt of a deposit of Shares (i) that a deposit of Shares has been made pursuant to Section 2.3, (ii) that such Deposited Securities have been recorded in the name of the Depositary, the Custodian or a nominee of either on the shareholders’ register maintained by or on behalf of the Company by the Share Registrar on the books of CREST, (iii) that all required documents have been received, and (iv) the person(s) to whom or upon whose order ADSs are deliverable in respect thereof and the number of ADSs to be so delivered. Such notification may be made by letter, cable, telex, SWIFT message or, at the risk and expense of the person making the deposit, by facsimile or other means of electronic transmission. Upon receiving such notice from the Custodian, the Depositary, subject to the terms and conditions of the Deposit Agreement and applicable law, shall issue the ADSs representing the Shares so deposited to or upon the order of the person(s) named in the notice delivered to the Depositary and, if applicable, shall execute and deliver at its Principal Office Receipt(s) registered in the name(s) requested by such person(s) and evidencing the aggregate number of ADSs to which such person(s) are entitled, but, in each case, only upon payment to the Depositary of the charges of the Depositary for accepting a deposit of Shares and issuing ADSs (as set forth in Section 5.9 and Exhibit B hereto) and all taxes and governmental charges and fees payable in connection with such deposit and the transfer of the Shares and the issuance of the ADS(s). The Depositary shall only issue ADSs in whole numbers and deliver, if applicable, ADR(s) evidencing whole numbers of ADSs. Nothing herein shall prohibit any Pre-Release Transaction upon the terms set forth in the Deposit Agreement.

Section 2.6 Transfer, Combination and Split-up of ADRs .

(a) Transfer . The Registrar shall register the transfer of ADRs (and of the ADSs represented thereby) on the books maintained for such purpose and the Depositary shall (x) cancel such ADRs and execute new ADRs evidencing the same aggregate number of ADSs as those evidenced by the ADRs canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs and (z) deliver such new ADRs to or upon the order of the person entitled thereto, if each of the following conditions has been satisfied: (i) the ADRs have been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a transfer thereof, (ii) the surrendered ADRs have been properly endorsed or are accompanied by proper instruments of transfer (including signature guarantees in accordance with standard securities industry practice), (iii) the

surrendered ADRs have been duly stamped (if required by the laws of the State of New York or of the United States), and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject, however, in each case, to the terms and conditions of the applicable ADRs, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

(b) Combination & Split-Up . The Registrar shall register the split-up or combination of ADRs (and of the ADSs represented thereby) on the books maintained for such purpose and the Depositary shall (x) cancel such ADRs and execute new ADRs for the number of ADSs requested, but in the aggregate not exceeding the number of ADSs evidenced by the ADRs canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs and (z) Deliver such new ADRs to or upon the order of the Holder thereof, if each of the following conditions has been satisfied: (i) the ADRs have been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a split-up or combination thereof, and (ii) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject, however, in each case , to the terms and conditions of the applicable ADRs, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

Section 2.7 Surrender of ADSs and Withdrawal of Deposited Securities . The Holder of ADSs shall be entitled to Delivery (at the Custodian’s designated office) of the Deposited Securities at the time represented by the ADSs upon satisfaction of each of the following conditions: (i) the Holder (or a duly-authorized attorney of the Holder) has duly Delivered ADSs to the Depositary at its Principal Office (and if applicable, the ADRs evidencing such ADSs) for the purpose of withdrawal of the Deposited Securities represented thereby, (ii) if applicable and so required by the Depositary, the ADRs Delivered to the Depositary for such purpose have been properly endorsed in blank or are accompanied by proper instruments of transfer in blank (including signature guarantees in accordance with standard securities industry practice), (iii) if so required by the Depositary, the Holder of the ADSs has executed and delivered to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of the person(s) designated in such order, and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B ) have been paid, subject, however, in each case , to the terms and conditions of the ADRs evidencing the surrendered ADSs, of the Deposit Agreement, of the Company’s Articles of Association and of any applicable laws and the rules of CREST, and to any provisions of or governing the Deposited Securities , in each case as in effect at the time thereof.

Upon satisfaction of each of the conditions specified above, the Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the ADR(s) evidencing the ADSs so Delivered), (ii) shall direct the Registrar to record the cancellation of the ADSs so Delivered on the books maintained for such purpose, and (iii) shall direct the Custodian to Deliver, or cause the Delivery of, in each case, without unreasonable delay, the Deposited Securities represented

by the ADSs so canceled together with any certificate or other document of title for the Deposited Securities, or evidence of the electronic transfer thereof (if available), as the case may be, to or upon the written order of the person(s) designated in the order delivered to the Depositary for such purpose, subject however, in each case, to the terms and conditions of the Deposit Agreement, of the ADRs evidencing the ADSs so canceled, of the Articles of Association of the Company, of any applicable laws and of the rules of CREST, and to the terms and conditions of or governing the Deposited Securities, in each case as in effect at the time thereof.

The Depositary shall not accept for surrender ADSs representing less than one (1) Share. In the case of Delivery to it of ADSs representing a number other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) return to the person surrendering such ADSs the number of ADSs representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Share represented by the ADSs so surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxes withheld) to the person surrendering the ADSs.

Notwithstanding anything else contained in any ADR or the Deposit Agreement, the Depositary may make delivery at the Principal Office of the Depositary of Deposited Property consisting of (i) any cash dividends or cash distributions, or (ii) any proceeds from the sale of any non-cash distributions, which are at the time held by the Depositary in respect of the Deposited Securities represented by the ADSs surrendered for cancellation and withdrawal. At the request, risk and expense of any Holder so surrendering ADSs, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any Deposited Property (other than Deposited Securities) held by the Custodian in respect of such ADSs to the Depositary for delivery at the Principal Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission.


Section 2.8	Limitations on Execution and Delivery, Transfer, etc. of ADSs; Suspension of Delivery, Transfer, etc .

(a) Additional Requirements . As a condition precedent to the execution and Delivery, the registration of issuance, transfer, split-up, combination or surrender, of any ADS, the delivery of any distribution thereon, or the withdrawal of any Deposited Property, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of ADSs or of an ADR of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 and Exhibit B , (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1, and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of ADRs or ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations as the Depositary and the Company may establish

consistent with the provisions of the representative ADR, if applicable, the Deposit Agreement and applicable law.

(b) Additional Limitations . The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the deposit of particular Shares may be refused, or the registration of transfer of ADSs in particular instances may be refused, or the registration of transfers of ADSs generally may be suspended, during any period when the transfer books of the Company, the Depositary, a Registrar or the Share Registrar are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law or regulation, any government or governmental body or commission or any securities exchange on which the ADSs or Shares are listed, or under any provision of the Deposit Agreement or the representative ADR(s), if applicable, or under any provision of, or governing, the Deposited Securities, or because of a meeting of shareholders of the Company or for any other reason, subject, in all cases, to Section 7.8.

(c) Regulatory Restrictions . Notwithstanding any provision of the Deposit Agreement or any ADR(s) to the contrary, Holders are entitled to surrender outstanding ADSs to withdraw the Deposited Securities associated herewith at any time subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Shares in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of the Deposited Securities, and (iv) other circumstances specifically contemplated by Instruction I.A.(l) of the General Instructions to Form F-6 (as such General Instructions may be amended from time to time).

Section 2.9 Lost ADRs, etc . In case any ADR shall be mutilated, destroyed, lost, or stolen, the Depositary shall execute and deliver a new ADR of like tenor at the expense of the Holder (a) in the case of a mutilated ADR, in exchange of and substitution for such mutilated ADR upon cancellation thereof, or (b) in the case of a destroyed, lost or stolen ADR, in lieu of and in substitution for such destroyed, lost, or stolen ADR, after the Holder thereof (i) has submitted to the Depositary a written request for such exchange and substitution before the Depositary has notice that the ADR has been acquired by a bona fide purchaser, (ii) has provided such security or indemnity (including an indemnity bond) as may be required by the Depositary to save it and any of its agents harmless, and (iii) has satisfied any other reasonable requirements imposed by the Depositary, including, without limitation, evidence satisfactory to the Depositary of such destruction, loss or theft of such ADR, the authenticity thereof and the Holder’s ownership thereof.

Section 2.10 Cancellation and Destruction of Surrendered ADRs; Maintenance of Records . All ADRs surrendered to the Depositary shall be canceled by the Depositary. Canceled ADRs shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable against the Depositary for any purpose. The Depositary is authorized to destroy ADRs so canceled, provided the Depositary maintains a record of all destroyed ADRs. Any ADSs held in book-entry form ( e.g. , through accounts at DTC) shall be deemed canceled when

the Depositary causes the number of ADSs evidenced by the Balance Certificate to be reduced by the number of ADSs surrendered (without the need to physically destroy the Balance Certificate).

Section 2.11 Escheatment . In the event any unclaimed property relating to the ADSs, for any reason, is in the possession of Depositary and has not been claimed by the Holder thereof or cannot be delivered to the Holder thereof through usual channels, the Depositary shall, upon expiration of any applicable statutory period relating to abandoned property laws, escheat such unclaimed property to the relevant authorities in accordance with the laws of each of the relevant States of the United States.

Section 2.12 Partial Entitlement ADSs . In the event any Shares are deposited which (i) entitle the holders thereof to receive a per-share distribution or other entitlement in an amount different from the Shares then on deposit or (ii) are not fully fungible (including, without limitation, as to settlement or trading) with the Shares then on deposit (the Shares then on deposit collectively, “ Full Entitlement Shares ” and the Shares with different entitlement, “ Partial Entitlement Shares ”), the Depositary shall (i) cause the Custodian to hold Partial Entitlement Shares separate and distinct from Full Entitlement Shares, and (ii) subject to the terms of the Deposit Agreement, issue ADSs representing Partial Entitlement Shares which are separate and distinct from the ADSs representing Full Entitlement Shares, by means of separate CUSIP numbering and legending (if necessary) and, if applicable, by issuing ADRs evidencing such ADSs with applicable notations thereon (“ Partial Entitlement ADSs/ADRs ” and “ Full Entitlement ADSs/ADRs ”, respectively). If and when Partial Entitlement Shares become Full Entitlement Shares, the Depositary shall (a) give notice thereof to Holders of Partial Entitlement ADSs and give Holders of Partial Entitlement ADRs the opportunity to exchange such Partial Entitlement ADRs for Full Entitlement ADRs, (b) cause the Custodian to transfer the Partial Entitlement Shares into the account of the Full Entitlement Shares, and (c) take such actions as are necessary to remove the distinctions between (i) the Partial Entitlement ADRs and ADSs, on the one hand, and (ii) the Full Entitlement ADRs and ADSs on the other. Holders and Beneficial Owners of Partial Entitlement ADSs shall only be entitled to the entitlements of Partial Entitlement Shares. Holders and Beneficial Owners of Full Entitlement ADSs shall be entitled only to the entitlements of Full Entitlement Shares. All provisions and conditions of the Deposit Agreement shall apply to Partial Entitlement ADRs and ADSs to the same extent as Full Entitlement ADRs and ADSs, except as contemplated by this Section 2.12. The Depositary is authorized to take any and all other actions as may be necessary (including, without limitation, making the necessary notations on ADRs) to give effect to the terms of this Section 2.12. The Company agrees to give timely written notice to the Depositary if any Shares issued or to be issued are Partial Entitlement Shares and shall assist the Depositary with the establishment of procedures enabling the identification of Partial Entitlement Shares upon Delivery to the Custodian.

Section 2.13 Certificated/Uncertificated ADSs . Notwithstanding any other provision of the Deposit Agreement, the Depositary may, at any time and from time to time, issue ADSs that are not evidenced by ADRs (such ADSs, the “ Uncertificated ADS(s) ” and the ADS(s) evidenced by ADR(s), the “ Certificated ADS(s) ”). When issuing and maintaining Uncertificated

ADS(s) under the Deposit Agreement, the Depositary shall at all times be subject to (i) the standards applicable to registrars and transfer agents maintaining direct registration systems for equity securities in New York and issuing uncertificated securities under New York law, and (ii) the terms of New York law applicable to uncertificated equity securities. Uncertificated ADSs shall not be represented by any instruments but shall be evidenced by registration in the books of the Depositary maintained for such purpose. Holders of Uncertificated ADSs, that are not subject to any registered pledges, liens, restrictions or adverse claims of which the Depositary has notice at such time, shall at all times have the right to exchange the Uncertificated ADS(s) for Certificated ADS(s) of the same type and class, subject in each case to (x) applicable laws and any rules and regulations the Depositary may have established in respect of the Uncertificated ADSs, and (y) the continued availability of Certificated ADSs in the U.S. Holders of Certificated ADSs shall, if the Depositary maintains a direct registration system for the ADSs, have the right to exchange the Certificated ADSs for Uncertificated ADSs upon (i) the due surrender of the Certificated ADS(s) to the Depositary for such purpose and (ii) the presentation of a written request to that effect to the Depositary, subject in each case to (a) all liens and restrictions noted on the ADR evidencing the Certificated ADS(s) and all adverse claims of which the Depositary then has notice, (b) the terms of the Deposit Agreement and the rules and regulations that the Depositary may establish for such purposes hereunder, (c) applicable law, and (d) payment of the Depositary fees and expenses applicable to such exchange of Certificated ADS(s) for Uncertificated ADS(s). Uncertificated ADSs shall in all material respects be identical to Certificated ADS(s) of the same type and class, except that (i) no ADR(s) shall be, or shall need to be, issued to evidence Uncertificated ADS(s), (ii) Uncertificated ADS(s) shall, subject to the terms of the Deposit Agreement, be transferable upon the same terms and conditions as uncertificated securities under New York law, (iii) the ownership of Uncertificated ADS(s) shall be recorded on the books of the Depositary maintained for such purpose and evidence of such ownership shall be reflected in periodic statements provided by the Depositary to the Holder(s) in accordance with applicable New York law, (iv) the Depositary may from time to time, upon notice to the Holders of Uncertificated ADSs affected thereby, establish rules and regulations, and amend or supplement existing rules and regulations, as may be deemed reasonably necessary to maintain Uncertificated ADS(s) on behalf of Holders, provided that (a) such rules and regulations do not conflict with the terms of the Deposit Agreement and applicable law, and (b) the terms of such rules and regulations are readily available to Holders upon request, (v) the Uncertificated ADS(s) shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company unless such Uncertificated ADS(s) is/are registered on the books of the Depositary maintained for such purpose, (vi) the Depositary may, in connection with any deposit of Shares resulting in the issuance of Uncertificated ADSs and with any transfer, pledge, release and cancellation of Uncertificated ADSs, require the prior receipt of such documentation as the Depositary may deem reasonably appropriate, and (vii) upon termination of the Deposit Agreement, the Depositary shall not require Holders of Uncertificated ADSs to affirmatively instruct the Depositary before remitting proceeds from the sale of the Deposited Property represented by such Holders' Uncertificated ADSs under the terms of Section 6.2 of the Deposit Agreement. When issuing ADSs under the terms of the Deposit Agreement, including, without limitation, issuances pursuant to Sections 2.5, 4.2, 4.3, 4.4, 4.5 and 4.11, the Depositary may in its discretion determine to issue Uncertificated ADSs rather than Certificated ADSs, unless

otherwise specifically instructed by the applicable Holder to issue Certificated ADSs. All provisions and conditions of the Deposit Agreement shall apply to Uncertificated ADSs to the same extent as to Certificated ADSs, except as contemplated by this Section 2.13. The Depositary is authorized and directed to take any and all actions and establish any and all procedures deemed reasonably necessary to give effect to the terms of this Section 2.13. Any references in the Deposit Agreement or any ADR(s) to the terms “American Depositary Share(s)” or “ADS(s)” shall, unless the context otherwise requires, include Certificated ADS(s) and Uncertificated ADS(s). Except as set forth in this Section 2.13 and except as required by applicable law, the Uncertificated ADSs shall be treated as ADSs issued and outstanding under the terms of the Deposit Agreement. In the event that, in determining the rights and obligations of parties hereto with respect to any Uncertificated ADSs, any conflict arises between (a) the terms of the Deposit Agreement (other than this Section 2.13) and (b) the terms of this Section 2.13, the terms and conditions set forth in this Section 2.13 shall be controlling and shall govern the rights and obligations of the parties to the Deposit Agreement pertaining to the Uncertificated ADSs.

Section 2.14 Restricted ADSs . The Depositary shall, at the request and expense of the Company, establish procedures enabling the deposit hereunder of Shares that are Restricted Securities in order to enable the holder of such Shares to hold its ownership interests in such Restricted Securities in the form of ADSs issued under the terms hereof (such Shares, “ Restricted Shares ”). Upon receipt of a written request from the Company to accept Restricted Shares for deposit hereunder, the Depositary agrees to establish procedures permitting the deposit of such Restricted Shares and the issuance of ADSs representing the right to receive, subject to the terms of the Deposit Agreement and the applicable ADR (if issued as a Certificated ADS), such deposited Restricted Shares (such ADSs, the “ Restricted ADSs ,” and the ADRs evidencing such Restricted ADSs, the “ Restricted ADRs ”). Notwithstanding anything contained in this Section 2.14, the Depositary and the Company may, to the extent not prohibited by law, agree to issue the Restricted ADSs in uncertificated form (“ Uncertificated Restricted ADSs ”) upon such terms and conditions as the Company and the Depositary may deem necessary and appropriate. The Company shall assist the Depositary in the establishment of such procedures and agrees that it shall take all steps necessary and reasonably satisfactory to the Depositary to ensure that the establishment of such procedures does not violate the provisions of the Securities Act or any other applicable laws. The depositors of such Restricted Shares and the Holders of the Restricted ADSs may be required prior to the deposit of such Restricted Shares, the transfer of the Restricted ADRs and Restricted ADSs or the withdrawal of the Restricted Shares represented by Restricted ADSs to provide such written certifications or agreements as the Depositary or the Company may require. The Company shall provide to the Depositary in writing the legend(s) to be affixed to the Restricted ADRs (if the Restricted ADSs are to be issued as Certificated ADSs ) , or to be included in the statements issued from time to time to Holders of Uncertificated ADSs (if issued as Uncertificated Restricted ADSs), which legends shall (i) be in a form reasonably satisfactory to the Depositary and (ii) contain the specific circumstances under which the Restricted ADSs, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, may be transferred or the Restricted Shares withdrawn. The Restricted ADSs issued upon the deposit of Restricted Shares shall be separately identified on the books of the Depositary and the Restricted Shares so deposited shall, to the extent required by law, be held separate and distinct

from the other Deposited Securities held hereunder. The Restricted Shares and the Restricted ADSs shall not be eligible for Pre-Release Transactions. The Restricted ADSs shall not be eligible for inclusion in any book-entry settlement system, including, without limitation, DTC, and shall not in any way be fungible with the ADSs issued under the terms hereof that are not Restricted ADSs. The Restricted ADSs, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, shall be transferable only by the Holder thereof upon delivery to the Depositary of (i) all documentation otherwise contemplated by the Deposit Agreement and (ii) an opinion of counsel reasonably satisfactory to the Depositary setting forth, inter alia , the conditions upon which the Restricted ADSs presented, and, if applicable, the Restricted ADRs evidencing the Restricted ADSs, are transferable by the Holder thereof under applicable securities laws and the transfer restrictions contained in the legend applicable to the Restricted ADSs presented for transfer. Except as set forth in this Section 2.14 and except as required by applicable law, the Restricted ADSs and the Restricted ADRs evidencing Restricted ADSs shall be treated as ADSs and ADRs issued and outstanding under the terms of the Deposit Agreement. In the event that, in determining the rights and obligations of parties hereto with respect to any Restricted ADSs, any conflict arises between (a) the terms of the Deposit Agreement (other than this Section 2.14) and (b) the terms of (i) this Section 2.14 or (ii) the applicable Restricted ADR, the terms and conditions set forth in this Section 2.14 and of the Restricted ADR shall be controlling and shall govern the rights and obligations of the parties to the Deposit Agreement pertaining to the deposited Restricted Shares, the Restricted ADSs and Restricted ADRs.

If the Restricted ADRs, the Restricted ADSs and the Restricted Shares cease to be Restricted Securities, the Depositary, upon receipt of (x) an opinion of counsel reasonably satisfactory to the Depositary setting forth, inter alia , that the Restricted ADRs, the Restricted ADSs and the Restricted Shares are not as of such time Restricted Securities, and (y) instructions from the Company to remove the restrictions applicable to the Restricted ADRs, the Restricted ADSs and the Restricted Shares, shall (i) eliminate the distinctions and separations that may have been established between the applicable Restricted Shares held on deposit under this Section 2.14 and the other Shares held on deposit under the terms of the Deposit Agreement that are not Restricted Shares, (ii) treat the newly unrestricted ADRs and ADSs on the same terms as, and fully fungible with, the other ADRs and ADSs issued and outstanding under the terms of the Deposit Agreement that are not Restricted ADRs or Restricted ADSs, and (iii) take all actions necessary to remove any distinctions, limitations and restrictions previously existing under this Section 2.14 between the applicable Restricted ADRs and Restricted ADSs, respectively, on the one hand, and the other ADRs and ADSs that are not Restricted ADRs or Restricted ADSs, respectively, on the other hand, including, without limitation, by making the newly-unrestricted ADSs eligible for Pre-Release Transactions and for inclusion in the applicable book-entry settlement systems.

ARTICLE III

CERTAIN OBLIGATIONS OF HOLDERS
AND BENEFICIAL OWNERS OF ADSs

Section 3.1 Proofs, Certificates and Other Information . Any person presenting Shares for deposit, any Holder and any Beneficial Owner may be required, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary and the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Property, compliance with applicable laws, the terms of the Deposit Agreement or the ADR(s) evidencing the ADSs and the provisions of, or governing, the Deposited Property, to execute such certifications and to make such representations and warranties, and to provide such other information and documentation (or, in the case of Shares in registered form presented for deposit, such information relating to the registration on the books of the Company or of the Share Registrar) as the Depositary or the Custodian may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement and the applicable ADR(s). The Depositary and the Registrar, as applicable, may withhold the execution or delivery or registration of transfer of any ADR or ADS or the distribution or sale of any dividend or distribution of rights or of the proceeds thereof or, to the extent not limited by the terms of Section 7.8, the delivery of any Deposited Property until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information provided, in each case to the Depositary’s, the Registrar’s and the Company’s satisfaction. The Depositary shall provide the Company, in a timely manner, with copies or originals if necessary and appropriate of (i) any such proofs of citizenship or residence, taxpayer status, or exchange control approval or copies of written representations and warranties which it receives from Holders and Beneficial Owners, and (ii) any other information or documents which the Company may reasonably request and which the Depositary shall request and receive from any Holder or Beneficial Owner or any person presenting Shares for deposit or ADSs for cancellation, transfer or withdrawal. Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners, or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.

Section 3.2 Liability for Taxes and Other Charges . Any tax or other governmental charge payable by the Custodian or by the Depositary with respect to any Deposited Property, ADSs or ADRs shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Property, and may sell for the account of a Holder and/or Beneficial Owner any or all of the Deposited Property and apply such distributions and sale proceeds in payment of, any taxes (including applicable interest and penalties) or charges that are or may be payable by Holders or Beneficial Owners in respect of the ADSs, Deposited Property and ADRs, the Holder and the Beneficial Owner remaining liable for any deficiency. The Custodian may refuse the deposit of Shares and the Depositary may refuse to issue ADSs, to deliver ADRs, register the transfer of ADSs, register the split‑up or combination of ADRs and (subject to Section 7.8) the withdrawal of Deposited Property until payment in full of such tax, charge, penalty or interest is received. Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, and any of their agents, officers, employees and Affiliates for, and to hold each of them harmless from, any claims with respect to taxes

(including applicable interest and penalties thereon) arising from any tax benefit obtained for such Holder and/or Beneficial Owner. The obligations of Holders and Beneficial Owners under this Section 3.2 shall survive any transfer of ADSs, any cancellation of ADSs and withdrawal of Deposited Securities, and the termination of the Deposit Agreement.

Section 3.3 Representations and Warranties on Deposit of Shares . Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly allotted and issued, fully paid, not subject to any call for the payment of further capital, non‑assessable and legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived, disapplied, or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, (v) the Shares presented for deposit are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated in Section 2.14), and (vi) the Shares presented for deposit have not been stripped of any rights or entitlements. Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs. If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.

Section 3.4 Compliance with Information Requests . Notwithstanding any other provision of the Deposit Agreement or any ADR(s), each Holder and Beneficial Owner agrees to comply with requests from the Company pursuant to applicable law, the rules and requirements of any stock exchange on which the Shares or ADSs are, or will be, registered, traded or listed or the Articles of Association of the Company, which are made to provide information, inter alia , as to the capacity in which such Holder or Beneficial Owner owns ADSs (and Shares as the case may be) and regarding the identity of any other person(s) interested in such ADSs and the nature of such interest and various other matters, whether or not they are Holders and/or Beneficial Owners at the time of such request. The Depositary agrees to use its reasonable efforts to forward, upon the request of the Company and at the Company’s expense, any such request from the Company to the Holders and to forward to the Company any such responses to such requests received by the Depositary.

Section 3.5 Ownership Restrictions . Notwithstanding any other provision in the Deposit Agreement or any ADR, the Company may restrict transfers of the Shares where such transfer might result in ownership of Shares exceeding limits imposed by applicable law or the Articles of Association of the Company. The Company may also restrict, in such manner as it deems appropriate, transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single Holder or Beneficial Owner to exceed any such limits. The Company may, in its sole discretion but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner in excess of the limits set forth in the preceding sentence, including, but not limited to, the imposition of restrictions on the transfer of ADSs, the removal or limitation of voting rights or mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares

represented by the ADSs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Articles of Association of the Company. Nothing herein shall be interpreted as obligating the Depositary or the Company to ensure compliance with the ownership restrictions described in this Section 3.5.

Section 3.6 Reporting Obligations and Regulatory Approvals . Applicable laws and regulations may require holders and beneficial owners of Shares, including the Holders and Beneficial Owners of ADSs, to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. Holders and Beneficial Owners of ADSs are solely responsible for determining and complying with such reporting requirements and obtaining such approvals. Each Holder and each Beneficial Owner hereby agrees to make such determination, file such reports, and obtain such approvals to the extent and in the form required by applicable laws and regulations as in effect from time to time. Neither the Depositary, the Custodian, the Company or any of their respective agents or affiliates shall be required to take any actions whatsoever on behalf of Holders or Beneficial Owners to determine or satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.

ARTICLE IV

THE DEPOSITED SECURITIES

Section 4.1 Cash Distributions . Whenever the Company intends to make a distribution of a cash dividend or other cash distribution in respect of any Deposited Securities, the Company shall give notice thereof to the Depositary at least twenty (20) days (or such other number of days as mutually agreed to in writing by the Depositary and the Company) prior to the proposed distribution specifying, inter alia , the record date applicable for determining the holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such notice, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9. Upon receipt of confirmation of the receipt of (x) any cash dividend or other cash distribution on any Deposited Securities, or (y) proceeds from the sale of any Deposited Property held in respect of the ADSs under the terms hereof, the Depositary will (i) if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (pursuant to Section 4.8), be converted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (on the terms described in Section 4.8), (ii) if applicable and unless previously established, establish the ADS Record Date upon the terms described in Section 4.9, and (iii) distribute promptly the amount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxes withheld) to the Holders entitled thereto as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent, and any balance not so distributed shall be held by the Depositary (without liability for interest thereon) and shall be added to and become part of the next sum received by the Depositary for distribution to Holders of ADSs outstanding at the time of the next distribution. If the Company, the Custodian or the

Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities, or from any cash proceeds from the sales of Deposited Property, an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable Holders and Beneficial Owners of ADSs until the distribution can be effected or the funds that the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.1, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.1, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.1 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section 4.2 Distribution in Shares . Whenever the Company intends to make a distribution that consists of a dividend in, or free distribution of, Shares, the Company shall give notice thereof to the Depositary at least twenty(20) days (or such other number of days as mutually agreed to in writing by the Depositary and the Company) prior to the proposed distribution, specifying, inter alia , the record date applicable to holders of Deposited Securities entitled to receive such distribution. Upon the timely receipt of such notice from the Company, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, the Depositary shall either (i) subject to Section 5.9, distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as such dividend, or free distribution, subject to the other terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxes), or (ii) if additional ADSs are not so distributed, take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional integral number of Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxes). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares or ADSs, as the case may be, represented by the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1. In the event that the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, if the Company in the fulfillment of its obligation under Section 5.7, has furnished an opinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), the

Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of (a) applicable taxes and (b) fees and charges of, and expenses incurred by, the Depositary) to Holders entitled thereto upon the terms described in Section 4.1. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.2, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.2, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.2 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section 4.3 Elective Distributions in Cash or Shares . Whenever the Company intends to make a distribution payable at the election of the holders of Deposited Securities in cash or in additional Shares, the Company shall give notice thereof to the Depositary at least sixty (60) days (or such other number of days as mutually agreed to in writing by the Depositary and the Company) prior to the proposed distribution specifying, inter alia , the record date applicable to holders of Deposited Securities entitled to receive such elective distribution and whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Company wishes such elective distribution to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such elective distribution available to the Holders of ADSs. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution be made available to Holders, (ii) the Depositary shall have determined that such distribution is reasonably practicable and (iii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7. If the above conditions are not satisfied or if the Company requests such elective distribution not to be made available to Holders of ADSs, the Depositary shall establish the ADS Record Date on the terms described in Section 4.9 and, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in England and Wales in respect of the Shares for which no election is made, either (X) cash upon the terms described in Section 4.1 or (Y) additional ADSs representing such additional Shares upon the terms described in Section 4.2. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date on the terms described in Section 4.9 and establish procedures to enable Holders to elect the receipt of the proposed distribution in cash or in additional ADSs. The Company shall assist the Depositary in establishing such procedures to the extent necessary. If a Holder elects to receive the proposed distribution (X) in cash, the distribution shall be made upon the terms described in Section 4.1, or (Y) in ADSs, the distribution shall be made upon the terms described in Section 4.2. Nothing herein shall obligate the Depositary to make available to Holders a method to receive the elective distribution in Shares (rather than ADSs). There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive elective

distributions on the same terms and conditions as the holders of Shares. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for in this Section 4.3, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.3, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.3 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section 4.4 Distribution of Rights to Purchase Additional ADSs .

(a) Distribution to ADS Holders . Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least sixty (60) days (or such other number of days as mutually agreed to in writing by the Depositary and the Company) prior to the proposed distribution specifying, inter alia , the record date applicable to holders of Deposited Securities entitled to receive such distribution and whether or not it wishes such rights to be made available to Holders of ADSs. Upon the timely receipt of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Depositary shall consult with the Company to determine, and the Company shall assist the Depositary in its determination, whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to Holders only if (i) the Company shall have timely requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7, and (iii) the Depositary shall have determined that such distribution of rights is reasonably practicable. In the event any of the conditions set forth above are not satisfied or if the Company requests that the rights not be made available to Holders of ADSs, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b) below. In the event all conditions set forth above are satisfied, the Depositary shall establish the ADS Record Date (upon the terms described in Section 4.9) and establish procedures to (x) distribute rights to purchase additional ADSs (by means of warrants or otherwise), (y) enable the Holders to exercise such rights (upon payment of the subscription price and of the applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes), and (z) deliver ADSs upon the valid exercise of such rights. The Company shall assist the Depositary to the extent necessary in establishing such procedures. Nothing herein shall obligate the Depositary to make available to the Holders a method to exercise rights to subscribe for Shares (rather than ADSs).

(b) Sale of Rights . If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7, or determines it is not reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, in a riskless principal capacity, at such place and upon such terms (including public or private sale) as it may deem practicable. The Company shall assist the Depositary to the extent necessary to determine

such legality and practicability. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) upon the terms set forth in Section 4.1.

(c) Lapse of Rights . If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) or to arrange for the sale of the rights upon the terms described in Section 4.4(b), the Depositary shall allow such rights to lapse.

The Depositary shall not be liable for (i) any failure to accurately determine whether it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.

Notwithstanding anything to the contrary in this Section 4.4, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act (or other applicable law) covering such offering is in effect or (ii) unless the Company furnishes the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case reasonably satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. Because English law presently does not contemplate the issuance of rights in negotiable form and the possibility of such issuance is unlikely, a liquid market for rights may not exist, and this may adversely affect (1) the ability of the Depositary to dispose of such rights or (2) the amount the Depositary would realize upon disposal of rights.

In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of Deposited Property (including rights) an amount on account of taxes or other governmental charges, the amount distributed to the Holders of ADSs shall be reduced accordingly. In the event that the Depositary determines that any distribution of Deposited Property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such Deposited Property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes or charges.

There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive or exercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights.

Section 4.5 Distributions Other Than Cash, Shares or Rights to Purchase Shares .

(a) Whenever the Company intends to distribute to the holders of Deposited Securities property other than cash, Shares or rights to purchase additional Shares, the Company shall give timely notice thereof to the Depositary and shall indicate whether or not it wishes such distribution to be made to Holders of ADSs. Upon receipt of a notice indicating that the Company wishes such distribution to be made to Holders of ADSs, the Depositary shall consult with the Company, and the Company shall assist the Depositary, to determine whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7, and (iii) the Depositary shall have determined that such distribution is reasonably practicable.

(b) Upon receipt of satisfactory documentation and the request of the Company to distribute property to Holders of ADSs and after making the requisite determinations set forth in (a) above, the Depositary shall distribute the property so received to the Holders of record, as of the ADS Record Date, in proportion to the number of ADSs held by them respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any applicable taxes withheld. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.

(c) If (i) the Company does not request the Depositary to make such distribution to Holders or requests the Depositary not to make such distribution to Holders, (ii) the Depositary does not receive satisfactory documentation within the terms of Section 5.7, or (iii) the Depositary determines that all or a portion of such distribution is not reasonably practicable, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem practicable and shall (i) cause the proceeds of such sale, if any, to be converted into Dollars and (ii) distribute the proceeds of such conversion received by the Depositary (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) to the Holders as of the ADS Record Date upon the terms of Section 4.1. If the Depositary is unable to sell such property, the Depositary may dispose of such property for the account of the Holders in any way it deems reasonably practicable under the circumstances.

(d) Neither the Depositary nor the Company shall be liable for (i) any failure to accurately determine whether it is lawful or practicable to make the property described in this Section 4.5 available to Holders in general or any Holders in particular, nor (ii) any loss incurred in connection with the sale or disposal of such property.

Section 4.6 Distributions with Respect to Deposited Securities in Bearer Form . Subject to the terms of this Article IV, distributions in respect of Deposited Securities that are

held by the Depositary or the Custodian in bearer form shall be made to the Depositary for the account of the respective Holders of ADS(s) with respect to which any such distribution is made upon due presentation by the Depositary or the Custodian to the Company of any relevant coupons, talons, or certificates. The Company shall promptly notify the Depositary of such distributions. The Depositary or the Custodian shall promptly present such coupons, talons or certificates, as the case may be, in connection with any such distribution.

Section 4.7 Redemption . If the Company intends to exercise any right of redemption in respect of any of the Deposited Securities, the Company shall give notice thereof to the Depositary at least sixty (60) days (or such other number of days as mutually agreed to in writing by the Depositary and the Company) prior to the intended date of redemption which notice shall set forth the particulars of the proposed redemption. Upon timely receipt of (i) such notice and (ii) satisfactory documentation given by the Company to the Depositary within the terms of Section 5.7, and only if the Depositary shall have determined that such proposed redemption is practicable, the Depositary shall provide to each Holder a notice setting forth the intended exercise by the Company of the redemption rights and any other particulars set forth in the Company’s notice to the Depositary. The Depositary shall instruct the Custodian to present to the Company the Deposited Securities in respect of which redemption rights are being exercised against payment of the applicable redemption price. Upon receipt of confirmation from the Custodian that the redemption has taken place and that funds representing the redemption price have been received, the Depositary shall convert, transfer, and distribute the proceeds (net of applicable (a) fees and charges of, and the expenses incurred by, the Depositary, and (b) taxes), retire ADSs and cancel ADRs, if applicable, upon delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1 and 6.2. If less than all outstanding Deposited Securities are redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as may be determined by the Depositary. The redemption price per ADS shall be the dollar equivalent of the per share amount received by the Depositary (adjusted to reflect the ADS(s)-to-Share(s) ratio) upon the redemption of the Deposited Securities represented by ADSs (subject to the terms of Section 4.8 and the applicable fees and charges of, and expenses incurred by, the Depositary, and applicable taxes) multiplied by the number of Deposited Securities represented by each ADS redeemed.

Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed redemption provided for in this Section 4.7, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.7, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.7 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Section 4.8 Conversion of Foreign Currency . Whenever the Depositary or the Custodian shall receive Foreign Currency, by way of dividends or other distributions or the net proceeds from the sale of Deposited Property, which in the judgment of the Depositary can at such time be converted on a practicable basis, by sale or in any other manner that it may determine in accordance with applicable law, into Dollars transferable to the United States and

distributable to the Holders entitled thereto, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such Foreign Currency into Dollars, and shall distribute such Dollars (net of any applicable fees, any reasonable and customary expenses incurred in such conversion and any expenses incurred on behalf of the Holders in complying with currency exchange control or other governmental requirements) in accordance with the terms of the applicable sections of the Deposit Agreement. If the Depositary shall have distributed warrants or other instruments that entitle the holders thereof to such Dollars, the Depositary shall distribute such Dollars to the holders of such warrants and/or instruments upon surrender thereof for cancellation, in either case without liability for interest thereon. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Holders on account of any application of exchange restrictions or otherwise.

If such conversion or distribution generally or with regard to a particular Holder can be effected only with the approval or license of any government or agency thereof, the Depositary shall have authority to file such application for approval or license, if any, as it may deem desirable. In no event, however, shall the Depositary be obligated to make such a filing.

If at any time the Depositary shall determine that in its judgment the conversion of any Foreign Currency and the transfer and distribution of proceeds of such conversion received by the Depositary is not practicable or lawful, or if any approval or license of any governmental authority or agency thereof that is required for such conversion, transfer and distribution is denied or, in the opinion of the Depositary, not obtainable at a reasonable cost or within a reasonable period, the Depositary may, in its discretion, (i) make such conversion and distribution in Dollars to the Holders for whom such conversion, transfer and distribution is lawful and practicable, (ii) distribute the Foreign Currency (or an appropriate document evidencing the right to receive such Foreign Currency) to Holders for whom this is lawful and practicable, or (iii) hold (or cause the Custodian to hold) such Foreign Currency (without liability for interest thereon) for the respective accounts of the Holders entitled to receive the same.

Section 4.9 Fixing of ADS Record Date . Whenever (a) the Depositary shall receive notice of the fixing of a record date by the Company for the determination of holders of Deposited Securities entitled to receive any distribution (whether in cash, Shares, rights, or other distribution), (b) for any reason the Depositary causes a change in the number of Shares that are represented by each ADS, (c) the Depositary shall receive notice of any meeting of, or solicitation of consents or proxies of, holders of Shares or other Deposited Securities, or (d) the Depositary shall find it necessary or convenient in connection with the giving of any notice, solicitation of any consent or any other matter, the Depositary shall fix the record date (the “ ADS Record Date ”) for the determination of the Holders of ADS(s) who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Shares represented by each ADS. The Depositary shall make reasonable efforts to establish the ADS Record Date as closely as practicable to the applicable record date for the Deposited Securities (if any) set by the Company in England and Wales and shall not announce the establishment of any ADS Record

Date prior to the relevant corporate action having been made public by the Company (if such corporate action affects the Deposited Securities). Subject to applicable law and the provisions of Section 4.1 through 4.8 and to the other terms and conditions of the Deposit Agreement, only the Holders of ADSs at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.

Section 4.10 Voting of Deposited Securities . As soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or solicitation of consent or proxy in accordance with Section 4.9. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least thirty (30) days prior to the date of such vote or meeting), at the Company’s expense and provided no U.S. legal prohibitions exist, distribute to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy, (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Articles of Association of the Company and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s ADSs, and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary or in which voting instructions may be deemed to have been given in accordance with this Section 4.10 if no instructions are received prior to the deadline set for such purposes to the Depositary to give a discretionary proxy to a person designated by the Company. Notwithstanding anything contained in this Deposit Agreement to the contrary, in the event the Company fails to timely request that the Depositary distribute the information as provided for in this Section 4.10,the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in this Section 4.10, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in this Section 4.10 where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

Notwithstanding anything contained in the Deposit Agreement or any ADR, with the Company’s prior consent, the Depositary may, to the extent not prohibited by law or regulations, or by the requirements of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwise publicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request (e.g., by reference to a website containing the materials for retrieval or a contact for requesting copies of the materials).

The Depositary has been advised by the Company that under the Articles of Association of the Company as in effect on the date of the Deposit Agreement, voting at any meeting of

shareholders of the Company is by show of hands unless (before or on the declaration of the result of the show of hands) a poll is demanded. The Depositary will not join in demanding a poll, whether or not requested to do so by Holders of ADSs. Under the Articles of Association of the Company as in effect on the date of the Deposit Agreement, a poll may be demanded by (a) the chairman of the meeting, (b) not fewer than five shareholders present in person or by proxy and having the right to vote on the meeting resolution, (c) any shareholder(s) present in person or by proxy and representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding any shares held in treasury), or (d) any shareholder(s) present in person or by proxy and holding shares in the Company conferring a right to vote on the resolution being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right (excluding any shares held in treasury).

Voting instructions may be given only in respect of a number of ADSs representing an integral number of Deposited Securities. Upon the timely receipt from a Holder of ADSs as of the ADS Record Date of voting instructions in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of the Deposit Agreement, Articles of Association of the Company and the provisions of the Deposited Securities, to vote, or cause the Custodian to vote, the Deposited Securities (in person or by proxy) represented by such Holder’s ADSs as follows: (a) in the event voting takes place at a shareholders’ meeting by a show of hands, the Depositary will instruct the Custodian to vote all Deposited Securities in accordance with the voting instructions received timely from a majority of Holders of ADSs who provided voting instructions, and (b) in the event voting takes place at a shareholders’ meeting by poll, the Depositary will instruct the Custodian to vote the Deposited Securities in accordance with the voting instructions timely received from the Holders of ADSs. If voting is by poll and the Depositary does not receive voting instructions from a Holder as of the ADS Record Date on or before the date established by the Depositary for such purpose, such Holder shall be deemed, and the Depositary shall deem such Holder, to have instructed the Depositary to give a discretionary proxy to a person designated by the Company to vote the Deposited Securities; provided, however, that no such discretionary proxy shall be given by the Depositary with respect to any matter to be voted upon as to which the Company informs the Depositary that (a) the Company does not wish such proxy to be given, (b) substantial opposition exists, or (c) the rights of holders of Deposited Securities may be adversely affected.

Neither the Depositary nor the Custodian shall under any circumstances exercise any discretion as to voting and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of, for purposes of establishing a quorum or otherwise, the Deposited Securities represented by ADSs, except pursuant to and in accordance with the voting instructions timely received from Holders or as otherwise contemplated herein. If the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, the Depositary will deem such Holder (unless otherwise specified in the notice distributed to Holders) to have instructed the Depositary to vote in favor of the items set forth in such voting instructions. Deposited Securities represented by ADSs for which no timely voting instructions are received by the Depositary from the Holder shall not be voted (except (a) in the case voting is

by show of hands, in which case the Depositary will instruct the Custodian to vote all Deposited Securities in accordance with the voting instructions received from a majority of Holders of ADSs who provided timely voting instructions, and (b) as contemplated in this Section 4.10). Notwithstanding anything else contained herein, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the sole purpose of establishing quorum at a meeting of shareholders.

Notwithstanding anything else contained in the Deposit Agreement or any ADR, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Deposited Securities if the taking of such action would violate U.S. laws. The Company agrees to take any and all actions reasonably necessary and as permitted by the laws of England and Wales to enable Holders and Beneficial Owners to exercise the voting rights accruing to the Deposited Securities and to deliver to the Depositary an opinion of U.S. counsel addressing any actions requested to be taken if so reasonably requested by the Depositary.

There can be no assurance that Holders generally or any Holder in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.

Section 4.11 Changes Affecting Deposited Securities . Upon any change in nominal or par value, split‑up, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, consolidation or sale of assets affecting the Company or to which it is a party, any property which shall be received by the Depositary or the Custodian in exchange for, or in conversion of, or replacement of, or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Property under the Deposit Agreement, and the ADSs shall, subject to the provisions of the Deposit Agreement, any ADR(s) evidencing such ADSs and applicable law, represent the right to receive such additional or replacement Deposited Property. In giving effect to such change, split-up, cancellation, consolidation or other reclassification of Deposited Securities, recapitalization, reorganization, merger, consolidation or sale of assets, the Depositary may, with the Company’s approval, and shall, if the Company shall so request, subject to the terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) applicable taxes) and receipt of an opinion of counsel to the Company satisfactory to the Depositary that such actions are not in violation of any applicable laws or regulations, (i) issue and deliver additional ADSs as in the case of a stock dividend on the Shares, (ii) amend the Deposit Agreement and the applicable ADRs, (iii) amend the applicable Registration Statement(s) on Form F-6 as filed with the Commission in respect of the ADSs, (iv) call for the surrender of outstanding ADRs to be exchanged for new ADRs, and (v) take such other actions as are appropriate to reflect the transaction with respect to the ADSs. The Company agrees to, jointly with the Depositary, amend the Registration Statement on Form F-6 as filed with the Commission to permit the issuance of such new form of ADRs. Notwithstanding the foregoing, in the event that any Deposited Property so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval,

and shall, if the Company requests, subject to receipt of an opinion of Company’s counsel reasonably satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such Deposited Property at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) for the account of the Holders otherwise entitled to such Deposited Property upon an averaged or other practicable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to Section 4.1. The Depositary shall not be responsible for (i) any failure to reasonably determine that it may be lawful or practicable to make such Deposited Property available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such Deposited Property.

Section 4.12 Available Information .

The Company is subject to the periodic reporting requirements of the Exchange Act and, accordingly, is required to file or furnish certain reports with the Commission. These reports can be retrieved from the Commission's website ( www.sec.gov ) and can be inspected and copied at the public reference facilities maintained by the Commission located (as of the date of the Deposit Agreement) at 100 F Street, N.E., Washington D.C. 20549.

Section 4.13 Reports . The Depositary shall make available for inspection by Holders at its Principal Office any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Property and (b) made generally available to the holders of such Deposited Property by the Company. The Depositary shall also provide or make available to Holders copies of such reports when furnished by the Company pursuant to Section 5.6.

Section 4.14 List of Holders . Promptly upon written request by the Company, the Depositary shall furnish to it a list, as of a recent date, of the names, addresses and holdings of ADSs of all Holders.

Section 4.15 Taxation . The Depositary will, and will instruct the Custodian to, forward to the Company or its agents such information from its records as the Company may reasonably request to enable the Company or its agents to file the necessary tax reports with governmental authorities or agencies. The Depositary, the Custodian or the Company and its agents may file such reports as are necessary to reduce or eliminate applicable taxes on dividends and on other distributions in respect of Deposited Property under applicable tax treaties or laws for the Holders and Beneficial Owners. In accordance with instructions from the Company and to the extent practicable, the Depositary or the Custodian will take reasonable administrative actions to obtain tax refunds, reduced withholding of tax at source on dividends and other benefits under applicable tax treaties or laws with respect to dividends and other distributions on the Deposited Property. As a condition to receiving such benefits, Holders and Beneficial Owners of ADSs may be required from time to time, and in a timely manner, to file such proof of taxpayer status,

residence and beneficial ownership (as applicable), to execute such certificates and to make such representations and warranties, or to provide any other information or documents, as the Depositary or the Custodian may deem necessary or proper to fulfill the Depositary’s or the Custodian’s obligations under applicable law. The Depositary and the Company shall have no obligation or liability to any person if any Holder or Beneficial Owner fails to provide such information or if such information does not reach the relevant tax authorities in time for any Holder or Beneficial Owner to obtain the benefits of any tax treatment. The Holders and Beneficial Owners shall indemnify the Depositary, the Company, the Custodian and any of their respective directors, employees, agents and Affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained.

If the Company (or any of its agents) withholds from any distribution any amount on account of taxes or governmental charges, or pays any other tax in respect of such distribution ( e.g. , stamp duty tax, capital gains or other similar tax), the Company shall use its commercially reasonable efforts to (or cause such agent to) remit within a reasonable time to the Depositary information about such taxes or governmental charges withheld or paid, and, if so reasonably requested, the tax receipt (or other proof of payment to the applicable governmental authority) therefor, in each case, in a form reasonably satisfactory to the Depositary. The Depositary shall, to the extent required by U.S. law, report to Holders any taxes withheld by it or the Custodian, and, if such information is provided to it by the Company, any taxes withheld by the Company. The Depositary and the Custodian shall not be required to provide the Holders with any evidence of the remittance by the Company (or its agents) of any taxes withheld, or of the payment of taxes by the Company, except to the extent the evidence is provided by the Company to the Depositary or the Custodian, as applicable. Neither the Depositary nor the Custodian shall be liable for the failure by any Holder or Beneficial Owner to obtain the benefits of credits on the basis of non‑U.S. tax paid against such Holder’s or Beneficial Owner’s income tax liability.

The Depositary is under no obligation to provide the Holders and Beneficial Owners with any information about the tax status of the Company. The Depositary shall not incur any liability for any tax consequences that may be incurred by Holders and Beneficial Owners on account of their ownership of the ADSs, including without limitation, tax consequences resulting from the Company (or any of its subsidiaries) being treated as a “Passive Foreign Investment Company” (in each case as defined in the U.S. Internal Revenue Code and the regulations issued thereunder) or otherwise.

ARTICLE V

THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY

Section 5.1 Maintenance of Office and Transfer Books by the Registrar . Until termination of the Deposit Agreement in accordance with its terms, the Registrar shall maintain in the Borough of Manhattan, the City of New York, an office and facilities for the issuance and delivery of ADSs, the acceptance for surrender of ADS(s) for the purpose of withdrawal of

Deposited Securities, the registration of issuances, cancellations, transfers, combinations and split‑ups of ADS(s) and, if applicable, to countersign ADRs evidencing the ADSs so issued, transferred, combined or split-up, in each case in accordance with the provisions of the Deposit Agreement.

The Registrar shall keep books for the registration of ADSs which at all reasonable times shall be open for inspection by the Company and by the Holders of such ADSs, provided that such inspection shall not be, to the Registrar’s knowledge, for the purpose of communicating with Holders of such ADSs in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the ADSs.

The Registrar may close the transfer books with respect to the ADSs, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable written request of the Company subject, in all cases, to Section 7.8.

If any ADSs are listed on one or more stock exchanges or automated quotation systems in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co‑registrars for registration of issuances, cancellations, transfers, combinations and split-ups of ADSs and, if applicable, to countersign ADRs evidencing the ADSs so issued, transferred, combined or split-up, in accordance with any requirements of such exchanges or systems. Such Registrar or co-registrars may be removed and a substitute or substitutes appointed by the Depositary. As promptly as practicable, the Depositary shall notify the Company of any such removal or appointment.

Section 5.2 Exoneration . Notwithstanding anything contained in the Deposit Agreement or any ADR, neither the Depositary nor the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or incur any liability (i) if the Depositary, the Custodian, the Company or their respective agents shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required or contemplated by the terms of the Deposit Agreement, by reason of any provision of any present or future law or regulation of the United States, England and Wales or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of potential criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Articles of Association of the Company or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles of Association of the Company or provisions of or governing Deposited Securities, (iii) for any action or inaction in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit

which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADSs, (v) for any action or inaction of any clearing or settlement system (and any participant thereof) for the Deposited Property or the ADSs, or (vi) for any consequential or punitive damages (including lost profits) for any breach of the terms of the Deposit Agreement.

The Depositary, its controlling persons, its agents, any Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement.

Section 5.3 Standard of Care . The Company and the Depositary assume no obligation and shall not be subject to any liability under the Deposit Agreement or any ADRs to any Holder(s) or Beneficial Owner(s), except that the Company and the Depositary agree to perform their respective obligations specifically set forth in the Deposit Agreement or the applicable ADRs without negligence or bad faith.

Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective controlling persons, or agents, shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Property or in respect of the ADSs, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expense (including fees and disbursements of counsel) and liability be furnished as often as may be required (and no Custodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary).

The Depositary and its agents shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities, or for the manner in which any vote is cast or the effect of any vote, provided that any such action or omission is in good faith and without negligence and in accordance with the terms of the Deposit Agreement. The Depositary shall not incur any liability for any failure to accurately determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Property, for the validity or worth of the Deposited Property or for any tax consequences that may result from the ownership of ADSs, Shares or other Deposited Property, for the credit‑worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement, for the failure or timeliness of any notice from the Company, or for any action of or failure to act by, or any information provided or not provided by, DTC or any DTC Participant.

provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

The Depositary shall not be liable for any acts or omissions made by a predecessor depositary whether in connection with an act or omission of the Depositary or in connection with any matter arising wholly prior to the appointment of the Depositary or after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

Section 5.4 Resignation and Removal of the Depositary; Appointment of Successor Depositary . The Depositary may at any time resign as Depositary hereunder by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2), or (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided.

The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2), or (ii) upon the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its commercially reasonable efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor (other than as contemplated in Sections 5.8 and 5.9). The predecessor depositary, upon payment of all sums due it and on the written request of the Company, shall, (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9), (ii) duly assign, transfer and deliver all of the Depositary’s right, title and interest to the Deposited Property to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADSs and such other information relating to ADSs and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly provide notice of its appointment to such Holders.

Any entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

Section 5.5 The Custodian . The Depositary has initially appointed Citibank, N.A., London Branch as Custodian for the purpose of the Deposit Agreement. The Custodian or its successors in acting hereunder shall be authorized to act as custodian in England and Wales and

shall be subject at all times and in all respects to the direction of the Depositary for the Deposited Property for which the Custodian acts as custodian and shall be responsible solely to it. If any Custodian resigns or is discharged from its duties hereunder with respect to any Deposited Property and no other Custodian has previously been appointed hereunder, the Depositary shall promptly appoint a substitute custodian. The Depositary shall require such resigning or discharged Custodian to Deliver, or cause the Delivery of, the Deposited Property held by it, together with all such records maintained by it as Custodian with respect to such Deposited Property as the Depositary may request, to the Custodian designated by the Depositary. Whenever the Depositary determines, in its discretion, that it is appropriate to do so, it may appoint an additional custodian with respect to any Deposited Property, or discharge the Custodian with respect to any Deposited Property and appoint a substitute custodian, which shall thereafter be Custodian hereunder with respect to the Deposited Property. Immediately upon any such change, the Depositary shall give notice thereof in writing to all Holders of ADSs, each other Custodian and the Company.

Citibank, N.A. may at any time act as Custodian of the Deposited Property pursuant to the Deposit Agreement, in which case any reference to Custodian shall mean Citibank, N.A. solely in its capacity as Custodian pursuant to the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary shall not be obligated to give notice to the Company, any Holders of ADSs or any other Custodian of its acting as Custodian pursuant to the Deposit Agreement.

Upon the appointment of any successor depositary, any Custodian then acting hereunder shall, unless otherwise instructed by the Depositary, continue to be the Custodian of the Deposited Property without any further act or writing, and shall be subject to the direction of the successor depositary. The successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority to act on the direction of such successor depositary.

Section 5.6 Notices and Reports . On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action by such holders other than at a meeting, or of the taking of any action in respect of any cash or other distributions or the offering of any rights in respect of Deposited Securities, the Company shall transmit to the Depositary and the Custodian a copy of the notice thereof in the English language but otherwise in the form given or to be given to holders of Shares or other Deposited Securities. The Company shall also furnish to the Custodian and the Depositary a summary, in English, of any applicable provisions or proposed provisions of the Articles of Association of the Company that may be relevant or pertain to such notice of meeting or be the subject of a vote thereat.

The Company will also transmit to the Depositary (a) an English language version of the other notices, reports and communications which are made generally available by the Company to holders of its Shares or other Deposited Securities and (b) the English‑language versions of the Company’s annual and semi-annual reports prepared in accordance with the applicable

requirements of the Commission to the extent such notices, reports and communications are not available on the Company’s website or are not otherwise publicly available. The Depositary shall arrange, at the request of the Company and at the Company’s expense, to provide copies thereof to all Holders or make such notices, reports and other communications available to all Holders on a basis similar to that for holders of Shares or other Deposited Securities or on such other basis as the Company may advise the Depositary or as may be required by any applicable law, regulation or stock exchange requirement . The Company has made available to the Depositary and the Custodian a copy of the Company’s Articles of Association along with the provisions of or governing the Shares and any other Deposited Securities issued by the Company in connection with such Shares, and promptly upon any amendment thereto or change therein, the Company shall make available to the Depositary and the Custodian a copy of such amendment thereto or change therein to the extent such amendment or change is not available on the company’s website or is not otherwise publicly available.. The Depositary may rely upon such copy for all purposes of the Deposit Agreement.

The Depositary will, at the expense of the Company, make available a copy of any such notices, reports or communications issued by the Company and delivered to the Depositary for inspection by the Holders of the ADSs at the Depositary’s Principal Office, at the office of the Custodian and at any other designated transfer office.

Section 5.7 Issuance of Additional Shares, ADSs etc . The Company agrees that in the event it or any of its Affiliates proposes (i) an issuance, sale or distribution of additional Shares, (ii) an offering of rights to subscribe for Shares or other Deposited Securities, (iii) an issuance or assumption of securities convertible into or exchangeable for Shares, (iv) an issuance of rights to subscribe for securities convertible into or exchangeable for Shares, (v) an elective dividend of cash or Shares, (vi) a redemption of Deposited Securities, (vii) a meeting of holders of Deposited Securities, or solicitation of consents or proxies, relating to any reclassification of securities, merger or consolidation or transfer of assets, (viii) any assumption, reclassification, recapitalization, reorganization, merger, consolidation or sale of assets which affects the Deposited Securities, or (ix) a distribution of securities other than Shares, it will obtain U.S. legal advice and take all steps necessary to ensure that the application of the proposed transaction to Holders and Beneficial Owners does not violate the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act and the securities laws of the states of the U.S.). In support of the foregoing, the Company will furnish to the Depositary (a) a written opinion of U.S. counsel (reasonably satisfactory to the Depositary) stating whether such transaction (1) requires a registration statement under the Securities Act to be in effect or (2) is exempt from the registration requirements of the Securities Act and (b) an opinion of English counsel stating that (1) making the transaction available to Holders and Beneficial Owners does not violate the laws or regulations of England and Wales and (2) all requisite regulatory consents and approvals have been obtained in England and Wales. If the filing of a registration statement is required, the Depositary shall not have any obligation to proceed with the transaction unless it shall have received evidence reasonably satisfactory to it that such registration statement has been declared effective. If, being advised by counsel, the Company determines that a transaction is required to be registered under the Securities Act, the Company will either (i) register such transaction to the

extent necessary, (ii) alter the terms of the transaction to avoid the registration requirements of the Securities Act or (iii) direct the Depositary to take specific measures, in each case as contemplated in the Deposit Agreement, to prevent such transaction from violating the registration requirements of the Securities Act. The Company agrees with the Depositary that neither the Company nor any of its Affiliates will at any time (i) deposit any Shares or other Deposited Securities, either upon original issuance or upon a sale of Shares or other Deposited Securities previously issued and reacquired by the Company or by any such Affiliate, or (ii) issue additional Shares, rights to subscribe for such Shares, securities convertible into or exchangeable for Shares or rights to subscribe for such securities or distribute securities other than Shares, unless such transaction and the securities issuable in such transaction do not violate the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act and the securities laws of the states of the U.S.).

Notwithstanding anything else contained in the Deposit Agreement, nothing in the Deposit Agreement shall be deemed to obligate the Company to file any registration statement in respect of any proposed transaction.

Section 5.8 Indemnification . The Depositary agrees to indemnify the Company and its directors, officers, employees, agents and Affiliates against, and hold each of them harmless from, any direct loss, liability, tax, charge or expense of any kind whatsoever (including, but not limited to, the reasonable fees and expenses of counsel) which may arise out of acts performed or omitted by the Depositary under the terms hereof due to the fraud, negligence or bad faith of the Depositary.

The Company agrees to indemnify the Depositary, the Custodian and any of their respective directors, officers, employees, agents and Affiliates against, and hold each of them harmless from, any direct loss, liability, tax, charge or expense of any kind whatsoever (including, but not limited to, the reasonable fees and expenses of counsel) that may arise (a) out of, or in connection with, any offer, issuance, sale, resale, transfer, deposit or withdrawal of ADRs, ADSs, the Shares, or other Deposited Securities, as the case may be, (b) out of, or as a result of, any offering documents in respect thereof or (c) out of acts performed or omitted, including, but not limited to, any delivery by the Depositary on behalf of the Company of information regarding the Company, in connection with the Deposit Agreement, any ancillary or supplemental agreement entered into between the Company and the Depositary, the ADRs, the ADSs, the Shares, or any Deposited Property, in any such case (i) by the Depositary, the Custodian or any of their respective directors, officers, employees, agents and Affiliates, except to the extent such loss, liability, tax, charge or expense is due to the fraud, negligence or bad faith of any of them, or (ii) by the Company or any of its directors, officers, employees, agents and Affiliates. The Company shall not indemnify the Depositary or the Custodian (for so long as the Custodian is a branch of Citibank, N.A.) against (x) any liability or expense arising out of information relating to the Depositary or such Custodian, as the case may be, furnished in a signed writing to the Company, executed by the Depositary expressly for use in any registration statement, prospectus or preliminary prospectus relating to any Deposited Securities represented by the ADSs, (y) any fees, charges or expenses payable by third party Holders or Beneficial

Owners under this Deposit Agreement, or(z) any Pre-Release Transaction (as defined in Section 5.10) other than a Pre-Release Transaction entered into at the request of the Company.

The obligations set forth in this Section shall survive the termination of the Deposit Agreement and the succession or substitution of any party hereto.

Any person seeking indemnification hereunder (an “indemnified person”) shall notify the person from whom it is seeking indemnification (the “indemnifying person”) of the commencement of any indemnifiable action or claim promptly after such indemnified person becomes aware of such commencement (provided that the failure to make such notification shall not affect such indemnified person’s rights to seek indemnification except to the extent the indemnifying person is materially prejudiced by such failure) and shall consult in good faith with the indemnifying person as to the conduct of the defense of such action or claim that may give rise to an indemnity hereunder, which defense shall be reasonable in the circumstances. No indemnified person shall compromise or settle any action or claim that may give rise to an indemnity hereunder without the consent of the indemnifying person, which consent shall not be unreasonably withheld.

Section 5.9 ADS Fees and Charges . The Company, the Holders, the Beneficial Owners, persons depositing Shares or withdrawing Deposited Securities in connection with the issuance and cancellation of ADSs, and persons receiving ADSs upon issuance or whose ADSs are being cancelled shall be required to pay the ADS fees and charges identified as payable by them respectively in the ADS fee schedule attached hereto as Exhibit B . All ADS fees and charges so payable may be deducted from distributions or must be remitted to the Depositary, or its designee, and may, at any time and from time to time, be changed by agreement between the Depositary and the Company, but, in the case of ADS fees and charges payable by Holders and Beneficial Owners, only in the manner contemplated in Section 6.1. The Depositary shall provide, without charge, a copy of its latest ADS fee schedule to anyone upon request.

ADS fees and charges for (i) the issuance of ADSs and (ii) the cancellation of ADSs will be payable by the person for whom the ADSs are so issued by the Depositary (in the case of ADS issuances) and by the person for whom ADSs are being cancelled (in the case of ADS cancellations). In the case of ADSs issued by the Depositary into DTC or presented to the Depositary via DTC, the ADS issuance and cancellation fees and charges will be payable by the DTC Participant(s) receiving the ADSs from the Depositary or the DTC Participant(s) holding the ADSs being cancelled, as the case may be, on behalf of the Beneficial Owner(s) and will be charged by the DTC Participant(s) to the account(s) of the applicable Beneficial Owner(s) in accordance with the procedures and practices of the DTC Participant(s) as in effect at the time. ADS fees and charges in respect of distributions and the ADS service fee are payable by Holders as of the applicable ADS Record Date established by the Depositary. In the case of distributions of cash, the amount of the applicable ADS fees and charges is deducted from the funds being distributed. In the case of (i) distributions other than cash and (ii) the ADS service fee, the applicable Holders as of the ADS Record Date established by the Depositary will be invoiced for the amount of the ADS fees and charges and such ADS fees may be deducted from distributions made to Holders. For ADSs held through DTC, the ADS fees and charges for distributions other

than cash and the ADS service fee may be deducted from distributions made through DTC, and may be charged to the DTC Participants in accordance with the procedures and practices prescribed by DTC from time to time and the DTC Participants in turn charge the amount of such ADS fees and charges to the Beneficial Owners for whom they hold ADSs.

The Depositary may reimburse the Company for certain expenses incurred by the Company in respect of the ADR program established pursuant to the Deposit Agreement, by making available a portion of the ADS fees charged in respect of the ADR program or otherwise, upon such terms and conditions as the Company and the Depositary agree from time to time. The Company shall pay to the Depositary such fees and charges, and reimburse the Depositary for such out-of-pocket expenses, as the Depositary and the Company may agree from time to time. Responsibility for payment of such fees, charges and reimbursements may from time to time be changed by agreement between the Company and the Depositary. Unless otherwise agreed, the Depositary shall present its statement for such fees, charges and reimbursements to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The obligations of Holders and Beneficial Owners to pay ADS fees and charges shall survive the termination of the Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4, the right to collect ADS fees and charges shall extend for those ADS fees and charges incurred prior to the effectiveness of such resignation or removal.

Section 5.10 Pre-Release Transactions . Subject to the further terms and provisions of this Section 5.10, the Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs. In its capacity as Depositary, the Depositary shall not lend Shares or ADSs; provided, however, that the Depositary may (i) issue ADSs prior to the receipt of Shares pursuant to Section 2.3 and (ii) deliver Shares prior to the receipt of ADSs for withdrawal of Deposited Securities pursuant to Section 2.7, including ADSs which were issued under (i) above but for which Shares may not have been received (each such transaction a “ Pre-Release Transaction ”). The Depositary may receive ADSs in lieu of Shares under (i) above and receive Shares in lieu of ADSs under (ii) above. Each such Pre-Release Transaction will be (a) subject to a written agreement whereby the person or entity (the “ Applicant ”) to whom ADSs or Shares are to be delivered (w) represents that at the time of the Pre-Release Transaction the Applicant or its customer owns the Shares or ADSs that are to be delivered by the Applicant under such Pre-Release Transaction, (x) agrees to indicate the Depositary as owner of such Shares or ADSs in its records and to hold such Shares or ADSs in trust for the Depositary until such Shares or ADSs are delivered to the Depositary or the Custodian, (y) unconditionally guarantees to deliver to the Depositary or the Custodian, as applicable, such Shares or ADSs, and (z) agrees to any additional restrictions or requirements that the Depositary deems appropriate, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not more than five (5) business days’ notice and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The Depositary will normally limit the number of ADSs and Shares involved in such Pre-Release

Transactions at any one time to thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstanding under (i) above), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate.

Section 5.11 Restricted Securities Owners . The Company agrees to advise in writing each of the persons or entities who, to the knowledge of the Company, holds Restricted Securities that such Restricted Securities are ineligible for deposit hereunder (except under the circumstances contemplated in Section 2.14) and, to the extent practicable, shall require each of such persons to represent in writing that such person will not deposit Restricted Securities hereunder (except under the circumstances contemplated in Section 2.14).

ARTICLE VI

AMENDMENT AND TERMINATION

Section 6.1 Amendment/Supplement . Subject to the terms and conditions of this Section 6.1 and applicable law, the ADRs outstanding at any time, the provisions of the Deposit Agreement and the form of ADR attached hereto and to be issued under the terms hereof may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the prior written consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding ADSs until the expiration of thirty (30) days after notice of such amendment or supplement shall have been given to the Holders of outstanding ADSs. Notice of any amendment to the Deposit Agreement or any ADR shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided , however , that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment ( e.g. , upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be settled solely in electronic book‑entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold

such ADSs, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement and the ADR, if applicable, as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such ADS and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require an amendment of, or supplement to, the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and any ADRs at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement and any ADRs in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.

Section 6.2 Termination . The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. If ninety (90) days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign, or the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and, in either case, a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. The date so fixed for termination of the Deposit Agreement in any termination notice so distributed by the Depositary to the Holders of ADSs is referred to as the “ Termination Date ”. Until the Termination Date, the Depositary shall continue to perform all of its obligations under the Deposit Agreement, and the Holders and Beneficial Owners will be entitled to all of their rights under the Deposit Agreement.

If any ADSs shall remain outstanding after the Termination Date, the Registrar and the Depositary shall not, after the Termination Date, have any obligation to perform any further acts under the Deposit Agreement, except that the Depositary shall, subject, in each case, to the terms and conditions of the Deposit Agreement, continue to (i) collect dividends and other distributions pertaining to Deposited Securities, (ii) sell Deposited Property received in respect of Deposited Securities, (iii) deliver Deposited Securities, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any other Deposited Property, in exchange for ADSs surrendered to the Depositary (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (iv) take such actions as may be required under applicable law in connection with its role as Depositary under the Deposit Agreement.

At any time after the Termination Date, the Depositary may sell the Deposited Property then held under the Deposit Agreement and shall after such sale hold un-invested the net

proceeds of such sale, together with any other cash then held by it under the Deposit Agreement, in an un-segregated account and without liability for interest, for the pro rata benefit of the Holders whose ADSs have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement except (i) to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (ii) as may be required at law in connection with the termination of the Deposit Agreement. After the Termination Date, the Company shall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Depositary under Sections 5.8, 5.9 and 7.6 of the Deposit Agreement. The obligations under the terms of the Deposit Agreement of Holders and Beneficial Owners of ADSs outstanding as of the Termination Date shall survive the Termination Date and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement (except as specifically provided in the Deposit Agreement).

Notwithstanding anything contained in the Deposit Agreement or any ADR, in connection with the termination of the Deposit Agreement, the Depositary may, independently and without the need for any action by the Company, make available to Holders of ADSs a means to withdraw the Deposited Securities represented by their ADSs and to direct the deposit of such Deposited Securities into an unsponsored American depositary shares program established by the Depositary, upon such terms and conditions as the Depositary may deem reasonably appropriate, subject however, in each case, to satisfaction of the applicable registration requirements by the unsponsored American depositary shares program under the Securities Act, and to receipt by the Depositary of payment of the applicable fees and charges of, and reimbursement of the applicable expenses incurred by, the Depositary.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Counterparts . The Deposit Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts together shall constitute one and the same agreement. Copies of the Deposit Agreement shall be maintained with the Depositary and shall be open to inspection by any Holder during business hours.

Section 7.2 No Third‑Party Beneficiaries/Acknowledgments . The Deposit Agreement is for the exclusive benefit of the parties hereto (and their successors) and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person, except to the extent specifically set forth in the Deposit Agreement. Nothing in the Deposit Agreement shall be deemed to give rise to a partnership or joint venture among the parties nor establish a fiduciary or similar relationship among the parties. The parties hereto acknowledge

and agree that (i) Citibank and its Affiliates may at any time have multiple banking relationships with the Company, the Holders, the Beneficial Owners, and their respective Affiliates, (ii) Citibank and its Affiliates may be engaged at any time in transactions in which parties adverse to the Company, the Holders, the Beneficial Owners or their respective Affiliates may have interests, (iii) the Depositary and its Affiliates may from time to time have in their possession non-public information about the Company, the Holders, the Beneficial Owners, and their respective Affiliates, (iv) nothing contained in the Deposit Agreement shall (a) preclude Citibank or any of its Affiliates from engaging in such transactions or establishing or maintaining such relationships, (b) obligate Citibank or any of its Affiliates to disclose such information, transactions or relationships, or to account for any profit made or payment received in such transactions or relationships, (v) the Depositary shall not be deemed to have knowledge of any information any other division of Citibank or any of its Affiliates may have about the Company, the Holders, the Beneficial Owners, or any of their respective Affiliates, and (vi) the Company, the Depositary, the Custodian and their respective agents and controlling persons may be subject to the laws and regulations of jurisdictions other than the U.S. and England and Wales, and the authority of courts and regulatory authorities of such other jurisdictions, and, consequently, the requirements and the limitations of such other laws and regulations, and the decisions and orders of such other courts and regulatory authorities, may affect the rights and obligations of the parties to the Deposit Agreement.

Section 7.3 Severability . In case any one or more of the provisions contained in the Deposit Agreement or in the ADRs should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.

Section 7.4 Holders and Beneficial Owners as Parties; Binding Effect . The Holders and Beneficial Owners from time to time of ADSs issued hereunder shall be parties to the Deposit Agreement and shall be bound by all of the terms and conditions hereof and of any ADR evidencing their ADSs by acceptance thereof or any beneficial interest therein.

Section 7.5 Notices . Any and all notices to be given to the Company shall be deemed to have been duly given if personally delivered or sent by mail, air courier or cable, telex or facsimile transmission, confirmed by letter personally delivered or sent by mail or air courier, addressed to 267 Great Valley Parkway, Malvern, PA 19355, Attention : Chief Financial Officer, or to any other address which the Company may specify in writing to the Depositary.

Any and all notices to be given to the Depositary shall be deemed to have been duly given if personally delivered or sent by mail, air courier or cable, telex or facsimile transmission, confirmed by letter personally delivered or sent by mail or air courier, addressed to Citibank, N.A., 388 Greenwich Street, New York, New York 10013, U.S.A., Attention : Depositary Receipts Department, or to any other address which the Depositary may specify in writing to the Company.

Any and all notices to be given to any Holder shall be deemed to have been duly given (a) if personally delivered or sent by mail or cable, telex or facsimile transmission, confirmed by letter, addressed to such Holder at the address of such Holder as it appears on the books of the

Depositary or, if such Holder shall have filed with the Depositary a request that notices intended for such Holder be mailed to some other address, at the address specified in such request, or (b) if a Holder shall have designated such means of notification as an acceptable means of notification under the terms of the Deposit Agreement, by means of electronic messaging addressed for delivery to the e-mail address designated by the Holder for such purpose. Notice to Holders shall be deemed to be notice to Beneficial Owners for all purposes of the Deposit Agreement. Failure to notify a Holder or any defect in the notification to a Holder shall not affect the sufficiency of notification to other Holders or to the Beneficial Owners of ADSs held by such other Holders. Any notices given to DTC under the terms of the Deposit Agreement shall (unless otherwise specified by the Depositary) constitute notice to the DTC Participants who hold as the ADSs in their DTC accounts and to the Beneficial Owners of such ADSs.

Delivery of a notice sent by mail, air courier or cable, telex or facsimile transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex or facsimile transmission) is deposited, postage prepaid, in a post-office letter box or delivered to an air courier service, without regard for the actual receipt or time of actual receipt thereof by a Holder. The Depositary or the Company may, however, act upon any cable, telex or facsimile transmission received by it from any Holder, the Custodian, the Depositary, or the Company, notwithstanding that such cable, telex or facsimile transmission shall not be subsequently confirmed by letter.

Delivery of a notice by means of electronic messaging shall be deemed to be effective at the time of the initiation of the transmission by the sender (as shown on the sender’s records), notwithstanding that the intended recipient retrieves the message at a later date, fails to retrieve such message, or fails to receive such notice on account of its failure to maintain the designated e-mail address, its failure to designate a substitute e-mail address or for any other reason.

Section 7.6 Governing Law and Jurisdiction . The Deposit Agreement and the ADRs shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York applicable to contracts made and to be wholly performed in the State. Notwithstanding anything contained in the Deposit Agreement, any ADR or any present or future provisions of the laws of the State of New York, the rights of holders of Shares and of any other Deposited Securities and the obligations and duties of the Company in respect of the holders of Shares and other Deposited Securities, as such, shall be governed by the laws of England and Wales (or, if applicable, such other laws as may govern the Deposited Securities).

Except as set forth in the following paragraph of this Section 7.6, the Company and the Depositary agree that the federal or state courts in the City of New York shall have jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that may arise out of or in connection with the Deposit Agreement and, for such purposes, each irrevocably submits to the non-exclusive jurisdiction of such courts. The Company hereby irrevocably designates, appoints and empowers Realm Therapeutics, Inc. (the “ Agent ”) now at 267 Great Valley Parkway, Malvern, PA 19355, United States of Americas, as its authorized agent to receive and accept for and on its behalf, and on behalf of its properties, assets and

revenues, service by mail of any and all legal process, summons, notices and documents that may be served in any suit, action or proceeding brought against the Company in any federal or state court as described in the preceding sentence or in the next paragraph of this Section 7.6. If for any reason the Agent shall cease to be available to act as such, the Company agrees to designate a new agent in New York on the terms and for the purposes of this Section 7.6 reasonably satisfactory to the Depositary. The Company further hereby irrevocably consents and agrees to the service of any and all legal process, summons, notices and documents in any suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Agent (whether or not the appointment of such Agent shall for any reason prove to be ineffective or such Agent shall fail to accept or acknowledge such service), with a copy mailed to the Company by registered or certified air mail, postage prepaid, to its address provided in Section 7.5. The Company agrees that the failure of the Agent to give any notice of such service to it shall not impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon.

Notwithstanding the foregoing, the Depositary and the Company unconditionally agree that in the event that a Holder or Beneficial Owner brings a suit, action or proceeding against (a) the Company, (b) the Depositary in its capacity as Depositary under the Deposit Agreement or (c) against both the Company and the Depositary, in any such case, in any state or federal court of the United States, and the Depositary or the Company have any claim, for indemnification or otherwise, against each other arising out of the subject matter of such suit, action or proceeding, then the Company and the Depositary may pursue such claim against each other in the state or federal court in the United States in which such suit, action, or proceeding is pending and, for such purposes, the Company and the Depositary irrevocably submit to the non-exclusive jurisdiction of such courts. The Company agrees that service of process upon the Agent in the manner set forth in the preceding paragraph shall be effective service upon it for any suit, action or proceeding brought against it as described in this paragraph.

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any actions, suits or proceedings brought in any court as provided in this Section 7.6, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, and agrees not to plead or claim, any right of immunity from legal action, suit or proceeding, from setoff or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, from attachment in aid of execution or judgment, from execution of judgment, or from any other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, and consents to such relief and enforcement against it, its assets and its revenues in any jurisdiction, in each case with respect to any matter arising out of, or in connection with, the Deposit Agreement, any ADR or the Deposited Property.

EACH OF THE PARTIES TO THE DEPOSIT AGREEMENT (INCLUDING, WITHOUT LIMITATION, EACH HOLDER AND BENEFICIAL OWNER) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING AGAINST THE COMPANY AND/OR THE DEPOSITARY ARISING OUT OF, OR RELATING TO, THE DEPOSIT AGREEMENT, ANY ADR AND ANY TRANSACTIONS CONTEMPLATED THEREIN (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR OTHERWISE).

No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement. The provisions of this Section 7.6 shall survive any termination of the Deposit Agreement, in whole or in part.

Section 7.7 Assignment . Subject to the provisions of Section 5.4, the Deposit Agreement may not be assigned by either the Company or the Depositary.

Section 7.8 Compliance with U.S. Securities Laws . Notwithstanding anything in the Deposit Agreement to the contrary, the withdrawal or delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.

Section 7.9 English Law References . Any summary of English laws and regulations and of the terms of the Company’s Articles of Association set forth in the Deposit Agreement have been provided by the Company solely for the convenience of Holders, Beneficial Owners and the Depositary. While such summaries are believed by the Company to be accurate as of the date of the Deposit Agreement, (i) they are summaries and as such may not include all aspects of the materials summarized applicable to a Holder or Beneficial Owner, and (ii) these laws and regulations and the Company’s Articles of Association may change after the date of the Deposit Agreement. Neither the Depositary nor the Company has any obligation under the terms of the Deposit Agreement to update any such summaries.

Section 7.10 Titles and References .

(a) Deposit Agreement . All references in the Deposit Agreement to exhibits, articles, sections, subsections, and other subdivisions refer to the exhibits, articles, sections, subsections and other subdivisions of the Deposit Agreement unless expressly provided otherwise. The words “the Deposit Agreement”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import refer to the Deposit Agreement as a whole as in effect at the relevant time between the Company, the Depositary and the Holders and Beneficial Owners of ADSs and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to sections of the Deposit Agreement are included for convenience only and shall be disregarded in construing the language contained in the Deposit Agreement. References to “applicable laws and

regulations” shall refer to laws and regulations applicable to ADRs, ADSs or Deposited Property as in effect at the relevant time of determination, unless otherwise required by law or regulation.

(b) ADRs . All references in any ADR(s) to paragraphs, exhibits, articles, sections, subsections, and other subdivisions refer to the paragraphs, exhibits, articles, sections, subsections and other subdivisions of the ADR(s) in question unless expressly provided otherwise. The words “the Receipt”, “the ADR”, “herein”, “hereof”, “hereby”, “hereunder”, and words of similar import used in any ADR refer to the ADR as a whole and as in effect at the relevant time, and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender in any ADR shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to paragraphs of any ADR are included for convenience only and shall be disregarded in construing the language contained in the ADR. References to “applicable laws and regulations” shall refer to laws and regulations applicable to the Company, the Depositary, the Custodian, their agents and controlling persons, the ADRs, the ADSs and the Deposited Property as in effect at the relevant time of determination, unless otherwise required by law or regulation.

Section 7.11 Amendment and Restatement . The Depositary shall arrange to have new ADRs printed that reflect the form of ADR attached to the Deposit Agreement. All ADRs issued hereunder after the date hereof, whether upon the deposit of Shares or other Deposited Securities or upon the transfer, combination or split-up of existing ADRs, shall be substantially in the form of the specimen ADR attached as Exhibit A hereto. However, American depositary receipts issued prior to the date hereof under the terms of the Original Deposit Agreement and outstanding as of the date hereof, which do not reflect the form of ADR attached hereto as Exhibit A , do not need to be called in for exchange and may remain outstanding until such time as the Holders thereof choose to surrender them for any reason under the Deposit Agreement. The Depositary is authorized and directed to take any and all actions deemed necessary to effect the foregoing.

IN WITNESS WHEREOF, REALM THERAPEUTICS PLC and CITIBANK, N.A. have duly executed the Deposit Agreement as of the day and year first above set forth and all Holders and Beneficial Owners shall become parties hereto upon acceptance by them of ADSs issued in accordance with the terms hereof, or upon acquisition of any beneficial interest therein.



REALM THERAPEUTICS PLC


By:
	Name:
	Title:


CITIBANK, N.A.


By:
	Name:
	Title:

EXHIBIT A

[FORM OF ADR]



Number		CUSIP NUMBER:

American Depositary Shares (each American Depositary Share representing the right to receive twenty-five (25) fully paid ordinary shares)

AMERICAN DEPOSITARY RECEIPT

for

AMERICAN DEPOSITARY SHARES

representing

DEPOSITED ORDINARY SHARES

REALM THERAPEUTICS PLC

(Incorporated under the laws of England and Wales)

CITIBANK, N.A., a national banking association organized and existing under the laws of the United States of America, as depositary (the “Depositary”), hereby certifies that _____________is the owner of ______________ American Depositary Shares (hereinafter “ADS”) representing deposited ordinary shares, including evidence of rights to receive such ordinary shares (the “Shares”), of Realm Therapeutics plc, a corporation incorporated under the laws of England and Wales (the “Company”). As of the date of issuance of this ADR, each ADS represents the right to receive twenty-five (25) Shares deposited under the Deposit Agreement (as hereinafter defined) with the Custodian, which at the date of issuance of this ADR is Citibank, N.A., London Branch (the “Custodian”). The ADS(s)-to-Share(s) ratio is subject to amendment as provided in Articles IV and VI of the Deposit Agreement. The Depositary’s Principal Office is located at 388 Greenwich Street, New York, New York 10013, U.S.A.

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(1) The Deposit Agreement . This American Depositary Receipt is one of an issue of American Depositary Receipts (“ADRs”), all issued and to be issued upon the terms and conditions set forth in the Deposit Agreement, dated as of [date] , 2018 (as amended and supplemented from time to time, the “Deposit Agreement”), by and among the Company, the Depositary, and all Holders and Beneficial Owners from time to time of ADSs issued thereunder. The Deposit Agreement sets forth the rights and obligations of Holders and Beneficial Owners of ADSs and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other Deposited Property (as defined in the Deposit Agreement) from time to time received and held on deposit in respect of the ADSs. Copies of the Deposit Agreement are on file at the Principal Office of the Depositary and with the Custodian. Each Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and the applicable ADR(s), and (b) appoint the Depositary its attorney‑in‑fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the Deposit Agreement and the applicable ADR(s), to adopt any and all procedures necessary to comply with applicable law and to take such action as the Depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the Deposit Agreement and the applicable ADR(s), the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof. The manner in which a Beneficial Owner holds ADSs (e.g., in a brokerage account vs. as registered holder) may affect the rights and obligations of, the manner in which, and the extent to which, services are made available to, Beneficial Owners pursuant to the terms of the Deposit Agreement.

The statements made on the face and reverse of this ADR are summaries of certain provisions of the Deposit Agreement and the Articles of Association of the Company (as in effect on the date of the signing of the Deposit Agreement) and are qualified by and subject to the detailed provisions of the Deposit Agreement and the Articles of Association, to which reference is hereby made.

All capitalized terms not defined herein shall have the meanings ascribed thereto in the Deposit Agreement.

The Depositary makes no representation or warranty as to the validity or worth of the Deposited Property. The Depositary has made arrangements for the acceptance of the ADSs into DTC. Each Beneficial Owner of ADSs held through DTC must rely on the procedures of DTC and the DTC Participants to exercise and be entitled to any rights attributable to such ADSs. The Depositary may issue Uncertificated ADSs subject, however, to the terms and conditions of Section 2.13 of the Deposit Agreement.

(2) Surrender of ADSs and Withdrawal of Deposited Securities . The Holder of this ADR (and of the ADSs evidenced hereby) shall be entitled to Delivery (at the Custodian’s designated office) of the Deposited Securities at the time represented by the ADSs evidenced hereby upon satisfaction of each of the following conditions: (i) the Holder (or a duly-authorized attorney of the Holder) has duly Delivered ADSs to the Depositary at its Principal Office the ADSs evidenced hereby (and, if applicable, this ADR evidencing such ADSs) for the purpose of

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withdrawal of the Deposited Securities represented thereby, (ii) if applicable and so required by the Depositary, this ADR Delivered to the Depositary for such purpose has been properly endorsed in blank or is accompanied by proper instruments of transfer in blank (including signature guarantees in accordance with standard securities industry practice), (iii) if so required by the Depositary, the Holder of the ADSs has executed and delivered to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of the person(s) designated in such order, and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case , to the terms and conditions of this ADR evidencing the surrendered ADSs, of the Deposit Agreement, of the Company’s Articles of Association and of any applicable laws and the rules of CREST, and to any provisions of or governing the Deposited Securities , in each case as in effect at the time thereof.

Upon satisfaction of each of the conditions specified above, the Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, this ADR(s) evidencing the ADSs so Delivered), (ii) shall direct the Registrar to record the cancellation of the ADSs so Delivered on the books maintained for such purpose, and (iii) shall direct the Custodian to Deliver, or cause the Delivery of, in each case, without unreasonable delay, the Deposited Securities represented by the ADSs so canceled together with any certificate or other document of title for the Deposited Securities, or evidence of the electronic transfer thereof (if available), as the case may be, to or upon the written order of the person(s) designated in the order delivered to the Depositary for such purpose, subject however, in each case, to the terms and conditions of the Deposit Agreement, of this ADR evidencing the ADSs so canceled, of the Articles of Association of the Company, of any applicable laws and of the rules of CREST, and to the terms and conditions of or governing the Deposited Securities, in each case as in effect at the time thereof.

Notwithstanding anything else contained in this ADR or the Deposit Agreement, the Depositary may make delivery at the Principal Office of the Depositary of Deposited Property consisting of (i) any cash dividends or cash distributions, or (ii) any proceeds from the sale of any non-cash distributions, which are at the time held by the Depositary in respect of the Deposited Securities represented by the ADSs surrendered for cancellation and withdrawal. At the request, risk and expense of any Holder so surrendering ADSs represented by this ADR, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any Deposited Property (other than Deposited Securities) held by the

A-3

Custodian in respect of such ADSs to the Depositary for delivery at the Principal Office of the Depositary. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission.

(3) Transfer, Combination and Split-up of ADRs . The Registrar shall register the transfer of this ADR (and of the ADSs represented hereby) on the books maintained for such purpose and the Depositary shall (x) cancel this ADR and execute new ADRs evidencing the same aggregate number of ADSs as those evidenced by this ADR canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs and (z) deliver such new ADRs to or upon the order of the person entitled thereto, if each of the following conditions has been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a transfer thereof, (ii) this surrendered ADR has been properly endorsed or is accompanied by proper instruments of transfer (including signature guarantees in accordance with standard securities industry practice), (iii) this surrendered ADR has been duly stamped (if required by the laws of the State of New York or of the United States), and (iv) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case, to the terms and conditions of this ADR, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

The Registrar shall register the split-up or combination of this ADR (and of the ADSs represented hereby) on the books maintained for such purpose and the Depositary shall (x) cancel this ADR and execute new ADRs for the number of ADSs requested, but in the aggregate not exceeding the number of ADSs evidenced by this ADR canceled by the Depositary, (y) cause the Registrar to countersign such new ADRs, and (z) Deliver such new ADRs to or upon the order of the Holder thereof, if each of the following conditions has been satisfied: (i) this ADR has been duly Delivered by the Holder (or by a duly authorized attorney of the Holder) to the Depositary at its Principal Office for the purpose of effecting a split-up or combination hereof, and (ii) all applicable fees and charges of, and expenses incurred by, the Depositary and all applicable taxes and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each case , to the terms and conditions of this ADR, of the Deposit Agreement and of applicable law, in each case as in effect at the time thereof.

(4) Pre-Conditions to Registration, Transfer, Etc . As a condition precedent to the execution and Delivery, the registration of issuance, transfer, split-up, combination or surrender, of any ADS, the delivery of any distribution thereon, or the withdrawal of any Deposited Property, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of ADSs or of this ADR of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 of, and Exhibit B to, the Deposit Agreement and in this ADR, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1 of the

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Deposit Agreement, and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of this ADR or ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations as the Depositary and the Company may establish consistent with the provisions of this ADR, if applicable, the Deposit Agreement and applicable law.

The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the deposit of particular Shares may be refused, or the registration of transfers of ADSs in particular instances may be refused, or the registration of transfers of ADSs generally may be suspended, during any period when the transfer books of the Company, the Depositary, a Registrar or the Share Registrar are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law or regulation, any government or governmental body or commission or any securities exchange on which the ADSs or Shares are listed, or under any provision of the Deposit Agreement or this ADR, if applicable, or under any provision of, or governing, the Deposited Securities, or because of a meeting of shareholders of the Company or for any other reason, subject, in all cases, to Section 7.8 of the Deposit Agreement and Paragraph (25) of this ADR.

Notwithstanding any provision of the Deposit Agreement or this ADR to the contrary, Holders are entitled to surrender outstanding ADSs to withdraw the Deposited Securities associated therewith at any time subject only to (i) temporary delays caused by closing the transfer books of the Depositary or the Company or the deposit of Shares in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of the Deposited Securities, and (iv) other circumstances specifically contemplated by Instruction I.A.(l) of the General Instructions to Form F-6 (as such General Instructions may be amended from time to time).

(5) Compliance With Information Requests . Notwithstanding any other provision of the Deposit Agreement or this ADR, each Holder and Beneficial Owner of the ADSs represented hereby agrees to comply with requests from the Company pursuant to applicable law, the rules and requirements of any stock exchange on which the Shares or ADSs are, or will be, registered, traded or listed or the Articles of Association of the Company, which are made to provide information, inter alia , as to the capacity in which such Holder or Beneficial Owner owns ADSs (and Shares as the case may be) and regarding the identity of any other person(s) interested in such ADSs and the nature of such interest and various other matters, whether or not they are Holders and/or Beneficial Owners at the time of such request. The Depositary agrees to use its reasonable efforts to forward, upon the request of the Company and at the Company’s expense, any such request from the Company to the Holders and to forward to the Company any such responses to such requests received by the Depositary.

(6) Ownership Restrictions . Notwithstanding any other provision of this ADR or of the Deposit Agreement, the Company may restrict transfers of the Shares where such transfer might result in ownership of Shares exceeding limits imposed by applicable law or the Articles of Association of the Company. The Company may also restrict, in such manner as it deems

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appropriate, transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single Holder or Beneficial Owner to exceed any such limits. The Company may, in its sole discretion but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner in excess of the limits set forth in the preceding sentence, including, but not limited to, the imposition of restrictions on the transfer of ADSs, the removal or limitation of voting rights or mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADSs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Articles of Association of the Company. Nothing herein or in the Deposit Agreement shall be interpreted as obligating the Depositary or the Company to ensure compliance with the ownership restrictions described herein or in Section 3.5 of the Deposit Agreement.

(7) Reporting Obligations and Regulatory Approvals . Applicable laws and regulations may require holders and beneficial owners of Shares, including the Holders and Beneficial Owners of ADSs, to satisfy reporting requirements and obtain regulatory approvals in certain circumstances. Holders and Beneficial Owners of ADSs are solely responsible for determining and complying with such reporting requirements and obtaining such approvals. Each Holder and each Beneficial Owner hereby agrees to make such determination, file such reports, and obtain such approvals to the extent and in the form required by applicable laws and regulations as in effect from time to time. Neither the Depositary, the Custodian, the Company or any of their respective agents or affiliates shall be required to take any actions whatsoever on behalf of Holders or Beneficial Owners to determine or satisfy such reporting requirements or obtain such regulatory approvals under applicable laws and regulations.

(8) Liability for Taxes and Other Charges . Any tax or other governmental charge payable by the Custodian or by the Depositary with respect to any Deposited Property, ADSs or this ADR shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Property, and may sell for the account of a Holder and/or Beneficial Owner any or all of the Deposited Property and apply such distributions and sale proceeds in payment of, any taxes (including applicable interest and penalties) or charges that are or may be payable by Holders or Beneficial Owners in respect of the ADSs, Deposited Property and this ADR, the Holder and the Beneficial Owner hereof remaining liable for any deficiency. The Custodian may refuse the deposit of Shares and the Depositary may refuse to issue ADSs, to deliver ADRs, register the transfer of ADSs, register the split‑up or combination of ADRs and (subject to Paragraph (25) of this ADR and Section 7.8 of the Deposit Agreement) the withdrawal of Deposited Property until payment in full of such tax, charge, penalty or interest is received. Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, and any of their agents, officers, employees and Affiliates for, and to hold each of them harmless from, any claims with respect to taxes (including applicable interest and penalties thereon) arising from any tax benefit obtained for such Holder and/or Beneficial Owner. The obligations of Holders and Beneficial Owners under this Section 3.2 shall survive any transfer of ADSs, any cancellation of ADSs and withdrawal of Deposited Securities, and the termination of the Deposit Agreement.

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(9) Representations and Warranties on Deposit of Shares . Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly allotted and issued, fully paid, not subject to any call for the payment of further capital, non‑assessable and legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived, disapplied, or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, (v) the Shares presented for deposit are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated in Section 2.14 of the Deposit Agreement), and (vi) the Shares presented for deposit have not been stripped of any rights or entitlements. Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of ADSs in respect thereof and the transfer of such ADSs. If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.

(10) Proofs, Certificates and Other Information . Any person presenting Shares for deposit, any Holder and any Beneficial Owner may be required, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary and the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Property, compliance with applicable laws, the terms of the Deposit Agreement or this ADR evidencing the ADSs and the provisions of, or governing, the Deposited Property, to execute such certifications and to make such representations and warranties, and to provide such other information and documentation (or, in the case of Shares in registered form presented for deposit, such information relating to the registration on the books of the Company or of the Share Registrar) as the Depositary or the Custodian may deem necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement and this ADR. The Depositary and the Registrar, as applicable, may withhold the execution or delivery or registration of transfer of any ADR or ADS or the distribution or sale of any dividend or distribution of rights or of the proceeds thereof or, to the extent not limited by Paragraph (25) and Section 7.8 of the Deposit Agreement, the delivery of any Deposited Property until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information are provided, in each case to the Depositary’s, the Registrar’s and the Company’s satisfaction.

(11) ADS Fees and Charges . The following ADS fees are payable under the terms of the Deposit Agreement:


(i)	ADS Issuance Fee : by any person for whom ADSs are issued ( e.g. , an issuance upon a deposit of Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason), excluding issuances as a result of distributions described in paragraph (iv) below, a fee not in excess of U.S.

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$5.00 per 100 ADSs (or fraction thereof) issued under the terms of the Deposit Agreement;


(ii)	ADS Cancellation Fee : by any person for whom ADSs are being cancelled ( e.g. , a cancellation of ADSs for Delivery of deposited shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) cancelled;


(iii)	Cash Distribution Fee : by any Holder of ADSs, a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) held for the distribution of cash dividends or other cash distributions ( e.g. , upon a sale of rights and other entitlements);


(iv)	Stock Distribution /Rights Exercise Fee : by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) held for the distribution of ADSs pursuant to (a) stock dividends or other free stock distributions, or (b) an exercise of rights to purchase additional ADSs;


(v)	Other Distribution Fee : by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) held for the distribution of securities other than ADSs or rights to purchase additional ADSs ( e.g. , spin-off shares); and


(vi)	Depositary Services Fee : by any Holder of ADS(s), a fee not in excess of U.S. $5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary.

The Company, Holders, Beneficial Owners, persons depositing Shares or withdrawing Deposited Securities in connection with ADS issuances and cancellations, and persons for whom ADSs are issued or cancelled shall be responsible for the following ADS charges under the terms of the Deposit Agreement:


(a)	taxes (including applicable interest and penalties) and other governmental charges;


(b)	such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities on the share register and applicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;


(c)	such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of the person depositing Shares or withdrawing Deposited Securities or of the Holders and Beneficial Owners of ADSs;

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(d)	the expenses and charges incurred by the Depositary in the conversion of foreign currency;


(e)	such fees and expenses as are incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to Shares, Deposited Securities, ADSs and ADRs; and


(f)	the fees and expenses incurred by the Depositary, the Custodian, or any nominee in connection with the servicing or delivery of Deposited Property.

All ADS fees and charges so payable may be deducted from distributions or must be remitted to the Depositary, or its designee, and may, at any time and from time to time, be changed by agreement between the Depositary and the Company, but, in the case of ADS fees and charges payable by Holders and Beneficial Owners, only in the manner contemplated by Paragraph (23) of this ADR and as contemplated in Section 6.1 of the Deposit Agreement. The Depositary shall provide, without charge, a copy of its latest ADS fee schedule to anyone upon request.

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upon such terms and conditions as the Company and the Depositary agree from time to time. The Company shall pay to the Depositary such fees and charges, and reimburse the Depositary for such out-of-pocket expenses, as the Depositary and the Company may agree from time to time. Responsibility for payment of such fees, charges and reimbursements may from time to time be changed by agreement between the Company and the Depositary. Unless otherwise agreed, the Depositary shall present its statement for such fees, charges and reimbursements to the Company once every three months. The charges and expenses of the Custodian are for the sole account of the Depositary.

The obligations of Holders and Beneficial Owners to pay ADS fees and charges shall survive the termination of the Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4 of the Deposit Agreement, the right to collect ADS fees and charges shall extend for those ADS fees and charges incurred prior to the effectiveness of such resignation or removal.

(12) Title to ADRs . Subject to the limitations contained in the Deposit Agreement and in this ADR, it is a condition of this ADR, and every successive Holder of this ADR by accepting or holding the same consents and agrees, that title to this ADR (and to each Certificated ADS evidenced hereby) shall be transferable upon the same terms as a certificated security under the laws of the State of New York, provided that, in the case of Certificated ADSs, this ADR has been properly endorsed or is accompanied by proper instruments of transfer. Notwithstanding any notice to the contrary, the Depositary and the Company may deem and treat the Holder of this ADR (that is, the person in whose name this ADR is registered on the books of the Depositary) as the absolute owner thereof for all purposes. Neither the Depositary nor the Company shall have any obligation nor be subject to any liability under the Deposit Agreement or this ADR to any holder of this ADR or any Beneficial Owner unless, in the case of a holder of ADSs, such holder is the Holder of this ADR registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner, or the Beneficial Owner’s representative, is the Holder registered on the books of the Depositary.

(13) Validity of ADR . The Holder(s) of this ADR (and the ADSs represented hereby) shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose against the Depositary or the Company unless this ADR has been (i) dated, (ii) signed by the manual or facsimile signature of a duly-authorized signatory of the Depositary, (iii) countersigned by the manual or facsimile signature of a duly-authorized signatory of the Registrar, and (iv) registered in the books maintained by the Registrar for the registration of issuances and transfers of ADRs. An ADR bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the delivery of such ADR by the Depositary.

(14) Available Information; Reports; Inspection of Transfer Books . The Company is subject to the periodic reporting requirements of the Exchange Act and, accordingly, is required to file or furnish certain reports with the Commission. These reports can be retrieved

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from the Commission's website ( www.sec.gov ) and can be inspected and copied at the public reference facilities maintained by the Commission located (as of the date of the Deposit Agreement) at 100 F Street, N.E., Washington D.C. 20549. The Depositary shall make available for inspection by Holders at its Principal Office any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Property and (b) made generally available to the holders of such Deposited Property by the Company.

Dated:



	CITIBANK, N.A. Transfer Agent and Registrar		CITIBANK, N.A. as Depositary
By:		By:
	Authorized Signatory		Authorized Signatory

The address of the Principal Office of the Depositary is 388 Greenwich Street, New York, New York 10013, U.S.A.

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[FORM OF REVERSE OF ADR]

SUMMARY OF CERTAIN ADDITIONAL PROVISIONS

OF THE DEPOSIT AGREEMENT

(15) Dividends and Distributions in Cash, Shares, etc . (a) Cash Distributions : Upon the timely receipt by the Depositary of a notice from the Company that it intends to make a distribution of a cash dividend or other cash distribution, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement. Upon receipt of confirmation of the receipt of (x) any cash dividend or other cash distribution on any Deposited Securities, or (y) proceeds from the sale of any Deposited Property held in respect of the ADSs under the terms of the Deposit Agreement, the Depositary will (i) if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (pursuant to Section 4.8 of the Deposit Agreement), be converted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (on the terms described in Section 4.8 of the Deposit Agreement), (ii) if applicable and unless previously established, establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement, and (iii) distribute promptly the amount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxes withheld) to the Holders entitled thereto as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent, and any balance not so distributed shall be held by the Depositary (without liability for interest thereon) and shall be added to and become part of the next sum received by the Depositary for distribution to Holders of ADSs outstanding at the time of the next distribution. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities, or from any cash proceeds from the sales of Deposited Property, an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable Holders and Beneficial Owners of ADSs until the distribution can be effected or the funds that the Depositary holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.1 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.1 of the Deposit Agreement where such

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notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

(b) Share Distributions : Upon the timely receipt by the Depositary of a notice from the Company that it intends to make a distribution that consists of a dividend in, or free distribution of Shares, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.9 of the Deposit Agreement. Upon receipt of confirmation from the Custodian of the receipt of the Shares so distributed by the Company, the Depositary shall either (i) subject to Section 5.9 of the Deposit Agreement, distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as such dividend, or free distribution, subject to the other terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxes), or (ii) if additional ADSs are not so distributed, take all actions necessary so that each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional integral number of Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) applicable taxes). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares or ADSs, as the case may be, represented by the aggregate of such fractions and distribute the net proceeds upon the terms described in Section 4.1 of the Deposit Agreement.

In the event that the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, if the Company in the fulfillment of its obligation under Section 5.7 of the Deposit Agreement, has furnished an opinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of (a) applicable taxes and (b) fees and charges of, and expenses incurred by, the Depositary) to Holders entitled thereto upon the terms described in Section 4.1 of the Deposit Agreement. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.2 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.2 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

(c) Elective Distributions in Cash or Shares : Upon the timely receipt of a notice indicating that the Company wishes an elective distribution in cash or Shares to be made

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available to Holders of ADSs upon the terms described in the Deposit Agreement, the Company and the Depositary shall determine in accordance with the Deposit Agreement whether such distribution is lawful and reasonably practicable. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution be made available to Holders, (ii) the Depositary shall have determined that such distribution is reasonably practicable and (iii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement. If the above conditions are not satisfied or if the Company requests such elective distribution not to be made available to Holders of ADSs, the Depositary shall establish the ADS Record Date on the terms described in Section 4.9 of the Deposit Agreement and, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in England and Wales in respect of the Shares for which no election is made, either (X) cash upon the terms described in Section 4.1 of the Deposit Agreement or (Y) additional ADSs representing such additional Shares upon the terms described in Section 4.2 of the Deposit Agreement. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date on the terms described in Section 4.9 of the Deposit Agreement and establish procedures to enable Holders to elect the receipt of the proposed distribution in cash or in additional ADSs. The Company shall assist the Depositary in establishing such procedures to the extent necessary. If a Holder elects to receive the proposed distribution (X) in cash, the distribution shall be made upon the terms described in Section 4.1 of the Deposit Agreement, or (Y) in ADSs, the distribution shall be made upon the terms described in Section 4.2 of the Deposit Agreement. Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to Holders a method to receive the elective distribution in Shares (rather than ADSs). There can be no assurance that Holders generally, or the Holder hereof will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares. Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed distribution provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.3 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.3 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

(d) Distribution of Rights to Purchase Additional ADSs : Upon the timely receipt by the Depositary of a notice indicating that the Company wishes rights to subscribe for additional Shares to be made available to Holders of ADSs, the Depositary upon consultation with the Company, shall determine, whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to Holders only if (i) the Company shall have timely requested that such rights be made available to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution of rights is reasonably practicable. In the event any of the conditions set forth above are not satisfied or if the Company requests that the rights not be made available to Holders of ADSs, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b) of the Deposit Agreement and described below. In the event all conditions set forth above are satisfied, the

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Depositary shall establish the ADS Record Date (upon the terms described in Section 4.9 of the Deposit Agreement) and establish procedures to (x) distribute rights to purchase additional ADSs (by means of warrants or otherwise), (y) enable the Holders to exercise such rights (upon payment of the subscription price and of the applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes), and (z) deliver ADSs upon the valid exercise of such rights. The Company shall assist the Depositary to the extent necessary in establishing such procedures. Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to the Holders a method to exercise rights to subscribe for Shares (rather than ADSs).

If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7 of the Deposit Agreement, or determines it is not reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, in a riskless principal capacity, at such place and upon such terms (including public or private sale) as it may deem practicable. The Company shall assist the Depositary to the extent necessary to determine such legality and practicability. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) upon the terms set forth in Section 4.1 of the Deposit Agreement.

If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) of the Deposit Agreement or to arrange for the sale of the rights upon the terms described in Section 4.4(b) of the Deposit Agreement, the Depositary shall allow such rights to lapse.

Notwithstanding anything herein or in the Deposit Agreement to the contrary, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act (or other applicable law) covering such offering is in effect or (ii) unless the Company furnishes the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case reasonably satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. Because English law presently does not contemplate the issuance of rights in negotiable form and the possibility of such issuance is unlikely, a liquid market for rights may not exist, and this may

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adversely affect (1) the ability of the Depositary to dispose of such rights or (2) the amount the Depositary would realize upon disposal of rights.

There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive or exercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights. Nothing herein or in the Deposit Agreement shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights.

(e) Distributions other than Cash, Shares or Rights to Purchase Shares : Upon receipt of a notice indicating that the Company wishes property other than cash, Shares or rights to purchase additional Shares to be made to Holders of ADSs, the Depositary shall determine whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation contemplated in the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution is reasonably practicable.

Upon satisfaction of such conditions, the Depositary shall distribute the property so received to the Holders of record, as of the ADS Record Date, in proportion to the number of ADSs held by them respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any applicable taxes withheld. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.

If the conditions above are not satisfied, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem practicable and shall (i) cause the proceeds of such sale, if any, to be converted into Dollars and (ii) distribute the proceeds of such conversion received by the Depositary (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) to the Holders as of the ADS Record Date upon the terms hereof and of the Deposit Agreement. If the Depositary is unable to sell such property, the Depositary may dispose of such property for the account of the Holders in any way it deems reasonably practicable under the circumstances.

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Neither the Depositary nor the Company shall be liable for (i) any failure to accurately determine whether it is lawful or practicable to make the property described in Section 4.5 of the Deposit Agreement available to Holders in general or any Holders in particular, nor (ii) any loss incurred in connection with the sale or disposal of such property.

(16) Redemption . Upon timely receipt of notice from the Company that it intends to exercise its right of redemption in respect of any of the Deposited Securities, and satisfactory documentation, and upon determining that such proposed redemption is practicable, the Depositary shall (to the extent practicable) provide to each Holder a notice setting forth the Company’s intention to exercise the redemption rights and any other particulars set forth in the Company’s notice to the Depositary. The Depositary shall instruct the Custodian to present to the Company the Deposited Securities in respect of which redemption rights are being exercised against payment of the applicable redemption price. Upon receipt of confirmation from the Custodian that the redemption has taken place and that funds representing the redemption price have been received, the Depositary shall convert, transfer, and distribute the proceeds (net of applicable (a) fees and charges of, and the expenses incurred by, the Depositary, and (b) taxes), retire ADSs and cancel ADRs, if applicable, upon delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1 and 6.2 of the Deposit Agreement. If less than all outstanding Deposited Securities are redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as may be determined by the Depositary. The redemption price per ADS shall be the dollar equivalent of the per share amount received by the Depositary (adjusted to reflect the ADS(s)-to-Share(s) ratio) upon the redemption of the Deposited Securities represented by ADSs (subject to the terms of Section 4.8 of the Deposit Agreement and the applicable fees and charges of, and expenses incurred by, the Depositary, and applicable taxes) multiplied by the number of Deposited Securities represented by each ADS redeemed.

Notwithstanding anything contained in the Deposit Agreement to the contrary, in the event the Company fails to give the Depositary timely notice of the proposed redemption provided for above, the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.7 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.7 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

(17) Fixing of ADS Record Date . Whenever the Depositary shall receive notice of the fixing of a record date by the Company for the determination of holders of Deposited Securities entitled to receive any distribution (whether in cash, Shares, rights or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each ADS, or whenever the Depositary shall receive notice of any meeting of, or solicitation of consents or proxies of, holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient in connection with the giving of any notice, solicitation of any consent or any other matter, the Depositary shall fix the record date (the “ ADS Record Date ”) for the determination of the Holders of ADS(s) who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights

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at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Shares represented by each ADS. Subject to applicable law, the terms and conditions of this ADR and Sections 4.1 through 4.8 of the Deposit Agreement, only the Holders of ADSs at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.

(18) Voting of Deposited Securities . As soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or solicitation of consent or proxy in accordance with Section 4.9 of the Deposit Agreement. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least thirty (30) days prior to the date of such vote or meeting), at the Company’s expense and provided no U.S. legal prohibitions exist, distribute to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy, (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Articles of Association of the Company and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s ADSs, and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary or in which voting instructions may be deemed to have been given in accordance with Section 4.10 of the Deposit Agreement if no instructions are received prior to the deadline set for such purposes to the Depositary to give a discretionary proxy to a person designated by the Company.

Notwithstanding anything contained in this Deposit Agreement to the contrary, in the event the Company fails to timely request that the Depositary distribute the information as provided for in this Section 4.10,the Depositary agrees to use commercially reasonable efforts to perform the actions contemplated in Section 4.10 of the Deposit Agreement, and the Company, the Holders and the Beneficial Owners acknowledge that the Depositary shall have no liability for the Depositary’s failure to perform the actions contemplated in Section 4.10 of the Deposit Agreement where such notice has not been so timely given, other than its failure to use commercially reasonable efforts, as provided herein.

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The Depositary has been advised by the Company that under the Articles of Association of the Company as in effect on the date of the Deposit Agreement, voting at any meeting of shareholders of the Company is by show of hands unless (before or on the declaration of the result of the show of hands) a poll is demanded. The Depositary will not join in demanding a poll, whether or not requested to do so by Holders of ADSs. Under the Articles of Association of the Company as in effect on the date of the Deposit Agreement, a poll may be demanded by (a) the chairman of the meeting, (b) not fewer than five shareholders present in person or by proxy and having the right to vote on the meeting resolution, (c) any shareholder(s) present in person or by proxy and representing not less than 10% of the total voting rights of all the shareholders having the right to vote on the resolution (excluding any shares held in treasury), or (d) any shareholder(s) present in person or by proxy and holding shares in the Company conferring a right to vote on the resolution being shares on which an aggregate sum has been paid up equal to not less than 10% of the total sum paid up on all the shares conferring that right (excluding any shares held in treasury).

Neither the Depositary nor the Custodian shall under any circumstances exercise any discretion as to voting and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of, for purposes of establishing a quorum or otherwise, the Deposited Securities represented by ADSs, except pursuant to and in accordance with the voting instructions timely received from Holders or as otherwise contemplated in the Deposit Agreement or herein. If the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, the Depositary will deem such Holder (unless otherwise specified in the notice distributed to Holders) to have instructed the Depositary to vote

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in favor of the items set forth in such voting instructions. Deposited Securities represented by ADSs for which no timely voting instructions are received by the Depositary from the Holder shall not be voted (except (a) in the case voting is by show of hands, in which case the Depositary will instruct the Custodian to vote all Deposited Securities in accordance with the voting instructions received from a majority of Holders of ADSs who provided timely voting instructions, and (b) as contemplated in Section 4.10 of the Deposit Agreement).

Notwithstanding anything else contained herein, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the sole purpose of establishing quorum at a meeting of shareholders.

Notwithstanding anything else contained in the Deposit Agreement or this ADR, the Depositary shall not have any obligation to take any action with respect to any meeting, or solicitation of consents or proxies, of holders of Deposited Securities if the taking of such action would violate U.S. laws. The Company agrees to take any and all actions reasonably necessary and as permitted by the laws of England and Wales to enable Holders and Beneficial Owners to exercise the voting rights accruing to the Deposited Securities and to deliver to the Depositary an opinion of U.S. counsel addressing any actions requested to be taken if so reasonably requested by the Depositary.

(19) Changes Affecting Deposited Securities . Upon any change in nominal or par value, split‑up, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, consolidation or sale of assets affecting the Company or to which it is a party, any property which shall be received by the Depositary or the Custodian in exchange for, or in conversion of, or replacement of, or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Property under the Deposit Agreement, and this ADR shall, subject to the provisions of the Deposit Agreement, this ADR evidencing such ADSs and applicable law, represent the right to receive such additional or replacement Deposited Property. In giving effect to such change, split-up, cancellation, consolidation or other reclassification of Deposited Securities, recapitalization, reorganization, merger, consolidation or sale of assets, the Depositary may, with the Company’s approval, and shall, if the Company shall so request, subject to the terms of the Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary, and (b) applicable taxes) and receipt of an opinion of counsel to the Company satisfactory to the Depositary that such actions are not in violation of any applicable laws or regulations, (i) issue and deliver additional ADSs as in the case of a stock dividend on the Shares, (ii) amend the Deposit Agreement and the applicable ADRs, (iii) amend the applicable Registration Statement(s) on Form F-6 as filed with the Commission in respect of the ADSs, (iv) call for the surrender of outstanding ADRs to be exchanged for new ADRs, and (v) take such other actions as are appropriate to reflect the transaction with respect to the ADSs.

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The Company agrees to, jointly with the Depositary, amend the Registration Statement on Form F-6 as filed with the Commission to permit the issuance of such new form of ADRs.

Notwithstanding the foregoing, in the event that any Deposited Property so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall, if the Company requests, subject to receipt of an opinion of Company’s counsel reasonably satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such Deposited Property at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of applicable (a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes) for the account of the Holders otherwise entitled to such Deposited Property upon an averaged or other practicable basis without regard to any distinctions among such Holders and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to Section 4.1 of the Deposit Agreement. The Depositary shall not be responsible for (i) any failure to reasonably determine that it may be lawful or practicable to make such Deposited Property available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such Deposited Property.

(20) Exoneration . Notwithstanding anything contained in the Deposit Agreement or any ADR, neither the Depositary nor the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or incur any liability (i) if the Depositary, the Custodian, the Company or their respective agents shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required or contemplated by the terms of the Deposit Agreement and this ADR, by reason of any provision of any present or future law or regulation of the United States, England and Wales or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of potential criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Articles of Association of the Company or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, acts of terrorism, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles of Association of the Company or provisions of or governing Deposited Securities, (iii) for any action or inaction in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADSs, (v) for any action or inaction of any clearing or settlement system (and any participant thereof) for the Deposited Property or the ADSs, or (vi) for any consequential or punitive damages (including lost profits) for any breach of the terms of the Deposit Agreement.

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No disclaimer of liability under the Securities Act is intended by any provision of the Deposit Agreement or this ADR.

(21) Standard of Care . The Company and the Depositary assume no obligation and shall not be subject to any liability under the Deposit Agreement or this ADR to any Holder(s) or Beneficial Owner(s), except that the Company and the Depositary agree to perform their respective obligations specifically set forth in the Deposit Agreement or this ADR without negligence or bad faith.

The Depositary shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

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resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without negligence or bad faith while it acted as Depositary.

(22) Resignation and Removal of the Depositary; Appointment of Successor Depositary . The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 of the Deposit Agreement), or (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement.

The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 of the Deposit Agreement), or (ii) upon the appointment by the Company of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement.

In case at any time the Depositary acting hereunder shall resign or be removed, the Company shall use its commercially reasonable efforts to appoint a successor depositary, which shall be a bank or trust company having an office in the Borough of Manhattan, the City of New York. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor (other than as contemplated in Sections 5.8 and 5.9 of the Deposit Agreement). The predecessor depositary, upon payment of all sums due it and on the written request of the Company, shall, (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9 of the Deposit Agreement), (ii) duly assign, transfer and deliver all of the Depositary’s right, title and interest to the Deposited Property to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding ADSs and such other information relating to ADSs and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly provide notice of its appointment to such Holders.

Any entity into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act.

(23) Amendment/Supplement . Subject to the terms and conditions of this Paragraph (23) and Section 6.1 of the Deposit Agreement and applicable law, this ADR and the provisions of the Deposit Agreement may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the prior written consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and other

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governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding ADSs until the expiration of thirty (30) days after notice of such amendment or supplement shall have been given to the Holders of outstanding ADSs. Notice of any amendment to the Deposit Agreement or any ADR shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided , however , that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment ( e.g. , upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be settled solely in electronic book‑entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADSs, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement and this ADR, if applicable, as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such ADS and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require an amendment of, or supplement to, the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and this ADR at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement and this ADR in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.

(24) Termination . The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. If ninety (90) days shall have expired after the Depositary shall have delivered to the Company a written notice of its election to resign, or the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and, in either case, a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by distributing notice of such termination to the Holders of all ADSs then outstanding at least thirty (30) days prior to the date fixed in such notice for such termination. The date so fixed for termination of the Deposit Agreement in any termination notice so distributed by the Depositary to the Holders of ADSs is referred to as the “ Termination Date ”. Until the Termination Date, the Depositary shall continue to perform all of its obligations under the Deposit Agreement, and the Holders and Beneficial Owners will be entitled to all of their rights under the Deposit Agreement.

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At any time after the Termination Date, the Depositary may sell the Deposited Property then held under the Deposit Agreement and shall after such sale hold un-invested the net proceeds of such sale, together with any other cash then held by it under the Deposit Agreement, in an un-segregated account and without liability for interest, for the pro rata benefit of the Holders whose ADSs have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement except (i) to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the fees and charges of, and expenses incurred by, the Depositary, and all applicable taxes or governmental charges for the account of the Holders and Beneficial Owners, in each case upon the terms set forth in Section 5.9 of the Deposit Agreement), and (ii) as may be required at law in connection with the termination of the Deposit Agreement. After the Termination Date, the Company shall be discharged from all obligations under the Deposit Agreement, except for its obligations to the Depositary under Sections 5.8, 5.9 and 7.6 of the Deposit Agreement. The obligations under the terms of the Deposit Agreement of Holders and Beneficial Owners of ADSs outstanding as of the Termination Date shall survive the Termination Date and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement (except as specifically provided in the Deposit Agreement).

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(25) Compliance with U.S. Securities Laws . Notwithstanding any provisions in this ADR or the Deposit Agreement to the contrary, the withdrawal or delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to the Form F-6 Registration Statement, as amended from time to time, under the Securities Act.

(26) Certain Rights of the Depositary; Limitations . Subject to the further terms and provisions of this Paragraph (26), the Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs. In its capacity as Depositary, the Depositary shall not lend Shares or ADSs; provided, however, that the Depositary may (i) issue ADSs prior to the receipt of Shares pursuant to Section 2.3 of the Deposit Agreement and (ii) deliver Shares prior to the receipt of ADSs for withdrawal of Deposited Securities pursuant to Section 2.7 of the Deposit Agreement, including ADSs which were issued under (i) above but for which Shares may not have been received (each such transaction a “ Pre-Release Transaction ”). The Depositary may receive ADSs in lieu of Shares under (i) above and receive Shares in lieu of ADSs under (ii) above. Each such Pre-Release Transaction will be (a) subject to a written agreement whereby the person or entity (the “ Applicant ”) to whom ADSs or Shares are to be delivered (w) represents that at the time of the Pre-Release Transaction the Applicant or its customer owns the Shares or ADSs that are to be delivered by the Applicant under such Pre-Release Transaction, (x) agrees to indicate the Depositary as owner of such Shares or ADSs in its records and to hold such Shares or ADSs in trust for the Depositary until such Shares or ADSs are delivered to the Depositary or the Custodian, (y) unconditionally guarantees to deliver to the Depositary or the Custodian, as applicable, such Shares or ADSs, and (z) agrees to any additional restrictions or requirements that the Depositary deems appropriate, (b) at all times fully collateralized with cash, U.S. government securities or such other collateral as the Depositary deems appropriate, (c) terminable by the Depositary on not more than five (5) business days’ notice and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The Depositary will normally limit the number of ADSs and Shares involved in such Pre-Release Transactions at any one time to thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstanding under (i) above), provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it deems appropriate.

The Depositary may also set limits with respect to the number of ADSs and Shares involved in Pre-Release Transactions with any one person on a case-by-case basis as it deems appropriate. The Depositary may retain for its own account any compensation received by it in conjunction with the foregoing. Collateral provided pursuant to (b) above, but not the earnings thereon, shall be held for the benefit of the Holders (other than the Applicant). The Depositary may issue ADSs against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares. Such evidence of rights shall consist of written blanket or specific guarantees of ownership of Shares furnished by the Company or any such custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares.

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(27) Governing Law / Waiver of Jury Trial . The Deposit Agreement and the ADRs shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York applicable to contracts made and to be wholly performed in the State. Notwithstanding anything contained in the Deposit Agreement, any ADR or any present or future provisions of the laws of the State of New York, the rights of holders of Shares and of any other Deposited Securities and the obligations and duties of the Company in respect of the holders of Shares and other Deposited Securities, as such, shall be governed by the laws of England and Wales (or, if applicable, such other laws as may govern the Deposited Securities).

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(ASSIGNMENT AND TRANSFER SIGNATURE LINES)

FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto ______________________________ whose taxpayer identification number is _______________________ and whose address including postal zip code is ________________, the within ADR and all rights thereunder, hereby irrevocably constituting and appointing ________________________ attorney‑in‑fact to transfer said ADR on the books of the Depositary with full power of substitution in the premises.



Dated:	Name:
		By:
		Title:

NOTICE: The signature of the Holder to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatsoever.

If the endorsement be executed by an attorney, executor, administrator, trustee or guardian, the person executing the endorsement must give his/her full title in such capacity and proper evidence of authority to act in such capacity, if not on file with the Depositary, must be forwarded with this ADR.

SIGNATURE GUARANTEED

All endorsements or assignments of ADRs must be guaranteed by a member of a Medallion Signature Program approved by the Securities Transfer Association, Inc.

Legends
[The ADRs issued in respect of Partial Entitlement American Depositary Shares shall bear the following legend on the face of the ADR: “This ADR evidences ADSs representing 'partial entitlement' Shares of Realm Therapeutics plc and as such do not entitle the holders thereof to the same per-share entitlement as other Shares (which are 'full entitlement' Shares) issued and outstanding at such time. The ADSs represented by this ADR shall entitle holders to distributions and entitlements identical to other ADSs when the Shares represented by such ADSs become 'full entitlement' Shares.”]

A-28

EXHIBIT B

FEE SCHEDULE

ADS FEES AND RELATED CHARGES

All capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Deposit Agreement.

I. ADS Fees

The following ADS fees are payable under the terms of the Deposit Agreement:



Service	Rate	By Whom Paid
(1) Issuance of ADSs ( e.g. , an issuance upon a deposit of Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason), excluding issuances as a result of distributions described in paragraph (4) below.	Up to U.S. $5.00 per 100 ADSs (or fraction thereof) issued.	Person for whom ADSs are issued.
(2) Cancellation of ADSs ( e.g. , a cancellation of ADSs for Delivery of deposited Shares, upon a change in the ADS(s)-to-Share(s) ratio, or for any other reason).	Up to U.S. $5.00 per 100 ADSs (or fraction thereof) cancelled.	Person for whom ADSs are being cancelled.
(3) Distribution of cash dividends or other cash distributions ( e.g. , upon a sale of rights and other entitlements).	Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held.	Person to whom the distribution is made.
(4) Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) an exercise of rights to purchase additional ADSs.	Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held.	Person to whom the distribution is made.
(5) Distribution of securities other than ADSs or rights to purchase additional ADSs ( e.g. , spin-off shares).	Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held.	Person to whom the distribution is made.
6) ADS Services.	Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the Depositary.	Person holding ADSs on the applicable record date(s) established by the Depositary.

B-1


II.	Charges


(i)	taxes (including applicable interest and penalties) and other governmental charges;


(ii)	such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities on the share register and applicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;


(iii)	such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of the person depositing Shares or withdrawing Deposited Securities or of the Holders and Beneficial Owners of ADSs;


(iv)	the expenses and charges incurred by the Depositary in the conversion of foreign currency;


(v)	such fees and expenses as are incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to Shares, Deposited Securities, ADSs and ADRs; and


(vi)	the fees and expenses incurred by the Depositary, the Custodian, or any nominee in connection with the servicing or delivery of Deposited Property.

B-2

Exhibit 4.3

DATED , 2017

WARRANT INSTRUMENT



THIS WARRANT INSTRUMENT is made on	, 2017

REALM THERAPEUTICS PLC, a company incorporated under the laws of England and Wales, with a registered office at Cannon Place, 78 Cannon Street, London EC4N 6AF, United Kingdom (the “ Company ”).

AGREED TERMS

This warrant instrument (this “ Warrant Instrument ”) has been entered into by the Company by way of deed poll relating to the Warrants to subscribe for the Warrant Shares (as such terms are defined herein), subject to the Company's articles of association.

This Warrant Instrument and the exhibits and appendices set out the terms and conditions of the Warrants.

Subject to the terms herein, no modification to this Warrant Instrument may be effected except by deed poll executed by the Company.

This Warrant Instrument, and any non- contractual rights or obligations arising out of or in connection with it or its subject matter, shall be governed by and construed in accordance with English law.

This Warrant Instrument has been duly executed by the Company and delivered as a deed on the date shown above.



EXECUTED as a DEED by	)
REALM THERAPEUTICS PLC	)
acting by a director	)
in the presence of:
	Director

Witness signature:

Witness name:

Witness address:

Terms and Conditions of the Warrants


1.	Terms and Conditions of the Warrants


1.1	Background and Reasons for Issuing the Warrants

At a general meeting of shareholders of Realm Therapeutics plc (the “ Company ”) held on October 9, 2017, the Board of Directors of the Company (or a duly authorised committee thereof) were authorised to issue certain warrants (the “ Warrants ”) free from pre-emption providing for the subscription of new ordinary shares of 10 pence each in the capital of the Company (the “ Shares ”) in accordance with the Companies Act 2006 (the “ Companies Act ”) and the Company's articles of association and on the terms and conditions set out herein (the “ Terms and Conditions ”).

The issuance of the Warrants is made pursuant to these Terms and Conditions.

In respect of the Private Placement (defined below), these Terms and Conditions will be appended to a securities purchase agreement dated September 21, 2017 (the “ Securities Purchase Agreement ”) between the Company and certain investors (the “ US Investors ”) in an offering exempt from registration pursuant to Regulation D under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), and to certain other investors (the “ Private Placement Offshore Investors ”), in an offering exempt from registration pursuant to Regulation S under the Securities Act (“ Regulation S ”) under which the US Investors and the Private Placement Offshore Investors have, subject to certain terms and conditions, undertaken to subscribe for securities of the Company (the “ Units ”), with each Unit consisting of (i) one Share; and (ii) one Warrant to purchase two-fifths (0.40) of a Share, at a purchase price of £0.29 per Unit and, out of such purchase price, £0.01 shall be allocated as the consideration for the issue of each Warrant (the “ Private Placement ”).

Concurrently with the Private Placement there will be a parallel offshore-only offering (together with the Private Placement, the “ Offerings ”) to certain investors pursuant to Regulation S (the “ Offshore Investors ” and, together with the US Investors and the Private Placement Offshore Investors, the “ Investors ”) under which the Offshore Investors have, subject to certain terms and conditions, undertaken to subscribe for Units, with each Unit consisting of (i) one Share; and (ii) one Warrant to purchase two -fifths (0.40) of a Share, at a purchase price of £0.29 per Unit and, out of such purchase price, £0.01 shall be allocated as the consideration for the issue of each Warrant (the “ Parallel Offshore Transaction ”, together with the Private Placement, the “ Transaction ”).


1.2	Number of Warrants

The Company shall issue Warrants to the Investors entitling the holders thereof (the “ Warrantholders ”) to subscribe for in aggregate a maximum of 26,558,600 Shares in accordance with Section 2, subject to adjustment as described in these Terms and Conditions.


1.3	Subscription of Warrants

In accordance with the terms of the Offerings, the Warrants have been subscribed for by and shall be issued to the Investors at the completion of the Transaction. The subscription price in respect of each Warrant shall be £0.01 (payable pursuant to Section 2 of the Securities Purchase Agreement or Clause 3(B) of the Placing Agreement, as applicable).

The Warrants will be issued in certificated form in the form set out in Exhibit C (each such certificate, a “ Warrant Certificate ”). The Company or its duly authorised agent shall maintain a register of the holders of Warrants, the Warrant Certificates they hold, and the number of Warrant Shares (defined below) for which their Warrants are exercisable.

The Warrants will not be listed by the Company on a regulated market or other trading platform.


1.4	Transfer of Warrant

The holder of the Warrant to be transferred or pledged must, prior to transfer or pledge of the Warrant, deliver to the Company: (a) the original Warrant Certificate (or an indemnity in a form satisfactory to the Company (acting reasonably) in the event that the Warrant Certificate is lost or destroyed); and (b) a duly executed Warrant Assignment in the form of Exhibit A.


2.	Terms and Conditions of Share Subscription


2.1	Right to Subscribe for Warrant Shares

Each Warrant Certificate entitles its holder to subscribe for a number of new Shares set forth in the Warrant Certificate (the “ Warrant Shares ”), subject to adjustment as described in these Terms and Conditions. The Warrants may be exercised in whole or in part and, if in part, may be exercised from time to time.

If this Warrant shall have been exercised in part, the Company shall, at the request of a Warrantholder and upon surrender of this Warrant Certificate, at the time of delivery of the Warrant Shares, deliver to the Warrantholder a new Warrant evidencing the rights of the Warrantholder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

No fractional shares shall be issued upon the exercise of any Warrant. As to any fraction of a share which the Warrantholder would otherwise be entitled to purchase upon such exercise (determined on an aggregate basis with all other Warrants then being exercised by the Warrantholder), the Company shall round up to the next whole share.


2.2	Subscription Price

The subscription price for each Warrant Share is £0.58 (which price is expressed on a per-Share basis), subject to adjustment as described in these Terms and Conditions (the “ Warrant Exercise Price ”). The Warrant Exercise Price shall be booked in its entirety to the share capital (including to the extent relevant the share premium account) of the Company.


2.3	Share Subscription, Payment and Registration of Shares

Unless otherwise specifically provided under these Terms and Conditions, the Warrants shall be exercisable for the Warrant Shares as set forth in this Section 2.3 during the subscription period that commences on the date of issue of the Warrants and ends on [•][i.e. 30 months after the date of completion of the Transaction] (the “ Share Subscription Period ”).

The Warrants may be exercised in whole or in part, at any time or from time to time on any Business Day (meaning a day on which banks are open for normal business in London and New York (other than a Saturday, Sunday or a public holiday) (any such day being a “ Business Day ”) during the Share Subscription Period, by surrender of the Warrant Certificate and the exercise notice in the form set out in Exhibit B (the “ Exercise Notice ”), duly completed and executed by the Warrantholder, to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Warrantholder at the address of the Warrantholder appearing on the books of the Company) with the Warrantholder making payment to the Company in cash of the Warrant Exercise Price for the Warrant Shares (the “ Exercise Amount ”) by wire transfer of immediately available funds to the following account of the Company:

Beneficiary Bank: Wells Fargo Bank NA, San Francisco

Swift: WFBIUS6WFFX

Intermediary Bank: National Westminster Bank Plc, London

Intermediary Bank SWIFT: NWBKGB2L

Beneficiary Customer: Wells Fargo Clearing Services, LLC

1 North Jefferson

St. Louis, MO 63103

Beneficiary Account Number: 4122023377

Further Credit: Realm Therapeutics, Inc., Acct # 8622-9179

(or such other account as the Company may from time to time notify the Warrantholder in replacement thereof) in an amount equal to the Exercise Amount, with such exercise to be effective upon receipt by the Company of such notice and such Exercise Amount (the “ Effective Exercise ”).

Unless there is then an effective registration statement covering the issuance or resale of the Warrant Shares to be issued upon exercise, the Warrant Shares shall bear the legend set forth in Section 2.9. If delivered to the Warrantholder via CREST, the Warrant Shares shall be issued free of any restrictive legends (with such Shares being eligible for trading on AIM, a market operated by the London Stock Exchange plc) or, if there is an effective registration statement covering the Warrant Shares to be issued upon exercise, then the Warrant Shares following a Listing or a U.S. IPO (each, as defined in the Securities Purchase Agreement), the Warrant Shares shall be delivered via DTC (with such shares being eligible for listing on the U.S. securities exchange on which the Shares (or ADSs, as defined in the Securities Purchase Agreement) are then listed for trading, as applicable.

Once received by the Company, an Exercise Notice shall be irrevocable save with the consent of the Directors of the Company (or a duly authorised committee thereof).

The Company shall issue Warrant Shares on the basis of the Warrants validly exercised in

accordance with this Section 2.3 to the exercising Warrantholder. Warrant Shares issued on the basis of Warrants validly exercised in accordance with this Section 2.3 shall be: (i) written up in the Company's register of members and, if the applicable Exercise Notice requires the issue of share certificates, the applicable share certificates shall be issued to the Relevant Warrantholders within 10 Business Days of the issuance of the referable Warrant Shares; (ii) admitted to trading as set forth in Section 4.1; and (iii) if the applicable Exercise Notice requires delivery in uncertificated form, delivered to the relevant Warrantholder's CREST account as set forth in Section 4.1.

Delivery of the Warrant Shares issuable upon exercise of this Warrant shall be made as soon as practicable but in any case within five (5) Business Days after the Effective Exercise.

The Warrants shall be exercised and the Warrant Shares shall be issued subject to and in accordance with any applicable laws or regulations to which the Company is subject including the AIM Rules for Companies and the Market Abuse Regulation (EU 596/2014) and any other laws or regulations applicable in the jurisdiction in which the Warrantholder is located.

Any Warrants which have not been exercised prior to the expiry of the Share Subscription Period shall lapse. Following the expiry of the Share Subscription Period all Warrant Certificates shall be deemed cancelled and will not in any circumstances be available for reissue or be valid for any purpose.


2.4	Shareholder Rights

The Warrant Shares subscribed for on the basis of the Warrants will entitle the holders thereof to any possible dividend and to other shareholder rights upon their proper registration in the Company's register of members, but Warrantholders shall not be entitled to any dividend, voting or other shareholder rights prior to such time, except as set forth herein.


2.5	Adjustment for Subdivisions and Consolidations

If the Company, prior to the end of the Share Subscription Period, shall effect a subdivision of its ordinary shares, the Warrant Exercise Price then in effect immediately before that subdivision shall be proportionately decreased and the number of shares issuable upon exercise of such Warrant shall be proportionately increased. If the Company, prior to the end of the Share Subscription Period shall consolidate its ordinary shares, the Warrant Exercise Price then in effect immediately before the consolidation shall be proportionately increased and the number of shares issuable upon exercise of such Warrant shall be proportionately decreased. Any adjustment under this Section 2.5 shall become effective at the close of business on the date the subdivision or consolidation becomes effective.


2.6	Adjustment for Certain Dividends and Distributions

If the Company, prior to the end of the Share Subscription Period, shall make or issue, or fix a record date for the determination of holders of its ordinary shares entitled to receive, a dividend or other distribution to the shareholders payable in ordinary shares in the Company,

then and in each such event the Warrant Exercise Price then in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Warrant Exercise Price then in effect by a fraction:


(a)	the numerator of which shall be the total number of ordinary shares outstanding immediately prior to the time of such issuance or the close of business on such record date, and


(b)	the denominator of which shall be the total number of ordinary shares outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of ordinary shares issuable in payment of such dividend or distribution;

and the number of shares issuable upon exercise of such Warrant shall be multiplied by the inverse of such fraction; provided , however , that if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Warrant Exercise Price and the issuable number of shares shall be recomputed accordingly as of the close of business on such date and thereafter the Warrant Exercise Price and the issuable number of shares shall be adjusted pursuant to this paragraph as of the time of actual payment of such dividends or distributions, if any, and (ii) no such distribution or dividend shall be made to the extent that the consequent adjustment under this Section 2.6 would be unlawful (including pursuant to section 549 of the Companies Act) and/or would be subject to pre-emption rights (including pursuant to section 561 of the Companies Act).


2.7	Adjustment for Fundamental Transactions

If, prior to the end of the Share Subscription Period, (a) the Company effects any merger, reorganization, consolidation or other similar transaction of the Company with or into another Person, in which the Company is not the survivor or the shareholders of the Company immediately prior to such transaction do not own, directly or indirectly, at least 50% of the voting securities and economic interests of the surviving entity, (b) the Company effects any sale or similar transaction of all or substantially all of its assets or a majority of its ordinary shares are acquired by a third party, in each case in one or a series of related transactions, (c) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which all or substantially all of the holders of ordinary shares are permitted to tender or exchange their shares for other securities, cash or property, or (d) the Company effects any reclassification of the ordinary shares or any compulsory share exchange pursuant to which the ordinary shares are effectively converted into or exchanged for other securities, cash or property (other than those covered by Sections 2.5 or 2.6) (in any such case, a “ Fundamental Transaction ”), then the Company shall use its best efforts to ensure that lawful and adequate provision shall be made whereby each Warrantholder shall thereafter continue to have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares issuable upon exercise of the Warrants held by such Warrantholder (without regard to any limitations on exercise contained in such Warrants), shares of voting stock (the “ Alternate Warrants ”) in such successor entity, surviving entity or entity purchasing or otherwise acquiring such assets in the Fundamental Transaction (as the case may be, the “ Acquirer ”), such that the aggregate value

of the Warrantholder’s warrants to purchase such number of shares of the Acquirer (where the value of a warrant to purchase one share in the Acquirer is determined in accordance with the Black-Scholes Option Pricing formula set forth in Exhibit D hereto) is equivalent to the aggregate value of the Warrants held by such Warrantholder (where the value of each Warrant to purchase one Warrant Share is determined in accordance with the Black-Scholes Option Pricing formula set forth Exhibit E hereto). Furthermore, Alternate Warrants shall have the same expiration date as the Warrants, and shall have a strike price, KAcq, that is calculated in accordance with Exhibit D hereto. For the avoidance of doubt, if the successor, surviving or acquiring entity, as the case may be, is a member of a consolidated group for financial reporting purposes, the “Acquirer” shall be deemed to be the parent of such consolidated group for purposes of this Section 2.7 and Exhibit D hereto.

Moreover, appropriate provision shall be made with respect to the rights and interests of each Warrantholder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Exercise Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock thereafter deliverable upon the exercise thereof. The Company shall not effect any such Fundamental Transaction unless prior to or simultaneously with the consummation thereof the successor corporation resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume by written instrument, reasonably deemed by the Board of Directors of the Company to be satisfactory in form and substance, the obligation to deliver to the holder of the Warrants, at the last address of such holder appearing on the books of the Company, the Alternate Warrants to purchase such shares of stock, as, in accordance with the foregoing provisions, such holder may be entitled to purchase, and otherwise assume the other obligations under these Warrants. The provisions of this Section 2.7 shall similarly apply to successive,Fundamental Transactions. Notwithstanding anything to the contrary hereunder, if the Fundamental Transaction, is (1) a transaction where the consideration paid to the holders of the Shares consists of cash, (2) a “Rule 13e-3 transaction” as defined in Rule 13e -3 under the Securities Exchange Act of 1934, as amended, (3) a Fundamental Transaction involving a person or entity not traded on a regulated market (within the meaning of the Markets in Financial Instruments Directive (2004/39(EC))) or a United States national securities exchange or (4) a transaction for which the holders of Warrants Shares and Warrants representing at least of a majority of the Warrant Shares outstanding or issuable upon the exercise of all outstanding Warrants (without regard to any limitations on exercise) reasonably determine that the Alternate Warrants proposed to be provided by the Acquirer do not satisfy the terms hereof (provided, that such holders consult with the Company and provide a written basis for such determination and that includes evidence of such determination by a majority of Warrantholders), at the request of the Warrantholder delivered before the ninetieth (90th) day after such Fundamental Transaction, the Company (or the Acquirer) shall purchase this Warrant from the Warrantholder by paying to the Warrantholder, within five (5) Business Days after such request (or, if later, on the effective date of the Fundamental Transaction), cash in an amount equal to the aggregate value of this Warrant, where the value of each Warrant to purchase one Warrant Share is calculated in accordance with the Black-Scholes Option Pricing formula set forth in Exhibit E hereto and such valuation and payment shall be without regard to any limitations on exercise contained in this Warrant.


2.8	Notice of Adjustment

A reasonable period of time, and in no event less than ten (10) Business Days, prior to the record date or effective date (which in any event shall not be set prior to the public announcement of the transaction), as the case may be, of (i) any action which requires or might require an adjustment or readjustment of the Warrant Exercise Price or the number, amount or type of securities or other assets issuable upon exercise of the Warrants or (ii) a Fundamental Transaction, the Company shall give notice to the Warrantholders of such event, describing such event in reasonable detail and specifying the record date or effective date, as the case may be, and, with if determinable, the required adjustment and computation thereof or Alternate Consideration to be provided, respectively. If the required adjustment or Alternate Consideration to be provided, respectively, is not determinable at the time of such notice, the Company shall provide such information to the Warrantholders as soon as reasonably practicable after such information becomes determinable.


2.9	Legend

Neither the Warrants nor the Warrant Shares issuable upon exercise of the Warrants have been or will be registered under the Securities Act or under any state securities laws of the United States, except as provided under the Registration Rights Agreement. Except as otherwise permitted by Section 2.3, each Warrant Certificate and each certificate representing the Warrant Shares shall bear the following legends or such variations thereof as the Company may prescribe from time to time:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT IN COMPLIANCE WITH THE SECURITIES ACT, (B) RULE 903 or 904 UNDER THE SECURITIES ACT, OR (C) RULE 144 UNDER THE SECURITIES ACT (UPON FURNISHING TO THE COMPANY SUCH REPRESENTATION LETTERS OR OPINION OF U.S. COUNSEL AS THE COMPANY MAY REQUIRE), OR (II) UNLESS AN OPINION OF U.S. COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, SHALL BE PROVIDED TO THE COMPANY, PROVIDING THAT SUCH SALE, TRANSFER OR ASSIGNMENT DOES NOT REQUIRE REGISTATION UNDER THE SECURITIES ACT.


2.10	Exercise Limitations

Notwithstanding anything to the contrary in these Terms and Conditions, no transaction that would give rise to an adjustment pursuant to these Terms and Conditions shall be effected if any such adjustment would: (i) be in contravention of, or could result in an issue of Shares in contravention of, the authority conferred on the Directors of the Company under Section 551 of the Companies Act; or (ii) require the Company to issue Shares at a discount to their nominal value.


2.11	Buy-in.

If, by the close of the fifth (5th) Business Day after valid delivery of a Exercise Notice by the Warrantholder and the payment to the Company of the aggregate exercise price by such Warrantholder for all or any part of this Warrant, the Company through its own neglect or willful default fails to deliver to the Warrantholder the required number of Warrant Shares pursuant to the terms of said exercise, and if after such fifth (5th) Business Day and prior to the Warrantholder’s receipt of such Warrant Shares, the Warrantholder purchases (in an open market transaction) Shares to deliver in satisfaction of a sale by the Warrantholder of the Warrant Shares which the Warrantholder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall, within three (3) Business Days after the Warrantholder’s request and in the Company’s sole discretion, either (1) pay in cash to the Warrantholder an amount equal to the Warrantholder’s total purchase price (including brokerage commissions actually incurred by the Warrantholder, if any) for the Shares so purchased, at which point the Company’s obligation to deliver such Warrant Shares shall terminate, or (2) promptly honor its obligation to deliver to the Warrantholder the Warrant Shares and pay cash to the Warrantholder in an amount equal to the excess (if any) of the Warrantholder’s total purchase price (including brokerage commissions actually incurred, if any) for the Shares so purchased in the Buy -In over the product of (A) the number of Shares purchased in the Buy-In, multiplied by (B) the closing price of a Share on AIM on the date of the Exercise Notice.


3.	Variation of Rights

3.1

Subject to Section 3.3, all or any of the rights for the time being attached to the Warrants may from time to time (whether or not the Company is being wound up) be altered or abrogated with the consent in writing of the Company and with either the consent in writing of any Warrantholders entitled to subscribe for not less than 66 2/3 per cent. of the Shares which are subject to outstanding Warrants or with the sanction of a Special Resolution of the Warrantholders. All the provisions of the Articles of Association of the Company as to general meetings of the Company shall mutatis mutandis apply to any separate meeting of the Warrantholders as though the Warrants were a class of shares forming part of the Company and as if such provisions were expressly set out in extenso herein but so that:


(a)	the necessary quorum shall be the Warrantholders (present in person or by proxy) entitled to subscribe for one-third in nominal amount of the Shares subject to outstanding Warrants;


(b)	every Warrantholder present in person or by proxy at any such meeting shall be entitled on a show of hands to one vote and on a poll to one vote for every Share for which it is entitled to subscribe pursuant to the Warrants;


(c)	any Warrantholder or Warrantholders of 10 per cent. or more of the aggregate outstanding Warrants present in person or by proxy may demand or join in demanding a poll; and


(d)	if at any adjourned meeting a quorum as above defined is not present those holders of outstanding Warrants who are then present in person or by proxy shall be a quorum.


3.2	“Special Resolution” for the purposes of this Section 3 means a resolution proposed at a meeting of the Warrantholders duly convened and held and passed by a majority consisting of not less than 66 2/3 per cent. of the votes cast, whether on a show of hands or on a poll.

3.3

In addition, the Directors of the Company (or a duly authorised committee thereof) in its sole discretion may amend the provisions of the Warrants without the consent of the Warrantholders if such amendment would not be prejudicial to the interests of the Warrantholders in any material respect. Any such amendment shall be notified to the Warrantholders in writing as soon as reasonably practicable.


4.	Other Terms


4.1	Stock Exchange Listing and Government Approvals

The Company will, at its own expense, use its commercially reasonable efforts to: (a) maintain the listing of its ordinary shares on the AIM Market operated by the London Stock Exchange plc (“ AIM ”) or any other recognized exchange in the determination of the Company’s Board of Directors; (b) obtain and keep effective any and all permits, consents and approvals of governmental agencies and authorities which may from time to time be required of the Company in order to satisfy its obligations under these Terms and Conditions; (c) to effect the admission to trading of the Warrant Shares on AIM by the time of the Closing; and (d) with respect to Warrant Shares that are to be delivered in uncertificated form (as specified in the applicable Exercise Notice), deliver such Shares, as soon as possible following issuance, to the CREST account provided for in such Exercise Notice, provided ,that if there is a failure within the CREST system on the date of issuance of the Warrant Shares that renders delivery of uncertificated shares impracticable, the Company may either, at the Warrantholder's election (1) deliver definitive share certificates in accordance with Section 2.3 in lieu of uncertificated shares or (2) delay delivery of Warrant Shares until such failure ceases to exist (such delay not to exceed three Business Days from the date the failure ceases to exist).


4.2	Governing Law and Jurisdiction

These Terms and Conditions, and any non-contractual rights or obligations arising out of or in connection with them or their subject matter, shall be governed by and construed in accordance with English law.


4.3	Notices

All notices related to the Warrants by the Company shall be sent by express courier or e-mail to the addresses provided to the Company by the respective Warrantholders. The notices related to the Warrants to the Company may be sent by express courier or e-mail:

Realm Therapeutics plc

address: 267 Great Valley Parkway, Malvern, Pennsylvania, United States of America

attention: Marella Thorell, Chief Financial Officer

mthorell@realmtx.com

With copies (which shall not constitute notice) to:

CMS Cameron McKenna Nabarro Olswang LLP

Cannon Place

78 Cannon Street

London EC4N 6AF

Attention: Gary Green

Gary.Green@cms-cmno.com

and

Cooley LLP

1114 Avenue of the Americas

New York, New York 10036

United States of America

Attention: Joshua A. Kaufman

josh.kaufman@cooley.com

A notice made in accordance with the above shall be deemed to have been received by its recipient (i) upon receipt, when sent by e-mail (provided that confirmation of transmission is mechanically or electronically generated and a read receipt is received, and in each case kept on file by the sending party) or (ii) on the fourth (4th) Business Day after the day of sending if sent by express courier.


4.4	Lost or destroyed Warrant Certificates

If any certificate for Warrant Certificate is worn out or defaced then upon production of such Warrant Certificate to the Directors of the Company they may cancel the same and may issue a new Warrant Certificate in lieu thereof. If any such Warrant Certificate be lost or destroyed then upon proof thereof to the reasonable satisfaction of the Directors of the Company in their sole discretion (or in default of proof, on such indemnity as the Directors of the Company may deem adequate being given) a new Warrant Certificate in lieu thereof may be given to the persons entitled to such lost or destroyed Warrant Certificate free of charge (save as regards any payment pursuant to any such indemnity).


4.5	Taxes, duties, etc

The Warrantholders shall be solely responsible for any taxes, duties and other such payments possibly incurred by the holders of Warrants in relation to receiving the Warrants and the subscription of any Warrant Shares under these Terms and Conditions.


4.6	Exercise limitation

Notwithstanding any provisions herein to the contrary, from and after the earlier of a Listing or a U.S. IPO (each, as defined in the Securities Purchase Agreement), so long as the Company does not qualify as a “foreign private issuer” (as that term is defined in the U.S. Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)), the Warrantholder shall not be entitled to exercise this Warrant for a number of Shares in excess of that number of

Shares which, upon giving effect to such exercise, would cause the aggregate number of Shares deemed beneficially owned by the Warrantholder to exceed 9.99% of the outstanding Shares following such exercise. For purposes of the foregoing proviso, the aggregate number of Shares beneficially owned by the Warrantholder shall include the number of Shares issuable upon exercise of this Warrant with respect to which determination of such proviso is being made, but shall exclude the Shares which would be issuable upon (i) exercise of the remaining, unexercised Warrants beneficially owned by the Warrantholder and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the Warrantholder subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the preceding sentence, for purposes of this Section 4.6, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. Notwithstanding the foregoing, the Warrantholder may waive the foregoing limitation, or increase or decrease the foregoing limitation to any other percentage, by written notice to the Company; provided that a waiver by the Warrantholder of the foregoing limitation or a request to increase such limitation requires not less than 61 days prior written notice (with such waiver of the foregoing limitation or request to increase such limitation taking effect only upon the expiration of such 61 day notice period and applying only to the Warrantholder and not to any other holder of Warrants). For purposes of this Section 4.6, in determining the number of outstanding Shares, the Warrantholder may rely on the number of outstanding Shares as reflected in (x) the Company’s disclosure of its total number of voting rights and capital pursuant to Disclosure Guidance and Transparency Rule 5.6, (y) a more recent public announcement by the Company or (z) any other notice by the Company or its registrar setting forth the number of Shares outstanding. Upon the written request of the Warrantholder, the Company shall use commercially reasonable efforts to confirm in writing or by electronic mail to the Warrantholder the number of Shares then outstanding within three (3) Business Days after written request by such Warrantholder. In any case, the number of outstanding Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Warrantholder since the date as of which such number of outstanding Shares was reported.


4.7	Registration Rights Agreement

The Warrantholder shall be entitled to the benefits of the Registration Rights Agreement with respect to the Registrable Securities (as defined in the Registration Rights Agreement), if any, represented hereby as if such Warrantholder was a signatory to the Registration Rights Agreement.

Exhibit A

Form of Warrant Assignment

To: Realm Therapeutics plc

Reference is made to the terms and conditions included in the Warrant Instrument, dated [●] 2017, concerning the issuance of Warrants by Realm Therapeutics plc (the “ Terms and Conditions ”). The capitalised terms used herein shall have the same meanings as in the Terms and Conditions.

[NOTE: IF THE FORM CONCERNS TRANSFER, THE FOLLOWING SHALL BE INCLUDED]

FOR VALUE RECEIVED [ ] (the “ Assignor ”) hereby notifies the Company that it has undertaken to sell, assign and transfer all of the rights of the Assignor under the Warrants to the Assignee(s) as set forth below:



Name(s) of Assignee(s)	Assignee(s) Contact Information	Number of Warrants

All notices to be given by the Company to the Assignor as Warrantholder shall be sent to the Assignee(s) at the above listed address(es).

[NOTE: IF THE FORM CONCERNS PLEDGE, THE FOLLOWING SHALL BEINCLUDED]

[ ] (the “Pledgor”) hereby notifies that it has undertaken to irrevocably and unconditionally pledge [with first priority all of the rights of, title to and other interests in] the Warrants to the Pledgee(s) as set forth below:



Name(s) of Pledgee(s)	Number of Warrants Pledged

[NOTE: THE BELOW SHALL BE INCLUDED IN ALL FORMS]



Place and date:
Name of the [Assignor / Pledgor]:

By:		By:
Title:		Title:

The above [assignment / pledge] is acknowledged and accepted.

Place and date:



REALM THERAPEUTICS PLC
By:
Title:

Exhibit B

Form of Exercise Notice

To: Realm Therapeutics plc

Reference is made to the terms and conditions, dated , 2017, concerning the issuance of Warrants by Realm Therapeutics plc (the “ Terms and Conditions ”). The capitalized terms used herein shall have the same meanings as in the Terms and Conditions.

The undersigned hereby irrevocably elects to exercise the warrant issued to it by the Company, dated , 20 , Warrant Certificate No. ____________ (the “ Warrant Certificate ”), and purchase thereunder (and surrenders herewith the Warrant Certificate) as follows:


(1)	_______________Warrant Shares to be issued as ordinary shares pursuant to the Terms and Conditions


(2)	The undersigned tenders payment in full for the purchase price of the Warrant Shares being purchased in accordance with item (5) below, together with all applicable transfer taxes, if any.


(3)	Exercise Amount payable: GBP _______________


(4)	Please issue a certificate or certificates representing the Warrant Shares specified in Item (1) above in the name of the undersigned or in such other name as is specified below:





	(Name)




	(Address)


(5)	Please deliver the Warrant Shares specified in Item (1) above in uncertified form through CREST:



Name of CREST participant

CREST participant ID

Name of contact for settlement queries

Telephone number of contact

The Warrantholder represents and warrants that this Exercise Notice has been duly signed and constitutes a valid and binding act by the undersigned to exercise the said Warrants.



Place and date:

Name of the Warrantholder:



By:

Title:

Exhibit C

Form of Warrant Certificate

Certificate no: ____________

Realm Therapeutics plc (Incorporated under the Companies Act 2006 with registered number 5789798)

WARRANT to subscribe for ordinary shares of 10 pence each in the capital of Realm Therapeutics plc (the “ Shares ”) pursuant to a Warrant Instrument executed by Realm Therapeutics plc on [•], 2017 (the “ Warrant Instrument ”).



Certificate no:

Date of issue:

Number of Warrants:

THIS IS TO CERTIFY that			of

is the holder of the number of Warrants set out above, which are subject to the articles of association of the Company and otherwise on the terms and conditions contained in the Warrant Instrument.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT IN COMPLIANCE WITH THE SECURITIES ACT, (B) RULE 903 OR 904 UNDER THE SECURITIES ACT, OR (C) RULE 144 UNDER THE SECURITIES ACT (UPON FURNISHING TO THE COMPANY SUCH REPRESENTATION LETTERS OR OPINION OF U.S. COUNSEL AS THE COMPANY MAY REQUIRE), OR (II) UNLESS AN OPINION OF U.S. COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, SHALL BE PROVIDED TO THE COMPANY, PROVIDING THAT SUCH SALE, TRANSFER OR ASSIGNMENT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT.

This certificate has been executed on the date of issue.



EXECUTED by	)
REALM THERAPEUTICS PLC	)
acting by a director	)
in the presence of:
	Director

Witness signature:

Witness name:

Witness address:

Exhibit D

Black Scholes Option Pricing formula to be used when calculating the value of each new warrant to purchase one share in the Acquirer shall be:

CAcq = SAcqe ^{-λ(TAcq-tAcq)} N(d1)-KAcqe ^{-r(TAcq-tAcq)} N(d2), where

CAcq = value of each warrant to purchase one share in the Acquirer

SAcq = price of Acquirer’s stock as determined by reference to the volume-weighted average of the closing prices on the principal securities exchange on which the Acquirer’s stock is then traded over the 20-day period ending three trading days prior to the closing date of the Fundamental Transaction described in Section 2.7 if the Acquirer’s stock is then traded on such exchange or system, or the volume-weighted average of the closing bid or sale prices (whichever is applicable) in the over-the-counter market over the 20-day period ending three trading days prior to the closing date of the Fundamental Transaction if the Acquirer’s stock is then actively traded in the over-the-counter market, or the then most recently completed financing if the Acquirer’s stock is not then traded on a securities exchange or system or in the over-the-counter market.



TAcq = expiration date of new warrants to purchase shares

in the Acquirer = TCorp



tAcq = date of issue of new warrants to purchase shares in

the Acquirer



TAcq-tAcq = time until warrant expiration, expressed in years

σ = volatility = annualized standard deviation of daily log-returns (using a 262-day annualization factor) of the Acquirer’s stock price on the principal securities exchange on which the Shares are then traded over a consecutive 20-day trading period, determined by the Warrantholders, that is within the 100-day trading period ending on the trading day immediately after the public announcement of the Fundamental Transaction described in Section 2.7 if the Acquirer’s stock is then traded on such exchange or system, or the annualized standard deviation of daily-log returns (using a 262-day annualization factor) of the closing bid or sale prices (whichever is applicable) in the over-the-counter market over a consecutive 20-day trading period, determined by the Warrantholder, that is within the 100-day trading period ending on the trading day immediately after the public announcement of the Fundamental Transaction if the Acquirer’s stock is then actively traded in the over-the-counter market, or 0.50 (or 50.00%) if the Acquirer’s stock is not then traded on a securities exchange or system or in the over-the-counter market. In no event will the volatility variable be greater than 1.0 (or 100%).



N = cumulative normal distribution function

d1 = (ln(SAcq/KAcq) + (r-λ+σ ² /2)(TAcq-

tAcq)) ÷ (σ√(TAcq-tAcq)) ln = natural

logarithm

λ = dividend rate of the Acquirer for the most recent 12-month period at the time of closing of the Fundamental Transaction.

KAcq = strike price of new warrants to purchase shares in the Acquirer = KCorp *

(SAcq / SCorp)

r = annual yield, as reported by Bloomberg at time tAcq, of the United States Treasury security measuring the nearest time TAcq

d2= d1-σ√(TAcq-tAcq)

Exhibit E

Black Scholes Option Pricing formula to be used when calculating the value of each Warrant to purchase one share in the Company shall be:

CCorp = SCorpe ^{-λ(TCorp-tCorp)} N(d1)-KCorpe ^-

^{r(TCorp-tCorp)} N(d2), where CCorp = value of each

Warrant to purchase one share in the Company

SCorp = price of Company stock as determined by reference to the volume-weighted average of the closing prices on the principal securities exchange on which the Shares are then traded over the 20-day period ending three trading days prior to the closing date of the Fundamental Transaction described in Section 2.7 if the Company’s stock is then traded on such exchange or system, or the volume-weighted average of the closing bid or sale prices (whichever is applicable) in the over-the-counter market over the 20-day period ending three trading days prior to the closing date of the Fundamental Transaction if the Company’s stock is then actively traded in the over -the -counter market, or the then most recently completed financing if the Company’s stock is not then traded on a securities exchange or system or in the over-the-counter market.



TCorp = expiration date of Warrants to purchase shares in the Company



tCorp = date of the public announcement of transaction



TCorp - tCorp = time until Warrant expiration, expressed in years

σ = volatility = the annualized standard deviation of daily log-returns (using a 262-day annualization factor) of the Company’s stock price on the principal securities exchange on which the Shares are then traded over a consecutive 20-day trading period, determined by the Warrantholders, that is within the 100-day trading period ending on the trading day immediately after the public announcement of the Fundamental Transaction described in Section 2.7 if the Company’s stock is then traded on such exchange or system, or the annualized standard deviation of daily-log returns (using a 262-day annualization factor) of the closing bid or sale prices (whichever is applicable) in the over-the-counter market over a consecutive 20-day trading period, determined by the Warrantholder, that is within the 100-day trading period ending on the trading day immediately after the public announcement of the Fundamental Transaction if the Company’s stock is then actively traded in the over-the-counter market, or 0.50 (or 50%) if the Company’s stock is not then traded on a securities exchange or system or in the over-the-counter market. In no event will the volatility variable be greater than 1.0 or (100%).



N = cumulative normal distribution function

d1 = (ln(SCorp/KCorp) + r-λ+σ ² /2)(TCorp-

tCorp)) ÷ σ√(TCorp-tCorp)) ln = natural logarithm

λ = dividend rate of the Company for the most recent 12-month period at the time of closing of the Fundamental Transaction.



KCorp = strick price of warrant

r = annual yield, as reported by Bloomberg at time tCorp, of the United States Treasury security measuring the nearest time TCorp

d2 = d1-σ√(TCorp-tCorp)

Exhibit 5.1

22 May 2018

Realm Therapeutics plc

267 Great Valley Parkway

Malvern, PA 19355

United States of America

Re: Realm Therapeutics plc – Registration Statement on Form F-1 – Exhibit 5.1

Ladies and Gentlemen:

We have acted as English legal advisers to Realm Therapeutics plc, a public limited company incorporated in England and Wales (the “ Company ”) in connection with the registration statement on Form F-1 (such registration statement, as amended, including the documents incorporated by reference therein, the “ Registration Statement ”) filed with the U.S. Securities and Exchange Commission (the “ SEC ”) under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), relating to the resale by the Registered Holders (as such term is defined in the Registration Statement) of up to 5,079,994 American Depositary Shares (“ ADSs ”), each representing 25 ordinary shares of nominal value £0.10 each in the issued share capital of the Company (“ Ordinary Shares ”).


1.	INTRODUCTION


1.1	Purpose

In connection with the preparation and filing of the Registration Statement, to which this letter is attached as an exhibit, with the SEC, we have been asked to provide opinions on certain matters, as set out below. We have taken instruction in this regard solely from the Company.


1.2	Defined terms and headings

In this letter:


(a)	capitalised terms used without definition in this letter or the schedules hereto have the meanings assigned to them in the Registration Statement unless a contrary indication appears; and


(b)	headings are for ease of reference only and shall not affect interpretation.


1.3	Legal review

For the purpose of issuing this letter, we have examined such matters of fact and questions of law as we have considered appropriate. We have reviewed only the following documents and conducted only the following enquiries and searches:


(a)	an online search at Companies House in respect of information available for inspection on the Company’s file conducted on 22 May 2018;


(b)	an enquiry by telephone at the Central Index of Winding Up Petitions, London on 22 May 2018 at 9:00 a.m. (London time) ((a) and (b) together, the “ Searches ”);


(c)	a PDF copy of the executed written resolutions of the board of directors of the Company dated 21 May 2018 regarding, inter alia , the Registration Statement (the “ Written Resolutions ”);

Cooley (UK) LLP Dashwood 69 Old Broad Street London EC2M 1QS, UK

t: +44 (0) 20 7583 4055 f: +44 (0) 20 7785 9355 cooley.com

Cooley (UK) LLP is a limited liability partnership and is registered in England and Wales with registered number OC395270. Our registered office is at the address above. Cooley (UK) LLP is authorised and regulated by the Solicitors Regulation Authority (SRA number 617791). A list of the members of Cooley (UK) LLP and their professional qualifications is open to inspection at its registered office. The word 'partner,' used in relation to Cooley (UK) LLP, refers to a member of Cooley (UK) LLP or an employee or consultant of Cooley (UK) LLP (or any affiliated firm) of equivalent standing.


(d)	a PDF copy of the certificate of incorporation of the Company dated 21 April 2006;


(e)	a PDF copy of the certificate of incorporation on change of name of the Company dated 7 December 2016;


(f)	a PDF copy of the current articles of association of the Company adopted pursuant to a special resolution of the shareholders of the Company passed at the general meeting of the Company dated 9 October 2018 (the “ Articles ”); and


(g)	a draft copy of the Registration Statement.


1.4	Applicable law

This letter, the opinions given in it, and any non-contractual obligations arising out of or in connection with this letter and/or the opinions given in it, are governed by, and to be construed in accordance with, English law and relate only to English law as applied by the English courts, including the laws of the European Union to the extent having the force of law in England, as at today’s date. In particular:


(a)	we have not investigated the laws of any country other than England and we assume that no foreign law affects any of the opinions stated below;


(b)	we do not undertake or accept any obligation to update this letter and/or the opinions given in it to reflect subsequent changes in English law or factual matters; and


(c)	we express no opinion in this letter on the laws of any jurisdiction other than England. It is assumed that no foreign law which may apply to the matters contemplated by the Registration Statement, the Company, any document or any other matter contemplated by any document would or might affect this letter and/or the opinions given in it.


1.5	Assumptions and reservations

The opinions given in this letter are given on the basis of each of the assumptions set out in schedule 1 ( Assumptions ) and are subject to each of the reservations set out in schedule 2 ( Reservations ) to this letter. The opinions given in this letter are strictly limited to the matters stated in paragraph 2 ( Opinions ) below and do not extend, and should not be read as extending, by implication or otherwise, to any other matters.


2.	OPINION

Subject to paragraph 1 ( Introduction ) and the other matters set out in this letter and its schedules, and subject further to the following:


(a)	the Registration Statement, as finally amended, having become effective under the Securities Act; and


(b)	that the Written Resolutions were validly passed in accordance with all applicable laws, including, but not limited to, the Companies Act 2006 (the “ Act ”), regulations and the Articles,

it is our opinion that, as at today’s date, the Ordinary Shares underlying the ADSs being proposed for resale by the Registered Holders have been duly and validly authorised and issued, are fully paid and will not be subject to any call for payment of further capital.

Cooley (UK) LLP Dashwood 69 Old Broad Street London EC2M 1QS, UK

t: +44 (0) 20 7583 4055 f: +44 (0) 20 7785 9355 cooley.com


3.	EXTENT OF OPINIONS

We express no opinion as to any agreement, instrument or other document other than as specified in this letter or as to any liability to tax or duty which may arise or be suffered as a result of or in connection with the transactions contemplated by the Registration Statement.

This letter only applies to those facts and circumstances which exist as at today’s date and we assume no obligation or responsibility to update or supplement this letter to reflect any facts or circumstances which may subsequently come to our attention, any changes in laws which may occur after today, or to inform the addressee of any change in circumstances happening after the date of this letter which would alter our opinion.


4.	DISCLOSURE AND RELIANCE

This letter is addressed to you in connection with the Registration Statement. We consent to the filing of this letter as an exhibit to the Registration Statement.

Other than for the purpose set out in the prior paragraph, this letter may not be relied upon, or assigned, for any purpose, without our prior written consent, which may be granted or withheld in our discretion.

Yours faithfully

/s/ Edward J. Lukins

Cooley (UK) LLP

Cooley (UK) LLP Dashwood 69 Old Broad Street London EC2M 1QS, UK

t: +44 (0) 20 7583 4055 f: +44 (0) 20 7785 9355 cooley.com

SCHEDULE 1

ASSUMPTIONS

The opinions in this letter have been given on the basis of the following assumptions:


(a)	the genuineness of all signatures, stamps and seals on all documents, the authenticity and completeness of all documents submitted to us as originals, and the conformity to original documents of all documents submitted to us as copies;


(b)	that, where a document has been examined by us in draft or specimen form, it will be or has been duly executed in the form of that draft or specimen;


(c)	that each of the signed documents examined by us has been duly executed and, where applicable, delivered by the parties thereto;


(d)	that the Articles referred to in paragraph 1.3(d) of this letter remain in full force and effect, and no alteration has been made or will be made to such Articles, prior to the effective date of the Registration Statement (the “ Effective Date ”);


(e)	that all documents, forms and notices which should have been delivered to the Registrar of Companies in respect of the Company have been so delivered, that information revealed by the Searches was complete and accurate in all respects and has not, since the time of the Searches, been altered and that the results of the Searches will remain complete and accurate as at the Effective Date;

(f)

that the Company has not taken any corporate or other action nor have any steps been taken or legal proceedings been started against the Company for the liquidation, winding up, dissolution, reorganisation or bankruptcy of, or for the appointment of a liquidator, receiver, trustee, administrator, administrative receiver or similar officer of, the Company or all or any of its assets (or any analogous proceedings in any jurisdiction) and the Company is not unable to pay its debts as they fall due within the meaning of section 123 of the Insolvency Act 1986 (the “ Insolvency Act ”) and will not become unable to pay its debts within the meaning of that section as a result of any of the transactions contemplated herein, is not insolvent and has not been dissolved or declared bankrupt (although the Searches gave no indication that any winding-up, dissolution or administration order or appointment of a receiver, administrator, administrative receiver or similar officer has been made with respect to the Company);


(g)	that the Written Resolutions provided to us in connection with the giving of the opinions set out in this letter are complete and correct, and have not been and will not be revoked or varied and remain in full force and effect and will remain so as at the Effective Date;


(h)	that in relation to the Registration Statement, the directors of the Company have acted and will act in the manner required by section 172 of the Act, and there has not been and will not be any bad faith, breach of trust, fraud, coercion, duress or undue influence on the part of any directors of the Company;


(i)	that no ADSs have been or shall be offered to the public in the United Kingdom in breach of the Financial Services and Markets Act 2000, as amended (“ FSMA ”) or of any other United Kingdom

Cooley (UK) LLP Dashwood 69 Old Broad Street London EC2M 1QS, UK

t: +44 (0) 20 7583 4055 f: +44 (0) 20 7785 9355 cooley.com

laws or regulations concerning offers of securities to the public, and no communication has been or shall be made in relation to the ADSs in breach of section 21 of FSMA or any other United Kingdom laws or regulations relating to offers or invitations to subscribe for, or to acquire rights to subscribe for or otherwise acquire, shares or other securities; and


(j)	the Company is not, nor will be, engaging in criminal, misleading, deceptive or unconscionable conduct or seeking to conduct any relevant transaction or any associated activity in a manner or for a purpose which might render any transaction contemplated by the Registration Statement or any associated activity illegal, void or voidable.

Cooley (UK) LLP Dashwood 69 Old Broad Street London EC2M 1QS, UK

t: +44 (0) 20 7583 4055 f: +44 (0) 20 7785 9355 cooley.com

SCHEDULE 2

RESERVATIONS

The opinions in this letter are subject to the following reservations:

(a)

the Searches are not capable of revealing conclusively whether or not a winding-up or administration petition or order has been presented or made, a receiver appointed, a company voluntary arrangement proposed or approved or any other insolvency proceeding commenced, and the available records may not be complete or up-to-date. In particular, the Central Registry of Winding-Up Petitions in England may not contain details of administration applications filed, or appointments recorded in or orders made by, district registries and county courts outside London. Searches at Companies House and at the Central Registry of Winding Up Petitions in England are not capable of revealing whether or not a winding up petition or a petition for the making of an administration order has been presented and, further, notice of a winding up order or resolution, notice of an administration order and notice of the appointment of a receiver may not be filed at Companies House immediately and there may be a delay in the relevant notice appearing on the file of the company concerned. Further, not all security interests are registrable, such security interests have not in fact been registered or such security interests have been created by an individual or an entity which is not registered in England. We have not made enquiries of any District Registry or County Court in England;

(b)

the opinions set out in this letter are subject to: (i) any limitations arising from applicable laws relating to insolvency, bankruptcy, administration, reorganisation, liquidation, moratoria, schemes or analogous circumstances; and (ii) an English court exercising its discretion under section 426 of the Insolvency Act ( co-operation between courts exercising jurisdiction in relation to insolvency ) to assist the courts having the corresponding jurisdiction in any part of the United Kingdom or any relevant country or territory;


(c)	we express no opinion as to matters of fact;


(d)	we have only reviewed the documents listed in paragraph 2 above;


(e)	we have made no enquiries of any individual connected with the Company;


(f)	a certificate, documentation, notification, opinion or the like might be held by the English courts not to be conclusive if it can be shown to have an unreasonable or arbitrary basis or in the event of a manifest error; and


(g)	it should be understood that we have not been responsible for investigating or verifying the accuracy of the facts, including statements of foreign law, or the reasonableness of any statements of opinion, contained in the Registration Statement, or that no material facts have been omitted from it.

Cooley (UK) LLP Dashwood 69 Old Broad Street London EC2M 1QS, UK

t: +44 (0) 20 7583 4055 f: +44 (0) 20 7785 9355 cooley.com

Exhibit 10.1

Realm Therapeutics plc

Executive Omnibus

Incentive Plan 2016

Adopted on 16 June 2016

(name changed to Realm Therapeutics plc from PuriCore plc in December 2016)

Contents



		Page

P art A - Definitions & Interpretation		3

Part B - Options		8

2.	Grant of Options	8
3.	Exercise and lapse of options	9

Part C - Share Awards		11

4.	Grant of Share Awars	11
5.	Vesting & Release of Share Awards	13
6.	Bonus Shares & Matching Shares	15
7.	Delivery of Shares and lapse of Share Awards	16

Part D - Stock Appreciation Rights		17

8.	Grant of Stock Appreciation Rights	17
9.	Exercise and lapse of Stock Appreciation Rights	18

Part E - Rules Applying to both Options & Share Awards and Stock Appreciation Rights		19

10.	Plan Limits	19
11.	Individual Limits	20
12.	Tax Liability and satisfaction of Awards in cash	20
13.	Variation of Share Capital	21
14.	Takeovers & Reconstructions	22
15.	Administration & Amendment	25
16.	Miscellaneous	27

Part F - Terms applicable to United States employees		28

17.	Grants to United States employee	28
18.	Incentive Stock Options	28

Part A – Definitions & Interpretation


1.	In these Rules, unless the context otherwise requires, the following words and expressions shall have, where the context so admits, the following meanings and shall apply where necessary to all relevant Parts of the Rules:



“Acceptance Notice”	a notice or agreement (which may form the same agreement as the Option Certificate) n the form agreed by the Remuneration Committee from time to time;
“Announcement Date”	the date on which the Company announces its final or interim results for a Financial Year;
“Associated Company”	a company is to be treated as another company’s associated company if at that time one of the two has Control of the other, or both are under the Control of the same person or persons;
“Award”	an award under the Plan which may consist of any or a combination of any of:
	(a)	a Share Award;
	(b)	a Market Value Option;
	(c)	a Nominal Cost Option;
	(d)	a Linked Option; and
	(e)	a Stock Appreciation Right.
“Award Certificate”	an Award certificate or agreement in the form agreed by the
"Board”	the Board of the Company (or a duly constituted committee thereof) at which a quorum is present;
“Bonus”	means a cash bonus for which an Eligible Employee may be eligible in respect of a Financial Year;
“Bonus Shares”	those Shares that the Remuneration Committee permits an Eligible Employee to purchase and/or which are acquired or awarded from or as a percentage of his Bonus, as provided for in Rule 6;
“Cause”	means that the Participant (a) has materially breached his or her employment or service contract with his employing company, which breach has not been remedied by the Participant after written notice has been provided to the Participant of such breach, (b) has engaged in disloyalty to any Group Company, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty, (c) has disclosed trade secrets or confidential information of the Group to persons not entitled to receive such information, (d) has breached any written noncompetition or non-solicitation agreement between the Participant and his employing company, or (e) has engagedin such other behavior detrimental to the interests of the Group as the Remuneration Committee determines;
“the Code”	the Internal Revenue Code of 1986, as amended;
“the Company”	Realm Therapeutics plc Registered Number 5789798 or, save for Rules 1, 2, 4, 6, 10 and 15.3, such company as shall be at any time the “Acquiring Company” as defined in Rule



“Control”	in relation to a body corporate (“the Body Corporate”) the power of a person which is a member of that body corporate to secure:
	(a)	by the holding of shares or the possession of voting power in or in relation to the Body Corporate or any other body corporate; or
	(b)	by virtue of its right to appoint or remove a majority of the board of directors of that Body Corporate; or
	(c)	by virtue of any power conferred by the certificate of incorporation, articles of association, bye laws, membership agreement or other document regulating the Body Corporate or any other body corporate that the affairs of the Body Corporate are conducted in accordance with the wishes of that person;
"Daily Official List”	the daily record setting out the prices of all trades in securities conducted on the London Stock Exchange;
“Date of Grant”	the date on which an Award is granted to an Eligible Employee;
“Eligible Employee”	an employee (whether contracted to work-full time or part-time) of any Group Company, including any director other than a non- executive director, who is not bound or due to Retire in the next 12 months (unless that person is employed in a jurisdiction where such restriction would be unlawful);
“Exercise Price”	the amount in pounds sterling (or such other currency as the Remuneration Committee shall determine at the Date of Grant) which a Participant shall pay to acquire a Share on the exercise of an Option being (subject to Rules 2.8, and 13):
	(a)	in the case of a Market Value Option or a Linked Option an amount which is not less than the Market Value of a Share on the Date of Grant (or the nominal value of a Share if greater in the case of an Option to subscribe); or
	(b)	n the case of a Nominal Cost Option, one pound sterling (or other currency equivalent) in aggregate to acquire all of the Shares over which the Nominal Cost Option is exercised on each occasion of exercise or such greater amount as the Remuneration Committee may determine at the Date of Grant;
“Financial Year”	the annual accounting reference period of the Company;
“Form of Renunciation”	the form of renunciation in the form agreed by the
“Grant Period”	the period of 42 days commencing on any one of the following:
	(a)	the day following an Announcement Date; or
	(b)	if the Remuneration Committee so resolves, a day on which exceptional circumstances exist which justify the grant of Awards;
“Group”	the Company and its Subsidiaries, and the phrase “Group Company” shall be construed accordingly;
“Group Employee”	an employee of any Group Company;
“Letter of Grant”	the letter or other communication (which may include electronic communication) in such form agreed by the Remuneration Committee from time to time;



“Linked Bonus”	the gross bonus payable to a Participant on exercise, where a Linked Option is granted in conjunction with the payment of such a Linked Bonus, being an amount not greater than the Exercise Price multiplied by the number of Shares over which the Linked Option is being exercised;
“Linked Option”	an option which is granted in conjunction with a Linked Bonus;
“London Stock Exchange”	London Stock Exchange plc, or any successor body carrying on the business of London Stock Exchange plc;
“Market Value”	on any day, the closing middle market quotation of a Share as derived from the Daily Official List of the London Stock Exchange on that day or on the dealing day which immediately precedes that day or, if the Remuneration Committee so determines, the average of the closing middle market quotations on a number of dealing days, not to exceed five, immediately preceding that day or if on that day the Shares are not listed, the market value of a Share determined in accordance with the provisions of Part VIII of the Taxation of Chargeable Gains Act 1192;
“Market Value Option”	an Option granted with an Exercise Price per Share which is not less than the Market Value of a Share at the Date of Grant (and, in the case of an Option to subscribe, not less than the nominal value of a Share), but not including a Linked Option;
“Matching Shares”	a Share Award related to Bonus Shares in accordance with Rule
“Model Code”	any code governing the conduct of dealings in securities by the Directors of the Company which the Company may adopt from time to time;
“New Award”	an award over shares in the Acquiring Company (as defined in Rule 14.6) granted in consideration of the Release of a Subsisting Award and which shall satisfy the following conditions:
	(a)	that it is a right or contingent right to acquire such number of shares in the Acquiring Company as has on the acquisition of the New Award an aggregate Market Value equal to the aggregate Market Value of the Shares subject to the Subsisting Award on its Release; and
	(b)	that in the case of an Award which is an Option, it has an Exercise Price per Share such that the aggregate price payable on the complete exercise equals the aggregate price which would have been payable on complete exercise of the Subsisting Option;
“NIC”	Class 1 National Insurance Contributions arising in the UK or any social security, social taxes, social insurance or other comparable liabilities arising in any other country;
“NIC Election”	an election in the form envisaged in paragraph 3(B)(1) of Schedule 1 to the Social Security Contribution and Benefits Act 1992 as a result of which the secondary (employer’s) NIC liability in respect of the exercise of an Option or the Vesting or Release (as the case may be) of an Award (other than an Option) becomes the Participant’s liability;
“Nominal Cost Option”	an Option whereby the aggregate price payable for the acquisition of the Shares on any exercise of that Option shall be one pence sterling (or other currency equivalent);



“Notice of Exercise”	the notice of exercise in the form agreed by the Remuneration Committee from time to time;
“Option”	an Award made in the form of a right to acquire Shares granted or to be granted pursuant to Rules 2.2, 2.6, 4.1 or and the term “Option” shall be construed to mean a “Market Value Option” or, save in relation to Part B, a “Linked Option” or a “Nominal Cost Option” or such combination of them as the context requires;
“Option Certificate”	the certificate or agreement evidencing the grant of an Option or Stock Appreciation Right in the form agreed by the Remuneration Committee from time to time;
“Other Plan”	any plan (other than this Plan) which provides for the subscription of Shares or transfer of Treasury Shares by or on behalf of employees of the Group;
“Participant”	an Eligible Employee who has been granted and remains entitled to a Subsisting Award or (where the context admits) his legal Personal Representative(s);
“Performance Condition”	a condition imposed by the Remuneration Committee whereby an Award may be granted on terms that it shall not Vest or be Released (as the case may be) until and to the extent that such condition has been satisfied;
“Performance Period”	the period over which a Performance Condition shall be measured to determine whether Awards shall Vest or be Released (as the case may be);
“Personal Representative”	the person or persons appointed to administer a deceased person’s estate, or any equivalent under the applicable law, including the Participant’s spouse or descendents or forebears, where the context so requires;
“Plan”	the Realm Therapeutics plc Executive Omnibus Incentive Plan 2016 constituted and governed by the Rules with and subject to any amendments thereto properly effected;
“Release Date”	subject to Rules 5 and 14, in respect of a Share Award which is made subject to Restrictions, the date or dates on which those Restrictions end and the expressions “Release” and “Release Date” shall have a corresponding meaning, provided that if the Release Date of any such Share Award would otherwise fall within a close period or a period when a Participant is prohibited by the Model Code, statute order or regulation from dealing in Shares or rights over or interests in Shares, the Release Date shall be the day following the end of such close or other period;
‘‘Remuneration Committee’’	a duly constituted committee of the Board delegated with authority to consider the remuneration of directors and senior employees of the Company and to oversee the operation of this Plan and exercise any discretions under these Rules;
“Restricted Shares”	an Award of Shares which is subject to Restrictions;
“Restrictions”	the conditions that shall apply to Restricted Shares, such that the Participant shall have beneficial ownership of the Shares which comprise that Award from the Date of Grant, but shall irrevocably agree not to sell, transfer or otherwise dispose of the Shares until the applicable Release Date;



“Retirement”	cessation of a Participant’s employment or office with a Group Company at his contractual retirement age, or at such other age as the Remuneration Committee agrees in its discretion is the Participant’s retirement age and the term “Retire” shall have a corresponding meaning;
“Rules”	the rules of this Plan as the same may be amended from time to time and "Rule” shall be construed accordingly;
“Share”	an Ordinary Share in the capital of the Company which is, was or will be fully paid on issue;
“Share Award”	an Award under Part C of this Plan made in such form specified in Rule 4.1 as the Remuneration Committee shall specify at the Date of Grant;
“Stock Appreciation Right”	an Award which at its Date of Grant is specified as a right to receive a cash sum or Shares equivalent to the growth in value of a Share (or number of Shares) between the Date of Grant and the date of exercise, multiplied by the number of Shares subject to the Stock Appreciation Right;
“Subsidiary”	a company or other body corporate in which the Company holds a majority of the voting rights or a majority of the economic interest and which is under the Control of the Company;
“Subsisting Award”	a Share Award, Stock Appreciation Right or Option (in which case the term “Subsisting Option” shall have a corresponding meaning as required and shall be read as also applying to Stock Appreciation Rights) which has been granted and which has not been surrendered, renounced, or, in the case of a Share Award (other than an Option), Vested or Released (as the case may be), or in the case of an Option or Stock Appreciation Right, Vested and exercised in full nor in either case otherwise lapsed;
“Tax Liability”	a liability to account for any tax, primary (employee’s) NIC, or other levy in respect of an Award by the Company or other Group Company (the “Relevant Company”), whether by reason of the grant, Vesting, Release or exercise of an Award or the sale of acquired Shares;
“Treasury Shares”	shares as Chapter 6 of Part 18 of Companies Act 2006;
“Trust”	any employee share ownership trust which has been or may be established from time to time by the Company or any other Group Company to operate in conjunction with this Plan;
“Trustee”	the trustee or trustees for the time being of the Trust;
“Vesting Date”	subject to Rules 3, 5, 9 and 14, in respect of an Award, other than Restricted Shares, the date or dates on which a Participant becomes unconditionally entitled to:
	(a)	exercise an Option or Stock Appreciation Right; and /or
	(b)	a beneficial interest in Shares subject to a Share Award (other than an Option)
	and the expression “Vesting”, “Vest and “Vested” and related terms shall have a corresponding meaning.


1.2	In these Rules, except insofar as the context otherwise requires:


(i)	words denoting the singular shall include the plural and vice versa;


(ii)	words importing a gender shall include every gender and references to a person shall include bodies corporate and unincorporated and vice versa;


(iii)	references to any enactment shall be construed as a reference to that enactment as from time to time amended, modified, extended or re-enacted and shall include any orders, regulations, instruments or other sub-ordinate legislation made under the relevant enactment; and


(iv)	headings and captions are provided for reference only and shall not be considered as part of the Plan.

Part B - Options


2.	Grant of Options

2.1 For the purposes of this Part B, references to the term Option shall mean only Market Value Options.


2.2	Subject to Rule 16.4 and to the limits set out in Rule 10 and Rule 11 and to the recommendation of the Remuneration Committee, the Company (or the Trustee where appropriate) may at any time during a Grant Period, grant Options to such employees as are Eligible Employees and are selected to receive an Option, upon the terms set out in the Plan.

2.3

Options may be granted subject to a Performance Condition and where granted to executive directors of any Group Company shall be subject to such a Performance Condition. The Performance Condition shall, subject to Rules 3.4(i)(a), 3.5 and 3.6, not be capable of amendment or waiver unless events happen which cause the Remuneration Committee to consider that the relevant Performance Condition has ceased to be appropriate whereupon the Remuneration Committee may, at any time, amend, relax or waive the Performance Condition.


2.4	The Remuneration Committee may determine or recommend to the Trustee that the Vesting of an Option will be subject to any other objective conditions in addition to any Performance Conditions (including, without limitation, a condition requiring that the Participant maintain a certain holding of Shares).


2.5	An Option may be granted subject to a condition that the Participant is required to:


(i)	bear the cost of all or part of the secondary NIC, if any, which arises in respect of the exercise of the Option; and/or


(ii)	enter into an NIC Election; or

(iii)

accept that an NIC Election that has already been entered into will apply to the Market Value Option being granted in which case any secondary NIC due on the exercise of the Option shall be payable by or recoverable from that Participant in accordance with Rule 12.3 provided that the Remuneration Committee may in its discretion at any time or times release the Participant from his liability or reduce his liability hereunder provided that where an NIC Election has been entered into between the relevant Group Company and

that Participant any amendment to that election to reduce the Participant’s liability will require prior approval of HM Revenue and Customs.

Where a Option is granted subject to (ii) or (iii) above and at the date of exercise no valid NIC Election is in place then the Option shall be deemed to have been granted subject to (i) above.


2.6	Options shall be granted by the Company (or the Trustee where appropriate) by resolution, deed or in such manner as shall be considered appropriate in order to effect such grant. A Letter of Grant and an Option Certificate evidencing the grant shall be despatched as soon as practicable after the Date of Grant to each Participant.


2.7	The Option Certificate and the Letter of Grant shall specify:


(a)	the Date of Grant;


(b)	the number of Shares subject to the Option;


(c)	the Exercise Price;


(d)	the event or events mentioned in Rule 3.4(i) and the date mentioned at Rule 3/8(i); and


(e)	the Performance Condition (if any) and the applicable Performance Period (or period on the expiry of which the Option may be exercised, if applicable).


2.8	Where the circumstances in Rule 14.5 apply, New Awards may be granted in consideration for the release of Subsisting Awards granted under the Plan. Such New Awards are deemed to be equivalent to the old Options and to have been granted within the terms of this Plan.

2.9

If the Remuneration Committee so determines, within 30 days of the Date of Grant a Participant may be required to complete and submit to the Company an Acceptance Notice and/or NIC Election and any other documentation required by the Remuneration Committee. An Option shall be treated as surrendered upon the expiry of this period if an Acceptance Notice and/or NIC Election and any other documentation required have not been received by the Company and shall for all purposes be treated as never having been granted.


2.10	No Option may be transferred, assigned or charged and any purported transfer, assignment or charge shall be void ab initio. Each Option Certificate shall carry a statement to this effect. This Rule 2.10 shall not prevent the Option of a deceased Participant being exercised by his Personal Representative(s) within the terms of these Rules.

3. Exercise and lapse of Options

3.1

The exercise of any Option granted under this Part B shall be effected in the form and manner prescribed by the Remuneration Committee and, unless the Remuneration Committee determines otherwise, any Notice of Exercise shall take effect only when received by the Company together with the relevant exercise monies or an agreement to provide such monies pursuant to arrangements acceptable to the Company.


3.2	Subject to Rule 3.3, an Option shall Vest and may be exercised by the Participant or, if deceased, by his Personal Representative, on the date or dates (or on the expiry of the periods) specified in the Letter of Grant and/or the Option Certificate.


3.3	Subject to Rules 3.4(i)(a), 3.5 and 3.6, an Option shall Vest only to the extent that any Performance Condition and any other conditions attaching to the Option have been satisfied.


3.4	Subject to each of the succeeding rules of this Rule 3, an Option may also be exercised by the Participant or, if deceased, by his personal representative at the time of or any time following the occurrence of the earliest of the following events:


(i)	upon a Participant ceasing to be a Group Employee (other than for Cause) where:


(a)	the Option Certificate or Letter of Grant specifies that cessation of employment in the applicable circumstances shall trigger exercise to the extent specified in the Letter of Grant or Option Certificate; or


(b)	the Remuneration Committee determines, in its absolute discretion, that exercise of the Option (or part thereof) shall be triggered by the cessation of employment (such discretion to be exercised within 90 days of cessation of employment); and


(ii)	upon an event giving a right of exercise in accordance with the provisions of Rule 14.

3.5

The Remuneration Committee may, in its discretion (or when exercising its discretion under Rule 3.4(i)(b)), determine that an Option shall not Vest under Rule 3.4(i) but shall instead Vest at the end of the Performance Period to the extent that the Performance Condition is satisfied at the end of the Performance Period. When exercising its discretion under Rule 3.4(i)(b) the Remuneration Committee shall have regard to the length of time elapsed since the Date of Grant and the extent to which any Performance Condition has been satisfied at the time of the event provided that the Remuneration Committee may, at its absolute discretion, determine that the Option shall Vest in full.

3.6

Where an event within Rule 3.4 (ii) occurs, the Option shall Vest pro rata to the length of time elapsed since the Date of Grant and to the extent to which any Performance Condition has been satisfied provided that the Remuneration Committee may, at is discretion, determine that the Option shall Vest in full. In determining whether and to what extent any Performance Condition has been satisfied where this discretion is not exercised, the Remuneration Committee shall have regard to the performance to date at the time of the event.


3.7	If a Participant gives or is given notice to terminate his employment or office such that he will no longer be a Group Employee, his Option will not be exercisable until such day (if any) as specified in the Option Certificate or Letter of Grant or as the Remuneration Committee so permits prior to the lapse of the Option.


3.8	An Option shall lapse and become thereafter incapable of exercise on the earliest of the following events:


(i)	the tenth anniversary of the Date of Grant or such earlier date specified by the Remuneration Committee and stated in the Letter of Grant and/or Option Certificate;

(ii)

(a) if a Participant ceases to be a Group Employee for a reason other than Cause (i) the date on which an Option shall lapse as specified in the Option Certificate or Letter of Grant; or (ii) if no such date is specified, 90 days following cessation of employment unless the Remuneration Committee has exercised its discretion in accordance with Rule 3.4(i)(b), in which case the Option (or relevant part thereof) shall lapse on the date or at

the end of the period specified by the Remuneration Committee or (b) if a Participant ceases to be a Group Employee for Cause, the date of cessation of employment;


(iii)	on the date of lapse determined in accordance with Rule 14;


(iv)	in respect of any part of an Option, the date (being a date not later than 90 days after the end of the Performance Period) when the Remuneration Committee has determined that the Performance Condition (if any) has not been met in respect of that part or proportion of the Option;


(v)	the Participant being adjudicated bankrupt; and


(vi)	the surrender of the Option by the Participant.

3.9

Subject to Rules 3.12 and 12, within 30 days after an Option has been exercised by any Participant, the Company shall allot to him or, as appropriate, transfer as Treasury Shares or procure the transfer to him of the number of Shares in respect of which the Option has been exercised (or, if such transfer or allotment in such period would be prohibited by the Model Code, at the earliest practicable time after such prohibition has lifted).


3.10	Subject to Rule 12, the Company may, in lieu of allotting or transferring Shares in accordance with this Rule 3, make arrangements to facilitate cashless exercise through a broker.


3.11	All Shares allotted or issued under this Plan pursuant to the exercise of Options shall rank equally in all respects with the shares of the same class then in issue except for any rights attaching to such shares by reference to a record date prior to the date of the allotment or issue.


3.12	For so long as the Shares in the Company are admitted to dealings on the London Stock Exchange or any other stock exchange, the Company shall apply for Shares in respect of which an Option has been exercised to be admitted to dealing, if they were not so admitted already.

Part C - Share Awards


4.	Grant of Share Awards


4.1	Subject to Rule 16.4 and to the limits set out in Rule 10 and Rule 11 and to the recommendation of the Remuneration Committee, the Company (or the Trustee where appropriate), may at any time during a Grant Period, make Awards of Shares to Eligible Employees in accordance with the terms of these Rules. A Share Award may comprise:


(a)	a conditional right to receive Shares for no payment;


(b)	an award of Restricted Shares;


(c)	the grant of a Nominal Cost Option;


(d)	the grant of a Linked Option;


(e)	an award of Bonus Shares and, if so determined, a related award of Matching Shares, the latter award being on the terms of and subject to the satisfaction of a Performance

Condition in accordance with Rule 6 unless the Remuneration Committee specify to the contrary at the Date of Grant; or


(f)	such other form of Share Award as the Remuneration Committee considers appropriate or desirable provided that such Awards are not economically materially different from the Awards specified in 4.1(a) to 4.1(e).

4.2

Share Awards may be granted subject to a Performance Condition and where granted to executive directors of any Group Company shall be subject to such a Performance Condition. The Performance Condition shall subject to Rules 5.3(i)(a), 5.4 and 5.5,not be capable of amendment or waiver unless events happen which cause the Remuneration Committee to consider that the relevant Performance Condition has ceased to be appropriate whereupon the Remuneration Committee may, at any time, amend, relax or waive the Performance Condition.


4.3	A Share Award may be granted subject to a condition that the Participant is required to:


(i)	bear the cost of all or part of the secondary NIC, if any, which arises in respect of the Vesting, Release or exercise (as the case may be) of the Share Award; and/or


(ii)	enter into an NIC Election; or


(iii)	accept that an NIC Election that has already been entered into will apply to the Share Award being granted

in which case any secondary NIC due on the Vesting, Release or exercise of the Share Award shall be payable by or recoverable from that Participant in accordance with Rule provided that the Remuneration Committee may in its discretion at any time or times release the Participant from his liability or reduce his liability hereunder provided that where an NIC Election has been entered into between the relevant Group Company and that Participant any amendment to that election to reduce the Participant’s liability will require prior approval of HM Revenue and Customs.

Where a Share Award is granted subject to (ii) or (iii) above and at the date of Vesting, Release or exercise (as the case may be) no valid NIC Election is in place then the Share Award shall be deemed to have been granted subject to (i) above.


4.4	Share Awards shall be granted by the Company (or the Trustee) by resolution, deed or in such manner as shall be considered appropriate. A Letter of Grant and an Award Certificate evidencing the Award shall be despatched as soon as practicable after the Date of Grant to each Participant.


4.5	The Award Certificate and the Letter of Grant shall specify:


(a)	the Date of Grant;


(b)	the number of Shares subject to the Award;


(c)	the form of the Award;


(d)	the event or events mentioned in Rule 5.3(i) and the date mentioned at Rule 7.3(g);

(e) the Performance Condition (if any) and the applicable Performance Period (if any);

(f) in the case of an Award other than Restricted Shares, the Vesting Date;


(g)	if the Award is in the form of a Nominal Cost Option or a Linked Option granted in conjunction with a Linked Bonus, a statement to that effect;


(h)	in the case of Restricted Shares:


(i)	the Release Date;


(ii)	whether the Participant has the right to receive dividends on the Restricted Shares and if so on what terms;


(iii)	whether the Participant has the right prior to the Release Date to direct the Trustee in respect of voting on the Restricted Shares; and


(i)	whether the Participant has any beneficial or legal ownership of the Shares subject to the Share Award prior to the Release Date or Vesting Date.


4.6	Where the circumstances in Rule 14.5 apply, New Awards may be granted in consideration for the release of Subsisting Awards granted under the Plan. Such New Awards are deemed to be equivalent to the old Awards and to have been granted within the terms of this Plan.

4.7

If the Remuneration Committee so determines, within 30 days of the Date of Grant a Participant may be required to complete and submit to the Company an Acceptance Notice and/or NIC Election and any other documentation required by the Remuneration Committee. A Share Award shall be treated as surrendered upon the expiry of this period if an Acceptance Notice and/or NIC Election and any other documentation required have not been received by the Company and shall for all purposes be treated as never having been granted.


4.8	No Share Award may be transferred, assigned or charged and any purported transfer, assignment or charge shall be void ab initio. Each Award Certificate shall carry a statement to this effect. This Rule 4.8 shall not prevent the transfer of Shares subject to a Share Award to a Participant’s Personal Representatives within the terms of these Rules.


5.	Vesting & Release of Share Awards


5.1	Subject to Rule 5.2, any Share Award shall Vest or be Released (as the case may be) on the date or dates (or expiry of the periods) specified in the Letter of Grant and/or Award Certificate.


5.2	A Share Award shall Vest or be Released (as the case may be) under Rule 5.1 only to the extent to which any Performance Condition and any other conditions attaching to the Share Award have been satisfied.


5.3	Subject to each of the succeeding rules of this Rule 5, a Share Award shall also Vest or be Released (as the case may be) at the time of the occurrence of the earliest of the following events:


(i)	upon a Participant ceasing to be a Group Employee (other than for Cause) where:


(a)	the Award Certificate or Letter of Grant specifies that cessation of employment in the applicable circumstances shall trigger Vesting or Release (as the case may be) to the extent specified in the Letter of Grant or Award Certificate; or


(b)	the Remuneration Committee determines, in its absolute discretion, that the Award (or part thereof) shall Vest or be Released (as applicable) on the cessation of employment (such discretion to be exercised within 90 days of cessation of employment); and


(ii)	upon an event in accordance with the provisions of Rule 14.

5.4

The Remuneration Committee may, at its discretion (or when exercising its discretion at Rule 5.3(i)(b)) determine that a Share Award shall not Vest or be Released under Rule 5.3(i)(b) but shall instead Vest or be Released at the end of the Performance Period to the extent that the Performance Condition is satisfied at the end of the Performance Period. When exercising its discretion under Rule 5.3(i)(b) the Remuneration Committee shall have regard to the length of time elapsed since the Date of Grant and the extent to which any Performance Condition has been satisfied at the time of the event provided that the Remuneration Committee may, at its absolute discretion, determine that the Share Award shall Vest or be Released (as the case may be) in full.

5.5

Where an event within Rule 5.3 (ii) occurs, the Share Award shall Vest or be Released (as the case may be) pro rata to the length of time elapsed since the Date of Grant and to the extent to which any Performance Condition has been satisfied provided that the Remuneration Committee may, at is discretion, determine that the Share Award shall Vest or be Released (as the case may be) in full. In determining whether and to what extent any Performance Condition has been satisfied where this discretion is not exercised, the Remuneration Committee shall have regard to the performance to date at the time of the event.


5.6	If a Participant gives or is given notice to terminate his employment or office such that he will no longer be a Group Employee, his Share Award shall not Vest or be Released until such day (if any) as specified in the Award Certificate or Letter or Grant or as the Remuneration Committee so permits prior to the lapse of the Share Award.


5.7	Subject to Rule 7.3(f), on the exercise of a Linked Option the succeeding provisions of this Rule 5.7 shall apply:


(a)	on the exercise of the Linked Option in whole, and provided either the Performance Condition is at that time satisfied in full or no Performance Condition was imposed on grant of the Linked Option, the Company shall, subject to Rule 5.7(c), make or procure the making of a Linked Bonus;

(b)

on the exercise of the Linked Option in part only (whether because the Performance Condition is only partially met or where the Performance Condition is met in full or no Performance Condition was imposed on grant of the Linked Option but the Option is exercised in part only), the Company shall, subject to Rule 5.7(c), make or procure the making of a payment equal to an amount in pounds sterling calculated by multiplying the number of Shares over which the Linked Option is exercised on that occasion by the Exercise Price per Share;

(c)

if the Performance Condition is met in whole or in part or no Performance Condition was imposed on grant of the Share Award but at the time that the Linked Option first becomes exercisable, the Market Value of a Share is lower than the Exercise Price, the Linked Option will lapse in accordance with Rule 7.3(e) in which case the Company shall transfer or procure the transfer to the Participant as soon as reasonably practicable (subject to all deductions as may be required by law for the payment of any Tax Liability)

such number of Shares as is equal to an amount calculated by multiplying the number of Shares over which the Linked Option would have been exercisable but for its lapse under Rule 7.3(e) by the Market Value of a Share on the date on which the Linked Option would otherwise have first become exercisable.


6.	Bonus Shares & Matching Shares

6.1

The Remuneration Committee may in its absolute discretion and subject to the limits set out at Rule 10 determine that a percentage of an Eligible Employee’s Bonus, being such percentage as the Remuneration Committee may determine, shall be awarded as Bonus Shares upon the terms set out in these Rules and upon such other terms as the Remuneration Committee may specify at the time of the Award. Such an Award may be made in any one of the following ways: by an Eligible Employee agreeing prior to the date on which entitlement to any Bonus arises that part of the Bonus which he might otherwise receive shall instead be comprised in an Award conferring a contingent right or other future interest over Bonus Shares (and, if appropriate, an Award of Matching Shares); or by the entitlement to a Bonus being computed from the outset as a right to receive settlement thereof partly in cash and partly in an Award of Bonus Shares (and, if appropriate, an Award of Matching Shares), the relative proportions of cash and Bonus Shares being specified by the Remuneration Committee.

6.2

Unless otherwise determined by the Remuneration Committee, the number of Shares comprised in an Award of Bonus Shares pursuant to Rules 6.1(a) or 6.1(b) shall equal the number of Shares which could have been acquired with the element of the Bonus (before tax and any other withholdings which would have been applicable) in respect of which the Bonus Shares award is awarded at the price per Share equal to the average middlemarket quotations of Shares in the Company on each of the seven dealing days immediately preceding the Date of Grant.


6.3	Bonus Shares awarded pursuant to Rule 6.1(a) or 6.1(b) shall Vest and be transferred to the Participant free of restrictions as soon as practicable upon the occurrence of the earliest of the following events:


(i)	Upon a Participant’s cessation of employment with the Group other than for Cause;


(ii)	The expiry of the period or on the date specified in the Letter of Grant and/or Award Certificate; and


(iii)	Upon an event in accordance with the provisions of Rule 14.

6.4

Subject to Rule 16.4 and to the limit set out in Rule 10, the Remuneration Committee may at its discretion award Matching Shares to each Participant in respect of his Bonus Shares acquired or awarded under Rule 6.1 above, on the terms set out in this Rule 6.4 and such other terms as the Remuneration Committee may specify at the Date of Grant. The Award of Matching Shares shall be a contingent Award of Shares (which may comprise an Award in any form permitted under Rule 4.1) and shall:


(a)	subject to Rules 5.3 to 5.6, not Vest prior to such date or the expiry of such period as may be specified at the Date of Grant;


(b)	be computed by reference to the gross Bonus waived pursuant to Rule 6.1(a) or applied pursuant to Rule 6.1(b);


(c)	be subject to the satisfaction of Performance Condition(s) unless the Remuneration Committee specify to the contrary at the Date of Grant (which it may not do in the case of Matching Shares awarded to executive directors of any Group Company); and


(d)	be subject to the terms of Rules 5.3 to 5.6 in the event of the Participant’s cessation of employment or the occurrence of an event set out in Rule 14 prior to Vesting.


6.5	The number of Matching Shares awarded shall be according to such ratio as the Remuneration Committee may in its absolute discretion determine prior to the Date of Grant of the Matching Shares.


7.	Delivery of Shares and lapse of Share Awards


7.1	The delivery of Shares subject to a Share Award, an Award of Bonus Shares or Matching Shares, or such other Award made within the terms of Rules 5 or 6 shall be effected in such form and manner as the Remuneration Committee from time to time prescribe and shall be subject to Rule 12.


7.2	Subject to the succeeding sections of this Rule 7, Shares subject to a Share Award granted under the Plan will not be transferred or allotted and issued to a Participant prior to the Release Date or Vesting Date (as appropriate).


7.3	A Share Award (or as the case may be part of a Share Award) or an Award of Bonus Shares or Matching Shares (except where specified) shall lapse on the earliest of the following dates:


(a)	the surrender of the Share Award, or Award of Bonus Shares or Matching Shares by the Participant;

(b)

(i) except in the case of Bonus Shares, if a Participant ceases to be a Group Employee other than for Cause (a) the date on which a Share Award or Award of Matching Shares shall lapse as specified in the Award Certificate or Letter of Grant or (b) if no such date is specified, 90 days following such cessation of employment but so that the Share Award or Award of Matching Shares shall not Vest or be Released following the cessation of employment unless the Remuneration Committee exercises its discretion to allow a Share Award or Award of Matching Shares (or part thereof) to Vest or be Released pursuant to Rule 5.3(i)(b) or (ii) if a Participant ceases to be a Group Employee for Cause, the date of cessation of employment;


(c)	except in the case of Bonus Shares, the date of lapse determined in accordance with Rule 14;


(d)	in respect of any part of a Share Award or Award of Matching Shares, the date (being a date not later than 90 days after the end of the Performance Period) when the Remuneration Committee has determined that the Performance Condition (if any) has not been met in respect of that part or proportion of the Share Award;


(e)	in the case of a Linked Option, on the day it would otherwise first be exercisable if the Exercise Price is higher than Market Value on that day;


(f)	in the case of a Nominal Cost Option or a Linked Option 90 days after the Vesting Date; and


(g)	the tenth anniversary of the Date of Grant or such earlier date specified by the Remuneration Committee and stated in the Letter of Grant and/or Award Certificate.

7.4

Subject to Rules 7.8 and 12, on the Release Date for Restricted Shares, the exercise of a Nominal Cost Option or Linked Option or the Vesting of other Awards under this Part C, the number of Shares subject thereto which have been Released or acquired on exercise or Vesting (as the case may be) shall be transferred or allotted and issued fully paid to or as directed by the Participant within 30 days of the Release Date, exercise date or Vesting Date (as appropriate) or if such transfer or allotment in such period would be prohibited by the Model Code at the earliest practicable time after such prohibition has lifted. The Company and/or the Trustee shall arrange for the delivery of a definitive share certificate or other evidence of title in respect thereof.

7.5

Where a Linked Bonus is payable in accordance with Rule 5.7, the Company shall, as soon as reasonably practicable, pay or procure the payment of such an amount to the Participant or where necessary, hold such amount as payment towards the aggregate Exercise Price which the Participant will need to pay on the exercise of the Linked Option, subject to such deductions as may be required by law for the payment of any Tax Liability.

7.6

The exercise of a Nominal Cost Option or Linked Option under this Part C shall be effected in the form and manner prescribed by the Remuneration Committee and, unless the Remuneration Committee determines otherwise, any Notice of Exercise shall take effect only when received by the Company together with the relevant exercise monies or an agreement to provide such monies pursuant to arrangements acceptable to the Company.


7.7	Save for any rights determined by reference to a record date preceding the date of allotment or transfer, Shares acquired under a Share Award shall rank pari passu with other shares of the same class as Shares then in issue.

7.8

For so long as the Shares in the Company are admitted to dealing on the Official List of the London Stock Exchange or any other stock exchange, the Company shall apply for Shares in respect of Share Award which has been exercised (in the case of a Nominal Cost Option or a Linked Option), Released (in the case of Restricted Shares) or Vested (in the case of other Share Awards) to be admitted to dealing, if they were not so admitted already.

Part D - Stock Appreciation Rights


8.	Grant of Stock Appreciation Rights


8.1	Subject to Rule 16.4 and to the limits set out in Rules 10 and 11, and to the recommendation of the Remuneration Committee, the Company (or the Trustee where appropriate) may at any time during a Grant Period, grant Stock Appreciation Rights to such employees as are Eligible Employees and are selected to receive a Stock Appreciation Right, upon the terms set out in the Pin.


8.2	Rules 2.5, 2.6, 2.8, 2.9 and 2.10 shall apply to the grant of Stock Appreciation Rights and references to Options in those Rules shall be read as referring to Stock Appreciation Rights.


8.3	The Option Certificate and Letter of Grant shall specify:


(a)	the Date of Grant;


(b)	the number of Shares subject to the Stock Appreciation Right:


(c)	the value of a Share at the Date of Grant; and


(d)	the event or events mentioned in Rule 9.3(i) and the date mentioned at Rule 9.7(i); and


(e)	the period, on the expiry of which, the Stock Appreciation Right may be exercised.


9.	Exercise and lapse of Stock Appreciation Rights


9.1	The exercise of a Stock Appreciation Right granted under this Part D shall be effected in the form and manner prescribed by the Remuneration Committee and, unless the Remuneration Committee determines otherwise, any Notice of Exercise shall take effect only when received by the Company.


9.2	A Stock Appreciation Right shall Vest and may be exercised by the Participant or, if deceased, by his Personal Representative, on the date or dates (or on the expiry of the periods) specified in the Letter of Grant and/or Option Certificate.


9.3	Subject to each of the succeeding rules of this Rule 9, a Stock Appreciation Right may also be exercised by the Participant or, if deceased, by his personal representative at the time of or any time following the occurrence of the earliest of the following events:


(i)	upon a Participant ceasing to be a Group Employee (other than for Cause) where:


(a)	the Option Certificate or Letter of Grant specifies that cessation of employment in the applicable circumstances shall trigger exercise to the extent specified in the Letter of Grant or Option Certificate; or


(b)	the Remuneration Committee determines, in its absolute discretion, that exercise of the Stock Appreciation Right (or part thereof) shall be triggered by the cessation of employment (such discretion to be exercised within 90 days of cessation of employment); and


(ii)	upon an event giving a right of exercise in accordance with the provisions of Rule 14.


9.4	The Remuneration Committee may, at its discretion, (or when exercising its discretion under Rule 9.3(i)(b)) determine that a Stock Appreciation Right shall not Vest under Rule 9.3(i) but shall instead Vest at the end of the period or on the date specified at the Date of Grant (under Rule 9.2) based on the Market Value of a Share on the expiry of the period or date specified.


9.5	Where an event within Rule 9.3 (ii) occurs, the Stock Appreciation Right shall Vest pro rata to the length of time elapsed since the Date of Grant (unless the Remuneration Committee determines, at its discretion, that the Stock Appreciation Right shall Vest in full) and based on the Market Value of a Share on the date the event occurs under Rule 14.


9.6	If a Participant gives or is given notice to terminate his employment or office such that he will no longer be a Group Employee, his Stock Appreciation Right will not be exercisable until such day (if any) as specified in the Option Certificate or as the Remuneration Committee so permits prior to the lapse of the Stock Appreciation Right.


9.7	A Stock Appreciation Right shall lapse and become thereafter incapable of exercise on the earliest of the following events:


(i)	the tenth anniversary of the Date of Grant or such earlier date specified by the Remuneration Committee and stated in the Letter of Grant and/or Option Certificate;

(ii)

(a) if a Participant ceases to be a Group Employee for a reason other than Cause (i) the date on which an Option shall lapse as specified in the Option Certificate or Letter of Grant; or (ii) if no such date is specified, 90 days following cessation of employment unless the Remuneration Committee has exercised its discretion in accordance with Rule 9.3(i)(b), in which case the Stock Appreciation Right (or relevant part thereof) shall lapse on the date or at the end of the period specified by the Remuneration Committee or (b) if a Participant ceases to be a Group Employee for Cause, the date of cessation of employment;


(iii)	on the date of lapse determined in accordance with Rule 14;


(iv)	the Participant being adjudicated bankrupt; and


(v)	the surrender of the Option by the Participant.

9.8

Subject to Rules 9.10 and 12, within 30 days after a Stock Appreciation Right has been exercised by any Participant, the Company shall allot or re-issue Treasury Shares to him or, as appropriate, procure the transfer to him of the number of Shares in respect of which the Stock Appreciation Right has been exercised (or, if such transfer, re-issue or allotment in such period would be prohibited by the Model Code, at the earliest practicable time after such prohibition has lifted). The number of Shares to which the Participant shall be determined based on the Market Value of a Share on the effective date of exercise (as determined under Rule 9.1).


9.9	All Shares allotted or issued under this Plan pursuant to the exercise of Stock Appreciation Rights shall rank equally in all respects with the shares of the same class then in issue except for any rights attaching to such shares by reference to a record date prior to the date of the allotment or issue.


9.10	For so long as the Shares in the Company are admitted to dealings on the London Stock Exchange or any other stock exchange, the Company shall apply for Shares in respect of which a Stock Appreciation Right has been exercised to be admitted to dealing, if they were not so admitted already.

Part E - Rules Applying to both Options & Share Awards and Stock

Appreciation Rights


10.	Plan Limits


10.1	Awards (whether in the form of Options or a Share Award) may be granted pursuant to these Rules provided that such Awards shall be limited and take effect so that the grant does not result in the aggregate of:


(a)	the number of Shares which remain issuable or Treasury Shares which remain transferrable pursuant to Subsisting Awards granted under the Plan;


(b)	the number of Shares which have been issued or Treasury Shares which have been transferred pursuant to Awards granted under the Plan; and

(c)

the number of Shares which have been issued or Treasury Shares which have been transferred or which remain issuable or transferrable pursuant to rights granted under any Other Plan or any other agreement under which options over Shares are granted to non-executive directors of any Group Company or a consultant providing services to any Group Company pursuant to awards made in the preceding ten years; and


(d)	excluding any Shares which have been issued or remain issuable or Treasury Shares which have transferred or remain transferable as Bonus Shares in accordance with Rule 6

exceeding ten per cent (10%) of the Shares in issue on the last Dealing Day before the Date of Grant provided that the number of Options granted as Incentive Stock Options under this Plan (as defined under Rule 17) shall not exceed 10,000,000 Shares. The Board may adjust the aggregate number of Shares in each case to reflect any subsequent variation of Share capital of the Company in such manner as is fair and reasonable.

10.2

To the extent that the Trustee transfers Shares to satisfy an Award, then, unless such Shares were specifically issued by the Company or Treasury Shares transferred to the Trustee to enable the Trustee to satisfy any Award or other right awarded under any Other Share Plan, the Shares subject to such Award or other right shall not be regarded for the purposes of Rule 10.1 as issuable or issued or transferrable or transferred (as the case may be).


11.	Individual Limits


11.1	Subject to Rule 11.3, an Award grant shall be limited and take effect so that immediately following such grant no Participant has been granted in any annual period:


(a)	Market Value Options over Shares with an aggregate Market Value (measured on the Dates of Grant) in excess of 200% of a Participant’s base salary for that annual period (“Salary”); and


(b)	Awards (other than Market Value Options, Bonus Shares and Matching Shares) over Shares with an aggregate Market Value (measured on the Dates of Grant) in excess of 100% of his Salary.


11.2	For the purposes of Rule 11.1 a Participant’s Salary shall be taken to mean his salary for the relevant period before tax and excluding any bonus and benefits in kind.


11.3	If there are exceptional circumstances (including the hiring of new employees) that the Remuneration Committee considers justify making Awards in excess of the limits referred to in Rule 11.1, the Remuneration Committee may, in respect of the relevant Participant apply the limit at Rule 11.1(a) as if it referred to 400% of Salary and the limit at Rule 11.1(b) as if it referred to 200% of Salary.


12.	Tax Liability and satisfaction of Awards in cash


12.1	Where an Option, Stock Appreciation Right or Share Award has Vested in respect of any number of Shares and those Shares have not yet been allotted or transferred to him, the Remuneration Committee may, in its discretion, determine that either:


(a)	in substitution for his right to acquire such number of Shares, the Participant shall be paid a sum equal to the cash equivalent of that number of Shares; or


(b)	the Company or the Trust, as the case may be, shall procure the sale on behalf of the Participant of the Shares and pay to the Participant the net proceeds of sale.

12.2

Where, on the exercise of an Option or Stock Appreciation Right or the Vesting or Release of a Share Award (other than an Option) any Group Company is obliged to account for any Tax Liability, the Participant will bear the cost of the Tax Liability. The relevant Group Company shall require the Participant to make arrangements to its satisfaction to reimburse it for the Tax Liability. If no such arrangements are made the Participant by participating in the Plan shall be deemed to have granted the Company an irrevocable authority to sell or procure the sale of such number of shares as is required to realise net proceeds equal to the Tax Liability.

12.3

Where, on the exercise of an Option or Stock Appreciation Right or the Vesting or Release of a Share Award (other than an Option) the Participant was required under Rule 4.3 either to bear the cost of all or part of the secondary NIC and/or to enter into an NIC Election, the Participant shall make arrangements to the satisfaction of the Relevant Company to reimburse it for the relevant secondary NIC. If no such arrangements are made the Participant by participating in the Plan shall be deemed to have granted the Company an irrevocable authority to sell or procure the sale of such number of shares as is required to realise net proceeds equal to the cost of the secondary NIC that is required to be borne by the Participant or the subject of the NIC Election.


13.	Variation of Share Capital


13.1	In the event of any variation of the Share capital of the Company (including but without prejudice to the generality of the preceding words, any demerger, capitalisation, rights issue, open offer or any consolidation, sub-division or reduction of capital) the Remuneration Committee may make such adjustments as it considers appropriate under Rule 13.2.


13.2	An adjustment may be to one or more of the following:


(a)	the number of Shares subject to any Subsisting Award;


(b)	he Exercise Price at which the Shares may be acquired on the exercise of any Subsisting Option;


(c)	where an Award has Vested or Released or an Option has been exercised but no Shares have been allotted or transferred pursuant to such Vesting, Release, or exercise, the number of Shares which may be so allotted or transferred and the price at which they may be acquired provided that in the case of a rights issue:

13.2.1

where a Share Award is in the form of Restricted Shares or Bonus Shares under Rule 6.1(b), the Participant may be invited to provide funds of his own to the Trustee or the Company to enable the take up of the rights and to the extent that he does not do so, he will be deemed to have given an irrevocable authority to sell sufficient rights nil paid at such time as the Trustee, or the Company, shall, in its discretion, determine to enable the take up with the net proceeds of sale the balance of the entitlement in respect of that Share Award; and


13.2.2	where a Share Award is in the form of a contingent Share Award the Trustee shall (to the extent that the Trustee holds Shares) sell sufficient rights nil paid, at such time as the Trustee shall, in its

discretion, determine to enable the Trustee to take up with the net proceeds of sale the balance of the entitlement in respect of that Award. To the extent the Trustee does not hold such Shares, the Company shall make such adjustments in respect of such a contingent Share Award as the Remuneration Committee considers appropriate.


13.3	An adjustment under this Rule 13 may only have the effect of reducing the price at which the Shares may be subscribed for on the exercise of a Market Value Option or a Linked Option to less than their nominal value provided the Board shall take such lawful actions as may be required (including the capitalisation of reserves) in order to permit or procure that such Options may be exercised.


13.4	Any adjustment under this Rule 13 shall be deemed to be effective from the record date at which the respective variation applied to other shares of the same class as the Shares.


13.5	The Remuneration Committee shall take such steps as it considers necessary to notify Participants of any adjustment made under this Rule 13 and to call in, cancel, endorse, issue or reissue any Option or Award Certificate consequent upon such adjustment.


14.	Takeovers & Reconstructions


14.1	If any person obtains Control of the Company as a result of making:


(a)	an offer (whether a general offer or not) to acquire the whole of the issued Share capital of the Company (other than that which is already owned by him) which is unconditional or which is made on a condition such that if it is satisfied the person making the offer will have Control of the Company; or


(b)	an offer (whether a general offer or not) to acquire all the Shares (other than Shares which are already owned by him) in the Company which are of the same class as Shares subject to a Subsisting Award then, subject to Rule 14.6 and Rule 14.9, the Remuneration Committee shall notify all Participants as soon as is practicable of the offer and:


14.1.1	Subsisting Options may, subject to Rule 3.4(ii), Rule 3.6, Rule 9.3(ii) or Rule 9.5 or Rule 12.1 (as applicable), be exercised from 21 days after the date of the receipt of that notification up to the expiry of a period ending on the earlier of:


(a)	six months from the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied; and


(b)	30 days after the date of service of a notice to minority shareholders that a person has become bound or entitled to acquire Shares in the Company under any statute or order governing company reconstructions, liquidations or amalgamations and that he intends to exercise his rights under such legislation,

To the extent that any Subsisting Option is unexercised or has not been exchanged for a New Option in accordance with Rule 14.6.1 at the end of such period it shall thereupon lapse; and


14.1.2	all Shares subject to Subsisting Awards (other than Options) shall, subject to Rule 5.3(ii), Rule 5.5 and Rule 12.1, be transferred to the Participants.

14.2

If under any statute or order governing company reconstructions, liquidations or amalgamations it is proposed that the relevant legal authority (“the Court”) sanctions a compromise or arrangement in relation to the Company or likely to apply to Shares in the Company, then the Company shall give notice thereof to all Participants and the Trustee at the same time as it sends notices to members of the Company calling the meeting to consider such a compromise or arrangement and, subject to Rules 14.1, 14.6 and 14.9:

(a)

all Subsisting Options may, subject to Rule 3.4(ii), Rule 3.6, Rule 9.3(ii) or Rule or Rule 12.1 (as applicable), be exercised from the date of the notice up to the expiry of a period of six months after the date the Court sanctions such compromise or arrangement. The exercise of an Option under this Rule 14.2(a) shall be conditional on the compromise or arrangement being sanctioned by the Court and becoming effective. To the extent that any Subsisting Option remains unexercised or has not been exchanged for a New Option in accordance with Rule 14.6 at the end of such period it shall thereupon lapse; and


(b)	all Shares subject to Subsisting Awards (other than Options) shall, subject to Rule 5.3(ii), Rule 5.5 and Rule 12.1 be transferred to the Participants forthwith.


14.3	If notice is duly given of a general meeting at which a resolution will be proposed for the voluntary winding-up of the Company then:

(a)

all Subsisting Options may, subject to Rule 3.4(ii), Rule 3.6, Rule 9.3(ii) or Rule or Rule 12.1 (as applicable), be exercised in whole or in part at the date notice of the resolution is served (but so that an exercise hereunder shall be conditional upon such resolution being passed) and at any time thereafter until the resolution is duly passed or defeated or the general meeting is concluded or adjourned, whichever shall first occur. Immediately after any such resolution is passed any Subsisting Options shall, to the extent that they are unexercised, thereupon lapse; and


(b)	all Shares subject to a Subsisting Award (other than Options) shall, subject to Rule 5.3(ii), Rule 5.5 and Rule 12.1 be transferred to the Participant upon such resolution being passed.


14.4	If any person becomes bound or entitled to acquire Shares in the Company under any statute or order governing company reconstructions, liquidations or amalgamations and serves notice of his intention to exercise such rights, then:


(a)	all Subsisting Options may, subject to Rule 3.4(ii), Rule 3.6, Rule 9.3(ii) or Rule or Rule 12.1 (as applicable), be exercised during the period in which the person in question is so bound or entitled. To the extent that any Subsisting Option remains unexercised or has not been exchanged for a New Option in accordance with Rule 14.6 at the end of this period it shall thereupon lapse; and


(b)	all Shares subject to Subsisting Awards (other than Options) shall, subject to Rule 5.3(ii), Rule 5.5 and Rule 12.1 be transferred to the Participants forthwith.

14.5

Notwithstanding Rule 14.1 if, following the occurrence of an event as set out at Rules or 14.2 a company has obtained Control of the Company, or a company has become bound or entitled as mentioned in Rule 14.4 (a “Relevant Event”) , the Remuneration Committee procures that all Subsisting Awards (including any Subsisting Awards which have not Vested or been Released (as the case may be) at the date of that Relevant Event) can be exchanged pursuant to Rule 14.6, the

Remuneration Committee may, in its discretion, determine that no Award shall be Vested, Released or lapsed as a result of Rule 14.1; and:


(a)	Subsisting Options do not become exercisable and Shares subject to Subsisting Share Awards (other than Options) do not become transferable as a result of the Relevant Event and any Subsisting Option which is already exercisable ceases to be exercisable as from the date of the Relevant Event; and

(b)

that all Subsisting Awards shall be released in consideration of the Grant of a New Award in accordance with Rules 14.6 and 14.7. Any Performance Conditions which applied to a Subsisting Award will apply to the related New Award subject to such adjustments as the Remuneration Committee considers reasonable to take account of the circumstances and affect of the Relevant Event and the exchange of Awards.

provided that if the Company which is the Acquiring Company in respect of the Relevant Event fails to grant or to make a binding contractual commitment to grant the New Awards pursuant to Rule 14.6 within 40 days after the Relevant Event such resolution of the Remuneration Committee will cease to be effective and all Subsisting Options will be exercisable and Shares subject to Subsisting Share Awards (other than Options) shall be transferred pursuant to Rule 14.1 as if such Rule 14.5 determination had not been made.

14.6

If, as a result of the events specified in Rule 14.1, the Remuneration Committee has required the release of a Subsisting Award in consideration of the grant of a New Award or a company has obtained Control of the Company, the Participant may and, in the case of a Remuneration Committee resolution under Rule 14.5 shall, if that other company (“the Acquiring Company”) so agrees, release any Subsisting Award (including any Subsisting Awards which are the subject of a Rule 14.5 determination) he holds in consideration of the grant of a New Award by the Acquiring Company, and:


14.6.1	a New Award shall be evidenced by an Award Certificate which shall import the relevant provisions of these Rules;


14.6.2	a New Award shall, for all other purposes of this Plan, be treated as having been acquired at the same original time as the corresponding released Award.

14.7

For the purpose of any application of the provisions of this Plan following a release of a Subsisting Award and the grant of a New Award all the Rules of this Plan shall apply mutatis mutandis to such New Award subject only to such amendments as the Remuneration Committee shall consider are necessary or appropriate to reflect the change in identity of the Company over whose shares the New Award subsists and similar consequential changes (including, where appropriate, the adjustment of the Performance Condition). For the avoidance of doubt, a Participant’s New Award shall have the same Vested or unvested status immediately following the release and new grant as the corresponding Awards released by that Participant and any Restrictions to which the Award was subject will continue to apply.


14.8	For the purpose of this Rule 14 other than Rule 14.6 a person shall be deemed to have obtained Control of a company if he and others acting in concert with him have together obtained Control of it.


14.9	Options and Stock Appreciation Rights shall not become exercisable and Shares shall not be allotted or transferred to Participants under this Rule 14 if, when a company acquires Control, or

becomes bound or entitled to obtain Control, the majority of the persons comprising its board are members of the Board.


14.10	The exercise of an Option or Stock Appreciation Right or the issue or transfer of Shares subject to a Share Award pursuant to the preceding provisions of this Rule 14 shall be subject to the provisions of Rules 3, 7, 9 and 12.


14.11	A New Award shall not be exercisable or transferable by virtue of the event on which it was granted.


15.	Administration & Amendment


15.1	The Plan shall be administered by the Remuneration Committee whose decision on any matter relating to the Plan shall be final.


15.2	Participants shall not be entitled to:


(a)	receive copies of accounts, circulars or notices sent to holders of Shares;


(b)	exercise voting rights (except in the case of Restricted Shares and where the Remuneration Committee or, where required, the Trustee, has consented; and/or where a Participant’s Award is on terms that he is entitled to vote such Shares); or


(c)	receive dividends (except where: the Remuneration Committee or where required, the Trustee, has consented; and/or where a Participant’s Award is on terms that he is entitled to dividends thereon within Rule 4.4(h));

in respect of Shares which have not yet been issued or transferred to such Participants in accordance with these Rules.


15.3.1	The Remuneration Committee may from time to time amend these Rules provided that:

(a)

subject to 15.3.2, no amendment shall be effective which would materially prejudice the interests of Participants in relation to Awards already granted to them unless such prior consent or sanction of Participants is obtained as would be required under the provisions for the alteration of class rights contained in the Articles of Association of the Company for the time being if the Shares to be allotted or transferred in respect of Subsisting Awards constituted a separate but single class of shares and such Shares were entitled to such right;


(b)	the provisions relating to:


(i)	Eligible Employees;


(ii)	the limits contained in Rule 10; and


(iii)	the basis for determining a Participant’s entitlement under the Plan, the terms of such entitlement and the provisions for the adjustment of the same under the terms of Rule 11;

cannot be altered to the advantage of Participants without the prior approval of the Company in general meeting (except for minor amendments to benefit the administration

of the Plan to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for Participants, or the Company or any Group Company).

15.3.2

Notwithstanding Rule 15.3.1 the Remuneration Committee shall have authority to amend the terms of any Award without the consent of the Participant in any manner whatsoever to the extent that it deems it necessary or desirable to procure or attempt to procure (in compliance with the United States Internal Revenue Code ("the Code")) that his Award is not and/or does not become subject to any additional excise tax, interest and/or penalties under Section 409A of the Code.

15.3.3

If any provision of the Plan and/or the terms of any Award or prospective Award would or might contravene any regulations or Treasury guidance promulgated under or in relation to Section 409A, or would or might cause such Award or prospective Award to be subject to the additional excise tax, interest and/or penalties under Section 409A of the Code, such provisions of the Plan applicable to the affected Award and/or the terms of a Subsisting Award and/or the terms of a prospective Award which it is considered may be or may become subject to taxation under the Code shall be automatically modified (in the case of a Subsisting Award) or modified in order in either case to maintain to the maximum extent practicable, the original intention of the Plan and/or the terms of the Subsisting or other Award without violating the provisions of Section 409A of the Code provided first, that such modifications would not themselves cause a breach of the Code and secondly that the terms of the Plan and/or the relevant Award will not, as a result be materially more advantageous to the affected Participant or potential Participant than other Awards under the Plan.

15.4

The Board may, subject to Rule 15.3, create sub-plans to this Plan in which it may make such amendments to the Rules as it considers necessary or desirable to operate the Plan in any jurisdictions in which Eligible Employees are situated and may implement such sub30 plans in the form of schedules to the Plan applicable to the specified jurisdiction and in particular the Board is hereby authorised to implement such sub-plans which may provide for additional terms and conditions (including holding periods imposed on Shares) provided such additional terms and conditions are not to the material advantage of the Participants of such sub-plans as opposed to the other Participants. For the avoidance of doubt and without prejudice to the generality of the foregoing, the Board is authorised to adopt a sub-plan or sub plans for Eligible Employees situated in France which satisfies the requirements for a French qualified option plan or qualified free share plan or for Eligible Employees situated in the United States or who are subject to tax in the United States which satisfies the requirements for a qualified incentive stock option plan under section 422 of the Code provided in either case that the terms and conditions of such subplan( s) and awards thereunder are not materially different to the terms and conditions of this Plan.


15.5	The Remuneration Committee may, in its discretion, delegate any or all administrative functions in relation to the administration and operation of the Plan as it considers desirable to a sub- committee which may include non-Board members or to a nominated individual member of the Remuneration Committee.


15.6	The cost of establishing and operating the Plan shall be borne by the Group Companies which employ the Participants in such proportions as the Remuneration Committee shall determine.


15.7	Any notice or other communication under or in connection with the Plan may be given by the Company or the Trustee either personally or by post or fax or e-mail or intranet, and to the Company or the Trustee, in a form previously determined as being acceptable to the

Remuneration Committee, either personally or by post or fax or e-mail or intranet to the Secretary of the Company or the Trustee. For the avoidance of doubt the Remuneration Committee may dispense with the requirement to tender an Option Certificate on the exercise of an Option where they authorise any system permitting the exercise of Options by means of electronic notification. Items sent by post shall be prepaid and shall in the case of notices or communications to the Company or the Trustee be treated as received on the day actually received by the Company or the Trustee and in the case of notices from the Company or the Trustee shall be deemed to have been received hours after posting. A requirement under these Rules for the making of any payment may be discharged by the electronic transmission of an authorisation to charge any account or credit card.


15.8	The Remuneration Committee may determine at any time that no further Awards be granted and may from time to time modify or at any time suspend or terminate the Plan (but without prejudice to Awards already granted).


15.9	Any limitations in the Trust in relation to the number of Shares which may be made available in respect of any employees’ share scheme adopted by the Company shall apply to the Plan and it is acknowledged that the Trustee may not hold at any one time such number of Shares as would exceed 5% of the Company’s issued ordinary share capital.

15.10

By accepting any benefit or potential benefit in respect of an Award, a Participant agrees to the holding of information about him by the Company and he authorises the Company and its agents and advisers to use such information for all purposes relating to the operation of this Plan including (without limitation) making information available to HM Revenue & Customs (or overseas tax authority) or to any other person as the Company considers reasonable. By accepting any benefit or potential benefit in respect of an Award, a Participant further agrees that agents of the Company, wherever located, may process data concerning his participation in this Plan and, where necessary, transmit it outside of the United Kingdom.


16.	Miscellaneous

16.1

The rights and obligations of any individual under the terms of his office or employment with any Group Company shall not, except as specifically provided under the Plan, be affected by his participation in the Plan or any right which he may have to participate therein, and an individual who participates in the Plan shall waive any and all rights to compensation or damages in consequence of the termination of his office or employment (whether lawful or not) for any reason whatsoever insofar as those rights arise or may arise from his ceasing to have rights under the Plan as a result of such termination.

16.2

The existence of Awards (whether Share Awards or Options) shall not affect in any way (save for any adjustments required by these Rules) the right or power of the Company or its shareholders to make or authorise any or all adjustments, recapitalisation, reorganisations, reductions of capital, purchase or redemption of its own Shares or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.


16.3	Neither the grant of an Award nor any benefit which may accrue to a Participant in respect of an Award shall form part of that Participant’s pensionable remuneration for the purposes of any pension scheme or similar arrangement which may be operated by any Group Company.


16.4	Awards may be granted at any time during a Grant Period unless the making of an Award would be prohibited by legislation or the Model Code. If such a prohibition prevents the making of an Award which might otherwise have been made during a Grant Period, the Award shall be granted immediately upon the prohibition ceasing.


16.5	This plan is an employees’ share scheme within the meaning of section 1166 Companies Act 2006.


16.6	The Plan shall terminate on the first anniversary of its adoption or at any earlier time by the passing of a resolution by the Board or the Company in general meeting. Termination of the Plan shall be without prejudice to the subsisting rights of Participants.


16.7	This Plan and all Awards granted under it shall be governed by and construed in accordance with the laws of England and Wales and any dispute concerning the operation of the Plan will be subject to the exclusive jurisdiction of the English courts.

Part F - Terms applicable to United States employees


17.	Grants to United States employees


17.1	Employees in the United States may receive Awards under the Plan, provided that the following additional rules shall apply to United States employees:


(i)	the Exercise Price of an Option shall not be less than the fair market value of the underlying Shares on the date of grant.


(ii)	options intended to qualify as “incentive stock options” within the meaning of section of the Code (“Incentive Stock Options”) shall meet the requirements of Section 18 below.

(iii) any other Awards shall either meet the requirements of Section 409A of the Code or shall be structured so as not to be subject to the requirements of Section 409A of the Code.

(iv) any adjustments pursuant to Section 13 of the Plan shall be made in accordance with Section 409A and Section 424 of the Code, to the extent applicable.


18.	Incentive Stock Options


18.1	The Company may grant Incentive Stock Options and the following provisions shall apply notwithstanding anything in the Plan to the contrary.


18.2	Incentive Stock Options may be granted only to Participants who are employees of the Company or a parent or subsidiary corporation as defined in section 424 of the Code.


18.3	The Exercise Price of a Share subject to an Incentive Stock Option shall be determined by the Remuneration Committee and may be equal to or greater than the fair market value of a Share on the date the Incentive Stock Option is granted; provided, however, that an Incentive Stock Option may not be granted to an employee who, at the Date of Grant, owns Shares possessing more than

10% of the total combined voting power of all classes of shares of the Company or any Associated Company, unless the Exercise Price per share is not less than 110% of the fair market value of a Share on the Date of Grant.


18.4	An Incentive Stock Option that is granted to an employee who, at the Date of Grant, owns Shares possessing more than 10% of the total combined voting power of all classes of shares of the Company or any Associated Company, may not have a term that exceeds five years from the Date of Grant.


18.5	An Incentive Stock Option shall not be transferable other than by will or the laws of descent and distribution and shall be exercisable during the Participant’s lifetime only by the Participant.

18.6

Each Incentive Stock Option shall provide that, if the aggregate fair market value of the Shares on the Date of Grant with respect to which Incentive Stock Options are exercisable for the first time by an employee during any calendar year under the Plan or any other stock option plan of the Company or an Associated Company exceeds $100,000, then the Option, as to the excess, shall be treated as a non-qualified stock option.


18.7	The Plan shall be approved by the shareholders of the Company within 12 months before or after the date of its adoption.


18.8	No Incentive Stock Options may be granted after the date that is immediately before the tenth anniversary of the date of the adoption of the Plan.

Exhibit 10.2

MASTER SERVICES AGREEMENT AND EXCLUSIVE PATENT LICENSE

This Master Services Agreement and Exclusive Patent License (“ Agreement ”), effective as of October 1, (the “ Effective Date ”) is made by and between PuriCore, Inc. a Delaware Corporation with offices at 508 Lapp Road, Malvern, PA 19355 (hereinafter referred to as “PuriCore”) and Vitold Mikhailovich Bakhir, an individual located at [*] (hereinafter referred to as “Inventor”). PuriCore and Inventor are each referred to herein as a “Party” and collectively as the “Parties.”

WHEREAS, PuriCore desires to acquire an exclusive patent license from Inventor to US Patent No. US [*] for use in its business;

WHEREAS, Inventor agrees to grant PuriCore an exclusive license to the [*] Patent;

WHEREAS Inventor provides a full range of technical and product development services; and

WHEREAS, PuriCore desires to engage Inventor provide technical advisory and product development services set forth in Exhibit B (“ Services ”) for PURICORE and in accordance with the conditions herein and more specifically in Exhibit C, the Work Order, attached hereto.

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the Parties hereto agree as follows:

1. Patent License: Inventor shall grant to PuriCore, an exclusive worldwide license to the [*] Patent (the “Exclusive License”) in accordance with the terms and conditions of the patent License, attached hereto as Exhibit A, and fully incorporated by reference. (the “License Agreement”). PuriCore will pay Inventor the amounts set forth in the License Agreement for the Exclusive License.

2. Scope Of Services : Inventor shall provide Services to PuriCore, including new system design and development work. PuriCore shall authorize specific assignments through the work order (“ Work Order ”) to Inventor, set forth in Exhibit C, attached hereto and fully incorporated by reference. The Work Order shall include a Work Order Services Form assignment that describes in reasonably sufficient detail (a) the Services to be performed, (b) any deliverables, (c) any special terms and conditions applicable to the Services, and (d) the estimated delivery schedule for the provision of the Services and deliverables.

Inventor and PuriCore shall execute a copy of each mutually acceptable Work Order Services Form that thereafter shall be incorporated and made part of this Agreement. In the event of a conflict between the terms and conditions of the Work Order or the Work Order Services Form and this Agreement, the terms and conditions of this Agreement shall control. No obligation shall be incurred by either Party unless the Work Order and Work Order Services Form have been executed by authorized agents of both Parties.

3. Professional Standards . Inventor warrants and represents that it has the experience, expertise, and third-party contract relationships (“Contractors”) sufficient in quality and quantity to perform all Services and agrees that it will perform all Services in a manner commensurate with professional standards generally applicable to its industry and in conformance with the requirements in this Agreement.

4. Compensation; Payment Terms : PuriCore will pay Inventor in accordance with the terms set forth on Exhibit B, attached hereto and fully incorporated by reference. PuriCore and Inventor acknowledge that, in exchange for mutually valuable consideration, PuriCore has previously paid a registration fee in the amount of [*] to the Vitold Bakhir Electrochemical Systems and Technologies. Neither Inventor nor any Inventor employee shall receive any royalty or other remuneration on the production or distribution of any products developed by PuriCore in connection with or based upon the Services. Inventor shall submit a monthly invoice in the amount of [*] detailing time spent on

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

the Services to PuriCore in connection with each individual Work Order Services Form. PuriCore shall make payment to Inventor within thirty (30) days after the date on which PuriCore receives Inventor’s invoice.

5. Term, Termination, And Cancellation : This Agreement shall remain in effect through March 31, 2016 unless terminated earlier by PuriCore for any reason or no reason upon giving thirty (30) days prior written notice. Any outstanding fees for work completed to PuriCore’s satisfaction will be prorated and paid to Inventor within 20 days following the date of termination. PuriCore may withhold payment for any work not satisfactory or not performed in compliance with this Agreement. This Agreement may be terminated immediately should either Party breach a material term hereof.

All Services performed under this Agreement shall be subject to PuriCore’s reasonable satisfaction and approval. In the event that PURICORE, at any time in its sole discretion, reasonably determines that the Services performed or any portion thereof is unsatisfactory, it may require Inventor to correct or improve the Services by giving Inventor written notice, specifying the nature of the unsatisfactory performance. Inventor shall promptly thereafter take steps to correct the deficient performance to the reasonable satisfaction of PuriCore. Should Inventor fail to perform to the reasonable satisfaction of PuriCore within fifteen (15) days after receipt of such notice to correct the deficiency, PuriCore shall have the right to terminate the Work Order and any Work Order Services Forms immediately.

The Work Order and any Work Order Services Forms may be terminated by PuriCore at any time for any reason or no reason upon giving thirty (30) days prior written notice to Inventor.

In the event of termination or expiration of the Work Order and any Work Order Services Forms, all PuriCore property and all PuriCore work in the possession of Inventor shall be forwarded at PuriCore’s reasonable expense to PuriCore and PuriCore shall make payment for Services provided prior to the effective date of expiration or termination; provided, however, that PuriCore shall have no obligation to pay Inventor any fees or expenses that accrued subsequent to (a) a breach of Inventor’s obligations hereunder, (b) the failure of Inventor to perform the Services as contemplated by this Agreement or (c) the commission of fraud upon PuriCore by Inventor.

6. Independent Contractor : In the performance of this Agreement, it is mutually understood and agreed that Inventor is at all times acting and performing as an independent contractor with, and not as an employee, joint venture, partner, agent, principal or lessee of PuriCore, and nothing in this Agreement shall be construed to create an employer-employee, agent-principal, joint venture or partnership relationship between Inventor and PuriCore. Inventor shall have no authority to act on behalf of or to enter into any contract, or incur any liability for or make any representations on behalf of PuriCore. PuriCore shall not be responsible nor liable for providing any taxes, withholdings and other similar statutory obligations including, but not limited to, disability insurance, unemployment insurance and any employee payroll taxes for Inventor’s employees, subcontractors and consultants. PuriCore shall not withhold on behalf of Inventor hereunder, any sums for income tax, unemployment insurance or any other withholding pursuant to any law or requirement of any government agency.

7. Insurance and Indemnification : Inventor agrees to hold harmless and indemnify PuriCore from any and all third party claims arising out of any injury, disability or death of any of Inventor’s employees, subcontractors and consultants. Inventor shall indemnify PuriCore, its officers, directors and shareholders from all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries and deficiencies, including interest, penalties, attorney’s fees and costs, damages arising from (a) any injury to person or damage to property caused by Inventor and (b) any breach of this Agreement by Inventor.

8. Confidentiality

8.1 PURICORE Confidential Information . Inventor shall hold in strict confidence, and not use, except for the benefit of PuriCore, and not disclose to any person or entity without written authorization of PuriCore, any

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Confidential Information (as defined below) of PuriCore. “ Confidential Information ” means any proprietary or confidential information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, customer lists and customers, markets, software, developments, inventions, processes, formulas, technology, designs, drawings, engineering, marketing, distribution and sales methods and systems, sales and profit figures, finances and other business information disclosed to Inventor by or on behalf of PuriCore , either directly or indirectly, whether in writing, orally or by drawings or inspection of documents or other tangible property; provided, Confidential Information shall not include any information or materials that are not personally identifiable information of the employee(s) and that: (a) are previously known by Inventor without an obligation of confidence; (b) are independently developed by or for Inventor without use of Confidential Information; or (c) which is or becomes publicly available through no breach of this Agreement. Upon the termination or expiration of this Agreement, or at any other time upon the written request of PuriCore, Inventor shall promptly return to PuriCore all Confidential Information in Inventor’s possession or control, together with all copies, summaries and analyses thereof, regardless of the format in which such information exists or is stored.

8.2 Third Party Information Held by the Inventor . Inventor recognizes that PuriCore has received, and in the future may receive, from third parties Confidential Information subject to a duty on PuriCore’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. Inventor shall hold all such information in strict confidence and not disclose it to any person or entity or use it except as necessary in carrying out Services consistent with the Inventor’s agreement with such third party. For purposes of this Agreement, such third party information shall be deemed part of the Confidential Information of PuriCore.

8.3 Required Disclosure Confidential Information . If Inventor is required by law or court or governmental order to disclose Confidential Information, Inventor shall give PuriCore prompt written notice of such requirement such that PuriCore shall have the opportunity to apply for a protective order, injunction or for confidential treatment of such Confidential Information.

9. No Conflict with Existing Agreements : PuriCore hereby acknowledges that it does not desire to acquire from Inventor any secret or confidential know-how or information which Inventor may have acquired from others. Inventor represents and warrants to the best of its knowledge that Inventor is free to divulge to PuriCore , without any obligation to, or violation of any right of others, any and all information, practice or techniques which Inventor will describe, demonstrate, divulge or in any other manner make known to PuriCore during Inventor’s performance of the Services hereunder. Inventor further represents and warrants that Inventor is not a party to any existing agreement that would prevent Inventor from entering into and performing its obligations under this Agreement in accordance with its terms. Inventor shall not enter into any agreement that is in conflict with, or that would prohibit or impair the performance of, Inventor’s obligations under this Agreement in accordance with its terms.

10. Ownership of Results and Right of First Refusal .

10.1 Assignment of Inventions from Performance of the Services . Inventor shall promptly make full written disclosure to PuriCore, shall hold in trust for the sole right and benefit of PuriCore, and hereby assigns, transfers and conveys to PuriCore, or its designee, all of Inventor’s worldwide right, title and interest in and to any and all inventions, original works of authorship, findings, conclusions, data, discoveries, developments, concepts, improvements, trade secrets, techniques, processes and know-how, whether or not patentable or registrable under patent, copyright or similar laws, that Inventor may solely or jointly conceive, develop or reduce to practice, or cause to be conceived, developed or reduced to practice, in the performance of the Services, including, without limitations electrochemical technology relating to food systems and hard surface disinfection, or that result, to any extent, from use of PuriCore’s premises or property (collectively, the “Services Related Inventions”), including any and all moral rights and intellectual property rights inherent therein and appurtenant thereto, including, but not limited to, all patent rights, copyrights, trademarks, know-how and trade secrets and the rights to apply for the same (collectively, “Intellectual Property Rights”).

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

10.2 Right of First Refusal . Inventor grants PuriCore a right of first refusal to obtain an exclusive license on any Inventions or improvements and related Intellectual Property Rights made by Inventor outside the scope of Services in the field of electrochemical technology, including, without limitation an electrochemical cell (the “Outside Services Inventions”) during the Term and for two years following termination or expiration, and to negotiate the terms of an exclusive license to use such Invention (the “Option”).

Inventor shall provide notice of such Outside Services Inventions to PuriCore promptly in writing. PuriCore, shall have [*] within which to provide Inventor written notice of PuriCore’s interest in licensing the Outside Services Invention (the “Option Period”).

Upon the Licensor receiving notice from the Licensee, the Parties will negotiate in good faith the terms of a license to the Outside Services Invention for a period of [*] the date of receipt of notice (the “Negotiation Period”).

If the Parties, acting in good faith, are unable to negotiate a license to the Outside Services Invention during the Negotiation Period, Licensor agrees not to license the Outside Services Inventions to a third party on terms more favorable than those last offered to the Licensee during the Term of this Agreement and for a period of two years following termination or expiration.

10.3 Works for Hire . Inventor acknowledges and agrees that all original works of authorship that are made by Inventor (solely or jointly with others) in the performance of the Services (a “ Work ”) and that are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act. However, to the extent that any Work may not, by operation of any applicable law, be a work made for hire, Inventor hereby assigns, transfers and conveys to PuriCore all of Inventor’s worldwide right, title and interest in and to such Work, including all Intellectual Property Rights relating thereto.

10.4 Further Assurances . Upon the request and at the expense of PuriCore, Inventor shall execute and deliver any and all documents and take such other acts as may be necessary or desirable to document the assignment and transfer described in Section 10 or to enable PuriCore to secure its rights in the Inventions, Works and Intellectual Property Rights relating thereto in any and all jurisdictions, or to apply for, prosecute and enforce Intellectual Property Rights in any and all jurisdictions with respect to any Inventions or Works, or to obtain any extension, validation, re-issue, continuance or renewal of any such Intellectual Property Right. Without limiting the foregoing, Inventor shall disclose to PuriCore all pertinent information and data with respect thereto and shall execute all applications, specifications, oaths and all other instruments which PuriCore deems necessary in order to apply for and obtain such rights and in order to assign and convey to PuriCore the sole and exclusive right, title and interest in and to such Inventions, Works and any Intellectual Property Rights relating thereto. If PuriCore is unable for any other reason to secure Inventor’s signature to apply for or to pursue any application for any patent, trademark, copyright or other registration covering Inventions or Works assigned to PuriCore hereunder, then Inventor hereby irrevocably designates and appoints PuriCore and its duly authorized officers and agents as Inventor’s agent and attorney in fact, to act for and in Inventor’s behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or trademark, copyright or other registrations thereon with the same legal force and effect as if executed by Inventor.

11. Force Majeure . Except with respect to the payment of monies due hereunder, neither Party shall be considered in default of the performance of any obligation hereunder to the extent that the performance of such obligation is prevented or delayed by fire, flood, earthquake, explosion, strike, acts of terrorism, war, insurrection, embargo, government requirement, civil or military authority, act of God, or any other event, occurrence or condition which is whole or in part, by that Party, and which is beyond the reasonable control of that Party.

12. Assignment . This Agreement shall not be assigned, delegated, or transferred by Inventor without the written consent of PuriCore which shall not be unreasonably withheld or delayed.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

13. Publicity . Inventor shall not use PuriCore’s name or that of any of its affiliates or employees in any advertising or sales promotional material or in any publication without the prior written consent of PuriCore, except as is required by law.

14. Section Headings : The headings of the several sections are inserted for convenience or reference only and are not intended to be a part of or to affect the meaning or interpretation of this agreement.

15. Governing Law, Jurisdiction and Attorney Fees .

This Agreement shall be governed by and interpreted in accordance with laws of the state of Delaware without giving effect to any conflict of laws provisions. Inventor irrevocably consents to the personal jurisdiction of the state and federal courts located in Chester and Philadelphia, Pennsylvania Counties respectively, for any suit or action arising from or related to this Agreement, and waives any right Inventor may have to object to the venue of such courts. Inventor further agrees that these courts will have exclusive jurisdiction over any such suit or action initiated by PuriCore against Inventor. The prevailing party in any dispute or legal action regarding the subject matter of this Agreement shall be entitled to recover attorney’s fees and costs.

16. Severability . If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application and shall not invalidate or render unenforceable such provision or application in any other jurisdiction.

17. Entire Agreement : This agreement contains the entire understanding between the Parties hereto and may not be altered, varied, revised or amended except by an instrument in writing signed by both Parties. In the event of any conflict between the terms of any Work Order and the terms of this Agreement, the terms of this Agreement shall control and prevail.

18. Survival : The provisions of Articles 3, 5, 6, 8, 10, 12, 13, 14 and 16 shall survive the termination or expiration of this Agreement. The expiration or termination of this Agreement shall not impair any right or obligation of any Party accruing prior to the effective date of such expiration or termination.

19. Notices : All notices and other communications required or permitted under this Agreement shall be in writing, served personally on, delivered by recognized overnight courier, to the Party to be charged with receipt thereof at the address specified below, or sent via facsimile with confirmation of receipt at the facsimile number specified below. All other notices shall be deemed given hereunder upon actual receipt.

PURICORE: 508 Lapp Road, Malvern, PA 19355

Inventor: [*]

20. Time Is of the Essence . Time is of the essence in the performance of the Services and Inventor’s other obligations under this Agreement.

21. Counterparts : This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have duly executed this Agreement as of the Effective Date.



VITOLD MIKHAILOVICH BAKHIR		PURICORE, INC.


/s/ Vitold Mikhailovich Bakhir		/s/ Michael Ashton
Title: Inventor		Title: CEO

This Agreement is to be executed in duplicate.

Please return one fully executed copy to PuriCore at the address above.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

EXHIBIT A
PATENT LICENSE

EXCLUSIVE PATENT LICENSE AGREEMENT

THIS AGREEMENT, effective as of October 1, 2014 by and between Vitold Makhailovich Bakhir, an individual located at [*]
(“LICENSOR”), and PuriCore, Inc., a Delaware Corporation with offices at 508 Lapp Road, Malvern, PA 19355 (“LICENSEE”).

WHEREAS, LICENSOR warrants that it is the owner of, all right, title, and interest in, United States Patent No. [*] issued on March 1, 2011 for an invention titled Device for Producing Anodic Oxidation Products of Alkali or Alkali-Earth Metal Chloride Solution in the name of the inventor Vitold Makhailovich Bakhir;

WHEREAS, LICENSEE desires to secure an exclusive license to make, have made, use, offer to sell, and sell constructions in accordance with the claims of the [*] patent;

WHEREAS, LICENSOR warrants that it has the right to grant the Exclusive License;

NOW, THEREFORE, in consideration of the promises and mutual covenants of this Agreement, the parties agree as follows.

ARTICLE 1GRANT

1.1 LICENSOR grants to LICENSEE an exclusive, royalty free license to make, have made, use, offer to sell, and sell throughout the world constructions embodying the invention disclosed and claimed in the [*] patent (“Exclusive License”).

1.2 LICENSEE shall not license any other third parties to make, have made, use, offer to sell, or sell licensed constructions embodying the invention disclosed and claimed in the [*] patent.

1.3 Product sold under the Exclusive License shall be referred to herein as Licensed Product.

1.4 This license shall remain in force until the [*] patent expires, unless sooner terminated under the provisions of Article III of this Agreement.

ARTICLE II– PAYMENT

2.1 LICENSEE shall pay LICENSOR a total of [*] for the Exclusive License. [*]

ARTICLE III– TERMINATION

3.1 Unless terminated earlier as provided, this Agreement shall extend for a term equal to the life of the [*] patent.

3.2 In the event that one party to this Agreement should materially breach or default on any of its obligations under this Agreement, the other party may, at its option, terminate this Agreement by giving [*] notice to the one party. Such termination will occur on the date when this [*] period expires. This Agreement shall not terminate, however, if

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

the one party shall, during the [*] period, have cured the breach or default, or is diligently pursuing a course of action to cure such breach or default and cure is not reasonably possible within the thirty (30) day period.

3.3 In the event that an appropriate decision-making body finds the [*] patent wholly invalid or unenforceable, either party to this Agreement may, at its option, terminate this Agreement by giving thirty (30) days’ notice to the other party. Such termination will occur on the date when this [*] period expires.

3.4 The notice required in Articles 3.2 and 3.3 must be in writing and specify the reason or reasons for termination of this Agreement. The notice must be sent by Registered or Certified mail to the non-terminating party at the address set forth above.

ARTICLE IV– MARKING

4.1 LICENSEE shall apply the appropriate patent notice, in accordance with the provisions of Title 35, Section 287, of the U.S. Patent Statute, and the corresponding foreign law where applicable, to all Licensed Product made, used, offered for sale, or sold by, or on behalf of, LICENSEE.

ARTICLE V– INFRINGEMENT

5.1 In the event that the [*] patent shall be infringed, LICENSOR shall have the first right to prosecute any action necessary to protect rights under this patent. In the event LICENSOR does not, within six (6) months after being notified in writing by LICENSEE of any such infringement, commence legal action or terminate the infringement, LICENSEE shall have the right, but not the obligation, to commence any legal action or to take such steps as LICENSEE may deem desirable to terminate such infringement with both LICENSEE and LICENSOR obligated to pay for one-half of the reasonable attorneys fees, costs, and expenses. LICENSEE may commence such action in its own name or jointly in the name of LICENSOR.

ARTICLE VI– VALIDITY

6.1 LICENSEE agrees not to dispute or contest the ownership, validity, or enforceability of the [*] patent, and LICENSOR agrees to maintain the [*] patent in force.

ARTICLE VII– GOVERNING LAW AND ATTORNEY FEES

7.1 This Agreement shall be governed by and interpreted in accordance with laws of the state of Delaware without giving effect to any conflict of laws’ provisions. The prevailing party in any dispute or legal action regarding the subject matter of this Agreement shall be entitled to recover attorney’s fees and costs.

ARTICLE VIII– MISCELLANEOUS

8.1 No waiver by either LICENSEE or LICENSOR, express or implied, of any breach of any term, condition, or obligation of this Agreement by the other shall be construed as a waiver of any subsequent breach of that term, condition, or obligation, or any other term, condition, or obligation of the Agreement of the same or different nature.

8.2 If it should be determined that one or more portions of this Agreement is or are invalid, such invalidation shall not affect the rights and obligations of the LICENSEE and LICENSOR with respect to each other under the remaining portions of this Agreement.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

8.3 This Agreement shall inure to the benefit of and will be binding upon all legal representatives of LICENSOR and LICENSEE. This Agreement shall not be transferable or assignable by LICENSEE except upon the written consent of LICENSOR.

8.4 This Agreement supersedes all oral and written Agreements between LICENSOR and LICENSEE relating to the subject matter of the [*] patent.

8.5 This Agreement may not be modified by either party, in whole or part, except by an additional agreement in writing signed by LICENSOR and LICENSEE.

IN WITNESS WHEREOF, the parties have respectively caused this instrument to be executed by an official duly authorized and their respective signatures to be affixed effective as of the day and year indicated in the first paragraph of this Agreement.



		Vitold Mikhailovich Bakhir
Attest.
/s/ Igor Kozlov		By: /s/ Vitold Bakhir
Title: Expert UBT		Title: Inventor
Name: Igor Kozlov		Name: Vitold Bakhir


		PuriCore, Inc
Attest.
/s/ Vadim Panichev		By: /s/ Michael Ashton
Title: Technology Director, CEO		Title: CEO
Name: Vadim Panichev		Name: Michael Ashton

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

EXHIBIT B
SERVICES

1. The proposed Services to be performed under the Agreement shall include, but not be limited to the following types of projects, which may be changed from time to time by the parties upon mutual agreement:[*].

2. The Fees for the Services areas follows: PuriCore will pay Inventor [*]. Inventor shall devote a minimum of [*] per month to performing the Services and provide PuriCore with written description of work performed. Payments of such fees shall be made in accordance with the provisions of the Agreement.

Additionally, PuriCore will pay Inventory [*], within 14 days following execution of the Agreement

3. The Work Order is set forth in Exhibit C, attached to this Agreement. Work Order Services Forms in connection with specific assignments will be mutually agreed upon in writing between the parties, signed by an authorized agent of PuriCore and Inventor numbered separately and set forth in Exhibit C-1, attached to this Agreement.

4. Invoices shall be delivered to:

PuriCore, Inc. (ATTN: Controller)

508 Lapp Road

Malvern. PA USA 19355

5. Joint Steering Committee: As soon as practicable after the Effective Date, PuriCore and Inventor shall each identify up to three representatives with the authority, experience, and seniority sufficient and appropriate to enable him/her to make decisions on behalf of the respective Parties, for appointment to the Joint Steering Committee. The Joint Steering Committee will convene a call no less than once per month to address all relevant issues regarding this Work Order, including any necessary revisions or additions or resolution of any areas of potential dispute.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

EXHIBIT C
WORK ORDER

This Work Order (“ Work Order ”) is entered into by and between Vitold Bakhir (“ Inventor’ ) and PuriCore, Inc. (“PuriCore”), effective as of October 1, 2014 with reference to the following:

WHEREAS, the Parties hereto have entered into a Master Services Agreement and Exclusive Patent License dated as of October 1, 2014 (the “ Agreement ”); and

WHEREAS, pursuant to the Agreement, Inventor has agreed to provide design and development services to PuriCore in accordance with written work orders entered into from time to time describing such services.

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the Parties hereto agree as follows:

1. Work Order: This document constitutes a “Work Order under the Agreement and this Work Order and all is subject in all respects to the terms and provisions of the Agreement. The specific Services to be performed shall be set forth in separately numbered Work Order Services Form(s) in the form of Exhibit C-1, a sample of which is attached to this Work Order. The Parties anticipate that the first Services will be the development/enhancement to the Aquachlor generator. The Parties may not make changes to this Work Order unless mutually agreed to in writing and signed by both Parties. All such changes must first be approved by the Joint Steering Committee.

Technical requirements (the “Technical Requirements”) for the new systems shall include, but not be limited to the following and shall be specified by PuriCore and discussed with Inventor to ensure that the Parties are in agreement with all such Technical Requirements:

[*]

2. Fees: PuriCore shall pay Inventor in accordance with fees set forth in Exhibit B of the Agreement, unless otherwise agreed in writing between PuriCore and Inventor. Invoices shall be sent to:

PuriCore, Inc. (ATTN: Controller)

508 Lapp Road

Malvern, PA 19355

USA

3. Time Line: All Services are to be completed in a timely fashion in accordance with the, timelines set forth in Work Order Services Form. including technical milestones (“Milestones”) as may be mutually agreed. Time is of the essence.

IN WITNESS WHEREOF, the Parties hereto have caused this Work Order to be duly executed as of the date herein above set forth.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.



PURICORE, INC.		VITOLD MIKHAILOVICH BAKHIR


/s/ Michael Ashton		/s/ Vitold Mikhailovich Bakhir
Authorized Signature		Authorized Signature

Name: Michael Ashton		Name: Vitold Bakhir

Title: CEO		Title: Inventor

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

EXHIBIT C4
WORK ORDERSERVICES FORM

SAMPLE WORK ORDER SERVICES FORM - SPECIFICATIONS TO BE PROVIDED BY PURICORE

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

AMENDMENT TO PATENT LICENSE

This Amendment (the “Amendment”) to the Exclusive Patent License Agreement between Vitold Makhailovich Bakhir and PuriCore, Inc. dated October 1, 2014 (“the Agreement”), is entered into as of June 23 ^rd 2016 by and among Vitold Makhailovich Bakhir , an individual located at [*] (“LICENSOR”), and PuriCore, Inc. , a Delaware Corporation with offices at 508 Lapp Road, Malvern, PA 19355 (“LICENSEE”).

RECITALS

WHEREAS LICENSOR and LICENSEE have entered into the Agreement granting LICENSEE an exclusive license to US Patent [*] , to make, have made, use, offer to sell, and sell constructions embodying the invention disclosed and claimed in the [*] Patent (the [*] Patent Rights). The Agreement does not grant LICENSEE rights to sublicense the [*] Patent Rights to third parties.

LICENSEE desires the right to sublicense the [*] Patent Rights to third parties.

In consideration of a one-time payment of [*], receipt of which by LICENSOR is hereby acknowledged, the Parties hereto agree to amend the Agreement as follows:

AMENDMENT

1. Terms . Capitalized terms in this Agreement shall have the same meaning as those in the Agreement, unless specifically defined in this Amendment. All section and paragraph references refer to sections or paragraphs as applicable in the Agreement. References to the term “Agreement” in the Agreement shall be deemed to include the Amendment.

2. Interpretation . Except as expressly modified herein, the Agreement shall remain in full force and effect in accordance with its terms. To the extent there are any inconsistencies or ambiguities between this Amendment and the Agreement, the terms of this Amendment shall supersede the Agreement.

3. Amendment .

Paragraph 1.2 is deleted in its entirety and replaced with:

1.2 LICENSOR grants to LICENSEE rights to sublicense the [*] Patent to make, have made, use, offer to sell, and sell constructions embodying the invention disclosed and claimed in the [*] Patent. Any such sublicensees shall consent in writing to be bound by the terms of at least Articles IV and VI of the Agreement to the same extent as LICENSEE, and shall agree in writing to use commercially reasonable efforts to practice the invention disclosed and claimed in the [*] Patent in order to maintain the sublicense.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Paragraph 1.5 is added:

1.5 LICENSEE will maintain the [*] Patent by payment of the year 8 and year 12 maintenance fees.

IN WITNESS THEREOF, the Parties have caused this Amendment to be executed:



VITOLD MAKHAILOVICH BAKHIR


By:	/s/ Vitold Makhailovich Bakhir
	(Signature)


Date:	21 June, 2016


PURICORE, INC.


By:	/s/ M. Sampson
	(Signature)

Name:	M. Sampson

Title:	VP R&D

Date:	23 ^rd June 2016

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

SECOND AMENDMENT TO PATENT LICENSE

This Second Amendment (the “Amendment”) to the Exclusive Patent License Agreement between Vitold Makhailovich Bakhir and PuriCore, Inc. dated October 1, 2014 (“the Agreement”) is entered into as of September 1, 2016, by and among Vitold Makhailovich Bakhir , an individual located at [*] (“LICENSOR”), and PuriCore, Inc. , a Delaware Corporation with offices at 508 Lapp Road, Malvern, PA 19355 (“LICENSEE”).

RECITALS

WHEREAS the Agreement was amended on June 21, 2016 granting LICENSEE rights to sublicense the [*] Patent Rights to third parties;

For consideration received, receipt of which by LICENSOR is hereby acknowledged, the Parties hereto agree to further amend the Agreement as follows:

AMENDMENT

1. Terms. Capitalized terms in this Agreement shall have the same meaning as those in the Agreement, unless specifically defined in this Amendment. All section and paragraph references refer to sections or paragraphs as applicable, in the Agreement. References to the term “Agreement” in the Agreement shall be deemed to include the Amendment.

2. Interpretation. Except as expressly modified herein, the Agreement shall remain in full force and effect in accordance with its terms. To the extent there are any inconsistencies or ambiguities between this Amendment and the Agreement, the terms of this Amendment shall supersede the Agreement.

3. Amendment .

Paragraph 1.2 (as amended on June 21, 2016) is deleted in its entirety and replaced with:

1.2 LICENSOR grants to LICENSEE rights to sublicense the [*] Patent to make, have made, use, offer to sell, and sell constructions embodying the invention disclosed and claimed in the [*] Patent. Sublicensees may grant further sublicenses upon prior written notice to LICENSOR. Any such sublicensees shall consent in writing to be bound by the terms of at least Articles IV and VI of the Agreement to the same extent as LICENSEE, and shall agree in writing to use commercially reasonable efforts to practice the invention disclosed and claimed in the [*] Patent in order to maintain the sublicense.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Paragraph 8.3 is deleted in its entirety and replaced with:

8.3 This Agreement shall inure to the benefit of and will be binding upon all legal representatives of LICENSOR and LICENSEE. This Agreement is transferable or assignable in whole or in part upon prior written notice to LICENSOR.

IN WITNESS THEREOF, the Parties have caused this Amendment to be executed:



VITOLD MAKHAILOVICH BAKHIR


By:	/s/ Vitold Makhailovich Bakhir
	(Signature)


Date:	2 September, 2016


PURICORE, INC.


By:	/s/ Marella Thorell
	(Signature)

Name:	Marella Thorell

Title:	CFO/COO

Date:	1 Sept 2016

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Exhibit 10.3

TECHNOLOGY TRANSFER AGREEMENT

This Technology Transfer Agreement ( “Agreement” ) is entered into as of April 4, 2018 ( “Effective Date” ) between Realm Therapeutics, Inc., a Delaware corporation ( “RTI” ) and Vitold M. Bakhir ( “Licensor” ) and sets forth the terms and conditions that will apply to the transfer of certain technology and the grant of certain licenses from Licensor to RTI.

1. License

1.1 License Grant .

(a) Subject to the terms of this Agreement, Licensor hereby grants to RTI and RTI hereby accepts, an exclusive, worldwide, perpetual, license, including the right to grant sublicenses in accordance with Section 1.1(c), under the Licensor Patent Rights and the Licensor Intellectual Property to make, have made, use, have used, offer for sale, sell, have sold and import Licensed Products in the Field.

“Field” means electrochemical cells for the production of hypochlorous acid for products regulated as pharmaceuticals including clinical trials for pharmaceutical development.

“Know-How” means discoveries, observations, inventions, know-how, trade secrets, techniques, methodologies, modifications, improvements, works of authorship, designs and data (whether or not protectable under patent, copyright, trade secrecy or other laws).

“Licensed Product(s)” means any product comprising or containing an electrochemical cell for the production of hypochlorous acid the development, manufacture, use or sale of which is covered by the Licensor Patent Rights or makes use of any Licensor Intellectual Property (“ Product ”), including but not limited to the electrochemical cells described and claimed in US Patent [*] including any improvements or modifications thereto (whether or not patented), including but not limited to the Licensor’s certain Electrochemical [*].

“Licensor Intellectual Property” means Know-How, that is owned or controlled by Licensor or its Affiliates during the term of this Agreement and that is necessary or useful for the development, manufacture, use, sale, offering for sale or importing of the Licensed Products, including any tangible materials that are provided by Licensor to RTI. The term Licensor Intellectual Property does not include any Know-How, which is, as of the Effective Date or later becomes, generally available to the public.

“Licensor Patent Rights” means those patents, patent applications, divisionals, continuations, continuations-in-part, reissues, extensions, supplementary protection certificates and foreign counterparts thereof that are controlled by Licensor at any time during the term of this Agreement and that are necessary or useful for the manufacture, use, sale, offer to sell, lease, or importation of Licensed products in the Field, including but not limited to U.S. Patent No. [*] and any continuations, continuations-in-part, divisions, reissues, examinations or extensions of such patent and all foreign counterparts of such patent.

(b) Parties acknowledge that Licensor sells Products to third parties for use outside the Field. In order to give effect to the exclusive license granted herein, Licensor covenants that he will not sell, license, or lease Products to any third party for use in any geography (worldwide) in the Field. In order to satisfy this covenant, Licensor will make inquiries of those third parties placing an order for Product and inform third parties that any contract for sale, license, or lease of Product is predicated on use of the Product outside the Field. Licensor will use commercially reasonable efforts to ensure he obtains factually accurate replies to the inquiries and to otherwise enforce this provision.

(c) The right of RTI to grant sublicenses under Section 1.1(a) is subject to the requirement that each such sublicense shall be in writing and shall include provisions (i) acknowledging that such sublicense is subject

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

to the applicable license(s) granted hereunder, (ii) requiring each sublicensee to perform all applicable obligations of RTI hereunder in the applicable portion of the Territory. RTI shall at all times remain responsible for the performance of any of its sublicensees.

(d) The license granted under this Section 1.1 shall be treated as a license of rights to “intellectual property” (as defined in Section 101(56) of Title 11 of the United States Code, as amended (the “Bankruptcy Code” )) for purposes of Section 365(n) of the Bankruptcy Code. The parties agree that RTI may elect to retain and may fully exercise all of its rights and elections under the Bankruptcy Code provided , that it abides by the terms of this Agreement.

1.2 Patent Matters .

(a) RTI shall be responsible for payment of maintenance fees for US Patent [*] that become due after the Effective Date.

(b) If either party learns of any actual or threatened infringement or misappropriation or any attack on the validity or enforceability by a third party with respect to Licensor Patent Rights and the Licensor Intellectual Property in the Field, such party shall promptly notify the other party and shall provide such other party with available evidence of such events.

(c) RTI shall have the first option to pursue any enforcement or defense of Licensor Patent Rights and the Licensor Intellectual Property against infringement or misappropriation, including defense against a declaratory judgment action alleging invalidity or non-infringement of any of the Licensor Patent Rights and the Licensor Intellectual Property in the Field; provided , that RTI pays all costs and expenses related to the same, keeps Licensor reasonably informed of its progress and provides Licensor with copies of any substantive documents related to such proceedings and reasonable notice of all such proceedings. RTI shall notify Licensor of its decision to exercise its right to enforce or defend Licensor Patent Rights or Licensor Intellectual Property not later than [*] following its discovery or receipt of notice of the alleged infringement or misappropriation.

(d) If (i) RTI notifies Licensor that it will not enforce Licensor Patent Rights and the Licensor Intellectual Property in accordance with Section 1.2(c); (ii) RTI has exhausted all legal appeals with respect to causing the alleged infringement or misappropriation to cease or causing the person alleging the infringement or misappropriation to forebear, (iii) RTI fails to bring an infringement or misappropriation action within [*] following its discovery or receipt of notice of the alleged infringement or misappropriation or (iv) RTI is not diligently pursuing an infringement or misappropriation action or diligently defending the validity or enforceability of Licensor Patent Rights and the Licensor Intellectual Property at issue, then Licensor shall have the right to pursue the alleged infringer or party responsible for the alleged misappropriation or take control of any action initiated by, or being defended by, RTI at Licensor’s own expense. Notwithstanding the foregoing, if RTI has not initiated an infringement or misappropriation action as described under (iii) above, or ceased to pursue such action, on the advice of outside patent counsel, then Licensor agrees not to initiate such an action without RTI’s prior consent not to be unreasonably withheld or delayed (with the determination of reasonableness taking into account the costs of such litigation, its likelihood for success, the potential damages or settlement recovery, and the potential for exposure to counterclaims and defenses against RTI with respect to any RTI Patent Rights with respect to the applicable Licensed Product). In any such case, RTI will, wherever possible under applicable law, substitute Licensor as party plaintiff for purposes of pursuing any alleged infringer or party responsible for the alleged misappropriation, or as defendant for defending any Licensor Patent Rights or Licensor Intellectual Property.

(e) Any recovery of damages or other sums recovered in a proceeding or action with regard to Licensor Patent Rights and the Licensor Intellectual Property Rights handled by a party pursuant to Section 1.2(c) or

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Section 1.2(d) shall be applied first in satisfaction of any unreimbursed expenses and legal fees of the party bringing or defending the proceeding or action (the “Acting Party” ) and next, if applicable, in satisfaction of the costs and expenses incurred by the other party in connection therewith, including reasonable attorneys’ fees involved in the prosecution and/or defense of any proceeding or action and, if after such reimbursement any funds shall remain from such damages or other sums recovered, the remaining recovery shall be retained one hundred percent (100%) by the Acting Party. No settlement, consent judgment or other voluntary final disposition of any suit regarding Licensor Patent Rights and the Licensor Intellectual Property may be entered into without the consent of the other party, which consent shall not be unreasonably withheld.

(f) In any infringement or misappropriation suit that either party may institute to enforce Licensor Patent Rights and the Licensor Intellectual Property, or in any declaratory judgment action alleging invalidity, non‑infringement or non-misappropriation of any Licensor Patent Rights and the Licensor Intellectual Property brought against Licensor or RTI, the other party shall, at the request and expense of the party initiating or defending the suit or action, cooperate and assist in all reasonable respects, having its employees testify when requested and making available relevant records, papers, information, specimens and the like. In addition, upon the reasonable request of the party instituting an action under this Section 1.2, or if required by applicable law, the other party shall join such action and shall be represented using counsel of its own choice, at the requesting party’s expense; provided, that if RTI does not initiate an action hereunder on the advice of outside patent counsel, then Licensor may not require RTI to join such action but Licensor may have RTI join such action as an involuntary party, but RTI shall not be required to participate in such action.

2. Technology Transfer

2.1 Technology Transfer . Licensor shall take the following actions to provide RTI with all information and data necessary or useful to enable RTI to practice the Licensor Patent Rights and the Licensor Intellectual Property for purposes of making, having made, using, have used, offering for sale, selling, having sold and importing Licensed Products in the Field.

2.2 Schedule for Transfer of Technology .

(a) In accordance with the schedule set forth below, Licensor shall take the following actions to provide RTI or its designees with all information that is necessary or useful to enable RTI and its designees to manufacture Licensed Products conforming with the applicable specifications (and any enhancements, modifications, upgrades, corrections, and components to the Licensed Products developed during the term of this Agreement), including any drawings, manufacturing instructions, testing equipment vendors (and detailed modification notes for any modifications made to such testing equipment for purposes of testing the Products), equipment settings, supply chain information, costed bills of materials, testing procedures, or other information as well as any manuals, programmers notes, and other materials needed to access and use such materials.

(b) Licensor will provide all Know-How and instructions, including knowledge, documentation, contacts, and support necessary to enable successful manufacture of Licensed Products by RTI and RTI’s designees.

(c) Licensor and/or Licensor’s employees or agents will be available, on a reasonable basis (at no further cost to RTI), for questions and trouble-shooting support to effect the successful transfer of the technology described in Sections 2.1-2.2(a), including but not limited to: [*].

3. Charges

3.1 License Fee . RTI shall pay Licensor [*] in consideration for the patent license granted under Section 1.1 within [*] following the Effective Date and delivery of Licensor's invoice.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

3.2 Tech Transfer Fee. RTI shall pay Licensor the following payments in consideration of each of the following deliverables covering the transfer of technology and know-how concerning the Licensor’s technology, within [*] following the achievement of each of the following events and delivery of Licensor’s invoice:

(i) upon delivery of draft documentation (for technology transfer in accordance with Section 2.2(c)(i)-(v)) for review/comment by RTI, such delivery to occur within [*] after the effective date, RTI will pay Licensor [*].

(ii) upon RTI’s final approval of the documentation relating to Sections 2.2(c)(i)-(v) such documentation to be delivered within [*] after the effective date, RTI shall pay Licensor [*].

(iii) upon completion by Licensor of an on-site presentation and training at the RTI facility [*].

(iv) upon delivery by Licensor to RTI of an annual update of improvements or modifications (if any), including of sourced parts, by December 15 each year (or earlier if available), RTI shall pay Licensor [*] (in those years in which improvements or modifications are made and an update is provided). This payment obligation will commence in 2019.

3.3 Restrictions within Field . In consideration for Licensor’s obligations under Section 1.1(b), RTI will pay Licensor [*] annually by December 31 of each year. This payment obligation will commence in 2019.

3.4 Remittance . All payments shall be made in U.S. Dollars. All invoices provided to RTI hereunder should include Licensor’s bank details and Licensor’s contact name for issue resolution and be sent to RTI at the notice address set forth below.

4. Confidentiality

4.1 Confidential Information . “Confidential Information” means all data, specifications, information and data provided by Licensor to RTI pursuant to this Agreement except any portion thereof which: (i) is known to RTI, as evidenced by RTI's written records, before receipt thereof pursuant to this Agreement; (ii) is disclosed to RTI by a third person who is under no obligation of confidentiality to Licensor with respect to such information and who otherwise has a right to make such disclosure; (iii) is or becomes generally known in the trade through no fault of RTI; or (iv) is independently developed by RTI, as evidenced by RTI's written records, without access to Licensor Confidential Information. It is understood that in the event a portion or aspect of Confidential Information becomes generally known, only that portion or aspect shall not be governed by this Agreement and that all other aspects of such Confidential Information shall remain subject to the provisions of this Agreement.

4.2 Permitted Use . Confidential Information will be used by RTI or its licenees solely for the purposes permitted by this Agreement. All Confidential Information will be received and held in confidence by RTI or its licensees, subject to the provisions of this Agreement. RTI acknowledges that it will not obtain any rights of any sort in or to the Confidential Information as a result of disclosure pursuant to this Agreement and that any such rights must be the subject of separate written agreement(s).

4.3 Non-Disclosure . RTI will restrict disclosure of Confidential Information to those of its employees to whom it is necessary to disclose such Confidential Information in connection with the purposes permitted under Section 4.2. RTI shall use its best efforts, including at least efforts fully commensurate with those employed by RTI for the protection of its own confidential information, to protect the Confidential Information.

5. Term; Termination

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

5.1 Term . This Agreement shall take effect as of the Effective Date and shall remain in effect until the expiration of the last to expire Licensor Patent Right, unless sooner terminated in accordance with Section 5.2. Thereafter, RTI shall have a fully paid-up, royalty-free, perpetual non-exclusive license to Licensor Patent Rights and Licensor Intellectual Property to make, have made, use, import, promote, distribute, sell, offer for sale and otherwise exploit the Licensed Products within the Field.

5.2 Termination .

(a) Either party may terminate this Agreement with [*] notice if the other party commits a material breach unless the breach is cured within the [*] notice period.

(b) RTI shall have the right to terminate this Agreement in its entirety at any time after the Effective Date by providing [*] prior written notice to Licensor.

5.3 Effect of Termination .

(a) If termination is made by Licensor pursuant to Section 5.2(a) or by RTI pursuant to Section 5.2(b), the parties will terminate all tasks then in process in an orderly manner, as soon as practical and in accordance with a schedule agreed to by RTI and Licensor.

(b) Except as otherwise provided herein, neither party shall be liable to the other party for any compensation or damages by reason of termination of this Agreement in accordance with this Section 5.3.

(c) Nothing herein shall be construed to release either party of any obligation which matured prior to the effective date of any termination. Either party’s liability for any uncontested charges, payments or expenses due to the other party that accrued prior to the termination date shall not be extinguished by termination, and such amounts (if not otherwise due on an earlier date) shall be immediately due and payable on the termination date.

5.4 Survival . Sections 4, 5, 7.2-7.10 shall survive any termination or expiration of this Agreement.

6. Representations and Warranties; Covenants

6.1 Authorization, etc . Each party hereby represents and warrants to the other that: (i) it has all requisite power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; (ii) this Agreement has been duly authorized, executed and delivered by such party, constitutes the legal, valid and binding obligation of such party and is enforceable against such party in accordance with its terms; (iii) it shall not disclose to the other party any proprietary confidential information of any third party.

6.2 Additional Representations of Licensor .

(a) Licensor has no knowledge that any issued patents that are part of Licensor Patent Rights are invalid or unenforceable.

(b) Licensor has no knowledge of any claims, judgments or settlements against Licensor pending, or threatened, that invalidate or seek to invalidate the Licensor Patent Rights. Licensor has no knowledge of any pending litigation against Licensor or any Affiliate of Licensor or any licensor of Licensor that alleges that any of Licensor’s activities have violated or Licensed Products would violate, any of the intellectual property rights of any third party (nor has it received any written communication threatening such litigation).

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

(c) Licensor has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in the Licensor Patent Rights or the Licensor Intellectual Property in a manner inconsistent with the terms hereof. There is no agreement to which Licensor is a party and by which it is bound that would conflict with or be breached by Licensor granting RTI the licenses in Section 1.1(a).

(d) Licensor is the sole and exclusive owner of the Licensor Patent Rights and the Licensor Intellectual Property and no other Person has any claim of ownership with respect to such Licensor Patent Rights and Licensor Intellectual Property. Licensor has the right to grant the license granted to RTI under Section 1.1 on the terms set forth herein, and such license does not conflict with the terms of any of the existing licenses to which Licensor is a party.

(e) Licensor has obtained the assignment of all interests and all rights of any and all third parties (including employees) involved in the creation of the Licensor Patent Rights and the Licensor Intellectual Property.

(f) Licensor has no knowledge of any use, infringement or misappropriation of the Licensor Patent Rights or the Licensor Intellectual Property in derogation of the rights granted to RTI in this Agreement.

6.3 Disclaimer . (a) EXCEPT FOR THE WARRANTIES EXPRESSLY MADE IN SECTIONS 6.1-6.2, NEITHER PARTY MAKES ANY OTHER REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED (WHETHER WRITTEN OR ORAL), INCLUDING ANY WARRANTY OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO.

(b) THE REPRESENTATIONS AND WARRANTIES OF EACH OF LICENSOR AND RTI EXTEND ONLY TO THE OTHER PARTY. NEITHER PARTY WILL BE LIABLE FOR ANY CLAIM OR DEMAND AGAINST SUCH OTHER PARTY BY A THIRD PARTY.

6.5 Limitation of Liability . (a) IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR SIMILAR DAMAGES OF ANY KIND, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. THESE LIMITATIONS SHALL APPLY REGARDLESS OF WHETHER LIABILITY ARISES FROM A CLAIM BASED UPON CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR ANY OTHER THEORY OF LIABILITY.

(b) NEITHER PARTY'S LIABILITY FOR DIRECT DAMAGES SHALL EXCEED THE AGGREGATE FEES PAID BY RTI PURSUANT TO THIS AGREEMENT AT THE TIME THE CLAIM ARISES.

7. General

7.1 Independent Contractors . For the purpose of this Agreement, the parties shall be, and shall be deemed to be, independent contractors and not agents or employees of the other parties. Neither party shall have the authority to make any statements, representations or commitments or to take any actions which shall be binding on the other party, except as may be explicitly authorized in writing. Licensor (or its subcontractors) shall be solely responsible for compensating all its personnel and for payment of all related FICA, workers' compensation, unemployment and withholding taxes. RTI shall not provide Licensor (or Licensor’s subcontractor’s) personnel with any benefits, including but not limited to compensation for insurance premiums, paid sick leave or retirement benefits.

7.2 Assignment . This Agreement will be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign this Agreement or any of its rights and obligations under this Agreement without the prior written consent of the other party; provided , that

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

either party may assign this Agreement to (a) any Person to which such party transfers all or substantially all of its assets to which this Agreement relates or with which such party is consolidated or merged; (b) any Person that owns a majority of the voting stock of such party; or (c) an Affiliate of the assigning party; provided , further , that in each instance the assignee expressly assumes all obligations imposed on the assigning party by this Agreement in writing and the other party is notified in advance of such assignment. This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

“Affiliate” means with respect to either party, any Person that, directly or indirectly, is controlled by, controls or is under common control with such party. For purposes of this definition only, “ control ” means, with respect to any Person, the direct or indirect ownership of more than fifty percent (50%) of the voting or income interest in such Person (or such lesser maximum percentage permitted in those jurisdictions where majority ownership by foreign entities is prohibited) or the possession otherwise, directly or indirectly, of the power to direct the management or policies of such Person.

“Person” means any individual, corporation, association, partnership (general or limited), joint venture, trust, estate, limited liability company, limited liability partnership, unincorporated organization, government (or any agency or political subdivision thereof) or other legal entity or organization, other than Licensor or RTI.

7.3 Notices . Any notice or communication required or permitted to be given under this Agreement shall be in writing and shall be deemed given when delivered by hand or delivered to an internationally recognized overnight courier service (such courier notice to be effective on the date which is two (2) business days after the date of mailing), or sent by .pdf email or telefax (such notice sent by .pdf email or telefax to be effective one (1) business day after sending, if confirmed by overnight courier as aforesaid), in each case properly addressed to the address indicated below, or at such other addresses as may be furnished in writing by either party in accordance with this Section 7.3.

7.4 Applicable Law . This Agreement shall be governed by, subject to, and construed in accordance with the substantive laws of Pennsylvania without regard for any choice or conflict of laws rule or provision that would result in the application of the substantive law of any other jurisdiction.

7.5 Waivers . The waiver by either party of a breach or default under any provision under this Agreement or the failure of such party to exercise its rights under this Agreement in any instance shall not operate or be construed as a continuing waiver or a waiver of any subsequent breach or default No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar).

7.6 Integration . This Agreement states the entire agreement of the parties with respect to its subject matter and supersedes all prior agreements, understandings, negotiations, representations, and proposals, whether written or oral, relating to its subject matter. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by a duly authorized representative of the party adversely effected by such writing.

7.7 Severability . In the event that any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement and such invalid or unenforceable provision shall be construed by limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

7.8 Binding Effect, Benefits . This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns; nothing in this Agreement, expressed or implied, is intended to confer on any person or entity other than the parties hereto or, as applicable, their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

7.9 Headings . The Section headings are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement

7.10 Defined Terms . Capitalized terms used in this Agreement and not defined in this Agreement are used with the meanings ascribed in the License Agreement. The following terms shall have the meanings set forth in the section appearing opposite such term:



“Acting Party”	Section 1.2
“Affiliate”	Section 7.2
“Agreement”	Recitals
“Confidential Information”	Section 4.1
“Effective Date”	Recitals
“Field”	Section 1.1
“Know-How”	Section 1.1
“Licensed Product(s)”	Section 1.1
“Licensor”	Recitals
“Licensor Intellectual Property”	Section 1.1
“Licensor Patent Rights”	Section 1.1
“Person”	Section 7.2
“RTI”	Recitals

[Remainder of this page intentionally left blank --signature page follows]

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed on their behalf by their duly authorized representatives as of the Effective Date.



VITOLD M. BAKHIR		REALM THERAPEUTICS, INC.


/s/ Vitold M. Bakhir		By: /s/ Marella Thorell
		Marella Thorell
		Authorized Signatory

Notice Address:		Notice Address:
Vitold M. Bakhir		Realm Therapeutics, Inc.
[*]		267 Great Valley Parkway
		Malvern, PA 19355
		Phone: [*]
		Fax: [*]
		Email: [*]

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Exhibit 10.4

EXECUTION VERSION

INTELLECTUAL PROPERTY LICENSE AGREEMENT

This Intellectual Property License Agreement (“ this Agreement ”) is effective as of October 7, 2016 (“ Effective Date ”), and is made by and between PuriCore, Inc., a Delaware corporation (“ LICENSOR ”), and Chemstar Corp., a Florida corporation (“ LICENSEE ”).

ARTICLE 1. BACKGROUND

1.01 LICENSOR and LICENSEE are parties to an Asset Purchase Agreement, dated as of September 19, 2016 (the “ Asset Purchase Agreement ”), among Licensor, Licensee and PuriCore plc, a public limited company organized under the laws of England and Wales, which has a Closing Date on the same date as the Effective Date, pursuant to which LICENSEE is purchasing certain of LICENSOR’S assets relating to the Business.

1.02 In connection with the Asset Purchase Agreement and LICENSEE’S acquisition of the Business, LICENSOR desires to grant to LICENSEE, and LICENSEE wishes to receive, a license to certain intellectual property rights owned or controlled by LICENSOR.

ARTICLE 2. DEFINITIONS

In this Agreement, unless indicated otherwise below, capitalized terms have the meaning set forth in the Asset Purchase Agreement. For purposes of this Agreement:

2.01 “ Confidential Information ” means information relating to the Contemplated Business which has not been made public and includes, without limitation, any documents, protocols, drawings, sketches, models, designs, data, memoranda, records, formulae and algorithms in hard copy form, or in electronic form, which LICENSEE receives from LICENSOR.

2.02 “ Licensed Intellectual Property ” means, collectively, the Licensed Patent Rights, Licensed Know-How, and the Bakhir License.

2.03 “ Licensed Field ” means the Business and Contemplated Business as defined in the Asset Purchase Agreement.

2.04 “ Licensed Patent Rights ” means LICENSOR’S interest in patents and patent applications within Seller-Owned Intellectual Property which are not Seller-Owned Intellectual Property acquired by LICENSEE pursuant to the Asset Purchase Agreement, and which have at least one claim related to the Licensed Field, as further itemized in Exhibit A, including (i) patents and patent applications that may issue from the applications, (ii) all continuations, continuations-in-part, divisions, reissues, reexaminations or extensions of the foregoing that include at least one claim relating to the Licensed Field, (iii) new applications containing at least one claim relating to the Licensed Field, and (iv) foreign counterparts containing at least one claim relating to the Licensed Field. For the avoidance of doubt, a patent or application is related to the Licensed Field when it includes at least one claim that would be infringed by activities within the Licensed Field absent this Agreement.

2.05 “ Licensed Know-How ” means [*].

2.06 “ Bakhir License ” means LICENSOR’S interest in US Patent [*] (the “ Bakhir Patent ”), by virtue of the Bakhir License Agreement.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

2.07 “ Bakhir License Agreement ” means that certain Exclusive Patent License Agreement by and between PuriCore, Inc. and Vitold Mikhailovich Bakhir, dated October 1, 2014, and as amended on June 22, 2016, and as further amended on September 1, 2016.

2.08 “ Excluded Patents ” means patents and applications that are neither acquired by nor licensed to LICENSEE pursuant to this Agreement and the Asset Purchase Agreement. Excluded Patents are not Licensed Intellectual Property, and Excluded Patents includes the patents itemized in Exhibit C.

ARTICLE 3. GRANT OF LICENSE

3.01 LICENSOR hereby grants to LICENSEE, and LICENSEE accepts, an exclusive worldwide, royalty free, irrevocable, license, under the Licensed Patent Rights and Licensed Know-How, to make, have made, use, lease, market, promote, offer to sell, sell and import products solely for use within the Licensed Field. LICENSEE may grant sublicenses, and its sublicensees may grant sublicenses, under this Section 3.01 upon prior written notice to LICENSOR and the sublicensees acknowledgement of the terms of this Agreement.

3.02 LICENSOR hereby grants to LICENSEE, and LICENSEE accepts, an exclusive, worldwide, royalty free, sublicense under the Bakhir License, to make, have made, use, lease, market, promote, offer to sell, sell and import products solely for use within the Licensed Field. The license granted in this Section 3.02 shall be irrevocable by LICENSOR, but subject to the rights of the licensor under the Bakhir License Agreement to terminate the Bakhir License Agreement in accordance with its terms. Notwithstanding anything to the contrary, LICENSOR shall take no action to terminate the Bakhir License Agreement pursuant to Article III thereof, nor shall it knowingly take any action or fail to take any necessary action which act or failure to act would give rise to a right of the licensor under the Bakhir License Agreement to terminate the Bakhir License Agreement pursuant to the terms of Article III thereof. In the event LICENSOR receives notice under the Bakhir License Agreement alleging a material breach or default of any of LICENSOR’s obligations thereunder, LICENSOR shall promptly, and in no event later than 3 days thereafter, give written notice thereof to LICENSEE. LICENSEE agrees to be bound by Articles IV and VI of the Bakhir License Agreement, and by signature hereto agrees to use commercially reasonable efforts to practice the invention disclosed and claimed in US Patent [*] to maintain the sublicense. LICENSEE may grant sublicenses, and its sublicensees may grant sublicenses, under this Section 3.02 upon prior written notice to LICENSOR and to Vitold Makhailovich Bakhir (at the address indicated in the Bakhir License) and the sublicensees acknowledgement of the terms of this Agreement and agreement to be bound by Article IV and VI of the Bakhir License Agreement and Article 4 of this Agreement to the same extent as LICENSEE.

3.03 The licenses granted in this Article 3 are exclusive even as to LICENSOR, meaning that LICENSOR shall not itself practice the Licensed Intellectual Property in the Licensed Field.

ARTICLE 4. CONFIDENTIALITY

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

4.01 LICENSEE acknowledges the proprietary and confidential nature of the Licensed Know-How, and agrees that such Licensed Know-How shall be Confidential Information and subject to the following restrictions on disclosure.

4.02 Except as hereafter specifically authorized in writing by LICENSOR, LICENSEE will not disclose Confidential Information to a third party. These obligations of non-disclosure do not apply to any Confidential Information which LICENSEE can demonstrate by reliable written evidence:

(a) was generally available to the public at the time of disclosure to LICENSEE; or

(b) was already in the possession of LICENSEE at the time of the disclosure, other than pursuant to a confidential disclosure agreement between the parties and not due to any unauthorized act by LICENSEE; or

(d) LICENSEE is required by law to disclose.

4.03 These obligations of non-disclosure will not continue to apply to any Confidential Information which LICENSEE can demonstrate by reliable written evidence:

(a) has become generally available to the public other than through a breach of this agreement by LICENSEE after disclosure; or

(b) has been acquired by LICENSEE on a non-confidential basis from any third party having a lawful right to disclose it to LICENSEE.

4.04 All Confidential Information will be clearly marked as confidential by LICENSOR and, if not in written or tangible form when disclosed, will be indicated as confidential upon disclosure and then summarized in writing and so marked as confidential within 30 days after disclosure to LICENSEE.

ARTICLE 5. PATENT PROSECUTION

5.01 LICENSOR, at LICENSOR’S expense shall file, prosecute and maintain all patents and patent applications within the Licensed Patent Rights. LICENSOR shall have control over all patent matters; provided, however, that if LICENSOR elects to abandon any patent application (except for purposes of filing a continuation application) or patent in any country, LICENSOR shall notify LICENSEE in writing at least [*] prior to any filing or payment due date or any other deadline that requires action to avoid loss of rights, and thereafter, LICENSEE shall have the right to control the filing, prosecution, and/or maintenance of such patent application or patent in such country at its own expense, and for its own benefit within the Licensed Field.

ARTICLE 6. INFRINGEMENT

6.01 LICENSOR and LICENSEE agree to notify each other promptly of each infringement or possible infringement of the Licensed Intellectual Property within the Licensed Field of which either party becomes aware.

6.02 LICENSOR shall have the first right to prosecute any action necessary to protect rights under the Licensed Intellectual Property. In the event that LICENSOR, or with respect to the Bakhir License the licensor thereunder, declines or does not, within six (6) months after being notified in writing by

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

LICENSEE of any such infringement, commence legal action or terminate the infringement, LICENSEE shall have the right, but not the obligation, to commence any legal action or to take such steps as LICENSEE may deem desirable to terminate such infringement at its own expense (but subject to any rights to reimbursement from the licensor under the Bakhir License). LICENSOR shall cooperate with any such legal action, including by providing prompt access to all necessary documents and rendering reasonable assistance in response to requests by LICENSEE, and, if applicable, by exercising its rights under the Bakhir License as necessary for any such legal action relating thereto. LICENSEE may require LICENSOR to initiate or join in any suit contemplated by this Section 6.02 if necessary to avoid dismissal of the suit. If LICENSOR is made a party to any such suit, LICENSEE will reimburse and indemnify LICENSOR for its costs, expenses, or fees which it incurs as a result of its joinder. In all cases, LICENSEE agrees to keep LICENSOR reasonably apprised of the status and progress of any litigation involved the Licensed Intellectual Property. In furtherance of LICENSEE’S rights under this Section 6.02, and without limiting the foregoing, LICENSOR hereby assigns to LICENSEE LICENSOR’S rights under Article V of the Bakhir License (including, without limitation, its rights to reimbursement from the licensor) as and to the extent necessary or desirable for LICENSEE to exercise its rights under this Section 6.02.

6.03 LICENSEE may, in any legal action for infringement of the Licensed Intellectual Property by a third party, ultimately enjoin infringement and collect for its use, damages, profits, and awards of whatever nature recoverable for such infringement; and settle any claim or suit for damages or a declaratory judgment involving the Licensed Intellectual Property, including the granting of further licenses or sublicenses, provided that LICENSEE does not concede invalidation of any Licensed Intellectual Property, without LICENSOR’S prior written consent.

6.04 LICENSOR has a continuing right to intervene in a suit initiated by LICENSEE under Section 6.02 or in a declaratory judgment action involving the Licensed Intellectual Property brought against LICENSEE. If LICENSOR chooses to intervene, LICENSOR will be responsible for its litigation expenses and will be entitled to all recoveries which it obtains for itself as a result of its intervention.

ARTICLE 7. LICENSOR’S REPRESENTATIONS AND WARRANTIES

7.01 LICENSOR represents and warrants that: (a) it is the sole and exclusive legal and beneficial owner, and has sole and exclusive control, of the entire right, title and interest in and to the Licensed Intellectual Property, and is the record owner of all patent applications and issued patents that are the Licensed Patent Rights constituting Seller-Owned Intellectual Property; (b) it has not previously granted any licenses, agreements or other permissions to any third party with respect to the Licensed Intellectual Property which would interfere with LICENSEE’s use and enjoyment of the rights granted under this Agreement; (c) the Licensed Intellectual Property is free and clear of any and all encumbrances, liens, or title defects; (d) there is no pending or threatened litigation against LICENSOR in connection with the Licensed Intellectual Property; and (e) the performance by LICENSOR hereunder does not and will not violate any contracts or commitments to which LICENSOR is bound.

ARTICLE 8. TERM AND TERMINATION

8.01 This Agreement will continue in full force and effect until the last to expire of the Licensed Patent Rights.

ARTICLE 9. MODIFICATION / ASSIGNABILITY

9.01 This License Agreement may be amended, supplemented, or modified by the terms of the Asset Purchase Agreement, but may not otherwise be amended, supplemented or modified except in a written instrument duly executed by each of the parties hereto.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

9.02 This License Agreement may be assigned in whole or in part by either party and their permitted assignees without the consent of the other party, provided the assigning party gives written notice thereof to such other party, and with regard to assignment of the Bakhir License in whole or in part, such notice to include notice to Vitold Makhailovich Bakhir in accordance with the terms of the Bakhir License, along with a written acknowledgement from the assignee that it shall be bound by the terms of this Agreement and the Bakhir License to the same extent as the assigning party.

ARTICLE 10. APPLICABLE LAW; JURISDICTION

10.01 This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of Delaware, without giving effect to any choice of law or conflicts of laws rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the substantive laws of any jurisdiction other than the State of Delaware, except that all questions concerning the construction or effect of patents will be decided in accordance with the laws of the country in which the particular patent concerned has been granted.

10.02 Each party hereto irrevocably submits to the exclusive jurisdiction of the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (unless the Delaware Court of Chancery shall decline to accept jurisdiction over a particular matter, in which case, in any Delaware state or federal court within the State of Delaware), for the purposes of any action arising out of this Agreement or any transaction contemplated hereby or thereby, and agrees to commence any such action only in such courts. Each party further agrees that service of any process, summons, notice or document by registered mail to such party’s respective address set forth in the Asset Purchase Agreement shall be effective service of process for any such action. Each party hereto irrevocably and unconditionally waives any objection to the laying of venue of any action arising out of this Agreement or the transactions contemplated hereby in such courts, and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action brought in any such court has been brought in an inconvenient forum. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

ARTICLE 11. MISCELLANEOUS

11.01 No license or right is granted by implication or otherwise with respect to any patent application or patent owned by either party, unless specifically set forth in this Agreement.

11.02 Any term or provision of this Agreement may be waived at any time by the party entitled to the benefit thereof by a written instrument duly executed by such party. Neither the failure nor the delay by any party hereto in exercising any right, power, or privilege hereunder shall operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege shall preclude any other or further exercise of any such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no waiver that may be given by a party hereto shall be applicable except in the specific instance for which it was given and (b) no notice to or demand on one party hereto shall be deemed to be a waiver of any obligation of such party or the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement.

11.03 If any provision of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

11.04 This Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto.

11.05 All notices hereunder shall be given in the manner and at the addresses set forth in the Asset Purchase Agreement.

11.06 This Agreement may be executed in two or more counterparts (delivery of which may occur via facsimile or email), each of which shall be binding as of the date first written above, and, when delivered, all of which shall constitute one and the same instrument. A facsimile signature or electronically scanned copy of a signature shall constitute and shall be deemed to be sufficient evidence of a party’s execution of this Agreement, without necessity of further proof. Each such copy (or facsimile) shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

The parties have caused this Agreement to be executed by their duly authorized representatives on the dates indicated below.



LICENSEE:

PURICORE, INC.

By:	/s/ Marella Thorell
Name:	Marella Thorell
Title:	Chief Operating Officer and Chief Financial Officer



LICENSOR:

CHEMSTAR CORP.

By:	/s/ Dan Barney
Name:	Dan Barney
Title:	Chief Executive Officer

[Signature Page to IP License Agreement]

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

EXHIBIT A

Licensed Patent Rights

[*]

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

EXHIBIT B

Licensed Know-How

[*]

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

EXHIBIT C

Excluded Patents

[*]

Certain portions of this exhibit denoted by [*] have been redacted pursuant to a request for confidential treatment that the registrant has filed with the SEC.

Exhibit 10.5

Realm Therapeutics plc

c/o CMS Cameron McKenna LLP

Cannon Place, 78 Cannon Street

London EC4N 6AF, United Kingdom

[Name]

[Date]

Dear [ ]

Realm Therapeutics plc (the “Company”) and your role as a director/officer of the Company

As you are aware, the articles of association of the Company (the “Articles”) contain provisions, at Article 145, granting an indemnity to the directors and officers of the Company from time to time. We are taking this opportunity to afford you the direct benefit of this indemnity in the form of this deed (this “Deed”). As you are aware the Companies Act 2006 (the “Act”) imposes certain statutory limitations on the scope of this indemnity. For the avoidance of doubt the Company will maintain directors and officers insurance (“D&O Cover”), which is intended to operate for your protection in addition to this indemnity. The current level of D&O Cover is set at £[ ] and will be reviewed on an annual basis by the Board.

Any defined terms used in this Deed (to the extent undefined) shall have the meanings given to them in the Articles.

1.1

Without prejudice to any indemnity to which you may otherwise be entitled pursuant to Article 145 of the Articles, you shall be indemnified by the Company against all liabilities, costs, charges and expenses incurred by you in the execution and discharge of your duties to the Company and any “Associated Company” of the Company (as defined by the Act for these purposes), including any liability incurred by you in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to be done or omitted by you as a director or officer of the Company or an Associated Company provided that no such indemnity shall extend to any liability arising out of your fraud or dishonesty or by you obtaining any personal profit or advantage to which you were not entitled. In addition, to the Act prohibits the indemnity conferred by this Deed extending to:


(A)	any liability incurred by you to the Company or any Associated Company of the Company;


(B)	any fine imposed in any criminal proceedings;


(C)	any sum payable to a regulatory authority by way of a penalty in respect of your personal non-compliance with any requirement of a regulatory nature howsoever arising;


(D)	any amount for which you have become liable in defending any criminal proceedings in which you are convicted and such conviction has become final;


(E)	any amount for which you have become liable in defending any civil proceedings brought by the Company or any Associated Company of the Company in which a final judgment has been given against you; and


(F)	any amount for which you have become liable in connection with any application under sections 661(3) or (4) or 1157 of the Act in which the court refuses to grant you relief and such refusal has become final,

however the D&O Cover in place is designed to provide cover for these specific areas which the Act prescribes that the Indemnity cannot extend, and for which it is possible to obtain coverage on commercial terms.

1.2

The Company will, upon a reasonable request from you accompanied by actual or estimates of costs from those appointed to defend you, provide funds (either directly or indirectly) to you to meet expenditure incurred or to be incurred by you in any proceedings (whether civil or criminal) brought by any person or in relation to any investigation or action to be taken by a regulatory authority which relate to anything done or omitted or alleged to have been done or omitted by you as a director and/or officer of the Company or any Associated

Company of the Company in respect of which it is alleged you have been guilty of negligence, default, breach of duty or breach of trust, provided that you will be obliged to repay to the Company any such amount no later than:


(A)	in the event that you are convicted in proceedings, the date when the conviction becomes final;


(B)	in the event that judgment is given against you in proceedings, the date when the judgment becomes final (except that such amount need not be repaid to the extent that such expenditure is recoverable hereunder or under any other valid indemnity given to you by the Company); or


(C)	in the event that the court refuses to grant you relief on any application under sections 144(3) or (4) or 727 of the UK Companies Act 1985 or sections 661(3) or (4) or 1157 of the Act, the date when the refusal becomes final.


1.3	This indemnity does not authorise any indemnity which would be prohibited or rendered void by any provision of the Act or by any other provision of law.

1.4

The Company hereby waives (to the maximum extent permitted the provisions of the Act or by any other provision of law) all and any claims that it may have against you as a result of, and in connection with, your tenure as a director or officer, whether actual or contingent, direct or indirect and irrevocably waives any such claims or rights of action and releases and forever discharges you from all and any liability in respect thereof.

1.5

You agree to give written notice to the Company as soon as reasonably practical after receipt of any demand relating to any claim under this indemnity (or becoming aware of circumstances which are reasonably be expected to give rise to a demand relating to a claim) giving full details and providing copies of all relevant correspondence and you agree to keep the Company fully informed of the progress of any claim, including providing all such information in relation to any claim or losses or any other costs, charges or expenses incurred as the Company may reasonably request, and shall take all such action as the Company may reasonably request to avoid, dispute, resist, appeal, compromise or defend any claim.


1.6	For the avoidance of doubt:


(a)	if a company ceases to be a subsidiary of the Company after the date of this Deed, the Company shall only be liable to indemnify you in respect of liabilities in relation to that company which arose before the date on which that company ceased to be a subsidiary of the Company; and


(b)	as director or officer of any company which becomes a subsidiary of the Company after the date of this Deed, you shall be indemnified only in respect of liabilities arising after the date on which that company became a subsidiary of the Company.


1.7	This Deed shall remain in force until such time as any relevant limitation periods for bringing Claims against you have expired, or for so long as you remain liable for any losses, notwithstanding that you may have ceased to be a director or officer of the Company or any of its subsidiaries.

1.9

Any dispute or claim arising out of or in connection with this Deed (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales and you and the Company irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Deed or its subject matter or formation (including non-contractual disputes or claims).

IN WITNESS whereof, this Deed has been entered into, executed and delivered as a deed on the day and year first above written.



Executed and delivered as a deed

for and on behalf of
REALM THERAPEUTICS PLC

In the presence of:


Signature and name of witness

Exhibit 10.6



DATED	September 20, 2017

ORBIMED PRIVATE INVESTMENTS VI, LP

and

REALM THERAPEUTICS

and

NPLUS1 SINGER ADVISORY LLP




	RELATIONSHIP AGREEMENT relating to REALM THERAPEUTICS PLC

Index



Clause No.		Page No.
1.	Definitions and interpretation	1
2.	Condition precedent and duration	3
3.	Conduct of transactions and relationships	4
4.	Takeover Code	5
5.	Procedure on conflict.	5
6.	Announcements and confidentiality	6
7.	Capacity	7
8.	Notices and other communications	7
9.	Remedies and waivers	8
10.	Invalidity	8
11.	Entire agreement	9
12.	Miscellaneous	9
13.	Governing law and jurisdiction	9



THIS DEED is made on	September 20, 2017

BETWEEN


(1)	ORBIMED PRIVATE INVESTMENTS VI, LP (a Delaware limited partnership (the " Shareholder ");


(2)	REALM THERAPEUTICS PLC (registered in England with company number 05789798 ) whose registered office is at Cannon Place, 78 Cannon Street, London EC4N 6AF (the " Company "); and


(3)	NPLUS1 SINGER ADVISORY LLP (registered in England with number OC364131 ), whose registered office is at One Bartholomew Lane, London, EC2N 2AX (the " Nomad ").

INTRODUCTION

(A)

The Company intends to undertake a fundraising whereby securities of the Company (the " Units ") will be offered for subscription, with each Unit consisting of (i) one new Ordinary Share (" New Ordinary Shares "); and (ii) one warrant to purchase 0.40 of an Ordinary Share (the " Warrants "). The New Ordinary Shares are proposed to be admitted to trading on the AIM market operated by the London Stock Exchange plc and Ordinary Shares arising from exercise of Warrants will also be admitted to trading in due course.


(B)	The Shareholder will, on Admission be the beneficial owners of, in aggregate, approximately twenty-one and ninety-one hundredths per cent. (21.91%) of the total number of votes capable of being cast on a poll at general meetings of the Company (assuming all the Warrants are exercised).


(C)	The Shareholder and the Company wish to regulate the relationship between them to ensure that:


(a)	all transactions, agreements, relationships and arrangements entered into between the Shareholder’s Group and the Company's Group will only be made on an arm's length basis and on normal commercial terms; and


(b)	with effect from Admission, the Company will be capable at all times of carrying on its business independently of the Shareholder’s Group.

AGREED TERMS

1. Definitions and interpretation


1.1	In this deed (including the introduction) the following words and expressions have the following meanings, except as otherwise provided or where the context otherwise requires:

" Act " means the Companies Act 2006;

" Admission " means the admission of the New Ordinary Shares to trading on AIM becoming effective in accordance with the AIM Rules;

" AIM " means the AIM market operated by the London Stock Exchange plc;

" AIM Nomad Rules " means the AIM Rules for Nominated Advisers published by the London Stock

Exchange;

" AIM Rules " means the AIM Rules for Companies published by the London Stock Exchange;

" Articles " means the articles of association of the Company from time to time;

" Associate " means in relation to a person:


(a)	a person who is his associate and the question of whether a person is an associate of another shall be determined in accordance with:


(i)	section 435 of the Insolvency Act 1986 (whether or not an associate as so defined); and


(ii)	to the extent not covered by the Insolvency Act 1986, in the Listing Rules of the Financial Conduct Authority; and


(b)	any group undertaking (as defined in section 1161 of the Companies Act 2006) of that person;

" Board " means the board of directors of the Company as constituted from time to time;

" Company's Group " means the Company and any other body corporate which is from time to time its subsidiary undertaking (as defined in section 1162 of the Act);

" Company's Nominated Adviser " means the Nomad or such other nominated adviser as appointed by the Company from time to time;

" Controlling Shareholder " means any person who is entitled to exercise, or control the exercise of, fifteen per cent. (15%) issued share capital (not including any treasury shares of the Company), which for the avoidance of doubt, shall include any non-voting shares capable of conversion into voting shares, or parallel non-voting ADSs capable of conversion into voting ADSs, if issued and as applicable;

" Directors " mean the directors of the Company from time to time and " Director " means any one of them;

" Independent Directors " means a Director who is determined by the then current Directors (having taken advice from the Company's Nominated Adviser) to be independent in character and judgment from any Shareholder's Group and in relation to whom the then current Directors determines that there are no relationships or circumstances which are likely to affect, or could appear to affect, his judgment in relation to his role as a director of the Company;

" London Stock Exchange " means the London Stock Exchange plc;

" Member of the Company's Group " means a person within the Company's Group;

" Member of the Shareholder's Group " means, in relation to a Shareholder, a person within that Shareholder's Group;

" Ordinary Shares " means ordinary shares of 10 pence each in the capital of the Company from

time to time;

" Shareholder's Group " means, in relation to a Shareholder, that Shareholder and each of that Shareholder's Associates from time to time;

" subsidiary undertaking " and " parent undertaking " have the meanings given in section 1162 of the Companies Act 2006; and

" Takeover Code " means the UK City Code on Takeovers and Mergers as amended, supplemented or replaced from time to time.


1.2	In this deed:


(a)	reference to:


(i)	any statute or statutory provision includes a reference:


(A)	to that statute or statutory provision as from time to time consolidated, modified, re-enacted (with or without modification) or replaced by any statute or statutory provision; and


(B)	any subordinate legislation made under the relevant statutory provision,

except to the extent that any such consolidation, modification or re-enactment coming into force after the date of this deed would increase or extend the liability of a party under this deed;


(ii)	the singular includes the plural and vice versa and any gender includes other genders;


(iii)	the " introduction " or to a " clause " is a reference to the Introduction or the relevant clause of or to this deed;


(iv)	a person includes all forms of legal entity including an individual, company, body corporate (wherever incorporated or carrying on business), unincorporated association, governmental entity and a partnership and, in relation to a party who is an individual, his legal personal representative(s); and


(v)	" this deed " includes this deed as amended or supplemented from time to time;


(b)	the words " include " and " including " are to be construed as being by way of illustration or emphasis only and are not to be construed so as to limit the generality of any words preceding them;


(c)	the words " other " and " otherwise " are not to be construed as being limited by any words preceding them; and


(d)	the headings to clauses are to be ignored in construing this deed.


2.	Condition precedent and duration


2.1	The obligations of the parties under this deed will become unconditional upon Admission taking

place.


2.2	The obligations and restrictions of the Shareholder pursuant to this deed shall continue in full force and effect, in relation to a Shareholder, for so long as any Member of the Shareholder's Group (whether individually or collectively) is a Controlling Shareholder and will automatically terminate in relation to any Shareholder upon:

(a) that Shareholder and each Member of the Shareholder's Group (whether individually or collectively) ceasing to be a Controlling Shareholder; or

(b) the Ordinary Shares ceasing to be admitted to AIM.


3.	Conduct of transactions and relationships


3.1	The Shareholder undertakes to the Company and the Nomad that the Shareholder shall, and shall procure (so far as it is able to do so) that each of the Shareholder's Associates shall:

(a)

conduct all transactions, agreements and relationships (whether contractual or otherwise, but including, for the avoidance of doubt, any variations or amendments to any such transactions, agreements and relationships, or any decision to terminate, enforce, release or take any other action in relation to any such transactions, agreements and relationships) with any Member of the Company's Group on arm's length terms and on a normal commercial basis, including in accordance with the related party rules set out in the AIM Rules and any other applicable laws, regulations and stock exchange rules;


(b)	exercise its voting rights and all other rights and powers so as to ensure that each Member of the Company's Group is at all times capable of carrying on its business and making decisions independently of the Shareholder's Group;


(c)	not take any action or allow any omission to occur which prevents or restricts any Member of the Company’s Group from carrying on its business for the benefit of its shareholders as a whole and independently of the Shareholder’s Group;


(d)	exercise its voting rights and all other rights and powers in such a manner so as to procure (to the extent possible by the exercise of such voting rights) that:


(i)	there will always be a majority of Independent Directors on the Board and any committee of the Board; and


(ii)	where any matters involving an actual or potential conflict of interest between the Company and the Shareholder are to be discussed, one or more Independent Directors shall be present;


(e)	not exercise any of its voting or other rights and powers to procure any amendment to the Articles which would be inconsistent with this deed;


(f)	not propose any resolution of the shareholders of the Company for the cancellation of the Company’s admission to trading on AIM, for the disapplication of any rights of pre-emption attaching to any shares in the capital of the Company or to vary or alter the share capital of the Company (but, subject to the remainder of this deed, nothing in this clause 3.1(f) shall

preclude a Shareholder or the Shareholder's Associates from otherwise voting on any such resolution if proposed by the Company); and


(g)	so far as it is within his control observe the provisions of this deed (as if they were a party to it as a Shareholder).

3.2

The Shareholder undertakes to the Nomad and the Company (and undertakes to procure that its Associates shall) abstain from voting at any general meeting in respect of any resolution concerning any contract, arrangement or transaction solely between the Company or any Member of the Company’s Group and any Member of the Shareholder’s Group including, without limitation, any resolution required pursuant to the AIM Rules for Companies including, but not limited to, any required by Rule 13 of the AIM Rules for Companies (Related party transactions).

3.3

The Company shall (and shall exercise all powers vested in it to procure, that each other Member of the Company's Group shall) conduct all transactions, agreements and relationships (whether contractual or otherwise) with the Shareholder and any Member of the Shareholder's Group on arm's length terms and on a normal commercial basis and in accordance with the related party rules set out in the AIM Rules.

3.4

In the event that any Shareholder or any of its Associates shall cease to be a Controlling Shareholder by virtue of a transfer of shares or through any other transaction or arrangement (" Transaction ") and one of its Associates shall be or become a Controlling Shareholder (" New Controlling Shareholder ") then, prior to any such Transaction taking effect, the Shareholder shall procure that the New Controlling Shareholder shall enter into a deed in a form acceptable to the Independent Directors to be bound by the provisions of this deed.


4.	Takeover Code

The Shareholder undertakes to the Company and the Nomad that it shall not, and shall, to the extent within its control, procure that no member of the Shareholder’s Group nor any party acting in concert (as defined in the Takeover Code) with any of them without the prior consent of a majority of the Independent Directors:


(a)	acquire or offer to acquire shares in, or any other interest in, the relevant securities (as defined in the Takeover Code) of the Company or any other derivative or contract referenced thereto, where such acquisition would result in a mandatory takeover offer requirement arising pursuant to Rule 9 of the Takeover Code;


(b)	make an offer for all or any part of the share capital of the Company;


(c)	announce or take any action which, under the Takeover Code or otherwise, would require any takeover, merger, consolidation or share exchange or similar transaction involving securities of the Company; or


(d)	enter into an agreement relating to shares in or any other interest in the relevant securities (as defined in the Takeover Code) in the share capital of the Company or any derivative or contract referenced thereto, for the express purpose of taking any of the action prevented by this clause 4.


5.	Procedure on conflict

5.1

The Shareholder shall (and shall exercise all powers vested in them to procure, so far as it is properly able, that each Associate shall) provide as soon as reasonably practicable to the Company any information in its (or any of its Associate's) possession or control which the Company reasonably requests for the purposes of ensuring that it is satisfied that all transactions and relationships between any Member of the Company's Group and any Member of the Shareholder's Group are at arm's length and on a normal commercial basis.


5.2	The Company and the Shareholder agree that any dispute between any Member of the Company's Group and any Member of the Shareholder's Group relating to any such existing or proposed transaction, arrangement or agreement between any Member of the Company's Group and any Member of the Shareholder's Group shall be resolved by a decision of the majority of the Independent Directors.


5.3	In event of conflict between the provisions of this deed and the articles of association of the Company, the provisions of this deed shall prevail as between the parties to this deed to the extent permitted by applicable law and regulation.


6.	Announcements and confidentiality


6.1	No party shall make (or in the case of the Company, permit any other Member of the Company's Group or in the case of a Shareholder, permit any of its Associates to make) any announcement or press release concerning the subject matter of this deed, save as required under the AIM Rules and in accordance with the AIM Nomad Rules.

6.2

Save as required in connection with Admission, each party undertakes to the others that it shall use all reasonable endeavours to ensure that any information of a secret or confidential nature received by it from any other party (" Confidential Information ") shall be treated as confidential by it and its officers, employees, advisers, representatives and agents and shall not be disclosed to any third party.


6.3	Nothing in this clause prevents any announcement being made or any Confidential Information being disclosed:


(a)	with the written approval of the other parties, which in the case of any announcement shall not be unreasonably withheld or delayed; or

(b)

to the extent required by law or by the London Stock Exchange or any other competent regulatory body, but a party required to disclose any Confidential Information or make any announcement shall promptly notify the other parties where practicable and lawful to do so, before disclosure occurs and co-operate with the other parties regarding the timing and content of such disclosure or announcement or other action which the other parties may reasonably elect to take to challenge the validity of such requirement.


6.4	Nothing in this clause prevents disclosure of Confidential Information by any party:


(a)	to the extent that the information is in or comes into the public domain (which includes the summary of the terms of this deed in the circular to be published by the Company in connection with the issue of New Ordinary Shares and Warrants) other than as a result of a breach of any undertaking or duty of confidentiality by that party;


(b)	to that party's professional advisers, auditors or bankers, but before any disclosure to any such person, the relevant party shall procure that the relevant person is made aware of the terms of this clause and shall use its reasonable endeavours to procure that such person adheres to those terms as if it were bound by the provisions of this clause;


(c)	received in good faith by the recipient from a third party that is not knowingly used or disclosed to others by the recipient party in breach of this clause; or


(d)	which is an investment manager as part of the regular investment updates provided to the investors in funds managed by that investment manager, but before any disclosure to any such investor, the investment manager shall procure that the relevant investor is made aware of the terms of this clause and shall ensure that such investors have signed a substantially similar confidentiality obligation.

6.5

The Shareholder shall, and shall procure that each of its Associates shall, provide all reasonable cooperation and information which the Company may reasonably require and comply with all other requests which the Company may reasonably make in connection with any announcement which the Company is required to make pursuant to the AIM Rules as a result of any transaction or other relationship entered into between the Company's Group and any Member of the Shareholder's Group.


6.6	The Shareholder acknowledges that all directors of the Company owe fiduciary duties to the Company and shall be obliged to act and vote on all matters pertaining to the Board in what they perceive to promote the success of the Company.


7.	Capacity

The Shareholder warrants and represents to the other parties that the Shareholder has the power to enter into this agreement and to exercise the Shareholder's rights and perform the Shareholder's obligations hereunder and all corporate and other action required to authorise the Shareholder's execution of this deed and the Shareholder's performance of its obligations hereunder has been duly taken.


8.	Notices and other communications


8.1	Where this agreement provides for the giving of notice or the making of any other communication, such notice or communication shall not (unless otherwise expressly provided) be effective unless given or made in writing in accordance with the following provisions of this clause.


8.2	Any notice or communication to be given or made under or in connection with this deed may be:

(a)

delivered or sent by post to the address of the Shareholder (marked for the attention of General Counsel) or the Nomad (marked for the attention of Aubrey Powell) as set out on page 1 of this deed and to the Company (marked for the attention of Marella Thorell) at 267 Great Valley Parkway, Malvern, Pennsylvania, 19355 United States of America (such addresses being referred to below as the " Postal Address " of the relevant party); or


(b)	sent by email to:

Shareholder: Legal@OrbiMed.com

Company: mthorell@realmtx.com

Nomad: aubrey.powell@n1singer.com


8.3	Any notice or other communication so delivered or sent shall (subject to the provisions of clause 8.5(c)) be deemed to have been served when received except that if it is received between 5.30 p.m. on a Relevant Day and 9.00 a.m. on the next Relevant Day it shall be deemed to have been served at 9.00 a.m. on the second of such Relevant Days.


8.4	Where any party has given notice to another party of any different address (postal or email) to be used for the purposes of this clause then such different address (postal or email) shall be substituted for that shown above.


8.5	For the purposes of this clause:


(a)	" Relevant Day " means any day other than a Saturday, Sunday or a day which is a public holiday at the Postal Address of the receiving party;


(b)	any reference to a time is to the time at the Postal Address of the receiving party;

(c)

reference to an email being received shall mean receipt at a server located in any office of the corporate body or partnership which receipt shall, notwithstanding the provisions of clause 8.3, and in the absence of evidence of earlier receipt, be deemed to have occurred 48 hours after sending unless the sender within 24 hours of sending the email received an error message indicating failure to deliver; and


(d)	" electronic communication " has the same meaning as in the Electronic Communications Act 2000.


9.	Remedies and waivers


9.1	The single or partial exercise of any right, power or remedy provided by law or under this deed shall not preclude any other or further exercise of it or the exercise of any other right, power or remedy.


9.2	The rights, powers and remedies provided in this deed are cumulative and not exclusive of any rights, powers and remedies provided by law.


9.3	In deciding whether to enforce this deed against the Shareholder, the Company shall consult with the Company's Nominated Adviser.

9.4

Without prejudice to any other rights and remedies which any party may have, each party acknowledges and agrees that damages would not be an adequate remedy for any breach by any party of this deed and any party shall be entitled to seek the remedies of injunction, specific performance and other equitable relief (and none of the parties shall contest the appropriateness or availability thereof), for any threatened or actual breach of any such provision of this deed by any party and no proof of special damages shall be necessary for the enforcement by any party of the rights under this deed.


10.	Invalidity

If at any time any provision of this deed is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect or impair:


(a)	the legality, validity or enforceability in that jurisdiction of any other provision of this deed; or


(b)	the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this deed.


11.	Entire agreement

This deed constitutes the entire agreement between the parties about the subject matter of this deed and supersedes all earlier understandings and agreements between the parties and all earlier representations by any party about such subject matter.


12.	Miscellaneous


12.1	Each party shall bear its own costs incurred in connection with this deed.


12.2	This deed may be executed in any number of counterparts each of which when executed and delivered is an original, but all the counterparts together constitute the same document.


12.3	This deed may only be varied in writing signed by or on behalf of each of the parties.


12.4	The parties do not intend that any term of this deed should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this deed.


13.	Governing law and jurisdiction


13.1	This deed, and any non-contractual rights or obligations arising out of or in connection with it or its subject matter, shall be governed by, and construed in all respects in accordance with English law.


13.2	The parties agree to submit to the exclusive jurisdiction of the courts of England and Wales.

The parties to this deed have executed and delivered this deed as a deed on the date shown on the first page.



EXECUTED as a deed by ORBIMED PRIVATE INVESTMENTS VI, LP in the presence of:	) ) ) )	/s/ Carl Gordon
		Carl Gordon, Member of the Managing Member of the General Partner of OrbiMed Private Investments VI, LP

(Witness signature)		/s/ Andrew So

(Witness name)		Andrew So

(Witness address)		601 Lexington Avenue
		NY, NY 10027

(Witness occupation)		Asst. General Counsel

EXECUTED as a deed by REALM THERAPEUTICS PLC acting by a director in the presence of:	) ) ) )	/s/ Marella Thorell

(Witness signature)		/s/ John Alexander Martin

(Witness name)		John Alexander Martin

(Witness address)		225 Hun Road
		Princeton, NJ 08540

(Witness occupation)		CEO, Realm Therapeutics

EXECUTED as a deed by NPLUS1 SINGER ADVISORY LLP acting by a director in the presence of:	) ) ) )	/s/ Aubrey Powell
		Director, Corporate Finance

(Witness signature)		/s/ James Maxwell

(Witness name)		James Maxwell

(Witness address)		1 Bartholomew Lane
		London EC2N 2AX

(Witness occupation)		ACA

Schedule 1

Accredited Investors Purchasing Pursuant to Regulation D

OrbiMed Private Investments VI, LP

Biotechnology Value Fund, LP

Biotechnology Value Fund II, LP

Investment 10, LLC

Biotechnology Value Trading Fund OS, LP

MSI BVF SPV LLC

RA Capital Healthcare Fund, L.P.

Blackwell Partners LLC - Series A

Schedule 2

Non-U.S. Persons Purchasing Pursuant to Regulation S

Abingworth Bioequities Master Fund Ltd

Polar Capital Funds Plc - Biotechnology Fund

Exhibit 10.7

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”), dated as of September 21, 2017, by and among Realm Therapeutics plc, a company incorporated under the laws of England and Wales (the “ Company ”), with a registered office at Cannon Place, 78 Cannon Street, London EC4N 6AF, United Kingdom, and the several purchasers signatory hereto (each a “ Purchaser ” and collectively, the “ Purchasers ”).

WHEREAS, this Agreement is made pursuant to either (i) the Securities Purchase Agreement, dated as of the date hereof, among the Company and the Purchasers named therein (the “ Purchase Agreement ”), pursuant to which, among other things, the Company agreed to offer and sell and such Purchasers agreed to purchase an aggregate of 61,799,804 units of the Company (each, a “ Unit ” and collectively, the “ Units ”), with each Unit consisting of one Ordinary Share and one Warrant (each, as defined below) to purchase 0.40 Ordinary Shares, or (ii) the Placing Agreement, dated as of the date hereof, by and among the Company, NPlus1Singer Advisory LLP and the Purchasers named therein (the “ Placing Agreement ”), pursuant to which, among other things, the Company agreed to sell, and such Purchasers agreed to purchase, an aggregate of 4,596,681 Units.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each of the Purchasers agree as follows:


1.	Definitions . As used in this Agreement, the following terms shall have the following meanings:

“ ADS ” means American Depositary Shares representing interests in the Ordinary Shares pursuant to a sponsored American Depositary Receipt facility with the Depositary.

“ Advice ” has the meaning set forth in Section 6(c) .

“ Affiliate ” means, with respect to any person, any other person which directly or indirectly controls, is controlled by, or is under common control with, such person.

“ Agreement ” has the meaning set forth in the Preamble.

“ AIM ” means the AIM Market operated by the London Stock Exchange plc.

“ Business Day ” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.

“ Closing ” has the meaning set forth in the Purchase Agreement.

“ Closing Date ” has the meaning set forth in the Purchase Agreement.

“ Commission ” means the United States Securities and Exchange Commission.

“ Company ” has the meaning set forth in the Preamble.

“ Designated Purchaser Counsel ” means Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, Attention: Geoffrey W. Levin.

“ Depositary ” means the depositary engaged by the Company for the issuance and transfer of ADSs.

“ Effective Date ” means the date that the Registration Statement filed pursuant to Section 2(a) is first declared effective by the Commission.

“ Effectiveness Deadline ” means, with respect to the Initial Registration Statement or the New Registration Statement, the forty-fifth (45 ^th ) calendar day following the Filing Deadline (or the seventy-fifth (75 ^th ) calendar day following the Filing Deadline in the event of a full review by the Commission); provided, that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business.

“ Effectiveness Period ” has the meaning set forth in Section 2(b) .

“ Event ” has the meaning set forth in Section 2(d) .

“ Event Date ” has the meaning set forth in Section 2(d) .

“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Filing Deadline ” means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a) , the thirtieth (30 ^th ) calendar day following the later of (i) the Listing, or (ii) the last day of the U.S. IPO Lock-up Period, provided, however , that in each case if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next business day on which the Commission is open for business.

“ Foreign Private Issuer ” means a “foreign private issuer,” as defined in Rule 405 under the Securities Act. At any time the Company is not a Foreign Private Issuer, any references in this Agreement to a form or filing that may be made by a Foreign Private Issuer shall be deemed to be references to the corresponding form or filing that may be made by an entity that is not a Foreign Private Issuer.

“ Holder ” or “ Holders ” means the holder or holders, as the case may be, from time to time of Registrable Securities.

“ Indemnified Party ” has the meaning set forth in Section 5(c) .

“ Indemnifying Party ” has the meaning set forth in Section 5(c) .

“ Initial Registration Statement ” means the initial Registration Statement filed pursuant to Section 2(a) of this Agreement.

“Lead Purchaser” means OrbiMed Private Investments VI, LP.

“Listing” means the listing, without qualification, of the Ordinary Shares or ADSs on a Trading Market. The parties acknowledge that the Company shall have no obligation to effect a Listing.

“Liquidated Damages” has the meaning set forth in Section 2(d) .

“Lock-up Agreement” means the Company’s agreement with the underwriters of the U.S. IPO not to offer or sell securities in connection with the U.S. IPO.

“Losses ” has the meaning set forth in Section 5(a) .

“ New Registration Statement ” has the meaning set forth in Section 2(a) .

“ Ordinary Shares ” means the ordinary shares of the Company, nominal value £0.10 per share.

“ Person ” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Principal Market ” means the Trading Market on which the Ordinary Shares are primarily listed on and quoted for trading.

“ Proceeding ” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), by or before any court or governmental, administrative or other regulatory body or the Commission, whether commenced or threatened.

“ Prospectus ” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A, 430B or Rule 430C under the Securities Act, as applicable, promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“ Purchase Agreement ” has the meaning set forth in the Preamble.

“ Purchaser ” or “ Purchasers ” has the meaning set forth in the Preamble.

“ Registrable Securities ” means all of (i) the Shares, (ii) the Warrant Shares and (iii) any securities issued or issuable upon any share split, dividend or other distribution, recapitalization or similar event with respect to the foregoing, provided , that the Holder has completed and delivered to the Company a Selling Shareholder Questionnaire; and provided, further , that with respect to a particular Holder, such Holder’s Shares and Warrant Shares shall

cease to be Registrable Securities upon the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in which case, only such security sold by the Holder shall cease to be a Registrable Security); (B) a sale of Ordinary Shares on AIM; or (C) becoming eligible for resale by the Holder under Rule 144 without the requirement for the Company to be in compliance with volume or manner-of-sale restrictions, pursuant to a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent.

“ Registration Statements ” means any one or more registration statements of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Initial Registration Statement, the New Registration Statement, any Remainder Registration Statements, a Demand Registration Statement and a Piggyback Registration Statement), amendments and supplements to such Registration Statements, including pre- and post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

“ Remainder Registration Statement ” has the meaning set forth in Section 2(a) .

“ Rule 144 ” means Rule 144 promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Rule 415 ” means Rule 415 promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Rule 424 ” means Rule 424 promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ SEC Guidance ” means (i) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff and (ii) the Securities Act.

“ Securities Act ” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Selling Shareholder Questionnaire ” means a questionnaire in the form attached as Annex B hereto, or such other form of questionnaire as may reasonably be adopted by the Company from time to time.

“ Shares ” means the Ordinary Shares issued or issuable to the Purchasers pursuant to the Purchase Agreement and the Placing Agreement.

“ Trading Day ” means a day on which the Ordinary Shares are listed or quoted and traded on its Principal Market; provided , that in the event that the Ordinary Shares are not so listed or quoted, then Trading Day shall mean a Business Day.

“ Trading Market ” means whichever of the New York Stock Exchange, the NYSE American, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market on which the Ordinary Shares are listed or quoted for trading on the date in question; for the avoidance of doubt, AIM shall not constitute a Trading Market.

“ Units ” has the meaning set forth in the Preamble.

“ U.S. IPO ” means a firm commitment registered offering of Ordinary Shares or ADSs in the United States pursuant to an effective registration statement filed under the Securities Act (other than (i) pursuant to a registration statement on Form S-8 (or any other registration statement solely relating to an offering or sale to employees or directors of the Company pursuant to an employee stock plan or other similar employee benefit arrangement), (ii) pursuant to a registration statement on Form S-4 or Form F-4 (or similar form), or (iii) in connection with any dividend or distribution reinvestment or similar plan). The parties acknowledge that the Company shall have no obligation to effect an U.S. IPO.

“U.S. IPO Lock-up Period” means the period ending on the earlier of (i) one hundred eighty (180) days after the effective date of the Company’s registration statement filed under the Securities Act to register the U.S. IPO or such other date as the Company and the underwriters of the U.S. IPO shall agree that the Lock-up Agreement shall expire, or (ii) the waiver or termination of the Lock-up Agreement.

“ Warrants ” means the Warrants issued pursuant to the Purchase Agreement and the Placing Agreement.

“ Warrant Shares ” means the Ordinary Shares issued or issuable upon exercise of the Warrants.


2.	Registration .

(a) Shelf Registration Statement . On or prior to the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities not previously covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities, by such other means of distribution of Registrable Securities as the Holders may reasonably specify (the “ Initial Registration Statement ”). The Initial Registration Statement shall be on F- 1 or S-1 (or such shorter registration form as may then be available to the Company), as may then be applicable to the Company, and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” section substantially in the form attached hereto as Annex A (which may be modified to respond to comments, if any, provided by the Commission). Notwithstanding the registration obligations set forth in this Section 2 , in the event the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale on a continuous basis as a secondary offering on a single registration statement, the Company agrees to promptly (i) inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission to permit offers

and sales of the Registrable Securities pursuant to the Initial Registration Statement, or (ii) withdraw the Initial Registration Statement and file one or more new registration statements (together, the “ New Registration Statement ”), in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission, on the applicable form; provided, however , that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, the Compliance and Disclosure Interpretation 612.09 with respect to the Securities Act Rule 415, dated Jan. 26, 2009, compiled by the Commission’s Division of Corporation Finance. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used commercially reasonable efforts to advocate with the Commission for the registration of all or a greater number of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will first be reduced by Registrable Securities not acquired pursuant to the Purchase Agreement or the Placing Agreement (whether pursuant to registration rights or otherwise), and second by Registrable Securities represented by holders of Warrant Shares (applied, in the case that some Warrant Shares may be registered, to such Holders on a pro rata basis based on the number of unregistered Warrant Shares held by such Holders), and third by Registrable Securities represented by Shares (applied, in the case that some Shares may be registered, to such Holders on a pro rata basis based on the number of unregistered Shares held by such Holders), subject to a determination by the Commission that certain Holders must be reduced first based on the number of Shares and Warrant Shares held by such Holders. In the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on the applicable form (the “ Remainder Registration Statements ”).

(b) The Company shall use its commercially reasonable efforts to cause the Initial Registration Statement, any New Registration Statement and any Remainder Registration Statement to be declared effective by the Commission as soon as practicable and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable, no later than the Effectiveness Deadline (including filing with the Commission a request for acceleration of effectiveness in accordance with Rule 461 promulgated under the Securities Act), and shall use its commercially reasonable efforts to keep each such Registration Statement continuously effective under the Securities Act until the earliest of (i) such time as all of the Registrable Securities covered by such Registration Statement have been sold by the Holders, (ii) the date that all Registrable Securities covered by such Registration Statement may be sold by non-affiliates without volume or manner-of-sale restrictions pursuant to Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s registrar, and (iii) the third anniversary of the effectiveness thereof (the “ Effectiveness Period ”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 P.M. New York City time on a Trading Day. The Company shall promptly notify the Holders via facsimile or electronic mail of a “.pdf” format data file of the effectiveness of such

Registration Statement on or before the first Trading Day after the date that the Company telephonically confirms effectiveness with the Commission, which date of confirmation shall initially be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 A.M. New York City time on the first Trading Day after the Effective Date, file a final Prospectus with the Commission, as required by Rule 424(b).

(c) Each Holder agrees to furnish to the Company a completed Selling Shareholder Questionnaire not more than five (5) Trading Days following the date of this Agreement. At least ten (10) Trading Days prior to the first anticipated filing date of a Registration Statement for any registration under this Agreement, the Company will notify each Holder of the information the Company requires from that Holder other than the information contained in the Selling Shareholder Questionnaire, if any, which shall be completed and delivered to the Company promptly upon request and, in any event, no later than three (3) Trading Days prior to the applicable anticipated filing date. Each Holder further agrees that it shall not be entitled to be named as a selling securityholder in the Registration Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company a completed and signed Selling Shareholder Questionnaire and a response to any requests for further information as described in the previous sentence. Each Holder acknowledges and agrees that the information in the Selling Shareholder Questionnaire or request for further information as described in this Section 2(c) will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion of such information in the Registration Statement.

(d) If: (i) the Initial Registration Statement is not filed with the Commission on or prior to the Filing Deadline (other than as a result of the objection of a Holder holding no less than the majority of the Registrable Securities under Section 3(a) hereof that makes it impracticable for the Company to satisfy the Filing Deadline), (ii) the Initial Registration Statement or the New Registration Statement, as applicable, is not declared effective by the Commission (or otherwise does not become effective) for any reason on or prior to the Effectiveness Deadline, or (iii) after its Effective Date, (A) such Registration Statement ceases for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement) to remain continuously effective as to all Registrable Securities included in such Registration Statement or (B) subject to Section 3(h), the Holders are not permitted to utilize the Prospectus therein to resell such Registrable Securities for any reason (other than due to a change in the “Plan of Distribution” or the inaccuracy of any information regarding any Holder holding no less than the majority of the Registrable Securities) in each case for more than an aggregate of thirty (30) consecutive calendar days or sixty (60) calendar days (which need not be consecutive days) during any twelve (12) month period (other than as a result of a breach of this Agreement by a Holder holding no less than the majority of the Registrable Securities or such Holder’s failure to return a Selling Stockholder Questionnaire within the time period provided by Section 2(d) hereof), or (iv) the Company fails to satisfy the current public information requirement pursuant to Rule 144(c)(1) as a result of which the Holders who are not affiliates are unable to sell Registrable Securities without restriction under Rule 144 (or any successor thereto), (any such failure or breach in clauses (i) through (iv) above being referred to as an “Event,” and, for purposes of clauses (i), (ii) or (iv), the date on which such Event occurs, or for purposes of clause (iii), the date on which such thirty (30) or sixty (60) calendar day period is exceeded, being referred to as an “ Event Date ”), then in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been

,cured by such date) until the earlier of (1) the applicable Event is cured or (2) the Registrable Securities are eligible for resale pursuant to Rule 144 without manner of sale or volume restrictions, the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty (“Liquidated Damages”), equal to two percent (2.0%) of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement or the Placing Agreement, as applicable, for any unregistered Registrable Securities then held by such Holder, which amount shall increase by one percent (1.0%) on the one-month anniversary of such Event Date that any such Event remains uncured; provided, that the parties agree that, notwithstanding anything to the contrary herein or in the Purchase Agreement or the Placing Agreement, as applicable, no Liquidated Damages shall be payable with respect to any period after the expiration of the Effectiveness Period, and in no event shall the aggregate amount of Liquidated Damages payable to a Holder exceed, in the aggregate, five percent (5%) of the aggregate purchase price paid by such Holder pursuant to the Purchase Agreement or the Placing Agreement, as applicable. The Liquidated Damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event Date. The Company shall not be liable for Liquidated Damages under this Agreement as to any Registrable Securities which are not permitted by the Commission to be included in a Registration Statement due solely to SEC Guidance from the time that it is determined that such Registrable Securities are not permitted to be registered until such time as the provisions of this Agreement as to the Remainder Registration Statements required to be filed hereunder are triggered, in which case the provisions of this Section 2(d) shall once again apply, if applicable. In such case, the Liquidated Damages shall be calculated to only apply to the percentage of Registrable Securities which are permitted in accordance with SEC Guidance to be included in such Registration Statement. The Effectiveness Deadline for a Registration Statement shall be extended without default or Liquidated Damages hereunder in the event that the Company’s failure to obtain the effectiveness of the Registration Statement on a timely basis results from the failure of any Holder to timely provide the Company with information requested by the Company and necessary to complete the Registration Statement in accordance with the requirements of the Securities Act (in which case the Effectiveness Deadline would be extended with respect to Registrable Securities held by such Holder).

(e) “Piggy-Back” Registration . If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holders) any of its Ordinary Shares or ADSs under the Securities Act in connection with the public offering in the United States of such securities solely for cash, other than (i) the initial registration under the Securities Act of any series or class of the Company’s securities, (ii) a registration under the Securities Act relating solely to the sale of securities to participants in an equity award plan, or (iii) a registration under the Securities Act on Form F-4 or S-4, as may then be applicable to the Company (or any successor form), relating solely to a transaction pursuant to the SEC’s Rule 145, the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request by a Holder given to the Company within twenty (20) days after such notice by the Company, the Company shall, subject to the following paragraph, cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be registered (each such registration, a “ Piggyback Registration ”) on such registration statement (each, a “ Piggyback Registration Statement ”). For the avoidance of doubt, and notwithstanding the foregoing, the Company shall have no such Piggyback Registration obligation to the extent that a depositary (other than the Depositary) for the Ordinary Shares files

a registration statement on Form F-6 or other applicable form related to an unsponsored Level 3 American Depositary Receipt program.

In connection with any Piggyback Registration involving a primary sale of Ordinary Shares, the Company shall not be required to include any of the Holders’ securities in such underwriting unless such Holders accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by Holders to be included in such offering exceeds the amount of securities to be sold (other than by the Company) that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in such offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering; provided, however, there shall first be excluded from such registration statement all Ordinary Shares sought to be included therein by any director, consultant, officer or employee of the Company or any subsidiary. If after such shares are excluded, the underwriters shall determine in their sole discretion that the number of securities which remain to be included in such offering exceeds the amount of securities to be sold that the underwriters determine is compatible with the success of the offering, then the Registrable Securities to be included, if any, shall be apportioned pro rata among the Holders providing notice of their desire to participate in the offering according to the total amount of securities entitled to be included therein owned by each selling Holder or in such other proportions as shall mutually be agreed to by such Holders.

No incidental right under this Section 2(e) shall be construed to limit any other registration required hereunder.

(f) Exchange of Ordinary Shares for ADSs . To the extent that the Company causes ADSs to be issued in the U.S. IPO (it being acknowledged that the Company shall have no obligation to effect an U.S. IPO of ADS, Ordinary Shares or other securities, and it being acknowledged that the Company shall have no such obligation in connection with the filing of an unsponsored Level 3 American Depositary Receipt program), following the U.S. IPO and as requested by the Holders, the Company shall use commercially reasonable efforts to ensure that the Ordinary Shares held by the Holders are able to be deposited from time to time with the Depositary, and to cause the Depositary to issue an equivalent number of ADSs to the Holders in exchange therefor upon deposit of such Ordinary Shares, provided, that no such deposit shall be required to be effected at any time at which to do so would cause the Company to violate the Lock-up Agreement.

(g) ADS Registration . Unless a Listing has occurred (it being acknowledged that the Company shall have no obligation to effect a Listing) and a market in the United States for Ordinary Shares not held in the form of ADSs exists, if Ordinary Shares constituting Registrable Securities are then represented by ADSs, the Company shall use commercially reasonable efforts to ensure that such ADSs are registered for sale under the Securities Act and that the class of ADSs is registered under the Exchange Act during the Effectiveness Period.


3.	Registration Procedures

In connection with the Company's registration obligations hereunder, the Company shall:

(a) Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than three (3) Trading Days prior to the filing of any related Prospectus or any amendment or supplement thereto (except for Annual Reports on Form 20-F or 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 6-K or 8-K and any similar or successor reports, in each case as may then be applicable to the Company), (i) furnish to the Holder or their Designated Purchaser Counsel copies of such Registration Statement, Prospectus or amendment or supplement thereto, as proposed to be filed, which documents will be subject to the review of such Holder (it being acknowledged and agreed that if a Holder does not object to or comment on the aforementioned documents within such five (5) Trading Day or three (3) Trading Day period, as the case may be, then the Holder shall be deemed to have consented to and approved the use of such documents) and (ii) use commercially reasonable efforts to cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file any such Registration Statement or amendment or supplement thereto in a form to which a Holder reasonably objects in good faith, provided that, the Company is notified of such objection in writing within the five (5) Trading Day or three (3) Trading Day period described above, as applicable.

(b) Use commercially reasonable efforts to (i) Prepare and file with the Commission such amendments (including post-effective amendments) and supplements, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably practicable to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide the Holders or their Designated Purchaser Counsel true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to the Holders as “Selling Shareholders” but not any comments that would result in the disclosure to the Holders of material and non-public information concerning the Company; and (iv) during the Effectiveness Period, comply with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in such Prospectus as so supplemented. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b) ) by reason of the Company filing a report on Form 20-F or 10-K, Form 10-Q or Form 6-K or 8-K, in each case as may then be applicable to the Company, or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the

Exchange Act report that created the requirement for the Company to amend or supplement such Registration Statement was filed with the Commission.

(c) Notify the Holders or their Designated Purchaser Counsel (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as practicable via electronic mail (and, in the case of (i)(A) below, not less than three (3) Trading Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (3) Trading Days following the day: (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on any Registration Statement (in which case the Company shall provide to each of the Holders true and complete copies of all comments that pertain to the Holders as a “Selling Shareholder” or to the “Plan of Distribution” and all written responses thereto, but not information that the Company believes would constitute material and non-public information); and (C) with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information that pertains to the Holders as “Selling Shareholders” or the “Plan of Distribution”; (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided that, any and all such information shall remain confidential to each Holder until such information otherwise becomes public, unless disclosure by a Holder is required by law; and provided , further , that notwithstanding each Holder’s agreement to keep such information confidential, each such Holder makes no acknowledgement that any such information is material, non-public information.

(d) Use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as soon as practicable.

(e) If requested by a Holder, furnish to such Holder, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided , that the Company shall have no obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system.

(f) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided , that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(g) If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates (if such securities are then represented by certificates) or book entry statements representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates or book entry statements, as the case may be, shall be free, to the extent permitted by the Purchase Agreement or the Placing Agreement, as applicable, and under law, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may reasonably request.

(h) Following the occurrence of any event contemplated by Section 3(c) , the Company shall as promptly as practicable (but, in the case of Section 3(c)(vi) , after taking into account the Company’s good faith assessment of any adverse consequences to the Company and its shareholders of the premature disclosure of such event) prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, form of prospectus or supplement thereto, in light of the circumstances under which they were made), not misleading. If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(c) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(h) to suspend the availability of a Registration Statement and Prospectus for a period not to exceed sixty (60) calendar days (which need not be consecutive days) in any twelve (12) month period without incurring liability for Liquidated Damages otherwise required pursuant to Section 2(d)(iii)(B).

(i) The Company may require each selling Holder to furnish to the Company a certified statement as to (i) the number of Ordinary Shares beneficially owned by such Holder and any Affiliate thereof, (ii) any Financial Industry Regulatory Authority (“ FINRA ”) affiliations, (iii) any natural persons who have the power to vote or dispose of the Ordinary Shares and (iv) any other information as may be requested by the Commission, FINRA or any state securities commission. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of Registrable Securities because any Holder holding no less than the majority of the Registrable Securities fails to furnish such information within three (3) Trading Days of the Company’s request, any Liquidated Damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.

(j) The Company shall cooperate with any registered broker through which a Holder proposes to resell its Registrable Securities in effecting a filing with FINRA pursuant to FINRA Rules 5110 and/or 5190 as requested by any such Holder and the Company shall pay the filing fee required for the first such filing promptly and in any case within the time period then required by FINRA.

4. Registration Expenses . All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions, and all legal fees and expenses of legal counsel for any Holder other than those referred to in the penultimate sentence of this paragraph) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Ordinary Shares are then listed for trading and with AIM, (B) with respect to compliance with applicable laws of the United Kingdom, state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders) and (C) if not previously paid by the Company pursuant to Section 3(j) above, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to the FINRA Rules 5110 and/or 5190, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, (vi) fees and expenses of any the Depositary to the extent agreed between the Company and the Depositary, and (vii) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. The Company shall also pay all expenses incurred in connection with each Piggyback Registration by each Holder, including all registration, filing and qualification fees, printers and accounting fees relating or apportionable thereto, and the fees and disbursements of one counsel for the selling Holders selected by them in each such offering, but excluding share transfer taxes, underwriting discounts and commissions relating to the Registrable Securities. In addition, the Company shall be

responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. The Company shall be responsible for the documented legal fees and expenses of the Lead Purchaser in connection with any Registration Statement, not to exceed $50,000 in the aggregate. In no event shall the Company be responsible for any underwriting, broker or similar fees or commissions or any out-of-pocket expenses of any Holder or, except to the extent provided for in the foregoing sentence and otherwise provided for in the Transaction Documents.


5.	Indemnification .

In the event any Registrable Securities are included in a Registration Statement under this Agreement:

(a) Indemnification by the Company . The Company shall, notwithstanding any termination of this Agreement, indemnify, defend and hold harmless each Holder, the officers, directors, agents, partners, members, managers, shareholders, Affiliates and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, shareholders, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and investigation and reasonable attorneys' fees) and expenses (collectively, “ Losses ”), as incurred, that arise out of or are based solely upon (i) any untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising solely out of or relating solely to any omission to state a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, or (ii) any violation or alleged violation by the Company of the Securities Act, Exchange Act or any state securities law or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (A) such untrue statements, alleged untrue statements, omissions or alleged omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that each Holder has approved Annex A hereto for this purpose), or (B) in the case of an occurrence of an event of the type specified in Section 3(c)(iii) - (vi) , related to the use by a Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing in accordance with the notice provisions of this Agreement that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated and defined in Section 6(c) below, to the extent that following the receipt of the Advice the untrue statement or omission giving rise to such Loss would have been corrected or (C) to the extent that any such Losses arise out of the Holder’s (or any other indemnified Person’s) failure to send or give a copy

of the Prospectus or supplement (as then amended or supplemented), if required, pursuant to Rule 172 under the Securities Act (or any successor rule) to the Persons asserting an untrue statement or alleged untrue statement or alleged untrue statement or omission or alleged omission at or prior to the written confirmation of the sale of Registrable Securities to such Person if such statement or omission was corrected in such Prospectus or supplement. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 5(c) ) and shall survive the transfer of the Registrable Securities by the Holders.

(b) Indemnification by Holders . Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents, shareholders, Affiliates and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, partners, members, managers, shareholders, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or are based solely upon any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising solely out of or relating solely to any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus, or any form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent that such untrue statements or omissions are based upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein or (ii) to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3(c)(iii) - (vi) , to the extent related to the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing in accordance with the notice provisions of this Agreement that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 6(c) . In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings . If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “ Indemnified Party ”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “ Indemnifying Party ”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable fees and expenses incurred in connection with defense thereof; provided , that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to

appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest exists if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party); provided , that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

Subject to the terms of this Agreement, all fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 5 ) shall be paid to the Indemnified Party, as incurred, within twenty (20) Trading Days of written notice thereof to the Indemnifying Party; provided , that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder). The failure to deliver written notice to the Indemnifying Party within a reasonable time of the commencement of any such action shall not relieve such Indemnifying Party of any liability to the Indemnified Party under this Section 5 , except to the extent that the Indemnifying Party is materially and adversely prejudiced in its ability to defend such action.

(d) Contribution . If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to

information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys' or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 5 was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d) , (A) no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission and (B) no contribution will be made under circumstances where the maker of such contribution would not have been required to indemnify the Indemnified Party under the fault standards set forth in this Section 5 . No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

The indemnity and contribution agreements contained in this Section 5 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement or the Placing Agreement, as applicable.


6.	Miscellaneous .

(a) Remedies . In the event of a breach by the Company or by a Holder of any of its obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(b) Compliance . Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration Statement.

(c) Discontinued Disposition . By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(iii) - (vi) , such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “ Advice ”)

by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company may provide share transfer orders to enforce the provisions of this Section 6(c) . The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(d) .

(e) Amendments and Waivers . The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, or waived unless the same shall be in writing and signed by the Company and Holders holding no less than two-thirds (2/3) of the then outstanding Registrable Securities, in which case such amendment, modification, supplement or waiver shall be binding on all Holders, provided that any party may give a waiver as to itself. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of all of the Registrable Securities to which such waiver or consent relates; provided , however , that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.

(f) Notices . Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.

(g) Successors and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) or obligations hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. Each Holder may assign its respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement or the Placing Agreement, as applicable; provided in each case that (i) the Holder agrees in writing with the transferee or assignee to assign such rights and related obligations under this Agreement, and for the transferee or assignee to assume such obligations, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being transferred or assigned, (iii) at or before the time the Company received the written notice contemplated by clause (ii) of this sentence, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein, and (iv) the transferee is an “accredited investor,” as that term is defined in Rule 501 of Regulation D.

(h) Execution and Counterparts . This Agreement may be executed in two or more counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when

counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.

(i) Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.

(j) Cumulative Remedies . The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

(k) Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their good faith reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(l) Headings . The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

(m) Independent Nature of Purchasers’ Obligations and Rights . The obligations of each Purchaser under this Agreement are several and not joint with the obligations of any other Purchaser hereunder, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser hereunder. The decision of each Purchaser to purchase the Securities pursuant to the Transaction Documents has been made independently of each other Purchaser. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Purchaser acknowledges that no other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its rights under the Transaction Documents. Each Purchaser shall be entitled to protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Purchasers has been provided with the same Registration Rights Agreement for the purpose of closing a transaction with multiple Purchasers and not because it was required or requested to do so by any Purchaser.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



REALM THERAPEUTICS PLC

By:	/s/ Marella Thorell
	Name: Marella Thorell
	Title: CFO/COO, Executive Director

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



ORBIMED PRIVATE INVESTMENTS VI, LP

By:	OrbiMed Capital GP VI LLC,
	its General Partner

By:	OrbiMed Advisors LLC,
	its Managing Member

By:	/s/ Jonathan Silverstein
Name:	Jonathan Silverstein
Title:	Member

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



BIOTECHNOLOGY VALUE FUND, L.P.

By:	BVF Partners, L.P., its General Partner
By:	BVF Inc., its General Partner

By:	/s/ Mark Lampert
Name:	Mark Lampert
Title:	President

BIOTECHNOLOGY VALUE FUND II, L.P.

By:	BVF Partners, L.P., its General Partner
By:	BVF Inc., its General Partner

By:	/s/ Mark Lampert
Name:	Mark Lampert
Title:	President

BIOTECHNOLOGY VALUE TRADING FUND OS, L.P.

By:	BVF Partners OS, Ltd., its General Partner
By:	BVF Partners, L.P., its Sole Member
By:	BVF Inc., its General Partner

By:	/s/ Mark Lampert
Name:	Mark Lampert
Title:	President

INVESTMENT 10, L.L.C.

By:	BVF Partners, L.P., as Attorney-in-fact
By:	BVF Inc., its General Partner

By:	/s/ Mark Lampert
Name:	Mark Lampert
Title:	President

MSI BVF SPV, L.L.C.

By:	BVF Partners, L.P., as Attorney-in-fact
By:	BVF Inc., its General Partner

By:	/s/ Mark Lampert
Name:	Mark Lampert
Title:	President

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



RA CAPITAL HEALTHCARE FUND, L.P.

By:	RA Capital Management, LLC
Its:	General Partner

By:	/s/ Nicholas McGrath
Name:	Nicholas McGrath
Title:	Authorized Signatory

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



Blackwell Partners LLC – Series A

By:	/s/ Justin B. Nixon
Name:	Justin B. Nixon
Title:	Investment Manager DUMAC, Inc. Authorized Agent

By:	/s/ Jannine M. Lall
Name:	Jannine M. Lall
Title:	Controller DUMAC, Inc. Authorized Agent

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



Abingworth BioEquities Master Fund Ltd

By:	/s/ James Abell
Name:	James Abell
Title:	Authorized Signatory

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



Polar Capital

By:	/s/ Boura Kym Tomlinson Cann
Name:	Boura Kym Tomlinson Cann
Title:	Chief Legal and Compliance Officer

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



By:	/s/ Alex Martin
Name:	Alex Martin

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



By:	/s/ Charles Spicer
Name:	Charles Spicer

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.



SUSSEX TRADING COMPANY LIMITED

By:	/s/ Stewart Newton
Name:	Stewart Newton
Title:	Director

ANNEX A

PLAN OF DISTRIBUTION

We are registering the Ordinary Shares issued to the selling shareholders and issuable upon exercise of the warrants issued to the selling shareholders to permit the resale of [American Depositary Shares, or ADSs, represented by] those Ordinary Shares by such holders of Ordinary Shares and warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the [ADSs][Ordinary Shares]. We will bear all fees and expenses incident to our obligation to register the Ordinary Shares.

The selling shareholders may sell all or a portion of the Ordinary Shares beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the [ADSs][Ordinary Shares] are sold through underwriters or broker-dealers, the selling shareholders will be responsible for underwriting discounts or commissions or agent's commissions. The [ADSs][Ordinary Shares] may be sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The selling shareholders may use any one or more of the following methods when selling shares:


•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;


•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;


•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;


•	an exchange distribution in accordance with the rules of the applicable exchange;


•	privately negotiated transactions;


•	settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;


•	broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share;


•	through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;


•	a combination of any such methods of sale; and


•	any other method permitted pursuant to applicable law.

The selling shareholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or Section 4(a)(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the criteria and conform to the requirements of those provisions.

Broker-dealers engaged by the selling shareholders may arrange for other broker-dealers to participate in sales. If the selling shareholders effect such transactions by selling [ADSs][Ordinary Shares] to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the [ADSs][Ordinary Shares] for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with FINRA Rule 2121 and Supplementary Material .01 and Supplementary Material .02 thereto.

In connection with sales of the [ADSs][Ordinary Shares] or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the [ADSs][Ordinary Shares] in the course of hedging in positions they assume. The selling shareholders may also sell [ADSs][Ordinary Shares] short and if such short sale shall take place after the date that this Registration Statement is declared effective by the Commission, the selling shareholders may deliver [ADSs][Ordinary Shares] covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge [ADSs][Ordinary Shares] to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The selling shareholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the selling shareholders have been advised that they may not use Ordinary Shares registered on this registration statement to cover short sales of our Ordinary Shares made prior to the date the registration statement, of which this prospectus forms a part, has been declared effective by the SEC.

The selling shareholders may, from time to time, pledge or grant a security interest in some or all of the warrants or [ADSs][Ordinary Shares] owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the [ADSs][Ordinary Shares] from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this prospectus. The selling shareholders also may transfer and donate the [ADSs][Ordinary Shares] in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The selling shareholders and any broker-dealer or agents participating in the distribution of the [ADSs][Ordinary Shares] may be deemed to be “underwriters” within the meaning of Section 2(a)(11) of the Securities Act in connection with such sales. In such event, any commissions paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale

of the [ADSs][Ordinary Shares] purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Selling Shareholders who are "underwriters" within the meaning of Section 2(a)(11) of the Securities Act will be subject to the applicable prospectus delivery requirements of the Securities Act including Rule 172 thereunder and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Each selling shareholder has informed the Company that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the [ADSs][Ordinary Shares]. Upon the Company being notified in writing by a selling shareholder that any material arrangement has been entered into with a broker-dealer for the sale of [ADSs][Ordinary Shares] through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling shareholder and of the participating broker-dealer(s), (ii) the number of [ADSs][Ordinary Shares] involved, (iii) the price at which such the [ADSs][Ordinary Shares] were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction.

Under the securities laws of some states, the [ADSs][Ordinary Shares] may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the [ADSs][Ordinary Shares] may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any selling shareholder will sell any or all of the [ADSs][Ordinary Shares] registered pursuant to the shelf registration statement, of which this prospectus forms a part.

Each selling shareholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the [ADSs][Ordinary Shares] by the selling shareholder and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the [ADSs][Ordinary Shares] to engage in market-making activities with respect thereto. All of the foregoing may affect the marketability of the [ADSs][Ordinary Shares] and the ability of any person or entity to engage in market-making activities with respect thereto.

We will pay all expenses of the registration of the [ADSs and the] Ordinary Shares pursuant to the registration rights agreement, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided , however , that each selling shareholder will pay all underwriting discounts and selling commissions, if any. We have agreed to pay for the legal expenses of one of the selling shareholders up to an aggregate of $50,000. We will indemnify the selling shareholders against certain liabilities, including some liabilities under the Securities Act, in accordance with the Registration Rights Agreement, or the selling shareholders will be entitled to contribution. We may be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act, that may arise from

any written information furnished to us by the selling shareholders specifically for use in this prospectus, in accordance with the related registration rights agreements, or we may be entitled to contribution.

ANNEX B

SELLING SHAREHOLDER NOTICE AND QUESTIONNAIRE

The undersigned holder of ordinary shares, nominal value £0.10 per share, of Realm Therapeutics plc, a company incorporated under the laws of England and Wales (the “ Company ”), issued pursuant to either (i) a certain Securities Purchase Agreement by and among the Company and the Purchasers named therein, dated as of September 21, 2017 (the “ Purchase Agreement ”) or (ii) a certain Placing Agreement by and among the Company, NPlus1 Singer Advisory LLP and the Purchasers named therein (the “ Placing Agreement ” and together with the Purchase Agreement, the “ Agreements ”), understands that the Company intends to file with the Securities and Exchange Commission a registration statement (the “ Resale Registration Statemen t”) for the registration and the resale under the Securities Act of 1933, as amended (the “ Securities Act ”), of the Registrable Securities in accordance with the terms of the Agreement. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement, dated as of September 21, 2017, pursuant to which this questionnaire is being completed.

In order to sell or otherwise dispose of any Registrable Securities pursuant to the Resale Registration Statement, a holder of Registrable Securities generally will be required to be named as a selling shareholder in the related prospectus or a supplement thereto (as so supplemented, the “ Prospectus ”), deliver the Prospectus to purchasers of Registrable Securities (including pursuant to Rule 172 under the Securities Act) and be bound by the provisions of the Agreement (including certain indemnification provisions, as described below). Holders must complete and deliver this Notice and Questionnaire in order to be named as selling shareholders in the Prospectus. Holders of Registrable Securities who do not complete, execute and return this Notice and Questionnaire within three (3) Trading Days following the date of the Agreement (1) will not be named as selling shareholders in the Resale Registration Statement or the Prospectus and (2) may not use the Prospectus for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling shareholder in the Resale Registration Statement and the Prospectus. Holders of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not named as a selling shareholder in the Resale Registration Statement and the Prospectus, and your signature below indicates that you either have consulted with counsel in this regard or have waived the opportunity to have done so.

NOTICE

The undersigned holder (the “ Selling Shareholder ”) of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities owned by it and listed below in Item (3), unless otherwise specified in Item (3), pursuant to the Resale Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire, understands and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire, the Registration Rights Agreement and the applicable Agreement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:

QUESTIONNAIRE


1.	Name.



(a)	Full Legal Name of Selling Shareholder:


(b)	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:


(c)	Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):


2.	Address for Notices to Selling Shareholder:







Telephone:

Fax:

Contact
Person:


Email Address of Contact Person:

3. Beneficial Ownership of Registrable Securities Issuable Pursuant to the Purchase Agreement or the Placement Agreement:



(a)	Type and Number of Registrable Securities beneficially owned and issued pursuant to the applicable Agreement:






(b)	Number of Ordinary Shares to be registered pursuant to this Notice for resale:


4.	Broker-Dealer Status:


(a)	Are you a broker-dealer?

Yes o No o

(b) If “yes” to Section 4(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

Yes o No o


Note:	If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

Yes o No o



Note: If yes, provide a narrative explanation below:


(c)	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

Yes o No o


Note:	If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.


5.	Beneficial Ownership of Other Securities of the Company Owned by the Selling Shareholder.

Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3.



Type and amount of other securities beneficially owned:


6.	Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.



State any exceptions here:


7.	Plan of Distribution:

The undersigned has reviewed the form of Plan of Distribution attached as Annex A to the Registration Rights Agreement, and hereby confirms that, except as set forth below, the information contained therein regarding the undersigned and its plan of distribution is correct and complete.



State any exceptions here:

***********

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof and prior to the effective date of any applicable Resale Registration Statement. All notices hereunder and pursuant to the Registration Rights Agreement and the applicable Agreement shall be made in writing, by hand delivery, confirmed or facsimile transmission, first-class mail or air courier guaranteeing overnight delivery at the address set forth below. In the absence of any such notification, the Company shall be entitled to continue to rely on the accuracy of the information in this Notice and Questionnaire.

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items (1) through (7) above and the inclusion of such information in the Resale Registration Statement and the Prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of any such Registration Statement and the Prospectus.

By signing below, the undersigned acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M in connection with any offering of Registrable Securities pursuant to the Resale Registration Statement. The undersigned also acknowledges that it understands that the answers to this Questionnaire are furnished for use in connection with Registration Statements filed pursuant to the Registration Rights Agreement and any amendments or supplements thereto filed with the Commission pursuant to the Securities Act.

The undersigned hereby acknowledges and is advised of the following Compliance and Disclosure Interpretation 239.10 with respect to the Securities Act Section 5, dated Nov. 26, 2008, compiled by the Commission’s Division of Corporation Finance, regarding short selling:

“An issuer filed a Form S-3 registration statement for a secondary offering of common stock which is not yet effective. One of the selling stockholders wanted to do a short sale of common stock “against the box” and cover the short sale with registered shares after the effective date. The issuer was advised that the short sale could not be made before the registration statement becomes effective, because the shares underlying the short sale are deemed to be sold at the time such sale is made. There would, therefore, be a violation of Section 5 if the shares were effectively sold prior to the effective date.”

By returning this Questionnaire, the undersigned will be deemed to be aware of the foregoing interpretation.

I confirm that, to the best of my knowledge and belief, the foregoing statements (including without limitation the answers to this Questionnaire) are correct.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Questionnaire to be executed and delivered either in person or by its duly authorized agent.



Dated:	Beneficial Owner:

	By:
		Name:
		Title:

PLEASE E-MAIL A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

Cooley LLP

1114 Avenue of the Americas New York,

New York 10036 Telephone No.: (212) 479-6495

Facsimile No.: (347) 438-3009

Attention: Joshua A. Kaufman

E-mail: josh.kaufman@cooley.com

Exhibit 16.1

Our Ref AS/JF

UK Company registration number 05789798



U.S. Securities and Exchange Commission Office of the Chief Accountant 100 F Street, NE Washington, DC 20549		Grant Thornton UK LLP 101 Cambridge Science Park Milton Road Cambridge CB4 0FY T +44 (0)1223 225600 F +44 (0)1223 225619 www.grant-thornton.co.uk

Attention: Mara L. Ronsom, Assistant Director, Office of Consumer Products Jenifer López, Staff Attorney

21 May 2018

Re: Realm Therapeutics plc

CIK No. 0001718903

Dear Sir or Madam:

We have read the section titled “Change of Independent Auditors” included under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Registration Statement on Form F-1 of Realm Therapeutics plc to be filed with the U.S. Securities and Exchange Commission on or about May 22, 2018, and agree with the statements concerning our Firm contained therein.

Very truly yours,

/s/ Grant Thornton UK LLP

Grant Thornton UK LLP

Exhibit 21.1

Realm Therapeutics plc

List of Subsidiaries



Subsidiary	Jurisdiction

Realm Therapeutics, Inc.	Delaware
PuriCore Europe Limited	England and Wales
PuriCore Scientific Limited	England and Wales

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Realm Therapeutics plc:

We consent to the use of our report included herein and to the reference to our firm under the heading “Experts” in the prospectus.

/s/ KPMG LLP

Philadelphia, Pennsylvania
May 22, 2018

Exhibit 24.1

POWERS OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Alex Martin and Marella Thorell, and each of them acting individually, as his or her true and lawful attorneys-in-fact and agents, each with full power of substitution, for him or her in any and all capacities, to file a registration statement with the U.S. Securities and Exchange Commission on behalf of Realm Therapeutics plc (the “Company”) on Form F-1 for the registration of ordinary shares of the Company (the “Registration Statement”) and to sign any and all amendments to such Registration Statement, including post-effective amendments or any abbreviated registration statement and any amendments thereto filed pursuant to Rule 462(b) increasing the number of securities for which registration is sought, and to file the same, with all exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.



SIGNATURE	TITLE	DATE

/s/ Charles Spicer	Chairman of the Board of Directors	27 April 2018
Charles Spicer	Chairman of the Board of Directors	27 April 2018

/s/ Joseph William Birkett	Director	11 April, 2018
Joseph William Birkett	Director	11 April, 2018

/s/ Ivan Gergel	Director	12 April, 2018
Ivan Gergel	Director	12 April, 2018

/s/ Balkrishan (Simba) Gill	Director	11 April, 2018
Balkrishan (Simba) Gill	Director	11 April, 2018

/s/ Sanford (Sandy) Zweifach	Director	1 May, 2018
Sanford (Sandy) Zweifach	Director	1 May, 2018