MINI PROSPECTUS - The Tax Shelter Report

MINI PROSPECTUS
WITH APPLICATION FORMS
SPONSORED BY BREWIN DOLPHIN SECURITIES

This document, which comprises a mini prospectus (“Mini Prospectus”), contains information in summary form
drawn from the Company’s Prospectus published on and dated 4 January 2005 (the “Prospectus”), which alone
contains full details of the Company and the Shares. Terms defined in the Prospectus bear the same meaning when
used in this document. The Directors are satisfied that this Mini Prospectus contains a fair summary of the key
information set out in the Prospectus. The UK Listing Authority has authorised the issue of this document without
the approval of its contents.
In subscribing for Shares, you will be treated as subscribing solely on the basis of the Prospectus, which should be
read in conjunction with this document and the Terms and Conditions of Application set out in this document and
in the Prospectus.
Application has been made for the Shares in the Company to be issued under the Offer to be admitted to the Official
List of the UK Listing Authority and to trading on the London Stock Exchange’s market for listed securities. It is
expected that such Admission will become effective, and that trading in the Ordinary Shares will commence, on
7 February 2005, on the assumption that the minimum subscription under the Offer of £1 million is reached.
Persons receiving this document should note that, in connection with the Offer, Brewin Dolphin Securities Ltd is
acting for Eclipse VCT 2 plc and no-one else and will not be responsible to any other person for providing the
protections afforded to customers of Brewin Dolphin Securities Ltd or providing advice in connection with the Offer.
ECLIPSE VCT 2 plc
(Incorporated and registered in England and Wales under the Companies Act 1985 with registered number 05260491)
Offer for Subscription
of up to 30,000,000 Ordinary Shares
at an issue price of 100p per share payable in full on application
Sponsor
The Offer will be open from 8.00 a.m. on 5 January 2005 until the earlier of 3.00 p.m. on 30 June 2005 and the date
on which the maximum subscription is reached. Dealings in respect of successful applications received on or before
31 January 2005 will commence on 7 February 2005 (or earlier if the minimum subscription level of £1,000,000 is
achieved before 31 January 2005). The Offer is not underwritten. The terms and conditions of the Offer are set out
in Part 4 of this document, followed by an Application Form for use in connection with the Offer. The minimum
subscription per investor is £3,000. Completed Application Forms in respect of the Offer should be sent by post or
delivered by hand to Octopus Asset Management Limited, 14 Dover Street, London W1S 4LW.
Your attention is drawn to the paragraph headed ‘Risk Factors’ set out on page 4 of this document.
Copies of this document are available for inspection during normal business hours at the Document Viewing Facility
at the Financial Services Authority, 25 The North Colonnade, London E14 5HS following the date of publication and
may be obtained free of charge for the duration of the Offer, by collection from:
Brewin Dolphin Securities Ltd
5 Giltspur Street
London EC1A 9BD
Octopus Asset Management Ltd
14 Dover Street
London W1S 4LW
Brewin Dolphin Securities Ltd
34 Lisbon Street
Leeds LS1 4LX
1

Contents
Page
2 Offer Timetable
2 Offer Statistics
3 Key Information
4 Risk Factors
5 Letter from the Chairman
Part 1
6 About Eclipse VCT 2
7 Tax Benefits for Investors
7 Potential for High Returns
8 Our Team
10 Investment Process
11 Management Remuneration
12 The Offer
12 Other Information
Offer Timetable
Offer opens 5 January 2005
First allotment
as soon as the minimum subscription of £1m is reached
Dealings commence
within 10 business days of allotment
Share and tax certificates sent out
within 15 business days of allotment
Deadline for receipt of applications for final allotment in 2004/2005 tax year 5 April 2005
Deadline for receipt of applications for final allotment in 2005/2006 tax year 30 June 2005
The deadline for receipt of applications is subject to the Offer not being fully subscribed by an earlier date. The final
closing date of the Offer may be extended by the Directors in their absolute discretion.
Offer Statistics
Offer Price per Ordinary Share
100p
Maximum number of Ordinary Shares in issue following the Offer 30,000,000
Minimum number of Ordinary Shares in issue following the Offer 1,000,000
Initial Net Asset Value per Ordinary Share 95p*
Commission available to introducers:
Initial
2.25% of gross proceeds
Plus
Annual (subject to an aggregate maximum of 4.5% of initial net asset value per Share) 0.375% of net asset value
* Based on a 100p subscription price less expenses of the Offer of 5p per Ordinary Share
Page
15 Directors and Advisers
16 Definitions
Part 2
17 Taxation Considerations for Investors
Part 3
19 Conditions to be met by Venture Capital Trusts
Part 4
21 Terms and Conditions of Application
Application Procedure
Application Forms
2

Key Information
Why Invest in a VCT?
VCTs offer two main advantages over other investment
products in the market. Firstly, the structure of a VCT
provides investors with a combination of tax
advantages unmatched by any other kind of
investment product in the UK. Secondly, VCTs offer
investors the opportunity to benefit from the higher
returns that can be achieved by investing in UK
smaller companies.
Background
VCTs were introduced by the UK Government in 1995
to encourage individuals to invest in the UK’s fastest
growing and potentially highest return companies.
The Government achieved this by offering investors an
up-front income tax relief of 20% of the amount
invested. As a result, more than £1.6 billion has been
invested in VCTs between 1995 and 2004. (Source:
Allenbridge)
Tax Law Changes
The Finance Act 2004 introduced changes to VCT
legislation. These were designed to make VCTs even
more attractive to investors in order to increase the
amount of money being invested into some of the UK’s
most exciting young companies. The main change is
an increase in the level of up-front income tax relief
from 20% to 40%.
At present, the legislation states that this increased
relief will only be available for a period of two years
from 6 April 2004.
Effect on Investors
The tax changes mean that if you invest £10,000 in
Eclipse 2, your income tax bill will be reduced by
£4,000 (provided that the Shares are held for at least
three years) - i.e. your investment of £10,000
effectively only costs you £6,000.
In addition to these benefits, all capital gains on sale
of Shares and all dividend payments will be tax-free.
Why Invest in Eclipse VCT 2?
Eclipse 2 also offers individual investors the
opportunity to enjoy the potentially high returns of the
UK venture capital market. This market has
consistently provided investors with superior
long-term returns compared to investing in large
quoted companies. In the ten years to December
2003, the average total return (net of fees) to
investors in UK venture capital funds was 14.2% per
annum. This compares to the FTSE 100 return of
6.1% per annum. (Source: PwC & BVCA Performance
Measurement Survey 2003).
The decision to launch Eclipse 2 so soon after the
closing of Eclipse VCT, which was the most successful
VCT launch in 2004 (by funds raised), was the result of
the number and the quality of the investment
opportunities the Manager is currently seeing.
Additionally, Eclipse 2 will be able to co-invest
alongside the Manager’s other VCTs, allowing the Fund
to invest in larger deals and, therefore, also
later-stage companies.
Our Team
The Manager has built a team with substantial
experience and a strong track record in small company
investing to help ensure the best possible returns for
investors. Members of the Investment Committee
have over 50 years of experience in successfully
sourcing, making and exiting investments. Their
individual track records are outstanding and specific
details are included on page 9.
Eclipse 2 will also benefit from the research
conducted by the other fund managers and analysts at
Octopus, in particular the team working on the
Phoenix VCT. Phoenix has made 25 investments since
launch and its investments have increased in value by
an average of 31.9% (as at 17 December 2004).
Eclipse 2’s AIM investments will be made under the
same investment policy as Phoenix.
Award Winning Manager
Octopus’ last VCT launch – Eclipse VCT – was voted
“New Venture Capital Fund of the Year 2004” in the
Investor AllStar Awards. The award, voted for by fund
managers within the venture capital industry, was
based on the Fund’s innovative investment strategy
and the active nature of Octopus’ investment
professionals.
How to Invest
An application form is attached at the end of this
document. The minimum investment is £3,000.
Although there is no maximum size of investment, tax
reliefs are available on a maximum investment of
£200,000 per individual in any one tax year.
Listing
Once the Fund has reached its minimum subscription
of £1 million, its Ordinary Shares will be admitted to
the Official List of the UK Listing Authority and to
trading on the London Stock Exchange. The maximum
subscription is £30 million.
The above information should be read in conjunction with the full text of this document, from which it is derived.
Investors should read the whole document and not just rely on the key information set out above. Information on
tax reliefs above relates to Qualifying Subscribers who hold the Shares for at least three years. Potential Investors
should seek their own independent tax advice.
3

Risk Factors
Prospective investors should be aware that the value of Ordinary Shares may go down as well as up, in which case
an investor may not get back the amount originally invested. The price at which the Ordinary Shares are traded
may not reflect the net asset value of the Fund. Investment in Eclipse 2 should be viewed as a longer-term
investment. The attention of prospective investors is drawn to the following risk factors:
• Past performance is no indication of future performance.
• There can be no assurances that the Company will meet its objectives or that suitable investment opportunities
will be identified.
• An investment in a VCT may not be suitable for all investors. If investors have any doubts they should seek
advice from their independent financial adviser.
• Investments made by the Fund will be in companies whose shares are not readily marketable and therefore may
be difficult to realise. The fact that a share is traded on AIM or OFEX does not guarantee its liquidity. The spread
between the buying and selling price of such companies’ shares may be wide and thus the mid-market price
used for valuation may not be achievable in the event of sale.
• Whilst it is the intention of the Directors that the Fund will be managed so as to qualify as a VCT, there can be
no guarantee that it will qualify or that such status will be maintained. A failure to meet the qualifying
requirements could result in the Fund losing the tax reliefs previously or prospectively obtained, resulting in
adverse tax consequences for investors, including a requirement to repay the 40% income tax relief.
• It is possible for investors to lose their tax reliefs by themselves taking or not taking certain steps, and investors
are advised to take their own independent financial advice on the tax aspects of their investment.
• Levels and bases of, and relief from, taxation are subject to change. Such changes could be retrospective.
• Although the Fund will be admitted to the Official List of the UK Listing Authority and to trading on the London
Stock Exchange’s market for listed securities, there will most likely be an illiquid market and investors may find
it difficult to realise their investment during the early years of the life of the Fund.
• The Company is seeking up to £30 million in the Offer. To the extent that a relatively small level of funds is raised
the Company may not be able to diversify its portfolio sufficiently.
• The Fund will invest in companies with gross assets of not more than £15 million prior to investment.
Such companies generally have a higher risk profile than larger “blue chip” companies.
• Any realised losses on disposal of shares in a VCT cannot be used to create an allowable loss for capital gains
tax purposes.
• Companies in which a VCT makes an investment may include companies undergoing significant change.
Such businesses are usually exposed to greater risks than established businesses.
4

Letter from the Chairman of
Eclipse VCT 2 plc
Eclipse VCT 2 PLC
14 Dover Street
London
W1S 4LW
4 January 2005
Dear Investor
I’m delighted to be writing to you as Chairman of Eclipse VCT 2.
I believe that this is one of the most attractive investment opportunities currently available. It enables you to
take advantage of the new VCT tax changes, as well as Octopus’ expertise in smaller company stock selection.
Tax Changes
In the March 2004 Budget, the Chancellor announced important changes to the legislation governing
investments into VCTs. The biggest change was to increase the level of up-front income tax relief to investors
from 20% to 40% for a period of two years until April 2006. This makes VCTs one of the most tax efficient
investments available to UK individuals.
Award Winning Manager
As well as significant tax advantages, an investment in Eclipse 2 provides you with the potential for superior
returns offered by the UK’s best performing asset class. Octopus’ commitment and success within the VCT
market was recognised when its peers voted its last VCT launch “New Venture Capital Fund of the Year” in the
Investor AllStar Awards. Eclipse was the most successful VCT launch last year in terms of funds raised, raising
almost £30 million from around 2,500 investors.
Personal Service
If you do decide to invest, you’ll see that the Team prides itself not only on its strong track record but also on
meeting the needs of each individual investor. That’s why you’ll be kept as involved and informed throughout
the investment process as you want to be. If you want to receive an update every time we make an investment,
you will.
I look forward to welcoming you as a shareholder.
Yours sincerely
Marc Vlessing
Chairman
5

Part 1
About Eclipse VCT 2
Eclipse 2 is a new VCT that will invest in a diversified portfolio of unlisted (including AIM quoted) UK companies with
the intention of maximising tax-free capital and income returns for its investors.
VCTs offer two main advantages over other investment products in the market. Firstly, the structure of a VCT
provides investors with a combination of tax advantages unmatched by any other investment product in the UK.
Secondly, VCTs offer investors the opportunity to benefit from the higher returns that can be achieved by
investing in UK smaller companies. Regarding Eclipse VCT 2, the Directors believe that this opportunity is further
enhanced by current low valuations and by the quality of the Team that has been assembled to manage the Fund.
I. Tax Benefits for Investors
One of the reasons that VCTs have proved so popular is that, provided individuals hold the shares for three
years, they offer an up-front tax relief which represents a significant return on any money invested. In
addition to this benefit, all capital gains on sale of Shares and all dividend payments will be tax-free (see
section entitled “Tax Benefits for Investors” on page 7).
II. High Returns
Investing in venture capital backed companies has consistently produced superior returns to investing in the
broader equity market. Eclipse 2 is a way for individuals to access what has historically been the UK’s best
performing asset class.
The decision to launch Eclipse 2 so soon after the launch of Eclipse VCT, which was the most successful VCT
launch in 2004 (by funds raised), was the result of the number and the quality of the investment
opportunities the Manager is currently seeing. Additionally, Eclipse 2 will be able to co-invest alongside the
Manager’s other VCTs, allowing the Fund to invest in larger deals and, therefore, later-stage companies.
We have built a team with substantial experience and a strong track record to ensure that we achieve the
best possible returns for investors. Members of the Investment Committee have over 50 years of experience
in successfully sourcing, making and exiting investments. Their individual track records are outstanding and
specific details are included on page 9.
In relation to your investment in Eclipse 2, the Team prides itself not only on the strong track record of the
Investment Manager but also on meeting the needs of each individual investor. The Board and the
Investment Manager aim to provide a personalised and educational approach to investment. As well as
receiving regular investment updates, investors will be invited to the regional investment seminars and
workshops that will be held. Investors are also encouraged to speak directly to the fund managers who are
investing their money.
6

Tax Benefits for Investors
The Finance Act 2004 has made changes to the VCT legislation. These changes are designed to make VCTs even
more attractive to investors and thereby increase the amount of money being invested into some of the UK’s most
exciting young companies. The main change has been to increase the level of up-front income tax relief from 20%
to 40%. The legislation states that this increased up-front relief will only be available on new investments in VCTs
for a period of two years from 6 April 2004.
To summarise, individual investors in Eclipse 2 are entitled to the following benefits:
• up-front income tax relief to the investor of 40% on amounts invested between £3,000 and £200,000 (provided
that the shares are held for at least three years);
• dividends paid to investors are free of income tax; and
• capital gains made by investors on disposal of Shares are tax-free.
The following shows the effect of the increased tax reliefs for an individual who invests £10,000 in Eclipse 2:
Initial Investment £10,000
Less income tax relief £4,000
Effective cost to investor £6,000
i.e. your investment of £10,000 effectively only costs you £6,000.
Investors should obtain their own independent financial advice on their eligibility for tax relief. A general guide to
the conditions to be met in order for the tax reliefs to be available is given in Parts 2 and 3 of this Document.
The above information should be read in conjunction with the full text of this document, from which it is derived.
Investors should read the whole document and not just rely on the summarised information set out above.
Potential for High Returns
Background
Eclipse 2 offers individuals the opportunity to enjoy the potentially higher returns of the UK venture capital market.
This market has consistently provided investors with superior long-term returns compared to investing in large
quoted companies. In the five and ten year periods to December 2003, the average total return (net of fees) to
investors in UK venture capital funds was 10.2% and 14.2% per annum respectively. This compares to the FTSE 100
return of –1.1% and 6.1% per annum over the same time periods.
FTSE 100 vs Venture Capital Long-Term Returns*
5 years to December 2003 (%) 10 years to December 2003 (%)
FTSE 100 -1.1% 6.1%
UK Venture Capital 10.2% 14.2%
Relative Outperformance 11.3% 8.1%
Source: PwC and BVCA Performance Measurement Survey 2003
* Past performance is no guarantee of future performance.
7

Unlike some VCTs, Eclipse 2 will not be investing in start-up or seed stage companies as the Directors believe that
the risks are too high and that the expected time to exit is too long for many investors. Instead, we believe that the
ideal time to invest in companies is when they have proven their business models and are looking for
expansion capital.
The Current Opportunity
The Directors believe that there has been a lack of money available to be invested into UK smaller companies over
the last four years. This has delayed some companies’ plans for expansion and has caused valuation levels of most
private businesses to fall over this period.
The Government’s desire to address this situation is reflected in its decision to increase the level of up-front income
tax relief to investors in VCTs. We believe that the effect of this is already starting to come through.
We are encouraged by both the number and the quality of the investment opportunities that we are currently
seeing. A further advantage is that Octopus already manages three VCTs, and Eclipse 2 should be able to co–invest
alongside the other VCTs in larger and later-stage investment opportunities.
The Directors’ view is that the Company’s prospects for the current financial year are good.
Our Team
Our team comprises the Board of Directors and the Investment Committee. The Board consists of three directors,
two of whom are independent of Octopus. The Board has overall responsibility for the Fund and its investment
policies and has appointed Octopus as the Investment Manager. Octopus will be represented by the five members
of the Investment Committee.
The Board
Marc Vlessing (Non-Executive Chairman – Age 42)
Marc started his career as a corporate financier with County NatWest. Upon leaving County NatWest in 1991, he set
up Media Finance, a management consultancy business specialising in the media sector. In 1997, Marc was
appointed Chief Executive of Crescent Entertainment which comprised a large group of West End theatres, a number
of cinemas and some film and TV businesses. Marc built up the group and assisted in its successful sale in 2000.
He then became Chief Executive of First Call International, the UK's largest independent ticketing business. More
recently, Marc has become a principal and main investor in S1 Homes, a developer of affordable housing. Marc sits
on the Board of ProVen Media VCT and has extensive venture capital experience, both as an entrepreneur and as an
investor.
Matt Cooper (Non-Executive Director – Age 38)
Matt is the Chairman of Octopus Asset Management Limited, the Investment Manager of Eclipse VCT 2. Prior to
joining Octopus, Matt was the Principal Managing Director of Capital One (Bank) Europe plc where he was
responsible for all aspects of the company’s strategic direction and day-to-day operations in Europe. He led the UK
portion of the business from start-up to two million customers, generating revenues of over £275 million and
employing over 2,000 people.
David Lambert (Non-Executive Director – Age 49)
David has over 17 years’ experience of private equity investment in smaller middle market UK companies. David
was formerly Managing Director of Royal Bank Development Capital which comprised six offices across the UK
focusing on private equity investments up to £10 million. He was responsible for developing this business from its
original inception in 1996 as the NatWest Pioneer Fund, commencing with a single office in Nottingham and an
initial focus on investments up to £1 million. Prior to this he was a Director with NatWest Equity Partners, where he
worked with the lead fund manager of Eclipse VCT, Chris Allner. He is currently a Director of Alcuin Capital Ltd, a
private equity fund manager.
David is a chartered accountant, having trained with Price Waterhouse in Birmingham and is a graduate of Bristol
University with a BSc in Economics and Accounting.
8

The Investment Committee
The Investment Committee is made up of five fund managers with more than 50 years of combined investment
experience. This team includes highly experienced venture capital managers, who have strong track records of
sourcing, making and realising unquoted and AIM listed investments with significant capital gains. They have
demonstrated this ability in a range of different stock market conditions.
Chris Allner
Chris has over two decades of venture capital experience at some of Europe’s leading venture capital houses and
has an excellent track record of generating consistent returns for his investors. In the period 1990-2003, Chris was
directly responsible for more than 30 deals, achieving an average annual rate of return of more than 35% for his
investors.
Chris started his career at 3i in 1982 before joining Charterhouse Development Capital in 1987. He moved to
NatWest Equity Partners in 1989, becoming the director responsible for the Southern regional office. In 2001, Chris
became a director of ProVen Private Equity, manager of both of the Proven VCTs and other venture capital funds.
Chris graduated from Oxford University with an MA in Politics, Philosophy and Economics and holds a Certified
Diploma in Accounting and Finance.
Joseph Bergin
Joseph has extensive investment experience from having worked for ten years for 3i (one of Europe’s largest
venture capital companies) in both the UK and Continental Europe. He has led on a number of different transactions
including Management Buyouts, Development Capital, and Public to Private. His sector experience includes
healthcare, food and technology. Joseph has achieved an average return of over 25% per annum on his realised UK
investments in the period to December 2003.
Joseph recently completed the Sloan Masters programme (an MBA and MSc in Management) at London
Business School.
Andrew Cavaghan
Prior to joining Octopus, Andrew set up and managed a generalist venture capital fund on behalf of GLE. While at
the company, Andrew had primary responsibility for deal origination but also represented GLE at Board level on a
number of portfolio companies. In 2003, Andrew was nominated as one of the "Top Ten Young Venture Capitalists
to Watch" in the Investor AllStar Awards.
Andrew graduated with a BA in Philosophy from University College London. He also has a postgraduate diploma in
Law from the York College of Law and is a qualified barrister.
Guy Myles
Guy is the Head of Investment at Octopus Asset Management. Prior to joining Octopus, Guy worked at Mercury
Asset Management, one of Europe’s leading fund management companies. Guy’s most recent position at Mercury
was as one of the fund managers on the global equity team, where he was also head of the technology research
team.
Guy also sits on the Investment Committee of the Phoenix VCT plc, which Octopus launched in 2002. This fund
accounted for around 20% of all VCT funds raised in the 2002/03 tax year and has made 25 investments since
launch. The average investment has increased in value by 31.9% (as at 17 December 2004).
Guy graduated with a BSc from Bristol University.
Richard Power
Richard has nine years experience managing UK smaller company funds, most recently at Close Brothers. Prior to
that, Richard spent five years at Duncan Lawrie Ltd. Whilst Richard was managing the Duncan Lawrie Smaller
Companies Fund, it won a number of awards and was the best performing UK smaller companies fund over the one,
three and five years ending 31st December 1999. Richard also sits on the Investment Committee of the Phoenix VCT
plc and will only focus on identifying AIM investment opportunities for Eclipse 2.
Richard graduated from Exeter University with a BA (Hons) in Economic and Political Development.
The Directors and the Investment Committee are investing £80,000 in the Offer.
9

Investment Process
Eclipse 2’s investment strategy aims to deliver absolute returns on its investments rather than a performance
measured against the market indices. This strategy aims to provide investors with attractive returns in all market
conditions whilst striving to minimize the amount of risk.
1. What kind of companies do we invest in?
Eclipse 2 will provide individuals with a diversified portfolio of investments in unlisted UK smaller
companies. The split of this portfolio will be as follows:
• approximately 80% will be invested in companies operating in sectors which the team believes have
excellent growth prospects and where the companies have demonstrated a clear and sustainable
advantage over their competition. This will include unlisted and, potentially, AIM or OFEX traded
businesses. As well as typically occupying strong market niches, the companies we invest in will have
proven management teams with a clear record of success in growing a company’s business, including
growth via acquisition.
• approximately 20% will remain in cash to facilitate share buybacks (further details in relation to the
buyback policy can be found on page 13 of this document).
Individual investments are expected to range in size from £200,000 to £1 million depending on the stage of
development of the company and the anticipated need for future funding. Initial investments may be
increased as a result of follow-on fundings.
These investments will be spread across a broad range of sectors in the UK to create a diversified portfolio.
We expect the portfolio to be spread across 20 to 30 investments and the total amount invested into any one
sector and any one company will be limited to a maximum of 20% and 10% of the Fund respectively.
2. How do we find these companies?
Our Team has an established network for generating deal flow for the Fund. In building this network there
has been a focus on individuals with a track record of successfully developing businesses of the type
targeted by the Fund. Such people provide invaluable industry insight in helping us to pre-screen potential
investment opportunities.
3. How will we make the decision to invest?
Prior to investment, the proceeds of the Offer will be held in cash, earning interest on behalf of investors.
Unlike many fund managers, we do not measure our performance relative to a stock market index. If we do
not believe that a particular investment can make a significantly better return than we could by leaving
investors’ money in the bank, then we will not invest.
We are aware of the requirement to be 70% invested in Qualifying Holdings by 31 January 2008 , and have
retained Grant Thornton UK LLP, one of the UK’s leading firms of accountants, to advise on the maintenance
of the VCT status.
Before investing in a company, the Team members will conduct their own fundamental analysis. To
understand and evaluate the business risks, the Team goes through a rigorous process that involves
spending time with a company’s management team, their customers and suppliers, evaluating competitors
and building and reviewing financial models.
In addition to undertaking financial and legal due diligence, we will introduce industry relevant people or
other professionals to provide additional market commentary and an independent assessment of the
company’s business model and its management.
Investment proposals recommended by the Investment Managers will be formally reviewed by the Directors
at their regular Board meetings.
10
4. How will we manage our investments?
The process does not end with our decision to invest. We will constantly re-evaluate our portfolio and
monitor every investment to ensure that it performs to our expectations. We will also seek to add value to
investee companies through strategic and financial input, helping with the hiring of key staff, advising on
potential acquisitions and, ultimately, helping to prepare the company for a trade sale or stock market
listing. In many cases, we will take a seat on the board of these companies.

5. What is the expected return?
The information contained below is not intended to be a dividend or profit forecast.
The Directors are confident that Eclipse has assembled a team which is well placed to generate strong
returns for its investors and the Board has confidence in the proposals for the current financial year.
In the short-term, provided the relevant conditions are met, you will receive:
• up-front income tax relief equivalent to 40% of the money that you invest. This means that if you invest
£10,000, your income tax bill for that tax year will be reduced by £4,000;
• following the publication of each year’s Report and Accounts, the Board intends to adopt a dividend
policy whereby any interest and dividends received in any year, less the costs of running the VCT, will be
paid out to shareholders by way of dividend. The Directors expect that the first dividend will be paid in
June 2006. Investors should realise that this dividend will depend on the size of the Fund and the
interest rates available for cash held on deposit by the Fund.
In the longer-term (from year three onwards) returns to investors will come from the underlying capital
growth of the portfolio of investments as well as dividends and income received from these investments.
From the income received and the capital gains realised, we intend to pay out a series of tax-free dividends
to investors. We will aim to make this dividend stream consistent year-on-year.
Management Remuneration
Management Fees
Octopus Asset Management has been appointed as the Investment Manager of the Fund. The agreement is for an
initial period of 5 years from Admission, and may be terminated by either party on 12 months' notice expiring at the
end of the fixed term or at any time thereafter.
The Investment Manager will receive:
(a) an annual management fee of 2.0% of net assets (exclusive of VAT and payable quarterly in advance);
(b) an accounting and administration fee of 0.3% of net assets (exclusive of VAT); and
(c) a performance fee which is outlined in more detail below.
Assuming full subscription, annual running costs are estimated to be no more than 2.7% of net assets. The running
costs of the Fund will include the management fees described above (excluding the performance fee), accounting
and administration fees, Directors’ fees, audit, taxation advice, sponsor’s and registrar’s fees and the costs of
communicating with Shareholders. Total annual running costs will be capped at 3.5% of net assets (excluding
irrecoverable VAT).
The Investment Manager retains the right to charge up-front arrangement and syndication fees to the companies in
which the Fund invests. Such charges are in line with industry practice and will not exceed 3% of the cost of each
investment plus VAT (if applicable). The costs of all deals that do not proceed to completion will be borne by the
Investment Manager and not by the Fund. The Investment Manager may also receive ongoing director’s fees and
monitoring fees from the investee companies as appropriate and in line with market practice.
Performance Related Incentive Fee
In line with industry practice, the Investment Manager will be entitled to performance related incentive fees.
The incentive fees are designed to encourage significant dividend payments to Shareholders as well as strong
performance in terms of capital and income growth, before any performance related incentive fee payment is
made. Therefore, if by the end of a financial year (commencing no earlier than close of the 2007/2008 financial
year), declared distributions per Share have reached 40p in the aggregate and if the Performance Value at that date
exceeds 130p per Share, the Investment Manager will be entitled to an incentive fee equal to 20% of the excess of
such Performance Value over 100p per Share. If, on a subsequent financial year end, the Performance Value of the
Fund falls short of the Performance Value on the previous financial year end, no incentive fee will arise. If, on a
subsequent financial year end, the Performance Value exceeds the previous best Performance Value of the Fund,
the Investment Manager will be entitled to 20% of such excess.
11

The Offer
Details of the Offer for Subscription
It is proposed to allot pursuant to the Offer between 1 million and 30 million Ordinary Shares. The Ordinary Shares
will be offered at 100p per Share payable in full, by cheque or banker’s draft, on application.
The Offer will be open from 5 January 2005 until the earlier of 3.00 p.m. on 30 June 2005 and the date on which the
maximum subscription is reached (or until such time as the Company and Brewin Dolphin Securities agree).
The terms and conditions of the Offer are set out in Part 4 of this document and an Application Form, together with
details of the application procedure, is set out at the end of this document.
Application has been made to the UK Listing Authority for the Ordinary Shares issued pursuant to the Offer to be
admitted to the Official List. Application has also been made to the London Stock Exchange for admission to trading
on the London Stock Exchange’s market for listed securities. The Ordinary Shares will be issued in registered form.
It is intended that an initial allotment of Ordinary Shares will be made as soon as the minimum subscription of £1
million is reached. Dealings in the shares are expected to commence on 7 February 2005, subject to the
minimum subscription of £1 million being achieved by that date.
In the event that the Offer is oversubscribed, allotment will be made to investors on a first come first served basis.
Launch Costs
The expenses of the Offer will be guaranteed by Octopus to amount to 5p per Share such that the initial net assets
of the Fund will be equal to 95p per Share. Whatever the level of subscription reached, the total launch cost will
amount to 5% of total funds subscribed. Octopus will be responsible for paying all of the costs of the Offer
including listing expenses and any initial intermediary commissions.
Intermediary Commission
Authorised financial intermediaries will be entitled to receive an initial commission at the rate of 2.25% on the
amount invested by their clients. Additionally, provided that the intermediary continues to act for the client and the
client continues to hold Ordinary Shares, intermediaries will be paid an annual trail commission of 0.375% of the
amount invested.
No payment of trail commission shall be made to the extent that the cumulative trail commission would exceed
4.5% of the initial net asset value per Share.
Authorised financial intermediaries may agree to waive part or all of their initial commissions. In such
circumstances, an investor’s application will attract an additional allotment of Ordinary Shares at no greater cost to
the Company or the investor and the commission waived will be used to satisfy the subscription price of such
Shares.
Minimum and Maximum Investment
The minimum subscription level under the Offer will be £3,000. Applications in excess of £3,000 may be made for
any higher amount in multiples of £1,000, subject to availability. There is no maximum investment but the
maximum investment on which income tax relief can be claimed is £200,000 in any Income Tax Year. Husbands and
wives may apply separately for up to £200,000 each.
Other Information
Dividend Policy
The information contained below is not intended to be a dividend or profit forecast.
Eclipse 2 will initially be structured as an investment company to take advantage of its ability to pay out tax-free
dividends to its investors. While it is an investment company it may only distribute income. The Directors intend to
dispense with this status once sufficient capital profits are realised for distribution as dividends.
12

As an indication, in the first two years, the Directors expect to pay a final dividend each year, the first dividend being
in respect of the financial period ending 31 January 2006, which is expected to be declared in April 2006. The
dividends payable for the periods ending 31 January 2007 and 31 January 2008 are expected to be paid out of
interest earned from money market deposits and from dividends received from investee companies.
The amount of these dividends depends, amongst other things, on the amount of funds received in the Offer, the
time at which these funds are received, the rate of investment by the Company, and the level of interest rates. No
commitment is made as to the level of the dividend but the Board will look to pay out as much of the Company’s
distributable reserves as it is able in dividends in each of the first two financial years.
VCT Status Monitoring
The Fund has retained Grant Thornton UK LLP to advise on tax matters generally and, in particular, the maintenance
of VCT status. The Inland Revenue has given provisional approval of the Fund as a Venture Capital Trust. Final
approval will be sought as soon as possible, and in any event no later than the accounting period of the VCT
beginning three years after provisional approval. Grant Thornton UK LLP will assist the Investment Manager in
establishing the status of investments as Qualifying Holdings and monitoring progress towards achieving full VCT
approval, but will report directly to the Board.
Whilst it is the intention of the Directors that the Fund will be managed so as to qualify as a VCT, there can be no
guarantee that it will qualify or that such status will be maintained. A failure to meet the qualifying requirements
could result in the Fund losing the tax reliefs previously obtained, resulting in adverse tax consequences for
investors, including a requirement to repay the 40% income tax relief.
Life of the Fund
It is intended that the Fund should have an unlimited life, but Shareholders will have the opportunity to review the
future of the Fund at appropriate intervals. Therefore, the Articles of Association of the Company require the
Directors to put a proposal for the continuation of the Company to Shareholders at the 10th annual general meeting
of the Company (the “10th AGM”), and, if passed, every fifth anniversary thereafter.
Realisation of Ordinary Shares
The Shares will be traded on the London Stock Exchange after Admission and thereby Shareholders may sell their
Ordinary Shares at any time to realise their investment. Investors should be aware that dealings in the Ordinary
Shares of the Fund are likely to be relatively illiquid. Shareholders must hold their Ordinary Shares for at least 3
years to retain the income tax relief described elsewhere in this document.
Buyback Facility
The Directors are aware of the possibility of the Ordinary Shares trading at a discount to net asset value. The
Directors consider that the Fund should have the ability, subject to having sufficient distributable reserves, to
purchase its Ordinary Shares in the market with the aim of reducing this discount and providing an opportunity for
Shareholders who wish to sell, given the likely illiquidity referred to above. It is intended that such purchases would
happen at less than or equal to a 10% discount to net asset value.
Any decision by the Board to submit to Shareholders a proposal for the Company to be authorised to purchase its
own equity shares other than the renewal of an existing authority will be subject to the Listing Rules.
Future Allotments
The Company is seeking to raise £30 million in the Offer.
13

Co-Investment Policy
Octopus Asset Management currently manages three other VCTs. The Directors believe that this provides investors
in Eclipse VCT 2 with a number of advantages, particularly in relation to deal flow and the ability for Eclipse VCT 2
to invest in larger deals and, therefore, later-stage companies
Allocations of investment opportunities between VCTs managed by Octopus are generally made pro-rata to the
initial level of demand by each fund rather than by each fund’s respective size.
In the case of Eclipse VCT and Eclipse 2, co–investment will be made pro-rata to the fund size in accordance with the
investment management agreement dated 21 December 2004 made between the Company and the Investment
Manager. To the extent that it differs from this, an alternative split will require the approval of the independent Directors.
In the event of a conflict of interest on the part of the Manager (including where an investment is proposed in a
company in which one of the existing VCTs has an investment), such an investment will require the approval of the
independent Directors.
14

Directors and Advisers
DIRECTORS
Marc Vlessing (Chairman)
Matthew Cooper
David Lambert
all of:
REGISTERED OFFICE
14 Dover Street
London W1S 4LW
SECRETARY
Woodside Secretaries Limited
INVESTMENT MANAGER AND
RECEIVING AGENTS
Octopus Asset Management Limited
14 Dover Street
London W1S 4LW
SPONSOR
Brewin Dolphin Securities Ltd
34 Lisbon Street
Leeds LS1 4LX
SOLICITORS TO THE COMPANY
AND TO THE ISSUE
Brown Rudnick Berlack Israels, LLP
8 Clifford Street
London W1S 2LQ
AUDITORS AND
VCT TAX ADVISER
Grant Thornton UK LLP
1 Westminster Way
Oxford OX2 0PZ
BANKERS
HSBC Bank plc
31 Holborn
London EC1N 2HR
REGISTRARS
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
15

Definitions
The following definitions are used throughout this document, unless the context requires otherwise:
Act
the Companies Act 1985 (as amended)
Admission
admission of the Ordinary Shares to the Official List of the UK
Listing Authority and to trading on the London Stock Exchange's
listed securities market
AIM
the Alternative Investment Market of the London Stock Exchange
annual running costs
the annual costs incurred by the Company in the ordinary course of
its business
Brewin Dolphin Securities or Sponsor
Brewin Dolphin Securities Ltd
BVCA
the British Venture Capital Association
Directors, Board of Directors, Board, “we”or”us”
the directors of the Company whose names appear under Directors
on page 8 of this document
Eclipse VCT
Eclipse VCT plc
Eclipse 2 , Eclipse VCT 2, Fund or Company
Eclipse VCT 2 plc
ICTA
Income and Corporation Taxes Act 1988 (as amended)
Income Tax Year
the 12 month period over which individuals are assessed to income
tax in the United Kingdom, running from 6 April to the following
5 April
Investment Committee
A committee of individuals drawn from the Investment Manager
Investment Manager, Manager,
Octopus Asset Management or Octopus
Octopus Asset Management Limited
Listing Rules
The Listing Rules of the UK Listing Authority
London Stock Exchange
London Stock Exchange plc
net asset value
the aggregate of the gross assets of the Company less its
gross liabilities
OFEX
a market operated by OFEX plc which allows trading of shares in
unquoted companies
Offer
the Offer for subscription of up to 30,000,000 Shares described in
this document
Offer Agreement
the agreement dated 21 December 2004 between the Company, the
Directors, the Investment Manager and Brewin Dolphin Securities
relating to the Offer
Offer Price
100p per Share
Official List
the Official List of the UK Listing Authority
Ordinary Shares or Shares
ordinary shares of 10p each in the capital of the Company
Performance Value
for the relevant financial year end, the sum of (i) the net asset value
of the Fund as at that date, (ii) all distributions declared and/or
paid to Shareholders since Admission and (iii) all performance
related incentive fee payments previously paid to the Investment
Manager, divided by the numbers of Shares in issue
Phoenix VCT
Phoenix VCT plc
Qualifying Company
a company satisfying the conditions of Schedule 28B ICTA as
described in Part 2 of this document
Qualifying Holding
shares in, or securities of, a Qualifying Company, which satisfy the
conditions of Schedule 28B ICTA as described in Part 2 of this
document
Qualifying Investment
an investment in an AIM listed or unquoted company which
satisfies the requirements of Schedule 28B ICTA, as described in
Part 3 of this document
Qualifying Limit
a total amount of £200,000 per individual invested in VCTs in any
one Income Tax Year
Qualifying Purchaser
an individual who purchases Shares from an existing Shareholder
and is aged 18 or over and satisfies the conditions of eligibility for
tax relief available to investors in a VCT
Qualifying Subscriber
an individual who subscribes for Shares under the Offer and is aged
18 or over and satisfies the conditions of eligibility for tax relief
available to investors in a VCT
Qualifying Subsidiary
a subsidiary company which falls within the definition of Qualifying
Subsidiary contained in paragraph 10 of Schedule 28B ICTA, as
described in Part 2 of this document
Qualifying Trade
a trade complying with the requirements of Schedule 28B ICTA
Quoted Investments
investments admitted to the Official List of the UK Listing Authority
and admitted to trading on the London Stock Exchange's market for
listed securities or other recognised investment exchange
Shareholders
holders of Ordinary Shares
Team
the Board of Directors of Eclipse VCT 2 and the Investment
Committee
UK Listing Authority
the Financial Services Authority acting in its capacity as the
competent authority for the purposes of Part VI of the Financial
Services and Markets Act 2000
Venture Capital Trust or VCT
a company approved as a venture capital trust under Section
842AA ICTA by the Board of the Inland Revenue
16

Part 2
Taxation Considerations for Investors
The following is a general guide to the position of investors. It does not set out any of the legislative provisions in
full and investors should seek their own independent taxation advice.
1 Tax Reliefs For Investors
The tax reliefs set out below are available to UK residents aged 18 or over who invest in shares in the VCT.
There is no specific limit on the amount an individual can invest in the VCT, but tax reliefs will only be given
to the extent that the total of an individual's subscription or other acquisitions of shares in VCTs in any tax
year does not exceed £200,000. Investors who intend to invest more than £200,000 in VCTs in any one tax
year should take independent advice on this.
2 Income Tax
a) Relief on subscription
An investor subscribing for shares in the VCT will be entitled to claim income tax relief on amounts
subscribed up to a maximum of £200,000 in any tax year. The relief is given at the rate of up to 40% on the
amount subscribed.
b) Dividend relief
An investor who acquires, in any tax year, VCT shares up to a maximum of £200,000 will not be liable to
income tax on dividends paid by the VCT on those shares.
c) Withdrawal of relief
Relief from all or some of income tax on subscription for shares in a VCT is withdrawn if the shares are
disposed of (other than between spouses) within three years of issue or if the VCT loses its approval within
this period.
3 Capital Gains Tax
a) Relief from capital gains tax on the disposal of shares
Any gains made on shares held within Eclipse 2 are not subject to capital gains tax (subject to a maximum
investment of £200,000 in any one tax year). Similarly, any losses on shares held within Eclipse 2 will not be
treated as an allowable loss. Both of the above apply to the extent that the shares have been acquired within
the limit of £200,000 for any tax year.
b) Purchasers in the market
An individual purchaser of existing shares in the market will be entitled to claim relief from capital gains tax
on disposal (as described in paragraph 3(a) above).
c) Withdrawal of relief
If a VCT which has been granted approval subsequently fails to comply with the conditions for approval, any
gains on the shares after the date on which loss of VCT status takes effect will be taxable. Where VCT status
is treated as never having been given all gains are taxable.
17

4 Obtaining Tax Reliefs
a) Income tax relief
(i) The VCT will give a certificate to each investor which the investor may use to claim income tax relief,
either by obtaining from the Inland Revenue an adjustment to his tax coding under the PAYE system,
or by waiting until the end of the tax year and using his Self Assessment Tax Return to claim relief.
(ii) Dividends received on shares acquired in VCTs up to the qualifying maximum of £200,000 per tax year
need not be shown in the investor's Self Assessment Tax Return.
b) Investors not resident in the UK
Investors not resident in the UK should seek their own professional advice as to the consequences of
making an investment in a VCT as they may be subject to tax in other jurisdictions as well as in the UK.
c) VCT reliefs may not be available if the investor takes out a loan specifically to subscribe in the VCT.
5 Consequences of Loss of VCT Status
a) For the VCT
The exemption from corporation tax on capital gains will not apply to any gain realised after the time from
which VCT status is lost. Where provisional approval is lost, all gains realised over the period during which
provisional approval was in force will be subject to corporation tax.
b) For Qualifying Subscribers
(i)
Income tax relief on investment
If VCT approval is treated as never having been given, or if it is withdrawn before the shares have been
held for three years, the relief will be withdrawn by the making of an assessment for the year of
assessment for which the relief was originally given on an amount equal to that relief. Interest on
overdue tax may arise.
c) For Qualifying Subscribers and Qualifying Purchasers
(i)
(ii)
Dividend Income
Dividend income will not be exempt from tax in respect of profits or gains arising or accruing in any
accounting period at a time when VCT status has been lost. A notional tax credit equal to 1/9th of the
net dividend paid will be available to offset against income tax due on the dividend.
Capital gains
If provisional VCT approval is withdrawn, approval is treated as never having been given. Gains and
losses on shares in the VCT will be taxable and allowable in the ordinary way. If full VCT approval is
withdrawn, the individual is treated as having disposed of his shares immediately before the status is
lost, for market value at that time, and is treated as reacquiring them at that value immediately after
the status is lost. Thus, any capital gains realised up to that date will be exempt from tax, but gains
after that date will be taxable in the ordinary way.
18

Part 3
Conditions to be met by Venture Capital Trusts
The legislation relating to VCTs is contained in ICTA which sets out the tests which a company has to satisfy to obtain
the tax benefits for the VCT and its shareholders. Explanations of these tax benefits and the consequences of
losing VCT status are set out in Part 2. These summaries are not intended to be comprehensive and intending
investors are strongly advised to seek their own independent professional advice.
1 Qualifying as a VCT
(a)
(b)
(c)
(d)
(e)
A VCT must not be a close company and must be approved as a VCT by the Inland Revenue. The main
conditions for approval are that throughout its most recent complete accounting period:
the Company's income has been derived wholly or mainly from shares or securities (including loans to
companies with a five year or greater maturity period);
at least 70% by value of its investments are represented by shares or securities in “Qualifying Holdings” (see
below), of which at least 30% by value are represented by holdings of ordinary shares carrying no
preferential rights;
Additionally at least 10% by value of investments in single companies or groups must be in ordinary shares
which carry no preferential rights;
not more than 15% by value of its investments has been held in a single company or group (other than a VCT);
and
it has not retained more than 15% of the income derived in that period from shares and securities.
each class of its ordinary share capital has been quoted on the London Stock Exchange;
Normally, the Inland Revenue cannot give approval of a VCT unless (a) to (e) above have all been met
throughout the Company’s most recent accounting period and the Inland Revenue is satisfied that they will
be met throughout its current accounting period at the time of application for approval. However, to facilitate
the launch of VCTs the Inland Revenue may give provisional approval if it is satisfied that conditions (a), (c),
(d) and (e) will be met throughout the current or subsequent accounting period and condition (b) will be
met in relation to an accounting period commencing no later than three years after the date of the
provisional approval.
2 Qualifying Holdings
Qualifying Holdings comprise new shares or securities (including loans with a five-year or greater maturity
period) issued by unquoted trading companies which exist wholly for the purpose of carrying on one or more
qualifying trades and are limited to investments of up to £1 million per Income Tax Year per investee
company. At least 10% of the investment in a qualifying holding must be for eligible ordinary shares and this
minimum percentage must be maintained for qualifying status to be continued. Most trades are qualifying
trades other than certain activities which are regarded as inappropriate. The company invested in must not
be controlled by the VCT or any other company and its gross assets must not exceed £15 million
immediately prior to the investment or £16 million thereafter.
Companies whose securities are traded on AIM or OFEX count as unquoted companies for the purposes of
determining Qualifying Holdings. Shares in an unquoted company which subsequently become quoted may
still be regarded as part of a Qualifying Holding for a further five years following quotation. The company
must apply the money invested (either directly or via a Qualifying Subsidiary (see below)) for the purpose of
a Qualifying Trade within certain time periods. It must also have no subsidiary companies other than
Qualifying Subsidiaries, and must not itself be controlled by another company.
19

3 Qualifying Trades and Qualifying Subsidiaries
The company invested in must exist wholly for the purpose of carrying on one or more Qualifying Trades
and/or be a holding company only of Qualifying Subsidiaries. The trade must either be carried on by, or be
intended to be carried on by, the company invested in or by a Qualifying Subsidiary. In the case of a
company intending to carry on a qualifying trade, the qualifying trade must begin within two years of the
issue of shares or securities to a VCT and continue thereafter. The trade must be carried on wholly or
mainly in the UK but the company need not be UK resident. Certain trades (for example, dealing in land or
shares or providing financial services) are excluded.
A subsidiary will be a Qualifying Subsidiary if at least 51% of its issued share capital is owned by the
company invested in and certain other tests are also satisfied.
The company invested in, or its Qualifying Subsidiary, must spend 80% of the money invested within
12 months.
4 Withdrawal of Approval
Approval of a VCT may be withdrawn if the conditions set out in paragraph 1 above are not met. Withdrawal
of approval generally has effect from the time when notice of withdrawal is given to a VCT.
If approval is withdrawn because the tests have not been met for at least a complete twelve month period,
approval is deemed never to have been given. The taxation consequences of approval being deemed never
to have been given are set out in paragraph 5 of Part 2 of this document.
20

Part 4
Terms and Conditions of Application
1. In these terms and conditions, which apply to the Offer, “Applicant” means a person whose name appears
in an Application Form, “Application” means the offer by an Applicant by completing an Application Form and
posting (or delivering) it to Octopus Asset Management Limited, 14 Dover Street, London W1S 4LW (“the
Receiving Agents”) or as otherwise indicated in this document or the Prospectus; and “Prospectus” means
the document dated 4 January 2005 issued in connection with the Offer. Save where the context otherwise
requires, words and expressions defined in this document have the same meanings when used in the
Application Form and explanatory notes in relation thereto.
The section headed “Application Procedure” as set out below forms part of these terms and conditions of
Application.
2. The contract created by the acceptance of an Application under the Offer will be conditional on:
(i) Admission becoming effective;
(ii) the Offer Agreement between the Company, Octopus and Brewin Dolphin Securities becoming
unconditional in all respects, and not being terminated in accordance with its terms before Admission
becomes effective.
3. The right is reserved by the Company to present all cheques and bankers’ drafts for payment on receipt and
to retain share certificates and application monies pending clearance of successful Applicants’ cheques and
bankers’ drafts. The Company may treat Applications as valid and binding even if not made in all respects in
accordance with the prescribed instructions and the Company may, at its discretion, accept an Application in
respect of which payment is not received by the Company prior to the closing of the Offer. If any Application
is not accepted in full or if any contract created by acceptance does not become unconditional, the
application monies or, as the case may be, the balance thereof will be returned (without interest) by returning
each relevant Applicant’s cheque or banker’s draft or by crossed cheque in favour of the Applicant, through
the post at the risk of the person(s) entitled thereto. In the meantime, application monies will be retained by
the Receiving Agents in a separate account.
4. By completing and delivering an Application Form, you:
(i) offer to subscribe for the number of Shares specified in your Application Form (or such lesser number
for which your Application is accepted) at the Offer Price on the terms of and subject to this document,
including these terms and conditions, and subject to the Memorandum and Articles of Association of
the Company;
(ii) agree that, in consideration of the Company agreeing that it will not on or prior to the Offer closing
issue or allot any Shares the subject of the Offer to any person other than by means of the procedures
referred to in this document, your Application may not be revoked and that this paragraph shall
constitute a collateral contract between you and the Company which will become binding upon
despatch by post to, or (in the case of delivery by hand) on receipt by, the Receiving Agents of your
Application Form;
(iii) agree and warrant that your cheque or banker’s draft may be presented for payment on receipt and
will be honoured on first presentation and agree that if it is not so honoured you will not be entitled
to receive a certificate in respect of the Ordinary Shares until you make payment in cleared funds for
such Ordinary Shares and such payment is accepted by the Company in its absolute discretion (which
acceptance shall be on the basis that you indemnify it, the Sponsor, and the Receiving Agents against
all costs, damages, losses, expenses and liabilities arising out of or in connection with the failure of
your remittance to be honoured on first presentation) and you agree that, at any time prior to the
unconditional acceptance by the Company of such late payment, the Company may (without
prejudice to its other rights) rescind the agreement to subscribe such Ordinary Shares and may issue
or allot such Ordinary Shares to some other person, in which case you will not be entitled to any
payment in respect of such Ordinary Shares, other than the refund to you, at your risk, of the proceeds
(if any) of the cheque or banker’s draft accompanying your Application, without interest;
21

(iv) agree that, in respect of those Ordinary Shares for which your Application has been received and is
not rejected, your Application may be accepted at the election of the Company either by notification
to the London Stock Exchange of the basis of allocation or by notification of acceptance thereof to the
Receiving Agents;
(v) agree that any monies refundable to you may be retained by the Receiving Agents pending clearance
of your remittance and any verification of identity which is, or which the Company or the Receiving
Agents may consider to be, required for the purposes of the Money Laundering Regulations 2003
and that such monies will not bear interest;
(vi) authorise the Receiving Agents to send share certificate(s) in respect of the number of Ordinary
Shares for which your Application is accepted and/or a crossed cheque for any monies returnable, by
post, without interest, to your address set out in the Application Form and to procure that your name
is placed on the register of members of the Company in respect of such Ordinary Shares;
(vii) agree that all Applications, acceptances of Applications and contracts resulting therefrom shall be
governed in accordance with English law, and that you submit to the jurisdiction of the English courts
and agree that nothing shall limit the right of the Company or the Sponsor to bring any action, suit or
proceeding arising out of or in connection with any such Applications, acceptances of Applications
and contracts in any other manner permitted by law or any court of competent jurisdiction;
(viii) confirm that, in making such Application, you are not relying on any information or representation
in relation to the Company other than the information contained in this document or the Prospectus
and accordingly you agree that no person responsible solely or jointly for this document, the
Prospectus or any part thereof or involved in the preparation thereof shall have any liability for such
information or representation;
(ix) irrevocably authorise the Receiving Agents and/or the Sponsor or any person authorised by either of
them, as your agent, to do all things necessary to effect registration of any Ordinary Shares subscribed
by or issued to you into your name and authorise any representative of the Receiving Agents or of the
Sponsor to execute any document required thereof;
(x) agree that, having had the opportunity to read this document, you shall be deemed to have had notice
of all information and statements concerning the Company and the Shares contained therein;
(xi) confirm that you have reviewed the restrictions contained in paragraph 6 below and warrant that you
are not a “US Person” as defined in the United States Securities Act of 1933 (“Securities Act”) (as
amended), nor a resident of Canada and that you are not applying for any Shares with a view to their
offer, sale or delivery to or for the benefit of any US Person or a resident of Canada;
(xii) declare that you are an individual aged 18 or over;
(xiii) agree that all documents and cheques sent by post to, by or on behalf of the Company or the Receiving
Agents will be sent at the risk of the person entitled thereto;
(xiv) agree, on request by the Company, or the Sponsor on behalf of the Company, to disclose promptly in
writing to the Company, any information which the Company or the Sponsor may reasonably request
in connection with your Application including, without limitation, satisfactory evidence of identity to
ensure compliance with the Money Laundering Regulations 2003 and authorise the Company and the
Sponsor to disclose any information relating to your Application as it considers appropriate;
(xv) agree that the Sponsor will not treat you as its customer by virtue of your Application being accepted
or owe you any duties or responsibilities concerning the price of the Shares or the suitability for you
of Shares or be responsible to you for providing the protections afforded to its customers;
(xvi) where applicable, authorise the Company to make on your behalf any claim to relief from income tax
in respect of any dividends paid by the Company;
(xvii) declare that the Application Form has been completed to the best of your knowledge;
(xviii) undertake that you will notify the Company if you are not or cease to be either a Qualifying Subscriber
or beneficially entitled to the Shares; and
(xix) declare that a loan has not been made to you or any associate, which would not have been made or
not have been made on the same terms, but for you offering to subscribe for, or acquiring, Shares and
that the Shares are being acquired for bona fide commercial purposes and not as part of a scheme or
arrangement the main purpose of which is the avoidance of tax.
22

5. No person receiving a copy of this document, the Prospectus or an Application Form in any territory other
than the UK may treat the same as constituting an invitation or offer to him, nor should he in any event use
such Application Form unless, in the relevant territory, such an invitation or offer could lawfully be made to
him or such Application Form could lawfully be used without contravention of any regulations or other legal
requirements. It is the responsibility of any person outside the UK wishing to make an Application to
satisfy himself as to full observance of the laws of any relevant territory in connection therewith, including
obtaining any requisite governmental or other consents, observing any other formalities requiring to be
observed in such territory and paying any issue, transfer or other taxes required to be paid by such territory.
6. The Ordinary Shares have not been and will not be registered under the Securities Act, as amended, and may
not be offered or sold in the United States of America, its territories or possessions or other areas subject to
its jurisdiction (“the USA”). In addition, the Company has not been and will not be registered under the
United States Investment Company Act of 1940, as amended. The Investment Manager will not be registered
under the United States Investment Advisers Act of 1940, as amended. No application will be accepted if it
bears an address in the USA.
7. The basis of allocation will be determined by the Company in its absolute discretion after consultation with
the Sponsor. The right is reserved to reject in whole or in part and scale down and/or ballot any Application
or any part thereof including, without limitation Applications in respect of which any verification of identity
which the Company or the Receiving Agents consider may be required for the purposes of the Money
Laundering Regulations 2003 has not been satisfactorily supplied. Dealings prior to the issue of certificates
for Ordinary Shares will be at the risk of Applicants. A person so dealing must recognise the risk that an
Application may not have been accepted to the extent anticipated or at all.
8. Money Laundering Regulations 2003
Investors should be aware of the following requirements in respect of the above law.
Under the Money Laundering Regulations 2003, we are required to check the identity of clients who invest
over £9,500 or who invest using third party cheques. Octopus Asset Management may therefore undertake
an electronic search for the purposes of verifying your identity. To do so Octopus Asset Management may
check the details you supply against your particulars on any database (public or other) to which we have
access. Octopus Asset Management may also use your details in the future to assist other companies for
verification purposes. A record of this search will be retained. If we cannot verify your identity we may ask
for a recent, original utility bill and an original Inland Revenue Tax Notification or a copy of your passport
certified by a bank, solicitor or accountant from you, or a Client Verification Certificate from your IFA. Clients
investing less than £9,500, who invest using cheques drawn off their own bank accounts, will not be subject
to money laundering checks.
Your cheque or bankers’ draft must be drawn in sterling on a account at a branch (which must be in the
United Kingdom, the Channel Islands or the Isle of Man) of a bank which is either a member of the Cheque
and Credit Clearing Company Limited or the CHAPS Clearing Company Limited, a member of the Scottish
Clearing Banks Committee or the Belfast Clearing Committee or which has arranged for its cheques or
bankers’ drafts to be cleared through facilities provided for members of any of those companies or
associations and must bear the appropriate sorting code in the top right hand corner. The right is reserved
to reject any Application Form in respect of which the cheque or bankers’ draft has not been cleared on first
presentation. In the event that the offer does not reach its minimum subscription any monies returned will
be sent by cheque crossed “A/C Payee only” in favour of the person named in Section 1 (“the Applicant”).
23

Application procedure
Please send the completed Application Form together with your cheque or bankers draft to
Octopus Asset Management, 14 Dover Street, London, W1S 4LW
If you have any questions on how to complete the Application Form please contact Octopus Asset Management on 0800 619 7979.
Section 1
Please insert your full name, permanent address, daytime telephone number, date of birth and national insurance
number in Section 1. Your national insurance number, which you will find on your pay slip, is required to ensure you obtain
your income tax relief. Joint applications are not permitted but husbands and wives may apply separately.
Section 2
Please note that the choice of investing in either the 2004/05 tax year or the 2005/06 tax year is designed for your tax
planning. Those investors seeking 40% income tax relief for the current tax year should fill in Box A.
Insert in Box A the amount you are investing in the 2004/05 tax year
Insert in Box B the amount you are investing in the 2005/06 tax year.
Insert the sum of Boxes A and B in Box C.
Section 3
Please note that the minimum investment is £3,000. The maximum investment, on which tax reliefs on investments in
VCTs are available, is £200,000. Attach your cheque or bankers’ draft to the Application Form for the total amount of your
investment.
Make cheques payable to “ECLIPSE VCT 2 PLC” and crossed “A/C Payee only”. Cheques must be from a recognised UK
bank account and your payment must relate solely to this application. No receipt will be issued.
Read the declaration below and sign and date the Application Form.
If this form is completed and signed by the investor named in Section 1:
By signing this form I HEREBY DECLARE THAT:
(i)
(ii)
(iii)
I have received the Prospectus dated 4 January 2005 and have read the terms and conditions of application
therein and agree to be bound by them;
I will be the beneficial owner of the Shares in ECLIPSE VCT 2 PLC issued to me under this Offer; and
to the best of my knowledge and belief, the personal details I have given to ECLIPSE VCT 2 PLC are correct.
If this form is completed and signed by an authorised financial intermediary or any other person apart from the investor:
By signing this form on behalf of the individual whose details are shown above, I make a declaration (on behalf of such
individual) on the terms of sub-paragraphs (i) to (iii) above.
Section 4
Authorised financial intermediaries who are entitled to receive commission should stamp and complete Section 4, giving
their full name and address, telephone number and details of their authorisation under the Financial Services and Markets
Act 2000. The right is reserved to withhold payment of commission if Eclipse VCT 2 PLC is not, in its sole discretion,
satisfied that the authorised financial intermediary is authorised.
Frequently asked questions
Q: Who should I make the cheque payable to?
A: Cheques should be made payable to “Eclipse VCT 2 plc”
Q: Where should I send my application?
A: Your application form and cheque should be sent to Octopus Asset Management, 14 Dover Street,
London, W1S 4LW
Q: What happens after I invest?
A: We will send you confirmation that we have received your application by return of post. You should expect to
receive your share certificate and tax certificate within a few weeks of making your investment.
Please call us at any time concerning your application on 0800 619 7979.

Application Form – Eclipse VCT 2 PLC
Before completing this application form you should read the Terms and Conditions of Application and Application Procedure.
This Offer opens on 5 January 2005 and the closing date will be 30 June 2005 (or earlier if the maximum subscription
has been reached). The final closing date will be determined by the Directors in their absolute discretion.
Section 1
Dr/Mr/Mrs/Miss/Other
Forenames
Address
Surname
National Insurance Number
Telephone (Day)
Postcode
Date of Birth
Telephone (Home)
Section 2
I offer to subscribe for the following number of ordinary shares under the Terms and Conditions of the Application as set out
in the Prospectus dated 4 January 2005. The Application must be for a minimum of £3,000.
I ENCLOSE A CHEQUE(S) OR BANKERS’ DRAFT(S) DRAWN ON A UK CLEARING BANK, MADE PAYABLE TO “ECLIPSE VCT 2 PLC”.
2004/05 tax year Number of shares At 100p per share £
Box A
2005/06 tax year Number of shares At 100p per share £
Total £
Box B
Box C
Section 3
Signature
Date
Section 4
Financial Adviser: David Knight Telephone 020 - 7318 6323
Mr/Mrs/Miss/Other Forenames Surname
Administrator: Ewoud A. Karelse Telephone 020 - 7318 6339
Mr/Mrs/Miss/Other Forenames Surname
I wish to waive £ 1.5% commission which will be used to satisfy an additional allotment of ordinary shares to the
investor named in Section 1 at no greater cost to the company or the investor.
FSA Number and Company Stamp
Tax Shelter Report
Allenbridge Group plc
17 Hill Street
London, W1J 5NZ
FSA: 137716
Investor Service Programme
1. How would you like to be updated ?
❏ Email ❏ Letter
❏ Telephone call from the Fund Manager
2. Would you like to receive invitations to investment
seminars / workshops?
❏ Yes – but only concerning Eclipse VCT 2 plc
❏ Yes to include other Octopus products ❏ No
3. From time to time we may choose to contact you by
telephone to explain an aspect of your investment.
Please indicate below if you are willing for us to call you:
❏ Yes I am happy to be called occasionally
❏ No thank you

Application Form – Eclipse VCT 2 PLC
Before completing this application form you should read the Terms and Conditions of Application and Application Procedure.
This Offer opens on 5 January 2005 and the closing date will be 30 June 2005 (or earlier if the maximum subscription
has been reached). The final closing date will be determined by the Directors in their absolute discretion.
Section 1
Dr/Mr/Mrs/Miss/Other
Forenames
Address
Surname
National Insurance Number
Telephone (Day)
Postcode
Date of Birth
Telephone (Home)
Section 2
I offer to subscribe for the following number of ordinary shares under the Terms and Conditions of the Application as set out
in the Prospectus dated 4 January 2005. The Application must be for a minimum of £3,000.
I ENCLOSE A CHEQUE(S) OR BANKERS’ DRAFT(S) DRAWN ON A UK CLEARING BANK, MADE PAYABLE TO “ECLIPSE VCT 2 PLC”.
2004/05 tax year Number of shares At 100p per share £
Box A
2005/06 tax year Number of shares At 100p per share £
Total £
Box B
Box C
Section 3
Signature
Date
Section 4
Financial Adviser: David Knight Telephone 020 - 7318 6323
Mr/Mrs/Miss/Other Forenames Surname
Administrator: Ewoud A. Karelse
Telephone
Mr/Mrs/Miss/Other Forenames Surname
020 - 7318 6339
I wish to waive £ 1.5% commission which will be used to satisfy an additional allotment of ordinary shares to the
investor named in Section 1 at no greater cost to the company or the investor.
FSA Number and Company Stamp
Tax Shelter Report
Allenbridge Group plc
17 Hill Street
London, W1J 5NZ
FSA: 137716
Investor Service Programme
1. How would you like to be updated ?
❏ Email ❏ Letter
❏ Telephone call from the Fund Manager
2. Would you like to receive invitations to investment
seminars / workshops?
❏ Yes – but only concerning Eclipse VCT 2 plc
❏ Yes to include other Octopus products ❏ No
3. From time to time we may choose to contact you by
telephone to explain an aspect of your investment.
Please indicate below if you are willing for us to call you:
❏ Yes I am happy to be called occasionally
❏ No thank you