Document:

Exhibit 4.4

 

DESCRIPTION
OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

 

The
following summary of the material terms of the securities of Star Peak Corp II (“we,”“us,”“our”
or “the company”) is not intended to be a complete summary of the rights and preferences of such securities and is
subject to and qualified by reference to our amended and restated memorandum and articles of association incorporated by reference
as an exhibit to the company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “Report”),
and applicable Delaware law. We urge you to read our amended and restated memorandum and articles of association in their entirety
for a complete description of the rights and preferences of our securities.

 

Certain
Terms

 

Unless
otherwise stated in this exhibit, or the context otherwise requires, references to:

 

		•	“common
                                         stock” are to our Class A common stock and our Class B common stock, collectively;

 

		•	“founder
                                         shares” are to shares of our Class B common stock initially purchased by our sponsor
                                         in a private placement prior to our initial public offering, and the shares of our Class
                                         A common stock issued upon the conversion thereof as provided herein;

 

		•	“initial
                                         stockholders” are to our sponsor and any other holders of our founder shares prior
                                         to our initial public offering (or their permitted transferees);

 

		•	“management”
                                         or our “management team” are to our officers and directors;

 

		•	“private
                                         placement warrants” are to the warrants issued to our sponsor in a private placement
                                         simultaneously with the closing of our initial public offering;

 

		•	“public
                                         shares” are to shares of our Class A common stock sold as part of the units in
                                         our initial public offering (whether they were purchased in our initial public offering
                                         or thereafter in the open market);

 

		•	“public
                                         stockholders” are to the holders of our public shares, including, without limitation,
                                         our initial stockholders and members of our management team to the extent our initial
                                         stockholders and/or members of our management team have purchased public shares, provided
                                         that each initial stockholder’s and member of our management team’s status
                                         as a “public stockholder” shall only exist with respect to such public shares;

 

		•	“public
                                         warrants” are to our redeemable warrants sold as part of the units in our initial
                                         public offering (whether they are purchased in our initial public offering or thereafter
                                         in the open market), to the private placement warrants if held by third parties other
                                         than our sponsor (or permitted transferees), and to any private placement warrants issued
                                         upon conversion of working capital loans that are sold to third parties that are not
                                         initial purchasers or executive officers or directors (or permitted transferees), in
                                         each case, following the consummation of our initial business combination;

 

		•	“sponsor”
                                         are to Star Peak Sponsor II LLC, a Delaware limited liability company;

 

		•	“warrants”
                                         are to our redeemable warrants, which includes the public warrants as well as the private
                                         placement warrants to the extent they are no longer held by the initial purchasers of
                                         the private placement warrants or their permitted transferees; and

 

		•	“we,”
                                         “us,” “company” or “our company” are to Star Peak
                                         Corp II.

     

     

    

General

 

Pursuant
to our amended and restated certificate of incorporation, our authorized capital stock consists of 400,000,000 shares of Class
A common stock, $0.0001 par value per share, 40,000,000 shares of Class B common stock, $0.0001 par value, and 1,000,000 shares
of undesignated preferred stock, $0.0001 par value per share. The following description summarizes the material terms of our capital
stock as set out more particularly in our amended and restated certificate of incorporation. Because it is only a summary, it
may not contain all the information that is important to you.

 

Units

 

Each
unit consists of one whole share of Class A common stock and one-fourth of one redeemable warrant. Each whole warrant entitles
the holder thereof to purchase one share of our Class A common stock at a price of $11.50 per share, subject to adjustment as
described in the registration statement on Form S-1 (No. 333- 251488). A warrant holder may exercise its warrants only for a whole
number of shares of Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrant
holder. No fractional warrants will be issued and only whole warrants will trade. Accordingly, unless you purchase at least three
units, you will not be able to receive or trade a whole warrant.

 

The
Class A Common Stock and Warrants began separate trading on February 26, 2021. Holders of the Units have the option to continue
to hold Units or separate their Units into the component securities. Holders need to have their brokers contact our transfer agent
in order to separate the Units into shares of Class A Common Stock and Warrants.

 

Common
Stock

 

Upon
the closing of our initial public offering, there were 43,750,000 shares of our common stock outstanding, consisting of:

 

		•	35,000,000
                                         shares of our Class A common stock underlying the Units being offered in our initial
                                         public offering; and

 

		•	8,750,000
                                         shares of Class B common stock held by our sponsor.

 

Common
stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Holders of
the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted
to a vote of our stockholders, except as required by law.

 

Unless
specified in our amended and restated certificate of incorporation or bylaws, or as required by applicable provisions of the General
Corporation Law of Delaware, as amended (the “DGCL”) or applicable stock exchange rules, the affirmative vote of a
majority of our shares of common stock that are voted is required to approve any such matter voted on by our stockholders. Our
board of directors is divided into three classes, each of which will generally serve for a term of three years with only one class
of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result
that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors. Our stockholders
are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds legally available therefor.
Prior to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors.
Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to
the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board
of directors for any reason.

 

Because
our amended and restated certificate of incorporation authorizes the issuance of up to 400,000,000 shares of Class A common stock,
if we were to enter into an initial business combination, we may (depending on the terms of such an initial business combination)
be required to increase the number of shares of Class A common stock which we are authorized to issue at the same time as our
stockholders vote on the initial business combination to the extent we seek stockholder approval in connection with our initial
business combination.

    2

     

    

Our
board of directors is divided into three classes with only one class of directors being elected in each year and each class (except
for those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. In accordance with
NYSE corporate governance requirements, we are not required to hold an annual meeting until no later than one full year after
our first fiscal year end following our listing on NYSE. Under Section 211(b) of the DGCL, we are, however, required to hold an
annual meeting of stockholders for the purposes of electing directors in accordance with our bylaws, unless such election is made
by written consent in lieu of such a meeting. We may not hold an annual meeting of stockholders to elect new directors prior to
the consummation of our initial business combination, and thus we may not be in compliance with Section 211(b) of the DGCL, which
requires an annual meeting. Therefore, if our stockholders want us to hold an annual meeting prior to the consummation of our
initial business combination, they may attempt to force us to hold one by submitting an application to the Delaware Court of Chancery
in accordance with Section 211(c) of the DGCL. Prior to the completion of an initial business combination, any vacancy on the
board of directors may be filled by a nominee chosen by holders of a majority of our founder shares. In addition, prior to the
completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board of
directors for any reason.

 

Prior
to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors.
Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to
the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board
of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended by
a resolution passed by a majority of our Class B common stock.

 

We
will provide our stockholders with the opportunity to redeem all or a portion of their public shares upon the completion of our
initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust
account calculated as of two business days prior to the consummation of our initial business combination including interest earned
on the funds held in the trust account and not previously released to us to pay our taxes, including franchise and income taxes,
divided by the number of then outstanding public shares, subject to the limitations described herein. The amount in the trust
account is initially anticipated to be approximately $10.00 per public share. The per-share amount we will distribute to investors
who properly redeem their shares will not be reduced by the deferred underwriting discounts and commissions we will pay to the
underwriters. The redemption rights will include the requirement that a beneficial owner must identify itself in order to validly
redeem its shares. Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have
agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with
the completion of our initial business combination. Our amended and restated certificate of incorporation requires these tender
offer documents to contain substantially the same financial and other information about the initial business combination and the
redemption rights as is required under the SEC’s proxy rules. If, however, stockholder approval of the transaction is required
by law, or we decide to obtain stockholder approval for business or other legal reasons, we will, like many blank check companies,
offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer
rules. If we seek stockholder approval, we will complete our initial business combination only if a majority of the outstanding
shares of common stock voted are voted in favor of the initial business combination. A quorum for such meeting will consist of
the holders present in person or by proxy of shares of outstanding capital stock of the company representing a majority of the
voting power of all outstanding shares of capital stock of the company entitled to vote at such meeting.

 

However,
the participation of our sponsor, officers, directors, advisors or their affiliates in privately-negotiated transactions (as described
in this exhibit), if any, could result in the approval of our business combination even if a majority of our public stockholders
vote, or indicate their intention to vote, against such business combination. For purposes of seeking approval of the majority
of our outstanding shares of common stock voted, non-votes will have no effect on the approval of our initial business combination
once a quorum is obtained. We will give not less than 10 days prior written notice of any such meeting, if required, at which
a vote shall be taken to approve our business combination. These quorum and voting thresholds, and the voting agreements of our
initial stockholders, may make it more likely that we will consummate our initial business combination.

    3

     

    

If
we seek stockholder approval of our initial business combination and we do not conduct redemptions in connection with our business
combination pursuant to the tender offer rules, our amended and restated certificate of incorporation will provide that a public
stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert
or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with
respect to more than an aggregate of 15% of the shares of common stock sold in our initial public offering, which we refer to
as the Excess Shares. However, we would not be restricting our stockholders’ ability to vote all of their shares (including
Excess Shares) for or against our business combination. Our stockholders’ inability to redeem the Excess Shares will reduce
their influence over our ability to complete our business combination, and such stockholders could suffer a material loss in their
investment if they sell such Excess Shares on the open market. Additionally, such stockholders will not receive redemption distributions
with respect to the Excess Shares if we complete the business combination. And, as a result, such stockholders will continue to
hold that number of shares exceeding 15% and, in order to dispose such shares would be required to sell their stock in open market
transactions, potentially at a loss.

 

If
we seek stockholder approval in connection with our business combination, our initial stockholders have agreed to vote their founder
shares and any public shares purchased during or after our initial public offering in favor of our initial business combination.
As a result, in addition to our initial stockholders’ founder shares, we would need only 13,125,001, or 37.5%, of the 35,000,000
public shares sold in our initial public offering to be voted in favor of the business combination (assuming all outstanding shares
are voted) in order to have our initial business combination approved. Additionally, each public stockholder may elect to redeem
its public shares irrespective of whether it votes for or against the proposed transaction (subject to the limitation described
in the preceding paragraph).

 

Pursuant
to our amended and restated certificate of incorporation, if we are unable to complete our initial business combination within
24 months from the closing of our initial public offering (subject to our ability to seek an extension of such 24-month period
as described herein), we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible
but no more than ten business days thereafter subject to lawfully available funds therefor, redeem the public shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds
held in the trust account and not previously released to us to pay our taxes, including franchise and income taxes (less up to
$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will
completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval
of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under
Delaware law to provide for claims of creditors and the requirements of other applicable law. Our sponsor, officers and directors
have entered into a letter agreement with us, pursuant to which they have agreed to waive their rights to liquidating distributions
from the trust account with respect to any founder shares held by them if we fail to complete our initial business combination
within 24 months from the closing of our initial public offering. However, if our sponsor, officers or directors acquire public
shares in or after our initial public offering, they will be entitled to liquidating distributions from the trust account with
respect to such public shares if we fail to complete our business combination within the prescribed time period.

 

In
the event of a liquidation, dissolution or winding up of the company after a business combination, our stockholders are entitled
to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is
made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription
rights. There are no sinking fund provisions applicable to the common stock, except that we will provide our public stockholders
with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit
in the trust account, upon the completion of our initial business combination, subject to the limitations described herein.

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Founder
Shares

 

The
founder shares are identical to the shares of Class A common stock included in the units sold in our initial public offering,
and holders of founder shares have the same stockholder rights as public stockholders, except that (i) the founder shares are
subject to certain transfer restrictions, as described in more detail below, (ii) our sponsor, officers and directors have entered
into a letter agreement with us, pursuant to which they have agreed (A) to waive their redemption rights with respect to any founder
shares and public shares held by them in connection with the completion of our initial business combination and a stockholder
vote to approve an amendment to our amended and restated certificate of incorporation (x) that would modify the substance or timing
of our obligation to provide holders of shares of Class A common stock the right to have their shares redeemed in connection with
our initial business combination or to redeem 100% of our public shares if we do not complete our initial business combination
within 24 months from the closing of the initial public offering or (y) with respect to any other provision relating to the rights
of holders of our Class A common stock and (B) to waive their rights to liquidating distributions from the trust account with
respect to any founder shares they hold if we fail to consummate an initial business combination within 24 months from the closing
of our initial public offering (although they will be entitled to liquidating distributions from the trust account with respect
to any public shares they hold if we fail to complete our initial business combination within the prescribed time frame), (iii)
the founder shares are shares of our Class B common stock that will automatically convert into shares of our Class A common stock
at the time of our initial business combination, or at any time prior thereto at the option of the holder, on a one-for-one basis,
subject to adjustment pursuant to certain anti-dilution rights, as described herein, and (iv) are entitled to registration rights.
If we submit our business combination to our public stockholders for a vote, our initial stockholders have agreed to vote any
founder shares held by them and any public shares purchased during or after our initial public offering in favor of our initial
business combination.

 

The
shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business
combination on a one-for-one basis (subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations
and the like), and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock,
or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the final prospectus and related to
the closing of the business combination, the ratio at which shares of Class B common stock shall convert into shares of Class
A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive
such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable
upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of
the total number of all shares of common stock outstanding upon completion of our initial public offering plus all shares of Class
A common stock and equity-linked securities issued or deemed issued in connection with the business combination (excluding any
shares or equity-linked securities issued, or to be issued, to any seller in the business combination. Holders of founder shares
may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject
to adjustment as provided above, at any time.

 

With
certain limited exceptions, the founder shares are not transferable, assignable or salable (except to our officers and directors
and other persons or entities affiliated with our sponsor, each of whom are subject to the same transfer restrictions) until the
earlier of (A) one year after the completion of our initial business combination or (B) subsequent to our initial business combination,
(x) if the closing price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least
150 days after our initial business combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange,
reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares
of common stock for cash, securities or other property.

 

Prior
to our initial business combination, only holders of our founder shares will have the right to vote on the election of directors.
Holders of our public shares will not be entitled to vote on the election of directors during such time. In addition, prior to
the completion of an initial business combination, holders of a majority of our founder shares may remove a member of the board
of directors for any reason. These provisions of our amended and restated certificate of incorporation may only be amended by
a resolution passed by a majority of our Class B common stock. With respect to any other matter submitted to a vote of our stockholders,
including any vote in connection with our initial business combination, except as required by law, holders of our founder shares
and holders of our public shares will vote together as a single class, with each share entitling the holder to one vote.

    5

     

    

Dividends

 

We
have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of
an initial business combination. The payment of cash dividends in the future will be dependent upon our revenues and earnings,
if any, capital requirements and general financial conditions subsequent to completion of an initial business combination. The
payment of any cash dividends subsequent to an initial business combination will be within the discretion of our board of directors
at such time. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants
we may agree to in connection therewith.

 

Preferred
Stock

 

Our
amended and restated certificate of incorporation provides that shares of preferred stock may be issued from time to time in one
or more series. Our board of directors is authorized to fix the voting rights, if any, designations, powers, preferences, the
relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable
to the shares of each series. Our board of directors is able to, without stockholder approval, issue preferred stock with voting
and other rights that could adversely affect the voting power and other rights of the holders of the common stock and could have
anti-takeover effects. The ability of our board of directors to issue preferred stock without stockholder approval could have
the effect of delaying, deferring or preventing a change of control of us or the removal of existing management. We have no preferred
stock outstanding at the date hereof. Although we do not currently intend to issue any shares of preferred stock, we cannot assure
you that we will not do so in the future. No shares of preferred stock were issued or registered in our initial public offering.

 

Warrants

 

Public
Stockholders’ Warrants

 

Each
whole warrant entitles the registered holder to purchase one share of our Class A common stock at a price of $11.50 per share,
subject to adjustment as discussed below, at any time commencing on the later of one year from the closing of our initial public
offering or 30 days after the completion of our initial business combination, except as discussed in the immediately succeeding
paragraph. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of
Class A common stock. You should review a copy of the warrant agreement, which has been filed with the SEC, for a complete description
of the terms and conditions applicable to the warrants. This means only a whole warrant may be exercised at a given time by a
warrant holder. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. Accordingly,
unless you purchase at least three units, you will not be able to receive or trade a whole warrant. The warrants will expire five
years after the completion of our initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or
liquidation.

 

We
will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation
to settle such warrant exercise unless a registration statement under the Securities Act with respect to the shares of Class A
common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to our satisfying
our obligations described below with respect to registration, or a valid exemption from registration is available. No warrant
will be exercisable and we will not be obligated to issue a share of Class A common stock upon exercise of a warrant unless the
Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities
laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately
preceding sentences are not satisfied with respect to a warrant, the holder of such warrant will not be entitled to exercise such
warrant and such warrant may have no value and expire worthless. In no event will we be required to net cash settle any warrant.
In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such
warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.

    6

     

    

We
have agreed that as soon as practicable, but in no event later than 20 business days after the closing of our initial business
combination, we will use our commercially reasonable efforts to file with the SEC a registration statement for the registration,
under the Securities Act, of the shares of Class A common stock issuable upon exercise of the warrants, and we will use our commercially
reasonable efforts to cause the same to become effective within 60 business days after the closing of our initial business combination,
and to maintain the effectiveness of such registration statement and a current prospectus relating to those shares of Class A
common stock until the warrants expire or are redeemed, as specified in the warrant agreement; provided that if our Class A common
stock is at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition
of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of public
warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities
Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will
use our commercially reasonably efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption
is not available. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants
is not effective by the 60th day after the closing of the initial business combination, warrant holders may, until
such time as there is an effective registration statement and during any period when we will have failed to maintain an effective
registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities
Act or another exemption, but we will use our commercially reasonable efforts to register or qualify the shares under applicable
blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering
the warrants for that number of shares of Class A common stock equal to the lesser of (A) the quotient obtained by dividing (x)
the product of the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “fair
market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) 0.361. The “fair
market value” as used in this paragraph shall mean the volume weighted average price of the Class A common stock for the
10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.

 

Redemption
of Warrants if the Price Per Share of Class A Common Stock Equals or Exceeds $18.00

 

Once
the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private
placement warrants):

 

		•	in
                                         whole and not in part;

 

		•	at
                                         a price of $0.01 per warrant;

 

		•	upon
                                         a minimum of 30 days’ prior written notice of redemption to each warrant holder;
                                         and

 

		•	if,
                                         and only if, the closing price of the Class A common stock equals or exceeds $18.00 per
                                         share (as adjusted for adjustments to the number of shares issuable upon exercise or
                                         the exercise price of a warrant) for any 20 trading days within a 30-trading day period
                                         ending three trading days before we send the notice of redemption to the warrant holders.

 

We
will not redeem the warrants as described above unless a registration statement under the Securities Act covering issuance of
the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating
to those shares of Class A common stock is available throughout the 30-day redemption period. If and when the warrants become
redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities
under all applicable state securities laws.

 

We
have established the last of the redemption criterion discussed above to prevent a redemption call unless there is at the time
of the call a significant premium to the warrant exercise price. Any such exercise would not be done on a “cashless”
basis and would require the exercising warrant holder to pay the exercise price for each warrant being exercised. If the foregoing
conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled to exercise
his, her or its warrant prior to the scheduled redemption date. However, the price of the Class A common stock may fall below
the $18.00 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the
like) as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.

    7

     

    

Redemption
of Warrants when the Price Per Share of Class A Common Stock Equals or Exceeds $10.00

 

Once
the warrants become exercisable, we may redeem the outstanding warrants:

 

		•	in
                                         whole and not in part;

 

		•	at
                                         $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that
                                         holders will be able to exercise their warrants on a cashless basis prior to redemption
                                         and receive that number of shares determined by reference to the table below, based on
                                         the redemption date and the “fair market value” of our Class A common
                                         stock (as defined below) except as otherwise described below;

 

		•	if,
                                         and only if, the closing price of our Class A common stock equals or exceeds $10.00
                                         per public share (as adjusted for adjustments to the number of shares issuable upon exercise
                                         or the exercise price of a warrant) for any 20 trading days within the 30-trading day
                                         period ending three trading days before we send the notice of redemption to the warrant
                                         holders; and

 

		•	if
                                         the closing price of the Class A common stock for any 20 trading days within a 30-trading
                                         day period ending on the third trading day prior to the date on which we send the notice
                                         of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments
                                         to the number of shares issuable upon exercise or the exercise price of a warrant), the
                                         private placement warrants must also be concurrently called for redemption on the same
                                         terms as the outstanding public warrants, as described above.

 

Beginning
on the date the notice of redemption is given until the warrants are redeemed or exercised, holders may elect to exercise their
warrants on a cashless basis. The numbers in the table below represent the number of shares of Class A common stock that
a warrant holder will receive upon such cashless exercise in connection with a redemption by us pursuant to this redemption feature,
based on the “fair market value” of our Class A common stock on the corresponding redemption date (assuming holders
elect to exercise their warrants and such warrants are not redeemed for $0.10 per warrant), determined for these purposes based
on volume-weighted average price of our Class A common stock during the 10 trading days immediately following the date on
which the notice of redemption is sent to the holders of warrants, and the number of months that the corresponding redemption
date precedes the expiration date of the warrants, each as set forth in the table below. We will provide our warrant holders with
the final fair market value no later than one business day after the 10-trading day period described above ends.

 

Pursuant
to the warrant agreement, references above to shares of Class A common stock shall include a security other than shares of
Class A common stock into which the shares of Class A common stock have been converted or exchanged for in the event
we are not the surviving company in our initial business combination. The numbers in the table below will not be adjusted when
determining the number of shares of Class A common stock to be issued upon exercise of the warrants if we are not the surviving
entity following our initial business combination.

    8

     

    

The
share prices set forth in the column headings of the table below will be adjusted as of any date on which the number of shares
issuable upon exercise of a warrant or the exercise price of a warrant is adjusted. If the number of shares issuable upon exercise
of a warrant is adjusted, the adjusted share prices in the column headings will equal the share prices immediately prior to such
adjustment, multiplied by a fraction, the numerator of which is the exercise price of the warrant after such adjustment and the
denominator of which is the exercise price of the warrant immediately prior to such adjustment. In such an event, the number of
shares in the table below shall be adjusted by multiplying such share amounts by a fraction, the numerator of which is the number
of shares deliverable upon exercise of a warrant immediately prior to such adjustment and the denominator of which is the number
of shares deliverable upon exercise of a warrant as so adjusted. If the exercise price of a warrant is adjusted as a result of
raising capital in connection with the initial business combination pursuant to the fifth paragraph under the heading “—Anti-dilution
Adjustments” in the registration statement on Form S-1 (No. 333-251488), the adjusted share prices in the column headings
will equal the unadjusted share price multiplied by a fraction, the numerator of which is the higher of the Market Value and the
Newly Issued Price as set forth under the heading “—Anti-dilution Adjustments” and the denominator of which
is $10.00.

 

	 	 	Fair
    Market Value of Class A Common Stock	 
	Redemption
    Date

    (period to expiration of warrants)	 	≤10.00	 	11.00	 	12.00	 	13.00	 	14.00	 	15.00	 	16.00	 	17.00	 	≥18.00	 
	60 months	 	 	0.261	 	 	0.281	 	 	0.297	 	 	0.311	 	 	0.324	 	 	0.337	 	 	0.348	 	 	0.358	 	 	0.361	 
	57 months	 	 	0.257	 	 	0.277	 	 	0.294	 	 	0.310	 	 	0.324	 	 	0.337	 	 	0.348	 	 	0.358	 	 	0.361	 
	54 months	 	 	0.252	 	 	0.272	 	 	0.291	 	 	0.307	 	 	0.322	 	 	0.335	 	 	0.347	 	 	0.357	 	 	0.361	 
	51 months	 	 	0.246	 	 	0.268	 	 	0.287	 	 	0.304	 	 	0.320	 	 	0.333	 	 	0.346	 	 	0.357	 	 	0.361	 
	48 months	 	 	0.241	 	 	0.263	 	 	0.283	 	 	0.301	 	 	0.317	 	 	0.332	 	 	0.344	 	 	0.356	 	 	0.361	 
	45 months	 	 	0.235	 	 	0.258	 	 	0.279	 	 	0.298	 	 	0.315	 	 	0.330	 	 	0.343	 	 	0.356	 	 	0.361	 
	42 months	 	 	0.228	 	 	0.252	 	 	0.274	 	 	0.294	 	 	0.312	 	 	0.328	 	 	0.342	 	 	0.355	 	 	0.361	 
	39 months	 	 	0.221	 	 	0.246	 	 	0.269	 	 	0.290	 	 	0.309	 	 	0.325	 	 	0.340	 	 	0.354	 	 	0.361	 
	36 months	 	 	0.213	 	 	0.239	 	 	0.263	 	 	0.285	 	 	0.305	 	 	0.323	 	 	0.339	 	 	0.353	 	 	0.361	 
	33 months	 	 	0.205	 	 	0.232	 	 	0.257	 	 	0.280	 	 	0.301	 	 	0.320	 	 	0.337	 	 	0.352	 	 	0.361	 
	30 months	 	 	0.196	 	 	0.224	 	 	0.250	 	 	0.274	 	 	0.297	 	 	0.316	 	 	0.335	 	 	0.351	 	 	0.361	 
	27 months	 	 	0.185	 	 	0.214	 	 	0.242	 	 	0.268	 	 	0.291	 	 	0.313	 	 	0.332	 	 	0.350	 	 	0.361	 
	24 months	 	 	0.173	 	 	0.204	 	 	0.233	 	 	0.260	 	 	0.285	 	 	0.308	 	 	0.329	 	 	0.348	 	 	0.361	 
	21 months	 	 	0.161	 	 	0.193	 	 	0.223	 	 	0.252	 	 	0.279	 	 	0.304	 	 	0.326	 	 	0.347	 	 	0.361	 
	18 months	 	 	0.146	 	 	0.179	 	 	0.211	 	 	0.242	 	 	0.271	 	 	0.298	 	 	0.322	 	 	0.345	 	 	0.361	 
	15 months	 	 	0.130	 	 	0.164	 	 	0.197	 	 	0.230	 	 	0.262	 	 	0.291	 	 	0.317	 	 	0.342	 	 	0.361	 
	12 months	 	 	0.111	 	 	0.146	 	 	0.181	 	 	0.216	 	 	0.250	 	 	0.282	 	 	0.312	 	 	0.339	 	 	0.361	 
	9 months	 	 	0.090	 	 	0.125	 	 	0.162	 	 	0.199	 	 	0.237	 	 	0.272	 	 	0.305	 	 	0.336	 	 	0.361	 
	6 months	 	 	0.065	 	 	0.099	 	 	0.137	 	 	0.178	 	 	0.219	 	 	0.259	 	 	0.296	 	 	0.331	 	 	0.361	 
	3 months	 	 	0.034	 	 	0.065	 	 	0.104	 	 	0.150	 	 	0.197	 	 	0.243	 	 	0.286	 	 	0.326	 	 	0.361	 
	0 months	 	 	—	 	 	—	 	 	0.042	 	 	0.115	 	 	0.179	 	 	0.233	 	 	0.281	 	 	0.323	 	 	0.361	 

    9

     

    

The
exact fair market value and redemption date may not be set forth in the table above, in which case, if the fair market value is
between two values in the table or the redemption date is between two redemption dates in the table, the number of shares of Class A
common stock to be issued for each warrant exercised will be determined by a straight-line interpolation between the number of
shares set forth for the higher and lower fair market values and the earlier and later redemption dates, as applicable, based
on a 365 or 366-day year, as applicable. For example, if the volume weighted average price of our Class A common stock during
the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of the warrants is
$11.00 per share, and at such time there are 57 months until the expiration of the warrants, holders may choose to, in connection
with this redemption feature, exercise their warrants for 0.277 shares of Class A common stock for each whole warrant. For
an example where the exact fair market value and redemption date are not as set forth in the table above, if the volume weighted
average price of our Class A common stock during the 10 trading days immediately following the date on which the notice of
redemption is sent to the holders of the warrants is $13.50 per share, and at such time there are 38 months until the expiration
of the warrants, holders may choose to, in connection with this redemption feature, exercise their warrants for 0.298 shares of
Class A common stock for each whole warrant. In no event will the warrants be exercisable on a cashless basis in connection
with this redemption feature for more than 0.361 shares of Class A common stock per warrant (subject to adjustment). Finally,
as reflected in the table above, if the warrants are out of the money and about to expire, they cannot be exercised on a cashless
basis in connection with a redemption by us pursuant to this redemption feature, since they will not be exercisable for any shares
of Class A common stock.

 

This
redemption feature is structured to allow for all of the outstanding warrants to be redeemed when the Class A common stock
is trading at or above $10.00 per public share, which may be at a time when the trading price of our Class A common stock
is below the exercise price of the warrants. We have established this redemption feature to provide us with the flexibility to
redeem the warrants without the warrants having to reach the $18.00 per share threshold. Holders choosing to exercise their warrants
in connection with a redemption pursuant to this feature will, in effect, receive a number of shares for their warrants based
on an option pricing model with a fixed volatility input as of the date of the initial public offering. This redemption right
provides us with an additional mechanism by which to redeem all of the outstanding warrants, and therefore have certainty as to
our capital structure as the warrants would no longer be outstanding and would have been exercised or redeemed. We will be required
to pay the applicable redemption price to warrant holders if we choose to exercise this redemption right and it will allow us
to quickly proceed with a redemption of the warrants if we determine it is in our best interest to do so. As such, we would redeem
the warrants in this manner when we believe it is in our best interest to update our capital structure to remove the warrants
and pay the redemption price to the warrant holders.

 

As
stated above, we can redeem the warrants when the Class A common stock is trading at a price starting at $10.00, which is
below the exercise price of $11.50, because it will provide certainty with respect to our capital structure and cash position
while providing warrant holders with the opportunity to exercise their warrants on a cashless basis for the applicable number
of shares. If we choose to redeem the warrants when the Class A common stock is trading at a price below the exercise price
of the warrants, this could result in the warrant holders receiving fewer shares of Class A common stock than they would
have received if they had chosen to wait to exercise their warrants for shares of Class A common stock if and when the Class A
common stock was trading at a price higher than the exercise price of $11.50.

 

No
fractional shares of Class A common stock will be issued upon exercise. If, upon exercise, a holder would be entitled to
receive a fractional interest in a share, we will round down to the nearest whole number of the number of shares of Class A
common stock to be issued to the holder. If, at the time of redemption, the warrants are exercisable for a security other than
the shares of Class A common stock pursuant to the warrant agreement (for instance, if we are not the surviving company in
our initial business combination), the warrants may be exercised for such security. At such time as the warrants become exercisable
for a security other than the Class A common stock, the Company (or surviving company) will use its commercially reasonable
efforts to register under the Securities Act the security issuable upon the exercise of the warrants.

    10

     

    

Ownership
Limit

 

A
holder of a warrant may notify us in writing in the event it elects to be subject to a requirement that such holder will not have
the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s
affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 9.8% (or such other amount as
a holder may specify) of the shares of Class A common stock issued and outstanding immediately after giving effect to such exercise.

 

Anti-Dilution
Adjustments

 

If
the number of outstanding shares of Class A common stock is increased by a stock dividend payable in shares of Class A common
stock, or by a split-up of shares of Class A common stock or other similar event, then, on the effective date of such stock dividend,
split-up or similar event, the number of shares of Class A common stock issuable on exercise of each warrant will be increased
in proportion to such increase in the outstanding shares of Class A common stock. A rights offering made to all or substantially
all holders of Class A common stock entitling holders to purchase shares of Class A common stock at a price less than the historical
fair market value will be deemed a stock dividend of a number of shares of Class A common stock equal to the product of (i) the
number of shares of Class A common stock actually sold in such rights offering (or issuable under any other equity securities
sold in such rights offering that are convertible into or exercisable for shares of Class A common stock) and (ii) one minus the
quotient of (x) the price per share of Class A common stock paid in such rights offering and (y) the historical fair market value.
For these purposes, (i) if the rights offering is for securities convertible into or exercisable for shares of Class A common
stock, in determining the price payable for Class A common stock, there will be taken into account any consideration received
for such rights, as well as any additional amount payable upon exercise or conversion and (ii) historical fair market value means
the volume weighted average price of the Class A common stock as reported during the 10 trading day period ending on the trading
day prior to the first date on which the shares of Class A common stock trade on the applicable exchange or in the applicable
market, regular way, without the right to receive such rights.

 

In
addition, if we, at any time while the warrants are outstanding and unexpired, pay a dividend or make a distribution in cash,
securities or other assets to all or substantially all of the holders of the shares of Class A common stock on account of such
shares of Class A common stock (or other securities into which the warrants are convertible), other than (a) as described above,
(b) any cash dividends or cash distributions which, when combined on a per share basis with all other cash dividends and cash
distributions paid on the shares of Class A common stock during the 365-day period ending on the date of declaration of such dividend
or distribution does not exceed $0.10 (as adjusted to appropriately reflect any other adjustments and excluding cash dividends
or cash distributions that resulted in an adjustment to the exercise price or to the number of shares of Class A common stock
issuable on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions
equal to or less than $0.10 per share, (c) to satisfy the redemption rights of the holders of shares of Class A common stock in
connection with a proposed initial business combination, (d) to satisfy the redemption rights of the holders of shares of Class
A common stock in connection with a stockholder vote to amend our amended and restated certificate of incorporation (i) to modify
the substance or timing of our obligation to allow redemption in connection with our initial business combination or to redeem
100% of our public shares if we do not complete our initial business combination within 24 months from the closing of our initial
public offering or (ii) with respect to any other provisions relating to the rights of holders of our Class A common stock or
pre-initial business combination activity, or (e) in connection with the redemption of our public shares upon our failure to complete
our initial business combination, then the warrant exercise price will be decreased, effective immediately after the effective
date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of
Class A common stock in respect of such event.

 

If
the number of outstanding shares of Class A common stock is decreased by a consolidation, combination, reverse stock split or
reclassification of shares of Class A common stock or other similar event, then, on the effective date of such consolidation,
combination, reverse stock split, reclassification or similar event, the number of shares of Class A common stock issuable on
exercise of each warrant will be decreased in proportion to such decrease in outstanding shares of Class A common stock.

    11

     

    

Whenever
the number of shares of Class A common stock purchasable upon the exercise of the warrants is adjusted, as described above, the
warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction
(x) the numerator of which will be the number of shares of Class A common stock purchasable upon the exercise of the warrants
immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of Class A common stock so
purchasable immediately thereafter.

 

In
addition, if (x) we issue additional shares of Class A common stock or equity-linked securities for capital raising purposes in
connection with the closing of our initial business combination at an issue price or effective issue price of less than $9.20
per share of our Class A common stock (with such issue price or effective issue price to be determined in good faith by our board
of directors and, in the case of any such issuance to our sponsors or their affiliates, without taking into account any founder
shares held by our initial stockholders or such affiliates, as applicable, prior to such issuance (the “Newly Issued Price”)),
(y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon,
available for the funding of our initial business combination on the date of the consummation of our initial business combination
(net of redemptions), and (z) the volume-weighted average trading price of our Class A common stock during the 20 trading day
period starting on the trading day prior to the day on which we complete our initial business combination (such price, the “Market
Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal
to 115% of the higher of the Market Value and the Newly Issued Price, and the $10.00 and $18.00 per share redemption trigger prices
described above will be adjusted (to the nearest cent) to be equal to 100% and 180% of the higher of the Market Value and the
Newly Issued Price, respectively.

 

In
case of any reclassification or reorganization of the outstanding shares of Class A common stock (other than those described above
or that solely affects the par value of such shares of Class A common stock), or in the case of any merger or consolidation of
us with or into another corporation (other than a consolidation or merger in which we are the continuing corporation and that
does not result in any reclassification or reorganization of our outstanding shares of Class A common stock), or in the case of
any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially
as an entirety in connection with which we are dissolved, the holders of the warrants will thereafter have the right to purchase
and receive, upon the basis and upon the terms and conditions specified in the warrants and in lieu of the shares of Class A common
stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount
of shares of Class A common stock or other securities or property (including cash) receivable upon such reclassification, reorganization,
merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of the warrants would have
received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to
exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or
merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed
to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively
make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders (other than a
tender, exchange or redemption offer made by the company in connection with redemption rights held by stockholders of the company
as provided for in the company’s amended and restated certificate of incorporation or as a result of the redemption of shares
of Class A common stock by the company if a proposed initial business combination is presented to the stockholders of the company
for approval) under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with
members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together
with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any
such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange
Act) more than 50% of the issued and outstanding shares of Class A common stock, the holder of a warrant will be entitled to receive
the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder
if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer
and all of the shares of Class A common stock held by such holder had been purchased pursuant to such tender or exchange offer,
subject to adjustment (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the
adjustments provided for in the warrant agreement.

    12

     

    

If
less than 70% of the consideration receivable by the holders of shares of Class A common stock in such a transaction is payable
in the form of shares of Class A common stock in the successor entity that is listed for trading on a national securities exchange
or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such
event, and if the registered holder of the warrant properly exercises the warrant within thirty days following public disclosure
of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the Black-Scholes
value (as defined in the warrant agreement) of the warrant. The purpose of such exercise price reduction is to provide additional
value to holders of the warrants when an extraordinary transaction occurs during the exercise period of the warrants pursuant
to which the holders of the warrants otherwise do not receive the full potential value of the warrants.

 

The
warrants have been issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company,
as warrant agent, and us. You should review a copy of the warrant agreement, which was filed as an exhibit to the registration
statement for a complete description of the terms and conditions applicable to the warrants.

 

The
warrant agreement provides that the terms of the warrants may be amended without the consent of any holder for the purpose of
(i) curing any ambiguity or correct any mistake, including to conform the provisions of the warrant agreement to the description
of the terms of the warrants and the warrant agreement set forth in this prospectus, or defective provision, (ii) amending the
provisions relating to cash dividends on shares of common stock as contemplated by and in accordance with the warrant agreement
or (iii) adding or changing any provisions with respect to matters or questions arising under the warrant agreement as the parties
to the warrant agreement may deem necessary or desirable and that the parties deem to not adversely affect the rights of the registered
holders of the warrants, provided that the approval by the holders of at least 65% of the then-outstanding public warrants is
required to make any change that adversely affects the interests of the registered holders of public warrants.

 

The
warrants may be exercised upon surrender of the warrant certificate on or prior to the expiration date at the offices of the warrant
agent, with the exercise form on the reverse side of the warrant certificate completed and executed as indicated, accompanied
by full payment of the exercise price (or on a cashless basis, if applicable), by certified or official bank check payable to
us, for the number of warrants being exercised. The warrant holders do not have the rights or privileges of holders of Class A
common stock and any voting rights until they exercise their warrants and receive shares of Class A common stock. After the issuance
of shares of Class A common stock upon exercise of the warrants, each holder will be entitled to one (1) vote for each share held
of record on all matters to be voted on by stockholders.

 

No
fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled
to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole number of shares of Class
A common stock to be issued to the warrant holder.

 

We
have agreed that, subject to applicable law, any action, proceeding or claim against us arising out of or relating in any way
to the warrant agreement will be brought and enforced in the courts of the State of New York or the United States District Court
for the Southern District of New York, and we irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive
forum for any such action, proceeding or claim. This provision applies to claims under the Securities Act but does not apply to
claims under the Exchange Act or any claim for which the federal district courts of the United States of America are the sole
and exclusive forum.

 

Private
Placement Warrants

 

The
private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) are not
transferable, assignable or salable until 30 days after the completion of our initial business combination (except, among other
limited exceptions as described under the section of the final prospectus relating to our initial public offering entitled “Principal
Stockholders — Restrictions on Transfers of Founder Shares and Private Placement Warrants,” to our officers and directors
and other persons or entities affiliated with our sponsor) and they are not redeemable under certain redemption scenarios by us
so long as they are held by our sponsor or its permitted transferees. Otherwise, the private placement warrants have terms and
provisions that are identical to those of the warrants sold as part of the units in our initial public offering, including as
to exercise price, exercisability and exercise period. If the private placement warrants are held by holders other than the sponsor
or its permitted transferees, the private placement warrants will be redeemable by us under all redemption scenarios and exercisable
by the holders on the same basis as the warrants included in the units sold in our initial public offering.

    13

     

    

If
holders of the private placement warrants elect to exercise them on a cashless basis, they would pay the exercise price by surrendering
their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of
the number of shares of Class A common stock underlying the warrants, multiplied by the excess of the “Sponsor fair market
value” (defined below) less the exercise price of the warrants by (y) the Sponsor fair market value. The “Sponsor
fair market value” shall mean the average reported closing price of the Class A common stock for the 10 trading days
ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. The reason
that we have agreed that these warrants will be exercisable on a cashless basis so long as they are held by the sponsor or its
permitted transferees is because it is not known at this time whether they will be affiliated with us following a business combination.
If they remain affiliated with us, their ability to sell our securities in the open market will be significantly limited. We expect
to have policies in place that prohibit insiders from selling our securities except during specific periods of time. Even during
such periods of time when insiders will be permitted to sell our securities, an insider cannot trade in our securities if he or
she is in possession of material non-public information. Accordingly, unlike public stockholders who could sell the shares of
Class A common stock issuable upon exercise of the warrants freely in the open market, the insiders could be significantly restricted
from doing so. As a result, we believe that allowing the holders to exercise such warrants on a cashless basis is appropriate.

 

In
order to finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of
our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. If we complete
our initial business combination, we would repay such loaned amounts out of the proceeds of the trust account. In the even that
our initial business combination does not close, we may use a portion of the working capital held outside the trust account to
repay such loaned amounts but no proceeds from our trust account would be used to repay such loaned amounts. Up to $1,500,000
of such loans may be convertible into warrants at a price of $1.50 per warrant at the option of the lender. Such warrants would
be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.

 

Our
sponsor has agreed not to transfer, assign or sell any of the private placement warrants (including the Class A common stock issuable
upon exercise of any of these warrants) until the date that is 30 days after the date we complete our initial business combination,
except that, among other limited exceptions as described under the section of the final prospectus entitled “Principal Stockholders
 — Restrictions on Transfers of Founder Shares and Private Placement Warrants” made to our officers and directors and
other persons or entities affiliated with our sponsor

 

Listing
of Securities

 

Our
units, Class A common stock and warrants are listed on NYSE under the symbols “STPC.U”, “STPC” and “STPC
WS” respectively.

 

Our
Transfer Agent and Warrant Agent

 

The
transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have
agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents
and each of its stockholders, directors, officers and employees against all claims and losses that may arise out of acts performed
or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad
faith of the indemnified person or entity. Continental Stock Transfer & Trust Company has agreed that it has no right of set-off
or any right, title, interest or claim of any kind to, or to any monies in, the trust account, and has irrevocably waived any
right, title, interest or claim of any kind to, or any monies in, the trust account that it may have now or in the future. Accordingly,
any indemnification provided will only be able to be satisfied, or a claim will only be able to be pursued, solely against us
and our assets outside the trust account and not against any monies in the trust account or interest earned thereon.

    14

     

    

Our
Amended and Restated Certificate of Incorporation

 

Our
amended and restated certificate of incorporation contains requirements and restrictions relating to our initial public offering
that apply to us until the completion of our initial business combination. These provisions cannot be amended without the approval
of the holders of 65% of our common stock. Our initial stockholders, who collectively beneficially own 20% of our common stock
upon the closing of our initial public offering, participate in any vote to amend our amended and restated certificate of incorporation
and have the discretion to vote in any manner they choose. Specifically, our amended and restated certificate of incorporation
provides, among other things, that:

 

		•	If
                                         we are unable to complete our initial business combination within 24 months from the
                                         closing of our initial public offering, we will (i) cease all operations except for the
                                         purpose of winding up, (ii) as promptly as reasonably possible but not more than ten
                                         business days thereafter subject to lawfully available funds therefor, redeem 100% of
                                         the public shares, at a per-share price, payable in cash, equal to the aggregate amount
                                         then on deposit in the trust account including interest earned on the funds held in the
                                         trust account and not previously released to us to pay our taxes, including franchise
                                         and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided
                                         by the number of then outstanding public shares, which redemption will completely extinguish
                                         public stockholders’ rights as stockholders (including the right to receive further
                                         liquidating distributions, if any), subject to applicable law, and (iii) as promptly
                                         as reasonably possible following such redemption, subject to the approval of our remaining
                                         stockholders and our board of directors, dissolve and liquidate, subject in each case
                                         to our obligations under Delaware law to provide for claims of creditors and the requirements
                                         of other applicable law;

 

		•	Prior
                                         to our initial business combination, we may not issue additional shares of capital stock
                                         that would entitle the holders thereof to (i) receive funds from the trust account or
                                         (ii) vote on any initial business combination;

 

		•	Although
                                         we do not intend to enter into a business combination with a target business that is
                                         affiliated with our sponsor, our directors or our officers, we are not prohibited from
                                         doing so. In the event we enter into such a transaction, we, or a committee of independent
                                         directors, will obtain an opinion from an independent investment banking firm or an independent
                                         accounting firm that such a business combination is fair to our company from a financial
                                         point of view;

 

		•	If
                                         a stockholder vote on our initial business combination is not required by law and we
                                         do not decide to hold a stockholder vote for business or other legal reasons, we will
                                         offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange
                                         Act, and will file tender offer documents with the SEC prior to completing our initial
                                         business combination which contain substantially the same financial and other information
                                         about our initial business combination and the redemption rights as is required under
                                         Regulation 14A of the Exchange Act;

 

		•	Our
                                         initial business combination must occur with one or more target business that together
                                         have an aggregate fair market value of at least 80% or our assets held in the trust account
                                         (excluding the deferred underwriting discounts and commissions and funds previously released
                                         to us to pay taxes payable on the income earned on the trust account) at the time of
                                         the agreement to enter into the initial business combination;

 

		•	If
                                         our stockholders approve an amendment to our amended and restated certificate of incorporation
                                         that would modify the substance or timing of our obligation to redeem 100% of our public
                                         shares if we have not consummated an initial business combination within 24 months from
                                         the closing of our initial public offering, we will provide our public stockholders with
                                         the opportunity to redeem all or a portion of their shares of Class A common stock upon
                                         such approval at a per-share price, payable in cash, equal to the aggregate amount then
                                         on deposit in the trust account, including interest earned on the funds held in the trust
                                         account and not previously released to us to pay our taxes, including franchise and income
                                         taxes, divided by the number of then outstanding public shares; and

    15

     

    

		•	We
                                         will not effectuate our initial business combination with another blank check company
                                         or a similar company with nominal operations. 

 

In
addition, our amended and restated certificate of incorporation provides that under no circumstances will we redeem our public
shares in an amount that would cause our net tangible assets to be less than $5,000,001 upon consummation of our initial business
combination and after payment of underwriters’ fees and commissions.

 

Certain
Anti-Takeover Provisions of Delaware Law and our Amended and Restated Certificate of Incorporation and Bylaws

 

We
have opted out of Section 203 of the DGCL. However, our amended and restated certificate of incorporation contains similar provisions
providing that we may not engage in certain “business combinations” with any “interested stockholder”
for a three-year period following the time that the stockholder became an interested stockholder, unless:

 

		•	prior
                                         to such time, our board of directors approved either the business combination or the
                                         transaction which resulted in the stockholder becoming an interested stockholder;

 

		•	upon
                                         consummation of the transaction that resulted in the stockholder becoming an interested
                                         stockholder, the interested stockholder owned at least 85% of our voting stock outstanding
                                         at the time the transaction commenced, excluding certain shares; or

 

		•	at
                                         or subsequent to that time, the business combination is approved by our board of directors
                                         and by the affirmative vote of holders of at least 66-2/3% of the outstanding voting
                                         stock that is not owned by the interested stockholder.

 

Generally,
a “business combination” includes a merger, asset or stock sale or certain other transactions resulting in a financial
benefit to the interested stockholder. Subject to certain exceptions, an “interested stockholder” is a person who,
together with that person’s affiliates and associates, owns, or within the previous three years owned, 20% or more of our
voting stock.

 

Under
certain circumstances, this provision will make it more difficult for a person who would be an “interested stockholder”
to effect various business combinations with a corporation for a three-year period. This provision may encourage companies interested
in acquiring our company to negotiate in advance with our board of directors because the stockholder approval requirement would
be avoided if our board of directors approves either the business combination or the transaction which results in the stockholder
becoming an interested stockholder. These provisions also may have the effect of preventing changes in our board of directors
and may make it more difficult to accomplish transactions which stockholders may otherwise deem to be in their best interests.

 

Our
amended and restated certificate of incorporation provides that our sponsor and its respective affiliates, any of their respective
direct or indirect transferees of at least 20% of our outstanding common stock and any group as to which such persons are party
to, do not constitute “interested stockholders” for purposes of this provision.

 

Our
amended and restated certificate of incorporation provides that our board of directors is classified into three classes of directors.
As a result, in most circumstances, a person can gain control of our board only by successfully engaging in a proxy contest at
two or more annual meetings.

 

Our
authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could
be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee
benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult
or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise. 

    16

     

    

Exclusive
Forum For Certain Lawsuits

 

Our
amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought
in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought
only in the Court of Chancery in the State of Delaware, and if brought outside of Delaware, the stockholder bringing the suit
will be deemed to have consented to service of process on such stockholder’s counsel. Although we believe this provision
benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies
the provision may have the effect of discouraging lawsuits against our directors and officers. Despite the fact that our amended
and restated certificate of incorporation provides that the exclusive forum provision is applicable to the fullest extent permitted
by applicable law. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any
duty or liability created by the Exchange Act or the rules and regulations thereunder and Section 22 of the Securities Act creates
concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities
Act and the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce
any duty or liability created by the Exchange Act, Securities Act, or any other claim for which the federal courts have exclusive
jurisdiction.

 

Special
meeting of stockholders

 

Our
bylaws provide that special meetings of our stockholders may be called only by a majority vote of our board of directors, by our
Chief Executive Officer or by our Chairman.

 

Advance
notice requirements for stockholder proposals and director nominations

 

Our
bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates
for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be
timely, a stockholder’s notice will need to be received by the company secretary at our principal executive offices not
later than the close of business on the 90th day nor earlier than the close of business on the 120th day
prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 under the Exchange
Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained therein. Our bylaws
also specify certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our
stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual
meeting of stockholders.

 

Action
by written consent

 

Subsequent
to the consummation of the offering, any action required or permitted to be taken by our common stockholders must be effected
by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders
other than with respect to our Class B common stock.

 

Classified
Board of Directors

 

Our
board of directors is divided into three classes, Class I, Class II and Class III, with members of each class serving staggered
three-year terms. Our amended and restated certificate of incorporation provides that the authorized number of directors may be
changed only by resolution of the board of directors. Subject to the terms of any preferred stock, any or all of the directors
may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting
power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together
as a single class. Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors,
may be filled only by vote of a majority of our directors then in office.

    17

     

    

Class
B Common Stock Consent Right

 

For
so long as any shares of Class B common stock remain outstanding, we may not, without the prior vote or written consent of the
holders of a majority of the shares of Class B common stock then outstanding, voting separately as a single class, amend, alter
or repeal any provision of our certificate of incorporation, whether by merger, consolidation or otherwise, if such amendment,
alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights
of the Class B common stock. Any action required or permitted to be taken at any meeting of the holders of Class B common stock
may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the
action so taken, shall be signed by the holders of the outstanding Class B common stock having not less than the minimum number
of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class B common stock were
present and voted.

 

Securities
Eligible for Future Sale

 

We
have 43,750,000 shares of common stock issued and outstanding. Of these shares, the 35,000,000 shares of Class A common stock
sold in our initial public offering are freely tradable without restriction or further registration under the Securities Act,
except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act. All of the remaining
8,750,000 Class B common stock and all 6,028,454 private placement warrants are restricted securities under Rule 144, in that
they were issued in private transactions not involving a public offering. These restricted securities are entitled to registration
rights as more fully described below under “— Registration and Shareholder Rights.”

 

Rule
144

 

Pursuant
to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would
be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time
of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements
for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during
the 12 months (or such shorter period as we were required to file reports) preceding the sale.

 

Persons
who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates
at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which
such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater
of:

 

		•	1%
                                         of the total number of shares of Class A common stock then outstanding, which equals
                                         437,500 shares immediately after our initial public offering; or

 

		•	the
                                         average weekly reported trading volume of the Class A common stock during the four calendar
                                         weeks preceding the filing of a notice on Form 144 with respect to the sale.

 

Sales
by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability
of current public information about us.

 

Restrictions
on the Use of Rule 144 by Shell Companies or Former Shell Companies

 

Rule
144 is not available for the resale of securities initially issued by shell companies (other than business combination related
shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important
exception to this prohibition if the following conditions are met:

 

		•	the
                                         issuer of the securities that was formerly a shell company has ceased to be a shell company;

 

		•	the
                                         issuer of the securities is subject to the reporting requirements of Section 13 or 15(d)
                                         of the Exchange Act;

    18

     

    

		•	the
                                         issuer of the securities has filed all Exchange Act reports and materials required to
                                         be filed, as applicable, during the preceding 12 months (or such shorter period that
                                         the issuer was required to file such reports and materials), other than Current Reports
                                         on Form 8-K; and

 

		•	at
                                         least one year has elapsed from the time that the issuer filed current Form 10 type information
                                         with the SEC reflecting its status as an entity that is not a shell company.

 

As
a result, our initial stockholders are able to sell their founder shares and private placement warrants, as applicable, pursuant
to Rule 144 without registration one year after we have completed our initial business combination.

 

Registration
and Shareholder Rights

 

The
holders of the founder shares, private placement warrants and warrants that may be issued upon conversion of working capital loans
(and any shares of Class A common stock issuable upon the conversion of such founder shares or exercise of such private placement
warrants and warrants that may be issued upon conversion of working capital loans pursuant to the terms of such securities) are
entitled to registration rights pursuant to a registration and shareholder rights agreement dated January 8, 2021, between the
Company and certain security holders, requiring us to register such securities for resale (in the case of the founder shares,
only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to
three demands, excluding short form demands, that we register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to our completion of our initial business combination
and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration
and shareholder rights agreement provides that we will not permit any registration statement filed under the Securities Act to
become effective until termination of the applicable lock-up period, which occurs (a) in the case of the founder shares, on the
earlier of (A) one year after the completion of our initial business combination or (B) subsequent to our business combination,
(i) if the closing price of our Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least
150 days after our initial business combination or (ii) the date on which we complete a liquidation, merger, capital stock exchange,
reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares
of common stock for cash, securities or other property and (b) in the case of the private placement warrants and the respective
Class A common stock underlying such warrants, 30 days after the completion of our initial business combination. We will bear
the expenses incurred in connection with the filing of any such registration statements.

 

In
addition, pursuant to the registration and shareholder rights agreement, our sponsor, upon consummation of an initial business
combination, will be entitled to nominate three individuals for election to our board of directors so long as the sponsor and
its permitted transferees continue to hold at least 50% of the number of founder shares held by the sponsor immediately prior
to the closing of our initial public offering and after any forfeiture of its founder shares.

    19EX-4.21

 Exhibit 4.21 

DATED 17 DECEMBER 2020 
  

			
	(1)	  	MEREO BIOPHARMA GROUP PLC
		
	(2)	  	THE NOTEHOLDERS NAMED HEREIN

  
  

DEED OF CONSENT AND AMENDMENT 

RELATING TO A CONVERTIBLE LOAN NOTE 

INSTRUMENT DATED 3 JUNE 2020 

 CONTENTS 
  

					
	1	  	DEFINITIONS AND INTERPRETATION	  	3
			
	2	  	CONSENT	  	3
			
	3	  	AMENDMENT, WAIVER AND DELIVERY OF AMENDED NOTE INSTRUMENT	  	4
			
	4	  	CONTINUITY AND FURTHER ASSURANCE	  	4
			
	5	  	COSTS AND EXPENSES	  	4
			
	6	  	MISCELLANEOUS	  	4
			
	7	  	GOVERNING LAW	  	5
		
	SCHEDULE 1 AMENDED NOTE INSTRUMENT (MARKED CHANGES)	  	6
		
	SCHEDULE 2 AMENDED NOTE INSTRUMENT (CLEAN COPY)	  	7

 THIS DEED is dated 17 December 2020 and made between: 

 

	(1)	 MEREO BIOPHARMA GROUP PLC, incorporated and registered in England and Wales with company number 09481161
whose registered office is at 4th Floor, 1 Cavendish Place, London W1G 0QF, United Kingdom (the “Company”); 

  

	(2)	 ORBIMED PRIVATE INVESTMENTS VII, LP a Delaware limited partnership with office address at c/o
Corporation Service Company, 251 Little Falls Drive, Wilmington, DE 19808; 

  

	(3)	 ORBIMED PARTNERS MASTER FUND LIMITED, a Bermuda company with office address at c/o Conyers Corporate
Services (Bermuda) Limited, Clarendon House, 2 Church Street, Hamilton, HM 11 Bermuda; 

  

	(4)	 ORBIMED GENESIS MASTER FUND, L.P. Cayman Islands limited partnership with office address at c/o
Intertrust (Cayman) Ltd., 190 Elgin Avenue, George Town, Grand Cayman KY1- 9005, Cayman Islands (together with OrbiMed Private Investments VII, LP and OrbiMed Partners Master Fund Limited, “OrbiMed”); 

 

	(5)	 667, L.P. a Delaware limited partnership with office address at Baker Brothers Investments, 860
Washington St, 3rd Floor, New York, NY 10014; 

  

	(6)	 BAKER BROTHERS LIFE SCIENCES, L.P. a Delaware limited partnership with office address at Baker Brothers
Investments, 860 Washington St, 3rd Floor, New York, NY 10014 (together with 667, L.P., “Baker Brothers”); 

  

	(7)	 VIVO CAPITAL FUND IX, L.P. a Delaware partnership with office address C/O Vivo Capital LLC, 192 Lytton
Avenue, Palo Alto, CA 94301; 

  

	(8)	 VIVO OPPORTUNITY FUND, L.P. a Delaware partnership with office address C/O Vivo Capital LLC, 192 Lytton
Avenue, Palo Alto, CA 94301 (together with Vivo Capital Fund IX L.P., “Vivo”); 

  

	(9)	 BOXER CAPITAL, LLC, a Delaware company with office address 11682 El Camino Real, Suite 320, San Diego,
CA 92130; and 

  

	(10)	 MVA INVESTORS, LLC, a Delaware company with office address 11682 El Camino Real, Suite 320, San Diego,
CA 92130 (together with Boxer Capital LLC, “Tavistock”), (OrbiMed, Baker Brothers, Vivo and Tavistock together, the “Noteholders”). 

WHEREAS: 
  

	(a)	 We refer to the convertible loan note instrument originally dated 3 June 2020 and as amended on
9 June 2020 pursuant to which the Company constituted certain unsecured convertible loan notes of £1 principal amount each (the “Note Instrument”), the defined terms of which shall bear the same meaning in this Deed
unless a contrary intention appears. 

  

	(b)	 As a result of an increasingly smaller proportion of trading in the Company’s shares being conducted on
the Alternative Investment Market (“AIM”) operated by the London Stock Exchange, and the duplicative costs and staff time involved in complying with both the AIM Rules for Companies and the NASDAQ market rules, the Company is
intending to cancel the 

  
 1 

	 	
admision of its Ordinary Shares to trading on AIM from with effect from 18 December 2020 (the “Delisting”). Following the Delisting, the only listing maintained by the Company will
be that of American depositary receipts on NASDAQ, the tradeable entitlement representing American Depositary Shares (“ADSs”), each of which such ADS represents five Ordinary Shares shares of £.003 in the capital of the Company.

  

	(c)	 If the Note Instrument is not amended as contemplated by this Deed then, following the Delisting, upon a
conversion of Notes under the Note Instrument, the Company’s legal obligations in respect of the issue of Shares to a converting Noteholder would be satisfied by the delivery of the relevant number of unlisted Ordinary Shares to which such
converting Noteholder is entitled. There would be no obligation on the Company to either (i) obtain an alternative listing of the Company’s Ordinary Shares; or (ii) to deliver ADSs upon a conversion of the Notes.

  

	(d)	 Given the limited liquidity offered by unlisted Ordinary Shares compared to AIM-listed Ordinary Shares, the
Company intends to amend the terms of the Note Instrument to allow for conversion of the Notes to result in the direct issue of ADSs to a Noteholder, without the need for such Noteholder to first be issued with unlisted Ordinary Shares. This
mechanism for conversion of Notes into ADSs will operate as follows: 

  

	 	(i)	 when a Noteholder serves a notice in writing to the Company that it wishes to convert outstanding Notes (a
“Conversion Notice”) pursuant to Part 2 of Schedule 2 of the Note Instrument, they may also send the Company an ADS Issuance and Delivery Instruction (the form of which is included at Part 4 to Schedule 2 of the Amended Note
Instrument) if they wish for such Ordinary Shares to be delivered in the form of ADSs; 

  

	 	(ii)	 on the relevant Conversion Date, in respect of any Noteholder who wishes to receive ADSs and who has also sent
a ADS Issuance and Delivery Instruction (the form of which is set out at Part 4 of Schedule 2 to the Amended Note Instrument), the Company issues the relevant number of unlisted Ordinary Shares as is specified in the Conversion Notice to the
custodian of the Depositary (as defined below); 

  

	 	(iii)	 the custodian confirms to the Depositary that it has received the relevant number of Ordinary Shares specified
in the Conversion Notice; and 

  

	 	(iv)	 upon receipt of such confirmation, the Depositary issues the relevant number of ADSs to the DTC Participant
Account details specified in the ADS Issuance and Delivery Instruction. 

  

	(e)	 By this deed, the Company seeks the Noteholder Majority Consent required pursuant to Clause 12
(Variation) to adopt the Amended Note Instrument in the form attached at Schedule 2 hereto so as to effect the amendments outlined at Recitals (a)-(d) above and detailed in the form of the Amended Note Instrument. 

  
 2 

 IT IS AGREED as follows: 
  

	1	 DEFINITIONS AND INTERPRETATION 

 

	1.1	 Definitions 

In this Deed: 
  

			
	ADS	  	has the meaning given in Recital (b);
		
	AIM	  	has the meaning given in Recital (b);
		
	Amended Note Instrument	  	means the Note Instrument, as amended by this Deed, in the form attached hereto at Schedule 1;
		
	Conversion Notice	  	has the meaning given in Recital (d);
		
	Delisting	  	has the meaning given in Recital (b);
		
	Depositary	  	means the Depositary engaged by the Company for the issuance and transfer of ADSs, being Citibank N.A. as at the Effective Date;
		
	Effective Date	  	the date of this Deed; and
		
	Note Instrument	  	has the meaning given in Recital (a).

  

	1.2	 Interpretation 

The principles of construction set out in the Note Instrument shall have effect as if set out in this Deed. 

 

	1.3	 Clauses 

In this Deed any reference to a “Clause” or a “Schedule” is, unless the context otherwise requires, a reference to a Clause
in or a Schedule to this Deed. 
  

	1.4	 Third party rights 

A Person who is not a party to this Deed has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit
of any term of this Deed. 
  

	2	 CONSENT 

For all purposes pursuant to the Note Instrument (in particular clause 12.1), the Noteholders hereby consent as of the Effective Date to the
adoption of the Amended Note Instrument by the Company on the terms set out in this Deed. 

  
 3 

	3	 AMENDMENT, WAIVER AND DELIVERY OF AMENDED NOTE INSTRUMENT 

 

	3.1	 Amendment 

With effect from the Effective Date, the Note Instrument shall be amended so as to include all the changes marked within the version of the
Note Instrument as set out in Schedule 1 (Amended Note Instrument). The amendment of the Note Instrument is without prejudice to the rights of any of the parties to the Note Instrument in respect of matters that arose prior to the Effective Date.
For the avoidance of doubt and for the future reference of the Noteholders, the Company, their successors in title and any other persons with an interest in the Notes or the terms of the Note Instrument (if any), Schedule 2 attaches a complete and
clean copy of the Amended Note Instrument which incorporates the changes implemented pursuant to this Deed. 
  

	3.2	 Waiver 

The adoption of the Amended Note Instrument by the Company constitutes a variation for the purposes of clause 12.1 of the Note Instrument and
is binding on all Noteholders. 
  

	3.3	 Delivery of Amended Note Instrument 

No later than 5 Business Days after the Effective Date, the Company shall dispatch an executed copy of the Amended Note Instrument to each
Noteholder. 
  

	4	 CONTINUITY AND FURTHER ASSURANCE 

 

	4.1	 Continuing obligations 

The provisions of the Note Instrument shall, save as amended by this Deed, continue in full force and effect and any Notes in issue shall, from
the Effective Date, be construed in accordance with the terms of the Amended Note Instrument. 
  

	4.2	 Further assurance 

The Company and each of the Noteholders, shall, at the request of the Company or the Noteholder Majority (as the case may be) and at their own
expense, do all such acts and things necessary to give effect to the amendments effected or to be effected pursuant to this Deed. 
  

	5	 COSTS AND EXPENSES 

Each Party shall be responsible for all costs and expenses (including but not limited to legal fees) it incurs in connection with the
negotiation, preparation, printing and execution of this Deed and any other documents referred to in this Deed. 
  

	6	 MISCELLANEOUS 

 

	6.1	 Incorporation of terms 

The provisions of clause 14 (Notices) of the Note Instrument shall be incorporated into this Deed as if set out in full in this Deed and as if
references in that clause to “this Instrument” are references to this Deed. 

  
 4 

	6.2	 Counterparts 

This Deed may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single
copy of this Deed. 
  

	7	 GOVERNING LAW 

This Deed and any non-contractual obligations arising out of or in connection with it are governed by English law. 

This Deed has been entered into and delivered on the date stated at the beginning of this Deed. 

  
 5 

 SCHEDULE 1 AMENDED NOTE INSTRUMENT (MARKED CHANGES) 

  
 6 

 THIS INSTRUMENT AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN APPLICABLE
EXEMPTION THEREFROM. 

DATED                 JUNEDECEMBER 2020 

AMENDED
 CONVERTIBLE LOAN NOTE INSTRUMENT
DATED 3
JUNE 2020
 
 RELATING TO 

MEREO BIOPHARMA GROUP PLC 

  
 1 

 CONTENTS 
  

							
	 1.
	 	Interpretation	  	 	4	 
			
	 2.
	 	Amount and description of notes	  	 	11	 
			
	 3.
	 	Status of notes	  	 	12	 
			
	 4.
	 	Use of Proceeds	  	 	13	 
			
	 5.
	 	Repayment of Notes	  	 	13	 
			
	 6.
	 	Interest	  	 	13	 
			
	 7.
	 	Certificates	  	 	14	 
			
	 8.
	 	The Register	  	 	14	 
			
	 9.
	 	Notes not to be quoted	  	 	15	 
			
	 10.
	 	Set-off	  	 	15	 
			
	 11.
	 	Meetings of Noteholders	  	 	16	 
			
	 12.
	 	Variation	  	 	16	 
			
	 13.
	 	Enforcement and third party rights	  	 	16	 
			
	 14.
	 	Notices	  	 	17	 
			
	 15.
	 	Governing law and jurisdiction	  	 	17	 
		
	 SCHEDULE 1
	  	 	1618	 
			
	 Part 1.
	 	 -Form of Tranche 1 Note Certificate
	  	 	1618	 
			
	 Part 2.
	 	 -Form of Tranche 2 Note Certificate
	  	 	1820	 
			
	 Part 3.
	 	-Form of Tranche 3 Note Certificate	  	 	2022	 
		
	 SCHEDULE 2 THE CONDITIONS
	  	 	2224	 
			
	 Part 1.
	 	 Interest, repayment and redemption
	  	 	2224	 
			
	 1.
	 	 Interest
	  	 	2224	 
			
	 2.
	 	 Repayment of principal
	  	 	2325	 
			
	 3.
	 	 Time of payment
	  	 	2527	 
			
	 4.
	 	 Redemption
	  	 	2527	 
			
	 5.
	 	 Events of Default
	  	 	3133	 
			
	 6.
	 	 Action following Event of Default
	  	 	3234	 
			
	 7.
	 	 Taxation
	  	 	3235	 
			
	 Part 2.
	 	 Conversion
	  	 	3436	 
			
	 1.
	 	 Conversion
	  	 	3436	 
			
	 2.
	 	 Procedures on conversion
	  	 	3538	 
			
	 Part 3.
	 	Transfer provisions, Undertakings and other matters	  	 	3740	 
			
	
Part 4.
	 	ADS Issuance and Delivery Instruction	  	 	46	 
		
	 SCHEDULE 3 MEETINGS OF
THE NOTEHOLDERS
	  	 	4349	 

  
 2 

 THIS INSTRUMENT is made as a deed poll on 3 June 2020 and as amended on 9 June 2020 and December 2020. 
 BY 

MEREO BIOPHARMA GROUP PLC incorporated and registered in England and Wales with company number 09481161 whose registered office is at 4th Floor, 1
Cavendish Place, London W1G 0QF, United Kingdom (the “Company”). 
 WHEREAS: 

 

	A.	 TheOn 3 June 2020
the Company is enteringentered into certain financing transactions on or
around the date hereof, pursuant to which OrbiMed Partners Master Fund Limited, OrbiMed Genesis Master Fund L.P. and OrbiMed Private Investments VII, LP (the “Lead Investors”) and certain other investors (the
“Investors”) shall be subscribingsubscribed for the following securities of the Company:
(x) a unit (referred to for convenience as “Ordinary Units”), consisting of (i) one ordinary share of the Company with a nominal value of £0.003 per share (such class of shares, the “Ordinary
Shares,” and all such shares to be issued to the Purchasers, the “Shares”) together with (ii) one warrant to subscribe for 0.50 Ordinary Shares (all such warrants to be issued to the Purchasers, the “Ordinary
Warrants”), at a purchase price of £0.174 per Unit and (y) a unit (referred to for convenience as the “Convertible Units”) consisting of (i) one Note together with (ii) warrants to subscribe for a number of
Ordinary Shares equal to 0.5 times the number of Ordinary Shares issuable upon conversion of each Note (all such warrants to be issued to the Purchasers, the “Note Warrants” and together with the Ordinary Warrants (the
“Warrants”) (the issuance of the foregoing Ordinary Units and Convertible Units collectively , the “Transaction”). 

  

	B.	 By exercise of the powers conferred on them by the Articles, the Directors of the Company have, by a
resolution passed on 1 June 2020, resolved to create, and to constitute the Notes hereunder. 

  

	C.	 This Instrument constitutes the Notes. 

 

	D.	 The Company and its subsidiaries are parties to an existing senior secured loan agreement in the
principal amount of £20,455,000 with Silicon Valley Bank (as lender) (“SVB”) and Kreos Capital V (UK) Limited (as lender, agent and security agent) (“Kreos”), dated 28 September 2018 (as updated and
amended from time to time) (the “Senior Loan”). 

  
 3 

	E.	 The Notes created hereunder shall be subordinated to the Senior Loan by entry into a separate
subordination deed between the Noteholders, Kreos and SVB on or around the date hereof (the “Subordination Agreement”). 

AGREED TERMS 
  

	1.	 INTERPRETATION 

 

	1.1	 The definitions and rules of interpretation in this clause apply in this Instrument. 

 

	1.2	 Acceleration Date: has the meaning given in paragraph 4 of Part 1 of Schedule 2. 

ADS: has the meaning given in the Securities Purchase Agreement. 

ADS Exchange
Ratio: means the ratio applicable to the exchange of Ordinary Shares for ADSs from time to time, currently being a ratio of 5 Ordinary Shares for each ADS. 

Affiliate: means a person that owns or controls directly or indirectly another person, any person that controls or is controlled by or
is under common control with the person, including, without limitation, any subsidiaries, and any of that person’s general or limited partners, senior executive officers, directors and, for any person that is a limited liability company, that
person’s managers and members or any venture capital fund or registered investment company now or hereafter existing that is controlled by one or more general partners or managing members or investment advisor of, or shares the same management
company or investors advisor (or member thereof) with, such person. 
 Alternative Warrant Conversion Notice: has the meaning given in
the Securities Purchase Agreement. 
 Articles: means the articles of association of the Company, as amended or superseded. 

Business Day: means any day other than Saturday, Sunday or federal legal holiday in the United States of America, or public holiday or
bank holiday in the United Kingdom. 
 Certificate: means a Tranche 1 Note Certificate, a Tranche 2 Note Certificate or a Tranche 3
Note Certificate, as applicable. 

  
 4 

 Change of Control: means, (a) in one transaction or a series of related
transactions, a person or one or more persons acting in concert, acquiring (i) all (or substantially all) of the share capital or assets of the Company, or (ii) more than fifty percent (50%) of the outstanding equity or other securities of
the Company; or (b) any merger, consolidation, reorganisation, or business combination as a result of which the majority equity or other security holders of the Company immediately preceding such transaction (s) hold less than fifty
percent (50%) of the outstanding voting power, respectively, of the ultimate company or entity resulting from such transaction(s) immediately after consummation of such transaction. In the foregoing case, “acting in concert” means a
group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition and/or ownership of voting shares in the Company, to obtain or consolidate control (directly or indirectly) of
the Company provided that the persons voting in the same or consistent manner at any general meeting of the Company will not be considered to be acting in concert by virtue only of exercising their votes in such manner. 

Change of Control Payment: has the meaning given in paragraph 4.12 of Part 1 of Schedule 2. 

Closing Price: means: (i) if at the relevant time the Ordinary Shares continue to be admitted to trading on AIM, the most recently
reported closing price of one Ordinary Share on AIM; or (ii) if at the relevant time the Shares are no longer admitted to trading on AIM, the implied price of one Ordinary Share in pounds sterling by reference to the most recently reported
closing price of an ADS on Nasdaq. 
 Conditions: means the conditions attaching to the Notes, as set out in Schedule 2 (as amended
from time to time in accordance with this Instrument). 
 Conversion Date: means (i) in the case of Tranche 1 Notes being
converted automatically following Shareholder Approval pursuant to the provisions of paragraph 1.2 of Part 2 of Schedule 2, the date on which such Shareholder Approval is granted; and/or (ii), in the case of an Uplift Notice or Pay Down Notice, the
date specified in such notice; and/or (iii) in all other cases, the date falling 5 Business Days after service of the Conversion Notice. 

Conversion Notice: means a notice in writing served by a Noteholder to the Company to convert all or, if the Ownership Limit applies,
some of its outstanding Notes. 
 Default Rate: means the Tranche 1 Default Rate, Tranche 2 Default Rate or Tranche 3 Default Rate (as
applicable). 

Depositary:
 has the meaning given in the Securities Purchase Agreement. 
 Directors:
means the board of directors of the Company, or a duly authorised committee of that board, for the time being. 
 Effective Date:
means the date of this Deed. 

  
 5 

 Event of Default: means any of the events set out in paragraph 5 of Part 1 of
Schedule 2. 
 Existing Indebtedness: means any indebtedness incurred by a Group Company and outstanding on or prior to the Effective
Date (which for the avoidance of doubt shall include indebtedness pursuant to the Senior Loan and the Novartis Loan Note). 
 Group
Company: means each of the Company and its subsidiaries. 
 Interest Rate: has the meaning given in paragraph 1 of Part 1 of
Schedule 2. 
 Kreos: has the meaning given in the recitals of this Instrument. 

Lead Investors: has the meaning given in the recitals of this Instrument. 

Nasdaq: means the Nasdaq Global Market or the Nasdaq Capital Market (as applicable). 

Notes: means the Tranche 1 Notes, the Tranche 2 Notes or the Tranche 3 Notes, as applicable. 

Noteholder: means a person for the time being entered in the Register as holder of any Notes. 

Noteholder Majority: means Noteholders holding more than 50% of the principal amount of all outstanding Notes. 

Noteholder Majority Consent: means the consent of a Noteholder Majority provided either at a meeting of Noteholders or in writing, in
each case in accordance with the requirements of Schedule 3. 
 Novartis: means Novartis Pharma AG, a company incorporated under the
laws of Switzerland. 
 Novartis Loan Note: means the convertible loan note originally issued by the Company to Novartis in the
principal amount of £3,841,479 on 8 February 2020. 
 Ordinary Shares: means the ordinary shares of £0.003 each
in the capital of the Company, which have the rights set out in the Articles. 
 Original Warrantholder: has the meaning given in the
Securities Purchase Agreement. 
 Ownership Limit: has the meaning given in paragraph 1.2 of Part 2 of Schedule 2. 

Pay Down Issue: has the meaning given in paragraph 4.7 of Part 1 of Schedule 2. 

Pay Down Notice: has the meaning given in paragraph 4.7 of Part 1 of Schedule 2. 

Pay Down Securities: has the meaning given in paragraph 4.7 of Part 1 of Schedule 2. 

  
 6 

 Pay Down Reduction Amount: has the meaning given in paragraph 4.8 of Part 1 of
Schedule 2. 
 Qualifying Noteholder: means any Noteholder holding Notes with a principal amount of £6,004,803.84 million or greater. 

Redemption Date: has the meaning given in paragraph 4.1 of Part 1 of Schedule 2. 

Redemption Notice: has the meaning given in paragraph 4.13 of Part 1 of Schedule 2. 

Register: means a register of Noteholders referred to in, and kept and maintained in accordance with, clause 8. 

Registered Office: means the registered office of the Company from time to time. 

Securities Purchase Agreement: means the agreement governing the purchase of Ordinary Shares comprising the Transaction among, inter
alios, the Company, the Lead Investors and the other Investors party thereto, dated on or around the date hereof. 
 Senior
Lenders: means SVB and Kreos (and each of them individually, a “Senior Lender”) and/or their respective successors in title. 

Senior Loan: has the meaning given in the recitals of this Instrument. 

Shareholder Approval: has the meaning given in the Securities Purchase Agreement. 

Shareholders Meeting: has the meaning given in the Securities Purchase Agreement. 

Shares: has the meaning given in the recitals of this Instrument. 

Subordination Agreement: has the meaning given in the recitals of this Instrument. 

SVB: has the meaning given in the recitals of this Instrument. 

Tranche 1 Conversion Price: £0.174 per Ordinary Share, subject to adjustment as set forth in Part 3 of Schedule 2. 

Tranche 2 Conversion Price: £0.348 per Ordinary Share, subject to adjustment as set forth in Part 3 of Schedule 2. 

Tranche 1 Default Rate: has the meaning given in paragraph 1.1 of Part 1 of Schedule 2. 

Tranche 2 Default Rate: has the meaning given in paragraph 1.2 of Part 1 of Schedule 2. 

Tranche 3 Default Rate: has the meaning given in paragraph 1.3 of Part 1 of Schedule 2. 

  
 7 

 Tranche 1 Extension Option: has the meaning given in paragraph 2.3 of Part 1 of
Schedule 2. 
 Tranche 1 Extension Notice: has the meaning given in paragraph 2.3 of Part 1 of Schedule 2. 

Tranche 2 Extension Option: has the meaning given in paragraph 2.5 of Part 1 of Schedule 2. 

Tranche 2 Extension Notice: has the meaning given in paragraph 2.5 of Part 1 of Schedule 2. 

Tranche 3 Extension Option: has the meaning given in paragraph 2.7 of Part 1 of Schedule 2. 

Tranche 3 Extension Notice: has the meaning given in paragraph 2.7 of Part 1 of Schedule 2. 

Tranche 1 Maturity Date: means 3 June 2023 or, in respect of any Tranche 1 Notes held by a Qualifying Noteholder, such later date
as may be applicable following exercise of the Tranche 1 Extension Option. 
 Tranche 2 Maturity Date: means the date falling three
years from the date of issue of such Tranche 2 Notes, or in respect of any Tranche 2 Notes held by a Qualifying Noteholder, such later date as may be applicable following exercise of the Tranche 2 Extension Option. 

Tranche 3 Maturity Date: means 3 June 2025 or, in respect of any Tranche 3 Notes held by a Qualifying Noteholder, such later date
as may be applicable following exercise of the Tranche 3 Extension Option and acceptance by the Company of the same. 
 Tranche 1 Note
Certificate: a certificate for Tranche 1 Notes in the form (or substantially in the form) set out in Part 1 of Schedule 1. 
 Tranche
2 Note Certificate: a certificate for Tranche 2 Notes in the form (or substantially in the form) set out in Part 2 of Schedule 1. 

Tranche 3 Note Certificate: a certificate for Tranche 3 Notes in the form (or substantially in the form) set out in Part 3 of Schedule
1. 
 Tranche 1 Noteholder: means a Noteholder holding Tranche 1 Notes.  

Tranche 2 Noteholder: means a Noteholder holding Tranche 2 Notes.  

Tranche 3 Noteholder: means a Noteholder holding Tranche 3 Notes. 

Tranche 1 Notes: up to £40,533,671 in aggregate unsecured convertible loan notes of £1 principal amount each, maturing on
the Tranche 1 Maturity Date constituted by this Instrument or, as the case may be, the principal amount of such loan notes for the time being issued and outstanding, and principal amount shall be construed accordingly. 

  
 8 

 Tranche 2 Notes: up to £40,032,025 in aggregate unsecured convertible loan
notes of £1 principal amount each, maturing on the Tranche 2 Maturity Date constituted by this Instrument or, as the case may be, the principal amount of such loan notes for the time being issued and outstanding, and principal amount
shall be construed accordingly. 
 Tranche 3 Notes: up to £56,044,831 in aggregate unsecured loan notes of £1 principal
amount each, maturing on the Tranche 3 Maturity Date constituted by this Instrument or, as the case may be, the principal amount of such loan notes for the time being issued and outstanding, and principal amount shall be construed
accordingly. 
 Transaction: has the meaning given in the recitals of this Instrument. 

Uplift Allocation Notice: has the meaning given in paragraph 4.3 of part 1 of Schedule 2. 

Uplift Reduction Amount: has the meaning given in paragraph 4.4 of part 1 of Schedule 2. 

Uplift Securities: has the meaning given in paragraph 4.3 of part 1 of Schedule 2. 

Warrant: has the meaning given in the recitals of this Instrument. 

Warrant Instrument: means the instrument constituting the Warrants dated on or about the Effective Date. 

 

	1.3	 Clause, Schedule and paragraph headings shall not affect the interpretation of this Instrument.

  

	1.4	 References to clauses and Schedules are to the clauses of and Schedules to this Instrument and references to
paragraphs are to paragraphs of the relevant Schedule. 

  

	1.5	 The Schedules (including, for the avoidance of doubt, the Conditions) form part of this Instrument and shall
have effect as if set out in full in the body of this Instrument. Any reference to this Instrument includes the Schedules. 

  

	1.6	 A reference to this Instrument, the Conditions or to any other agreement or document referred to
in this Instrument or the Conditions is a reference to this Instrument (which shall include the Conditions), the Conditions or such other agreement or document as varied or novated in accordance with their terms from time to time.

  
 9 

	1.7	 Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall
include the singular. 

  

	1.8	 Unless the context otherwise requires, a reference to one gender shall include a reference to the other
genders. 

  

	1.9	 A person includes a natural person, corporate or unincorporated body (whether or not having separate
legal personality) and that person’s personal representatives, successors and permitted assigns. 

  

	1.10	 A reference to a company shall include any company, corporation or other body corporate, wherever and
however incorporated or established. 

  

	1.11	 A reference to a holding company or a subsidiary means a holding company or a subsidiary (as the
case may be) as defined in section 1159 of the Companies Act 2006. 

  

	1.12	 A reference to writing or written includes fax but not e-mail (unless otherwise expressly
provided in this Instrument). 

  

	1.13	 Any words following the terms including, include, in particular, for example or any
similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms. 

 

	1.14	 Where the context permits, other and otherwise are illustrative and shall not limit the sense of
the words preceding them. 

  

	1.15	 A reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted from
time to time. 

  

	1.16	 A reference to a statute or statutory provision shall include all subordinate legislation made from time to
time under that statute or statutory provision. 

  

	1.17	 Any obligation on a person not to do something includes an obligation not to allow that thing to be done.

  

	1.18	 A reference in this Instrument to: 

  
 10 

	 	(a)	 any Notes being outstanding means such Notes as are in issue, not redeemed, not converted and not
cancelled at the relevant time; 

  

	 	(b)	 the assets of any person shall be construed as a reference to all or any part of its business,
undertaking, property, assets, revenues (including any right to receive revenues) and uncalled capital; 

  

	 	(c)	 indebtedness shall be construed as a reference to any obligation for the payment or repayment of money,
whether as principal or as surety and whether present or future, actual or contingent; 

  

	 	(d)	 repayment includes redemption and vice versa and the words repay, redeem, repayable, redeemed and
repaid shall be construed accordingly; 

  

	 	(e)	 $ or USD denotes the lawful currency of the United States of America; 

 

	 	(f)	 £ or sterling denotes the lawful currency of the United Kingdom; and 

 

	 	(g)	 tax shall be construed so as to include any present and future tax, levy, impost, deduction,
withholding, duty or other charge of a similar nature (including, without limitation, any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same). 

 

	1.19	 Unless the context otherwise requires, a reference to the Notes includes a reference to all and/or any
of the Notes. 

  

	2.	 AMOUNT AND DESCRIPTION OF NOTES

  

	2.1	 The aggregate principal amount of the Tranche 1 Notes is limited to £40,533,671. 

 

	2.2	 The aggregate principal amount of the Tranche 2 Notes is limited to £40,032,025. 

 

	2.3	 The aggregate principal amount of the Tranche 3 Notes is limited to £56,044,831. 

 

	2.4	 The Tranche 1 Notes shall be known as the unsecured convertible loan notes due 2023 and shall be issued by the
Company in integral multiples of £1. 

  

	2.5	 The Tranche 2 Notes shall be known as the unsecured convertible loan notes due 2026 and shall be issued by the
Company in integral multiples of £1. 

  

	2.6	 The Tranche 3 Notes shall be known as the unsecured loan notes due 2025 and shall be issued by the Company in
integral multiples of £1. 

  
 11 

	3.	 STATUS OF NOTES 

 

	3.1	 The Notes when issued and outstanding shall rank pari passu, equally and rateably, without discrimination or
preference among themselves and as unsecured obligations of the Company. 

  

	3.2	 The Notes shall be issued and held subject to and with the benefit of the provisions of this Instrument
(including the Conditions). All such provisions shall be binding on the Company and the Noteholders and all persons claiming through or under them respectively and shall enure for the benefit of all Noteholders. 

 

	3.3	 No Notes shall be issued or deemed issued pursuant to this Instrument until Closing (as defined in the
Securities Purchase Agreement) has occurred in accordance with the terms and conditions of the Securities Purchase Agreement. 

  

	3.4	 No Tranche 2 Notes shall be issued to any person who is not a Qualifying Noteholder and has not served upon the
Company an Optional Warrant Conversion Notice (as defined in the Securities Purchase Agreement) in accordance with the provisions of section 5(h)(ii) of the Securities Purchase Agreement. 

 

	3.5	 Any Qualifying Noteholder who delivers an Optional Warrant Conversion Notice (as defined in the Securities
Purchase Agreement) in accordance with the provisions of Clause section 5(h)(ii) of the Securities Purchase Agreement shall have the subscription monies paid to the Company thereunder applied towards the subscription price for Tranche 2 Notes (in
the face amount of £1 for each Tranche 2 Note issued) in accordance with section 5(h)(ii) of the Securities Purchase Agreement. The subscription price in respect of all Warrants subject to the Optional Warrant Conversion Notice shall be
aggregated for purposes of determining the number of Tranche 2 Notes issued, provided that no Tranche 2 Notes shall be issued for any part payment towards a Tranche 2 Note and after aggregation of all such amounts, any remaining fractional sums
pursuant to an Optional Warrant Conversion Notice shall be discounted when calculating the number of Tranche 2 Notes to be issued. 

  

	3.6	 No Tranche 3 Notes shall be issued to any person if the Shareholder Approval is obtained on or before
7 August, 2020. 

  
 12 

	3.7	 If the Shareholder Approval is not obtained on or before 7 August, 2020, the Company shall deliver Tranche
3 Notes (in the face amount of £1 for each Tranche 3 Note issued) to each Original Warrantholder that delivers an Alternative Warrant Conversion Notice in accordance with section 5(i)(ii) of the Securities Purchase Agreement, within five
(5) Business Days after the surrender by the holder of the certificate representing the Warrant and the delivery of the Alternative Warrant Conversion Notice. 

 

	3.8	 For so long as the Senior Loan remains outstanding, no Notes shall be issued or deemed issued to any person
pursuant to this Instrument unless such person has first executed the Subordination Agreement or a deed of adherence to the Subordination Agreement (pursuant to which such person becomes bound by the terms of the Subordination Agreement) and
provided a copy of such executed document to the Company and the Senior Lenders. 

  

	4.	 USE OF PROCEEDS 

 

	4.1	 The proceeds of all subscriptions for the Notes shall be used in accordance with the terms and conditions of
Section 5(j) of the Securities Purchase Agreement. 

  

	4.2	 No part of the proceeds of any subscription for the Notes shall be used by the Company to make any dividend or
distribution to any shareholder in the Company, or for the repurchase of Ordinary Shares. 

  

	5.	 REPAYMENT OF NOTES 

 

	5.1	 The Notes shall be repaid in accordance with Part 1 of Schedule 2. 

 

	5.2	 All Notes repaid by the Company shall be automatically and immediately cancelled and shall not be reissued.

  

	6.	 INTEREST 

Until the Notes are repaid by the Company or converted into Ordinary Shares, in each case in accordance with the provisions of this Instrument,
interest shall accrue and be paid on the principal amount of the Notes outstanding at the rate and in the manner provided in Part 1 of Schedule 2. 

  
 13 

	7.	 CERTIFICATES 

 

	7.1	 Each Noteholder (or the joint holders of any Notes) shall be entitled to receive, without charge, one Tranche 1
Note Certificate and/or Tranche 2 Note Certificate and/or Tranche 3 Note Certificate (as applicable) for the Tranche 1 Notes and/or Tranche 2 Notes and/or Tranche 3 Notes registered in his (or their) names. 

 

	7.2	 Where any Notes are held jointly, the Company shall not be bound to issue more than one Certificate in respect
of such Notes and delivery of a Certificate to the person who is first named in the Register as Noteholder shall be sufficient delivery to all joint holders of such Notes. 

 

	7.3	 Each Certificate shall: 

 

	 	(a)	 bear a denoting number; 

 

	 	(b)	 indicate whether it relates to Tranche 1 Notes, Tranche 2 Notes, or Tranche 3 Notes; 

 

	 	(c)	 be issued and executed by the Company as a deed in the form (or substantially in the form) set out in Part 1 of
Schedule 1, Part 2 of Schedule 1 or Part 3 of Schedule 1 (as applicable); and 

  

	 	(d)	 have the Conditions endorsed on or attached to it. 

 

	7.4	 In the case of repayment or transfer of part only of a Noteholder’s Notes, the Certificate(s) in respect
of such Notes shall be either: 

  

	 	(a)	 endorsed with a memorandum of the nominal amount of the Notes so redeemed or transferred and the date of such
repayment or transfer; or 

  

	 	(b)	 cancelled and (without charge) replaced by a new Certificate for the balance of the principal amount of the
Notes not then repaid or transferred. 

  

	8.	 THE REGISTER 

 

	8.1	 The Company shall keep and maintain the Register at the Registered Office or (subject always to the provisions
of section 743 of the Act) at such other place as the Company may from time to time appoint for this purpose and notify to the Noteholders. 

  

	8.2	 There shall be entered in the Register: 

  
 14 

	 	(a)	 the names and addresses of the Noteholders for the time being; 

 

	 	(b)	 the principal amount of the Notes held by each Noteholder; 

 

	 	(c)	 whether the Notes held by each Noteholder are Tranche 1 Notes, Tranche 2 Notes or Tranche 3 Notes;

  

	 	(d)	 the date of issue of each of the Notes and the date on which the name of each Noteholder is entered in the
Register in respect of the Notes registered in his name; 

  

	 	(e)	 the serial number of each Certificate issued and the date of its issue; and 

 

	 	(f)	 the date(s) of all transfers and changes of ownership of any of the Notes. 

 

	8.3	 The Company shall promptly amend the Register to record any change to the name or address of a Noteholder that
is notified in writing to the Company by that Noteholder. 

  

	8.4	 The Noteholders or any of them, or any person authorised by a Noteholder, shall be at liberty at all reasonable
times during office hours to inspect the Register and to take copies of or extracts from it or any part of it. 

  

	8.5	 Every Noteholder shall be recognised by the Company as entitled to his Notes free from any equity, set-off or
cross-claim against the original or an intermediate holder of such Notes. 

  

	9.	 NOTES NOT TO BE QUOTED

 No application has been, or shall be, made (unless pursuant to paragraph 7.2 of Part 1 of Schedule 2) to any
investment exchange (whether in the United Kingdom or otherwise) for permission to deal in, or for an official or other listing or quotation, in respect of the Notes. 
  

	10.	 SET-OFF 

Payments of principal and interest in respect of the Notes shall be paid by the Company to the Noteholders in accordance with the Conditions
without any deduction or withholding (whether in respect of any set-off, counterclaim or otherwise whatsoever) unless the deduction or withholding is required by law. 

  
 15 

	11.	 MEETINGS OF NOTEHOLDERS 

Meetings of the Noteholders shall be convened and held in accordance with the provisions of Schedule 3. 

 

	12.	 VARIATION 

 

	12.1	 All or any of the rights for the time being attached to the Notes or other provisions of this Instrument may
from time to time (whether or not the Company is being wound up) be altered or abrogated with the prior written consent of a Noteholder Majority. Any such alteration or abrogation shall be effected by way of deed poll executed by the Company and
expressed to be supplemental to this Instrument. 

  

	12.2	 Modifications to this Instrument which are of a minor nature or made to correct a manifest error may be
effected by way of deed poll executed by the Company and expressed to be supplemental to this Instrument. 

  

	12.3	 The Company shall, within 5 Business Days of making any variation pursuant to this clause 12, send to each
Noteholder (or, in the case of joint holders, to the Noteholder named first in the Register) a copy of the deed poll (or other document) effecting the variation. 

 

	12.4	 Any modification, alteration or abrogation made pursuant to clause 12.1 or clause 12.2 shall be binding on all
the Noteholders. 

  

	13.	 ENFORCEMENT AND THIRD PARTY
RIGHTS 

  

	13.1	 From and after the date of this Instrument, and for so long as any Notes are outstanding or any amount is
payable or repayable by the Company in respect of the Notes, the Company undertakes to duly perform and observe its obligations under this Instrument. 

  

	13.2	 Except as expressly provided in clause 13.3, a person who is not a party to this Instrument shall not have any
rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Instrument. 

  
 16 

	13.3	 This Instrument shall operate for the benefit of all Noteholders and each Noteholder shall be entitled to sue
for the performance or observance of the provisions of this Instrument in his own right so far as his own holding of Notes is concerned. 

  

	14.	 NOTICES 

Any notice to be given to or by any Noteholder(s) for the purposes of this Instrument shall be given in accordance with the provisions of
paragraph 9 and paragraph 10 of Part 3 of Schedule 2. 
  

	15.	 GOVERNING LAW AND JURISDICTION

  

	15.1	 This Instrument and the Notes and any dispute or claim arising out of or in connection with any of them or
their subject matter or formation (including non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. 

 

	15.2	 The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of
or in connection with this Instrument or the Notes or their subject matter or formation (including non-contractual disputes or claims). 

This instrument has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it. 

  
 17 

 Schedule 1 

Part 1. - Form of Tranche 1 Note Certificate 

Certificate No. [NUMBER] 
 Date of Issue [•]
[June] 2020 
 Amount £[AMOUNT] 

MEREO BIOPHARMA GROUP PLC 

£[AMOUNT] 
 UNSECURED
CONVERTIBLE LOAN NOTES 
 Created and issued pursuant to a resolution of a duly appointed committee of the board of directors of the Company passed on
3 June 2020. 
 THIS IS TO CERTIFY THAT [NAME OF NOTEHOLDER] is the registered holder of £[AMOUNT] of the £[AMOUNT]
unsecured convertible loan notes 2023 constituted by an instrument entered into by the Company on [•] [June] 2020 (“Instrument”). These are Tranche 1 Notes. Such Tranche 1 Notes are issued with the benefit of and subject to the
provisions contained in the Instrument and the Conditions endorsed on or annexed to this Certificate. 
 Notes: 

1. The Tranche 1 Notes are repayable and shall bear interest in accordance with the Conditions. 

2. This Certificate must be surrendered to the Company before any transfer or repayment, whether of the whole or any part of the Tranche 1 Notes comprised in
it, can be registered or effected, or any new certificate issued in exchange. 
 3. Any change of address of the Noteholder(s) must be notified in writing
signed by the Noteholder(s) to the Company at the Registered Office. 
 4. Subject to the Conditions, the Tranche 1 Notes are transferable in amounts and in
integral multiples of £1. 
 5. No transfer of any part of the Tranche 1 Notes represented by this Certificate can be registered without production of
this Certificate. 
 6. Words and expressions defined in the Instrument shall bear the same meaning in this Certificate and in the Conditions. 

7. The Tranche 1 Notes and any dispute or claim arising out of or in connection with any of them or their subject matter or formation (including
non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in
connection with the Tranche 1 Notes or their subject matter or formation (including non-contractual disputes or claims). 
  

  
 18 

 8. A copy of the Instrument is available for inspection at the registered office of the Company. 

This Certificate has been executed as a deed and is delivered and takes effect on the date of issue stated at the beginning of it. 

Executed as a deed by MEREO BIOPHARMA GROUP PLC acting by [NAME OF DIRECTOR], a director 

 

			
	  

	[SIGNATURE OF DIRECTOR]
	
	Director in the presence of:

			
		
	Witness Signature:	 	
             

			
		
	Name:	 	
             

			
		
	Address:	 	
             

			
	
	Occupation
	
	Dated: [INSERT DATE]

  
 19 

 Part 2. - Form of Tranche 2 Note Certificate 

Certificate No. [NUMBER] 
 Date of Issue [•]
[•] [•] 
 Amount £[AMOUNT] 

MEREO BIOPHARMA GROUP PLC 

£[AMOUNT] 
 UNSECURED
CONVERTIBLE LOAN NOTES 
 Created and issued pursuant to a resolution of a duly appointed committee of the board of directors of the Company passed on
3 June 2020. 
 THIS IS TO CERTIFY THAT [NAME OF NOTEHOLDER] is the registered holder of £[AMOUNT] of the £[AMOUNT] unsecured convertible
loan notes with a Maturity Date of [•], constituted by an instrument entered into by the Company on [•] [June] 2020 (“Instrument”). These are Tranche 2 Notes. Such Tranche 2 Notes are issued with the benefit of and subject
to the provisions contained in the Instrument and the Conditions endorsed on or annexed to this Certificate. 
 Notes: 

1. The Tranche 2 Notes are repayable and shall bear interest in accordance with the Conditions. 

2. This Certificate must be surrendered to the Company before any transfer or repayment, whether of the whole or any part of the Tranche 2 Notes comprised in
it, can be registered or effected, or any new certificate issued in exchange. 
 3. Any change of address of the Noteholder(s) must be notified in writing
signed by the Noteholder(s) to the Company at the Registered Office. 
 4. Subject to the Conditions, the Tranche 2 Notes are transferable in amounts and in
integral multiples of £1. 
 5. No transfer of any part of the Tranche 2 Notes represented by this Certificate can be registered without production of
this Certificate. 
 6. Words and expressions defined in the Instrument shall bear the same meaning in this Certificate and in the Conditions. 

7. The Tranche 2 Notes and any dispute or claim arising out of or in connection with any of them or their subject matter or formation (including
non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in
connection with the Tranche 2 Notes or their subject matter or formation (including non-contractual disputes or claims). 

  
 20 

 8. A copy of the Instrument is available for inspection at the registered office of the Company. 

This Certificate has been executed as a deed and is delivered and takes effect on the date of issue stated at the beginning of it. 

Executed as a deed by MEREO BIOPHARMA GROUP PLC acting by [NAME OF DIRECTOR], a director 

 

			
	
	  

	[SIGNATURE OF DIRECTOR]
	
	Director in the presence of:

			
		
	Witness Signature:	 	
             

			
		
	Name:	 	
             

			
		
	Address:	 	
             

			
	
	Occupation
	
	Dated: [INSERT DATE]

  
 21 

 Part 3. - Form of Tranche 3 Note Certificate 

Certificate No. [NUMBER] 
 Date of Issue [•]
[•] [•] 
 Amount £[AMOUNT] 

MEREO BIOPHARMA GROUP PLC 

£[AMOUNT] 
 UNSECURED
LOAN NOTES 
 Created and issued pursuant to a resolution of a duly appointed committee of the board of directors of the Company passed on 3 June 2020.

 THIS IS TO CERTIFY THAT [NAME OF NOTEHOLDER] is the registered holder of £[AMOUNT] of the £[AMOUNT] unsecured loan notes with a Maturity Date
of [•] June 2025, constituted by an instrument entered into by the Company on [•] [June] 2020 (“Instrument”). These are Tranche 3 Notes. Such Tranche 3 Notes are issued with the benefit of and subject to the provisions
contained in the Instrument and the Conditions endorsed on or annexed to this Certificate. 
 Notes: 

1. The Tranche 3 Notes are repayable and shall bear interest in accordance with the Conditions. 

2. This Certificate must be surrendered to the Company before any transfer or repayment, whether of the whole or any part of the Tranche 3 Notes comprised in
it, can be registered or effected, or any new certificate issued in exchange. 
 3. Any change of address of the Noteholder(s) must be notified in writing
signed by the Noteholder(s) to the Company at the Registered Office. 
 4. Subject to the Conditions, the Tranche 3 Notes are transferable in amounts and in
integral multiples of £1. 
 5. No transfer of any part of the Tranche 3 Notes represented by this Certificate can be registered without production of
this Certificate. 
 6. Words and expressions defined in the Instrument shall bear the same meaning in this Certificate and in the Conditions. 

7. The Tranche 3 Notes and any dispute or claim arising out of or in connection with any of them or their subject matter or formation (including
non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in
connection with the Tranche 3 Notes or their subject matter or formation (including non-contractual disputes or claims). 
 8. A copy of the Instrument is
available for inspection at the registered office of the Company. 
 This Certificate has been executed as a deed and is delivered and takes effect on the
date of issue stated at the beginning of it. 

  
 22 

 Executed as a deed by MEREO BIOPHARMA GROUP PLC acting by [NAME OF DIRECTOR], a director 

 

			
	  

	[SIGNATURE OF DIRECTOR]
	
	Director in the presence of:

			
		
	Witness Signature:	 	
             

			
		
	Name:	 	
             

			
		
	Address:	 	
             

			
	
	Occupation
	
	Dated: [INSERT DATE]

  
 23 

 Schedule 2 The Conditions 

Part 1. Interest, repayment and redemption 
  

	1.	 INTEREST 

  

	1.1	 Interest shall initially be payable on any outstanding Tranche 1 Notes (so far as not converted under Part 2 of
Schedule 2) at a fixed rate of 10% per annum (the “Interest Rate”), subject to the following adjustments: 

  

	 	(a)	 if Shareholder Approval is obtained on or prior to 7 August 2020, the initial 10% rate shall be reduced to
6% per annum, with effect retroactively as of the Effective Date; 

  

	 	(b)	 if an Event of Default takes place and is not remedied by the Company in accordance with the applicable
provisions of this Part 1 of Schedule 2, the Tranche 1 Interest Rate shall be increased by 2% per annum with effect from the date of such Event of Default (or, if applicable, the expiry of any cure period applicable thereto) (the
“Tranche 1 Default Rate”); and 

  

	 	(c)	 if the Tranche 1 Extension Option is exercised, interest shall cease to be payable on the Tranche 1 Notes from
the date of the relevant Tranche 1 Extension Notice (other than any interest payable at the Tranche 1 Default Rate following an Event of Default, which, for the avoidance of doubt, shall apply at a flat rate of 2% in such circumstances and remain
payable). 

  

	1.2	 Interest shall not be payable on any outstanding Tranche 2 Notes or Tranche 3 Notes other than where an Event
of Default takes place and is not remedied by the Company in accordance with the applicable provisions of this Part 1 of Schedule 2, where interest shall be payable on the Tranche 2 Notes and/or Tranche 3 Notes (as applicable) at a rate of
2% per annum with effect from the date of such Event of Default (or, if applicable, the expiry of any cure period applicable thereto) (the “Tranche 2 Default Rate” and “Tranche 3 Default Rate”, respectively).

  

	1.3	 Any interest due under paragraphs 1.1 or 1.2 shall be payable on the Redemption Date. 

  
 24 

	1.4	 Interest, if payable, shall accrue daily at the Interest Rate and shall be calculated on the basis of a 365-day
year and the actual number of days elapsed from the date of issue of the relevant Notes to the Redemption Date. 

  

	1.5	 If the Company fails to pay redemption monies when due, interest shall accrue on the unpaid amount at the
applicable Default Rate. 

  

	2.	 REPAYMENT OF PRINCIPAL 

 

	2.1	 As and when the Notes (or any part of them) are to be redeemed in accordance with paragraph 4 of this Part 1 of
Schedule 2, the Company shall pay the Noteholders the principal amount of the Notes which are to be redeemed, subject to adjustment in accordance with paragraph 4.2 of this Part 2 of Schedule 2. 

 

	2.2	 No prepayment of the principal amount of the Notes or any interest accrued thereon prior to the earlier of the
Maturity Date or, in the event of a Change of Control, the date on which the consideration in respect of such Change of Control is remitted to the holders of Ordinary Shares, shall be permitted without the consent of a Noteholder Majority, and, if
required, the consent of the Senior Lenders pursuant to the terms of the Subordination Deed. 

  

	2.3	 At any time prior to the Tranche 1 Maturity Date, a Qualifying Noteholder may (but shall not be required to)
notify the Company that it wishes to extend the Tranche 1 Maturity Date in respect of that Noteholder’s Tranche 1 Notes to a new date to be specified in such notice provided such date is a Business Day and not later than the date 10 years after
the date of this Instrument (a “Tranche 1 Extension Notice”), and the Company shall accept such extension (the “Tranche 1 Extension Option”), whereupon the Tranche 1 Maturity Date shall be revised accordingly. A
Qualifying Noteholder may only issue a Tranche 1 Extension Notice once and any such Tranche 1 Extension Option must be used in respect of all Tranche 1 Notes held by such Qualifying Noteholder. From the date of such Tranche 1 Extension Notice, other
than amounts accrued prior to delivery of the Tranche 1 Extension Notice, no additional interest shall be payable on the Tranche 1 Notes held by the exercising Qualifying Noteholder (other than any interest which becomes payable at the Tranche 1
Default Rate). 

  
 25 

	2.4	 On the date of the Tranche 1 Extension Notice the exercising Qualifying Noteholder shall deliver to the Company
the Tranche 1 Note Certificate in respect of the Tranche 1 Notes which are the subject of such Tranche 1 Extension Notice, and the Company shall, within 5 Business Days’ of the exercise of the Tranche 1 Extension Option, issue to such
Qualifying Noteholder a replacement Tranche 1 Note Certificate bearing the revised Tranche 1 Maturity Date. 

  

	2.5	 A Qualifying Noteholder who holds both Tranche 1 Notes and Tranche 2 Notes may (but shall not be required) if
they have already served an Extension Notice (or contemporaneously with the service of an Extension Notice), notify the Company that it wishes to extend the Tranche 2 Maturity Date in respect of that Noteholder’s Tranche 2 Notes to the same
date that it has specified as the Tranche 1 Maturity Date pursuant to its Extension Notice for Tranche 1 Notes (such further notice being a “Tranche 2 Extension Notice”), and the Company shall accept such extension (the
“Tranche 2 Extension Option”), whereupon the Tranche 2 Maturity Date shall be revised accordingly. A Qualifying Noteholder may only issue a Tranche 2 Extension Notice once and any such Tranche 2 Extension Option must be used in
respect of all Tranche 2 Notes held by such Qualifying Noteholder. 

  

	2.6	 On the date of the Tranche 2 Extension Notice the exercising Qualifying Noteholder shall deliver to the Company
the Tranche 2 Note Certificate in respect of the Tranche 2 Notes which are the subject of such Tranche 2 Extension Notice, and the Company shall, within 5 Business Days’ of the exercise of the Tranche 2 Extension Option, issue to such
Qualifying Noteholder a replacement Tranche 2 Note Certificate bearing the revised Tranche 2 Maturity Date. 

  

	2.7	 Any Qualifying Noteholder who holds Tranche 3 Notes may (but shall not be required), notify the Company that it
wishes to extend the Tranche 3 Maturity Date in respect of that Qualifying Noteholder’s Tranche 3 Notes to a new date to be specified in such notice provided such date is a Business Day and not later than the date 10 years after the date of
this Instrument (such notice being a “Tranche 3 Extension Notice”). Upon receipt of a Tranche 3 Extension Notice, the Company may reject a Tranche 3 Extension Notice by providing written notice of such rejection to the Noteholder
within 30 Business Days of receipt of such Tranche 3 Extension Notice (whereupon no extension of such Noteholder’s Tranche 3 Notes shall occur). If the Company does not reject a Tranche 3 Extension Notice within such foregoing period, the
Tranche 3 Extension Notice shall be considered accepted (the “Tranche 3 Extension Option”), whereupon the Tranche 3 Maturity Date shall be revised accordingly. A Qualifying Noteholder may only issue a Tranche 3 Extension Notice once
and any such Tranche 3 Extension Option must be used in respect of all Tranche 3 Notes held by such Qualifying Noteholder. 

  
 26 

	2.8	 On the date of the Tranche 3 Extension Notice the exercising Qualifying Noteholder shall deliver to the Company
the Tranche 3 Note Certificate in respect of the Tranche 3 Notes which are the subject of such Tranche 3 Extension Notice. If the Company rejects the Tranche 3 Extension Notice, the Company shall promptly return such Tranche 3 Note Certificate to
the Noteholder. If the Tranche 3 Extension Option is accepted, the Company shall, within 5 Business Days’ of the exercise of the Tranche 3 Extension Option, issue to such Qualifying Noteholder a replacement Tranche 3 Note Certificate bearing
the revised Tranche 3 Maturity Date. 

  

	3.	 TIME OF PAYMENT 

Whenever any payment of principal (or otherwise) becomes due on a day which is not a Business Day, payment shall be made on the next following
Business Day. 
  

	4.	 REDEMPTION 

 

	4.1	 The Notes then in issue (so far as not converted under Part 2 of this Schedule 2) shall be redeemed at the
principal amount together with interest on the Notes outstanding at the applicable Interest Rate on the earlier of the following dates: 

  

	 	(a)	 the Tranche 1 Maturity Date, Tranche 2 Maturity date or Tranche 3 Maturity date (as applicable); or

  

	 	(b)	 in the event of a Change of Control, the date on which the consideration in respect of such Change of Control
is remitted to the holders of Ordinary Shares; or 

  

	 	(c)	 following the occurrence of an Event of Default and the expiry of any applicable grace period applicable to
such Event of Default as set out in paragraph 5 of this Part 1 of Schedule 2 (the date on which an Event of Default occurs or, if later, the relevant grace period (if any) expires, the “Acceleration Date”), the date specified in the
relevant Redemption Notice; 

 (the “Redemption Date”). 

 

	4.2	 Subject to paragraph 4.12 below, in the event that Shareholder Approval has not been obtained on or before
7 August 2020, in addition to the amounts otherwise payable on the Redemption Date, each Noteholder holding any Tranche 1 Notes shall be entitled to be paid an additional sum on the Redemption Date, the amount of which shall be equal to the
principal amount of the Tranche 1 Notes outstanding on 7 

  
 27 

	 	August, 2020 and held by such Noteholder in recognition of such Noteholder not being able to (i) participate in the equity of the Company through conversion of the Tranche 1 Notes, or (ii) benefit from any
Warrants that were intended to be issued to such Tranche 1 Noteholder as part of the Transaction (such sum being the “Uplift Payment”). Notwithstanding the foregoing, in the event that Shareholder Approval has not been
obtained on or before 7 August 2020, upon conversion of the Notes in accordance with Part 2 of Schedule 2, the Noteholder shall be entitled to the benefit of the Uplift Payment. In the event that the Shareholder Approval has not been obtained
on or before 7 August 2020 and a Noteholder did not attend (either in person or by proxy) any general meeting of the Company’s members called for the purposes of obtaining the Shareholder Approval and vote in favour of such Shareholder
Approval with the entirety of all voting rights available to such Noteholder, such Noteholder shall cease to be entitled to the benefit of the Uplift Payment in any circumstances. 

 

	4.3	 At any time after 7 August 2020, when (i) at least one Tranche 1 Noteholder is entitled to the Uplift
Payment pursuant to paragraph 4.2 above; (ii) the Closing Price is above the Tranche 1 Conversion Price; and (iii) the Company has authority from its shareholders to allot additional Ordinary Shares, the Company may at its discretion
notify all (but not some) Tranche 1 Noteholders that it wishes to satisfy its obligations in respect of all or any portion of the Uplift Payment by the issuance of further Ordinary Shares pro rata to all Noteholder(s) (such Ordinary Shares being
“Uplift Securities”) (such notice an “Uplift Allocation Notice”). 

  

	4.4	 The amount of the Uplift Payment to be satisfied by the Uplift Securities shall be calculated by: multiplying
(x) being the number of Uplift Securities the Company wishes to issue, by (y) being the Tranche 1 Conversion Price (the “Uplift Reduction Amount”). 

 

	4.5	 The Uplift Allocation Notice served pursuant to paragraph 4.3 above shall specify, at a minimum:

  

	 	(a)	 the number of Uplift Securities the Company proposes to issue; 

 

	 	(b)	 each Tranche 1 Noteholder’s current percentage holding of the aggregate voting rights in the Company; and

  

	 	(c)	 the issue date of the Uplift Securities (which shall in all cases be within 5 Business Days of the date the
Uplift Allocation Notice was served). 

  
 28 

	4.6	 In the event that: 

  

	 	(a)	 there is only one Tranche 1 Noteholder, that Noteholder shall be automatically deemed to have subscribed for
the maximum number of Uplift Securities as it is possible to subscribe without the Ownership Limit of that Tranche 1 Noteholder being exceeded; and 

  

	 	(b)	 if there is more than one Tranche 1 Noteholder, each Tranche 1 Noteholder shall be automatically deemed to have
subscribed (and such subscription shall be deemed satisfied out of each Tranche 1 Noteholder’s entitlement to the Uplift Payment) for such number of Uplift Securities as is determined pro rata to each Tranche 1 Noteholder’s proportionate
entitlement to the Uplift Payment (provided that such amount does not result in the Ownership Limit being exceeded, and if it was to so result, such Tranche 1 Noteholder shall be required to subscribe for the maximum amount of Uplift Securities that
such Tranche 1 Noteholder could receive without being in breach of the Ownership Limit, any excess Uplift Securities would then be allocated to each other Tranche 1 Noteholder (who would be deemed to subscribe for the same) pro rata to their
entitlement to the Uplift Payment until either all Uplift Securities have been allocated amongst all Tranche 1 Noteholders or all Tranche 1 Noteholders have each reached the Ownership Limit), 

and in each case the Company shall issue such Uplift Securities (which shall be credited as fully paid and rank pari passu with Ordinary Shares
of the same class in issue on the Conversion Date) within 5 Business Days of the Uplift Allocation Notice and the applicable Tranche 1 Noteholder’s entitlement to the Uplift Payment shall thereon be reduced by their proportion of the Uplift
Reduction Amount. 
  

	4.7	 At any time when (i) the Company has satisfied the entirety of its obligations in respect of the Uplift
Payment through the issue of Uplift Securities pursuant to paragraphs 4.3 to 4.6 above (or the Uplift Payment has otherwise been discharged or waived); (ii) the Closing Price is above the Tranche 1 Conversion Price, and (iii) the Company
has authority from its shareholders to allot additional Ordinary Shares; the Company may notify all (but not some) of the Tranche 1 Noteholders that it wishes to satisfy its obligations in respect of an amount of interest and/or principal under the
Tranche 1 Notes by the issuance of further Ordinary Shares pro rata to all Tranche 1 Noteholders (such Ordinary Shares being “Pay Down Securities”) (such notice a “Pay Down Notice” and such process a “Pay
Down Issue”). 

  
 29 

	4.8	 The amount of principal and interest in respect of the Tranche 1 Notes to be satisfied by the issue of Pay Down
Securities shall be calculated by: multiplying (x) being the number of Pay Down Securities the Company wishes to issue, by (y) being the Tranche 1 Conversion Price (the “Pay Down Reduction Amount”). 

 

	4.9	 The Pay Down Notice served on each Tranche 1 Noteholder pursuant to paragraph 4.7 above shall specify, at a
minimum: 

  

	 	(a)	 the number of Pay Down Securities the Company proposes to issue; 

 

	 	(b)	 each Tranche 1 Noteholder’s current percentage holding of the aggregate voting rights in the Company; and

  

	 	(c)	 the issue date of the Pay Down Securities (which shall in all cases be within 5 Business Days of the date the
Pay Down Notice was served). 

  

	4.10	 In the event that: 

  

	 	(a)	 there is only one Tranche 1 Noteholder, that Tranche 1 Noteholder shall be automatically deemed to have
subscribed for the maximum number of Pay Down Securities as it is possible to subscribe without the Ownership Limit of that Tranche 1 Noteholder being exceeded; and 

 

	 	(b)	 there is more than one Tranche 1 Noteholder, each Tranche 1 Noteholder shall be automatically deemed to have
subscribed (and such subscription shall be deemed satisfied out of each Tranche 1 Noteholder’s entitlement to principal and/or interest under the Notes) for the maximum amount of Pay Down Securities that such Tranche 1 Noteholder could receive
without being in breach of the Ownership Limit, any excess Pay Down Securities would then be allocated to each other Tranche 1 Noteholder (who would be deemed to subscribe for the same) pro rata to their entitlement outstanding interest and/or
principal under the Tranche 1 Notes until either all Pay Down Securities have been allocated amongst all Tranche 1 Noteholders or all Tranche 1 Noteholders have each reached the Ownership Limit, 

and in each case the Company shall issue such Pay Down Securities (which shall be credited as fully paid and rank pari passu with Ordinary
Shares of the same class in issue on the Conversion Date) within 5 Business Days of the Pay Down Notice and the applicable Tranche 1 Noteholder’s entitlement to principal amount and/or interest shall thereon be reduced by their proportion of
the Pay Down Reduction Amount. 

  
 30 

	4.11	 At any time when (i) the Company has satisfied all principal and interest outstanding in respect of the
Tranche 1 Notes by the issue of Pay Down Securities; (ii) the Closing Price is above the Tranche 2 Conversion Price, and (iii) the Company has authority from its shareholders to allot additional Ordinary Shares, the Company may serve a Pay
Down Notice on the Tranche 2 Noteholders, notifying them it wishes to satisfy its obligations in respect of any interest and/or principal amount under the Tranche 2 Notes by way of a Pay Down Issue, and the provisions of the foregoing paragraphs 4.7
to 4.10 above shall apply mutatis mutandis in respect of any such Pay Down Issue in respect of the Tranche 2 Notes (and in such circumstances, for the avoidance of doubt, (y) for the purposes of calculating the Pay Down Reduction Amount
pursuant to paragraph 4.8 shall be the Tranche 2 Conversion price). At any time when (i) the Company has satisfied all principal and interest outstanding in respect of the Tranche 2 Notes by the issue of Pay Down Securities; and (ii) the
Company has authority from its shareholders to allot additional Ordinary Shares, the Company may serve a Pay Down Notice on the Tranche 3 Noteholders, notifying them it wishes to satisfy its obligations in respect of any interest and/or principal
amount under the Tranche 3 Notes by way of a Pay Down Issue, and the provisions of the foregoing paragraphs 4.7 to 4.10 above shall apply mutatis mutandis in respect of any such Pay Down Issue in respect of the Tranche 3 Notes (and in such
circumstances, for the avoidance of doubt, (y) for the purposes of calculating the Pay Down Reduction Amount in respect of Tranche 3 Notes pursuant to paragraph 4.8 shall be the weighted average of the Closing Price on the 5 Business Days
immediately prior to the date on which the Pay Down Notice is served in respect of such Tranche 3 Notes). 

  

	4.12	 In the event that (i) a Change of Control occurs on or prior to 7 August 2020 and Shareholder
Approval has not been obtained on or prior to the date of such Change of Control; or (ii) Shareholder Approval has not been obtained on or before 7 August 2020 and following 7 August 2020 but prior to the Tranche 1 Maturity Date, the
Company undergoes a Change of Control; in either case the Company shall pay or cause to be paid, within 3 Business Days of the date on which consideration in respect of such Change of Control is remitted to the holders of Ordinary Shares, to each
Noteholder, in addition to the sum payable pursuant to paragraph 4.1(b) of this Part 1 of Schedule 2, an additional sum, the amount of which shall be equal to the value of (a) minus ((b), (c) and (d)), where: 

 

	 	(a)	 is the pro rata amount of consideration which would have been received by such Noteholder in consideration for
their Ordinary Shares and Warrants (plus, to the extent they exist, any Tranche 3 Notes held by such Noteholder but without double-counting in respect of the value of any Warrants that were converted into such Tranche 3 Notes by the Noteholder) on
the Change of Control if that Shareholder Approval had been obtained on or prior to 7 August 2020 and as a result (i) all the Warrants held by such Noteholder as of the date of the Change of Control had become fully exercisable on or prior
to 7 August 2020; and (ii) all Tranche 1 Notes held by such Noteholder as of the date of the Change of Control had automatically converted into Ordinary Shares upon receipt of the Shareholder Approval; and 

  
 31 

	 	(b)	 is the aggregate of the principal amount of such Noteholder’s Tranche 1 Notes, together with any accrued
but unpaid interest thereon held by such Noteholder immediately prior to the Notes being redeemed pursuant to paragraph 4.1(b) of this Part 1 of Schedule 2; and 

 

	 	(c)	 is the pro rata amount of consideration actually received or due to be received by such Noteholder pursuant to
Section 2.10 of the Warrant Instrument in respect of Warrants held by such Noteholder as of the date of such Change of Control; and 

  

	 	(d)	 is the pro rata amount of consideration actually received or due to be received by such Noteholder (whether on
or prior to any Change of Control) in respect of any Ordinary Shares received by such Noteholder in exchange for Tranche 1 Notes pursuant to paragraphs 4.7 through 4.11 of this Schedule 2; 

(such sum being the “Change of Control Payment”). For the avoidance of doubt, if any Noteholder becomes entitled to be paid
the Change of Control Payment, such Noteholder shall cease to be entitled to the Uplift Payment pursuant to paragraph 4.2. 
  

	4.13	 Subject to paragraph 6 if the Noteholder Majority wishes to redeem the Notes following an Acceleration Date,
the Noteholder Majority shall give the Company written notice of the intention to exercise the right to redeem in accordance with the provisions of paragraph 4.1(b), together with confirmation on the date for such redemption (provided that such date
may not occur earlier than the date falling 20 Business Days after the relevant Acceleration Date), conditional always on any such Event of Default not being remedied in the case of paragraph 4.1(c) (“Redemption Notice”).

  

	4.14	 A Redemption Notice shall (unless the Company agrees otherwise) be irrevocable. 

 

	4.15	 For as long as the Subordination Agreement is in force, notwithstanding any of the provisions of paragraph 5 of
this Part 1 of Schedule 2, the Notes cannot be redeemed or repaid following an Acceleration Date until the applicable restriction in the Subordination Agreement has expired or been waived by the Senior Lenders; provided that such delay in payment
shall constitute an additional Event of Default hereunder. 

  
 32 

	4.16	 On the Redemption Date, the Company shall repay to all Noteholders the principal amount of the Notes so
redeemed, together with interest on such Notes outstanding at the applicable Interest Rate, and, if applicable, the Uplift Payment payable pursuant to paragraph 4.2. 

 

	4.17	 If, on redemption of a Note, a Noteholder fails to deliver the Certificate for it, or an indemnity in
accordance with these Conditions or to accept payment of moneys due to him, the Company shall pay the moneys due to him into bank account which payment shall discharge the Company from all further obligations in respect of the Note.

  

	4.18	 The Company shall cancel any Notes repaid, redeemed or purchased and shall not reissue them.

  

	5.	 EVENTS OF DEFAULT 

Subject to paragraphs 4.15 and 6.3 of this part 1 of Schedule 2, the Notes then in issue shall become immediately redeemable at the principal
amount, together with interest on the Notes outstanding, and interest shall become payable at the applicable Default Rate, if: 
  

	 	(a)	 the Company fails to pay any interest or principal in respect of the Notes on the relevant due date;

  

	 	(b)	 the Company fails to comply in any material respect with the covenants of the Notes or any of the Conditions
and does not remedy such failure within 30 calendar days; 

  

	 	(c)	 any judgment, arbitration award, order or decree for the payment of money and that is no longer subject to an
appeal process in an amount, individually or in the aggregate of at least £1,000,000 (or its equivalent in other currencies) is rendered against any Group Company and not cured or withdrawn within 30 calendar days of such judgment, award,
order or decree; 

  

	 	(d)	 a Group Company incurs an Event of Default (as such term is defined in the Novartis Loan Note) pursuant to the
terms of the Novartis Loan Note and such Event of Default is not remedied within the greater of (i) any applicable grace period pursuant to the terms of the Novartis Loan Note; and (ii) 30 days from the occurrence of such Event of Default;
and results in the acceleration by Novartis of any indebtedness owed pursuant to the terms of the Novartis Loan Note; 

  
 33 

	(e)	 a Group Company incurs an event of default (howsoever defined) in respect of any indebtedness in a principal
amount in excess of £1,000,000 and fails to cure (or have waived) such event of default within 30 calendar days of such event of default; 

  

	(f)	 a Group Company commits a material breach of any material contract to which such Group Company is a party and
fails to cure (or have waived) such material breach within 30 calendar days of such event of default 

  

	(g)	 an encumbrancor takes possession or a receiver is appointed of the whole or the major part of the assets or
undertaking of a Group Company or if distress, execution or other legal process is levied or enforced or sued out on or against the whole or the major part of the assets of any Group Company and is not discharged, paid out, withdrawn or removed
within 30 calendar days; 

  

	(h)	 a Group Company is the subject of any proceeding in bankruptcy or for their dissolution, liquidation,
winding-up, composition or other relief under any applicable insolvency or bankruptcy laws, whether voluntary or involuntary and, if involuntary, is not dismissed within 60 calendar days of filing; 

 

	(i)	 an administration order is made in relation to any Group Company; or 

 

	(j)	 an order is made, or an effective resolution is passed, for the winding-up, liquidation, administration or
dissolution of any Group Company (except for the purpose of reorganisation or amalgamation of the Group Companies). 

  

	6.	 ACTION FOLLOWING EVENT OF DEFAULT

  

	6.1	 The Company shall give written notice to the Noteholders as soon as reasonably practicable following the
Company becoming aware of the occurrence of an event specified in paragraph 5, giving reasonable details of that event. 

  

	6.2	 Following receipt of the notice provided pursuant to paragraph 6.1 above, and, if applicable, the expiry of any
cure period provided for such Event of Default, the Noteholders shall have a period of 10 Business Days in which they may exercise their right to waive such Event of Default by Noteholder Majority Consent. 

 

	6.3	 If the Noteholder Majority waives any Event of Default then the Notes shall cease to be immediately redeemable,
and no further interest shall accrue at the applicable Default Rate in respect of such Event of Default (for the avoidance of doubt, notwithstanding such waiver, the Noteholders’ shall remain entitled to any interest accrued at the applicable
Default Rate between the date of the Event of Default and the date of waiver by the Noteholder Majority). 

  
 34 

	7.	 TAXATION 

 

	7.1	 All payments to be made by the Company to a Noteholder under the Note shall be made free and clear of and
without any deduction or withholding for or on account of tax (a “Tax Deduction”), unless a Tax Deduction is required by law. If a Tax Deduction is required by law, the amount of the payment due from the Company shall be increased
to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. 

  

	7.2	 Each Noteholder shall, in consultation with the Company, take all reasonable steps to mitigate any
circumstances which arise and which would result in any amount becoming payable under or pursuant to paragraph 7.1 above, including (but not limited to) transferring its rights and obligations under this Instrument and the Notes to another affiliate
of such Noteholder and permitting the listing of the Notes on a recognised stock exchange. 

  

	7.3	 Paragraph 7.2 above does not in any way limit the obligations of the Company under this Instrument.

  

	7.4	 Each Noteholder and the Company shall co-operate in completing any procedural formalities necessary for the
Company to obtain authorisation to make that payment without a Tax Deduction including using commercially reasonable endeavours to procure that investors in such Noteholder complete such procedural formalities. 

 

	7.5	 If the Company makes an increased payment under paragraph 7.1 (a “Tax Payment”) and the
relevant Noteholder shall (and shall use commercially reasonable endeavours to procure that investors will) co-operate with the Company to take any reasonable steps to: 

 

	 	(a)	 investigate the availability of any credit against, relief or remission for, or repayment of any Tax is
attributable to that increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required (“Tax Credit”); and 

 

	 	(b)	 obtain and/or utilise that Tax Credit, 

  
 35 

 and the Noteholder shall (and shall use commercially reasonable endeavours to procure that
investors will) pay an amount to the Company which that Noteholder (or investors as applicable) determines (acting reasonably) will leave it (after that payment) in the same after-Tax position as it would have been in had some or all of the Tax
Payment not been required to be made by the Company. 
 Part 2. Conversion 

 

	1.	 CONVERSION 

 

	1.1	 Without prejudice to the provisions paragraphs 4.3 to 4.11 of Schedule 2 Part 1, the Notes shall not be capable
of conversion prior to Shareholder Approval having been obtained and no Noteholder shall serve any Conversion Notice prior to such time. 

  

	1.2	 Subject to paragraph 1.1 and paragraph 1.4 of this Part 2 of Schedule 2, all outstanding Tranche 1 Notes shall
automatically convert into a number of fully paid Ordinary Shares upon Shareholder Approval being obtained, determined by dividing(x) the sum of (i) the outstanding principal amount, plus (ii) all accrued and unpaid interest thereon, plus
(iii) any amount of the Uplift Payment (to the extent the same is applicable pursuant to the terms of this Instrument) which has become due and payable in accordance with paragraph 4.2 and has not already been paid or satisfied by the issue of
Uplift Securities (or otherwise), by (y) the Tranche 1 Conversion Price then in effect; provided that (but subject to paragraph 1.4 of this Part 2 of Schedule 2 below) following such conversion, no individual Noteholder shall hold more
than 9.99% of the aggregate voting rights in the Company (on a fully diluted basis) (the “Ownership Limit”). In the event that Conversion of any Noteholder’s holding of Notes would result in such Noteholder exceeding the
Ownership Limit, the principal amount of the Notes held by such Noteholder which shall convert shall be the greatest amount possible without that Noteholder exceeding such Ownership Limit and the remaining principal balance on such Notes shall
remain outstanding. 

  

	1.3	 Subject to paragraphs 1.1, 1.2 and 1.4 of this Part 2 of Schedule 2: 

 

	 	(a)	 each Noteholder holding Tranche 1 Notes shall have the right, at any time prior to the Tranche 1 Maturity Date,
to serve a Conversion Notice on the Company to convert all or, if the Ownership Limit applies, part of such Noteholder’s Tranche 1 Notes then outstanding (together with any accrued but unpaid interest thereon) into fully paid Ordinary Shares at
the Tranche 1 Conversion Price per Share; and 

  
 36 

	 	(b)	 each Noteholder holding Tranche 2 Notes shall have the right, at any time prior to the Tranche 2 Maturity Date
applicable to such Noteholder’s Tranche 2 Notes, to serve a Conversion Notice on the Company to convert all or, if the Ownership Limit applies, part of such Noteholder’s Tranche 2 Notes then outstanding (together with any accrued but
unpaid interest thereon) into fully paid Ordinary Shares at the Tranche 2 Conversion Price per Share, 

 provided that, in
each of the foregoing cases, at the time of the Conversion Notice, either (i) such Noteholder’s aggregate voting rights in the Company is not in excess of the Ownership Limit and would not become in excess of the Ownership Limit as a
result of the conversion contemplated by such Conversion Notice; or (ii) such Noteholder has waived the application of the Ownership Limit in accordance with paragraph 1.4 of this Part 2 of Schedule 2. 

 

	1.4	 Notwithstanding the foregoing, a Noteholder may increase or decrease the Ownership Limit to any other
percentage, by written notice to the Company; provided, that the Noteholder may not decrease the limitation prior to August 8, 2020; provided further that a waiver by the Noteholder of the Ownership Limit or a request to increase the Ownership
Limit requires not less than 61 days prior written notice to the Company (with such waiver of the Ownership Limit or request to increase the Ownership Limit taking effect only upon the expiration of such 61 day notice period and applying only to the
Noteholder and not to any other holder of Notes) and that such Ownership Limit shall never be increased above 19.99%. 

  

	1.5	 The Conversion Notice shall set out, at a minimum: 

 

	 	(a)	 the principal amount of the Tranche 1 Notes and/or Tranche 2 Notes to be converted; 

 

	 	(b)	 the amount (if any) of accrued but unpaid interest on such principal amount which is to be converted;

  

	 	(c)	 the Noteholder’s current percentage holding of the aggregate voting rights in the Company;

  

	 	(d)	 the Conversion Date; 

 

	 	(e)	 whether the Ordinary Shares
resulting from conversion are to be delivered as ADSs; and 

  

	 	(f)	 (e) any conditions (if any) applicable to the conversion and
agreed in writing in advance by the Company. 

  
 37 

	1.6	 If and to the extent that the Ordinary Shares
issued are to be delivered as ADSs, the Noteholder shall be required to deliver to the Company a completed Issuance
and Delivery Instruction in the form set out in Part 4 of this Schedule 2 (as such form may be amended from time to time by notice to the Noteholder) duly
completed and executed by the Noteholder no later than 3 Business Days following service of the relevant Conversion Notice on the Company.

  

	1.7	 In the event of any failure by a Noteholder to
deliver a duly completed Issuance and Delivery Instruction within such time period the Company shall disregard such Noteholder’s request for delivery of the relevant Ordinary Shares as ADSs and shall issue the number of Ordinary Shares
specified in the Conversion Notice to the Noteholder on the Conversion Date in accordance with paragraph 2 of this Part 2 of Schedule 2.

  

	1.8	 1.6 The Service of a Conversion Notice shall be irrevocable and binding on the
Noteholder. 

  

	2.	 PROCEDURES ON CONVERSION 

 

	2.1	 Subject to paragraph 1.1 of this Part 2 of Schedule 2, on the Conversion Date, the Directors shall convert the
principal amount of the Notes and accrued but unpaid interest and any amount of the Uplift Payment (to the extent the same is applicable pursuant to the terms of this Instrument) which has become due and payable in accordance with paragraph 4.2 and
has not already been paid or satisfied by the issue of Uplift Securities (or otherwise), into such number of new fully paid Ordinary Shares at the applicable Tranche 1 Conversion Price or Tranche 2 Conversion Price (as the case may be) as set out in
paragraph 1 of this Part 2 of Schedule 2 in accordance with the following provisions of paragraph 2.2 to paragraph 2.5 (inclusive). 

  

	2.2	 Conversion of the Notes shall be effected by the Company redeeming the relevant Notes on the Conversion Date.
Each Noteholder whose Notes are being converted shall be deemed to irrevocably authorise and instruct the Company to apply the redemption moneys payable to that Noteholder in subscribing for Ordinary Shares on conversion of the Notes.

  
 38 

	2.3	 In the event that a Noteholder has stated in the
relevant Conversion Notice that the Ordinary Shares arising from conversion are to be delivered as ADSs, and there is an effective registration statement covering the Ordinary Shares to be issued on such conversion, then such Ordinary Shares may be
issued to, and deposited with (and otherwise registered in the name of) the custodian (or its nominee) of the Depositary, and following such issuance and deposit the Company will direct the Depositary to issue an amount of ADSs via DTC (with such
ADSs being eligible for listing on Nasdaq) in accordance with the corresponding Issuance and Delivery Instruction. 

  

	2.4	 2.3 Ordinary Shares arising on conversion of the Notes (and any applicable
accrued but unpaid interest) shall be issued and allotted by the Company to the Noteholder or (where a Noteholder has delivered an Issuance and Delivery Instruction) to
the custodian of the Depositary on the Conversion Date and the certificates (if physical certificates are requested by such Noteholder) for such Ordinary Shares shall be despatched to the persons entitled to them at their own risk.

  

	2.5	 2.4 The Ordinary Shares arising on conversion of the Notes shall
be credited as fully paid and rank pari passu with Ordinary Shares of the same class in issue on the Conversion Date and shall carry the right to receive all dividends and other distributions declared, made or paid after the Conversion Date.

  

	2.6	 2.5 The entitlement of each Noteholder to a fraction of a Share
shall be rounded down to the nearest whole number of Ordinary Shares which result from the conversion of the Notes. 

  

	2.7	 In the event that a Noteholder
requires Ordinary Shares arising on conversion to be delivered as ADSs, the entitlement of such Noteholder to ADSs shall be calculated using the ADS Exchange Ratio. No fractional ADSs will be issued, and any fractional entitlements to an ADS shall
be issued to the relevant Noteholder in the form of Ordinary Shares in accordance with Part 2 of this Schedule 2, rounded down to the nearest whole share. 

 

	2.8	 2.6 In the event that the Ordinary Shares in issue on the Conversion Date are
traded on the AIM Market operated by London Stock Exchange plc, the Company shall use its reasonable best endeavours to ensure that the Ordinary Shares to be issued upon the conversion of the relevant Notes are admitted to trading on the AIM Market
as soon as reasonably practicable following the Conversion Date. In addition, as soon as practicable following the general meeting at which the Company seeks to obtain Shareholder Approval, the Company shall make or cause to be made an application
to AIM for a block listing (up to the maximum amount available to the Company under AIM block listing rules and in consideration of block listings registered at the 

  
 39 

	 	time of this Agreement) or otherwise to admit upon Admission or as soon as permitted by AIM thereafter the maximum number of Ordinary Shares that may be acquired upon conversion of the Notes. Further, the Company shall
list the Ordinary Shares issuable upon conversion of the Notes on each other securities exchange on which the Ordinary Shares are then listed and/or admitted to trading. 

Part 3. Transfer provisions, Undertakings and other matters 
  

	1.	 The Company shall recognise the registered holder of any Notes as the absolute owner of them and shall not
(except as provided by statute or as ordered by a court of competent jurisdiction) be bound to take notice or see to the execution of any trust (whether express, implied or constructive) to which any Note may be subject. The Company shall not
(except as provided by statute or as ordered by a court of competent jurisdiction) be bound to enter any notice of any trust (whether express, implied or constructive) on the register in respect of any of the Notes. 

The Notes are freely transferable in accordance with this Part 3 of Schedule 2 in integral multiples of £1 by instrument in writing in
the usual common form (or in such other form as the Directors may approve) and such instrument need not be under seal. Additionally and, notwithstanding any other provision of this Instrument, for so long as the Subordination Agreement remains in
force and effect, no transfer of the Notes may take place unless the transferee in respect of those Notes being transferred is either a party to the Subordination Agreement or has entered into a deed of adherence to be bound by the terms of such
Subordination Agreement, or has otherwise entered into subordination arrangements with the Senior Lenders in writing or the requirement to enter into subordination arrangements with the Senior Lenders has been otherwise waived by the Senior Lenders
in writing in advance of such intended transfer of the Notes; any attempt to transfer Notes in breach of the foregoing provisions is void ab initio. 
  

	2.	 Each instrument of transfer shall be signed by the transferor, and the transferor shall be deemed to remain the
owner of the Notes to be transferred until the name of the transferee is entered in the register in respect of such Notes. 

  

	3.	 Each instrument of transfer shall be sent to, or left for registration at, the registered office of the Company
for the time being, and shall be accompanied by the Certificate(s) for the Notes to be transferred and any other evidence that the Company may require to prove the title of the transferor or his right to transfer the Notes (and, if such instrument
is executed by some other person on his behalf, the authority of that person to do so). All instruments of transfer that are registered may be retained by the Company. 

  
 40 

	4.	 No transfer of Notes shall be registered in respect of which a Redemption Notice, an Uplift Allocation Notice,
a Pay Down Notice or Conversion Notice has been given. 

  

	5.	 The Company undertakes that, while an aggregate principal amount of Notes greater than £10,000,000
remains in issue, it shall not, without prior Noteholder Majority Consent: 

  

	 	(a)	 sell, transfer, lease, licence or otherwise dispose of any material asset or business of any Group Company
(including the sale, transfer or other disposition of a Group Company’s rights to a third party), other than in the ordinary course of business; 

  

	 	(b)	 carry out any merger, reorganisation, restructuring or sale of all or substantially all of the assets and/or
business of any Group Company; 

  

	 	(c)	 effect the liquidation, dissolution, or winding of any Group Company, or the cessation of all or substantially
all of the business of any Group Company; 

  

	 	(d)	 authorise any debt security (the incurrence, or extension of any credit or loan guarantee in respect of any
loan or grant of credit exceeding £800,640.512(save that, for the avoidance of doubt, no Noteholder Majority Consent shall be required for (i) any refinancing, in whole or in part, of any Existing Indebtedness; or (ii) the
subscription by any Qualifying Noteholder (and the issuance by the Company) for any Tranche 2 Notes pursuant to the Securities Purchase Agreement); 

  

	 	(e)	 discontinue any existing line of business of any Group Company or enter into any new line of line of business
by any Group Company; or 

  

	 	(f)	 issue any securities senior to the Ordinary Shares with respect to voting rights, dividends, conversion rights,
redemption rights, liquidation preference or otherwise. 

  

	6.	 Payment of the principal amount and all accrued interest on the Notes may be made by cheque made payable to, or
by bank transfer to an account nominated for the purpose to the Company in writing by, the registered holder or, in the case of joint registered holders, to the one who is first-named on the register, or to such person or persons as the registered
holder or all the joint registered holders may in writing direct and sent to the registered holder or in the case of joint registered holders to that one of the joint registered holders who is first-named on the register or to such

  
 41 

	 	address as the registered holder or joint registered holders may in writing direct. Cheques may be sent through the post at the risk of the registered holder or jointly registered holders and payment of any such cheque
by the bankers on whom it is drawn, or a bank transfer to the relevant account, shall be good discharge to the Company. 

  

	7.	 If more than one person is entered in the register as joint holders of any Notes then, without prejudice to
paragraph 5 of this Part 3 of Schedule 2, the receipt of any one of such holders for any moneys payable on or in respect of the Notes shall be as effective a discharge to the Company or other person making the payment as if the person signing such
receipt were the sole registered holder of such Notes. 

  

	8.	 If any Certificate is worn out or defaced then, on production of it to the Directors, they may cancel it and
may issue a fresh Certificate in lieu. If any Certificate is lost or destroyed it may be replaced on such terms (if any) as to evidence and indemnity as the Company may reasonably require. An entry recording the issue of the new Certificate and
indemnity (if any) shall be made in the register. No fee shall be charged for the registration of any transfer or for the registration of any probate, letters of administration, certificate of marriage or death, power of attorney or other documents
relating to or effecting title to any Notes. 

  

	9.	 Any notice or other document required to be given under this Instrument shall be in writing and may be given to
or served on any Noteholder by sending it by first-class post in a prepaid envelope addressed to such Noteholder at his registered address. In the case of joint Noteholders, a notice given to, or document served on, the Noteholder whose name stands
first in the register in respect of such Notes shall be sufficient notice to, or service on, all the joint holders. Any such notice sent or document served by first-class post shall be deemed to have been given or served 48 hours or 96 hours in the
case of a notice or document sent to an address for a Noteholder not in the United Kingdom after the time when it is posted and in proving such notice or service, it shall be sufficient to prove that the envelope containing the notice or document
was properly addressed, stamped and posted. 

  

	10.	 Any notice or other document delivered or sent by post to, or left at, the registered address of any Noteholder
in pursuance of these provisions shall, notwithstanding that such Noteholder is then dead or bankrupt or in liquidation, and whether or not the Company has notice of his death or bankruptcy or liquidation, be deemed to have been duly served or
delivered in respect of any Notes registered in the name of such Noteholder as sole or first-named joint holder unless his name shall at the time of the service of the notice or document have been removed from the register as the holder of the
Notes, and such service shall for all purposes be deemed sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the Notes. 

  
 42 

	11.	 A copy of this Instrument shall be kept at the Company’s registered office. A Noteholder (and any person
authorised by a Noteholder) may inspect that copy of the Instrument at all reasonable times during office hours. 

  

	12.	 Each Noteholder by subscribing for and/or holding any Notes pursuant to the terms of this Instrument expressly
and irrevocably agrees that the Group Companies may refinance all or any part of either the Senior Loan or the Novartis Loan Note (either with the existing creditors thereof or with third party creditors) and that, such refinanced loan shall for all
purposes under this Instrument be treated, mutatis mutandis ̧ as the Senior Loan or the Novartis Loan Note (as the case may be) and benefit from any protections, provisions, exemptions or other terms hereof, without requiring the consent
of any Noteholder; provided, that no such refinancing or amendment of the Senior Loan which increases the amount of the principal sum of the Senior Loan owing from time to time above £14 million, or extends the Final Repayment Date for
the Senior Loan beyond 1 March 2022, shall be effective unless otherwise approved by the Noteholder Majority; provided, further, that no such consent or agreement shall be required from any Noteholder Majority from or after the time when
Shareholder Approval has been obtained. For the avoidance of doubt, if any such refinancing takes place, any lenders thereunder shall be treated as the “Senior Lenders” for the purposes of this Instrument. The Company shall as soon as
reasonably practicable after the occurrence of any such refinancing, provide notice of the same to the Noteholders. 

  

	13.	 If the Company, whilst any Notes are outstanding, shall effect a subdivision of its Ordinary Shares, the
Tranche 1 Conversion Price and Tranche 2 Conversion Price (if any) then in effect immediately before that subdivision shall be proportionately decreased. If the Company, whilst any Notes are outstanding, shall combine its Ordinary Shares, the
Tranche 1 Conversion Price and Tranche 2 Conversion Price then in effect immediately before the combination shall be proportionately increased. 

  

	14.	 If the Company, whilst any Notes are outstanding, 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 from the fund for invested unrestricted equity payable in Ordinary Shares in the Company, then and in each such event the
Tranche 1 Conversion Price and Tranche 2 Conversion 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 Tranche 1 Conversion Price or Tranche 2 Conversion Price, as applicable, then in effect by a fraction: 

  
 43 

	 	(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; 

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 Tranche 1 Conversion Price and Tranche 2 Conversion Price shall be recomputed accordingly as of the close of business on such date and thereafter the Tranche 1 Conversion Price and Tranche 2 Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such dividends or distributions, if any. 
  

	15.	 When any adjustment is required to be made in the Tranche 1 Conversion Price or Tranche 2 Conversion Price
pursuant to paragraph 14 or 15, the number of Ordinary Shares issuable upon conversion of a Note shall be calculated by reference to the revised Tranche 1 Conversion Price or Tranche 2 Conversion price following the adjustment made by paragraph 14
or 15. 

  

	16.	 If the Company, whilst any Notes are outstanding, shall: (i) pay or declare a dividend payable to all
shareholders other than in Ordinary Shares (e.g. in cash or assets other than Ordinary Shares in the Company); or (ii) make any distribution of share capital (including share premium account and capital redemption legal reserve), then and in
each such event the Tranche 1 Conversion Price and Tranche 2 Conversion Price then in effect immediately before such event shall be decreased as of such event by multiplying the Tranche 1 Conversion Price or Tranche 2 Conversion Price, as
applicable, then in effect by a fraction: 

  

	 	(a)	 the numerator of which shall be equal to (i) the Closing Price on the day immediately prior to the date
when such event was first published (or if there is no such price, the fair market value of one ordinary share of the Company as of such date as determined in good faith by the Directors) minus (ii) the amount per issued share of such dividend
or distribution; and 

  
 44 

	 	(b)	 the denominator of which shall be the Closing Price on the day immediately prior to the date when such event
was first published (or if there is no such price, the fair market value of one ordinary share of the Company as of such date as determined in good faith by the Directors). 

In the event that the application of the above fraction would result in an increase in the Conversion Price, then no adjustment shall be made
hereunder. If the Company distributes assets other than cash, the amount per outstanding share of the distribution shall be calculated by reference to the fair market value of the assets distributed as determined in good faith by the Directors. 

“Closing Price” for purposes of this
paragraph means: the most recently reported closing price of the Ordinary Shares on AIM. 
  

	17.	 If, prior to the Maturity Date, there shall occur any reorganization, recapitalization, reclassification,
consolidation, merger or demerger involving the Company in which the Company’s Ordinary Shares are converted into or exchanged for securities, cash or other property (other than a transaction covered by paragraphs 14 or 15) (collectively, a
“Reorganization”), then, following such Reorganization, the Noteholders shall receive upon conversion the kind and amount of securities, cash or other property, if any, which the Noteholders would have been entitled to receive
pursuant to such Reorganization if such conversion had taken place immediately prior to such Reorganization. Appropriate adjustment (as determined in good faith by the Directors) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Noteholder, to the end that the provisions set forth in this Instrument (including provisions with respect to changes in and other adjustments of the Tranche 1 Conversion Price and/or
Tranche 2 Conversion Price (as applicable) and the number of Ordinary Shares issuable upon conversion of the Notes) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities, cash or other property thereafter
deliverable upon the conversion of the Notes. 

  
 45 

Part 4. ADS
Issuance
and
Delivery Instruction 

[DATE] 

Citibank, N.A., as
Depositary 

388 Greenwich
Street 

New York, New York
10013 

Attn.: Mr. Brian M.
Teitelbaum (brian.m.teitelbaum@citi.com) 
 With a copy simultaneously delivered to: 

Citibank, N.A., London
Branch 

25 Canada Square 

Canary Wharf 

London E14 5LB,
England 

Attn.: UK Custody
Settlements 

Custody Team
(uksettlements@citi.com) 
 Re: Issuance and Delivery Instruction—Mereo BioPharma Group plc (CUSIP No.: 589492107) – Deposit &
Hold 

Dear Sirs: 

Reference is
made to the Deposit Agreement, dated as of April 23, 2018, as amended and supplemented from time to time (the “Deposit Agreement”), by and among Mereo BioPharma Group plc, a public limited company incorporated under the laws of
England and Wales and its successors (the “Company”), Citibank, N.A., a national banking association organized and existing under the laws of the United States of America, as Depositary (the “Depositary”), and all Holders and
Beneficial Owners of American Depositary Shares (the “ADSs”) issued thereunder. All capitalized terms used, but not otherwise defined herein, shall have the meaning assigned thereto in the Deposit Agreement. 

In
accordance with the terms and subject to the limitations set forth in the Deposit Agreement, promptly following the Depositary’s receipt of confirmation from the Custodian that the Custodian has received a deposit of the number of Shares
specified below made by the Company for the benefit of the undersigned holder thereof (the “Holder” and together with the Company, the “Undersigned”), the Undersigned hereby jointly instruct the Depositary, and the Depositary
hereby agrees: 

  
 46 

(i) to
promptly accept for deposit the number of Shares and issue the number of ADSs as specified below: 
  

			
	Number of Shares deposited:	  	Shares

Number of ADSs (CUSIP No.:
589492107; each ADS representing five (5) Shares to be issued: 
 ADSs 
 and (ii) to promptly deliver such Program ADSs, as follows:

 Name of DTC
Participant to which the ADSs are to be delivered:  
 DTC Participant Account No.:  

Account No. for recipient of
ADSs at DTC Participant (f/b/o/ information):  
 Name on whose behalf the above number of ADSs are to be issued and delivered:  

Contact person at DTC
Participant: Daytime telephone number of contact person at DTC:  
 The Company hereby confirms and certifies that (i) the registration statement on Form F-3 (File No. 333-239708)
(the “Registration Statement”), filed with the U.S. Securities and Exchange Commission (the “Commission”) on July 6, 2020, registers the resale of the above Shares represented by ADSs, such ADSs will be freely transferable
following the issuance thereof by the Depositary, and there are no legal restrictions on subsequent transfers of the ADSs to be issued hereunder under the laws of England and Wales or the United States, (ii) the Registration Statement is
effective under the Securities Act of 1933, as amended (the “Securities Act”), and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or threatened by the Commission. 

The Holder hereby represents
and covenants to, and for the benefit of, the Depositary and Citibank, N.A.—London Branch (the “Custodian”), that (i) the Holder is not an “affiliate” of the Company as that term is defined in Rule 144 promulgated by
the Commission under the Securities Act and has not been an affiliate at any time during the 90 days immediately preceding the date hereof, and (ii) all stamp duty taxes, including, without limitation, the U.K. Stamp Duty Reserve Tax
(“SDRT”), will be paid in full and on a timely basis to the extent such taxes are payable in respect of the deposit of the Shares and the issuance and delivery of the ADSs as contemplated herein. 

  
 47 

Each of the Holder and, to
the extent it is not unlawful for the Company to do so under the applicable laws of England and Wales, the Company agrees to indemnify the Depositary and the Custodian for, and to hold the Depositary and the Custodian harmless against, all losses,
liabilities, taxes, charges, penalties or expenses (including reasonable legal fees and disbursements), incurred by the Depositary and/or by the Custodian or to which the Depositary and/or the Custodian may become subject to and arising directly or
indirectly from the failure by any person to pay (or discharge) any applicable stamp duty taxes, including, without limitation, SDRT, or any other similar duty or tax in connection with the deposit of the Shares and the issuance and delivery of the
ADSs as contemplated herein, save to the extent that such losses, liabilities, taxes, charges, penalties or expenses are due to the negligence or bad faith of the Custodian or the Depositary.

  

			
	[HOLDER]	  	MEREO BIOPHARMA GROUP PLC
		
	By:	  	By:
	Name:	  	Name:
	Title:	  	Title:

  
 48 

 Schedule 3 Meetings of the Noteholders 

 

	1.	 The Company may at any time convene a meeting of Noteholders. In addition, the Company shall at the written
request of the holders of not less than one-quarter (25%) in nominal amount of the outstanding Notes convene a meeting of the Noteholders. Any meeting shall be held at such place as the Company may designate. 

 

	2.	 At least 14 days’ notice (exclusive of the day on which the notice is served or deemed to be served and of
the day for which notice is given) of every meeting shall be given to the Noteholders. The notice shall specify the place, day and time of the meeting and the general nature of the business to be transacted, but it shall not be necessary (except in
the case of a Special Resolution) to specify in the notice the terms of any resolution to be proposed. The accidental omission to give notice to, or the non-receipt of notice by, any of the Noteholders shall not invalidate the proceedings at any
meeting. A meeting of the Noteholders shall, despite being called at shorter notice than specified above, be deemed to have been duly called if it is agreed in writing by all of the Noteholders. 

 

	3.	 At any meeting the quorum shall be two or more Noteholders holding, or representing by proxy, at least 50.1% in
nominal principal amount of the outstanding Notes. No business (other than choosing a Chairman) shall be transacted at any meeting unless the requisite quorum is present. 

 

	4.	 If a quorum is not present, within half an hour from the time appointed for the meeting, the meeting shall be
dissolved if it was convened on the requisition of Noteholders. In any other case, it shall stand adjourned to such day and time (at least 14 days later, but not more than 28 days later) and to such place as may be appointed by the Chairman. At such
adjourned meeting, two Noteholders present in person (or by proxy) and entitled to vote shall constitute a quorum (whatever the nominal amount of the Notes held by them). At least 14 days’ notice of any adjourned meeting of Noteholders shall be
given (in the same manner mutatis mutandis as for an original meeting). That notice shall state that two Noteholders present in person (or by proxy) at the adjourned meeting (whatever the nominal amount of Notes held by them) shall form a quorum.

  
 49 

	5.	 A person (who may but need not be a Noteholder) nominated by the Company shall be entitled to take the chair at
every such meeting but, if no such person is nominated or if the person nominated is not be present at the meeting within five minutes after the time appointed for holding the meeting, the Noteholders present shall choose one of their number to be
Chairman. Any Director or officer of, any Secretary of, and the solicitors to, the Company and any other person authorised in that behalf by the Company may attend at any such meeting. 

 

	6.	 Each question submitted to a meeting of Noteholders shall, unless a poll is demanded, be decided by a show of
hands. 

  

	7.	 At any meeting of Noteholders unless a poll is demanded by the Chairman or by one or more Noteholders present
in person or by proxy and holding or representing in the aggregate not less than one-twentieth in nominal amount of the outstanding Notes (before or on the declaration of the result of the show of hands), a declaration by the Chairman that a
resolution has been carried by the requisite majority, lost or not carried by the requisite majority 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.

  

	8.	 If a poll is duly demanded, it shall be taken in such manner and (subject as set out below) either at once or
after an adjournment as the Chairman directs. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll shall not prevent the meeting from continuing for the transaction of any
business other than the question on which the poll has been demanded. The demand for a poll may be withdrawn. 

  

	9.	 If there is an equality of votes, whether on a show of hands or on a poll, the Chairman of the meeting shall
not be entitled to a casting vote in addition to the vote(s) (if any) to which he may be entitled as a Noteholder or as a proxy. 

  

	10.	 The Chairman may, with the consent of (and shall if so directed by) any meeting at which a quorum is present,
adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting except business that might lawfully have been transacted at the meeting from which the adjournment took place.

  

	11.	 Any poll demanded at any meeting on the election of a Chairman, or on any question of adjournment, shall be
taken at the meeting without adjournment. 

  
 50 

	12.	 On a show of hands, each Noteholder who is an individual and is present in person or (being a corporation) is
present by its duly authorised representative or by one of its officers as its proxy, shall have one vote. On a poll, each Noteholder present in person or by proxy, shall have one vote for every £1 nominal principal amount of Notes held by him
and a person entitled to more than one vote need not (if he votes) use all his votes or cast all the votes he uses in the same way. 

  

	13.	 In the case of joint registered Noteholders any one of them shall be entitled to vote in respect of such Notes
either in person or by proxy and, in the latter case, as if the joint holder were solely entitled to such Notes. If more than one joint holder is present at any meeting either personally or by proxy that one joint holder so present whose name as
between himself and the other or others present stands first in the register as one of the joint holders shall alone be entitled to vote in person or by proxy. 

 

	14.	 Each instrument appointing a proxy must be in writing and duly executed by the appointor or his duly authorised
attorney or, in the case of a corporation under its common seal or duly executed by a duly authorised attorney or officer. The Chairman may (but shall not be bound to) require evidence of the authority of any attorney or officer. A proxy need not be
a Noteholder. 

  

	15.	 An instrument of proxy shall be in the usual or common form or in any other form that the Directors may accept.
The proxy shall be deemed to include the right to demand or join in demanding a poll. A proxy shall, unless stated otherwise, be valid as well for any adjournment of the meeting as for the meeting to which it relates and need not be witnessed.

  

	16.	 The instrument appointing a proxy, and the power of attorney or other authority (if any) under which it is
signed or a notarially certified copy of such power of attorney or authority, shall be deposited at the place specified in (or in any document accompanying) the notice convening the meeting. If no such place is specified, the proxy shall be
deposited at the registered office of the Company not less than 48 hours before the time appointed for holding the meeting or adjourned meeting or for taking of the poll at which the person named in that instrument proposes to vote. In default, the
instrument of proxy shall not be treated as valid. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the revocation of the proxy or of the authority under which the proxy is given, unless notification
in writing of the revocation has been received at the registered office of the Company or at such other place (if any) specified for the deposit of instruments of proxy in the notice convening the meeting (or any document accompanying it) 48 hours
before the commencement of the meeting or adjourned meeting or the taking of the poll at which the vote is given. 

  
 51 

	17.	 Without prejudice to any of the powers conferred on the Company under any of the provisions of the Instrument,
a meeting of the Noteholders shall, in addition to any other powers, have the following powers exercisable by Special Resolution: 

  

	 	(a)	 power to sanction the exchange or sale of the Notes for, or the conversion of the Notes into, or the
cancellation of the Notes in consideration of, shares, stock, debenture stock or other obligations or security of the Company or any other company formed or to be formed (provided, in each of the foregoing cases, that such action will be conducted
in accordance with the terms of the Conditions or with the prior written consent of the Company); 

  

	 	(b)	 power to sanction any abrogation, modification or compromise of, or any arrangement in respect of, the
Noteholders’ rights against the Company, provided the same has been previously approved in writing by the Company, whether those rights shall arise under the Instrument, the Notes or otherwise; 

 

	 	(c)	 power to assent to any modification of the provisions contained in the Instrument and the Conditions and to
authorise the Company to execute any supplemental instrument embodying any such modification. Any such modification shall be proposed by the Company; and 

  

	 	(d)	 with the prior written consent of the Company, power to: 

 

	 	(i)	 modify the date fixed for final redemption of the Notes; 

 

	 	(ii)	 reduce or cancel the principal amount payable on the Notes; 

 

	 	(iii)	 reduce the amount payable or modify the method of calculating the amount payable on the Notes; or

  

	 	(iv)	 modify the dates for payment in respect of any interest, on the Notes. 

 

	18.	 A Special Resolution passed at a meeting of the Noteholders shall be binding on all the Noteholders whether or
not they are present at the meeting. Each of the Noteholders shall be bound to give effect to it accordingly. The passing of any such resolution shall be conclusive evidence that the circumstances justify passing it (so that the meeting may
determine without appeal whether or not the circumstances justify passing it). 

  
 52 

	19.	 Special Resolution, when used in the Conditions, means a resolution passed at a meeting of the
Noteholders duly convened and held in accordance with the Conditions, and carried by a Noteholder Majority. 

  

	20.	 A resolution in writing signed by or on behalf of a Noteholder Majority shall, for all purposes, be as valid
and effectual as a Special Resolution passed at a meeting duly convened and held in accordance with the Conditions. Such resolution in writing may be contained in one document or in several documents in similar form, each signed by one or more
Noteholders. 

  

	21.	 Minutes of all resolutions and proceedings at every meeting shall be made and duly entered in books to be from
time to time provided for that purpose by the Company. Any minutes, if purporting to be signed by the Chairman of the meeting or by the Chairman of the next succeeding meeting of the Noteholders, shall be conclusive evidence of the matters stated in
them. Until the contrary is proved, every meeting for which minutes have been made and signed shall be deemed to have been duly held and convened, and all resolutions passed at the meeting to have been duly passed. 

  
 53 

 EXECUTED as a DEED by MEREO BIOPHARMA GROUP PLC 

acting by 
  

 
 Director/Authorised signatory 

 
  

Director/Authorised signatory 
  

			
		
	______________________	 	  

		
	Witness	 	
		
	Name:	 	  

		
	Address:	 	  

		
		 	  

		
	Occupation:	 	  

  
 54 

 SCHEDULE 2 

AMENDED NOTE INSTRUMENT (CLEAN COPY) 

  
 7 

 THIS INSTRUMENT AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN APPLICABLE
EXEMPTION THEREFROM. 

DATED                
DECEMBER 2020 
 AMENDED CONVERTIBLE LOAN NOTE
INSTRUMENT DATED 3 JUNE 2020 
 RELATING TO 

MEREO BIOPHARMA GROUP PLC 

  
 1 

 CONTENTS 
  

							
			
	1.	 	Interpretation	  	 	4	 
			
	2.	 	Amount and description of notes	  	 	11	 
			
	3.	 	Status of notes	  	 	11	 
			
	4.	 	Use of Proceeds	  	 	13	 
			
	5.	 	Repayment of Notes	  	 	13	 
			
	6.	 	Interest	  	 	13	 
			
	7.	 	Certificates	  	 	13	 
			
	8.	 	The Register	  	 	14	 
			
	9.	 	Notes not to be quoted	  	 	15	 
			
	10.	 	Set-off	  	 	15	 
			
	11.	 	Meetings of Noteholders	  	 	15	 
			
	12.	 	Variation	  	 	15	 
			
	13.	 	Enforcement and third party rights	  	 	16	 
			
	14.	 	Notices	  	 	16	 
			
	15.	 	Governing law and jurisdiction	  	 	16	 
		
	SCHEDULE 1	  	 	18	 
		
	Part 1. - Form of Tranche 1 Note Certificate	  	 	18	 
		
	Part 2. - Form of Tranche 2 Note Certificate	  	 	20	 
		
	Part 3. - Form of Tranche 3 Note Certificate	  	 	22	 
		
	SCHEDULE 2     THE CONDITIONS	  	 	24	 
		
	Part 1. Interest, repayment and redemption	  	 	24	 
			
	1.	 	Interest	  	 	24	 
			
	2.	 	Repayment of principal	  	 	25	 
			
	3.	 	Time of payment	  	 	27	 
			
	4.	 	Redemption	  	 	27	 
			
	5.	 	Events of Default	  	 	33	 
			
	6.	 	Action following Event of Default	  	 	34	 
			
	7.	 	Taxation	  	 	34	 
		
	Part 2. Conversion	  	 	36	 
			
	1.	 	Conversion	  	 	36	 
			
	2.	 	Procedures on conversion	  	 	38	 
		
	Part 3. Transfer provisions, Undertakings and other matters	  	 	40	 
		
	Part 4. ADS Issuance and Delivery Instruction	  	 	46	 
		
	SCHEDULE 3     MEETINGS OF THE NOTEHOLDERS	  	 	49	 

  
 2 

 THIS INSTRUMENT is made as a deed poll on 3 June 2020 and as amended on 9 June 2020 and
     December 2020. 
 BY 

MEREO BIOPHARMA GROUP PLC incorporated and registered in England and Wales with company number 09481161 whose registered office is at 4th Floor, 1
Cavendish Place, London W1G 0QF, United Kingdom (the “Company”). 
 WHEREAS: 

 

	A.	 On 3 June 2020 the Company entered into certain financing transactions, pursuant to which OrbiMed
Partners Master Fund Limited, OrbiMed Genesis Master Fund L.P. and OrbiMed Private Investments VII, LP (the “Lead Investors”) and certain other investors (the “Investors”) subscribed for the following securities of
the Company: (x) a unit (referred to for convenience as “Ordinary Units”), consisting of (i) one ordinary share of the Company with a nominal value of £0.003 per share (such class of shares, the
“Ordinary Shares,” and all such shares to be issued to the Purchasers, the “Shares”) together with (ii) one warrant to subscribe for 0.50 Ordinary Shares (all such warrants to be issued to the
Purchasers, the “Ordinary Warrants”), at a purchase price of £0.174 per Unit and (y) a unit (referred to for convenience as the “Convertible Units”) consisting of (i) one Note together with
(ii) warrants to subscribe for a number of Ordinary Shares equal to 0.5 times the number of Ordinary Shares issuable upon conversion of each Note (all such warrants to be issued to the Purchasers, the “Note Warrants” and
together with the Ordinary Warrants (the “Warrants”) (the issuance of the foregoing Ordinary Units and Convertible Units collectively , the “Transaction”). 

 

	B.	 By exercise of the powers conferred on them by the Articles, the Directors of the Company have, by a
resolution passed on 1 June 2020, resolved to create, and to constitute the Notes hereunder. 

  

	C.	 This Instrument constitutes the Notes. 

 

	D.	 The Company and its subsidiaries are parties to an existing senior secured loan agreement in the
principal amount of £20,455,000 with Silicon Valley Bank (as lender) (“SVB”) and Kreos Capital V (UK) Limited (as lender, agent and security agent) (“Kreos”), dated 28 September 2018 (as updated and
amended from time to time) (the “Senior Loan”). 

  

	E.	 The Notes created hereunder shall be subordinated to the Senior Loan by entry into a separate
subordination deed between the Noteholders, Kreos and SVB on or around the date hereof (the “Subordination Agreement”). 

  
 3 

 AGREED TERMS 

 

	1.	 INTERPRETATION 

 

	1.1	 The definitions and rules of interpretation in this clause apply in this Instrument. 

 

	1.2	 Acceleration Date: has the meaning given in paragraph 4 of Part 1 of Schedule 2. 

ADS: has the meaning given in the Securities Purchase Agreement. 

ADS Exchange Ratio: means the ratio applicable to the exchange of Ordinary Shares for ADSs from time to time, currently being a ratio of
5 Ordinary Shares for each ADS. 
 Affiliate: means a person that owns or controls directly or indirectly another person, any
person that controls or is controlled by or is under common control with the person, including, without limitation, any subsidiaries, and any of that person’s general or limited partners, senior executive officers, directors and, for any person
that is a limited liability company, that person’s managers and members or any venture capital fund or registered investment company now or hereafter existing that is controlled by one or more general partners or managing members or investment
advisor of, or shares the same management company or investors advisor (or member thereof) with, such person. 
 Alternative Warrant
Conversion Notice: has the meaning given in the Securities Purchase Agreement. 
 Articles: means the articles of association of
the Company, as amended or superseded. 
 Business Day: means any day other than Saturday, Sunday or federal legal holiday in the
United States of America, or public holiday or bank holiday in the United Kingdom. 
 Certificate: means a Tranche 1 Note
Certificate, a Tranche 2 Note Certificate or a Tranche 3 Note Certificate, as applicable. 
 Change of Control: means,
(a) in one transaction or a series of related transactions, a person or one or more persons acting in concert, acquiring (i) all (or substantially all) of the share capital or assets of the Company, or (ii) more than fifty percent
(50%) of the outstanding equity or other securities of the Company; or (b) any merger, consolidation, reorganisation, or business combination as a result of which the majority equity or other security holders of the Company immediately
preceding such transaction (s) hold less than fifty percent (50%) of the outstanding voting power, respectively, of the ultimate company or entity resulting from such transaction(s) 

  
 4 

 
immediately after consummation of such transaction. In the foregoing case, “acting in concert” means a group of persons who, pursuant to an agreement or understanding (whether formal or
informal), actively co-operate, through the acquisition and/or ownership of voting shares in the Company, to obtain or consolidate control (directly or indirectly) of the Company provided that the persons voting in the same or consistent manner at
any general meeting of the Company will not be considered to be acting in concert by virtue only of exercising their votes in such manner. 

Change of Control Payment: has the meaning given in paragraph 4.12 of Part 1 of Schedule 2. 

Closing Price: means: (i) if at the relevant time the Ordinary Shares continue to be admitted to trading on AIM, the most recently
reported closing price of one Ordinary Share on AIM; or (ii) if at the relevant time the Shares are no longer admitted to trading on AIM, the implied price of one Ordinary Share in pounds sterling by reference to the most recently reported
closing price of an ADS on Nasdaq. 
 Conditions: means the conditions attaching to the Notes, as set out in Schedule 2 (as
amended from time to time in accordance with this Instrument). 
 Conversion Date: means (i) in the case of Tranche 1 Notes being
converted automatically following Shareholder Approval pursuant to the provisions of paragraph 1.2 of Part 2 of Schedule 2, the date on which such Shareholder Approval is granted; and/or (ii), in the case of an Uplift Notice or Pay Down Notice, the
date specified in such notice; and/or (iii) in all other cases, the date falling 5 Business Days after service of the Conversion Notice. 

Conversion Notice: means a notice in writing served by a Noteholder to the Company to convert all or, if the Ownership Limit applies,
some of its outstanding Notes. 
 Default Rate: means the Tranche 1 Default Rate, Tranche 2 Default Rate or Tranche 3 Default Rate (as
applicable). 
 Depositary: has the meaning given in the Securities Purchase Agreement. 

Directors: means the board of directors of the Company, or a duly authorised committee of that board, for the time being. 

Effective Date: means the date of this Deed. 

Event of Default: means any of the events set out in paragraph 5 of Part 1 of Schedule 2. 

Existing Indebtedness: means any indebtedness incurred by a Group Company and outstanding on or prior to the Effective Date (which for
the avoidance of doubt shall include indebtedness pursuant to the Senior Loan and the Novartis Loan Note). 

  
 5 

 Group Company: means each of the Company and its subsidiaries.  

Interest Rate: has the meaning given in paragraph 1 of Part 1 of Schedule 2.  

Kreos: has the meaning given in the recitals of this Instrument. 

Lead Investors: has the meaning given in the recitals of this Instrument. 

Nasdaq: means the Nasdaq Global Market or the Nasdaq Capital Market (as applicable). 

Notes: means the Tranche 1 Notes, the Tranche 2 Notes or the Tranche 3 Notes, as applicable. 

Noteholder: means a person for the time being entered in the Register as holder of any Notes. 

Noteholder Majority: means Noteholders holding more than 50% of the principal amount of all outstanding Notes. 

Noteholder Majority Consent: means the consent of a Noteholder Majority provided either at a meeting of Noteholders or in writing, in
each case in accordance with the requirements of Schedule 3. 
 Novartis: means Novartis Pharma AG, a company incorporated
under the laws of Switzerland. 
 Novartis Loan Note: means the convertible loan note originally issued by the Company
to Novartis in the principal amount of £3,841,479 on 8 February 2020. 
 Ordinary Shares: means the ordinary shares
of £0.003 each in the capital of the Company, which have the rights set out in the Articles. 
 Original Warrantholder: has the
meaning given in the Securities Purchase Agreement. 
 Ownership Limit: has the meaning given in paragraph 1.2 of Part 2 of Schedule
2. 
 Pay Down Issue: has the meaning given in paragraph 4.7 of Part 1 of Schedule 2.  

Pay Down Notice: has the meaning given in paragraph 4.7 of Part 1 of Schedule 2. 

Pay Down Securities: has the meaning given in paragraph 4.7 of Part 1 of Schedule 2. 

Pay Down Reduction Amount: has the meaning given in paragraph 4.8 of Part 1 of Schedule 2. 

Qualifying Noteholder: means any Noteholder holding Notes with a principal amount of £6,004,803.84 or greater. 

Redemption Date: has the meaning given in paragraph 4.1 of Part 1 of Schedule 2. 

  
 6 

 Redemption Notice: has the meaning given in paragraph 4.13 of Part 1 of Schedule 2.

 Register: means a register of Noteholders referred to in, and kept and maintained in accordance with, clause 8. 

Registered Office: means the registered office of the Company from time to time. 

Securities Purchase Agreement: means the agreement governing the purchase of Ordinary Shares comprising the Transaction among,
inter alios, the Company, the Lead Investors and the other Investors party thereto, dated on or around the date hereof. 

Senior Lenders: means SVB and Kreos (and each of them individually, a “Senior Lender”) and/or their respective
successors in title. 
 Senior Loan: has the meaning given in the recitals of this Instrument. 

Shareholder Approval: has the meaning given in the Securities Purchase Agreement. 

Shareholders Meeting: has the meaning given in the Securities Purchase Agreement. 

Shares: has the meaning given in the recitals of this Instrument. 

Subordination Agreement: has the meaning given in the recitals of this Instrument. 

SVB: has the meaning given in the recitals of this Instrument. 

Tranche 1 Conversion Price: £0.174 per Ordinary Share, subject to adjustment as set forth in Part 3 of Schedule 2. 

Tranche 2 Conversion Price: £0.348 per Ordinary Share, subject to adjustment as set forth in Part 3 of Schedule 2. 

Tranche 1 Default Rate: has the meaning given in paragraph 1.1 of Part 1 of Schedule 2. 

Tranche 2 Default Rate: has the meaning given in paragraph 1.2 of Part 1 of Schedule 2. 

Tranche 3 Default Rate: has the meaning given in paragraph 1.3 of Part 1 of Schedule 2. 

Tranche 1 Extension Option: has the meaning given in paragraph 2.3 of Part 1 of Schedule 2. 

Tranche 1 Extension Notice: has the meaning given in paragraph 2.3 of Part 1 of Schedule 2. 

Tranche 2 Extension Option: has the meaning given in paragraph 2.5 of Part 1 of Schedule 2. 

  
 7 

 Tranche 2 Extension Notice: has the meaning given in paragraph 2.5 of Part 1 of
Schedule 2. 
 Tranche 3 Extension Option: has the meaning given in paragraph 2.7 of Part 1 of Schedule 2. 

Tranche 3 Extension Notice: has the meaning given in paragraph 2.7 of Part 1 of Schedule 2. 

Tranche 1 Maturity Date: means 3 June 2023 or, in respect of any Tranche 1 Notes held by a Qualifying Noteholder, such later date
as may be applicable following exercise of the Tranche 1 Extension Option. 
 Tranche 2 Maturity Date: means the date falling
three years from the date of issue of such Tranche 2 Notes, or in respect of any Tranche 2 Notes held by a Qualifying Noteholder, such later date as may be applicable following exercise of the Tranche 2 Extension Option. 

Tranche 3 Maturity Date: means 3 June 2025 or, in respect of any Tranche 3 Notes held by a Qualifying Noteholder, such later date
as may be applicable following exercise of the Tranche 3 Extension Option and acceptance by the Company of the same. 
 Tranche 1 Note
Certificate: a certificate for Tranche 1 Notes in the form (or substantially in the form) set out in Part 1 of Schedule 1. 
 Tranche
2 Note Certificate: a certificate for Tranche 2 Notes in the form (or substantially in the form) set out in Part 2 of Schedule 1. 

Tranche 3 Note Certificate: a certificate for Tranche 3 Notes in the form (or substantially in the form) set out in Part 3 of Schedule
1. 
 Tranche 1 Noteholder: means a Noteholder holding Tranche 1 Notes.  

Tranche 2 Noteholder: means a Noteholder holding Tranche 2 Notes.  

Tranche 3 Noteholder: means a Noteholder holding Tranche 3 Notes. 

Tranche 1 Notes: up to £40,533,671 in aggregate unsecured convertible loan notes of £1 principal amount each,
maturing on the Tranche 1 Maturity Date constituted by this Instrument or, as the case may be, the principal amount of such loan notes for the time being issued and outstanding, and principal amount shall be construed accordingly. 

Tranche 2 Notes: up to £40,032,025 in aggregate unsecured convertible loan notes of £1 principal amount each,
maturing on the Tranche 2 Maturity Date constituted by this Instrument or, as the case may be, the principal amount of such loan notes for the time being issued and outstanding, and principal amount shall be construed accordingly. 

  
 8 

 Tranche 3 Notes: up to £56,044,831 in aggregate unsecured loan notes of
£1 principal amount each, maturing on the Tranche 3 Maturity Date constituted by this Instrument or, as the case may be, the principal amount of such loan notes for the time being issued and outstanding, and principal amount shall be
construed accordingly. 
 Transaction: has the meaning given in the recitals of this Instrument. 

Uplift Allocation Notice: has the meaning given in paragraph 4.3 of part 1 of Schedule 2. 

Uplift Reduction Amount: has the meaning given in paragraph 4.4 of part 1 of Schedule 2. 

Uplift Securities: has the meaning given in paragraph 4.3 of part 1 of Schedule 2. 

Warrant: has the meaning given in the recitals of this Instrument. 

Warrant Instrument: means the instrument constituting the Warrants dated on or about the Effective Date. 

 

	1.3	 Clause, Schedule and paragraph headings shall not affect the interpretation of this Instrument.

  

	1.4	 References to clauses and Schedules are to the clauses of and Schedules to this Instrument and references to
paragraphs are to paragraphs of the relevant Schedule. 

  

	1.5	 The Schedules (including, for the avoidance of doubt, the Conditions) form part of this Instrument and shall
have effect as if set out in full in the body of this Instrument. Any reference to this Instrument includes the Schedules. 

  

	1.6	 A reference to this Instrument, the Conditions or to any other agreement or document referred to
in this Instrument or the Conditions is a reference to this Instrument (which shall include the Conditions), the Conditions or such other agreement or document as varied or novated in accordance with their terms from time to time.

  

	1.7	 Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall
include the singular. 

  

	1.8	 Unless the context otherwise requires, a reference to one gender shall include a reference to the other
genders. 

  
 9 

	1.9	 A person includes a natural person, corporate or unincorporated body (whether or not having separate
legal personality) and that person’s personal representatives, successors and permitted assigns. 

  

	1.10	 A reference to a company shall include any company, corporation or other body corporate, wherever and
however incorporated or established. 

  

	1.11	 A reference to a holding company or a subsidiary means a holding company or a subsidiary (as the
case may be) as defined in section 1159 of the Companies Act 2006. 

  

	1.12	 A reference to writing or written includes fax but not e-mail (unless otherwise expressly
provided in this Instrument). 

  

	1.13	 Any words following the terms including, include, in particular, for example or any
similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms. 

 

	1.14	 Where the context permits, other and otherwise are illustrative and shall not limit the sense of
the words preceding them. 

  

	1.15	 A reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted from
time to time. 

  

	1.16	 A reference to a statute or statutory provision shall include all subordinate legislation made from time to
time under that statute or statutory provision. 

  

	1.17	 Any obligation on a person not to do something includes an obligation not to allow that thing to be done.

  

	1.18	 A reference in this Instrument to: 

 

	 	(a)	 any Notes being outstanding means such Notes as are in issue, not redeemed, not converted and not
cancelled at the relevant time; 

  

	 	(b)	 the assets of any person shall be construed as a reference to all or any part of its business,
undertaking, property, assets, revenues (including any right to receive revenues) and uncalled capital; 

  
 10 

	 	(c)	 indebtedness shall be construed as a reference to any obligation for the payment or repayment of money,
whether as principal or as surety and whether present or future, actual or contingent; 

  

	 	(d)	 repayment includes redemption and vice versa and the words repay, redeem, repayable, redeemed and
repaid shall be construed accordingly; 

  

	 	(e)	 $ or USD denotes the lawful currency of the United States of America; 

 

	 	(f)	 £ or sterling denotes the lawful currency of the United Kingdom; and 

 

	 	(g)	 tax shall be construed so as to include any present and future tax, levy, impost, deduction,
withholding, duty or other charge of a similar nature (including, without limitation, any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same). 

 

	1.19	 Unless the context otherwise requires, a reference to the Notes includes a reference to all and/or any
of the Notes. 

  

	2.	 AMOUNT AND DESCRIPTION OF NOTES

  

	2.1	 The aggregate principal amount of the Tranche 1 Notes is limited to £40,533,671. 

 

	2.2	 The aggregate principal amount of the Tranche 2 Notes is limited to £40,032,025. 

 

	2.3	 The aggregate principal amount of the Tranche 3 Notes is limited to £56,044,831. 

 

	2.4	 The Tranche 1 Notes shall be known as the unsecured convertible loan notes due 2023 and shall be issued by the
Company in integral multiples of £1. 

  

	2.5	 The Tranche 2 Notes shall be known as the unsecured convertible loan notes due 2026 and shall be issued by the
Company in integral multiples of £1. 

  

	2.6	 The Tranche 3 Notes shall be known as the unsecured loan notes due 2025 and shall be issued by the Company in
integral multiples of £1. 

  

	3.	 STATUS OF NOTES 

 

	3.1	 The Notes when issued and outstanding shall rank pari passu, equally and rateably, without discrimination or
preference among themselves and as unsecured obligations of the Company. 

  
 11 

	3.2	 The Notes shall be issued and held subject to and with the benefit of the provisions of this Instrument
(including the Conditions). All such provisions shall be binding on the Company and the Noteholders and all persons claiming through or under them respectively and shall enure for the benefit of all Noteholders. 

 

	3.3	 No Notes shall be issued or deemed issued pursuant to this Instrument until Closing (as defined in the
Securities Purchase Agreement) has occurred in accordance with the terms and conditions of the Securities Purchase Agreement. 

  

	3.4	 No Tranche 2 Notes shall be issued to any person who is not a Qualifying Noteholder and has not served upon the
Company an Optional Warrant Conversion Notice (as defined in the Securities Purchase Agreement) in accordance with the provisions of section 5(h)(ii) of the Securities Purchase Agreement. 

 

	3.5	 Any Qualifying Noteholder who delivers an Optional Warrant Conversion Notice (as defined in the Securities
Purchase Agreement) in accordance with the provisions of Clause section 5(h)(ii) of the Securities Purchase Agreement shall have the subscription monies paid to the Company thereunder applied towards the subscription price for Tranche 2 Notes (in
the face amount of £1 for each Tranche 2 Note issued) in accordance with section 5(h)(ii) of the Securities Purchase Agreement. The subscription price in respect of all Warrants subject to the Optional Warrant Conversion Notice shall be
aggregated for purposes of determining the number of Tranche 2 Notes issued, provided that no Tranche 2 Notes shall be issued for any part payment towards a Tranche 2 Note and after aggregation of all such amounts, any remaining fractional sums
pursuant to an Optional Warrant Conversion Notice shall be discounted when calculating the number of Tranche 2 Notes to be issued. 

  

	3.6	 No Tranche 3 Notes shall be issued to any person if the Shareholder Approval is obtained on or before
7 August, 2020. 

  

	3.7	 If the Shareholder Approval is not obtained on or before 7 August, 2020, the Company shall deliver Tranche
3 Notes (in the face amount of £1 for each Tranche 3 Note issued) to each Original Warrantholder that delivers an Alternative Warrant Conversion Notice in accordance with section 5(i)(ii) of the Securities Purchase Agreement, within five
(5) Business Days after the surrender by the holder of the certificate representing the Warrant and the delivery of the Alternative Warrant Conversion Notice. 

  
 12 

	3.8	 For so long as the Senior Loan remains outstanding, no Notes shall be issued or deemed issued to any person
pursuant to this Instrument unless such person has first executed the Subordination Agreement or a deed of adherence to the Subordination Agreement (pursuant to which such person becomes bound by the terms of the Subordination Agreement) and
provided a copy of such executed document to the Company and the Senior Lenders. 

  

	4.	 USE OF PROCEEDS 

 

	4.1	 The proceeds of all subscriptions for the Notes shall be used in accordance with the terms and conditions of
Section 5(j) of the Securities Purchase Agreement. 

  

	4.2	 No part of the proceeds of any subscription for the Notes shall be used by the Company to make any dividend or
distribution to any shareholder in the Company, or for the repurchase of Ordinary Shares. 

  

	5.	 REPAYMENT OF NOTES 

 

	5.1	 The Notes shall be repaid in accordance with Part 1 of Schedule 2. 

 

	5.2	 All Notes repaid by the Company shall be automatically and immediately cancelled and shall not be reissued.

  

	6.	 INTEREST 

Until the Notes are repaid by the Company or converted into Ordinary Shares, in each case in accordance with the provisions of this Instrument,
interest shall accrue and be paid on the principal amount of the Notes outstanding at the rate and in the manner provided in Part 1 of Schedule 2. 
  

	7.	 CERTIFICATES 

 

	7.1	 Each Noteholder (or the joint holders of any Notes) shall be entitled to receive, without charge, one Tranche 1
Note Certificate and/or Tranche 2 Note Certificate and/or Tranche 3 Note Certificate (as applicable) for the Tranche 1 Notes and/or Tranche 2 Notes and/or Tranche 3 Notes registered in his (or their) names. 

 

	7.2	 Where any Notes are held jointly, the Company shall not be bound to issue more than one Certificate in respect
of such Notes and delivery of a Certificate to the person who is first named in the Register as Noteholder shall be sufficient delivery to all joint holders of such Notes. 

  
 13 

	7.3	 Each Certificate shall: 

 

	 	(a)	 bear a denoting number; 

 

	 	(b)	 indicate whether it relates to Tranche 1 Notes, Tranche 2 Notes, or Tranche 3 Notes; 

 

	 	(c)	 be issued and executed by the Company as a deed in the form (or substantially in the form) set out in Part 1 of
Schedule 1, Part 2 of Schedule 1 or Part 3 of Schedule 1 (as applicable); and 

  

	 	(d)	 have the Conditions endorsed on or attached to it. 

 

	7.4	 In the case of repayment or transfer of part only of a Noteholder’s Notes, the Certificate(s) in respect
of such Notes shall be either: 

  

	 	(a)	 endorsed with a memorandum of the nominal amount of the Notes so redeemed or transferred and the date of such
repayment or transfer; or 

  

	 	(b)	 cancelled and (without charge) replaced by a new Certificate for the balance of the principal amount of the
Notes not then repaid or transferred. 

  

	8.	 THE REGISTER 

 

	8.1	 The Company shall keep and maintain the Register at the Registered Office or (subject always to the provisions
of section 743 of the Act) at such other place as the Company may from time to time appoint for this purpose and notify to the Noteholders. 

  

	8.2	 There shall be entered in the Register: 

 

	 	(a)	 the names and addresses of the Noteholders for the time being; 

 

	 	(b)	 the principal amount of the Notes held by each Noteholder; 

 

	 	(c)	 whether the Notes held by each Noteholder are Tranche 1 Notes, Tranche 2 Notes or Tranche 3 Notes;

  

	 	(d)	 the date of issue of each of the Notes and the date on which the name of each Noteholder is entered in the
Register in respect of the Notes registered in his name; 

  

	 	(e)	 the serial number of each Certificate issued and the date of its issue; and 

  
 14 

	 	(f)	 the date(s) of all transfers and changes of ownership of any of the Notes. 

 

	8.3	 The Company shall promptly amend the Register to record any change to the name or address of a Noteholder that
is notified in writing to the Company by that Noteholder. 

  

	8.4	 The Noteholders or any of them, or any person authorised by a Noteholder, shall be at liberty at all reasonable
times during office hours to inspect the Register and to take copies of or extracts from it or any part of it. 

  

	8.5	 Every Noteholder shall be recognised by the Company as entitled to his Notes free from any equity, set-off or
cross-claim against the original or an intermediate holder of such Notes. 

  

	9.	 NOTES NOT TO BE QUOTED

 No application has been, or shall be, made (unless pursuant to paragraph 7.2 of Part 1 of Schedule 2) to any
investment exchange (whether in the United Kingdom or otherwise) for permission to deal in, or for an official or other listing or quotation, in respect of the Notes. 
  

	10.	 SET-OFF 

Payments of principal and interest in respect of the Notes shall be paid by the Company to the Noteholders in accordance with the Conditions
without any deduction or withholding (whether in respect of any set-off, counterclaim or otherwise whatsoever) unless the deduction or withholding is required by law. 
  

	11.	 MEETINGS OF NOTEHOLDERS 

Meetings of the Noteholders shall be convened and held in accordance with the provisions of Schedule 3. 

 

	12.	 VARIATION 

 

	12.1	 All or any of the rights for the time being attached to the Notes or other provisions of this Instrument may
from time to time (whether or not the Company is being wound up) be altered or abrogated with the prior written consent of a Noteholder Majority. Any such alteration or abrogation shall be effected by way of deed poll executed by the Company and
expressed to be supplemental to this Instrument. 

  
 15 

	12.2	 Modifications to this Instrument which are of a minor nature or made to correct a manifest error may be
effected by way of deed poll executed by the Company and expressed to be supplemental to this Instrument. 

  

	12.3	 The Company shall, within 5 Business Days of making any variation pursuant to this clause 12, send to each
Noteholder (or, in the case of joint holders, to the Noteholder named first in the Register) a copy of the deed poll (or other document) effecting the variation. 

 

	12.4	 Any modification, alteration or abrogation made pursuant to clause 12.1 or clause 12.2 shall be binding on all
the Noteholders. 

  

	13.	 ENFORCEMENT AND THIRD PARTY
RIGHTS 

  

	13.1	 From and after the date of this Instrument, and for so long as any Notes are outstanding or any amount is
payable or repayable by the Company in respect of the Notes, the Company undertakes to duly perform and observe its obligations under this Instrument. 

  

	13.2	 Except as expressly provided in clause 13.3, a person who is not a party to this Instrument shall not have any
rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Instrument. 

  

	13.3	 This Instrument shall operate for the benefit of all Noteholders and each Noteholder shall be entitled to sue
for the performance or observance of the provisions of this Instrument in his own right so far as his own holding of Notes is concerned. 

  

	14.	 NOTICES 

Any notice to be given to or by any Noteholder(s) for the purposes of this Instrument shall be given in accordance with the provisions of
paragraph 9 and paragraph 10 of Part 3 of Schedule 2. 
  

	15.	 GOVERNING LAW AND JURISDICTION

  

	15.1	 This Instrument and the Notes and any dispute or claim arising out of or in connection with any of them or
their subject matter or formation (including non- contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. 

  
 16 

	15.2	 The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of
or in connection with this Instrument or the Notes or their subject matter or formation (including non-contractual disputes or claims). 

This instrument has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it. 

  
 17 

 Schedule 1 

Part 1. - Form of Tranche 1 Note Certificate 
  

	
	Certificate No. [NUMBER]
	
	Date of Issue [•] [June] 2020
	
	Amount £[AMOUNT]

 MEREO BIOPHARMA GROUP PLC 

£[AMOUNT] 
 UNSECURED
CONVERTIBLE LOAN NOTES 
 Created and issued pursuant to a resolution of a duly appointed committee of the board of directors of the Company passed on
3 June 2020. 
 THIS IS TO CERTIFY THAT [NAME OF NOTEHOLDER] is the registered holder of £[AMOUNT] of the £[AMOUNT] unsecured
convertible loan notes 2023 constituted by an instrument entered into by the Company on [•] [June] 2020 (“Instrument”). These are Tranche 1 Notes. Such Tranche 1 Notes are issued with the benefit of and subject to the
provisions contained in the Instrument and the Conditions endorsed on or annexed to this Certificate. 
 Notes: 

1. The Tranche 1 Notes are repayable and shall bear interest in accordance with the Conditions. 

2. This Certificate must be surrendered to the Company before any transfer or repayment, whether of the whole or any part of the Tranche 1 Notes comprised in
it, can be registered or effected, or any new certificate issued in exchange. 
 3. Any change of address of the Noteholder(s) must be notified in writing
signed by the Noteholder(s) to the Company at the Registered Office. 
 4. Subject to the Conditions, the Tranche 1 Notes are transferable in amounts and in
integral multiples of £1. 
 5. No transfer of any part of the Tranche 1 Notes represented by this Certificate can be registered without production of
this Certificate. 
 6. Words and expressions defined in the Instrument shall bear the same meaning in this Certificate and in the Conditions. 

7. The Tranche 1 Notes and any dispute or claim arising out of or in connection with any of them or their subject matter or formation (including
non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in
connection with the Tranche 1 Notes or their subject matter or formation (including non-contractual disputes or claims). 

  
 18 

 8. A copy of the Instrument is available for inspection at the registered office of the Company. 

This Certificate has been executed as a deed and is delivered and takes effect on the date of issue stated at the beginning of it. 

Executed as a deed by MEREO BIOPHARMA GROUP PLC acting by [NAME OF DIRECTOR], a director 

[SIGNATURE OF DIRECTOR] 
 Director in the presence of: 

Witness
Signature:                                       
   

Name:                         
                                     

Address:                        
                                  

Occupation 
 Dated: [INSERT DATE] 

  
 19 

 Part 2. - Form of Tranche 2 Note Certificate 

Certificate No. [NUMBER] 
 Date of Issue [•]
[•] [•] 
 Amount £[AMOUNT] 

MEREO BIOPHARMA GROUP PLC 

£[AMOUNT] 
 UNSECURED
CONVERTIBLE LOAN NOTES 
 Created and issued pursuant to a resolution of a duly appointed committee of the board of directors of the Company passed on
3 June 2020. 
 THIS IS TO CERTIFY THAT [NAME OF NOTEHOLDER] is the registered holder of £[AMOUNT] of the £[AMOUNT] unsecured convertible
loan notes with a Maturity Date of [•], constituted by an instrument entered into by the Company on [•] [June] 2020 (“Instrument”). These are Tranche 2 Notes. Such Tranche 2 Notes are issued with the benefit of and subject
to the provisions contained in the Instrument and the Conditions endorsed on or annexed to this Certificate. 
 Notes: 

1. The Tranche 2 Notes are repayable and shall bear interest in accordance with the Conditions. 

2. This Certificate must be surrendered to the Company before any transfer or repayment, whether of the whole or any part of the Tranche 2 Notes comprised in
it, can be registered or effected, or any new certificate issued in exchange. 
 3. Any change of address of the Noteholder(s) must be notified in writing
signed by the Noteholder(s) to the Company at the Registered Office. 
 4. Subject to the Conditions, the Tranche 2 Notes are transferable in amounts and in
integral multiples of £1. 
 5. No transfer of any part of the Tranche 2 Notes represented by this Certificate can be registered without production of
this Certificate. 
 6. Words and expressions defined in the Instrument shall bear the same meaning in this Certificate and in the Conditions. 

7. The Tranche 2 Notes and any dispute or claim arising out of or in connection with any of them or their subject matter or formation (including
non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in
connection with the Tranche 2 Notes or their subject matter or formation (including non-contractual disputes or claims). 

  
 20 

 8. A copy of the Instrument is available for inspection at the registered office of the Company. 

This Certificate has been executed as a deed and is delivered and takes effect on the date of issue stated at the beginning of it. 

Executed as a deed by MEREO BIOPHARMA GROUP PLC acting by [NAME OF DIRECTOR], a director 

 
  

[SIGNATURE OF DIRECTOR] 
 Director in the presence of: 

Witness
Signature:                                       
      

Name:                         
                                        

Address:                        
                                     

Occupation 
 Dated: [INSERT DATE] 

  
 21 

 Part 3. - Form of Tranche 3 Note Certificate 

Certificate No. [NUMBER] 
 Date of Issue [•]
[•] [•] 
 Amount £[AMOUNT] 

MEREO BIOPHARMA GROUP PLC 

£[AMOUNT] 
 UNSECURED
LOAN NOTES 
 Created and issued pursuant to a resolution of a duly appointed committee of the board of directors of the Company passed on 3 June 2020.

 THIS IS TO CERTIFY THAT [NAME OF NOTEHOLDER] is the registered holder of £[AMOUNT] of the £[AMOUNT] unsecured loan notes with a Maturity Date
of [•] June 2025, constituted by an instrument entered into by the Company on [•] [June] 2020 (“Instrument”). These are Tranche 3 Notes. Such Tranche 3 Notes are issued with the benefit of and subject to the provisions
contained in the Instrument and the Conditions endorsed on or annexed to this Certificate. 
 Notes: 

1. The Tranche 3 Notes are repayable and shall bear interest in accordance with the Conditions. 

2. This Certificate must be surrendered to the Company before any transfer or repayment, whether of the whole or any part of the Tranche 3 Notes comprised in
it, can be registered or effected, or any new certificate issued in exchange. 
 3. Any change of address of the Noteholder(s) must be notified in writing
signed by the Noteholder(s) to the Company at the Registered Office. 
 4. Subject to the Conditions, the Tranche 3 Notes are transferable in amounts and in
integral multiples of £1. 
 5. No transfer of any part of the Tranche 3 Notes represented by this Certificate can be registered without production of
this Certificate. 
 6. Words and expressions defined in the Instrument shall bear the same meaning in this Certificate and in the Conditions. 

7. The Tranche 3 Notes and any dispute or claim arising out of or in connection with any of them or their subject matter or formation (including
non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales. The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in
connection with the Tranche 3 Notes or their subject matter or formation (including non-contractual disputes or claims). 
 8. A copy of the Instrument is
available for inspection at the registered office of the Company. 
 This Certificate has been executed as a deed and is delivered and takes effect on the
date of issue stated at the beginning of it. 

  
 22 

 Executed as a deed by MEREO BIOPHARMA GROUP PLC 

acting by [NAME OF DIRECTOR], a director 
  

 
 [SIGNATURE OF DIRECTOR] 

Director in the presence of: 
 Witness
Signature:                                       
 

Name:                         
                                   

Address:                        
                                

Occupation 
 Dated: [INSERT DATE] 

  
 23 

 Schedule 2 The Conditions 

Part 1. Interest, repayment and redemption 
  

	1.	 INTEREST 

 

	1.1	 Interest shall initially be payable on any outstanding Tranche 1 Notes (so far as not converted under Part 2 of
Schedule 2) at a fixed rate of 10% per annum (the “Interest Rate”), subject to the following adjustments: 

  

	 	(a)	 if Shareholder Approval is obtained on or prior to 7 August 2020, the initial 10% rate shall be reduced to
6% per annum, with effect retroactively as of the Effective Date; 

  

	 	(b)	 if an Event of Default takes place and is not remedied by the Company in accordance with the applicable
provisions of this Part 1 of Schedule 2, the Tranche 1 Interest Rate shall be increased by 2% per annum with effect from the date of such Event of Default (or, if applicable, the expiry of any cure period applicable thereto) (the
“Tranche 1 Default Rate”); and 

  

	 	(c)	 if the Tranche 1 Extension Option is exercised, interest shall cease to be payable on the Tranche 1 Notes from
the date of the relevant Tranche 1 Extension Notice (other than any interest payable at the Tranche 1 Default Rate following an Event of Default, which, for the avoidance of doubt, shall apply at a flat rate of 2% in such circumstances and remain
payable). 

  

	1.2	 Interest shall not be payable on any outstanding Tranche 2 Notes or Tranche 3 Notes other than where an Event
of Default takes place and is not remedied by the Company in accordance with the applicable provisions of this Part 1 of Schedule 2, where interest shall be payable on the Tranche 2 Notes and/or Tranche 3 Notes (as applicable) at a rate of
2% per annum with effect from the date of such Event of Default (or, if applicable, the expiry of any cure period applicable thereto) (the “Tranche 2 Default Rate” and “Tranche 3 Default Rate”, respectively).

  

	1.3	 Any interest due under paragraphs 1.1 or 1.2 shall be payable on the Redemption Date. 

  
 24 

	1.4	 Interest, if payable, shall accrue daily at the Interest Rate and shall be calculated on the basis of a 365-day
year and the actual number of days elapsed from the date of issue of the relevant Notes to the Redemption Date. 

  

	1.5	 If the Company fails to pay redemption monies when due, interest shall accrue on the unpaid amount at the
applicable Default Rate. 

  

	2.	 REPAYMENT OF PRINCIPAL 

 

	2.1	 As and when the Notes (or any part of them) are to be redeemed in accordance with paragraph 4 of this Part 1 of
Schedule 2, the Company shall pay the Noteholders the principal amount of the Notes which are to be redeemed, subject to adjustment in accordance with paragraph 4.2 of this Part 2 of Schedule 2. 

 

	2.2	 No prepayment of the principal amount of the Notes or any interest accrued thereon prior to the earlier of the
Maturity Date or, in the event of a Change of Control, the date on which the consideration in respect of such Change of Control is remitted to the holders of Ordinary Shares, shall be permitted without the consent of a Noteholder Majority, and, if
required, the consent of the Senior Lenders pursuant to the terms of the Subordination Deed. 

  

	2.3	 At any time prior to the Tranche 1 Maturity Date, a Qualifying Noteholder may (but shall not be required to)
notify the Company that it wishes to extend the Tranche 1 Maturity Date in respect of that Noteholder’s Tranche 1 Notes to a new date to be specified in such notice provided such date is a Business Day and not later than the date 10 years after
the date of this Instrument (a “Tranche 1 Extension Notice”), and the Company shall accept such extension (the “Tranche 1 Extension Option”), whereupon the Tranche 1 Maturity Date shall be revised accordingly. A
Qualifying Noteholder may only issue a Tranche 1 Extension Notice once and any such Tranche 1 Extension Option must be used in respect of all Tranche 1 Notes held by such Qualifying Noteholder. From the date of such Tranche 1 Extension Notice, other
than amounts accrued prior to delivery of the Tranche 1 Extension Notice, no additional interest shall be payable on the Tranche 1 Notes held by the exercising Qualifying Noteholder (other than any interest which becomes payable at the Tranche 1
Default Rate). 

  

	2.4	 On the date of the Tranche 1 Extension Notice the exercising Qualifying Noteholder shall deliver to the Company
the Tranche 1 Note Certificate in respect of the Tranche 1 Notes which are the subject of such Tranche 1 Extension Notice, and the Company shall, within 5 Business Days’ of the exercise of the Tranche 1 Extension Option, issue to such
Qualifying Noteholder a replacement Tranche 1 Note Certificate bearing the revised Tranche 1 Maturity Date. 

  
 25 

	2.5	 A Qualifying Noteholder who holds both Tranche 1 Notes and Tranche 2 Notes may (but shall not be required) if
they have already served an Extension Notice (or contemporaneously with the service of an Extension Notice), notify the Company that it wishes to extend the Tranche 2 Maturity Date in respect of that Noteholder’s Tranche 2 Notes to the same
date that it has specified as the Tranche 1 Maturity Date pursuant to its Extension Notice for Tranche 1 Notes (such further notice being a “Tranche 2 Extension Notice”), and the Company shall accept such extension (the
“Tranche 2 Extension Option”), whereupon the Tranche 2 Maturity Date shall be revised accordingly. A Qualifying Noteholder may only issue a Tranche 2 Extension Notice once and any such Tranche 2 Extension Option must be used in
respect of all Tranche 2 Notes held by such Qualifying Noteholder. 

  

	2.6	 On the date of the Tranche 2 Extension Notice the exercising Qualifying Noteholder shall deliver to the Company
the Tranche 2 Note Certificate in respect of the Tranche 2 Notes which are the subject of such Tranche 2 Extension Notice, and the Company shall, within 5 Business Days’ of the exercise of the Tranche 2 Extension Option, issue to such
Qualifying Noteholder a replacement Tranche 2 Note Certificate bearing the revised Tranche 2 Maturity Date. 

  

	2.7	 Any Qualifying Noteholder who holds Tranche 3 Notes may (but shall not be required), notify the Company that it
wishes to extend the Tranche 3 Maturity Date in respect of that Qualifying Noteholder’s Tranche 3 Notes to a new date to be specified in such notice provided such date is a Business Day and not later than the date 10 years after the date of
this Instrument (such notice being a “Tranche 3 Extension Notice”). Upon receipt of a Tranche 3 Extension Notice, the Company may reject a Tranche 3 Extension Notice by providing written notice of such rejection to the Noteholder
within 30 Business Days of receipt of such Tranche 3 Extension Notice (whereupon no extension of such Noteholder’s Tranche 3 Notes shall occur). If the Company does not reject a Tranche 3 Extension Notice within such foregoing period, the
Tranche 3 Extension Notice shall be considered accepted (the “Tranche 3 Extension Option”), whereupon the Tranche 3 Maturity Date shall be revised accordingly. A Qualifying Noteholder may only issue a Tranche 3 Extension Notice once
and any such Tranche 3 Extension Option must be used in respect of all Tranche 3 Notes held by such Qualifying Noteholder. 

  
 26 

	2.8	 On the date of the Tranche 3 Extension Notice the exercising Qualifying Noteholder shall deliver to the Company
the Tranche 3 Note Certificate in respect of the Tranche 3 Notes which are the subject of such Tranche 3 Extension Notice. If the Company rejects the Tranche 3 Extension Notice, the Company shall promptly return such Tranche 3 Note Certificate to
the Noteholder. If the Tranche 3 Extension Option is accepted, the Company shall, within 5 Business Days’ of the exercise of the Tranche 3 Extension Option, issue to such Qualifying Noteholder a replacement Tranche 3 Note Certificate bearing
the revised Tranche 3 Maturity Date. 

  

	3.	 TIME OF PAYMENT 

Whenever any payment of principal (or otherwise) becomes due on a day which is not a Business Day, payment shall be made on the next following
Business Day. 
  

	4.	 REDEMPTION 

 

	4.1	 The Notes then in issue (so far as not converted under Part 2 of this Schedule 2) shall be redeemed at the
principal amount together with interest on the Notes outstanding at the applicable Interest Rate on the earlier of the following dates: 

  

	 	(a)	 the Tranche 1 Maturity Date, Tranche 2 Maturity date or Tranche 3 Maturity date (as applicable); or

  

	 	(b)	 in the event of a Change of Control, the date on which the consideration in respect of such Change of Control
is remitted to the holders of Ordinary Shares; or 

  

	 	(c)	 following the occurrence of an Event of Default and the expiry of any applicable grace period applicable to
such Event of Default as set out in paragraph 5 of this Part 1 of Schedule 2 (the date on which an Event of Default occurs or, if later, the relevant grace period (if any) expires, the “Acceleration Date”), the date specified in the
relevant Redemption Notice; 

 (the “Redemption Date”). 

 

	4.2	 Subject to paragraph 4.12 below, in the event that Shareholder Approval has not been obtained on or before
7 August 2020, in addition to the amounts otherwise payable on the Redemption Date, each Noteholder holding any Tranche 1 Notes shall be entitled to be paid an additional sum on the Redemption Date, the amount of which shall be equal to the
principal amount of the Tranche 1 Notes outstanding on 7 August, 2020 and held by such Noteholder in recognition of such Noteholder not being able to (i) participate in the equity of the Company through conversion of the Tranche 1 Notes,
or (ii) benefit from any Warrants that were intended to be issued to such Tranche 1 Noteholder as part of the Transaction (such sum being the “Uplift Payment”). 

  
 27 

 Notwithstanding the foregoing, in the event that Shareholder Approval has not been obtained
on or before 7 August 2020, upon conversion of the Notes in accordance with Part 2 of Schedule 2, the Noteholder shall be entitled to the benefit of the Uplift Payment. In the event that the Shareholder Approval has not been obtained on or
before 7 August 2020 and a Noteholder did not attend (either in person or by proxy) any general meeting of the Company’s members called for the purposes of obtaining the Shareholder Approval and vote in favour of such Shareholder Approval
with the entirety of all voting rights available to such Noteholder, such Noteholder shall cease to be entitled to the benefit of the Uplift Payment in any circumstances. 
  

	4.3	 At any time after 7 August 2020, when (i) at least one Tranche 1 Noteholder is entitled to the Uplift
Payment pursuant to paragraph 4.2 above; (ii) the Closing Price is above the Tranche 1 Conversion Price; and (iii) the Company has authority from its shareholders to allot additional Ordinary Shares, the Company may at its discretion
notify all (but not some) Tranche 1 Noteholders that it wishes to satisfy its obligations in respect of all or any portion of the Uplift Payment by the issuance of further Ordinary Shares pro rata to all Noteholder(s) (such Ordinary Shares being
“Uplift Securities”) (such notice an “Uplift Allocation Notice”). 

  

	4.4	 The amount of the Uplift Payment to be satisfied by the Uplift Securities shall be calculated by: multiplying
(x) being the number of Uplift Securities the Company wishes to issue, by (y) being the Tranche 1 Conversion Price (the “Uplift Reduction Amount”). 

 

	4.5	 The Uplift Allocation Notice served pursuant to paragraph 4.3 above shall specify, at a minimum:

  

	 	(a)	 the number of Uplift Securities the Company proposes to issue; 

 

	 	(b)	 each Tranche 1 Noteholder’s current percentage holding of the aggregate voting rights in the Company; and

  

	 	(c)	 the issue date of the Uplift Securities (which shall in all cases be within 5 Business Days of the date the
Uplift Allocation Notice was served). 

  

	4.6	 In the event that: 

  

	 	(a)	 there is only one Tranche 1 Noteholder, that Noteholder shall be automatically deemed to have subscribed for
the maximum number of Uplift Securities as it is possible to subscribe without the Ownership Limit of that Tranche 1 Noteholder being exceeded; and 

  
 28 

	 	(b)	 if there is more than one Tranche 1 Noteholder, each Tranche 1 Noteholder shall be automatically deemed to have
subscribed (and such subscription shall be deemed satisfied out of each Tranche 1 Noteholder’s entitlement to the Uplift Payment) for such number of Uplift Securities as is determined pro rata to each Tranche 1 Noteholder’s proportionate
entitlement to the Uplift Payment (provided that such amount does not result in the Ownership Limit being exceeded, and if it was to so result, such Tranche 1 Noteholder shall be required to subscribe for the maximum amount of Uplift Securities that
such Tranche 1 Noteholder could receive without being in breach of the Ownership Limit, any excess Uplift Securities would then be allocated to each other Tranche 1 Noteholder (who would be deemed to subscribe for the same) pro rata to their
entitlement to the Uplift Payment until either all Uplift Securities have been allocated amongst all Tranche 1 Noteholders or all Tranche 1 Noteholders have each reached the Ownership Limit), 

and in each case the Company shall issue such Uplift Securities (which shall be credited as fully paid and rank pari passu with Ordinary Shares
of the same class in issue on the Conversion Date) within 5 Business Days of the Uplift Allocation Notice and the applicable Tranche 1 Noteholder’s entitlement to the Uplift Payment shall thereon be reduced by their proportion of the Uplift
Reduction Amount. 
  

	4.7	 At any time when (i) the Company has satisfied the entirety of its obligations in respect of the Uplift
Payment through the issue of Uplift Securities pursuant to paragraphs 4.3 to 4.6 above (or the Uplift Payment has otherwise been discharged or waived); (ii) the Closing Price is above the Tranche 1 Conversion Price, and (iii) the Company
has authority from its shareholders to allot additional Ordinary Shares; the Company may notify all (but not some) of the Tranche 1 Noteholders that it wishes to satisfy its obligations in respect of an amount of interest and/or principal under the
Tranche 1 Notes by the issuance of further Ordinary Shares pro rata to all Tranche 1 Noteholders (such Ordinary Shares being “Pay Down Securities”) (such notice a “Pay Down Notice” and such process a “Pay
Down Issue”). 

  

	4.8	 The amount of principal and interest in respect of the Tranche 1 Notes to be satisfied by the issue of Pay Down
Securities shall be calculated by: multiplying (x) being the number of Pay Down Securities the Company wishes to issue, by (y) being the Tranche 1 Conversion Price (the “Pay Down Reduction Amount”). 

 

	4.9	 The Pay Down Notice served on each Tranche 1 Noteholder pursuant to paragraph 

 

	4.7	 above shall specify, at a minimum: 

 

	 	(a)	 the number of Pay Down Securities the Company proposes to issue; 

  
 29 

	 	(b)	 each Tranche 1 Noteholder’s current percentage holding of the aggregate voting rights in the Company; and

  

	 	(c)	 the issue date of the Pay Down Securities (which shall in all cases be within 5 Business Days of the date the
Pay Down Notice was served). 

  

	4.10	 In the event that: 

  

	 	(a)	 there is only one Tranche 1 Noteholder, that Tranche 1 Noteholder shall be automatically deemed to have
subscribed for the maximum number of Pay Down Securities as it is possible to subscribe without the Ownership Limit of that Tranche 1 Noteholder being exceeded; and 

 

	 	(b)	 there is more than one Tranche 1 Noteholder, each Tranche 1 Noteholder shall be automatically deemed to have
subscribed (and such subscription shall be deemed satisfied out of each Tranche 1 Noteholder’s entitlement to principal and/or interest under the Notes) for the maximum amount of Pay Down Securities that such Tranche 1 Noteholder could receive
without being in breach of the Ownership Limit, any excess Pay Down Securities would then be allocated to each other Tranche 1 Noteholder (who would be deemed to subscribe for the same) pro rata to their entitlement outstanding interest and/or
principal under the Tranche 1 Notes until either all Pay Down Securities have been allocated amongst all Tranche 1 Noteholders or all Tranche 1 Noteholders have each reached the Ownership Limit, 

and in each case the Company shall issue such Pay Down Securities (which shall be credited as fully paid and rank pari passu with Ordinary
Shares of the same class in issue on the Conversion Date) within 5 Business Days of the Pay Down Notice and the applicable Tranche 1 Noteholder’s entitlement to principal amount and/or interest shall thereon be reduced by their proportion of
the Pay Down Reduction Amount. 
  

	4.11	 At any time when (i) the Company has satisfied all principal and interest outstanding in respect of the
Tranche 1 Notes by the issue of Pay Down Securities; (ii) the Closing Price is above the Tranche 2 Conversion Price, and (iii) the Company has authority from its shareholders to allot additional Ordinary Shares, the Company may serve a Pay
Down Notice on the Tranche 2 Noteholders, notifying them it wishes to satisfy its obligations in respect of any interest and/or principal amount under the Tranche 2 Notes by way of a Pay Down Issue, and the provisions of the foregoing paragraphs 4.7
to 4.10 above shall apply mutatis mutandis in respect of any such Pay Down Issue in respect of the Tranche 2 Notes (and in such circumstances, for the avoidance of doubt, (y) for the purposes of calculating the Pay Down Reduction Amount
pursuant to paragraph 4.8 shall be the Tranche 2 Conversion price). At any 

  
 30 

	 	
time when (i) the Company has satisfied all principal and interest outstanding in respect of the Tranche 2 Notes by the issue of Pay Down Securities; and (ii) the Company has authority
from its shareholders to allot additional Ordinary Shares, the Company may serve a Pay Down Notice on the Tranche 3 Noteholders, notifying them it wishes to satisfy its obligations in respect of any interest and/or principal amount under the Tranche
3 Notes by way of a Pay Down Issue, and the provisions of the foregoing paragraphs 4.7 to 4.10 above shall apply mutatis mutandis in respect of any such Pay Down Issue in respect of the Tranche 3 Notes (and in such circumstances, for the avoidance
of doubt, (y) for the purposes of calculating the Pay Down Reduction Amount in respect of Tranche 3 Notes pursuant to paragraph 4.8 shall be the weighted average of the Closing Price on the 5 Business Days immediately prior to the date on which
the Pay Down Notice is served in respect of such Tranche 3 Notes). 

  

	4.12	 In the event that (i) a Change of Control occurs on or prior to 7 August 2020 and Shareholder
Approval has not been obtained on or prior to the date of such Change of Control; or (ii) Shareholder Approval has not been obtained on or before 7 August 2020 and following 7 August 2020 but prior to the Tranche 1 Maturity Date, the
Company undergoes a Change of Control; in either case the Company shall pay or cause to be paid, within 3 Business Days of the date on which consideration in respect of such Change of Control is remitted to the holders of Ordinary Shares, to each
Noteholder, in addition to the sum payable pursuant to paragraph 4.1(b) of this Part 1 of Schedule 2, an additional sum, the amount of which shall be equal to the value of (a) minus ((b), (c) and (d)), where: 

 

	 	(a)	 is the pro rata amount of consideration which would have been received by such Noteholder in consideration for
their Ordinary Shares and Warrants (plus, to the extent they exist, any Tranche 3 Notes held by such Noteholder but without double-counting in respect of the value of any Warrants that were converted into such Tranche 3 Notes by the Noteholder) on
the Change of Control if that Shareholder Approval had been obtained on or prior to 7 August 2020 and as a result (i) all the Warrants held by such Noteholder as of the date of the Change of Control had become fully exercisable on or prior
to 7 August 2020; and (ii) all Tranche 1 Notes held by such Noteholder as of the date of the Change of Control had automatically converted into Ordinary Shares upon receipt of the Shareholder Approval; and 

 

	 	(b)	 is the aggregate of the principal amount of such Noteholder’s Tranche 1 Notes, together with any accrued
but unpaid interest thereon held by such Noteholder immediately prior to the Notes being redeemed pursuant to paragraph 4.1(b) of this Part 1 of Schedule 2; and 

  
 31 

	 	(c)	 is the pro rata amount of consideration actually received or due to be received by such Noteholder pursuant to
Section 2.10 of the Warrant Instrument in respect of Warrants held by such Noteholder as of the date of such Change of Control; and 

  

	 	(d)	 is the pro rata amount of consideration actually received or due to be received by such Noteholder (whether on
or prior to any Change of Control) in respect of any Ordinary Shares received by such Noteholder in exchange for Tranche 1 Notes pursuant to paragraphs 4.7 through 4.11 of this Schedule 2; 

(such sum being the “Change of Control Payment”). For the avoidance of doubt, if any Noteholder becomes entitled to be paid
the Change of Control Payment, such Noteholder shall cease to be entitled to the Uplift Payment pursuant to paragraph 4.2. 
  

	4.13	 Subject to paragraph 6 if the Noteholder Majority wishes to redeem the Notes following an Acceleration Date,
the Noteholder Majority shall give the Company written notice of the intention to exercise the right to redeem in accordance with the provisions of paragraph 4.1(b), together with confirmation on the date for such redemption (provided that such date
may not occur earlier than the date falling 20 Business Days after the relevant Acceleration Date), conditional always on any such Event of Default not being remedied in the case of paragraph 4.1(c) (“Redemption Notice”).

  

	4.14	 A Redemption Notice shall (unless the Company agrees otherwise) be irrevocable. 

 

	4.15	 For as long as the Subordination Agreement is in force, notwithstanding any of the provisions of paragraph 5 of
this Part 1 of Schedule 2, the Notes cannot be redeemed or repaid following an Acceleration Date until the applicable restriction in the Subordination Agreement has expired or been waived by the Senior Lenders; provided that such delay in payment
shall constitute an additional Event of Default hereunder. 

  

	4.16	 On the Redemption Date, the Company shall repay to all Noteholders the principal amount of the Notes so
redeemed, together with interest on such Notes outstanding at the applicable Interest Rate, and, if applicable, the Uplift Payment payable pursuant to paragraph 4.2. 

 

	4.17	 If, on redemption of a Note, a Noteholder fails to deliver the Certificate for it, or an indemnity in
accordance with these Conditions or to accept payment of moneys due to him, the Company shall pay the moneys due to him into bank account which payment shall discharge the Company from all further obligations in respect of the Note.

  
 32 

	4.18	 The Company shall cancel any Notes repaid, redeemed or purchased and shall not reissue them.

  

	5.	 EVENTS OF DEFAULT 

Subject to paragraphs 4.15 and 6.3 of this part 1 of Schedule 2, the Notes then in issue shall become immediately redeemable at the principal
amount, together with interest on the Notes outstanding, and interest shall become payable at the applicable Default Rate, if: 
  

	 	(a)	 the Company fails to pay any interest or principal in respect of the Notes on the relevant due date;

  

	 	(b)	 the Company fails to comply in any material respect with the covenants of the Notes or any of the Conditions
and does not remedy such failure within 30 calendar days; 

  

	 	(c)	 any judgment, arbitration award, order or decree for the payment of money and that is no longer subject to an
appeal process in an amount, individually or in the aggregate of at least £1,000,000 (or its equivalent in other currencies) is rendered against any Group Company and not cured or withdrawn within 30 calendar days of such judgment, award,
order or decree; 

  

	 	(d)	 a Group Company incurs an Event of Default (as such term is defined in the Novartis Loan Note) pursuant to the
terms of the Novartis Loan Note and such Event of Default is not remedied within the greater of (i) any applicable grace period pursuant to the terms of the Novartis Loan Note; and (ii) 30 days from the occurrence of such Event of Default;
and results in the acceleration by Novartis of any indebtedness owed pursuant to the terms of the Novartis Loan Note; 

  

	 	(e)	 a Group Company incurs an event of default (howsoever defined) in respect of any indebtedness in a principal
amount in excess of £1,000,000 and fails to cure (or have waived) such event of default within 30 calendar days of such event of default; 

  

	 	(f)	 a Group Company commits a material breach of any material contract to which such Group Company is a party and
fails to cure (or have waived) such material breach within 30 calendar days of such event of default 

  
 33 

	 	(g)	 an encumbrancor takes possession or a receiver is appointed of the whole or the major part of the assets or
undertaking of a Group Company or if distress, execution or other legal process is levied or enforced or sued out on or against the whole or the major part of the assets of any Group Company and is not discharged, paid out, withdrawn or removed
within 30 calendar days; 

  

	 	(h)	 a Group Company is the subject of any proceeding in bankruptcy or for their dissolution, liquidation,
winding-up, composition or other relief under any applicable insolvency or bankruptcy laws, whether voluntary or involuntary and, if involuntary, is not dismissed within 60 calendar days of filing; 

 

	 	(i)	 an administration order is made in relation to any Group Company; or 

 

	 	(j)	 an order is made, or an effective resolution is passed, for the winding-up, liquidation, administration or
dissolution of any Group Company (except for the purpose of reorganisation or amalgamation of the Group Companies). 

  

	6.	 ACTION FOLLOWING EVENT OF DEFAULT

  

	6.1	 The Company shall give written notice to the Noteholders as soon as reasonably practicable following the
Company becoming aware of the occurrence of an event specified in paragraph 5, giving reasonable details of that event. 

  

	6.2	 Following receipt of the notice provided pursuant to paragraph 6.1 above, and, if applicable, the expiry of any
cure period provided for such Event of Default, the Noteholders shall have a period of 10 Business Days in which they may exercise their right to waive such Event of Default by Noteholder Majority Consent. 

 

	6.3	 If the Noteholder Majority waives any Event of Default then the Notes shall cease to be immediately redeemable,
and no further interest shall accrue at the applicable Default Rate in respect of such Event of Default (for the avoidance of doubt, notwithstanding such waiver, the Noteholders’ shall remain entitled to any interest accrued at the applicable
Default Rate between the date of the Event of Default and the date of waiver by the Noteholder Majority). 

  

	7.	 TAXATION 

 

	7.1	 All payments to be made by the Company to a Noteholder under the Note shall be made free and clear of and
without any deduction or withholding for or on account of tax (a “Tax Deduction”), unless a Tax Deduction is required by law. If a Tax Deduction is required by law, the amount of the payment due from the Company shall be increased
to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required. 

  
 34 

	7.2	 Each Noteholder shall, in consultation with the Company, take all reasonable steps to mitigate any
circumstances which arise and which would result in any amount becoming payable under or pursuant to paragraph 7.1 above, including (but not limited to) transferring its rights and obligations under this Instrument and the Notes to another affiliate
of such Noteholder and permitting the listing of the Notes on a recognised stock exchange. 

  

	7.3	 Paragraph 7.2 above does not in any way limit the obligations of the Company under this Instrument.

  

	7.4	 Each Noteholder and the Company shall co-operate in completing any procedural formalities necessary for the
Company to obtain authorisation to make that payment without a Tax Deduction including using commercially reasonable endeavours to procure that investors in such Noteholder complete such procedural formalities. 

 

	7.5	 If the Company makes an increased payment under paragraph 7.1 (a “Tax Payment”) and the
relevant Noteholder shall (and shall use commercially reasonable endeavours to procure that investors will) co-operate with the Company to take any reasonable steps to: 

 

	 	(a)	 investigate the availability of any credit against, relief or remission for, or repayment of any Tax is
attributable to that increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required (“Tax Credit”); and 

 

	 	(b)	 obtain and/or utilise that Tax Credit, 

and the Noteholder shall (and shall use commercially reasonable endeavours to procure that investors will) pay an amount to the Company which
that Noteholder (or investors as applicable) determines (acting reasonably) will leave it (after that payment) in the same after-Tax position as it would have been in had some or all of the Tax Payment not been required to be made by the Company.

  
 35 

 Part 2. Conversion 

 

	1.	 CONVERSION 

 

	1.1	 Without prejudice to the provisions paragraphs 4.3 to 4.11 of Schedule 2 Part 1, the Notes shall not be capable
of conversion prior to Shareholder Approval having been obtained and no Noteholder shall serve any Conversion Notice prior to such time. 

  

	1.2	 Subject to paragraph 1.1 and paragraph 1.4 of this Part 2 of Schedule 2, all outstanding Tranche 1 Notes shall
automatically convert into a number of fully paid Ordinary Shares upon Shareholder Approval being obtained, determined by dividing (x) the sum of (i) the outstanding principal amount, plus (ii) all accrued and unpaid interest thereon, plus
(iii) any amount of the Uplift Payment (to the extent the same is applicable pursuant to the terms of this Instrument) which has become due and payable in accordance with paragraph 4.2 and has not already been paid or satisfied by the issue of
Uplift Securities (or otherwise), by (y) the Tranche 1 Conversion Price then in effect; provided that (but subject to paragraph 1.4 of this Part 2 of Schedule 2 below) following such conversion, no individual Noteholder shall hold more
than 9.99% of the aggregate voting rights in the Company (on a fully diluted basis) (the “Ownership Limit”). In the event that Conversion of any Noteholder’s holding of Notes would result in such Noteholder exceeding the
Ownership Limit, the principal amount of the Notes held by such Noteholder which shall convert shall be the greatest amount possible without that Noteholder exceeding such Ownership Limit and the remaining principal balance on such Notes shall
remain outstanding. 

  

	1.3	 Subject to paragraphs 1.1, 1.2 and 1.4 of this Part 2 of Schedule 2: 

 

	 	(a)	 each Noteholder holding Tranche 1 Notes shall have the right, at any time prior to the Tranche 1 Maturity Date,
to serve a Conversion Notice on the Company to convert all or, if the Ownership Limit applies, part of such Noteholder’s Tranche 1 Notes then outstanding (together with any accrued but unpaid interest thereon) into fully paid Ordinary Shares at
the Tranche 1 Conversion Price per Share; and 

  

	 	(b)	 each Noteholder holding Tranche 2 Notes shall have the right, at any time prior to the Tranche 2 Maturity Date
applicable to such Noteholder’s Tranche 2 Notes, to serve a Conversion Notice on the Company to convert all or, if the Ownership Limit applies, part of such Noteholder’s Tranche 2 Notes then outstanding (together with any accrued but
unpaid interest thereon) into fully paid Ordinary Shares at the Tranche 2 Conversion Price per Share, 

  
 36 

	 	
provided that, in each of the foregoing cases, at the time of the Conversion Notice, either (i) such Noteholder’s aggregate voting rights in the Company is not in excess of the
Ownership Limit and would not become in excess of the Ownership Limit as a result of the conversion contemplated by such Conversion Notice; or (ii) such Noteholder has waived the application of the Ownership Limit in accordance with paragraph
1.4 of this Part 2 of Schedule 2. 

  

	1.4	 Notwithstanding the foregoing, a Noteholder may increase or decrease the Ownership Limit to any other
percentage, by written notice to the Company; provided, that the Noteholder may not decrease the limitation prior to August 8, 2020; provided further that a waiver by the Noteholder of the Ownership Limit or a request to increase the Ownership
Limit requires not less than 61 days prior written notice to the Company (with such waiver of the Ownership Limit or request to increase the Ownership Limit taking effect only upon the expiration of such 61 day notice period and applying only to the
Noteholder and not to any other holder of Notes) and that such Ownership Limit shall never be increased above 19.99%. 

  

	1.5	 The Conversion Notice shall set out, at a minimum: 

 

	 	(a)	 the principal amount of the Tranche 1 Notes and/or Tranche 2 Notes to be converted; 

 

	 	(b)	 the amount (if any) of accrued but unpaid interest on such principal amount which is to be converted;

  

	 	(c)	 the Noteholder’s current percentage holding of the aggregate voting rights in the Company;

  

	 	(d)	 the Conversion Date; 

 

	 	(e)	 whether the Ordinary Shares resulting from conversion are to be delivered as ADSs; and 

 

	 	(f)	 any conditions (if any) applicable to the conversion and agreed in writing in advance by the Company.

  

	1.6	 If and to the extent that the Ordinary Shares issued are to be delivered as ADSs, the Noteholder shall be
required to deliver to the Company a completed Issuance and Delivery Instruction in the form set out in Part 4 of this Schedule 2 (as such form may be amended from time to time by notice to the Noteholder) duly completed and executed by the
Noteholder no later than 3 Business Days following service of the relevant Conversion Notice on the Company. 

  
 37 

	1.7	 In the event of any failure by a Noteholder to deliver a duly completed Issuance and Delivery Instruction
within such time period the Company shall disregard such Noteholder’s request for delivery of the relevant Ordinary Shares as ADSs and shall issue the number of Ordinary Shares specified in the Conversion Notice to the Noteholder on the
Conversion Date in accordance with paragraph 2 of this Part 2 of Schedule 2. 

  

	1.8	 The Service of a Conversion Notice shall be irrevocable and binding on the Noteholder. 

 

	2.	 PROCEDURES ON CONVERSION 

 

	2.1	 Subject to paragraph 1.1 of this Part 2 of Schedule 2, on the Conversion Date, the Directors shall convert the
principal amount of the Notes and accrued but unpaid interest and any amount of the Uplift Payment (to the extent the same is applicable pursuant to the terms of this Instrument) which has become due and payable in accordance with paragraph 4.2 and
has not already been paid or satisfied by the issue of Uplift Securities (or otherwise), into such number of new fully paid Ordinary Shares at the applicable Tranche 1 Conversion Price or Tranche 2 Conversion Price (as the case may be) as set out in
paragraph 1 of this Part 2 of Schedule 2 in accordance with the following provisions of paragraph 2.2 to paragraph 2.5 (inclusive). 

  

	2.2	 Conversion of the Notes shall be effected by the Company redeeming the relevant Notes on the Conversion Date.
Each Noteholder whose Notes are being converted shall be deemed to irrevocably authorise and instruct the Company to apply the redemption moneys payable to that Noteholder in subscribing for Ordinary Shares on conversion of the Notes.

  

	2.3	 In the event that a Noteholder has stated in the relevant Conversion Notice that the Ordinary Shares arising
from conversion are to be delivered as ADSs, and there is an effective registration statement covering the Ordinary Shares to be issued on such conversion, then such Ordinary Shares may be issued to, and deposited with (and otherwise registered in
the name of) the custodian (or its nominee) of the Depositary, and following such issuance and deposit the Company will direct the Depositary to issue an amount of ADSs via DTC (with such ADSs being eligible for listing on Nasdaq) in accordance with
the corresponding Issuance and Delivery Instruction. 

  
 38 

	2.4	 Ordinary Shares arising on conversion of the Notes (and any applicable accrued but unpaid interest) shall be
issued and allotted by the Company to the Noteholder or (where a Noteholder has delivered an Issuance and Delivery Instruction) to the custodian of the Depositary on the Conversion Date and the certificates (if physical certificates are requested by
such Noteholder) for such Ordinary Shares shall be despatched to the persons entitled to them at their own risk. 

  

	2.5	 The Ordinary Shares arising on conversion of the Notes shall be credited as fully paid and rank pari passu with
Ordinary Shares of the same class in issue on the Conversion Date and shall carry the right to receive all dividends and other distributions declared, made or paid after the Conversion Date. 

 

	2.6	 The entitlement of each Noteholder to a fraction of a Share shall be rounded down to the nearest whole number
of Ordinary Shares which result from the conversion of the Notes. 

  

	2.7	 In the event that a Noteholder requires Ordinary Shares arising on conversion to be delivered as ADSs, the
entitlement of such Noteholder to ADSs shall be calculated using the ADS Exchange Ratio. No fractional ADSs will be issued, and any fractional entitlements to an ADS shall be issued to the relevant Noteholder in the form of Ordinary Shares in
accordance with Part 2 of this Schedule 2, rounded down to the nearest whole share. 

  

	2.8	 In the event that the Ordinary Shares in issue on the Conversion Date are traded on the AIM Market operated by
London Stock Exchange plc, the Company shall use its reasonable best endeavours to ensure that the Ordinary Shares to be issued upon the conversion of the relevant Notes are admitted to trading on the AIM Market as soon as reasonably practicable
following the Conversion Date. In addition, as soon as practicable following the general meeting at which the Company seeks to obtain Shareholder Approval, the Company shall make or cause to be made an application to AIM for a block listing (up to
the maximum amount available to the Company under AIM block listing rules and in consideration of block listings registered at the time of this Agreement) or otherwise to admit upon Admission or as soon as permitted by AIM thereafter the maximum
number of Ordinary Shares that may be acquired upon conversion of the Notes. Further, the Company shall list the Ordinary Shares issuable upon conversion of the Notes on each other securities exchange on which the Ordinary Shares are then listed
and/or admitted to trading. 

  
 39 

 Part 3. Transfer provisions, Undertakings and other matters 

 

	1.	 The Company shall recognise the registered holder of any Notes as the absolute owner of them and shall not
(except as provided by statute or as ordered by a court of competent jurisdiction) be bound to take notice or see to the execution of any trust (whether express, implied or constructive) to which any Note may be subject. The Company shall not
(except as provided by statute or as ordered by a court of competent jurisdiction) be bound to enter any notice of any trust (whether express, implied or constructive) on the register in respect of any of the Notes. The Notes are freely transferable
in accordance with this Part 3 of Schedule 2 in integral multiples of £1 by instrument in writing in the usual common form (or in such other form as the Directors may approve) and such instrument need not be under seal. Additionally and,
notwithstanding any other provision of this Instrument, for so long as the Subordination Agreement remains in force and effect, no transfer of the Notes may take place unless the transferee in respect of those Notes being transferred is either a
party to the Subordination Agreement or has entered into a deed of adherence to be bound by the terms of such Subordination Agreement, or has otherwise entered into subordination arrangements with the Senior Lenders in writing or the requirement to
enter into subordination arrangements with the Senior Lenders has been otherwise waived by the Senior Lenders in writing in advance of such intended transfer of the Notes; any attempt to transfer Notes in breach of the foregoing provisions is
void ab initio. 

  

	2.	 Each instrument of transfer shall be signed by the transferor, and the transferor shall be deemed to remain the
owner of the Notes to be transferred until the name of the transferee is entered in the register in respect of such Notes. 

  

	3.	 Each instrument of transfer shall be sent to, or left for registration at, the registered office of the Company
for the time being, and shall be accompanied by the Certificate(s) for the Notes to be transferred and any other evidence that the Company may require to prove the title of the transferor or his right to transfer the Notes (and, if such instrument
is executed by some other person on his behalf, the authority of that person to do so). All instruments of transfer that are registered may be retained by the Company. 

 

	4.	 No transfer of Notes shall be registered in respect of which a Redemption Notice, an Uplift Allocation Notice,
a Pay Down Notice or Conversion Notice has been given. 

  
 40 

	5.	 The Company undertakes that, while an aggregate principal amount of Notes greater than £10,000,000
remains in issue, it shall not, without prior Noteholder Majority Consent: 

  

	 	(a)	 sell, transfer, lease, licence or otherwise dispose of any material asset or business of any Group Company
(including the sale, transfer or other disposition of a Group Company’s rights to a third party), other than in the ordinary course of business; 

  

	 	(b)	 carry out any merger, reorganisation, restructuring or sale of all or substantially all of the assets and/or
business of any Group Company; 

  

	 	(c)	 effect the liquidation, dissolution, or winding of any Group Company, or the cessation of all or substantially
all of the business of any Group Company; 

  

	 	(d)	 authorise any debt security (the incurrence, or extension of any credit or loan guarantee in respect of any
loan or grant of credit exceeding £800,640.512(save that, for the avoidance of doubt, no Noteholder Majority Consent shall be required for (i) any refinancing, in whole or in part, of any Existing Indebtedness; or (ii) the
subscription by any Qualifying Noteholder (and the issuance by the Company) for any Tranche 2 Notes pursuant to the Securities Purchase Agreement); 

  

	 	(e)	 discontinue any existing line of business of any Group Company or enter into any new line of line of business
by any Group Company; or 

  

	 	(f)	 issue any securities senior to the Ordinary Shares with respect to voting rights, dividends, conversion rights,
redemption rights, liquidation preference or otherwise. 

  

	6.	 Payment of the principal amount and all accrued interest on the Notes may be made by cheque made payable to, or
by bank transfer to an account nominated for the purpose to the Company in writing by, the registered holder or, in the case of joint registered holders, to the one who is first-named on the register, or to such person or persons as the registered
holder or all the joint registered holders may in writing direct and sent to the registered holder or in the case of joint registered holders to that one of the joint registered holders who is first-named on the register or to such address as the
registered holder or joint registered holders may in writing direct. Cheques may be sent through the post at the risk of the registered holder or jointly registered holders and payment of any such cheque by the bankers on whom it is drawn, or a bank
transfer to the relevant account, shall be good discharge to the Company. 

  
 41 

	7.	 If more than one person is entered in the register as joint holders of any Notes then, without prejudice to
paragraph 5 of this Part 3 of Schedule 2, the receipt of any one of such holders for any moneys payable on or in respect of the Notes shall be as effective a discharge to the Company or other person making the payment as if the person signing such
receipt were the sole registered holder of such Notes. 

  

	8.	 If any Certificate is worn out or defaced then, on production of it to the Directors, they may cancel it and
may issue a fresh Certificate in lieu. If any Certificate is lost or destroyed it may be replaced on such terms (if any) as to evidence and indemnity as the Company may reasonably require. An entry recording the issue of the new Certificate and
indemnity (if any) shall be made in the register. No fee shall be charged for the registration of any transfer or for the registration of any probate, letters of administration, certificate of marriage or death, power of attorney or other documents
relating to or effecting title to any Notes. 

  

	9.	 Any notice or other document required to be given under this Instrument shall be in writing and may be given to
or served on any Noteholder by sending it by first-class post in a prepaid envelope addressed to such Noteholder at his registered address. In the case of joint Noteholders, a notice given to, or document served on, the Noteholder whose name stands
first in the register in respect of such Notes shall be sufficient notice to, or service on, all the joint holders. Any such notice sent or document served by first-class post shall be deemed to have been given or served 48 hours or 96 hours in the
case of a notice or document sent to an address for a Noteholder not in the United Kingdom after the time when it is posted and in proving such notice or service, it shall be sufficient to prove that the envelope containing the notice or document
was properly addressed, stamped and posted. 

  

	10.	 Any notice or other document delivered or sent by post to, or left at, the registered address of any Noteholder
in pursuance of these provisions shall, notwithstanding that such Noteholder is then dead or bankrupt or in liquidation, and whether or not the Company has notice of his death or bankruptcy or liquidation, be deemed to have been duly served or
delivered in respect of any Notes registered in the name of such Noteholder as sole or first-named joint holder unless his name shall at the time of the service of the notice or document have been removed from the register as the holder of the
Notes, and such service shall for all purposes be deemed sufficient service of such notice or document on all persons interested (whether jointly with or as claiming through or under him) in the Notes. 

  
 42 

	11.	 A copy of this Instrument shall be kept at the Company’s registered office. A Noteholder (and any person
authorised by a Noteholder) may inspect that copy of the Instrument at all reasonable times during office hours. 

  

	12.	 Each Noteholder by subscribing for and/or holding any Notes pursuant to the terms of this Instrument expressly
and irrevocably agrees that the Group Companies may refinance all or any part of either the Senior Loan or the Novartis Loan Note (either with the existing creditors thereof or with third party creditors) and that, such refinanced loan shall for all
purposes under this Instrument be treated, mutatis mutandis ̧ as the Senior Loan or the Novartis Loan Note (as the case may be) and benefit from any protections, provisions, exemptions or other terms hereof, without requiring the consent
of any Noteholder; provided, that no such refinancing or amendment of the Senior Loan which increases the amount of the principal sum of the Senior Loan owing from time to time above £14 million, or extends the Final Repayment Date for
the Senior Loan beyond 1 March 2022, shall be effective unless otherwise approved by the Noteholder Majority; provided, further, that no such consent or agreement shall be required from any Noteholder Majority from or after the time when
Shareholder Approval has been obtained. For the avoidance of doubt, if any such refinancing takes place, any lenders thereunder shall be treated as the “Senior Lenders” for the purposes of this Instrument. The Company shall as soon as
reasonably practicable after the occurrence of any such refinancing, provide notice of the same to the Noteholders. 

  

	13.	 If the Company, whilst any Notes are outstanding, shall effect a subdivision of its Ordinary Shares, the
Tranche 1 Conversion Price and Tranche 2 Conversion Price (if any) then in effect immediately before that subdivision shall be proportionately decreased. If the Company, whilst any Notes are outstanding, shall combine its Ordinary Shares, the
Tranche 1 Conversion Price and Tranche 2 Conversion Price then in effect immediately before the combination shall be proportionately increased. 

  

	14.	 If the Company, whilst any Notes are outstanding, 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 from the fund for invested unrestricted equity payable in Ordinary Shares in the Company, then and in each such event the
Tranche 1 Conversion Price and Tranche 2 Conversion 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 Tranche 1 Conversion Price or Tranche 2 Conversion Price, as applicable, then in effect by a fraction: 

  
 43 

	 	(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; 

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 Tranche 1 Conversion Price and Tranche 2 Conversion Price shall be recomputed accordingly as of the close of business on such date and thereafter the Tranche 1 Conversion Price and Tranche 2 Conversion Price shall be
adjusted pursuant to this paragraph as of the time of actual payment of such dividends or distributions, if any. 
  

	15.	 When any adjustment is required to be made in the Tranche 1 Conversion Price or Tranche 2 Conversion Price
pursuant to paragraph 14 or 15, the number of Ordinary Shares issuable upon conversion of a Note shall be calculated by reference to the revised Tranche 1 Conversion Price or Tranche 2 Conversion price following the adjustment made by paragraph 14
or 15. 

  

	16.	 If the Company, whilst any Notes are outstanding, shall: (i) pay or declare a dividend payable to all
shareholders other than in Ordinary Shares (e.g. in cash or assets other than Ordinary Shares in the Company); or (ii) make any distribution of share capital (including share premium account and capital redemption legal reserve), then and in
each such event the Tranche 1 Conversion Price and Tranche 2 Conversion Price then in effect immediately before such event shall be decreased as of such event by multiplying the Tranche 1 Conversion Price or Tranche 2 Conversion Price, as
applicable, then in effect by a fraction: 

  

	 	(a)	 the numerator of which shall be equal to (i) the Closing Price on the day immediately prior to the date
when such event was first published (or if there is no such price, the fair market value of one ordinary share of the Company as of such date as determined in good faith by the Directors) minus (ii) the amount per issued share of such dividend
or distribution; and 

  

	 	(b)	 the denominator of which shall be the Closing Price on the day immediately prior to the date when such event
was first published (or if there is no such price, the fair market value of one ordinary share of the Company as of such date as determined in good faith by the Directors). 

  
 44 

 In the event that the application of the above fraction would result in an increase in the
Conversion Price, then no adjustment shall be made hereunder. If the Company distributes assets other than cash, the amount per outstanding share of the distribution shall be calculated by reference to the fair market value of the assets distributed
as determined in good faith by the Directors. 
  

	17.	 If, prior to the Maturity Date, there shall occur any reorganization, recapitalization, reclassification,
consolidation, merger or demerger involving the Company in which the Company’s Ordinary Shares are converted into or exchanged for securities, cash or other property (other than a transaction covered by paragraphs 14 or 15) (collectively, a
“Reorganization”), then, following such Reorganization, the Noteholders shall receive upon conversion the kind and amount of securities, cash or other property, if any, which the Noteholders would have been entitled to receive
pursuant to such Reorganization if such conversion had taken place immediately prior to such Reorganization. Appropriate adjustment (as determined in good faith by the Directors) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Noteholder, to the end that the provisions set forth in this Instrument (including provisions with respect to changes in and other adjustments of the Tranche 1 Conversion Price and/or
Tranche 2 Conversion Price (as applicable) and the number of Ordinary Shares issuable upon conversion of the Notes) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities, cash or other property thereafter
deliverable upon the conversion of the Notes. 

  
 45 

 Part 4. ADS Issuance and Delivery Instruction 

[DATE] 
 Citibank, N.A., as Depositary 

388 Greenwich Street 
 New York, New York 10013 

Attn.: Mr. Brian M. Teitelbaum (brian.m.teitelbaum@citi.com) 

With a copy simultaneously delivered to: 
 Citibank, N.A., London
Branch 
 25 Canada Square 
 Canary Wharf 

London E14 5LB, England 
 Attn.: UK Custody Settlements 

Custody Team (uksettlements@citi.com) 
 Re: Issuance and Delivery
Instruction—Mereo BioPharma Group plc (CUSIP No.: 589492107) – Deposit & Hold 
 Dear Sirs: 

Reference is made to the Deposit Agreement, dated as of April 23, 2018, as amended and supplemented from time to time (the “Deposit
Agreement”), by and among Mereo BioPharma Group plc, a public limited company incorporated under the laws of England and Wales and its successors (the “Company”), Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, as Depositary (the “Depositary”), and all Holders and Beneficial Owners of American Depositary Shares (the “ADSs”) issued thereunder. All capitalized terms used, but not otherwise
defined herein, shall have the meaning assigned thereto in the Deposit Agreement. 
 In accordance with the terms and subject to the
limitations set forth in the Deposit Agreement, promptly following the Depositary’s receipt of confirmation from the Custodian that the Custodian has received a deposit of the number of Shares specified below made by the Company for the benefit
of the undersigned holder thereof (the “Holder” and together with the Company, the “Undersigned”), the Undersigned hereby jointly instruct the Depositary, and the Depositary hereby agrees: 

(i) to promptly accept for deposit the number of Shares and issue the number of ADSs as specified below: 

  
 46 

Number of Shares deposited:                   
                                         
                                         
                                         
                                   Shares 

Number of ADSs (CUSIP No.: 589492107; each ADS representing five (5) Shares to be issued: 

                       
     ADSs             
 and (ii) to promptly
deliver such Program ADSs, as follows: 
  

			
	Name of DTC Participant to which the ADSs are to be delivered:	 	  

		
	DTC Participant Account No.:	 	  

		
	Account No. for recipient of ADSs at DTC Participant (f/b/o/ information):	 	  

		
	Name on whose behalf the above number of ADSs are to be issued and delivered:	 	  

		
	Contact person at DTC Participant:	 	  

		
	Daytime telephone number of contact person at DTC:	 	  

 The Company hereby confirms and certifies that (i) the registration statement on Form F-3 (File No. 333-239708) (the
“Registration Statement”), filed with the U.S. Securities and Exchange Commission (the “Commission”) on July 6, 2020, registers the resale of the above Shares represented by ADSs, such ADSs will be freely transferable
following the issuance thereof by the Depositary, and there are no legal restrictions on subsequent transfers of the ADSs to be issued hereunder under the laws of England and Wales or the United States, (ii) the Registration Statement is
effective under the Securities Act of 1933, as amended (the “Securities Act”), and (iii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or threatened by the Commission. 
 The Holder hereby represents and covenants to,
and for the benefit of, the Depositary and Citibank, N.A.—London Branch (the “Custodian”), that (i) the Holder is not an “affiliate” of the Company as that term is defined in Rule 144 promulgated by the Commission under
the Securities Act and has not been an affiliate at any time during the 90 days immediately preceding the date hereof, and (ii) all stamp duty taxes, including, without limitation, the U.K. Stamp Duty Reserve Tax (“SDRT”), will be
paid in full and on a timely basis to the extent such taxes are payable in respect of the deposit of the Shares and the issuance and delivery of the ADSs as contemplated herein. 

Each of the Holder and, to the extent it is not unlawful for the Company to do so under the applicable laws of England and Wales, the Company agrees to
indemnify the Depositary and the Custodian for, and to hold the Depositary and the Custodian harmless against, all losses, liabilities, taxes, charges, penalties or expenses (including reasonable legal fees and disbursements), incurred by the
Depositary and/or by the Custodian or to which the 

  
 47 

 Depositary and/or the Custodian may become subject to and arising directly or indirectly from the failure by
any person to pay (or discharge) any applicable stamp duty taxes, including, without limitation, SDRT, or any other similar duty or tax in connection with the deposit of the Shares and the issuance and delivery of the ADSs as contemplated herein,
save to the extent that such losses, liabilities, taxes, charges, penalties or expenses are due to the negligence or bad faith of the Custodian or the Depositary. 
  

			
	[HOLDER]	  	MEREO BIOPHARMA GROUP PLC
		
	By:                                     
                    	  	By:                                     
                    
	Name:	  	Name:
	Title:	  	Title:

  
 48 

 Schedule 3 Meetings of the Noteholders 

 

	1.	 The Company may at any time convene a meeting of Noteholders. In addition, the Company shall at the written
request of the holders of not less than one-quarter (25%) in nominal amount of the outstanding Notes convene a meeting of the Noteholders. Any meeting shall be held at such place as the Company may designate. 

 

	2.	 At least 14 days’ notice (exclusive of the day on which the notice is served or deemed to be served and of
the day for which notice is given) of every meeting shall be given to the Noteholders. The notice shall specify the place, day and time of the meeting and the general nature of the business to be transacted, but it shall not be necessary (except in
the case of a Special Resolution) to specify in the notice the terms of any resolution to be proposed. The accidental omission to give notice to, or the non- receipt of notice by, any of the Noteholders shall not invalidate the proceedings at any
meeting. A meeting of the Noteholders shall, despite being called at shorter notice than specified above, be deemed to have been duly called if it is agreed in writing by all of the Noteholders. 

 

	3.	 At any meeting the quorum shall be two or more Noteholders holding, or representing by proxy, at least 50.1% in
nominal principal amount of the outstanding Notes. No business (other than choosing a Chairman) shall be transacted at any meeting unless the requisite quorum is present. 

 

	4.	 If a quorum is not present, within half an hour from the time appointed for the meeting, the meeting shall be
dissolved if it was convened on the requisition of Noteholders. In any other case, it shall stand adjourned to such day and time (at least 14 days later, but not more than 28 days later) and to such place as may be appointed by the Chairman. At such
adjourned meeting, two Noteholders present in person (or by proxy) and entitled to vote shall constitute a quorum (whatever the nominal amount of the Notes held by them). At least 14 days’ notice of any adjourned meeting of Noteholders shall be
given (in the same manner mutatis mutandis as for an original meeting). That notice shall state that two Noteholders present in person (or by proxy) at the adjourned meeting (whatever the nominal amount of Notes held by them) shall form a quorum.

  
 49 

	5.	 A person (who may but need not be a Noteholder) nominated by the Company shall be entitled to take the chair at
every such meeting but, if no such person is nominated or if the person nominated is not be present at the meeting within five minutes after the time appointed for holding the meeting, the Noteholders present shall choose one of their number to be
Chairman. Any Director or officer of, any Secretary of, and the solicitors to, the Company and any other person authorised in that behalf by the Company may attend at any such meeting. 

 

	6.	 Each question submitted to a meeting of Noteholders shall, unless a poll is demanded, be decided by a show of
hands. 

  

	7.	 At any meeting of Noteholders unless a poll is demanded by the Chairman or by one or more Noteholders present
in person or by proxy and holding or representing in the aggregate not less than one-twentieth in nominal amount of the outstanding Notes (before or on the declaration of the result of the show of hands), a declaration by the Chairman that a
resolution has been carried by the requisite majority, lost or not carried by the requisite majority 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.

  

	8.	 If a poll is duly demanded, it shall be taken in such manner and (subject as set out below) either at once or
after an adjournment as the Chairman directs. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll shall not prevent the meeting from continuing for the transaction of any
business other than the question on which the poll has been demanded. The demand for a poll may be withdrawn. 

  

	9.	 If there is an equality of votes, whether on a show of hands or on a poll, the Chairman of the meeting shall
not be entitled to a casting vote in addition to the vote(s) (if any) to which he may be entitled as a Noteholder or as a proxy. 

  

	10.	 The Chairman may, with the consent of (and shall if so directed by) any meeting at which a quorum is present,
adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting except business that might lawfully have been transacted at the meeting from which the adjournment took place.

  

	11.	 Any poll demanded at any meeting on the election of a Chairman, or on any question of adjournment, shall be
taken at the meeting without adjournment. 

  
 50 

	12.	 On a show of hands, each Noteholder who is an individual and is present in person or (being a corporation) is
present by its duly authorised representative or by one of its officers as its proxy, shall have one vote. On a poll, each Noteholder present in person or by proxy, shall have one vote for every £1 nominal principal amount of Notes held by him
and a person entitled to more than one vote need not (if he votes) use all his votes or cast all the votes he uses in the same way. 

  

	13.	 In the case of joint registered Noteholders any one of them shall be entitled to vote in respect of such Notes
either in person or by proxy and, in the latter case, as if the joint holder were solely entitled to such Notes. If more than one joint holder is present at any meeting either personally or by proxy that one joint holder so present whose name as
between himself and the other or others present stands first in the register as one of the joint holders shall alone be entitled to vote in person or by proxy. 

 

	14.	 Each instrument appointing a proxy must be in writing and duly executed by the appointor or his duly authorised
attorney or, in the case of a corporation under its common seal or duly executed by a duly authorised attorney or officer. The Chairman may (but shall not be bound to) require evidence of the authority of any attorney or officer. A proxy need not be
a Noteholder. 

  

	15.	 An instrument of proxy shall be in the usual or common form or in any other form that the Directors may accept.
The proxy shall be deemed to include the right to demand or join in demanding a poll. A proxy shall, unless stated otherwise, be valid as well for any adjournment of the meeting as for the meeting to which it relates and need not be witnessed.

  

	16.	 The instrument appointing a proxy, and the power of attorney or other authority (if any) under which it is
signed or a notarially certified copy of such power of attorney or authority, shall be deposited at the place specified in (or in any document accompanying) the notice convening the meeting. If no such place is specified, the proxy shall be
deposited at the registered office of the Company not less than 48 hours before the time appointed for holding the meeting or adjourned meeting or for taking of the poll at which the person named in that instrument proposes to vote. In default, the
instrument of proxy shall not be treated as valid. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the revocation of the proxy or of the authority under which the proxy is given, unless notification
in writing of the revocation has been received at the registered office of the Company or at such other place (if any) specified for the deposit of instruments of proxy in the notice convening the meeting (or any document accompanying it) 48 hours
before the commencement of the meeting or adjourned meeting or the taking of the poll at which the vote is given. 

  
 51 

	17.	 Without prejudice to any of the powers conferred on the Company under any of the provisions of the Instrument,
a meeting of the Noteholders shall, in addition to any other powers, have the following powers exercisable by Special Resolution: 

  

	 	(a)	 power to sanction the exchange or sale of the Notes for, or the conversion of the Notes into, or the
cancellation of the Notes in consideration of, shares, stock, debenture stock or other obligations or security of the Company or any other company formed or to be formed (provided, in each of the foregoing cases, that such action will be conducted
in accordance with the terms of the Conditions or with the prior written consent of the Company); 

  

	 	(b)	 power to sanction any abrogation, modification or compromise of, or any arrangement in respect of, the
Noteholders’ rights against the Company, provided the same has been previously approved in writing by the Company, whether those rights shall arise under the Instrument, the Notes or otherwise; 

 

	 	(c)	 power to assent to any modification of the provisions contained in the Instrument and the Conditions and to
authorise the Company to execute any supplemental instrument embodying any such modification. Any such modification shall be proposed by the Company; and 

  

	 	(d)	 with the prior written consent of the Company, power to: 

 

	 	(i)	 modify the date fixed for final redemption of the Notes; 

 

	 	(ii)	 reduce or cancel the principal amount payable on the Notes; 

 

	 	(iii)	 reduce the amount payable or modify the method of calculating the amount payable on the Notes; or

  

	 	(iv)	 modify the dates for payment in respect of any interest, on the Notes. 

 

	18.	 A Special Resolution passed at a meeting of the Noteholders shall be binding on all the Noteholders whether or
not they are present at the meeting. Each of the Noteholders shall be bound to give effect to it accordingly. The passing of any such resolution shall be conclusive evidence that the circumstances justify passing it (so that the meeting may
determine without appeal whether or not the circumstances justify passing it). 

  

	19.	 Special Resolution, when used in the Conditions, means a resolution passed at a meeting of the
Noteholders duly convened and held in accordance with the Conditions, and carried by a Noteholder Majority. 

  
 52 

	20.	 A resolution in writing signed by or on behalf of a Noteholder Majority shall, for all purposes, be as valid
and effectual as a Special Resolution passed at a meeting duly convened and held in accordance with the Conditions. Such resolution in writing may be contained in one document or in several documents in similar form, each signed by one or more
Noteholders. 

  

	21.	 Minutes of all resolutions and proceedings at every meeting shall be made and duly entered in books to be from
time to time provided for that purpose by the Company. Any minutes, if purporting to be signed by the Chairman of the meeting or by the Chairman of the next succeeding meeting of the Noteholders, shall be conclusive evidence of the matters stated in
them. Until the contrary is proved, every meeting for which minutes have been made and signed shall be deemed to have been duly held and convened, and all resolutions passed at the meeting to have been duly passed. 

  
 53 

 EXECUTED as a DEED by MEREO BIOPHARMA GROUP PLC 

acting by 
  

                          
                                         
      
 Director/Authorised signatory 
  

                          
                                         
      
 Director/Authorised signatory 
  

					
	  
	 		 	  

	 Witness
	 		 	
			
	 Name:
	 		 	  

			
	 Address:
	 		 	  

			
		 		 	  

			
	 Occupation:
	 		 	  

  
 54 

 SIGNATURES 

THE COMPANY 
 EXECUTED as a DEED by

 MEREO BIOPHARMA GROUP PLC 
  

					
	  
	 		 	Signature of Director
			
	  
	 		 	Name of Director
			
	  
	 		 	Signature of Secretary
			
	  
	 		 	Name of Secretary

  
 8 

 THE NOTEHOLDERS 

EXECUTED as a DEED by 
 ORBIMED PRIVATE INVESTMENTS VII, LP

 By: OrbiMed Capital GP VII LLC, 

its General Partner 
 By: OrbiMed
Advisors LLC, 
 its Managing Member 
  

					
	 By:
	  	  
	  	
		  	Name:	  	
		  	Title:	  	

 Notice details 

Address:                c/o OrbiMed Advisors LLC, 601 

Lexington Avenue, 54th Floor, New York, NY 
 10022 

Email:                   Legal@OrbiMed.com 

Attention:             General Counsel 

  
 9 

 EXECUTED as a DEED by 

ORBIMED PARTNERS MASTER FUND LIMITED 

By: OrbiMed Capital LLC, solely in its 

capacity as Investment Advisor 
  

					
	 By:
	  	  
	  	
		  	Name:	  	
		  	Title:	  	

 Notice details 
 Address:
                c/o OrbiMed Advisors LLC, 
 601 Lexington Avenue, 54th
Floor, New York, 
 NY 10022 
 Email:
                  Legal@OrbiMed.com 
 Attention:             General Counsel 

  
 10 

 EXECUTED as a DEED by 

ORBIMED GENESIS MASTER FUND, L.P. 
 By: OrbiMed Genesis
GP, LLC, its General Partner 
 By: OrbiMed Advisors LLC, its Managing Member 

 

					
	 By:
	  	  
	  	
		  	Name:	  	
		  	Title:	  	

 Notice details 

Address:                 c/o OrbiMed Advisors LLC, 601 

Lexington Avenue, 54th Floor, New York, NY 
 10022 

Email:                     Legal@OrbiMed.com 

Attention:               General Counsel 

  
 11 

 EXECUTED as a DEED by 

667, L.P. 
 By: BAKER BROS. ADVISORS LP, 

management company and investment adviser to 
 667, L.P., pursuant
to authority granted to it by 
 Baker Biotech Capital, L.P., general partner to 

667, L.P., and not as the general partner. 
 By:
                                         
                                         
   

  
 12 

 EXECUTED as a DEED by 

BAKER BROTHERS LIFE SCIENCES, L.P. 
 By: BAKER BROS.
ADVISORS LP, 
 management company and investment adviser to 

Baker Brothers Life Sciences, L.P., pursuant to 
 authority
granted to it by Baker Brothers Life 
 Sciences Capital, L.P., general partner to Baker 

Brothers Life Sciences, L.P., and not as the 
 general partner.

 By:
                                        
                                     

  
 13 

 EXECUTED as a DEED by 

BOXER CAPITAL, LLC 
 acting by 

 

                          
                                   

Director/Authorised signatory 
  

                          
                                   

Director/Authorised signatory 
 Witness: 

 

					
	 Name:
	  	  
	  	
			
	 Address:
	  	  
	  	
			
	 Occupation:
	  	  
	  	
			
		  	  
	  	

 Notice details 
 Address:
            12860 El Camino Real, Suite 300, San Diego, CA 92130 
 Email:
                adavis@tavistock.com 
 Attention:
          Aaron Davis 

  
 14 

 EXECUTED as a DEED by 

MVA INVESTORS, LLC 
 acting by 

 

                          
                               

Director/Authorised signatory 
  

                          
                               

Director/Authorised signatory 
 Witness: 

 

					
	 Name:
	  	  
	  	
			
	 Address:
	  	  
	  	
			
	 Occupation:
	  	  
	  	
			
		  	  
	  	

 Notice details 
 Address:
            12860 El Camino Real, Suite 300, San Diego, CA 92130 
 Email:
                adavis@tavistock.com 
 Attention:
          Aaron Davis 

  
 15 

 EXECUTED as a DEED by 

VIVO CAPITAL FUND IX, L.P. 
 acting by 

 

                          
                               

Director/Authorised signatory 
  

                          
                               

Director/Authorised signatory 
  

					
	 Witness:
	  	  
	  	
			
	 Name:
	  	  
	  	
			
	 Address:
	  	  
	  	
			
		  	  
	  	
			
	 Occupation:
	  	  
	  	

 Notice details 
 Address:
            C/O Vivo Capital LLC 192 
 Lytton Avenue, Palo Alto, CA 94301 

Email:                 legal@vivocapital.com 

Attention:           Legal 

  
 16 

 EXECUTED as a DEED by 

VIVO OPPORTUNITY FUND, L.P. 
 acting by 

 

                          
                               

Director/Authorised signatory 
  

                          
                               

Director/Authorised signatory 
  

					
	 Witness:
	  		  	
			
	 Name:
	  	  
	  	
			
	 Address:
	  	  
	  	
			
		  	  
	  	
			
	 Occupation:
	  	  
	  	

 Notice details 
 Address:
            C/O Vivo Capital LLC 192 
 Lytton Avenue, Palo Alto, CA 94301 

Email:               legal@vivocapital.com 

Attention:         Legal 

  
 17

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