Next Gen Solicitors

Security

1. Prioritisation of Investor Security Investor security is the Company’s priority.

Should a case fail, however, the ATE insurance policy provides cover for the legal costs and disbursements incurred by Next Gen Solicitors in the pursuit or defence of litigation and arbitration on each individual case. The policy is applied: • after the case has gone through the vetting process; and • once the client has instructed Next Gen Solicitors to handle the case.

The Company has granted a debenture over all of its assets to the Trustee, acting on behalf of Bondholders. The debenture over the Company will be only be filed once the charge held by VFS Legal Ltd has been satisfied in full. The contractual right to receive the proceeds of each case actioned by Next Gen Solicitors, whether in the form of costs awarded and success fee for a successful claim or the proceeds of ‘After the Event’ (ATE) Insurance policy for an unsuccessful claim, will be assigned by the client to the Company and then assigned by the Company to the Trustee to be held for the benefit of Investors pending the repayment in full of their subscribed capital.

These disbursements include: • the cost of the insurance policy premium; • any specialist report; • third party court costs; • court costs incurred to bring the case.

Please note, these security arrangements only cover Investors’ subscribed capital. It does not cover any interest payments due to Investors.

It should be noted here, too, that Next Gen Solicitors uses invested capital solely to cashflow the costs of the case. Next Gen Solicitors does not take any fees, commissions or business expenses of any kind from the capital raised. In summary, ATE insurance removes the risk of having to pay the other side's costs if Next Gen Solicitors were to lose a case. It also provides an incentive for the other side to settle, knowing that the insurer will have conducted its own analysis of the merits of the case.

The Trustee, acting as Escrow Agent, will hold investors’ funds until they are drawn down by Next Gen Solicitors to fund a specific case. Proceeds received from each case, in the form of either damages or proceeds of ATE Insurance claims, will be held by the Escrow Agent and allocated against the specific case in the ledger. In the event of the insolvency of the Company or its default under the Bond documents, this will form an asset pool controlled by the Trustee fromwhich to satisfy the claims of Bondholders. As regards on-going cases in a default situation, a substitute Solicitor has already been contracted to continue with any ongoing cases until completion in the event that the Company is unable to do so. 2.2 Capital protection – ATE Insurance On each case it enacts, Next Gen Solicitors has in place After the Event (ATE) Insurance. This class of insurance is essential to the 'NoWin, No Fee' service model offered by Next Gen Solicitors. (ATE insurance is a one-off payment, made up front by Next Gen Solicitors.) Next Gen Solicitors finances each case on behalf of that client in exchange for a share of the winnings should the claim be successful. It is this share of the success fee model (as opposed to charging fees to the client) that makes the entire ‘claimant’ sector so profitable.

ATE insurance also sends a clear message to the defendant that the insured is in the litigation for the duration, having already minimised the litigation costs risk.

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