INVESTOR TERMS AND CONDITIONS
These terms and conditions (these “terms”) set out the terms of the agreement between you (“you”) as the user of our Site, the Nominee, and us, Capital Cell Ltd (“we”, “us” or “CC”).
These terms should be read in conjunction with our terms of website use https://capitalcell.co.uk/terms-and-conditions/ and they apply to your use of the Site as an investor (“Investor”), including as the lead investor(s) in respect of a particular Fund Raising (“Lead Investor”). Use of our Site is conditional upon your acceptance of these terms. If you do not agree to these terms you should immediately discontinue use of our Site.
These terms shall become binding as soon as you have completed the registration process and have successfully passed our anti-money laundering checks (if any).
“Articles” means the articles of association of the Company concerned as adopted and in force from time to time.
“Company” means a private company limited by shares which is seeking to raise funds in whole or part through our Site.
“Fund Raising” means a fund raising performed by a company in whole or part through our Site.
“HMRC” means HM Revenue and Customs.
“Investor” has the meaning given to such term in the opening paragraph of this agreement.
“Lead Investor” has the meaning given to such term in the opening paragraph of this agreement.
“Maximum Target Amount” means the maximum total amount that a Company seeks to raise in a Fund Raising which, in any event is no more than 125% of the Target Amount.
“Minimum Target Amount” means the minimum total amount that a Company seeks to raise in a Fund Raising which, in any event, is no less than 90% of the Target Amount.
“Nominated Account” means the bank account of an Investor (in the name of the Investor) nominated by such Investor at the time of registration on the Site, as may be subsequently changed by such Investor.
“Nominee” has the meaning given to such term in the opening paragraph of this agreement.
“Posting” means a listing for a Company on the Site.
“Pre-Closing Account” means the bank account of the Nominee.
“Relevant Person” means each Lead Investor, the Nominee, CC and any and all of CC and the Nominee’s directors, employees, consultants, agents or advisers.
“Site” means our online crowdfunding site at www.capitalcell.co.uk.
“Investment Agreement” means an agreement between the Nominee and the Company under which the Nominee agrees to subscribe for shares in the Company through the Site on behalf of the Investor(s), and which sets out the full terms on which the Nominee (acting on behalf of the Investors) agrees to subscribe for such shares.
“Target Amount” means the amount a Company is seeking to raise on the Site.
“Target Date” means the date by which the Minimum Target Amount must be raised.
INVESTMENT RISKS AND WARNINGS
By using our Site in any capacity you acknowledge and agree that you have read and understood the following risks and warnings. If you do not understand any of the risks or warnings set out below you should take advice from an Independent Financial Advisor, solicitor or similar qualified professional before using our Site. The following list of risk factors is not intended to be exhaustive, nor a complete explanation of the risks involved. Any decision to make an investment through our Site is made entirely at your own risk.
- Potential for Loss. Investing in start-up businesses is inherently risky and most start-ups will fail. There is a significant chance that you will lose all of the monies you invest in Companies that appear on the Site. Given the risks involved in investing in start-up companies, you are advised to adopt a diversified portfolio of investments. You are strongly advised to invest no more in these opportunities than you can afford to lose.
For many people, a sensible maximum threshold is the greater of 10% of your stated annual income or 10% of your net assets. These figures are a guide and you should note that this does not constitute a representation on the part of any Relevant Person that investing 10% of your net assets is in any way safe or recommended.
You should only invest if you can afford to lose the money you are investing. If you do not have disposable income of this nature to invest, we recommend that you do not proceed to use our Site.
- History. As the majority of Companies that appear on our Site are recently formed start-up companies, they may lack any trading or other operating history. The success of the Company will depend upon the ability of the Company’s management team to implement a strategy for growing the Company.
- Statements of Anticipated Performance. A Posting for a Company may contain certain statements, estimates, projections, forecasts and data provided by the Company with respect to the anticipated future performance of the Company’s business and/or its industry. Such statements, estimates, projections, forecasts and data reflect various assumptions by the Company’s management concerning anticipated results, which assumptions may or may not prove to be correct. Actual results may vary from such statements, estimates, projections, forecasts and data, and such variations may be material.
- Liquidity Risk. It is highly unlikely that, in the short to medium term, any secondary market for shares that you acquire in Companies seeking investment on our Site will develop, nor is it likely that any of them will be listed on any recognised stock market. As such you are unlikely to be able to sell your shares unless and until an offer is made by a buyer for the whole of the Company’s issued share capital.
- Dividends. Start-up companies very rarely pay dividends so you are unlikely to receive any return on your investment unless and until an offer is made by a buyer for the whole of the Company’s issued share capital.
- Dilution. Any investment you make is subject to dilution. It is likely that the Company will need to raise additional capital in the future which is likely to require one or more issues of shares to existing and/or new investors. Therefore, the proportion of the Company which your shares correspond to at the time you make your investment may subsequently be diluted by such subsequent issue(s) of shares.
In order to incentivise, retain or attract directors, employees or service providers the Company may also choose to issue shares or grant share options to them, which would also dilute your shareholding.
New shares issued in subsequent fund raising(s) by the Company may also carry preferential rights to those acquired by you on the Site. For example, they may carry a right to participate in the proceeds of sale before any proceeds of sale are distributed to shareholders who applied for shares through the Site or to receive one or more times the amount invested by the relevant investor.
- Tax Treatment of Shares. The UK government provides certain types of tax relief for investments in small businesses by UK tax resident individuals, among which are the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS). Certain investments made through the Site may be eligible for EIS, SEIS or similar relief («Reliefs«), as described below.
In the event that a Company (i) has received advance assurance from HMRC that it is eligible for a Relief and (ii) has agreed to allow Investors to claim Relief, we will indicate this in the Posting. Similarly, in the event that a Company has not yet received advance assurance from HMRC that it is eligible for a Relief but (i) appears to us to be eligible for a Relief and (ii) has agreed to allow Investors to claim such Relief, we will indicate this in the Posting, and will only complete an investment in the Company if and after it receives such advance assurance.
Notwithstanding advance assurance having been granted as described above, the decision as to whether a Company or investment is ultimately eligible for a Relief is a matter determined by HMRC following completion of the investment. We cannot guarantee that a Relief will be granted even if the Company has received advance assurance, regardless of whether HMRC’s refusal to grant Relief is due to a characteristic of the Company or a characteristic of the structure of your investment in the Company or otherwise.
There are a number of restrictions as to which Investors are able to claim a Relief, and even if the Company is eligible for Relief, you may not be able to take advantage of it, or you may lose your ability to take advantage of it.
Eligibility for a Relief can be lost as a result of subsequent events (for example sale of the shares or changes to the business or ownership of the Company), and neither CC nor the Company provide any guarantee that an investee company or your investment will remain eligible. If your investment ceases to be eligible for a Relief, you may have to repay amounts to HMRC and/or you may lose certain other tax advantages associated with the Relief.
You represent and warrant that you are resident in the United Kingdom for taxation and all other purposes. In particular but without limitation, if you are not resident for tax purposes in the United Kingdom your investment will not be eligible either for any Relief.
We will not be liable to you for any losses, damages or costs arising in the event that you are not able to claim a Relief on a particular investment or because any Relief you have claimed is lost, due to any of the circumstances described in these terms or otherwise. You are strongly advised to speak with your tax adviser and/or a solicitor before making any investment on the basis that you will be able to receive any Relief.
- Compensation. Investors will not be able to bring any claim under the Financial Services Compensation Scheme in the event that any Company fails.
- Site Profile. At some stage after you log onto the Site, you will be asked to register to use the Site and create a profile. The information you provide in your profile is the basis on which we identify you for purposes of communicating with you, fulfil any reporting obligations that we have to any regulatory or governmental authorities, and conduct any anti-money laundering or other checks we run on you (as described below).
- Self-Certification. If you make an investment in a Company through the Site you will become a “retail” client of CC for the purposes of the FCA (Financial Conduct Authority, www.fca.org.uk) Rules. As part of your registration process, you will be required to answer self-certification questions. It is important that you answer such questions entirely on your own and without the assistance of another individual.
- No Advice. You acknowledge and agree that CC has not provided you with any advice in relation to the transactions conducted through the Site. In addition, you confirm to both CC and the Nominee that, for the purposes of entering into any investment, you enter into any investment independently and entirely on the basis of your own assessment of the risks involved.
- Fund Raising Updates. As part of the registration process, you will be able to sign up for regular updates in respective of the progress of a Company’s Fund Raising. These updates will be sent to you via email to the address you provide as part of the registration process. You can opt-out of receiving these updates at any time by contacting us at firstname.lastname@example.org.
- No offer to invest. The opportunity to invest in a Company through the Site may also be deemed to involve an «offer» to you of those shares. By agreeing to these terms you are expressly agreeing that you consider, and will treat for all purposes, any such offer (a) as «not being calculated to result, directly or indirectly, in such shares becoming available to persons other than those receiving the offer,» as that phrase is used in section 756(3) of the Companies Act, and, as a consequence, (b) as not being a «public offer» for purposes of section 755 of the Companies Act.
- Information contained in a Posting. On becoming an “Investor”, you will be able to view the majority of the Postings on the Site. The information that you have access to in respect of each Posting that you can view will normally include without limitation:
- the name, legal status, physical address and website address of the Company;
- the names of the directors and 20% or greater shareholders;
- a description of the business and intended use of the proceeds from the Fund Raising;
- the Minimum Target Amount and the Maximum Target Amount that the Company wishes to raise and the Target Date by which the Minimum Target Amount must have been raised;
- details about the Lead Investor(s), unless they wish to remain anonymous, in which case you will only see the amount invested or agreed to be invested by the Lead Investor(s);
- a summary of the ownership and capital structure of the Company including a summary of the rights attaching to the shares being offered on the Site;
- any due diligence reports prepared by the Company or its Lead Investor(s);
- a description of the Company’s proposed exit strategy (please note that this is subject to, and is likely to, change as the Company develops);
- whether the Company has received advance assurance from HMRC that it is eligible for EIS or SEIS relief and, if not, whether the Company (i) appears to us to be eligible for a EIS or SEIS; and (ii) has agreed to allow Investors to claim such relief (in which case the Fund Raising will only complete if and after it receives advance assurance from HMRC);
- the Investment Agreement that the Company will enter into with the Nominee on completion of the Fund Raising; and
- the Articles or, as the case may be, the form of Articles of Association that will be adopted on completion of the Fund Raising (which will set out in detail the rights attaching to shares issued to Investors).
You may also have the chance of taking part in a question and answer session with a member(s) of the Company’s management team, should the Company wish to offer such a service.
- Confidentiality. An Investor shall not use any information contained in the Posting except for the purposes of considering an investment in the Company. Without limitation, each Investor agrees with CC and with each Company that it will not directly or indirectly seek to use the information to enter into competition with the Company or to solicit employees, customers or suppliers of the Company. Any information contained in a Posting is highly confidential and should not be disclosed or distributed to any third party except with the prior written consent of the Company given in its absolute discretion. You agree to indemnify the Company and CC for any loss or damage including legal and other costs and expenses suffered or incurred by them as a result of your breach of this obligation of confidentiality.
- CC’s Review of a Posting. CC has reviewed each Posting before Investors are able to review it. Before doing so, CC will ask the Company for evidence that factual statements are correct and we require that opinions and forward-looking statements in the Posting are phrased fairly and clearly. Each Investor should be aware that, whilst we have taken reasonable care in asking for and reviewing evidence for factual statements, in doing so we rely on the Company concerned acting honestly and with reasonable care. Each Investor should also be aware that we may approve opinions and forward-looking statements for inclusion in the Posting that, by their nature or otherwise, it is not possible to verify with any accuracy or at all.
- No Recommendation. An Investor shall not take our approval of a Posting as any form of recommendation to invest in a Company nor as to the merits of the Company’s business or its likelihood of success. Any decision to invest in the Company shall be the Investor’s alone.
- Terms of the Investment Agreement. Although, in most cases, an Investor will not be a party to the Investment agreement, an Investor may nevertheless be able to see the agreement (redacted and/or anonymised as requested by the Company and/or the Nominee)) as part of the Posting, although this will not be the case if the Company has requested otherwise. In any event, the Investment Agreement may contain, amongst other provisions, some or all of the following provisions:
- The Company being obliged to secure investment through the Site of at least the Minimum Target Amount. If the Lead Investor(s) have already invested or agreed to invest the Minimum Target Amount then the fund raising will complete whether or not any funds are raised through the Site;
- The Company and Company’s management may agree to provide the Investors that are parties to a Investment Agreement with representations and warranties relating to the Company and its business which will be true at the date of completion of the Fund Raising. In the event of a breach of any of these representation and warranties, the Nominee would have a right to claim damages for any loss suffered on behalf of the Investor(s);
- Standard non-competition, non-solicitation and confidentiality undertakings which will apply to the Investor(s);
- The consent of the Nominee may be required for certain key decisions of the Company such as, by way of example only, issuing new shares or changing the share capital, amending the Articles of Association, acquiring any new business, shares or other securities or doing any act or thing other than in ordinary course of business;
- The Company may have an obligation to supply financial and operational information about the Company to the Nominee for the benefit of the investors; and
- Certain members of the Company’s management team and the Company may undertake certain matters to the Nominee for the benefit of the Investors.
- Terms of the Articles of Association. On completion of a Fund Raising, the Investor(s) will become a shareholder(s) in the Company and will become subject to the Articles. The Articles can be amended or replaced at any time by a special resolution of the shareholders. A special resolution is a 75% majority of the total voting rights of those entitled to vote (being either 75% of the total voting rights of all shareholders if the resolution is to be passed as a written resolution or 75% of the total voting rights of those present if the resolution is to be passed at a shareholders’ meeting). The Company’s existing Articles or, as the case may be, the form of Articles that will be adopted on completion of the Fund Raising can be viewed as part of its Posting. They may contain, amongst other provisions, some or all of the following:
- Any dividends or distributions declared or paid by the Company to be payable to all shareholders on a pro rata basis;
- Upon liquidation of the Company, to the extent that the Company has assets remaining after payment of its liabilities, the balance to be paid to all of the shareholders pro rata to the number of shares held. A sale of all or substantially all of the assets of the Company or a sale of shares involving a change in control will be treated in the same way as a liquidation and the proceeds of sale will be distributed accordingly;
- Some only or all of the shareholders may have a right of first refusal on any new issue of shares by the Company;
- Some only or all of the shareholders may have a right of first refusal to acquire any shares which are proposed to be transferred or sold;
- Some only or all of the shareholders may have rights such that if any shareholder has an opportunity to sell any or all of its shares, the effect of which would result in a change of control of the Company, the other shareholders must be given the opportunity to sell all of their shares on the same terms and at the same price;
- If certain of the shareholders or holders of a specified percentage of all of the shares agree to sell their shares, there may be drag along rights so that all remaining shareholders and option holders will be required to sell to the buyer on the same terms. Please note that this could result in you being forced to sell your shares in circumstances where you do not want to sell them.
- Rights attaching to shares. All investments made through the Site will take the form of subscriptions for voting ordinary shares which rank equally with each other in terms of the right to receive any dividends and the right to participate in the proceeds of sale on a sale of the Company and otherwise.
- Investment Period. A Company’s Posting will remain open for investment for an initial period of between 30 and 120 days, as set out on the Posting (the “Period”). If the Company has not received its Minimum Target Amount by the end of the Period then the Posting will be withdrawn. If the Company has received its Minimum Target Amount by the end of the Period then the Company will proceed to completion.
- Investing in the Company. An Investor may invest in a Company at any time during the Period by following the process set out on the Site. This will require the Investor to confirm the amount it wishes to invest in the Company (through the Nominee), use the MarketPay facility to commit such funds accordingly, and authorise the Nominee to enter into the Investment Agreement (the “Commitment”).
- Nominee. When you choose to make an investment through the Site, your shares in the Company will be held by your nominee and you agree that your nominee shall administer the shares on your behalf. The full terms of the nominee arrangement are set out below at Schedule 1. This means that you will receive an economic interest in the investee entity that is equivalent to the economic interest you would hold if you purchased its shares directly (subject to our fees), but you will not hold or administer the shares and will therefore not be in the same legal position as a direct shareholder would be.
- Overfunding. If at the end of the Period (extended if necessary by such number of days as is necessary to allow for the expiry of all 7 day cancellation periods), Investors have applied to invest in aggregate for more than the Maximum Target Amount then applications by the Investors will be satisfied on a ‘first come first served’ basis. If any Investor has an application that is not satisfied in full then CC will credit that Investor’s Nominated Account with the difference between the amount the Investor transferred to the Pre-Closing Account and the amount of the investment allocated to that Investor.
- Cancellation: After the Commitment, the Investor(s) has the right at any time during the period of 7 days commencing on the date of the Commitment to cancel its subscription for the shares by notifying the Site in accordance with the notice provisions set out in these terms and CC will credit that Investor’s Nominated Account with the amount the Investor transferred to the Pre-Closing. In order to effect this credit, the administrators of the Pre-Closing Account may need to carry out additional anti-money laundering or other checks to verify the identity of the transferee of the investment and the recipient of the funds to be returned. Accordingly, in order to ensure compliance with its own anti-money laundering obligations, the Pre-Closing Account administrators may therefore be required to withhold or delay returning funds to an Investor who cancels their investment until these checks have been completed satisfactorily and in compliance with those obligations.
- If an Investor does not exercise its cancellation right during such 7 day period then it will no longer be able to cancel its investment.
- CC Fees, Company’s Legal Fees and Other Fees. At completion of a Fund Raising, the CC’s fees will be deducted from the amount held in the Pre-Closing Account prior to transfer of the funds to the Company. In the event that any Company raises funds directly from any Investor(s) who is registered with CC during the period of 12 months commencing on the date of the Posting for that Company then the Company agrees and acknowledges that CC’s fees shall be due and payable as if those funds had been raised through the CC Site. We will only charge you a fee for acting as an investor if you make a profit from an investment. If you receive proceeds from an investment that in aggregate exceed the amount of capital you invested, we will deduct 7,5% of the excess before crediting the money to the balance of your Nominated Account. This means that, once you have received your capital back from a given investment, any future proceeds will be subject to a deduction for our fee.
- Minimum investment amount. The minimum amount an Investor can invest is £100.
LEAD INVESTOR(S) (the following clauses apply only to Lead Investor(s)
By agreeing to lead or to participate in an investment in a Company you declare that you have no prior interest in or affiliation with the Company and that you do not stand to benefit (other than through the investment itself or as otherwise stated in the Posting) in any way if the Fund Raising for the Company completes.
- The process for Lead Investors. Except as set out above, the investment process for a Lead Investor(s) investing in a Company is the same as the investment process for any other Investor.
- Obtaining Lead Investor status. An Investor is only able to obtain Lead Investor status with the prior approval of CC given in its discretion.
- Further investments by a supporting Lead Investor: A Lead Investor may agree to invest further amounts over and above its initial commitment at any time during the Period.
Shares in a Company in which you invest shall be purchased, managed and held on your behalf by a nominee. The services, described below, to be provided by the Nominee shall be referred to as the Nominee Service and the shares purchased shall be referred to as the Nominee Shares. The full terms and conditions of the Nominee Service are set out at Schedule 1 of these terms. You acknowledge and agree that the terms and condition at Schedule 1 are expressly incorporated into these terms by reference.
- confirming a wish to invest in equities (such confirmation to be in a format as described from time to time on the Site);
- being aged 18 or over and having satisfied appropriate testing and other eligibility criteria as decided by the Nominee; and
- remitting the share subscription amount to such Pre-Closing Account as notified to you; and
- CC confirming that the equity investment is proceeding (either because the Minimum Target Amount has been achieved, or other pre-conditions to investment have been met),
the Nominee shall, upon instruction from CC, undertake to:
- Sign the Investment Agreement with the Company in respect of the relevant Nominee Shares;
- Use the monies held in the Pre-Closing Account to purchase the Nominee Shares; and
- Hold and manage the Nominee shares as nominee for you, upon these terms and the terms contained in Schedule 1 to these terms.
You acknowledge and agree that the Nominee holds the shares as nominee for you subject to the provisions of the Articles and any other document governing the terms on which the shares are issued. You understand that the Nominee will be the legal owner of the shares and you will be the beneficial owner of the shares. This means that subject to its legal obligations, CC will treat the shares as if they belonged to you.
In the event of any transfer of shares from the Nominee to the Investor or to his or estate or beneficiaries, such transfer shall be conditional upon the person to whom the Shares are transferred entering into a deed of adherence to the Investment Agreement at the time of such transfer.
The Company is solely liable for the Posting and the information provided in support of the Posting. Except as stated above, these have not been verified by any of CC nor any of CC’s directors, employees, consultants, agents or advisers nor any supporting Lead Investor (each being a «Relevant Person”) and it is likely that no Relevant Person(s) has carried out any due diligence exercise in respect of the information in the Posting or the Company or its business generally. Subject to the terms of the Investment Agreement to which the Nominee is a party, all investments made through the Site are made entirely at the Investor’s own risk and are based on the Investor’s own judgment.
Except in the event of fraud, death, or personal injury, no Relevant Person shall be liable or responsible to any Investor or any Company for any of the following matters and each Relevant Person hereby excludes, to the fullest extent permitted under law (including contract, tort or breach of statutory duty), any and all liability for, or in respect of:
- The performance of any Company, the market opportunity, or its ability to meet its business plan;
- The suitability of any Company for investment;
- The terms of any investment in a Company (including without limitation the Investment Agreement and the Articles);
- The undertaking or outcome of any due diligence exercise in respect of a Company or any due diligence report in respect of a Company (whether legal, financial, technical or otherwise); nor
- Obtaining any Relief in relation to an investment in a Company or that Company remaining eligible for a Relief after the investment has been made.
ANTI-MONEY LAUNDERING REGULATIONS
We are required to establish your identity before you are able to use the Site. We will use third party organisations to assist with this process at the point when you register for our Site.
By registering for our Site you consent to us and our partner organisations using your personal information for the purposes of carrying out credit checks and other searches on you to establish your identity, your creditworthiness and your suitability to carry out transactions through our Site.
If we are unable to establish your identity using these third party methods, you must provide sufficient documentation about yourself to enable us and other relevant parties to ascertain and verify your identity. This may include providing certified copies of identification documents such as your passport, driving licence and recent utility bills and providing personal information such as your address, residency and date of birth.
Full details will be requested as part of the registration process. The information required may change from time to time and should that prove to be the case we will notify you that additional documentation has become necessary. Until you provide that additional documentation you will be unable to use our Site.
RELATIONSHIP BETWEEN US
You are not a client of any Relevant Person. As a registered user of the Site, CC offers you a number of protections as described in these terms. However, no Relevant Person is acting for you nor will be responsible for providing you with any of the protections that would be afforded to clients.
Each Company and Investor confirms to each Relevant Person that, for the purposes of entering into the transactions contemplated by this agreement:
- he enters into such transactions entirely on the basis of his own assessment of the risks and effect thereof;
- he is owed no duty of care or other obligation by any Relevant Person; and
- insofar as he is owed any such duty or obligation (whether in contract, tort or otherwise) by any Relevant Person he hereby waives, to the extent permitted by law, any rights (save in the case of any fraud) which he may have in respect of such duty or obligation.
Your account on the Site may be terminated and closed at any time either by you or us, or suspended at any time by us. In the event that we suspend, terminate or close your account then we will notify you by e-mail at the address associated with your account. These terms will continue in full force and effect following termination, closing or suspension of your account in respect of prior acts and events. In any event, all disclaimers, indemnities and exclusions in these terms shall survive termination of these terms for any reason, as shall any other provisions of these terms that by their nature are intended to survive such termination.
These terms may be varied by us, at our absolute discretion, from time to time. If these terms are varied we will notify you by posting the revised terms on the Site and sending an email to the email address you provide to us as part of your registration process.
Subject to the following sentence, this agreement does not confer any rights on any person or party (other than the parties to this agreement) pursuant to the Contracts (Rights of Third Parties) Act 1999.
All communications between us will be carried out by e-mail. Notices to CC should be sent to CC at email@example.com. CC will contact you using the e-mail address associated with your account. Notices will be deemed served 24 hours after sending unless this falls on a day which is a weekend or bank holiday in the United Kingdom, in which case they will be deemed served on the next working day after they were sent.
Should you have any complaints in relation to your use of the Site, please notify us by email at firstname.lastname@example.org. We will aim to reply to your complaint promptly, investigate the circumstances and revert back to you with the results of our investigation within 8 weeks of the date of your complaint. If your complaint is unresolved 8 weeks from the date you first made the complaint you may refer it directly to The Financial Ombudsmen Service at www.financial-ombudsman.org.uk.
You shall from time to time (both during the continuance of these terms and after its termination) do all such acts and execute all such documents as may be reasonably necessary in order to give effect to the provisions of these terms.
Your and our costs and expenses (including professional, legal and accountancy expenses) of the preparation, negotiation and execution of these terms and any associated documentation shall be borne by you and us respectively.
No failure or delay by you or us in exercising any of our rights under these terms shall be deemed to be a waiver of that right, and no waiver by you or us of a breach of any provision of these terms shall be deemed to be a waiver of any subsequent breach of the same or any other provision.
If any provision of these terms is held by any court or other competent authority to be invalid or unenforceable in whole or in part, these terms shall continue to be valid as to its other provisions and the remainder of the affected provision.
These terms shall not be construed so as to create a partnership or joint venture between you and us. Nothing in these terms shall be construed so as to constitute you and us as agents of one another.
You shall not be entitled assign, transfer, sub-contract or delegate any of your rights or obligations under this agreement. CC may assign the whole or part of any of its rights in this agreement to any person.
We shall not be in breach of these terms if there is, and shall not be liable or have responsibility of any kind for any loss or damage incurred by you as a result of, any total or partial failure, interruption or delay in performance of our duties and obligations occasioned by any act of God, fire, act of government, state, governmental or supranational body or regulatory authority or war, civil commotion, terrorism, failure of any internet or computer system, interruptions of power supplies, labour disputes of whatever nature or any other reason (whether or not similar in kind to any of the above) beyond our reasonable control.
In the event that we cease to trade for any reason, any amounts contained in the Pre-Closing Account will be refunded to you and any live Postings will be withdrawn immediately.
This agreement (and any dispute or claim relating to it or its subject matter (including non-contractual claims)) is governed by and is to be construed in accordance with English law. The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any claim, dispute or issue (including non-contractual claims) which may arise out of or in connection with this agreement.
NOMINEE SERVICES TERMS AND CONDITIONS
- Definitions and Interpretations
- In these conditions, and in addition to the definitions set out in the terms unless the context otherwise requires, the following words and expressions shall have the following meanings:
«Business Day» a day, other than Saturday, Sunday or public holiday, on which clearing banks are open for non-automated business in the City of London;
«CASS» the FCA’s Client Assets Sourcebook which contains the FCA’s requirements for holding client assets and client money;
«Closing Date» the initial closing date and any subsequent date(s) on which a round of fund raising for an Investee Company may be completed, in each case as determined by CC and communicated to the Investor through the Site;
«Commencement Date» in relation to any Investment, the effective date of the Subscription Agreement pursuant to condition 2.2;
«EIS» the Enterprise Investment Scheme established under Part 5 of the Income Tax Act 2007 and designed to help small higher risk trading companies to raise finance by offering a range of tax reliefs («EIS Relief(s)»);
«FCA» the Financial Conduct Authority and its statutory successor (or any other body to which its statutory functions have been delegated);
«FCA Rules» the rules and guidance issued and modified by the FCA from time to time;
«FSMA» the Financial Services and Markets Act 2000;
«Investee Company or Company» has the meaning given to Company in the Subscription Agreement;
«Investment» the equity or other interest in the Investee Company (as further described in the Subscription Agreement) to be acquired by the Nominee on behalf of the Investor using the Subscription Monies provided by the Investor for such purpose;
«Investor» has the meaning given to it in the Subscription Agreement;
«Loss» any damages, loss, costs, claims or expenses (excluding any loss of business or profits or any indirect or consequential loss or damage, in each case whether arising from negligence, breach of contract or otherwise);
«PRA» the Prudential Regulation Authority and its statutory successor (or any other body to which its statutory functions have been delegated);
«Professional Client» has the meaning given to it in the FCA Rules;
«Retail Client» has the meaning given to it in the FCA Rules;
«Services» the custodian, nominee and administration services to be provided by the Nominee under the Subscription Agreement;
“Shareholder Matters” means any matters which require the consent or approval of the Investor;
“Site” means CC’s online crowdfunding Site at www.capitalcell.net.
“Subscription Agreement” means the form containing details of the proposed Investment comprising, together with these conditions, the Subscription Agreement;
«Subscription Monies» the subscription monies for investment in an Investee Company, provided to CC by the Investors;
- Basis of Contract
- These conditions and the terms of the Subscription Agreement apply to the provision of the Services to the exclusion of any other terms that the Nominee may seek to impose or incorporate, or which are implied by trade, custom, practice or course of dealing.
- A contract for the provision of Services in relation to a particular Investment shall be deemed to be have been offered by the Investor on the execution by them of the Subscription Agreement relating to such Investment and the payment by the Investor of the Subscription Monies, and accepted by the Nominee and CC when CC confirms that the completed Subscription Agreement and the Subscription Monies have been received, at which point a contract (incorporating these Conditions) shall come into existence between the Nominee and the Investor.
- In the event of a conflict between these conditions and the Subscription Agreement, the Subscription Agreement shall prevail. In the event of a conflict between these conditions and any other document or information provided to the Investor through the Site or otherwise, these conditions shall prevail.
- Appointment of Custodian, Nominee and Administrator
- The Nominee shall provide the Services in respect of the Investments on the terms set out in these conditions.
- The Nominee represents and warrants to the Investor and CC that it is authorised and regulated by the FCA in respect of its investment business and has the necessary permissions under its authorisation to provide the Services to the Investor.
- Subscription Process
- The Investor acknowledges and agrees that the decision to make an Investment is a decision undertaken solely at the Investor’s own discretion. For the avoidance of doubt, neither of the Nominee or CC is responsible for:undertaking any due diligence in relation to the Investment;
- the accuracy or completeness or any other aspect of promotional materials relating to the Investee Company provided via the Site or otherwise distributed to the Investor;
- providing the Investor with any advice on the merits of the Investment;
- assessing the suitability or appropriateness of any Investment for the Investor; or
- any activity whatsoever which would constitute the provision of investment management services to the Investor.
- The Investor shall, in relation to each Investment to which it has committed (whether via the Site or otherwise) and to which such commitment has been accepted by the Investee Company and CC, on or prior to the relevant Commencement Date:
- execute the Subscription Agreement;
- authorise CC to make the payment of the Investor’s Subscription Monies to The Nominee; and
- provide the Nominee with such documentation as it may require to satisfy:
- its anti-money laundering requirements in respect of the Investor; or
any other obligations arising under the FCA Rules or other regulatory requirements, including, if applicable, a form whereby the Investor consents to be treated as a Professional Client.
- The Nominee is entitled at its discretion to reject any Subscription Agreement which it believes on reasonable grounds it cannot accept without being in breach of relevant FCA Rules. In the event that a Subscription Agreement related to an Investment is not accepted then any Subscription Monies paid in respect of that Investment shall be returned to the Investor as soon as practicable (and in any event no later than seven days after the relevant Closing Date) whereupon the Subscription Agreement relating to such proposed Investment will be terminated.
- The Investor acknowledges that she has read and understands the risk warnings in relation to the Investment which are set out in these terms.
- By executing the Subscription Agreement the Investor:
- confirms to the Nominee that she is aware of her obligations and rights under the agreement; and
- instructs the Nominee to enter into the proposed Investment to which the Subscription Agreement relates on her behalf.
- The Services
- With effect from the Commencement Date, the Nominee will provide the Services to the Investor on the terms and conditions set out in these conditions.
- The Nominee shall perform the Services with reasonable care and skill in accordance with generally recognised commercial practices and standards and observe and comply with all applicable laws and regulations, including but not limited to the FCA Rules (as modified from time to time).
- The Nominee shall devote such time and attention, and shall provide all necessary competent personnel and equipment as may be required to enable them to provide the Services properly, efficiently and in compliance with FCA Rules.
- All sums held by the Nominee on behalf of the Investor from time to time will be held in a client bank account in the name of the Nominee, held with a UK bank authorised and regulated by the PRA, and in accordance with the FCA’s client money rules contained in CASS. The Nominee may debit or credit the said account for all sums payable by or to the Investor under the Subscription Agreement. Any interest payable on credit balances in a client bank account will be retained by the Nominee.
- Upon receipt of a written instruction from CC that an Investment is to proceed, the Nominee shall:
- enter into and execute such documents as are required to give effect to the Investment; and
- release the Subscription Monies to a solicitor nominated by the Investee Company, or directly to the bank account of the Investee Company, on completion of the Investment.
- The Nominee shall have legal title to the Investment and the Investor shall be the beneficial owner of the Investment.
- The Investor hereby:
- consents to the Investments being registered in the name of the Nominee; and
- confirms that it shall provide the Nominee with such express instructions as are required in order to exercise any voting or other rights relating to Investments.
- The Nominee shall act in accordance with clause 4.2 of the Subscription Agreement in relation to any Shareholder Matters.
- In relation to each Investment, the Nominee undertakes with the Investor that it shall:
- hold such Investment as nominee and on trust for the Investor;
- promptly account to the Investor (or as the Investor may direct) for all dividends or other payments paid to the Nominee in respect of the Investment;
- hold all bonus shares, rights issue shares or other property or benefits acquired in respect of the Investment on trust for the Investor on the same terms as the Nominee holds the Investment;
- exercise all voting and other rights, powers and privileges attaching to the Investment only in such manner as is set out at clause 4.2 of the Subscription Agreement;
- and when requested by the Investor, certify that any transfer of the Investment executed by the Nominee does not constitute a change in the beneficial interest of the Investment, subject to reasonable evidence being produced to the Nominee that the transfer is completed in favour of the Investor or another nominee for the Investor; and
- to notify the Investor in writing (with a copy to CC) as soon as practicable upon receipt by the Nominee of all notices and documents whatsoever affecting or relating in any way to the Investment.
- The Nominee may not lend any Investments or title documentation to a third party or borrow against the security of such Investments or documents.
- In compliance with the FCA Rules, the Nominee will procure that CC:
- provide the Investor with information in relation to the Investment promptly after it has executed, on behalf of the Investor, such documents as are required in relation to the Investment; and
- send the Investor a statement of the Investments it holds on its behalf at least once a year.
- Fees and Payment
- Fees falling due to the Nominee and CC will be charged to the Investee Company by CC.
- Distribution of Proceeds and Income
- Any income or proceeds due and payable to the Investor resulting from a disposal of an Investment shall first be paid to the Nominee and shall then be distributed to the Investor within 7 calendar days of receipt of the income/proceeds by the Investor, after deduction of any fees or expenses of the Nominee, as detailed in the Subscription Agreement.
- Any tax liability in relation to an Investment, or the disposal of an Investment shall be the sole liability of the Investor.
- In the event that:
- the Investment ceases to be S/EIS qualifying; and
- HMRC demand tax payments from the Nominee in relation to the liabilities of the Investor,
the Nominee shall be entitled to make the tax payments, subject to full disclosure to the Investor before their making and affording the Investor such time as is reasonable in the circumstances to make representations to HMRC concerning the obligation to pay the same, and such payments will then be owed to the Nominee by the Investor as a debt.
- Transfer of Interests
- On the death or bankruptcy of the Investor, his or her personal representatives or trustee (as the case may be) shall become the “Investor” in his or her place and entitled to receive any distribution of monies under these conditions as the “Investor”.
- On termination of the Subscription Agreement, the Investments shall (unless otherwise agreed by the Investor) be transferred into the name of the Investor or to another nominee appointed by the Investor.
- Subject to Conditions 8.1 and 8.2 and except on the disposal of an Investment, no sale, assignment or transfer by the Investor of the underlying beneficial ownership of an Investment or any other rights hereunder shall be valid or effective without the prior written consent of the Nominee, CC, and the Investee Company, and the Nominee shall not recognise the same for the purposes of its records or the making of distributions of monies in accordance with these conditions without such consent.
The Investor shall not during the term of the Subscription Agreement appoint any person other than the Nominee to perform the Services (or any part of them) in relation to the Investment.
- Conflicts of Interest
The Nominee is required by FCA Rules to establish, implement and maintain a conflicts of interest policy, which sets out the types of actual or potential conflicts of interest which may affect The Nominee. A copy of this policy will be provided on request and the Nominee represents and warrants that it will act in compliance with FCA Rules when handling actual or potential conflicts of interest.
- Nothing in these conditions or the Subscription Agreement shall exclude or restrict the Nominee’s liability for death or personal injury caused by its negligence, or the negligence of its employees, or subcontractors or its fraud, wilful default or fraudulent misrepresentation, or any liability which cannot be limited or excluded under the FCA Rules.
- Subject to Condition 11.3, the Nominee shall have no liability to the Investor, whether in contract, tort (including negligence), breach of statutory duty or otherwise, for any loss of profit, loss of reputation, or for any indirect or consequential loss arising under or in connection with the Subscription Agreement.
- The Nominee gives no representation or warranty as to the performance of the Investee Companies. The Investor undertakes that she has herself considered the suitability of the investment in each of the Investee Companies carefully and has noted the risk warnings set out in the Site. The Nominee shall not be responsible or liable to the Investor for the economic performance of the Investments.
- The Nominee shall have no liability to any Investor in respect of any Loss which arises from an Investment not qualifying for EIS Relief or ceasing to qualify to EIS Relief, where relevant.
- Term and Termination
- The Subscription Agreement incorporating these conditions shall commence on the Commencement Date and continue until such time as the Investment has been disposed of unless terminated earlier in accordance with this condition 12.
- The Nominee’s appointment hereunder may be terminated:
- by either the Investor or the Nominee if the Nominee ceases to be permitted by law or authorised by the FCA to perform the Services;
- at any time, by the Nominee giving the Investor not less than three months’ written notice of its intention to terminate its provision of the Services;
- with the prior consent of CC, by the Investor notifying the Nominee that she wishes to have all Investments transferred either into her or her name personally or to a different provider of custody, administration and nominee services;
- with the prior consent of CC, by the Nominee where the Investor ceases for any reason to be a member of the Site;
- by either the Investor or the Nominee where CC is itself dissolved or discontinued; or
- by either the Investor or the Nominee if the other has committed a material breach of the Subscription Agreement, has been requested to rectify it and has failed to do so within 10 Business Days of being so requested.
- Consequences of Termination
- Upon termination of the Subscription Agreement pursuant to condition 12, the Nominee will use best efforts to promptly transfer legal title to the Investor’s Investment to the Investor.
- Where applicable, upon termination of the Subscription Agreement, the Nominee will, as soon as practicable, deliver all documentation and any copies thereof relating to the Investment to which the subscription agreement, save that copies of any documentation may be retained by the Nominee where it is necessary in order to fulfil a regulatory or legal obligation to keep such records.
- Upon termination of the Subscription Agreement, the parties will as soon as practicable return or destroy (as directed by the supplying parties) all Confidential Information (as defined below) to the party which supplied such Confidential Information, subject to the Nominee and CC’s obligations to maintain records in accordance with the FCA rules.
- The provisions of conditions 11 and 14, as well as any provisions of the Subscription Agreement necessary to interpret the same, shall survive the termination of the Subscription Agreement.
- The Investor, the Nominee and CC will keep confidential all information received from another party (the “Disclosing Party”) which is marked or asserted as confidential at the time of its disclosure (“Confidential Information”), and shall not without the prior written consent of the Disclosing Party use, or make any copies, or disclose to any third party the Confidential Information for any purpose whatsoever except for the purposes permitted or envisaged under these conditions and the Subscription Agreement and only to the extent necessary for those purposes, and each shall inform its employees and contractors (if applicable) of their duty of confidentiality.
- All documents and other records (in whatever form) containing Confidential Information supplied to or acquired from a Disclosing Party shall be destroyed or returned promptly to the Disclosing Party on termination of the Subscription Agreement, and no copies shall be kept.
- The obligations of confidentiality shall not extend to any part of the Confidential Information:
- which is already known to the recipient prior to its disclosure by the Disclosing Party; or
- which is lawfully received by the recipient from a third party; or
- which is required to be disclosed to any court, governmental or other authority or regulatory body (including, without limitation, the FCA); or
- which is published at the date of such disclosure or subsequently through no fault of the recipient; or
- which is independently developed by the receiving party without recourse to the Confidential Information; or
- which is required to be disclosed by law to the extent of such required disclosure.
- This clause 14 shall survive termination of this agreement for any reason.
- Force Majeure
No party shall be in breach of the Subscription Agreement or these conditions nor liable for delay in performing, or failure to perform, any of its obligations under the Subscription Agreement or these conditions if such delay or failure result from events, circumstances or causes beyond its reasonable control. In such circumstances the affected party shall be entitled to a reasonable extension of the time for performing such obligations. If the period of delay or non-performance continues for two months, the party not affected may terminate this agreement by giving one month’s written notice to the affected party.
- Any notice, demand or other communication given or made in connection with the Subscription Agreement shall be in writing and delivered either personally or by prepaid first class post or transmitted by electronic mail to the address and contact details contained in the Subscription Agreement.
- Such notice, demand or other communication delivered in accordance with Condition 16.1 shall be deemed to have been duly delivered if:
- personally delivered, upon delivery at the address of the relevant party;
- sent by first class post, two Business Days after the date of posting; or
- emailed, 60 minutes from the time of transmission, provided that such transmission has not elicited a postmaster or equivalent response from the recipient or its service provider to the effect that the email has failed for some reason specified therein to be delivered.
- The Investor shall be under an obligation to notify the Nominee of any changes in its postal or email address.
- Complaints and Compensation
- The Nominee has established procedures in accordance with the FCA rules for consideration of complaints. Details of these procedures are available upon request.
- If The Nominee cannot resolve the complaint to the satisfaction of the Investor, the Investor may be entitled to refer it to the Financial Ombudsman Service. However, the Investor is warned that if he or she has been classified as a ‘Professional Client’, the Financial Ombudsman Service may consider her ineligible to complain.
- Data Protection Act 1998
- The Nominee represents and warrants to the Investor that it is registered under the Data Protection Act 1998 (the “DPA”) for all purposes related to the performance of its functions under the Subscription Agreement, and further represents and warrants that it shall take all reasonable steps to maintain such registration and comply with all applicable data protection legislation for the duration of the Subscription Agreement.
- The personal data which has been provided by the Investor to the Nominee will be held and may be used by the Nominee for the purposes set out in or contemplated by the Subscription Agreement.
- The Investor acknowledges that the Nominee may also share the personal data with (or obtain other information about the Investor from) other organisations:
- for legal or regulatory purposes;
- in order to check the accuracy of the information which the Investor has provided; or
- to detect or prevent crime.
- The Nominee may continue to hold personal data about the Investor after termination of the Subscription Agreement for legal, regulatory and audit purposes.