OAM2681 OVCT 2 Prospectus aw12 - Clubfinance

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(ii) communication in respect of such share from the member or person entitled by transmission. To give effect to any sale of shares pursuant to this article the Board may authorise some person to transfer the shares in question and may enter the name of the transferee in respect of the transferred shares in the register notwithstanding the absence of any share certificate being lodged in respect of it and may issue a new certificate to the transferee. An instrument of transfer executed by that person shall be as effective as if it had been executed by the holder of, or the person entitled by transmission to, the shares. The purchaser shall not be bound to see to the application of the purchase moneys nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale. (j) Transfer or Sale under Section 110, Insolvency Act 1986 A special resolution sanctioning a transfer or sale to another company duly passed pursuant to Section 110, Insolvency Act 1986 may in the like manner authorise the distribution of any shares or other consideration receivable by the liquidator among the members otherwise than in accordance with their existing rights and any such determination shall be binding on all the members, subject to the right of dissent and consequential rights conferred by the said section. (k) Duration of the Company In order for the future of the Company to be considered by the members, the Board shall at the annual general meeting of the Company to be held in 2016, and thereafter at five yearly intervals, invite the members to consider whether the Company should continue as a VCT and if such resolution is not carried the Board shall within nine months of that meeting convene a general meeting to propose: (i) Distribution of Realised Capital Profits At any time when the Company has given notice in the prescribed form (which has not been revoked) to the registrar of companies of its intention to carry on business as an investment company (a “Relevant Period”) distribution of the Company’s capital profits (within the meaning of section 833 of the Act shall be prohibited. The Board shall establish a reserve to be called the capital reserve. During a Relevant Period all surpluses arising from the realisation or revaluation of investments and all other monies realised on or derived from the realisation, payment off of or other dealing with any capital asset in excess of the book value thereof and all other monies which are considered by the Board to be in the nature of accretion to capital shall be credited to the capital reserve. Subject to the Act, the Board may determine whether any amount received by the Company is to be dealt with as income or capital or partly one way and partly the other. During a Relevant Period, any loss realised on the realisation or payment off of or other dealing with any investments or other capital assets and, subject to the Act, any expenses, loss or liability (or provision thereof) which the Board considers to relate to a capital item or which the Board otherwise considers appropriate to be debited to the capital reserve shall be carried to the debit of the capital reserve. During a Relevant Period, all sums carried and standing to the credit of the capital reserve may be applied for any of the purposes for which sums standing to any revenue reserve are applicable except and provided that notwithstanding any other provision of these Articles during a Relevant Period no part of the capital reserve or any other money in the nature of accretion to capital shall be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution or be applied in paying dividends on any shares in the Company. In periods other than a Relevant Period any amount standing to the credit of the capital reserve may be transferred to the revenue reserves of the Company or be regarded or treated as profits of the Company available for distribution or be applied in paying dividends on any shares in the Company. (l) (m) (i) (ii) a special resolution for the reorganisation or reconstruction of the Company; and to wind up the Company voluntarily, provided that if the special resolution referred to at paragraph k(i) is not passed the shareholders voting in favour of this resolution shall be deemed to have such number of additional votes as are required to pass such resolution to wind up. Uncertificated Shares The Board may make such arrangements as it sees fit, subject to the Act, to deal with the transfer, allotment and holding of shares in uncertificated form and related issues. Indemnity and Insurance The Company shall indemnify the directors to the extent permitted by law and may take out and maintain insurance for the benefit of the directors. 5. Material Contracts The following contracts, not being contracts entered into in the ordinary course of business, are all of the contracts which have been entered into by the Company since its incorporation and which are, or may be, material, or have been entered into by the Company and contain provisions under which the Company has obligations or entitlements which are material to it at the date of this document: (a) An investment management agreement dated 28 January 2011 between the Company (1) and Octopus (2), whereby Octopus has agreed (subject to the overall policy and supervision of the Directors and such directions as the Directors may give from time to time) to manage or procure the management of the Company’s investments on a discretionary basis (save that the approval of the Directors independent of the Investment Manager will be required in relation to investment/divestment decisions relating to investment opportunities sourced by or involving Lightsource) for an initial six-year period and thereafter on 12 months’ notice either side. The appointment may also be terminated (inter alia) in circumstances of material breach by either party. For the provision of investment management services, Octopus will receive an annual management fee of an amount equivalent to 2.0% of the net assets of the Company (plus applicable VAT). The annual management 34
(b) fees will be rolled up (interest free) and will only be paid to Octopus once Shareholders have received back a minimum of 105p per Ordinary Share (in the form of dividends and other distributions) either during the life of the Company or through other returns (including liquidation distributions and tender offers but excluding normal share buybacks). In addition, Octopus will only be entitled to receive an annual management fee for the period up to the date on which the annual general meeting in 2016 is held (expected to be in June 2016) if Shareholders approve the Company being wound-up at that meeting. Octopus retains the right to charge arrangement, exit and syndication fees to investee companies, and will be responsible for all costs of an investment that does not proceed. Octopus may also receive ongoing directors’ fees and monitoring fees from the investee companies as appropriate. Under the agreement, annual running costs of Octopus VCT 2 (excluding irrecoverable VAT, management fees (including fees rolled-up) and trail commission) will be capped at 1.2% per annum of its net assets of the VCT and any excess will be met by Octopus out of the rolled up management fee should it become, and to the extent, payable. Such costs will include the accounting and administration fees, Directors’ fees, company secretarial fees, audit, taxation and advice, VCT monitoring fees, regulatory, broker’s and registrar’s fees and the costs of communicating with Shareholders. Given the targeted lower-risk nature of the VCT, there are no performance incentive fees for this VCT. Octopus has, pursuant to the same agreement, agreed to provide or procure the provision of certain administrative and accounting services to Octopus VCT 2 for an additional annual fee of 0.3% (plus VAT, if any, at the applicable rate) of the net assets of the Company and company secretarial services for an annual fee of £15,000 (plus VAT, if any, at the applicable rate) in each case payable quarterly in advance and not rolled up. Octopus VCT 2 has agreed to indemnify the Investment Manager against all or any actions, proceedings, losses, claims, demands and liabilities whatsoever arising out of the proper performance of the Investment Manager’s duties. There are no value or time limits attached to the indemnity other than the statutory time limit of 12 years which applies to agreements signed as deeds. An offer agreement dated 28 January 2011 between the Company (1), the Directors (2), Octopus (3) and Singer (4) whereby Octopus has agreed to act as promoter in connection with the Offer and Singer has agreed to act as sponsor to the Company in connection with the Offer. The Company shall pay to Octopus a commission of 5.5% of the gross amount subscribed under the Offer out of which will be paid all costs, charges and expenses of or incidental to the Offer including the fees of Singer, but excluding annual trail commission which will be borne by the Company. The Company and the Directors have given customary representations and warranties to, and in the case of the Company alone, an indemnity, to Octopus and Singer. The liability of each Director under the warranties is limited to one times their annual directors’ fee. The Company, the Directors and Singer under the agreement have the benefit of a warranty from Octopus (as (c) investment manager) in relation to the information contained in this document in relation to Octopus. There are no value or time limits attached to the indemnity other than the statutory limit of six years. Singer may terminate the agreement at any time prior to Admission if it becomes aware of any material breach of warranty prior to Admission. Under the terms of the agreement, any interest received by the Company or the Registrars in respect of applications for Ordinary Shares prior to the dates such Ordinary Shares are allotted will be for the benefit of Octopus and shall be applied to defray the costs of the Offer. By letters dated 17 January 2011 the Directors agreed to act as non-executive directors of the Company on the terms set out at paragraph 3(f) above. 6. Taxation and Close Company Status The following paragraphs, which are intended as a general guide only and are based on current legislation and HMRC practice, summarise advice received by the Directors as to the position of Shareholders who hold Ordinary Shares other than for trading purposes. Any person who is in any doubt as to his taxation position or is subject to taxation in any jurisdiction other than the UK should consult his professional advisers. (a) Taxation of dividends – under current law, no tax will be withheld by the Company when it pays a dividend. (b) The Company has been advised that no stamp duty reserve tax (“SDRT”) will be payable on the issue of the Ordinary Shares. The transfer on sale of any Ordinary Shares will be liable to ad valorem stamp duty normally at the rate of 0.5% of the amount or value of the consideration (rounded up to the nearest £5). An unconditional agreement to transfer Ordinary Shares also gives rise to an obligation to account for SDRT, which is payable within seven days of the start of the month following that in which the agreement was entered into. The payment of stamp duty gives rise to a right to repayment of any SDRT paid. There will be no stamp duty or SDRT on a transfer of Ordinary Shares into CREST unless such a transfer is made for a consideration in money or money’s worth, in which case a liability to SDRT will arise at a rate of 0.5%. A transfer of Ordinary Shares effected on a paperless basis through CREST will generally be subject to SDRT at a rate of 0.5% of the value of the consideration (c) On the issue of the Ordinary Shares pursuant to the Offer, the Company is unlikely to be a close company for tax purposes. If the Company was a close company in any accounting period, approval as a VCT would be withdrawn. 7. Overseas Investors (a) No person receiving a copy of this document in any territory other than the UK may treat the same as constituting an offer or invitation to him to subscribe for or purchase Ordinary Shares in the Company. (b) No action has been taken to permit the distribution of this document in any jurisdiction outside the UK where such action is required to be taken. 8. Related Party Disclosures The following related party transactions have taken place since incorporation of the Company to the date of this document: (a) Octopus, as investment manager to the Company which is a closed-ended investment fund, is regarded as a related party. Octopus will receive an up-front fee of 5.5% of the 35
Page 1: OCTOPUS VCT 2 PLC Sponsored by Sing
Page 4 and 5: CONTENTS SUMMARY 3 RISK FACTORS 5 L
Page 6 and 7: e inappropriate for Octopus to be i
Page 8 and 9: ■ The following risk factors may
Page 10 and 11: COMPELLING FEE STRUCTURE In order t
Page 12 and 13: PART ONE - INTRODUCTION TO THE OFFE
Page 14 and 15: INTERMEDIARY COMMISSION Authorised
Page 16 and 17: PART THREE - THE INVESTMENT OPPORTU
Page 18 and 19: PART FOUR - THE INVESTMENT MANAGER
Page 20 and 21: PART FIVE - THE BOARD The Board con
Page 22 and 23: PART SEVEN - OTHER INFORMATION LIFE
Page 24 and 25: PART NINE - CONDITIONS TO BE MET BY
Page 26 and 27: (iii) (iv) the Company was empowere
Page 28 and 29: 26 (n) The Directors are currently
Page 30 and 31: (b) (iv) Where the restricted share
Page 32 and 33: (e) particular date or be entitled
Page 34 and 35: (1) at the rate of exchange used fo
Page 38 and 39: (b) gross amount subscribed under t
Page 40 and 41: (n) (o) The Directors do not antici
Page 42 and 43: DEFINITIONS The following definitio
Page 44 and 45: PART ELEVEN TERMS AND CONDITIONS OF
Page 46: the Ordinary Shares. Allotments wil
Page 49 and 50: % % ! ) $ # $ ' " $ 1B=> CA + )
Page 51 and 52: % % ! ) $ # $ ' " $ 1B=> CA + )
Page 56: www.octopusinvestments.com Please c

OAM2681 OVCT 2 Prospectus aw12 - Clubfinance

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