SPEARHAVOC FINANS A/S
COMPANY DESCRIPTION
IN RELATION TO THE ADMISSION TO TRADING OF THE COMPANY’S 3% SECURED 2027 CORPORATE BOND ON NASDAQ FIRST NORTH, COPENHAGEN
3 NOVEMBER 2017
First North Bond Market is an alternative marketplace operated by an exchange within the Nasdaq group. Issuers on First North Bond Market are not subject to the same rules as Issuers on the regulated main market. Instead they are subject to a less extensive set of rules and regulations. The risk in investing in an Issuer on First North Bond Market may therefore be higher than investing in an Issuer on the main market. At least during the application process Issuers – except for Issuers whose securities are already admitted to trading on a regulated market or a First North market – applying for admission to trading of fixed income instruments on First North Bond Market shall have a Certified Adviser who monitors that the rules are followed. The Exchange approves the application for admission to trading.
CERTIFIED ADVISER
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CONTENTS
Page number
1 IMPORTANT INFORMATION 3
2 RISK FACTORS 7
3 THE SPEARHAVOC GROUP 11
4 BUSINESS STRATEGY AND MARKETS 14
5 MANAGEMENT 21
6 FINANCIAL POSITION 24
7 ADDITIONAL INFORMATION 25
8 DENMARK TAXATION 30
APPENDIX 1 DEFINED TERMS 31
APPENDIX 2 THE BOND INSTRUMENT 32
APPENDIX 3 SPEARHAVOC INVEST ACCOUNTS 53
APPENDIX 4 SWAN PARK PROJECT ILLUSTRATIONS 55
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1. IMPORTANT INFORMATION
1.1 THE ISSUING COMPANY
Spearhavoc Finans A/S (The Issuer)
Registered in Denmark on 01/10/2016 with number 38102788
Gothersgade 21 DK-1123 Copenhagen K Denmark
Website: www. spearhavocfinans.com
Phone: + 45 3316 0661
Email: [email protected]
The business of The Issuer is to function exclusively as a funding vehicle for Spearhavoc Invest Aps (The Company) in relation to The Company’s property investments and developments. The Issuer is 100% owned by The Company.
The operating and running costs of The Issuer are met by The Company.
1.2 THE BOND INSTRUMENT
The Bond offered is designated “3% Secured 2027 Corporate Bond”. The Bond may be subscribed for a maximum total of DKK 80,000,000 (apprx £9.4m) and is issued under a corporate resolution adopted by the Board of The Issuer on 12th December 2016 to issue up to DKK 80,000,000 of bonds.
The Bond is a secured instrument paying an annual coupon of 3%.
As of the date of this document a total of 4 investors have committed a total of DKK 25.000.000 (approximately GBP 3.000.000) and the relevant Bonds will be subscribed for and issued prior to Admission. These bondholders are corporate professional investment entities, 3 Danish and 1 British. They are Benjamin Capital ApS (DKK 10m), PUA Invest ApS (DKK 10m), Spearhavoc Limited (DKK 4m) and City Ejendomskontor A/S (DKK 1m).
The Bond is principally marketed to professional fund managers, professionally qualified investors, high net worth investors and professionally run family offices domiciled in Denmark and the UK. The minimum initial subscription is DKK 800,000 (approximately £100,000) being 100 units of the Bond at DKK 8,000 (approximately £1,000) per unit. Additionally, the Board may at their discretion allow smaller investments to be made, but this discretion may only be exercised in respect of a maximum of 100 bondholders.
The principal features of the Bonds are described in Table I below:
TABLE I: BOND FEATURES
The Bonds are available for investment through Kapitalpension, Ratepension, ISA (UK Individual Savings Accounts), SIPP (UK Self Invested Pension Plans) Availability: and SSAS tax wrappers (UK Small Self Administered Pension Schemes) as well as direct monies The Bond is not convertible Conversion:
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Issuing Company: Spearhavoc Finans A/S
Denomination: Danish Kroner (DKK). Nominal Value DKK 8,000.00
On one of the identified events listed in the Bond Instrument, the Bonds will be Events of default: redeemed immediately at the Principal amount.
In the event of the death of the Bondholder the Bond and accrued interest Event on death: should form part of the Bondholder’s estate under the control of their executors or estate administrator. The Bond pays 3% interest per annum, payable quarterly in arrears on 15/4, Income: 15/7, 15/10 and 15/01 each year.
Issuer: Spearhavoc Finans A/S
Joint ownership: The Bonds can be subscribed for jointly or by individuals.
Listed/unlisted: The Issuer is applying for the Bonds to be admitted to trading on Nasdaq First North Copenhagen. Meetings of The Issuer may, at any time, convene a meeting of the Bondholders. Bondholders: The Issuer will not make any offer of Bonds other than in circumstances falling within Article 3(2) of Directive 2003/71/EC, as amended (the Prospectus Raise Amount: Directive) and which do not require the publication of a prospectus or supplementary prospectus under the Prospectus Directive.
Ranking: All the Bonds shall rank pari passu, equally and rateably, without discrimination.
Redemption: Repayment of capital on the Redemption Date which is 31st December 2027
Secured by a legal charge over the assets of the Issuer.
The Issuer will receive a pledge on all property assets and related rental income owned by The Company. The charge will be registered along with the security document (The Debenture). The security document thus provides a fixed and floating charge on all property assets of The Company. The security document also provides the bond holders, in the event of default on the bond document, the rights to appoint a receiver to act on their behalf and step in to take control of Security: all property assets of the Company.
The Issuer will utilise the bond monies to issue a corporate loan to The Company for the purposes of future property investments, property developments and to retire existing debt. These monies will be provided to The Company on standard commercial loan documentation including the security document listed above.
An amount of DKK 5 million from the proceeds of the issuance of Bonds lodged Security Fund with the Security Trustee
Security Trustee Advokat Morten Hemmingsen, Gothersgade 21, 1123 Copenhagen, Denmark
Term: Maturing 31 December 2027
Ownership of the Bonds is freely negotiable and can be transferred to another Transferable: party.
Withholding Taxes: Income is paid net of basic withholding taxes in Denmark.
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1.3 REASONS FOR APPLICATION FOR ADMISSION TO FIRST NORTH
The Issuer wishes to provide a market for its bondholders to trade their Bonds and also to attract investments in the Bond from investors only able to invest in Bonds that are admitted to trading on a public market. Application for Admission is made for all of the Bonds that are a part of this issue.
1.4 IMPORTANT DATES
Expected first day of trading on First North: 6 November 2017
Semi Annual financial results to 30 June 2017 15 August 2017
Annual report; year to 31 December 2017: 28 March 2018
Annual General Meeting: 30 April 2018
1.5 BOND INFORMATION
First North Ticker: SPEARHAVOC
ISIN: DK0030404611
LEI: 549300S4WGC1P8720269
CFI CODE: DBFUGB
Bond registered through: Danish VP
Minimum subscription (100 units) DKK 800,000
Proposed trading lot on First North: Units of DKK 8000 each
1.6 CERTIFIED ADVISER
Keswick Global AG Hoffingergasse 16/1/6 A-1120 Vienna Austria
Keswick Global AG has been appointed as Certified Adviser and that appointment is on-going.
1.7 NEWS PROVIDER
The Issuer has engaged Nasdaq Global Corporate Solutions to disseminate regulatory announcements to the market.
1.8 LIQUIDITY PROVIDER
The Issuer will consider the appointment of a liquidity provider in due course but one has not been appointed at the date of Admission
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2. RISK FACTORS
2.1 SUMMARY
The bond investment presented carries certain risks and, as such, is suitable only for entities or persons who can bear those risks, have a limited need for liquidity during the investment period and who are able to be certified as professional, high net worth or sophisticated investors. The Issuer may be subject to certain regulatory requirements in jurisdictions where it issues the Bond, and has the right to refuse applications from potential initial subscribers who it believes do not qualify with the requirements set by applicable regulatory authorities. Once issued, the Bond is freely negotiable. This chapter presents and discusses risk factors. Both specific risks regarding the Group’s business and the general risks regarding bonds as a financial instrument. The risk factors are not ranked and do not claim to be exhaustive. Additional risks, not currently known to The Issuer or currently considered inconsequential, could provide a significant adverse effect on the Issuer’s operations in the future.
2.2 GROUP RISKS Reliance on Management The Company’s Board will make all decisions with respect to the Company’s investments. The Company will depend on the services of its managers and advisors that they may appoint from time to time. Although the Company believes it has the necessary business and industry skills to successfully manage and achieve the objectives, there can be no assurance that the Company will perform adequately, or that it will be successful. Accordingly, no person should invest in any of the Bonds offered hereby unless such prospective investor is willing to entrust all aspects of the Group’s performance to the management and the Board. There is also a risk that the key personnel may become unavailable as a result of illness, death or other reasons.
Operating and Performance History Whilst the management have long and strong track records, as set out in Section 5 of this Company description, the Group has only a limited operating history upon which prospective investors may base an evaluation of the likely performance of the Group.
Area of Operations The Group operates in the property sector and is therefore subject to the inherent volatilities of that sector; principally the demand (and achievable price) for investment properties and for completed properties, the costs of construction and the regulations surrounding planning consent for proposed developments. Whilst this chapter includes a discussion of the potential impact of such volatilities on the profitability of the operations, significant volatility may render current or proposed investments and developments unprofitable. Such an event could have an adverse effect on the bottom-line results and the Group’s ability to meet its obligations.
Conflicts of Interest.
Directors and key personnel of both The Issuer and The Company may engage in other business activities, including, without limitation, property development or property development finance and organizing other entities with similar investment objectives as the Group. As a result of such other activities, the aforementioned parties may have conflicts of interest both in the identification of potential investment projects and in the allocation of their time. Notwithstanding this, said parties have provided assurances that they have sufficient resources to completely discharge their responsibilities in relation to each entity, as applicable, and will fully disclose any potential or actual conflicts to the relevant Board.
Currency
The Group conducts all its business in Denmark and in Danish Kroner (DKK), both on income and expenditure side.
Investors who manage their portfolio in other currencies than DKK, should be mindful that the exchange rate can go up as well as down against other currencies, specifically against the British Pound (GBP).
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Government Regulation
It is possible that The Issuer, The Company, and its share- and bondholders, could be negatively impacted by future legislation in Denmark or any other country.
Alternative Investment
The Group may elect to invest net proceeds of the Bond in assets other than direct property investments and developments. Such investments may be required, where the Group has funds on hand which are allocated to a property development project which is yet to commence. The Directors will wish the Group to earn a return on such funds in order to facilitate payment of the coupon on the Bond.
Whilst management will ensure that such investments are prudent, the Group cannot guarantee a return on such investments and, in certain cases, the principal invested may be at risk.
Tax
Various taxation issues such as increased corporation tax in Denmark could affect the Issuer’s ability to meet its future Bond obligation.
2.3 RISK FACTORS RELATED TO THE BOND PRICE
Changes in the Bond price
Asset Markets worldwide may be affected at any times to significant changes in terms of asset prices and volume. The price of The Issuer’s Bonds can fluctuate due to the aforementioned changes and not because these changes are connected directly with the business and prospects of the Group. The general economic, political and asset market conditions, such as economic recession, fluctuations in interest and exchange rates, may significantly affect the price and demand for the Bonds of The Issuer. The Issuer’s Bonds are not a suitable investment for all investors. Each potential investor should assess the appropriateness of an investment in the Issuer’s Bonds and, specifically, should: • Have the necessary knowledge and experience so as to be able to carry out a meaningful evaluation and understanding of risks inherent in such an investment, in the context of his/her economic situation, the investment in the Bonds of the Issuer and the impact of such an investment in his/her total portfolio. • Have sufficient financial resources and liquidity in order to be able to bear all the risks of his investment. • Acknowledge that they may not be able to sell their Bonds for a long time or at all; and • Be able to evaluate (either themselves or through financial advisers) possible scenarios regarding the factors that may affect their investment like the wider economic environment, or other factors, and their ability to take risks contained in this investment.
Secondary Market
The Bonds may have no established trading market when issued, and one may never develop. If a market does develop, it may not be very liquid. Therefore investors may not be able to sell the bonds easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. Investors should therefore regard their investment in the Bonds to be of an illiquid nature and as such close ended prior to the redemption date. The Bonds are designed for specific investment objectives or strategies. As such, the Bonds generally will have a more limited secondary market and more price volatility than conventional debt securities. Illiquidity may at times have a severely adverse effect on the market value of the Bonds.
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Risks related to the structure of the Bond
§ Modification, determination, waivers and substitution: The conditions provide that The Issuer may without the consent of Bondholders agree to any modification of the Bond Instrument which is (in the opinion of The Issuer) of a formal, minor or technical nature or which is made to correct a manifest error. Bondholders will be notified of any such modification through the Bond Registrar. § Change of law: The conditions are based on Danish law in effect as at the date of this issue description. No assurance can be given as to the impact of any possible judicial decision or change to Danish law or administrative practice after the date of this issue description. § The Bond is not protected from loss by any Financial Services or other Compensation Scheme. § Tax and Independent Savings Accounts (Kapitalpension/Rate Pension/ISA/SIPP): Bondinvestors should seek their own tax advice as to the consequences of owning bonds as well as receiving returns from them. No representation or warranty expressed or implied, is given to Bondholders as to the tax consequences of their investment, owing or disposing of the Bond and neither The Issuer nor The Company or any of its employees/Directors will be responsible for any tax consequences for any such applicants. Any commentary is general in nature and is intended as a guide only to the Danish taxation consequences of the investment, ownership or redemption of the Bond by a Bondholder resident in Denmark. The Bond is eligible for Kapital- and ratepensions. Any commentary regarding taxation is general in nature and is intended as a guide only. • Interest Rate Risks: The Bond is a fixed rate obligation and involves the risk that Bondholders will not benefit from any subsequent increases in market interest rates. § Transference or Early Redemption: The Bonds are transferable between individuals. There are no provisions for early redemption with the Principal plus the interest for the final quarter of the tenth year being paid on the Redemption Date into the account nominated by the Bondholder at issue. In the case of death of a registered Bondholder of the Bond or of any other event giving rise to the transmission of the Bond by operation of law, the only persons recognised by The Issuer as having any title to such bond of such registered Bondholder are the executors or administrators of that deceased registered Bondholder's estate or such other person or persons as the Board of the Issuer may reasonably determine. Any person becoming entitled to the Bond as a result of such transmission may upon producing such evidence as reasonably required by the Board be registered as the holder of the Bond. § The security of the Bond: Whilst Bondholders have security over the assets of the Issuer,(Spearhavoc Finans) those assets will in principally be the advances made by the Issuer to Spearhavoc Invest ApS or to other future members of the Group, who are engaged in developing properties. Such advances are secured against the related property, but the failure of any one development may mean that the Issuer may not recover all, or indeed any, of the amounts advanced. This means that neither the interest payable nor the investment amount is guaranteed. If The Company were to become insolvent there is the risk that Issuer would not recover the advances made and (a) some or all of the nominal value of the Bonds will not be redeemed; and (b) some or all of the interest due on the Bonds will not be paid. § The Bond is held in the name of The Issuer: The Issuer is dependent upon The Company or other Group companies performing in order for it to be able to fund the interest repayments during the Bond’s fixed term and repay the capital amount on redemption. Failure or underperformance by the Company or other Group companies could have an adverse effect on the Group’s results and the Issuer’s ability to meet its obligations.
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2.4 FORWARD-LOOKING INFORMATION
This Company Description contains forward-looking statements. Forward-looking statements are not statements of historical facts but rather reflect current expectations, estimates and predictions about future results and events.
The Company Description uses words such as “anticipate”, “continue”, “estimate”, “expect”, “predict”, “may”, “will”, “project”, “should”, “assume”, “believe”, “plan”, “intend”, and similar expressions to identify forward- looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the Issuer’s and the Company’s ability to control or predict. This could therefore cause actual results to differ materially from those anticipated in these forward-looking statements.
Assumptions regarding future revenues, acquisitions and other components of any projections are necessarily speculative in nature. In addition, projections do not and cannot take into account such factors as general economic conditions, unforeseen regulatory and legal developments and other factors discussed in this Risk and Other Factors section, and elsewhere in this presentation. This includes the potential entry into The Company’s market of significant additional competitors and other risks inherent to the business of The Company. While The Company believes that any forward-looking statements herein reflect possible future results of The Company’s operations, such results cannot be guaranteed.
Bond Holders must be prepared for the substantial economic risks involved in the purchase of the Bonds as presented.
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3. THE SPEARHAVOC GROUP
3.1 SUMMARY
Spearhavoc Finans A/S (The Issuer) is a Danish limited company.
The Issuer is 100 pct owned by Spearhavoc Invest ApS (The Company), a Danish limited company that has been active in the property sector since 2009.
The Issuer was incorporated on 01 October 2016 and received its certification that it was entitled to do business and borrow on 01 October 2016. The sole purpose of The Issuer is the issuing of the presented corporate bond in order to finance the development plans of The Company.
3.2 GROUP STRUCTURE
FIGURE I: GROUP STRUCTURE
The Company (Spearhavoc Invest ApS) has been actively involved in the Danish property market – both investing and developing – since 2009.
The Company is majority owned (90%) by Spearhavoc Limited – registered in England under English Law and number 07076543 – and minority owned (10%) by Lawyer (Danish: Advokat) Morten Hemmingsen, a senior property lawyer with more than 20 years of experience within the Danish 11 property market and Managing Director of The Company. Spearhavoc Limited acts solely as a shareholder and is not actively involved in the day to day operations of the Group.
3.3 CURRENT PORTFOLIO
TABLE II: LIST OF CURRENT PROPERTIES
Address Postcode Reg./Matr. No. Category Nykoebingvej 42 4460 Snertinge 6n, Særslev By, Særslev Residential
Caprivej 7 2300 Copenhagen S 3572 Sundbyøster, Appt. 34 Residentiall
Sankelmarksgade 13 9000 Aalborg 501r Aalborg Bygrunde, Appt. 1-5 Residential
Oerbaekvej 883 5883 Fjerritslev 36ag Rolsted By, Rolsted Development *)
Oerkildsgade 3 5700 Svendborg 157a Svendborg Bygrunde Residental
( *) Currently being developed and converted from commercial to residential letting) ( **) Mixed commercial and residential letting)
Whilst the Company has completed the acquisition of the properties above, it has also entered into agreements to acquire three further properties which will be completed on the raising of sufficient funds from the issuance of the Bond. These are:
Address Postcode Reg./Matr. No. Category Gravensgade 3 9000 Aalborg 280 Aalborg Bygrunde, Appt. 1-3 Mixed **)
Kong Hans Gade 1 9000 Aalborg 1266a Aalborg Bygrunde, Appt. 1-4 Mixed **)
Algade 47 4760 Vordingbrog 20a Vordingborg Bygrunde Mixed **)
( *) Currently being developed and converted from commercial to residential letting) ( **) Mixed commercial and residential letting)
3.4 SECURITY AND FUNDS FLOW
The Bond will be issued with a security document granting the bondholders a fixed and floating charge over the entire property portfolio owned by The Company and all rental income that these properties generates. This charge is secured as The Company provides The Issuer with a comprehensive security pledge of its entire property portfolio and associated rental income.
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In summary, the flow of funds and grant of security charge in favour of the bondholders is illustrated below.
FIGURE II: FLOW CHART
Once the Issuer has issued the Bonds envisaged in this Company Description, the Company will pay the Issuer interest at the rate of 3% on the full DKK 80 million. This is to ensure that the Issuer maintains funds available for the next project envisaged by the Company (which is described in section 4.7.1 below) and which the Company wishes to commence as soon as possible as it has already acquired the site.
For the Issuer, this commitment means that the Issuer will receive interest equal to the coupon it has to pay on the Bonds from commencement.
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4. BUSINESS STRATEGY AND MARKETS
4.1 OFFER
The Issuer will raise funds via the Bond in order to make a subsequent secured loan to The Company. The security will consist of a pledge of The Company’s entire property portfolio and associated rental income. The Company will use the loan to 1) retire current expensive debt and 2) to fund future investments and developments.
The management’s combined experience, capabilities and skills in the property and construction sectors enable them to provide a structured, controlled and profitable Danish property development business with a core focus on minimising development and operational risk utilising their expertise and focusing on residential properties in Denmark only.
The Issuer will pay Investors in the Bond a fixed coupon of 3% per annum, quarterly in arrears with a redemption date of 31 December 2027.
The 3 pct coupon is at the lower end of current yields in the property market (which ranges from 3-6 pct depending on type, condition and location of property).
The Board believe that 3 pct is relatively attractive given that the alternative is 0 (zero) pct, or negative if money is left in the bank, and because other yield offers outside Denmark entails both currency and political risk.
It should also be taken into consideration that this yield is derived from residential property only, which means that the risk of loss of income due to empty properties is minimised. In the history of the properties, they have been empty less than 0.5 pct of the time owned.
Higher yields would be available with direct investment into similar properties, but the investor would then have to carry burden of purchase fees, lawyer fees and management fees in addition to the risk of empty properties.
In order to mitigate the very small risk of empty properties, The Issuer will, following issuance of the Bond, establish a Security Fund of DKK 5 million with Advokat Morten Hemmingsen, the Security Trustee, which is the equivalent of 2 years bond payments.
When the current property portfolio were acquired, and when future properties are acquired, a rigid and detailed process was and will be employed to ensure that properties and/or sites meet minimum criteria and management will, where and if appropriate, seek to secure sale agreements during the development process so that a clear, defined and legally secure sale route is in place prior to completion of the development.
The core focus of activity is on small residential developments in premium areas which can be sold into an owner occupier market that is un-reliant on mortgage debt to fund the purchase of the property.
The company has a meritorious track record of identifying, acquiring and maximising the return on residential property in Denmark.
The company currently owns 8 properties as listed in Table II above – all in Denmark and located in Aalborg, Vordingborg, Kalundborg, Svendborg and Copenhagen - and is looking to expand the portfolio to 20 top class residential properties in those and other locations.
This will be done through acquisition, renovation and conversion (where necessary) in order to maximize rental return.
The investments and acquisitions of mixed residential/commercial property (office or shop spaces), and subsequent conversion of the commercial part into residential, is a conversion process that The Company has great expertise and results with.
The added security of yield that comes with residential property also increases the re-sale value of these properties.
Of the Company’s current portfolio, 3 projects are undergoing the conversion process to residential use (a pharmacy, a hairdressing boutique and a ceramic workshop) and is expected that the value/yield will be superior with residential tenants as well as a much improved, steady and secure future rental income. 14
People will always need a place to live and populations are increasing!
4.2 PURPOSE
The Company is focused on Danish property investments and developments, operating in sectors and geographical areas where there is identified strong demand and low levels of suitable properties.
The demand for residential properties is growing and there remains a lack of supply.
Similarly there is a growing demand from private investors for property investments that represent good rental value and the potential for capital appreciation in the medium term.
The Company’s corporate objectives are;
• Provide an alternative secure investment for sophisticated investors • Minimise development risk by seeking pre lets • To create long term investment value for its Bond and shareholders • Provide completed developments to potential purchasers that are underpinned by strong occupier covenant strength
The team has the experience and skillsets needed to identify profitable investments and development opportunities and execute their delivery.
4.3 CURRENT DEVELOPMENTS
The Company is currently undertaking 3 developments in Denmark.
Eg at Oerbaekvej 15, an old pharmacy is being converted into 3 luxury flats and the expected yield evaluation on this property is expected to go from 6 pct (which is typical for a retail space) to 3 pct, which is typical for attractive luxury flats near major metropolitan areas.
Eg if rental income is DKK 10,000 per calendar month, which equals DKK 120,000 per annum, a flat at 6 pct yield is worth DKK 2,000,000. But at 3 pct yield it is worth DKK 4,000,000.00 thus securing a profit of DKK 2,000,000 on just one flat conversion from retail to residential.
Further developments are being secured with similar predicted returns. With Invest having live development opportunities, Bond monies can be immediately deployed into secured opportunities.
A further development, typical of those the Issuer seeks is at Sankelmarksgade 13 in Aarlborg (pictured below). Here the two ground floor retail units are being converted to residential use.
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4.4 MARKET OPPORTUNITY
With the continual undersupply of new build homes, there is a clear and growing demand for suitable property by both owners and occupiers.
Since early 2008 there has been low levels of development activity (though currently on the increase), Occupiers have somewhat changed their needs whilst statutory requirements have increased, all-in-all creating a profitable opportunity that The Company intend to capitalise upon.
There is a severe restriction on the supply of traditional bank development finance, which is likely to continue for some time, and has contributed to a lack of property stock though stock is gradually being replenished.
These situations create an opportunity, which The Company will exploit to secure the best opportunities in areas and locations where there is high demand and low supply.
The next planned project of the Company which will be financed by the Issuer is described in Section 4.7.1 below.
4.5 DEVELOPMENT PROCESS
The Company sources investment and development opportunities from a range of groups and individuals, whom the management have long-standing business dealings with. They understand our criteria and what opportunities we require in order to maximise the ability to source developments.
4.5.1 SITE SELECTION
Once our partners have selected opportunities that meet our criteria, we then undertake an initial desktop exercise to establish;
• Current supply and demand levels • Trend analysis on values of similar properties • Desktop analysis of the site and its surrounding area • Initial development appraisal to assess viability
Following this assessment our management team decide if resources are allocated to investigate the opportunity further. Upon agreement to do this we will undertake; 16
• Detailed market study supported by local property agents • Market value analysis • Profile likely occupiers and determine location against their known criteria • Seek planning advice on development proposals • Undertake high level development cost assessment • Produce a development program • Produce detailed development appraisal and cash flow analysis
This is then considered by the Board of The Company concerning its viability and whether to start the formal process to acquire the target site.
The necessary legal due diligence on the acquisition is conducted to ensure we fully understand the title of the land, what restrictions there are and plan a way to deal with these.
Once the legal due diligence and further commercial assessments are completed a full purchase report will be produced and submitted to the Board of the Company for consideration. A decision by the Board of The Company will then be made on whether to complete the acquisition of the site or not. A part of this deliberation being the approval of funding by the Board of The Issuer.
4.5.2 DELIVERY
Once planning has been obtained a Project Manager will be assigned to deliver the construction phase of the project whilst working with the Development Manager with overall responsibility to the Board for the delivery of the development and subsequent sale.
The Project Manager will coordinate design, procurement and construction activities against the Investment criteria. Agreed specification levels will have been established and the Project Manager is responsible in delivering against these and pre agreed timescales.
During the delivery phase the Development Manager will liaise with the occupier or agent regarding progress and completion of the development
4.5.3 SALE / RENTAL
The Development Manager will work with property agents and lawyers to close out the sale / rental of the development upon completion. The Development Manager will be given discretion to be able to negotiate on the sale / rental within a framework and criteria set by the Board. Any divergence must be agreed to by the Board.
4.6 SUMMARY
There are a number of factors that could affect The Company’s performance as for example decreasing market values and demand and/or increasing construction costs. The Company has a strategy to deal with each one of these risks.
We work with respected property agents who have detailed knowledge of market rents and capital yields. Professional advice is taken during the development process to benchmark and monitor sale values, rental values and capital yields so that any adjustments can be made during the process to react to any growth or reduction in both.
4.6.1 DECREASING MARKET VALUES
Decreasing market values are irrelevant to the quarterly interest payments on the bond in the short term as we are principally dealing with fully let residential properties and with a DKK 5 million reserve fund set aside for any gaps in income caused periods of idle running and by new tenants coming in.
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4.6.2 INCREASING CONSTRUCTION COSTS
Our management team has vast experience in delivering construction projects. Robust and detailed cost exercises are undertaken at each stage to manage cost risk.
As we will be managing the whole process including on site construction teams, we have the flexibility to change elements of the project to accommodate cost fluctuations. Similarly the flexibility gives us the opportunity to exploit any cost opportunities in the supply of materials and labour.
We also factor in material and labour inflation into our financial analysis and the analysis identifies the impact of unforeseen cost fluctuations, rather than normal market fluctuations.
4.6.3 DECREASING MARKET DEMAND
As we are dealing with residential property (or conversion to residential) we do not foresee any meaningful decreased market demand.
4.7 FINANCIAL MODEL
4.7.1 SUMMARY
Proceeds from the issuance of the Bond will, assuming full subscription, be DKK 79 million after issuance expenses. The initial allocation of these monies will be:
a. Advance funds to the Company in order to complete the acquisition of the three properties set out in Section 3.3 (DKK 27 million) b. Advance funds to the Company in order to retire existing expensive debt (DKK 24 million) c. Establish the Security Fund (DKK 5 million) d. Available for further advances to the Company to assist in the expansion of the portfolio through the acquisition of further properties and, in particular Swan Creek.
The detailed financial model for the portfolio is set out in 4.7.2 below.
As set out in 3.4 above, the Company will pay the Issuer interest at 3% on the full amount of DKK 80,000,000; such interest being sufficient to cover the Bond interest payments due from the Issuer. However, as security for the Bondholders, the Issuer will set aside a fund of DKK 5 million (to be held by the Security Trustee) which equates to more than 2 years interest on the whole Bond amount.
Next Spearhavoc Invest project
On Funen Island, just outside Odense, Denmark’s third largest city, Spearhavoc Invest ApS has purchased a building of approximately 700 m2 in size, situated on about 2,200 m2 of land. The building has, until recently, and for more than 100 years served as the local town's Pharmacy.
The Company plans to renovate and expand the building and build modern, high quality sheltered accommodation for the local Seniors in the area (pop. approx. 480,000). The project is named “Swan Park” and plans are illustrated at Appendix 4.
This will allow people of retirement age to stay in the local area and be near family and lifelong friends, when tending the garden and looking after a big house becomes too much of a burden.
The Company plans to build 12-16 modern, high quality sheltered houses on the land as well as renovating and converting the old Pharmacy to 4-5 more sheltered dwellings with common facilities for cooking, hobbies, crafts, dining, TV room etc., which will allow the residents to stay active in a safe and sheltered setting with a real sense of local community.
The renovation and building work will start immediately after the completion of the subscription for the current Bond offering of Spreahavoc Finans A/S and the consequent availability of the required development funds by way of an advance to the Company. The development is expected to cost approx.. DKK 17,000,000, take 18
12 months and yield a rental return of between 6-8% when fully let.
The individual units will be 48m2-66m2 in size and will all have large, furnish-able balconies and terraces. There will also be a large, common terrace between the main building and the new ones.
The Company considers his property to be ideal for this conversion to contemporary and high quality Senior accommodation. All the properties will have individual parking spaces and there are excellent public transport links with the nearest bus stop less than 25 meters away.
The monthly rent will be in the area of DKK 4,800 to DKK 6,600 plus utilities. This is in line with the rental level for newly built housing in the area. Alternatively, the Company may offer some of the units for direct sale. Direct sale would generate a margin of 100% over build costs.
The Company has concluded an agreement with a local Real Estate Agent, Erik Rask Nielsen Consult, who will provide local guidance and counsel to the project during the build as well as the marketing of the units.
The above project, plus further planned augmentations of the portfolio will give a portfolio value in the future which the directors of the Company forecast in the region of DKK 150 million.
Over the 10 year period the profits will be more than enough to repay the DKK 80 million Bond principal including an ample reserve for any adverse events. In any event, at the Bond expiry date, the existing properties and properties acquired during the 10 year period, can with reasonable certainty be sold and cover repayment of the advances received from the Issuer and, in turn, the Bond.
4.7.2 FINANCIAL DETAIL
Spearhavoc Invest ApS will, in the immediate future, derive income from three elements:
- its existing portfolio – where the Issuer will make advances to retire expensive debt; - its expanded portfolio – where the Issuer will make advances in order to complete the acquisition of these properties; - the Swan Creek project – where the Issuer will make advances for the build and development cost.
The annual revenues and costs of these three elements are summarised below (all in DKK 000):
Current Expanded Swan Creek properties properties
Date revenue generative ongoing Oct 2017 Nov 2018
Estimated completed portfolio value 42,320 44,200 27,000
Advances from Issuer 24,300 27,100 20,000
Swan Creek development cost - build cost 15,000 - other cost 2,100
Estimated equity on completion 18,020 17,100 7.000
Annual rental income 1,548 1,603 1,800
Maintenance cost 278 277 300
Coupon cost on advances 729 813 600
Operating profit 541 513 900
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The achievement of the above results allows Spearhavoc Invest ApS to pay the required coupon payments to the Issuer and, in turn allows the Issuer to pay the coupon payments to Bondholders without having to utilise the DKK 5 million Security Fund.
The Directors consider that the two principal financial risks are: - having empty rental properties with no tenant income (the model above assumes full occupancy) - delays and / or cost overruns on the Swan Creek development
The model has been sensitised for the scenarios set out below and the resultant amount of utilisation of the DKK 5 million Security Fund is shown for each scenario.
SCENARIO AMOUNT OF DKK 5 MILLION SECURITY FUND UTILISED (in DKK 000)
Base model, as described above 0
Two of the Company’s medium sized properties are empty with no income for a 6 month period 0
The Swan Creek project is delayed by 6 months and development 5 commences in May 2018
The Swan Creek project is delayed by 6 months and development commences in May 2018 AND two of the Company’s medium 263 sized properties are empty with no income for a 6 month period
The Swan Creek project is delayed by 6 months and development commences in May 2018 AND two of the Company’s medium sized properties are empty with no income for a 6 month period 1,488 AND the build cost of the Swan Creek development overruns by 30% (therefore costing DKK 19.5 million as opposed to DKK 15 million).
Based on the above, the Directors believe that the Security Fund is adequate to protect the interests of Bondholders. The Security Fund is sufficient to finance the payment of the coupon on the whole DKK 80,000,000 Bond for a period in excess of two years.
4.7.3 DIVERSIFICATION PLAN
The Company does not anticipate to allocate more than an accumulated 30% of its gross assets directly into any one project or investment. However, the management reserve the right to allocate more than an accumulated 30%, should management at the time consider an allocating above 30% to be in the best interests of The Company.
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5. MANAGEMENT
5.1 BOARD OF DIRECTORS
The Directors are responsible for the overall management and control of The Issuer. The Board comprises 3 executive directors.
Advokat Morten Hemmingsen
The Chairman of the Board of The Issuer, and minority shareholder of The Company with a 10 pct shareholding, is Advokat Morten Hemmingsen, principal of Advokatfirmaet Morten Hemmingsen and City Ejendoms- & Administrationskontor A/S (http://www.ejendomskontoret.com/). Advokat Hemmingsen has been actively involved in the property market since 1990 and is a most well esteemed property lawyer. Advokat Hemmingsen is also chairman of the B93 Football Club in Copenhagen.
Advokat Hemmingsen has during the five years preceding the date of this Company Description been a director of the following companies:
Name Incorp Appointed Ceased Note City Ejendoms-og Administrationkontor ApS DK 14/09/1999 - Halmtorvet 29 A/S DK 01/09/2008 - Rønnegade 5 ApS DK 27/05/2008 - Café Benzon ApS DK 30/04/2008 - Dansk Skraldesug ApS DK 22/01/2009 - Fejfer & Iversen ApS DK 28/09/2011 - Hostrupsvej 13 ApS DK 02/01/2004 - Vester Stejlebakke 2D ApS DK 31/03/2000 - Philmor Invest ApS DK 21/12/2004 - Vordingborg byejendomme ApS DK 23/04/2003 - Østerbrogade 27 A/S DK 22/02/2001 -
None of the above companies have their shares admitted to trading on a stock exchange.
Advokat Hemmingsen is engaged by the Issuer under a service agreement dated 25 July 2017 which provides, inter alia, for a monthly fee of DKK 5,000. The agreement is terminable at three months notice from either party.
Bo McCormick
The Managing Director and a board member of The Issuer is Director Bo McCormick (MSc Economics & Finance). Director McCormick brings along a significant and diverse investment experience gained through more than 20 years of international investments, analysis and trading across a multitude of asset classes including mortgaged back securities, property finance and development loans.
Director McCormick spend 10+ years employed as Executive Director for the Equity Derivatives Division at Morgan Stanley, London. 2 years as Senior Portfolio Manager and Desk Head at Danske Bank, Copenhagen and recently 6+ years at Chief Investment Officer at Benjamin Capital - A Copenhagen based family office with significant interests, investments and development exposure within the Danish property sector.
Mr McCormick has during the five years preceding the date of this Company Description not been a director of any other companies:
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Mr McCormick is engaged by the Issuer under a service agreement dated 25 July 2017 which provides, inter alia, for for a monthly fee of DKK 10,000. The agreement is terminable at three months notice from either party.
Henrik Christiansen
The final Board Member is Director Henrik Christiansen. Director Christiansen has a background in property management, construction, renovation and design and is a former Technical Director of Q8, Denmark. Director Christiansen brings a wealth of experience in all things related to properties to the table and has been involved in several projects for The Company in the past.
Mr Christiansen has during the five years preceding the date of this Company Description been a director of the following companies:
Name Incorp Appointed Ceased Note Global Green Capacity UK 01/04/2014 01/08/2015 Global Green Cherry UK 01/04/2014 01/08/2015 Hech Holding ApS DK 01/05/2007 -
None of the above companies have their shares admitted to trading on a stock exchange.
Mr Christiansen is engaged under an agreement with the Issuer, under which he charges the Issuer for his time spent on administrative and property project related matters at a rate of DKK 800 per hour. The agreement may be terminated by three months notice from either party.
5.2 DIRECTORS’ INTERESTS
The interests of the Directors and their interests in companies associated with the management, administration, promotion and marketing of The Issuer and the issuance of Bonds are set out below:
Each of the Directors may act as Director of, be a shareholder, or have other interests in companies or vehicles other than The Issuer, in circumstances which may give rise to additional conflicts of interest. Each Director will disclose such matters to the Board and seek to ensure that any such conflict of interest of which he or she is aware, is resolved fairly.
None of the Directors has, in the five years prior to the date of this company description:
(a) any unspent convictions in relation to indictable offences;
(b) had any bankruptcy order made against him or entered into any voluntary arrangements with creditors;
(c) been a director of a company which has been placed into receivership, insolvent liquidation or administration or been subject of a voluntary arrangement while he was a director of that company or within the 12 months after he ceased to be a director of that company;
(d) been a partner in any partnership which has been placed into receivership,
(e) insolvent liquidation or administration or been subject of a partnership voluntary arrangement while he was a partner in that partnership or within the 12 months after he ceased to be a partner in that partnership;
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(f) been publicly criticised by any statutory or regulatory authority (including designated professional bodies); or
(g) been disqualified by a court from acting in the management or conduct of the affairs of a company.
5.3 SENIOR MANAGEMENT
The senior management team that has expertise required for a development business.
The Directors are supported by construction managers, development surveyors, project managers and other support staff as needed in order to source and complete new investments and developments. Such managers and surveyors are engaged on a contract basis for the relevant project and are not employed by the Group.
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6. FINANCIAL POSITION
The operating company, Spearhavoc Invest Aps, was established to carry out property development projects in 2009. In its last audited period of operation to 31 December 2016, and the audited accounts are included in this Company Description at Appendix 3.
The Issuer is a newly formed company and, as such, has not yet produced accounts. At 31 October 2016, its balance sheet comprised:
Cash DKK 500,000
Capital DKK 500,000
On Admission it will have raised DKK 25,000,000 from investors in the Bond.
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7. ADDITIONAL INFORMATION
1. Incorporation of The Issuer.
The company was incorporated on 01/10 2016.
The company website is www.spearhavocfinans.com
2. Share Capital of The Issuer.
There is only one class of shares. The Issuer directors are authorised to issue an unlimited number of Ordinary Shares of DKK 1.00 par value each. There are currently 500,000 Ordinary shares in issue, all of which are fully paid.
All of the issued shares of The Issuer are held by The Company.
There are no situations existing at the date of this Document (including employee share option schemes) which could require The Issuer to issue further shares.
3. Memorandum and Articles of Association.
These are available on The Issuer’s website and were adopted by The Issuer on 12th December 2016; they include, amongst other things, provisions to the following effect:
Limited Liability
The liability of the members of The Issuer is limited to the amount, if any, unpaid on the shares held by them. [Note – The Issuer does not have any amounts unpaid on shares – all shares in issue are fully paid up.]
Rights attaching to Ordinary Shares
Voting
Every member present in person or by proxy at a general meeting has upon a show of hands one vote, and every member present in person or by proxy has upon a poll one vote for every share held by that member.
Dividends
Subject to the provisions of Danish Law and of the Articles Subject as hereinafter provided The Issuer in general meeting may declare a dividend to be paid to the members according to their respective rights and interests in the profits, but no larger dividend shall be declared than is recommended by the Board. All dividends shall be apportioned and paid pro-rata according to the amounts paid up or credited as paid up on the shares during any portion or portions of the period in respect of which the dividend is paid.
Interim dividends may be paid in accordance with Danish Law and the Articles. No dividends shall bear interest. All dividends unclaimed for a period of twelve years after having been declared shall be forfeited and shall belong to The Issuer.
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Redeemable shares
Subject to Danish Law, The Issuer may issue shares which are liable to be redeemed.
Transfer of Ordinary Shares
All transfers of ordinary shares shall be effected by an instrument in writing in the usual form or such other form approved by the Board. Subject to the statutes, the Board may refuse to register the transfer of a share which is not fully paid or in respect of which it The Issuer has a lien in which cases the Board shall within two months after the date on which the transfer was lodged with The Issuer send to the transferee notice of the refusal and return to him the instrument of transfer save as aforesaid, there are no restrictions on the free transferability of the ordinary shares of The Issuer save where any jurisdiction, statute or regulation places restrictions upon transferability.
Under and subject to the Danish Law, the Board may permit title to shares of any class to be evidenced otherwise than by certificate and title to shares of such a class to be transferred by means of a relevant system and may make arrangements for a class of shares (if all shares of that class are in all respects identical) to become a participating class. Title to shares of a particular class may only be evidenced otherwise than by a certificate
Consolidation and sub-division of shares
The Issuer may by ordinary resolution consolidate its shares into shares of a larger amount and by special resolution sub-divide all or any of its shares into shares of a smaller amount.
Increase or reduction of capital
The Issuer may by ordinary resolution, increase the capital of The Issuer by the creation of new shares. The Issuer may, subject to Danish Law, by special resolution reduce its share capital, any capital redemption or any share premium account. Subject to and in accordance with Danish Law and subject as provided in the Articles, The Issuer may purchase its own shares (including any redeemable shares).
Variation of Rights
If at any time the share capital of The Issuer is divided into shares of different classes, any of the rights for the time being attached to any share or class of shares in The Issuer may be varied or abrogated in such manner (if any) as may be provided by such rights or, in the absence of any such provision, either with the consent in writing of the holders of not less than three-quarters in nominal value of the issued shares of the class or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of the class duly convened and held as hereinafter provided (but not otherwise). Any meeting for the purpose of the last preceding article shall be convened and conducted in all respects as nearly as possible in the same way as a general meeting of The Issuer. The quorum at any such meeting shall be at least two persons present holding or representing by proxy at least one-third in nominal value of the issued shares of the class, and at an adjourned meeting one person holding shares of the class in
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question or his proxy and (d) a poll may be demanded in writing by any member present in person or by proxy and entitled to vote at the meeting.
Borrowing Powers
The Board may exercise all the powers of The Issuer to borrow money and to mortgage or charge its undertaking, property and uncalled capital, and to issue debentures and other securities.
Management Remuneration
Non-executive Directors shall be paid out of the funds of The Issuer or The Company by way of fees for their services in an aggregate amount of up to DKK 100,000 per annum or such further sums (if any) as The Issuer or The Company in general meeting may from time to time determine.
The Directors shall be entitled to be repaid all reasonable travelling, hotel and other expenses incurred by them respectively in or about the performance or their duties as
Directors including any expenses incurred in attending meetings of the Board or of Committees of the Board or general meetings and if in the opinion of the Directors it is desirable that any of their number should make any special journeys or perform any special services on behalf of The Issuer or The Company or its business, such Director or Directors may be paid reasonable additional remuneration and expenses as the Directors may from time to time determine.
Appointment of Directors
Without prejudice to the power of The Issuer or The Company pursuant to the Articles the Directors shall have the power at any time to appoint any person either to fill a casual vacancy or as an addition to the Board.
General Meetings
The Issuer and The Company shall within 6 months of its financial year end, at such time and place as may be determined by the Directors, hold a general meeting as its Annual General Meeting in addition to any other meetings in that year, and shall specify the meeting as such in the notice convening.
An Annual General Meeting and a General Meeting called for the passing of a special resolution shall be called by not less than twenty-one days notice in writing and all other General Meetings of The Issuer and The Company shall, subject to the statutes, be called by not less than fourteen days notice in writing or by electronic communication.
Every notice calling a meeting of The Issuer or any class of the members of The Issuer shall comply with the statutes in respect of the information to be made available to members and there shall also appear with reasonable prominence a statement that a member entitled to attend, speak and vote is entitled to appoint one or more proxies to attend, speak and, on a poll, vote instead of him, and that a proxy need not also be a member, and that a member may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that member.
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The business of an annual general meeting shall be to receive and consider the profit and loss account, the balance sheet and reports of the Directors and of the Auditors, and the documents required by law to be annexed to the balance sheet, to elect Directors and officers and to fix their remuneration if required, to declare dividends, to appoint the Auditors and to fix, or determine the manner of the fixing of, their remuneration. All other business transacted at an annual general meeting and all business transacted at a general meeting shall be deemed special.
Subject to the provisions in respect of adjourned meetings, for all purposes the quorum for a general meeting shall not be less than two members present in person or by proxy.
Indemnities and Directors’ and Officers’ Insurance
Subject to the provisions of Danish Law, every director (including the Directors) or other officer of The Issuer and The Company shall be indemnified out of the assets of The Issuer or The Company against all costs, charges, expenses, losses and liabilities which he may sustain or incur in or about the execution of his office or otherwise in relation thereto.
The Directors be entitled to purchase and maintain an insurance policy for any such liability as the Directors shall determine.
4. Parent Company
The immediate parent company of The Issuer is Spearhavoc Invest ApS (The Company):
5. Material Contracts.
The Issuer has:
a. entered into an engagement with Keswick Global AG under which Keswick will act as Certified Adviser to The Issuer. The agreement is for an indefinite period but may be terminated by either party at three months notice following Admission. b. Granted by a deed a fixed and floating charge on the corporate loan to The Company by the Issuer in favour of the Bondholders. c. Received a fixed and floating charge (The Pledge) over the property assets and rental income of The Company. d. Entered into a Security Trustee agreement with Advokat Morten Hemmingsen by which Advokat Hemmingsen will, in a segregated client account, maintain the Security Fund of DKK 5,000,000 in favour of the Bondholders. As Advokat Hemmingsen is also a Director of the Issuer, the agreement contains provisions limiting Advokat Hemmingsen’s involvement in board meetings of the Issuer on the subject of the Security Fund; thus avoiding a conflict of interest position.
6. Litigation & Arbitration.
There are no threatened or pending legal action being brought by or against or involving The Issuer or The Company or any of its directors and assets that could give rise to a significant effect on The Issuer’s or The Company’s financial standing.
7. Taxation.
A brief summary of taxation related to the Bonds is contained on page 27. All bondholders are strongly advised to take their own tax advice.
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8. Significant changes.
There have been no significant changes since the publication of the financial statements included in this company description.
9. Related Party Transactions.
There are no related party transactions other than those disclosed in this company description.
10. Other advisers:
Legal Advisers
Danders & More Frederiksgade 17 DK -1265 Copenhagen K
Registrars
VP Securities A/S Weidekampsgade 14 DK-2300 Copenhagen S
General.
The Board are of the opinion that no additional information is reasonably required to be disclosed in order to make an informed assessment of the company’s financial position and business activities.
11. No payments (other than to a trade supplier, professional adviser or underwriter) of fees in excess of DKK 85.000 – approximately £10,000 - (however satisfied) in respect of services provided to The Issuer during the period of twelve months prior to the publication of the company description.
12. This document can be reviewed at The Issuer’s registered office
Corporate Governance
The management recognise the importance of sound corporate governance and intend, so far as is practicable given The Company's size and the constitution of the Board, to comply with the good governance practice.
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8. DANISH TAXATION
THE FOLLOWING STATEMENTS ARE INTENDED ONLY AS A GENERAL GUIDE TO CERTAIN DANISH TAX CONSIDERATIONS AND DO NOT PURPORT TO BE A COMPLETE ANALYSIS OF ALL POTENTIAL DANISH TAX CONSEQUENCES OF ACQUIRING, HOLDING OR REDEEMING THE BOND. THEY ARE BASED ON CURRENT DANISH LEGISLATION AS AT THE DATE OF THIS COMPANY DESCRIPTION. THEY APPLY ONLY TO BONDHOLDERS WHO ARE RESIDENT AND DOMICILED FOR TAX PURPOSES IN (AND ONLY IN) DENMARK, AND WHO HOLD THE BOND AS AN INVESTMENT.
THE PRECISE TAX TREATMENT OF A BONDHOLDER WILL DEPEND ON THE BONDHOLDER'S INDIVIDUAL CIRCUMSTANCES AND LAW AND PRACTICE IN FORCE AT THE RELEVANT TIME AND MAY THEREFORE BE SUBJECT TO CHANGE IN THE FUTURE.
PROSPECTIVE ACQUIRERS OF THE BOND ARE ADVISED TO CONSULT THEIR OWN PROFESSIONAL ADVISERS CONCERNING THE TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP OR REDEMPTION OF THE BOND AND ANY BENEFITS DERIVED THEREON.
Income will be paid net of basic rate tax, currently 27 pct in Denmark, for individuals and gross for pension schemes. The ultimate liability to tax in respect of the total return on the Bond will depend upon the individual circumstances of each Bondholder at the relevant time and may be subject to change.
A Bondholder who is subject to income tax at a rate or rates not exceeding the basic rate should not be liable for additional income tax on the total return on the Bond.
A Bondholder who is subject to income tax at higher rates of income tax exceeding the basic rate may be required to pay additional tax after taking into account tax withheld at source by the Company.
A Bondholder who is not normally subject to tax in Denmark may be entitled to claim repayment of the tax withheld at the basic rate by the Company from SKAT.
No liability to Denmark capital gains tax should arise on the issue of the Bond or subsequent redemption.
No stamp duty or stamp duty reserve tax will be payable on the issue of the Bond.
A holding of the Bond should form part of a Bondholder's estate for inheritance tax purposes.
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Appendix 1
Defined Terms
Board The Board of Directors of Spearhavoc Finans A/S (The Issuer) or Spearhavoc Invest Aps (The Company) Bond The Fixed Rate Secured Loan Bond 2027 issued by The Issuer
Bondholder The registered holder of a Bond from time to time
Company Spearhavoc Invest Aps
Directors The Directors of The Issuer from time to time
Group Spearhavoc Limited and its subsidiary companies
The income received by the Bondholder from the investment in Income the Bonds
Quarterly 15/4, 15/7, 15/10 and 15/01. Interest Date Spearhavoc Finans A/S Issuer 31 December 2027; Redemption Date
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Appendix 2
The Bond Instrument
The Directors have the authority to issue up to DKK 80,000,000 of bonds through this issue.
The Bond Instrument that follows was adopted by resolution of the Board of Directors on 12th December 2016.
The Issuer has appointed Advokat Morten Hemmingsen to represent the Bondholder’s interests through the holding of a Security Fund.
The Issuer has granted a fixed and floating legal charge over its assets and undertaking in favour of the Bondholders.
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DATED 12TH DECEMBER 2016.
CORPORATE BOND INSTRUMENT
Constituting Up To DKK 80,000,000.00
3% Secured 2027 Corporate Bond
SPEARHAVOC FINANS A/S
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CONTENT
PARTY
BACKGROUND
AGREED TERMS
1 DEFINITIONS & INTERPRETATION 2 AMOUNT OF BONDS 3 DESCRIPTION OF BONDS 4 STATUS OF BONDS 5 REPAYMENT OF BONDS 6 INTEREST ON BONDS 7 REDEMPTION 8 CERTIFICATES 9 REGISTER 10 EVENTS OF DEFAULT 11 NO SET-OFF 12 ENFORCEMENT 13 MODIFICATION 14 GOVERNING LAW AND JURISDICTION
SCHEDULE 1 – BOND CERTIFICATE
SCHEDULE 2 – THE CONDITIONS
SCHEDULE 3 – PROVISIONS AS TO REGISTRATION AND OTHER MATTERS
SCHEDULE 4 – PROVISIONS FOR MEETINGS OF THE BOND HOLDERS
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THIS INSTRUMENT is dated 12 December 2016
PARTY
Spearhavoc Finans A/S, a Limited Company registered at Gothersgade 21, DK-1123 Copenhagen K (“the Issuer”).
BACKGROUND
The Issuer has, by resolution of its board of directors resolved to create up to a maximum nominal amount of DKK 80,000,000 fixed rate Corporate Bonds (The Bond), to be constituted in the manner set out below.
AGREED TERMS
1. DEFINITIONS AND INTERPRETATION
1.1 The definitions and rules of interpretation in this clause apply in this instrument. “The Issuer” refers to Spearhavoc Finans A/S, a Limited Company incorporated and registered in Denmark with number 38102788, whose registered office is Gothersgade 21, DK-1123 Copenhagen K and whose place of business is at the same address.
“Application” means the Application from The Issuer to a potential Corporate Bond Holder dealing with the mechanics for purchase of the Bonds which the potential Bond Holder completes and returns to The Issuer specifying the amount of Bonds they wish to purchase;
“Bond Proceeds” refers to the monies sent to The Issuer together with the Application in respect of the Bond being purchased under the Application;
“Bond Holder” each person for the time being entered in the Register as a holder of any Bonds; “Bonds” up to DKK 80,000,000 fixed rate Corporate Bonds constituted by this instrument or, as the case may be, the amount of such Corporate Bonds for the time being issued and outstanding;
“Business Day” any day, other than a Saturday or Sunday or Danish Bank Holiday; “Conditions” the conditions set out in Schedule 2 as from time to time amended and “Condition” shall be construed accordingly;
“Directors” the board of directors of The Issuer for the time being;
“Event of Default” any of those events specified in clause 9;
“Register” the register of Bond holders (provisions relating to which are set out in clause 8);
“Repayment Date” means the date that each annual coupon payments are due, from the date on which the Instrument is executed;
“Security” a fixed and floating charge over The Issuer’s assets in the favour of Bond holders pari passu.
1.2 Any reference in this instrument to:
1.2.1 the assets of any person shall be construed as a reference to all or any part of its business, undertaking, assets, revenues (including any right to receive revenues) and uncalled capital;
1.2.2 an encumbrance shall be construed as a reference to a mortgage, charge, assignment, pledge, lien (save as arising in the ordinary course of business), hypothecation, right of set-off (save as arising under the general law for the protection of certain classes of creditors) or trust arrangement for the purpose of and having a similar effect to the granting of security, or
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other security interest of any kind;
1.2.3 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;
1.2.4 this instrument or to any other instrument, agreement or document shall, unless the context otherwise requires, be construed as reference to this instrument or such other instrument, agreement or document as the same may from time to time be amended, varied, supplemented or novated, in each case, in accordance with its terms;
1.2.5 a month shall be construed as a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month save that, where any such period would otherwise end on a day which is not a Business Day, it shall end on the next Business Day, unless that day falls in the calendar month succeeding that in which it would otherwise have ended, in which case it shall end on the preceding Business Day provided that, if a period starts on the last Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that later month;
1.2.6 a person shall be construed as a reference to any individual, firm, company or other body corporate, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) and, respectively, wherever incorporated or established;
1.2.7 repayment includes redemption and vice versa and the words repay, redeem, repayable, redeemed and repaid shall be construed accordingly;
1.2.8 a subsidiary of any person shall be construed as a reference to any person which is, at any time, a subsidiary within the meaning of Danish Law of that first-mentioned person;
1.2.9 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);
1.2.10 the winding-up, dissolution or administration of a person shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such person is incorporated or of any jurisdiction in which such person carries on business; and
1.2.11 DKK is the lawful currency of the Kingdom of Denmark.
1.3 References to any statute or statutory provision shall include references to such statute or statutory provision as in force at the date of this instrument and as subsequently re-enacted or consolidated and shall include references to any statute or statutory provision of which it is a re-enactment or consolidation.
1.4 References to any statute or statutory provision which is not applicable to the Company because the Company is subject to the statutes and laws of a different jurisdiction shall be deemed to substituted by and refer to any statute or statutory provision under the laws of the jurisdiction of the Company which is analogous to or has a substantially similar effect.
1.5 In construing this instrument general words introduced by the word other shall not be given a restrictive meaning by reason of the fact that they are preceded by.
1.6 All the provisions of this instrument are severable and distinct from one another and the illegality invalidity or unenforceability of any provision of this instrument under the law of any jurisdiction shall not affect its validity or enforceability under the law of any other jurisdiction nor the legality, validity or enforceability of any other provision. 36
1.7 References to the Bonds include references to all and/or any of the Bonds.
1.8 The headings in this instrument are inserted for convenience only and shall not affect construction or interpretation and references to a clause, schedule, condition or paragraph are (unless otherwise stated) to a clause or schedule in this instrument and to a condition or a paragraph of the relevant schedule, respectively.
2. AMOUNT OF BONDS
2.1 The principal amount of the Bonds is limited to DKK 80,000,000
3. DESCRIPTION OF BONDS
3.1 The Bonds shall be known as “Fixed Rate Secured Loan Bonds 2027” and shall be issued by The Issuer in a minimum value of DKK 800,000 and thereafter increments of DKK 8,000. The Directors may issue, at their discretion, Bonds with a lower minimum amount, save that no more than 100 bondholders will be granted such discretion over the life of the Bond.
4. STATUS OF BONDS
4.1 The whole of the Bonds when issued shall rank as a secured obligation of The Issuer for the due and punctual payment of the principal and interest in respect of them and performance of all the obligations of The Issuer with respect to them.
4.2 All Bonds when issued shall rank pari passu equally and rateably without discrimination or preference among themselves.
5. REPAYMENT OF BONDS
5.1 When the Bonds become payable in accordance with the provisions of this instrument, The Issuer shall pay to the Bond holders the full principal amount of the Bonds to be repaid together with any accrued interest on such Bonds (less any tax which The Issuer is required by law to deduct or withhold from such payment) up to and including the date of payment.
5.2 All payments under this instrument, whether of principal, interest or otherwise, shall be made by The Issuer to the Bond holders entitled to such payments as provided in paragraph 5 of Schedule 3.
5.3 Where any payment to a Bond holder, whether of principal, interest or otherwise, is due in accordance with the terms of this instrument on a day which is not a Business Day, payment shall take place on the next succeeding Business Day. If that next succeeding Business Day is in the month following the month in which payment would otherwise be made, payment shall take place on the immediately preceding Business Day.
6. INTEREST ON BONDS
6.1 Until the Bonds are repaid in accordance with the provisions of this instrument, interest shall accrue and be paid on the principal amount of the Bonds, which are outstanding at the rate and in the manner set out in the Conditions.
7. REDEMPTION
7.1 The Issuer may redeem the Bonds at any time by repaying to investors their capital and the interest that they would have accrued to the date that the Bonds are redeemed.
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8. CERTIFICATES
8.1 Following receipt by The Issuer of:
8.1.1 a signed Application; and
8.1.2 the purchase Funds;
a certificate (as described below) shall be issued to the Bond holder on the date which the Security is registered.
8.2 Each certificate for Bonds shall:
8.2.1 bear a denoting number;
8.2.2 be issued to a Bond holder as a deed, substantially in the form set out in Schedule 1; and
8.2.3 have the Conditions endorsed on it.
8.3 Each Bond holder shall be entitled to receive without charge one certificate for the Bonds registered in their name.
8.4 The Issuer shall not be bound to register more than four persons as the joint holders of any Bonds and, in the case of Bonds held jointly by several persons, The Issuer shall not be bound to issue more than one certificate. Delivery of a certificate to the person who is first named in the Register as Bond holder shall be sufficient delivery to all joint holders of the Bonds in respect of which such certificate has been delivered.
8.5 When a Bond holder redeems part of his Bonds, the old certificate shall be cancelled and a new certificate for the balance of such Bonds shall be issued without charge.
9. REGISTER
9.1 The Register shall contain the following details:
9.1.1 the names and addresses of the Bond holders for the time being;
9.1.2 the principal amount of the Bonds held by each Bond holder;
9.1.3 the date at which the name of each Bond holder is entered in respect of the Bonds registered in his/her name;
9.1.4 the date of issue of each Bond.
9.2 Any change of name or address by any Bond holder which is notified to The Issuer at its registered office address above shall be entered in the Register.
9.3 Any Bond holder may on reasonable notice request a copy of the Register. Subject to limitations of the data protection act.
10. EVENTS OF DEFAULT
10.1 The following are Events of Default:
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10.1.1 “Non-payment”: The Issuer fails to pay any principal or interest on any of the Bonds within 30 Business Days after the due date for payment thereof;
10.1.2 “Breach of undertaking”: The Issuer fails duly to perform or comply with any obligation (other than an obligation to pay principal or interest in respect of the Bonds) expressed to be assumed by it in this instrument and such failure continues for 30 Business Days after written notice has been given by any Bond holder requiring remedy thereof;
10.1.3 “Insolvency”: The Issuer is, or could be, deemed by law or a court to be insolvent or unable to pay its debts as defined in the Danish Insolvency Act (“Konkursloven”);
10.1.4 “Enforcement proceedings”: A distress, attachment, execution or other legal process is levied, enforced or sued out on or against all or any part of the assets of The Issuer or any member of the Group and is not discharged or stayed within 21 days;
10.1.5 “Winding-up”: The Issuer takes any corporate action or other steps are taken or legal or other proceedings are started for its winding-up, dissolution or re-organisation (other than for the purposes of a bona fide, solvent scheme of reconstruction or amalgamation previously approved by Special Resolution) or for the appointment of a receiver, administrator, administrative receiver, liquidator, trustee or similar officer of it or of any or all of its assets;
10.1.6 “Analogous proceedings”: Anything analogous to or having a substantially similar effect to any of the events specified in clause 9.1.3 to clause 9.1.5 inclusive shall occur under the laws of any applicable jurisdiction;
10.1.7 “Encumbrance enforceable”: Any encumbrance on or over the assets of The Issuer or any member of the Group becomes enforceable and any step (including the taking of possession or the appointment of a receiver, manager or similar person) is taken to enforce that encumbrance;
10.1.8 “Cessation of business”: The Issuer ceases to carry on the business it carries on at the date of this instrument or a substantial part thereof; and
10.1.9 “Illegality”: It is or becomes or will become unlawful for The Issuer to perform or com- ply with any of its obligations under this instrument, or any such obligation is not or ceases to be legal, valid and binding.
11. NO SET-OFF
11.1 Payments of principal and interest under this instrument shall be paid by The Issuer to the Bond holders without any deduction or withholding (whether in respect of any set-off, counterclaim, duties, taxes or otherwise whatsoever) unless the deduction or withholding is required by law.
12. MEETINGS OF BOND HOLDERS
12.1 The provisions for meetings of the Bond holders set out in Schedule 4 shall be deemed to be incorporated in this instrument and shall be binding on The Issuer and the Bond holders and on all persons claiming through or under them respectively.
13. TRANSFER
13.1 The Bonds are capable of being transferred. The Bonds shall be capable of being dealt in or on any stock exchange in Denmark or elsewhere and an application has been or shall be made to an appropriate stock exchange for permission to deal in or for an official or other quotation for the Bonds.
14. ENFORCEMENT 39
14.1 From and after the date of this instrument and so long as any amount is payable by The Issuer in respect of the Bonds, the Company undertakes that it shall duly perform and observe the obligations on its part contained in this instrument.
14.2 The Bonds shall be held subject to and with the benefit of the provisions of this instrument, the Conditions and the schedules (all of which shall be deemed to be incorporated in this Company and the Bond holders and all persons claiming through or under them respectively, and shall ensure for the benefit of all Bond holders.
15. MODIFICATION
15.1 The provisions of this instrument and the Conditions and the rights of the Bond holders may from time to time be modified, abrogated or compromised in any respect (including in any manner set out in paragraph 16.1 of Schedule 4) with the sanction of a Special Resolution and with the consent of The Issuer.
16. GOVERNING LAW AND JURISDICTION
16.1 This instrument and the Bonds 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 Denmark.
16.2 The courts of Denmark shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this instrument or any Bond or their subject matter or formation (including non-contractual disputes or claims).
16.3 This instrument has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it.
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Schedule 1
Bond Certificate
Spearhavoc Finans A/S (The Issuer)
Coupons are paid quarterly in arrears from the date of issue until the end of the term.
FIXED RATE SECURED LOAN BONDS 2027
Created and issued pursuant to a resolution of the board of directors of The Issuer passed on 12th December 2016.
THIS IS TO CERTIFY THAT
1. The Bonds are repayable in accordance with Schedule 2.
2. The Isser may redeem the Bond Holder’s Bonds at its discretion if it considers that it has sufficient liquidity to permit that redemption in accordance with Schedule 2.
3. Any change of address of the Bond holder(s) must be notified in writing signed by the Bond holder(s) to the Company at its registered office from time to time.
4. The Bonds are transferable in accordance with the terms of the Conditions and the Instrument.
5. Words and expressions defined in the Instrument shall bear the same meaning in this Certificate and in the Conditions endorsed hereon.
5. The Bonds 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 Denmark.
7. This Certificate has been executed as a deed and is delivered and takes effect on its date of issue stated at the beginning of it.
Executed as a deed by Spearhavoc Finans A/S (The Issuer) acting by Advokat Morten Hemmingsen, a director
______Advokat Morten Hemmingsen, Director
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Schedule 2
The Conditions
1. REPAYMENT
1.1 On the Repayment date, The Issuer shall pay the coupon amounts of Bonds then outstanding to the Bond holders, less any tax required by law to be deducted or withheld from such payment accrued on the Bonds up to (and including) the date of such repayment by the Company.
2. VOLUNTARY EARLY REPAYMENT
2.1 The Issuer may at any time, by giving the Bond holders not less than five (5) days written notice, repay the principal amount of all or a portion of the Bonds (such portion being the amount of DKK 100,000 or integral multiples thereof) on the date specified in such notice.
2.2 The Issuer shall also pay to the Bond holders all unpaid interest accrued on the Bonds to be redeemed up to and including the date of such redemption (in each case less any taxes required by law to be deducted or withheld from such payments).
2.3 Any payment made under the provisions of Condition 2.1 shall be treated as reducing the amount of the repayments under Condition 1 proportionately.
2.4 Any redemption of the Bonds under the provisions of Condition 2.1 shall be made pro-rata to the holdings of all Bond holders.
3. CANCELLATION
3.1 All Bonds repaid, prepaid or purchased by The Issuer shall be cancelled and The Issuer shall not be entitled to re-issue the same.
4.. PAYMENT OF INTEREST (Coupon)
4.1 Until the Bonds are repaid in accordance with these Conditions, interest on the principal amount of the Bonds outstanding from time to time shall accrue at the rate of 3% per annum.
4.2 Coupons are paid quarterly in arrears from the date of issue until the end of the term on 15/4, 15/7, 15/10 and 15/01.
4.3 The Issuer shall pay coupon payments in cash, in arrears to the persons who were registered as Bond holders at the close of business on the relevant Repayment Date.
4.4 Interest shall be calculated on the basis of the actual number of days elapsed in the relevant period and a 365 day year.
4.5 If The Issuer fails to pay any amount of interest or principal on any Bond when such amount is due, interest at the rate applicable under these Conditions plus 1% per annum shall accrue on the unpaid amount from the due date until the date of payment.
4.6 Interest on any Bonds repaid by The Issuer in accordance with these Conditions shall cease to accrue as from the date of such repayment.
5. DEALINGS
5.1 The Bonds shall be capable of being dealt in or on any stock exchange in the Denmark or elsewhere and an application has been or shall be made to an appropriate stock exchange for permission to deal in or for an official or other quotation for the Bonds. The minimum lot size of any trade on a stock exchange is DKK 8,000.
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6. NOTICES
6.1 Any Bond holder described in the Register as being at an address outside Denmark but who shall from time to time give to The Issuer an address within Denmark at which any notice may be served upon him shall be entitled to have notice served on him at such address. Save as otherwise provided in this Condition 6, no Bond holder other than a Bond holder described in the Register as being at an address within Denmark shall be entitled to receive any notice.
7. PURPOSE
7.1 The Issuer shall only use sums received on the issue of the Bonds for the purposes of its own business.
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Schedule 3
Provisions as to Registration and Other Matters
1. RECOGNITION OF BOND HOLDER AS ABSOLUTE OWNER
1.1 The Issuer shall recognise as absolute owner the registered holder of any Bonds. The Issuer shall not (except 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 Bonds may be subject.
1.2 The receipt of the registered holder for the time being of any Bonds or, in the case of joint registered holders, the receipt of any of them, for the principal payable in respect of such Bonds and for the interest from time to time accruing due in respect of such Bonds or for any other moneys payable in respect of such Bonds shall be a good discharge to The Issuer notwithstanding any notice it may have (whether express or otherwise) of the right, title, interest or claim of any other person to or in such Bonds, interest or moneys. The Issuer shall not be bound to enter any notice of any express, implied or constructive trust on the Register in respect of any Bonds.
2. TRANSFERABILITY OF BONDS
2.1 The Bonds are transferable in whole or part, under the Terms and Conditions of the issue.
3. RECOGNITION OF PERSONAL REPRESENTATIVES
3.1 The executors or administrators of a deceased Bond holder (not being one of several joint registered holders) and in the case of the death of one or more of several joint registered holders the survivor or survivors of such joint registered holders, shall be the only person or persons recognised by The Issuer as having any title to such Bonds.
4. TRANSMISSION OF BONDS
4.1 Any person who becomes entitled to any of the Bonds as a result of the death or bankruptcy of any Bond holder, or of any other event giving rise to the transmission of such Bonds by operation of law may, upon producing such evidence that he sustains the character in respect of which he proposes to act under this Condition or of his title as the Directors shall think sufficient, be registered himself as the holder of such Bonds or, subject to the preceding Conditions as to transfer, may transfer such Bonds.
4.1 The Issuer may retain any payments paid upon any such Bonds which any person under this provision is entitled to, until such person is registered as the holder of such Bonds or has duly transferred the Bonds.
5. PAYMENT OF INTEREST AND PRINCIPAL
5.1 The payments of principal, interest or other sums payable in respect of the Bonds may be paid by:
5.1.1 electronic transfer in immediately available cleared funds on the due date for payment, to the account specified for the purpose by the Bond holder or joint Bond holders in writing to the Company; or
5.1.2 in the absence of such notification, by cheque, warrant or bankers’ draft made payable to and sent to the registered address of the Bond holder or in the case of joint registered
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holders, made payable to the order of and sent to the registered address of that one of the joint registered holders who is first named on the Register or made payable to such person and sent to such address as the registered holder or all the joint registered holders may in writing direct.
5.2 Every such cheque, warrant or bankers' draft shall be sent on the due date for payment and may be sent through the post at the risk of the registered Bond holder or joint registered holders. Payment of the cheque, warrant or bankers' draft shall be a good discharge to The Issuer.
5.3 All payments of principal, interest or other moneys to be made by The Issuer shall be made after any deductions or withholdings for or on account of any present or future taxes required to be deducted or withheld from such payments.
6. RECEIPT OF JOINT HOLDERS
6.1 If several persons are entered in the Register as joint registered holders of any Bonds then without prejudice to the provisions of paragraph 5 the receipt of any one of such persons for any interest or principal or other moneys payable in respect of such Bonds shall be as effective a discharge to The Issuer as if the person signing such receipt were the sole registered holder of such Bonds.
7. REPLACEMENT OF CERTIFICATES
7.1 If the Certificate for any Bonds is lost, defaced or destroyed it may be renewed on such terms (if any) as to evidence and indemnity as the Directors may require. In the case of defacement the defaced Certificate shall be surrendered before the new Certificate is issued.
8. NOTICE OF BOND HOLDERS
8.1 Any notice or other document (including Certificates for Bonds) may be given or sent to any Bond holder by sending the same by post in a prepaid, first-class letter addressed to such Bond holder at his registered address in Denmark or (if he has no registered address within Denmark) to the address (if any) within Denmark supplied by him to The Issuer for the giving of notice to him. In the case of joint registered holders of any Bonds a notice given to the Bond holder whose name stands first in the Register in respect of such Bonds shall be sufficient notice to all joint holders.
8.2 Notice may be given to the persons entitled to any Bonds as a result of the death or bankruptcy of any Bond holder by sending the same by post in a prepaid, first-class envelope addressed to them by name or by the title of the representative or trustees of such Bond holder at the address (if any) in Denmark supplied for the purpose by such persons or (until such address is supplied) by giving notice in the manner in which it would have been given if the death or bankruptcy had not occurred.
9. NOTICE TO THE COMPANY
9.1 Any notice or other document (including Certificates for Bonds) may be given or sent to The Issuer by sending the same by recorded post in a prepaid, first-class letter addressed to The Issuer at its registered office for the time being.
10. SERVICE OF NOTICES 45
10.1 Any notice, communication or document sent by recorded post shall be deemed to have been delivered or received on the second Business Day following the day on which it was posted. In proving such delivery or receipt it shall be sufficient to prove that the relevant notice, communication or document was properly addressed, stamped and posted (by airmail, if to another country) in Denmark.
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Schedule 4
Provisions for meetings of the Bond Holders
1. CALLING OF MEETINGS
1.1 The Issuer may at any time and shall upon the request in writing signed by any registered holder of the Bonds for the time being outstanding convene a meeting of the Bond holders to be held at such place as The Issuer shall determine.
2. NOTICE OF MEETINGS
2.1 At least 14 clear days notice specifying the place, day and hour of the meeting shall be given to the Bond holders of any meeting of Bond holders in the manner provided in Schedule 3.
2.2 Any such notice shall specify the general nature of the business to be transacted at the meeting thereby convened but, except in the case of a resolution to be proposed as a Special Resolution, it shall not be necessary to specify the terms of any resolutions to be proposed.
2.3 The omission to give notice to any Bond holder shall invalidate any resolution passed at any such meeting.
3. CHAIRMAN OF MEETINGS
3.1 A person nominated by The Issuer shall be entitled to take the chair at any such meeting and if no such nomination is made, or if at any meeting the person nominated shall not be present within 15 minutes after the time appointed for holding the meeting, the Bond holders present shall choose one of their number to be Chairman.
3.2 The Directors and the Secretary and legal advisers of the Company and any other person authorised in that behalf by the Directors may attend at any such meeting.
4. QUORUM AT MEETINGS
4.1 At any such meeting convened for any purpose, other than the passing of a Special Resolution, a person or persons holding or representing by proxy one tenth in nominal value of the Bonds for the time being outstanding shall form a quorum for the transaction of business.
4.2 At any meeting convened for the purpose of passing a Special Resolution persons (at least two in number) holding or representing by proxy a clear majority in nominal value of the Bonds for the time being outstanding shall form a quorum.
4.3 No business (other than the choosing of a Chairman) shall be transacted at any meeting unless the requisite quorum is present at the commencement of the meeting.
5. ABSENCE OF QUORUM
5.1 If within 30 minutes from the time appointed for any meeting of the Bond holders a quorum is not present the meeting shall, if convened upon the requisition of the Bond holders, be dissolved.
5.2 In any other case it shall stand adjourned to such day and time (being not less than 14 days and not more than 42 days thereafter) and to such place as may be appointed by the Chairman.
6. ADJOURNMENT OF MEETINGS
6.1 The Chairman may with the consent of (and shall if directed by) any such meeting adjourn the same from time to time and from place to place. No business shall be transacted at any
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adjourned meeting other than business which might lawfully have been transacted at the meeting from which the adjournment took place.
7. NOTICE OF ADJOURNED MEETINGS
7.1 Notice of any adjourned meeting at which a Special Resolution is to be submitted shall be given in the manner provided for in the instrument. Such notice shall state that two Bond holders present in person or by proxy and entitled to vote at the adjourned meeting whatever the principal amount of the Bonds held by them shall form a quorum.
8. RESOLUTION ON SHOW OF HANDS
8.1 Every question submitted to a meeting of Bond holders shall be decided in the first instance by a show of hands. In case of an equality of votes the Chairman shall not have a casting vote.
9. DEMAND FOR POLL
9.1 At any meeting of Bond holders, unless (before or on the declaration of the result of the show of hands) a poll is demanded by the Chairman or by one or more Bond holders present in person or by proxy, a declaration by the Chairman that a resolution has been carried or carried by a particular majority or lost or not carried by any particular majority shall be conclusive evidence of the fact.
10. MANNER OF TAKING POLL
10.1 If at any such meeting a poll is so demanded it shall be taken in such manner as the Chairman may direct. The result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll may be withdrawn.
11. TIME FOR TAKING POLL
11.1 Any poll demanded at any such meeting shall be taken at the meeting without adjournment. The demand for a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which the poll has been demanded.
12. PERSONS ENTITLED TO VOTE
12.1 The registered holders of any of the Bonds or, in the case of joint holders, any one of them shall be entitled to vote in respect thereof either in person or by proxy and in the latter case as if such joint holder were solely entitled to such Bonds.
12.2 If more than one of such joint holders be present at any meeting either personally or by proxy the vote of the senior who tenders a vote (seniority being determined by the order in which the joint holders are named in the Register) shall be accepted to the exclusion of the votes of the other joint holders.
13. INSTRUMENT APPOINTING PROXY
13.1 Every instrument appointing a proxy shall be in writing, signed by the appointor or his attorney or, in the case of a corporation, under its common seal, or signed by its attorney or a duly authorised officer and shall be in such form as the Directors may approve.
13.2 Such instrument of proxy shall, unless the contrary is stated thereon, be valid both for an adjournment of the meeting and for the meeting to which it relates and need not be witnessed. A person appointed to act as a proxy need not be a Bond holder.
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14. DEPOSIT OF INSTRUMENT APPOINTING PROXY
14.1 The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified or office copy of such power or authority shall be deposited with The Issuer y at the address where the Register is maintained for the time being (as referred to in clause 8.1 of the instrument) or at such other place as may be specified in the notice convening the meeting before the time appointed for holding the meeting or adjourned meeting or the taking of a poll at which the person named in such instrument proposes to vote and in default the instrument of proxy shall not be treated as valid.
14.2 A vote given in accordance with the terms of an instrument appointing a proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the instrument of proxy or of the authority under which the instrument of proxy is given or transfer of the Bonds in respect of which it is given unless previous intimation in writing of such death, insanity, revocation or transfer shall have been received by The Issuer at the address where the Register is maintained for the time being (as referred to in clause 8.1 of the instrument).
14.3 No instrument appointing a proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution.
15. VOTES
15.1 On a show of hands every Bond holder who (being an individual) is present in person or by proxy or (being a corporation) is present by a representative (not being himself a Bond holder) or by proxy shall have one vote (provided that a proxy appointed by more than one member should only have one vote or, where the proxy has been instructed by one or more of those members to vote for the resolution and by one or more other of those members to vote against it, such proxy shall have one vote for and one vote against the resolution).
15.2 On a poll every Bond holder shall have one vote for every DKK 8,000 in nominal amount of the Bonds of which he is the holder. A Bond holder (or a proxy or representative of a Bond holder) entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in the same way.
16. POWER OF MEETINGS OF BOND HOLDERS
16.1 In events of default as stated in clause 9 and In addition to any other powers it may have, a meeting of the Bond holders may, by Special Resolution:
16.1.1 sanction any compromise or arrangement proposed to be made between The Issuer and the Bond holders;
16.1.2 sanction any abrogation, modification or compromise or any arrangement in respect of the rights of the Bond holders against the Company or its property whether such rights shall arise under this instrument or otherwise;
16.1.3 sanction any scheme for the reconstruction of The Issuer or for the amalgamation of the Company with any other company;
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16.1.4 sanction any scheme or proposal for the sale or exchange of the Bonds for, or the conversion of the Bonds into, cash or shares, stock, debentures, debenture stock or other obligations or securities of the Company or any other company formed or to be formed, and for the appointment of a person with power on behalf of the Bond holders to execute an instrument of transfer of the Bonds held by them in favour of the person to or with whom the Bonds are to be sold or exchanged (as the case may be);
16.1.5 assent to any modification or abrogation of the provisions contained in this instrument which shall be proposed by The Issuer and authorise the Company to execute an instrument supplemental to the instrument embodying any such modification or abrogation; and
16.1.6 give any authority or sanction which under the provisions of this instrument is required to be given by Special Resolution.
16.2 No resolution shall be effective which would increase any obligation of The Issuer under this instrument or postpone the due date for payment of any principal or interest in respect of any Bond without the consent of The Issuer.
17. SPECIAL RESOLUTION BINDING ON ALL BOND HOLDERS
17.1 A Special Resolution, passed at a meeting of Bond holders duly convened and held in accordance with the provisions of this schedule, shall be binding on all the Bond holders whether or not present at such meeting and each of the Bond holders shall be bound to give effect to such Special Resolution accordingly. The passing of any such resolution shall be conclusive evidence that the circumstances justify the passing of such Special Resolution.
18. RESOLUTIONS IN WRITING
18.1 A resolution in writing signed by the holders of at least 75% in nominal value of the Bonds for the time being outstanding who are for the time being entitled to receive notice of meetings in accordance with the provisions contained in the instrument shall for all purposes be as valid and effectual as a Special Resolution.
18.2 Such resolution in writing may be contained in one document or in several documents in like form each signed by one or more of the Bond holders.
19. MINUTES OF MEETINGS
19.1 Minutes of all resolutions and proceedings at every such meeting of the Bond holders shall be made and duly entered in books to be from time to time provided for that purpose by The Issuer.
19.2 Any minutes which purport to be signed by the Chairman of the meeting at which such resolutions were passed or proceedings held or by the Chairman of the next succeeding meeting of the Bond holders shall be conclusive evidence of the matters contained in such minutes.
19.3 Unless the contrary is proved, every such meeting in respect of the proceedings of which minutes have been made shall be deemed to have been duly convened and held and all resolutions passed at such meetings to have been duly passed.
Executed as a deed by Spearhavoc Finans A/S (The Issuer) acting by Advokat Morten Hemmingsen, a director
______Advokat Morten Hemmingsen, Director
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APPLICATION FORM
To: The Directors, Spearhavoc Finans A/S (“The Issuer”) 10 Year Corporate Bond issued by The Issuer (the “Bonds”) Price: Offered at a minimum DKK 800,000 with DKK 8,000 increments thereafter
Surname Forename(s) Address
Postcode
Email Telephone Total (DKK)
Bank Name Acc Name Account No.
Sort Code IBAN Swift Code
Intermediary Name
Bank Name Acc Name Account No.
Sort Code IBAN Swift Code
By signing this form I HEREBY DECLARE THAT:
(i) I have received the Information Memorandum and read the terms and conditions of application. I agree to be bound by them and; (ii) To the best of my knowledge and belief, the particulars I have given The Issuer are correct.
Signature Date
Next Steps
Please note, copies of ID and proof of address will be requested to satisfy the bank’s Anti Money Laundering requirements as stipulated by the Bank. (The documents required can be confirmed with a Director of The Issuer).
Payment in Danish Kroner (DKK) by wire transfer for the amount of the purchase must be received by The Issuer on or about one Business Day prior to the Purchase Date. Payment Instructions:
Bank: Danske Bank Account name: Spearhavoc Finans SWIFT code: DABADKKK IBAN: DK95 3000 0012 3990 49 Ref: Spearhavoc Finans Bond
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APPLICATION FORM – TRUST/PENSION
To: The Directors, Spearhavoc Finans A/S (“The Issuer”) 10 Year Corporate Bond issued by The Issuer (the “Bonds”) Price: Offered at a minimum DKK 800,000 with DKK 8,000 increments thereafter.
Trustee name Client surname
Forename(s)
Address
Postcode
Email Telephone
Total (DKK).
By signing this form I HEREBY DECLARE THAT:
(i) I have received the Information Memorandum and read the terms and conditions of application. I agree to be bound by them and; (h) To the best of my knowledge and belief, the particulars I have given The Issuer are correct.
Trustee Signature Date.
FINANCIAL ADVISER
Adviser name Finanstilsyns Number
Firm Name
Address
Postcode
Email Telephone
Signature Date
Next Steps Please note, copies of ID and proof of address will be requested to satisfy the bank’s Anti Money Laundering requirements as stipulated by the Bank. (The documents required can be confirmed with a Director of The Issuer).
Payment in Danish Kroner (DKK) by wire transfer for the amount of the purchase must be received by The Issuer on or about one Business Day prior to the Purchase Date. Payment Instructions:
Bank: Danske Bank Account name: Spearhavoc Finans SWIFT code: DABADKKK IBAN: DK95 3000 0012 3990 49 Ref: Spearhavoc Finans Bond
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Appendix 3
Audited Financial Statements
The audited financial statements for Spearhavoc Invest ApS follow.
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Appendix 4
Swan Park Project Illustrations
Architects plans for the new Swan Creek project include:
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