Information Memorandum - Foresight Group

APPENDIX 2: INVESTOR’S AGREEMENT
SCHEDULE 1 - INVESTMENT OBJECTIVES AND
RESTRICTIONS
Investment Objectives of the Fund
To generate capital gains and (if the Investor has so indicated
in his Application Form) to provide such Investors with the
Tax Advantages associated with EIS Investments principally
derived from investing in Solar Power Plants backed by the
RO Scheme.
Investment Restrictions of the Fund
1 In carrying out its duties hereunder in respect of the Fund,
regard shall be had, and all reasonable steps taken, by the
Fund Manager to comply with such policies or restrictions
as are required in respect of EIS Investments in order to
attract the reliefs from taxation under the EIS as may be
prescribed by HMRC from time to time.
2 In particular, but without prejudice to the generality of
the above statements, the restrictions for the Fund are
as follows:
(a) No more than 25% of the Subscription of an Investor (or
£5 million at Fund level) will be invested in any one Investee
Company at full fundraising provided that this shall not
restrict the subsequent merger, acquisition or unitisation of
Investee Companies with other Investee Companies.
(b) Investors should be aware that the Fund’s Investments
will include non-Readily Realisable Investments. There
is a restricted market for such Investments and it may
therefore be difficult to deal in the Investments or to obtain
reliable information about their value;
(c) in the event of a gradual realisation of Investments
prior to termination of the Fund under Clause 15.1, the
cash proceeds of realised EIS investments may be placed
on deposit or invested in fixed interest government
securities or other investments of a similar risk profile.
Proceeds will be paid out on termination of the Fund or in
instalments in advance of termination, as determined by
the Fund Manager.
SCHEDULE 2 - FEES AND EXPENSES IN RESPECT
OF THE FUND
The charges described below (other than the performance
incentive fee) are payable by Investee Companies and not
directly by the Fund to the Fund Manager. The percentages
shown below will be applied to the amount invested in
Investments made in each Investee Company.
The fund management and annual charges will accrue from the
date of acceptance of the Investor’s Application Form and will
be payable quarterly in advance, with the first payment being
on the date of investment in the relevant Investee Company.
Fees and charges payable to the Fund Manager and
remuneration payments to advisers that are not paid by
Investee Companies will be recouped from the proceeds of sale
of Investments or dividends received.
VAT will be added where applicable.
34 FORESIGHT SOLAR EIS FUND 3
1 Initial Fundraising Charges
The level of the fundraising charges payable to the Fund
Manager reflects whether or not commission is payable
to financial intermediaries. In certain limited situations,
commission may be paid as described in more detail below:
Fundraising Charge: 2.5% of Subscription
(no commission payable) payable immediately.
Fundraising Charge: 5.5% of Subscription
(commission payable) payable immediately plus
0.5% pa of Subscription
for 4 years payable
annually.
To ensure fairness between Investors different numbers
of Shares will be issued to Investors to reflect the
different charge levels that may be payable in relation
to Subscriptions of individual Investors. Although the
amount of the fundraising charges should not reduce the
EIS Relief available to Investors the fundraising charges
payable by an Investor will reduce the value of the
Portfolio of that Investor.
The Fund Manager will receive the fundraising charges
out of which will be paid all costs of establishing the Fund,
including legal and taxation costs incurred in creating the
Fund, the preparation and issue of this document and
any other direct expenses wholly incurred in establishing
the Fund. The fundraising charges will be settled by
the Investee Companies from the gross proceeds of
Investments to maximise the benefits from tax reliefs
on the full amount invested. Charges payable to the
authorised financial intermediary of an Investor to be
facilitated by the Fund Manager will only be paid by prior
agreement of the Investor and Adviser as noted on the
Application Form.
Authorised financial intermediaries may in certain
situations be permitted to receive commission such as
for execution only clients where no advice or personal
recommendation has been given or for professional
clients. In such permitted situations authorised financial
intermediaries will be paid initial commission, usually
at the rate of 3% of Subscriptions, plus annual trail
commission at the rate of 0.5% of Subscriptions for a
maximum of four years (inclusive of VAT). All commission
will be paid from fundraising charges described above.
If the Investor changes his/her adviser to whom annual
commission is payable he/she should inform the
Administrator of the details of his new adviser who will,
subject to legal and regulatory requirements, be entitled to
receive the annual trail commission instead.
2 Annual Fund Management Charges
Annual management charge 1.75% of the value
of the Portfolio.
Secretarial charge 0.3% of the value of the
Portfolio (subject to an
RPI linked* minimum of
£60,000 in aggregate).