General Terms and Conditions (GTC)
10x Health Investment Club
|
Aescuvest GmbH. Hanauer Landstr. 328-330. 60314 Frankfurt am Main AG Frankfurt/Main |
Medical Valley GmbH. Henkestraße 91 91052 Erlangen AG Fürth HRB 17125 |
Volitan Global LLC 490 Post Street, Ste. 526 San Francisco, CA 94102, United States |
| (hereinafter “Operators“) |
1. Scope of Application
1.1. The 10x Health Investment Club (“Club“) is a network set up by the Operators, in which financial investors, business angels and strategic entrepreneurs and companies (“Club Members“) can get in touch with fast-growing companies in the health care sector (including “digital health”) (“10xTargets“), selected by the Club, where Club Members can inform and exchange information about possible investments in such 10xTargets and are given the opportunity to enter into co-investments in such 10xTargets accompanied by the Club (“Club“).
1.2. The following terms and conditions (“Terms“) apply to the business relationship between the Club Members and the Operators. The Terms are directed exclusively at entrepreneurs and not at consumers.
1.3. The respectively applicable Terms are available on the website https://10xhealth.club/contract. In addition, the Club Member shall receive these Terms before conclusion of the contract either in person or by e-mail.
1.4. The business relationship between the Club Members and the Operators is governed solely by these Terms. Conflicting terms and conditions of the Club Member shall not become part of the contract even if the Operators do not expressly object to their inclusion in individual cases.
1.5. Any contractual relationships that may arise between investing Club Members and 10x-Targets as well as between the Club and the 10xTargets are not subject to these contractual provisions.
2. Services of the Operators
2.1. Structure of Investments/Transactions
2.1.1. Club Transactions. Investments of Club Members in 10xTargets are exclusively executed as “Private Placements”. The Private Placement is intended to stabilize the financing of the 10xTarget and, if necessary, to promote the implementation of a subsequent public campaign with a larger volume. For the Club Members, a subsequent (possibly public) financing round means a short-term increase in the value of their investment through a higher company valuation and the injection of further funds for the 10xTarget by external investors via the public capital market.
2.1.2. Form of Investment. Depending on the specific financing round, the investment in Private Placements can be made in all common forms of venture capital financing, including equity investments (acquisition of shares or equity interests via capital increase or share purchase), mezzanine investments (in particular profit-sharing loans, subordinated loans, convertible loans) and silent partnerships (“10xInvestment“).
2.2. Club Services
2.2.1. Transaction-related activities
Within the scope of identifying, preparing and implementing 10xInvestments, the Operators provide the following services (“Club Services”) for the benefit of their Club Members:
a) Exclusive pre-selection and presentation of suitable 10xTargets; opportunistically, but usually every three (3) months;
b) Internal (non-binding) preliminary examination (high-level due diligence) of the 10xTargets within the scope of the pre-selection in financial and business terms (products, business model, market, competition);
c) Procurement of an external company valuation (e.g. by Equidam) at the expense of the 10xTarget;
d) Organization and support of exclusive presentation dates (pitches) of the selected start-ups to Club Members;
e) Support with the preparation of an LOI between interested Club Members and 10xTargets;
f) Appointment of suitable external advisors to conduct a legal and tax due diligence of the 10xTarget;
g) Supporting the communication between 10xTarget and Club Members;
h) Supporting 10xTarget in setting up a virtual data room according to the specifications of the Club using the Club’s market standard request list (“10xRequest List“);
i) Coordinating with the 10xTarget in the preparation of the corporate presentation, if required;
j) Support with respect to possible Q&A topics;
k) Appointment of suitable legal and tax advisors to support the Club Members in structuring and executing the transaction (including participation agreement, contract negotiations, internal pooling agreement, powers of attorney, notarization).
2.2.2. Other Activities of the Operators
The Club Members are aware that the Club will enter into a Finders’ Fee Agreement with the 10xTargets selected for a Pitch before the 10xTarget is presented to the Club, see also Section 4.1.3.
a) Organization of physical and electronic “community events” exclusively for the Club Members;
b) Provision of information on community events via online newsletter and an annual club activities program;
c) Networking, including evaluating recommendations for the admission of new members by existing Club Members. 2.3. Compensation. The services and benefits for Club Members mentioned in Clause 2.2 shall be compensated for with the payment of the Membership Fee (cf. Clause 4.1.1) and the Success Fee (cf. Clause 4.1.3), which is agreed separately between the Operators and the 10xTarget in the Finder’s Fee Agreement.
2.4. Members’ Investment Decisions. It is clarified that the Club Members make the decision to make a 10x Investment independently and conclude the Investment Agreement themselves in their own name with the 10xTarget. Within the Club, the Operators do neither provide (i) any financial services within the meaning of § 1 German Banking Act (KWG), in particular no financial asset brokerage, acquisition brokerage, investment advice or financial portfolio management nor (ii) any other consulting services (in particular no commercial, medical, legal or tax advice).
2.5. Disclaimer. The Operators can only forward the information provided by 10xTarget. The Operators cannot guarantee a certain scope and quality of such information before or after a transaction. The 10xTargets are also solely responsible for specific content, completeness and accuracy of the respective concrete information or documents provided to the Club Members. This also applies if and insofar as the Operators provide details that have been taken from the respective representations, information and documents of the 10xTargets, in particular any income reported or promised by the Targets or details of the probable development of the Targets.
2.6. Addressing 10xTargets, External Targets
2.6.1. Acquisition of Targets. It is not prohibited for members to bring their own investment opportunities into the network. However, in order to avoid double contacting and to harmonize communication, such opportunities must first be brought to the attention of the Operators, who will then evaluate the various possibilities and decide whether the investment opportunity should be presented in the Club. The prerequisite for a presentation in the Club is the conclusion of a Finders’ Fee Agreement between the Club and the target concerned.
2.7. External Targets. Club Members will not discuss investments in 10xTargets without the involvement of the Club. Likewise, Club Members will not approach Club Members with investment opportunities that they learn about outside the Club (“External Targets“), but will first bring these External Targets to the attention of the Club in order to allow the External Target to be included in the Club as a “10xTarget”. The Club will conclude a Finder’s Fee Agreement with the External Target only after an appropriate commission sharing arrangement with the introducing Club Member.
3. Conclusion of Contract (membership agreement), term
3.1. The conclusion of the membership agreement between the Operators and the Club Member is made in text form (§ 126b BGB) and usually comes into force when the membership application is accepted by the Operators (“Membership Agreement”).
3.2. The operators decide on the admission of new Club Members. There is no entitlement to admission of a member, e.g. a member introduced by a Club Member.
3.3. The Membership Agreement shall run for an indefinite period of time and may be terminated by the Club and by the Club Member with three (3) months’ notice to the end of a calendar year, but not before the end of the calendar year following the calendar year in which the Agreement was concluded.
3.4. The right to terminate the agreement for good cause (§ 314 BGB) shall remain unaffected for both parties.
4. Remuneration
4.1. Annual fee, Success Fees through 10xTargets 4.1.1. Annual Fee. The annual subscription owed to the operators of the Club shall amount to (in full or pro rata temporis as the case may be, cf. sentence 2):
a) EUR 5,000.00 p.a. for the year 2020 (pro rata temporis for the remainder part of the year);
b) EUR 5,000.00 for the year 2021, but only for Members concluding their Membership Agreement before the end of 31 January 2021; and
c) EUR 10,000.00 p.a. for the year 2021 for all Members concluding their Membership Agreement after 31 January 2021, and generally for the year 2022 and all subsequent years.
For partial contractual years the Membership Fees will be paid pro rata temporis. Changes to the Membership Fees require the consent (in Text-Form) of all Parties.
4.1.2. Payment. The annual fee shall be due for payment within 10 days of the beginning of each membership year. If a member joins or leaves during a calendar year, the pro rata annual fee for the remainder of the calendar year shall be calculated by the Club and communicated to the member prior to conclusion of the contract. The annual fee will be collected by SEPA Direct Debit mandate from the investor’s bank account as notified by the Club member or transferred by the investor to the Operator to the bank account designated by the Operator. The billing and payment processing will be carried out by one of the three operators in relation to the club member; the operators divide the membership fee among themselves.
4.1.3. Success Fee. The Club Members themselves do not owe the Operators any performance-related fees within the scope of 10xInvestments or the related transaction preparations, unless such fees are the subject of a separate written agreement between the contractual parties in the individual case. However, Club Members are aware that the Operators receive fees from the 10xTargets under a Finder’s Fee Agreement. Therefore, upon successful completion of a transaction, the operators will generally receive from the 10xTarget a standard market “Success Fee” for the brokerage and preparation of the investment, as follows
a) up to 5% (plus VAT) of the investment volume (equity and mezzanine financing, including profit-participating loans, subordinated loans, convertible loans, profit participation certificates, silent partnerships etc.) (“Investment Volume“), provided that the investment volume does not exceed EUR 1,000,000.00;
b) up to 3.5% (plus VAT) of the investment volume, as far as such investment volume exceeds the amount of EUR 1,000,000.00. 4.1.4. The Club Members are aware that the entitlement to the Success Fee pursuant to Section 4.1.3 is generally also applicable to subsequent financings by the Club Members, by companies affiliated with them or by persons closely related to them within a period of 24 months after the initial financing by the Club Members.
The Success Fee is paid by the 10xTarget out of the 10xInvestment.
4.2. External Transaction Costs
4.2.1. For external advisors appointed by the Operators according to clause 2.2.1f) and k), the Club Members hereby declare that they will bear the costs within the limits set out below:
a) costs will only be borne from the signing of a term sheet or LOI with the 10xTarget (“Letter of Intent“) or otherwise (in the absence of a Letter of Intent) on the basis of individual agreement with the external advisors;
b) costs will only be borne for settlements that are customary in the market in terms of size and type of the transaction;
c) the external advisors will be appointed by the Club Members themselves and the costs will be borne pro rata in accordance with the investments of the respective Club Members as compared among themselves; and
d) based on these Terms external advisor costs will be assumed up to a total amount of EUR 10,000.00 net per transaction, but beyond this amount require further separate approval of the investing Club Members in text form (§ 126b German Civil Code).
4.3. Other Costs, Taxes
4.3.1. Any additional costs incurred by the Club Member in connection with a 10xInvestment or the preliminary transaction consulting pursuant to Section 2, e.g. other external audit/advisory costs, shall be borne by the Club Member. Clause 4.2 remains unaffected.
5. Confidentiality, Disclosure of Information
5.1. The contracting parties agree that the information and data provided by the operators or a 10xTarget are in need of protection and must be treated confidentially. Confidential in the sense of these Terms are all enterprise / company related internal information and data provided by the Operators or a 10xTarget. The Club Member undertakes to use confidential information within the meaning of this Agreement only in the context of examining an investment in a 10xTarget within the meaning of Clause 2 of this Agreement.
5.2. The Club Member further undertakes to keep all confidential information within the meaning of this Agreement confidential and to disclose such information exclusively to such employees, persons bound to professional secrecy and selected other advisors, members of committees or financing partners who need to have access to such information in order to review or implement a 10xInvestment.
5.3. Only such information is excluded from secrecy which is or becomes public knowledge in general or in the respective business circles without disclosure by the Club Member, which was demonstrably already known to the Club Member before or which was or will be disclosed to the Club Member by third parties without the imposition of a secrecy obligation and without any recognizable breach of a secrecy obligation.
5.4. Should the Club Member pass on information or data to third parties contrary to clause 5 of these contractual provisions, the Operators shall be entitled to impose a reasonable contractual penalty of up to EUR 50,000.00 on the Club Member. Further claims for damages shall remain unaffected; the contractual penalty shall be offset against any liability for damages.
5.5. The provisions of this Clause 5 shall continue to apply beyond the date of termination of these Terms for a further three (3) years after termination. The obligation to maintain business secrets, in particular in accordance with the German Business Secrets Act (GeschGehG), shall remain unaffected.
6. Liability of Operators
6.1. The following exclusions and limitations of liability apply to any liability of the Operators:
6.2. The Operators are liable for intent and gross negligence as well as for damages resulting from injury to life, body or health without limitation according to applicable laws.
6.3. In cases of slight negligence, the Operators shall only be liable for breach of a cardinal obligations. A cardinal obligation within the meaning of this Clause is an obligation whose fulfilment is essential for the execution of the contract and on whose fulfilment the contractual partner may therefore regularly rely. The liability according to sentence 1 is limited to the foreseeable damage typical for the contract at the time of conclusion of the contract.
6.4. The liability of the Operators under mandatory law, e.g. in the case of guarantees or under mandatory product liability legislation, shall remain unaffected by the limitations of liability under the above paragraphs.
6.5. The liability of the Operators beyond the above paragraphs 6.2 to 6.4 is excluded.
6.6. In any case, the Operators shall only be liable as partial debtors and not as joint and several debtors.
6.7. A civil law partnership (GbR) is not concluded by these Terms; neither between the Operators nor in the relationship between the Operators and Club Members. The operators have also excluded the creation of a GbR in the internal relationship.
7. Risk Notices
7.1. Investments in 10xTargets in the form of a Private Placement involve risks. The investment in a young company or start-up (venture) represents a high-risk entrepreneurial investment, the result of which depends on a number of factors the future development of which cannot be predicted. In connection with an investment it can lead to a total loss of the invested capital for an investor. The Operators expressly advise against financing the investment with borrowed capital, as otherwise interest and repayment obligations may continue to exist despite a possible total loss.
7.2. By agreeing to these Terms, a Club Member assures that he or she has sufficient experience in the field of venture capital investments and in the health care sector to be able to professionally assess the opportunities and risks of an investment.
7.3. Club Members should consider investing in a venture via a private placement only as part of a comprehensive investment strategy and only invest if they can accept a total loss of the invested capital. Therefore, an investment in a venture should only represent an appropriate portion of the investor’s capital investment in accordance with the willingness to take risks, as otherwise the liquidity of the Club Member for other investments or the lifestyle would also be endangered. In order to spread the risks of their investments in targets, it is recommended that investors do not focus on investing in a venture, but rather pursue an appropriate diversification of their investments.
7.4. The Operators only provide information on the 10xTargets, but do not provide investment advice or other advice in any way. In particular, the Operators are not obliged to inform investors about further developments of the 10xTargets – unless otherwise agreed. Furthermore, the Operators are not responsible for an insufficient return on investment or for non-payment or non-fulfillment of other obligations of the 10xTarget under the investment agreement concluded with the respective investor.
7.5. The decision whether an investor invests in a venture or in which venture he invests is the sole responsibility of the investor. The Operators recommend that each investor seek legal, economic and tax advice both in his investment decision and during the term of the investment.
8. Miscellaneous
8.1. The Operators are joint and several creditors with regard to claims arising from the membership relationship with the Club Member.
8.2. These Terms shall be governed exclusively by the laws of the Federal Republic of Germany under exclusion of conflicts of laws provision as far as admissible.
8.3. Exclusive place of jurisdiction for all disputes arising from this contract is Frankfurt am Main, Germany.
8.4. Should individual provisions of these Terms be or become void or ineffective in whole or in part and/or contradict the statutory provisions, the effectiveness of the remaining provisions shall not be affected. In place of any provisions which are not included or which are invalid, statutory law shall apply (§ 306 (2) German Civil Code). In all other respects, the parties shall replace the void or ineffective provision by an effective provision which comes closest to the economic sense and purpose of the ineffective provision in a legally effective manner, provided that no supplementary interpretation of the contract has priority or is possible. The above provision shall apply accordingly in case of loopholes.
8.5. The Operators reserve the right to change these Terms. With regard to essential service obligations, the Operators are only entitled to make changes to the concluded contracts if changes in the law with regard to regulatory requirements make it necessary. The Operators shall notify the investor of changes as follows: The investors will be informed of the intended changes by e-mail at least one (1) month before the planned entry into force of the new version of the contractual provisions. If a Club Member does not object to the validity of the new contractual provisions within one (1) month after receipt of the e-mail in writing or in text form to the Operators, the amended contractual provisions shall be deemed accepted. The Operators will separately inform the investors by e-mail containing the amended terms and conditions about the significance of the one-month period and the right of objection as well as the legal consequences of silence. The respective current contractual provisions can be accessed on the Internet at https://10xhealth.club/contract.
8.6. The contract languages are English and German. Translations into other languages are for the sole purpose of comprehensibility and are not legally binding. Communication with the Operators regarding information relating to 10xTargets can be made in both English and German.