Conditions of sale (breeding equity) agreement

Proaliant Consulting Limited T/A Equideq (“Equideq”)
2021 Conditions of Sale (Breeding Equity) Agreement (Updated 19th March 2021)
PARTIES
The individual or entity that sells a breeding equity share(s) in the horse (the "Vendor"); the individual or entity that purchases a breeding equity share(s) in the horse (the "Purchaser") and the individual or entity that manages the horse on behalf of the Group (the “Agent”) (each a “Party” and together the “Parties”)
IMPORTANT:
The purchase of shares in bloodstock (breeding equity) is a high-risk investment and the Purchaser may lose all or a significant amount of their investment. Past performance is no guarantee of future performance. The purchase or sale of breeding equity shares on the Platform is final and non-refundable.
By clicking the “I Agree” button or using the Platform for either the reserving, ordering, purchasing, selling, management or trading of equity shares, then the Parties are agreeing to be bound by this Conditions of Sale Agreement (the “Agreement”) and the Equideq Terms of Service which is expressly incorporated.
The role of Equideq in this Agreement is limited to the provisions of the technology and service (as per the Equideq Terms of Service) to facilitate the sale and management of breeding equity shares between the Vendor, the Purchaser, and the Agent. Equideq is otherwise not a party to this Agreement.
PURPOSE OF AGREEMENT
The purpose of this Agreement is to set forth the terms and conditions of sale of breeding equity shares in a horse between the Vendor, the Purchaser, and the Agent on the Equideq Platform.
1 DEFINITIONS
“Vendor” means the individual or entity that sells a breeding equity share(s) in the horse. This also includes the “Original Vendor” who is the individual or entity that sells breeding equity shares in the horse for the first time as part of the initial offering.
“Purchaser” means the individual or entity that purchases a breeding equity share(s) in the horse
“Equity Holder” means the Purchaser that holds a breeding equity share(s) in the horse
“Group” means the group of Equity Holders
“Agent” means the individual or entity who is managing the horse on behalf of the Group
“Platform” The software platform and service provided by Equideq
“Equity Register” A digital record of key contractual information related to the sale and ownership of breeding equity shares.
“Term” The duration of the horse breeding career, as determined by the Agent
2 EQUITY SHARES
2.1 Equity ownership of the horse shall consist of breeding equity shares known as “Capex Shares”. A single Capex Share represents a single, indivisible unit of equity ownership in the horse. The total number of Capex Shares will be determined by the Original Vendor and are fixed. The cost of a single Capex Share is displayed as the “Capex” on the Platform and this cost is also subject to any additional taxes and charges that may apply. THE VALUE OF THE CAPEX SHARE MAY FALL AS WELL AS RISE. The names, details and quantity of Capex Shares held by the Equity Holders will be maintained in the Equity Register on the Platform. The Equity Register shall be conclusive as to equity ownership of the horse.
2.2 Each Capex Share is linked with an operational share known as “Opex Shares”. The cost of a single Opex Share is displayed as the “Opex” on the Platform and this cost is also subject to any additional taxes and charges that may apply. The term of the equity holding is undefined and at the discretion of the Agent. Payment of the Opex for an Opex Share covers the horse operational expense for that Opex Share only, for the period specified only and additional payments will be required if the term extends beyond this period. EQUITY HOLDERS WHO FAIL TO MAINTAIN THEIR OPEX SHARE PAYMENTS WILL FORFEIT THEIR CAPEX SHARES IN THE HORSE. The cost of an Opex Share is determined by the Agent and is inclusive and not limited to costs associated with insurance, keep, veterinary and sales preparation. The Opex may vary during the term.
2.3 A Purchaser must be over 18 years of age to purchase a Capex Share.
2.4 No certificates representing equity ownership of Capex Shares shall be created but a digital record will be maintained in the Equity Register on the Platform.
2.5 A Capex Share may entitle but does not guarantee the Equity Holder to certain benefits associated with equity share ownership of a horse. These benefits if applicable and the administration of such, are the responsibility of the Agent and are detailed in Section 6.
2.6 A Capex Share does not entitle the Equity Holder to voting rights on the management of the horse. All commercial decisions and responsibility regarding the management and welfare of the horse will remain the responsibility of the Agent as detailed in Section 6.
2.7 An Original Vendor may at their discretion retain any number of Capex Shares in the horse during the initial offering and/or purchase or sell any number of additional Capex Shares on the exchange. With the exception of the Original Vendor, and at the discretion of the Agent, there will be a limit on the maximum number of Capex Shares that can be purchased and held by an Equity Holder for each horse.
2.8 Capex shares are transferable by buying or selling through the Agent on the Equideq exchange only. Any Vendor, who sells a share(s) on the exchange, immediately surrenders, and transfers, full equity ownership and any associated benefits of the Capex Share(s) to the Purchaser, by transacting through the Agent.
2.9 Capex Shares in the horse can only be reserved, ordered, purchased, and exchanged on the Platform during the Term, where the Equity Register is maintained and updated.
3 EQUITY SALE PROCESS
The equity sale process is detailed in Sections 7, 8, 9,11 and 13 in the Equideq Terms of Service and is expressly incorporated.
4 HORSE AND BREEDING MANAGEMENT
4.1 The Original Vendor is responsible for the welfare and management of a horse until an initial offering has successfully concluded and the Capex shares transfer into the ownership of the Purchaser, upon which, responsibility for the welfare and management of the horse, in its entirety, becomes the responsibility of the Agent.
4.2 The Purchaser understands that responsibility for the welfare, breeding and management of the horse, in its entirety, and all commercial decisions related to the horse and the Term, including but not limited to, decisions around the timing, valuation, method, execution and distribution of any proceeds resulting from the ultimate sale of the horse are the sole responsibility and decision of the Agent.
4.3 All Opex payments, from all Purchasers, for the period specified will be transferred to the Agent at the successful conclusion of the initial offering. The Agent is solely responsible for the care and administration of these funds. The Opex payment covers the costs associated with care, transport (within Ireland) and standard veterinary expenses for the horse, for only the Opex period specified. The Opex payment does not cover international transport and extraordinary veterinary expenses.
4.4 All communications with the Group, including but not limited to, the health, performance, breeding updates for the horse are the responsibility of the Agent.
4.5 The name of the Group shall be decided by the Agent in their absolute discretion.
4.6 Hospitality events and stud farm visits may be organised at the discretion of the Agent. Any additional cost to the Equity Holders will be communicated and must be paid by Equity Holders, in advance, to the Agent.
4.7 The foal will be insured by the Agent against all risks of mortality. It shall be the responsibility of each individual Equity Holder to insure against any additional risks as they see fit.
4.8 Equity Holders will be expected to behave in a respectful manner and in accordance with the rules of any premises during hospitality outings. Any Equity Holder found to be in breach of these rules may be subject to disciplinary action and may be removed from the Group at the discretion of the Agent.
5 PAYMENTS, TAXES & CHARGES
5.1 There is no charge for submitting or cancelling a reservation in a planned offering.
5.2 Unless indicated otherwise, the cost of a single Capex Share is displayed as the Capex and the cost of a single Opex Share is displayed as the Opex. Where VAT applies then the Capex and Opex costs displayed will be inclusive of VAT. The displayed Capex and Opex excludes the taxes and charges payable to Equideq. The taxes and charges payable to Equideq are displayed on the order form prior to submitting an order.
5.3 There is a transaction charge, payable by the Purchaser to Equideq, of 5% of the Capex Share cost, for the purchase of a Capex Share in an initial offering. This is a once off charge. This transaction charge is also subject to VAT. Payment will be debited from the Purchaser Equideq account. Transaction charges, payable between the Original Vendor and Equideq are agreed separately.
5.4 There is a subscription charge, payable by the Purchaser to Equideq, of 4% of the Opex share value that is deducted at the time of purchase of the share in an initial offering and on the exchange. Payment will be debited from the Purchaser Equideq account. This is an annual charge that will then be deducted automatically at least 30 days before the Term renewal date. This subscription charge is subject to VAT. Subscription charges, payable between the Agent and Equideq are agreed separately.
5.5 There is a transaction charge, payable by the Vendor to Equideq of 9%, of the share value, for the sale of a Capex Share on the exchange. There is a transaction charge, payable by the Purchaser to Equideq of 5% for the purchase of an Capex Share on the exchange. These transaction charges are subject to VAT. Payment will be debited from the Vendor Equideq account and the Purchaser Equideq account. Transaction charges, payable between the Agent and Equideq, and the Original Vendor and Equideq are agreed separately.
5.6 Any purchase or sale of breeding equity shares on the Platform is final and non-refundable. There will be no reimbursement of the above payments, taxes and charges, should an Equity Holder close their Equideq account or have their equity share ownership terminated for breach of this Agreement.
6 OTHER RESPONSIBILITIES
6.1 The Purchaser is responsible for ensuring that they apply their own necessary due diligence in the research and valuation of the horse in advance of purchasing shares. Equideq does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with the Platform, you should consult a professional adviser.
6.2 The Purchaser, so long as they remain an Equity Holder is responsible for payment of the recurring Opex Share payment as specified in Section 2.2 and also the recurring subscription charge on the Opex Share value as specified in Section 5.4. The Purchaser and Equity Holder understand that failure to maintain payment and failure to make payment in an Opex Share before the specified due date will forfeit their ownership in the corresponding Capex Share. Any final decision is at the discretion of the Agent.
6.3 The role of Equideq in this Agreement is limited to the provisions of the technology and service (as per the Equideq Terms of Service) to facilitate the sale and management of breeding equity shares between the Vendor, the Purchaser, and the Agent. Equideq is otherwise not a party to this Agreement. Equideq is not responsible for any disputes, errors or omissions arising out of the sale or management of racing lease shares.
6.4 Compliance with applicable tax law is solely the responsibility of the Parties. Equideq takes no responsibility, and shall not be liable, for the deduction of any such taxes. It is the Parties sole responsibility to account for any taxes that may be payable to the appropriate authorities in respect of their activity on the Platform.
6.5 The Agent is solely responsible for the management of the horse on behalf of the Group in accordance with Section 4 for this Agreement.
7 TERMINATION
7.1 This Agreement will automatically terminate in the following circumstances:
i At the conclusion of the Term and when the horse is sold
ii On the death of the horse
7.2 On early termination of this Agreement, the Agent will reimburse the Equity Holders any outstanding Opex value and Capex value that may remain (less any amounts owed and not yet paid by the Equity Holders).
7.3 The Agent may terminate this Agreement at any time upon giving notice to any Vendor, Purchaser or Equity Holder who commits a material breach of the Agreement. Any Vendor, Purchaser or Equity Holder who commits a material breach of this Agreement will forfeit their equity shares and will not be entitled to any refund or re-imbursement. Any final decisions are at the discretion of the Agent.
7.4 The Parties understand and agree that their access and continued use of the Platform, is only permitted, subject to adherence to the Equideq Terms of Service which is available at www.equideq.com/legal
8 WARRANTIES
8.1 The Original Vendor warrants that they are the original owner of the horse and have the legal right and authority to sell equity shares in the horse and perform its obligations under the Agreement.
8.2 The Original Vendor warrants that all horse details and pedigree information provided is accurate as per the horse passport and Weatherby registration details.
8.3 The Original Vendor warrants that, to the best of their knowledge, the horse is suitable for the stated purpose; further, that all relevant conditions of the horse, both physical, mental and/or behaviour specific, which would be relevant to use for the stated purpose and which are known or reasonably known, have been fully disclosed by the Original Vendor to the Purchaser prior and/or during the initial offering.
8.4 The Agent warrants that, first and foremost, they will immediately disclose to the Equity Holders, any information that comes to light regarding an alteration in the condition of the horse, both physical, mental and/or behaviour specific, which would be relevant to use for the stated purpose of breeding.
8.5 All Parties warrant, that they will not utilise any inside information related to the health or performance of the horse, that they may possess or acquire, to the detriment or unfair advantage of others.
8.6 The Purchaser warrants, that in purchasing breeding equity shares, they fully understand the associated risks and financial obligations, that breeding equity investment is considered a high-risk investment and that they may lose all or a significant amount of their investment. They also understand that the purchase of breeding equity shares on the Platform is final and non-refundable.
9 LIMITATIONS AND EXCLUSIONS OF LIABILITY
9.1 The Purchaser agrees to fully indemnify and hold harmless, the Vendor, the Agent and Equideq against any financial losses or associated damages, either direct or indirect, which they may sustain as a result of the purchase of breeding equity shares.
9.2 The Vendor, Purchaser, Equity Holder and Agent understand and agree that the role of Equideq is to facilitate the promotion, sale and management of shares and payments, on the platform, on a best effort basis only. The Vendor, Purchaser, Equity Holder and Agent agree to indemnify and hold harmless Equideq from all responsibility for any negative impact, either direct or indirect, either now or in the future, resulting from any action or inaction from the sale or management of shares and the services or technology provided by Equideq.
10 ENFORCEABILITY
If at any time one or more of the provisions of this Agreement becomes invalid, illegal or unenforceable under Irish law or is held by an Irish court to be invalid, illegal or unenforceable, then the validity and enforceability of the remaining provisions shall not in any way be affected or impaired.
11 DISPUTES
11.1 Any dispute, arising out of the order and purchase of shares as part of an initial offering, is between the Original Vendor and the Purchaser and Equideq shall not be liable to either Party in connection therewith.
11.2 Any dispute, arising out of the buying of shares and the selling of shares on the exchange is between the Agent and the Purchaser and the Agent and the Vendor respectively. Equideq shall not be liable to either Party in connection therewith.
11.3 Any dispute related to the management or breeding of the horse is between the Equity Holder(s) and the Agent and Equideq shall not be liable to either Party in connection therewith.
12 LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with laws of the Republic of Ireland. The courts of the Republic of Ireland shall have exclusive jurisdiction to adjudicate any dispute arising under or in connection with this Agreement.
13 REVISIONS
13.1 Equideq reserves the right to change these terms and conditions, in accordance with the Equideq Terms of Service, at any time subject to notice. In the event that any changes are made, the revised terms and conditions shall be posted on the Platform at www.equideq.com/legal
13.2 These terms and conditions were last updated on the 19th March 2021.
14 CONFIDENTIALITY
All Parties information is strictly confidential and only shared with others in line with the Equideq Privacy Policy which is available at www.equideq.com/legal
15 GENERAL PROVISIONS
15.1 The terms outlined in the “Horse detail” page on the Platform, at the time of sale are expressly incorporated.
15.2 All disclaimers, indemnities and exclusions in this Agreement shall survive termination of this Agreement for any reason.
16 EXECUTION
By clicking the “I Agree” button or using the Platform for either the reserving, ordering, purchasing, selling, management or trading of equity shares, then the Parties are agreeing to be bound by this Agreement and the Equideq Terms of Service which is expressly incorporated.

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