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Conflicts Policy - Transition Level Investments

Conflicts Policy

1 Overview

This policy covers general Conflicts of Interest as well as specific issues in relation to the Manager simultaneously managing multiple Portfolio Companies, Clients and any conflicts arising with the related entity of the Manager, Birkdale.

This policy covers the following key areas:

  • (a) identifying Conflicts of Interest;
  • (b) managing Conflicts of Interest in respect of;
    • (i) between the Manager and Clients; and
    • (ii) between Clients; and
    • (iii) co-investment with Birkdale.
  • (c) monitoring of Conflicts of Interest.

This policy may be amended from time to time, as circumstances demand and in accordance with the requirements of the Manager. The Manager will provide a copy of the updated policy to all Clients as requested.

2 Definitions

In this document:

Affiliate of any person means an associated entity or a related body corporate as these times are defined in the Corporations Act.

Birkdale means Birkdale Holdings (QLD) Pty Ltd ACN 120 407 981 as trustee for The Baxter Family Trust.

Client means an investor who has entered into the Investment Management Agreement, the Nominee Agreement and has been onboarded to the TEN13 Platform, and includes a Co-Investor

Co-Investment means an investment where Birkdale and the Clients co-invest into an Investment Opportunity:

    • (a) through the TEN13 Platform; or
    • (b) in the same investment round.

Co-Investor means a person who make makes a Co-Investment with Birkdale.

Compliance Officer means the person appointed as a compliance officer by the Manager from time to time.

Conflict of Interest has the meaning set out in clause 4.1.

Corporations Act means the Corporations Act 2001.

Investment Management Agreement means the agreement of that name between the Client and the Manager.

Investment Opportunity means the potential investment in companies on or though the TEN13 Platform.

Manager means Ten13 Management Pty Ltd ACN 634 071 579.

Portfolio Company means a company that has received investment through the TEN13 Platform.

TEN13 Group means the Manager and its Affiliates.

TEN13 Parties means any employee, contractor or officeholder of a member of the TEN13 Group.

TEN13 Platform means the platform development and maintained by the TEN13 Group in connection with the Investment Opportunity.

3 General principle applying to Conflicts of Interest

In dealing with Conflicts of Interest identified under this policy, the Manager will act in good faith and in accordance with the law.

4 Identifying Conflicts of Interest

4.1 What are Conflicts of Interest?

Conflicts of Interest arise where an independent observer might reasonably question whether the actions or decisions of the Manager are influenced by interests other than the interests of a particular Client in respect of whom the actions are taken or decisions are made. Without limiting the foregoing, the following are situations where a Conflict of Interest may arise:

(a) a conflict between the interests of the Manager and those of a Client;
(b) a conflict between the interests of one Client of the Manager and those of another Client of the Manager;
(c) a conflict between the interests of any employee, contractor or director of the TEN13 Group and those of a Client; or
(d) a conflict between the interests of Birkdale and those of a Client.

4.2 Managing conflicts

The Manager is committed to:

(a) adopting internal controls and appropriate disclosure statements and procedures;
(b) adopting the policy and procedures described in this document;
(c) ensuring the Compliance Officer is responsible for the management of this policy and conflicts of interest within the Manager’s business;
(d) training its employees and representatives with respect to conflicts of interest; and
(e) reviewing regularly the Manager’s Conflict of Interest management arrangements.

5 Managing Conflicts of Interest between the Manager and a Client

5.1 Methods for dealing with Conflicts of Interest

(a) The Manager will seek to disclose to a Client any conflict of interest that arises between the Manager and the Client.
(b) The Manager has sole discretion of:

(i) who may be onboarded onto the TEN13 Platform;
(ii) who may be removed from the TEN13 Platform; and
(iii) who it allows to participate in an Investment Opportunity.

6 Managing Conflicts of Interest between Clients

6.1 Methods for dealing with Conflicts of Interest and investment allocation

The Manager has sole discretion of who it allows to participate in an Investment Opportunity, and may have consideration to the following (non-exhaustive) list of considerations below:

(a) the Co-Investor is aligned with the Manager’s values;
(b) the Co-Investor will be a value add to the Portfolio Company;
(c) the Co-Investor does not have any competitive affiliation or conflicts of interest with the Investment Opportunity;
(d) the allocation provided to the Manager for the Portfolio Company (whether this is a new opportunity, a follow-on round or the exercise of pre-emptive rights on transfer of securities in the Portfolio Company); and
(e) the timing and responsiveness of the Co-Investors offer.

The Manager shall not be obliged to progress a new investment opportunity where the making of such an offer would be contrary to law in any jurisdiction or would require the consent or approval of any regulatory body having jurisdiction over the subject matter of the new investment opportunity and such consent or approval is not forthcoming.

7 Managing Conflicts of Interest between TEN13 Parties and a Client

7.1 Methods for dealing with Conflicts of Interest

(a) TEN13 Parties may participate in Investment Opportunities alongside the Clients through the TEN13 Platform.
(b) In doing so the Manager will notify the relevant Clients of the following:

(i) which Investment Opportunity the TEN13 Party invests in; and
(ii) whether the TEN13 Party has any prior association with the Investment Opportunity.

(c) TEN13 Parties may have differing fees and carried interest structures and may rank higher in allocation preference than Clients on an Investment Opportunity.

8 Co-investment with Co-Investors

8.1 Methods for dealing with Conflicts of Interest

In making or receiving offers in respect of a Co-Investment Opportunity, the Manager may, in its sole discretion:

(a) provide Birkdale a first right to investment in an Investment Opportunity (whether this is a new opportunity, a follow-on round or the exercise of pre-emptive rights on transfer of securities in the Portfolio Company);

(b) provide Birkdale with its choice of allocation in an Investment Opportunity (whether this is a new opportunity, a follow-on round or the exercise of pre-emptive rights on transfer of securities in the Portfolio Company);

(c) impose (and may vary or waive) such conditions as the Manager considers appropriate, including as to the form of the investment, the amount of the investment, documents to be executed and steps to be taken (and the timing of both) by the Co-Investors;

(d) reduce or revoke the proposed amount to be invested by the Co-Investor in that investment opportunity where the investment round has been over-subscribed;

(e) Birkdale has full discretion in whether or not it will introduce an investment to the TEN13 Platform as an Investment Opportunity or whether to invest in the opportunity directly; and

(f) Birkdale may negotiate and enter into any Investment Opportunity on more favourable terms than the Clients.

9 Previous Investments

Birkdale and its Affiliates have made multiple investments across various sectors in Australia and overseas (Previous Investments). Some of these Previous Investments may be in direct or indirect competition to the Investment Opportunities provided through the Platform. Birkdale, the Manager and their Affiliates disclaim all liability pertaining to the action taken by a Previous Investment, including (but not limited to):
(a) any action taken while a TEN13 Party held, or holds, a board or board observer position; and
(b) poaching of employees, contractors, suppliers and customers of Portfolio Companies (or anything analogous with these restrictions) by the Previous Investments.

10 Management of investments in Portfolio Companies

(a) The Manager will provide a high level of strategic value add to the Portfolio Companies however it will not be involved in the operational conduct of the Portfolio Companies.
(b) The Manager may provide incentive arrangements or referral fees for deals provided in relation to new investors introduced to the TEN13 Platform.
(c) The information provided to the Investor from the Manager or its Affiliates, either through the TEN13 Platform or directly, in relation to the Investment Opportunities and Portfolio Companies should not be regarded as legal, financial, investment, taxation or any other form of advice.
(d) The Manager does not warrant or represent the origin, validity, accuracy, completeness or reliability of the information provided in relation to the TEN13 Platform, the Investment Opportunities and the Portfolio Companies.

11 Fees

The Manager will have the sole discretion to:
(a) waive or discount any management fees, set-up fees and carry to any Client, Birkdale and / or TEN13 Parties in relation to any Investment Opportunity.
(b) provide incentive arrangements including fee relief and discounts to Clients and TEN13 Parties that have referred new investors to the TEN13 Platform.

12 Review procedures

The Compliance Officer is responsible for reviewing the Manager’s compliance arrangements to ensure that:
(a) regular reviews of conflict of interest procedures are undertaken;
(b) the Manager’s internal structures and reporting lines enable them to effectively manage Conflicts of Interest;
(c) the Manager’s arrangements are designed according to the nature, scale and complexity of the business;
(d) the conflict management records are adequate, including reports to senior management and disclosures to key stakeholders; and
(e) employee and representative training is adequate and in line with the Manager’s conflict of interest procedures.