Issuer Disclosure

Conventional Investment Notes

These standard terms and conditions, together with the Investment Note entered into between the Investor(s) and the Issuer, setting out the particulars of the Investor, the Issuer and the Principal Subscription Amount, and the repayment schedule setting out the interests and amounts payable and the date on which such repayment is payable (collectively the “Note” or “Investment Note”), constitutes the terms on which this Investment Note is issued. 

WHEREAS the Investor hereby agrees and shall be deemed to have so agreed to subscribe to the Note issued by the Issuer and the Issuer agrees to accept from the Investor a sum of money as specified in the Note subject to these standard terms and conditions. 

These standard terms and conditions must be read together with the Agreements (as hereinafter defined). 

In the event of any inconsistency between the terms herein and the terms in any Agreement, the terms in this Note shall prevail to the extent of such inconsistency only. 

 


1. DEFINITIONS AND INTERPRETATION 

1.1 In this Note, unless the context otherwise requires, the following expressions shall have the meanings set out against them: 

“Agreements” means the Investor Agreement and Issuer Agreement, collectively, and “Agreement” means any one of the Agreements; 

"Business Day" means a day (excluding Saturday and Sunday) when commercial banks in Kuala Lumpur are open for business; 

“CapSphere” means CapSphere Services Sdn Bhd, the operator of the Platform and includes its successors in title and assigns; 

“CapSphere Account” shall mean the account which CapSphere maintains with a financial institution licensed in Malaysia which is held in trust by a third party trustee, as more particularly defined in the Agreements; 

“CMSA” means the Capital Markets and Services Act 2007; 

“FSA” means the Financial Service Act 2013; 

“Guidelines” mean the Guidelines on Recognized Markets issued by the SC; 

“Investor” means a user which is registered as a member on the Platform who is intending to fund Issue Requests; 

“Investor Agreement” means the Investor Agreement entered into between the Investor and CapSphere, including the documents and appendices as annexed thereto and as may be supplemented, amended or varied from time to time; 

“Issuer Agreement” means the Issuer Agreement entered into between the Issuer and CapSphere, including the documents and appendices as annexed thereto and as may be supplemented, amended or varied from time to time; 

“Issuer” means a borrower which is registered as a member on the Platform to obtain funds; 

“Issue Request” shall mean the request by an Issuer for Investors to subscribe for an Investment Note to be issued by the Issuer; 

“Maturity Date” means the date on which the Note Tenure ends; “Note Tenure” means such period within which the full amount of the Note will be due and payable; 

“Parties” mean the Investor and the Issuer, and each of them individually shall be a “Party”; 

“Platform” means http://www.capsphere.com.my/ or any other updated domain or site as may be notified by CapSphere from time to time; 

“Principal Subscription Amount” means the principal amount payable or paid by Investors who have subscribed to the Notes; 

“Personal Data Protection Notice” means the notice pursuant to the Personal Data Protection Act 2010 made available on the Platform, as from time to time be amended, varied and/or supplemented thereto; 

“Repayment Date” means such date on which repayment of the Principal Subscription Amount, interest and/or such other amounts payable under this Note, as set out in a repayment schedule specified in this Note; 

“SC” means the Securities Commission of Malaysia; 

“Security Documents” shall mean any guarantee, debenture, charge and/or any other security documents in connection with any security provided or to be provided by the Security Parties to secure the payment or repayment of all monies payable to the Investor(s) and/or CapSphere under this Note and/or the terms of the Agreements; 

“Security Parties” shall mean the Issuer, any guarantor and/or any other security party for the time being or from time to time providing any security under the relevant Security Documents to secure the payment or repayment of all monies payable to the Investor(s) and/or CapSphere under this Note and/or the terms of the Agreements; 

“RM” mean Malaysian Ringgit, being the lawful currency of Malaysia; 

“Subscription Offer” means an offer submitted by an Investor over the Platform in response to an Issue Request, stating the Principal Subscription Amount that the Investor wishes to subscribe for upon the Note. 

The expressions the “Issuer” and the “Investor” shall include their respective successors in title and permitted assigns. 


1.2 Any reference in this Note to "Sections" is to the sections of this Note. 

1.3 The headings to the Sections are inserted for convenience only and shall not affect the interpretation of this Note. 

1.4 Unless the context otherwise requires or permits, references to the singular number shall include references to the plural number and vice versa, references to persons shall be construed as including bodies corporate and vice versa and words denoting any gender shall include all genders. 

1.5 In the absence of any expression to the contrary, all payments and repayments made under the provisions of this Note, including damages, shall be made in Malaysia Ringgit unless otherwise agreed by the Parties. 

1.6 Any reference to any legislation or to any provisions of any legislation shall include any modification or re-enactment thereof and any legislation or legislative provision substituted therefor, and all regulations, subsidiary legislations, by-laws, guidelines, practice notes, codes of practice and statutory instruments issued thereunder. 

1.7 Any reference to any document or agreement shall be deemed to include references to such document or agreement as amended, novated, supplemented, varied or replaced from time to time. 

1.8 Any reference to “law” includes any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty, by-law or other legislative measure in Malaysia. 

1.9 Any reference to any agreement or instrument shall be deemed to include references to such agreement or instrument as amended, novated, supplemented, varied or replaced from time to time. 

1.10 Any reference to a “day”, “week”, “month”, or “year” is to that day, week, month or year in accordance with the Gregorian calendar. 

1.11 If any period of time is specified from a given day or a day of a given act or event is specified, it is to be calculated exclusive of that day and if any such specified period of time or a day of a specified given act or event falls on a day which is not a Business Day, then such period of a specified time or a specified day of a given act or event is deemed to be on the next Business Day. 

1.12 Any reference to “pay” or its cognate expressions includes payment made by way of bank draft (drawn on a bank licensed to carry on banking business under the provisions of the FSA) or effected through inter-bank transfers to the account of the Investor giving the Investor immediate access to available funds. 

 


2. INVESTMENT NOTE 

2.1 This Note is issued in compliance with the Guidelines. 

2.2 This Note shall not be subsequently sold to any person, unless as permitted under the Guidelines and/or applicable laws, and which sale shall, to the extent permitted by law, be subject to the prior written consent of CapSphere and the terms and conditions of the Agreements and this Note. 

 


3. INTEREST 

3.1 The Issuer shall pay an interest (“Interest”) on the Principal Subscription Amount specified in this Note. 

3.2 Interest shall accrue monthly and shall be payable on such date in accordance with the terms of this Note. 

3.3 If the Issuer fails to make any payment due under this Note on any Repayment Date, interest payable upon late payment of the unpaid, overdue and/or outstanding amounts shall in addition accrue daily, at a rate of up to 0.1% on principal outstanding from the date of non-payment to the date of the actual payment or any updated rate set out on the platform (subject to clearance of such funds). 

 


4. REPAYMENT UPON THE INVESTMENT NOTE 

4.1 The Issuer shall repay the Principal Subscription Amount and Interest Payable (as set out in the Note) in instalments (“Instalment”), together with all interest accrued and due up to each Repayment Date (as set out in the Note). Such amount payable and the Repayment Dates shall be set out in a repayment schedule specified in this Note. 

4.2 The Principal Subscription Amount shall be payable in full by the Maturity Date. 

4.3 Repayment (which repayment includes but is not limited to repayment of Principal Subscription Amount, interest and late payment interest subject to any deduction pursuant to the Agreements and this Note) shall be made by the Issuer via standing instructions including but not limited to the Interbank GIRO (“IBG”), Visa, Mastercard or Financial Process Exchange (“FPX”) to CapSphere into the CapSphere Account. The Issuer shall be entitled to require presentation of the Note prior to the payment of the final Instalment. 

 


5. PREPAYMENT 

5.1 The Issuer may prepay the full Principal Subscription Amount (“Prepayment”) provided always that: 

a) the Issuer shall have first given to CapSphere at least 30 days prior written notice of the intended Prepayment; 
b) the Prepayment must be in respect of the full outstanding Principal Subscription Amount and proposed redemption date must be at least 6 months after the investment note disbursement date 
c) CapSphere consents in writing to the Prepayment upon such terms and conditions as may be specified by CapSphere; 
d) Within 5 days of the aforesaid consent in writing by CapSphere, the Issuer shall pay the full outstanding Principal Subscription Amount together with, a prepayment fee of 20% on the total interest outstanding due from Principal Subscription Amount (as may be revised by CapSphere in writing from time to time), all other costs and expenses incurred or to be incurred by CapSphere with regard to or in connection with the Prepayment and any sum payable to Capsphere under the Agreement. 

 

5.2 Any notice of the intended Prepayment once having been given by the Issuer to CapSphere and consented to in writing by CapSphere shall not be revocable by the Issuer and the Issuer shall be obliged to make the Prepayment in accordance with Section 5.1(d) above.
 
5.3 For the avoidance of doubt, any partial Prepayment is not allowed. 

5.3 The certificate issued by CapSphere as to the full outstanding Principal Subscription Amount, accrued interest and any sum payable to CapSphere under the Agreement by the Issuer shall be final and binding on the Issuer, and CapSphere shall not, in the absence of manifest error, be questioned on any account whatsoever. 

 


6. REPRESENTATIONS AND WARRANTIES 

6.1 The Issuer hereby represents and warrants as follows: 

a) the Issuer is a company duly incorporated and validly existing or a limited liability partnership or sole proprietorship duly set up and validly existing under the laws of Malaysia with full power and authority to own its properties and to conduct its business as currently conducted; 
b) the Principal Subscription Amounts are for the Issuer’s own use solely for such purposes as specified in this Note and/or the Issue Request, and the Issuer has not been hosted or applied to be hosted concurrently on any other peer-to-peer platforms for funding for the same purpose; 
c) the Issuer has not been wound-up or dissolved and there is no dissolution or winding-up proceedings pending or threatened against the Issuer; 
d) the Issuer has the power and authority to issue this Note and that this Note, when executed, constitutes valid and legally binding obligations enforceable against the Issuer in accordance with the terms herein; 
e) all actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents), in order: 

i. To enable the Issuer lawfully to enter into, exercise its rights and perform and comply with its obligations under this Note, the Issuer Agreement and any Security Document; and 

ii. To ensure that those obligations are valid, legally binding and enforceable, have been taken, fulfilled and done; 

f) the execution and delivery of, and the performance by it of its obligations under, this Note, the Issuer Agreement and any Security Document do not: 

i. Infringe, or constitute a default under, any instrument, contract, document or agreement to which it is a party or by which it or its assets are bound; and 

ii. Result in a breach of any law, rule, regulation, ordinance, order, judgement or decree of or undertaking to any court, government body, statutory authority or regulatory, administrative or supervisory body (including, without limitation, any relevant stock exchange or securities council) to which it is a party or by which it or its assets are bound, whether in Malaysia or elsewhere; 

g) no litigation, arbitration or administrative proceedings are taking place, pending or threatened against it, any of its directors or any of its assets, which, if adversely determined, might reasonably be expected to have a material adverse effect on its business, assets or conditions, or its ability to perform its obligations under this Note, the Issuer Agreement and any Security Document; 
h) the Issuer shall comply, in all respects, with all applicable laws and regulations including but not limited to the CMSA and the Guidelines; 
i) the Issuer is not a person or an entity that is prohibited by the SC or the Guidelines from raising funds or making an Issue Request or issuing an Investment Note through the Platform; 
j) the Issuer is not a public listed company or a subsidiary of a public listed company; and 
k) the Issuer is not an entity with a structure which is commercially or financially complex such as an investment fund company or a financial institution.

 

6.2 The Issuer further represents and warrants as follows with regard to each Security Document and/or Security Party: 

a) That the Security Party has full legal right authority and power to enter into and bind itself by the Security Documents and to exercise its respective rights and perform its respective obligations under the Security Documents and that all appropriate and necessary action have been taken to authorise the execution and delivery of the relevant Security Documents and the exercise by the Security Party of its rights and the performance by the Security Party of its obligations under the relevant Security Documents and the execution thereof does not exceed the power and authority of the Security Party or its officers executing the same; 
b) That any corporate Security Party has in respect of the operations of its business complied or will comply with all relevant laws and have obtained all relevant licences, permits and approvals required to be obtained by the Security Party under the provisions thereof; 
c) That each Security Document constitutes legal, valid and binding obligations of the Security Party and is enforceable in accordance with its respective terms and the obligation of the Security Party under the Security Document in respect of the payment of principal, interest, fees and other expenses and charges do not contravene any legislation or regulation binding on the Security Party; 
d) Save as otherwise disclosed in writing to CapSphere prior to the date hereof, no charges, pledges, liens, caveats, mortgages or encumbrances whatsoever exist on any of the assets of the Security Parties as security for any indebtedness or otherwise howsoever; 
e) That the execution of the Security Documents by the Security Parties and the exercise of its rights and performance of its obligations thereunder do not and will not contravene or violate the 
provisions of any agreement or other instrument to which any Security Party is a party or which is binding upon it or any of its assets, the provisions of its constitutive documents or the provisions of any applicable law, regulation or official or judicial order of any court or other governmental agency or authority: 
f) That each Security Document to which a Security Party creates or once entered into, will create the security interest which it is expressed to create with the ranking and priority it is expressed to have; 
g) That each Security Party has good and marketable title to the assets and properties subject to the security interest created by it pursuant to the Security Document and that such assets and properties are free from all charges, pledges, liens, caveats, mortgages or encumbrances whatsoever except the security interest created pursuant to, or permitted by the Security Document; 
h) That all insurances required to be taken under the Security Document have been duly taken and are in full force and effect as required pursuant to the terms of the Security Document and no event or circumstance has occurred, and there has been no failure to disclose a material fact, which would entitle any insurer to reduce or avoid the relevant Security Party’s liability under any such insurance. 

 

6.3 The Security Documents are intended to be and shall be continuing security for all moneys whatsoever now or hereafter and from time to time owing under the Notes. 

6.4 The Investor’s acceptance of this Note is subject to it representing that: 

a) all actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents), in order: 

i. To enable the Investor lawfully to enter into, exercise its rights and perform and comply with its obligations under this Note and the Investor Agreement; and 

ii. To ensure that those obligations are valid, legally binding and enforceable, have been taken, fulfilled and done; and 

b) the execution and delivery of, and the performance by it of its obligations under, this Note, and the Investor Agreement do not: 

i. Infringe, or constitute a default under, any instrument, contract, document or agreement to which it is a party or by which it or its assets are bound; and 

ii. Result in a breach of any law, rule, regulation, ordinance, order, judgement or decree of or undertaking to any court, government body, statutory authority or regulatory, administrative or supervisory body (including, without limitation, any relevant stock exchange or securities council) to which it is a party or by which it or its assets are bound, whether in Malaysia or elsewhere. 


7. COVENANTS

7.1 The Issuer covenants with the Investor(s) that, as from the date of this Note until the date that the Principal Subscription Amounts and all monies (including any interest and late payment interest) payable to the Investor(s) are fully paid up and discharged: 

a) The Issuer shall comply, in all respect, with all laws, if failure to do so has or is likely to have a material adverse effect on its business, assets or condition, or its ability to perform its obligations under this Note; 
b) The Issuer shall promptly, after becoming aware of them, notify the Investor and CapSphere of any Event of Default described in Section 8.1 below; 
c) The Issuer shall not pass any resolution or mandate approving the change in directors or partners of the Issuer or the divestment of any or all of the shareholding or any shareholder or partner of the Issuer, without first obtaining the prior written consent of CapSphere; 
d) The Issuer shall not apply for or obtain any loan, advance or financing from any third party (including any of its directors, shareholders, partners or any financial institution) or create any fixed or floating charge, lien (other than a lien arising by operation of law) or other encumbrance over the whole or any part of the undertaking, property or assets of the Issuer without first obtaining the prior written consent of CapSphere; 
e) The Issuer shall not pass any resolution for the winding-up or dissolution of the Issuer, nor cause a petition for dissolution or winding-up to be presented against the Issuer, or the appointment of a receiver or receiver and manager of the respective undertakings or assets of the Issuer; 
f) The Issuer shall forthwith at the request of CapSphere do all acts and execute and/or procure the Security Parties to do all acts and to execute all necessary Security Document(s) in such form and content and at such time as may be requested by CapSphere for the purposes of securing the payment and repayment of all monies payable to the Investor(s) and/or CapSphere under this Note and/or the Agreement and/or for perfecting the security(ies) under the Security Document(s); 
g) The Issuer shall not declare, make or pay more dividends, reserves, charges, shareholder advances, fees or compensation to directors, management, advisors, consultants, partners and other officers of the Issuer, and loans to affiliates (whether in cash or in kind) than already declared, made or are already paying based on the reported figures (on the financial statements) of the last financial year of the Issuer immediately prior to the execution of this Note; 
h) The Issuer shall not sell, lease, transfer or otherwise dispose of more than 20% of its non-current assets, unless proceeds are used to pay down indebtedness to the Investor and/or CapSphere, and such sale, lease, transfer or disposal shall not be made otherwise than on arm’s length basis or term, and for full market value; 
i) The Issuer shall not enter into any transaction that, in the sole opinion of CapSphere, puts the business of the Issuer in jeopardy or affects the ability of the Issuer to perform its obligations under this Note; 
j) The Issuer shall not apply for, seek or obtain any other funding (in any amount) through any other peer-to-peer platform, operator or company for same purpose it has represented to the Investor and/or CapSphere in the Investment Note and/or the Issue Request; and 
k) The Issuer shall not use the Principal Amount or any part thereof for purposes other than that as specified in the Investment Note and/or the Issue Request. 

 

7.2 The Issuer irrevocably warrants and undertakes that its payment obligations and liabilities under this Note shall, at all times, rank ahead of or otherwise at least pari-passu in all respects with all its other present and future unsecured and in-subordinated payment obligations and liabilities to its other creditors. 

 


8. EVENTS OF DEFAULT 

8.1 In the event that Issuer misses, fails to pay, or only partially pays any Instalment, interest, late payment interest and/or other payment that is due to any Investor in accordance with the repayment schedule specified in the Investment Note, or fails to pay or fully pay up the Note or the full outstanding Principal Subscription Amount and interest and/or any payment payable to Capsphere under the Agreement (collectively the “Amount Due”) by the Maturity Date or the due date of any such payment, the Parties agree that CapSphere has the authority to act as follows: 

a) The right but not the obligation to report such default in payment to any credit bureaus it deems appropriate; 
b) To contact or attempt to contact the Issuer to remedy the default and make such payment of the Amount Due within ninety (90) days (or such other period as CapSphere shall in its discretion determine) of the date on which the Amount Due is due (“Said Period”). 
For the avoidance of doubt, the Investor shall refrain from contacting the Issuer, and CapSphere shall have the sole right to contact and deal with or authorise any third party to contact and deal with the Issuer and to notify the Issuer to remedy the default and make such payment within the Said Period; 
c) If (i) the Amount Due is not fully paid within the Said Period; and or (ii) it becomes evident (in the sole discretion of CapSphere) that the Issuer is unable to satisfy the Amount Due , CapSphere shall at the cost and expense of the Investor be entitled, but shall not be obliged to, and the Investors hereby authorises CapSphere to, in CapSphere’s sole and absolute discretion and without any further consent or agreement required from the Investor to, do any one or more of the following: 

(1) Appoint any third party professional debt collector to collect from the Issuer the Amount Due. The Investor shall bear the costs and expenses incurred in relation to the services provided by such third party professional debt collector, based on the schedule of rates as from time to time notified on the Platform generally or to the Investor; 

(2) On its own or authorise a third party to enter upon any premises where any of the assets charged or secured under the Security Documents are situated and take possession and control of such assets and all documents relating thereto, and to deal with the same in accordance with the provisions of the Security Documents; 

(3) Appoint a solicitor to commence legal proceedings on behalf of the Investor against the Issuer to recover any the Amount Due; and the Investor hereby authorises and appoints CapSphere as its representative to act in any manner it deems fit (including agreeing to any settlement with the Issuer as CapSphere deems reasonable) in connection with such proceedings. All costs and expenses (including legal fees on solicitors and client basis) incurred in connection with the legal proceedings shall be solely borne by the Investor. The Investor agrees, in the event that CapSphere commences proceedings against the Issuer under this Section, to pay such fees and costs as notified by CapSphere which shall include fees earned and charges incurred by CapSphere. The Investor agrees that while costs may be incurred in connection with efforts to recover the Principal Subscription Amount, there is no assurance that such efforts may be successful in recovering any amounts due under the Investment Note; and/or 

(4) Take such other actions as may from time to time deemed fit by CapSphere in its sole discretion (including but not limited to restructuring of the repayment of the Amount Due) or be authorised by the Investor (subject to the agreement of CapSphere). 


For the avoidance of doubt, all costs and expenses incurred or to be incurred by CapSphere or any third party in connection with or incidental to any of the above-said shall be solely borne by the Investor. 
 

8.2 Each of the following events or circumstances set out in this Section 8.2 is an Event of Default: 

a) The Issuer has breached any term, covenant, warranty or undertaking of this Note, the Issuer Agreement or Security Documents, and such default (if capable of being remedied) is not remedied within seven (7) Business Days of the earlier of: 

i. CapSphere notifying the Issuer of the default and the remedy required; or 

ii. The Issuer becoming aware of the default. 

b) Any representation, warranty or information made, given or submitted by the Issuer in Section 5 above or under this Note, the Issuer Agreement and/or the Security Documents is incomplete, untrue, incorrect or misleading in any material respect. 
c) The membership of the Issuer in the Platform, the online platform on which this Note was executed, is terminated for any reason under the Issuer Agreement. 
d) The Issuer ceases to pay its debts or is unable to pay its debts as they fall due or is deemed unable to or admits its inability to do so or makes a general assignment for the benefit of or a composition with its creditors. 
e) Any action, proceedings, procedure or step is taken for: 

i. The suspension of payments or a moratorium of any obligation of the Issuer to pay or repay money, present or future, actual or contingent, sole or joint (“Indebtedness”); 

ii. Winding up, dissolution, administration or reorganisation (using a voluntary arrangement, scheme of arrangement or otherwise) of the Issuer; or 

iii. The appointment of a liquidator, receiver, administrator in respect of the Issuer or any part of the undertaking or assets of the Issuer. 

f) The Issuer commences negotiations, or enters into any composition, compromise, assignment or arrangement, with one or more of its creditors with a view to rescheduling any of its Indebtedness without the prior written consent of CapSphere. 
g) The Issuer ceases, or threatens to cease, to carry on all or a substantial part of its business. 
h) There is a change of directors or partners of the Issuer, where any existing shareholder or partner of the Issuer divests all or any part of his shareholding, direct or indirect, in the Issuer, without the prior written consent of CapSphere. 
i) Litigation, arbitration or administrative proceedings are initiated, pending or, to the Issuer’s knowledge, threatened against the Issuer, any of its directors, its partner or any of its assets, which, if adversely determined, might reasonably be expected to have a material adverse effect on its business, assets or conditions, or its ability to perform its obligations under this Note or the Issuer Agreement. 
j) Any agreement entered into between the Issuer and CapSphere (including the Issuer Agreement) is terminated for any reason pursuant to the terms of such agreement or otherwise. 
k) The Principal Subscription Amount or any part thereof is used for purposes different from those represented to the Investor and/or CapSphere in the Investment Note or Issuer Request. 
l) The Principal Subscription Amount or any part thereof is transferred, in any form, to any other entity that the Issuer or any of their immediate relatives have a vested interest in. 
m) It is or will become unlawful for the Issuer to perform or comply with any one or more of its obligations under this Note or the Issuer Agreement. 

 

8.3 At any time after an Event of Default has occurred, CapSphere may, upon notice to the Issuer, on behalf of the Investor(s), terminate this Note and demand immediate repayment of the entire amount of the Principal Subscription Amount, including accrued Interest and late payment interest up to the date of repayment (subject to clearance of such funds) and any payment payable to Capsphere under the Agreement, in accordance with Section 8.1. 

 


9. INDEMNITIES 

9.1 Each of the Issuer and the Investor(s) shall keep CapSphere fully and effectively indemnified against all losses, costs, damages, claims, demands, actions, proceedings, liabilities and expenses whatsoever, that may incur in connection with or arising from any material breach of its representations, warranties, obligations, covenants and undertakings under this Note, the Agreements and/or the use of the Platform. 

 


10. COSTS, EXPENSES AND TAXES 

10.1 Each of the Issuer and the Investor(s) shall bear all their own costs and expenses in relation to the entering of this Note and as more particularly set out in the Platform and/or the Agreements, including the administration fees to be paid to CapSphere. 

 


11. NOTICES 

11.1 All notices, demands or other communications required or permitted to be given or made under this Note between the Investor(s) and the Issuer shall firstly be made to CapSphere through the online messaging system on the Platform or email, and immediately thereafter to CapSphere, in writing and delivered personally or sent by prepaid registered post with recorded delivery, addressed to CapSphere at its registered address or to such other address as CapSphere may from time to time duly notify the first mentioned Party in writing. Any such notice, demand or communication by the Investor to CapSphere shall be subject to actual receipt by CapSphere. 

11.2 The address, facsimile number, telephone number and email address of CapSphere for the purposes of this Note are specified on the Platform. 

11.3 Any such notice, demand or communication shall be deemed to have been duly served (a) if sent through the online messaging system on the Platform or delivered personally, immediately or (b) if sent by prepaid registered post with recorded delivery two (2) Business Days after posting and in proving the same it shall be sufficient to show that personal delivery or prepaid registered post was made or that the envelope containing such notice was properly addressed, duly stamped and posted, or that the online message was properly addressed and dispatched. 

 


12. GENERAL 

12.1 Further Assurance. Each Party shall execute such other documents, do such acts and things and take such further actions as may be reasonably required by the other and/or CapSphere or desirable to give full effect to the provisions of this Note and the transactions hereunder and each Party shall use its best endeavours to procure that any necessary third party shall execute such documents, do such acts and things and take such further actions as may be reasonably required by the other and/or CapSphere for giving full effect to the provisions of this Note and the transactions hereunder. 

12.2 Time of Essence. Any time or period mentioned in any provision of this Note may be extended by mutual written agreement between the Parties but as regards any time, date or period originally fixed or any time, date or period so extended as aforesaid, time shall be of the essence. 

12.3 Remedies. No remedy conferred by any of the provisions of this Note is intended to be exclusive of any other remedy which is otherwise available at law, in equity, by statute or otherwise and each and every other remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute or otherwise. The election of any one or more of such remedies by a Party hereto shall not constitute a waiver by such Party of the right to pursue other available remedies. No failure on the part of a Party hereto to exercise, and no delay in exercising any right under this Note will operate as a waiver thereof, nor will any single or partial exercise of any right under this Note preclude any other or further exercise of any right thereof or of the exercise of any other right. 

12.4 Release and Indulgence. Any liability to any Party hereto may in whole or in part be released, compounded or compromised or time or indulgence given by that Party in that Party’s absolute discretion as regards the other Party hereto under such liability without in any way prejudicing or affecting the first Party’s rights against the second Party. 

12.5 Assignment. Save as provided for in this Note and the Agreements, none of the Parties shall have the right to assign or transfer any of such rights, undertakings, agreements, duties, liabilities and/or obligations hereunder. 

12.6 Entire and Continuing Effect of Investment Note. This Note and the documents referred to in this Note collectively embody the entire terms and conditions agreed upon by the Parties as to the subject matter of the same and supersedes and revokes in all respects all other documents, agreements, letters of intent, and undertakings entered into between the Parties, whether such be written or oral, with respect to the subject matter hereof. All provisions of this Note shall so far as they are capable of being performed or observed continue in full force and effect notwithstanding completion of the matters set out therein except in respect of those matters then already performed and except where expressly stated to the contrary. This Note shall be binding on and shall endure for the benefit of each of the Parties’ successors in title or legal personal representatives and permitted assigns, as the case may be. 

12.7 Severance. If any provision of this Note or part thereof is rendered void, illegal or unenforceable by any legislation to which it is subject, it shall be rendered void, illegal or unenforceable to that extent and no further and, for the avoidance of doubt, the rest of this Note shall continue in full force and effect and the legality, validity and enforceability of the whole of this Note in any other jurisdiction shall not be affected. 

12.8 Governing Law and Jurisdiction. This Note shall be governed by, and construed in accordance with, the laws of Malaysia. Any dispute arising out of or in connection with this Note and/or the documents referred to herein, including any question regarding their existence, validity or termination, shall be referred to and finally resolved by the Courts of Malaysia and the Parties hereby unconditionally and irrevocably submit to the exclusive jurisdiction of the Courts of Malaysia.
 
12.9 Privacy and Data Protection. This Note shall be subject to, and the Parties agree to be bound by and shall comply with, the Personal Data Protection Notice on the Platform.

Islamic Investment Notes

These standard terms and conditions, together with the Islamic Investment Note entered into between the Investor(s) and the Issuer, setting out the particulars of the Investor, the Issuer and the Principal Subscription Amount, and the payment schedule setting out the profits and amounts payable and the date on which such payment is payable (collectively the “Islamic Note” or “Islamic Investment Note”), constitutes the terms on which this Islamic Investment Note is issued.

 

WHEREAS the Investor hereby agrees and shall be deemed to have so agreed to subscribe to the Islamic Note issued by the Issuer and the Issuer agrees to accept from the Investor a sum of money as specified in the Islamic Note subject to these standard terms and conditions.

 

These standard terms and conditions must be read together with the Agreements (as hereinafter defined). 

 

In the event of any inconsistency between the terms herein and the terms in any Agreement, the terms in this Islamic Note shall prevail to the extent of such inconsistency only.

 


1. DEFINITIONS AND INTERPRETATION 
 

1.1 In this Islamic Note, unless the context otherwise requires, the following expressions shall have the meanings set out against them: 

 

“Agreements” means the Investor Agreement and the Issuer Agreement, collectively, and “Agreement” means any one of the Agreements;

 

"Business Day" means a day (excluding Saturdays, Sundays and public holidays) when commercial banks in Kuala Lumpur are open for business;

 

“CapSphere” means CapSphere Services Sdn Bhd (Company No. 201601021272 (1192211-H)), the operator of the Platform and includes its successors in title and assigns;

 

“CapSphere Account” shall mean the account which CapSphere maintains with a financial institution licensed in Malaysia which is held in trust by a third party trustee, as more particularly defined in the Agreements;

 

“CMSA” means the Capital Markets and Services Act 2007;

 

“Commodity” or “Commodities” means any Shariah-compliant commodity which shall be traded on the Platform and may include such other commodity as may be mutually agreed upon from time to time by the Parties;

 

“Commodity Broker” means the commodity broker (commodity buyer and seller) in commodity trading platform engaged by the Platform;

 

“Commodity Murabahah via Tawarruq arrangement” means the arrangement as agreed by the Issuer and the Investor of which Commodity Murabahah means the sale and purchase of an asset where the acquisition cost and the mark-up are disclosed to the purchaser whilst Tawarruq consists of two sale and purchase contracts of which the first involves the sale of an asset by a seller to a purchaser on a deferred basis and subsequently, the purchaser of the first sale will sell the same asset to a third party on a cash and spot basis;

 

“Commodity Purchase Price” means the purchase price payable by the Investor for the purchase of the Commodity from the Commodity Broker;

 

“Commodity Sale Price” means the amount as stated in this Agreement and the Islamic Investment Note, payable by the Issuer to the Investors on deferred basis as the sale price for the Commodity, which comprises of the Principal Subscription Amount and Profit;

 

“Commodity Trading Platform” means a platform where CapSphere acts as the agent of the Investors and the Issuers, to facilitate the trade of the Commodities;

 

“Contracted Note Tenure” means an additional period of 12 months after the Maturity Date;

 

“FSA” means the Financial Service Act 2013;

 

“Guidelines” mean the Guidelines on Recognised Markets issued by the SC;

 

“Investor” means a user which is registered as a member on the Platform who is intending to fund Issue Requests;

 

“Investor Agreement” means the Investor Agreement entered into between the Investor and CapSphere, including the documents and appendices as annexed thereto and as may be supplemented, amended or varied from time to time;

 

“Issuer Agreement” means the Issuer Agreement entered into between the Issuer and CapSphere, including the documents and appendices as annexed thereto and as may be supplemented, amended or varied from time to time;

 

“Issuer” means a customer which is registered as a member on the Platform to obtain funds;

 

“Issue Request” shall mean the request by an Issuer for Investors to subscribe for an Islamic Investment Note to be issued by the Issuer;

 

“Maturity Date” means the date on which the Note Tenure ends;

 

“Note Tenure” means such period within which the full amount of the Islamic Note will be due and payable;

 

“Parties” mean the Investor and the Issuer, and each of them individually shall be a “Party”;

 

“Platform” means http://capsphere.com.my/ or any other updated domain or site as may be notified by CapSphere from time to time, the mobile application developed by CapSphere and/or its affiliates, and such other platforms owned and/or operated by CapSphere, which is used to facilitate directly or indirectly the issuance, execution or offering of the Islamic Notes;

 

“Principal Subscription Amount” means the principal amount payable or paid by the Investors who have subscribed to the Islamic Notes;

 

“Personal Data Protection Notice” means the notice pursuant to the Personal Data Protection Act 2010 made available on the Platform, as from time to time be amended, varied and/or supplemented thereto;

 

“Payment Date” means such date on which payment of the Principal Subscription Amount, interest and/or such other amounts payable under this Islamic Note, as set out in a payment schedule specified in this Islamic Note;

 

“Rebate” means the amount to be granted at the discretion of the Investor to the Issuer on the profit amount under the principle of Ibra'. Rebate may be granted on a portion of the unearned profit upon full settlement of the facility or at any interval as may be agreed by the Parties.

 

“SC” means the Securities Commission of Malaysia;

 

“Security Documents” shall mean any guarantee, debenture, charge and/or any other security documents in connection with any security provided or to be provided by the Security Parties to secure the payment of all monies payable to the Investor(s) and/or CapSphere under this Islamic Note and/or the terms of the Agreements;

 

“Security Parties” shall mean the Issuer, any guarantor and/or any other security party for the time being or from time to time providing any security under the relevant Security Documents to secure the payment of all monies payable to the Investor(s) and/or CapSphere under this Islamic Note and/or the terms of the Agreements;

 

“RM” means Malaysian Ringgit, being the lawful currency of Malaysia;

 

“Subscription Offer” means an offer submitted by an Investor over the Platform in response to an Issue Request, stating the Principal Subscription Amount that the Investor wishes to subscribe for upon the Islamic Note.

 

The expressions the “Issuer” and the “Investor” shall include their respective successors in title and permitted assigns.


 

1.2 Any reference in this Islamic Note to "Sections" is to the sections of this Islamic Note. 


1.3 The headings to the Sections are inserted for convenience only and shall not affect the interpretation of this Islamic Note. 

1.4 Unless the context otherwise requires or permits, references to the singular number shall include references to the plural number and vice versa, references to persons shall be construed as including bodies corporate and vice versa and words denoting any gender shall include all genders. 

1.5 In the absence of any expression to the contrary, all payments made under the provisions of this Islamic Note, including damages, shall be made in Malaysia Ringgit unless otherwise agreed by the Parties.

1.6 Any reference to any legislation or to any provisions of any legislation shall include any modification or re-enactment thereof and any legislation or legislative provision substituted therefor, and all regulations, subsidiary legislations, by-laws, guidelines, practice notes, codes of practice and statutory instruments issued thereunder. 

1.7 Any reference to any document or agreement shall be deemed to include references to such document or agreement as amended, novated, supplemented, varied or replaced from time to time.

1.8 Any reference to “law” includes any constitution, decree, judgment, legislation, order, ordinance, regulation, statute, treaty, by-law or other legislative measure in Malaysia.

1.9 Any reference to any agreement or instrument shall be deemed to include references to such agreement or instrument as amended, novated, supplemented, varied or replaced from time to time.

1.10 Any reference to a “day”, “week”, “month”, or “year” is to that day, week, month or year in accordance with the Gregorian calendar.

1.11 If any period of time is specified from a given day or a day of a given act or event is specified, it is to be calculated exclusive of that day and if any such specified period of time or a day of a specified given act or event falls on a day which is not a Business Day, then such period of a specified time or a specified day of a given act or event is deemed to be on the next Business Day.

1.12 Any reference to “pay” or its cognate expressions includes payment made by way of bank draft (drawn on a bank licensed to carry on banking business under the provisions of the FSA) or effected through inter-bank transfers to the account of the Investor giving the Investor immediate access to available funds.
 


2. INVESTMENT NOTE 

2.1 This Islamic Note is issued in compliance with the Guidelines. 

2.2 This Islamic Note shall not be subsequently sold to any person, unless as permitted under the Guidelines and/or applicable laws, and which sale shall, to the extent permitted by law, be subject to Shariah provisions and the prior written consent of CapSphere and the terms and conditions of the Agreements and this Islamic Note. 

 

2.3 For Islamic Investment Note, funding is provided under the Islamic concept of Commodity Murabahah via Tawarruq arrangement. 


2.4 Commodity Murabahah via Tawarruq arrangement is a Shariah mode of financing which involves the sale of Commodities with the cost and profit margin disclosed to the purchaser.


2.5 In this arrangement, CapSphere, pursuant to Section 6 shall be appointed as agent to both the Issuer and the Investor, to execute the Commodity trading through the Commodity Trading Platform.


2.6 Upon receiving a purchase request from the Issuer in the form as set out in Appendix A (“Purchase Request”), CapSphere on behalf of the Investor, will buy the Commodity from the Commodity Broker amounting to the Principal Subscription Amount. 


2.7 Subsequently, the Investor, through CapSphere as agent, will issue an offer for sale in the form as set out in Appendix B (“Offer for Sale”) to sell the Commodity to the Issuer at cost price being the Principal Subscription Amount plus the agreed profit payable on the Payment Date. The Issuer through CapSphere as agent will issue acceptance for the Offer for Sale in the form as set out in Appendix C (“Acceptance for the Offer for Sale”) to conclude the Murabahah Sale.


2.8 The Islamic Investment Note is issued as evidence of the indebtedness of the Issuer of the Commodity Sale Price to the Investor. 

 
2.9 CapSphere as the Issuer’s agent will then sell the Commodity to a Commodity Broker on spot basis and the proceeds will be disbursed into the Issuer’s bank account.
 


3. PROFIT 
 

3.1 The Issuer shall pay the Commodity Sale Price which comprises of the Principal Subscription Amount and profit (“Profit”) as specified in this Islamic Note. 

3.2 Profit shall accrue monthly and shall be payable on such date in accordance with the terms of this Islamic Note. 

3.3 If the Issuer fails to make any payment due under this Islamic Note on any Payment Date, late payment charges payable upon late payment of the unpaid, overdue and/or outstanding amounts shall in addition accrue daily, at a rate of up to 0.1% on principal outstanding from the date of non-payment to the date of the actual payment or any updated rate set out on the platform (subject to clearance of such funds).

3.4 The imposition of late payment charges is based on the Shariah principle of Gharamah (penalty) and Ta’widh (compensation).


3.5 The late payment charges shall not be compounded. 
 


4. PAYMENT UPON THE INVESTMENT NOTE 
 

4.1 The Issuer shall pay the Principal Subscription Amount and Profit Payable (as set out in this Islamic Note) in instalments (“Instalment”), together with all late payment charges      accrued and due up to each Payment Date (as set out in this Islamic Note). Such amount payable and the Payment Dates shall be set out in a payment schedule specified in this Islamic Note. 

4.2 The Principal Subscription Amount, Profit, late payment charges other fees and charges, shall be payable in full by the Maturity Date.

4.3 Payment (which payment includes but is not limited to payment of Principal Subscription Amount, Profit, late payment charges and other fees and charges subject to any deduction pursuant to the Agreements and this Islamic Note) shall be made by the Issuer via standing instructions including but not limited to the Interbank GIRO (“IBG”), Visa, Mastercard or Financial Process Exchange (“FPX”) to CapSphere into the CapSphere Account. The Issuer shall be entitled to require presentation of the Islamic Note prior to the payment of the final Instalment.
 


5. PREPAYMENT AND REBATE
 

5.1 The Issuer may prepay the full Principal Subscription Amount (“Prepayment”) provided always that:

a) The Issuer shall have first given to CapSphere at least 30 days prior written notice of the intended Prepayment;

b) The Prepayment must be in respect of the full outstanding Principal Subscription Amount and proposed redemption date must be at least 6 months after the Islamic Investment Note disbursement date;  

c) CapSphere consents in writing to the Prepayment upon such terms and conditions as may be specified by CapSphere; 

d) Within 5 days of the aforesaid consent in writing by CapSphere, the Issuer shall pay the full outstanding Commodity Sale Price subject to Rebate granted and all other costs and expenses incurred or to be incurred by CapSphere with regard to or in connection with the Prepayment and any sum payable to Capsphere under the Agreement.

5.2 Any notice of the intended Prepayment once having been given by the Issuer to CapSphere and consented to in writing by CapSphere shall not be revocable by the Issuer, and the Issuer shall be obliged to make the Prepayment in accordance with Section 5.1(d) above.

 

5.3 For the avoidance of doubt, any partial Prepayment is not allowed.


5.4 In the event of Prepayment in accordance with Section 5.1 above, CapSphere on behalf of the Investors, may grant Rebate to the Issuer in respect of the balance unearned Profit portion of the Commodity Sale Price, on the settlement date, based on the following formula:

 

Early settlement/settlement amount = Outstanding Commodity Sale Price – Rebate + other charges (if any) 

Where, 

Rebate = Deferred profit calculated based on Contracted Note Tenure - (20% x deferred profit calculated based on Note Tenure) 

 

For the avoidance of doubt, the Rebate shall only be deemed granted upon receipt of the settlement amount as determined by CapSphere. 
 

5.5 CapSphere on behalf of the Investors shall also grant Rebate to the Issuer on the difference between the Profit portion of the Commodity Sale Price calculated based on the Contracted Note Tenure and the Profit portion calculated based on the Note Tenure as set out in Islamic Investment Notes, provided that the Issuer makes timely payment. 

5.6 The certificate issued by CapSphere as to the full outstanding Commodity Sale Price and any sum payable to CapSphere under the Agreement by the Issuer shall be final and binding on the Issuer, and CapSphere shall not, in the absence of manifest error, be questioned on any account whatsoever. 

 


6. DUTIES OF AGENT UNDER COMMODITY MURABAHAH VIA TAWARRUQ ARRANGEMENT


6.1 Under Commodity Murabahah transaction, CapSphere shall act as an agent (Wakil) to the Issuer and the Investors and shall be authorised from time to time to:

a)    Act as agent (Wakil) on behalf of the Issuer, to issue a Purchase Request to the Investors confirming its desire to purchase the Commodity from the Investors at a Commodity Sale Price;
b)    Act as agent (Wakil) on behalf of the Investors to purchase the Commodity from the Commodity Broker at the Commodity Purchase Price and take beneficial ownership of the Commodity;
c)    Act as agent (Wakil) on behalf of the Investors to sell the Commodity to the Issuer at Commodity Sale Price for spot delivery and deferred payment;
d)    Act as agent (Wakil) on behalf of the Issuer to purchase the Commodity from the Investors at Commodity Sale Price and take beneficial ownership of the Commodity;
e)    Act as agent (Wakil) on behalf of the Issuer to sell the Commodity to the Commodity Broker at Commodity Purchase Price for payment on spot basis. 

 

6.2 The Issuer and the Investors hereby appoint CapSphere as its agent (Wakil) and authorises CapSphere to perform all the above matters and any other matters in connection thereto at any time and from time to time. The Issuer and the Investors hereby agree to indemnify and hold CapSphere harmless from and against, any and all damages, claims, losses and liabilities whatsoever (including, without limitation, legal fees and expenses) arising out of or resulting from CapSphere agreeing to act as an agent (Wakil) to the Issuer and/or any act or performance by the Platform as a result thereof. 


7. REPRESENTATIONS AND WARRANTIES
 

7.1    The Issuer hereby represents and warrants as follows: 

a) The Issuer is a company duly incorporated and validly existing or a limited liability partnership or sole proprietorship duly set up and validly existing under the laws of Malaysia with full power and authority to own its properties and to conduct its business as currently conducted; 

b) The Principal Subscription Amounts are for the Issuer’s own use solely for such Shariah-compliant purposes as specified in this Islamic Note and/or the Issue Request, and the Issuer has not been hosted or applied to be hosted concurrently on any other peer-to-peer platforms for funding for the same purpose;

c) The Issuer has not been wound-up or dissolved and there is no dissolution or winding-up proceedings pending or threatened against the Issuer; 

d) The Issuer has the power and authority to issue this Islamic Note and that this Islamic Note, when executed, constitutes valid and legally binding obligations enforceable against the Issuer in accordance with the terms herein; 

e) All actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents), in order:

i. To enable the Issuer lawfully to enter into, exercise its rights and perform and comply with its obligations under this Islamic Note, the Issuer Agreement and any Security Document; and

ii. To ensure that those obligations are valid, legally binding and enforceable, have been taken, fulfilled and done; 

f) The execution and delivery of, and the performance by it of its obligations under, this Islamic Note, the Issuer Agreement and any Security Documents do not: 

i. Infringe, or constitute a default under, any instrument, contract, document or agreement to which it is a party or by which it or its assets are bound; and 

ii. Result in a breach of any law, rule, regulation, ordinance, order, judgement or decree of or undertaking to any court, government body, statutory authority or regulatory, administrative or supervisory body (including, without limitation, any relevant stock exchange or securities council) to which it is a party or by which it or its assets are bound, whether in Malaysia or elsewhere; 

g) No litigation, arbitration or administrative proceedings are taking place, pending or threatened against it, any of its directors or any of its assets, which, if adversely determined, might reasonably be expected to have a material adverse effect on its business, assets or conditions, or its ability to perform its obligations under this Islamic Note, the Issuer Agreement and any Security Documents; 

h) The Issuer shall comply, in all respects, with all applicable laws and regulations including but not limited to the CMSA and the Guidelines;

i) The Issuer is not a person or an entity that is prohibited by the SC or the Guidelines from raising funds or making an Issue Request or issuing an Islamic Investment Note through the Platform;

j) The Issuer is not a public listed company or a subsidiary of a public listed company; and
k) The Issuer is not an entity with a structure which is commercially or financially complex such as an investment fund company or a financial institution. 

 

7.2 The Issuer further represents and warrants as follows with regard to each Security Document and/or Security Party:

a) That the Security Party has full legal right authority and power to enter into and bind itself by the Security Documents and to exercise its respective rights and perform its respective obligations under the Security Documents and that all appropriate and necessary action have been taken to authorise the execution and delivery of the relevant Security Documents and the exercise by the Security Party of its rights and the performance by the Security Party of its obligations under the relevant Security Documents and the execution thereof does not exceed the power and authority of the Security Party or its officers executing the same;

b) That any corporate Security Party has in respect of the operations of its business complied or will comply with all relevant laws and have obtained all relevant licences, permits and approvals required to be obtained by the Security Party under the provisions thereof;

c) That each Security Document constitutes legal, valid and binding obligations of the Security Party and is enforceable in accordance with its respective terms and the obligation of the Security Party under the Security Document in respect of the payment of principal, profit, fees and other expenses and charges do not contravene any legislation or regulation binding on the Security Party; 

d) Save as otherwise disclosed in writing to CapSphere prior to the date hereof, no charges, pledges, liens, caveats, mortgages or encumbrances whatsoever exist on any of the assets of the Security Parties as security for any indebtedness or otherwise howsoever; 

e) That the execution of the Security Documents by the Security Parties and the exercise of its rights and performance of its obligations thereunder do not and will not contravene or violate the provisions of any agreement or other instrument to which any Security Party is a party or which is binding upon it or any of its assets, the provisions of its constitutive documents or the provisions of any applicable law, regulation or official or judicial order of any court or other governmental agency or authority:
f) That each Security Document to which a Security Party creates or once entered into, will create the security interest which it is expressed to create with the ranking and priority it is expressed to have;

g) That each Security Party has good and marketable title to the assets and properties subject to the security interest created by it pursuant to the Security Document and that such assets and properties are free from all charges, pledges, liens, caveats, mortgages or encumbrances whatsoever except the security interest created pursuant to, or permitted by the Security Document;

h) That all insurances/takaful required to be taken under the Security Document have been duly taken and are in full force and effect as required pursuant to the terms of the Security Document and no event or circumstance has occurred, and there has been no failure to disclose a material fact, which would entitle any insurer/takaful operator to reduce or avoid the relevant Security Party’s liability under any such insurance.

 

7.3 The Security Documents are intended to be and shall be continuing security for all moneys whatsoever now or hereafter and from time to time owing under the Islamic Notes. 

7.4 The Investor’s acceptance of this Islamic Note is subject to it representing that: 

a) All actions, conditions and things required to be taken, fulfilled and done (including the obtaining of any necessary consents), in order:

i. To enable the Investor lawfully to enter into, exercise its rights and perform and comply with its obligations under this Islamic Note and the Investor Agreement; and

ii. To ensure that those obligations are valid, legally binding and enforceable, have been taken, fulfilled and done; and 

b) The execution and delivery of, and the performance by it of its obligations under, this Islamic Note, and the Investor Agreement do not: 

i.Infringe, or constitute a default under, any instrument, contract, document or agreement to which it is a party or by which it or its assets are bound; and 

ii.Result in a breach of any law, rule, regulation, ordinance, order, judgement or decree of or undertaking to any court, government body, statutory authority or regulatory, administrative or supervisory body (including, without limitation, any relevant stock exchange or securities council) to which it is a party or by which it or its assets are bound, whether in Malaysia or elsewhere.
 

8. COVENANTS
 

8.1 The Issuer covenants with the Investor(s) that, as from the date of this Islamic Note until the date that the Principal Subscription Amounts and all monies (including any Profit and late payment charges) payable to the Investor(s) are fully paid up and discharged: 

a) The Issuer shall comply, in all respect, with all laws, if failure to do so has or is likely to have a material adverse effect on its business, assets or condition, or its ability to perform its obligations under this Islamic Note; 

b) The Issuer shall promptly, after becoming aware of them, notify the Investor and CapSphere of any Event of Default described in Section 9.1 below; 

c) The Issuer shall not pass any resolution or mandate approving the change in directors or partners of the Issuer or the divestment of any or all of the shareholding or any shareholder or partner of the Issuer, without first obtaining the prior written consent of CapSphere; 

d) The Issuer shall not apply for or obtain any loan, advance or financing from any third party (including any of its directors, shareholders, partners or any financial institution) or create any fixed or floating charge, lien (other than a lien arising by operation of law) or other encumbrance over the whole or any part of the undertaking, property or assets of the Issuer, without first obtaining the prior written consent of CapSphere;  

e) The Issuer shall not pass any resolution for the winding-up or dissolution of the Issuer, nor cause a petition for dissolution or winding-up to be presented against the Issuer, or the appointment of a receiver or receiver and manager of the respective undertakings or assets of the Issuer;

f) The Issuer shall forthwith at the request of CapSphere, do all acts and execute and/or procure the Security Parties to do all acts and to execute all necessary Security Document(s) in such form and content and at such time as may be requested by CapSphere for the purposes of securing the payment of all monies payable to the Investor(s) and/or CapSphere under this Islamic Note and/or the Issuer Agreement and/or for perfecting the securityies under the Security Documents;

g) The Issuer shall not declare, make or pay more dividends, reserves, charges, shareholder advances, fees or compensation to directors, management, advisors, consultants, partners and other officers of the Issuer, and loans to affiliates (whether in cash or in kind) than already declared, made or are already paying based on the reported figures (on the financial statements) of the last financial year of the Issuer immediately prior to the execution of this Islamic Note; 

h) The Issuer shall not sell, lease, transfer or otherwise dispose of more than 20% of its non-current assets, unless proceeds are used to pay down indebtedness to the Investor and/or CapSphere, and such sale, lease, transfer or disposal shall not be made otherwise than on arm’s length basis or term, and for full market value;

i) The Issuer shall not enter into any transaction that, in the sole opinion of CapSphere, puts the business of the Issuer in jeopardy or affects the ability of the Issuer to perform its obligations under this Islamic Note;

j) The Issuer shall not apply for, seek or obtain any other funding (in any amount) through any other peer-to-peer platform, operator or company for same purpose it has represented to the Investor and/or CapSphere in this Islamic Investment Note and/or the Issue Request; and 

k) The Issuer shall not use the Principal Amount or any part thereof for purposes other than that as specified in this Islamic Investment Note and/or the Issue Request
 

8.2 The Issuer irrevocably warrants and undertakes that its payment obligations and liabilities under this Islamic Note shall, at all times, rank ahead of or otherwise at least pari-passu in all respects with all its other present and future unsecured and in-subordinated payment obligations and liabilities to its other creditors.

 


9. EVENTS OF DEFAULTS
 

9.1 In the event that Issuer misses, fails to pay, or only partially pays any Instalment, Profit, late payment charges and/or other payment that is due to any Investor in accordance with the payment schedule specified in this Islamic Investment Note, or fails to pay or fully pay up the Islamic Note or the full outstanding Principal Subscription Amount and Profit and/or any payment payable to CapSphere under the Issuer Agreement (collectively the “Amount Due”) by the Maturity Date or the due date of any such payment, the Parties agree that CapSphere has the authority to act as follows:  

a) The right but not the obligation to report such default in payment to any credit bureaus it deems appropriate; 

b) To contact or attempt to contact the Issuer to remedy the default and make such payment of the Amount Due within ninety (90) days (or such other period as CapSphere shall in its discretion determine) of the date on which the Amount Due is due (“Said Period”).
 

For the avoidance of doubt, the Investor shall refrain from contacting the Issuer, and CapSphere shall have the sole right to contact and deal with or authorise any third party to contact and deal with the Issuer and to notify the Issuer to remedy the default and make such payment within the Said Period; 

c) If (i) the Amount Due is not fully paid within the Said Period; and or (ii) it becomes evident (in the sole discretion of CapSphere) that the Issuer is unable to satisfy the Amount Due, CapSphere shall at the cost and expense of the Investor, be entitled, but shall not be obliged to, and the Investors hereby authorises CapSphere to, in CapSphere’s sole and absolute discretion and without any further consent or agreement required from the Investor to, do any one or more of the following: 

(1) Appoint any third party professional debt collector to collect from the Issuer the Amount Due. The Investor shall bear the costs and expenses incurred in relation to the services provided by such third party professional debt collector, based on the schedule of rates as from time to time notified on the Platform generally or to the Investor; 

(2) On its own or authorise a third party to enter upon any premises where any of the assets charged or secured under the Security Documents are situated and take possession and control of such assets and all documents relating thereto, and to deal with the same in accordance with the provisions of the Security Documents;

(3) Appoint a solicitor to commence legal proceedings on behalf of the Investor against the Issuer, to recover any the Amount Due; and the Investor hereby authorises and appoints CapSphere as its representative to act in any manner it deems fit (including agreeing to any settlement with the Issuer as CapSphere deems reasonable) in connection with such proceedings. All costs and expenses (including legal fees on solicitors and client basis) incurred in connection with the legal proceedings shall be solely borne by the Investor. The Investor agrees, in the event that CapSphere commences proceedings against the Issuer under this Section, to pay such fees and costs as notified by CapSphere which shall include fees earned and charges incurred by CapSphere. The Investor agrees that while costs may be incurred in connection with efforts to recover the Principal Subscription Amount, there is no assurance that such efforts may be successful in recovering any amounts due under the Islamic Investment Note; and/or

(4) Take such other actions as may from time to time deemed fit by CapSphere in its sole discretion (including but not limited to restructuring of the payment of the Amount Due) or be authorised by the Investor (subject to the agreement of CapSphere).

For the avoidance of doubt, all costs and expenses incurred or to be incurred by CapSphere or any third party in connection with or incidental to any of the above-said shall be solely borne by the Investor

 

9.2 Each of the following events or circumstances set out in this Section 9.2 is an Event of Default: 

a) The Issuer has breached any term, covenant, warranty or undertaking of this Islamic Note, the Issuer Agreement or Security Documents, and such default (if capable of being remedied) is not remedied within seven (7) Business Days of the earlier of: 

i. CapSphere notifying the Issuer of the default and the remedy required; or 

ii. The Issuer becoming aware of the default; 

b) Any representation, warranty or information made, given or submitted by the Issuer in Section 7 above or under this Islamic Note, the Issuer Agreement and/or the Security Documents is incomplete, untrue, incorrect or misleading in any material respect; 

c) The membership of the Issuer in the Platform, the online platform on which this Islamic Note was executed, is terminated for any reason under the Issuer Agreement;

d) The Issuer ceases to pay its debts or is unable to pay its debts as they fall due or is deemed unable to or admits its inability to do so or makes a general assignment for the benefit of or a composition with its creditors; 

e) Any action, proceedings, procedure or step is taken for: 

i. The suspension of payments or a moratorium of any obligation of the Issuer to pay or repay money, present or future, actual or contingent, sole or joint (“Indebtedness”); 

ii. Winding up, dissolution, administration or reorganisation (using a voluntary arrangement, scheme of arrangement or otherwise) of the Issuer; or 

iii. The appointment of a liquidator, receiver, administrator in respect of the Issuer or any part of the undertaking or assets of the Issuer. 

f) The Issuer commences negotiations, or enters into any composition, compromise, assignment or arrangement, with one or more of its creditors with a view to rescheduling any of its Indebtedness without the prior written consent of CapSphere; 

g) The Issuer ceases, or threatens to cease, to carry on all or a substantial part of its business; 

h) There is a change of directors or partners of the Issuer, where any existing shareholder or partner of the Issuer divests all or any part of his shareholding, direct or indirect, in the Issuer, without the prior written consent of CapSphere; 

i) Litigation, arbitration or administrative proceedings are initiated, pending or, to the Issuer’s knowledge, threatened against the Issuer, any of its directors, its partner or any of its assets, which, if adversely determined, might reasonably be expected to have a material adverse effect on its business, assets or conditions, or its ability to perform its obligations under this Islamic Note or the Issuer Agreement;

j) Any agreement entered into between the Issuer and CapSphere (including the Issuer Agreement) is terminated for any reason pursuant to the terms of such agreement or otherwise; 

k) The Principal Subscription Amount or any part thereof is used for purposes different from those represented to the Investor and/or CapSphere in this Islamic Investment Note or Issuer Request;

l) The Principal Subscription Amount or any part thereof is transferred, in any form, to any other entity that the Issuer or any of their immediate relatives have a vested interest in;

m) It is or will become unlawful for the Issuer to perform or comply with any one or more of its obligations under this Islamic Note or the Issuer Agreement.

 

9.3 At any time after an Event of Default has occurred, CapSphere may, upon notice to the Issuer, on behalf of the Investor(s), terminate this Islamic Note and demand immediate payment of the entire amount of the Commodity Sale Price and late payment charges up to the date of payment (subject to clearance of such funds) and any payment payable to CapSphere under the Issuer Agreement, in accordance with Section 9.1.

10. INDEMNITIES 

10.1 Each of the Issuer and the Investor(s) shall keep CapSphere fully and effectively indemnified against all losses, costs, damages, claims, demands, actions, proceedings, liabilities and expenses whatsoever, that may incur in connection with or arising from any material breach of its representations, warranties, obligations, covenants and undertakings under this Islamic Note, the Agreements and/or the use of the Platform. 

 


11. COSTS, EXPENSES, AND TAXES 

11.1 Each of the Issuer and the Investor(s) shall bear all their own costs and expenses in relation to the entering of this Islamic Note and as more particularly set out in the Platform and/or the Agreements, including the administration fees to be paid to CapSphere.

 


12. NOTICES 

12.1 
All notices, demands or other communications required or permitted to be given or made under this Islamic Note between the Investor(s) and the Issuer shall firstly be made to CapSphere through the online messaging system on the Platform or email, and immediately thereafter to CapSphere, in writing and delivered personally or sent by prepaid registered post with recorded delivery, addressed to CapSphere at its registered address or to such other address as CapSphere may from time to time duly notify the first mentioned Party in writing. Any such notice, demand or communication by the Investor to CapSphere shall be subject to actual receipt by CapSphere. 

12.2 The address, facsimile number, telephone number and email address of CapSphere for the purposes of this Islamic Note are specified on the Platform. 

12.3 Any such notice, demand or communication shall be deemed to have been duly served (a) if sent through the online messaging system on the Platform or delivered personally, immediately or (b) if sent by prepaid registered post with recorded delivery two (2) Business Days after posting and in proving the same it shall be sufficient to show that personal delivery or prepaid registered post was made or that the envelope containing such notice was properly addressed, duly stamped and posted, or that the online message was properly addressed and dispatched.

 

13. GENERAL

 

13.1 Further Assurance. Each Party shall execute such other documents, do such acts and things and take such further actions as may be reasonably required by the other and/or CapSphere or desirable to give full effect to the provisions of this Islamic Note and the transactions hereunder and each Party shall use its best endeavours to procure that any necessary third party shall execute such documents, do such acts and things and take such further actions as may be reasonably required by the other and/or CapSphere for giving full effect to the provisions of this Islamic Note and the transactions hereunder. 

13.2 Time of Essence. Any time or period mentioned in any provision of this Islamic Note may be extended by mutual written agreement between the Parties but as regards any time, date or period originally fixed or any time, date or period so extended as aforesaid, time shall be of the essence. 

13.3 Remedies. No remedy conferred by any of the provisions of this Islamic Note is intended to be exclusive of any other remedy which is otherwise available at law, in equity, by statute or otherwise and each and every other remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law, in equity, by statute or otherwise. The election of any one or more of such remedies by a Party hereto shall not constitute a waiver by such Party of the right to pursue other available remedies. No failure on the part of a Party hereto to exercise, and no delay in exercising any right under this Islamic Note will operate as a waiver thereof, nor will any single or partial exercise of any right under this Note preclude any other or further exercise of any right thereof or of the exercise of any other right. 

13.4 Release and Indulgence. Any liability to any Party hereto may in whole or in part be released, compounded or compromised or time of indulgence given by that Party in that Party’s absolute discretion as regards the other Party hereto under such liability without in any way prejudicing or affecting the first Party’s rights against the second Party. 

13.5 Assignment. Save as provided for in this Islamic Note and the Agreements, none of the Parties shall have the right to assign or transfer any of such rights, undertakings, agreements, duties, liabilities and/or obligations hereunder. 

13.6 Entire and Continuing Effect of Islamic Investment Note. This Islamic Note and the documents referred to in this Islamic Note collectively embody the entire terms and conditions agreed upon by the Parties as to the subject matter of the same and supersedes and revokes in all respects all other documents, agreements, letters of intent, and undertakings entered into between the Parties, whether such be written or oral, with respect to the subject matter hereof. All provisions of this Islamic Note shall so far as they are capable of being performed or observed continue in full force and effect notwithstanding completion of the matters set out therein except in respect of those matters then already performed and except where expressly stated to the contrary. This Islamic Note shall be binding on and shall endure for the benefit of each of the Parties’ successors in title or legal personal representatives and permitted assigns, as the case may be. 

13.7 Severance. If any provision of this Islamic Note or part thereof is rendered Shariah non-compliant, void, illegal or unenforceable by any legislation to which it is subject, it shall be rendered Shariah non-compliant, void, illegal or unenforceable to that extent and no further and, for the avoidance of doubt, the rest of this Islamic Note shall continue in full force and effect and the Shariah complaint, legality, validity and enforceability of the whole of this Islamic Note in any other jurisdiction shall not be affected.

 

13.8 Governing Law and Jurisdiction. This Islamic Note and the rights and duties of the Parties shall be governed by, and construed in accordance with, the laws of Malaysia. Any dispute arising out of or in connection with this Islamic Note and/or the documents referred to herein, including any question regarding their existence, validity or termination, shall be referred to and finally resolved by the Courts of Malaysia and the Parties hereby unconditionally and irrevocably submit to the exclusive jurisdiction of the Courts of Malaysia. The Issuer agrees to make an application for the courts to refer any questions involving any Shariah matter to the Shariah Advisory Council of the SC for a ruling, and irrevocably agree to be bound by any decision or conclusion related to Shariah matter pronounced or made by the Shariah Advisory Council of the SC in respect of this Islamic Investment Note.

13.9 Privacy and Data Protection. This Islamic Note shall be subject to, and the Parties agree to be bound by and shall comply with, the Personal Data Protection Notice on the Platform.