1. CROWD2LET CAPITAL LTD CROWDFUNDING AGREEMENT

These are the terms and conditions on which all your investments in Crowdfunding Companies on the Crowd2Let crowdfunding platform at http://www.crowd2let.com (the “Website”) will be held. The Website is operated by Prosper Capital LLP (the “Operator”). The Operator is authorised and regulated by the Financial Conduct Authority, whose address is 25 The North Colonnade, London E14 5HS. In accordance with FCA Rules the Operator proposes to treat you as a Retail Client. Unless otherwise agreed, the Operator will communicate with you in English. You may contact the Operator, and the Operator may contact you, by telephone, in writing and by email.

1. DEFINITIONS

1.1 The following terms shall have the following meanings in this Agreement:

“Application” the online application form which will be completed by you each time you make an investment in a Crowdfunding Company on the Website;
“Conflicts Policy” our policy on managing conflicts of interest;
“Crowdfunding Company” means a company which you have invested in or which is available for you to invest in through the Website;
“Administrator” Woodside Corporate Services Limited or such other person as is authorised and regulated by the FCA and whom the Operator may appoint to provide receiving agent, custodial or nominee services for the Website;
“FCA” the Financial Conduct Authority (or any successor regulator);
“FCA Rules” all relevant rules and regulations made by the FCA from time to time which affect our performance of this Agreement;
“Investment Documentation” means the terms and conditions of each investment in a Crowdfunding Company, which must be accepted by you on the Website before you can invest;
“Investors” investors who invest in one or more of the Crowdfunding Companies;
“Nominee” WCS Nominees Limited, (an associate of the Administrator) or any other nominee or custodian appointed by the operator;
“Property Manager” means MRA Property or such other property management company as may be appointed by each Crowdfunding Company to manage the property held by it;
“Start Date” the date upon which you first invest in the Website under the terms of this
Agreement;
“Subscription Price” the subscription price to be paid for your Shares under the terms of the Investment Documentation;
“your Account” means the total of:
(a) all shares held by you in Crowdfunding Companies; and
(b) all cash held on your account (after deduction of expenses and charges);
“your Shares” means the shares held by you in each Crowdfunding Company you invest in.

1.2 Where this Agreement uses and defines a term that is also used in the Investment Documentation, the definition in this Agreement prevails.

1.3 Words and expressions defined in the FCA Rules which are not otherwise defined in the Agreement shall, unless the context otherwise requires, have the same meaning in this Agreement.

1.4 Any reference to a statute, statutory instrument, rules or regulations are taken to refer to such statute, statutory instrument, rules and regulations amended, re-enacted or replaced from time to time and to any codification, consolidation, re-enactment or substitution of them.

2. APPOINTMENT

2.1 This Agreement comes into force on the date you electronically sign the Application (or, if later, the date on which we complete any relevant procedures for the verification of your identity etc., in accordance with prevailing anti-money laundering regulations).

2.2 By completing and electronically signing the Application, you:
(a) appoint the Operator as manager of your Account;
(b) appoint the Administrator to act as custodian of investments in your Account; and
(c) agree to the terms of this Agreement.

2.3 Under the FCA rules you have the right to cancel this Agreement for a period of up to 14 days. In this regard, you are advised that:
(a) in order to cancel this Agreement, you must ensure that your written instructions to cancel are dispatched to the Administrator before the expiry of the 14 day cancellation period;
(b) if you cancel in accordance with (a), we will arrange for the return of your Subscription Price (but will deduct bank and transfer chatges (including charges levied by any electronic money provider) together with our expenses incurred in relation to your application to invest. We will use reasonable endeavours to return the balance of your Subscription Price within 30 days of receipt of your written instructions to cancel; and
(c) the cancellation right under this clause 2.3 applies only to any subscription in the 14 days and does not require us to cancel any previous investments which may already have been made for your Account.

2.4 The Operator is entitled at its discretion to reject your application in part or in full.

3. INVESTMENTS

3.1 There is no limit to the number of Crowdfunding Companies that you may invest in under this Agreement but your investment in any one Crowdfunding Company may not exceed the maximum amount being raised by that Crowdfunding Company at the time you invest. The minimum amount that may be invested in any Crowdfunding Company, after deduction of any charges, is £500. If you pay the Subscription Price using an electronic money provider, payment will be subject to a separate contract between you and the electronic money provider.   Any cash amounts paid to a Crowdfunding Company will be held in your Account in the name of the Administrator until it is used to subscribe for shares in a Crowdfunding Company. No interest will be payable to you on any amounts held in your Account.

3.2 Subject to this Agreement (and in particular but without limitation clause 3.4 below) and the Investment Documentation, we will exercise all rights relating to your Shares (including the execution of contracts on your behalf). We shall not, except as expressly provided in this Agreement or unless otherwise authorised, have any authority to act on your behalf or as your agent.

3.3 Subject to 3.4 and 5.6 below, you shall retain the right to exercise or direct the exercise of all voting and other rights attaching to your Shares. If your vote is required in relation to any of your Shares, we will request your guidance as to how you wish your vote to be exercised and shall direct the Nominee to vote in accordance with the wishes of the majority (by investment amount) of those Investors who respond.

3.4 You accept that we shall have the discretion to sell your Shares in a Crowdfunding Company or the property underlying the Crowdfunding Company where we believe that to do so is in the overall best interests of all Investors in that Crowdfunding Company.

3.5 We have categorised you as a retail client for FCA Rules purposes and accepted your application to invest in Crowdfunding Copanies through the Website on the basis of an assessment of this type of investment is suitable for you. That assessment has been conducted through your having provided us with information in the suitability questionnaire you completed when you registered as a user of the Website. We will rely on this information in assessing the suitability of the investment for you. You must let us know immediately if your circumstances change and this information is no longer correct.

4. TRANSACTIONS

4.1 In general, the number of shares in a Crowdfunding Company allocated to you will be calculated with reference to the proportion of money invested by you pro rata to the total amount of money invested by other investors into a particular Crowdfunding Company. Minor variations in the allocation made on behalf of your Account may occur in order to enable Investors to hold whole shares or other securities.

4.2 Crowdfunding Companies are unlisted private companies and it is unlikely that you will be able to sell your Shares until the property is sold and the Crowdfunding Company is wound up.

5. CUSTODY

5.1 By virtue of this Agreement and the Administrator’s Terms of Business, the Administrator will arrange for the safekeeping of investments and cash in your Account from time to time, and for the settlement of transactions, collection of income and the effecting of other administrative actions in relation to your Account. We have assessed the Administrator in accordance with the FCA Rules to ensure that it is an appropriate person to carry out its functions under this Agreement.

5.2 All investments in your Account will be registered in the name of the Nominee. They will therefore be beneficially owned by you at all times, although the Nominee will have the legal title to them and will hold any documents evidencing ownership.

5.3 Neither the Operator nor the Administrator may, subject to clause 5.4, lend your Account’s investments or documents evidencing ownership to a third party or borrow against the security of such investments or documents.

5.4 Individual customer entitlements will not be identifiable by separate certificates or other physical documents or external electronic record. In the event of an irreconcilable shortfall were the Nominee to default, all Investors will share in that shortfall pro-rata to their investments. On occasion, investments may be used to settle another person’s transaction, which will not affect the Administrator’s record of your entitlements. The Administrator may deliver or accept delivery of certificates on behalf of the Nominee. The Administrator accepts responsibility for holdings in the name of the Nominee and for the acts and omissions of the Nominee. The Nominee holds your Shares in a trust under which the interests of all Investors are created or extinguished on the making of acquisitions or disposals in accordance with this Agreement.

5.5 We or the Administrator may realise an investment in your Account in order to discharge any obligation that you may have under the Agreement, for example the payment of fees, costs and expenses.

5.6 You irrevocably empower and authorise us to direct the Administrator to exercise any conversion, subscription, voting or other rights relating to investments in your Account (which we may nevertheless exercise or refrain from exercising, at our discretion). You acknowledge and agree that the Administrator is not obliged to seek or to accept any instruction or direction directly from you to exercise any rights in respect of any investment in your Account.

5.7 Cash received from you or on your behalf will be deposited with an authorised credit institution in the UK in the name of the Administrator and with customer trust status, together with cash balances belonging to deposits held by the Administrator on behalf of third parties. Cash within your Account will be treated as client money (as understood under the FCA Rules), and will be deposited by the Administrator in a client bank account in the name of the Administrator with an authorised credit institution in the UK. No interest will be payable to you on any amounts held within your Account.

6. REPORTS AND INFORMATION

6.1 You will receive half yearly statements produced by the Administrator in respect of your Account for the periods ending on or around 5 April and 5 October.

6.2 Reports on your investments are available in your Crowd2Let dashboard
6.3 Details of dividends which are received in respect of investments in your Account will be provided in respect of each tax year ending 5 April and appropriate statements sent to you in accordance with sections 1105 of the Corporation Taxes Act 2010.

6.4 Contract notes will be provided on the Website for each transaction for your Account.

7. FEES AND EXPENSES

7.1 An initial fee of 5% of your Subscription Price will be payable to us.

7.2 Crowdfunding Companies will generally employ the Property Manager to manage property held by them. The fees of the Property Manager will be set out in the Investment Documentation, 9% of the gross rental yield will be charged by the Property Manager to each Crowdfunding Company.

7.3 An administration and compliance fee of 1% of the gross rental yield will also be charged by the Operator to each Crowdfunding Company. Should we or our associates receive transaction, directors or other fees from Crowdfunding Companies or third parties, we or our associates shall be entitled to retain these fees in full.

7.4 The Operator and the Administrator shall both be entitled to recover reasonable expenses incurred in relation to their respective functions under this Agreement.

7.5 The Administrator may deduct from your Account or the Crowdfunding Companies:
(a) an administration fee at the rate of £50 per annum payable in advance; and
(b) a dealing commission of 0.35% of the value of each transaction made on your behalf.

7.6 All fees, costs and expenses that are subject to VAT or any other taxation will be payable from your Account together with a deduction for VAT or such other taxation.

7.7 If at any time your Account does not have sufficient cash liquidity to pay in full any fees or expenses (plus VAT or other tax where appropriate) as and when these become due, we will carry forward such unpaid amounts and debit them to your Account when dividends are paid or when sufficient cash is generated through realisations of investments. Please note that we will provide for sufficient cash to be retained in your Account following realisations of your Shares to cover fees which we reasonably anticipate to fall due for a rolling 12 month period; this means that not all monies received from realisations in your Account will be available for immediate distribution. We reserve the right to charge interest on outstanding fees and will reflect any such interest actually charged in the periodic statements that you receive.

7.8 On termination, pursuant to clause 14, your liabilities, including fees and expenses, shall be allocated to your Account and, if there is insufficient cash, investments may be retained and/or realised in order to meet such outstanding liabilities.

8. YOUR OBLIGATIONS

8.1 By confirming your agreement to the Application you have made representations which we will rely upon. You must immediately inform us in writing of any material change in circumstance and any change in the information provided in the Application.

8.2 In addition, you must provide us with any information which we or the Administrator may reasonably request for the purposes of administering your Account.

9. DELEGATION AND ASSIGNMENT

9.1 We or the Administrator may engage agents, including associates, to perform any of our respective functions under this Agreement. We or the Administrator (as applicable) will act in good faith and with due diligence in the selection, use and monitoring of these agents. Any such engagement of agents shall not affect our or the Administrator’s respective acknowledgment of liability under this Agreement.

9.2 For the avoidance of doubt, we will not be liable for the acts or omissions of the Administrator or the Nominee and neither the Administrator nor the Nominee will be liable for our acts or omissions.

10. INTERESTS AND DISCLOSURE

10.1 We may provide services to any person, including to the Crowdfunding Companies, and shall not in any circumstances be required to account to you for any profits earned in connection with such services. However, we will use reasonable endeavours to ensure fair treatment as between you and other customers of the Operator in accordance with the FCA Rules and the Conflicts Policy.

10.2 We may promote transactions in which we or any associate of ours may have, directly or indirectly, a material interest or in relation to which we may have a relationship of any description with another party, which may involve a potential conflict with our duty to you. However, our employees are required to comply with the Conflicts Policy and disregard any such interest, relationship or arrangement when managing your Account.

10.3 A copy of the Conflicts Policy is available from us on request.

11. LIABILITY

11.1 Both we and the Administrator will at all times act in good faith and with reasonable care.

11.2 We shall not be liable for any loss to you arising from any decision you make to invest or not to invest in any of the Crowdfunding Companies or for other action taken in accordance with this Agreement, except to the extent that such loss is directly due to our negligence, wilful default or fraud.

11.3 Neither we nor the Administrator shall be liable for any defaults of any counterparty, agent, banker or other person or entity which holds money, investments or documents of title for you or for the Crowdfunding Companies. Notwithstanding this, the Administrator is fully liable for the Nominee.

11.4 In the event of any failure, interruption or delay in the performance of our or the Administrator’s obligations resulting from acts, events or circumstances not reasonably within the relevant party’s control, neither we nor the Administrator shall be liable or have any responsibility of any kind for any loss or damage suffered by you. Such acts shall include: war, riot, fire, civil commotion or acts of terrorism; severe weather conditions; industrial action; acts of governmental or regulatory authorities and breakdown of computer or communications systems.

11.5 Shares in Crowdfunding Companies will generally be unquoted securities. Unquoted securities carry a higher degree of risk than securities quoted on a stock exchange or regulated market. There is a restricted market for such securities and it can be difficult to obtain reliable valuations for them. By signing the Application and entering into this Agreement you confirm:
(a) your understanding that there is no promise as to the performance of any of your Shares; and
(b) that you have properly considered the risk warnings set out in the Investment Documentation or have taken professional advice as to their significance and importance as you judged appropriate.

12. TERMINATION AND EXIT

12.1 Each Crowdfunding Company will generally seek to offer Investors an opportunity to exit around the fifth anniversary of the purchase of the underlying property. However, the property market is cyclical and there may not be an opportunity to exit at a reasonable price or at all at that time. Each Crowdfunding Company will decide, after taking advice from the Property Manager, when it is appropriate to offer Investors an opportunity to exit. At such time, you will be asked to indicate your preference as to whether the underlying property of that Crowdfunding Company should be sold and if the holders of 50% or more of the voting shares in that Crowdfunding Company vote that the underlying property should be sold, then the Property Manager will seek to arrange a sale of the underlying property. On a successful sale of the underlying property the Crowdfunding Company which held it will be wound up and the remaining assets, less costs of sale, tax, expenses, outstanding fees and any other liabilities will be returned to shareholders.

12.2 You may withdraw the uninvested and uncommitted portion of your investment held as cash by the Administrator from your Account prior to termination of your Account by giving written notice to us. Upon receipt of your withdrawal notice we will promptly arrange for the transfer to you of the amount of cash you wish to withdraw. You should note that:
(a) notice of withdrawal, once served, is irrevocable;
(b) notice to withdraw all of the cash value of your Account at a time prior to the making of any investments is the equivalent of notice by you to terminate this Agreement;
(c) if you serve notice to withdraw from your Account money of such amount as would in our opinion make the remainder of your Account uneconomic or impracticable to administer under the terms of this Agreement, we may at our discretion elect to treat that notice as equivalent to a notice to terminate this Agreement (and we will advise you accordingly in writing);
(d) other than in the case of a termination referred to in (c), we are entitled to treat a notice to withdraw as being subject to our right to retain sufficient cash within your Account to meet our fees under clause 7 on the full amount of your investments (as if the withdrawal had not occurred).

12.3 Subject to the provisions of clause 13, you may terminate this Agreement on not less than three months’ written notice to us. Termination shall not require us to procure any purchaser for the Shares in your Account, nor to purchase them for our own account, and accordingly we do not give any commitment in the event of your terminating this Agreement that we will be able to sell your Shares or transfer them to you prior to the date on which your Account is terminated under clause 13.1.

12.4 If we:
(a) give you not less than three months’ written notice of our intention to terminate the Website as a whole, or our role as operator of the Website; or
(b) cease to be appropriately authorised by the FCA or become insolvent; or
(c) are unable to procure an appropriately authorised custodian,

we shall endeavour to make arrangements to transfer the cash and Shares in your Account to another operator or custodian on the basis that the latter shall assume the required role under this Agreement. If, however, in any such circumstances, we are unable to appoint a successor, this Agreement shall at that point terminate and, subject to clause 13, investments in your Account shall be transferred into your name or as you may otherwise direct.

13. CONSEQUENCES OF TERMINATION

13.1 On termination of this Agreement, we will use reasonable endeavours to expeditiously complete all transactions in progress at termination.

13.2 Termination will not affect accrued rights, existing commitments or any contractual provision intended to survive termination and will be without penalty or other additional payments, except that you will pay fees, expenses and costs properly incurred by us up to the date of termination and payable under the terms of this Agreement.

13.3 On termination, we may retain cash and/or realise Shares in your Account as may be required to settle transactions already initiated and to pay your outstanding liabilities, including fees and expenses payable to us and the Administrator under clause 7.

14. CONFIDENTIAL INFORMATION

14.1 The Property Manager, Operator and the Administrator will at all times keep confidential all information acquired in consequence of their respective roles and duties as manager of the properties owned by the Crowdfunding Companies, operator of the Website and custodian of the investments comprised within your Account, except for information in the public domain; or which we, the Property Manager or the Administrator may be entitled or required to disclose by law; or regulation or by the FCA, HMRC or other government agencies; or given by us to professional advisers where reasonably necessary for the performance of their professional services; or which you authorise us, the Property Manager or the Administrator to disclose.

14.2 None of the Property Manager, Operator nor the Administrator shall be obliged to make use of any information which comes to the notice of an employee, officer or agent of theirs or of any respective associate but properly does not come to the actual notice of the personnel whom we or they respectively designate to actually provide services under this Agreement.

15. COMPLAINTS AND COMPENSATION

15.1 We and the Administrator have established procedures in accordance with the FCA Rules for consideration of complaints. Details of these procedures are available on request. Should you have a complaint, you should contact either us or the Administrator, as appropriate. If we or the Administrator cannot resolve the complaint to your satisfaction, you may be entitled to refer it to the Financial Ombudsman Service.

15.2 We and the Administrator participate in the Financial Services Compensation Scheme, established under the Financial Services and Markets Act 2000, which provides compensation to eligible claimants in the event of a firm being unable to meet its customer liabilities. Payments under the protected investment business scheme are limited to a maximum of £50,000 per person. Further information is available from us or the Administrator, and from the FSCS web site www.fscs.org.uk.

16. COMMUNICATIONS

16.1 Notices of instructions to us should be provided electronically through the secure messaging service on the Website.

16.2 We may rely and act on any instruction or communication which purports to have been given by persons authorised to give instructions by you under the Application or subsequently notified by you from time to time and, unless we receive written notice to the contrary, whether or not the authority of such person shall have been terminated.

16.3 All communications which we make with you under this Agreement shall be in English.

16.4 You accept that we may communicate an unsolicited real time financial promotion (e.g. a telephone call promoting investments) to you.

17. GENERAL

17.1 We may amend this Agreement by giving you not less than 10 business days’ written notice by email to the email address provided by you when you first registered with the Website . We may also amend this Agreement by giving you written notice with immediate effect if such amendment is necessary in order to comply with the FCA Rules or other legal requirements.

17.2 All data which you provide to us or the Administrator is held by us or the Administrator subject to the Data Protection Act 1998. You agree that we and the Administrator may pass personal data:
(a) to other persons insofar as is necessary in order to provide services as set in this Agreement;
(b) to the FCA, HMRC and any other governmental or regulatory authority; and
(c) in accordance with all other applicable legal or regulatory requirements.

We will not share data obtained from you with other persons or in other circumstances without your prior consent.

17.3 We may assign this Agreement to any appropriately regulated associate, and will give you notice if we do so. You may not assign this Agreement as it is personal to you.

17.4 This Agreement, together with the Investment Documents, the Application and the Administrator’s Terms of Business, comprises the entire agreement between us, the Administrator and you relating to the administration of your Account.

17.5 A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

17.6 If any provision of this Agreement shall be held to be invalid, unlawful or unenforceable to any extent, such provision shall not affect the validity, legality or enforceability of the remainder of this Agreement.

17.7 This Agreement shall be governed by and construed in accordance with English Law and the parties submit to the exclusive jurisdiction of the English Courts.

18. CONFIRMATIONS AND REPRESENTATIONS

18.1 By electronically signing the Application, you confirm each of the following:
(a) you are applying for Shares on your own behalf;
(b) before you invest in any Crowdfunding Company you will read the relevant Investment Documentation and take its provisions into consideration, in particular with regard to the risk factors;
(c) you acknowledge that we will collect any dividends and other entitlements arising on your Shares, and that as the beneficial owner of your Shares you will be liable for all personal taxation in respect of your Account; however, you agree and understand that tax may be deducted from payments due to you if it is due to be deducted under any applicable law and practice.