MEMBERSHIP & NOMINEE AGREEMENT

MEMBERSHIP & NOMINEE AGREEMENT 

This Membership & Nominee Agreement (the "Agreement") dated 02/12/2021 is made between:

  1. Crowd for Angels (UK) Limited, a company incorporated in England and Wales under No. 03064807 whose registered office is at 8 Little Trinity Lane, London, United Kingdom, EC4V 2AN (“CfA”); and
  2. [members_name] You.


Crowd for Angels (UK) Limited, a company incorporated in England and Wales under No. 03064807 whose registered office is at 8 Little Trinity Lane, London, United Kingdom, EC4V 2AN hereinafter referred to as ‘CfA’ or ‘We’ set out the terms and conditions upon which CfA offers a CfA Member (who is acting in the capacity of a CfA Investor) herein referred to as ‘You’ and ‘Your’ a licence to use the CfA Platform located at www.crowdforangels.com (the ‘Site’) (the ‘Membership & Nominee Agreement’). This Membership & Nominee Agreement incorporates the Nominee Terms set out at Schedule 1 as well as the Privacy Policy, the Website Terms of Use and the Cookie Policy by these references (collectively called the ‘CfA Agreement’).

Crowd for Angels (UK) Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) (under number 176508), 12 Endeavour Square,  London E20 1JN.

  1. DEFINITIONS

         The definitions to be read with this Membership & Nominee Agreement are set out in full at Paragraph 41.

  1. GENERAL

2.1    The terms in this Membership & Nominee Agreement shall remain in full force and effect to the extent that a CfA Member makes use of the CfA Platform and/ or the Site (including during which any user-generated content (“UGC”) remains displayed on, or stored by, the Site) unless terminated by You or by CfA in accordance with the terms herein. Please read this Membership & Nominee Agreement carefully and We strongly advise You to keep a printed or electronically stored copy for Your future reference.

2.2    CfA acts as an intermediary host provider of the CfA Platform which is a crowdfunding platform dedicated to facilitating an online venue whereupon CfA Members can interact with CfA and each other. A CfA Member who is acting as a Director of an Investee Company can create, post and promote a Pitch to invite investment or token sales and a CfA Member acting as a CfA Investor can view one or more Pitches and invest in the Investee Company by way of Shares, Loan Notes, Loans, Tokenised Securities or Tokens by virtue of their CfA Membership, both parties can further administer their investment activities on the CfA Platform via the CfA Account which is accessible by way of a CfA Login.

2.3    By using the Site and/ or the CfA Platform, You expressly agree to be bound by this Membership & Nominee Agreement and all applicable laws and regulations governing Your use of the CfA Platform and Your CfA Membership. This Membership & Nominee Agreement forms a legally binding contract between You and CfA and applies to all CfA Members acting as CfA Investors as applicable who may also be contributors of UGC posted on the Site.

2.4    In addition to this Membership & Nominee Agreement, You may enter into several other contracts directly with CfA or via CfA. For example, acting as a CfA Investor, You may enter into an Investment Agreement and receive a Nominee Deed of Trust each time You make an investment through the CfA Platform. By using the Site, You are deemed to have agreed to the Privacy Policy, the Website Terms of Use and the Cookie Policy. All of these agreements and other agreements You may enter into in connection with Your use of the CfA Platform, are intended to be consistent with each other and should be read and interpreted together, but if a conflict arises, the terms of any agreement to which You agree after the date of this Membership & Nominee Agreement will prevail, while the terms of this Membership & Nominee Agreement will prevail over the terms of any agreement to which You agreed before the date of this Membership & Nominee Agreement.

2.5    We may choose to amend this Membership & Nominee Agreement from time to time. If We choose to amend the Membership & Nominee Agreement, We will notify You by e-mail of the amendments before they take effect. If We provide You with such notice and You do not object to an amendment by the means given in the notice prior to the amendment taking effect, You will be deemed to have agreed to the amendment. If You object to an amendment, such amendment will not be effective with respect to You, but Your rejection will be deemed to constitute Your notice of termination of Your CfA Membership in accordance with Paragraph 27. CfA reserves the right to change the terms in the Privacy Policy, the Website Terms of Use and the Cookie Policy at any time without notice, effective immediately upon posting on the Site. Please check the Site periodically. You agree that CfA will treat Your use of the Site as acceptance of these amendments including Your continued use subsequent to any changes being posted on the Site.

2.6    You should read these terms carefully and ensure that You understand the effect before proceeding to use the Site and/ or the CfA Platform. If You disagree with any part of these terms, do not use the Site and/ or the CfA Platform. CfA Members who violate these terms herein may be subject to review, which can result in suspension of Your CfA Membership and/ or termination which could also bar You from future use of the Site and/ or the CfA Platform. CfA reserves the right to suspend or terminate Your CfA Membership at any time and/or take appropriate legal action against You.

 

  1. CfA MEMBERSHIP & THE CfA PLATFORM

3.1    CfA Users agree to comply with the terms in this Membership & Nominee Agreement in full as applicable. In order to join CfA as a CfA Member, You must be either:

(a)   a natural person who is 18 years or over; or

(b)   a legal person, including a limited company or a limited partnership (which We refer to as an “Institutional Member”).

(“CfA Membership Criteria”)

3.2    In Executing this Membership & Nominee Agreement, You warrant to CfA that You meet this CfA Membership Criteria (which for the avoidance of doubt is NOT the same criteria You must meet in order to post a Pitch as a CfA Listing and invest in an Investee Company or purchase Tokens in a Token Generation Company). You must inform CfA if a change in circumstances means that You no longer meet the CfA Membership Criteria which shall result in suspension of Your CfA Membership. Such may be reinstated as circumstances permit. You may only become a CfA Member once.

3.3    You may not attempt to create multiple CfA Memberships for Yourself by using different e-mail addresses or other identifying information in order to abuse the terms of the licence granted herein.

3.4    When You visit the CfA Platform and apply to join as a CfA Member, You will be asked to input various bits of information including Your email and Your password. You will also be asked to review and accept the terms in the Membership & Nominee Agreement. After You have Executed this Membership & Nominee Agreement, You will be sent an e-mail and asked to click on a link for verification purposes. This helps us to reduce spam. Once You have done so, You will be able to log on to the CfA Platform using Your email and password which shall represent Your CfA Login. Your CfA Login is personal to You and is not transferable. As long as the correct CfA Login is entered, We will assume that You are the person conducting activity on the CfA Platform.

3.5    You may not share Your CfA Login with anyone else, and, in the event You do so, You will be fully responsible for all actions on the CfA Platform by the person with whom You share them and by any other person with whom that person shares them, and We will not be liable to You for any Losses suffered or Claims made, arising out of or in connection with You sharing Your CfA Login. Your CfA Login is the method used by CfA to identify You. You must notify CfA immediately if You learn or suspect that the security of Your CfA Login may have been breached. If We receive such notification from You or determine ourselves that the security of Your CfA Login may have been breached, You will not be able to access the CfA Platform until measures have been taken to re-verify Your identity.

3.6    Upon logging on to the CfA Platform for the first time, You may be asked to complete a CfA Profile. The CfA Profile is the basis on which We identify You for the purposes of communicating with You, and any anti-money laundering or other checks We are entitled to run on You will be based on the information You have provided in Your CfA Profile. It will also be the basis on which other CfA Members identify You. Your CfA Profile is private unless You set it to be public.

3.7    As a CfA Member, You must act honestly and in good faith and provide truthful, accurate and complete information at all times. You shall fully indemnify CfA in respect of all Losses incurred by CfA through Your failure to do so.

3.8    Location of activities, In executing this Agreement, you agree that all of the activities that we conduct with you take place within the United Kingdom, regardless of where you may be physically located at the time you use the platform or otherwise engage with us. This means that you agree that our activities are subject only to the laws of the United Kingdom and not to the laws of any other country in which you may be physically present at any given time, and therefore that any redress you may seek from us must be sought under United Kingdom law. However, you agree to comply with all relevant laws and regulations that may apply to your use of the platform in any jurisdiction in which you may be located. You agree that under no circumstances will you make any claim to the effect that our activities are conducted in, or subject to, the laws of any country other than the United Kingdom. 

3.9    Agents, If you are a corporate member, an unincorporated member or a government member, you must designate at least one natural person to take actions on your behalf. We refer to this person as your ‘Agent’. You Agent is the person who provided his or her name in the joining form on the platform. Should you wish to replace your Agent at any time, you may do so by having either the outgoing Agent or one of your directors or officers notify us. Your Agent is not an individual member (except to the extent that he or she joins separately as such) and only has rights and obligations under this Agreement to the extent that he or she is, or purports to be, acting for you. Throughout this Agreement, any reference to “you” which relates to taking a particular action through the platform, or doing anything else that only a natural person can physically do, shall be read as a reference to your Agent doing so on your behalf, while any other reference to “You” shall be read as a reference to you as a corporate member, an unincorporated member or a government member.

 

  1. COMMUNICATIONS VIA THE CfA PLATFORM

4.1    Your interactions with CfA and with other CfA Members will take place almost entirely through the CfA Platform. In acting as a CfA Investor, You will use the CfA Platform to make investments and participate in Token Sales. This may include following the progress of Your investments after they have been completed including receiving proceeds from disposals or dividends. In addition, most communications between CfA and You, and between You and other CfA Members, will take place through the CfA Platform via the CfA Discussion Board. There are certain exceptions (enquire with CfA direct) where We may interact with You, or You may interact with other CfA Members via direct e-mail, the feedback and support button, telephone or in person, but in general You should expect that You will not be able to communicate with CfA or with other CfA Members via any means other than the CfA Discussion Board. If You are uneasy using the CfA Platform for these interactions, You should not Execute this Membership & Nominee Agreement nor become a CfA Member.

4.2    You are solely responsible for Your interactions with other CfA Members. We reserve the right but are not obliged, to monitor actions and disputes between You and other CfA Members. Although CfA cannot monitor the conduct of CfA Members off the Site, it is a violation to use any information obtained from this Site in order to harass, abuse, or harm another person, or in order to contact, advertise to, solicit or sell to any CfA Member without our or their prior explicit consent.

 

  1. UGC & CfA CONTENT

You are solely responsible for any UGC that You post on the CfA Platform, including but not limited to Your CfA Profile and any information whatsoever that You are required to submit to, or via, the CfA Platform. You may not post, transmit or share information on the CfA Platform that You do not own or have permission to display, publish or post. You agree to indemnify and hold harmless each CfA Member and CfA in respect of Losses suffered or Claims made, arising out of or in connection with Your UGC posted on the CfA Platform. With the exception of UGC submitted to the Site by You, all other content and the selection and arrangement of such content on the Site constitutes CfA Content and is either owned by, or licensed to, CfA and is subject to copyright, trade mark rights, and other intellectual property rights of CfA and licensors of CfA. Such CfA Content is protected by UK copyright laws and international laws. Any third party trade or service marks present on CfA Content not uploaded or posted by You are trade or service marks of their respective owners. Such CfA Content may not be downloaded, copied, reproduced, distributed, transmitted, broadcast, displayed, sold, licensed, or otherwise exploited for any other purpose whatsoever without the prior written consent of CfA or, where applicable, the licensors of CfA. CfA and/ or its licensors reserve all rights not expressly granted in and to their CfA Content.

 

  1. STATUS & RELATIONSHIP

To the extent that You make an investment through the CfA Platform, You are considered a ‘client’ of CfA, and We will treat You as our client for all purposes related to Your activities on the CfA Platform. Unless We notify You otherwise, We will categorise You as a ‘retail’ client for the purposes of the FCA Rules and as such, once authorised by CfA to invest on the CfA Platform in accordance with Paragraph 9.1, You will be considered a Retail Investor.

                                         

  1. YOUR INVESTMENT DECISIONS

We do NOT provide advice with respect to any aspect of transactions or investment activity conducted through the CfA Platform, other than advice on the technical use of the CfA Platform per se. This means, among other things, that We cannot give You any investment, legal, taxation or other advice in connection with Your CfA Membership or any investments You make through the CfA Platform. If You need or want advice, You should consult an appropriate professional i.e. financial, legal, taxation or another adviser. We do not offer advice, recommendations, endorsements or legal representation under any circumstances with regards to Your Investment Decisions.

 

  1. INVESTMENT TYPES

8.1    As a CfA Investor, You will have the opportunity to view a Pitch and to invest in any of the investments available as CfA Listings from time to time. The investment in an Equity Pitch consists of shares in private companies, while that in a Debt Pitch consists of interest-bearing Loan Notes or Loans in private or public companies. The purchase of Tokens in a Token sale consist of tokens provided by a Token Sales Company. Shares and Loan Notes are held through a nominee arrangement as described further in Paragraph 8.2 and are subject to the Nominee Terms set out at Schedule 1. For the purposes of the CfA Platform, Small Companies whether public or private may include Early-Stage Businesses operating in any sector. These Investee Companies may have commenced trading or be in an early phase of commercialisation.

8.2    When You choose to invest through the CfA Platform, Your Shares, Loan Notes or Loans in the Investee Company will be held by the Nominee in accordance with the Nominee Terms at Schedule 1. As a result of the nominee arrangement, You will be the Beneficial Owner of the Shares and/ or Loan Notes or Loans of the Investee Company but not the legal owner. The Nominee shall be the legal owner of the Shares and/ or Loan Notes or Loans subscribed to on an Investee Company’s behalf. This means, in effect, that You will receive an economic interest in the Investee Company that is equivalent to the economic interest You would hold if You acquired its Shares, Loan Notes or Loans directly but You will not manage or be able to exercise voting rights in respect of the Shares, Loan Notes or Loans  and You will therefore not be in the same legal position as a shareholder or a Noteholder would ordinarily be in. You may consider this an advantage or a disadvantage.

Your Tokens in the Token Sales Company will be transferred directly to your Ethereum based wallet you provided when registering.

 

  1. INVESTMENT AUTHORISATION

9.1    As stated in Paragraph 3, meeting the CfA Membership Criteria to become a CfA Member does not necessarily mean that You are lawfully permitted to invest in an Investee Company acting as a CfA Investor. There are a number of ways to become authorised i.e. You may become authorised by:

(a)   self-certifying that You are a Sophisticated Investor (either on behalf of Yourself as an individual investor or on behalf of a legal entity as an Institutional Investor); or,

(b)   declaring that You are a certified High Net Worth Individual; or,

(c)    declaring that You will not invest more than 10% of Your net investible portfolio in unlisted Shares, Loan Notes, Loans, Tokenised securities or Tokens (excluding Your primary residence, pensions and life cover) (“Restricted CfA Investor”)

These terms have specific definitions under the statutory instruments promulgated pursuant to the Financial Services and Markets Act 2000, and self-certification involves signing electronically a statement (provided on the platform) that says that you fall within the relevant definition. From time to time we may ask you to confirm any certification you make under this paragraph 9.1.

  1. Without prejudice to these authorisation options and processes, by Executing this Membership & Nominee Agreement You warrant to CfA that, in Your view, You have:
  2. the requisite experience, expertise and knowledge to understand the risks involved in making Investment Decisions about investments in non-readily realisable equity and debt securities in Small Companies (“Requisite Knowledge”); and.
  3. You can properly understand and evaluate the risks involved with such investments including the Risk Warnings set out at Clause 17

9.2    You may self-certify as a “Sophisticated Investor” or certify as a “High Net Worth Individual” (as defined). Those terms have specific definitions under the statutory instruments pursuant to the FiPO. Self-certification and declarations of certification on the CfA Platform involves signing electronically a statement of truth (provided on the CfA Platform) that says that You fall within the relevant category of Retail Investor.

9.3    The decision whether to authorise You to act as a CfA Investor is entirely ours, and notwithstanding the processes described in this Paragraph 9, We may decide not to authorise You for any reason whatsoever. We will not be liable to You for any Losses whatsoever resulting from our decision not to authorise You.

9.4    If We have authorised You to act as a CfA Investor, We will not normally revoke that authorisation (except in accordance with termination or suspension of Your CfA Membership set out herein) but We reserve the right to do so if facts come to our attention that leads CfA to believe that You may not have the Requisite Knowledge. Further, if You no longer wish to be a CfA Investor, You may notify CfA of this and We will revoke Your authorisation on that basis. In the event that Your authorisation is revoked, You will no longer be able to act as a CfA Investor but You will continue to be able to act as an Investee Company if You so choose and You will be able to participate in the Post-Investment Process for investments already completed. Once authorisation has been revoked, it may not normally be reinstated.

9.5    If You choose to become authorised by way of one of the options at Paragraph 9.1(a)-(c), You must do so truthfully, honestly, accurately and completely with only Yourself in mind.

 

  1. PITCHES AND CfA LISTINGS

10.1  Summary Pitches: As a CfA Investor, upon logging onto the CfA Platform You will be able to access the Pitches. A limited version of the Pitches will be accessible only if You are not yet authorised to act as a CfA Investor which will not allow You to enter into the investment process. These limited Pitches provide only summary information about the Investee Companies that are currently seeking funding through CfA. We refer to this information as the “Pitch Summary Box”. You can browse the Pitch Summary Box in the order in which they are presented or You may search the Summary Pitches with the search tool provided on the CfA Platform.

10.2  Detailed Pitches: You can click through any Pitch Summary Box to see Additional Information about the Investee Companies, which We refer to as a “Detailed Pitch” (a Pitch Summary Box and the Detailed Pitch together are an Investee Company’s “Pitch”). A Detailed Pitch in the case of private companies seeking funding includes the answers that the Investee Company has provided in response to the Pitch Creation Form and it may include a short Video Pitch if the Investee Company has chosen to upload one. The Pitch will also include information on how much funding the Investee Company is seeking to raise and the price at which it is offering its Shares, Loan Notes, Loans, Tokenised Securities or Tokens.

10.3  For debt issued by listed companies We will request similar information but this will be limited to information that is in the public domain. All companies will also state the amount of loan funding that the Investee Company is seeking and the terms they are offering to CfA Investors.

10.4  Each Pitch will set out the Minimum Funding Target and the Maximum Funding Target i.e. the minimum and maximum amounts the Investee Company is seeking to raise and will state the duration of the CfA Listing Window (which may be extended under certain circumstances at the discretion of CfA upon request). Save for the Investee Company’s business plan or whitepaper which the CfA Investor will source directly from the Investee or Token Sales Company and which the Investee Company shall promptly provide without undue delay, the Detailed Pitch represents the information upon which You will make an Investment Decision with respect to the Investee Company.

10.5  Each Pitch on the CfA Platform will include an Updates section and a CfA Discussion Board. These dedicated functions will help You to keep on top of the game and to take advantage of the crowd. Rewards may also be available to CfA Investors investing in Equity Pitches as an incentive to invest. Rewards are determined by the Investee Company and are subject to certain thresholds being met.

 

  1. CfA REVIEW AND APPROVALS PROCESS

11.1  We review every Pitch that You see on the CfA Platform, and We have approved its contents as of a specified date as Financial Promotions for the purposes of the FCA Rules. This means that We have concluded that the information, taken as a whole, is “fair, clear and not misleading” as of such date, which in turn means that for factual statements, We have reviewed evidence of their accuracy, and that for aspirational statements or statements of opinion or belief, We believe that they are phrased appropriately in light of their speculative or subjective nature. You should note that in the case of factual statements, the evidence We review is provided by the Investee Company and while We take reasonable care in our review, We do not audit nor verify it, which means that We will not be liable for any Losses if We fail to identify forged or altered evidence or information or deliberately misleading or inaccurate statements. You should further note that in the case of aspirational statements or statements of opinion or belief, the nature of Small Companies is such that the directors who run them are likely to have high ambitions, and We may approve statements that convey those ambitions even where We do not have a view on whether it is likely that they will be fully realised and approval does not convey a belief on our part that it is likely that they will be fully realised.

11.2  Our review and approval of the Detailed Pitch does not mean that We are recommending the Investee Company or that We believe the Investee Company is likely to be successful or that We take any responsibility or will in any way be liable to You if the Investee Company is not successful. The Investment Decision with respect to any investment through the CfA Platform is Your own. Other than what is contained in the Pitch, We will not review or approve any information about the Investee Company, including any information on websites that are linked to, or from the CfA Listing (such as, without limitation, the Investee Company’s website or social media profiles of directors or of the Investee Company itself), and You may not rely on any such information in making Your Investment Decision.

11.3  For the avoidance of doubt, as a CfA Investor, You must review a CfA Listing (as well as the related business plan which You must request directly from the Investee Company as per Paragraph 10.4) and draw Your own conclusions as to the authenticity and effect of the content and You are solely responsible for making Your own  Investment or purchase Decisions based upon Your own independent assessments and due diligence. CfA will under no circumstances be liable to You for any Pitch Information in a CfA Listing that contains any misdescriptions, misrepresentations, inaccuracies or incompleteness in respect of the Investee Company (whether innocent, negligent or fraudulent) including any reliance that You place on such CfA Listing or business plan in making any   Investment or purchase Decisions.

 

  1. INVESTMENT PROCESS

12.1  Once the Detailed Pitch has gone through the CfA Review and Approvals Process and has been accepted by CfA for full publication, promotion and posting on the CfA Platform, the Pitch will occupy a CfA Listing Window as a CfA Listing during which it will be able to receive investment from CfA Investors. The duration of a CfA Listing Window is up to ninety (90) days for an Equity Pitch (unless the Maximum Funding Target is reached sooner than this at which point the CfA Listing will automatically close) and is variable for a Debt Pitch or Token Sale. Notwithstanding this, it may be extended as per Paragraph 10.4. When the Pitch is first approved and published on the CfA Platform as a CfA Listing, it enters the Normal Period which starts on the CfA Listing Date and ends on the sooner happening of either:

(a)   the Minimum Funding Target being reached; or

(b)   the expiration of the CfA Listing Window.

12.2  If the Minimum Funding Target is reached prior to the expiration of the CfA Listing Window, the CfA Listing will enter the Extra Period in the quest to achieve the Maximum Funding Target which starts on the Initial Closing Date of the Normal Period and ends on the Extra Closing Date which shall be on the sooner happening of either:

(a)   the Maximum Funding Target being reached; or

(b)   the expiration of the CfA Listing Window.

12.3  Where either happening in 12.2 (a) or (b) occurs during the Normal Period or the Extra Period, this will represent the Final Closing Date, after which no further investment can be made in respect of a CfA Listing and the CfA Listing expires.

12.4  After You have decided to invest in an Investee Company during the investment process, You will Execute either an Investment Agreement and receive a Nominee Deed of Trust Executed by the Nominee or a Token Sale Agreement through the means provided on the CfA Platform each time You make an investment. The Investment Agreement and the Nominee Terms set out the terms on which You acquire the Shares, Loan Notes or Loans of an Investee Company in which You have decided to invest. It also describes Your, CfA’s and the Nominee’s responsibilities and obligations of one to the other.

When You Execute the Investment Agreement or Token Sale Agreement, Your investment or token purchase becomes committed and You hereby irrevocably and expressly authorise CfA to debit Your CfA Account (or to implement the direct debit instructions) in order to transfer all of the Investment Amount to the Investee Company in exchange for Shares, Loan Notes, Loans, Tokenised Securities or Tokens.

12.5  If the Investee Company fails to achieve the Minimum Funding Target during the Normal Period and up to the expiration of the CfA Listing Window, the Committed Funds shall be transferred back to the relevant CfA Account. If the Investee Company fails to achieve the Maximum Funding Target during the Extra Period and up to the expiration of the CfA Listing Window, the Investment Amount committed by each CfA Investor (which shall constitute a level somewhere in between the Minimum Funding Target and the Maximum Funding Target shall be paid to the Investee Company less the applicable CfA Fees. CfA reserve the right to terminate a CfA Listing (or transaction) at any point before the expiration of the CfA Listing Window for any reason. In the event that a CfA Listing (or transaction) is so terminated, the Investment Agreement that You Executed will automatically terminate in accordance with its terms, and the relevant Investment Amount will be credited back to the balance of Your CfA Account. We will not be liable to You for any Claims or Losses that may ensue as a result of or arising from our decision to terminate a CfA Listing or a transaction.

12.6  You may invest multiple times in the same business if you so choose. In order to do so, you will need to repeat the process, including executing a new Investment Agreement with respect to the additional shares you purchase.

12.7  Acting as a CfA Investor does not preclude You from also seeking funding, either simultaneously or at a different time.

Promotion of unregulated collective investment schemes:

Certain of the nominee arrangements may be deemed to be unregulated collective investment schemes (UCIS) for the purposes of the FCA Rules. By providing you the opportunity to make investments through such nominee arrangements, we may, therefore, be deemed to be promoting unregulated collective investment schemes to you, although this does not mean that we are advising you to invest in them. In executing this Agreement, you are expressly agreeing that we may promote these unregulated collective investment schemes to you.

No Offering to the Public:

The opportunity to invest in the shares, loan notes, loans, tokenised securities or tokens of a business, may also be deemed to involve an ‘offer’ to you of those shares. In executing this Agreement, you are expressly agreeing that you consider and will treat for all purposes, any such offer (a) as ‘not being calculated to result, directly or indirectly, in such shares becoming available to person other than those receiving the offer,’ as that phrase is used in section 756(3) of the Companies Act, and, as a consequence, (b) as not being a ‘public offer’ for purposes of section 755 of the Companies Act

LOAN NOTES, NOTICE OF INTENTION TO CONVERT & CONVERSION NOTICES

12.8        Loan Notes are loans which may have the benefit of a Warrant that carries a conversion feature granting the CfA Investor the right to subscribe for Shares by way of conversion of all or a portion of the Loan Notes into Shares. Your Loan Notes will start accruing Interest once the investment has been legally completed by way of the Investment Agreement, a Nominee Deed of Trust, the Subscription Agreement, and a Loan Note Instrument (or any other ancillary documentation to implement the Subscription Agreement). On the prescribed Conversion Dates, every CfA Investor will have the option to submit a Notice of Intention to Convert by the means made available on the CfA Platform in order to instruct the Nominee to serve a Conversion Notice on the Investee Company. CfA will procure that the Notice of Intention to Convert is sent to the Nominee and the Investee Company. Upon receipt of the Conversion Notice from the Nominee acting in the capacity of the legal Noteholder, the Investee Company will issue the Shares to the CfA Investor’s nominated brokerage account.

12.9        The Investee Company is contractually obliged to make Shares available at the Conversion Price calculated in accordance with the Conversion Price Formula. The Conversion Price can be calculated by the CfA Investor and it will be made available to CfA Investors on the close of business on the Conversion Dates. The Conversion Price is based on the average closing Bid Price of a set number of days in advance of actual conversion. This Bid Price is discounted by the Conversion Discount to give the Conversion Price. The Investee Company determines form the outset:

(a)   the number of days for which the average or lowest Bid Price is calculated;

(b)   the Interest Rate;

(c)    the Conversion Discount; and,

(d)   the Conversion Dates.

12.10      Submitting a Conversion Notice is not mandatory. If the CfA Investor chooses not to convert all or a portion of the Loan Notes up to the natural Repayment Date of the Loan Notes, the CfA Investor will be entitled to be repaid the principal sum plus accrued Interest on the Repayment Date and such funds shall be transferred to Your CfA Account.

12.11    Type and Structure of Investments 

Type of investments: If you become an investment-authorised member, you will have the opportunity to invest in some or all of the investments available from time to time on the platform. Each of these investments consists of shares, loan notes, loans, tokenised securities or tokens or other equity in one or more early-stage businesses or entities or arrangements that invest in early-stage businesses (which we refer collectively as ‘businesses’). In certain cases, these investments will be held through a nominee arrangement.

  1. WITHDRAWAL RIGHTS (EQUITY AND DEBT)

During the Normal Period, a CfA Investor is entitled to withdraw from an investment made during the Normal Period for any reason and at any time up to seven (7) days after the Minimum Funding Target has been reached. During the Extra Period, a CfA Investor is entitled to withdraw from an investment made during the Extra Period for any reason and at any time up to seven (7) days after the Maximum Funding Target has been reached. If the Maximum Funding Target has not been reached during the Extra Period and by the time the CfA Listing Window expires, a CfA Investor who invests during the Extra Period is entitled to withdraw from an investment up to seven (7) days after the expiry of the CfA Listing Window. After such point, there shall be no automatic entitlement to withdraw. In the event that a CfA Investor validly withdraws an investment, a new CfA Investor may invest in order to either replace any withdrawn investment or to increase the overall amount of investment if the Maximum Funding Target has yet to be reached and the CfA Listing has not yet ended. In order to withdraw an investment in accordance with this Paragraph 13, You must confirm the request to CfA in writing by sending an email to [email protected] with "Urgent - Withdrawal Request" in the subject line. In the event that Your Investment Amount is agreed to be returned to You, it shall be returned to Your CfA Account from where it was debited.

Completion of the Investment

For any given business seeking funds through the platform, the relevant Investment Agreement will set forth the process and circumstances under which we will complete or not complete the investment, as well as the consequences of such completion or non-completion.

 

  1. LIMITED LEGAL DUE DILIGENCE & SUBSCRIPTION AGREEMENT, LOAN NOTE OR LOAN AGREEMENT

On the Initial Closing Date and the Extra Closing Date where applicable, You authorise us or CfA’s nominated lawyers to conduct a limited legal due diligence investigation and to negotiate a Subscription Agreement, Loan Note or Loan Agreement (and Loan Note Instrument or any other ancillary documentation to implement the Subscription Agreement, Loan Note or Loan) with the Investee Company on Your behalf (“Legal Services”). In the event that the legal due diligence investigation and Subscription Agreement, Loan Note or Loan Agreement negotiation are satisfactory to CfA, the Nominee will Execute the Subscription Agreement, Loan Note or Loans (and Loan Note Instrument or any other ancillary documentation to implement the Subscription Agreement, Loan Note or Loan Agreement) as Nominee of all the CfA Investors in the Investee Company. A Token Sales Agreement and the purchase of tokenised securities will not be concluded through a Nominee but with the individual purchasers of the token or tokenised securities. The determination as to whether the legal due diligence investigation and Subscription Agreement, Loan Note or Loan Agreement negotiation are satisfactory is entirely at CfA’s discretion, and We will not be liable to You in any way whatsoever for any Losses or Claims in the event that We fail to identify one or more issues in the legal due diligence investigation or fail to include provisions in the Subscription Agreement, Loan Note or Loan Agreement (and Loan Note Instrument or any other ancillary documentation to implement the Subscription Agreement, Loan Note or Loan Agreement) to address those issues (except as a result of our gross negligence, wilful default or fraud). The limited legal due diligence process will be conducted as quickly as is practicable but the length of time between the Final Closing Date and the date on which the Subscription Agreement, Loan Note or Loan Agreement is signed (and the Loan Note Instrument or any other ancillary documentation to implement the Subscription Agreement is issued and served where applicable) will vary between different investments.

 

  1. YOUR CfA ACCOUNT

15.1  If You become a CfA Investor, upon logging into the CfA Platform You will be able to access a section called “My Profile“. This shows Your CfA Account. The purpose of Your CfA Account is to receive, hold and distribute the Investment Amounts invested or distributed in connection with an investment. In order to make an investment through the CfA Platform, You need to have at least as much money in Your CfA Account as the Investment Amount You want to invest (unless You have completed a direct debit mandate). You can transfer money into Your CfA Account at any time as described in Paragraph 15.2 subject to CfA identity and other checks described in Paragraph 15.3.You can withdraw money from Your CfA Account at any time as described in Paragraph 15.7. You can check the balance of Your CfA Account at any time by visiting the “My Funds” section of the CfA Platform.

15.2  You can transfer money in to Your CfA Account by bank transfer, by direct debit or by any other means made available to You on the CfA Platform from time to time. Instructions on how to make such a transfer and how long it will take before the transfer is credited to Your CfA Account are set forth in the My Funds section of the CfA Platform.

15.3  We have certain responsibilities under the FCA Rules, the Money Laundering Regulations 2007 and other applicable regulations to verify the identity of, and run anti-money laundering checks on CfA Investors. In order to fulfil these responsibilities, We will use a third-party identification checking service to confirm Your identity when You first seek to transfer money into Your CfA Account or when you start to set up a direct debit mandate. In the event that this service is not able to verify Your identity to our satisfaction, You may be asked to send CfA physical versions of certain identification documents. From time to time, after You have made Your first transfer into Your CfA Account, We may need to run additional identity checks on You. In Executing this Membership & Nominee Agreement, You hereby irrevocably and expressly authorise CfA to run any and all of these checks on You at any time, and that You will not be able to transfer money into Your CfA Account or make investments until and unless We are able to complete these checks to our satisfaction. We will not be liable for any Losses arising from our conduct of these checks or Your inability to transfer money into Your CfA Account or make investments while the checks are pending or as a result of the unsatisfactory completion of the checks.

15.4  Any money that has been transferred to Your CfA Account and not withdrawn or transferred to an Investee Company will be held in a client money account controlled by Thomas Grant & Company Limited (a company authorised by the FCA to hold client funds) at a major UK bank. The client money account will also hold the money of other CfA Investors, and it will be segregated from our own account and therefore will not be exposed to our creditors in the unlikely event that We default on our obligations. You will not receive interest or other earnings on any money held in this account.

15.5  When You make an investment through the CfA Platform using the process described in Paragraph 12, the Investment Amount that You have committed will be deducted from Your CfA Account and held in a segregated client account whereupon, it will not appear as part of the balance shown in the “My Funds” section of the CfA Platform, and it will not be available for You to withdraw. Once the investment is completed, the Committed Funds are transferred from the client money account to the Investee Company. If the investment is not successful, the Committed Funds will remain in the client money account and will be credited back to the balance of Your CfA Account.

15.6  When proceeds are paid to You on an investment, the money will be credited to the balance of Your CfA Account as if You had transferred the money into Your CfA Account directly.

15.7  Instructions on how to make a withdrawal are set forth in the “My Funds” section of the CfA Platform. You may withdraw any amount up to the total balance of Your CfA Account at any time by requesting a bank transfer (or by any other means made available to You on the CfA Platform from time to time) to the bank account in Your name through which the money originated in the “My Funds” section of the CfA Platform.

 

  1. POST-INVESTMENT PROCESS

16.1  Once You have Executed an Investment Agreement with respect to an investment, the investment will be listed in the “My Portfolio” section of the CfA Platform, and You will be able to see information about other investments that You have made through the CfA Platform. If the investment is completed, it will continue to be listed in the “My Portfolio” section where You will also be able to access information and exercise certain other rights. Upon completion, You will receive the Nominee Deed of Trust.

16.2  If a dividend or other distribution is paid to the Nominee on the Shares, Loan Notes or Loans the Nominee holds for You, or the Nominee receives proceeds from the sale of those Shares, Loan Notes or Loans the Nominee shall make the same available in Your CfA Account by way of a relevant transfer which You authorise the Nominee to do in the Nominee Terms. These payments will be credited to the balance of Your CfA Account as set forth on the Site and which may be amended from time to time. A dividend or other distribution will be paid directly to the wallet holders.

16.3  We do not intend to create a market for You to acquire and sell shares in private companies or Loan Notes in which You have invested, and in making any investment You should be aware that it is unlikely that You will be able to sell Your Shares or Loan Notes. However, there are certain circumstances in which You may be able to sell or otherwise transfer Your Shares in a private transaction, all as set forth in the Investment Agreement and/ or Nominee Terms.

16.4  You can view the balance of Your CfA Account and Your full transaction history through the My Portfolio section of the CfA Platform at any time, and You can view all of Your current investments through the ‘My Portfolio’ section of the CfA Platform at any time. These are the only ways in which You will be able to obtain information about Your CfA Account and Your investments from CfA, and We will not send any form of periodic statements to You.

 

  1. RISK WARNINGS

17.1  Loss of Capital

Many Small Companies may fail. If You invest in an Investee Company through the CfA Platform, rather than seeing a return of capital or a profit, it is possible that You will lose some or all of Your invested capital . You should not invest more money through the CfA Platform than You can afford to lose without altering Your standard of living.

17.2  Illiquidity

Investments in Small Companies made through the CfA Platform will be highly illiquid. It is very unlikely that there will be a secondary market for the Shares or Loan Notes of the Investee Company. This means that You are unlikely to be able to sell Your Shares until and unless the Investee Company floats on a securities exchange or is bought by another company. Even for a successful Investee Company, a flotation or purchase is unlikely to occur for a number of years from the time You make Your investment. Loan Notes or Loans have to be held until maturity before they become payable. There is no guarantee that the Investee Company will be able to make repayment of the Loan Note or Loan and Interest on the due date.

17.3  Rarity of Dividends

Small companies rarely pay dividends. This means that if You invest shares in an Investee Company through the CfA Platform, even if it is successful, You are unlikely to see any return of capital or profit until You are able to sell Your shares in the Investee Company. As explained in Paragraph 17.2, even for a successful Investee Company, this is unlikely to occur for a number of years from the time You make Your investment.

17.4  Dilution

Investments in shares of private companies made through the CfA Platform are likely to be subject to dilution. This means that if the Investee Company raises additional capital at a later date, it will offer new shares of the Investee Company to the CfA Investors, irrespective of whether You accept any such offer, the percentage of the Investee Company that You own will decline. Any new shares issued may also have certain preferential rights to dividends, sale proceeds and other matters, and the exercise of these rights may work to Your disadvantage. Your investment may also be subject to dilution as a result of the grant of options (or similar rights to acquire shares) to employees of, service providers, or certain other parties connected with, the Investee Company.

17.5  Diversification

Investing in shares, Loan Notes, Loans, Tokenised securities or Tokens in Small Companies should only be done as part of a diversified portfolio. This means that You should invest relatively small amounts in multiple companies rather than a lot in one or two companies. It also means that You should invest only a small proportion of Your investable capital in either of these asset classes, with the majority of Your investable capital invested in safer, more liquid assets. 

  1.  
  2. TAXATION & TAX RELIEF

18.1  Depending on Your individual tax position, You may be liable to pay taxes on any dividends, interest received, or gains You receive from your investments. Payment of these taxes is entirely Your responsibility and save as required by law, We will not deduct, or withhold any taxes for You, or provide You with any statements or information with respect to Your tax liability other than the information about Your CfA Account and investments.

18.2  The UK government provides certain types of tax relief (“Relief”) for investments in Small Companies, among which is the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS). Certain investments made through the CfA Platform may be eligible for EIS, SEIS or similar Relief.

18.3  In the event that an Investee Company has:

(a)  received advanced assurance from HMRC that it is eligible for a Relief; and,

(b)  agreed to allow CfA Investors who make investments through the CfA Platform to claim Relief, such will be indicated in the Detailed Pitch.

 

18.4  Similarly, in the event that an Investee Company has not yet received advanced assurance from HMRC that it is eligible for a Relief but:

(a)   appears to CfA to be eligible for a Relief; and,

(b)   has agreed to allow CfA Investors who make investments through the CfA Platform to claim such Relief in the knowledge of (a);

such will be indicated in the Detailed Pitch. We will only complete an investment in the Investee Company if and after the Investee Company receives such advanced assurance.

18.5  Notwithstanding advanced assurance having been granted as described in Paragraph 18.3, the decision as to whether a particular Investee Company or investment is eligible for a Relief is a matter to be determined by HMRC. We cannot guarantee that a Relief will be granted even if the Investee Company has received advanced assurance, regardless of whether HMRC’s refusal to grant Relief is due to a characteristic of the Investee Company or a characteristic of the structure of Your investment in the Investee Company or otherwise.

18.6  There are a number of restrictions as to which CfA Investors are entitled to claim a Relief and even if the Investee Company is eligible for Relief, You may not be entitled to take advantage of it, or You may lose Your ability to take advantage of it.

18.7  Entitlement for a Relief can be lost as a result of subsequent events (for example sale of the Shares or changes to the Investee Company or ownership of the Investee Company), and no guarantee can be given that an Investee Company or Your investment will remain eligible or entitled as the tax treatment depends on the individual circumstances of each CfA Investor and may be subject to change in future for any reason. Further, Your Nominee may be entitled to take steps as prescribed in the Nominee Terms which may lead to the loss of Relief.

18.8  CfA will not be liable to You for any Claims or Losses that may ensue in the event that You are not able to claim Relief on a particular investment, or because any Relief You have claimed is lost. You are strongly advised to speak with Your independent tax adviser before making any investment on the basis that You will be able to receive Relief.

 

  1. CfA FEES

We will never charge CfA Investors a fee for investing in pitches on the platform. We may however charge fees for other services provided beyond this. 

Here under is our standard Fee Schedule for  all other services and supersedes any previous fee schedule

Innovative Finance Individual Savings (IF-ISA) Account fees

IF-ISA Account Fee

0.35% per annum

This is charged on the gross market value of your portfolio as at the valuation date of your total investments in securities and cash.

This fee is charged every 3 months (quarterly) in advance usually on or shortly after 1st of January, 1st of April, 1st of July and 5th of October each year.

 

Transfer Fees

Transfers in

Free

Transfer out to UK Bank Account

Free

ISA transfer to a new ISA provider

0.5% of the total value of the account, subject to a minimum charge of £25

 

 

Other Account Charges

Paper based statements (available electronically free of charge via online account).

£15 per document sent by post, to cover printing, stationery and postage costs.

Provision of a company’s published annual report and/or any other relevant information

£10 per document requested

Tracing “gone away” investors - Per tracing enquiry where investor has failed to notify us of changed contact details

 

£26 per tracing attempt and for each letter, call or email to cover basic administrative expenses, plus time costs for additional work, plus all third party costs and associated VAT incurred

 

Secondary market fee

Seller fee

Request to sell shares or Bonds on Crowd for Angels Secondary Market (bulletin board).

Fee payable on execution of a Transfer Of Beneficial Ownership Agreement, after which the share purchase price paid by the buyer will be transferred to the seller (net of fees)Processing security trades will be charged at 1%  (subject to minimum of £15 per trade)

 

Different charges may apply in some circumstances and some charges for specialised services are not listed. If in doubt, please enquire.

 

  1. NON-CIRCUMVENTION

You hereby legally and irrevocably covenant to CfA that in respect of any Pitch, You will not cause (or in part contribute to causing) the circumvention or avoidance of the payment of any applicable CfA Fees by an Investee Company, either actively or passively, directly or indirectly, through any persons(s), firm, business or company by entering into investment activities or business transactions outside of the Site that results in the loss of actual or potential business opportunity or revenue for CfA or otherwise results in any form of financial return or considerations to, or for the benefit of, the other party or any other company or third party thereby causing a detriment to CfA. In the event of CfA being circumvented, CfA shall be entitled to a legal monetary penalty equal to maximum considerations or applicable CfA Fees as reasonably determined by a court of competent jurisdiction plus any or all Losses incurred in recovering the lost revenue by way of applicable CfA Fees or otherwise. The obligations contained in this Paragraph 20 shall continue without limit of time notwithstanding termination or expiry of CfA Membership.

 

  1. COMMUNICATIONS

21.1  In addition to the Pitch Information set forth in each CfA Listing, We may provide on the CfA Platform information about investing in or operating businesses generally or other matters that We believe may be relevant or of interest to You. We refer to this as “Additional Information”. None of the Additional Information, including information about historical returns from angel investing can be relied on as a guarantee or indication of any particular result, and the Additional Information does not constitute any form of advice, recommendation or endorsement by CfA. We cannot assure You that any Additional Information is complete, accurate, up-to-date or error free, and We will not be liable to You for any Losses if it is not. To the extent that any Additional Information constitutes links to other websites or third-party contact details, We take no responsibility for the availability or accuracy of such websites or contact details or the acts of such third parties.

21.2  From time to time, We may send You communications by electronic mail in accordance with our Privacy Policy. Any communications that we do send to You DO NOT constitute advice or a recommendation to invest.

 

  1. COMPLAINTS

22.1  If You have a complaint with respect to any aspect of the CfA Platform, You should report it to CfA immediately by sending an e-mail from the e-mail address in which Your CfA Membership is registered, to [email protected] We shall use reasonable endeavours to send an initial response to Your e-mail within five (5) Working Days after We receive it, and this response will state either that it is our final response or that We are investigating the matter further. If We are investigating the matter further, We will use reasonable endeavours to provide You with a final response within eight (8) weeks after We receive Your e-mail. We may need to ask You questions in order to understand the details of Your complaint, and any questions We ask, as well as any response We give, will be sent by e-mail to the e-mail address in which Your CfA Membership is registered.

22.2  If You make a complaint pursuant to Paragraph 22.1 and We do not resolve it to Your satisfaction, You may have a right to complain directly to the Financial Ombudsman Service. Their address is Exchange Tower, Harbour Exchange Square, London E14 9SR, and their website is at http://www.financial-ombudsman.org.uk. In addition, the European Commission's Online Dispute Resolution platform is at http://ec.europa.eu/consumers/odr.

22.3   Investments made in companies listed on the Crowd For Angels platform are not covered by the Financial Services Compensation Scheme (FSCS). However, you may be able to make a claim if We default in our obligations to You. Further information can be obtained from their website, which is at http://www.fscs.org.uk.

 

  1. DATA PROTECTION

In respect of any Personal Data (as defined in the Data Protection Act 1998 (the ‘1998 Act’)) (herein referred to as “Data”) processed by CfA or a CfA Member pursuant to lawfully using the CfA Platform, each party warrants and undertakes to the other that it complies, and will continue to comply with, all applicable Data Protection Legislation, including the 1998 Act, any regulations made thereunder and any guidance notes or guidelines issued by the Information Commissioner; and, shall comply at all times with the terms and conditions of the CfA Privacy Policy and the CfA Cookie Policy which are hereby incorporated by this reference. CfA may release Your information if required by law, or if the information is necessary or appropriate to release to deal with an unlawful or harmful activity. In connection with the Nominee Terms set out at Schedule 1 and the Nominee Services to which Schedule 1 relates, You acknowledge and agree that CfA may disclose Your Data to the Investee Company and any person acting on behalf of the Investee Company, any New Nominee or prospective New Nominee or to any prospective purchaser of the Shares or Loan Notes and their respective officers, employees and professional advisers. Further, in connection with any application for EIS or SEIS Relief, such Data may be passed by the Investee Company to HM Revenue & Customs.

 

  1. NOTICES

Any notice from You to CfA in respect of this Membership & Nominee Agreement, Your CfA Membership or Your activities on the CfA Platform shall be given by e-mail to [email protected]. Any notice from CfA to You in respect of the same on the CfA Platform may be given either through the CfA Platform or by e-mail to the address set forth in Your CfA Profile. Notices given pursuant to this Paragraph 24 through the CfA Platform or by e-mail shall be deemed received by the recipient upon despatch (provided no failure delivery notice is received). Notices given pursuant to this Paragraph 24 by post or courier shall be deemed received by the recipient within two Working Days after despatch. In the event that You give CfA notice by means other than those set forth herein and We, in fact, receive it, We may, but are not required to, choose to deem the notice received upon our actual receipt of it. All notices given under this Membership & Nominee Agreement shall be in the English language.

 

  1. CONFLICT OF INTEREST

We do our best to ensure that our interests do not conflict with Yours, and We have deliberately designed our fee structure so that We do not charge applicable CfA Fees to CfA Investors. We only make money when an Investee Company succeeds in raising funds which shall be payable by the Investee Company and not by You. Nevertheless, as a CfA Platform provider, We are not Your representative or agent (except in the express circumstances described herein), and at times our interests may conflict with Yours. In particular, if You act as a CfA Investor, You should note that We or our employees may choose to make investments, through the CfA Platform or otherwise, in Investee Companies that seek funding through the CfA Platform and although the incentives relevant to such investments are likely to be aligned with Your incentives, they may not be perfectly aligned.

 

  1. LIABILITY

26.1  You shall be liable to CfA for any Claims or Losses incurred or suffered by CfA as a result of any breach of the CfA Agreement or any other agreement which You enter into with CfA. You further release, acquit and forever discharge CfA from any and all Claims asserted against, or Losses suffered by You (actual and consequential, direct or indirect) of every kind and nature, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way connected with any CfA Listing and consequent transaction. Without limiting any other remedies of CfA, CfA reserves the right to suspend and/or terminate Your access to the CfA Platform if CfA has any reason to suspect that You have engaged in, or have in any way been involved in, or linked to, any fraudulent activity in connection with the CfA Platform or Your use of the Site or that You have misused the Site and/ or the CfA Platform.

26.2  Subject to Paragraph 26.3, We shall in no circumstances be liable to You in contract, tort (including negligence) or otherwise for any consequential, special or incidental loss or damage (whether direct or indirect) or any loss of profit, anticipated profits, business, data, opportunity, revenue, goodwill, or reputation arising from Your use of the CfA Platform or for any liability that is expressly excluded herein. Subject to Paragraph 26.3, CfA’s total maximum liability in aggregate arising under or in connection with this Membership & Nominee Agreement, whether in contract, tort (including negligence), breach of statutory duty or otherwise shall not exceed, in respect of any investment, an amount equivalent to the monies paid to CfA by an Investee Company by way of applicable CfA Fees in respect of the relevant investment. CfA shall not be in breach of any of its obligations under this Membership & Nominee Agreement which arise or occur due to the act, omission, default of a CfA Member or a CfA Member’s failure to comply with any of its obligations herein.

26.3  Nothing in this Membership & Nominee Agreement is intended nor shall it be construed as an attempt by any party to exclude or limit any liability for:

(a)   fraudulent misrepresentations;

(b)   any liability where the law does not permit such exclusion of liability; and,

(c)    death or personal injury arising from negligence.

 

  1. TERMINATION OF CfA MEMBERSHIP

27.1  If You no longer wish to be a CfA Member, You may terminate Your CfA Membership at any time by notifying CfA pursuant to the notification process set forth in Paragraph 24. We may terminate Your CfA Membership at any time and for any reason or no reason. In the event that We do so, We will notify You of such termination by e-mail.

27.2  If You send CfA information pursuant to Paragraph 3 that states or leads CfA to believe that You no longer meet the CfA Membership Criteria, We may suspend Your CfA Membership until We determine that You are again eligible to be a CfA Member.

27.3  If Your CfA Membership is terminated pursuant to Paragraph 27.1 or is suspended pursuant to Paragraph 27.2, You will no longer be able to seek funds or make investments through the CfA Platform. If there is any money in Your CfA Account at the time of such termination or suspension, You will be notified that You have a limited period of time in which to withdraw such money, after which time We will send a money order for such money to the address in Your CfA Profile and despatch of the same will reduce the balance of Your CfA Account to zero.

27.4  Subject to Paragraph 28, after termination or suspension You will be able to continue to access the CfA Platform in order to engage in the Post-Investment Process for any investment You have already made or Investee Company for which You have raised funds.

 

  1. TERMINATION OF CfA PLATFORM ACCESS & MEMBERSHIP & NOMINEE AGREEMENT

28.1  If Your CfA Membership is terminated or suspended pursuant to Paragraph 27, Your access to the CfA Platform will be terminated at such time as You no longer have any investments listed in the “My Portfolio” section of the CfA Platform or any Investee Companies listed in the “My Pitches” section. This in turn will terminate Your Membership & Nominee Agreement.

28.2  Either party may upon written notice to the other terminate this Membership & Nominee Agreement with immediate effect if:

 

(a)   the other party is in material breach of any of its obligations under this Membership & Nominee Agreement and (if remediable) such breach has not been remedied within fourteen (14) days of service of a notice requiring remedy of such breach; or

(b)   the other party is deemed by any competent authority unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986; or becomes unable to pay its debts as they fall due; or suspends or threatens to suspend making payments with respect to all or any class of its debts; or becomes bankrupt; or convenes a meeting of its creditors; or proposes or makes any arrangement or composition with or assignment or moratorium for the benefit of its creditors generally or any class of creditors; or negotiations are commenced with a view to the general re-adjustment or re-scheduling of all or any part of its liabilities; or a resolution is passed or any step was taken with a view to the other party being adjudicated or found insolvent; or the winding up or dissolution of the other Party; or the other party obtains a moratorium or other protection from its creditors; or a trustee, supervisor, administrative or another receiver, administrator, liquidator or similar officer or encumbrancer is appointed in respect of the other party or any part of its assets; or the other party suffers any event analogous to any of the above in any jurisdiction, or the other party ceases to carry on business as intended by these terms.

 

28.3  There are additional circumstances in which We may terminate Your access to the CfA Platform even if You still have investments listed in the “My Portfolio“ section. These circumstances are listed in our Website Terms of Use.

28.4  If We terminate Your access to the CfA Platform pursuant to this Paragraph 28 and You still have investments listed in the “My Portfolio” section, We will be deemed to become Your agent for the purposes of conducting the Post-Investment Process, as set forth in the relevant Investment Agreement and the Nominee will be deemed to be Your agent in respect of the Nominee Services in accordance with the Nominee Terms, and We will send, or procure that the Nominee will send, any dividends or other proceeds to You by cheque at the address that was listed in Your CfA Profile at the time of termination, unless You notify CfA in writing of a different address.

28.5  Notwithstanding termination under Paragraph 27 and 28, such termination shall not affect the accrued rights or obligations or remedies of the parties in relation to antecedent breaches and nor shall it affect the continuance in force or the coming into force of any provision which expressly or by implication is intended to come into force or continue in force after termination of this Membership & Nominee Agreement in accordance with Paragraph 37.

 

  1. FORCE MAJEURE

CfA reserves the right to cancel or defer a CfA Listing (whether or not already live) or to terminate and revoke any licence granted by the terms herein with no liability if it is prevented from, or delayed in, carrying on its business by a Force Majeure Event.

  1. ENTIRE TERMS/ SEVERABILITY

This Membership & Nominee Agreement including the Nominee Terms set out at Schedule 1, incorporates the Privacy Policy, the Website Terms of Useand the Cookie Policy which together constitute the entire agreement between You and CfA in relation to Your use of the Site and/ or the CfA Platform and supersedes any prior representations, inducements or agreements relating to its subject matter. Should the courts strike-out as invalid or unenforceable or otherwise alter any part of the terms in this Membership & Nominee Agreement, the remaining terms shall remain valid and in force.

  1. COSTS

Your and our costs and expenses (including professional, legal and accountancy expenses) of the preparation, negotiation and Execution of this Membership & Nominee Agreement and any associated documentation shall be borne by You and CfA respectively.

  1. CfA NO LONGER TRADING

In the event that We cease to trade, any money in Your CfA Account will be protected. We will notify You as soon as possible after We have taken a decision to cease to trade, and at that stage all active CfA Listings will be terminated. You will have a specified period of time in which to withdraw any money in Your CfA Account, after which time We will send a cheque or money order for such money to the address in Your CfA Profile. Meanwhile, the Shares, Loan Notes or Loans in which You have invested will continue to be handled as set forth in the relevant Investment Agreement, Nominee Terms at Schedule 1 and Subscription Agreement, Loan Note or Loan Agreement (and Loan Note Instrument or any other ancillary documentation to implement the Subscription Agreement, Loan Note or Loan Agreement) where applicable. In the event of Crowd for Angels no longer trading, We will seek to appoint an Administrator who will act on behalf of clients and deal with any client money and asset queries. In the event that Crowd for Angels is unable to find an alternative IF-ISA Manager, income and returns from any investments held within an IF-ISA may lose their tax free status. In the event of Crowd for Angels ceasing to trade, your client status is likely to change.

In the event that Thomas Grant and Company or the Nominee ceases to trade, Crowd for Angels would seek to appoint an alternative FCA authorised firm to hold client assets/funds on your behalf.

  1. FURTHER ASSURANCES

You and We shall from time to time (both during the continuance of this Membership & Nominee Agreement and after its termination) do all such acts and Execute all such documents as may be reasonably necessary in order to give effect to the provisions of this Membership & Nominee Agreement.

  1. ASSIGNMENT

The terms herein shall be personal to You and You may not assign, transfer or delegate all or any of Your rights and obligations, without CfA’s prior written consent. This prohibition on assignment and delegation does not affect Your right to make certain transfers as described herein and in any other agreements You enter with CfA. Any attempt to, transfer, assign or delegate any of Your rights or obligations in contravention of this Paragraph 35 shall be null and void. CfA reserves the right to assign or transfer all or any of its rights and obligations under this Membership & Nominee Agreement in the same group as CfA or another third party. We may provide information about You and Your activities on the CfA Platform to any person to whom We assign, transfer or delegate our obligations or rights. In the event of assignment or transfer, notification will either be given to You by e-mail or posted on the Site.

  1. NO WAIVER

Failure by either CfA or You to exercise or enforce any right conferred shall not be deemed to be a waiver of any such right nor operate so as to bar that exercise or enforcement thereof or of any other right on any later occasion.

  1. SURVIVAL

All disclaimers, indemnities and exclusions in this Membership & Nominee Agreement shall survive termination of the Agreement for any reason, as shall any other provisions of this Membership & Nominee Agreement that by their nature are intended to survive such termination.

  1. NO PARTNERSHIP OR AGENCY

This Membership & Nominee Agreement shall not be construed so as to create a partnership or joint venture between You and CfA. Nothing in this Membership & Nominee Agreement shall be construed so as to constitute You and CfA as agents of one another.

  1. THIRD PARTY RIGHTS

You may enforce the terms of this Membership & Nominee Agreement in accordance with the provisions of the Contracts (Rights of Third Parties) Act 1999 (the “Act”). Except as provided above, the terms in this Membership & Nominee Agreement do not create any right enforceable by any person who is not a party to it under the Act, but do not affect any right or remedy that a third party has which exists or is available apart from that Act.

  1. LAW AND JURISDICTION

All of these Terms are governed by English Law and any disputes arising in relation to the terms herein and/or the Site are subject to the exclusive jurisdiction of the English Courts. We retain the right to bring proceedings against You for breach of this Membership & Nominee Agreement in Your country of residence or any other relevant country.

  1. DEATH

If we receive proof of your death that is satisfactory to us, we will terminate your CfA membership. If at such time you still have investments listed in the ‘Portfolio’ section, we will handle them as set forth in the relevant Investment Agreement.

  1. DEFINITIONS

In this Membership & Nominee Agreement (except where the context otherwise requires), the following words and phrases have the meanings given below:

act/ acting as a Director of an Investee Company

means to use the CfA Platform to seek funds for an Investee Company and participate in the Post-Investment Process after an investment is made in the Investee Company;

act/ acting as a CfA Investor

means to use the CfA Platform to invest capital in an Investee Company and participate in the Post-Investment Process after an investment is made in the Investee Company;

Additional Information

means information We provide on the CfA Platform other than information contained in a Pitch as a CfA Listing, as explained further in Paragraph 21;

Attorney

as per Paragraph 2 of the Nominee Terms in Schedule 1;

Beneficial Owner

means the equitable, non-legal owner as per Paragraph 9.1 of the Nominee Terms in Schedule 1;

Bid Price

means the closing bid price of an Ordinary Share on a Trading Day as reported by Bloomberg;

Bloomberg

means Bloomberg LP: A financial information provider;

CfA Account

means, for a CfA Member who acts as an Investor, the account You hold with CfA for the purposes of transferring investment monies to be used in making investments and receiving proceeds from investments, as explained further in Paragraph 15;

CfA Agreement

means this Membership & Nominee Agreement between You and CfA along with the Privacy Policy, Website Terms of Use and Cookie Policy as can be found on the Site;

CfA Content

means any data or information provided by or on behalf of CfA on, or in connection with, the Site and the CfA Platform;

CfA Discussion Board

refers to the functionality provided to enable You to communicate with other CfA Members and CfA publicly on the Site;

CfA Fees

means the success fees charged by CfA to an Investee Company in consideration of providing the CfA Platform and all the services rendered thereunder and herein which may be amended from time to time and can be found on the Site;

CfA Investor

means a CfA Member who has been authorised to invest via the CfA Platform as a Retail Investor by one of the ways set out in Paragraph 9.1;

CfA Listing

means the Pitch that has been approved and is displayed and published on the CfA Platform as a Pitch Summary Box and a Detailed Pitch;

CfA Listing Date

means the date that the Pitch is approved and first posted as a CfA Listing on the Site;

CfA Listing Agreement

means an agreement entered into between CfA and a CfA Member wishing to submit a Pitch to be listed on the CfA Platform;

CfA Listing Window

means the time allocated for the CfA Listing to remain live and active on the CfA Platform during which a CfA Investor can make an investment. The duration is up to ninety (90) days for an Equity Pitch and variable for a Debt Pitch or Token Sale but this may be extended as per Paragraph 12.1;

CfA Login

means the unique username and password used by a CfA Member to access the CfA Platform;

CfA Member

means a person who has joined the CfA Platform as a member by Executing the CfA Agreement and who therefore has valid CfA Membership, a CfA Account (where a CfA Investor) and a CfA Login;

CfA Membership

means the membership provided to a CfA Member;

CfA Membership Criteria

means that set out in Paragraph 3;

CfA Platform

means, the dedicated crowd funding online platform residing on the Site as may be amended from time to time;

CfA Profile

means the profile You complete as part of joining CfA, as explained further in Paragraph 3.6;

CfA Review and Approvals Process

means CfA’s review of the Detailed Pitch submitted by a potential Investee Company to ensure that it is approved for posting to enter the Normal Period of the investment process;

CfA User(s)

means a registered CfA Member or a non-registered CfA Visitor;

CfA Visitor(s)

means a CfA User who visits the Site but who does not join as a CfA Member;

Claims

means all demands, claims and liability (actual and consequential and direct and indirect and whether known and unknown, suspected and unsuspected, disclosed and undisclosed, criminal or civil, in contract, tort or otherwise for all Losses including any other expenses of any nature whatsoever;

COBS Rules

refers to the FCA Conduct of Business sourcebook rules;

Co-CfA Investors

means those CfA Investors who invest in the same Pitch for the same Investee Company;

Committed Funds

means the funds You commit to an investment up to the Minimum Funding Target being reached. Once the investment is successful, the Committed Funds will be transferred from the segregated client money account to the Investee Company. If the investment is not successful, the Committed Funds will remain in the segregated client money account and will be credited back to the balance of Your CfA Account;

Companies Act

means the Companies Act 2006, as it may be amended from time to time;

Conversion Date(s)

means the prescribed dates upon which a CfA Investor will be permitted to exercise Warrants attached to Loan Notes in order to convert the Loan Notes into Shares as determined on the CfA Platform by the relevant Investee Company;

Conversion Discount

means the discount on the market share price of the Investee Company that  is to be offered to a CfA Investor in the event that they choose to convert;

Conversion Notice

means the notice of the intention to exercise the Warrants attached to Loan Notes;

Conversion Price

means the price at which the Loan Notes can be converted into Shares on the relevant Conversion Date(s) by the exercise of Warrants;

Conversion Price Formula

the Loan Notes will be into Ordinary Shares at a Conversion Discount which can vary but is expected to be of the lowest or average Bid Price during a set number of Trading Days immediately prior to the Conversion Date. The Bid Price is discounted by the Conversion Discount to give the Conversion Price;

Data

means Personal Data and Financial Data as set out in Paragraph 23;

Data Protection Legislation

the Data Protection Act 1998, the Data Protection Directive (95/46/EC), the Regulation of Investigatory Powers Act 2000, the Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000 (SI 2000/2699), the Electronic Communications Data Protection Directive (2002/58/EC), the Privacy and Electronic Communications (EC Directive) Regulations 2003 (SI 2426/2003) and all applicable laws and regulations relating to the processing of Personal Data and privacy, including where applicable the guidance and codes of practice issued by the Information Commissioner;

Debt Pitch

means a Pitch looking for funding through the issue of Loan Notes or Loans;

Detailed Pitch

means the detailed information about an Investee Company seeking funding through the CfA Platform that is represented by the Pitch and displayed when clicking through a Pitch Summary Box, as explained further in Paragraph 10.2;

Early-Stage Businesses

means an Investee Company that has not yet begun generating revenue from its core activities, as described further in Paragraph 8.1;

Equity Pitch

means a Pitch looking for funding through the sale of Shares in private companies;

Execute/ Executed/ Executing

means, with respect to any agreement that You enter in to with CfA or via CfA, that You express Your assent to be legally bound by its terms whether accepted by You via electronic means provided on the CfA Platform or otherwise in a manner approved by CfA;

Exit Transaction

means either a Mandatory Exit Transaction or a Voluntary Exit Transaction;

Extra Closing Date

means the date on which the Extra Period ends which shall be the earlier of (1) the Maximum Funding Target being reached; or, (2) the CfA Listing Window for the Pitch has reached its expiry date;

Extra Period

means the period after the Initial Closing Date when the Maximum Funding Target has yet to be reached and the Listing Window has not expired, which ends on the Extra Closing Date;

FCA

means the Financial Conduct Authority Limited, an independent organisation that authorises and regulates CfA, whose address is 12 Endeavour Square, London, England, E20 1JN;

FCA Rules

means the FSMA, all secondary legislation implemented there under, COB Rules and regulations promulgated by the FCA or any successor or replacement regulatory body responsible for the regulation of our company, and any other financial services laws or regulations applicable to CfA;

Fiat

Is terminology to reference currency (£, $ €);

Final Closing Date

as per Paragraph 12.3;

Financial Data

means Data which is of a personal and financial nature and type;

Financial Promotion

as defined and interpreted in the FSMA;

Force Majeure Event

means any happening or event beyond the control of the party concerned including fire, flood, any act of God, act of terrorism, riot, labour dispute, power or telecommunications failure;

FPO

FSMA 2000 (Financial Promotion) Order 2005;

Funding Target

means the Minimum Funding Target and/ or the Maximum Funding Target;

FSMA

Financial Services and Markets Act 2000;

High Net Worth Individual

refers to a Retail Investor who meets the criteria for categorisation as a high net worth individual under any of the high net worth investor exemptions in the PCIS Order, the FPO or in the COB Rules. Among the criteria are having an annual income of more than £100,000 or having investable net assets of more than £250,000;

IF-ISA

IF-ISA: an innovative finance individual savings account under ISA Regulations.

Inheritor

as per Paragraph 11.2 of the Nominee Terms in Schedule 1;

Inheritor Nominee Agreement

as per Paragraph 11.2 of the Nominee Terms in Schedule 1;

Initial Closing Date

means the date during the Normal Period on which an Investee Company receives its Minimum Funding Target;

Institutional Investor

means the entity including but not limited to a private company, public company, partnership or government organisation that joins the CfA Platform as a CfA Member in order to invest on behalf of that entity as opposed to an individual CfA Members who wishes to invest on their own behalf;

Institutional Member

 means a legal person who has joined the CfA Platform as a CfA Member to invest as referred to in Paragraph 3.1;

Interest

means the interest payable at the Interest Rate on the Repayment Date upon redemption;

Interest Rate

means the interest rate determined by the Investee Company which is the rate at which the Investee Company will pay CfA Investors over the 360 day year;

Investee Company

means the legal entity that controls an Investee Company in which an investment is made through the CfA Platform;

Investment

means investment in shares, loan notes, loans, as well as tokenised securities or tokens purchase.

Investment Agreement

means an investment agreement entered into between, inter alia, the CfA Investor, CfA and the Nominee in relation to the CfA Investor’s commitment to invest into an Investee Company;

Investment Amount

means the actual amount of funds invested by one or more CfA Investors in a relevant investment;

Investment Decision

means a decision whether to invest in a given Investee Company through the CfA Platform, and if so, how much to invest;

Legal Services

those services to be rendered by CfA’s nominated lawyers as per Paragraph 14;

Loan Note Instrument

refers to the deed instrument expressing the active intention of the Investee Company, documenting the rights governing the subsequent conversion or other redemption of the Loan Notes. The Noteholder can directly enforce the obligations of the Investee Company;

Loan Notes

means a loan first and foremost which may or may not be issued subject to and with the benefit of a Warrant granting the right to convert;

Loan Note or Loan Agreement

to be entered in respect of the investment between the Investee Company, its Directors and the Nominee (acting on behalf of the CfA Investors) to document the acquisition of loan notes or loans;

Losses

means any claims, losses, demands, actions, third party claims, damages, costs (including court costs and legal fees), fines, liabilities, obligations, liens and expenses;

Mandatory Exit Transaction

as per Paragraph 4 of the Nominee Terms in Schedule 1;

Maximum Funding Target

means the highest sum that the Investee Company hopes to raise via the Site, for a debt or equity pitch.

Minimum Funding Target

means the lowest sum that the Investee Company hopes to raise via the Site, for a debt or equity pitch.

Net Assets Limitation

means 10% of Your Stated Net Assets, as explained further in Paragraph 9.7;

New Nominee

means the replacement nominee that CfA may choose to appoint at any time and entirely at its discretion in accordance with the Nominee Terms;

Nominee

Thomas Grant & Company Nominees Limited (company number 02834389) (or such other New Nominee that is appointed as a replacement) is a subsidiary of Thomas Grant & Company Limited;

Nominee Deed of Trust

refers to the pre-populated, signed and dated declaration of trust issued to a CfA Investor via the CfA Platform when an investment is completed which serves to document by deed that the Nominee shall hold the Shares, Loan Notes or Loans on trust for the CfA Investor;

Nominee Services

as set out in Paragraph 2 of Schedule 1;

Nominee Terms

refers to the terms governing the Nominee Services as set out in Schedule 1;

Normal Period

means the period commencing on the CfA Listing Date of a Pitch and ending on the Initial Closing Date;

Noteholder

means the Nominee who holds the Loan Notes for the benefit of the relevant CfA Investors who have acquired the Loan Notes in the Investee Company via the CfA Platform and who are the Beneficial Owners of the Loan Notes;

Notice of Intention to Convert

means the notice given by a CfA Investor on the CfA Platform which represents an express instruction to the Nominee to serve a Conversion Notice on the Investee Company;

Ordinary Retail Investor

same as “Restricted Investor”;

PCIS Order

FSMA 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001;

Personal Data

means Data of a personal type and nature;

Pitch(es)

means a submission of any details / files (such as links to Video Pitch, screen cast pitch and or text content produced or uploaded) using the CfA Platform, or any other communication directly with CfA to raise equity or debt funding or token sales which shall be posted on the CfA Platform as a CfA Listing once approved by CfA;

Pitch Creation Form

means the questions that the Investee Company is asked by CfA when wishing to submit Pitch Information to create a Pitch as a CfA Listing for publication, posting and promotion on the Site;

Pitch Information

means the information required to create the Pitch;

Pitch Summary Box

means the summary information about an Investee Company seeking funding through the CfA Platform as displayed in the “Browse Pitches” section, as explained further in Paragraph 10.1;

Post-Investment Process

means, with respect to a CfA Investor, the information, rights, payments and transfer processes referred to in Paragraph 16;

Pre-Emption Offer

as per Paragraph 3.1 of the Nominee Terms in Schedule 1;

Privacy Policy

means the privacy policy of CfA, which is accessible from each page of the Site and to which You are deemed to have consented by using the Site;

Redemption Notice

means the notice served by the Nominee on the Investee Company upon maturity of the Loan Note i.e. on the Repayment Date;

Relief(s)

means any of certain tax reliefs for investing in Early-Stage Businesses, as explained further in Paragraph 18;

Repayment Date

means the date upon which the Loan Notes or any part thereof shall become repayable;

Restricted  CfA Investor

or otherwise known as an “Ordinary Retail Investor” pursuant to the FCA, refers to a Retail Investor who is neither a Sophisticated Investor nor a High Net Worth Individual, rather, investors of ordinary means and experience;

Retail Investor

means a CfA Investor who is a client for the purposes of the FCA and who is authorised to invest on the CfA Platform (as per Paragraph 6) in one of the ways referred to in Paragraph 9.1. For the purposes of the CfA Platform and the FCA, We distinguish between three types of retail customer i.e. the Sophisticated Investor, the High Net Worth Investor and the Ordinary Retail Investor (or Restricted Investor);

Rewards

as per Paragraph 10.5;

Secondary Market Transaction

as per Paragraph 4.2 of the Nominee Terms in Schedule 1;

Shares

means the ordinary shares acquired by a CfA Investor on the CfA Platform;

Site

means, with respect to CfA, the website hosted at http://www.crowdforangels.com, including all sub-domains thereof;

Small Company or Small Companies

To be a small company (private or public) by UK standards, at least two of the following conditions must be met:

  • Annual turnover must be £6.5 million or less
  • The balance sheet total must be £3.26 million or less
  • The average number of employees must be 50 or fewer

Source: http://www.companieshouse.gov.uk/companiesAct/implementations/apr2008ExemptionThreshold.shtml 

Sophisticated Investor

refers to a Retail Investor who meets the criteria for categorisation as a sophisticated investor under any of the sophisticated investor exemptions in the PCIS Order, the FPO or in the COB Rules. These are Retail Investors with extensive investment experience and knowledge of complex instruments, who are better able to understand and evaluate the risks and potential rewards of unusual, complex and/or illiquid investments;

Stated Net Assets

means the bottom of the range in which You have declared to CfA Your net assets falls, as explained further in Paragraph 9.7;

Subscription Agreement

a subscription agreement to be entered into in respect of the investment between the Investee Company, its shareholders (Directors) and the Nominee (acting on behalf of the CfA Investors) to document the acquisition of Shares,Loan Notes or Loans;

Thomas Grant & Company Limited

means the company with registered office at 40a Friar Lane, Leicester, Leicestershire, LE1 5RA and Company No.02788515 which is permitted to hold and control client money by the FCA (163296);

Token

Are a representation of a particular asset or utility, that usually reside on top of their own or another blockchain;

Token Sale

 refers to a digital mechanism, of raising funds from the public in exchange for fiat or other cryptocurrencies, such as bitcoins or Ethereum;

Token Sales Company

is a company that is the issuer of tokens in return for fiat or other cryptocurrencies;

Token Security

Means the ownership of the security whether in the form of shares, loan notes, loans or other assets is represented in digital form on the blockchain;

Tokenised Security and Nominee Release

A CfA Investor investing in Tokenised Securities is released from the Schedule 1 of this agreement referring the Nominee terms and holds the tokenised security at his own risk in his digital wallet;

UGC

means content provided/ generated by a CfA User (including CfA Listings) when accessing and using the CfA Platform which are uploaded, embedded or otherwise displayed and/ or stored on the Site which may include but are not limited to text, articles, images, graphics, photos, stories, audio, video, software, audio-visual combinations, interactive features and other materials in any form, medium or technology now known or hereinafter developed that may be viewed on, accessed through or disseminated publicly on the Site for use by CfA or a CfA User as the functionality of the Site permits;

Updates

refers to the updates published in relation to a CfA Listing as per Paragraph 10.5;

Video Pitch

means a Pitch that is submitted in video format;

Voluntary Exit Transaction

as per Paragraph 4 of the Nominee Terms in Schedule 1;

Wallet

Refers to a software program that stores private and public keys and interacts with various blockchain

Warrant

means the rights subject to which the Loan Note is issued which grants the Noteholder the right to convert all or a portion of the outstanding principal of the loan into Shares in the Investee Company at the Conversion Price on a Conversion Date;

Website Terms of Use

means the general terms governing Your use of the Site, which are accessible from each page of the Site and to which You are deemed to have consented to by using the Site;

Whitepaper

equivalent of a business plan for a Token Sales Company.

Working Day

means any day other than a Saturday, Sunday, English or international public / national holiday;

 

34.2. Subject to the above, expressions used in this Membership & Nominee Agreement shall, where the context permits, have the same meaning as in the FCA Rules.

 

34.3. Unless the context requires otherwise, words in the singular include the plural and vice versa, and use of the masculine includes the feminine and neuter and vice versa.

 

34.4. The word "including" or "includes" is not exclusive, so it should be read as if followed by the words "without limitation".

 

34.5. References to a specific Paragraph means a Paragraph of this Agreement unless otherwise stated.

 




MEMBERSHIP & NOMINEE AGREEMENT (EQUITY & DEBT)

Schedule 1

NOMINEE TERMS

  1. APPOINTMENT (AND REPLACEMENT) OF NOMINEE

1.1             By way of a power of attorney set out at Paragraph 2 below, You authorise CfA to appoint the Nominee (Thomas Grant & Company Nominees Limited (company number 02834389) a subsidiary of Thomas Grant & Company Limited) (or such other New Nominee that is appointed as a replacement) as Your nominee to act on Your behalf in purchasing, administering and holding Your Shares, Loan Notes or Loans subscribed to pursuant to Your investment completed on the CfA Platform in accordance with the Investment Agreement. You hereby accept such appointment on the terms and conditions set forth in this Schedule 1 and the Nominee Deed of Trust which shall be issued to You via the CfA Platform upon completion and acceptance of an Investment Agreement.

1.2             You further authorise CfA to procure that the Nominee shall do all things stated in these Nominee Terms on Your behalf. Subject to the due completion of the relevant investment and acceptance of the terms, the Nominee shall:

(a)                use the Investment Amount to subscribe for the Shares, Loan Notes or Loans on Your behalf;

(b)                hold and administer the Shares, Loan Notes or Loans as the legal shareholder of the Shares or the legal Noteholder of Loan Notes or Loans;

(c)                 submit a Conversion Notice to the Investee Company as may be instructed by the Beneficial Owner in order to convert the Loan Notes into Shares;

(d)                submit a Redemption Notice to the Investee Company upon maturity of the Loan Notes or Loans on the Repayment Date in order to procure for the Beneficial Owner the principal sum and accrued interest where conversion has not taken place in respect of all or a portion of the Loan Notes or Loans; and

(e)                have and claim no beneficial or other interest in the Shares, Loan Notes or Loans (except in its capacity as Nominee hereunder).

1.3             You acknowledge that You may be one of a group of other CfA Members who make investments in the Investee Company via the CfA Platform, all of whom are held to share common objectives in terms of the role to be played by the Nominee in respect of the relevant Shares, Loan Notes or Loans (“Co-CfA Investors”).

1.4             The Nominee shall hold and administer the Shares, Loan Notes or Loans as it believes (in its absolute discretion) to be in the best interests of the CfA Investor having regard at all times to the best interests of the relevant Co-CfA Investors as a whole.

1.5             These Nominee Terms do not create a relationship of partnership between You and the Nominee and should not be construed so as to create any partnership or another form of joint venture.

1.6             CfA may, at any time and entirely at its discretion, appoint any other person, corporate entity, body or organisation as a replacement Nominee provided that CfA is satisfied that such New Nominee is competent to perform the obligations of the Nominee under this Agreement and that the New Nominee agrees to be bound by such obligations before the departing Nominee can be released from such obligations. Upon a New Nominee's appointment, the departing Nominee shall cease to be the Nominee and shall no longer be bound by this Agreement.

1.7             You irrevocably acknowledge and confirm to CfA that:

(a)                You have not relied on any representation, advice, information or appraisal of the Investee Company (or its respective affairs) or the directors of the Investee Company carried out or effected by the CfA;

(b)                CfA shall have no liability to You in respect of Your Investment Decision to invest in the Investee Company;

(c)                 You have made Your own investigations, appraisals and assessment of the Investee Company in making Your Investment Decisions; and,

(d)                You shall not be entitled to direct the actions of the Nominee except as expressly provided for in this Agreement.

1.8             Where the term “Sell” is used throughout these Nominee Terms, it shall mean to sell, transfer or otherwise dispose of.

 

  1. POWER OF ATTORNEY

Subject to termination of these Nominee Terms pursuant to Paragraph 13, You hereby expressly appoint CfA to be Your true and lawful attorney (“Attorney”) in Your name and on Your behalf to do and perform all things that are necessary and desirable and for CfA to appoint the Nominee on Your behalf to also be Your true and lawful attorney (“Sub-Attorney”) on Your behalf to do and perform all things that are necessary and desirable by the Nominee including inter alia the performance of the Nominee Services, and to procure that the Nominee carries out the relevant Nominee Services as required by You in respect of the investments made by You in the relevant Investee Company. All actions and decisions deemed necessary by CfA to procure the provision of the Nominee Services including being authorised to appoint the Nominee and to grant the Nominee power of attorney in respect of the Nominee Services to be rendered hereunder are authorised by this power of attorney and any and all acts done, decisions made and instruments or other documents executed pursuant to this power of attorney by the Nominee shall be valid and effectual as though done by CfA and You hereunder. Subject to Paragraph 8, this appointment shall extend but shall not be limited to the Nominee undertaking any of the following matters:

(a)                taking the actions required to comply with Paragraph 1.2(a)-(e);

(b)                supplying the Investee Company with the CfA Investor's personal details i.e. names and addresses provided via the CfA Platform for the purposes of filing any documentation required for the purposes of obtaining EIS or SEIS Relief;

(c)                 taking all decisions, giving or refusing all consents, exercising all rights, performing any acts and things to be done that are capable of being exercised or performed by You in connection with the Investee Company including, but not limited to a sale, listing or winding-up as defined in the Companies Act and any related and applicable legislation (“Exit Transaction”);

(d)                attending and voting at any meeting of the Investee Company including the appointment of a proxy or corporate representative to attend and vote in lieu of the Nominee in such manner as the Nominee shall think fit;

(e)                appointing and removing any director, officer, member, partner or trustee of the Investee Company who the Nominee is entitled to appoint or remove;

(f)                 accepting or declining any offer of Shares, Loan Notes or Loans in the Investee Company (whether by way of transfer, assignment or allotment) made to You; and,

(g)                take any other actions to which the Nominee is entitled by virtue of being the legal holder of Your Shares, Loan Notes or Loans.

(“Nominee Services”)

 

  1. PRE-EMPTION OFFERS

3.1             The terms of any Subscription Agreement, Loan Note or Loan Agreement, the articles of association (and Loan Note Instrument or any other ancillary documentation to implement the Subscription Agreement, Loan Note or Loan Agreement) of the Investee Company may give You (together with any other shareholders in the Investee Company) the right to subscribe for new Shares in the Investee Company or securities giving rights to, or in to, such Shares or to acquire existing Shares in the Investee Company before they are offered to third parties. The CfA Investor acknowledges that:

(a)                if an Investee Company makes such an offer (a "Pre-Emption Offer"), the Nominee will not accept or decline any such Pre-Emption Offer on Your behalf but will send to the CfA Investor any relevant documentation which is sent by the Investee Company to the Nominee with respect to the Pre-Emption Offer as soon as reasonably practicable after the Nominee receives such documentation;

(b)                any such Pre-Emption Offer will typically be subject to the CfA Investor accepting it within a designated period of time;

(c)                 any further communications between You and the Investee Company in relation to such Pre-Emption Offer shall be made directly between You and the Nominee shall not have any further obligation to You in relation to such Pre-Emption Offer;

3.2             Any Shares which You acquire as a result of such Pre-Emption Offer shall also be held by or administered by, the Nominee on Your behalf.

 

  1. EXIT TRANSACTIONS

4.1             The Nominee may Sell Your Shares or Loan Notes if the Investee Company or some or all of its shareholders (whether or not including the Nominee) enter into either:

(a)                a transaction in which the Investee Company's shareholders, including the Nominee on Your behalf, are required to Sell the Shares, Loan Notes or Loans they hold pursuant to the terms of the Investee Company's articles of association or the Subscription Agreement, Loan Note or Loan Agreement (and Loan Note Instrument or any other ancillary documentation to implement the Subscription Agreement, Loan Note or Loan Agreement) (a "Mandatory Exit Transaction"); or,

(b)                a Change-of-Control transaction or initial public offering process pursuant to which the Investee Company's shareholders, including the Nominee on Your behalf, are entitled to Sell the Shares, Loan Notes or Loans they hold pursuant to the terms of the Investee Company's articles of association or the Subscription Agreement, Loan Note or Loan Agreement (and Loan Note Instrument or any other ancillary documentation to implement the Subscription Agreement, Loan Note or Loan Agreement) (a "Voluntary Exit Transaction", the Nominee shall Sell Your Shares, Loan Notes or Loans pursuant to such Exit Transaction.

4.2             In the event that an opportunity arises which will give rise to a formal offer for the Nominee to Sell Your Shares, Loan Notes or Loans other than pursuant to an Exit Transaction (a "Secondary Market Transaction"), and the Nominee believes (in its absolute discretion) that the Secondary Market Transaction represents for You a bona fide and reasonable opportunity:

(a)                the Nominee shall provide You with such information about the Secondary Market Transaction as is reasonably practicable and shall request instructions from You, within a designated period of time, as to whether to Sell Your Shares,Loan Notes or Loans;

(b)                if You instruct the Nominee to Sell Your Shares or Loan Notes, the Nominee shall use its reasonable endeavours to Sell the Shares, Loan Notes or Loans pursuant to the terms of the Secondary Market Transaction and You acknowledge that:

  1.              the Secondary Market Transaction may be subject to pre-conditions and the willingness of the counter-party to progress the Secondary Market Transaction; and
  2.              in the case of competition to Sell Shares, Loan Notes or Loans in a Secondary Market Transaction, the number of Shares,Loan Notes or Loans to be sold may be scaled back in such manner as may be agreed by the Nominee and the other parties to the Secondary Market Transaction; and,

                                       iii.                     if You instruct the Nominee not to Sell the Shares, Loan Notes or Loans or You do not provide the Nominee with instructions in the period of time designated by the Nominee, the Nominee shall not Sell the Shares, Loan Notes or Loans and instead shall continue to hold the Shares, Loan Notes or Loans as Your Nominee.

4.3             If the Nominee Sells the Shares, Loan Notes or Loans pursuant to Paragraph 4.1 or 4.2, then:

(a)                with respect to any cash received in consideration, the Nominee shall, as soon as practicable after receiving such cash, credit Your CfA Account; and,

(b)                with respect to any non-cash property received in consideration, hold or Sell such property as Your Nominee in accordance with Paragraph 12.

 

  1. GENERAL PROHIBITION OF TRANSFER

5.1             You may not make a transfer of Shares, Loan Notes or Loans except pursuant to:

(a)                an Exit Transaction in accordance with Paragraph 4.1; or,

(b)                a Secondary Market Transaction in accordance with Paragraph 4.2.

5.2             Any purported transfer in contravention of this Paragraph 5 shall be null and void.

5.3             For the purpose of this Paragraph 5, transfer includes the transfer, assignment or another disposal of a beneficial or other interest in Your Shares or Loan Notes or the creation of a trust or encumbrance over Your Shares, Loan Notes or Loans.

 

  1. DISTRIBUTIONS FROM INVESTEE COMPANY

6.1             If the Investee Company pays a cash dividend or makes a cash distribution, the Nominee shall, as soon as practicable after receiving such dividend or distribution, credit Your CfA Account.

6.2             In the event that the Investee Company makes a distribution of property other than cash, the Nominee shall hold or Sell such property in accordance with Paragraph 7.

  1. NON-CASH PROPERTY

7.1             In the event that at any time the Nominee holds property (other than the shares or cash), the Nominee shall administer such property in Your interests until such time as the property is sold pursuant to Paragraph 7.2.

7.2             The Nominee may Sell some or all of any non-cash property at any time, in any manner and for any consideration it deems advisable in its discretion and in Your interests and those of any Co-CfA Investors.

7.3             If the Nominee receives cash in consideration of property it Sells, the Nominee shall treat it in the same way as the Nominee would treat cash received in consideration of the sale pursuant to Paragraph 4.3(a).

7.4             If the Nominee receives non-cash property in consideration, the Nominee shall treat it in the same way as the Nominee would treat non-cash property pursuant to Paragraph 4.3(b).

  1. CFA FEES FOR NOMINEE SERVICES

You shall not be charged any CfA Fees for the Nominee Services You receive via the CfA Platform. You acknowledge and agree that CfA is entitled to charge and collect all CfA Fees payable for the Nominee Services from the Investee Company to which Your relevant investment relates. Notwithstanding this, the Nominee shall be entitled to charge You fees at its then current standard applicable rates for any services rendered by the Nominee that go beyond the Nominee Services as defined and set out at Paragraph 2 (a) – (g) of these Nominee Terms. Such fees shall be payable direct to the Nominee upon receipt of an invoice in accordance with the Nominee’s standard rates and standard terms of business.

 

  1. NOMINEE DEED OF TRUST

9.1             When You complete the Investment Agreement, You shall be issued with a Nominee Deed of Trust by the Nominee via the CfA Platform. You acknowledge that the Nominee Deed of Trust is a legal trust declaration issued by the Nominee confirming that Your Shares or Loan Notes shall be held on trust for You as the “Beneficial Owner” and that the Nominee shall carry out the Nominee Services in accordance with these Nominee Terms and shall grant You general powers of attorney.

 

  1. LIABILITY

10.1           You acknowledge that CfA and the CfA Platform solely act as a conduit and all Nominee Services are undertaken and performed by the Nominee who is solely responsible for the provision and quality of the Nominee Services. CfA shall not be liable for any Claims asserted against, or Losses suffered by You (actual and consequential, direct or indirect) of every kind and nature, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way connected with the Nominee’s acts or omission. For the avoidance of doubt, CfA shall have no liability whatsoever arising under or in connection with the Nominee Services to be rendered in accordance with these Nominee Terms, whether in contract, tort (including negligence or wilful default), breach of statutory duty or otherwise.

10.2           Subject to Paragraph 10.4, the Nominee shall not be liable to You for any special, indirect or consequential loss or damage or any loss (whether direct or indirect) of profit, anticipated profits, business, data, opportunity, revenue, goodwill or reputation.

10.3           Subject to Paragraph 10.4, the Nominee’s total maximum liability in aggregate arising under or in connection with the Nominee Services, whether in contract, tort (including negligence), breach of statutory duty or otherwise shall not exceed, an amount equivalent to the CfA Fees paid to CfA for the Nominee Services by the Investee Company.

10.4           Nothing in this Paragraph 10 shall however exclude or restrict any party’s liability for (i) fraudulent misrepresentations, (ii) any liability where the law does not permit such exclusion of liability, and (iii) death or personal injury arising from negligence.

10.5           Except as expressly set out in these Nominee Terms, CfA on behalf of itself and the Nominee, gives no warranties and excludes all other express or implied terms, conditions and warranties to the fullest extent permitted by law.

10.6           No action arising out of or in connection with these Nominee Terms may be brought by You more than twelve (12) months after the date of the event from which the claim (or series of related claims) arose.

 

  1. DEATH

11.1           In the event of Your death, the Nominee shall hold the Shares, Loan Notes, Loans or property received in consideration, as Nominee for Your estate until such time as the beneficial interest in the same is transferred pursuant to Paragraph 11.2.

11.2           If the Nominee receives instructions from Your personal representative, executor or heir following Your death indicating to whom the beneficial interest in the Shares, Loan Notes, Loans and/or any non-cash property received in consideration should be transferred (the "Inheritor") together with evidence to the satisfaction of the Nominee of the instructing party's authority to give such instructions:

(a)                The Nominee shall instruct such Inheritor to join the CfA Platform as a CfA Member (or the Nominee will create a special CfA Membership on his or her behalf subject to and on the terms of an “Inheritor Nominee Agreement” but shall take no other actions through the CfA Platform; and,

(b)                At such time as the Inheritor executes an Inheritor Nominee Agreement in the form and manner prescribed by the Nominee:

  1.              Your estate shall cease to be the Beneficial Owner of the Shares, Loan Notes, Loans and/or any non-cash property received in consideration; and,
  2.              the Inheritor shall be, and the Nominee shall treat the Inheritor as being, the Beneficial Owner of the Shares, Loan Notes, Loans and/or any non-cash property received in consideration.

 

  1. NOMINEE'S RELEASE OF CfA SHARES TO CfA INVESTORS

12.1           The Nominee may transfer legal ownership of some or all of Your Shares, Loan Notes, Loans and/or any non-cash property held by the Nominee pursuant to Paragraph 7, to You or, where relevant, Your estate at any time if either:

(a)                The Nominee concludes that it is no longer in a position to hold the Shares, Loan Notes, Loans and/or any non-cash property in Your best interests and in compliance with all applicable laws and regulations and a New Nominee has not been appointed; or,

(b)                It reasonably appears to the Nominee that the Investee Company (or other non-cash property) is likely to be stagnant for the foreseeable future, meaning that it is unlikely to produce significant returns but does not intend to wind up its business or otherwise cease to exist.

12.2           Any transfer of legal ownership of the Shares, Loan Notes, Loans and/or any non-cash property pursuant to Paragraph 12.1 will, if the Nominee requires, be subject to You or Your estate agreeing to be bound by the terms of any shareholder agreement or similar document in place in relation to the Investee Company at the time of transfer.

12.3           You expressly agree and acknowledge that, in the event that the Nominee exercises its right under Paragraph 12.1, You will become the legal, in addition to Beneficial Owner of the Shares, Loan Notes, Loans and/or any non-cash property and You recognise that, among other things, You shall incur the administrative and other burdens of administering and holding such Shares, Loan Notes, Loans and/or any non-cash property.

 

  1. TERMINATION OF THE NOMINEE ARRANGEMENT OR CfA MEMBERSHIP

13.1           These Nominee Terms and therefore, the appointment of the Nominee as well as the Nominee Deed of Trust shall continue in force until and unless the Nominee no longer holds any of the Shares, Loan Notes, Loans and/or any non-cash property received in consideration as Your Nominee or the Nominee of Your estate. Your CfA Membership shall not be affected.

13.2           Should Your CfA Membership terminate for any reason, these Nominee Terms and the Nominee Deed of Trust (which has not since been dissolved) shall remain in full force and effect and the Nominee shall hold Your Shares, Loan Notes, Loans and/or any non-cash property received in consideration as Your agent as well as Your Nominee.

13.3           The Nominee will make any payments due to You to the address You submitted to the CfA Platform unless the Nominee is otherwise instructed by You in writing.        

13.4           Notwithstanding anything else in this Paragraph 13, the rights and privileges of the Nominee provided in these Nominee Terms shall apply to the Nominee in its capacity as agent to the same extent that they apply in its capacity as Nominee.

 

  1. NOTICES

14.1           Except where these Nominee Terms provide otherwise, any notice from You to the Nominee in respect of the Nominee Services shall be given by e-mail to [email protected] and You must also cc the CfA Platform at [email protected]

14.2           You agree that any notice from the Nominee to You in respect of the Nominee Services may be given either via the CfA Platform, by e-mail to the address set forth in the Your CfA Profile or by post or courier to the physical address set forth in Your CfA Profile. All notices given under this Agreement shall be in the English language.


  1. RATIFICATION

You hereby undertake to ratify and confirm whatever CfA and the Nominee shall do or cause to be done hereunder and to indemnify CfA (and the Nominee) and to keep CfA (and the Nominee) indemnified against all Losses which CfA may suffer as a result of any claims asserted by You other than any Losses arising as a result of negligence, wilful misconduct or fraud by CfA.

 

Updated 15th June 2021

Risk Warning

Investing in small public listed or private companies involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Investing in debt pitches through Crowd for Angels (UK) Limited involves lending to companies and therefore your capital is at risk and interest payments are not guaranteed if the borrower defaults. Investments on this website are targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own Investment Decisions. You will only be able to invest in pitches on this website once you are authorised. Please click here to read the full Risk Warning.

This page has been approved as a Financial Promotion by Crowd for Angels (UK) Limited (Company number: 03064807) , which is authorised and regulated by the Financial Conduct Authority (Reference number: 176508). Investments can only be made on the basis of information provided in the Pitches by the Investee Companies concerned. Crowd for Angels takes no responsibility for this Information or for any recommendations or opinions made by the Investee Companies.

Pitches may contain forward looking statements and financial forecasts or projections. Forecasts are not a reliable indicator of future performance. Crowd For Angels makes no judgement or opinion of the likelihood of targets being achieved. Investments made in companies listed on the Crowd For Angels platform are not covered by the Financial Services Compensation Scheme (FSCS).

The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and of the company concerned, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.