Crowdprop Pledge Terms and Conditions

Pledge Overview:

The Prospectus of CrowdProp Fund is the official document that provides the details about a particular Property Project investment and drives the investment by the crowd. However, the Prospectus needs to go through a registration process before a Crowd Member can invest in a particular Corresponding Investee Company that owns the relevant Property Project. This is where the Pledge Agreement comes in. This document serves as an interim investment agreement until the official Prospectus is registered and serves as a mechanism allowing you, the investor, to confirm your place as a potential investor while the Prospectus undergoes its registration process.

The pledge process works as follows:

You will be provided the opportunity to pledge a sum of money to be used in future to subscribe for a special class of shares in CrowdProp Fund, for a particular Property Project (namely, your investment) and which will be governed by the Terms. This confirms your intention to invest, but is a soft pledge, meaning that it allows you to withdraw the investment pledged (but only at a specific time, as set out in the Terms).

All investments made in terms hereof are securely held in a dedicated 3PIM Account, managed and administered by CrowdProp, up until a Subscription Agreement is entered into and the funds are transferred to the Corresponding Investee Company that owns the particular Property Project.

You will have the option to confirm your investment into a Property Project or revoke your soft pledge and have your investment amount returned to you in full. Likewise, your investment will be returned to you in full if the particular raise for your Property Project is unsuccessful.

It is important to note that your soft pledge will only be used to subscribe for shares in CrowdProp Fund for a specific Property Project if you confirm this in Writing after receiving the Prospectus (see the Terms below) and as such, this pledge does not guarantee you shares in CrowdProp Fund.

Furthermore, CrowdProp, or any entity affiliated to it, is authorised in terms of the Terms, to sign the Subscription Agreement on your behalf to ensure that the implementation of the crowdfunding campaign with the various investors involved is implemented as soon as possible and as smoothly as possible.

 

CrowdFin Proprietary Limited (Company Registration No. 2019/552151/07) (herein referred to as CrowdProp) is a juristic representative of ELA Asset Management (Pty) Ltd (Company registration no. 2017/435463/07) which is an authorized Financial Services Provider (no. 49010). Should you have any questions about the above process, email [email protected]

Pledge Terms and Conditions:

1. Interpretation and Definitions

1.1. “3PIM Account” means a separate and independent bank account, administered and managed by CrowdProp (as a juristic representative of ELA Asset Management (Pty) Ltd (Company registration no. 2017/435463/07)) and opened with First National Bank, A Division of FirstRand Bank Limited (Registration number 1929/001225/06) in terms of its 3rd Party Investment Manager system;

1.2. “Account” means the account created by you on the Website through which you access the Website and manage any Property Projects invested in

1.3. “Business Day” means any day excluding Saturday, Sunday and a public holiday in South Africa;

1.4. “CIPC” means the Companies and Intellectual Property Commission of South Africa;

1.5. “Corresponding Investee Company” means the party who the Crowd Member potentially wishes to invest into and for which the Pledged Amount is directed to;

1.6. “Crowd Member” and “you” means the person in charge of the Account and who is pledging the Pledged Amount in terms of these Terms;

1.7. “CrowdProp” means CrowdFin Proprietary Limited (Company Registration No. 2019/552151/07) with its registered address situated at Office 103 Killarney mall office tower, 60 Riviera road, Killarney, Johannesburg, Gauteng, 2193, email: [email protected];

1.8. “CrowdProp Fund” means CrowdProp (RF) Limited, (Company Registration No. 2019/076437/06) whose physical address is Office 103 Killarney mall office tower, 60 Riviera road, Killarney, Johannesburg, Gauteng, 2193, email: [email protected];

1.9. “Investment Close Date” means the final date on which any investment may be made towards the specific Property Project, as specified on the Website;

1.10. “Minimum Raise” means the minimum amount that needs to be raised for the class of shares in CrowdProp Fund allocated to the Corresponding Investee Company as stipulated in the Prospectus;

1.11. “Parties” means the parties to this Agreement;

1.12. “Pledged Amount” means the amount that you, the Crowd Member, wishes to use to subscribe for shares in CrowdProp Fund and to which these Terms apply to;

1.13. “Property Project” means the selected immovable property or immovable property project of a Corresponding Investee Company, which the Pledged Amount will be pledged towards;

1.14. “Prospectus” means the prospectus that is to be registered by CrowdProp Fund;

1.15. “Subscription Agreement” means the subscription agreement into CrowdProp Fund, a copy of which will be available with the Prospectus;

1.16. “Terms” means these terms in this legally binding agreement that regulate your Pledged Amount and further matters set out herein;

1.17. “Website” means https://CrowdProp.co.za, including all sub-domains; and

1.18. “Writing” or “Written” means any form of written communication, including through ‘Electronic Communication’, as defined in the Electronics Communications and Transactions Act No. 25 of 2002 (being ‘communication by means of data messages’).

2. Application of these terms

BY PLEDGING THE PLEDGED AMOUNT, YOU AGREE TO BE BOUND TO THESE TERMS. YOU MAY NOT PLEDGE ANY PLEDGED AMOUNT IF YOU DO NOT ACCEPT THESE TERMS.

3. Introduction

3.1. You have indicated that you are interested in using the online platform of CrowdProp to invest in the selected Property Project.

3.2. Your investment will be by means of subscribing for shares in CrowdProp Fund and which shares, will be directly linked to the particular Property Project. However, the Prospectus for the Property Project has not yet been lodged with the CIPC and is a necessary step before you can subscribe for shares in CrowdProp Fund. Despite the Prospectus not being lodged, you still wish to confirm your place as a potential subscriber of shares in CrowdProp Fund, by pledging the Pledged Amount to be held in trust in a 3PIM Account, administered by CrowdProp. This pledge does not create an obligation on you to subscribe for shares in CrowdProp Fund, unless as set out herein.

4. Pledge

4.1. CrowdProp manages and is the sole administrator of the 3PIM Accounts opened for and on behalf of all Crowd Members, which includes you.

4.2. You have 7 (seven) Business Days from consenting to these terms, to deposit the Pledged Amount with CrowdProp. The Pledged Amount will be held in trust on behalf of you in the relevant 3PIM Account, managed and administered by CrowdProp. This Pledged Amount must reflect in the relevant 3PIM Account nominated by CrowdProp within 7 (seven) Business Days in order for the Pledged Amount to be deemed to have been deposited in terms of these Terms, failure of which will result in your Pledged Amount being deemed invalid and of no force and effect, meaning that it will not be considered for the subscription of shares in CrowdProp Fund for the particular Property Project.

4.3. The Pledged Amount referred to in clause 4.2 only signifies your intention to subscribe for shares in CrowdProp Fund and does not create any binding obligation on you to do so, until you have given Written confirmation that you elect to subscribe for shares in CrowdProp Fund, as contemplated in clause 5.2.

4.4. You agree that the Pledged Amount cannot be returned to you until either:

4.4.1.  the Investment Close Date; or

4.4.2.  the Prospectus is registered with the CIPC,

whichever is the earlier date and then only if such return is in accordance with these Terms.

4.5. However, as soon as one of the events referred to in clause 4.4 occurs, you may request the return of the full Pledged Amount to a bank account nominated by you in writing (which must be accompanied by an appropriate confirmation letter of such bank details), provided that the Pledged Amount return request is submitted to CrowProp in Writing, at [email protected]

4.6. CrowdProp may in its sole discretion return the Pledged Amount to you at any stage and in which case, these Terms will not be applicable any more.

5.Conversion of pledged amount to subscription shares

5.1. As soon as the Prospectus has been validly lodged with the CIPC, CrowdProp will deliver the Prospectus to you before any other party who has not made a similar investment contemplated herein.

5.2. You will have 10 (ten) calendar days from receiving the Prospectus, or as many days as is communicated to you by CrowdProp in Writing when delivering the Prospectus to you (whichever period is longer), to withdraw your Pledged Amount and have it returned to a bank account nominated by you in writing (which must be accompanied by an appropriate confirmation letter of such bank details). Such request must be submitted to CrowProp in Writing, at [email protected]

5.3. Should you not withdraw the Pledged Amount within the prescribed time period, you hereby agree and confirm that your Pledged Amount shall be converted and used to subscribe for shares in the manner set out in the Subscription Agreement and the Prospectus.

5.4. Should the final day of the prescribed time period set out in clause 5.2 fall on either a Saturday, Sunday or a public holiday in South Africa, then such final day shall be regarded as the following Business Day.

5.5. CrowdProp, nor CrowdProp Fund shall be under any obligation to ensure that there are adequate shares available for subscription by you into CrowdProp Fund and you are encouraged to convert the Pledged Amount, in the manner set out in clause 5.2, as soon as possible in order to ensure that you can subscribe for shares in CrowdProp Fund for the particular Property Project.

6.Return of pledged amount

6.1. Further to what is set out in these terms, CrowdProp will return the Pledged Amount to you if:

6.1.1.  the Minimum Raise has not been met within the time periods stipulated in the Prospectus (or such later date as may be approved by CrowdProp Fund in its sole discretion, which date shall not extend beyond 60 (sixty) days after the Investment Close Date, unless with written consent of all subscribers, as per the Subscription Agreement) and, in terms of which, the Pledged Amount shall be returned within 7 (seven) Business Days of the end of the time period for the Minimum Raise as stated in the Prospectus or 60 (sixty) days thereafter, if applicable; or

6.1.2.  you send a Written request in terms of clause 4.5 for the Pledged Amount to be returned to you, in terms of which, the Pledged Amount shall be returned to you within 7 (seven) Business Days of the request having been received by CrowdProp; or

6.1.3.  you requested the withdrawal of the Pledged Amount, as set out in clause 5.2, in terms of which, the Pledged Amount shall be returned to you within 7 (seven) Business Days of the expiry of the longest time period provided for in clause 5.2.

6.2. Any returned Pledged Amount, as per clause 6.1, shall be returned to the bank account nominated by you in Writing (which must be accompanied by an appropriate confirmation letter of such bank details) and which amount shall be net of any withdrawal or transaction fees or charges levied by your bank (i.e. you are responsible for any fees or charges raised by your bank for any returned Pledged Amount).

7. Appointment of Crowdprop as your agent

As from the date on which the Prospectus is registered and you confirm in Writing that you elect to subscribe for shares in CrowdProp Fund, as per clause 5.2, you hereby nominate and appoint CrowdProp, with full power of substitution, with full power to act, as your true and lawful representative and agent, in your name, place and stead, to take all steps, execute and sign the Subscription Agreement and all documents necessary in order to ensure the subscription by you for shares in CrowdProp Fund pursuant to the terms and conditions of the Subscription Agreement.

8. Interest on pledged amount

The interest earned on any of the Pledged Amount shall be retained by CrowdProp as an administration fee for the services offered to you by CrowdProp in terms of these Terms.

9. Arbitration

9.1. Any dispute which arises out of or pursuant to these Terms (other than where an interdict is sought or urgent relief may be obtained from a court of competent jurisdiction) shall be submitted to and decided by arbitration in accordance with the arbitration rules and legislation for the time being in force in the Republic of South Africa.

9.2. The Parties shall jointly appoint an arbitrator within 10 (ten) Business Days of either Party demanding arbitration from the other Party, failing which either Party shall be entitled to approach the Secretariat of the Arbitration Foundation of South Africa (“AFSA”) to recommend an arbitrator to preside over the arbitration proceedings, which recommendation will immediately be deemed to have been accepted by the Parties as soon as such recommendation is made to either Party and the arbitration process may immediately commence.

9.3. Unless otherwise agreed, the rules of Commercial Arbitration as stipulated by AFSA will apply to such arbitration.

9.4. That arbitration shall be held:

9.4.1.  with only the Parties and their representatives present;

9.4.2.  at Johannesburg.

9.5. The provisions of this clause are severable from the rest of these Terms and shall remain in effect even if these Terms are terminated for any reason.

9.6. The arbitrator’s award shall be final and binding on the Parties and incapable of appeal.

10. General

10.1. Governing law: these Terms and any matter arising from these Terms shall be governed by and interpreted in accordance with the laws of the Republic of South Africa.

10.2. Amendment: no change, amendment or modification of any provision of these Terms shall be valid unless set forth in a Written instrument signed by both Parties.

10.3. Breach: If any party to these Terms breaches any material provision or term of these Terms and fails to remedy such breach within 14 (fourteen) days of receipt of Written notice requiring it to do so then the aggrieved party shall be entitled without notice, in addition to any other remedy available to it at law or under these Terms (including obtaining an interdict), to cancel these Terms or to claim specific performance of any obligation whether or not the due date for performance has arrived, in either event without prejudice to the aggrieved party’s right to claim damages. The parties agree that the Apportionment of Damages Act as amended shall apply to these Terms.

10.4. No assignment: neither Party will be entitled to cede their rights or delegate their obligations in terms of these Terms without the express prior Written consent of the other Party.

10.5. Entire agreement: these Terms constitutes the whole agreement between the Parties relating to the subject matter of these Terms and supersedes any other discussions, agreements and/or understandings regarding the subject matter of these Terms.

10.6. No waiver: the failure of either Party to insist upon or enforce strict performance by the other Party of any provision of these Terms, or to exercise any right under these Terms, shall not be construed as a waiver or relinquishment of such Party’s right to enforce any such provision or right in any other instance.

10.7. Severability: any provision of these Terms which is or may become illegal, invalid or unenforceable in any jurisdiction affected by these Terms shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability and shall be severed from the balance of these Terms, without invalidating the remaining provisions of these Terms or affecting the validity or enforceability of such provision in any other jurisdiction.

10.8. Third party stipulation: no part of these Terms shall constitute a stipulation in favour of any person who is not a party to these Terms unless the provision in question expressly provides that it does constitute such a stipulation.

10.9. Representations: to the extent permissible by law no Party shall be bound by any express or implied or tacit term, representation, warranty, promise or the like not recorded in these Terms, whether it induced the contract and/or whether it was negligent or not.

10.10. Confidentiality: neither Party shall disclose any confidential information to any third party without the prior written approval of the other Party, unless required by law.

10.11. Good faith: the Parties shall in their dealings with each other display good faith. Address for Service:

10.12. Address for Service:

10.12.1. CrowdProp selects Office 103 Killarney mall office tower, 60 Riviera road, Killarney, Johannesburg, Gauteng, 2193 as its physical address and [email protected] as its email address for the service of all formal notices and legal processes in connection with these Terms, which may be updated from time to time by updating these Terms;

10.12.2. you hereby select the email address specified in your Account as your address for service of all formal notices and legal processes in connection with these Terms, which may be changed by providing CrowdProp with 7 (seven) calendar days’ notice in Writing; and

10.12.3. service via email shall be accepted in all cases where notice is required unless alternative service is required by law. Service via email is deemed to be received at the time and day of sending.

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