Company Management and Investment Agreement

Dated 2019-03-25



Parties

(1) (“the Company”)

(2) Crowd With Us Limited, which is incorporated in England & Wales with registered number 9243491, and whose registered office is at 207 Regent Street (3rd Floor), London W1B 3HH (“CWU”)

(3) You, as an Investor (defined below), along with all other Investors accepted as holders of B Shares in the Company

Background

(A) CWU has arranged for the Company to acquire with full title guarantee the Property.

(B) The Company is engaging CWU to manage the Property for the duration of this Agreement.

(C) CWU directly holds one non-redeemable Management Share. CWU either holds or via one or more nominee entities controls 1000 redeemable “A” Shares in the capital of the Company, and has arranged for redeemable “B” Shares in the Company to be offered for subscription via the Website to the Investors.

(D) This Agreement is intended to regulate the basis upon which the Property is managed so as to return to the Investors an income return derived from rental of the Property and a share in the capital proceeds of the disposal of the Property.

Agreement

  1. 1. Definitions and other initial provisions

    1. 1.1 This Agreement uses the following defined terms:

Articles the articles of association of the Company. Please note that while you should be aware of the Articles and ideally should review them at the time of investing in B Shares, there may be provisions in this Agreement which appear to conflict with the Articles, and if so, this Agreement prevails

A Share a redeemable A Share in the capital of the Company (all such A Shares being at all material times in issue to CWU or one or more nominee entities

Associate in relation to CWU:
(a) a director for the time being of CWU or of the Company;
(b) a shareholder in CWU; and
(c) a person or entity that holds or intends to subscribe for A Shares.

B Share a redeemable B Share in the capital of the Company (all such B Shares being in issue to the Investors, in proportion to their amounts of invested capital committed via the Website or Offline)

Business Day a day other than a Saturday, Sunday or public holiday in the UK on which banks in London are generally open for non-automated business

the Company , which has been incorporated for the sole purpose of acquiring, owning, refurbishing, managing and eventually selling the Property

Completion completion of the purchase of the Property (and “Completion Date” shall be understood accordingly

Confidential Information information which any party provides to any other which is confidential in nature or which, though provided in order that this Agreement may be properly performed, the providing party reasonably expects that the receiving party (unless required to do so for legal reasons) will not be sharing outside of the relationship governed by this Agreement

CWU Crowd With Us Limited

the Directors the directors for the time being of the Company

Dividend Interval Period each period of one calendar month, the first such ending on the First Dividend Date

Dividend Year each period of 12 months commencing at the end of the Refurbishment Period or on each anniversary thereof

the Escrow Account as the case may be:

(a) the bank account maintained by the Payment Firm or by the Solicitors to the Company, into which subscription moneys for B Shares are paid under the terms of the Offer; or

(b) the bank account maintained by the Payment Firm, into which the net proceeds of the sale of the Property (after deductions provided for under this Agreement)

FCA The Financial Conduct Authority (and “FCA Rules” shall be understood accordingly)

First Dividend Date The date falling four months after the date on which the Property is first let to a tenant

HM Land Registry Her Majesty’s Land Registry, at which title to the Property is registered

HMRC Her Majesty’s Revenue and Customs

Investors persons whose offer to subscribe for B Shares has been accepted by CWU as manager of the Company. Subject to the terms of this Agreement, Investors may include CWU itself or its Associates

the Management Share the single £1 non-redeemable management share in the Company which CWU holds

Majority a majority of the B Shareholders (excluding CWU and any Associate), calculated by reference to the number of B Shares outstanding

the Mortgagee should the Directors decide to borrow money by granting a first legal charge (“the Mortgage”) over the Property, the party to whom the Mortgage is granted (whose identity, and the outline terms of whose security, will be made known to Investors via the Website)

Offer an offer to subscribe for B Shares made via the Website (and “your Offer” shall mean specifically your own offer to do so)

Offline denotes the promotion of the Offer other than via the Website, in circumstances where CWU raises money for the purchase of the Property through its contacts rather than through persons who register on the Website

Operating Budget the Company’s budget, published by the Directors via the Website, which sets out the income that is expected to be generated through rental of the Property and the costs expected to be incurred managing the Property through the process of rental to tenants

the Payment Firm Leetchi Corp SA incorporated in Luxembourg with company number B173459, authorised as a financial institution by the CSSF under number W00000005 and operating in the UK under the business name MangoPay

Refurbishment Budget the Company’s budget, published by the Directors via the Website, which sets out the costs that the Company expects to incur in refurbishment of the Property prior to its being available for rental which is subject to review and revision from time to time (for example when a tenant vacates the Property if it is already rented when purchased by the Company, if it therefore becomes necessary to carry out any refurbishment deemed necessary by CWU).

Refurbishment Period the period disclosed by the Directors during which the Property, following Completion, undergoes refurbishment prior to rental. Generally this will not exceed 6 months

Risk Statement the summary statement of generic risk associated with investments made on the Website or Offline as presented by CWU

the Property the Freehold property registered with title number Garratt Lane, London, SW17 0ND, full details of which are provided via the Website, which is registered with full title guarantee in the name of the Company

the Rent Roll the total anticipated rental income from the Property in each calendar year commencing from Completion and continuing until the Property is sold

Solicitors to the Company Howard Kennedy LLP of No 1. London Bridge, London, SE1 9BG, being the firm of private practice solicitors who represent the Company in relation to the purchase of the Property and, if relevant, the Mortgage and the eventual sale of the Property (or such other firm as the Company may appoint in its place)

Terms of Use the terms that regulate your access to and use of the Website, set out in Schedule 1 to this Agreement, which includes CWU’s privacy policy

the Website the website maintained by CWU at www.crowdwithus.london, at which details of the Property are available and through which B Shares in the Company are offered for subscription

  1. 1.2 The object of this Agreement is to set out the legal relationship between CWU, the Company and you (as an Investor), and to do so in plain English so far as is possible. This Agreement does create legal relationships and establish legal rights and duties for its parties, and these cannot always be expressed in everyday language.

  2. 1.3 Each Investor will be simultaneously a party to an identical version of this Agreement.

  3. 1.4 You are treated as being a party to this Agreement (and accordingly this Agreement comes into force) as soon as all of the following have taken place:

    1. 1.4.1 you have registered with CWU via the Website or Offline as:

      1. 1.4.1.1 a certified high net worth individual; or

      2. 1.4.1.2 a certified sophisticated investor; or

      3. 1.4.1.3 a self-certified sophisticated investor; or

      4. 1.4.1.4 a certified restricted investor

(each term as explained on the Website and defined in the FCA Rules), and the conditions for your registration remain in force;

      1. 1.4.2 if this is the first time that you have made an Offer, you have acknowledged that you have read and understood:

        1. 1.4.2.1 the Terms of Use; and

        2. 1.4.2.2 the Risk Statement;

      2. 1.4.3 you have participated in the Offer;

      3. 1.4.4 your Offer has been accepted by CWU (which includes a part acceptance, which could occur where there are more subscriptions for B Shares than there are B Shares to allot);

      4. 1.4.5 you have transferred money in cleared funds to the Escrow Account in consideration for the acceptance of your Offer and within [5] Business Days of CWU telling you that your Offer has been accepted;

      5. 1.4.6 CWU is satisfied that you have provided complete details concerning your identity and the source of your funds, in accordance with UK anti-money-laundering regulatory procedures; and

      6. 1.4.7 where cancellation rights apply under clause 1.6, you have not exercised your cancellation rights or the relevant period for doing so has expired.

    1. 1.5 You should note that if CWU is not satisfied that all of the conditions in clause 1.4 have been properly satisfied, then CWU will notify you of this fact, this Agreement will thereupon be treated as terminated by the Company and CWU and you will no longer be a party to it for any purposes.

    2. 1.6 If your Offer was made via the Website, this Agreement is subject to cancellation in accordance with the FCA Rules implementing the EC Distance Marketing Directive. You will accordingly have 14 days from being notified that your Offer is accepted within which to cancel this Agreement (which you may do in writing to CWU).

    3. 1.7 Subject to clause 1.5 and to clause 10 (which deals with termination for breach and the like), this Agreement remains in force until the distribution of the proceeds of the sale of the Property take place, as provided for in clause 9.

    4. 1.8 Please note as follows:

      1. 1.8.1 this Agreement is not subject to cancellation rights other than as specified in clause 1.6;

      2. 1.8.2 if you have any complaint regarding this Agreement or the services which CWU provides hereunder, please address it in writing to CWU and it will be investigated promptly. Individual investors generally speaking also have the right to complain to the Financial Ombudsman Service, more details concerning which can be found at www.financial-ombudsman.org.uk; and

      3. 1.8.3 should CWU default for any reason, or should Share In Ltd do so, you may be entitled to compensation from the Financial Services Compensation Scheme, which caps this at a maximum of £50,000. Please note that this is not applicable in cases where the Company fails to pay dividends or to realise the Property so as to generate capital profit. Further details of the Scheme can be found at www.fscs.org.uk.

    5. 1.9 Finally, please also bear in mind that even if you are a repeat Investor with CWU and have been party to an agreement with CWU in broadly this form, there may be small variations between that agreement and this Agreement, particularly as may reflect the specific commercial terms of the Company and the Property.

  1. 2. The Property

    1. 2.1 For a physical description of the Property, you should refer to the Website. The Company does not undertake to allow you to make a physical inspection of the Property, whether prior to or after acceptance of your Offer.

    2. 2.2 If you have been notified via the Website of the creation of the Mortgage at Completion, then you should note that your rights as a B Shareholder to enjoy income and capital returns from the Property will be subject to the priority rights of the Mortgagee, who will be entitled in case of default by the Company to sell the Property (or arrange for a receiver to do so) in order to recover the amount of the Mortgage. Although the Mortgagee has a duty in law to obtain the best price they can on selling the Property in such circumstances, you may well not get back the total amount of your investment in B Shares and/or not receive some or all of the dividends to which these B Shares would otherwise be entitled.

    3. 2.3 Completion may already have taken place, in which case the Company may have entered into arrangements to bridge the necessary finance, and the moneys you subscribe under the Offer are authorised by this Agreement to be applied to paying down any such bridge finance. If Completion has not taken place, CWU will advise the Completion Date via the Website.

  2. 3. The Company

    1. 3.1 The Company warrants to you (severally with all other Investors), on a continuing basis while this Agreement remains in force, as follows:

      1. 3.1.1 the Company is validly incorporated in England and Wales, is solvent and is in good standing;

      2. 3.1.2 the sole business of the Company has since incorporation been, and remains, the acquisition, management and eventual sale of the Property (with all matters reasonably ancillary thereto);

      3. 3.1.3 except for:

        1. 3.1.3.1 the Mortgage, if there is one;

        2. 3.1.3.2 bridge finance facilities intended to be repaid at Completion (if this has not already taken place); and

        3. 3.1.3.3 normal commercial overdraft facilities

the Company has no debts, secured or unsecured.

    1. 3.1.4 the Property has been (or at Completion, will be) acquired by the Company as a Freehold property with full title guarantee and free from any encumbrances (other than the Mortgage);

    2. 3.1.5 the Property is, or will from the end of the Refurbishment Period be, suitable for the purposes of a residential rental for the duration (or remainder) of this Agreement; and

    3. 3.1.6 the Directors have agreed with the Company to devote so much of their time to the management of the Property as is necessary and reasonable for the Company to be able to perform this Agreement, but recognising that the Directors do or will perform similar functions for other companies formed to acquire and manage properties offered via the Website.

  1. In consideration for your Offer, you have been issued with 310,000 B Shares in the capital of the Company. B Shares:

    1. 3.2.1 are issued with a £0.01 par value at a premium over par of 99p;

    2. 3.2.2 may be redeemed exclusively at the discretion of the Company, using powers under Part XVIII Companies Act 2006;

    3. 3.2.3 carry the right to priority dividends paid monthly by the Company (subject to the Articles and this Agreement) commencing from the First Dividend Date, reflecting an allocation to you of net income after expenses derived from rental of the Property.

    4. 3.2.4 do not carry voting rights other than in relation to certain matters relating to the prolongation of the life of the Company addressed in clause 8.2 and some matters relating to the management of the property, addressed in clause 3.6 below; and

    5. 3.2.5 may be transferred only under the provisions of clause 13 of this Agreement.

  2. 3.3 Please note that the Company (advised by CWU) reserves the right to issue further B Shares at any time prior to the termination of this Agreement (including to CWU or its Associates), where, for example, the Company is in need of further equity capital for investment into refurbishment of the Property. It is the Company’s policy, in accordance with the Articles, to offer all existing Investors the right to subscribe for further B Shares pro rata to their existing holdings before any offer is made (on the Website or Offline) to third parties who are not already Investors.

  3. 3.4 The management of the Company’s business, including the Property, is vested in the Directors. They have agreed to meet as frequently as necessary in order to overview the Company’s affairs and in particular:

    1. 3.4.1 to supervise the refurbishment of the Property during the Refurbishment Period;

    2. 3.4.2 to keep under review both the Refurbishment Budget and the Operating Budget and to advise Investors via the Website of any material proposed changes that may be required to either of these;

    3. 3.4.3 to review the Mortgage and the Company’s relationship with the Mortgagee (if there is one);

    4. 3.4.4 to approve and execute any documents related to the Property that require approval of the Directors; and

    5. 3.4.5 to receive and consider proposals from CWU from time to time with respect to the realisation of the Property.

  4. 3.5 The Directors have agreed to delegate to CWU the day to day management of the Property, and CWU has agreed to accept the responsibilities set out in clause 4.3 accordingly.

  5. 3.6 Although B Shares are essentially non-voting, the Company and CWU propose to afford Investors (except, if applicable, CWU or its Associates in their capacity as B Shareholders) the opportunity to respond to consultation with respect to matters related to the management of the Property (for example, if it is practical to consider two or more alternatives for a core aspect of the refurbishment of the Property, Investors may be shown these alternatives on the Website and invited over a period not usually exceeding 24 hours to offer a click-through indication of their preferred choice). Neither the Company nor CWU is bound by any such consultation, other than where a Majority votes in one particular way.

  6. 3.7 The Company is not:

    1. 3.7.1 a collective investment scheme, as defined in s 235 Financial Services and Markets Act 2000, because it is a body corporate that is closed-ended (that is to say, you do not have the right to request the redemption or transfer of your shares at net asset value); or

    2. 3.7.2 an alternative investment fund, for the purposes of the Alternative Investment Fund Managers Regulations 2013, because the Company operates as an internally managed commercial business under the supervision of the Directors at all times.

  7. 3.8 The Company will keep, or arrange for CWU to keep, a register of the names and other details of the B Shareholders electronically and these will be available for inspection within one anniversary of the Completion Date when filed by the Company or CWU at Companies House. The shareholding information held at Companies House is accessible to the public and you can download this electronically. The Company will issue electronic share certificates for all B Shares issued under the Articles, although please note that this is for your records only and is not proof of your title to these Shares.

  8. 3.9 The Company will bear all of the following costs and expenses:

    1. 3.9.1 all legal fees of the Solicitors to the Company in relation to the purchase of the Property and Completion;

    2. 3.9.2 any stamp duty land tax due in relation to Completion;

    3. 3.9.3 all registration charges and other expenses of vesting title to the Property in the Company;

    4. 3.9.4 the setup fee to CWU for its services under clause 4.5

    5. 3.9.5 the rental management fee paid to CWU for its services under clause 4.4;

    6. 3.9.6 all insurance premiums due in relation to the Property;

    7. 3.9.7 the fees of all estate agents, managing agents, valuers and other real estate professionals engaged by the Company or by CWU on the Company’s behalf;

    8. 3.9.8 the fees of the Payment Firm and the Solicitor to the Company for their respective services in relation to the Escrow Account and the management of payments to and from Investors;

    9. 3.9.9 any council tax due on the Property if not occupied by tenants at any time, for example during a refurbishment period. For the avoidance of doubt, when the Property is occupied by a tenant, the tenant is responsible for paying the council tax;

    10. 3.9.10 the fees of the Company’s auditors, as well as costs associated with the keeping of the Company’s books of account and financial records (including costs of preparation of unaudited periodic financial data and management accounts);

    11. 3.9.11 bank charges in relation to the Company’s banking arrangements;

    12. 3.9.12 if required, the costs associated with bringing or defending claims made in relation to the Property or the Company itself and;

    13. 3.9.13 any sums which the Company is liable to meet in accordance with the Articles.

and all of the above shall bear VAT at the appropriate rate if relevant. Such of these costs as are of an income nature shall be borne by the Rent Roll.

  1. 4. Crowd With Us Limited as manager

    1. 4.1 CWU enters into this Agreement as an appointed representative of Share In Ltd (which is authorised and regulated by the FCA, ref. 603332). CWU appears on the FCA register in its own right, ref. 707804. CWU undertakes to you that it will use all reasonable measures to either remain an appointed representative of Share In Ltd or another authorised and regulated principal firm or to seek direct FCA regulation.

    2. 4.2 Please note that CWU does not have any duty under this Agreement to provide you with investment advice. You are recommended to seek independent financial, fiscal and legal advice, and confirm that you have already been warned of this on the Website prior to making your Offer.

    3. 4.3 CWU provides day to day management services in relation to the Property. These include:

      1. 4.3.1 liaison with the Solicitors to the Company with respect to Completion and the processing of all post-Completion matters needed to register the Property in the Company’s name;

      2. 4.3.2 supervision of the refurbishment of the Property during the Refurbishment Period, appointment of professionals and workmen to carry out the refurbishment and determination of their compensation (but with prior approval of the Directors if this exceeds 110% of the provision therefore in the Refurbishment Budget);

      3. 4.3.3 appointment of estate agents to market (and from time to time remarket) the Property for rental;

      4. 4.3.4 appointment of managing agents, if thought necessary, to manage the rental, collect rent payments and liaise with the tenant for the time being;

      5. 4.3.5 negotiation of insurance arrangements for the Property;

      6. 4.3.6 obtaining periodic valuations of the Property and reporting these to the Directors;

      7. 4.3.7 advising the Directors in relation to the making of any claims by or against the Company and, subject to the authority of the Directors in each specific case, managing the Company’s position in relation to each such claim;

      8. 4.3.8 managing the payment of all dues by the Company in respect of the Property (including stamp duty land tax and council tax & utility provider costs if applicable where there are no tenants in situ);

      9. 4.3.9 subject to clause 4.3.4, dealing on the Company’s behalf with actual or prospective tenants at the Property;

      10. 4.3.10 outsourcing and overseeing all book-keeping and maintenance of financial records for and on behalf of the Company;

      11. 4.3.11 on the Company’s behalf, liaison with you and with all other Investors, for the purposes of reporting the Company’s and the Property’s financial positions while this Agreement is in force;

      12. 4.3.12 maintaining the Website, and with specific reference to the Property, maintaining a part of the Website at which Investors can review the progress of the Property on a confidential basis;

      13. 4.3.13 making recommendations to the Directors concerning the time and manner of the sale of the Property; and

      14. 4.3.14 Generally doing anything else required of CWU as manager of the Property under this Agreement,

and doing anything that is reasonably ancillary to any or all of the above.

    1. 4.4 In consideration for its management services, as from the end of the Refurbishment Period the Company shall pay CWU a management fee of per annum equal to 10% of the Rent Roll, which is payable in quarterly instalments in advance, with the first such due on the first Business Day of the first calendar month following the end of the Refurbishment Period.

    2. 4.5 The Company will pay to CWU a setup fee calculated at the rate of 5% of the value of the Property at or around the time of Completion, as certified to the Company in writing by a surveyor accredited by the Royal Institution of Chartered Surveyors.

    3. 4.6 CWU shall be responsible at its own expense for providing staff, premises and IT sufficient to perform its duties under this Agreement, and for its operating costs as a company generally.

    4. 4.7 You may correspond with CWU in relation to any matter of interest to you concerning the Property, but CWU is not obliged to give effect to any suggestions, and is not liable to you in any way for failing to do so.

  1. 5. Upon commencement of this Agreement

    1. 5.1 By way of clarification, the money that you are expected to advance to the Escrow Account upon acceptance of your Offer will be applied by the Company in contribution to:

      1. 5.1.1 the cost of Completion (i.e. purchase of the Property from its vendor);

      2. 5.1.2 the cost of refurbishment of the Property;

      3. 5.1.3 the payment of expenses by the Company as identified in clause 3.9;

      4. 5.1.4 a provision that the Company is entitled to hold for meeting certain further contingencies (such as reinstatement of the Property where it is damaged and insurance is insufficient to address this cost in full), which to the extent not used prior to the sale of the Property will be deemed to constitute a part of the gross assets of the Company available for distribution to Investors following the sale; and

      5. 5.1.5 the setup fee paid to CWU under clause 4.5.

    2. 5.2 CWU has authority under this Agreement to instruct the Payment Firm to transfer from its Escrow Account all moneys advanced by Investors under the Offer, and to arrange for these to be paid to the Company or as the Board may direct.

    3. 5.3 Documents of title to the Property will be filed with HM Land Registry for registration. The Solicitors to the Company will hold record copies of all documents of title that are filed in this way. HM Land Registry is a public record, and you are entitled to search the title register and to obtain copies of entries in relation to the Property if you pay HM Land Registry the appropriate fees for this service.

  2. 6. Accounts and reports

    1. 6.1 The Directors shall arrange for the Company’s books to be audited annually and shall provide Investors with a copy of the accounts (as well as posting them to the Website).

    2. 6.2 In general, reporting to Investors shall be via the Website (even where they have become party to this Agreement Offline). Where any material is to be sent to you personally, this will be despatched by, or as attachment to, an email, and forwarded to the email address that you provided to CWU when registering with CWU on the Website or Offline (unless you have provided a more recent address).

  3. 7. Dividends

    1. 7.1 The Company will not declare a dividend to the B Shares during or in respect of the Refurbishment Period (if there is one), and at any rate shall not do so in relation to the first three months of the date on which the Company first lets the Property.

    2. 7.2 As from the First Dividend Date and monthly thereafter, the Directors expect there to be a dividend payable to the B Shares (including, for the sake of clarity, to B Shares held by CWU or its Associates). Each such month is referred to in this clause as a Dividend Interval period. This will be your only entitlement by way of income distribution from the Company.

    3. 7.3 Subject to clause 7.4, the dividend to which you will be entitled in each Dividend Interval Period shall be calculated as follows:

      1. 7.3.1 all expenses payable in respect of the Dividend Interval Period shall be deducted (or treated as deducted) from the Rent Roll (you are referred in particular to clause 3.9 above);

      2. 7.3.2 the difference obtained under clause 7.3.1 shall be divided by the total number of B Shares in issue at the end of the Dividend Interval Period; and

      3. 7.3.3 the quotient obtained under clause 7.3.2 shall be multiplied by the number of B Shares in issue to you at the end of the Dividend Interval Period.

To summarise clauses 7.3.1 to 7.3.3 in as plain English as possible, you will be paid dividends from the net rental profit after deduction of the running expenses of the Company in a rateable proportion to your B Share holding as a percentage of all B Shares in the Company.

  1. 7.4 Please note that the power to declare dividends is vested in the Directors, and they have the parallel power in relation to any Dividend Interval Period:

    1. 7.4.1 to reduce the amount of the dividend in any given declaration; or

    2. 7.4.2 not to declare a dividend at all;

where the Directors consider that to declare a dividend for the full amount that would otherwise apply under clause 7.2 would jeopardise the financial standing of the Company.

    1. 7.5 Your dividends will be paid to you within [5] Business Days of declaration by the Company, and will reach you by electronic transfer to a bank account whose details you have provided to CWU at the time of making your Offer. You will receive an electronic confirmation of the amount of the dividend as soon as declared, and if you consider that there is an error in the calculation of the dividend, you must contact CWU to discuss this immediately. All dividend payments once made are deemed to be conclusively correct.

    2. 7.6 Please note that if the Company is required to withhold moneys from dividend payments in consideration of your basic rate liability to UK income tax, the amount you receive will be net of this tax withholding, and the Company will provide a statement to indicate the deducted amount and the resulting tax credit you receive.

  1. 8 Sale of the Property

    1. 8.1 As you will be aware from the Website (or from communication to you Offline), the intention is that the Property should be realised:

      1. 8.1.1 at or around the fifth anniversary of the Completion Date providing the Property can be sold for at least 50% more than the total costs to acquire the property in the Company; or

      2. 8.1.2 materially sooner if the Directors hold a reliable valuation of the Property that indicates that the Property could realistically be disposed of for 50% more than the total costs to acquire the Property at Completion.

In either such case, the Directors have power to organise the sale of the Property with no requirement to consult with you or the other Investors.

    1. 8.2 However, the Directors also have the power, subject to receiving a Majority approval of Investors, to do the following:

      1. 8.2.1 at any time prior to the fifth anniversary of Completion, to sell the Property based upon a lower valuation than is implicit in clause 8.1.2, if the Directors and CWU believe that this is a reasonable and realistic value at which to organise a sale of the Property, given market conditions and sentiments or other factors they may reasonably consider to be likely to affect the prospects for a sale at a materially higher value;

      2. 8.2.2 if by the fifth anniversary of Completion, the Directors are unable to obtain a reliable valuation of the Property that indicates that the Property could realistically be disposed of for at least 50% more than the total costs to acquire the Property into the Company at Completion, the Company may propose that the Property is retained for up to a further two years, after which is will be sold at whatever price the Company can reasonably obtain for it; and

      3. 8.2.3 if by the seventh anniversary of Completion, the Directors are unable to obtain a reliable valuation of the Property that indicates that the Property could realistically be disposed of for at least 50% more than the total costs to acquire the Property into the Company at Completion the Property will be sold for the best price that can be obtained unless a Majority of the Investors votes for the Company to retain the Property for a longer period, but subject always to the terms of the Mortgage permitting this.

  1. 9 Termination and redemption of shares

    1. 9.1 Upon sale of the Property, the following shall happen:

      1. 9.1.1 the proceeds of sale (together with what remains of the provision referred to in clause 5.1.4) which are transferred to the Solicitors to the Company shall be used first of all:

        1. 9.1.1.1 to pay off the Mortgage, if there is one and it remains unpaid, and including any redemption penalty or equivalent charge due to the mortgagee;

        2. 9.1.1.2 to provide for the expenses of the sale, including the fees of the Solicitors to the Company, any estate or property agents and any related costs;

        3. 9.1.1.3 to provide for forthcoming or residual anticipated expenses of the Company, if any;

        4. 9.1.1.4 to make a provision for any reasonable anticipated expenses of the Company related to its ownership of the Property subsequent to the redemption of the A Shares and the B Shares.

with sums under items 9.1.1.3 and 9.1.1.4 being transferred to the Company and the remaining balance transferred to the Payment Firm to be held in its Escrow Account.

  1. 9.1.2 The Directors shall direct the Payment Firm:

    1. 9.1.2.1 to set aside from the balance in the Escrow Account sufficient capital to repay you and all other Investors the amounts subscribed under the Offer for their B Shares (or if there are insufficient funds, then a rateable proportion thereof); and

    2. 9.1.2.2 to divide the remainder of the balance in the Escrow Account and allocate this as value in the books of the Company (and as determined in accordance with the Articles):

      1. (a) 50% to the A Shares; and

      2. (b) 50% spread among the B Shares (Investors).

The Management Share shall not be entitled to any allocation.

    1. 9.2 The capital values allocated to the classes of Share under clause 9.1.2 shall become available to CWU (as holder of the A Shares) and to you and the other Investors (as holders of the B Shares) upon redemption by the Company of the A Shares and the B Shares, respectively, under the Articles, which the Directors agree to implement as swiftly as possible following sale of the Property and transfer of the net proceeds of sale to the Escrow Account with the Payment Firm. For the sake of clarity, the proportion of the total amount under clause 9.1.2.2(b) to which you will be entitled is calculated by reference to your number of B Shares as a proportion of the total number of B Shares in issue.

    2. 9.3 The Directors will provide you with a statement of your entitlement to returns on your B Shares, which you shall have 5 Business Days to query but subject to which is final and binding on you as a definitive statement of that entitlement.

    3. 9.4 Subject to the conclusion of the payment-out of the sums indicated in this clause 9, this Agreement will terminate.

    4. 9.5 The Company may at CWU’s option remain in existence with the Management Share being the only remaining share outstanding or be liquidated.

  1. 10 Right to terminate early

    1. 10.1 CWU and the Company have the right to terminate this Agreement, meaning that the provisions of clauses 10.2 and 10.3 will apply to you exclusively (with other Investors unaffected). However, the provisions of clauses 10.2, 10.3 and 10.4.2 do not apply in favour of a B Shareholder that is CWU itself or an Associate.

    2. 10.2 This right applies in the following limited circumstances:

      1. 10.2.1 where CWU has determined that you are in fact ineligible to participate in the Offer as none of the categories of certification noted in clause 1.4.1 applies to you in practice;

      2. 10.2.2 where CWU determines that you have shared with unauthorised persons Confidential Information and/or your access code to the Website, and this has caused or threatened to cause material prejudice to the Company, CWU or the operation or integrity of the Website; or

      3. 10.2.3 where CWU or the Company determines on reasonable grounds that you have conducted yourself in a manner likely to bring into disrepute the Company, CWU, any of the Directors or any persons connected with provision of the opportunity to invest in the Company.

    3. 10.3 Where termination occurs under clause 10.2, CWU shall notify you of this in writing and thereupon:

      1. 10.3.1 your B Shares are deemed automatically redeemed by the Company at par value;

      2. 10.3.2 you cease to be entitled to any further dividends on those B Shares (including any dividends declared but remaining unpaid);

      3. 10.3.3 you will not qualify to participate in capital profit to the Company on sale of the Property; and

      4. 10.3.4 if the Company cannot afford to pay out your B Shares, it is entitled to postpone doing so until winding-up.

    4. 10.4 Additionally, early termination may occur in the following circumstances:

      1. 10.4.1 you have the right to terminate automatically if:

        1. 10.4.1.1 the Company is insolvent;

        2. 10.4.1.2 CWU is insolvent and/or ceases to benefit from the regulatory status disclosed to you in clause 4.1;

        3. 10.4.1.3 the Company, notwithstanding clause 3.7.2, is found by a court to constitute an alternative investment fund, and CWU and the Company have taken no, or insufficient, steps to cause the Company to comply with the Alternative Investment Fund Managers Regulations 2013 as a result of such finding; or

        4. 10.4.1.4 the Company or CWU has committed a material breach of this Agreement, you have given them 20 Business Days’ written notice to put it right and they have failed to do so.

      2. 10.4.2 the Company and/or CWU has the right to terminate automatically if you have committed a material breach of this Agreement, you have been given 20 Business Days’ written notice to put it right and you have failed to do so.

  2. 11 Liability and indemnity

    1. 11.1 Neither the Company nor CWU is liable to you for failure of the Property to perform in capital terms on account of market conditions or other matters (whether financial, economic, political or regulatory) over which it is not reasonable to expect the Company or CWU to have any control.

    2. 11.2 Neither CWU nor the Company is liable to you under this Agreement for any matter concerning the purchase, refurbishment, rental or sale of the Property, or for any loss you sustain as a result thereof, except where this is the result of the fraud, wilful default or negligence of CWU or the Company. Other than in the case of fraud:

      1. 11.2.1 the maximum liability of the Company shall not exceed the amount that you paid for your B Shares; and

      2. 11.2.2 the maximum liability of CWU is calculated from the X x Y/Z where:

X = the amount of management fees paid to CWU as at the date of any claim;

Y = the total number of B Shares in issue; and

Z = the number of B Shares issued to you.

    1. 11.3 CWU may delegate the performance of functions under this Agreement to third parties that it considers are suitably skilled or qualified to perform those functions. Provided that CWU has selected these delegates with appropriate care and has periodically reviewed their appointment, CWU is not liable to you for any loss or damage sustained on account of the wrongful or negligent acts or omissions of any such delegate.

    2. 11.4 Nothing in this Agreement precludes the liability of the Company or CWU from losses you sustain as a result of death or personal injury occasioned by their fraud or negligence or that of their Directors, agents, servants or delegates.

    3. 11.5 With respect to CWU, nothing in this Agreement excludes or limits any liability which it may have to you in accordance with FCA Rules.

    4. 11.6 Please note that any claim you may have under this Agreement can only be brought against the Company or CWU.

    5. 11.7 CWU has placed reliance on information that you have given about yourself in registering with CWU on the Website (in particular, though not exclusively, in relation to the declaration that you have made regarding your status as an investor, for which purposes you are cross-referred to clause 1.4.1). In the event that you have provided false information, CWU will look to you to indemnify it against any losses it may sustain or costs or expenses it may incur as a result.

    6. 11.8 The indemnity provisions in this clause 11 survive termination of this Agreement, other than in relation to the Company as indemnified party, where they cease to apply after the Company is wound up.

  1. 12 Confidentiality

    1. 12.1 Confidential Information will be shared between all the parties to this Agreement.

    2. 12.2 The Company and CWU both agree to respect the status of Confidential Information which you provide to either of them. Your Confidential Information will be protected from disclosure to third parties other than in the following limited circumstances:

      1. 12.2.1 where disclosure is required by law, in compliance with a court order or in order to satisfy a requirement under the rules or procedures of the FCA, HMRC or any equivalent regulatory or fiscal authority;

      2. 12.2.2 where disclosure is essential for the performance by the Company or CWU of this Agreement; or

      3. 12.2.3 where we have your express personal consent.

    3. 12.3 Each of the Company and CWU asks you to similarly treat as Confidential Information all materials and information concerning the Company, the Property or the business methods of CWU which is provided to you in confidence as part of the performance by the Company and CWU of this Agreement. Reciprocal provisions to those in clauses 12.2.1, 12.2.2 and 12.2.3 apply, however, and additionally, you are entitled to refer any such Confidential Information to your financial, professional or legal advisers.

    4. 12.4 You will be provided with an access code to a part of the Website on which information concerning the Company and the Property will be featured. This is made available to all Investors, but is otherwise also to be treated as Confidential Information. Please do not share this code other than as permitted under clause 12.3.

  2. 13 Transfer and transmission of B Shares

    1. 13.1 You have been advised that there is no secondary market for your B Shares. CWU may be able to promote your interest in selling your B Shares prior to the intended date for their redemption, but cannot broker such a sale and will merely use reasonable endeavours, via the Website to solicit for a purchaser and place you and the prospective purchaser into contact.

    2. 13.2 You are free to sell or otherwise transfer your B Shares, subject to the transferee:

      1. 13.2.1 first registering on the Website and confirming that s/he falls into one or other of the certified categories of individual noted at clause 1.4.1; and

      2. 13.2.2 satisfying CWU in accordance with clause 1.4.6 with respect to his/her identity.

    3. 13.3 The effect of a transfer of your B Shares is that you cease to be a party to this Agreement from the effective date of the transfer, and the transferee becomes a B Shareholder (and is treated as an Investor) from that day forward. You will cease to be entitled to receive dividends (including any declared and not paid prior to the transfer, and any which would have been paid had you remained a shareholder under the end of the Dividend Interval Period during which the transfer took effect) and to share in capital profit from the sale of the Property.

    4. 13.4 If while this Agreement is in force you:

      1. 13.4.1 die; or

      2. 13.4.2 are adjudged bankrupt; or

      3. 13.4.3 become subject to an order made under the Mental Health Act 1983,

then upon presentation of the relevant credentials by your executors, administrators or trustees (as the case may be) indicating their entitlement to administer your estate, the Company will arrange for the B Shares registered in your name to be transferred to such persons. However, the Company does not undertake to sanction the registration of the B Shares in the name of any person entitled to inherit them under the terms of the estate in question unless such person can satisfy clause 13.2 above, in in exceptional cases the Directors may redeem such B Shares in full.

    1. 13.5 Following transfer or transmission, the Company and CWU will enter into an Agreement with the new holder of the B Shares in substantially similar terms to this Agreement.

  1. 14 Notices

    1. 14.1 All notices to you will be sent by email, or as documents attached to email, and shall be sent to you at the email address that CWU holds on its records. It is your responsibility to inform CWU if this address changes via the Website. Any notice CWU or the Company is treated as served if there is no error transmission report or postmaster notification of non-receipt within 30 minutes of sending.

    2. 14.2 You must similarly serve any notice on the Company or on CWU at the following email addresses: info@crowdwithus.london

    3. 14.3 All communications between you and CWU will be in English. The Website is in English.

  2. 15 Ancillary matters

    1. 15.1 This Agreement is personal to all of its parties and may not be assigned. This does not prevent CWU from delegating aspects of the performance of this Agreement to persons that it considers to have the relevant degree of skill and expertise to perform those aspects.

    2. 15.2 Any amendment to this Agreement must be in writing and signed by or on behalf of all parties.

    3. 15.3 No person not a party to this Agreement is entitled to enforce any of its terms, for the purposes of the Contracts (Rights of Third Parties) Act 1999.

    4. 15.4 This Agreement is subject to English law, and all parties agree that the English courts have exclusive jurisdiction in respect of all matters (contractual or otherwise) arising from this Agreement and its performance.


Schedule 1


Terms of Website Use


  1. 1 General terms of access

  1. 15.5 The Website, which includes all materials found on the Website and all code used to create and operate the Website, are exclusive property of CWU. CWU reserves the right to bar any person from access to all or any part of the Website in its complete discretion.

  2. 15.6 Access to the Website is intended to be consistently available. However:

    1. 15.6.1 there may be periods during which access is denied for maintenance purposes; and

    2. 15.6.2 the Website may become unavailable for reasons beyond CWU’s reasonable control.

CWU is not liable to any person for the Website being unavailable at any time, for whatever reason, and excludes absolutely any liability to any person for the costs or losses s/he may sustain due to not being able to interact with the Website in normal or routine fashion for any reason.

  1. Copyright

Unless otherwise stated, the content of the Website is copyrighted to CWU. All material appearing on the Website that is the copyright of another person will be acknowledged as such. You are not permitted to use the material you read on the Website for any commercial purpose of your own, or for any purpose not connected with the use of the Website to invest in opportunities that CWU promotes there.

  1. 17 Responsible use

    1. 17.1 You are expected to use this Website responsibly and honestly. CWU reserves the right to withhold access to any person whom it believes is not using the Website in a responsible fashion, for the broad purpose for which it has been published.

    2. 17.2 More specifically:

      1. 17.2.1 you are not permitted to link to the Website, other than for the purpose of a personal bookmark to the home page, enabling you to locate it;

      2. 17.2.2 you agree not to access the Website other than via the home page;

      3. 17.2.3 if you register and are given a password, you agree not to share this with any other person;

      4. 17.2.4 you agree not to share with any other person the content of any pages on the Website that are not open access (other than where you legitimately afford access and/or take copies of materials for the purposes of seeking bona fide professional advice);

      5. 17.2.5 any comment you make on line about the Website or CWU or any offer on the Website must be fair and reasonable and responsible;

      6. 17.2.6 you are not permitted to download any material on the Website unless it is clearly indicated that it is available for download (for these purposes “download” includes saving in any format for later review or onward transmission to third parties);

      7. 17.2.7 you may not use any facility on the Website that is designed to stimulate discussion or interaction for the publication of any material of an offensive, defamatory or illegal nature; and

      8. 17.2.8 you may not use any code derived from the Website or reverse-engineer any content of the Website for your own or any other person’s purposes.

    3. 17.3 CWU reserves the right to seek an indemnity from any user of the Website who, by reason of that use (or implicit or actual abuse) causes damage to:

      1. 17.3.1 the Website itself; or

      2. 17.3.2 the financial position of any company that owns a property featured on the Website, or any director or officer of any such company; or

      3. 17.3.3 the reputation of CWU or of any person involved with the business of CWU; or

      4. 17.3.4 any other responsible user of the Website.

  2. 18 Links and other content

    1. 18.1 The Website may contain links to third party websites. CWU has included these for informational purposes only, is not responsible for their content and accepts no responsibility to you should you choose to follow such links and/or act upon the information found at destination websites.

    2. 18.2 The Website may contain materials and information provided to CWU in good faith by third parties considered by CWU to be responsible or reliable persons. However, CWU accepts no responsibility in practice for the correctness or reasonableness of any such materials or information, and you make use of such entirely at your own risk.

  3. 19 Your information

    1. 19.1 Please refer to our Privacy Policy with respect to the manner in which CWU treats the information that you provide concerning yourself and your activities. Our Privacy Policy is available on the Website and can also be retrieved by following link. It is deemed to be incorporated into this Schedule.

    2. 19.2 Please note that the Website does make use of cookies, and the manner in which these are used is also addressed in our Privacy Policy.

    3. 19.3 Please note that where you provide information to CWU for the purposes of your use of the Website (including but not limited to information provided when you register to use the Website for investment in Properties), you are expected to update this information from time to time. Should you fail to do so, CWU is not responsible for resultant failure of information in reaching you.

  4. 20 Liability of CWU

    1. 20.1 CWU does not seek to exclude any liability to you in relation to:

      1. 20.1.1 fraud;

      2. 20.1.2 death or personal injury arising from its negligence; or

      3. 20.1.3 any matter which cannot be excluded because of the operation of the FCA Rules.

    2. 20.2 Subject to 6.1, CWU limits its liability to users of the Website as follows:

      1. 20.2.1 prior to your having registered (or after your having done so but on the basis that you have yet to invest in the B Shares of any Company), £1,000 in all circumstances;

      2. 20.2.2 after registration, then in relation to any claim arising from a specific Property or the Company that owns it, a sum calculated by:

        1. 20.2.2.1 taking the total of all fees paid to CWU in respect thereof to date;

        2. 20.2.2.2 multiplying this by the number of B Shares of that Company in issue to you; and

        3. 20.2.2.3 dividing the product thereof by the total number of B Shares in that Company in issue.

      3. 20.2.3 CWU further clarifies that it will not be liable to you for any loss, cost or damages that are indirect or consequential.




I confirm that I have read and understood and agree to abide by these Terms of Use


2019-03-25




Schedule 2


Risk Statement


This Risk Statement represents a broad summary of the sort of risk factors that apply to an investment in the Company, and in companies like it, which CWU may promote for the purposes of presenting Investors with the chance to participate in residential property acquisitions. These are not intended as a definitive set of statements, and other factors may apply to you personally of which CWU is not (and is not required to be) fully aware.


You should note that CWU is not your investment adviser. You cannot rely on any provision of this Agreement or of the Website (or any representation made to you Offline) to be in the nature of regulated investment advice. You should always consider taking independent financial advice before making any investment.


Of you are a first-time investor with CWU, you must acknowledge that you have read and understood the content of this Schedule.


  1. 1 Real Estate

    1. 20.3 Real estate is illiquid by its very nature. Properties can be difficult to sell. Sometimes the market is not propitious for the sale of properties, or properties of a certain type or value bracket. The valuation process is subjective, in that although there are recognised criteria for valuing properties for sale, the views of the valuer still greatly affect the value ascribed.

    2. 20.4 Properties can be difficult to let. Sometimes, a tenant can default and then be difficult to eject (on grounds of statutory rights etc.).

    3. 20.5 Properties that are subject to a first legal charge (mortgage) in favour of a bank or similar lender can be sold by that lender if there has been a default under the mortgage. That lender selling in the event of a default in the mortgage is not obliged to sell at full market value.

    4. 20.6 Property taxation can increase over time, and there has in recent years been a tendency for governments of both major parties to more heavily tax real estate transactions.

  1. 21 Private Equity

    1. 21.1 You should be aware that your investment is actually in the shares of an unquoted private company. Although the company owns the property in question, your shares give you no rights to the Property or any part of it.

    2. 21.2 Shares in private companies are illiquid and difficult to sell or value. There is no market for such shares, and CWU is not obliged to repurchase, redeem or arrange transfers/sales of your Shares.

    3. 21.3 You should consider this a minimum five year investment, and shall not commit any money which you need to access during this period.

    4. 21.4 In principle the Shares you acquire will pay dividends related to net income of the Property after management and running expenses. Dividend payments are not guaranteed, because there could be periods when the Property is prevented from producing income (e.g. if it requires refurbishment, or during periods when there are no tenants in situ).

    5. 21.5 In principle you will be entitled to half of the capital upside on your Shares when the Company redeems them. This assumes that the Property which the Company acquires had gained in value. Should it have fallen in value, there will be no capital appreciation and you risk not getting back all of the money you originally invested.

  2. 22 General

    1. 22.1 Tax rates vary. Generally tax law is not changed with retrospective effect but in principle it could be. If you are not certain of the impact of an investment via the CWU Website on your personal tax position, you should take independent fiscal advice.

    2. 22.2 All transactions on this Website are in Pounds Sterling. If you are using a different currency to finance your investments, then the exchange rate between the Pound Sterling and that currency will have an effect on the investment return.



I CONFIRM THAT I HAVE READ AND UNDERSTOOD THE RISK-RELATED REPRESENTATIONS IN THIS SCHEDULE. I FURTHER ACKNOWLEDGE THAT THESE REPRESENTATIONS ARE GENERIC IN CHARACTER, AND THAT OTHER ISSUES MIGHT AFFECT ME PERSONALLY THAT ARE NOT LISTED HERE. I UNDERSTAND THAT IT IS UP TO ME TO CONSIDER WHETHER I TAKE FURTHER FINANCIAL, FISCAL, TAX OR LEGAL ADVICE BEFORE PARTICIPATING IN OFFERS ON THE CWU WEBSITE, AND THAT I SHOULD NOT CLICK TO CONFIRM I ACCEPT THESE RISK STATEMENTS UNTIL I HAVE EITHER TAKEN SUCH ADVICE OR CONSIDERED FOR MYSELF THAT I DO NOT REQUIRE ADVICE.

2019-03-25