Please read these terms and conditions of use of the BnkToTheFuture.com Online Investment Platform including all the attached Schedules (Terms) carefully before signing up as a user of any of the products or services (Services) offered on the www.BnkToTheFuture.com website (Website). These Terms will apply to your use of the Website as well as to any Services you use, in addition to any supplemental terms and conditions you may be required to agree to, in order to access those particular Services. The Terms constitute a binding agreement between you, as the user of the Website and any Services and each member of the BF Group (as defined below). Your use of the Website and/or any Services will confirm your acceptance of these Terms. Please note that changes may be made to the Terms from time to time to reflect changes to the Services offered, changes to applicable laws or regulations or other changes that any member of the BF Group considers desirable. Any such changes will be published on the Website and your continued use of the BF Platform shall be your consent to such changes.
In these Terms, capitalised terms have the following meanings:
|Account||means your user account on the BF Platform, including your User Data and Account Balance.|
|Account Balance||means, at the applicable time, the balance of funds credited to your Account and held by or on behalf of the BF Group or subsidiaries in one or more client accounts.|
|Affiliate||means, in relation to any person, any other person that directly or indirectly controls, is controlled by or is under common control with that person.|
|BF Content||means content generated by the Platform Operator that may be displayed on the Investor Page. All information included in such content is provided by the applicable Investee Entity to the Platform Operator and is presented by the Platform Operator in good faith.|
|BF Global||means BF Global, a Cayman Islands exempted company with registered number 344615.|
|BF Group||means BF Global, the Platform Operator, the Platform Company, the RPB Platform Company and any of their Affiliates from time to time.|
|BF Platform||means the online investment platform comprising the Website and the Services operated by the Platform Operator.|
|BF Team||means all individuals who represent the BF Group, including, but not limited to, contractors, agents, consultants, partners or other parties working on behalf of the BF Group.|
|BF Token (BFT)||The membership and rewards crypto tokens issued by the Platform Operator, as more fully described in the white paper at http://bf-token.BnkToTheFuture.com/pdf/whitepaper.pdf.|
|BF Wallet||means the digital wallet application owned and operated by BF Global.|
|Broker Member||means a Member that is authorised to act as a broker dealer for Investor Members to facilitate their investments on the BF Platform, generally to satisfy legal and/or regulatory restrictions in an Investor Member’s home jurisdiction.|
|Contact Information||means all information associated to the Member’s Account including, but not limited to, full name, business name, telephone numbers, personal or business addresses, email addresses, and all other information necessary to comply with due diligence requirements.|
|Control||means the power or authority, whether exercised or not, to direct the business or management of a person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.|
|Corporate Action Administration Fee||means a charge on the carrying out of a corporate action on behalf of a Platform SP. Details of the charge are described in the Fee Schedule|
|Cryptocurrency or Cryptographic Token||have the meaning given in Clause 16.|
|Digital Wallet||means a digital profile representing a balance of Funds held, that allows the user to hold and transfer such Funds in an electronic format.|
|Disclosure Schedule||means the schedule to these Terms setting out certain disclosures relating to the BF Platform and its operations.|
|Electronic Transactions Law||means the Electronic Transactions Law (as revised) of the Cayman Islands.|
|Escrow Account||means one or more bank accounts and/or Digital Wallets (as applicable) that are created to hold the Funds of Investor Members during a PItch. The operation of the Escrow Account may be carried out by the Platform Company as a service for the Platform Operator. Or in the case of US Investor Members their Pitch investments will be held by PrimeTrust in a specified Escrow Account set up for a Pitch.|
|Escrow Agent||means the agent indicated in the Investment Agreement, who is appointed by the Platform Company to hold funds until the Platform Company communicates to the Escrow Agent the Completion Determination (as defined in the Investment Agreement). The Escrow Agent may vary from time-to-time depending on the jurisdiction of Investor or the type of transaction. For bank card payments the Escrow Agent is Prime Trust (Prime Trust LLC offers trustee and fiduciary services and is a “bank” under the SEC Rule 15c2-4 and a “Qualified Third Party” under Reg CF and are able to hold assets as a qualified third party trustee. It is incorporated and registered in Las Vegas, 330 S. Rampart Blvd., NV 89145, United States, with registration number 812236823 (File Number 021-337687)) including for non-US and US Investors. For other types of transactions involving US investors the Escrow Agent is Prime Trust. For non-US investors where the transaction is not a bank card payment the escrow agent is the Platform Operator.|
|Fee Schedule||means the schedule to these Terms setting out a detailed list of fees for the different Services provided by the Platform Operator and certain third parties, which can be viewed at https://bnktothefuture.com/fees/|
|Forum Content||means content generated by Members on a forum provided to them on the BF Platform for sharing content about investment opportunities.|
|Funding Member or Investee Entity||means a Member that is authorised to submit a Pitch on the BF Platform.|
|Funds||means any fiat currency or any non-fiat electronic currency (including, without limitation, crypto-currencies such as Bitcoin and Ethereum).|
|HNW Person||means a high net worth person, as defined in the SIBL.|
|Holding Fee||means a fee applying in any events where there is a distribution of funds including but not limited to shares, tokens, cryptocurrencies, Security Tokens, exit proceeds, fiat currencies or other.|
|Investee Entity||see Funding Member above.|
|Investee Securities||means any shares or other equity interests, debt securities, blockchain tokens or any other unitised representations of value that may be, or have been, invested in by Investor Members through a Platform SP pursuant to a Pitch.|
|Investment||means an indirect investment in Investee Securities offered by a Funding Member through the BF Platform, represented by Platform Company Shares.|
|Investment Agreement||means a standard form investment agreement available on the BF Platform, between an Investor Member, the Platform Operator, the Platform Company and the applicable Platform SP, setting out the terms and conditions on which the Investor Member may make a specified Investment (pursuant to a Pitch or by acquisition from another member on the Secondary Market).|
|Investor||means an Investor Authorised Member that invests in Shares of a Platform SP.|
|Investor Member or Investment-Authorised Member||means a Member that has been authorised to make Investments through the BF Platform.|
|Investor Page||means the investor page on the BF Platform containing Pitches.|
|IPO||means, in respect of an Investee Entity, any initial public offering of its Investee Securities.|
|Member||means any person that has established an Account, whether such person is a User, Investor Member, Premium Member, Broker Member, Funding Member or any other category of Member from time to time.|
|Non-Disclosure Agreement||means a standard form non-disclosure agreement available on the BF Platform, between an Investor Member and the Platform Operator, setting out certain confidentiality terms and conditions that will apply to the Investor Member in relation to a specific Pitch.|
|Payment Gateway||means any payment method made available to Members by the BF Platform from time to time, which may include, without limitation; credit and debit card payments through third party service provider PrimeTrust.|
|Payment Information||means any payment data required by the BF Platform and/or any third party Payment Gateway provider to process a Member’s payment through that Payment Gateway.|
|Pitch||means the submission of and investment opportunity in Investee Securities submitted to the BF Platform by a Funding Member.|
|Pitch Agreement||means a standard form pitch agreement available on the BF Platform, between a Funding Member, the Platform Company and the Platform Operator, setting out the terms and conditions on which the Funding Member may submit a Pitch on the BF Platform.|
|Pitch Content||means any information that is presented on the Investor Page including slides, videos, information and documentation produced by the Investee Entity.|
|Platform Company or BF||means BNK To The Future Capital SPC, a Cayman Islands exempted segregated portfolio company with registered number 298427 and/or any of its segregated portfolios from time to time, as applicable, and also includes any successor thereto as the entity through which Investments are held.|
|Platform Operator||means BNK To The Future, a Cayman Islands exempted company with registered number 296093, and includes any successor thereto as operator of the BF Platform.|
|Platform SP||means a segregated portfolio of the Platform Company created to hold any Investment.|
|Premium Member||means any Investor Member that, at the applicable time, holds sufficient BF Tokens in its Account to qualify for Premium Services.|
|Premium Services||means access to certain Services, including, without limitation, access to certain Investments, discounts and rewards, that are only made available to Premium Members from time to time.|
|Prime Trust||means Prime Trust LLC, a Las Vegas company incorporated with registration number 812236823, which is a “bank” under SEC Rule 15c2-4 and a “Qualified Third Party” under Reg CF.|
|RPB Platform Company||means BF Portfolio Builder SPC, a Cayman Islands exempted segregated portfolio company with registered number 372663.|
|RPB Schedule||means the schedule to these Terms setting out the specific terms and conditions on which Members may establish and invest through the BF Platform in a Retirement Plan B Portfolio Builder account, as described therein. Certain additional defined terms used in the RPB Schedule are defined therein.|
|SEC||means the United States Securities and Exchange Commission.|
|Secondary Market||means a facility made available to Investor Members on the BF Platform to facilitate the transfer of existing Investments between Investor Members.|
|Securities Act||means the United States Securities Act of 1933, as amended.|
|Security Tokens||means a tokenised digital form of a traditional security that incorporates typical features of a financial instrument such as shares in an Investee Entity.|
|Services||means any products or services offered by, or obtainable from, any member of the BF Group through the Website or which are otherwise made available to Members by any member of the BF Group.|
|Shares||means shares in any Platform SP that are issued to Investor Members to represent their indirect investment, through that Platform SP, in Investee Securities of an Investee Entity.|
|SIBL||means the Securities Investment Business Law (as revised) of the Cayman Islands.|
|Side Letter||means a supplement to an Investee Entity’s Pitch Agreement in respect of a Pitch, among the Investee Company, the Platform Operator, the Platform Company, the applicable Platform SP and its Investors.|
|Sophisticated Person||means a sophisticated person, as defined in the SIBL.|
|Stablecoin Loss Event||means an event whereby the stablecoins held by the BF Platform are subject to a technical or liquidity issue that may include but is not limited to: the issuer of a stablecoin not having sufficient reserves to satisfy the redemption of a stablecoin, the stablecoin technology suffering a technical fault or being ‘hacked’.|
|Terms||means these Terms and Conditions of Use of the BnkToTheFuture.com Online Investment Platform including all schedules hereto (which for the avoidance of doubt includes, without limitation, the Disclosure Schedule, the RPB Schedule and the Fee Schedule).|
|Third Party Content||means content regarding an Investee Entity generated by third parties and not displayed on the BF Platform.|
|Trading Facilities||has the meaning given in Clause 11.|
|Transferable Share(s)||means any Share eligible to be traded on the BF Platform.|
|User||means a non-Member that accesses the Website and/or a Member that has not been authorised as an Investor Member, Broker Member or Funding Member.|
|User Generated Content||means any content, in any format, created and/or uploaded to the Website by a User.|
|Website||means the website at www.BnkToTheFuture.com and any sub-domains thereof (unless expressly excluded by their own terms and conditions).|
|Whitelisting||means a method where token issuers can control who holds their tokens.|
|You||means any person accessing or using the Website and or any Services and Your should be interpreted accordingly.|
3.1 Unless the context otherwise requires in these Terms:
3.1.1 the singular includes the plural and the masculine includes the feminine and neuter genders and vice versa;
3.1.2 references to a person include natural persons, companies, partnerships, firms, joint ventures, associations or other bodies of persons (whether or not incorporated);
3.1.3 writing and written includes any method of representing or reproducing words in a visible form, including in the form of an Electronic Record;
3.1.4 a reference to shall shall be construed as imperative and a reference to may shall be construed as permissive;
3.1.5 the term and/or is used to mean both and as well as or. The use of and/or in certain contexts in no respects qualifies or modifies the use of the terms and or or in others. Or shall not be interpreted to be exclusive, and and shall not be interpreted to require the conjunctive, in each case unless the context requires otherwise;
3.1.6 any phrase introduced by the terms including, includes, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;
3.1.7 headings are inserted for reference only and shall not affect construction;
3.1.8 references to any statute or statutory provision include that statute or provision as it may have been, or may from time to time be, amended, modified, re-enacted, or replaced and include references to all by-laws, instruments, orders and regulations for the time being made thereunder or deriving validity therefrom;
3.1.9 sections 8 and 19(3) of the Electronic Transactions Law are hereby excluded; and
3.1.10 any reference to these Terms or to any other terms and conditions, agreement or instrument is a reference to these terms or, as the case may be, the relevant terms and conditions, agreement or instrument as may be amended, restated, supplemented, replaced or otherwise modified from time to time.
4. BF PLATFORM INTELLECTUAL PROPERTY
4.1 The company name and stylised logo of BnkToTheFuture®, BnkToTheFuture.com®, BnkToTheFuture®, BnkToTheFuture.com® and BF® are registered trademarks owned by the Platform Operator. All rights to use these registered trademarks are reserved to members of the BF Group.
4.2 The Platform Operator owns the copyright in all content displayed on or provided through the Website, other than third party images and descriptions licensed for use on the Website and any User Generated Content. No Website content may be copied, reproduced or revised without the prior consent of the Platform Operator. Copies of Website content may be saved and/or printed for personal use only.
4.3 Any User that uploads any User Generated Content to the Website represents that it has the legal right to do so without infringing the intellectual property rights of any other person, and grants BF Group a royalty-free, unlimited duration, irrevocable licence to display and distribute such User Generated Content on the Website and to make use of the content in any manner the BF Group considers appropriate, in its absolute discretion.
4.4 Members of the BF Group own and assert their intellectual property rights in the software, processes and Website content and Services that constitutes the BF Platform, except to the extent any such intellectual property rights are licensed from third party providers.
5. USE OF THE WEBSITE
5.1 There is no age restriction for browsing the Website, but a natural person must be aged 18 or over to become a Member. Each User is responsible for checking any additional age restrictions that apply to them in their own jurisdiction.
5.2 You shall not, and you shall ensure that no person using your Account shall submit any content to or otherwise use the Website or make use of any content or Services displayed on or provided through the Website in any manner that would infringe any patent, trademark, trade secret, copyright, right of publicity, or other intellectual property right of any other person or entity, or violate any law, regulation, court order or contract.
5.3 You shall not, and you shall ensure that no person using your Account shall submit any content to the Website that:
5.3.1 you know is false, misleading, non-factual, lacking of official proof and evidence or inaccurate;
5.3.2 is unlawful, threatening, abusive, harassing, racist, prejudice, defamatory, libellous, deceptive, fraudulent, tortious, obscene, offensive, profane, or invasive of another’s privacy;
5.3.3 constitutes unsolicited or unauthorized advertising or promotional material or any junk mail, spam, or chain letters;
5.3.4 contains software viruses or any other computer codes, files, or programmes that are designed or intended to disrupt, damage, limit, or interfere with the proper function of any software, hardware, or telecommunications equipment or to damage or obtain unauthorized access to any system, data, password, or other information of the Company or any third party; or
5.3.5 impersonates any person or entity, including any BF Team.
5.4 You may only use the content or Services displayed on or provided through the Website for your own personal, non-commercial purposes, unless you are a Funding Member (in which case you may submit Pitches in accordance with these Terms and a Pitch Agreement) or a Broker Member (in which case you may act as a broker for Investor Members in accordance with these Terms).
5.5 You shall not take any action that imposes or may impose (as determined by the Platform Operator in its sole discretion) an unreasonable or disproportionately large load on the BF Platform’s infrastructure; interfere or attempt to interfere with the proper working of the Website or any Services; bypass any measures used to prevent or restrict access to any part of the Website or any Services (or other accounts, computer systems, or networks connected to the Website); attempt to or actually override any security component included in or underlying the Website; run mail list, list serv, or any form of auto-responder or “spam” on the Service; use manual or automated software, devices, or other processes to access, “scrape”, “crawl” or “spider” any page of the Website or any Services provided on or through the Website; or perform any activities through the Website that are not expressly permitted by the Platform Operator and/or these Terms.
5.6 You shall not directly or indirectly decipher, decompile, disassemble, reverse engineer, or otherwise attempt to derive any source code or underlying ideas or algorithms of any part of the Website or any Services, except to the limited extent applicable laws specifically prohibit such restriction; modify, translate, or otherwise create derivative works of any part of the Website or any Services; or copy, rent, lease, distribute, or otherwise transfer any of the rights that you receive hereunder.
5.7 You shall not engage in “framing”, “mirroring” or otherwise simulating the Website; and you shall not use any manual or automatic mechanism for monitoring any activity conducted on or through the Website for any purpose, unless expressly permitted by the Platform Operator and/or these Terms.
5.8 The Platform Operator does not guarantee the availability of the Website or any Services or that any User Generated Content will be made available on the Website. The Platform Operator reserves the right, at any time, for any reason, and without notice to: (i) cancel, reject, interrupt, remove, or suspend any Pitch; (ii) remove, edit, or modify any content, including, but not limited to, any User Generated Content; and/or (iii) remove or block any User Generated Content.
5.9 The BF Group is not responsible for, does not endorse and makes no representation whatsoever as to the truth, accuracy, correctness or otherwise of any User Generated Content.
5.10 The inclusion of a link to another website on the Website does not imply any endorsement or control of such website. Unless expressly stated, no websites linked to the Website are under the control of the BF Group. Accordingly, the BF Group assumes no responsibility for the content of any such websites and disclaims liability for any and all forms of loss or damage arising out of the use of them.
5.11 While the Platform Operator takes reasonable steps to ensure that the Services correspond with their descriptions on the Website, it takes no responsibility for any variation between such descriptions and the actual Services provided.
6. NO INVESTMENT ADVICE
6.1 The Platform Operator is registered with the Cayman Islands Monetary Authority as an arranger of deals in securities (as defined in SIBL). The BF Platform operated by the Platform Operator is designed to bring together businesses seeking investment finance with investors looking to invest in such businesses. Investor Members are required to make their own assessment of any investment opportunity presented to them on the BF Platform. Neither the Platform Operator nor any other member of the BF Group should be regarded as advising on the suitability of any investment opportunity presented on the BF Platform and, in particular, the presentation of an investment opportunity on the BF Platform should not be regarded as an implied recommendation of such opportunity by any member of the BF Group to Investor Members or any other person.
7. INVESTMENT RISK WARNING
7.1 Investments through the BF Platform are speculative and are only available to sophisticated and high net worth investors as defined under Cayman Islands law. You should not make any Investment through the BF Platform if you are not able to bear the loss of your entire Investment.
8. USE OF COMMUNICATION FACILITIES
8.1 When submitting any content or making any other communication through the BF Platform or any communications system provided on the BF Platform you must:
8.1.1 not use obscene, pornographic, illegal, indecent, inappropriate, defamatory, offensive, racist, sexist, antisocial and vulgar content, language or materials;
8.1.2 not behave in a manner that may cause offense to other Users/Members and BF Team, or behave in an antisocial way such as – online “trolling” or harassing;
8.1.3 refrain from abusive, offensive or threatening behaviour towards other Users/Members and BF Team;
8.1.4 not submit any content that is unlawful or otherwise objectionable. This includes but is not limited to content that is abusive, offensive, threatening, harassing, prejudice, defamatory, attack on religious beliefs, ageist, sexist, or racist;
8.1.5 not submit any content that is intended to promote or incite hate and/or violence;
8.1.6 not submit any content, express opinions, ideas or beliefs without hard official proof of evidence or without legal validation that may discredit, mislead, or cause loss and harm in any way including, but not limited to, financial or personal loss and harm to any person’s reputation;
8.1.7 make all submissions or enquiries in the English language;
8.1.8 only identify yourself by means which do not violate these Terms or any applicable law or regulation;
8.1.9 not impersonate other people, particularly BF Team;
8.1.10 not use the BF Platform for unauthorised mass-communication such as “spam” or “junk mail”; and
8.1.11 not refer to, intervene in, interfere with or intercept information relating to any ongoing investigation, litigation or dispute carried out by or involving the BF Group. Any dispute and/or litigation shall be strictly between the BF Group and the individual User and shall be kept strictly private and confidential. Any User that breaches this obligation will be liable for any direct or indirect loss or damage to any member of the BF Group, whether financial, reputational or otherwise, together with any costs of recovery from such User.
8.2 You acknowledge that the Platform Operator reserves the right to record, monitor and retain copies of any and all communications made through the BF Platform.
8.3 You agree that the Platform Operator may communicate with you through your Account or through other means including but not limited to email, mobile devices, smartphone devices and other digital electronic devices, telephone, or delivery services such as courier services and postal services; and that the Platform Operator may contact you to discuss your Account, the BF Platform or any Services. Please review the settings on your Account to control what kind of messages you receive from the BF Platform. You acknowledge and agree that the BF Group accepts no liability associated with or arising from your failure to maintain accurate contact details or other information on your Account, including, but not limited to, your failure to receive critical information about any Services. You are solely responsible for keeping your Contact Information up to date. You understand and agree that if any member of the BF Group or any BF Team send you a communication to the Contact Information you provide but you do not receive it because your Contact Information is obsolete, incorrect, out of date, blocked by your provider or you are otherwise unable to receive the communication, the BF Group will be deemed to have provided the communication to you. If we receive an email bounce back as a response to communication we send to you, we may deem to consider your Account not active and your ability to operate on the BF Platform may be limited. No member of the BF Group is responsible for the update of your Contact Information. If you intend to update your Contact Information, please log into your Account and update your information according to these Terms. If you are unable to access your Account please contact us to [email protected]
8.4 The BF Platform offers various forums such as “Questions and Answers” and “Network Updates”, where you can post your observations and comments on designated topics and Pitches. The BF Platform also enables sharing of information by allowing Users/Members to post updates, including links to news articles and other information such as other pitches, due diligence, product recommendations, and other content to their profile and other parts of the Website, such as “Company Pages”.
8.5 Any questions, feedback, suggestions, comments, inquiry and or requests you post on the “Questions & Answers” section of the Website in relation to any Pitch, must not contain any false or unfounded accusation and must not intend to cause harm, damage or loss to the Funding Member that has submitted the Pitch. In the case of criticism, you may provide constructive criticism only without use of vulgar or abusive language, you will avoid criticism that may cause the Funding Member embarrassment, loss, damage or harm, or negatively affect the reputation of its Pitch, unless the criticism is justified and backed by hard or digital evidence to be legally truthful and accurate. Any information, comment and opinion you wish to express or disclose publicly in relation to a Pitch must be backed verifiable evidence or information. Any information disclosed must be factually accurate and truthful, and must not constitute defamation or a disclosure of private and confidential information.
8.6 Funding Members that submit a Pitch can create “Company Pages” for free, however, the Platform Operator may close or transfer any “Company Pages”, or remove any content, including any Pitch, from the Website at any time without prior notification if the content violates any of these Terms, any third party’s intellectual property rights or any other law, regulation, court order or contract.
8.7 Please note that ideas you post, due diligence and information you share may be seen and used by other Users/Members, and the BF Group cannot guarantee that other Users/Members will not use the ideas, due diligence and information that you disclose and share on the BF Platform. Therefore, if you have an idea or information that you would like to keep confidential and or don’t want others to use, or may be subject to infringement of third party rights due to you sharing it, do not post it anywhere on the Website. The BF Group is not responsible for any User’s misuse or misappropriation of any content or information you post on any part of the Website.
8.8 You are solely responsible for your interactions with other Users/Members and BF Team. Without any prior notification to you, the Platform Operator may in certain circumstances, prohibit, block or restrict your use of the Website or any Services and/or your communications with other Users/Members through the BF Platform. The Platform Operator reserves the right, but has no obligation, to monitor disputes between you and other Users/Members and to restrict, suspend, or close your Account at any time for any or no reason.
8.9 You agree that any translation of these Terms or any other documentation relating to the BF Platform, provided to you by the Platform Operator, is for your convenience only and that the English language versions of these Terms and any such other documentation shall prevail in the event of any inconsistency.
8.10 You acknowledge and agree that any communications and information you submit to the BF Platform or through any communication system provided on the BF Platform, such as posting comments and opinions on any Website forum, may be removed or modified in any way by the Platform Operator, without any prior notification, for any reason and without having to provide a reason to you, and you hereby waive your moral right to be identified as the author of such information. Any restrictions you may wish to place upon our use of your communications and information must be communicated to us in advance, yet we reserve the right to reject such terms and associated information.
8.11 You acknowledge and agree that any ideas, suggestions, documents, or proposals you submit to the BF Platform through its comment, suggestion or feedback webpages, do not constitute your confidential or proprietary information; and that the BF Group is under no obligation of confidentiality, express or implied, with respect to any such submission, shall be entitled to use or disclose any such submission for any purpose, in any way, in any media worldwide. You irrevocably assign to the BF Group all rights in and to any intellectual property contained in any such submission, and acknowledge that you are not entitled to any compensation or reimbursement of any kind from the BF Group in respect thereof.
9.1 All Users must first open an Account on the BF Platform to become a Member. Members are only permitted to open one Account on the BF Platform. If, upon investigation, it is discovered that a Member has attempted to open two Accounts then it is in the entire discretion of BF to terminate the duplicate account created by the Member or to consolidate the same. Creation of more than one Account by a Member is a breach of these terms and could result in all Accounts of the Member concerned being closed. Membership gives a User access to certain Services and rewards as set out in Clause 11, but a Member cannot make Investments on the BF Platform until it becomes an Investor Member.
9.2 To become an Investor Member, a Member must also complete the BF Platform’s customer due diligence (CDD) process, which is required for the BF Group to comply with its obligations under applicable anti-money laundering, counter-terrorist financing, anti-proliferation financing, anti-bribery and sanctions (collectively AML) laws, rules and regulations. The CDD process for Investor Members involves the Member providing such verification of its identity, source of funds/wealth and tax identification number (TIN) as the Platform Operator may require, and an Investor Member will be required to update and/or supplement any such CDD periodically, at such intervals as the Platform Operator considers necessary or reasonable to comply with the BF Group’s AML obligations. Each Investor Member must update their Contact Information as per above. An Investor Member must also verify that it is a HNW Person or a Sophisticated Person, and, if applicable, that it falls within a specific category of professional investor within its jurisdiction. The specific verification requirements from time to time will be displayed in the verification section of your Account. In the Platform Operator’s discretion, a Member may be granted Investor Member access to the BF Platform prior to completing the CDD process, but that process must be completed prior to the Investor Member making its first Investment. It is each Investor Member’s responsibility to update its CDD information provided to the Platform Operator if any of the details contained therein become out of date.
9.3 To become a Premium Member, an Investor Member must hold the minimum amount of BF Tokens as set out in Clause 11 and/or specified on the Website from time to time to unlock Premium Services.
9.4 Broker Members are admitted to the BF Platform by separate agreement with the Platform Operator. They are authorised to act as brokers on behalf of Investor Members in certain jurisdictions where local securities regulations prevent those Investor Members making Investments on their own behalf. Where a Member is resident in an applicable jurisdiction the details of the services of the relevant Broker Member will be displayed, as such, the Platform Operator will share data about relevant Investor Members to the Broker Member. An Investor Member that invests through a Broker Member will access Services through the Website as if it were investing directly, but the Broker Member will review and assess whether the Investor Member meets the local requirements to be able to invest. Investor Members may receive communications from Broker Members regarding their due diligence provided and the Broker Member may request additional documentation or information in order to assure it that the Investor Member meets the investment qualification requirements. An Investor Member should endeavour to cooperate with the Broker Member in order to complete the due diligence necessary. At no point will a Broker Member request an Investor Member to make a transfer to it; all financial transactions are done through the Platform Operator and, where relevant, with the Escrow Agent.
9.5 To become a Funding Member and submit a Pitch on the BF Platform, a User must open an Account, submit certain information relating to the Pitch, and complete the BF Platform’s CDD process. The CDD process for Funding Members and their proposed Pitches, includes verifying the identity of the individual Funding Member and due diligence on the entity offering Investee Securities. Successful applicants must also enter into a separate Pitch Agreement with the Platform Operator.
9.6 In certain circumstances, the Platform Operator (or third party service providers acting on its behalf) will accept self-certifications from Members in relation to their investor status for regulatory purposes, in lieu of full third party certification of such status that may be required by the laws and regulations applicable to other Members. Where self-certification is accepted, the Member submitting the self-certification will be deemed to represent and warrant to each member of the BF Group that all information contained in the self-certification is true, accurate and correct and that no information is omitted that would result in such information being misleading in any way.
9.7 You acknowledge and consent to the sharing of your personal data with third party service providers for purposes of screening Members for purposes of legal and regulatory compliance, including, but not limited to, compliance with applicable international and/or national sanctions, and AML compliance. This verification work may be conducted on an ongoing basis. Due to regulatory requirements, the Platform Operator may request additional due diligence from Investor Members from time-to-time which includes matters such as source of funds, proof of address and residency, questionnaires to determine risk. Such requests may be made at any time whilst the Investor Member has an Account with the BF Platform and are an obligation to be undertaken by the BF Platform. Under no circumstances does the Platform Operator accept any liability for any delays that result from imposing due diligence requirements during or after the onboarding process with an Investor Members. Investor Members agree to cooperate in a timely manner regarding the provision of due diligence information.
9.8 The BF Platform is provided on an as is basis. At times the BF Platform may experience a high demand which results in congestion of the customer support desk. This may result in a delay in the delivery of support to Investor Members. The Platform Operator endeavours to address enquiries within a reasonable period however does not accept liability for any losses, indirect or otherwise, that results from an Investor Member suffering a loss due to a delay in customer support.
9.9 No person who is a direct or indirect competitor of the BF Platform (or any Affiliate of such person) may be a Member and any use of the Website to obtain information or content for any competitive purpose will be a breach of these Terms.
9.10 Death of a Member
9.10.1 Upon the death of a Member, the Platform Operator shall cooperate with the estate of the deceased Member (the Deceased) following such procedures as are required by the applicable laws. The Platform Operator requires all persons communicating with the Platform Operator as a representative of the Deceased (Personal Representative) to go through an identity verification process and to provide evidence of their authority (eg. grant of probate). The Platform Operator requires that all documents provided by Personal Representatives shall be authenticated through certification or notarisation. All such Personal Representatives will be informed by the Platform Operator of the procedures that apply in the event of an inheritance matter, such procedures to be shared with the Personal Representative at the time of an enquiry being sent to the BF Platform. The Platform Operator shall have the right to charge a reasonable administration fee for the work associated with processing any transfers in relation to the Deceased’s estate as such may pertain to assets held by the Deceased on the BF Platform.
9.11.1 An Investor Member may apply to transfer Platform Company Shares and/or outstanding Funds from an Investor Member to another Investor Member. Upon the Investor Member’s application, the Platform Operator charges the applicant US$1,500, and proceeds with the transfer.
10. PITCHES AND INVESTMENTS
10.1 All Members can access general but limited investment information on the BF Platform, but only Investor Members are able to access the full investment section, including the “Pitch Summary” page of the Website and make Investments. Clicking on any Pitch Summary will reveal additional information about the Pitch on its “Pitch Detail” page of the Website. The Pitch will include responses to questions posed by the BF Platform as well as files such as business plans, financial forecasts, slide decks, articles of association, video pitch and any shareholder agreements submitted by the relevant Funding Member. The Pitch will also include information on how much finance the business is seeking, what percentage of its equity it is offering (where applicable) and how long the Pitch will stay active (meaning for how long Investments will be accepted). The detailed Pitch is the information upon which Investor Members make an investment decision with respect to a proposed Investment.
10.2 The Platform Operator has reviewed every Pitch published on the Website and taken reasonable steps to check that the information in the Pitch is fair, clear and not misleading. While the Platform Operator takes reasonable care in its review of any evidence provided for factual statements made in any Pitch, it does not audit or endorse it and will not be liable for any failure to identify forged or altered evidence or information or deliberately misleading or inaccurate statements made in any Pitch (except where such failure is the result of its gross negligence). As a result, each Investor Member will be solely responsible for performing its own due diligence on any Pitch, which can be facilitated by joining the “Pitch Investor Zone” on the Website. You should further note that the Platform Operator’s approval of a Pitch for publication on the Website, does not constitute its endorsement of any aspirational statements, or statements of opinions or belief made in the Pitch by the entrepreneurs who have submitted it.
10.3 The Platform Operator does not provide investment advice. Its approval of a Pitch for publication on the Website does not imply any recommendation by the Platform Operator of the proposed Investment contained in the Pitch. The BF Group will not be liable for any investment losses incurred by an Investor Member that makes an Investment based on the information contained in a Pitch. Investor Members should recognise that all Investments made on the BF Platform are speculative and no Investor Member should make an Investment unless it is prepared to bear the loss of the entire amount invested.
10.4 Pitches are made available on the BF Platform for the sole purpose of Investor Members evaluating the Investments proposed therein. Any confidential information contained in a Pitch must be kept confidential and not used for any other purpose, in accordance with the terms of the Non-Disclosure Agreement Investor Members must agree to prior to viewing any Pitch.
10.5 An Investor Member must enter into an Investment Agreement and provide its Payment Information at the time it pledges Funds to an Investment pursuant to a Pitch or deposits Funds into its Account for Secondary Market purchases. Payments may be made via any Payment Gateway and will be held in an Escrow Account. Where Funds are submitted for Investment pursuant to a Pitch, they will be held in an Escrow Account for the duration of the applicable funding period and then returned (if the funding goal is not reached) or released to the Platform Company to make the Investment in accordance with the terms of the Investment Agreement. Where Funds are deposited for the purpose of Secondary Market purchases, they will be held in an Escrow Account until applied to a purchase or a withdrawal is requested.
10.6 Funding Members cannot cancel their Pitch while it is live on the BF Platform, but the Pitch can be cancelled at the end of its funding period. If a Pitch is cancelled, all Investor Members that have pledge Funds will have those Funds returned.
10.7 Upon an Investment being funded through the BF Platform, the Funding Member responsible for the applicable Pitch shall be responsible for ensuring that the investment interests offered pursuant to the Pitch are issued to the Platform Company, as nominee for the investing Investor Members. No member of the BF Group shall be responsible for any losses resulting from a Funding Member’s failure to do so, in the absence of any fraud, wilful misconduct or gross negligence on the part of such BF Group member.
10.8 The Platform Operator accepts no responsibility for any failure by an Investor Member to successfully make a specific Investment as a result of any incorrect or incomplete Payment Information submitted by the Investor Member or any non-receipt of pledged Funds into an Escrow Account during the applicable funding period (for example, where Funds are sent by bank wire transfer and do not arrive in time). Any Funds pledge pursuant to a Pitch that arrive in an Escrow Account after the end of the applicable funding period will be returned. No interest will be payable on any amounts held in an Escrow Account and any interest that accrues will be retained for the benefit of the Platform Operator.
10.9 Any transaction fees payable to a third party provider of a Payment Gateway when Funds are paid into an Escrow Account, returned or withdrawn from an Escrow Account will be payable in addition to the amount of any pledged Investment or deducted from any amount returned or withdrawn, as applicable.
10.10 Withdrawal without investment. After having completed the CDD process, the Investor Member will be in a position to deposit funds into its Account. All deposits are for the sole purpose of investment. Should the Investor Member decide to make a deposit and then request for a withdrawal of funds without making any eligible investment, the Investor Member will be in breach of these Terms. Nonetheless the Platform Operator may allow for the withdrawal to be made under exceptional circumstances and with a reasonable cause provided by the Investor Member. In such a case, the Platform Operator may charge an additional administrative fee for the processing of the Investor Member’s request. The amount of the fee will be communicated to the Investor Member upon receipt of the request for a withdrawal.
10.11 The Platform Operator may further charge withdrawal fees on any withdrawal by an Investor Member from its Account at the rate published on the Website from time to time.
10.12 A Funding Member that submits a Pitch shall be entitled to reject a proposed Investment by any Investor Member, for any reason or no reason. If a Funding Member rejects an Investor Member’s proposed Investment, any pledged Funds submitted by the Investor Member to an Escrow Account in respect of the proposed Investment shall be returned.
10.13 Any Funds that are to be returned to an Investor Member from an Escrow Account may, at the Investor Member’s request, be retained in an Escrow Account. Any Funds so retained will be subject to any applicable withdrawal charge, if later withdrawn.
10.14 Any Funds paid into an Escrow Account by an Investor Member by bank wire transfer and subsequently returned or withdrawn, will be repaid to the same bank account from which they were originally sent.
10.15 Funding Members should not take any action in anticipation of an Investment being funded through the BF Platform prior to receiving subscription Funds from the Platform Company for the investment interests offered pursuant to the applicable Pitch. No member of the BF Group will be liable to a Funding Member for any losses incurred by a Funding Member in anticipation of funding from a Pitch that does not result in an Investment though the BF Platform.
11. TRADING FACILITIES
11.1 BF Platform provides two trading facilities on its platform. The ability for users to buy and sell Cryptocurrency and the ability to trade Transferable Shares with other Members on the BF Platform. You acknowledge that in order to be eligible to access the trading facilities on the BF Platform you must be an Investor Member and comply with applicable local or national laws or regulations of your country of residence. You are solely responsible for compliance with such laws and regulations that are applicable based on the jurisdiction in which you reside.
11.2 You acknowledge that engagement in any trade may be financially risky. You should not use our trading facilities in the case you do not understand the risks of trading in Transferable Shares or Cryptocurrency. Any use of our trading facilities is at your own risk.
11.3 You acknowledge that if you decide to use our Trading Facilities as described in Clause 11 you should be aware that the risk of loss in trading or holding Cryptocurrency may be substantial. Transferable Shares and Cryptocurrency are volatile assets and there is a substantial risk of you losing your capital.
11.4 You acknowledge that the Trading Facilities provided on the BF Platform are dependent on the availability of telecommunication and internet access. You accept the risk of any failure of access to an internet network due to local, hardware and/or software issues. You acknowledge and agree that BF shall not be responsible for any communication failures, disruption, errors, or delays you may experience when you trade on the BF Platform, however caused.
11.5 You understand and agree that we will not be liable for any losses or damages arising out or relating to any use of our Trading Facilities by you or any third party operating with or without your consent. Further, we are not responsible for any: a) omission, inaccuracy or defect of price data in relation to Transferable Shares or Cryptocurrency; b) interruption or corruption of such data; c) error or delay in communication of such data; d) the actions of other Investor Members not authorized by us or in violation of these Terms affecting price data. We do not owe best execution obligations to you for your use of our Trading Facilities.
11.6 In the event the BF Platform is subject to an error during a Secondary Market or Cryptocurrency transaction, we reserve the right either to correct such error and proceed with the instructed transaction accordingly (this may include a revision and charge of the correct price and fee) or to cancel the transaction and proceed with administering a refund in accordance with our refund policy.
11.7 The Platform Operator reserves the right to suspend transactions on the Secondary Market for the sale or purchase of Cryptocurrencies or withdrawal of funds from your Account without notice to you.
11.8 You acknowledge and agree that all transactions executed on the BF Platform are final. Subject to 11.6 we do not accept any returns, provide a refund or purchase back for your executed transactions.
11.9 SECONDARY MARKET
11.9.1 The BF Platform provides a billboard where Investor Members can post an advert to sell or buy Transferable Shares in a particular Platform SP. This is not an order matching system. The buyer and seller connect directly together to perform a trade between the parties. On your Account you will be able to see which Transferable Shares are eligible for the Secondary Market.
11.9.2 An Investor Member submits a request to sell or buy by creating an order on the BF Platform and electronically accepting the Transfer of Beneficial Ownership Agreement at the point of the order (Transferable Share Order). When a seller submits an Order (“Sell Order”), it has to deposit funds covering operational fees relating to the Sell Order on its Account. These funds are automatically blocked on the seller Account unless the Sell Order is cancelled. A Sell Order can be cancelled before it matches a request to buy (“Buy Order”). A Buy Order can only be submitted if the buyer has enough funds on its Account to cover administration fees. A Buy Order cannot be cancelled.
11.9.3 At the point in which two Orders are matched on the secondary market the trade is binding between the parties. Thereby the parties authorize the Platform Operator to execute the agreed trade by transferring funds reflecting the share purchase price from the buyer’s Account to the seller’s Account and to charge any applicable fees. The Platform Operator updates the share register accordingly, and the buyer will be registered as new owner of the transferred Transferable Share(s). An electronic confirmation specifying details of the trade is then sent to buyer and seller. Each Investor Member can then access a record of executed transactions on its Account.
11.9.4 It is at the discretion of BF which Transferable Shares are eligible to be displayed on the secondary market. There may be additional restrictions that may apply to Investors who use the secondary market. These restrictions may be imposed for regulatory compliance reasons or otherwise.
11.9.5 You acknowledge that when you trade Transferable Shares you trade shares in a segregated portfolio created by BF that holds securities in the Investee Entity. Please, be aware that you are not trading any securities in the Investee Entity.
11.9.6 You acknowledge that even if your Transferable Shares are eligible for trading on the BF secondary market, your ability to sell will depend on buyer’s demand. You may be prevented from selling your Transferable Share due to lack of requests from buyers.
11.9.7 You acknowledge that information about the Investee Entity you have may not be accurate. Shareholders have access to the forums on the BF Platforms where they can get updates from the relevant Investee Entity they invested through an Platform SP. However, if you are not a current shareholder in a Platform SP you will not be able to access this information until you become a shareholder. BF does not perform any due diligence on secondary market shares. Buyer can only access documents provided by the Investee Entity to BF at the time of the fundraise (the “Financing Agreements”) on the BF Platform. BF is not responsible for any information you may have obtained before you decide to purchase a Transferable Share from whatever sources including, but not limited to, the BF Platform, the Investee Entity website, social networks, newspapers or elsewhere. You are solely responsible for any trade you make on the BF secondary market.
11.9.8 The Platform Operator uses commercially reasonable efforts to settle trades within a reasonable period of 7 working days of the date upon which users have agreed to execute a trade via the BF Platform. There may be instances where the settlement takes place after the requisite period due to no fault of the Platform Operator. Only reasonable efforts will be undertaken to perform the settlement within the said period.
11.10 BUYING OR SELLING CRYPTO
11.10.1 The BF Platform provides Investor Members with a facility to buy or sell Cryptocurrency. BF provides to Investor Members Cryptocurrency trading brokerage service. An Investor Member may place an order to purchase or sell Cryptocurrency (Cryptocurrency Order). The Platform Operator may take the order for execution with a third party Cryptocurrency service provider. This Cryptocurrency brokerage service is made available to Investors at the discretion of BF that reserves the right to choose a different third party service provider. Investors agree and acknowledge that this Cryptocurrency brokerage service is provided by third parties Cryptocurrency exchanges. Cryptocurrency exchanges are high-risk businesses due to, but not limited to, internal negligence, loss of keys, software failure, internet failure, and may be targets of internal frauds or cyber-attacks that may result in the exchange not being able to satisfy all clients withdrawals and becoming effectively insolvent. Investors bear the risk associated with the failure of a Cryptocurrency trade. BF will not be liable or responsible for any failure of a third party service provider to perform, or delay in performance of, any of its services. Investors should further be aware that there may be restrictions on the Investors that may access this product based on a number of different factors for regulatory reasons including the jurisdiction of the Investor.
11.10.2 If the Investor Member decides to purchase or sell cryptocurrencies on the BF Platform, the Platform Operator will attempt, on a commercially reasonable basis, to execute the purchase on or close to the exchange rate available to the Investor Member at the time of the purchase. However, the Investor Member’s order to buy or sell Cryptocurrencies may be settled hours after the placement of such order. The Investor member acknowledges that the price displayed on the BF Platform at the time the order is placed is a mere estimate of the final settlement price. The Platform Operator does not make any guarantee that the settlement price correctly reflects the price displayed on the BF Platform when the order to buy or sell was placed.
11.10.3 Should the Investor Member decide to buy BFT on the BF Platform a trading fee as indicated in the Schedule will be applied to the transaction. If the Investor Member decides to proceed with the purchase of BFT, the Investor Member will receive a notice with details of the operation, including any applicable fees. The Investor Member acknowledges the notice, and agrees to proceed with the transaction. An electronic confirmation is then sent to the Investor Member.
11.10.4 The Cryptocurrency price displayed to the Investor Member at the point of purchase or sale is based on the exchange rate applicable to the fiat or crypto chosen for the exchange. The minimum order size (excluding fees) of each order to buy or sell cannot be lower than USD$100. Each transaction in cryptocurrency shall incur a trading fee. The applicable trading fee is indicated in the Schedule. If an Investor Member decides to proceed with a purchase or a sale, the Investor Member will receive a notice with details of the operation, including any applicable fees. The Investor Member acknowledges the notice, and agrees to proceed with the transaction. An electronic confirmation is then sent to the Investor Member.
11.10.5 Cryptocurrency transactions on the BF Platform can only be executed in a payment method specified by us. We reserve the right to suspend or cancel a transaction in the case the chosen payment method cannot be verified, is invalid or is otherwise not acceptable.
11.10.6 Once an Investor Member places a Cryptocurrency Order to purchase or sell Cryptocurrency it is final. An Investor Member cannot cancel an executed transaction or ask for a refund, except as otherwise provided in these Terms.
11.10.7 The Cryptocurrencies sale and purchase is subject to availability on the BF Platform. The Platform reserves the right to suspend the sale or purchase of cryptocurrencies without notice to investors.
11.10.8 Before purchasing Cryptocurrencies, you must be aware of the nature, complexity and risks involved in such trading. Investments in Cryptocurrencies may not be suitable to you or may not align with your financial position. You should understand the extent of your exposure to potential loss.
11.10.9 Cryptocurrencies may be subject to pure speculation and their price may be quite volatile. The market rate at which an order to buy or sell is executed may be different from the rate indicated on the BF Platform at the time of your order. You acknowledge that when you invest in cryptocurrencies you may lose your entire investment.
11.10.10 You acknowledge that many factors outside of the control of BF may affect the price of Cryptocurrencies, including, but not limited to, market disruption, pandemic, earthquakes, fire, power outages, floods and other catastrophic events, strikes and terrorism. In these cases, the Platform Operator may suspend all operations on the BF Platform and you may be prevented from buying or selling cryptocurrencies. Following the event, when the BF Platform resumes its operability, you acknowledge that the market rate available to you may vary from the rate displayed to you prior to such event.
11.10.11 You acknowledge that, in many countries, current regulatory and legal treatment of Cryptocurrencies is unclear and there is a risk that relevant authorities may impose strict regulations and compliance which could adversely affect trading in Cryptocurrency. Consequently, you may be subject to investigations by regulators or government agencies regarding any potential infraction of laws, rules or regulations that may result in fines or other sanctions.
12. BF TOKEN REWARDS AND LOYALTY PROGRAM
12.1 Members will be entitled to receive BF Tokens as rewards (BF Token Rewards) for providing specific services to the Platform (in accordance with offers published from time to time on the Website, to which these Terms will apply) or, in the case of Premium, Premium+ and Premium+ Partners Members, for making qualifying Investments. Those rewards are discretionary in nature and are conditional upon the Member making at least one eligible investment on the BF Platform. An eligible investment on the BF Platform is not less than US$100,000 in a single or accumulated investment. If you do not meet the eligible investment threshold then you will be able to continue to use the BF Token Rewards on the BF Platform for the payment of fees (where applicable) on the BF Platform. You will not be able to withdraw those BF Token Rewards until you meet the eligible investment threshold as stated above.
12.2 Members are categorised into rewards tiers based on the number of BF Tokens they hold in their Account or linked BF Wallet, as set out in the table below:
|BF Member||BF Premium Member||BF Premium+ Member||BF Premium+
Partner (coming soon)
|Minimum no. of BF Tokens to be staked on BF account or linked BF Wallet.||0||10,000||100,000||1,000,000|
|BF Token Rewards for verifying & certifying on BF Identity (BF ID)||Yes||Yes||Yes||Coming soon|
|48 hours Priority Access
|50% Discounted Trading fee on BF Secondary Market when paid with BF Tokens||No||Yes||Yes||Coming soon|
|1% BF Token Rewards bonus for every investment made on BF Primary Markets||No||No||Yes||Coming soon|
12.3 A Premium+ Member will qualify to receive BF Token Rewards if it: (a) holds at least 100,000 BF Tokens in the funds section of its Account and/or linked BF Wallet; (b) invests at least US$1,000 in an Investment (other than a Secondary Market transaction, as defined in the Investment Agreement); and (iii) payment is not made by credit or debit card.
12.4 Any Member that receives BF Token Rewards may only withdraw any such BF Tokens from its Account if it has made at least one qualifying Investment on the BF Platform.
12.5 In the event that a Premium+ Member receives BF Token Rewards in connection with an Investment that is subsequently refunded, whether by repurchase of the Platform Company Shares issued in connection with the Investment, or otherwise, the Premium+ Member’s receipt of the refund will be conditional upon its surrender of such BF Token Rewards.
12.6 Members hereby acknowledge and agree that:
12.6.1 BF Token Rewards will be deposited in an Investor’s Account only after the share certificates have been issued and the Pitch has been closed.
12.6.2 There are no BF Token Rewards for making any investments through Card Payments.
12.6.3 In case of any refunds, the Investor needs to return the BF Tokens received as a reward for the refund to be complete.
12.6.4 The BF Tokens collected as a reward can only be withdrawn after an investor has made at least one (1) investment on the BF platform.
12.6.5 The 1% BF Token Rewards bonus is based on the Investment amount invested by an Investor on the BF Platform. The Investment amount is only computed in USD. The BF Token Reward is only awarded to the Investor upon settlement of the Investment in Investee Securities between the Platform SP and the Investee Entity. Settlement in this context refers to the completion of all legal steps to execute the relevant documents with the Investee Entity and the subsequent delivery of the Investment amounts to the Investee Entity with the delivery of the Investee Securities by the Investee Entity to the Platform SP, and any other additional legal or otherwise steps that may be necessary to complete the documents between the parties. If settlement has not occurred, then no BF Token Reward will be awarded to the Investors. Under no circumstances does an Investor have the right to claim the BF Token Rewards in advance of settlement occurring. It is wholly the discretion of BF to determine when the settlement has occurred for the purpose of delivering the BF Token Rewards. Upon BF determining that settlement has occurred BF will compute the 1% bonus in BF Token Rewards based on the Investment amount i invested by the Investor in USD. Upon computation of the amount of the 1% bonus in USD, BF will determine the applicable exchange rate between USD and BFT. Such exchange rate shall be by reference to external sources but entirely determined at the discretion of BF. The exchange rate selected shall not be challengeable by Investors.
12.6.6 Investing means investing in BF Platform’s primary offerings only.
12.6.7 The BF Group reserves the right to change the terms of the rewards program at any time due to changing market conditions, risk of fraud, or any other factors we deem relevant.
12.7 Notwithstanding the provision of this Clause 11, BF Group reserves the right to unilaterally amend the terms applicable to the issue of BF Token Rewards at any time and for any reason.
13.1 Where applicable, a Service will only be provided once full payment for the Service has been cleared and received, except as otherwise stated in its specific terms and conditions.
13.2 All Services are provided pursuant to these Terms and the specific terms and conditions pertaining to the Service.
13.3 The Platform Operator makes no representations with respect to any Service.
14. LIMITATION OF LIABILITY
14.1 To the maximum extent permitted by law, the BF Group accepts no liability for any direct or indirect loss or damage, infringements of third party intellectual property rights and/or other rights, foreseeable or otherwise, including but not limited to any indirect, consequential, special or exemplary damages arising from the use of the Website or any information contained therein by any person. Users should be aware that they use the Website and its content at their own risk. You agree indemnify and hold harmless each member of the BF Group against all damages, losses, costs and fees, including, but not limited to, reasonable legal fees and costs related to all third party claims, charges, and investigations, caused by your failure to comply with these Terms, including, without limitation, your submission of any content that violates third party rights or applicable laws or regulations, and any other activity in which you engage on or through the BF Platform.
14.2 No member of the BF Group shall be liable for any damages (including any special, incidental, indirect, punitive or consequential damages) or loss of use, profit, revenue or data to you or any third person arising from your use of any Services, or any platform applications, content or other materials accessed through or downloaded from the BF Platform. This limitation of liability is part of the basis of the bargain between the parties and without it the terms and prices charged would be different. This limitation of liability shall apply to any claim, whether in equity, contract, tort, statute or otherwise; but may be varied in respect of specific Premium Services that are expressly made subject to a different limitation of liability in their applicable terms and conditions.
14.3 No member of the BF Group provides business, legal, financial, tax or other advice with respect to any Investment made through the BF Platform or any other Services provided on or through the Website. All training provided on or through the Website is for your information, reference, support and guidance only (even when such training contains guidance on legal, tax or other similar issues), and should not be regarded as constituting advice, other than technical advice on your use of the Website. You will be solely responsible for any investment decision you make in relation to an Investment through the BF Platform and accordingly, if you require advice, you should seek advice from appropriately qualified professional advisors.
14.4 No member of the BF Group shall be liable for any loss you incur as a result of another person gaining access to your Account with or without your consent, unless such access results from the fraud or wilful misconduct of the BF Group or any BF Team member.
14.5 Where any limitation of liability in these Terms exceeds the legally permitted limitations in any applicable jurisdiction, the foregoing limitations shall be deemed amended as necessary so that they only operate to limit the liability of the BF Group to the maximum extent permitted by the laws of such jurisdiction.
14.6 No member of the BF Group shall have any obligation to take any legal action on behalf of Members on the BF Platform against the Platform Company or any Investee Entities. If BF or related party decides to proceed with legal action against an Investee Entity such action will be at its discretion and costs shall be borne by the Members interested in pursuing such action. BF is under no obligation to seek mediation or dispute resolution or negotiations or settlements with Investee Entities acting on behalf of Members.
15. FUNDING ACCOUNT AND USD*
15.1 For US Investors no pre-funding of an Account is possible and all transactions are with the Escrow Account regarding any investment made into a PItch. For non-US Investor Members they are able to pre-fund their Account. Different funding methods are provided to non-US Investor Members. These funding methods may change from time-to-time and the Platform Operator is under no obligation to continue to offer a particular funding method.
15.2 Investor Members are offered the ability to fund their account by transferring funds in the currency of their choice to the bank account designated by the Platform Operator. Funds not sent in US Dollars will be converted by the bank or financial institution of the Platform Operator. All Investor Members agree to the exchange rates set by the bank at the time of transaction.
15.3 Balances on the BF Platform. Investor Members will have a balance displayed on the BF Platform in “USD*”. The Platform Operator, at its discretion, converts part or all of fiat currencies received into stablecoins. Details about the stablecoins that BF Platform uses can be found on the relevant sections of the BF Platform. All Investor Members should understand the risks associated with stablecoins that may arise in the case of a Stablecoin Loss Event. A Stablecoin Loss Event may affect the balances of USD* held by the Platform Operator for Investor Members. It is likely that the price of the stablecoin in question will drop and will result in the value of the stablecoin losing its ‘peg’ to USD. If the BF Platform is holding such stablecoins then this will reduce the amount of US Dollar value backing the Accounts of Investor Members. In such circumstances the BF Platform will impose a reduction of the Account balances to adjust to the underlying Stablecoin Loss Event. The Platform Operator retains the right to, in the event of a Stablecoin Loss Event, freeze deposits, withdrawals on the BF Platform to undertake an audit of the statement of accounts and calculation of the impairment of the stablecoin assets while any adjustment is taking place. The Platform Operator disclaims any liability to the greatest extent permissible under the law for the consequences associated with Stablecoin Loss Event that affects the balances on the BF Platform. All Investor Members know and understand the risks associated with stablecoins and proceed with full knowledge and acceptance of the adjustment procedure required in the event of a Stablecoin Loss Event.
15.4 In the event that an Investor Member requests a withdrawal from the BF Platform the Investor Member may request the withdrawal in the supported stablecoins or Cryptocurrency on the BF Platform for withdrawal or alternatively in US Dollars. If a fiat withdrawal is requested then the Investor Member will be charged a withdrawal fee as displayed on the BF Platform. If any Cryptocurrency withdrawal is requested in stablecoins or Other Cryptocurrency then the Investor Member may be subject to a blockchain transaction fee in addition to a withdrawal fee. The blockchain transaction fees for blockchain transactions can be found in the fee schedule. The amounts charged for blockchain transaction fees may be subject to variation from time to time to account for the variation in blockchain network transaction fees. In the event of a request for a withdrawal, the Platform Operator shall verify whether the requested amount covers any withdrawal fee and, if applicable, blockchain transaction fee prior to confirming the withdrawal. The Platform Operator reserves the right to cancel any request for a withdrawal if the requested amount does not cover all fees applicable for the execution of the requested withdrawal. If the amount being withdrawn is below a certain threshold whereby the transaction fees are greater than the amount withdrawn then the transaction will, at the discretion of BF, be cancelled. BF reserves the right to delay or cancel the processing of a withdrawal if the transaction fees on the blockchain exceed the amount charged to cover such fees at which point BF will contact the relevant Investor to inform them of the specific transaction fee applicable and for the Investor to agree to the same before processing.
15.5 The BF Group is not responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever resulting or arising directly or indirectly from any delay due to the process of withdrawal.
16. CRYPTOCURRENCIES AND CRYPTOGRAPHIC TOKENS
16.1 Cryptocurrency is a medium of exchange like traditional fiat currencies, using cryptography to secure the transactions and to control the creation of new units. Cryptocurrency is electricity converted into lines of code with monetary value. In the simplest form Cryptocurrency is digital currency. Bitcoin became the first decentralized cryptocurrency in 2009, and since then numerous cryptocurrencies have been created.
16.2 The Platform Operator does not guarantee the value of any Cryptocurrency. The value of a Cryptocurrency can rapidly increase or decrease at any time. You acknowledge that the price or value of a Cryptocurrency may fluctuate and that the conversion rate for converting local fiat currency into Cryptocurrency (Conversion Rate) may not be the same Conversion Rate that applies when converting Cryptocurrency into local fiat currency. You will always be shown the applicable Conversion Rate for a transaction on the BF Platform prior to consummating the transaction.
16.3 You agree to deliver Cryptocurrency with a present value equal to your funding commitment, where you have agreed to pay in Cryptocurrency, regardless of changes in the Conversion Rate between the time of the commitment and the time of funding. The Services do not involve any extension of credit to you, and no credit is extended to you in connection with your use of the Services. In the event you are entitled to a refund, you will be refunded the same amount of Cryptocurrency originally paid, except on pitches where funds are hedged to another currency as may happen in which case the refund will occur in the hedged currency, and the Platform Operator shall have no liability for any losses resulting from a change in the Conversion Rate since that time. No member of the BF Group is responsible for any losses due to any failure or delay in processing any Cryptocurrency payment.
16.4 BFT is a token based on the ERC20 standard protocol. ERC20 protocol has been developed by the Ethereum community and includes a set of criteria and functions that allow developers to create smart contract programs operating on the Ethereum blockchain. ERC20 is software enabling interoperability across multiple interfaces and distributed applications. ERC20 tokens can be stored into Cryptocurrency wallets that are software that keeps track of the secret keys used to digitally sign Cryptocurrency transactions for distributed ledgers. Cryptocurrency wallets can be centralised (e.g. a centralised platform or exchange) or decentralised. You acknowledge and agree that BFT should not be sent to centralised wallets. If you send your BFT to centralised wallets you may lose access to your BFT. The BF Group is not responsible or liable to refund you for any losses of BFT caused by you sending your BFT to centralised wallets.
16.5 Some Tokens you can purchase on the BF Platform are Security Tokens. Unlike Cryptocurrency, Security Tokens have restrictions on transfers because: a) the holder’s real-world identity has to be known in order to maintain the shareholders register (or equivalent) up to date; and b) regulatory restrictions may apply to the transfers of shares. These issues can be solved through the process of Whitelisting. As such, you acknowledge and agree to undergo the process of Whitelisting in the case you decide to purchase Security Tokens on the BF Platform. You further agree that the process of Whitelisting may take a few weeks to be complete and may cause significant delay on your ability to withdraw your Security Tokens. The BF Group is not responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever resulting or arising directly or indirectly from any delay due to the process of Whitelisting.
16.6 A virtual currency network is a network of computers operated by individuals or entities known as miners, who voluntarily participate in the process of confirming transactions on the network. These computers (known as “mining rigs”) compile a list or block of pending transactions, verify that each transaction in the block is valid and does not involve an attempt to double-spend coins, and attempt to complete a mathematical algorithm that determines whether the block may be added to the public ledger of confirmed blocks, called the blockchain. Typically, miners receive: (i) an amount of virtual currency as a reward for any confirmed transaction, generated automatically via the virtual currency mining protocol; and (ii) any fees voluntarily included within the block by the individuals who initiated the proposed transaction (miners fees). Since miners verify virtual currency transactions on a voluntary basis, it is customary to include a miners fee to provide an incentive to the miners to add a proposed transaction to the next block for confirmation via the virtual currency network. Any miners fees or other blockchain transaction fees incurred in connection with contributions to or returns or withdrawals from an Investor Member’s Account, will be borne by the Investor Member.
17. CARD PAYMENTS AND BANK TRANSFERS
17.1 The BnkToTheFuture platform works with PrimeTrust to provide you with online card payment services. Payments made by card by Investor Members are processed by PrimeTrust. By using card payment as a method of payment you agree to the terms of PrimeTrust including their terms relating to transaction fees and refunds. For information regarding PrimeTrust terms and conditions contact BF Support.
18. DATA PROTECTION PROCEDURES
18.1 All BF Team members are required to comply with the procedures set out in our Data Protection Procedures Policy, which is published on the Website.
18.2 The BF Group (and third parties acting on its behalf) will use your information for the legitimate purposes of:
18.2.1 understanding and meeting your needs and preferences in using the Services;
18.2.2 developing new Services and enhance existing Services;
18.2.3 manage and develop its business and operations;
18.2.3 carrying out any purposes for which you have given your consent; and meeting legal and regulatory requirements.
18.3 The BF Group also reserves the right to use aggregated personal data to understand how Users use the Services, provided that no individual can be identified from such data.
18.4 The BF Group uses Google Analytics, which is a web analytics tool to help understand how Users engage with the Website. Like many services, Google Analytics uses first-party cookies to track user interactions, as with the BF Platform, where they are used to track information about how Users use the BF Wallet. This information is used to compile reports and help the Platform Operator improve the Website. The reports disclose BF Wallet trends without identifying individual visitors. You can opt out of Google Analytics without it affecting your use of the Website. For more information on opting out of being tracked by Google Analytics across all websites you use, visit https://tools.google.com/dlpage/gaoptout.
18.5 The BF Group also use Firebase and Crashlytics, a tool that assists in the collection of anonymous data.
18.6 The BF Group will process your personal data legally and fairly and not use it outside the purposes stated in these Terms or on the Website. The BF Group will use its reasonable endeavours to ensure that all your personal data it holds is accurate and up to date.
19.1 You are reminded that it is your responsibility, and not the responsibility of any BF Group member, to pay any taxes due and make any required tax filings in any jurisdiction where you are tax resident, in respect of any Investment income or gains. It is also your responsibility, and not the responsibility of any BF Group member, to reclaim any tax withheld in respect of any Investment income or gains, where you are entitled to do so, and to claim any other type of tax relief to which you may be entitled in respect of any Investment income or gains.
20.1 Your Account may be terminated by the Platform Operator at any time, in which case: (i) any balance of your Account, including any amount held in an Escrow Account, will be returned to you without any deduction of withdrawal fees, but after deduction of any other amounts owed by you to any member of the BF Group; and (ii) any underlying securities held by the Platform Company in respect of your Investments will be distributed to you in accordance with the applicable Investment Agreement(s) and, to the extent any such distribution is not possible, will continue to be held by the Platform Company on the terms of the applicable Investment Agreement(s) and these Terms.
20.2 You may terminate your account at any time, in which case: (i) any balance of your Account, including any amount held in an Escrow Account, will be returned to you after deduction of withdrawal fees and any other amounts owed by you to any member of the BF Group; and (ii) any underlying securities held by the Platform Company in respect of your Investments will, to the extent possible, be distributed to you in accordance with the applicable Investment Agreement(s) and, to the extent any such distribution is not possible, will continue to be held by the Platform Company on the terms of the applicable Investment Agreement(s) and these Terms.
21. NO WAIVER
21.1 No failure to exercise any right or remedy that a person may have under these Terms shall operate as a waiver of that right or remedy.
22. ENTIRE AGREEMENT
22.1 These Terms, together with any supplemental terms and conditions you are required to agree to access specific Services on the Website, constitute the entire agreement between you and each member of the BF Group in connection with your use of the Website, the BF Platform and any Services accessed on or through the Website or the BF Platform.
23.1 The rights and obligations of any member of the BF Group under these Terms are assignable to any other member of the BF Group from time to time, and in particular shall be deemed automatically assigned to the successor upon the replacement by the BF Group of the Platform Operator, the Platform Company or any Platform SP with another BF Group member.
24.1 Except where these Terms provide a specific procedure or notice period for amendment, BF may unilaterally amend, vary, modify or rescind any of the Terms at any time.
24. GOVERNING LAW AND JURISDICTION
24.1 These Terms are governed by the laws of the Cayman Islands and you agree to submit to the exclusive jurisdiction of the Cayman Islands courts in respect of any dispute relating to or arising out of the matters governed by these Terms.
24.2 If there is any dispute between any Member and any other Member and/or the BF Group arising out or relating to these Terms, the relevant parties shall attempt to resolve the matter through negotiations between their appointed representatives who have the authority to settle such disputes. If the matter cannot be settled through direct discussions the parties will submit their dispute to private arbitration in the Cayman Islands according to Cayman Islands Arbitration Law, 2012. Both parties acknowledge and agree that the existence and content of any dispute between the parties shall be confidential. Each party shall share the costs equally of such arbitration proceedings and shall bear their own costs in relation to any legal representation expenditure. The parties agree that in the context of such arbitral proceedings: (a) the language of the arbitration shall be English; (b) the seat of the arbitration shall be the Cayman Islands; (c) there shall be one arbitrator; (d) the appointing authority may, based on mutual agreement, be chosen by the parties or in the absence of such agreement, the court may designate an appointing authority. In this arbitration clause: “issue” in relation to a contract includes (a) a dispute; (b) a controversy; (c) a claim; (d) a breach; (e) termination; or (f) invalidity. The Parties hereby agree that the decision and outcome of the arbitration proceeding shall be final and binding on all parties.
24.3 Nothing shall prohibit any party from applying to a court for interim injunctive relief. In such circumstances the Courts of the Cayman Islands shall only have jurisdiction over such interim relief.
This Disclosure Schedule forms part of the terms and conditions of use of the Bnktothefuture.com Online Investment Platform (Terms), and capitalised terms defined elsewhere in the Terms have the same meanings when used in this Disclosure Schedule unless otherwise defined in this Disclosure Schedule.
Section 1 – DISCLOSURES
BNK TO THE FUTURE SUMMARY
- BF Global is the sole shareholder of the Platform Operator and holds all the Management Shares (i.e. the shares entitled to vote at general meetings of shareholders) in the Platform Company.
- The Platform Operator is a Cayman Islands exempted company (registered number 296093), having its registered office at P.O. Box 10008, Willow House, Cricket Square, Grand Cayman, KY1-1001, Cayman Islands and being regulated by the Cayman Islands Monetary Authority as a registered person for purposes of arranging deals in securities under SIBL (CIMA Registration No. 21601784).
- The Platform Operator is the sole director of the Platform Company. The directors of the Platform Operator are Simon Dixon and Bliss Dixon.
- The Platform Company is a Cayman Islands segregated portfolio company (registered number 298427), also having its registered office at, P.O. Box 10008, Willow House, Cricket Square, Grand Cayman, KY11001, Cayman Islands.
- The memorandum and articles of association of the Platform Company can be found here.
- The Platform Operator operates and maintains the BF Platform, which is an online platform highlighting various Investee Companies who post their Pitches on the BF Platform to solicit indirect investment in their Investee Securities. The Investee Entities enter into agreements with the Platform Operator and the Platform Company to communicate these investment pitches through the BF Platform. Users of the BF Platform that have been qualified as an Investment Authorised Member for at least 30 days prior to the start of this offering may be offered investment opportunities into the Investee Entity that would not otherwise be available to them.
- Investment Authorized Members will invest in the IPlatform SP created by the Platform Company for purposes of the specific Investment.
- A Platform SP is a segregated portfolio created within the Platform Company (meaning a portfolio of assets and liabilities that are legally ring-fenced from the other assets and liabilities of the Platform Company, including those of its other segregated portfolios).
- Investment Authorised Members whose investments into the Platform SP are accepted will become Investors.
- Investors will invest in Shares issued by the Platform SP and do not invest directly in the Investee Entity.
The Platform SP applies the subscription proceeds from the issue of each Investor’s Shares to subscribe for matching Investee Securities issued by the Investee Entity.
BF COMPANY STRUCTURE
The Platform Company has two directors – Simon Dixon and Bliss Dixon whose biographies can be found below under the heading “MANAGEMENT OF BNK TO THE FUTURE”. The Platform Operator is the sole director of the Platform Company.
This Disclosure Schedule explains key factors relating to your investment in the Platform SP. The Disclosure Schedule describes the particular process of investing in the Platform SP on the BF Platform, the risks associated with investing in general, the risks of investing in an Platform SP, and the general risks of the industry that Investee Entities operate in. You should read this document in detail and assure yourself that you understand the structure and risks of this investment.
Your Investment in a Platform SP will be governed by the terms of an Investment Agreement, a Side Letter and these Terms (all of which are made available to you on the Investor Page). By proceeding with any Investment you agree that you have read and accepted the contents and terms of the applicable Investment Agreement and Side Letter, as well as these Terms. This Disclosure Schedule to the Terms is provided to you as a means of giving you an overview of the investment and associated risks.
To invest in a Platform SP, you must first be an Investment Authorised Member of the BF Platform and are therefore bound by the Terms, which regulate your use of the BF Platform.
Once you are an Investment Authorised Member you will be required to be accredited to be able to access any of the investment opportunities displayed on the BF Platform. If you are from the United States, then our US Broker Member will review your accredited investor status and decide if you can invest in an opportunity. If you are from other countries, then you may be required to go through one of the BF Platform’s other Broker Members to determine your investor status and whether you are able to access and/or invest in this opportunity. At times, if there are no Broker Members available to verify your investor status, the Platform Operator will determine whether you qualify to invest.
Where applicable, if you are from the United States then you will be required to accept the terms of our US Broker Member (“Broker Member Terms”). The Broker Member Terms sets out the role of the US Broker Member in verifying your accreditation status and compliance with the relevant exemption applicable and your consent to share your data with the US Broker Member for that purpose.
All documents referred to in this Disclosure Schedule can be found and downloadable from the Investor Page. If you are not familiar with any document referenced in this Disclosure Schedule feel free to contact the Platform Operator directly to provide you with a copy via email.
You should seek legal and or tailored financial advice from a suitable professional about any potential Investment. You should understand your own tax situation before making an Investment. It is entirely your responsibility to ensure that you are aware of the implications of investing in any Platform SP through the BF Platform. You are urged to seek professional tax advice on your use of the BF Platform and in relation to any Investment you make. Neither the Platform Operator nor the Platform Company should be regarded as providing any advice to you in relation to any Investment. The content displayed in this Disclosure Schedule or on the Investor Page should not be construed as an investment recommendation.
The risks outlined below under the heading “Risk Factors” are indicative risks of the business and industry but are not intended to be exhaustive. There are numerous and unpredictable risks affecting businesses and industries which may have an adverse effect on this investment. You are advised to conduct your own due diligence in respect of any Investee Entity presented on the BF Platform.
INVESTEE ENTITY PITCH
You can find information on the Investee Entity on the BF Platform. This Pitch Content includes what we refer to as the Financing Documents which are the terms upon which the Investee Entity will offer Investee Securities to the Platform SP ; as well as other information that has been provided by the Investee Entity regarding their company. This may include the Pitch and other slides, videos, information and documentation produced by the Investee Entity and hosted on the Investor Page of the BF Platform (together with the Financing Documents, the “Pitch Content”).
All Pitch Content is provided to you on an as-is basis. The Platform Operator will not have verified whether any information provided by an Investee Entity found in the Pitch Content is accurate or is not misleading. The Platform Operator has assumed that all information provided by the Investee Entity has been provided in good faith. The Platform Operator does not provide any warranty on the accuracy of the Pitch Content. Neither the Platform Operator nor any Investee Entity warrant that any such information is still current at the time of any applicable Investment and no Investee Entity is under any obligation to make ongoing updates to its Pitch Content.
The Platform Operator may generate BF Content about the Investee Entity and display it on the Investor page of the BF Platform. This content may consist of content such as interviews between BF and the founders of the Investee Entity. The BF Content is to provide the opportunity for the Investee Entity to describe its business and to present the Investee Entity to the Investors. Any BF Content such as interviews with founders and marked as such, is provided simply as anecdotal information and you confirm that you have not relied on any applicabile BF Content should you decide to proceed with any Investment.
The Platform Operator does conduct verification on the founders of the Investee Entity, including “bad actor”’ background checks. These background checks are done on a proportionate and best endeavours basis. The Platform Operator by no means represents that its due diligence is absolutely able to detect all adverse information on the founders or persons involved in the Investee Entity. Further information about the due diligence process undertaken by The Platform Operator can be found in the Investment Agreement.
The BF Platform permits Investors to discuss between themselves investment opportunities in a forum. Your use of this forum is subject to the Membership Terms. Investors may share Forum Content about investment opportunities on such forums. At times an Investee Entity may communicate with potential Investors on the Investors forum. You confirm that you have not relied on any applicable Forum Content should you decide to proceed with any Investment..
You may have seen other Third Party Content outside of the Investor Page about the Investee Entity. For example, you may have read press releases about the Investee Entity or similar content on third party websites, or you may have received information about the Investee Entity from third parties. This Third Party Content is content that the Platform Operator is not in control of. You confirm that you have not relied on any applicable Third Party Content should you decide to proceed with any Investment.
MANAGEMENT OF BNK TO THE FUTURE
The two-person Board of Directors of the Platform Company is comprised of Simon Dixon and Bliss Dixon. Please refer to the organisation chart above to show their ownership and management role of the Platform Company. Every decision related to the Platform Company and any and all Platform SPs are made by the Board of Directors of the Platform Company. There are no other employees of the Platform Company, and no employees of any Platform SP.
All decisions relating to SPs will be made by both persons as directors. A description of their background is provided as follows:
Simon Dixon is the CEO and co-founder of BNKToTheFuture.com and author of the book, ‘Bank to the Future’.
An ex-investment banker, market maker and stock broker before co-founding BnkToTheFuture.com and becoming a FinTech angel investor. Simon qualified as an economist with a master’s degree in economics at the University of Manchester as well as holding professional qualifications in financial planning, securities and investments and regulatory compliance with the Chartered Institute for Securities and Investments.
Simon is regularly found speaking in the media about sustainable banking, Bitcoin and alternative finance with articles in the Financial Times, Wall Street Journal, City AM and has provided commentary for the BBC, Bloomberg, CNBC and Reuters to mention a few.
Bliss Dixon is the COO & co-founder of BnkToTheFuture.com with a focus on legal compliance and risk management.
Ms. Dixon completed professional training on Anti-Money Laundering and securities and investments with the Chartered Institute For Securities & Investments after a professional career in retail banking at Barclays PLC.
Ms. Dixon has over 9 years experience working as chief operating officer for financial institutions and 15 years experience working in tightly regulated industries.
From time to time, the Investor may be asked to vote on a Pass-through basis (defined below) on “corporate actions” proposed by the Investee Entity. Corporate actions include, but are not limited to, attendance to meetings, voting on resolutions and/or participating in events that may cause a material change to the Investee Entity and/or Investee Securities. The Investee Entity will inform the Platform SP, as the holder of Investee Securities, in advance of these corporate actions. The Investor will be then informed by the Platform SP and will vote according to the procedure explained in the section below (Voting Rights).
The Investor agrees that it may be charged an administrative fee for any administration costs we may incur to process a corporate action, including, without limitation, reorganisation of shares issued by the Investee Entity (that should be reflected in the Platform SP) and requirements on exit of the Investee Entity or shareholders. The Corporate Action Administration Fee may be up to the percentage amount described in the Fee Schedule. The precise amount shall be at the sole discretion of BF. The Investor further agrees that any applicable fee may be deducted in kind on the relevant assets that the Investor holds. The asset value shall be calculated based on the last funding round or the last price on the previous day on the Secondary Market prior to charging the administrative fee.
From time to time a Platform SP may be requested or may need to solicit the consent of its Investors on a particular course of action or corporate action. In such circumstances, the Investors in the Platform SP will be asked to vote their Shares (in writing or by poll vote at a shareholder meeting) to indicate how they would like the Platform SP vote in respect of the Investee Securities. Below is a detailed description of the voting policy and procedures for the approval of corporate actions by Platform SPs on the BF Platform. The following description is provided by way of guidance, but the articles of association of the Platform Company must be followed at all times and take precedence in the event of any conflict between this guidance and the articles. The voting policy described below applies in any situation where an Investee Entity asks the Platform SP holding its Investee Securities to vote or exercise any other right in respect of those Investee Securities, but there is no pre-determined response required by the Investment Agreement terms.
Pass-through Voting. The general principle of the BF Platform is that although Investors hold Shares in Platform SPs, their rights as holders of Shares in a Platform SP should replicate, as closely as possible, the voting rights they would have if they held directly the Investee Securities held by the Platform SP. Accordingly, each Share represents specific Investee Securities and when the Platform SP is asked to vote its Investee Securities, the Platform SP will, wherever possible and practicable, seek to vote the Investee Securities indirectly represented by an Investor’s Shares, in line with that Investor’s wishes. This should operate in the same way regardless of the type of Investee Securities held (eg. if they are convertible notes rather than shares). The exceptions to this general principle include: (i) where the Investment Agreement already provides that the Platform SP must act in a specified manner in a given situation; (ii) where the Investee Entity will not permit split voting (so that all the Investee Securities held by the Platform SP must all be voted the same way); (iii) where the Directors of the Platform Company, in their discretion, determine that it is not practicable to obtain the votes of Investors (for example, because there are an unusually large number of options to be voted on or because there is insufficient time to obtain such votes); or (iv) in the unusual circumstance that an Investor holds tokens rather than Shares in a Platform SP.
Voting Procedure. In the event that a split vote is permitted by the Investee Company and the Directors consider it practicable, each Investor in the relevant Platform SP will be sent a notice containing the matters to be voted on by the Platform SP and asking whether the Investor would like the Investee Securities indirectly represented by its Shares to be voted for or against or abstain. The Platform SP will then vote for or against or abstain from voting its Investee Securities in the same proportions its Investors voted (or abstained from voting) their Shares. Where split voting is not permitted by the Investee Company, each Investor will still receive a notice, as above, but the Platform SP will vote all its Investee Securities: (i) in accordance with the unanimous vote of its Investors, or, if that is not achieved; (ii) in accordance with the simple majority of the A Shares that voted, or, if no A Shares are in issue or none were voted; (iii) in accordance with the simple majority of the B Shares that voted.
Time sensitive matters. In some instances an Investee Company may impose an unusually short deadline within which a Portfolio SP must vote its Investee Securities, or may entirely fail to give a Portfolio SP notice of a required corporate action. This could mean that Investors are not given sufficient time to conduct a full analysis of the facts to make a determination on how to vote, or it could mean that the Portfolio SP (and therefore its Investors) lose the opportunity to vote altogether. Neither the Platform Company nor any other member of the BF Group is responsible for any such timelines imposed by an Investee Entity or an Investee Entity’s failure to give proper notice when required, and accordingly the BF Group disclaims all liability for any losses incurred by Investors as a result of Investors not having sufficient time to make an informed decision. The voting procedure outlined above is provided by the Platform Company on a reasonable endeavours basis. Voting notices sent to Investors will usually only be available on the BF Platform until 24 hours before the Investee Entity’s voting deadline so that the Platform Company has sufficient time to tally the votes of Investors and submit the Platform SP’s votes to the Investee Entity.
Platform Company Articles.
More details can be found on the voting procedures in the Articles of Association of the Platform Company which can be found here. Please review in particular Article 6(c) and Article 17.2.
There may be restrictions imposed by the BF Platform from time-to-time on the minimum amount to be invested. The minimum amount investable may change from time-to-time at the discretion of the Platform Operator. BF may offer voting or non-voting Platform SP shares. You may be required to invest above a certain amount to obtain voting shares. Any applicable threshold before voting shares are offered will be indicated to you at the time of investment.
An Investee Entity may offer pre-emption rights to a Platform SP. The Investee Entity will send a notice of the same to the Platform SP. The Platform SP will consider, whether practicable, to offer the pre-emption rights to the shareholders of the relevant Platform SP. It may not be feasible to do so due to lack of time to prepare a Pitch or the costs to be incurred by third parties in making arrangements to start the Pitch. In such circumstances the Platform Operator will request information from the Investee Entity to be added to a new Pitch. Existing Investors within a Platform SP will be offered a period of time to exercise their pre-emption rights if applicable. If after that period the Investors do not exercise their pre-emption rights then the offer will be made available to other Investors on the BF Platform (where relevant). Note below that a Platform SP may not have pre-emption rights whereas another Platform SP may have pre-emption rights even though they relate to the same Pitch. The determination as to whether to offer pre-emption rights to Investors is entirely at the discretion of the Platform Operator.
INVESTEE ENTITY INFORMATION RIGHTS
A Platform SP may or may not be entitled to information from an Investee Entity after the investment in the Investee Entity has taken place. The type of information that may not be available may include financial information (including accounting and projections), corporate plans (including financing or merger and acquisition plans) or other information an Investor might consider significant. Available Investee Entity information will differ depending on contracts entered into between the Platform SP and the Investee Entity. The Platform SP will endeavour to request from the Investee Entity regular updates as to its progress. However there may be limitations on the type and quantity of information that an Investee Entity is willing to divulge. The BF Group disclaims any and all liability for any lack of information provided to Investors in respect of an Investee Entity. All information shared by a Platform SP with Investors is confidential (note more details on your obligation as an Investor to keep information shared confidential is below in the Summary section below), on a good faith and best endeavours basis and is subject to the contractual limitations specified in the contract with the Investee Entity. If the Investee Entity decides not to provide information or is no longer responsive to requests for information, no member of the BF Group is bound to take legal action against the Investee Entity to compel them to carry out a contractual duty. All information provided by the Investee Entity in relation to their progress, financial situation or other information is provided to the Platform Operator on an ‘as is’ basis. The Platform Operator does not verify the accuracy of the data provided. In the event that the Investee Entity misrepresents its progress, the BF Group disclaims any liability for the same.
CONFLICTS OF INTEREST
There may at times be a conflict of interest between the interests of the BF Platform, the Platform Company or a Platform SP, and the Investors in a Platform a Platform SP. This conflict may arise as the BF Platform collects a Holding Fee from the Investee Entity as described below. There may be other instances of conflicts that may arise from time to time. The directors of the Platform Company are the only authorised persons to enter into contracts on behalf of an SP and their interests may conflict with those of the SP shareholders.
All Investors will receive an electronic certificate evidencing their ownership of any Share. Investors’ details will be added to a share register of the applicable Platform SP in respect of any Shares that they own. For further details please refer to the Timeline section below.
RESTRICTIONS ON TRANSFER
You are investing in the Platform SP and not the Investee Entity. You will receive Shares in the Platform SP that are not freely transferable. You may have seen on the BF Platform that there is a secondary market for Shares. However, such a secondary market may not apply to a particular offering. To be clear the transfer restriction means not only that you cannot freely sell any Shares, but it restricts you from assigning, pledging, gifting, granting a participation interest in, encumbering, mortgaging, or otherwise disposing of the Shares. This restriction would not apply in the event that the Investee Entity were to do an Initial Public Offering (please read the section below on IPO to understand what would happen in that instance). The transfer restriction does not apply to any transfer which is done for estate planning purposes, pursuant to divorce settlements, that occurs by operation of law, by will or intestacy, to an entity established solely for the benefit of yourself or your immediate family or, in the case of an entity, to an entity that wholly owns, or is under common control with such entity. Any permitted transfer is also only accepted if the entirety of the Shares held by an Investor are transferred, meaning that any transfer will not increase the total number of Investors in a Platform SP.
LITIGATION AGAINST INVESTEE ENTITY
The Platform Operator and the Platform Company have a due diligence process to determine that statements provided by the Investee Entity are supported by documentary evidence. However, we disclaim any liability for statements made by the Investee Entity and shared with you that may later prove to be inaccurate. It is the responsibility of Investors to conduct their own due diligence on the Investee Entity. All Investors agree to waive any legal action against the BF Group in relation to representations made by the Investee Entity that prove to be inaccurate. The BF Group is under no obligation to commence any legal proceedings on behalf of any Investor. Any legal action to be taken by an Investor should be directed to the Investee Entity on the basis of rights provided to Investors in the applicable Side Letter. In the event that an Investor wishes to pursue action against an Investee Entity, the applicable Platform SP will cooperate with the Investor in facilitating that process within the scope of what is reasonable and proportionate in the circumstances; if any such facilitation results in additional costs for the Platform SP, then the Investor may be charged any such reasonable costs to support the Investor in any such claim which the Investor agrees to pay for.
All information shared by the Investee Entity to the BF Group is strictly confidential. You are reminded that when you became a Member that you accepted a non-disclosure agreement. That non-disclosure agreement covers all materials that you see on the Investor Page provided by the Investee Entity and any further materials or information provided by the Investee Entity at a later date. You may be required to sign an additional confidentiality agreement to meet the level of non disclosure as required by the Investee Entity.
- Dilution within SP
Additional Shares in an existing Platform SP are unlikely to be issued, following a funding round. Upon completion of a funding round, the applicable Platform SP purchases a fixed number of Investee Securities and issues corresponding Shares to Investors. The Platform Company typically creates a new Portfoliio SP for each new funding round of an Investee Entity. While it is not anticipated that any Platform SP will issue additional Shares outside of a funding round, it nonetheless has the ability to do so if required. For more details, please refer to the Articles of the Platform Company found on the Investor Page.
- Dilution of Investee Entity shares held by Platform SP in the Investee Entity in case of conversion of securities into equities under the SAFE
In the case of any conversion of convertible Investee Securities into other Investee Securities (such as preferred shares into common shares), it is not anticipated that the relevant Platform SP would issue additional Shares. However, the Investee Entity may continue to raise capital by issuing more of its equity, whether in the form of common shares or other classes of shares which could lead to the dilution of the Investee Securities held by the Platform SP. Where an Investee Entity provides an Options Scheme for stakeholders and employees, the Options Scheme may cause dilution to the Investee Securities held by the applicable Platform SP (usually of up to 10%, by the issue of additional shares in the Investee Entity upon the exercise of any such options).. A Platform SP’s rights as a holder of Investee Securities will vary and it is not intended that any Platform SP will own controlling shareholder positions in any Investee Entity. Therefore, any Platform SP will have limited and minority control over its Investee Entity. A Platform SP’s interest in its Investee Entity will likely not be significant enough to influence the Investee Entity in any decisions relating to its equity structure, financing, management, or day to day operations.
- Share price
The purchase price of each Share is the same as the purchase price of the corresponding Investee Securities. Where practicable, a Platform SP will issue one Share to represent one Investee Security, but in some cases the pricing of Investee Securities may result in the Platform SP issuing Shares that represent multiple Investee Securities or fractions of Investee Securities. The price of the Investee Securities is not derived by the Platform Operator or the Platform Company, but determined solely by the Investee Entity. It is likely that the Investee Entity has established a valuation method to determine the price of its Investee Securities. Any information provided by the Investee Entity to the Platform Operator relating to the valuation or pricing of its Investee Securities is provided on an as-is basis. The BF Group will not have verified any such valuation or pricing presented to it. The BF Group disclaims any liability for the valuation process or method employed by the Investee Entity.
- Minimum investment
There is a minimum amount required before the Platform SP can proceed with the investment in the Investee Entity. This minimum amount is described in the Side Letter as the Minimum Funding Goal.
ACCREDITED INVESTOR STATUS
You confirm that you will provide information that is accurate and up to date and that you will not provide any false statements or misrepresentations about your ability to meet the accredited or professional investor requirements. Neither BF Group nor the Investee Entity accepts any liability for your failure to qualify to invest in an Investee Entity due to your inability to qualify as an accredited investor, professional investor, HNW Person or Sophisticated Person.
REPRESENTATIONS YOU ARE MAKING
In respect of any Investment you elect to make, you represent (as at the time you make the Investment) that you have received adequate information concerning all matters which you consider material to making a decision to purchase Shares. You represent that you are capable of evaluating investment risks independently and will exercise independent judgment, and that you will not have not relied on any BF Content, Third Party Content or Forum Content to make an investment decision. The Platform Operator provides on the Investor Page any information an Investee Entity has provided for display for you. However, BF Group does not confirm the accuracy of any such information. See more information on Pitch Content and Forum Content above. You acknowledge that you have sufficient knowledge and experience in financial and investment matters, and in illiquid investments in particular and you are capable of evaluating the merits and risks of any Investment without the assistance, if applicable, of an Investor Representative (such term defined in the Securities Act). You acknowledge that you can bear a complete loss of any Investment you choose to make and that such loss would not materially adversely affect your capital needs (in case of an entity) or your standard of living or that of your family (in the case of an individual).
INVESTOR QUALIFICATION CAYMAN ISLANDS
You represent that you meet the investor qualification requirements of the Cayman Islands as a Sophisticated and/or High Net Worth investor. A Sophisticated person is a person who “by virtue of knowledge and experience in financial and business matters is reasonably to be regarded as capable of evaluating the merits of a proposed transaction; and (y) participates in a transaction with a value or in monetary amounts of at least US$100,000 or its equivalent in any other currency, in the case of each single transaction”. A High Net Worth person is an individual with a net worth of at least US$1,000,000 (or its equivalent in any other currency); or any person with total assets of at least US$5,000,000 (or its equivalent in any other currency).
The Shares of any Platform SP will be offered in the United States to accredited investors only. If you are an Investor located, or the Investee Entity is incorporated, in the US, your investment will be subject to the rules and regulations promulgated by the SEC. If you are from the United States your ability to participate in an Investment will only be possible if you and the applicable Platform SP qualify for an exemption from registration requirements of the SEC. For United States investors, to be an accredited investor, you must be:
A natural person with income exceeding USD$200,000 in each of the two most recent years, or joint income with a spouse exceeding USD$300,000 and a reasonable expectation of the same income level in the current year;
A natural person who has individual net worth or joint net worth with the person’s spouse that exceeds USD$1 million at the time of the purchase, excluding the value of the primary residence of such person;
Any trust, with total assets in excess of USD$5 million, not formed specifically to purchase the subject securities, whose purchase is directed by a sophisticated person;
Any entity in which all of the equity owners are accredited investors.
If you are a United States Investor, you warrant to BF Global and any applicable Investee Entity and, where relevant, Broker Member that you understand and meet the requirements to qualify as an accredited investor as defined under Rule 501(a) of Regulation D promulgated under the Securities Act.
If you are from the United States, you agree that you will cooperate with the process of determining whether you qualify as an accredited investor.
MAXIMUM OF 99 INVESTORS FOR US SP
There is a maximum of an aggregate of 99 Investors permitted into any US SP. This means that, if you are from the US, you may not be able to invest in an offering if the total number of Investors in the applicable US SP has reached this limit. You will note below that all transactions involving US persons shall involve an Escrow Agent. Any US investor may be presented with single or multiple ways to pay for their investment including: ACH, Card Payments, Bank Wire or BTC/ETH. Investors should note the period of clearing transactions varies based on the terms of the Escrow Agent. Investors from the US that invest through our Escrow Agent may not settle the transaction resulting in that Investor being removed from the list of Investors into the US SP. It is our discretion, based on information provided by the Escrow Agent to us, to reject any investment on the basis of your payment not clearing with the Escrow Agent. Such rejection is final resulting in you not being considered to have invested in the applicable US SP. A US SP may reach 99 Investors, at which point, no further US investors will be permitted or able to invest in the Platform SP. However due to the settlement reversals indicated to us by the Escrow Agent there may be additional slots (Additional Slots) that become available again during the funding campaign. At the point that the Additional Slots become available US investors may be able to continue to invest in the US SP. These Additional Slots are available on a first-come-first-serve basis and we are not obliged to inform investors of when such Additional Slots become available. Should any investor succeed through any administrative or technical fault to invest when the US SP has already been deemed to reach the cap of 99 investors, then the Investment made shall be deemed not have been completed and the US SP shall have the right to reverse the transaction and refund the investor accordingly less any transaction charges associated with the refund.
If you do not invest from the US, you must meet the definition of a professional investor as defined by the BF Platform and adhere to the Cayman Islands requirements for investor qualification. If you are a non-US investor, then BF Platform may, in addition to local Cayman Islands requirements, assess, at its own discretion, and based on your local jurisdiction, whether you meet the correct investor qualification in your local jurisdiction.
You agree to cooperate with the process to determine whether you are a professional investor under Cayman Islands law and or professional investor as defined in your local jurisdiction.
INFORMATION ABOUT SEGREGATED PORTFOLIO COMPANIES
Once registered under the Cayman Islands Companies Law, a segregated portfolio company (an SPC) can operate segregated portfolios (SPs) with the benefit of statutory segregation of assets and liabilities between SPs.
Some advantages of an SPC are the structure enables protection of the assets of one portfolio from the liabilities of other portfolios and also allows the ability to create SPsportfolios either with different strategies, different investors or different share-classes in mind. More information about SPCs and their risks can be found below in the Risk section.
- The Platform Company creates a separate Platform SP for each Investee Entity. Each new Platform SP created is operated by the Platform Company.
- The role of each Platform SP is to hold the Investee Securities issued by an Investee Entity. The purpose of having different SPs per investment on the BF Platform is to segregate the assets of each Platform SP.
- Each Platform SP issues its own Shares to Investors, which can be fractional shares.
- The Platform Company does not own or have an economic interest in the SPs created except for the Holding Fee.
- Platform SPs are not separate entities, and are each an internal part of the Platform Company. However, the Platform Company is not entitled to access the assets of any Platform SP to satisfy its general creditors, except to the extent of each Platform SP’s share of its general expenses from which the Platform SP has benefitted (such as the Platform Company’s annual maintenance fees).
- The Platform Company is not regulated and simply acts as an investment holding vehicle.
- The Platform Company is ultimately controlled by BF Global, which holds its management shares. Unlike Shares, which can only vote on proposed variations of their class rights or on a pass-through basis on matters relating to the applicable Investee Entity, the management shares carry the right to vote at general meetings of the Platform Company.
PLATFORM SPs. The Platform Company may create more than one Platform SP for a single Pitch. The Platform Company may elect to create a Platform SP for US investors. Then the Platform Company may create a separate Platform SP for non-US investors. The impact of this division may lead to the result that certain Investors within one Platform SP have certain rights that Investors in another Platform SP may not have even though both Platform SPs refer to the same Pitch. This can arise if there are, for instance, pre-emption rights offered to one SP and not the other. This would occur if the amount of Investments collected by one SP was greater than the amount of Investments collected by the other.. These are not elements that you, as an Investor, control. However there is a risk that you should be aware of: from time-to-time we may not be able to offer you pre-emption rights as the Platform SP that you have shares in does not have pre-emption rights from the Investee Entity.
The Platform Company is owned and controlled by BF Global which is also the owner of the Platform Operator, which operates the BF Platform. BF Global is a part owner of BMI Capital, the US Broker/Dealer designated by the BF Platform to arrange deals in Investments for US persons. Simon Dixon and Bliss Dixon are not part of the management of the following entities:
BMI Capital International LLC
BMI Capital International LLC (“BMI”) is a registered US Broker/Dealer and member of FINRA and SIPC. BMI specializes in corporate finance advising, raising equity, and venture services for customers in the United States
There are three types of fees applicable in the BF Platform. The first is the fee charged to the Investee Entity which is the Commission. The second are the fees charged to the Investors referred to as the Holding Fee. The third are merchant processing fees. These fees are further described as follows:
Commission charge during the funding round
Investors do not pay any commission to the Platform Operator to make an Investment on the BF Platform. Any commission is charged to the Investee Entity.
the Holding Fee applied to distribution of funds
Any distribution of funds generated for Investors in an Investment is subject to a Holding Fee, which is imposed on Investors rather than the Investee Entity and is charged directly to the Investors by the Platform Company. The Holding Fee is imposed on any distribution of funds to a Platform SP, including profits, sales proceeds of the Investee Entity, dividends of the Investee Entity or other revenue that is paid to the Platform SP. Further details on the Holding Fee can be found in the Investment Agreement. All distributions are paid to an Investor’s Account. The Investor is then able to withdraw from that Account less the Holding Fee.
Merchant processing fees
The BF Platform may be charged fees for third party merchant processing of credit cards or cryptocurrency payments. All such fees are disclosed to Investors at the point that an Investment is made on the BF Platform. These fees are discussed elsewhere in the Terms.
GENERAL RISKS RELATED TO INVESTING IN SEGREGATED PORTFOLIOS
Type of investment
If, as an Investor, you invest in a Pitch, you are agreeing to invest in Shares issued by a Platform SP, that will aggregate the investments of all participating Investors and invest as a single investor in the Investee Entity. Proportionally each Investor has the same underlying economic benefit as if he or she would own Investee Securities directly.
Segregation of the SP assets from the SPC assets
A segregated portfolio company is a single entity which may create internal segregated portfolios for the purpose of segregating assets and liabilities. The assets and liabilities of each Platform SP are segregated from the general assets and liabilities of the Platform Company and from each other Platform SP.
The segregation within the segregated portfolios of a Cayman Islands segregated portfolio company will not necessarily be recognised in all other jurisdictions. As a result the Platform Company structure, particularly the segregation of assets and liabilities within Platform SPs, could be subject to the risk of legal challenges.
The rights of Investors as holders of Shares are described in the Investment Agreement and the articles of association of the Platform Company which can be found here.
The issue price of Shares will reflect and will generally match 1:1 the current price of the Investee Securities. The Platform SP will generally issue the same number of Shares as the number of Investee Securities the Investee Entity issues to the Platform SP. However, for practical reasons, in some cases Shares will be issued that represent multiple Investee Securities or fractional Investee Securities; and fractional Shares may also be issued.
Minority shareholder and drag-along risks
If convertible Investee Securities held by a Platform SP are convertible into shares of the Investee Entity, the Platform SP may only have a minority interest in the Investee Entity. As a minority shareholder the Platform SP may have limited power to influence the Investee Entity in its decision making. You are advised to read the by-laws/ articles of association of the Investee Entity and the other contractual documents on the Investor Page to understand more about the rights of shareholders of the Investee Entity. The board of the Investee Entity may decide to sell or merge the company to/with a third party, or liquidate the company; a majority of the shareholders may decide to go ahead with this transaction and drag the minority shareholders along, meaning that the minority shareholder may be forced to do an action such as to sell their shares. As a minority shareholder, Platform SP will have little or no influence over such a decision.
A Platform SP may or may not be offered pre-emption rights by the Investee Entity. There may be cases where there are two Platform SPs for the same Pitch and one Platform SP may have pre-emption rights but the other may not have. Whether this will affect an Investor is not within the Investor’s control. The creation of multiple Platform SPs is based on the separation of US versus non-US jurisdictions. If an Investor is in a Platform SP that does not have pre-emption rights then the Platform Operator will not arrange for these rights to be passed through to the Investor. This may result in the Investor not being able to follow on an investment and experiencing a dilution as a result.
The Platform Company legal structure may not be recognised in all jurisdictions. This may have an effect on the taxation of an Investor interest in a Share issued by a Platform SP. All Investors should obtain independent legal advice before investing as to their personal tax situation.
There is no guarantee that you will be able to access a potential exit opportunity with any Investment. However, there may be cases where an Investee Entity is acquired or the management of the Investee Entity decides to buy back the Investee Securities they have sold to the Platform SP. There may also be other potential exit scenarios to those listed below. This section should be read with the applicable Investment Agreement in particular Clause 9 of the Investment Agreement which describes how the Platform SP will deal with exit scenarios.
This scenario provides a sale of the business to a third party operating in a similar industry of the selling company. This purchase may benefit the holders of Investee Securities.. In this event , at the option of the holders, each Investee Security shall be converted into Investee Entity common stock or cancelled in exchange for principal amount paid together with any accrued and unpaid interest.The proceeds will then be paid to the Platform SP’s Investors less the Holding Fee.
A corporate partnership or joint venture
They are corporate strategies that allow entrepreneurs to combine synergies and expand their offerings of services or products. The risk with such a process is that a joint venture might be a complicated legal arrangement. There is no guarantee that any Investee Securities converted into shares of the new joint venture entity will be worth more than the Investee Entity. At times joint ventures may not be successful and result in having to unwind the arrangement, which can be costly.
- Management buy-out or company share buy-back
There may be instances where the management of an Investee Entity may wish to purchase Investee Securities or the board of the Investee Entity may decide that the Investee Entity should repurchase Investee Securities from the Platform SP.
This may, at times, be a complicated process with no guarantee that the initiative will be successful. Also, the offer to Investors may be less than may be obtainable by Investors selling their Shares.
INITIAL PUBLIC OFFERING (IPO)
Offering securities of a company to the public may represent an exit strategy that can be executed when the company has met its business growth objectives and can show investors that the business is maturing.
You will not hold shares directly in any Investee Entity, since the Platform SP holds any Investee Securities.
If the Investee Entity does an Initial Public Offering or is listed on a stock exchange, then the Platform SP will have the right to receive, at the Platform SP’s election, a cash payment equal to the amount invested or a number of shares determined as described in the Subscription Agreement. The description below is the process by which the Platform SP will send you the Investee Entity shares so that you will have those shares in your name and will be able to sell the shares directly into the stock market.
There is no guarantee that anyInvestee Entity securities will be converted into Investee Entity shares and will be listed on a stock exchange or will become tradeable. Most new businesses struggle to reach a level of growth or revenue to be able to list on a stock exchange. The investment you are making is known as an illiquid investment as it can take a long time, if at all, to produce a return on investment.
If an Investee Entity issues capital stock under the SAFE, Investee Securities may be converted into Investee Entity shares. There may be complications surrounding delivering the Investee Entity shares to you on a timely basis. You agree that you will cooperate promptly with the Platform Operator and the Platform Company on the steps you need to take to obtain listed shares. The Platform Operator has explained the basic process for you to receive your shares below, however, you agree that the procedures surrounding the distribution of the shares may change. You agree that you will cooperate promptly with the Platform Operator and the Platform Company to provide any required documents and information necessary to progress the transfer of the shares to you. You also acknowledge that any failure to provide information and documents to the Platform Operator and the Platform Company may result in a delay. Neither the Platform Operator nor the Platform Company accepts any liability for a delay in being able to deliver to you the shares.
You may be required to create an account with a broker to be able to receive anyInvestee Entity shares. It may not be easy for you to create a brokerage account. You may be required to provide documentation and information for this purpose and you may not be able to meet the requirements of the broker. This will result in delays or you will not be able to receive the Investee Entity shares. There may be other administrative matters outside of the control of the Platform Company and the Platform Operator that affect the ability to deliver the shares to you on time.
If you do receive Investee Entity shares at the time of a listing on the stock market, those shares may not be immediately tradeable. The Investee Entity may require you to hold the Investee Entity shares for a period of time before you are entitled to sell. You should review the rights of shareholders in the Investee Entity as outlined in their articles/bylaws or other shareholder agreement. The Investee Entity may impose new requirements or there may be statutory restrictions that may affect your ability to sell the Investee Entity shares once listed. Neither BF nor the Platform Company accept any liability for any delay as a result of you not being able to sell the Investee Entity shares because of these restrictions. There may be certain restrictions imposed on you to sell the shares even if the shares are listed on the stock exchange.
The Platform Company will have an account with a brokerage firm and from that account will distribute the Investee Entity shares to the Platform SP’s Investors based on their relative percentages of Shares in the Platform SP.
You agree that upon receipt of the shares of the Investee Entity that the Platform SP will cancel you Shares. By way of example if you have 5 Shares in the Platform SP and then subsequently receive the corresponding 5 shares in the Investee Entity, then your 5 Shares in the Platform SP will be cancelled. You may be asked at the time to sign additional documents to put this process into legal effect where needed.
BF would apply a Holding Fee to the delivery of the Investee Entity’s shares. This fee would be payable in the Investee Entity’s shares.
You should note that there may be additional third party fees incurred for the delivery of the Investee Entity shares to you. These fees may be charged by custodians or brokers involved in processing any transfer. BF does not absorb any of these charges. All such charges are passed to you which you agree to settle. Where the third party is unable to receive payment in Investee Entity shares then you may be required to credit your account with BF in order for you to pay the relevant third party fees in fiat.
There may be other issues that arise preventing us from being able to deliver Investee Entity shares to you. These could be as a result of their being a restriction preventing the Investee Entity from having fractional shares. We will endeavour to transfer as many whole number shares to you to your brokerage account. However there may be a balance of fractional shares which we may not be able to transfer. We will liaise with you on finding a resolution. As the shares will be held by a custodian they will be assigned to you as the owner but you will not be able to transfer them outside of custody. In most cases we will arrange for the fractional shares to be sold if there is a liquid market. This would be one of the only solutions for us to resolve this matter for you. Where feasible we will liaise with you on the sale of the fractional shares so that you are aware of the same. If we were to do this it would be a market order and you may not get the best price for the fractional shares remaining. Under no circumstances does BF Group accept any liability for any losses you incur from the sale of the fractional shares or not selling the fractional shares. Under no circumstances is BF bound to sell the fractional shares for you.
If an Investee Entity is liquidated then the applicable Platform SP is left open in case any assets come back to be distributed to Investors. Any remaining assets will be paid to the relevant Platform SP based on the type of securities and the amount of securities held.
GENERAL INVESTMENT RISKS
Almost all investments Investors make in the businesses displayed on the BF Platform are highly illiquid. This means that Investors are unlikely to be able to realise their Investment until and unless the company goes public and its shares are listed on a stock exchange or is bought by another company; and, even if the business is bought by another company or goes public, their investments may continue to be illiquid. Even for a successful business, an initial public offering or acquisition is unlikely to occur for a number of years from the time you make your investment.
Limited history & limited relevant experience
Startups and early-stage companies have limited operating histories, which makes it difficult to evaluate their businesses and prospects and may increase the risk associated with the investment in the Investee Entity.
Loss of investment
Invest only with risk capital; that is, invest with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations.
Past performance is no indication of future performance
Some businesses on the platform may have successful operational experience. This may have led to strong financial results. However, no past success of the business means that this will continue or that it will increase. Past results are no indication of future performance.
Companies displayed on the BF Platform rarely, if ever, pay dividends. This means that if you invest in a business through the BF 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. Even for a successful business, this is unlikely to occur for a number of years from the time you make your investment.
Reliance on information
Information provided in the Pitch is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
Results of the Platform SP or an Investee Entity may vary materially from those expressed or implied in forward-looking statements. Forward-looking statements are based on beliefs and assumptions and on information available at the time. All statements other than statements of historical facts are “forward-looking statements” for purposes of these provisions. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance, time frames or achievements to be materially different from any future results, performance, time frames or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from those in its forward-looking statements include, but are not limited to, government regulation, economic, strategic, political and social conditions.
General economic conditions
Businesses may be affected by a downturn in global economic conditions. For example, a recession or a global economic crisis or a pandemic could generally affect the ability of every industry to see growth and profitability. Some crises can be regional or local and if a business is located in the affected area then it may experience a downturn in its business.
Founder control risk; minority share risk
Businesses may have certain directors or managers that are the largest shareholders of the company. This means those individuals will be able to exert significant control over the company’s affairs and that their interests may be different to other shareholders.
If you are a minority shareholder in a company, it is likely that you have less influence over the company’s decisions
For technology companies to succeed, they need to expand significantly. During this growth phase, a company may fail to manage its growth effectively which could lead to cash flow deficiencies, compliance issues or operational issues.
Success of a technology business can be attributed in part to the guidance of professional investors. A technology business without such support may face a greater chance of failure.
It is possible that persons within a business may commit criminal acts, including fraud. This may lead to the demise of the company and the destruction of the shareholder value.
Section 2 – ESCROW AGENT INFORMATION AND PROCESS
Information for US Investors who are investing by bank transfer, bank card payments or cryptocurrencies
The following details apply to US Investors only who are sending funds. In the US there is a requirement for funds to be held by a regulated Escrow Agent. In this case, the Platform SP and (where applicable) Broker Member and the Escrow Agent enter into a contract where the investment funds raised are held in the specific escrow account provided by the Escrow Agent. You are advised to read Section 2 that sets out the terms of the Escrow Agent in particular how it processes any conversion of cryptocurrency to fiat currencies. Note that the Escrow Agent may change their terms from time-to-time and the schedule may be outdated; you are advised to refer to the most recent terms provided by the Escrow Agent available upon request.
Once the funding process has reached its end, the funds are disbursed to the Platform SP for it to pay the BF Platform for the transaction processing fees (where applicable) and to enter into the investment contract with the Investee Entity. Funds are also disbursed from the Escrow Agent to the Broker Member to settle its brokerage fees (where applicable).
The Escrow Agent may charge the BF Platform for transaction-based fees which include but are not limited to a conversion fee of any cryptocurrency it receives into USD, a withdrawal fee from the escrow account, customer due diligence processing fees or bank card processing fees. To cover the cost of these fees BF Platform passes on the cost to the Investors.
This means that if you are a US person and you pay by bank card then you will pay 5% extra fees to BF Platform to cover the direct costs associated with that processing.
If you are a US person and pay using cryptocurrency, then the Escrow Agent will convert the cryptocurrency and charge a 2% fee for the conversion process which will be removed by the Escrow Agent from your investment funds. This cost is paid from your investment funds that you send to the Escrow Agent. This will reduce the net amount that you will be investing so you need to take that into account when making the cryptocurrency investment. More details will be provided by the Escrow Agent at the time of investment, but for convenience please read Section 3.
If you are paying in cryptocurrency or bank wire then you will be charged a fixed administration fee of $35 per transaction. This is to cover the direct costs charged to the BF Platform by the Escrow Agent associated with due diligence on your investment and other direct costs including bank wire fees charged to the BF Platform.
By continuing with this investment you agree to pay for all the above transaction processing fees. For greater clarity about fees you may be charged for operations on the BF Platform, please read here.
The Escrow Agent is responsible for receiving funds sent by Investors during the funding round. Those funds may be sent in fiat currency via bank card payment or by sending bitcoin or Ether to the Escrow Agent. If other fiat currencies are sent then those will be converted into US Dollars. Other payment options may be available.
For US investors all cryptocurrency and fiat currency are converted into USD by the Escrow Agent (unless stated otherwise). If funds are sent by bank card in different currencies then the funds are converted to USD and held in the Escrow account. If cryptocurrency is sent to the Escrow account then the Escrow Agent will convert the cryptocurrency into USD. The process and timing of conversion are described in Section 3.
The Escrow Agent does not convert the cryptocurrency it receives into the Escrow account immediately. This is done once a day. This means that there may be a difference between the value of the cryptocurrency you send and the value of the cryptocurrency when converted by the Escrow Agent.
Once the Escrow Agent has completed the conversion of your cryptocurrency and removed their 2% conversion fee this net amount will be your investment amount. There may be a difference between the amount you sent at the time of signing the Agreement and the cryptocurrency being converted and the conversion fees deducted. You understand that this may result in a shortfall on what you were expecting to have invested. We will only apply the net amount to the investment you made after the Escrow Agent has completed conversion and deducted their conversion fees. You understand and acknowledge this and by proceeding with this investment agree to those terms. BF Platform, the Platform Company, Investee Entity, Platform SP and (where applicable) Broker Member do not accept any liability for any shortfall that may result from the amount you sent in cryptocurrency at the time of transaction valued in USD being greater than the net amount after conversion by the Escrow Agent and the deduction of their conversion fees.
The conversion rate by the Escrow Agent is final and you agree to their terms and rates as indicated in Section 3.
All cryptocurrencies held by the Escrow Agent are converted into USD (unless stated otherwise). Note that the Escrow Agent will conduct its own due diligence on any cryptocurrency transactions it receives from Investors. This could mean at times that it may at its own discretion decide to refund a transaction or may conduct a regulatory investigation into the transaction as the transaction does not meet its due diligence requirements. BF Platform, the Platform Company, the Platform SP, Investee Entity and Broker Member are not responsible for you being unable to meet the requirements of the Escrow Agent and all liability is disclaimed as a result of your inability to invest as a result of a decision of the Escrow Agent.
At times the Escrow Agent may agree with the Platform SP to hold the cryptocurrency it receives rather than convert the cryptocurrency. You will be informed if that is the case at the time you invest. However, by default, the Escrow Agent converts all cryptocurrency it receives in USD into the Escrow account.
The Escrow Agent will set the exchange rate for any conversion from cryptocurrency that it receives into fiat. The Escrow Agent will decide on the markets it will use to convert the cryptocurrency. Cryptocurrency is an illiquid asset and the rates of conversion may vary between vendors. Further, cryptocurrency is highly volatile and the exchange rate can change during a short period of time. The precise exchange rate will be set by the Escrow Agent and you agree to their exchange rates by proceeding with this investment. If you require further information about their exchange rates see Section 3.
When you make a payment using a bank card you have to pay 5% additional fees to BF Platform. This is on top of the amount that you intend to invest. So by way of example if you invest $10,000 then you will be charged $10,500 with $500 being paid to BF Platform to cover the transaction card processing fees. This fee applies whether or not the Investee Entity reaches its Minimum Funding Goal. For more information please read here.
Refunds are paid back in cryptocurrency if the original payment was in cryptocurrency. In the event of a refund the Escrow Agent will pay you back in cryptocurrency if you contributed cryptocurrency however the conversion for the refund will be at the time of the transaction. This means you will suffer a loss if at the time you invested cryptocurrency was low against the USD and then the value of the cryptocurrency increased at the time of the refund – this would mean that you would end up with less cryptocurrency upon the refund cryptocurrency being paid to you. You acknowledge this risk and under no circumstances is BF Platform, the Platform Company or Investee Entity or Platform SP liable for any loss that you may suffer as a result of this cryptocurrency volatility.
In the event of a bank card refund the Escrow Agent will refund you in USD. This means if you paid from another fiat currency account you may suffer a loss if there is an exchange rate movement between the two relevant currencies which BF Platform, the Platform Company, Investee Entity or Platform SP disclaims.
All refunds are paid to you and cannot be paid to any third party.
Upon the Completion Determination (see definition below) being announced by Platform SP to the Escrow Agent, the funds held by the Escrow Agent are released to the Platform SP. The Platform SP is then able to enter into the Financing Documents with the Investee Entity and pay for the Investee Securities. The commission then is paid from the Escrow Agent to the Broker Member.
Where you pay in cryptocurrency to the Escrow Agent there may be a delay in the conversion. This means you could send cryptocurrency, the price may then drop and then the Escrow Agent converts the cryptocurrency and will charge their conversion fee leaving a net amount in USD. This net amount could be lower than the value of your cryptocurrency when you sent it to the Escrow Agent. If there is a refund then the Escrow Agent will then convert the net amount into cryptocurrency and send you back cryptocurrency. Again if the price of cryptocurrency increases against USD then when the refund is processed you will get less cryptocurrency back. You accept these risks when making an investment in cryptocurrency. For more details refer to Section 3.
You should appreciate that the Escrow Agent may convert your cryptocurrency according to rates that are available to them. However those rates may not be the best rates for conversion in the market at the time. As you will understand, cryptocurrency is a volatile asset and may have appreciated from the time that you sent your cryptocurrency up to the time that the Escrow Agent refunds you. BF Platform, our Escrow Agent, the Platform Company, the Platform SP, the Investee Entity and our Broker Members do not accept any liability for losses that you incurred as a result of an appreciation of cryptocurrency from the time you invested up to the time that a refund was processed.
If the Escrow Agent needs to refund you, then we expect that the refund will be processed promptly. You may be required to provide additional information as requested by the Escrow Agent to meet its compliance requirements to process any refund. You are obliged to ensure that we have accurate information about you including your banking details as the refund will be returned to the account that you paid from or an account registered in your name.
The processing of refunds typically does not take more than a week for the Escrow Agent to send out. However, once it sends out the refund transaction, there may be delays with banking networks including your bank outside of the control of the Escrow Agent that result in a delay of the refund. Your bank may also charge you to receive the refund or the banking network or correspondent banks may charge you to receive the refund. Any charges related to sending the refund amount back to you will be incurred by you unless agreed otherwise in writing. None of those charges imposed by your bank or correspondent bank or banking network will be paid for by BF Platform or the Escrow Agent in processing your refund. BF Platform, the Broker Member and the Escrow Agent also disclaim any loss you may incur for the failure of you not receiving your refund as a result of events out of their control.
Escrow information for non-US Investors who are transacting by bank card
If you are not a US person and you invest then all bank card payments are currently handled by Prime Trust LLC acting as an Escrow Agent, the conditions that apply to such transactions are as described above.
- Escrow information for non-US Investors who are transacting on the BF Platform or who are paying in cryptocurrency
Any other payment type for non-US investors is handled by BF acting as an Escrow Agent. You may have a balance on the BF Platform that you use to invest in an offering. That balance may be in cryptocurrency or in USD* (these balances are defined in these terms and conditions. Any investment from an existing balance with the BF Platform is held in escrow by the BF Platform until the minimum funding goal is met within the minimum funding period. After completion of the SP with the Investee Entity the escrowed funds are released to the Investee Entity.
You may not invest using your balance on the BF Platform but rather invest directly in cryptocurrency in the pitch and if so BF will hold your funds in escrow. The cryptocurrency is converted by the BF Platform and the USD amount is made available after the Minimum Funding period to the Platform SP for it to proceed with the investment in the Investee Entity. The conversion rates are set by the BF Platform – see section 14 of the Terms. Note the exchange rates are set by BF and are final. Should a refund occur then you will receive the refund to your BF Account within a reasonable period. From which you will be able to withdraw Tether or USD subject to the usual withdrawal fees. For more details on the withdrawal fees applicable to Non-US investors see section 10 of the Terms.
Section 3 – Prime Trust LLC fees and terms
Digital Asset Escrow Transaction Process and Acknowledgements
Transmission of Digital Asset: Transaction instructions provide you with a unique, customized
QR code and wallet address for transmission of your Digital Asset for this transaction.
Acceptance of your Transaction and Conversion of Digital Asset to USD: Generally, once per business day, we will effect a conversion of Digital Assets to USD using the facilities of Digital Asset exchanges with whom we do business. We will calculate your Final Transaction Amount based on the exchange rate we receive less Prime Trusts’ Digital Asset Handling Fee. Digital Assets received during non-business hours or after 4pm New York City time (EST or EDT) on a business day will be converted the following business day. The USD proceeds from this conversion will be used to calculate an Exchange Rate, inclusive of any exchange fees and transfer fees, that we will apply to your Digital Asset transaction to calculate your individual Gross Conversion Proceeds. Prime Trust makes absolutely no representation and provides no warranties that the conversion price will be the best available at the time of conversion.
Prime Trust’s Digital Asset Handling Fee will be subtracted from your Gross Conversion Proceeds to yield your Final Transaction Amount.
Important: Because the Digital Asset to USD exchange rate may vary significantly from time to time, and even moment to moment, the exact amount of your Final Transaction Amount and any resulting securities purchased in this transaction will be reported to you only after we have converted to USD and your transaction has been accepted by all parties.
Calculation of your Final Transaction Amount:
- Digital Assets Received x Exchange Rate = Gross Proceeds
- Final Transaction Amount = Gross Proceeds – Prime Trust Digital Assets Handling Fee
- Digital Assets received x Exchange Rate = Gross Conversion Proceeds
- Final Transaction Amount = Gross Conversion Proceeds – Prime Trust Digital Asset Handling Fee.
Digital Asset Transaction In Full: BY TRANSMITTING DIGITAL ASSETS USING THE INSTRUCTIONS PROVIDED HEREIN, YOU HEREBY AGREE TO INVEST 100% OF THE FINAL TRANSACTION AMOUNT AS DEFINED ABOVE IN the offering. If the issuer does not accept your transaction in part or in full for any reason, Prime Trust will issue you a prompt refund of the Digital Assets for the USD equivalent, at the market conversion prices, to the wallet address from which the Digital Assets originated.
Refunds: If your Digital Asset transaction is not accepted by Investee Entity , or the offering is canceled prior to acceptance, or if a refund is required for any other reason prior to acceptance, Prime Trust will issue a prompt refund only in the type of Digital Asset transacted and such refunds will be transmitted only to the wallet address from which the Digital Asset originated. Prime Trust will not issue a refund in USD for transactions paid with Digital Assets. BY TRANSMITTING Digital Asset USING THE INSTRUCTIONS PROVIDED HEREIN, YOU HEREBY ACKNOWLEDGE THAT ANY REFUND YOU RECEIVE MAY BE SUBSTANTIALLY REDUCED BY FEES AND BY MARKET VOLATILITY RELATIVE TO YOUR ORIGINAL TRANSACTION. FOR AVOIDANCE OF DOUBT, ANY AND ALL SUCH FEES ARE EXCLUSIVELY PAID BY YOU FROM YOUR REFUND AMOUNT. BY TRANSMITTING DIGITAL ASSETS FOR THIS TRANSACTION, YOU ACCEPT THIS RISK.
Transaction Costs: Prime Trust makes no claim or guarantee that investing in the offering using Digital Assets is economically efficient relative to other payment methods or conversion options available elsewhere. You may pay lower all-in fees by converting Digital Assets to USD away from
Prime Trust and this transaction process, and then using the proceeds of that conversion to make a USD transaction in the offering.
Potentially Irreversible: Once Prime Trust converts your Digital Assets into USD, it may be impossible to convert the USD back into Digital Assets without substantial delay and without incurring significant losses due to market volatility. While Prime Trust will make all commercially reasonable efforts to refund Digital Assets promptly and efficiently, refunds converted from USD back to Digital Assets are subject to delays and market volatility, and you agree to bear 100% of this risk.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PRIME TRUST MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND WHETHER EXPRESS, IMPLIED (EITHER IN FACT OR BY OPERATION OF LAW). PRIME TRUST EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, ACCURACY, TITLE, AND NON-INFRINGEMENT. PRIME TRUST DOES NOT WARRANT AGAINST INTERFERENCE WITH THE USE OF THE SERVICES OR AGAINST INFRINGEMENT. PRIME TRUST DOES NOT WARRANT THAT THE SERVICES OR SOFTWARE ARE ERROR-FREE OR THAT OPERATION OR DATA WILL BE SECURE OR UNINTERRUPTED. PRIME TRUST EXPRESSLY DISCLAIMS ANY AND ALL LIABILITY ARISING OUT OF THE FLOW OF DATA AND DELAYS ON THE INTERNET, INCLUDING BUT NOT LIMITED TO FAILURE TO SEND OR RECEIVE ANY ELECTRONIC COMMUNICATIONS (e.g. EMAIL). YOU DO NOT HAVE THE RIGHT TO MAKE OR PASS ON ANY REPRESENTATION OR WARRANTY ON BEHALF OF PRIME TRUST TO ANY THIRD PARTY. YOUR ACCESS TO AND USE OF THE SERVICES ARE AT YOUR OWN RISK. YOU UNDERSTAND AND AGREE THAT THE SERVICES ARE PROVIDED TO IT ON AN “AS IS” AND “AS AVAILABLE” BASIS. PRIME TRUST EXPRESSLY DISCLAIMS LIABILITY TO YOU FOR ANY DAMAGES RESULTING FROM YOUR RELIANCE ON OR USE OF PRIME TRUST’S SERVICES.
- Disclaimer of Consequential Damages.
YOU HEREBY ACKNOWLEDGES AND AGREE, PRIME TRUST WILL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO YOU FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO ANY TRANSACTION OR TRANSACTION, INCLUDING BUT NOT LIMITED TO, LOST PROFITS OR LOSS OF BUSINESS.
- Cap on Liability.
YOU HEREBY ACKNOWLEDGE AND AGREE UNDER NO CIRCUMSTANCES WILL PRIME TRUST‘S TOTAL LIABILITY OF ANY AND ALL KINDS ARISING OUT OF OR RELATED TO THIS SERVICE (INCLUDING BUT NOT LIMITED TO WARRANTY CLAIMS), REGARDLESS OF THE FORM AND REGARDLESS OF WHETHER ANY ACTION OR CLAIM IS BASED ON CONTRACT, TORT, OR OTHERWISE, EXCEED THE TOTAL AMOUNT OF FEES PAID, IF ANY, BY YOU TO PRIME TRUST IN THE TRANSACTION, AND FURTHERMORE, THAT PRIME TRUST BEARS ABSOLUTELY NO LIABILITY FOR LOSSES YOU MAY INCUR AS A RESULT OF MARKET PRICE MOVEMENTS, LACK OR FAILURE OF EXECUTION, LACK OR FAILURE OF OBTAINING A BEST PRICE, AND FEES CHARGED BY THIRD-PARTIES IN PROCESSING YOUR TRANSACTION AND THE USD CONVERSIONS THEREUNDER.
- General Indemnification.
You hereby agree to indemnify, protect, defend and hold harmless Prime Trust and its officers, directors, members, shareholders, employees, agents, partners, vendors, successors and assigns from and against any and all third party claims, demands, obligations, losses, liabilities, damages, regulatory investigations, recoveries and deficiencies (including interest, penalties and reasonable attorneys’ fees, costs and expenses), which Prime Trust may suffer as a result of: (a) any breach of or material inaccuracy in the representations and warranties, or breach, non-fulfillment or default in the performance of any of the conditions, covenants and agreements contained herein or in any certificate or document delivered by you or your agents pursuant to any of the provisions herein, or (b) any obligation which is expressly your responsibility in this transaction, or(d) any breach, action or regulatory investigation arising from your failure to comply with any laws or regulation, and/or arising out of any alleged misrepresentations, misstatements or omissions of material fact in the transaction and/or personal details you provide to us. You are required to immediately defend Prime Trust including the immediate payment of all attorney fees, costs and expenses, upon commencement of any regulatory investigation arising or relating to the transaction and any complaints subsequently arising. Any amount due under the aforesaid indemnity will be due and payable by you within thirty (30) days after demand thereof.
- Limitation on Prime Trust’s Duty to Litigate
Without limiting the foregoing, Prime Trust shall not be under any obligation to defend any legal action or engage in any legal proceedings with respect to the Transaction or with respect to any transaction made by you unless Prime Trust is indemnified to Prime Trust’s satisfaction. Whenever Prime Trust deems it reasonably necessary, Prime Trust is authorized and empowered to consult with its counsel in reference to the Transaction and to retain counsel and appear in any action, suit or proceeding affecting the Transaction. All fees and expenses so incurred shall be your responsibility.
- Third Party Claims.
You agree to bear sole responsibility for the prosecution or defense, including the employment of legal counsel, of any and all legal actions or suits involving the Transaction, including but not limited to those which may arise or become necessary for the protection of the transactions you make resulting from the Transaction. You also agree to bear sole responsibility for enforcing any judgments rendered in favor of any person, including judgments rendered in the name of Prime Trust.
Section 4 – Representations and warranties for the sale of securities
Certain capitalised terms used in this Section 4 and not otherwise defined in the Terms, have the meanings given in the Investment Agreement.
Section 4(A) – Non-US Investors
The purpose of this Section 4(A) is to provide representations and warranties for the sale of securities to Investors located outside of the United States. Shares issued on the Platform and accessible through Pitches may qualify for the exemption described below.
Regulation S provides an SEC compliant way for US and international (Non-US) companies to raise capital outside the US. Regulation S uses a territorial approach and defines criteria pursuant to which certain companies are permitted to conduct their securities offerings without complying with the registration requirements of Section 5 under the US Securities Act.
1 The Investor hereby acknowledges and agrees that:
1.1 The Investor has full power and authority to enter into the Investment Agreement, the execution and delivery of the Investment Agreement has been duly authorized, if applicable, and the Investment Agreement constitutes a valid and legally binding obligation of the Investor and Investor is a non-U.S. Person who is not purchasing for the account or benefit of a U.S. Person as defined under Regulation S; the Investor further represents that the sale of the Investor Shares is in compliance with the home country of the Investor;
1.2 The issuance of Investor Shares pursuant to the Investment Agreement is intended to qualify for the safe harbour from registration under the Securities Act pursuant to Regulation S thereunder;
1.3 Neither the offer and sale of the Investor Shares have been, nor the offer and sale of the Investor Underlying Securities, will be registered under the Securities Act at the time of their issue and for a period of at least one year thereafter, no registration statement is contemplated;
1.4 Neither the Investor Shares nor the Investor Underlying Securities may be offered, Sold or transferred within the United States or to or for the account or benefit of any U.S. person, other than pursuant to an effective registration statement under the Securities Act or under an applicable exemption from such registration requirements;
1.5 Hedging transactions involving the Investor Shares or the Investor Underlying Securities may only be conducted in compliance with the Securities Act; and
1.6 Any offer, Sale or transfer of the Investor Shares or the Investor Underlying Securities must be subject to the following conditions:
1.6.1 subject to Clause 1.3, unless under an applicable exemption from registration, the Investor or transferee must certify that it is not a U.S. person and is not purchasing or receiving the Investor Shares or the Investor Underlying Securities for the account or benefit of a U.S. person; and
1.6.2 the Investor or transferee must agree to resell the Investor Shares or the Investor Underlying Securities only pursuant to registration under the Securities Act or under an applicable exemption from registration, and that hedging transactions involving the Investor Shares or the Investor Underlying Securities may only be conducted in compliance with the Securities Act.
1.7 The Investor is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
1.8 Neither the Investor, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder
1.8.1 engaged in any general solicitation, or
1.8.2 published any advertisement in connection with the offer and sale of the Shares.
1.9 If the Investor is an individual, then the Investor resides in the state or province identified in the address provided by the Investor to BF on the BF Platform; if the Investor is a partnership, corporation, limited liability company or other entity, then the office or offices of the Investor in which its principal place of business is identified in the address or addresses provided by the Investor to BF on the BF Platform.
1.10 The Investor understands that no public market now exists for the Shares, and that the SP has made no assurances that a public market will ever exist for the Shares.
Section 4(B) – US Investors
The purpose of this Section 4(B) is to provide representations and warranties for the sale of securities to US Iinvestors. If the asset is classified as a security and the Platform SP intends to collect funds within the United States, it must register the offer and sale of the securities with the SEC unless it qualifies as an exempt transaction which is a securities transaction where the Platform SP does not need to file such registration statement with SEC (the Exemption).
Shares issued on the Platform and accessible through Pitches may qualify for the Exemption below provided that the requirements described below are met.
Regulation D, Rule 506(b)
Rule 506(b) of Regulation D provides a “safe harbor” under Section 4(a)(2) of the Securities Act, whereby a company can raise an unlimited amount of money provided that certain requirements are met. Companies that comply with the requirements of Rule 506(b) do not have to file a registration statement for their offerings of securities with the SEC, but they must file a notice known as a “Form D” electronically with the SEC after they first sell their securities.
More information about this Exemption can be found here. The Form D contains information about the offering.
1. Each US Investor hereby represents and warrants to the Platform SP that:
1.1 The Investor has full power and authority to enter into the Investment Agreement, the execution and delivery of the Investment Agreement has been duly authorized, if applicable, and the Investment Agreement constitutes a valid and legally binding obligation of the Investor.
1.2 The Investor has had an opportunity to discuss the appropriate Platform SP’s business, the proposed investment in the Investee Entity, management, financial affairs, and the terms and conditions of the offering of the Shares with the Platform SP’s management.
1.3 The Investor acknowledges and understands that the issuance of Investor Shares pursuant to the Investment Agreement is intended to qualify for the safe harbour from registration under the Securities Act pursuant to Rule 506(b) thereunder.
1.4 The Investor certifies that he/she is not a ‘Bad Actor’ as defined in Rule 506(d) and does not have a relevant criminal conviction, regulatory or court order or other disqualifying event that occurred on or after September 23, 2013, the effective date of the rule amendments.
1.5 That the respective Platform SP is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Investor set forth herein to determine the applicability of such exemptions and the suitability of the Investor to acquire the Securities.
1.6 Neither the offer and sale of the Investor Shares have been, nor the offer and sale of the Investor Underlying Securities will be registered under the Securities Act at the time of their issue and for a period of at least one year thereafter, no registration statement is contemplated.
1.7 The Investor is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
1.8 The Investor, or the Investor’s professional advisors, has such knowledge and experience in finance, securities, taxation, investments and other business matters as to evaluate investments of the kind described in the offering agreement.
1.9 The Investor understands that the Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption therefrom and understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Investor must hold the Shares indefinitely unless a registration statement is filed with and declared effective by the SEC with respect to the sale and qualified by state authorities.
1.10 Neither the Investor, nor any of its officers, directors,employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder
1.10.1 engaged in any general solicitation, or
1.10.2 published any advertisement in connection with the offer and sale of the Shares.
1.11 If the Investor is an individual, then the Investor resides in the state or province identified in the address provided by the Investor to BF on the BF Platform; if the Investor is a partnership, corporation, limited liability company or other entity, then the office or offices of the Investor in which its principal place of business is identified in the address or addresses provided by the Investor to BF on the BF Platform.
1.12 The Investor understands that no public market now exists for theShares, and that the respective Platform SP has made no assurances that a public market will ever exist for the Shares.
Regulation D Rule 506(c)
Under Rule 506(c), a company can raise an unlimited amount of money by a general solicitation, including advertising, the offering, and still be deemed to be in compliance with the Exemption’s requirements.
Companies that comply with the requirements of Rule 506(c) do not have to register their offering of securities with the SEC.
More information about this Exemption can be found here.
1 Each US Investor hereby represents and warrants to the (issuer) SP that:
1.1 The Investor has full power and authority to enter into the Investment Agreement, the execution and delivery of the Investment Agreement has been duly authorized, if applicable, and the Investment Agreement constitutes a valid and legally binding obligation of the Investor.
1.2 The Investor has had an opportunity to discuss the Platform SP’s business, management, financial affairs, and the terms and conditions of the offering of the Shares with the Platform SP’s management.
1.3 The Investor acknowledges and understands that the issuance of Investor Shares pursuant to the Investment Agreement is intended to qualify for the safe harbour from registration under the Securities Act pursuant to Rule 506(c) thereunder.
1.4 The Investor certifies that he/she is not a ‘Bad Actor’ as defined in Rule 506(d) and do not have a relevant criminal conviction, regulatory or court order or other disqualifying event that occurred on or after September 23, 2013, the effective date of the rule amendments.
1.5 That the Platform SP is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Investor set forth herein in order to determine the applicability of such exemptions and the suitability of the Investor to acquire the Securities.
1.6 Neither the offer and sale of the Investor Shares have been, nor the offer and sale of the Investor Underlying Securities will be, registered under the Securities Act at the time of their issue and for a period of at least one year thereafter, no registration statement is contemplated.
1.7 The Investor is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act and has been verified by a third party.
1.8 The Investor, or the Investor’s professional advisors, has such knowledge and experience in finance, securities, taxation, investments and other business matters as to evaluate investments of the kind described in the offering agreement.
1.9 The Investor understands that the offer and sale of the Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption and understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Investor must hold the Shares indefinitely unless they are registered with the SEC and qualified by state authorities.
2 If the Investor is an individual, then the Investor resides in the state or province identified in the address provided by the Investor to BF on the BF Platform; if the Investor is a partnership, corporation, limited liability company or other entity, then the office or offices of the Investor in which its principal place of business is identified in the address or addresses provided by the Investor to BF on the BF Platform.
2.1 The Investor understands that no public market now exists for theShares, and that the Platform SP has made no assurances that a public market will ever exist for the Shares.
3 The maximum number of US-based accredited investors that can participate in an investment campaign is 99. This campaign is on a first-come, first-serve basis once the Investor account has been certified as accredited. BF will restrict US investors from investing once 99 US investors is reached.
These RPB Portfolio Builder Terms and Conditions (RPB Terms) form part of the terms and conditions of use of the Bnktothefuture.com Online Investment Platform (Terms) and should be read in conjunction with the remainder of the Terms, which also apply to investments pursuant to these RPB Terms. Capitalised terms defined elsewhere in the Terms have the same meanings when used in this RPB Schedule, except when they are otherwise defined in this RPB Schedule. Additional defined terms have the meanings given in the definitions section below. The Terms, including these RPB Terms, are incorporated into each RPB Portfolio Builder Mandate (Mandate) entered into between a Member and the RPB Platform Company, acting on its own behalf and on behalf of its segregated portfolio that shall be formed for that Member pursuant to such Mandate (Member SP).
A Member that enters into a Mandate will subscribe for shares in the Member SP created for it (SP Shares), the proceeds of which will be invested in accordance with the Mandate, together considered “BF Portfolio Builder” for the purpose of these RPB Terms.
The investment process will be as follows:
- A Member enters into a Mandate, pursuant to which it selects an investment strategy and agrees to be bound by the Terms (including these RPB Terms).
- RPB Platform Company issues a fee invoice to the Member (in respect of fees payable under these RPB Terms) and the Member, as an Investor on the BF Platform, deposits funds in its Account to pay the fees.
- Once payment for the fees has been received, the RPB Platform Company establishes the Member SP.
- RPB Platform Company, on behalf of the Member SP, opens a custody account with the Custodian which is First Digital Trust on the terms of the Custody Services Agreement set out in Appendix 3 (Member SP’s Custody Account).
- RPB Platform Company, on behalf of the Member SP, creates the Member SP’s Online Portal on the BF Platform where the Member can make contributions to the Member SP from its Account.
- The Member can then make contributions from its Account balance on the BF Platform to the Member SP. Each contribution made via the Member SP’s Online Portal is subject to a Custody Transfer Fee. After application of the Custody Transfer Fee, the net contribution is applied as a subscription for SP Shares.
- All amounts subscribed for SP Shares are invested in accordance with the Mandate and held in the Member SP’s Custody Account.
Each Member that executes a Mandate hereby acknowledges that neither the RPB Platform Company nor any other member of the BF Group has provided it with any investment advice in connection with its entry into the Mandate, its choice of investment strategy in the Mandate or otherwise in connection with its investment in the BF Portfolio Builder. It is each Member’s responsibility to understand the tax, regulatory implications of entering into a Mandate. Members should seek professional advice on whether the BF Portfolio Builder is right for them. Local laws may vary from country to country. It is incumbent on Members to seek professional advice from the relevant professionals to support them in determining whether this product is suitable for them. If a Member is unsure whether this product is right for them, they should not proceed. Tax laws vary significantly, are complex and may change from time to time. It is each Member’s responsibility to determine the application of those laws to this product and whether it would work for them. Information a Member has come across regarding the BF Portfolio Builder product prior to entering into a Mandate is expressly excluded from Mandate’s terms, including but not limited to course materials and brochures.
NEITHER THE RPB PLATFORM COMPANY NOR ANY OTHER MEMBER OF THE BF GROUP, NOR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES OR MEMBERS (COVERED PERSONS), WILL BE LIABLE FOR ANY LOSS A MEMBER MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF ITS ENTRY INTO AND/OR ANY PERSON’S PERFORMANCE OF A MANDATE, EXCEPT TO THE EXTENT SUCH LOSS IS THE DIRECT RESULT OF SUCH PERSON’S DISHONESTY, ACTUAL FRAUD OR WILFUL BREACH OF THE MANDATE.
Members should take time to read the risk disclaimers associated with this product, which are set out in Appendix 1 to these RPB Terms.
Certain defined terms used in these RPB Terms have the following meanings:
|Custodian||First Digital Trust, the entity providing trust and custody services pursuant to the Custody Services Agreement.|
|Custody Services Agreement||The contract between the RPB Platform Company and the Custodian for the provision of trust and custody services, in the form set out in Appendix 2.|
|Custody Transfer Fee||The fee charged by BF for the conversion and transfer of USD* to USD fiat to the Custodian.|
|RPB Fee Schedule||The list of RPB Fees, which are included in the Fee Schedule.|
|RPB Fees||Fees charged by the RPB Platform Company for the provision of services pursuant to each Mandate, as set forth in the RPB Fee Schedule.|
|RPB Platform Company Articles||The RPB Platform Company memorandum and articles of association, which can be viewed at:|
|RPB Terms||the specific terms and conditions set forth in this RPB Schedule, that form part of the Terms and apply to each Mandate.|
|Service Providers||Third parties providing services to the RPB Platform Company.|
|Statement||A statement uploaded to a Member SP’s Online Portal each month, setting out a breakdown of the Member SP’s current assets.|
|Mandate||An RPB Portfolio Builder Mandate entered into between a Member and the RPB Platform Company, as described above.|
|Member SP’s Custody Account||A sub-account established for a Member SP with the Custodian, as described above.|
|Member SP’s Online Portal||An online portal created for a Member SP, to facilitate the applicable Member’s investments into the Member SP and its viewing of Statements.|
|1. Assignment||A Member that enters into a Mandate will subscribe for SP Shares in the Member SP established for it by the RPB Platform Company. This will result in the Member holding SP Shares once it has invested in its Member SP. The Member may decide to request the transfer of its SP Shares to a third party. The Platform Operator is the sole director of the RPB Platform Company and imposes charges for any transfer of SP Shares. Refer to the Fee Schedule for details on administrative charges and procedures associated with any share transfers or other corporate actions. In the event of there being any conflict between a procedure described here and the procedure in the Terms the procedure here shall apply.|
|2. Suppliers||The BF Portfolio Builder is a product that relies upon the services of Service Providers. The Platform Operator, as the sole director of the RPB Platform Company, on behalf of each Member SP, sources the services of such Service Providers required to carry out the provisions of the Mandates. The current material agreements with Service Providers are attached to these RPB Terms and will be updated from time to time. It is each Member’s responsibility to conduct its own due diligence on these Service Providers to ensure it is satisfied with the risks presented. We will inform Members in due course of any changes to Service Providers and provide reasonable notice (where feasible) of such changes.|
|3. Conflicts of interest||The Platform Operator operates the BF Platform and is the sole director of the RPB Platform Company. BF may have existing relationships with Service Providers. Those Service Providers may have used the services of BF previously or they are existing service providers to BF. Based on such existing relationships this may result in BF suggesting them as Service Providers to the RPB Platform Company. There may also exist a conflict of interest between the business activities or interests of the BF Platform and the RPB Platform Company at times. Where any such conflicts are identified they will be disclosed to you from time to time. The RPB Platform Company may receive compensation from Service Providers for business introduced by the RPB Platform Company to the Service Provider. Such commission is the income of the RPB Platform Company and payable to BF. The result of a commission arrangement may be that the RPB Platform Company selects certain Service Providers over other suppliers.|
|4. RPB Terms Prevail||The RPB Terms supplement and form part of the Terms. However, in respect of any Mandate, if there is any conflict between the RPB Terms and any other part of the Terms, the RPB Terms will prevail.|
|5. Role of BF||BF is the Platform Operator and provides primary, secondary market securities services and virtual asset trading and virtual asset custody services through the BF Platform.
BF is also the sole director of the RPB Platform Company and enters into each Mandate as director on behalf of the RPB Platform Company. In its capacity as director, BF’s role includes the establishment of Member SPs, administering contributions to Member SPs and issuing SP Shares, engaging Service Providers for Member SPs, administering Mandates, making arrangements for Member SPs to conduct transactions in accordance with the applicable Mandates and, if at any time a Member terminates its Mandate, closing down its Member SP and arranging for its SP Shares to be repurchased in-kind with the Member SP’s surplus assets.
BF’s administration of Mandates involves coordinating with the Custodian to ensure that Mandates are implemented on a monthly basis and providing Members with periodic statements from the Custodian in respect of their Member SP’s Custody Account.
From time to time BF will review the Service Providers to the Member SPs and determine if other Service Providers should be selected or considered.
|6. Variation||These RPB Terms may be varied from time to time by the RPB Platform Company. Members who have executed a Mandate will be given 30 days’ notice before any change becomes effective. If an affected Members does not object to the change it will come into force upon the expiry of such notice period. If an affected Member does object it may elect to terminate its Mandate in accordance with the termination clause of these RPB Terms.|
|7. Compliance & Data sharing||For the avoidance of doubt, the Terms relating to BF’s customer due diligence requirements apply to all Members, including in respect of any Mandate they execute and they are expected to cooperate with such processes. Members that execute a Mandate agree that their data may be shared, where required, with the Custodian and other Service Providers for purposes of their own legal and regulatory compliance.
The Custodian will request an applicable Member’s KYC records from BF. We will provide those records in accordance with these RPB Terms. In addition, the Custodian will require tax information from each applicable Member to meet their compliance obligations.
|8. Formation of Member SP||Members agree that upon execution of their Mandate and payment of their RPB Fees, the Platform Operator shall proceed with the establishment on their behalf of a Member SP, as a segregated portfolio of the RPB Platform Company, in accordance with the following terms:
|9. Mandate Strategy||We offer fixed strategy options, which are chosen by Members upon execution of their Mandates. The strategy selected upon execution of a Mandate can only be changed with the consent of the RPB Platform Company, on behalf of the applicable Member SP.|
|10. Crypto-Assets||Crypto Assets, for purposes of the Mandates and these RPB Terms, are Shares in a Platform SP established on the BF Platform to invest in Investee Securities of an Investee Entity operating within the cryptocurrency industry. A Member that wishes to invest in Crypto Assets must have been authorised as an Investment Member of the BF Platform in accordance with the Terms.|
|11. Subscription conditions||Members can make additional subscriptions for SP Shares at any time of the month via the applicable Member SP’s Online Portal page. Members may invest up to the 23rd of every month (inclusive based on Cayman Islands Time Zone) for subscriptions to be included in the next month. For the avoidance of doubt if a Member invests on the 24th via its Member SP’s Online Portal page those funds would remain unallocated for the next month and would be allocated on the month after. Subscriptions are processed in USD. As soon as a Member’s additional contribution is credited to its Member SP’s Custody Account, its additional subscription for SP Shares will be registered. The Platform Operator will then invest the additional subscription in accordance with the Member’s Mandate. Members acknowledge and agree that subscriptions will not be invested in the following types of investment, where applicable to the Mandate, until the next occurring investment date for that type of investment, as follows:
except that when the first Friday of every month is a public holiday in the relevant jurisdiction(s) of the Custodian the applicable transaction will be executed on the next available working day.
|12. Statements||Members with a Member SP will be provided with a Statement on a monthly basis, providing a breakdown of the Member SP’s assets. Each Statement relates to the immediately preceding month. We endeavour to have Statements added to each Member SP’s Online Portal within 7 days after the end of a month. To calculate the value of the assets held by a Member SP we may apply a methodology for the calculation of value. Any such methodology will be chosen in our discretion, and will be disclosed in the applicable Statement.|
|13. Fees||Members will be charged fees in respect of their Mandate as set out in the RPB Fee Schedule and, where applicable, the remainder of the Fee Schedule. Members will need to fund their Accounts, from which fees are deducted in advance. Prior to establishing a Member SP, we will deduct from the Member’s Account the set-up fee and the monthly fees for 12 months paid in advance. Such fees are non-refundable. The RPB Platform Company reserves the right to increase any RPB Fees from time to time as a result of inflation.
We may incur transactional costs beyond the costs listed in the RPB Fee Schedule. These transactional costs include but are not limited to bank charges, charges for the exchange of cryptocurrency to fiat or other foreign exchange charges. These may be charged to the RPB Platform Company by third parties from time to time. We reserve the right to pass on such transactional costs to you. Any additional transactional costs may be deducted from the contribution amount lowering the net subscription amount accordingly or they may be charged directly to the applicable Member’s Account or its Member SP’s Custody Account.
Each year following the establishment of a Member SP, the RPB Platform Company will issue an invoice to the applicable Member for the next year’s monthly fees. Members will have the option to pay the invoice electronically or for it to be charged to their Account. If any such invoice is not settled within 6 months, the RPB Platform Company reserves the right to dispose of any assets of the applicable Member SP and apply the proceeds to settle such invoice.
Platform Operator from time to time may offer discounts or promotions. All such discounts or promotions are subject to contract. If any discount is agreed it will be directly mentioned in this written contract. Any representation outside of this written contract is expressly excluded. If the discount is not mentioned in the contract then it shall not be binding. A discount may be withdrawn at any time and at the entire discretion of the RPB Platform Company.
|14. Distributions||Members may request from the RPB Platform Company a distribution from their Member SP. Any such distribution will be subject to RPB Fees in accordance with the RPB Fee Schedule. There would be a fee applied to enable the corporate action involved. In addition, a fee is applied according to the timing of your distribution request. You may instruct us to proceed with a distribution based on a dividend or as a partial buy-back of the SP Shares. Both types of transactions shall be classified as distributions for these purposes.
All distributions will happen via the BF Platform. You will request the distribution and the assets will be made available on your Account on the BF Platform. You will then be able to process a withdrawal from your Account on the BF Platform. Any withdrawal from your Account would be subject to the Terms. Note that there may be charges associated with the transfer of assets to you from the BF Platform. Please refer to the Fee Schedule for more information.
|15. Termination||A Mandate shall continue indefinitely unless otherwise terminated by the applicable Member or the RPB Platform Company, in either case upon 60 days’ written notice at any time and for any reason to the other party. Upon termination of a Mandate, the Platform Operator will wind up the applicable Member SP and the Member SP’s assets will be applied to the repurchase and cancellation of its SP Shares. Such assets will at all times be distributed to the terminating Member in-kind to its Account. The RPB Platform Company will not sell any of the Member SP’s assets to fund a cash distribution. It is the terminating Member’s responsibility to be in a position to cooperate with the RPB Platform Company on any liquidation matters requiring the distribution of its Member SP’s assets in-kind and in the form that they exist at the time of the termination notice being received. A terminating Member may be required to ensure that its identity documents and customer due diligence file is in good standing and meets the regulatory requirements of the Platform Operator prior to any buy-back of its SP Shares. If the Member SP has already distributed all of its SP assets to the terminating Member then any outstanding SP Shares remaining shall be cancelled without any further consideration being paid.
If the Member SP of a terminating Member has invested in Shares of Platform SPs the terminating Member will be required to pass the accreditation process on the BF Platform for the Shares to be transferred to its own Account.
Termination of a Mandate will result in cancellation fees being charged. In addition any administrative actions including any assignment of securities will be subject to charges that can be found in the Fee Schedule.
|16. Assignment||Members may not assign their Mandate to any third party without the RPB Platform Company’s prior written consent. The RPB Platform Company may assign its and/or any Member SP’s rights and obligations under any Mandate as it deems necessary or desirable in order to perform its services under such Mandate or in connection with any BF Group restructuring or its acquisition by a third party.|
|18. Severability||The various provisions of these RPB Terms are severable, and if any provision or identifiable part thereof is held to be invalid or unenforceable by any court of competent jurisdiction then such invalidity or unenforceability shall not affect the validity or enforceability of the remaining provisions or identifiable parts.|
|19. Third Party Rights||Each Covered Person shall be entitled to enforce its rights under any Mandate pursuant to the Contracts (Rights of Third Parties) Act, 2014 of the Cayman Islands. No such Covered Party’s consent shall be required for any variation, waiver, rescission or termination of any Mandate in accordance its terms.|
|20. Exculpation and Indemnity||No Covered Person shall be liable to any Member for any cost, liability or other loss the Member may incur, directly or indirectly, as a result of its entry into and/or any person’s performance of any Mandate, except to the extent such cost, liability or other loss is the direct result of such Covered Person’s dishonesty, actual fraud or wilful default.
Each Member will indemnify each Covered Person for the full amount of any cost, liability or other loss it incurs, directly or indirectly, as a result of such Member’s dishonesty, actual fraud or wilful default in connection with such Member’s entry into or performance of any Mandate.
|21. Governing Law and Dispute Resolution||The governing law and dispute resolution provisions of the Terms shall apply to each Mandate.|
RPB Portfolio Builder – Appendix 1 – Risks Disclosure
|ON THE BF PLATFORM YOU CAN INVEST IN CRYPTO AND/OR SECURITIES IN A PLATFORM SP THAT CAN INVOLVE A HIGH DEGREE OF RISK AND MAY RESULT IN THE LOSS OF YOUR ENTIRE INVESTMENT. ANY PERSON CONSIDERING THE PURCHASE OF CRYPTO OR SECURITIES SHOULD BE AWARE OF THIS AND OTHER FACTORS SET FORTH IN THIS APPENDIX 2 AND SHOULD CONSULT WITH HIS OR HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT. CRYPTO AND/OR SECURITIES IN A PLATFORM SP SHOULD ONLY BE PURCHASED BY PERSONS WHO CAN AFFORD TO LOSE ALL OF THEIR INVESTMENT.|
|RISKS OF SEGREGATED PORTFOLIO
A segregated portfolio company (SPC) is a type of Cayman Islands company. Under this structure the RPB Platform Company will create a segregated portfolio (Member SP) for each Member that executes a Mandate. The Member SP is deemed under Cayman Islands law to hold its assets and liabilities segregated from the assets and liabilities of the RPB Platform Company itself and from those of its other segregated portfolios. There is some risk that this legal segregation of assets and liabilities under Cayman Islands law may not be recognised in another jurisdiction, which could result in assets held by the Member SP in that jurisdiction becoming available to creditors of the RPB Platform Company itself or another of its segregated portfolios.
The tax treatment of SPCs and their segregated portfolios in any applicable jurisdiction may also be uncertain. Any jurisdiction may change or clarify its stance on the treatment of SPCs and their segregated portfolios in the future, leading to the imposition of additional taxes on the SPC, its segregated portfolios or holders of shares in its segregated portfolios. This could include not only taxes moving forwards but also the imposition of taxes in retrospect and fines for non-compliance.
|RISKS OF INVESTING IN CRYPTO
Wide entrance, narrow exit
Whether Cryptocurrencies have democratised several aspects of finance by posing lower barriers to entry to the Crypto-market, a wide entrance leads to a risk of a very narrow exit. This means that an issue with the blockchain, a lack of liquidity or technological constraints may create panic among Crypto-holders who may rush to get out. This may disrupt the Crypto-market as a whole.
Internal wars with forks
Because the majority of crypto wealth is concentrated in the hands of a few persons without the control of a central authority there is the risk that those persons may influence the Crypto-market. This may bring to severe price fluctuations that may adversely affect the Crypto.
Identification of Satoshi Nakamoto
Satoshi Nakamoto is the name or identifier of the person who developed Bitcoin, the first blockchain. This person is unknown. The crypto-market may be adversely affected whether this person is identified.
To access cryptocurrencies, the user has a private key (similar to a password). If a user loses the private key, he/she will be unable to access his/her cryptocurrencies and there is no mechanism for recovering the private key and gaining access to a wallet. If the business suffers a loss of private keys associated with cryptocurrencies in its possession then it will lose the value of those cryptocurrencies.
Quantum computers and blockchains
Quantum computers can process applications that reduce the mathematical difficulties underlying cryptography systems. The spread of quantum computers may represent a treat to the crypto industry. In the case the security of a blockchain is compromised, this may cause the collapse of the entire crypto-market based on that blockchain.
Systemic risk can be defined as the risk of collapse of an entire financial system or entire market due to the financial failure of a relevant institution could negatively impact the functioning of the financial system as a whole. In this situation, cryptocurrency prices may significantly drop and you may lose your investment.
Force majeure event
An event or circumstance which is, by definition, beyond the control and without the fault or negligence of crypto businesses operators that may disrupt the operability and reliance of their service or market. Such events can include natural disasters, pandemics, acts of war, riots, civil disturbance, strikes and labour disputes, acts of terrorism, vandalism, governmental and political strife and similar.
Telecommunication and internet access
The blockchain infrastructure is dependent on the availability of telecommunication and internet access. Any failure of access to an internet network due to a local issue or otherwise could have a significant adverse impact on business operations.
Volatility in price of cryptocurrencies
The cryptocurrency industry is relatively recent and, in many cases, the cryptocurrency market reflects pure speculation. The price of cryptocurrencies has been historically quite volatile. This can make the income deriving from investing in Crypto highly risky.
While in certain cases geopolitical crises may lead to an increase in demand for cryptocurrencies which could lead to a price increase, once the crisis period is over, the prices of cryptocurrencies will reduce as people stop ‘panic buying’.
Only a few companies, service providers, and online exchanges accept cryptocurrency as a legitimate exchange mechanism.
Telecommunication and internet access
The operability of the Crypto-industry is dependent on the availability of telecommunication and internet access. Any failure of access to an internet network due to a local issue or otherwise could have a significant adverse impact on Crypto.
Risk of a cryptocurrency network
The structural foundations of blockchains, and the software applications and other interfaces or applications that are built upon them, are unproven, and there can be no assurances that a blockchain and the creation, transfer or storage of the token issued on that blockchain will be uninterrupted or fully secure, which may result in impermissible transfers of the token, a complete loss of users’ tokens or an unwillingness of users to access, adopt and utilize tokens and/or the blockchain itself. A blockchain may also be the target of malicious attacks seeking to identify and exploit weaknesses in the software which may result in the loss or theft of tokens.
Cyberattack on cryptocurrency network that may affect a cryptocurrency business
A “51% attack” is an attack that occurs when an attacker controls a majority of the mining power for a particular blockchain. Miners that successfully obtain this mining power—either individually or as part of a “mining pool” or group of miners—may prevent other miners from completing blocks, theoretically allowing themselves to monopolize the mining of new blocks and mining the rewards; they can block other users’ transactions; or they can make it appear as though they still have tokens that have been spent, which is known as a “double-spend attack.”
Selfish-mining attacks occur when a miner with less than 50% of the total mining power successfully mines a new block, and starts adding a new block to a “private” version of the blockchain, that is not shared with the network. The attacker can temporarily develop private versions of the blockchain that are longer than the public blockchain. This could disrupt the operation of the mining mechanisms.
Hoarding involves people buying or mining cryptocurrencies without spending them with the hope of making a profit in the future. This action may reduce the liquidity in the cryptocurrency market and may lead to a significant shift in the price and demand of cryptocurrency.
The cryptocurrency industry is an emerging area of regulation. It is unclear whether a cryptocurrency may become worldwide regulated activity. New regulations may come into force and limit the operability of the cryptocurrency industry. This may cause a significant drop in price for Crypto.
Uncertainty of tax treatment of cryptocurrency as is an emerging area
The cryptocurrency industry as an asset is faced with legal uncertainty as to its tax treatment. This could affect your investment in Crypto. For example, due to the new and evolving nature of digital currencies, tokens and blockchain assets, and a general absence of clearly controlling authority with respect to these assets, many significant aspects of the income tax treatment of digital currencies are uncertain. It is unclear what guidance on the treatment of tokens and blockchain may be issued in the future.
Frauds and illegal activities involving the Crypto
Crypto operates on blockchains that may be targeted by illegal activities. Criminals are relying on sophisticated methods to capture inventors data for illegal purposes.
|RISKS OF INVESTING IN A PLATFORM SP
The Investee Entity may suffer a loss of a right resulting from laws and regulations being inapplicable or unenforceable or other legal circumstances such as, but not limited to, inadequate laws or inadequate legal documentation.
Systemic risk can be defined as the risk of collapse of an entire financial system or entire market due to the financial failure of a relevant institution could negatively impact the functioning of the financial system as a whole. In this situation, the Investee Entity may not be able to meet its obligations.
Force majeure event
An event or circumstance which is, by definition, beyond the control and without the fault or negligence of crypto businesses operators that may disrupt the operability and reliance of their service or market. Such events can include natural disasters, pandemics, acts of war, riots, civil disturbance, strikes and labour disputes, acts of terrorism, vandalism, governmental and political strife and similar. Such events may negatively affect the operability of the Investee Entity.
Telecommunication and internet access
The Investee Entity’s operations are dependent on the availability of telecommunication and internet access. Any failure of access to an internet network due to a local issue or otherwise could have a significant adverse impact on business operations.
Conflicts of interest
A conflict of interest may arise between the RPB Platform Company, any member of the BF Group and/or a Service Provider and an Investee Entity raising funds on the BF Platform. Such a situation may result in reputational risks, a failure to act in the best interest of the investor, and poor governance.
Volatility in price of cryptocurrencies
Cryptocurrency business is a relatively recent industry and, in many cases, the cryptocurrency market reflects pure speculation. The price of cryptocurrencies has been historically quite volatile. This can make the operation of a business which is dependent on cryptocurrencies income risky as the value of the income received on a monthly basis varies based on the price of cryptocurrency.
The Investee Entity business may rely heavily on the operation of their data centers. These systems may be backed up and there may be redundancy measures in place. However, there is always the risk of the data center being damaged or not functioning properly and for backup measures to not be adequate to sustain the operation.
Increase in competition
A cryptocurrency business industry may face increasing competition. This may be due to an increase of profitability of the industry that leads to new ventures being established to participate in that market. Any cryptocurrency business operation may be affected by an increase in competition leading potentially to the redundancy of their operation due to competitors being better capitalized or equipped with more performant technology.
Cyber attacks on cryptocurrency-based companies
Cryptocurrencies are processed by a blockchain infrastructure on which a purchased token may rely may be the target of malicious cyberattacks or may contain exploitable flaws in their underlying code, which may result in security breaches and the loss or theft of cryptocurrency.
Incorrect or fraudulent transactions
Cryptocurrencies transactions are irrevocable. When a digital currency is stolen or transferred to a wrong person, the transaction is irreversible. As a consequence, incorrect or fraudulent transactions may negatively impact the Investee Entity business and assets.
Currently, transaction fees incurred on transactions using cryptocurrencies are not significant. However, in future transaction fees may increase. This may be a disincentive to the adoption of cryptocurrencies, and the Investee Entity’s operations may be adversely affected.
As with any business there is definitive risk of legal proceedings against the company and within the company. There may be claims by suppliers for breach of contract or claims by government agencies in areas, such as, but not limited to, licensing, health and safety compliance, environmental compliance,and antitrust matters. There may also be the risk of legal action against a company for intellectual property rights infringement. There may be legal actions from shareholders or employees. Such claims may arise immediately or later in the business due to later detection of the infractions. A cryptocurrency business has a higher chance of litigation risk as it operates in an emerging area of technology. The emerging cryptocurrency regulations increase the litigation risk generally. Any form of litigation against the business of the Investee Entity will affect its ability to operate as time and resources will be directed to defending the company and ultimately will have a financial impact on the business.
A crypto business may be subject to investigations by regulators or government agencies regarding any potential infraction of laws, rule or regulations. This may be in addition to any litigation risk outlined above. Such investigations may result in fines or forced closure of the crypto business.
Lack of insurance; difficulty of obtaining insurance for the cryptocurrency industry
Adequate insurance may not be available due to the novelty of the cryptocurrency industry business. This could mean that the Investee Entity may struggle to find or keep insurance to cover key risks.
The cryptocurrency industry is an emerging area of regulation. It is unclear whether a cryptocurrency business may become a regulated activity. If it becomes a regulated business, the Investee Entity may be faced with additional costs for its operability and it may not be feasible for it to continue to operate profitably.
Uncertainty of tax treatment of cryptocurrency as is an emerging area
The cryptocurrency industry as an asset is faced with legal uncertainty as to its tax treatment. This could affect the operation of cryptocurrency-based business activities. For example, due to the new and evolving nature of digital currencies, tokens and blockchain assets, and a general absence of clearly controlling authority with respect to these assets, many significant aspects of the income tax treatment of digital currencies are uncertain. It is unclear what guidance on the treatment of tokens and blockchain may be issued in the future. Future developments regarding the treatment of tokens or blockchain assets for income tax purposes could adversely affect the Investee Entity.
Bankruptcy or dissolution event of the Investee Entity
In a dissolution or bankruptcy of the Investee Entity, the Platform SP you invested into may not be treated as priority debt holders and therefore it may be difficult to recover any assets in the event of a bankruptcy or dissolution event.
Limited history of the Investee Entity
The Investee Entity is a new venture in the cryptocurrency industry. As such, the risks of investing are significant as the business will need to first establish its operations and generate sufficient return to be sustainable.
Bugs in the source code
While the Investee Entity adopts quality assurance procedures to best ensure the source codes as accurately as possible to reflect their intended operation, the Investee Entity cannot guarantee that malicious hackers may discover and exploit a bug, flaw, error or vulnerability in the source code. These bugs may cause disability to certain functionalities, create vulnerabilities or cause instability that may negatively affect the Investee Entity’s business.
Tokens may be lost
Transactions of tokens, once authorised, may be irreversible. In this context, investors may lose their investment in case of fraudulent or accidental transactions, technology failures or cyber-security breaches.
Business model changes
The Investee Entity may change its business model if the market and the cryptocurrency industry will require to do so. In addition, the Investee Entity may decide to extend its business model to cover other activities within the banking industry. The risks of those new business areas may be different to the risks described in this document. Moreover, any change of the business model may affect the use of funds of the Investee Entity.
Technological developments in the payment industry
The Investee Entity may not be able to keep the pace with the technological changes and developments that may take place in several areas of the payment industry which include, but is not limited to smart cards, wireless payment systems, marketing, e-commerce.
In addition, the Investee Entity relies on third-parties services providers to develop and access to new technologies that may decide to interrupt the provision of the technology to the Investee Entity.
In the situations described above the Investee Entity may suffer a disruption of its business.
Acquisitions of other business activities
The Investee Entity may decide to acquire complementary businesses, products or technologies from time to time. These operations may require significant capital expenditure that may increase liabilities of the Investee Entity. In addition, it may be difficult to integrate the acquired business in the daily operations of the Investee Entity, as well as the Investee Entity may not realise the expected benefits of the acquisition. This may harm the Investee Entity business.
Competitors and financial institutions
The Investee Entity operates in a high competitive sector where competitors may also have a privileged relationship with financial institutions. Such a situation may make competitors in a position of advantage because the Investee Entity may find the increase of its business more difficult or cost-prohibitive which may impact on its growth and reduce revenues.
The Investee Entity may decide to explore certain strategic initiatives, and decisions to strengthen its position in the cryptocurrency industry. This could lead to risks and uncertainties of its business.
The Investee Entity may inaccurately forecast its new customers growth which could result in its expenses exceeding its revenue and negatively affect its business
The forecast of new customers relying on the Investee Entity business is a key area in the Investee Entity business plan. In the case of overestimation of potential customers the Investee Entity revenues may not increase as to cover its costs and expenses, and the Investee Entity will not be able to make profits. Such a situation may harm the Investee Entity business and negatively affect its development.
Customers complaints and negative publicity
Customers complaints or negative publicity about the services provided by the Investee Entity may negatively affect the Investee Entity business.
Any inability by the Investee Entity to manage its customer services or handle customers complaints may result in a loss of customers confidence and negatively affect the Investee Entity business.
Reliance on the personnel
The responsibility of overseeing the day-to-day operations and the strategic management of the Investee Entity depends substantially on senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Investee Entity if one or more of these employees cease their employment or directors leave the Investee Entity.
Retaining employee talent
The Investee Entity may face challenges attracting and keeping the right talent to its organisation. This may affect its ability to run or grow its business.
Relationships with services providers
The Investee Entity is currently operating its business in cooperation with third parties services providers. Whether these third parties interrupt or terminate the provision of services the Investee Entity may experience a disruption in its business.
Competitive technologies may negatively impact the Investee Entity business
The Investee Entity operates in a very competitive fintech sector. This means that, if a competitive technology is launched in future, users may no longer be interested in the Investee Entity business and may decide to move to a competitor’s business. Such cases may negatively impact the operability of the Investee Entity business.
Financial accounting of cryptocurrency is an emerging area. It is complicated for accountants and auditors to understand how to provide accounting services to a cryptocurrency business. It can be difficult to find auditors that are willing to work with companies involved with cryptocurrency. How cryptocurrency is characterized by local tax authorities creates uncertainty in the cryptocurrency community, including the Investee Entity.
The need of cash flow and additional resources for the business
The Investee Entity business is dependent on the availability of adequate capital to develop and operate the business. Hence, the cash flow deriving from the daily operating activities may be insufficient for the operability of the Investee Entity business.
The Investee Entity may not have the ability to obtain borrowing capacity to finance required capital expenditures, fund strategic initiatives and meet its other cash needs. Additional resources may be required, which may not be readily available.
If the Investee Entity business does not attract new clients or institutional investors, the Investee Entity will need to seek additional financing or revise its business plan.
Low level of cash flow and limited access to capital or credit may have a significant impact on the development of the Investee Entity business which may need to change its offer and conditions.
Credit quality risk
Adverse changes in the Investee Entity’s credit quality, resulting as a general deterioration of the economic conditions, or arising from systemic risks in the financial systems, could increase the Investee Entity’s exposure.
The Investee Entity holds crypto-assets as collateral to mitigate credit risks and potential credit losses. However, a severe price drop of the collateral may lead the Investee Entity not having sufficient collateral to back its operability.
Lack of interest in cryptocurrencies and securities offerings
Tokens are traded on token trading platforms that represent vehicles for users to trade digital assets based on a blockchain system. Nowadays, these trading facilities are increasing in popularity among investors and financial institutions. However, they are still surrounded by regulatory uncertainties that have delayed their adoption among governments and established financial institutions. These concerns may even increase in future, which may lead to a significant scepticism for these instruments and their abandon.
The Investee Entity business may be affected by the competitiveness of the market. Whether the interest rates increase or decrease suddenly, market volatility is likely to increase. As a consequence, the level of investments across the entire economy may rise or drop, depending on the direction of the rate change. Such a situation may affect asset prices and investments, and this may negatively reflect on the Investee Entity business.
Future growth and expansion into new markets
The Investee Entity is exploring new opportunities to expand its operations to new countries and enter into new markets. However, entering a new market may be risky because, on the one hand it may require the Investee Entity to make a number of acquisitions so they have appropriate premises to operate, on the other hand the Investee Entity may face unfamiliar competitive environments which involve various risks, including incurring losses or failing to comply with applicable laws and regulations. There is no guarantee that the Investee Entity business will succeed in a new market. This may make it difficult for the Investee Entity to grow or expand.
Illiquidity in financial markets and/or no market support from financial institutions may could harm the Investee Entity business
The Investee Entity faces the risks associated with the deterioration of financial market liquidity and/or the failure of its financial partners for the processing of its daily operations.
As a consequence, the Investee Entity may be unable to:
access liquidity as a result of the Investee Entity lenders unable or unwilling to advance funds to the Investee Entity, nor the Investee Entity able to borrow from other financial institutions.
The cases listed above may substantially deteriorate the Investee Entity business.
It may be difficult and costly to protect the intellectual property rights of the Investee Entity, and the Investee Entity may not be able to ensure their protection. There is the risk that the Investee Entity may face intellectual property challenges which may inhibit continuing its business.
Uncertainty of privacy laws
The Investee Entity runs a data analysis business whose database relies on the Investee Entity’s ability to track, collect, use and leverage personal data and other content.
Laws and regulations governing the collection, use and disclosure of personal data and use of online analytics and tracking technologies are rapidly evolving globally. Interpretation and application of these laws and regulations may vary from a country to another as well as implementation or compliance practices. This means that the Investee Entity business operates in an uncertain legal environment which may negatively affect the Investee Entity business.
A violation of privacy or data protection laws by the Investee Entity or employees or third parties that are inherent in aspects of the Investee Entity business and engaged in the buying and selling of shareable data, could have a material adverse effect in the Investee Entity and the value of its stock.
Illegal use of the Investee Entity business
Third parties may use the Investee Entity as a conduit for illegal activities without the Investee Entity’s knowledge, which may result in a material adverse effect on the Investee Entity business.
The Investee Entity is required to comply with all relevant regulations to prevent and defend against serious and organised crime in all its forms which include, but not limited to, any applicable anti-money laundering laws and regulations, including internal control and “know-your-customer” procedures.
However, if the Investee Entity is involved in a criminal proceeding, the outcome could have a material adverse effect on the Investee Entity’s operations or financial condition.
Failed payments and fraud risks
In order to minimise payment and fraud risk, the Investee Entity has to comply with all due diligence requirements, anti-money laundering (AML) regulations, and other legal requirements to verify customers and avoid criminal activities.
At the same time increasing scrutiny from state and foreign regulators in connection with the potential for consumer fraud is conducted on the Investee Entity.
However, an economic crisis may result in increased customer frauds that may lead to governmental enforcement actions and investigations that may deter new customers from relying on the Investee Entity business. This situation may negatively affect the operability of the Investee Entity
Frauds and illegal activities involving the Investee Entity business
The Investee Entity operates in a sector where criminals are relying on sophisticated methods to capture data for illegal purposes such as identity theft and fraud. In the case your data is stolen and used for unlawful activities, the Investee Entity may suffer reputational damage that can negatively harm the Investee Entity business.
Malfunction due to problems with the blockchain
The Investee Entity operates its business on the blockchain. As a consequence, any malfunction that interests the blockchain may negatively impact the operability of the Investee Entity business itself.
Information security risks have generally increased in recent years, in part because of the proliferation of new technologies and the use of the Internet, and the increased sophistication and activities of organized crime, hackers, terrorists, activists, and other external parties, some of which may be linked to terrorist organizations or hostile foreign governments. Further, most blockchain networks operate based on some form of open-source software. An open source project is not represented, maintained or monitored by an official organization or authority. Because of the nature of open-source software projects, it may be easier for third parties not affiliated with the issuer to introduce weaknesses or bugs into the core infrastructure elements of the blockchain network. This could result in the corruption of the open-source code which may result in the loss or theft of blockchain assets. The Investee Entity may be subject to cyberattacks, security risks and risks of security breaches which will adversely affect the Investee Entity business.
The Investee Entity’s business may be subject to the risks of pandemic, earthquakes, fire, power outages, floods and other catastrophic events, and to interruption by man-made problems such as strikes and terrorism.
Regulatory requirements imposed on crypto-related activities
Crypto-businesses are heavily regulated and the source of frequent mitigation. The Investee Entity’ business is based on crypto, and a new regulation may subject the network or network participants to licensing obligations, compliance obligations, supervision and examination and/or litigation. Any such impact could be negative, and material affect the Investee Entity.
The current regulatory and legal treatment of cryptocurrency is unclear and there is a risk that relevant authorities may impose strict regulations and compliance which could adversely affect trading in cryptocurrency.
Actions by regulators
The Investee Entity provides money transfers and payment services: sectors that are heavily regulated in all countries. As a consequence, the Investee Entity has to comply with an extensive set of legal and regulatory requirements, including licensing requirements. This means that the Investee Entity may be under law enforcement or regulatory scrutiny. Whether regulators take action that prevent the Investee Entity from transferring money from particular states or jurisdictions that are significant for its business, the Investee Entity business may be negatively affected.
Uncertainty on the future of cryptocurrency
Cryptocurrency is a relatively new concept. If the market price of cryptocurrency falls, this would adversely affect a cryptocurrency business like the Investee Entity.
|RISKS RELATED TO SERVICE PROVIDERS
Change of business strategy
The acquisition of a service provider may lead to a change in the company’s culture and management. However, such a change does not always result in a positive outcome for a business and may lead to a lack of communication and transparency that may negatively affect the service provider’s operability and efficiency.
Threats to security
A service provider business may be negatively affected by a security breach. Whether the service provider experiences an accident that results in unauthorised access to sensitive data, its business may suffer significant losses and its operability may be negatively affected.
The bankruptcy of a service provider
Members acknowledge and agree that investments made pursuant to their Mandates are highly risky. The completion of such investments require the mutual cooperation of service providers from different jurisdictions. These businesses are often subject to risks not foreseen or fully appreciated by their management. It is not possible to foresee all risks that may affect these enterprises. As such, Members acknowledge and agree that in the event of dissolution or bankruptcy of a service provider they may not be able to proceed with an investment or an investment may be delayed.
Conflict of interest
Although the RPB Platform Company, any member of the BF Group, and the service providers are committed to operating in a cooperative and harmonic manner to provide the best experience to investors, this cooperation may result in a conflict of interests that may lead to reputational risk or a failure to act. Such a situation may negatively affect the investor’s investment.
A service provider may suffer a financial loss resulting from inadequate or failed internal processes, people or systems, or from external events. A financial loss may also derive from the failure to comply with applicable regulations, contractual agreements. The service provider will adopt all measures to mitigate such as, but not limited to, stringent controls, self-assessment and monitoring of its operational risk exposure, and allocation of sufficient capital to cover potential losses.
Regulatory restrictions imposed on service providers
The services provided in accordance with the Mandates derive from the coordinated action of businesses operating in different countries. New regulations in these countries may negatively affect the ability of the service providers to provide the services in accordance with any Mandate.
|RISKS IN LENDING ACTIVITIES
RPB Platform Company may invest, pursuant to a Mandate, in Crypto-lending activities through a third party Crypto-lending service provider (Crypto-lender). Please find below a few risks related to Crypto-lending. It is hereby clarified that any Crypto-lender with which the RPB Platform Company may transact will not be in a contractual relationship with any Member and will therefore owe no obligations directly to any Member.
Returns and Default Risk
A Crypto-lending activity is based on the investment of investors’ funds on a Crypto-lending platform operated by the Crypto-lender who, in turn, lends either dollars or cryptocurrencies to a third party borrower. Crypto borrowers can borrow dollars against crypto, and institutional investors can borrow cryptocurrencies to reinvest in the market. Even though the Crypto-lender mitigates the risk of default on the loan by carrying on checks of the borrower and assessing the risks related to the specific loan, a borrower may not be able to repay the capital and fees on part or the full amount of the loan. The Crypto-lender may lend cryptocurrencies, stablecoins or fiat as a principal business activity, as well as use such assets for other income generating activities. Whether borrowers use funds lent for trading activities on cryptocurrency exchanges, they face the risk to lose up to 100% of their capital. Stablecoins are digital currencies that may be based on a wider range of assets and may be exposed to the market and liquidity risk of those assets and the credit risk of their issuers. A fall in the value of the reserve assets triggered either by overall market conditions or by a specific change in the fundamental value of the asset could reduce the value of the stablecoins. In such cases, the Crypto-lender may not be able to recover funds lent and may suffer losses that can negatively impact its business and the Crypto-lending activity.
Credit check risk
Before lending funds, the Crypto-lender carries out credit checks and identity and history checks of the directors and major shareholders on the investor or the entity seeking for funds. The key component of this process is to provide the borrower with a credit rating that quantifies the default risk based on the borrower’s ability of repayment through the analysis of the borrower’s credit information. However, it is very difficult for the service provider to monitor the real use of the loan and conduct post-loan management. In case funds are diverted from their stated purpose or the borrower defaults, the Crypto-lender’s business may suffer losses that can negatively impact its business operations and your investment.
Credit quality risk
Adverse changes in the borrowers’ credit quality, resulting as a general deterioration of the economic conditions, or arising from systemic risks in the financial systems, could reduce the recoverability of loans. The Crypto-lender holds crypto-assets as collateral to mitigate credit risks and potential credit losses. However, a severe price drop of the collateral may lead the service provider not having sufficient collateral to back the loan.
Incomplete or inaccurate information provided by borrowers
The Crypto-lender verifies each borrower’s assets and assesses the reliability and suitability for granting a loan. However, sometimes, this information may be inaccurate or incomplete. All information provided by borrowers must be assessed in light of the risks, expenses, and difficulties frequently encountered when any business is operating. Any lack of information may make it more difficult and riskier for the service provider to foresee the outcome of the loan. The Crypto-lender cannot assure that a borrower will be able to repay the loan.
Reliance on Information from Third Parties
The Crypto-lender may rely on third parties’ information when it assesses the reliability and suitability of the borrower for granting a loan. Although the Crypto-lender adopts all measures to protect the Crypto-lending activity, information provided to the Crypto-lender may be wrong or inaccurate. In such a case the Crypto-lender may suffer loss and the investment in the Crypto-lending may not be profitable.
Regulatory requirements imposed on lending and related activities
Lending and related activities are subject to regulatory requirements and the source of frequent mitigation. The Crypto-lender’s business is based on lending activities, and a new regulation or regulatory changes may subject the network or network participants to licensing obligations, compliance obligations, supervision and examination and/or litigation. Any such impact could be negative, and material affects the Crypto-lender.
|Please note that more risks can be found in the Terms here: https://bnktothefuture.com/terms-conditions/.|
RPB Portfolio Builder – Appendix 2 – Custody Services RPB Agreement
The Trustee Ordinance in Hong Kong qualifies FDT to custody assets, including Digital Assets, and take deposits from the public, the specifics of which are outlined in section 81(1)(f), (g), (j) and (k) of the Trustee Ordinance.
USE OF CUSTODY SERVICES
The Client agrees and understands that this Custody Services RPB Agreement is subject to the terms and conditions set forth in the Client RPB Agreement. The terms and conditions set forth in this Custody Services RPB Agreement are in addition to those set forth in the Client RPB Agreement, and that the former shall prevail. The Client further agrees and understands that the defined terms used in this Custody Services RPB Agreement, if defined in the Client RPB Agreement, shall have the meanings set forth in the Client RPB Agreement.
The Client agrees and understands that by using the custody services following any change to this Custody Services RPB Agreement, the use of our custody services shall constitute the Client’s agreement to the amended Custody Services RPB Agreement by and between FDT and the Client, and Client agrees to be legally bound by its terms and conditions as amended. The Client should, therefore, read this Custody Services RPB Agreement from time to time. The Client further agrees and understands that FDT has the right to require Client’s affirmative consent and continuing acceptance of this Custody Services RPB Agreement, from time to time, as a condition of using the custody services. If the Client does not agree to be bound by this Custody Services RPB Agreement, the Client should not use our custody services.
3.1. Client agrees and understands that the defined terms used in this Custody Services RPB Agreement, if not defined in our Client RPB Agreement, shall have the meanings set forth below:
“Agent” means any sub-custodian, delegate, nominee, and administrative or other service provider selected and used by the FDT in connection with carrying out its obligations under this RPB Agreement whether or not such person would be deemed an agent under principles of any applicable law.
“RPB Agreement” means this Custody Services RPB Agreement (including the Annex and any other applicable terms) agreed to by the Client and the FDT, as amended from time to time, and any other terms and conditions agreed upon by the Client and the FDT from time to time in connection with this RPB Agreement.
“Applicable Law and Regulations” means the laws, regulations and rules of any applicable governmental or regulatory authority in Hong Kong including but not limited to the Trustee Ordinance (Cap. 29), Banking Ordinance (Cap.155), the Securities and Futures Ordinance (Cap.571), the Money Lenders Ordinance (Cap.163), the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap.615), the Payment systems and Stored Value Facilities Ordinance (Cap.584), the Insurance Companies Ordinance (Cap.41), the Personal Data (Privacy) Ordinance (Cap.486), the Drug Trafficking (Recovery of Proceeds) Ordinance (Cap.405), the Organised and Serious Crimes Ordinance (Cap.455) and the United Nations (Anti-Terrorism Measures) Ordinance (Cap.575).
“Asset Ledger” means each ledger established under Books of Account for the receipt, recording and maintenance of Securities, Digital Assets or other assets as agreed by the FDT.
“Authorized Persons” means the Client or a person with authority to act on behalf of the Client, or any other person holding a duly executed power of attorney from the Client which is in a form acceptable to the FDT, in each case as authenticated in accordance with security procedures as described in this RPB Agreement.
“Books of Account” means a system of records, established for the Client under this RPB Agreement pursuant to s.89 of the Trustee Ordinance (Cap. 29), which records and explains the financial transactions concerning Property and, for the avoidance of doubt, may include loose-leaf books, cards and such other forms of permanent documents of record as are appropriate for the operation of and the vouching of an efficient accounting system, whether written, mechanical or electronic.
“Business Day” means a day, other than a Saturday, Sunday or public holiday in Hong Kong, when banks in Hong Kong are open for business.
“Cash” means all cash in any fiat currency received by the FDT from time to time for the account of the Client, whether by way of deposit or arising out of or in connection with any Property in the Custody Account.
“Cash Ledger” means each ledger established under Books of Account for the receipt, recording and maintenance of Cash or other assets as agreed by the FDT.
“Clearance System” means any clearing house, settlement system, payments system, or depository (including any dematerialized book entry system or entity that acts as a system for the central handling of Property in the country where it is incorporated or organized or that acts as a transnational system for the central handling of Property), whether or not acting in that capacity, or other financial market utility or organized trading facility used in connection with transactions relating to Property and such other clearing agency, settlement network or depository as may from time to time be used in connection with transactions relating to Property, and any nominee, clearing agency, or depository for any of the foregoing.
“Client” means entity entering into this RPB Agreement with FDT as identified in the Client Information & RPB Agreement Form, and where the context so admits, includes any one of those persons and may include one or more individuals, a partnership, a sole proprietorship or a corporation.
“Client Information & RPB Agreement Form” means the questionnaire which is used by FDT to gather relevant information about Client, Client’s future needs and Client’s attitude to risk and is completed, signed and returned to FDT.
“Cryptocurrencies” means a Digital Asset which is a digital representation of value based on (or built on top of) a cryptographic protocol of a computer network.
“Currency” means a medium of exchange for goods and services, such as, but not limited to bills, coins, bank balances, money orders, and checks.
“Digital Asset” means cryptographically secured digital representations of value or contractual rights that can be transferred, stored and traded electronically.
“DLT” means Distributed Ledger Technology.
“FDT Group Companies” means First Digital Trust Limited and any company or entity of which First Digital Trust Limited directly or indirectly owns or is directly or indirectly owned.
“Instructions” means any and all instructions received by the FDT from an Authorized Person (including directions, notices and consents) effected through any electronic medium or system or manually as provided in this RPB Agreement.
“Ledger Account” means that part of the Books of Account of a FDT which records in respect of each Property transactions conducted by the FDT with or on behalf of the Client, on Custody Account.
“OTC Trade” means a trade between two parties and without a central exchange or broker. “Parties” (each, individually a “Party”) means FDT or Client.
“Property” means, as the context requires, all or any part of any Securities, Digital Asset, Cash, or any other property that have been delivered to FDT to be held by FDT on Client’s behalf, in each case until such assets are withdrawn pursuant to this RPB Agreement.
“Securities” means any financial asset (other than Cash) from time to time held by the FDT for the Client under the terms of this RPB Agreement, including any security entitlement or similar interest or right; provided, however, each financial asset must be (i) a security dealt in or traded on securities exchanges for which settlement normally occurs in a Clearance System, or (ii) a certificated security in bearer form or registered (or to be registered) in the name of the FDT or its Agent and transferable by delivery of a certificate with endorsement to a subsequent holder, or (iii) a book-entry security that is publicly offered to investors under the applicable laws (but settled outside a Clearance System) including, but not limited to an interest in an investment company where the interest is registered in the name of the FDT or its Agent. Securities do not include other financial assets or physical evidence of such other financial assets including loans, participations, contracts, subscriptions and confirmations, which the FDT shall accept only on terms as agreed in writing by the FDT.
“Taxes” means all taxes, levies, imposts, charges, assessments, deductions, withholdings and related liabilities, including additions to tax, penalties and interest imposed on or in respect of (i) Property (including all payments made by the FDT to the Client in connection with any Property), (ii) the transactions effected under this RPB Agreement (including stamp duties or financial transaction taxes), or (iii) the Client (including its customers); provided “Taxes” does not include income or franchise taxes imposed on or measured by the net income of the FDT or its Agents.
“Uncertificated Security” means share or other interest in Property or an enterprise, or an obligation of an issuer that is not represented by an instrument but is registered on the issuer’s books.
3.2. Section, Clause and paragraph headings are for ease of reference only and shall not be read in isolation, nor shall they affect the interpretation of this RPB Agreement or any part of it.
3.3. Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular.
3.4. Any words following the terms including, include, in particular, for example or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms.
3.5. References to a “person” shall be construed so as to include any individual, any firm, any company, corporation or other body corporate, any government or governmental body, any state or agency of a state, any trust, or any joint venture, association or partnership (whether or not having separate legal personality).
3.6. Unless the context otherwise requires, a reference to one gender shall include a reference to the other genders.
3.7. References in this RPB Agreement to Exhibits or Annexes mean the Exhibits or Annexes attached hereto, the terms of which are incorporated into and form part of this RPB Agreement. In the event of any inconsistency between this RPB Agreement and any Exhibit or Annex, the relevant terms of the Exhibit or Annex prevail. SECTION 4
APPOINTMENT OF FDT AND ACCEPTANCE
4.1. Appointment of the FDT. The Client hereby appoints the FDT, and the FDT hereby accepts such appointment to provide services under the terms of this RPB Agreement.
4.2. Setup of Accounts. The Client hereby instructs and authorizes the FDT to establish on its books and records an account for the deposit of Property (“Custody Account”) that the FDT may receive from the Client on the terms of this RPB Agreement.
4.3. No Partnership, Agency, or Joint Venture. For the avoidance of doubt, nothing in this RPB Agreement is intended to, or shall be deemed to, establish any partnership or joint venture between any of the Parties, constitute any Party the agent of another Party, or authorize any Party to make or enter into any commitments for or on behalf of any other Party.
4.4. Sole Obligation of the FDT. The Client understands and agrees that: (i) the obligations and duties of the FDT will be performed only by the FDT and are not obligations or duties of any other member of the FDT Group Companies; and (ii) the rights of the Client with respect to the FDT are only enforceable against the FDT and, except as provided by law, do not extend to any other member of the FDT Group Companies.
REPRESENTATIONS AND WARRANTIES
5.1. General. Each party to this RPB Agreement hereby represents and warrants as at the date this RPB Agreement is entered into and for the period during which services under this RPB Agreement are provided, that: (i) to the best of its knowledge, all required consents (governmental or otherwise) that are required to have been obtained by it with respect to its performance of this RPB Agreement have been obtained and are in full force and effect and all conditions of any such consents have been complied with; (ii) its entry into and performance of the RPB Agreement will not violate or conflict with any law, regulation, judgment, order, regulation or contractual obligation; (iii) the entering into this RPB Agreement and the performance of its obligations hereof are in compliance with all Applicable Law and Regulations; and (iv) its obligations under this RPB Agreement constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms.
5.2. By FDT. The FDT represents and warrants as at the date this RPB Agreement is entered into and for the period during which services under this RPB Agreement are provided that it is duly organized and validly existing under the laws of the jurisdiction of its incorporation and is in good standing.
5.3. By Client. The Client represents and warrants as at the date this RPB Agreement is entered into and for the period during which services under this RPB Agreement are provided that: (i) if the Client is a natural person, it has the legal capacity to enter into and perform its obligations under this RPB Agreement, or if the Client is not a natural person, it has been duly organized and is validly existing and in good standing, under the laws of its jurisdiction of formation, and it has properly taken all corporate, limited liability, partnership or other action required to be taken with respect to the execution and delivery of this RPB Agreement and consummate the transactions contemplated by this RPB Agreement; (ii) it has good title to the Property and authority to deliver the Property to the FDT; (iii) there is no claim or encumbrance that adversely affects any deposit with any Clearance System or delivery of Property, or payment of Cash made in accordance with this RPB Agreement; (iv) except as provided in this RPB Agreement, it has not granted any person a lien, security interest, charge or similar right or claim against Property; and (v) it has not relied on any oral or written representation made by the FDT or any person on its behalf other than those set forth in this RPB Agreement.
6.1. Designation of Accounts. The FDT shall on its records identify each Custody Account in the name of the Client or such other name as the Client may reasonably designate. Custody Account is to be designated to show that the Property belongs to the Client and is segregated from the FDT’s own assets and those of the other clients’ of FDT.
6.2. Segregation of Assets. The FDT intends that Property will be held in such manner that they should not become available to the insolvency administrator or creditors of the FDT.
6.2.1. The FDT shall identify Property on its records in a manner so that it is readily apparent the Property (i) belong to the Client or its customers, (ii) do not belong to the FDT or any other clients of the FDT, and (iii) are segregated on the books and records of the FDT from the FDT’s and its other clients’ assets.
6.2.2. The FDT may, subject to Part 4A of the Trustee Ordinance (Cap. 29), hold Property with an Agent. The FDT shall hold Property only in an account at the Agent that holds exclusively assets held by the FDT for its clients (omnibus or separated in the names of its clients) and that has been so identified on the books and records of the Agent. The FDT shall require the Agent to identify on its records in a manner so that it is readily apparent that the Property (i) do not belong to the FDT and are held by the FDT for and belong to clients of the FDT, (ii) do not belong to the Agent or other clients of the Agent, and (iii) are segregated on the books and records of the Agent from the Agent’s and its other clients’ assets. The FDT shall re-quire each Agent to agree that Property will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the Agent. Any Property held with any Agent will be subject only to Instructions of the FDT.
6.2.3. The FDT will not, and shall procure that its Agents do not, lend, pledge, hypothecate or rehypothecate any Property without the Client’s consent.
6.3. Custody of Cash.
6.3.1. The FDT will hold Client’s Cash deposits in one or more omnibus bank accounts (each an “Omnibus Account”), a fully segregated bank account established principally for the Client (a “Segregated Account”), and/or one or more omnibus or segregated money market accounts (each a “Money
Market Account”) (collectively, each a “Client Money Bank Account”) at a depository institution (each a “Bank”). Each Client Money Bank Account is (i) in the name of the FDT, or in the case of a Segregated Account jointly in the name of Client and FDT, and under FDT’s control; (ii) separated from FDT’s business or operating bank accounts; (iii) established specifically for the benefit of FDT’s Clients; and (iv) a representation of a banking relationship, not a custodial relationship, between the FDT and the relevant Bank. The Client agrees and acknowledges that the Client Money Bank Accounts do not create or represent any relationship between the Client and any of the Banks.
6.3.2. Client’s Cash deposits are: (i) held across Client Money Bank Accounts, reflecting the exact proportion that all Clients’ Cash deposits are held across the Omnibus Accounts, except in the case of a Segregated Account such funds are held exclusively for the relevant Client; (ii) not treated as FDT’s general assets; (iii) fully owned by Client; and (iv) recorded and maintained in good faith on the Books of Account and reflected in a Ledger Account (i.e., the Cash Ledger of the Custody Account) so that Client’s interests in the Client Money Bank Accounts are readily ascertainable.
6.3.3. Notwithstanding anything herein to the contrary, the Client agrees and understands that the FDT may hold some or all of Client’s Cash deposits in Client Money Bank Accounts that do receive interest and/or other earnings and, in such case, the Client agrees to pay to the FDT a fee equal to the amount of any such interest and/or other earnings attributable or allocable to Client’s Cash deposits as payment for the services the FDT provides to the Client under this RPB Agreement. Client agrees and understands that the FDT shall collect any such payment, equal to the amount of such allocable interest and/or other earnings, simultaneously upon being paid such interest and/or other earnings to the Client Money Bank Accounts. Furthermore, the Client agrees and understands that the FDT may receive compensation for the Client Money Bank Accounts, either in the form of services provided at a reduced rate, the payment of a referral fee, or otherwise. Any such compensation will be retained by the FDT and the Client agrees and understands that it will not receive any portion of such compensation.
6.4. Custody of Securities.
6.4.1. FDT shall and shall require any Agents to hold Securities in a Clearance System only in an account that holds assets exclusively belonging to its clients and that has been so identified on the books and records of the Clearance System or that is identified at the Clearance System in the name of a nominee of the FDT or Agent used exclusively to hold Securities for clients. In certain markets,
the FDT or its Agents may open an account at a Clearance System in the name of the Client or its customer, as required by the rules of the Clearance System.
6.4.2. The FDT shall and shall require any Agents to record book-entry Securities or Uncertificated Securities settled outside a Clearance System on the books and records of the applicable transfer agent or registrar (or the issuer if none) in a way that identifies that the Property or Securities are being held by the FDT or its Agents as custodian for clients and are not assets belonging to the FDT or the Agents, if applicable.
6.4.3. The FDT shall and shall require any Agents to hold Certificated Securities in registered or bearer form in its vault segregated from certificates held for itself and/or any other clients. If the registered certificates are not registered in the FDT’s or its Agents’ name (or its nominee name) the FDT will not be responsible for asset services as provided in Section 10 under this RPB Agreement.
6.4.4. The FDT may hold Securities in the name of a nominee of the FDT or its Agents or a nominee of the Clearance System as may be required by that Clearance System.
6.4.5. The FDT shall require that any actions with respect to Securities held for the Client under this RPB Agreement in a Clearance System or in the name of the FDT or any Agent, on the books and records of any transfer agent or registrar will be subject only to the instructions of the FDT or its Agents, if applicable. 6.5. Custody of Digital Assets.
6.5.1. The FDT shall, and shall require, any Agents to hold Digital Assets in segregated wallets, using unique digital asset addresses, which are independently verifiable and auditable on their respective blockchains.
6.5.2. Client hereby acknowledges that Digital Assets are a novel form of Property, that the law regarding the ownership, custody and transfer of Digital Assets is developing and uncertain, and that the FDT does not own or control the underlying DLT, software protocols or networks which govern the title, custody and transfer aspects of the relevant Digital Assets, that the FDT makes no guarantees regarding their security, functionality or availability, and that in no event shall the FDT be liable for or in connection with any acts, decisions or omissions made by the developers, issuers or promoters of such Digital Assets.
6.5.3. The Client agrees that it assumes the risks associated with custody or effecting transactions in Digital Assets including potential loss or diminution in value of the Digital Assets due to changes or developments in the law or conditions under existing law in which its rights in and to such Digital Assets may not be adequately protected.
6.5.4. Client acknowledges and understands that the underlying DLT of Digital Assets are subject to changes in operating rules (each a “Fork”) that may result in more than one version (each, a “Forked Network”) and us holding an identical amount of Digital Assets associated with each Forked Network. Client further agrees and understand that Forks may materially affect the value, function, and/or name of the Digital Assets held by FDT under this RPB Agreement.
7.1. Credits and Debits.
7.1.1. The Client shall ensure that it has sufficient Property or sufficient immediately available Cash in the required currency credited with the FDT as necessary to effect any Instruction or other delivery or payment required under this RPB Agreement.
7.1.2. The FDT may, but is not obligated to, credit cash to the Cash Ledger before a corresponding and final receipt in cleared funds. The Client agrees that the FDT may at any time before final receipt (i.e. if a Clearance System at any time reverses an applicable credit to the FDT) reverse all or any part of a credit of Cash to the Client and make an appropriate entry to Books of Account including restatement of the Cash Ledger and reversing any interest paid.
7.1.3. Pursuant to s.89 of the Trustee Ordinance (cap. 29), the FDT will credit Property to the Books of Account upon receipt of the Property by final settlement determined in accordance with the practices of the relevant market. Final settlement depends on the market confirmation of settlement to the FDT and may include real time movement with finality, real time movement without finality, or confirmation of settlement but with movement of Property at end of the day. If any Clearance System reverses any credit of Property (or the FDT is otherwise obligated to return Property as a result of a settlement reversed in accordance with market requirements), the Client agrees that the FDT may reverse all or any part of the credit of the Property to the Books of Account and make
an appropriate entry to its records including restatement of the Asset Ledger. In the event of any reversal of Property, the Client agrees that the FDT may reverse any credit of Cash provided to the Client with respect to the Property, such as distributions or the proceeds of any transaction.
7.1.4. The FDT shall provide the Client with prompt notice of a reversal of Cash or Property.
7.1.5. Where notice of a reversal of Cash or Property has been given and there is insufficient Cash or Property to satisfy the reversal, the Client shall, as applicable, promptly repay in the applicable currency the amount required to satisfy the deficit in the Cash Ledger and/or return any Property to the Asset Ledger.
7.1.6. If the FDT has received Instructions (or is authorized under this RPB Agreement to make any delivery or payment without an Instruction) that would result in the delivery of a Property or payment of Cash in any currency exceeding credits to the Client for that Security or Cash, the FDT may in its discretion, subject to acting consistently in accordance with this RPB Agreement, (i) effect any cash payment or other funds transfer and create or increase an extension of credit to the Client including any overdraft, (ii) make partial deliveries or payments consistent with market practice, (iii) fulfill subsequently received Instruction to the extent of then available Property held for the Client, or (iv) suspend or delay acting on any Instruction until it receives required Property. The FDT shall notify the Client if the FDT does not act on any Instruction because the Client has insufficient Property.
7.1.7. Notwithstanding any Instruction or termination of this RPB Agreement, at any time the FDT may retain sufficient Property to close out or complete any Instruction or transaction that the FDT will be required to settle on the Client’s behalf or to cover any obligation of the Client.
7.1.8. The Client will not enforce any payment obligation of the FDT at or against another affiliate of the FDT. The FDT is obligated to pay Cash only in the currency in which the applicable payment obligation is denominated and only in the country in which such Cash is used in connection with Property received, held or delivered or other services under this RPB Agreement are provided in that country, regardless of whether that currency’s transferability, convertibility or availability has been affected by any law, regulation, decree rule or other governmental or regulatory action. The Client agrees that it may not require the FDT or any member of the FDT Group Companies to substitute a currency for any other currency.
7.2. Over-the-Counter Trades.
7.2.1. The Client may instruct the FDT to execute OTC Trades concerning Property as part of the services under this RPB Agreement. Instructions may be given on a case by case basis or as a standing Instruction. The FDT may net or set off transactions when effecting OTC Trades. The FDT may be compensated in part from the spread taken on OTC Trade, and the FDT or an affiliate may act as principal in any OTC Trade. The Client will be notified of the price at which the transaction was completed of all executed OTC Trades in its reporting from the FDT or, if not included, upon Client’s request. The Client acknowledges that the price at which the transaction is completed will depend on a number of factors, including the size of the transaction, the liquidity in the relevant assets, the time of day and other market factors.
7.2.2. Unless otherwise provided in applicable law, neither the FDT nor any applicable affiliate assumes any fiduciary or other duty by virtue of effecting OTC Trade, nor are they acting as trustee. The Client agrees that it assumes the risks associated with effecting OTC Trades including any events or laws that delay or adversely affect transferability, convertibility or availability of any asset, appropriation or seizure, any devaluation or redenomination of any asset or fluctuations or changes in market prices.
7.3. Foreign Exchange Transactions.
7.3.1. The Client agrees that it assumes the risks associated with holding or effecting transactions in Cash including any events or laws that delay or adversely affect transferability, convertibility or availability of any currency, appropriation or seizure, any devaluation or redenomination of any currency or fluctuations or changes in foreign exchange rates.
7.3.2. The Client may instruct the FDT to execute a foreign exchange as part of the services under this RPB Agreement. Instructions may be given on a case by case basis or as a standing Instruction. The FDT will debit the Client’s Cash Ledger to process foreign exchange and credit the Client’s Cash Ledger with the new currency in accordance with the Instruction(s). The FDT may net or set off transactions when effecting foreign exchange. The FDT may be compensated in part from the spread taken on foreign exchange, and the FDT or an affiliate may act as principal in any foreign exchange. The Client will be notified of the exchange rate of all executed foreign exchange in its reporting from the FDT or, if not included, upon Client’s request. The Client acknowledges that the
foreign exchange rate applied will depend on a number of factors, including the size of the transaction, the liquidity in the relevant currencies, the time of day and other market factors. The Client may not receive published spot rates in the relevant currencies. Unless otherwise provided in applicable law, neither the FDT nor any Agents assumes any fiduciary or other duty by virtue of effecting foreign exchange, nor are they acting as trustee.
7.4. Extensions of Credit; Reimbursement.
7.4.1. The Client acknowledges that any extension of credit to the Client under this RPB Agreement will be unadvised, uncommitted and at the sole discretion of the FDT, and the Client agrees that it shall repay any extension of credit upon demand. The FDT may charge interest on any overdraft at the rate notified to the Client from time to time. The FDT may at any time cancel or refuse any extension of credit. No prior action or course of dealing by the FDT with respect to extending credit to effect any settlement of any transactions or any Instructions will obligate the FDT to extend any credit in regard to any subsequent settlement of any transaction or Instruction.
7.4.2. As used in this RPB Agreement “extension of credit” includes any daylight and overnight overdraft or similar advances, any reimbursement obligation as provided in this RPB Agreement, and uncommitted overdraft lines or similar uncommitted lines provided by the FDT to the Client in connection with the Cash Ledger or services under this RPB Agreement.
7.4.3. At any time the FDT may demand that the Client reimburse the FDT in respect of any irrevocable commitment incurred in carrying out Instructions to clear and/or settle transactions for the Client under this RPB Agreement (including fail costs payable by the FDT if the Client were to fail to deliver any required Property). Irrevocable commitments are incurred on the date the FDT becomes irrevocably obligated to a Clearance System or other counterparty for the delivery of Property or payment of Cash, even if the Asset Ledger or the Cash Ledger has insufficient Property on the applicable settlement date. The Client agrees that its reimbursement obligation arises when the irrevocable commitment is incurred by the FDT despite the actual settlement or maturity date. The Client agrees that after the FDT has made a demand for reimbursement by the Client, the FDT may debit the Client for the amount the FDT will be obligated to pay in regard to the irrevocable commitment, whether or not that debit creates or increases any overdraft by the Client.
RIGHTS FOR EXTENSIONS OF CREDIT
8.1. Lien. In addition to any other remedies available to the FDT under applicable law, the FDT will have, and the Client herby grants, a continuing general lien on all Property until satisfaction of all liabilities and obligations arising under this RPB Agreement (whether actual or contingent) of the Client to the FDT with respect to any fees and expenses or extensions of credit including, but not limited to, daylight and overnight overdrafts, charges resulting from reversals of credits, reimbursement demands of the FDT in respect of irrevocable commitments, and any other present and future obligations of the Client payable to the FDT.
8.2. Set Off. Without limiting any rights the FDT may have under applicable law, the FDT may, without prior notice to the Client, set off any payment obligation with regard to an extension of credit or the value of any other payment or delivery obligation owed by the Client to it against any payment obligations or the value of any delivery obligations owed by the FDT to the Client, regardless of the place of payment, delivery and/or currency of any obligation (and for such purposes may make any currency conversion necessary). If any obligation is unliquidated or unascertained, the FDT may set off as provided herein an amount estimated by it in good faith to be the amount of that obligation.
8.3. Exercise of Rights.
8.3.1. If the Client fails to pay the FDT in respect of any extension of credit, is dissolved or becomes the subject of formal insolvency proceedings in any jurisdiction, or any step is taken against the Client to initiate insolvency proceedings in any jurisdiction, the FDT may, without notice to the Client except as required by law, and at any time: (i) appropriate and apply all or any part of the Property held under this RPB Agreement by the FDT against any or all obligations of the Client under this RPB Agreement to the FDT (whether matured or subject to any demand); (ii) sell all or any part of the Property; and (iii) exercise, in respect of the Property, all the rights and remedies a party with a senior security or similar right would be entitled to exercise in such default under any applicable law.
8.3.2. The Client shall not grant any person a lien, security interest, charge or similar rights or claims against Property without the FDT’s consent.
9.1. Authority. The Client authorizes the FDT to accept and act upon any communications provided by an Authorized Person, including Instructions and any form or document. Subject to the authority or restrictions with respect to any Authorized Person specified in any document received and accepted by the FDT, the Client confirms that each Authorized Person is authorized to perform all lawful acts on behalf of the Client in connection with any Property, or otherwise in connection with this RPB Agreement including, but not limited to, (i) opening, closing and operating any Asset Ledger or Cash Ledger, (ii) signing any agreements, declarations or other documents relating to any Property or service, and (iii) providing any Instruction, until the FDT has received written notice or other notice acceptable to it of any change of an Authorized Person and the FDT has had a reasonable opportunity under the circumstances to act.
9.2. Instructions and Other Client Communications. The Client and the FDT shall comply with security procedures acceptable to the FDT intended to establish the origination of the communication and the authority of the person sending any communication, including any Instruction, inquiries, data and other information exchanges, and advices. Depending on the method of communication used by the Client, the security procedures may constitute one or more of the following measures: unique transaction identifiers, digital signatures, encryption algorithms or other codes, multi-factor authentication, user entitlements, schedule validation or such other measures as in use for the communication method by the Client. If the Client sends Instructions or other communications through any electronic communications method, the Client and the FDT agree that the security procedures utilized by such electronic communications method will be the agreed security procedures for the purpose of this RPB Agreement.
9.3. Authentication. Provided the FDT complies with the applicable security procedures, the Client agrees that the FDT is entitled to treat any communication including any Instruction as having originated from an Authorized Person and the FDT may rely and act on that communication as authorized by the Client.
9.4. Errors, Duplication. The Client shall be solely responsible for errors or omissions made by the Client or the duplication of any Instruction by the Client.
9.5. Account Numbers. The FDT may act on any Instruction by reference to an account number only, even if an account name is provided.
9.6. Incomplete or Insufficient Instructions. The FDT may act on Instructions where the FDT reasonably believes the Instruction contains sufficient information. The FDT may decide not to act on an Instruction where it reasonably doubts its contents.
9.7. Recall, Amendment, Cancellation. If the Client requests the FDT to recall, cancel or amend an Instruction, the FDT shall use its reasonable efforts to comply.
9.8. Email Instructions. The Client expressly acknowledges that it is aware that email communication increases the risk of error, security, privacy issues and fraudulent activities. If the FDT acts on an email instruction and complies with the applicable security procedures, the Client shall be solely responsible for any costs, losses and other expenses suffered by itself and/or the FDT.
9.9. Operation Hours. The FDT shall accept and act on Instructions or any other communication on Business Days when the FDT and the relevant market are open for business. From time to time the FDT shall notify the Client of the days the FDT and any applicable market will not be open and the cut-off times for accepting and acting on Instructions or other communications on the days the FDT is open.
9.10. Notice. The FDT shall promptly notify the Client (by telephone or email if appropriate) if an Instruction is not acted upon for any reason
ACTIONS BY THE FDT AND ASSET SERVICES
10.1. Custodial Duties Requiring Instructions. The FDT shall carry out the following actions only upon receipt of Instructions: (i) make payment for and/or receive any Property or deliver or dispose of any Property except as otherwise specifically provided for in this RPB Agreement, (ii) deal with rights, conversions, options, warrants and other similar interests or any other discretionary corporate action or discretionary right in connection with Property, and (iii) except as otherwise provided in this RPB Agreement, carry out any action affecting Property.
10.2. Non-Discretionary Custodial Duties. Absent a contrary Instruction, the Client agrees that the FDT will be authorized to carry out non-discretionary matters in connection with any Instruction or services provided under this RPB Agreement. Without limiting the authority of the FDT with regard to non-discretionary matters, the FDT may carry out the following: (i) except as otherwise provided in this RPB Agreement, separately identify the Property on its records as being held for the account of the Client and segregate all Property held on behalf of the Client by the FDT from the assets of the FDT; (ii) take any action which is necessary and proper to enable the FDT to provide services to the Client within, and to observe and perform its obligations
in respect of, any relevant Clearance System; (iii) collect, receive and hold for the account of the Client all Property received by the FDT as a result of a stock dividend, share sub-division or reorganization, capitalization of reserves, Fork or otherwise; (iv) in the Client’s name or on its behalf, sign any documents relating to Property which may be required (a) pursuant to an Instruction to obtain any Property or (b) by any tax or other regulatory authority or market practice; (v) collect and receive, for the account of the Client, all income, payments and distributions in respect of the Property, and credit the same to the Cash Ledger; (vi) exchange interim or temporary receipts for definitive certificates, and old or overstamped certificates for new certificates; (vii) deposit Property with any Clearance System as required by law, regulation or market practice; (viii) make any payment by debiting any balance credited to the Client as required to effect any Instructions, payment of Taxes or other payment provided in this RPB Agreement; (ix) to the extent any shortage of Property occurs in connection with receipt of distributions in regard to any corporate action, make pro rata distributions, allocations, deliveries or credits of received Property as consistent with market practice and as it deems fair and equitable; (x) make cash disbursements for any expenses incurred in handling the Property and for similar items in connection with the FDT’s duties under this RPB Agreement in accordance with the Fee RPB Agreement, and debit the same to the Cash Ledger or any other account of the Client with the FDT; and (xi) any other matters which the FDT considers reasonably necessary in furtherance of the services provided under this RPB Agreement.
10.3. Notices and Actions Related to Securities.
10.3.1. The FDT shall promptly notify the Client of all official notices, circulars, reports and announcements (both mandatory and discretionary) in respect of Securities held for the Client received in its capacity as FDT. With regard to events requiring discretionary action, the FDT shall advise the Client of the applicable timeframe for taking any action elected by the Client. For the avoidance of doubt the FDT’s notice obligation does not include notices, circulars, reports and announcements in regard to a class action.
10.3.2. The FDT will be responsible only for the form, accuracy and content of any notice, circular, report, announcement or other material prepared by the FDT or its Agent, including translations. The FDT will not be responsible for errors or omissions in notices or information prepared by other persons, including issuers or Clearance Systems, used by the FDT to provide any notice to the Client or forwarded by the FDT to the Client.
10.3.3. The FDT shall act on discretionary matters in accordance with Instructions sent within applicable cut off times. The Client acknowledges that the FDT will not participate in or take any action concerning any discretionary matter, including shareholder voting, if the FDT does not receive a timely Instruction. Notwithstanding any other provision in this RPB Agreement, the FDT will be required to provide shareholder voting services only as specified in a separate proxy services letter agreement between the FDT and the Client.
10.3.4. The Client acknowledges that in some markets the FDT or its Agent may be required to vote all Securities of a particular issue for all of its clients in the same way and may not be able to effect split voting without regard to any Instruction.
10.4.1. The Client shall provide the FDT with information and proof (copies or originals) as to the Client’s and/or the underlying beneficial owner’s tax status or residence or other information as the FDT reasonably requests in order for the FDT or any Agent to achieve compliance with the requirements of governmental or regulatory authorities. Information and proof may include executed certificates, representations and warranties, or other documentation the FDT deems necessary or proper to fulfill the requirements of applicable tax authorities. The Client shall notify the FDT in writing of any change that affects the Client’s tax status pursuant to any applicable law or regulation, legal, governmental or regulatory authority, or agreement entered into between any two or more governmental authorities (law, regulation and authority, as used in this sentence, may be domestic or foreign), and the Client shall provide the notice within thirty (30) days of that change or any lesser period as stipulated under any applicable law or regulation.
10.4.2. Taxes are the responsibility of the Client and the Client agrees that Taxes shall be paid by the Client. The FDT will deduct or withhold for or on account of Taxes from any payment to the Client if required by any applicable law including, but not limited to, (i) statute or regulation, (ii) requirements of any legal, governmental or regulatory authority, or (iii) agreement entered into by the FDT and any governmental authority or between any two or more governmental authorities (applicable law as used in this sentence may be domestic or foreign). The Client acknowledges that the FDT may debit any amount available in any balance held for the Client and apply such Cash in satisfaction of Taxes. The FDT will timely pay the full amount debited or withheld to the relevant governmental authority in accordance with the applicable law as provided in this Clause.
If any Taxes become payable with respect to any prior credit to the Client by the FDT, the Client acknowledges that the FDT may debit any balance held for the Client in satisfaction of such prior Taxes. The Client shall remain liable for any deficiency and pay such deficiency upon notice from the FDT or any governmental authority. If Taxes are paid by the FDT or any of its Agents, the Client agrees that it shall promptly reimburse the FDT for such payment to the extent not covered by withholding from any payment or debited from any balance held for the Client.
10.4.3. In the event the Client requests that the FDT provide tax relief services and the FDT agrees to provide such services, the FDT will apply for appropriate tax relief (either by way of reduced tax rates at the time of an income payment or retrospective tax reclaims in certain markets as agreed from time to time); provided, the Client provides to the FDT such documentation and information relating to it or its underlying beneficial owner customers as is necessary to secure such tax relief. However, in no event will the FDT be responsible or liable for any Taxes resulting from the inability to secure tax relief, or for the failure of any Client or beneficial owner to obtain the benefit of credits, on the basis of foreign taxes withheld, against any income tax liability.
FDT’S COMMUNICATIONS, RECORDS AND ACCESS
11.1. Communications and Statements. The Client agrees that communications, notices and announcements by the FDT, and statements or advices with regard to Property, may be made available by electronic form only. The Client shall notify the FDT promptly in writing of any errors in a statement or advice and in any case within fifteen (15) days from the date on which the statement or advice is sent or made available to the Client. Nothing herein is intended to prevent the Client from notifying the FDT of any errors or corrections beyond such time; provided, however, that the FDT will not be responsible for any additional losses caused by such delay in notification.
11.2. Price Information. The FDT may, from time to time, provide information on statements or reports showing pricing or values of Property held for the Client. The Client acknowledges that the FDT will not be responsible under this RPB Agreement for the pricing or valuation of any Property. The Client agrees that the FDT has no responsibility to independently verify such prices or similar data, and the FDT has no liability for the availability or accuracy of any price or similar data obtained from any pricing source.
11.3. Access to Records. The FDT shall allow the Client and its independent public accountants, agents or regulators reasonable access to the records of the FDT relating to Property, the Books of Account and the controls utilized by the FDT in connection with the performance of this RPB Agreement as is reasonably required by the Client and at the Client’s expense and shall seek to obtain such access from each Agent and Clearance System. SECTION 12
12.1. Agents. The Client agrees that the FDT is hereby authorized to appoint Agents in connection with the FDT’s performance of any services under this RPB Agreement. The FDT shall exercise due skill, care and diligence in the selection, continued appointment and ongoing monitoring of Agents.
12.2. Other Third Parties. The Client agrees that the FDT is hereby authorized to participate in or use (i) Clearance Systems, and (ii) public utilities, external telecommunications facilities and other common carriers of electronic and other messages, external postal services, and other facilities commonly recognized as market infrastructures in any jurisdiction. Further, in providing services under this RPB Agreement the FDT will interact with other third parties whom the FDT does not select and/or over which the FDT exercises no discretion or control, including issuers of Securities, transfer agents or registrars, and the Client’s counterparties or brokers (or their agents). The Client acknowledges that Clearance Systems and such other third parties as described herein are not Agents, and the FDT has no responsibility for (i) selecting, appointing or monitoring such third parties, or (ii) the performance or credit risks of the third parties.
PERFORMANCE OBLIGATIONS AND LIABILITIES
13.1. Responsibility of the FDT. The FDT shall perform its obligations with due skill, care and diligence as determined in accordance with the standards and practices of a professional custodian for hire in the markets or jurisdictions in which the FDT performs services under this RPB Agreement and maintains Property for the Client. The FDT shall be liable for payment to the Client for its direct damages only where the FDT or any Agent has not satisfied such obligation of due skill, care and diligence.
13.2. Mutual Indemnity. Each of FDT and the Client shall indemnify, keep indemnified each other from and against any and all Loss (including reasonable legal costs) suffered or incurred, or which may be suffered or incurred, by either party as a result of or in connection with: (i) any failure by either party to comply with the terms and conditions of this RPB Agreement, or to fully and punctually perform any of its obligations hereunder; (ii) any act or thing done or caused to be done by either party in breach of the RPB Agreement (iii) any of either party’s representations, warranties, agreements and undertakings provided under this RPB Agreement being untrue, incorrect, incomplete or misleading in any material respect; (iv) any actions, claims, demands or proceedings brought by third parties against either party relating to this RPB Agreement.
13.3. Mutual Exclusion of Damages. Each of FDT and the Client shall be liable to the other party only for direct damages for any liability arising under this RPB Agreement. Under no circumstances shall a party be liable to the other party for special or punitive damages, or indirect, incidental, consequential loss or damage, or any loss of profits, goodwill, business opportunity, business revenue or anticipated savings in relation to this RPB Agreement, whether arising out of breach of contract, tort (including negligence, but excluding gross negligence) or otherwise, regardless of whether the relevant loss was foreseeable or the party has been advised of the possibility of such loss or damage, or that such loss was in contemplation of the other party.
13.3.1. The restrictions on liability in this clause apply to every liability arising under or in connection with this RPB Agreement including but not limited to liability in contract, tort (including negligence, but excluding gross negligence), misrepresentation, restitution or otherwise.
13.3.2. Each party’s total liability to the other party (including any liability for the acts or omissions of its Agents or employees) shall not exceed the aggregate value of the Fees paid or the value of Property at any given time, provided always that nothing in this RPB Agreement limits any liability for fraud, or fraudulent misrepresentation or wilful default.
13.3.3. Neither party shall be liable to the other party under this RPB Agreement for any (i) loss of profit; (ii) loss of revenue; (iii) loss of business; or (iv) indirect or consequential loss or damage, in each case, however caused, even if foreseeable.
13.4. Insurance. The FDT need not maintain any special insurance for the benefit of the Client, unless such arrangements have been separately made between Client and FDT.
13.5. Mitigation of Damages. Upon the actual knowledge by any party of the occurrence of any event which may cause any loss, damage or expense to the party, the party shall as soon as reasonably practicable (i) notify the other party of the occurrence of such event and (ii) use its commercially reasonable efforts to take reasonable steps under the circumstances to mitigate or reduce the effects of such event and to avoid continuing harm to it.
13.6. Mutual Exclusion of Damages. Each party shall be liable to the other party only for direct damages for any liability arising under this RPB Agreement. Under no circumstances shall any party be liable to any other party for special or punitive damages, or indirect, incidental, consequential loss or damage, or any loss of profits, goodwill, business opportunity, business revenue or anticipated savings in relation to this RPB Agreement, whether arising out of breach of contract, tort (including negligence) or otherwise, regardless of whether the relevant loss was foreseeable or the party has been advised of the possibility of such loss or damage, or that such loss was in contemplation of the other party.
13.7. Legal Limitations on the FDT’s Performance.
13.7.1. Performance Subject to Laws. The Client understands and agrees that the FDT’s performance of this RPB Agreement, including acting on any Instruction, is subject to the laws (including, without limitation, governmental and regulatory actions, orders, decrees and regulations) applicable to the FDT as a result of the jurisdiction in which the FDT or its parent is organized or the FDT is located or performs this RPB Agreement, including with respect to the holding of any Property, and the rules, operating procedures and practices of any relevant Clearance System, exchange, or market.
13.7.2. Country Risk. The Client agrees that it shall bear all risks and expenses associated with investing in Property or holding Cash denominated in any currency. The Client acknowledges that the FDT will not be liable for country specific risks of loss or value or other restrictions resulting from country risk, including the risk of investing and holding Property in a particular country or market such as, but not limited to, risks arising from (i) any act of war, terrorism, riot or civil commotion, (ii) investment, repatriation or exchange control restriction or nationalization, expropriation or other actions by any governmental authority, (iii) devaluation or revaluation of any currency, (iv) changes in applicable law, and (v) a country’s financial infrastructure and practices including market rules and conditions.
13.7.3. Conformity with Market Practices. Notwithstanding the Client’s Instruction to deliver Property against payment or to pay for Property against delivery, the Client authorizes the FDT to make or accept payment for or delivery of Property at such time and in such form and manner as complies with relevant local law and practice or with the customs prevailing in the relevant market.
13.7.4. Prevention of Performance. The Client agrees that the FDT will not be responsible for any failure
to perform any of its obligations (nor will it be responsible for any unavailability of Cash in the applicable currency credited to the Client) if such performance by the FDT or any Agent of the FDT is prevented, hindered or delayed by a Force Majeure Event. “Force Majeure Event” means any event attributable to a cause beyond the reasonable control of the FDT or its Agent such as restrictions on convertibility or transferability, requisitions, involuntary transfers, unavailability of any Clearance System, sabotage, fire, flood, explosion, epidemic, pandemic, acts of God, civil commotion, strikes or industrial action of any kind, riots, insurrection, war or acts of government or similar institutions, as well as any other matter specified as a country risk in this RPB Agreement. On the occurrence of any Force Majeure Event, the obligations of the FDT will be suspended for so long as the Force Majeure Event continues. Upon the occurrence of any Force Majeure Event, the FDT shall inform the Client and shall use its reasonable efforts to minimize the effect of the Force Majeure Event on the Client.
13.7.5. Client’s Reporting Obligations. The Client agrees that it shall be solely responsible for all filings, tax returns and reports relating to Property as may be required by any relevant authority, whether governmental or otherwise. The Client will be responsible for compliance with all applicable limitations or qualifications in regard to the Client’s investment in any Property in any country or jurisdiction.
13.7.6. Capacity of FDT. The Client acknowledges that the FDT is not acting under this RPB Agreement as an investment manager, broker, or investment, legal or tax adviser to the Client. The FDT’s duty is solely to act as a custodian in accordance with the terms of this RPB Agreement, and the FDT will take no view on the efficacy or soundness of any investment decision made by the Client. No performance of this RPB Agreement by the FDT shall be considered as financial advice provided to the Client.
13.8. Limitation of the FDT’s Liability.
13.8.1. The restrictions on liability in this clause apply to every liability arising under or in connection with this RPB Agreement including but not limited to liability in contract, tort (including negligence), misrepresentation, restitution or otherwise.
13.8.2. The FDT’s total liability to the Client (including any liability for the acts or omissions of its Agents or employees) shall not exceed the aggregate value of the Property at any given time, provided always that nothing in this RPB Agreement limits any liability for fraud or fraudulent misrepresentation.
13.8.3. The FDT shall not be liable to the Client under this RPB Agreement for any (i) loss of profit; (ii) loss of revenue; (iii) loss of business; or (iv) indirect or consequential loss or damage, in each case, however caused, even if foreseeable.
NOT AGENT FOR CLIENT’S CUSTOMERS; CLIENT’S DIRECT LIABILITY
The Client agrees that it will not be relieved of its obligations as principal as the Client under this RPB Agreement where (or if) the Client discloses that it has entered into this RPB Agreement as agent, custodian or other representative of another person. Notwithstanding any requirement that accounts, documentation or agreements, or transactions be effected in the name of any customer of the Client or for any other beneficial owner acting directly or indirectly though the Client, the Client agrees that it shall be solely responsible as principal for all obligations to the FDT with regard to such beneficial owner accounts, agreements, or transactions. The Client agrees that its customers will not have any direct rights against the FDT, and the FDT shall have no liability to the Client’s underlying customers.
Neither the Client nor the FDT will display the name, trademark or service mark of the other without the prior written approval of the other, nor will the Client display that of any member of the FDT Group Companies without prior written approval from the FDT. The Client agrees that it shall not advertise or promote any service provided by the FDT without the FDT’s prior written consent; provided, however the Client may identify the FDT as its custodian in any regulatory or other legally required or permitted disclosure by the Client without first obtaining the FDT’s consent. SECTION 16
FEES AND EXPENSES
16.1. The Client agrees to pay all fees, charges and obligations incurred from time to time for the provision of any services pursuant to this RPB Agreement (collectively, the “Fees”) as determined in accordance with the rate and in the manner as set out in Schedule 1 (“Fee Schedule”), together with any other amounts payable to the FDT under this RPB Agreement.
16.2. All Fees are to be paid upfront and in the event of the termination of this RPB Agreement howsoever and for any reason whatsoever, any Fees paid shall be non-refundable.
16.3. The Client acknowledges and agrees that the FDT may in its sole and absolute discretion deduct any Fees directly from the Cash Ledgers upon such fees becoming due and payable. Further or in the alternative, the Client acknowledges and agrees that the FDT may in its sole and absolute discretion put a lien on such Property until such time as the fees are fully paid.
16.4. All Fees are exclusive of any applicable Taxes and duties or similar charges which shall be payable by the Client at the rate and in the manner from time to time prescribed by law.
16.5. All Fees due under this RPB Agreement shall be paid in full without any set-off, counterclaim, deduction or withholding (other than any deduction or withholding of tax as required by law).
16.6. In the event the Client fails to pay any Fees to the FDT by the due date, then, without limiting any of the FDT’s remedies available to it by law, the Client shall pay interest at the rate of 6.5% per year on the overdue sum pro rata from the due date until payment of the overdue sum. SECTION 17
17.1. The FDT will treat information related to the Client as confidential but, unless prohibited by law, the Client authorizes the transfer or disclosure of any information relating to the Client to and between the branches, subsidiaries, representative offices, affiliates and agents of the FDT and third parties selected by any of them, wherever situated, for confidential use in connection with the provision of services to the Client (including for data processing, statistical and risk analysis purposes), and further acknowledges that any such branch, subsidiary, representative office, affiliate, agent or third party may transfer or disclose any such information only as required by any law, court, regulator or legal process.
17.2. Each Party undertakes that it shall not at any time during this RPB Agreement, and for a period of two (2) years after termination of this RPB Agreement, disclose to any person any confidential information concerning the business, affairs, customers, clients or suppliers of the other Party or of any member of the group of companies to which the other Party belongs, except as permitted by Section 17.3.
17.3. Each Party may disclose the other Party’s confidential information: (i) to its employees, officers, representatives or advisers who need to know such information for the purposes of carrying out the Party’s obligations under this RPB Agreement. Each Party shall ensure that its employees, officers, representatives or advisers to whom it discloses the other Party’s confidential information comply with this Section 17; and (ii) as may be required by law, a court of competent jurisdiction or any governmental or regulatory authority.
17.4. FDT expressly authorizes and permits the Client to communicate to the Cayman Islands Monetary Authority (CIMA) the services under the terms of this Custody Services RPB Agreement. To the extent practicable giving reference to the circumstances then subsisting, FDT agrees to inform the Client of any matter that would or might have a materially negative effect on FDT’s ability to properly provide the services under this Custody Services RPB Agreement. FDT further agrees not use the Client’s proprietary information or its customers’ information unless it is a necessary part of providing the contracted services or compelled by the relevant data privacy laws to do so. 17.5. No Party shall use any other Party’s confidential information for any purpose other than to perform its obligations under this RPB Agreement.
17.6. The Client will treat the terms of this RPB Agreement, including any Fee Schedule, as confidential.
18.1. Any notice or other communication given to a Party under or in connection with this RPB Agreement shall be in writing and shall be: (i) delivered by hand or by pre-paid first-class post or other next working day delivery service at its registered office (if a company) or its principal place of business (in any other case); or (ii) sent by email to the address specified below:
18.2. Any notice or communication shall be deemed to have been received: (i) if delivered by hand, on signature of a delivery receipt; and (ii) if sent by pre-paid first-class post or other next working day delivery service, at 9:00 am on the second Business Day after posting; and (iii) if sent by email, at the time of transmission, or, if this time falls outside business hours in the place of receipt, when business hours resume. In this Section 18.2 business hours mean 9:00am to 5:00pm Monday to Friday on a day that is not a public holiday in the place of receipt.
18.3. This clause does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution.
19.1. Termination; Closing an Account. 19.1.1. This RPB Agreement shall continue indefinitely unless otherwise terminated by either party in accordance with this RPB Agreement.
19.1.2. The Client or the FDT may terminate this RPB Agreement as between itself and the other party hereto by giving not less than sixty (60) days’ prior written notice to such other party.
19.1.3. Unless otherwise agreed in writing, the FDT may close an inactive Asset Ledger or Cash Ledger upon thirty (30) days’ prior written notice (but subject to any legal requirement as to a different notice period). The FDT may close any Asset Ledger or Cash Ledger upon notice to the Client as the FDT reasonably considers necessary for the FDT or any other member of the FDT Group Companies to comply with applicable law in regard to AML/CTF, Taxes or other requirements including, but not limited to, (i) statute or regulation, (ii) legal, governmental or regulatory authority, or (iii) agreement entered into by the FDT and any governmental authority or between any two or more governmental authorities (applicable law as used in this sentence may be domestic or foreign) as provided in this RPB Agreement.
19.2. Effect on Property. If by the termination date the Client has not given Instructions to deliver any Property, the FDT shall continue to safe-keep such Property and/or Cash until the Client provides Instructions to effect a free delivery of such. However, the FDT will provide no other services as regard to any such Property except to collect and hold any Cash distributions. The Client shall be liable for standard fees for Property retained in safekeeping after termination of this RPB Agreement.
19.3. Surviving Terms. The parties agree that the rights and obligations contained in Section 7.1.2, Section 7.1.3, Section 7.1.8, Section 7.4, Section 8, Section 10.4, Section 13, Section 14, Section 15, Section 16, Section 17, and Section 20 of RPB Agreement shall survive the termination of this RPB Agreement.
19.4. Fees Non-Refundable. For the avoidance of doubt, the termination of this RPB Agreement shall not affect or prejudice any rights of the parties accrued up to the date of termination, and that any Fees paid shall be non-refundable.
GOVERNING LAW AND JURISDICTION
20.1. Governing Law. This RPB Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of Hong Kong.
20.2. Jurisdiction. Each Party irrevocably agrees that the courts of Hong Kong shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this RPB Agreement or its subject matter or formation.
20.3. No Third Party Rights. Unless expressly stated otherwise, this RPB Agreement does not give rise to any rights under the Contracts (Rights of Third Parties) Ordinance (Cap.623) to enforce any term of this RPB Agreement. The rights of the Parties to rescind or vary this RPB Agreement are not subject to the consent of any other person.
21.1. Rights and Remedies. Except as expressly provided in this RPB Agreement, the rights and remedies provided under this RPB Agreement are in addition to, and not exclusive of, any rights or remedies provided by law.
21.2. Severability. If any provision of this RPB Agreement is or becomes illegal, invalid or unenforceable under any applicable law, the parties intend that the remaining provisions will remain in full force and effect (as will that provision under any other law).
21.3. Waiver of Rights. No failure or delay of the Client or the FDT in exercising any right or remedy under this RPB Agreement constitutes a waiver of that right. Any waiver of any right is limited to the specific instance. The exclusion or omission of any provision or term of this RPB Agreement shall not constitute a waiver of any right or remedy the Client or the FDT may have under applicable law.
21.4. Force Majeure. Neither Party shall be in breach of this RPB Agreement nor liable for delay in performing, or failure to perform, any of its obligations under this RPB Agreement if such delay or failure result from events, circumstances or causes beyond its reasonable control. In such circumstances the affected Party shall be entitled to a reasonable extension of the time for performing such obligations. If the period of delay or non-performance continues for one (1) month, the Party not affected may terminate this RPB Agreement by giving seven (7) days’ written notice to the affected Party.
21.5. Recordings. The Client and the FDT consent to telephonic or electronic monitoring or recordings of any communications for security and quality of service purposes and agree that either may produce telephonic or electronic recordings or computer records as evidence in any proceedings brought in connection with this RPB Agreement.
21.6. Written Notice. Unless otherwise provided, when “written”, “writing” and words of similar meaning are used in this RPB Agreement, they refer to both paper and electronic forms such as emails, faxes, digital images and copies, and similar electronic versions. A written notice shall be effective if delivered to the Client’s principal business address specified in writing to the FDT or to the FDT’s address specified in writing to the Client (or any other address it may provide by written notice for this purpose). Any method used to communicate Instructions may be used to give any notice. Notices will be in English unless otherwise agreed. For the avoidance of doubt, a written notice does not include an Instruction or other communication as specified in this RPB Agreement.
21.7. Further Information. The Client agrees to provide to the FDT all documents and other information reasonably requested by the FDT in relation to its performance of services under this RPB Agreement and its duties and obligations under this RPB Agreement.
21.8. Entire RPB Agreement; Amendments. The Parties agree that this RPB Agreement consists exclusively of this document together with any specified annex or identified schedules and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter. The Client agrees that the FDT is responsible for the performance of only those duties set forth in this RPB Agreement, including the performance of any Instruction. The Client acknowledges that the FDT will have no implied duties or obligations except as cannot be excluded by applicable law. Except as specified in this RPB Agreement, this RPB Agreement may only be modified by written agreement of the Client and the FDT.
21.9. Assignment. The parties agree that no party may assign or transfer any of its rights or obligations under this RPB Agreement without the other’s prior written consent, which consent will not be unreasonably withheld or delayed; provided that the FDT may make such assignment or transfer to a branch, subsidiary or affiliate if it does not materially affect the provision of services to the Client.
21.10. Electronic Signatures. The Parties acknowledge and agree that this agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement may be executed by means of electronic signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature. “Electronic Signature” means any electronic proof of acceptance combined with metadata, such as date/time stamps and IP addresses, in a process attached to or logically associated with this RPB Agreement and executed and adopted by a Client with the intent to sign the RPB Agreement. Evidence of the Electronic Signature will be captured and stored in electronic format in the FDT’s database, and that Electronic Signature will create and evidence a binding contract between Client and the FDT.
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