General Loan Terms for loan agreements with Project Owners

SUBJECT
1. These general loan terms (“General Loan Terms”) apply to each loan granted via the Website and form, with the principal loan terms agreed in respect of the relevant loan, an integral loan contract in respect of that loan (“Loan Contract”), where the Borrower is the Project Owner in the meaning of the Website’s Terms of Service. Different general loan terms apply to the loan agreements concluded between the User and the Project Owner and the User and the SPV.
TRANSFER OF THE LOAN AMOUNT
1. The loan amount is transferred to the Project Owner provided that all the following conditions have been satisfied:
  1. The Users have given acceptances in respect of a Loan Request in an aggregate principal amount of at least the amount that corresponds to the minimum amount of the funding target specified by the Project Owner in the loan request;
  2. the Project Owner has validly established collaterals of the type and in the scope specified in the principal loan terms in favour of the Collateral Agent, within 14 days after receipt of relevant notice by the Operator;
  3. no event or circumstance described in Section 11.4 of these General Loan Terms exists.
2. The Operator determines the satisfaction or non-satisfaction of the conditions described above at its own reasonable discretion.
3. The security shall be established in form and substance satisfactory to the Operator and, among other things be established in favour of the Collateral Agent to secure obligations arising from all Loan Contracts entered into for the funding of the project in relation to which the loan is being granted (including to secure the performance of the parallel obligation described in Section 12).
4. Any fees and other costs payable or reimbursable by the Project Owner shall be paid from the loan amount, in which case the loan amount is transferred to the Project Owner only in an amount it exceeds the relevant fees and costs.
PURPOSE OF THE LOAN
1. The Project Owner must use the loan only for the purpose specified in the principal loan terms of the relevant loan and for the funding of the payment of fees and reimbursement of costs relating to that loan specified in the Terms. Using loan for any other purpose is a material breach of obligation of the Loan Contract.
REPAYMENT OF LOAN
1. The Project Owner shall repay the principal loan amount to the Users according to the payment schedule agreed upon in the principal loan terms of the relevant loan.
2. If the principal loan terms of the relevant loan do not state otherwise, the Project Owner must repay the loan amount to the User as follows:
  1. If according to the principal loan terms the loan is repayable in full at end of the loan period, the Project Owner must repay the loan amount within 30 days after the last day of the loan period specified in the principal loan terms;
  2. If according to the principal loan terms the loan is repayable in instalments, the loan shall be returned in instalments in the frequency stipulated in the principal loan terms, and in any case the loan amount shall be repaid in full no later than within 60 days upon the termination of the loan period.
3. The repayment schedule and/or interest payment schedule applicable to the relevant loan sent to the User and the Project Owner may change, among other things, as a result of amendments to the loan contract, delays in any payments to be made by the Project Owner and/or the occurrence of other similar events. If the relevant changed repayment schedule and/or interest payment schedule is sent to the Project Owner, the changed repayment schedule and/or interest payment schedule replaces the relevant schedule that had previously been sent to the Project Owner.
PREPAYMENT OF LOAN
1. The Project Owner can prepay the loan earlier by giving a prior notice of at least three working days to the Operator, who shall notify the Users.
INTEREST AND DEFAULT INTEREST
1. The Project Owner as the Borrower must pay interest on the loan.
2. The interest rate payable on the loan is the interest rate referred to in the principal loan terms of the relevant loan expressed as a percentage rate per annum. A higher interest rate may be appointed by the Project Owner in the principal loan terms to a User who within a single investment invests a loan amount higher than a given amount in the principal loan terms.
3. Interest accrues on the outstanding balance of the loan amount for each day the relevant amount is used by the Project Owner (with the loan amount being deemed as being used by the borrower for so long and until it is repaid in accordance with the procedure provided for in the loan contract).
4. In case of prepayment of the loan in full, the borrower shall pay to the User unpaid interest accrued until the date of repayment of the loan together with the repayment of the principal amount of the loan.
5. In case of delay in the performance of a financial obligation, the Project Owner shall pay default interest. Default interest is calculated from the moment the financial obligation becomes due until its due performance, unless it is otherwise stated in the Terms or these general loan terms.
6. The rate of default interest amounts to the standard interest set out in the principal loan terms plus an additional 3% of the principal amount of the loan. This means that if the standard interest in the principal loan terms is 15%, then the default interest is 18%.
OTHER PAYMENTS AND FEES
1. The Project Owner shall, in a timely and otherwise due manner, pay all fees and compensate all losses, fees, costs and duties the payment and/or compensation of which is the SPV’s obligation according to the Terms (including fees, duties, costs and losses payable and/or reimbursable to the Operator and Collateral Agent).
2. In case of a secured loan the cost of the conclusion of a notarised collateral agreement (first of all, the notary fees) shall be borne by the Project Owner.
PROJECT OWNER’S OBLIGATIONS
1. The Project Owner shall refrain from transactions and acts in its activities that are beyond the scope of everyday economic activities of the Project Owner or as the result of which the Project Owner’s ability to timely and duly perform the obligations arising from the Loan Documents relating to the loan granted within the project may materially reduce. Among other things, the Project Owner may not:
  1. make payments to its direct or indirect owners (including shareholders) (“owners”), members of management board or supervisory council (“members of the governing body”) or persons connected with the Project Owner, the members of the Project Owner’s governing body or owners, or other persons related to the Project Owner, members of the Project Owner’s governing body or owners, by way of distributions or fees or by way of payments made in discharge of debt obligations or other payments (with the above not restricting the making of payments by the Project Owner of fees of members of the governing body, salaries or other ordinary employment related payments in the ordinary course of its everyday economic activities provided that the relevant payments are made with a view to discharging its obligations arising from contract or law in a reasonable amount on arm’s length terms or on terms more favourable for the Project Owner than the arm’s length terms);
  2. encumber its assets (including the real property the subject of the project to which the loan relates) with a restricted real right or other right of a third person (including with securities);
  3. dispose of the real property the subject of the project to which the loan relates, or any other material assets;
  4. take out a loan or credit or incur other financial indebtedness which according to the generally accepted accounting principles in Estonia are treated as borrowings (laenukohustused), except for the loans taken via the Website or mentioned in project description;
  5. guarantee, provide surety or otherwise secure the obligations of any person;
  6. reduce its capital; or
  7. be the subject of merger or division, except in cases and to the extent the relevant act or activity described in Sections 8.1.1 to 8.1.6 above was expressly contemplated in the business plan, activity plan or other relevant project description of the relevant project made available to the User in the Website before entry into the Loan Documents, or if the User gives its prior consent in a format which can be reproduced in writing.
2. The Project Owner must refrain from transactions and acts that may materially reduce the value or scope of security or otherwise prejudice the enforcement of security (object of Loan).
3. The Project Owner undertakes to keep its assets (including the real property provided as a security) and activities insured against the risks and to the extent as is usual for persons carrying on similar activities or for similar projects, and deliver to the User copies of the relevant insurance policies at the User’s request.
4. The Project Owner must adhere to the business plan, activity plan and budget made available to the User for the User’s inspection within the project to which the loan relates except in case deviation from it does not, in the opinion of the User, prejudice the interests of the User.
5. All payments related to any Loan Document shall be made in full in accordance with the procedure provided for in the Terms, with the SPV not being entitled to set off any amounts owing by it or make any other deductions or withholdings from such amounts.
6. The Project Owner undertakes to duly follow and comply with the provisions of the Terms and any laws and other regulations applicable to it.
PROJECT OWNER’S NOTIFICATION OBLIGATIONS
1. The Project Owner shall, in the manner provided for in the Terms, notify the Operator:
  1. promptly upon such change, of a change of its name, postal address, e-mail address or other information required in the Terms;
  2. promptly upon becoming aware of the same, of the commencement of court, arbitral tribunal, bankruptcy, rehabilitation (saneerimine), enforcement or administrative proceedings in respect of the Project Owner, the Project Owner’s assets, an asset subject to loan security or the provider of loan security or its assets, if the relevant proceeding concerns proprietary obligations (varalised kohustused) with an aggregate value of at least EUR 10,000 and provide details of the substance of the relevant proceeding;
  3. promptly upon becoming aware of the same, of any other circumstances or events concerning the Project Owner, Project Owner’s assets, the assets subject to loan security, the provider of loan security or its assets, with regard to which the User would have, having regard to the purpose of the Loan Documents, a reasonably recognisable interest (including any relevant circumstances and events concerning the project to which the loan relates and circumstances and events concerning the real property the subject of that project (including of events described in Section 12.4.5 or 10.1.2 of these general loan terms)).
2. On request of the User, the Project Owner must promptly provide any data and information requested by the User about the circumstances and events concerning the borrower, Project Owner’s assets, the asset subject to loan security, provider of the loan security, use of the loan amount or its assets, including information about the progress of the project.
3. The Project Owner shall, within fifteen (15) days of the relevant request by the User, at its own cost commission and deliver to the User, a valuation report of the real property/ies the subject of the project to which the loan relates or the subject of security, from a reputable and independent real estate bureau whose business includes valuation of real estate. The User may not make such request more often than once during any half-year period except where in the User’s opinion the Project Owner has breached the loan contract or any other loan document (or the User reasonably suspects that the relevant breach has occurred) or where in the User’s opinion other grounds for extraordinary cancellation of the loan contract may subsist, in which case the User may make the relevant request more frequently.
PAYMENTS DEFAULTS AND OTHER BREACHES
1. If the Project Owner delays the performance of any financial or non-financial obligation arising from Loan Documents related to the loan:
  1. default interest is calculated on the relevant obligation pursuant to the procedure provided for in Section 7 of these General Loan Terms;
  2. actions and steps described in Section 10 of the Terms may be taken with respect to the Project Owner in respect of that obligation; and
  3. in cases provided for in Section 11.4 of these general loan terms, the User may extraordinarily cancel the Loan Contract in accordance with the procedure provided for in the Terms.
2. The provisions of Sections 10.1.2 and 10.1.3 of these general loan terms apply also in circumstances where the SPV breaches any non-financial obligation arising from the Loan Documents related to the loan or other grounds subsist for extraordinary cancellation of the Loan Contract.
TERMINATION OF THE LOAN CONTRACT
1. The Loan Contract terminates when the principal amount of the loan has been repaid to the Users in accordance with Section 4 and the Project Owner has performed all other financial obligations arising from or on the basis of the Loan Documents related to the relevant loan, or in case the Loan Contract has been cancelled or withdrawn.
2. The Loan Contract terminates automatically when any condition described in Sections 2.1.1 and 2.1.2 of these general loan terms is not satisfied within the prescribed time period and procedure, or if the loan amount is not transferred to the Project Owner as described in Section 2.2 of these general loan terms.
3. The Loan Contract terminates automatically if before the transfer of the loan amount to the Project Owner:
  1. the User status of the User is terminated by the procedure described in Section 19 of the Terms; or
  2. bankruptcy of the Operator is declared or if the Operator otherwise terminates its operation.
4. The Platform can cancel the Loan Contract extraordinarily in cases provided for in law or if at least one of the following circumstance or event has occurred:
  1. if according to the principal loan terms the loan is repayable in instalments and the Project Owner is in delay with the payment of an amount that is greater than two instalments, or with the payment of one instalment for more than 45 days (disregarding, for the purposes of calculating the amounts referred to above, Loan Return payments related to the relevant instalments);
  2. the Project Owner fails to perform the obligation to pay Loan Returns or any other financial obligation arising from or on the basis of Loan Documents (excluding the obligation to repay the principal amount of the loan) and at least 14 days have elapsed from the day the relevant obligation fell due;
  3. any information or confirmations provided by the Project Owner occurs to be untrue, misleading or otherwise inaccurate in any material respect, or the Project Owner has failed to disclose information or circumstances with regard to which the User would have had a recognisable significant interest having regard to the purpose of the Loan Contract;
  4. bankruptcy, rehabilitation (saneerimine) or liquidation proceedings have been commenced with respect to the SPV, or enforcement proceeding has been commenced with respect to the SPV concerning a monetary claim in an amount of at least EUR 10,000;
  5. any other financial obligation of the Project Owner falls due and payable prematurely as a result of a breach of obligation or the occurrence of another similar event, or any other agreement entered into with the Project Owner in respect of incurring a loan obligation is extraordinarily cancelled or is otherwise cancelled as a result of breach of agreement or the occurrence of another similar event, except where the aggregate amount of such financial obligations or the amount of loan or credit under such agreements does not exceed EUR 10,000; or
  6. if compulsory enforcement (sundtäitmine) has been commenced in respect of the property subject to security, or the value of the property subject to security has materially decreased and the creditworthiness of the person who had granted that security has materially deteriorated.
5. In case of extraordinary cancellation of the Loan Contract, the loan amount becomes immediately repayable in full and all other consequences provided for in law shall occur (with all payment obligations in respect of Loan Return and other fees also falling due and payable). Section 12 of these general loan terms remains in effect also after cancellation of the Loan Contract.
AGREEMENT ON PARALLEL OBLIGATION
1. This Section 12 of these general loan terms applies to each secured loan issued via the Website.
2. The Project Owner undertakes to pay to the Collateral Agent an amount (such obligation of the Project Owner to the Collateral Agent hereinafter the “parallel obligation”) equal to and in the currency of each other monetary obligation of the Project Owner arising from any Loan Document related to the relevant loan (such other monetary obligation hereinafter the “base obligation”).
3. The parallel obligation falls due and must be performed to the Collateral Agent at the same time and in the same currency when and in which the corresponding base obligation falls due and must be performed.
4. The amount of the parallel obligation decreases from time to time in the extent by which the base obligation that corresponds to that parallel obligation is duly performed to the creditor for the time being of that base obligation (with such base obligation not being deemed to have been performed for such purposes until such creditor has irreversibly received the relevant amount in full), and the amount of the relevant base obligation decreases from time to time in the extent by which the parallel obligation that corresponds to that base obligation is duly performed to the Collateral Agent or to a person appointed by the Collateral Agent (with such parallel obligation not being deemed to have been performed for such purposes until the Collateral Agent or the person appointed by the Collateral Agent has irreversibly received the relevant amount in full).
5. The Collateral Agent may demand the performance of the parallel obligation pursuant to the Loan Contract from the Project Owner independently on its own behalf and the Project Owner must perform the relevant obligation to the Collateral Agent or the person appointed by the Collateral Agent.
6. The Project Owner understands and acknowledges the parallel obligation and the right of the Collateral Agent to demand performance from the Project Owner under this parallel obligation on the same terms and on behalf of the Users that have granted loan to the Project Owner.
ORDER OF APPLICATION OF INSUFFICIENT PAYMENTS
1. If a payment made pursuant to a Loan Document related to the relevant loan is not sufficient for the satisfaction of all obligations that have fallen due, that payment shall be applied:
  1. first, towards covering of costs incurred for collection of obligations (including covering of costs of the actions and steps referred to in Section 10.1 of these general loan terms);
  2. second, towards covering of fees and costs that have not been paid to the Operator and the Collateral Agent;
  3. third, towards covering of accrued default interest;
  4. fourth, towards covering of outstanding Loan Return;
  5. fifth, towards covering of outstanding principal loan amount; and
  6. sixth, towards covering of all other payments and fees.
2. If a payment is not sufficient for the full satisfaction of all obligations within the same priority level referred to in Section 13.1, that payment shall be applied towards covering the relevant obligations in a chronological order of such obligations falling due or in any other order at the choice of the User. The order of application of payments arising from clause 13.1 applies insofar as the Terms of Service do not state otherwise.
OPERATOR’S POWERS
1. The User and the Project Owner have agreed that the Operator (or any legal successor of the Operator from time to time) administrates the loan and the Operator acts as a representative of the User and the Project Owner in the relations between the User and the Project Owner notwithstanding any potential conflict of interests. The authorization hereby given to the Operator is irrevocable.
2. If pursuant to a Loan Document a consent of the User is required for any act or activity, or if the subsistence of any circumstance or event, or the satisfaction of any condition, is to be determined by the User, the Operator gives the relevant consent or determines the relevant matter on the User’s behalf at its own discretion.
3. The Operator is entitled to rely on Sections 14.1 and 14.2 of the Terms and independently on its own behalf demand the performance of the same.
4. The more particular role and scope of powers of the Operator may be provided for in the Terms.
TRANSFER OF RIGHTS AND OBLIGATIONS
1. The Project Owner may assign or otherwise transfer the rights and/or obligations arising from the Loan Documents relating to the loan only with the consent of the User. The Operator (or any legal successor of the Operator from time to time) communicates with the Users and represents Users for providing their consent for transferring the rights and/or obligations arising from the Loan Documents. In addition to the above, the consent of the Collateral Agent (or any legal successor of the Collateral Agent from time to time) is required for assignment and/or transfer of the relevant rights and/or obligations.
2. The User may assign or otherwise transfer the rights and/or obligations arising from the Loan Documents relating to that loan only in the secondary market of the Website or with the consent of the Operator (or any legal successor of the Operator from time to time) in accordance with these General Loan Terms and Terms.
3. Notwithstanding the provisions of Sections 15.1 and 15.2, the rights and/or obligations arising from Loan Documents may only be assigned or otherwise transferred if the same is expressly contemplated and permitted in the Terms, and only in the manner and in accordance with the procedure provided for in the Terms.
FINAL PROVISIONS
1. All notices related to the Loan Contract shall be delivered in the format and in the manner provided for in the Terms.
2. The User understand s and acknowledges that this Loan Contract, theTerms or any of the Loan Documents does not constitute as a contract of partnership (seltsing).
3. The provisions of the Terms in respect of governing law, jurisdiction and resolving of disputes shall apply with respect to the User and Project Owner.
4. If not otherwise expressly stated in these general loan terms, among other things, the rules and explanations provided for in the Terms of Service of the Website apply to the interpretation of any Loan Document. If the Terms have ascribed a certain meaning or explanation to the word or expression used in the principal loan terms and/or these general loan terms, such meaning and/or explanation shall apply also to the interpretation of the principal loan terms and/or these general loan terms.