Jul 23, 2021
1.1 These General Loan Terms (the ‘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 (the ‘Principal Loan Terms’), an integral loan agreement in respect of that loan (the ‘Loan Agreement’).
1.2 In addition to the Loan Agreement, the relations between a lender and a borrower, including the procedure, manner and scope of performance of certain rights and obligations under a loan contract, are regulated by the Koia Techologies OÜ (Koia) user terms (‘User Terms’), which in the relevant respects are deemed as part of each Loan Agreement and the adherence to which by each other can be demanded by the borrower and lender in their relations.
1.3 The lender’s rights may, inter alia, be restricted by the rights of other lenders who are parties to the loan contracts entered into within the relevant project, and a lender undertakes to consider the interests of the relevant other lenders in enforcement of his or her rights. Also, the borrower undertakes to treat all lenders that are parties to the loan contracts entered into within the relevant project equally in similar circumstances and each lender can demand from the borrower performance of the relevant obligation.
2.1 By entering into a Loan Agreement in accordance with the procedure provided for in the User Terms, the lender undertakes to grant a sum of money to the borrower by way of a loan, and the borrower undertakes to repay that sum of money to the lender. The currency and amount of the relevant sum, its manner of repayment and other matters referred to in these General Loan Terms are specified in the Principal Loan Terms of the relevant loan.
3. TRANSFER OF THE LOAN AMOUNT
3.1The loan amount is transferred to the Item Keeper by the User after the User has given acceptance to the Loan Request.
3.2 Any fees and other costs payable or reimbursable by the Item Keeper shall be paid from the loan amount, in which case the loan amount is transferred to the Item Keeper only in an amount it exceeds the relevant fees and costs.
4. PURPOSE OF THE LOAN
4.1 The Item Keeper may use the money received under the Loan Agreement only for the following purposes:
4.1.1purchasing the Item specified in the Loan Request;
4.1.2 covering the Item management costs, which include the costs deriving from the following activities: verifying the authenticity of the Item, organising the safekeeping of the Item, transporting the Item, insuring the Item, evaluating the price of the Item, selling the Item.The Loan Request shall include an overview of the budget for the expected management costs of the Item.
4.2 If the management costs exceed the costs stipulated in the budget presented with the Loan Request, then the Item Keeper shall inform the lenders immediately. The additional costs shall be covered by the Operator and later added to the ‘related Costs and Expenses’ in the meaning of Section 9.1 of these General Loan Terms in so agreed in the Principal Loan Terms related to the specific Loan.
4.3 Using the money received from the Users under the Loan Agreements for any other purpose than purposes listed on Section 4.1 of these General Loan Terms is a material breach of obligation of the Loan Agreement unless otherwise agreed in the Special Loan Terms.
4.4 When concluding the Loan Agreement, the lender acknowledges that the loan is provided for a long term and Interest from the Loan may be received if the value of the Item has increased.
5. PURCHASING THE ITEM
5.1 The Item Keeper shall use the money received under the Loan Agreements to purchase the Item specified in the Loan Request from the Owner. The conditions of purchasing the Item (including the price of the Item and conditions of the transfer of possession) shall be agreed between the Item Keeper and the Owner before concluding the Loan Agreements with the Investors.
5.2 The Item Keeper shall verify the authenticity of the Item, if necessary, after receiving the possession of the Item.
5.3 In the event that the Owner refuses to transfer the Item to the Item Keeper then the Loan Agreement shall be terminated, and the Item Keeper shall return the money to the Users in a reasonable time after the termination of the sale and purchase agreement.
5.4 The Item Keeper and the Operator are not responsible for the accuracy of the information provided by the Owner and the fulfilment of Owner’s obligations under the sale and purchase agreement of the Item. If the Owner has provided false or misleading information about the Item or breaches the sale and purchase agreement, then the Item Keeper shall initiate legal proceedings or take other reasonable measures against the Owner to ensure the fulfilment of the sale and purchase agreement.
6. SAFEKEEPING OF THE ITEM
6.1 The Item Keeper is obligated to organise the safekeeping of the Item until the Item is sold. The Item Keeper shall conclude storage agreements with a company (the ‘Storage Company’) which has specific facilities for ensuring the safekeeping of the Items, including for holding the Item at the required temperature, humidity, lightning, and/or other conditions depending on the type of the Item to ensure that the Item would not get damaged, and its value would not decrease due to the conditions in which the Item is held. The Item Keeper shall not be liable for the damage or destruction of the Item which happened while the Item was kept by the Storage Company.
6.2 The Item Keeper undertakes to keep the Item insured against the risks and deliver to the User copies of the relevant insurance policies at the User’s request. The Item Keeper shall deliver evidence of concluded insurance agreements related to the specific Item to the lenders if requested by the lender, who has provided a loan to the Item Keeper holding the Item.
6.3 The Item Keeper is not liable for refunding the loan to the lenders in case the insurance company refuses to fulfil their obligations under the insurance policy or if the market value of the Item is deemed to be significantly different from the insurance company’s valuation except in cases where the insurance company’s refusal is based to the fact that the Item’s damage or destruction is a result of Item Keeper’s malicious intent and/or gross negligence (in Estonian: tahtluse ja raske hooletuse korral).
6.4 The specific conditions for safekeeping the Item shall be stipulated in the Principal Loan Terms.
6.5 The lenders shall be informed when the Item must be moved (due to the termination of the agreement with the Storage Company or for any other reason) or if any new agreements are concluded in order to ensure the safekeeping of the Item.
7. SELLING THE ITEM
7.1 The Item shall be sold if the lenders vote on selling the Item. The voting process is described on Section 13 of these General Loan Terms.
7.2 After the keeping period specified on the Principal Loan Terms ends, then the Item Keeper shall request offer or offers from the potential buyers of the Item. The offers must be in written form. The Item Keeper shall inform the lenders about the offers given by the potential buyers and the lenders shall vote on selling the Item. If at least 60% of the lenders’ votes are in favour of selling the Item, then the Item Keeper shall organise selling the Item on the conditions set out in the best offer received. If the lender does not vote within a week after the request to vote has been sent to the lender, then it is presumed that the lender has agreed to sell the Item.
7.3 The Item may be sold before the keeping period specified in the Principal Loan Terms if the lenders make the relevant decision. Every 5 years, the Item Keeper suggests selling the Item and the lenders vote on whether to request offers from potential buyers. If at least 60% of the lenders’ votes are in favour of selling the Item, then the Item Keeper shall take the offers from potential buyers. If the lender does not vote within a week after the request to vote has been sent to the lender, then it is presumed that the lender does not want to take offers from the potential buyers. After the Item Keeper has offers from the potential buyers of the Item, the Item Keeper shall inform the lenders about the offers given by the potential buyers and the lenders shall vote on selling the Item. If at least 60% of the lenders’ votes are in favour of selling the Item, then the Item Keeper shall organise selling the Item on the conditions set out in the best offer received. If the lender does not vote within a week after the request to vote has been sent to the lender, then it is presumed that the lender agreed to sell the Item.
7.4 The Item Keeper may request offers from potential buyers and suggest selling the Item at any time.
7.5 The loan period ends after the Item has been sold and the Item Keeper has received the money from the buyer of the Item.
8. REPAYMENT OF LOAN
8.1 The Item Keeper shall repay the principal loan amount to the Users after the Item has been sold and the repayment shall be done from the funds received from selling the Item (‘Realisation’).
8.2 The Item Keeper has the right to decrease the repayable loan amount if upon the Realisation the proceeds from the Realisation minus all applicable costs and fees is less than the aggregate principal loan amount lent to the Item Keeper. In such case the principal loan amount being repaid to each User shall be decreased pro rata to their investment amount. For example: Item Keeper received EUR 100,000 as a loan from the Users and acquired an Item valued at EUR 95,000 in 2021. Upon the Realisation, the Item Keeper sells the Item for EUR 90,000 because the value of the Item has decreased 10% by the time the lenders decided to vote on selling the Item. The applicable fees and costs in connection with the Realisation amount to EUR 5,000, which means that the Item Keeper shall have EUR 90,000 for loan repayment. The User has provided EUR 1,000 as a loan to the Item Keeper, which constitutes 1% of the aggregate principal loan amount. The Item Keeper decreases the repayable loan amount to EUR 90,000 and the repayment to the User shall be decreased pro rata. Thus, the User shall receive EUR 900, which constitutes 10% of the decreased principal loan amount, as a repayment of the principal loan amount.
8.3 The User understands that the Item Keeper shall have the unilateral right to decrease the principal loan amount to the extent as decreased based on the Section 8.2 and explicitly agrees to waive its right to claim repayment of the principal loan amount in full upon negative Realisation of the Item, which shall constitute as termination of obligation by agreement in the meaning of Section 207(1) of the Estonian Law of Obligations Act. The User confirms that it understands the consequences related to the termination of obligation by agreement upon negative Realisation. The Item Keeper shall make all underlying information and data available to the Users upon which the calculations are based on.
8.4 In case the selling price of the Item is greater than the principal loan amount, the User has the right to receive a return in the form of Interest in accordance with the Section 9 of the General Loan Terms.The Item Keeper must repay the loan amount within 30 days after the Realisation of the Item.
9.1 Upon the Realisation of the Item, the User has the right to receive Interest from the Item Keeper based on the benefits gained by the Item Keeper from the Realisation of the Interest from which all the costs and expenses have been deduced. The Interest rate does not have a fixed rate and the Interest rate depends on the Realisation Benefit received by the Item Keeper on the Realisation of the Item and shall be calculated as follows:
Sale Price – Buying Price – related Costs and Expenses = Realisation Benefit
9.2 The Realisation Benefit shall be divided proportionally between all lenders who provided loans to the Item Keeper for purchasing the Item. If Realisation Benefit equals to 0, then the lenders shall not receive any Interest.
9.3 The Operator undertakes to provide Users with periodic statements at least once in every 12 months containing the review of the activities of the Item Keeper with respect to the safekeeping of the Item and the estimated value of the Item. The statement will be available to the User within the relevant section of the Application.
10. DEFAULT INTEREST
10.1 In case of delay in the performance of a financial obligation before the Lender, the Item Keeper 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.
10.2 The rate of default interest amounts to 1% of the amount due per annum.
11. ITEM KEEPER’S OBLIGATIONS
11.1 The Item Keeper shall refrain from transactions and acts in its activities that are beyond of economic activities which are required for keeping the Item or as the result of which the Item Keeper’s ability to timely and duly perform the obligations arising from the Loan Agreements relating to the loan granted within the project may materially reduce. Among other things, the Item Keeper may not:
11.1.1 encumber its assets (including the Item to which the loan relates) with a restricted real right or other right of a third person (including with securities);
11.1.2 sell or otherwise dispose of the Item to which the loan relates to, or any other material assets of the Item Keeper unless the conditions in Section 7 of these General Loan Terms are fulfilled;
11.1.3 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 if allowed so by Loan Agreement;
11.1.4 guarantee, provide surety or otherwise secure the obligations of any person;
11.1.5 reduce its share capital; or
11.1.6 be the subject of merger or division.
11.2 The Item Keeper must refrain from transactions and acts that may materially reduce the value or scope of security or otherwise prejudice selling the Item.
11.3 All payments related to any Loan Agreement shall be made in full in accordance with the procedure provided for in the Terms, with the Item Keeper not being entitled to set off any amounts owing by it or make any other deductions or withholdings from such amounts.
11.4 The Item Keeper undertakes to duly follow and comply with the provisions of the Terms and any laws and other regulations applicable to it.
12. ITEM KEEPER’S NOTIFICATION OBLIGATIONS
12.1 The Item Keeper shall, in the manner provided for in the Terms, notify the Operator:
12.1.1 promptly upon such change, of a change of its name, postal address, e-mail address or other information required in the Terms;
12.1.2 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 Item Keeper, the Item Keeper’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;
12.1.3 promptly upon becoming aware of the same, of any other circumstances or events concerning the Item Keeper, Item Keeper’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 Agreements, a reasonably recognisable interest (including any relevant circumstances and events concerning the Item to which the loan relates (including of events described in Section 12.1.2 of these General Loan Terms)).
13. VOTING RIGHTS OF THE USERS
13.1 The voting shall be done via technical solution provided by the Operator.
13.2 The lenders are requested to vote on the following occasions:
13.2.1 once in every 5 years to decide on whether to request offers from potential buyers or not;
13.2.2 a potential buyer has made an offer and it must be decided whether to accept the offer and sell the Item or not;
13.2.3 any other questions related to the safekeeping the Item, which the Item Keeper deems necessary to request the lender’s opinion on.
13.3 Each lender shall have a certain number of votes depending on their proportion of the sum of the loan provided to the Item Keeper.
13.4 The lenders shall be informed by means stipulated in Section 15 of the Terms when they are required to vote. The lenders are required to vote within 7 days after the notification was sent to the lenders via email provided by the lenders when registering as Users of the Application.
14. PAYMENTS DEFAULTS AND OTHER BREACHES
14.1 If the Item Keeper delays the performance of any financial or non-financial obligation arising from Loan Agreements related to the loan:
14.1.1 default interest is calculated on the relevant obligation pursuant to the procedure provided for in Section 7 of these General Loan Terms;
14.1.2 in cases provided for in Section 15.3 of these General Loan Terms, the User may extraordinarily cancel the Loan Agreement in accordance with the procedure provided for in the Terms.
14.2 The provisions of Section 14.1.2 of these General Loan Terms applies also in circumstances where the Item Keeper breaches any non-financial obligation arising from the Loan Agreements related to the loan or other grounds subsist for extraordinary cancellation of the Loan Agreement.
15.TERMINATION OF THE LOAN CONTRACT
15.1 The Loan Agreement terminates when the principal amount of the loan has been repaid to the Users in accordance with Section 8, the Interest has been paid in accordance with Section 9, and the Item Keeper has performed all other financial obligations arising from or on the basis of the Loan Agreements related to the relevant loan, or in case the Loan Agreement has been cancelled or withdrawn.
15.2 The Loan Agreement terminates automatically if before the transfer of the loan amount to the Item Keeper:
15.2.1 the User status of the User is terminated by the procedure described in the Terms; or
15.2.2 bankruptcy of the Operator is declared or if the Operator otherwise terminates its operation.
15.3 The User can cancel the Loan Agreement extraordinarily exclusively if at least one of the following circumstances or events has occurred:
15.3.1 the Item Keeper fails to perform the obligation to pay any financial obligation arising from or on the basis of Loan Agreements (excluding the obligation to repay the principal amount of the loan) to the lender and at least 14 days have elapsed from the day the relevant obligation fell due;
15.3.2 the Item, which the loan relates to, has been heavily damaged or destroyed and the Item Keeper has not notified the insurance within 14 days;
15.3.3 the Item Keeper has sold or encumbered the Item without the consent of the Users according to Section 7, or the Realisation of the Item has become unreasonably difficult for any other reason;
15.3.4 bankruptcy, rehabilitation (saneerimine) or liquidation proceedings have been commenced with respect to the Item Keeper or Operator, or enforcement proceeding has been commenced with respect to the Item Keeper concerning a monetary claim in an amount of at least EUR 10,000;
15.4 In case of extraordinary cancellation of the Loan Agreement by the User, the Item may be sold, and 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).
16. ORDER OF APPLICATION OF INSUFFICIENT PAYMENTS
16.1 If a payment made pursuant to a Loan Agreement related to the relevant loan is not sufficient for the satisfaction of all obligations that have fallen due, that payment shall be applied:
16.1.1 first, towards covering of costs incurred for collection of obligations (including covering of costs of the actions and steps referred to in Section 14.1 of these General Loan Terms);
16.1.2 second, towards covering of management costs of the Item;
16.1.3 third, towards covering of fees and costs that have not been paid to the Operator;
16.1.4 fourth, towards covering of accrued default interest;
16.1.5 fifth, towards covering of outstanding Interest;
16.1.6 sixth, towards covering of outstanding principal loan amount; and
16.1.7 seventh, towards covering of all other payments and fees.
16.2 If a payment is not sufficient for the full satisfaction of all obligations within the same priority level referred to in Section 16.1, 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.
17. OPERATOR’S POWERS
17.1 The User and the Item Keeper 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 Item Keeper in the relations between the User and the Item Keeper notwithstanding any potential conflict of interests. The authorization hereby given to the Operator is irrevocable. For instance, the Operator may conclude parallel obligation agreements to the Loan Agreement if necessary for establishing the collateral.
17.2 If pursuant to a Loan Agreement 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.
17.3 The Operator is entitled to rely on Sections 17.1 and 17.2 of the Terms and independently on its own behalf demand the performance of the same.
17.4 The more particular role and scope of powers of the Operator may be provided for in the Terms.
18. TRANSFER OF RIGHTS AND OBLIGATIONS
18.1 The Item Keeper may not assign or otherwise transfer the rights and/or obligations arising from the Loan Agreements relating to the loan.
18.2 The User may assign or otherwise transfer the rights and/or obligations arising from the Loan Agreements relating to that loan only in the secondary market of the Application 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.
18.3 Notwithstanding the provisions of Sections 18.1 and 18.2, the rights and/or obligations arising from Loan Agreements 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.
19. FINAL PROVISIONS
19.1 All notices related to the Loan Agreement shall be delivered in the format and in the manner provided for in the Terms.
19.2 The User understands and acknowledges that this Loan Agreement, the Terms or any of the Loan Agreements does not constitute as a contract of partnership (seltsing).
19.3 The provisions of the Terms in respect of governing law, jurisdiction and resolving of disputes shall apply with respect to the User and Item Keeper.
19.4 If not otherwise expressly stated in these General Loan Terms, among other things, the rules and explanations provided for in the Terms of the Website apply to the interpretation of any Loan Agreement. 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.