EnergyFunders Marketplace Investor Agreement

 

PROVISIONS GOVERNING THE USE OF THE
EF SITE BY INVESTORS AND INVESTMENTS IN OFFERINGS

EF Funding
Portal, LLC operates this website, energyfunders.com (the "Site"),
which facilitates through EF Funding Portal, LLC, Regulation Crowdfunding
securities offerings (the "Offerings") by early stage, start-up
companies or operating businesses (collectively, “Company” or "Companies")
All of these Offerings are made pursuant to:

Regulation
Crowdfunding of the Securities Act of 1933 ("Reg Crowdfunding
Offerings"), which are facilitated either through the portion of the Site
operated by EF Funding Portal, LLC ("EF Portal"), a wholly-owned
subsidiary of EF Resources, Inc., or by a third party funding portal (each, a
"Third Party Funding Portal").

Your ability
to participate in a particular Offering may depend on your income or net worth
and/or your recent participation in certain other Offerings, as described
further below. By using this Site, you are agreeing to the terms and conditions
of this Investor Agreement, which includes, by reference, the Terms of Service
(the "Terms of Service") and the other agreements listed in Section 1
below (collectively, this "Agreement"), and you are agreeing to the
following terms, among others, with respect to your use of the Site as a
registered member of the Site (a "Member").

THIS
AGREEMENT ALSO CONTAINS PREDISPUTE ARBITRATION PROVISIONS THAT AFFECTS YOUR
RIGHTS, INCLUDING THE ABILITY TO DEMAND A JURY TRIAL AND THE ABILITY TO APPEAL
THE OUTCOME OF YOUR ARBITRATION.  THE PROVISIONS ARE LOCATED UNDER SECTION 5 TO
THIS AGREEMENT.  THE PAGE NUMBER WILL VARY DEPENDING ON THE DEVICE YOU ARE
USING TO ACCESS THIS AGREEMENT, THE SIZE OF YOUR BROWSER WINDOW, AND THE RESOLUTION
OF THIS SCREEN.  HOWEVER, THE ARBITRATION PROVISIONS ARE LOCATED WITHIN THE
LAST SEVERAL PAGES TO THIS AGREEMENT.  IF YOU WISH TO SKIP DIRECTLY TO THEM,
PLEASE CLICK HERE.

TERMS OF
THIS AGREEMENT

1. GENERAL;
DOCUMENTS INCORPORATED BY REFERENCE INTO THIS AGREEMENT

This
Agreement between you and EF (as defined herein) sets forth the terms and
conditions for your access to the Site and your use of the information,
features, products, services and tools on the Site (the "Services").
If you participate in a Reg Crowdfunding Offering, this Agreement is also between
you and EF Portal. For ease of reference, when EF Portal and its affiliates,
related companies, parents and/or subsidiaries are referred to together in this
Agreement, they are referred to as "EF," "we," or
"us."

This
Agreement incorporates by reference the Terms of Service. You represent that
you have read the Terms of Service and agree that the Terms of Service govern
your use of the Site and the Services (as those terms are defined in the Terms
of Service). Capitalized terms used in this Agreement that are not otherwise
defined herein have the meaning given to them in the Terms of Service.

This
Agreement should be read carefully before using any Services or continuing to
access the Site. By using the Site in any manner, including but not limited to
visiting or browsing the Site, you agree and consent to, and you agree to be
bound by, the Terms of Service, this Agreement, the Privacy Policy, and all
other operating agreements, rules, policies and procedures that may be
published by EF from time to time on the Site, each of which is incorporated by
reference and each of which may be updated by EF from time to time without
notice to you.

Your use of
the Site is governed by the version of this Agreement in effect on the date of
use. We may modify these terms and conditions at any time and without
prior notice, and you agree to be bound by this Agreement as so modified. It is
your responsibility to visit the link accessible on the Site home page
periodically to review the most current terms and conditions of this Agreement
for changes. You acknowledge that by accessing the Site after we have made
changes to this Agreement, you are agreeing to the terms and conditions of this
Agreement as modified.

The terms
and provisions of the following agreements and other documents are incorporated
into this Agreement by reference:

The Site’s
Terms of Service;

The
information on the Site about the particular Company (such information, the
"Company Information");

The relevant
Disclosure Memo, which sets forth general information about venture investments
in a fund or partnership made through the EF Site;

The
Subscription Agreement (together, the "Subscription Agreement") or
Investment Contract, as applicable, submitted by you with respect to a
particular Offering (if applicable);

The terms of
each Offering (the "Offering Terms") in which you invest, as provided
to you and set forth in the applicable documents;

For a Reg
Crowdfunding Offering, this will include: (i) the Company’s Form C; and (ii)
the Company’s EF Portal profile;

Any other
information provided to you with respect to an Offering or the Site via the
Site.

You should
carefully read each of the above documents before subscribing to an Offering.
You alone are responsible for ensuring that you are aware of all of the terms
of this Agreement and your rights and responsibilities under it. You may have
additional agreements with EF, and you are responsible for understanding the
content of those agreements.

2.
AGREEMENTS WITH RESPECT TO THE SITE AND ALL OFFERINGS

2.1 GENERAL
ACKNOWLEDGMENTS

You
understand and acknowledge that EF is not responsible for any content on the
Site provided by any third parties, including Companies, and any service
providers or other third parties, or any content provided to you in connection
with your use of the Site even if that information is distributed to you on
behalf of a third party by EF, and is not liable for any type of loss or damage
associated with your use of the Site.

You
acknowledge that nothing on the Site constitutes a recommendation to buy securities
or any other type of investment advice to you by EF, and any investment risk is
solely your own. You are not a client of EF, EF Portal or any of their
affiliates.

You
acknowledge that EF, EF Portal, and any affiliates, do not independently verify
information regarding Companies (although EF Portal does conduct some diligence
on information provided by Companies as required by Regulation Crowdfunding) or
endorse any Company for direct or indirect investment, and that information on
the Site has been prepared without reference to any particular Member’s
investment requirements or financial situation. You agree to abide by this and
other agreements between you and EF and service providers that govern or relate
to your use of the Site or the services available on the Site.

You
understand that the Site offers different types of Offerings for investment,
each of which operate under different regulatory regimes and requirements, and
that each type of Offerings may have its own unique risks and levels of regulatory
involvement.

You
acknowledge that you have been provided access to additional sources of
information regarding your investment in the Company, including the information
that is incorporated into this Agreement by reference, such as the Company Information,
the Subscription Agreement, the Offering Terms, and the Disclosure Statement.

2.2
CONFLICTS OF INTEREST ASSOCIATED WITH ALL OFFERINGS

2.2.1
General

The Site
includes Offerings facilitated by EF Portal and third party issuers. Each of
these parties has divergent interests and duties or responsibilities with
respect to “Members” (which, as defined herein, includes members/investors in
venture funds and limited and general partner investors in venture partnerships,
as applicable, or investors in Regulations Crowdfunding Offerings) that invest
in the Offerings they sponsor. EF, EF Advisor, LLC (“EF Advisor”) and EF Portal
share members, managers, officers and/or employees that may perform services
for various Offerings simultaneously. Each of these persons may take actions in
the performance of their duties to their other clients that could differ from
the timing and nature of action taken with respect to you or a Company or fund
or partnership in which you invest.

2.2.2 Members
in Different Offerings May Invest in the Same Company

A Company
may engage in a Fundraising (as defined below) on the Site with respect to Reg
D Offerings and Reg Crowdfunding Offerings at the same time, or Reg D Offerings,
or Reg Crowdfunding Offerings. A conflict of interest may arise when EF Advisor
determines to sponsor a Reg D Offering with respect to a Company that has
engaged in, is currently engaged in, or will in the future engage in a Reg
Crowdfunding Offering on the Site. In this event, EF Advisor will negotiate the
terms of the investment in the Company by the venture fund or venture
partnership, and in doing so it will not take into account the interests of
Members that have or may invest in the Company through other Offerings, and the
interests of the venture fund or venture partnership, on the one hand, and the
interests of Members that have or may invest in the Company through other
Offerings, on the other, may be opposed. Further, in the event of a bankruptcy
of a Company, EF Advisor will act in the interests of the venture fund or
venture partnership only and without regard to any Members that may have
invested in the Company through the Site in another Offering.

2.2.3
Different Fee Structures Associated with Different Offerings

EF Advisor
and EF Portal will devote the time reasonably required to facilitate their
respective Offerings. However, because different fees may be charged, and they
each share officers and employees, this may create an incentive for their
shared employees to favor and spend more time and effort with respect to
Offerings that may result in higher fees or better carried interest.

2.3 RISKS
GENERALLY ASSOCIATED WITH ALL OFFERINGS

You should
consult your own legal, tax and financial advisers regarding the suitability,
desirability and appropriateness of purchasing interests through an Offering.
You should also carefully consider the following risks prior to investing
through an Offering:

2.3.1
Significant Risk of Loss; Not a Complete Investment Program

An
investment in a Company involves significant risks, only some of which are
described in this Agreement, and is suitable only for investors who have
limited need for liquidity in their investment, who can afford the potential
loss of their investment and who otherwise meet the conditions for eligibility
set forth in this Agreement. A direct or indirect investment in a Company is
not intended as a complete or diversified investment program and should
represent only a small portion of a potential investor’s investment portfolio.

2.3.2
Companies Are Early Stage Venture Companies with High Risk of Failure

Companies
are usually early stage venture companies. Venture investments involve a high
degree of risk and many or most venture company investments lose money and fail
at a particularly high rate. You may ultimately receive cash, securities, or a
combination of cash and securities (and in some cases nothing at all). If you
receive securities, the securities may not be publicly traded, and may not have
any significant value.

2.3.3 Lack
of Operational Record

Each Company
will typically have limited or no operational record.

2.3.4 Limitation
on Liability; Indemnification

This
Agreement, including the Terms of Service and the Subscription Agreement, limit
the liability of EF, and provide for indemnification in certain circumstances.

2.4 PRIVACY

EF maintains
a Privacy Policy, which is available on the Site and incorporated into this
Agreement.

2.5 USE OF
NAME

You consent
to the disclosure by EF of your name (or, if you are acting on behalf of a
company or entity, the name of such entity) on the Site. Without limiting such
consent, or any other lawful use of your name by EF, you specifically consent
to disclosure by EF to potential investors in a Fundraising that you have
submitted a Subscription Agreement with respect to that Fundraising, and to
disclosure by EF to any Company or Member, or combination of Companies or
Members, that you have invested in one or more Companies or venture funds or
venture partnerships through the Site, and the number of such investments. You
may withdraw this consent at any time by contacting EF.

2.6
ELECTRONIC COMMUNICATIONS

EF requires
that you consent to delivery of all communications via electronic
communications. Please see the Electronic Consent that is available on the Site
and incorporated into this Agreement.

4 AGREEMENTS
WITH RESPECT TO REG CROWDFUNDING OFFERINGS

4.1 GENERAL
ACKNOWLEDGMENTS

You
understand and acknowledge that, while EF Portal will verify such information
to the extent such verification is required under applicable law, it may rely
on the truthfulness of your representations regarding your income, net worth,
and/or your prior participation in Reg Crowdfunding Offerings in the prior 12
months when determining whether to permit you to participate in a particular
Reg Crowdfunding Offering.

You
acknowledge that you are limited in the amount you may invest in offerings
under Regulation Crowdfunding over any 12 month period and that, even though EF
Portal will ask you about these investment amounts and store data regarding
such amounts on the Site, you alone are responsible for complying with all
investment limitations applicable to all such Offerings, both through the Site
and not through the Site;

You
understand that any investment you make in a Reg Crowdfunding Offering on the
Site will be in a security of the particular Company ("Company Securities"),
and that neither EF Portal nor any of its affiliates will be involved in the
setting of the Offering Terms or the management of the Company.

You
represent that you have or you will review the educational materials provided
to you on the EF Portal portion of the Site prior to making each investment in
a Reg Crowdfunding Offering.

4.2 INVESTOR
REPRESENTATIONS

You
represent and warrant to EF Portal (or any Third Party Funding Portal as
applicable) that the answers you provided to the questions in the Investor
Certification page are correct and complete and may be relied upon by EF Portal
or any Third Party Funding Portal (as applicable) in determining whether you
are eligible to invest in Offerings that are listed on the Site. You represent
that you are using the Site with the intent to make any potential investments
for yourself or your institution, and not with the view to sell or otherwise
distribute your investment in a Company. You agree that if any event occurs or
circumstance arises that materially adversely affects your annual income or net
worth, or causes any other statement made in your Investor Certification to
become untrue or misleading in any material respect (including with respect to
other investments made by you under Regulation Crowdfunding in the prior 12
months), then prior to investing in Companies through the Site you will
complete a new Investor Certification to determine if you are still eligible to
invest in Companies listed on the Site. You acknowledge that Companies in which
you invest may rely, and that EF Portal, any Third Party Funding Portal (if
applicable), Companies, and their principals, affiliates, and other parties may
rely, on the information you have provided to EF Portal or any Third Party
Funding Portal in your Investor Certification to determine if you are eligible
to invest in Companies. You represent that you have read and understand the
risks contained in the Company Information.

4.3 CHOOSING
AND MAKING INVESTMENTS

4.3.1
Services of EF Portal with Respect to Reg Crowdfunding Offerings

EF Portal
operates the portions of the Site that present Reg Crowdfunding Offerings by
Companies. Members are not clients of EF Portal or any Third Party Funding
Portal. Although EF Portal evaluates potential Companies and determines which
Companies will be able to engage in Reg Crowdfunding Offerings on the Site, you
acknowledge and agree that this evaluation is limited to certain predetermined,
objective criteria and does not constitute an endorsement of any particular Company
or a recommendation that Members invest in any particular Company, and does not
establish an advisory relationship between you and EF Portal.

For all
Companies listed on the EF Portal Site, EF Portal performs a limited review of
the information provided by each Company to determine whether it is appropriate
for inclusion on the Site (including, among other things, to determine whether
EF Portal has a reasonable basis for believing that the Company complies with
Regulation Crowdfunding). The information reviewed includes all information in
the Company’s profile and in its Form C. This review is not intended to verify
any information provided by the Companies regarding their operations, assess
the likelihood that a Company will succeed or generate investment returns, or
otherwise inform or influence any investment decisions by investors. Neither EF
Portal nor its affiliates performs any separate due diligence on the Companies.
Some of the Companies listed on the EF Portal Site may have been considered
for, but not listed by a Third Party Funding Portal.

You
acknowledge that as a Member of the Site, you are not in an investment advisory
relationship with EF Portal.

You also
acknowledge that none of EF Portal, any Third Party Funding Portal, or any of
their affiliates advises Members on the merits of a particular investment or
transaction or provides legal or transactional advisory services to Members.
The information, materials and services made available on the Site do not
constitute a recommendation, endorsement, or any other form of investment
advice to Members by EF Portal, any Third Party Funding Portal or their
affiliates to buy or sell any securities or other financial instruments.
Neither EF Portal nor any Third Party Funding Portal provides any legal, tax,
investment, financial or other advice to Members. The content of the Site has
been prepared without reference to any particular Member’s investment
requirements or financial situation. You expressly agree that the information,
materials and services made available on the Site are not a substitute for the
exercise of independent judgment and expertise. You should always seek the
assistance of a professional for advice on investments, tax, the law, or other
similar matters.

4.3.2
Investments in Reg Crowdfunding Offerings through Company Securities

In Reg
Crowdfunding Offerings, EF Portal provides Companies an opportunity to raise
funds by allowing Members to invest directly in Companies seeking capital from
both accredited and non-accredited investors. Companies seeking to raise money
through Regulation Crowdfunding are limited to raising a maximum of $1 million
through Reg Crowdfunding Offerings in a single 12 month period, and are subject
to certain investment limitations for all investors, as described below in
Section 4.3.8 – "Investor Eligibility Requirements."

Members
participating in Reg Crowdfunding Offerings will invest in Company Securities,
which will be debt or equity securities issued by the Company. The terms of the
Company Securities purchased in Reg Crowdfunding Offerings will vary depending
on the type of security offered by a Company. Investors should carefully
consider the terms of the Company Securities in which they invest and read the
educational materials available on the Site about each type of security.

The terms of
your investment in the Company will be set forth in the Company Information and
will be governed by the investment contract between you and the Company. The Company
may reject your investment for any reason or for no reason in its discretion.

Once you
complete and submit an investment contract, you will be asked to transfer funds
from your bank or other type of account into a bank account maintained by a
bank for the benefit of the Company and other Companies raising funds through
EF Portal. You agree to provide all funds required to complete the transaction
promptly. If you do not submit funds at the time that you submit your
investment contract, your investment in the Company may not be processed. To
the extent the number of investors in a Company is capped by the Company,
Investors who have submitted investment contracts and transferred the required
funds will be given preference over those who have only submitted an investment
contract. If your investment is rejected, your funds will be returned to you
without interest.

Your
investment in Company Securities may only be processed if a predetermined
Funding Target is reached in a particular Reg Crowdfunding Offering by the
deadline set forth in the Company Information ("Target Deadline")
provided on the Site. Funds designated for investment in a Company will not be
invested in the Company until and unless the Funding Target is reached by the
Target Deadline. If the Funding Target is not reached by the Target Deadline,
your funds will be returned to you without interest within 14 days of the
termination of the Fundraising. If the Funding Target is reached prior to the
Target Deadline and the Company desires to move the Target Deadline up, EF
Portal or a Third Party Funding Portal (if applicable) will provide you with at
least five business days’ notice of such change. Otherwise, EF Portal or a Third
Party Funding Portal (if applicable) will close the Fundraising at the time of
the Target Deadline if the Funding Target has been reached. A Company may also
decide to accept investments that exceed the Funding Target. In this case, the Company
will provide investors with information regarding the Maximum Amount that will
be accepted and the manner of allocating excess subscriptions. You will receive
notice from EF Portal or a Third Party Funding Portal (if applicable) when a Company
for which you have submitted an investment contract has closed, and whether
your investment in the Company will be processed.

You may
revoke your investment in a Company during the Fundraising by providing notice
to EF Portal or a or a Third Party Funding Portal (if applicable) as provided
on the Site. You may also revoke your investment at any time up until 48 hours
before the Target Deadline. After that, your investment in the Company can be
processed. None of EF Portal, any Third Party Funding Portal or any of their
affiliates will take physical custody of your funds.

You
acknowledge that, in Reg Crowdfunding Offerings, if the Funding Target is not
reached, your funds will be returned to you without interest, within 7 days of
the termination of the Fundraising.

4.3.3
Limitation on Subscriptions

You
acknowledge that no Company for which you submit an investment contract has any
obligation to accept your investment, and that any fraction of the investment
amount stated on the investment page of the Site and/or in the investment
contract may be accepted, or your investment may be rejected entirely, for any
reason. If you submitted funds in excess of the investment amount accepted, the
excess funds will be returned to you without interest in a manner determined in
the sole discretion of the Company.

4.3.4
Aggregate Subscriptions

With respect
to any Regulation Crowdfunding Offerings in which you invest, you agree that
you will not use the Site to invest more than you are permitted to invest in
any 12 month period under Reg Crowdfunding, as discussed further below in
Section 4.3.8.

4.3.5
Limitation of Liability and Indemnification

The Terms of
Service, this Agreement, and the Subscription Agreement limit the liability of
EF Portal, any Third Party Funding Portal and/or their affiliates, and provide
for indemnification in certain circumstances. You acknowledge that EF Portal,
any Third Party Funding Portal, and any of their affiliates, or any member,
manager or employee thereof, shall not be liable in connection with any
information or omission of information contained in materials prepared or
supplied by a Company or other third party or developed in reliance on
information provided by a Company. You acknowledge that such materials may
include, but are not limited to, information available through the Site, and
materials distributed to investors by EF Portal, a Third Party Funding Portal
or any of their affiliates (or members, managers, or employees). You
acknowledge that the information regarding Companies presented on the Site is
provided by the Companies and not by EF Portal, any Third Party Funding Portal
or any of their affiliates. You acknowledge that none of EF Portal, any Third
Party Funding Portal, their affiliates, or their members, managers, or
employees approves or reviews information prepared or supplied by a Company or
otherwise undertakes any due diligence with respect to a Company and shall not
be liable with respect to the past, present, or future performance or
non-performance by a Company of the activities described in such information.
You acknowledge that you understand that the information provided by companies
on the Site may not be sufficient or suitable to support an informed investment
decision.

4.3.6 Fees
Charged in Respect of Reg Crowdfunding Offerings

EF Portal will
charge a fee to each Member who invests in a Reg Crowdfunding Offerings, which
will be a percentage of the amount the Member invested at the time each Reg
Crowdfunding Offering closes.

4.3.7
Subscribing for Company Securities

The Company
Securities offered to Members in Reg Crowdfunding Offerings will not be
registered under the 1933 Act or the securities laws of any state or any other
jurisdiction. Companies will generally set a minimum subscription amount for
investment for each Fundraising, which will generally be $100 or more, at a
minimum.

4.3.8
Investor Eligibility Requirements

In
accordance with Regulation Crowdfunding’s requirements, you are not permitted
to invest more than a certain amount in offerings made under Regulation Crowdfunding
(including those not made through the Site) during any single 12 month period,
which amount is determined based on your own financial circumstances. In
particular, if your annual income or net worth is less than $107,000, you may
only invest a maximum amount equal to the greater of $2,200 or 5 percent of the
lesser of your annual income or your net worth. If both your annual income and
net worth are equal to more than $107,000, you may only invest a maximum amount
equal to 10 percent of the lesser of your annual income or net worth, but you
may not invest more than $107,000 through all Regulation Crowdfunding
offerings.

Further, you
understand and agree that EF Portal is permitted under Regulation Crowdfunding
to rely on your representations regarding your compliance with these investment
limits when determining whether to permit you to participate in a Reg
Crowdfunding Offering.

4.4 RISKS
ASSOCIATED WITH REG CROWDFUNDING OFFERINGS

You should
consult your own legal, tax and financial advisers regarding the suitability,
desirability and appropriateness of purchasing interests in a Company. You
should also carefully consider the following risks prior to investing in a Company:

4.4.1 General

An
investment in a Company involves significant risks, only some of which are
described in this Agreement, and is suitable only for sophisticated investors
who have limited need for liquidity in their investment, who can afford the
potential loss of their investment and who meet the conditions for eligibility
set forth in this Agreement. An investment in a Company is not intended as a
complete investment program. Companies are early stage venture companies.
Venture investments involve a high degree of risk and many or most venture
investments lose money. After a Liquidity Event (if any), you may ultimately
receive cash, securities, or a combination of cash and securities (and in some
cases nothing at all). If you receive securities, the securities may not be
publicly traded, and may not have any significant value.

4.4.2 No
Guarantee of Investment Returns

None of EF
Portal, any Third Party Funding Portal, or any of their affiliates guarantees
the future performance or financial results of any Company, and an investment
in a Company may result in a gain or loss upon termination or liquidation of
your investment.

4.4.3
Restrictions on Resale or Transfer

The Company
Securities are issued in a transaction exempt from registration under the 1933
Act and are not registered thereunder or any other law of the United States, or
under the securities laws of any state or other jurisdiction. Company
Securities purchased through the Site in Reg Crowdfunding Offerings cannot be
resold, pledged, assigned or otherwise disposed of during the one-year period
starting with the date of purchase, unless they are transferred: (1) to the Company
itself; (2) to an "accredited investor" (as defined in as defined in
Regulation D under the 1933 Act); (3) in connection with a registered offering
of the Company Securities with the SEC; (4) to a family member of the Member,
or to a trust of the Member or one of its family members; or (5) in connection
with the Member’s death or divorce.

However,
even if you are able to sell or transfer your Company Securities, there is a
limited market for the sale of a Company Securities, and there is no guarantee
that a market will develop in the future for the Company Securities you
purchase. Therefore, if you require liquidity in your investment, you should
not invest in a Company.

4.4.4 No
Control Over Management of the Companies

You will not
have any right to manage, influence or control the management or operations of
Companies. In particular, you will not have, or will have only limited, voting
rights associated with your Company Securities, but in any event will not have
voting powers to direct the management decisions of the Company. You must refer
to the voting provisions in the relevant investment contract that controls your
investment. The success of any Company investment depends on the ability and
success of the management of the Company, in addition to economic and market
factors.

4.4.5 No
Control Over Company Future Valuation

Valuations
may fluctuate considerably and the price paid for Company Securities by you may
bear limited or no relationship to future valuations of the Company’s
securities in any market that may develop for such securities, whether private
or public.

4.4.6
Limited Information About Companies

Due to the
nature of private companies, there may be limited information—financial,
operating or otherwise—regarding each Company. You should read and understand
the risk factors contained in the Company Information, including the Form C,
before investing in Company Securities. Each Company is solely responsible for
providing risk factors, conflicts of interest, and other disclosures that you
should consider when investing in Company Securities.

4.4.7 No
Assurance of Profit

An
investment in Company Securities may not generate profits for you. A return on
investment will depend upon successful liquidity of a Company’s securities and
thus, the ultimate value of any investment depends upon factors beyond your or
EF Portal’s control. You will typically not receive returns, if any, until a Liquidity
Event, which may not occur for many years. You must therefore bear the economic
risk of an investment for an indefinite period of time.

4.4.8 Direct
Investment in Companies in Reg Crowdfunding Offerings

In Reg
Crowdfunding Offerings, Members will invest directly in the securities of
Companies. The Company will not be managed by EF Portal or any of its
affiliates in any respect. The terms of any investment in a Company effected
through a Reg Crowdfunding Offering will be set by the Company, and to the
extent any negotiation occurs, it will be solely between a Member and the Company.

4.4.9 Lack
of Regulatory Oversight of Reg Crowdfunding Offerings and Offering Materials

EF Portal
and the Third Party Funding Portals are registered as funding portals with the
SEC and are members of the Financial Industry Regulatory Authority
("FINRA"). As such, EF Portal and Third Party Funding Portals must
submit certain information and materials to FINRA and the SEC and are subject
to examination by FINRA and the SEC. In addition, Companies must file with the
SEC a disclosure document called a Form C and updates and amendments to the
Form C. However, the funding portal regulatory regime and the Form C are not as
comprehensive as the regulatory regime and disclosure documents that apply to
offerings registered under the Securities Act of 1933, and, as a result, you
may not receive the same level of disclosure and oversight that is available in
registered offerings.

4.4.10
Review of Reg Crowdfunding Offering Documents by SEC and EF Portal and/or a
Third Party Funding Portal No Indicator of Likely Success of Company or
Guarantee of Investment Returns

Under
Regulation Crowdfunding, a Company must file a Form C disclosure document with
the SEC and provide the disclosure to prospective investors. As noted above, EF
Portal will perform a limited review of Companies, including the information
proposed to be provided to the SEC and potential investors, to determine
whether to permit a Company to engage in Reg Crowdfunding Offerings on the
Site. However, none of the SEC, EF Portal or any Third Party Funding Portal (if
applicable) will be reviewing any Company’s Form C or other offering materials
with the view to determine the likelihood of success of the Company’s business
strategy or the likelihood that it will generate investment returns. Further,
the review of a Company’s Form C by the SEC under Regulation Crowdfunding does
not indicate the SEC’s endorsement of such Company or its view with regard to
the likely financial performance of the Company or the advisability of
investing in such Company, and is not a guarantee of investment returns.

4.4.11 An
Investment in a Company Does Not Offer a Complete Investment Program

An
investment in a Company is not a complete or diversified investment program and
should represent only a small portion of a potential investor’s investment
portfolio.

4.4.12
Possibility of Phantom Income

It is
possible that your investment will result in "phantom income," which
could require you to pay taxes on your investment even though the Company does
not distribute any income (or does not distribute sufficient income to pay the
taxes).

4.4.13 Other
Specific Risks Associated with Investing in a Particular Company May Not Be
Disclosed by the Company.

Each Company
will disclose in the Company Information the particular risks associated with
an investment in the Company. YOU SHOULD CONSULT YOUR OWN LEGAL AND TAX
ADVISERS REGARDING THE POSSIBLE TAX AND OTHER CONSEQUENCES OF BUYING, HOLDING,
TRANSFERRING AND REDEEMING STARTUP SECURITIES.

4.4.14 Entire
Agreement; Severability

This
Agreement embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter of this Agreement and supersedes all
prior or contemporaneous agreements and understanding other than this Agreement
relating to the subject matter hereof.

If any part
of this Agreement is declared unenforceable or invalid, the remainder
will continue to be valid and enforceable.

 

4.5
CONFLICTS OF INTEREST ASSOCIATED WITH REG CROWDFUNDING OFFERINGS

4.5.1
General

EF Portal
will facilitate Reg Crowdfunding Offerings, and its affiliates, members,
managers, officers and/or employees will manage other businesses, including,
without limitation, those associated with EF Advisor and EnergyFunders, LLC.
Each of EF Portal, EF Advisor and EnergyFunders, LLC are affiliated and related
parties. Certain inherent conflicts of interest arise from the activities of EF
Portal and its affiliates. You should carefully consider the conflicts of interest
described in the Terms of Service, this Agreement, and on the Site prior to
investing in a Company.

 

5 MANDATORY
ARBITRATION

5.1 ARBITRATION
DISCLOSURES

This agreement contains a predispute
arbitration clause. By signing an arbitration agreement the parties agree as
follows:

(A) All parties to this agreement are giving up the
right to sue each other in court, including the right to a trial by jury,
except as provided by the rules of the arbitration forum in which a claim is
filed.

(B) Arbitration awards are generally final and
binding; a party’s ability to have a court reverse or modify an arbitration
award is very limited.

(C) The ability of the parties to obtain documents,
witness statements and other discovery is generally more limited in arbitration
than in court proceedings.

(D) The arbitrators do not have to explain the
reason(s) for their award unless, in an eligible case, a joint request for an
explained decision has been submitted by all parties to the panel at least 20
days prior to the first scheduled hearing date.

(E) The panel of arbitrators may include a minority
of arbitrators who were or are affiliated with the securities industry.

(F) The rules of some arbitration forums may impose
time limits for bringing a claim in arbitration. In some cases, a claim that is
ineligible for arbitration may be brought in court.

(G) The rules of the arbitration forum in which the
claim is filed, and any amendments thereto, shall be incorporated into this
agreement.

No person shall
bring a putative or certified class action to arbitration, nor seek to enforce
any pre-dispute arbitration agreement against any person who has initiated in
court a putative class action; or who is a member of a putative class who has
not opted out of the class with respect to any claims encompassed by the
putative class action until: (i) the class certification is denied; or (ii) the
class is decertified; or (iii) the investor is excluded from the class by the
court. Such forbearance to enforce an agreement to arbitrate shall not constitute
a waiver of any rights under this agreement except to the extent stated herein.

 

5.2 ARBITRATION
AGREEMENT

AGREEMENT
TO ARBITRATE CONTROVERSIES
.  IT IS AGREED THAT ANY CONTROVERSY BETWEEN US ARISING OUT
OF YOUR BUSINESS OR THIS AGREEMENT IN ANY WAY WHATSOEVER, INCLUDING ANY CLAIMS
OR ALLEGATIONS YOU MAY MAKE REGARDING MISREPRESENTATIONS OR ALLEGED FRAUD OF
ANY SORT OR KIND OR ANY CLAIMS OR ALLEGATIONS THAT YOU WERE WRONGFULLY OR
TORTIOUSLY INDUCED INTO THIS SUBSCRIPTION AGREEMENT OR ARBITRATION AGREEMENT
SHALL BE SUBMITTED TO ARBITRATION CONDUCTED BEFORE THE AMERICAN ARBITRATION
ASSOCIATION IN HOUSTON, TEXAS, AND IN ACCORDANCE WITH ITS RULES. ARBITRATION
MUST BE COMMENCED BY SERVICE UPON THE OTHER PARTY OF A WRITTEN DEMAND FOR
ARBITRATION OR A WRITTEN NOTICE OF INTENTION TO ARBITRATE. Prior to initiating arbitration, the
initiating party must notify the non-initiating party that it plans to initiate
arbitration and both must submit to a non-binding mediation to be located in
Houston, Texas, within 60 days of such notification, unless both parties
mutually agree in writing to forego mediation; otherwise, such mediation shall
be required. Filing for any legal action regarding the controversy between us
or arising out of your business or this Agreement IN ANY WAY, NO MATTER THE
CLAIMS OR ALLEGATIONS YOU MAKE, EVEN IF REGARDING ANY KIND OR SORT OF
MISREPRESENTATION, FRAUD, OR INDUCEMENT INTO THIS SUBSCRIPTION AGREEMENT OR
ARBITRATION AGREEMENT, shall be considered a breach of this Agreement, which
shall allow the non-breaching party to recover its attorney fees and costs
incurred in defending the legal action and in compelling this matter to
mediation and/or arbitration.