EnergyFunders, LLC and EF Advisor, LLC Investor Agreement

Provisions Governing the House of the EF Site by Investors and Investments in Offerings

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 D Offering, this Agreement is also between you and EF Advisor. If you participate in a Reg Crowdfunding Offering, this Agreement is also between you and EF Portal. For ease of reference, when EF Resources, Inc., EnergyFunders, LLC, and EF Advisor, 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 D Offering, this will include: (i) the terms and agreement applicable to the specific fund or partnership, which sets forth certain specific terms of the relevant fund; (ii) the applicable subscription agreement, which sets forth certain terms of the relevant venture investment partnership or fund; and (iii) the partnership or company agreement, which sets forth other terms applicable to each fund or partnership.

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 or any of their affiliates.

You acknowledge that EF does not independently verify information regarding Companies 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, EF Portal, and third parties. 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 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.

3 AGREEMENTS WITH RESPECT TO REG D OFFERINGS

3.1 GENERAL ACKNOWLEDGMENTS

You understand and acknowledge that any investment you make in a Reg D Offering on the Site will be made in a venture fund or venture partnership managed by EF Advisor or EF GP, LLC and not directly in any Company on the Site and that EF Advisor or EF GP, LLC may receive compensation based on the returns of investments held by a venture fund or venture partnership, and that the returns of your investment in a venture fund or venture partnership, if any, will be reduced by such compensation paid to EF Advisor or EF GP, LLC.

You understand and acknowledge that once you choose to invest in a Company through a venture fund or venture partnership, EF Advisor and/or EF GP, LLC, and not you, will make all decisions with respect to your investment, including, but not limited to, decisions concerning the disposition of your investment.

3.2 INVESTOR REPRESENTATIONS

You represent and warrant to EF Advisor that the answers you provided to the questions in the investor certification (“Investor Certification”) page are correct and complete and may be relied upon by EF Advisor and its affiliates 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 venture fund or venture partnership. You agree 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, then prior to investing in venture funds or venture partnerships through the Site you will complete a new Investor Certification to determine if you are still eligible to invest in venture funds or venture partnerships listed on the Site. You acknowledge that venture funds or venture partnerships in which you invest may rely, and that EF Advisor, Companies, EF, and their principals, affiliates, and other parties may rely, on the information you have provided in your Investor Certification to determine if you are eligible to invest in venture funds or venture partnerships. You represent that you have read and understand the risks contained in the Company Information. You represent that you are an accredited investor or represent an entity that qualifies as an accredited investor, within the meaning of 17 CFR § 230.215.

3.3 CHOOSING AND MAKING INVESTMENTS

3.3.1 Services of EF Advisor with Respect to Reg D Offerings

EF Advisor is an investment adviser to pooled investment vehicles engaged in Reg D Offerings, each of which is a series of venture funds or venture partnerships, LLC (the “LLC”), that invest in the Companies described on the Site (each such series, a “venture fund or venture partnership”). EF Portal is not involved in any way in the portions of the Site through which Reg D Offerings are made or with any venture funds or venture partnerships. Members of the Site may invest in a venture fund or venture partnership, but Members are not clients of any EF entity. Although EF and its affiliate EF Advisor evaluate potential Companies and determine which Companies will be available as potential investments for venture funds or venture partnerships on the Site, you acknowledge and agree that this evaluation 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.

EF Advisor performs a limited review of the information provided by each Company to determine whether it is appropriate for inclusion on the Site; the information reviewed includes information regarding a Company’s Fundraisers, business plan, and its current and anticipated resources. 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 nor EF Advisor performs any separate due diligence on the Companies either before or after venture fund or venture partnership invests in them.

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

You also acknowledge that none of EF Advisor or its affiliates advises Members on the merits of a particular investment or transaction or provide 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 Advisor or its affiliates to buy or sell any securities or other financial instruments. EF Advisor does not provide 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.

3.3.2 Investments in Venture Funds or Venture Partnerships

In Reg D Offerings, EF Advisor provides Companies an opportunity to raise funds by allowing Members to invest in Companies seeking capital from accredited investors. Members invest in a venture fund or venture partnership that, in turn, invests in a Company (each such opportunity, a “Fundraising”). If you decide to invest in a venture fund or venture partnership, the venture fund or venture partnership will invest in securities issued by the particular Company engaged in the Fundraising. The terms of the venture fund or venture partnership’s investment in the Company will be negotiated between EF Advisor, on behalf of the venture fund or venture partnership, and the Company. The terms of your investment in the venture fund or venture partnership will be governed by the Subscription Agreement between you and the venture fund or venture partnership, pursuant to which you will make certain representations to the venture fund or venture partnership and EF. EF Advisor may reject your investment in a venture fund or venture partnership for any reason or for no reason in its discretion. Information regarding the terms of a venture fund or venture partnership’s investment in a Company will be made available on the Site, and together with the Terms of Service, this Agreement, and the Subscription Agreement will govern your investment in a venture fund or venture partnership.

Once you complete and submit a Subscription Agreement, you will be asked to transfer funds from your bank account into a bank account maintained at a third party service provider (“Third Party Service Provider”). You agree to comply with the terms of the Subscription Agreement and to provide all funds required to complete the transaction promptly. If you do not submit funds at the time that you submit your Subscription Agreement, your investment in the venture fund or venture partnership may not be processed. If your investment is rejected, your funds will be returned to you without interest.

Your investment into a venture fund or venture partnership will be processed only if a predetermined minimum amount of funds are raised from Members on the Site, either in the aggregate or for investment in the venture fund or venture partnership, during the Fundraising (the “Funding Target”). The Funding Target is established by agreement between EnergyFunders, LLC, EF Advisor, and the Company raising funds on the Site. No funds designated for investment in a venture fund or venture partnership will be invested in the venture fund or venture partnership until and unless the Funding Target is reached. 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. EF Advisor may close the Fundraising at any time after the Funding Target has been reached, and may consult with the Company to determine whether, and for how long, the Fundraising will remain open. EF Advisor may also enter into an agreement with a Company to close a Fundraising once a certain amount of funds have been raised in the Fundraising, either through a venture fund or venture partnership or in the aggregate, including direct investments (the “Maximum Amount”), or after the Fundraising has been open for a predetermined period of time. If the value of the funds raised from Members in a Fundraising exceeds the Maximum Amount, the amounts in excess of the Maximum Amount will be returned to investors without interest in a manner determined by EF Advisor in its sole discretion. You will receive notice from EF Advisor when a venture fund or venture partnership for which you have submitted a Subscription Agreement has closed, and whether your subscription in the venture fund or venture partnership will be processed. After issuance of the notice and prior to the closing, you will be required to confirm the information in your Subscription Agreement. Upon closing, each investor who becomes an investor in a venture fund or venture partnership will be deemed to have again entered into the Subscription Agreement, including (without limitation) to have agreed to each representation therein.

You may revoke your subscription into the venture fund or venture partnership during the Fundraising by providing notice to EF Advisor as provided on the Site. You may also revoke your subscription into the venture fund or venture partnership for an additional 48 hours after receiving notice that a Fundraising has closed. 48 hours after you have received notice that a Fundraising has closed, or at any time thereafter, at EF Advisor’s discretion, your investment in a venture fund or venture partnership will be processed. None of EF Advisor or any affiliate of EF will take physical custody of your funds.

You acknowledge that none of EF Advisor, any venture fund or venture partnership, any of their affiliates, or any third party has represented to you that securities of any venture fund or venture partnership or Company are being sold on an “all or none” basis. You acknowledge that, if the Funding Target is not reached and a lesser deal cannot be negotiated (given appropriate notice to all investors and compliance with applicable regulations), your funds will be returned to you without interest, within 14 days of the termination of the Fundraising.

3.3.3 Limitation on Subscriptions

EF Advisor may, in its sole discretion: (a) refuse to permit any person to invest in a venture fund or venture partnership or in the LLC, or may limit the amount a person may invest in any venture fund or venture partnership or the LLC; and (b) compulsorily redeem an investor’s interest in one or more venture funds or venture partnerships, in whole or in part, on terms that the EF Advisor determines are reasonable. You acknowledge that no venture fund or venture partnership for which you submit a Subscription Agreement has any obligation to accept your investment, and that any fraction of the investment amount stated on your Subscription Agreement may be accepted, or your subscription may be rejected entirely, for any reason. You acknowledge and agree that, in the event that only a portion of the investment amount stated in your Subscription Agreement is accepted, such Subscription Agreement will be treated for all purposes as a Subscription Agreement to invest the amount ultimately accepted. 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 venture fund or venture partnership.

3.3.4 Direct Investments in Companies

It is possible that you may be invited by a Company or one of its Fundraisers to invest directly in the securities of a Company rather than through venture fund or venture partnership. In this case, you will indicate on the Site that you intend to invest in the particular Company, and EF Advisor or its affiliate will provide your information, including the information you provided in the Investor Certification and your intended investment amount, to the Company upon the closing of the Fundraising. You may withdraw your indication of interest to invest in the Company at any time during the Fundraising, and for an additional 48 hours after receiving notice that the Fundraising has closed. Although EF Advisor may disclose to the Company, or on the Site, that you have indicated an interest in investing in the Company, EF Advisor will not supply your information to the Company upon the close of the Fundraising if you have withdrawn the indication.

Your direct investment in the Company will not be managed or supervised by EF Advisor or any of its affiliates in any respect. Any transaction in the securities of a Company will be negotiated and effected directly between you and the Company. None of EF Advisor, its affiliates, or any third party service provider will collect or hold funds for investment in the Company in a direct investment, and the sole involvement of EF Advisor or its affiliates with respect to such offerings will be (1) hosting of the Company Information on the Site; (2) disclosure to the Company of a Member’s indication of interest to invest directly in the Company, and (3) the provision of information regarding the Member to the Company.

3.4 INFORMATION REGARDING VENTURE FUNDS AND VENTURE PARTNERSHIPS (VIA A REGULATION D OFFERING)

3.4.1 Venture Capital Fund Structure

Each venture fund or venture partnership is a venture capital fund. Each venture fund or venture partnership is a separate venture concern. Each venture fund or venture partnership is treated as a separate and distinct venture capital fund with its own assets and liabilities. EF Advisor will implement a venture capital strategy in pursuing its investment objective, which is to invest substantially all of its assets in securities issued by a privately-held Company. The investment objective of each venture fund or venture partnership is to seek investment returns through investments in the Company.

3.4.2 Venture Funds or Venture Partnerships’ Investment Process

After a Fundraising closes and the aggregate investment amount for the venture fund or venture partnership has been established, all investments in the venture fund or venture partnership will be processed, and the venture fund or venture partnership will begin operations. At the launch of the venture fund or venture partnership, the venture fund or venture partnership will acquire securities of a Company through privately negotiated transactions directly with the Company. Each venture fund or venture partnership’s investment program generally involves: (i) the investment of substantially all venture fund or venture partnership assets (except for funds reserved for administrative expenses) in securities of a Company, (ii) holding such securities until (a) they are redeemed by the Company in accordance with their terms, (b) they come due and are paid by the Company in accordance with their terms, or (c) EF Advisor identifies an opportunity to dispose of securities owned by the venture fund or venture partnership, which may include sales in a secondary market transaction, resale of the securities back to the Company, or an offer or sale of securities of the Company to the public or to other affiliated or third-party investors (a “Liquidity Event”) and (iii) distribution of funds paid by the Company, or of securities or proceeds from a cash sale or other Liquidity Event. EF Advisor will generally seek to identify Liquidity Events that maximize the total return to investors.

In managing a venture fund or venture partnership, EF Advisor may exercise management rights negotiated with a Company on behalf of a venture fund or venture partnership as set forth in the agreement between the Company and the venture fund or venture partnership. In addition, subject to the terms of the agreement between the venture fund or venture partnership and the Company and any applicable laws, EF Advisor, in its sole discretion, may, without limitation: (i) exercise any voting rights associated with securities of the Company; (ii) exercise conversion or other rights associated with securities of the Company; (iii) decide when and on what terms to dispose of securities owned by the venture fund or venture partnership, which may include sales in a secondary market transaction, resale of the securities back to the Company, or an offer or sale of securities of the Company to the public or to other affiliated or third-party investors; (iv) decide whether to participate in any tender offer offered by the Company; (v) decide when to dissolve the venture fund or venture partnership, and administer such dissolution; and (vi) decide whether the venture fund or venture partnership should distribute cash and/or securities to investors.

In addition to securities of a Company, a venture fund or venture partnership may also hold cash or short-term investments. A venture fund or venture partnership will not borrow for investment purposes.

3.4.3 Limitation of Liability and Indemnification

The Terms of Service, this Agreement, and the Subscription Agreement limit the liability of EF Advisor and/or its affiliates, and provide for indemnification in certain circumstances. You acknowledge that EF Advisor, and any of its 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 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 Advisor or an affiliate (or member, manager, or employee) thereof. You acknowledge that the information regarding Companies presented on the Site is provided by the Companies and not by EF Advisor or any of its affiliates. You acknowledge that none of EF Advisor, its 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.

3.4.4 Management and Administration of a Venture Fund or Venture Partnership

If you invest in a venture fund or venture partnership, you will not be a recordholder of securities of the Company. You may not vote, exercise management rights, or dispose of securities of the Company.

EF Advisor, a Texas limited liability company headquartered in Houston, Texas or EF GP, LLC, a Texas limited liability company headquartered in Houston, Texas, is the managing member or managing partner of each venture fund or venture partnership, as applicable. EF Advisor or EF GP, LLC, is responsible for carrying out each venture fund or venture partnership’s ordinary affairs, and will appoint appropriate Third Party Service Providers to the venture fund or venture partnership, including investment managers.

EF Advisor is also the investment manager of the venture fund or venture partnership. EF Advisor is a venture capital fund adviser that is an exempt reporting adviser that has filed notice of its status as such with the U.S. Securities and Exchange Commission (“SEC”). The sole owner and member of EF Advisor is EnergyFunders, LLC. Pursuant to the terms of the applicable company agreement or partnership agreement and/or one or more investment management agreements between the LLC or specific venture funds or venture partnerships and EF Advisor, EF Advisor has been delegated primary responsibility for the implementation of each venture fund or venture partnership’s investment program, including but not limited to deciding when and on what terms to dispose of securities owned by the venture fund or venture partnership, when to participate in any tender offer by the Company, whether and when to dissolve the venture fund or venture partnership, and whether the venture fund or venture partnership should distribute cash and/or securities to investors in the venture fund or venture partnership. The management rights exercised by EF Advisor may vary on a venture fund or venture partnership-by-venture fund or venture partnership basis.

EF Advisor may, in its sole discretion, to determine whether to offer follow-on and other related investment opportunities in a Company, if such opportunities are made available, to some or all of the investors in a venture fund or venture partnership that previously invested in securities of that Company or to investors who did not invest in that prior venture fund or venture partnership.

3.4.5 Venture Fund or Venture Partnership Expenses

A portion of the money invested in the venture fund or venture partnership may be reserved to pay administrative fees, details of which will be disclosed to you when you invest. These fees may vary on a venture fund or venture partnership-by-venture fund or venture partnership basis and generally include expenses of operating the venture fund or venture partnership and organizational expenses (“Organizational Expenses”). venture fund or venture partnership expenses may include, without limitation, (i) fees and expenses for advisors, including tax advisors, attorneys, auditors and consultants but not EF Advisor; (ii) all third party costs and expenses incurred in developing, negotiating, structuring, acquiring, or otherwise transacting in investments, including brokerage, third-party finders’ fees, background checks and custodial fees and expenses; (iii) the costs of any litigation, directors’ and officers’ liability or other insurance and indemnification obligations or extraordinary expense or liability relating to the affairs of the venture fund or venture partnership; (iv) expenses for indemnity or contribution; (v) expenses incurred in connection with the collection of amounts due to the venture fund or venture partnership; (vi) the costs of liquidating or dissolving the venture fund or venture partnership; and (vii) any taxes, fees or other governmental charges levied against the venture fund or venture partnership and all expenses incurred in connection with any tax audit, investigation, settlement or review of the venture fund or venture partnership. Organizational Expenses encompass those incurred in connection with (i) the formation and organization of the venture fund or venture partnership, and (ii) the offering of interests in the venture fund or venture partnership, including related travel, accommodation, legal, accounting, consulting, filing, registration, marketing, publishing, selling and printing costs. No administrative fees are paid to EF, Inc., EF Advisor, or any of their affiliates or principals, although these entities may be reimbursed by the venture fund or venture partnership for documented venture fund or venture partnership expenses.

For accounting purposes, a venture fund or venture partnership may amortize its Organizational Expenses for up to 60 months. A venture fund or venture partnership will generally limit the amount of Organizational Expenses that are amortized so that the audit opinion issued with respect to its financial statements will not be qualified. EF Advisor, or one or more of its affiliates, may, at their sole discretion, pay any such excess Organizational Expenses directly, or they will be expensed by the venture fund or venture partnership in the year in which they are incurred.

The investment returns experienced by investors in venture funds or venture partnerships will be reduced by these expenses, which may have a material effect on such returns. Members that are invited by a Company or its Fundraisers to invest directly in the Company on similar terms as a venture fund or venture partnership will not pay similar expenses, and are likely to experience better investment returns as a result.

3.5 ADDITIONAL INFORMATION REGARDING INVESTMENTS IN VENTURE FUNDS OR VENTURE PARTNERSHIPS (VIA A REGULATION D OFFERING)

3.5.1 Subscribing for Interests

The venture fund or venture partnership interests offered to Members are securities of each venture fund or venture partnership and not of a Company. These securities will not be registered under the 1933 Act or the securities laws of any state or any other jurisdiction.

A venture fund or venture partnership will generally set a minimum subscription amount for investment for each Fundraising.

No certificates will be issued for interests in a venture fund or venture partnership. You will, however, receive written confirmation of your holdings.

Each venture fund or venture partnership will establish and maintain on its books a capital account (“Capital Account”) for you, which will reflect your investment and certain other transactions.

3.5.2 Investor Eligibility Requirements

In order to invest in a venture fund or venture partnership, you must be (i) an “accredited investor” as defined in Regulation D under the 1933 Act, and (ii) a United States citizen or resident, unless EF Advisor determines, in its sole discretion, to admit investors that are not United States persons.

3.5.3 Redemption of Interests

You will have no right to redeem your interests in a venture fund or venture partnership, unless permitted by prior written consent of EF Advisor, in its sole discretion. EF Advisor may, in its sole discretion, compulsorily redeem your interest, in whole or in part, on terms that EF Advisor determines are reasonable. There is no secondary market for interests in the venture fund or venture partnership and none is contemplated, and if one were to develop, you could not sell your interests without the prior written consent of EF Advisor, in its sole discretion. See Section 3.6.6 – “Restrictions on Transfer” below.

3.5.4 Determination of Net Asset Value

EF Advisor will not calculate or report a net asset value or similar calculation for the venture fund or venture partnership. From time to time, EF Advisor may calculate an estimated value of venture fund or venture partnership assets when making important investment decisions for the venture fund or venture partnership, but that value will only be one factor EF Advisor may consider in making its decisions.

3.5.5 Transfer Restrictions

You may not sell, pledge, assign or otherwise transfer any venture fund or venture partnership interest without the prior written consent of EF Advisor, which may be withheld or conditioned upon the payment of certain fees or transaction costs in EF Advisor’s discretion. In addition, interests will not be registered under the federal or state securities laws and, therefore, will be subject to restrictions on transfer under those laws.

3.5.6 Distributions

Distributions from a venture fund or venture partnership, if any, generally will result from the venture fund or venture partnership’s receipt of the proceeds from the sale, redemption, or liquidation of the securities of the Company in which the venture fund or venture partnership has invested. When authorized by EF Advisor, in its discretion, distributions generally will be made in cash as available, net of fees and expenses and reasonable reserves for future venture fund or venture partnership expenses, but may be made in-kind at EF Advisor’s discretion. It is not anticipated that distributions will be made until the end of the term of the venture fund or venture partnership. Distributions when declared will be made to investors in proportion to their Capital Account balances and will be subject to performance-based compensation due to EF Advisor. Each venture fund or venture partnership’s LLC Agreement and venture fund or venture partnership-specific Appendix contains detailed information regarding the terms of the performance-based compensation payable to EF Advisor.

3.5.7 Reports

After the end of each fiscal year, you will receive a Schedule K-1 (IRS Form 1065) reporting your share of the items of the venture fund or venture partnership’s income, gain, loss and deduction for that fiscal year.

3.5.8 Term

Each venture fund or venture partnership will terminate after the occurrence of a Liquidity Event so that all or substantially all of the venture fund or venture partnership’s investments are converted to cash or publicly-traded securities, unless otherwise terminated in the sole discretion of EF Advisor. In winding up the venture fund or venture partnership, EF Advisor has sole discretion to determine if and when to liquidate securities, and investors may lose money depending on the decisions made by EF Advisor.

3.6 RISKS ASSOCIATED WITH REG D OFFERINGS

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

3.6.1 General

An investment in a venture fund or venture partnership 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 venture fund or venture partnership is not intended as a complete investment program. There can be no assurance that the investment objective of any venture fund or venture partnership will be met. venture funds or venture partnerships invest in early stage venture companies. Venture investments involve a high degree of risk and many or most venture company investments lose money. 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.

3.6.2 No Guarantee of Investment Returns

Neither EF Advisor nor any of its affiliates guarantee the future performance or financial results of any Company or any venture fund or venture partnership, and an investment in a Company through a venture fund or venture partnership may result in a gain or loss upon termination or liquidation of your investment.

3.6.3 Limited Financial Information About venture funds or venture partnerships

You will not receive audited financial statements with respect to any venture fund or venture partnership, and you will receive only limited information about each such venture fund or venture partnership and the Company to which that venture fund or venture partnership relates. You will not receive ongoing information about the value or valuation of the venture fund or venture partnership, the Company or the securities of the Company held by the venture fund or venture partnership, and you understand and agree that any such valuation information would in any event be of limited reliability and use.

3.6.4 Privately-Offered Security Risk

Investing in privately offered securities entails a significant degree of risk and, therefore, should be undertaken only by investors capable of evaluating and bearing those risks. Venture company investments, such as those in the Companies, involve a high degree of risk and many or most venture company investments lose money.

3.6.5 Limited Market for Interests in venture funds or venture partnerships and Company Securities

The interests in venture funds or venture partnerships have not been registered under the 1933 Act or any other law of the United States, or under the securities laws of any state or other jurisdiction. Therefore, interests in venture funds or venture partnerships cannot be resold, pledged, assigned or otherwise disposed of unless they are so registered or an exemption from registration is available. A limited market exists for the sale of a Company’s securities, and the transferability of those securities is generally restricted. In the event that EF Advisor determines to distribute Company securities to investors in a venture fund or venture partnership, there may be no market through which the Company securities may be sold, and even if there were such a market, the transfer of Company securities may be subject to significant legal and contractual restrictions, including Federal and state securities laws and regulations. Neither EF Advisor nor any of its affiliates, is under any obligation to register interests in a venture fund or venture partnership on your behalf or to assist you in complying with an exemption from registration under the 1933 Act.

In addition, if a distribution of Company securities to investors in a venture fund or venture partnership is made prior to the existence of a public market for such securities, the securities distributed would not be registered under Federal securities laws or qualified under any state securities law. Any sale would be required to be made in reliance upon exemptions under those laws. Unless a Company’s securities are registered with the SEC and any required state authorities, or an appropriate exemption from registration is available, if you receive Company Securities in a distribution from a venture fund or venture partnership, you may be unable to liquidate those securities, even though your personal financial condition may dictate such liquidation. Moreover, the resale of any Company securities will generally be subject to Section 4(a)(7) of the 1933 Act or Rule 144 of the 1933 Act. If you intend to sell Company securities distributed to you by a venture fund or venture partnership, you may be required to aggregate your sales with sales made by other investors for some period of time following the distribution, which may restrict your ability to liquidate the Company securities. Therefore, if you require liquidity in your investment, you should not invest in a venture fund or venture partnership.

3.6.6 Restrictions on Transfer

Interests in venture funds or venture partnerships generally cannot be traded and cannot be redeemed. Your ability to transfer interests in venture funds or venture partnerships is subject to contractual, legal and regulatory restrictions. Your interest in a venture fund or venture partnership can only be transferred with the prior written authorization of EF Advisor, which may be withheld in EF Advisor’s absolute discretion. You may not be able to transfer your interests in a venture fund or venture partnership at the time or at the price you seek to make a transfer of your interests. You typically must hold your interest in a venture fund or venture partnership until a liquidation event has occurred.

3.6.7 No Control Over Management of Venture Funds or Venture Partnerships

You will not have any right to manage, influence or control the management or operations of venture funds or venture partnerships. In particular, you will have limited voting rights associated with your interests in a venture fund or venture partnership, but in any event will not have voting powers to direct the management of the Company. Further, EF Advisor typically will not obtain representation on the board of directors or have any control over the management of any Company. The success of any venture fund or venture partnership or Company investment depends on the ability and success of the management of the Company, in addition to economic and market factors.

As investment manager of each venture fund or venture partnership, EF Advisor makes all investment and other decisions for each venture fund or venture partnership, including (without limitation) whether and on what terms to dispose of Company securities held by a venture fund or venture partnership, whether to exercise any conversion, warrant or similar rights on any Company securities held by a venture fund or venture partnership, and whether and how to vote on any proxy or other voting matters related to the Company. Except as required by law, you have no right to remove EF Advisor from its role with respect to a venture fund or venture partnership. You should not invest in a venture fund or venture partnership unless you are willing to entrust all aspects of the management of the venture fund or venture partnership to EF Advisor. Any determination as to whether to distribute securities, or sell the securities and distribute cash, will be made by the EF Advisor, in its sole discretion.

EF Advisor may, in its sole discretion, determine whether to offer follow-on and other related investment opportunities in a Company to some or all of the investors in a venture fund or venture partnership that previously invested in securities of that Company, or to investors who did not invest in that prior venture fund or venture partnership.

3.6.8 No Control Over Company Future Valuation

Valuations may fluctuate considerably and the price paid for Company securities by a venture fund or venture partnership 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.

3.6.9 Investor Expenses That May Not Be Incurred through Other Offerings and/or Direct Purchases of a Company Securities

In general, by purchasing interests in venture funds or venture partnerships through the Site, investors will be charged certain fees that they may not have been charged if making such investments without the use of the Site. Each venture fund or venture partnership will allocate to EF Advisor performance-based compensation in the form of an incentive allocation, representing a portion of any investment gains realized by the venture fund or venture partnership. In addition, investors are required to pay administrative expenses of the venture fund or venture partnership, which would not otherwise be incurred by an investor making a direct investment in securities of the Company. Each venture fund or venture partnership may bear all or part of its own organizational, operating and third party expenses, which may be significant in terms of the size and assets of the venture fund or venture partnership. The expenses and incentive allocation will reduce the amount received by investors in each venture fund or venture partnership, and the incentive allocation could give the EF Advisor an incentive to reject offers to purchase securities held by a venture fund or venture partnership if the purchase price would not be sufficient to generate a significant (or any) incentive allocation.

3.6.10 Expenses Charged to a Venture Fund or Venture Partnership

Each venture fund or venture partnership may allocate certain extraordinary fees and expenses under the terms of its governing documents. Such fees and expenses will be allocated among the investors in a venture fund or venture partnership in accordance with terms of the governing documents. Such fees or expenses may reduce, perhaps materially, your return on investment.

3.6.11 Limited Information About Companies

Due to the nature of private companies, there may be limited information—financial, operating or otherwise—regarding each Company. Any decision to purchase Company securities indirectly through a venture fund or venture partnership must be made without certainty of the Company’s financial and operating data. In the context of other investment decisions, such data might be a necessary part of an investor’s appraisal of the advisability of making an indirect investment in the Company. Investors considering an investment in a venture fund or venture partnership must be aware that there is a risk that: (i) there are facts or circumstances pertaining to a Company that the public, the venture fund or venture partnership and you are not aware of, and (ii) publicly available information and information on the Site concerning the Company upon which you and/or the venture fund or venture partnership rely may prove to be inaccurate, and, as a result, you may suffer a partial or complete loss of the investment.

You should read and understand the risk factors contained in the Company Information before investing in a venture fund or venture partnership. Each Company is solely responsible for providing risk factors, conflicts of interest, and other disclosures that you should consider when investing in a venture fund or venture partnership. Neither EF Advisor nor any of its affiliates has any ability to assure, and has not in any way assured, that any or all such risk factors, conflicts of interest and other disclosures have been presented fully and fairly, or that all applicable risk factors or conflicts of interests have been presented at all.

3.6.12 No Assurance of Profit Distributions

An investment in interests of a venture fund or venture partnership 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 Advisor’s control. You will typically not receive distributions, 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.

3.6.13 Lack of Performance Record

Each venture fund or venture partnership is a newly formed entity with no performance record.

3.6.14 A Venture Fund or Venture Partnership Does Not Offer a Complete Investment Program

A venture fund or venture partnership investment is not a complete or diversified investment program and should represent only a small portion of a potential investor’s investment portfolio.

3.6.15 Potential Liability to Return Prior Distributions

Under applicable law, members of a venture fund or venture partnership may be liable to return prior distributions made to them by a venture fund or venture partnership in the event that such venture fund or venture partnership becomes insolvent subsequent to the date of such distributions.

3.6.16 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 venture fund or venture partnership does not distribute any income (or does not distribute sufficient income to pay the taxes).

3.6.17 Lack of Regulatory Oversight Regarding Reg D Offerings and Offering Materials

Offering documents provided by Companies engaging in Reg D Offerings are not required to be reviewed by, and are not reviewed by, the SEC or any other federal or state regulatory body. Neither the interests in venture funds or venture partnerships nor the underlying Company securities in which venture funds or venture partnerships invest have been registered under the 1933 Act or any other law of the United States, or under the securities laws of any state or other jurisdiction. EF Advisor is an exempt reporting adviser and therefore is not registered as an investment adviser with the SEC or any state or other jurisdiction.

3.7 CONFLICTS OF INTEREST ASSOCIATED WITH REG D OFFERINGS

3.7.1 General

Generally, EF Advisor will manage the venture fund or venture partnership and other funds, and its affiliates, members, managers, officers and/or employees will manage other businesses, including, without limitation, those associated with EF Portal. Each of EF Advisor, EF Portal and each venture fund or venture partnership are affiliated and related parties. Certain inherent conflicts of interest arise from the activities of EF Advisor 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 venture fund or venture partnership.

EF Advisor will devote the time reasonably required to manage the venture fund or venture partnership. EF Advisor and its affiliates, members, managers, officers and/or employees may be engaged in other businesses and activities, including exercising investment advisory and management responsibility and buying, selling or otherwise dealing with investments for their own accounts, for the accounts of family members, and for the accounts of other clients, including with respect to some of the types of investments that EF Advisor will purchase or sell on behalf of a venture fund or venture partnership.

Each of these persons may give advice and take action in the performance of their duties to their other clients that could differ from the timing and nature of action taken with respect to a venture fund or venture partnership. EF Advisor will have no obligation to purchase or sell for a venture fund or venture partnership any investment that EF Advisor or its affiliates, members, managers, officers and/or employees purchase or sell, or recommend for purchase or sale, for its or their own accounts, for the account of any other client. A venture fund or venture partnership will not have any rights of first refusal, co-investment or other rights in respect of the investments made by EF Advisor and its affiliates for other clients, or in any fees, profits or other income earned or otherwise derived from them. If a determination is made that a venture fund or venture partnership and another client of EF Advisor should purchase or sell the same investments at the same time, EF Advisor will allocate these purchases and sales as it considers equitable to each. You will not, by reason of being an investor, have any right to participate in any manner in any profits or income earned or derived by or accruing to EF Advisor or its affiliates from the conduct of any business (other than the venture fund or venture partnership’s business) or from any transaction in investments effected by EF Advisor or any of its affiliates for any account other than that of the venture fund or venture partnership.

3.7.2 Performance-Based Compensation Paid to EF Advisor

EF Advisor will receive a portion of any returns available for distribution to venture fund or venture partnership investors that exceed the initial aggregate investment in the venture fund or venture partnership. If a venture fund or venture partnership sells or otherwise disposes of Company securities, EF Advisor is entitled to receive compensation measured as a portion of the appreciation or net returns on that investment upon a disposition resulting in a distribution of assets to venture fund or venture partnership investors or simply entitled to receive compensation on the basis of distributions due EF Advisor per its ownership interest in a given venture fund or venture partnership. This incentive allocation could give EF Advisor an incentive to reject offers to purchase securities held by a venture fund or venture partnership if the purchase price would not be sufficient to generate a significant (or any) incentive allocation. Before you submit a Subscription Agreement for a venture fund or venture partnership, you will receive information regarding the specific terms of the compensation payable to EF Advisor with respect to the venture fund or venture partnership.

The investment returns experienced by investors in venture funds or venture partnerships will be reduced by any performance-based compensation paid to EF Advisor, which may have a material effect on such returns. Members that are invited by a Company or its Fundraisers to invest directly in the Company on similar terms as a venture fund or venture partnership will not pay any compensation to EF Advisor, and are likely to experience better investment returns as a result.

3.8 EMPLOYEE BENEFIT PLAN CONSIDERATIONS

Individual retirement accounts (“IRAs”) are “benefit plan investors,” as that term is defined by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and are permitted to invest in the venture fund or venture partnership. However, it is not expected that the assets of a venture fund or venture partnership will be treated as “plan assets” of such benefit plan investors for purposes of the fiduciary responsibility standards and prohibited transaction restrictions of ERISA and the parallel prohibited transaction excise tax provisions of Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”). Each venture fund or venture partnership will limit investments by IRAs and other benefit plan investors so that such investments constitute less than 25% of the value of venture fund or venture partnership’s assets.

3.9 TAX CONSIDERATIONS

3.9.1 Partnership Taxation

EF Advisor intends that a venture fund or venture partnership will be classified for federal income tax purposes as a partnership that is not a “publicly traded partnership” treated as a corporation. As a partnership, the venture fund or venture partnership will not be subject to U.S. federal income tax, but you will be required to take into account your distributive share of items of venture fund or venture partnership income, gain, loss and deduction substantially as though you had directly realized such items.

It is not anticipated that any venture fund or venture partnership will provide tax distributions to its investors.

If you are a tax-exempt entity, such as an individual retirement account, generally you will not be subject to U.S. federal income tax on your distributive share of items of income or on gains you recognizes on the sale, exchange or redemption of your interest, unless such items of income or such gain constitute unrelated business taxable income (“UBTI”) for you under the Code. A tax-exempt investor of a venture fund or venture partnership may have UBTI if the venture fund or venture partnership engages in borrowing or if that investor incurs debt to acquire its interest. The venture fund or venture partnership will not borrow for investment purposes; accordingly, EF Advisor does not anticipate that a tax-exempt investor will have UBTI from debt-financed property as a result of its investment in a venture fund or venture partnership unless that investor incurs debt to acquire its interest. Tax-exempt investors should consult their tax advisers about the tax consequences of an investment in a venture fund or venture partnership.

3.9.2 Taxation of Non-United States Investors

The following considerations apply to any investor who is not a United States person as defined in the Code (a “Non-US Investor”). Non-US Investors are allowed to invest in the venture fund or venture partnership only with the permission of EF Advisor.

In general, a non-US Investor’s allocable share of US-source dividends and certain other types of passive income earned by the venture fund or venture partnership will be subject to US federal withholding tax at a rate of 30% or such lower rate as may be provided under an applicable tax treaty.

A non-US Investor that is not otherwise subject to US taxing jurisdiction will not be subject to US federal income tax on its allocable share of gains of the venture fund or venture partnership so long as the venture fund or venture partnership is not engaged in a trade or business within the United States. The venture fund or venture partnership does not anticipate that its investment activities will cause it to be treated as being engaged in the conduct of a trade or business in the United States. If the venture fund or venture partnership were considered to be engaged in a U.S. trade or business, a non-US Investor would be required to file a U.S. federal income tax return and pay tax on its allocable share of the venture fund or venture partnership’s income that was treated as effectively connected with that U.S. trade or business. In the case of a non-US Investor that is a foreign corporation, an additional 30% branch profits tax might be imposed. In addition, in such event the venture fund or venture partnership would be required to withhold taxes from the income or gain allocable to such non-U.S. Investor. Any amounts so withheld would reduce amounts otherwise distributable to such non-U.S. Investor.

Special rules may apply to a non-US Investor that (1) has an office or other fixed place of business in the United States to which such gain is attributable, (2) is a former citizen or resident of the United States, a controlled foreign corporation, a foreign insurance company that holds interests in connection with its US business, a passive foreign investment company, or a corporation that accumulates earnings to avoid U.S. federal income tax, or (3) is present in the United States for 183 days or more during a taxable year. These persons in particular are urged to consult their U.S. tax advisers before investing in the venture fund or venture partnership.

Non-US Investors may need to provide additional certifications to avoid a 30% U.S. withholding tax that applies to US-source dividends and certain other types of passive income starting after June 30, 2014, and to gross proceeds from the sale after December 31, 2018, of assets producing US-source dividends and interest under recent legislation commonly referred to as the “Foreign Account Tax Compliance Act” or “FATCA.”

YOU SHOULD CONSULT YOUR OWN LEGAL AND TAX ADVISERS REGARDING THE POSSIBLE TAX AND OTHER CONSEQUENCES OF BUYING, HOLDING, TRANSFERRING AND REDEEMING INTERESTS IN A VENTURE FUND OR VENTURE PARTNERSHIP.

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