INVESTOR NOMINEE TERMS - Last updated May 2022
AGREEMENT FOR APPOINTMENT OF CROWDCUBE CAPITAL LIMITED OR CROWDCUBE EUROPE SL AS INVESTOR REPRESENTATIVE FOR NOMINEE DEALS
1. Agreement forms part of Investor Terms
(a) This Agreement applies between the Investor and Crowdcube in relation to any investment in a Company involving Crowdcube Nominees Limited (“the UK Nominee”) or Crowdcube Nominees Europe Limited (“the EU Nominee”) and forms part of the Investor Terms.
(b) The shares are held on behalf of the investors by either the UK Nominee or the EU Nominee, as specified in the Legal Review or the EU Legal Review. This agreement is therefore between the Investor, Crowdcube Capital Ltd, Crowdcube Europe SL, the UK Nominee and the EU Nominee. This Agreement forms part of the Investor terms.
(c) In this Agreement, the “Company” means a company in which Crowdcube members have invested and on behalf of whom Crowdcube Nominees Limited or Crowdcube Nominees Europe Limited holds the legal title to the Securities; “Securities” means any security (including any electronic token or other form of digitised asset) issued by the Company and held by the Nominee on behalf of the Investors from time to time; and “Investors” means the investors in any Company from time to time in accordance with the Investor Terms (and “Investor” shall be construed accordingly).
(d) Expressions defined in the Investor Terms have the same meaning in this Agreement unless expressly provided otherwise. References to “this Agreement” shall mean reference to the provisions set out in this schedule 1.
(a) Each Investor appoints Crowdcube with full power and authority to perform the actions as set out in this Agreement and the Investor acknowledges and agrees that it may not instruct the Nominee directly.
3. Execution of agreements, taking all action, notifications and voting
(a) Subject to clause 3(c), the Investor agrees that Crowdcube may instruct the Nominee on his or her behalf to execute such agreements and documents as Crowdcube deems, in its absolute discretion, to be in the best interests of the Investors, including but not limited to a shareholders’ agreement between shareholders in the Company and a sale and purchase agreement in respect of any Securities (each a “Company Document”) and to instruct the Nominee to:
(i) take and refrain from taking any actions;
(ii) consent to or withhold its consent to any matter; or
(iii) waive the Investor's rights;
under any such Company Document and, whether or not the Nominee enters into or is bound by any Company Document, to take any and all other action relating to the Company and Securities which Crowdcube determines is in the best interests of Investors as a whole, unless expressly provided otherwise in this Agreement.
(b) Notwithstanding the provisions of clause 3(a), Crowdcube shall not be required or obligated to enforce any term of a Company Document or take any other action, save where clause 3(c) applies.
(i) this Agreement expressly requires it; or
(ii) if Crowdcube determines (in its absolute discretion) that any action should be determined by the Investors,
Crowdcube shall, subject to clause 3(d), use reasonable endeavours to notify the Investors (“Notification”) of the matter which requires a decision to be made by the Investors. Crowdcube shall action any matter which is the subject of a Notification in accordance with the views of the majority of those Investors (measured by the numbers of shares owned beneficially in the Company on the date of the Notification) that respond to Crowdcube in respect of the relevant Notification within the period specified in the Notification. Any response from an Investor received after the deadline specified in the Notification shall be invalid.
(d) There may be circumstances where Crowdcube is not appropriately notified by the Company, or receives insufficient information from the Company, or is otherwise prevented by applicable law to make a Notification under clause 3(c) and the Investor acknowledges and agrees that neither Crowdcube nor its Nominee shall be liable for any such failure to make a Notification.
(e) Crowdcube may instruct the Nominee to vote on any resolution on which the Nominee is entitled to vote or give or withhold its consent to any matter where the Nominee’s consent is required, whether following a Notification or otherwise, except where expressly provided otherwise in this Agreement.
(f) Crowdcube shall not be obliged to follow the procedure set out in clause 3(c) where it has been notified by the Company that the resolution has already been passed or a decision binding on the Nominee has already been made on the basis of the agreement or disagreement (as the case may be) of the requisite number of the other shareholders of the Company.
(g) In the event that the Nominee is obliged to take or refrain from taking any action by any provision of the Company’s articles of association (or equivalent constitutional documents) (“Articles”) or a Company Document, Crowdcube may instruct the Nominee to take or refrain from taking that action (as the case may be) without requiring any further authority from the Investors.
(h) Neither Crowdcube nor the Nominee shall provide the Investor with legal, financial, tax or investment advice in respect of the contents of any Notification or any other matter.
4. Investor back-to-back obligations
(a) If the Nominee is required to enter into any agreement on behalf of the Investor, whether a Company Document or otherwise, the Investor agrees to “back to back” all obligations of the Nominee so that the Investor owes the Nominee the same obligations that the Nominee owes under such agreement.
(b) Crowdcube shall use reasonable endeavours to send any agreement referred to in clause 4(a) to relevant Investors at least 3 Business Days prior to the proposed date of entry into such agreement.
(c) The Investor shall indemnify and keep indemnified Crowdcube, the Nominee and their respective directors, officers, employees, agents and shareholders from and against all claims, actions, proceedings, demands, damages, liabilities, losses, settlements, judgements, costs and expenses (including reasonable legal expenses) which arise out of, directly or indirectly, arising out of or in connection with Crowdcube’s entering into any agreement on behalf of an Investor under clause 4(a).
(d) Clause 4(c) shall not apply to the extent that a claim under it results from Crowdcube’s negligence or wilful misconduct.
5. Dividends and other monies
(a) Crowdcube shall account to the Investor for all dividends and other monies which may be paid by a Company from time to time in respect of its Securities, providing the Investor’s entitlement to those monies is greater than £5.00 or €5.00 and the cost of payment does not outweigh the Investor’s entitlement.
(b) On request by Crowdcube, the Investor shall notify Crowdcube of the bank account to which any payments to be made pursuant to this clause 5 shall be made
(c) Crowdcube shall hold any dividends or other monies due to an Investor in accordance with clause 9.13 of the Investor Terms.
6. Pre-emption rights
(a) Except where clause 6(b) applies, on any transfer or further issue of securities in the Company in respect of which the Nominee holds pre-emption rights and these rights are not disapplied or waived pursuant to the Articles and/or a Company Document (as the case may be), Crowdcube shall use reasonable endeavours to procure that the Nominee’s pro-rata entitlement to such shares (“Nominee’s Entitlement”) is made available to the Investors. This may be by way of a private pitch on the Crowdcube platform (“Pre-Emption Pitch”), in which case the following terms shall apply:
(i) Crowdcube shall use reasonable endeavours to notify the Investors prior to the opening of the Pre-Emption Pitch;
(ii) Crowdcube reserves the right to limit participation in the Pre-Emption Pitch to the individual entitlement of each participating Investor based on their existing holdings in the Company;
(iii) any further shares subscribed for or purchased by the Investors via the Pre-Emption Pitch shall be held by the Nominee as trustee on behalf of the Investors and this Agreement will apply to those Securities; and
(iv) Crowdcube may in its absolute discretion allocate any of the Nominee’s Entitlement which is not taken up by the Investors to any person on the same terms as were offered to Investors.
(b) Crowdcube may instruct the Nominee to waive pre-emption rights in respect of any transfer or further issue of securities in the Company, where Crowdcube determines, in its absolute discretion, that the waiver of pre-emption rights is in the best interests of Investors (including but not limited to where the offer is so small that the cost of administration of the offer to Investors is disproportionate or where a new material transaction is contingent on such waiver).
(c) Crowdcube shall not be obligated to complete a Pre-Emption Pitch in the following circumstances:
(i) if the total amount raised from Investors is less than £20,000 or EUR 20,000 unless a lower amount has been agreed between the Company and Crowdcube in writing; or
(ii) if the Company fails to provide all information reasonably requested by Crowdcube in order for Crowdcube to facilitate the Pre-Emption Pitch, including but not limited to the number of shares to be allocated to the Nominee.
7. Transfer of shares
(a) In the event that the Nominee is obliged by law or pursuant to a provision of the Articles to transfer any Securities (including without limitation on exercise by any shareholders of the Company of any drag-along rights set out in the Articles), or if Crowdcube determines in accordance with clause 3 that the transfer of Securities is in the best interests of Investors:
(i) Crowdcube shall notify the Investor as soon as reasonably practicable;
(ii) The making of any notification made under clause 7(a)(i) by Crowdcube shall be considered to be an instruction to Crowdcube from the Investor to take the relevant action under clause 7(a)(iii) as may be necessary to affect the transfer of the relevant Securities on behalf of the Investor; and
(iii) Crowdcube may instruct the Nominee to transfer the legal title and the beneficial title (on behalf of the Investors) to all of the Securities held by Crowdcube and the Investors and sign all documents and take all actions necessary to affect such transfer.
(b) In the event that Crowdcube is unable to determine that a transfer of Securities is in the best interest of Investors:
(i) Crowdcube shall notify the Investor as soon as is reasonably practicable with a copy of the contract for sale (if available);
(ii) unless otherwise set out in the Notification, Crowdcube shall make such decision in accordance with the views of the majority of those Investors (measured by the numbers of shares owned beneficially on the date of the Notification) that respond to Crowdcube in respect of the relevant Notification within the period specified in the Notification; and
(iii) if the result of the Notification is positive, Crowdcube may then instruct the Nominee to transfer the legal title and the beneficial title (on behalf of Investors) to all of the the Securities held by Crowdcube and the Investors and sign all documents and take all actions necessary to effect such transfer.
(c) To the extent permitted by the Articles or by the Shareholder’s Agreement, the Investor may transfer the beneficial title to the Securities, provided that:
(i) the Investor notifies Crowdcube of its intention to transfer the beneficial title to the Securities as soon as reasonably practicable;
(ii) the Investor provides such information about the transfer and the transferee as Crowdcube may reasonably request (including without limitation the name and address of the transferee, the number of Securities being transferred, the date of the transfer and the price at which the Securities are being transferred);
(iii) the transferee satisfies Crowdcube’s anti-money laundering checks;
(iv) the transferee is, or immediately on the completion of the transfer becomes, a member of the Crowdcube platform; and
(v) following completion of the transfer, the transferee shall be deemed to have adhered to and shall be bound by the terms of this Agreement in all respects as an "Investor".
Any purported transfer of the beneficial title to the Securities by the Investor that is not in accordance with the Articles and this clause 8(c) shall be void and shall not be recognised by Crowdcube, the Nominee or the Company.
8. Investor Obligations
(a) The Nominee shall hold the legal title to the Securities on behalf of the Investor and in consideration of this, the Investor shall:
(i) comply with the provisions of this Agreement, the Articles, any Company Document, and any agreement of the Company as are in effect whilst the Investor holds the beneficial interest in the Securities;
(ii) not attempt to transfer, or purport to transfer the legal title to the Securities whilst this Agreement is in force, or represent that the Investor holds the legal title to the Securities in any way;
(iii) not attempt to transfer the beneficial title to the Securities in any way other than in accordance with the provisions of the Articles and this Agreement; and
(iv) not allow a Security Interest to be created or allow a Security Interest to exist over the Securities, including without limitation, conversion rights and rights of pre-emption, on, over or affecting the Securities and not to enter into an agreement or arrangement to give or create any such Security Interest. For the purposes of this clause 9(a)(iv), a “Security Interest” shall mean any option, mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, assignment, security, interest, retention of title or other encumbrance of any kind securing, or any right conferring, a priority of payment in respect of any obligation of any person or a contractual right to shares or to any asset or liability.
(b) The Investor represents and warrants on an ongoing basis while the Securities are held by the Nominee that each of the obligations in clause 9(a) above is true at all times.
(c) The Investor shall indemnify and keep indemnified Crowdcube, the Nominee, the Company and their respective / its directors, officers, employees, agents and shareholders from and against all claims, actions, proceedings, demands, damages, liabilities, losses, settlements, judgements, costs and expenses (including reasonable legal expenses) which arise out of, directly or indirectly, any act or omission of the Investor, any breach of clause 8(a) or any breach of warranty by the Investor in clause 8(b).
(a) Subject to clause 9(b) of this Agreement, any notice (including, without limitation, any Notification or response to such Notification) shall be given to the parties by email to the following addresses:
(i) Crowdcube: [email protected]
(ii) Investor: the email address most recently notified by the Investor to Crowdcube
(b) Crowdcube may from time to time decide that notices may be given by other means (including, without limitation, via an internet-based platform), in which case Crowdcube shall notify the Investor of such decision by email.
(c) Crowdcube may determine in its absolute discretion whether or not to circulate a notification it has received from a Company to Investors.
10. Fees and expenses
(a) Crowdcube may from time to time charge the Investor fees and expenses for providing the services under this Agreement. Any such fees and expenses shall be exclusive of any fees and expenses which are covered by the Investor Terms.
(b) Crowdcube shall not be required or obligated to take any action in relation to any Securities or any Company unless the Investor agrees to indemnify the Nominee for any cost, expense (including legal fees), claim and/or charge incurred by the Nominee in such enforcement
(a) Save in respect of the Crowdcube's fraud, negligence or breach, neither Crowdcube nor the Nominee shall have any liability whatsoever to the Investor and, subject to applicable law and regulation, may use any assets it holds on trust to cover any loss, liability, damages, costs and expenses incurred or suffered by Crowdcube in the due performance of its rights and obligations under this Agreement.
(b) This Agreement does not confer any rights on any person or party pursuant to the Contracts (Rights of Third Parties) Act 1999 other than the Investor, Crowdcube and the Nominee, except that the Company will be entitled to enforce its rights and benefits under clause 8 this Agreement at all times as if party to this Agreement.
(c) No variation of this agreement shall be effective unless it is in writing and signed by Crowdcube and the Company (or their respective authorised representatives). If any clause is deemed invalid or unenforceable, it shall not impact upon the remainder of this Agreement which shall remain in force.
(d) This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales. The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).
e) This Agreement can be translated from time to time. In the event of conflict between the English text and a translation, the English version shall prevail.
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