Finder's Agreement

The Finder's Agreement is a document that outlines the terms and conditions between two parties, referred to as the Principal and the Agent. The document is important as it establishes the agreement between the Principal, who is seeking to acquire or sell the issued share capital of a target company, and the Agent, who will provide services to facilitate the transaction.

 

The entire document consists of several sections that cover various aspects of the agreement. The first section is the interpretation section, which defines key terms used throughout the agreement. This section ensures that both parties have a clear understanding of the terminology used.

 

The second section outlines the services to be provided by the Agent. Depending on whether the Principal is a buyer or a seller, the Agent will be engaged to source independent third-party purchasers or sellers for the entire sale interest. This section specifies the duration of the engagement and the non-exclusive nature of the agreement.

 

The third section identifies the excluded persons, who are individuals or entities that have already approached the Principal to negotiate the acquisition or sale of the sale interest. The Principal may notify the Agent of other excluded persons, and all excluded persons and their affiliates are referred to as excluded persons.

 

The fourth section introduces the concept of an agreed person. Before any introduction or meeting between a potential independent third party and the Principal, the parties must sign a written confirmation that includes the full legal name, description, and contact details of the agreed person. This section ensures that the Agent is aware of the potential buyers or sellers and their contact information.

 

The fifth section addresses the commission to be paid to the Agent. If a qualified transaction is completed, the Agent is entitled to receive a commission based on the net premium. The commission is conditional on the completion of the transaction and the Principal receiving the consideration in full by the completion date. The Principal is required to pay the commission within a specified timeframe.

 

The sixth section covers taxes and states that each party is responsible for paying their own taxes arising from the transactions under the agreement. This section ensures clarity regarding tax obligations.

 

The seventh section addresses confidentiality. Both parties are obligated to keep the terms of the agreement confidential, except when required by applicable laws or court orders. This section protects the sensitive information shared between the parties.

 

The eighth section covers the nature of the agreement. It clarifies that the Principal can perform its obligations and exercise its rights through other affiliated companies. The Principal also has the right to assign the agreement and its rights and obligations. The Agent, on the other hand, cannot assign its rights without the written consent of the Principal. This section also clarifies that the agreement does not create a partnership or employer-employee relationship between the parties.

 

The ninth section states that the agreement does not confer any rights to third parties to enforce its terms. This section ensures that only the parties to the agreement have legal rights under it.

 

The tenth section addresses arbitration and proper law. It specifies that any disputes arising from the agreement will be resolved through arbitration and identifies the applicable law.

 

The eleventh section covers notices and service. It outlines the requirements for giving notice under the agreement, including the methods of delivery and the addresses of the parties. This section ensures that both parties can effectively communicate with each other.

 

The agreement concludes with the signatures of the authorized representatives of the Principal and the Agent, indicating their acceptance of the terms and conditions outlined in the document.

How to use this document?

To use the Finder's Agreement effectively, follow these steps:

1. Interpretation: Familiarize yourself with the definitions provided in the interpretation section. This will ensure a clear understanding of the terms used throughout the agreement.

2. Services: Determine whether you are the buyer or the seller. If you are the buyer, engage the Agent to source independent third-party sellers. If you are the seller, engage the Agent to source independent third-party purchasers. Make sure to specify the duration of the engagement and the non-exclusive nature of the agreement.

3. Excluded Persons: Review the list of excluded persons in Schedule 1. If any additional excluded persons have approached you, notify the Agent in writing and update Schedule 1 accordingly.

4. Agreed Person: Before any introduction or meeting with potential buyers or sellers, both parties must sign a written confirmation that includes the full legal name, description, and contact details of the agreed person. Ensure that this step is completed before proceeding with any negotiations.

5. Commission: If a qualified transaction is completed, the Principal is obligated to pay the Agent a commission based on the net premium. Ensure that the commission is paid within the specified timeframe after the completion of the transaction.

6. Taxes: Each party is responsible for paying their own taxes arising from the transactions under the agreement. Make sure to fulfill your tax obligations accordingly.

7. Confidentiality: Maintain the confidentiality of the agreement and its terms, except when required by applicable laws or court orders. Only disclose the existence of the agreement to necessary parties.

8. Nature of Agreement: Understand the nature of the agreement, including the Principal's ability to perform obligations through affiliated companies and the limitations on the Agent's rights to assign or delegate obligations without written consent.

9. No Rights for Third Parties: Remember that the agreement does not confer any rights to third parties to enforce its terms. Only the parties to the agreement have legal rights under it.

10. Arbitration and Proper Law: Be aware that any disputes arising from the agreement will be resolved through arbitration and that the proper law governing the agreement is specified.

11. Notices and Service: Follow the requirements for giving notice under the agreement, including the methods of delivery and the addresses of the parties. Ensure that any changes to contact information are promptly communicated to the other party.

By following these steps, you can effectively use the Finder's Agreement to facilitate the acquisition or sale of the sale interest with the assistance of the Agent.