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A finder’s agreement is a legal document entered into by a principal seeking to sell a target company and an agent engaged to source independent third-party buyers for the sale. The principal engages the agent for a specific period to find a buyer on a non-exclusive basis.
The finder’s agreement outlines the services provided by the agent to the principal, the excluded persons, and the agreed person. The document defines terms such as Affiliate, Business Day, Completion Date, Net Premium, and Qualified Transaction. The agreement specifies that the principal is seeking to acquire the issued share capital of and shareholder loans due from the target company as its legal and beneficial owner, while the principal may also seek to sell the issued share capital of and shareholder loans due to them from the target company. The document requires the principal to inform the agent of all the third-party purchasers that have approached them with an intention to buy the sale interest. The schedule is updated to include these parties, and they are referred to as excluded persons. The principal cannot engage with excluded persons, and the finder’s agreement does not apply to them.
During the term of the agreement, the agent is required to seek an agreement person, who will purchase the entire sale interest. The agreement person must be legally, irrevocably, and effectively settled, and the completion date of the sale must take place within a specified period. The finder’s agreement defines terms used in the document and sets the conditions for the engagement of the agent by the principal to seek an agreed person who will purchase the entire sale interest.
This is a Finder's Agreement between two parties, where the principal is seeking to acquire or sell the issued share capital of a company, and is engaging the agent to find independent third-party purchasers/sellers. Here are the steps to use this document:
1. Understand the Purpose: This agreement is for businesses seeking to engage a third party to find potential buyers or sellers for the entire sale interest of a company.
2. Interpretation: The document provides specific definitions for certain terms used in the agreement, which should be read and understood before proceeding.
3. Services: The Principal engages the Agent for a specific period to source independent third-party purchasers/sellers. This engagement is non-exclusive.
4. Excluded Persons: Schedule 1 lists all persons, including their affiliates, who have already approached the Principal to negotiate the sale/acquisition of the Sale Interest. Any other persons who approach the Principal during the engagement will be added to Schedule 1 and treated as Excluded Persons.
5. Agreed Person: The Agent will provide written confirmation to the Principal when they have found an independent third-party purchaser/seller. The Principal and Agent will then agree on the terms and conditions of the sale/purchase with that person. This person is referred to as an "Agreed Person."
6. Payment: The Agent will be paid a fee for its services, which is calculated as a percentage of the net premium. This fee will be paid within a specified timeframe after the completion of the sale/purchase.
7. Confidentiality: Both parties agree to maintain confidentiality and not to disclose any information to any third party without the other party's written consent.
8. Termination: The agreement may be terminated by either party for any reason by giving written notice. However, termination will not affect the parties' obligations that arose prior to termination.
9. Governing Law: The agreement is governed by the laws of the jurisdiction where the principal has its place of business.
10. Signatures: The agreement is signed by both parties and is effective on the date it is signed.