Finder's Agreement

The Finder's Agreement is a legal document that outlines the terms and conditions between two parties, referred to as the Principal and the Agent. The agreement is entered into with the purpose of engaging the Agent to provide services to the Principal. The document begins with a brief introduction, highlighting the importance of the agreement. It then proceeds to define various terms used throughout the agreement, ensuring clarity and understanding for both parties.

 

The agreement consists of several sections, each addressing different aspects of the engagement. Section 2 focuses on the services to be provided by the Agent. It states that the Agent will source independent third-party purchasers or sellers, depending on whether the Principal is a buyer or a seller. The engagement is non-exclusive and has a specified term.

 

Section 3 introduces the concept of excluded persons. These 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 they are listed in Schedule 1 of the agreement.

 

Section 4 outlines the requirement for an agreed person. Before any introduction or meeting between a potential independent third party and the Principal, a written confirmation must be signed by both parties. This confirmation includes the full legal name, description, and contact details of the agreed person.

 

Section 5 covers 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 specific conditions for payment vary depending on whether the Principal is a seller or a buyer.

 

Section 6 states that each party is responsible for paying their own taxes arising from the transactions under the agreement. Section 7 emphasizes the confidentiality of the agreement and restricts the disclosure of its terms to third parties, except as required by law.

 

Section 8 clarifies the nature of the agreement, stating that the Principal can perform its obligations through other affiliated companies. It also confirms that the agreement does not create a partnership or employer-employee relationship between the parties. This section further states that the agreement represents the entire understanding between the parties and supersedes any previous agreements.

 

Section 9 specifies that the agreement does not confer any rights on third parties to enforce its terms. Section 10 addresses arbitration and proper law, while Section 11 covers notices and service of the agreement.

 

The agreement concludes with the signatures of the duly authorized representatives of both parties, along with a schedule listing the excluded persons.

How to use this document?

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

1. Understand the purpose: Familiarize yourself with the importance of the agreement, which is to engage the Agent to provide services to the Principal.

2. Define services: Clearly specify the type of services the Agent will provide. If the Principal is a buyer, the Agent will source independent third-party sellers. If the Principal is a seller, the Agent will source independent third-party purchasers.

3. Identify excluded persons: Review Schedule 1 to determine if any excluded persons have approached the Principal for negotiations. Notify the Agent of any additional excluded persons in writing.

4. Confirm agreed persons: Before any introduction or meeting with potential third parties, both parties must sign a written confirmation. This confirmation should include the full legal name, description, and contact details of the agreed person.

5. Commission payment: If a qualified transaction is completed, the Agent is entitled to a commission based on the net premium. Ensure that the conditions for commission payment are met, depending on whether the Principal is a seller or a buyer.

6. Consider tax obligations: Each party is responsible for paying their own taxes arising from the transactions under the agreement.

7. Maintain confidentiality: Both parties must keep the terms of the agreement confidential, except as required by law or court order.

8. Understand the nature of the agreement: Recognize that the Principal can perform obligations through affiliated companies and that the agreement does not create a partnership or employer-employee relationship.

9. No rights for third parties: Understand that third parties have no rights to enforce the terms of the agreement.

10. Follow arbitration and proper law provisions: Familiarize yourself with the jurisdiction and arbitration clauses specified in the agreement.

11. Ensure proper notice and service: Any notices or communications related to the agreement must be in writing and served according to the specified methods in Section 11.

By following these steps, you can effectively use the Finder's Agreement and ensure a clear understanding of the terms and obligations for both the Principal and the Agent.