- To be executed on Stamp Paper.
- Please take out two copies of this agreement, retain one for your safekeeping and return the other to the Preseed team after sending the signed scanned image of the same into email@example.com.
- Please mention the page number on every page in the format ‘page x of y’, where y is the total number of pages.
- The agreement must be signed on all pages by the concerned parties.
- The necessary annexes be attached wherever applicable.
This Advisor Agreement executed on ……………… (“Effective Date”) summarizes the principal terms and conditions between Preseed Ventures Private Limited CIN U74900UP2014PTC062407 (“Advisor”) and ………………………………………………………..(“Company”) for providing the Advisor Services (as defined hereinafter) (“Proposed Transaction”).
The Advisor, the Company and the Promoter (as defined hereinafter) may be individually be referred to as “Party” and shall collectively be referred to as the “Parties”.
The Company is engaged in the business of financial product distribution and execution (“Business”) and the Promoter is an expert in the Business with his knowledge, reputation and goodwill over the years in …………………….. sector. The Promoter and the Company wish to avails the Advisor Services (as defined hereunder). In light of the above, the Advisor has agreed to offer the Advisor Services and the Promoter and the Company has agreed to avail the Advisor Services in accordance with the terms and conditions of this Term Sheet.
2. Definitive Agreement(s)
The Parties shall enter into Definitive agreement(s) as required by the Advisor in accordance with the terms and conditions of this Term Sheet within 5 (Five) days from the date of Valuation as per Clause 4, unless such time period is extended mutually by all the Parties. The Parties shall negotiate in good faith to conclude and execute Definitive agreement(s). The failure to agree upon the Definitive agreement(s) shall not void this Term Sheet, which shall then be implemented by each Party in good faith. This Term Sheet and the Definitive agreement(s) shall be subject to applicable laws of India.
3. Advisor Services
Advisor agrees to act as a mentor or advisor to the Company and provide advice and assistance to the Company from time to time as further described on Schedule A attached hereto or as otherwise mutually agreed to by the parties (collectively, the “Services”).
An Independent appraiser as confirmed by the Advisor shall be appointed by the Company to provide Independent Valuation, at the cost and expenses of the Company.
5. Investment / Investor Shares
The Company requires an investment of INR ……………….. (To be filled) (“Investment Amount”) in the Company from a Potential Investor in lieu of maximum …….. (To be filled) fully diluted equity shares of the Company (“Investor Shares”).
The Advisor shall be entitled to receive consideration as indicated in Schedule A.
Parties shall have the right to withdraw from the Transaction hereunder without cause, by giving notice to the other party, at any time and without continuing obligation to the other party. Provided that, the provisions of confidentiality, arbitration and Jurisdiction will remain operative regardless of any such withdrawal/termination.
If the Transaction (Signed investment agreement with a potential investor that Advisor has arranged for the Company) is not proceeded with or is abandoned at any stage, during the term of this Agreement, by the Company, then in such case, the Advisor shall be entitled to receive and be paid a Drop Dead Fee, which shall be a fixed fee of Rs. ………………. In case if the Transaction does not proceed with post-acceptance of any Term Sheet (detailing all investment terms with a potential investor) received from prospective Investor then the Advisor shall be entitled to a fee of 50% of the Success Fee based on the value of the transaction as accepted by the Company in such Term Sheet.
The Parties agrees and acknowledges that,
(a) The Advisor may assist the Company in relation to obtaining the Investment Amount, directly by itself or indirectly through a third party as identified and referred by the Advisor (“Preseed Agent”), for a commission, as agreed between the Company and the Preseed Agent.
(b) The Parties agree and acknowledge that the Advisor has the right but not any obligation to directly participate in any negotiation between the (i) Promoter/the Company and (ii) The Potential Investor/any Potential Clients and (iii) Preseed Agent, if any, as the case may be.
(c ) The Promoter and/or the Company shall at no time directly or indirectly avail or attempt to avail financial gains or other non-monetary gains of any nature, with the Potential Investor or any Potential Client, other than the Investment Amount in accordance with the terms of this Term Sheet, unless with prior approval from the Advisor in writing.
(d) If the Company avails any mentoring services from the Advisor, it shall be at mutual agreed terms and conditions.
None of the provisions of this Term Sheet shall be deemed to constitute a partnership between the Parties. Each Party is and shall remain an independent party. None of the Party shall be considered an agent of the other, nor shall it have authority to enter into any contract or any obligation for, or make any warranty or representation on behalf of the other.
10. Right of First Refusal
After the transfer of Total Advisor Shares, in the event either the Promoter or the Advisor (“Selling Party”) intends to transfer any or all of the shares of the Company as held by them (“Offered Shares”) to a third-party transferee (“Identified Transferee”), the Selling Party must offer such Offered Shares to the Advisors as existing shareholder of the Company (“Purchasing Party”) by delivering a written notice (“Offer Notice”). If the Purchasing Party does not exercise this Right of First Refusal within the offer period of 30 days from receipt of the Offer Notice, it will be deemed to be a rejection of the Right of First Refusal, in which case the Selling Party will be permitted to transfer the Offered Shares to the Identified Transferee on the same consideration and upon the terms and conditions as set out in the Offer Notice.
11. Tag-Along Right
In the event the Advisor has not exercised the Right of First Refusal, the Advisor will have the right, but not the obligation, to require the Promoter to cause that the Identified Transferee to purchase from the Advisor any or all shares of Company as held by the Advisor, along with the shares of the Promoter as being purchased by the Identified Transferee for the same consideration and upon the terms and conditions.
12. Deemed Rights of the Advisor
Notwithstanding anything to the contrary herein, the Parties agree and acknowledge that, in the event any Investment Amount in the Company, of whatsoever nature, directly or indirectly, by the Potential Investor or any commercial arrangement between the Promoter/Company with any Potential Client, is made/finalized without the information and prior approval of the Advisor in writing, all of the rights of the Advisor under this Term Sheet (including but not limited to the right of the Advisor in relation to the Total Advisor Shares) shall be automatically effective, valid, legally binding and enforceable.
13. Obligation to act in the best interest of the Company
The Parties undertake towards each other, and for the benefit of the Company, to procure that the Parties shall exercise any power to vote or cause the power to vote to be exercised, at any meeting of the shareholders or the board of director of the Company, as the case may be, so as to enable the approval of any and every resolution necessary or desirable to procure that the affairs of the Company are conducted in accordance with and otherwise to give full effect to this Term Sheet, and likewise so as to ensure that no resolution is passed which is not in accordance with such provisions and in the best interest of the Company.
Any and all disputes, controversies or claims arising out of or in connection with this Term Sheet shall be referred to an arbitration tribunal consisting of sole Arbitrator mutually appointed between the Parties. The arbitration proceedings shall be conducted under and in accordance with the Arbitration and Conciliation Act, 1996. The venue of arbitration shall be Lucknow.
15. Governing Law and Jurisdiction
This Agreement shall be governed by the laws of India and courts of Lucknow shall have exclusive jurisdiction.
16. Expenses and Cost
The Company shall reimburse Advisor for reasonable travel and related expenses incurred in the course of performing services hereunder, provided, however, that any expenses shall be approved by the Advisor emailing a request including the nature of the expense and a maximum amount to the company for approval.
This Term Sheet shall constitute a legally binding agreement of the Parties and their respective legal heirs, successors, legal representatives, administrators, executors and permitted assigns. The Parties agree that the term of this Term Sheet shall be applicable and binding on the Parties irrespective of any change in their shareholding, change in control or change in ownership of any of the Parties.
This Term Sheet may be executed in two (2) or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF the Parties have set their hands on the day, month and year first hereinabove mentioned.
For the ADVISOR
For the COMPANY
For the PROMOTER
Schedule A — Scope of Work
The Advisor will work with the Company on the Proposed Transaction and will:
1. Assist in preparation of Preliminary Information Memorandum (PIM) / Information Memorandum (1M) and financial model with 3 -5 years projections with P&L, Balance sheet and Cash flow based on inputs that shall be shared by the management of the Company
2. Identify Potential Investors and exchange information about the Company with them
3. Assisting raising of funds from the Potential Investors as per the terms of this Agreement.
Our Scope will only be limited to advisory assistance with regard to the above. The Company shall be solely responsible for making all management decisions and performing all management functions. Advisor’s scope of service is restricted to the services specified above and does not cover any other services including the following:
- Tax and regulatory implications in any jurisdiction(s) outside India other than those identified by the Company
- Valuation of assets and issue of any certificate in relation thereto;
- Due diligence of any of the companies of the Company
- Providing legal services or providing any legal opinion on matters of any law;
- Providing comments on the existing direct and indirect tax positions adopted by the Company
- Representation of the Company before any tax/ regulatory/ other judicial or other authorities except as mentioned specifically;
Schedule B — Consideration
For providing the services rendered under this Term Sheet, the fees payable by the Company upon Closing to the Advisor would be as under:
1. Cash Consideration: Success Fee of …… (To be filled) (exclusive of GST and all taxes) of the Transaction Size. The fees would be payable on completion of the Transaction. Transaction Size is the total Investment Amount raised by the Advisor for the Company and
2. Non-Cash Consideration: The Company agrees to dilute …….. (To be filled) of its current shareholding against Proposed Investment of Rs…….. (To be filled). The Advisor will have a balance of any equity partnership that remains after the Proposed Investor has been prorated his equity shares for the Proposed Investment.