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A balanced ADGM-law agreement for a startup or board advisor engaged by an ADGM company as an independent contractor and paid in equity, a fee or both: services and time commitment, an optional share, option or equivalent award under the ADGM Companies Regulations 2020 with monthly vesting, cliff and optional acceleration, confidentiality, IP in deliverables, data protection under the ADGM Data Protection Regulations 2021, liability and ADGM Courts.
Abu Dhabi Global Market (ADGM)
Highlighted blanks are the details your parties fill in.
This agreement is dated the date on which it is signed by the last of the parties.
This agreement is made between [TO BE CONFIRMED — Company] (the "Company") and [TO BE CONFIRMED — Advisor] (the "Advisor").
"Purpose" means [TO BE CONFIRMED — Purpose].
"Services" means [TO BE CONFIRMED — Services].
"Time Commitment" means up to 5 hours a month, at times agreed between the parties.
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"Commencement Date" means [TO BE CONFIRMED — Commencement Date].
"Term" means from the Commencement Date until terminated under the Term and Termination clause.
"Fees" means [TO BE CONFIRMED — Fees].
"Payment Period" means 30 days after receipt of a valid invoice.
"Expense Policy" means the Company will reimburse reasonable, properly documented expenses that it has approved in writing in advance.
"Termination Notice Period" means 30 days.
"Liability Cap" means the greater of AED 50,000 and the total fees paid or payable to the Advisor under this agreement in the 12 months before the event giving rise to the claim.
Where a party is an individual, "it", "its" and "itself" refer to that individual; a reference to a party's officers, board, constitutional documents or being duly incorporated or organised applies only to a party that is a body corporate or other entity; and a reference to a party becoming insolvent includes, for an individual, being made bankrupt or becoming subject to any equivalent procedure in any jurisdiction.
The Company appoints the Advisor to provide the Services during the Term, and the Advisor accepts that appointment. The Advisor must perform the Services with reasonable skill, care and diligence, in a timely and professional manner, and use reasonable efforts to advance the Purpose.
The Company must provide the information, decisions, access and cooperation that the Advisor reasonably needs to perform the Services. The Advisor may rely on information supplied by or for the Company unless the Advisor knows it is materially inaccurate or incomplete.
The Advisor must make itself reasonably available to provide the Services for the Time Commitment. The Advisor decides how, when and where it provides the Services, subject to reasonable coordination with the Company. Any work beyond the Time Commitment requires the parties' prior written agreement.
The Services do not include introducing or soliciting investors, negotiating or arranging any issue or sale of the Company's securities, promoting a market in them, or any other activity that requires a licence, authorisation or registration the Advisor does not hold. The Advisor must not carry on any of those activities for the Company unless the parties first agree separate written terms.
The Advisor acts as an independent contractor and not as the Company's employee, worker, partner, agent or representative. Nothing in this agreement authorises the Advisor to bind the Company, incur liability for it, make representations on its behalf or hold itself out as having that authority.
The Advisor is responsible for its own personnel, methods of work, tax filings, social-security contributions, insurance and other obligations arising from its status as an independent contractor. The Company will make deductions or withholdings only where required by applicable law.
The Company must pay the Fees on the basis stated in the Key Terms, against a valid invoice from the Advisor. The Company must pay each undisputed amount within the Payment Period. It may withhold a genuinely disputed amount if it tells the Advisor promptly why it disputes that amount, and must pay the undisputed balance when due.
The Company must deal with the Advisor's expenses in accordance with the Expense Policy. The Advisor must provide reasonable supporting evidence for any reimbursable expense.
Unless the Fees expressly state otherwise, the Fees are exclusive of any VAT or similar indirect tax properly chargeable by the Advisor. The Advisor is responsible for taxes on its compensation under this agreement. If the Company is required by law to make a withholding, it may do so and must provide the Advisor with reasonable evidence of the withholding.
Subject to the approvals required by the Company's articles of association and the ADGM Companies Regulations 2020, the Company must grant the Advisor an award equal to [TO BE CONFIRMED — Advisor equity (number or percentage of shares, and basis)] (the "Advisor Equity") under the Company's share incentive plan or, where the articles or applicable law do not permit the Advisor to hold shares directly, a phantom award giving an equivalent economic interest. The Company must seek those approvals within 30 days after the date of this agreement, and the award documents must reflect the vesting terms of the Equity Compensation clause. The award documents govern all other terms, including price, exercise, settlement, leaver treatment and transfer, and prevail over this clause if they conflict. No right to the Advisor Equity arises until the award is approved and the award documents are signed. The Advisor is responsible for any tax arising to it on the Advisor Equity.
The Advisor Equity vests in equal monthly instalments over 24 months starting on the Commencement Date (the "Vesting Start Date"). Each instalment vests on the same day of each following month or, if a month has no such day, on its last day. No Advisor Equity vests until 3 months after the Vesting Start Date, when every instalment that would otherwise have vested by then vests together. Instalments are rounded down to whole shares, with any remainder vesting in the final instalment. Vesting stops on the date the Advisor's engagement under this agreement ends for any reason, and no Advisor Equity vests after that date except under the acceleration terms of this agreement, if any.
If, within 12 months after a Change of Control, the Company or its successor ends the Advisor's engagement under this agreement other than for the Advisor's material breach, all unvested Advisor Equity vests in full immediately before that engagement ends. "Change of Control" means a transfer of shares or other transaction after which the persons who held the Company's shares immediately before it hold less than 50% of its shares or voting rights, or a sale of all or substantially all of the Company's business and assets, but not an internal reorganisation or a transaction made principally to raise finance. The Company must ensure the award documents reflect this clause.
The Advisor confirms that entering into and performing this agreement does not breach any obligation it owes to another person. The Advisor may provide services to others, provided that doing so does not create a material conflict with its obligations under this agreement or misuse the Company's Confidential Information. The Advisor must promptly disclose any actual or reasonably foreseeable material conflict, including advising a competitor of the Company, and the parties must work in good faith to agree appropriate safeguards.
Each party must comply with laws applicable to its performance of this agreement, including applicable anti-bribery, anti-corruption, sanctions and export-control laws. Neither party may do anything that would cause the other party to breach those laws.
During the term of this agreement, the Company may name the Advisor as an advisor to the Company, and use the Advisor's name, title and a biography the Advisor has approved, on its website and in its investor, recruitment and marketing materials. The Advisor may withdraw this permission for future materials by written notice. When this agreement ends, the Company must stop presenting the Advisor as a current advisor within a reasonable time.
Each party must keep the other party's Confidential Information confidential and use it only to perform or receive the Services. A party may disclose Confidential Information to its personnel and professional advisers who need to know it and are bound by confidentiality obligations, or where disclosure is required by law, court order or regulator, provided it gives advance notice where legally permitted. "Confidential Information" means information that a reasonable person would understand to be confidential, excluding information that the receiving party can show was lawfully known to it without restriction, becomes public other than through breach, or is independently developed without use of the other party's information.
The Advisor assigns to the Company, with full title guarantee, all present and future intellectual-property rights in deliverables specifically created by the Advisor for the Company in performing the Services, when those rights arise. The Advisor retains ownership of its pre-existing materials, tools, methods, know-how and general skills. To the extent any retained material is incorporated in a deliverable, the Advisor grants the Company a perpetual, worldwide, non-exclusive, royalty-free licence to use, reproduce, modify and distribute it as necessary to use that deliverable for the Company's business.
Each party must comply with applicable data-protection law, including the ADGM Data Protection Regulations 2021 where they apply, when processing personal data in connection with this agreement. Where the Advisor processes personal data for the Company as processor, it may process that personal data only on the Company's documented instructions, must implement appropriate technical and organisational security measures, must ensure authorised personnel are bound by confidentiality, and must promptly notify the Company after becoming aware of a personal-data breach. The parties must put in place any further processor terms required by applicable data-protection law.
This agreement begins on the Commencement Date and continues for the Term, unless ended earlier under this clause.
Either party may terminate this agreement for convenience by giving the other party written notice of at least the Termination Notice Period.
Either party may terminate this agreement immediately by written notice if the other party commits a material breach that is capable of remedy and does not remedy it within 14 days after receiving written notice requiring remedy, commits a material breach that is not capable of remedy, becomes insolvent, ceases or threatens to cease business, or is prohibited by law from performing its material obligations. If the Advisor is an individual, this agreement ends automatically on the Advisor's death, and the Company may terminate it immediately by written notice if the Advisor is unable through illness, injury or incapacity to provide the Services for more than 60 consecutive days.
On termination, the Advisor must promptly stop providing the Services unless the Company asks it to assist with an orderly handover, return or securely destroy the Company's Confidential Information and property on request, and deliver completed work product. The Company must pay undisputed fees and reimbursable expenses properly accrued up to termination. Vesting of any Advisor Equity stops as the Equity Compensation clause provides. Termination does not affect rights or liabilities accrued before termination. The Interpretation, Confidentiality, Intellectual Property, Liability, Notices, General and Governing Law and Disputes clauses continue after termination to the extent needed to give them effect, as do the Company's obligation to pay fees and expenses accrued up to termination and, where this agreement includes them, the Equity Compensation clause as it applies to equity that vested before termination and the Data Protection clause as it applies to personal data the Advisor still holds.
Neither party excludes or limits liability for fraud, fraudulent misrepresentation, death or personal injury caused by negligence, or any liability that cannot lawfully be excluded or limited. Subject to that, neither party is liable to the other for loss of profit, revenue, business, goodwill, anticipated savings or indirect or consequential loss. Each party's aggregate liability arising out of or in connection with this agreement is limited to the Liability Cap, except liability for breach of the Confidentiality clause and the Company's obligation to pay fees and expenses properly due.
A notice under this agreement must be in writing and delivered by hand, reputable courier or email to the Company at [TO BE CONFIRMED — Company notice details] and to the Advisor at [TO BE CONFIRMED — Advisor notice details], or to replacement details notified in writing. A notice is deemed received when delivered by hand, when the courier records delivery, or, for email, when sent without an automated failure message before 5.00 pm on a business day at the recipient's location, and otherwise at 9.00 am on the next such business day.
This agreement is the entire agreement between the parties about its subject matter and replaces prior discussions and arrangements about that subject matter. Each party acknowledges that it has not relied on a statement or representation not set out in this agreement, without limiting liability for fraud or fraudulent misrepresentation. A variation must be in writing and signed by both parties. A waiver is effective only if in writing and only for the specific circumstance for which it is given.
Neither party may assign, transfer or subcontract its rights or obligations under this agreement without the other party's prior written consent, except that the Company may assign this agreement to an affiliate or in connection with a sale of all or substantially all of its business or assets, on written notice to the Advisor. A person who is not a party to this agreement has no right to enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999 as it applies in Abu Dhabi Global Market.
If a provision of this agreement is invalid or unenforceable, it is to be modified to the minimum extent necessary to make it valid and enforceable, and the remaining provisions continue in force. This agreement may be signed in counterparts, each of which is an original and together form one instrument. Electronic signatures may be used to the extent permitted by applicable law.
This agreement and any non-contractual obligations arising out of or in connection with it are governed by the laws of Abu Dhabi Global Market.
The courts of Abu Dhabi Global Market have exclusive jurisdiction to settle any dispute arising out of or in connection with this agreement, including any dispute about its existence, validity or termination.