Co-Ownership & Consignment Agreement

PARTIES TO THIS AGREEMENT

Party A (TradeLounge): TradeLounge, a proprietorship firm registered under the laws of India, having its principal place of business at 7th Floor, Pavilion Business Square, Unit No. 705, Sindhi Society, Chembur, Mumbai, Maharashtra 400071 (hereinafter referred to as "TradeLounge" or the "Sales Agent").

Party B (Co-Owner / Participant): The individual or entity whose name, address, PAN, and bank details are set out in Schedule A to this Agreement (hereinafter referred to as the "Co-Owner" or "Participant").

1. RECITALS

A. TradeLounge sources verified surplus inventory ("Inventory") from established brands at significant discounts to the Maximum Retail Price (MRP).

B. TradeLounge invites Participants to co-own discrete batches of such Inventory ("Deals") by advancing a Stock Purchase Advance.

C. As appointed Sales Agent for all Co-Owners of a Deal, TradeLounge sells the co-owned Inventory through its network of 10,000+ retail partners across India and distributes the proportionate share of sale proceeds to each Co-Owner on a weekly basis.

D. The parties wish to record the terms and conditions of such co-ownership and the sales agency arrangement in this Agreement.

2. DEFINITIONS

In this Agreement, unless the context otherwise requires:

"Deal" means a specific batch of Inventory offered by TradeLounge for co-ownership, as described in the relevant Deal Sheet (Schedule B).

"Stock Purchase Advance" or "SPA" means the amount paid by the Co-Owner to acquire their proportionate co-ownership interest in the Inventory of a Deal.

"Co-Ownership Interest" means the undivided proportionate share in the physical Inventory of a Deal held by the Co-Owner, calculated as SPA ÷ Total Deal Size.

"Deal Payout" means the Co-Owner's proportionate share of the actual net sale proceeds received by TradeLounge from the sale of co-owned Inventory.

"Deal Sheet" means the document attached as Schedule B specifying Deal particulars including Inventory description, MRP value, Deal size, Deal Payout projections, and indicative deal duration.

"Retail Network" means TradeLounge's network of retail and trade distribution partners through which co-owned Inventory is sold.

"Deal Cycle" means the period from the date of this Agreement until full liquidation of the co-owned Inventory and final distribution of Deal Payouts, estimated at 5–9 months as set out in the Deal Sheet.

3. CO-OWNERSHIP OF INVENTORY

3.1 Acquisition of Co-Ownership Interest

Upon receipt of the Stock Purchase Advance specified in Schedule A, TradeLounge acknowledges and confirms that the Co-Owner holds an undivided proportionate co-ownership interest in the physical Inventory described in the Deal Sheet (Schedule B). The Co-Owner's interest is in specific, identifiable physical goods held in TradeLounge's warehouses.

3.2 Nature of Interest

The Co-Owner's interest is in physical, tangible goods and NOT in any financial instrument, scheme, or pooled investment vehicle. The Co-Owner is a beneficial co-owner of physical inventory. This Agreement does not constitute:

A collective investment scheme within the meaning of Section 11AA of the SEBI Act, 1992;

A deposit, debenture, or bond of any kind;

A securities instrument regulated by SEBI or RBI; or

A lending or borrowing arrangement.

3.3 Physical Verification

The Co-Owner acknowledges they have been offered the opportunity to verify the Inventory either by a virtual warehouse tour or a physical visit to TradeLounge's warehouse during business hours prior to executing this Agreement.

3.4 Warehousing

TradeLounge shall hold the co-owned Inventory in its warehouses at Bhiwandi, Thane, Maharashtra (or such other warehouse as notified to Co-Owners) and shall maintain the Inventory in good and saleable condition throughout the Deal Cycle.

4. APPOINTMENT AS SALES AGENT

4.1 Appointment

The Co-Owner hereby irrevocably appoints TradeLounge as their exclusive sales agent for the purpose of selling the co-owned Inventory through TradeLounge's Retail Network during the Deal Cycle on the terms set out herein.

4.2 Agency Powers

As Sales Agent, TradeLounge is authorised to:

Market, promote, and sell the co-owned Inventory through its Retail Network;

Issue tax invoices to retailers in TradeLounge's own name as Sales Agent;

Collect sale proceeds from retailers on behalf of all Co-Owners;

Deduct TradeLounge's service fee as specified in Clause 6 from gross sale proceeds; and

Distribute net Deal Payouts to Co-Owners in accordance with Clause 5.

4.3 GST and Invoicing

TradeLounge, as Sales Agent, shall issue GST-compliant invoices to retailers and shall be solely responsible for GST compliance in respect of such sales. The Co-Owner shall have no GST liability in respect of the sale of co-owned Inventory, and no GST invoices shall be raised on or by the Co-Owner in connection with this Agreement.

5. DEAL PAYOUTS

5.1 Distribution of Sale Proceeds

TradeLounge shall distribute Deal Payouts to the Co-Owner on a weekly basis as Inventory sells. Deal Payouts represent the Co-Owner's proportionate share of actual net sale proceeds and are NOT fixed, guaranteed, or predetermined returns.

5.2 Calculation

The Co-Owner's weekly Deal Payout shall be calculated as:

Deal Payout = (Net Sale Proceeds for the Week × Co-Ownership Interest %)

5.3 Indicative Projections

The Deal Sheet (Schedule B) sets out indicative Deal Payout projections based on historical sale prices. These projections are illustrative only. Actual Deal Payouts may be higher or lower depending on prevailing market conditions, retail demand, and actual sale prices achieved.

5.4 Payment Mode

All Deal Payouts shall be transferred directly to the Co-Owner's bank account registered in Schedule A via NEFT/RTGS/IMPS.

5.5 Final Settlement

Upon liquidation of all co-owned Inventory, TradeLounge shall issue a Final Settlement Statement to the Co-Owner setting out total units sold, total sale proceeds, total Deal Payouts made, and balance (if any) payable. Any balance shall be remitted within 7 (seven) business days of the final sale.

6. TRADELOUNGE SERVICE FEE

TradeLounge shall be entitled to retain, from gross sale proceeds, a service fee as specified in the Deal Sheet (Schedule B) in consideration of its sales agency, warehousing, logistics, and distribution services. The service fee shall be deducted from gross sale proceeds prior to calculation of the Co-Owner's Deal Payout.

7. TAX DEDUCTION AT SOURCE (TDS)

TradeLounge shall deduct TDS from Deal Payouts as applicable under the Income Tax Act, 1961, including but not limited to Section 194C at the rate of 1% (for individual/HUF Participants) or 2% (for other Participants), or such other rate as may be applicable. TDS certificates (Form 16A) shall be issued to the Co-Owner within the statutory timeline.

The Co-Owner shall be responsible for their own income tax obligations in respect of Deal Payouts received, which shall be declared as income from other sources (for individuals) or as consignment trading income (for business entities), as applicable.

8. REPRESENTATIONS AND WARRANTIES

8.1 By TradeLounge

TradeLounge represents and warrants that:

The Inventory is genuine, legally sourced surplus stock from verified brand suppliers;

TradeLounge holds clear title to the Inventory at the time of co-ownership transfer;

TradeLounge maintains adequate warehousing and insurance for the co-owned Inventory;

TradeLounge shall act in good faith as Sales Agent and endeavour to achieve the best available sale prices through its Retail Network.

8.2 By Co-Owner

The Co-Owner represents and warrants that:

They have the legal capacity and authority to enter into this Agreement;

The Stock Purchase Advance is being paid from legitimate funds and is not the proceeds of any unlawful activity;

They understand that Deal Payouts are not guaranteed and may vary;

They have read and understood the Deal Sheet and the risks associated with co-ownership of physical inventory.

9. RISK DISCLOSURE

10. TERM AND TERMINATION

This Agreement shall remain in force from the date of execution until the completion of the Deal Cycle and final settlement of all Deal Payouts. Early exit by the Co-Owner is not permitted during the Deal Cycle unless TradeLounge provides written consent and arranges a substitute Co-Owner at its sole discretion.

11. CONFIDENTIALITY

Each party agrees to keep confidential all non-public business information of the other party disclosed in connection with this Agreement, including deal terms, pricing, and Retail Network details, and shall not disclose the same to third parties without prior written consent.

12. GOVERNING LAW AND DISPUTE RESOLUTION

This Agreement shall be governed by and construed in accordance with the laws of India. Any dispute arising out of or in connection with this Agreement shall first be attempted to be resolved amicably between the parties. If unresolved within 30 days, the dispute shall be referred to arbitration under the Arbitration and Conciliation Act, 1996, with a sole arbitrator mutually appointed by the parties. The seat of arbitration shall be Mumbai, Maharashtra.

13. MISCELLANEOUS

This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior understandings.

This Agreement may not be amended except by a written instrument signed by both parties.

If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.

Notices under this Agreement shall be in writing and delivered to the addresses/email addresses set out in Schedules A and B.