If you already have a draft research agreement and want to better understand and see if it doesn`t contain standard clauses, you can have it checked quickly with LawGeex. If a discoverer is not authorized as a broker-dealer under U.S. and government securities laws, a research contract could be illegal and unenforceable. Below is our agreement, taking into account each other`s commitments or actions with respect to this De Finder royalty agreement. Consultant has introduced potential investors to the client in return for the client`s agreement to pay a advisory (or appointment) allowance for these introductory services and/or will he present to potential investors when an investment is made. Therefore, the parties agree that a research fee is a reward and therefore a form of incentive, business contact and resources that pass on the needs of a business or organization to potential customers or partners. While contracts are not necessary in such agreements, the structuring and approval of the terms of research costs can be maintained by all parties on the extent of the compensation. This can be especially useful for contacts that constantly attract companies into the business. With so much at stake, it`s not a good idea to sign a random Finder arrangement that you pull out of the Internet and don`t really understand. This is the compensation clause in a research agreement when highlighted by LawGeex: a common sanction sought by the SEC against issuers who use unregistered discoverers is to prevent the issuer from executing future offers of Regulation D. This could, of course, have deadly consequences for a start-up dependent on private capital.
While the decision was undoubtedly a relief to the Finder, it is not advisable to act as a finder without carefully considering existing securities laws. This can not only lead to the cancellation of the compensation agreement (as almost happened here), but can also result in serious sanctions on the part of financial market supervisors. Rich May`s Investment Management practice group regularly helps clients navigate these issues. In NTV Management, Inc., vs. Lightship Global Ventures, LLC, Massachusetts Supreme Judicial Court struck a first instance that found that a finder fee agreement was not applicable, since it was null and void under Massachusetts and Federal securities laws, since the finder was not registered as a broker. The Finder`s compensation agreement in question, like many of these agreements, held that The Finder (NTV Management, Inc.) had a commission on obtaining capital from investors and/or lenders that lightship Global Ventures, LLC needed to acquire Salary.com. The agreement also provided that, under certain conditions, if Lightship did not use NTV`s sources of capital to acquire Salary.com, a $330,000 consulting fee would be paid instead of a commission.