VIEWS: 4 PAGES: 6 POSTED ON: 3/13/2014
______ ______ ______ ______, ______ ______ Re: Equity Placement Engagement ______ We are pleased to confirm the arrangements under which ______, a[n] ______ [entity of owner], (the "Company") is engaging ______, a[n] ______ [corporation/LLC/GP/LP/other] ("Advisor") as the Company's exclusive financial advisor in connection with the sale of securities by the Company*[ and/or the Company's affiliate, ______ ]*. 1. Appointment of Advisor The Company hereby appoints Advisor, and Advisor agrees to represent the Company, as its exclusive financial advisor to assist the Company in arranging for the sale of securities by the Company *[and/or the Company's affiliate, ______ ]*(the "Securities"), to United States investors, the proceeds of which sale are to be used to finance ______. Advisor shall have the right during the term of this letter agreement to represent to the public that it is a financial advisor to the Company. 2. Advisor's General Duties (a) Advisor shall use its best efforts to introduce the Company to underwriters which may be interested in underwriting the sale of the Securities to United States investors. Each underwriter for which introductions are made by Advisor hereunder shall be a Designated Underwriter and shall be listed by Advisor on Exhibit ______ hereto. (b) To perform its duties hereunder, Advisor may perform valuation analysis of the Company *[ and/or the Company's affiliate]*, make presentations regarding the Company *[ and/or the Company's affiliate ]*to underwriters, coordinate visits of potential underwriters with the Company and assist the Company in negotiating the underwriting arrangements for a sale of the Securities. *[(c) Advisor will deliver copies of the offering Memorandum to each prospective investor in the Offering and will not offer to sell or solicit offers to purchase interests in the Fund other than through the Memorandum or other material provided or approved by the Company. The Offering will be made and sold in reliance upon an exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended, and in compliance with all other securities laws applicable to the Offering. Prospective investors will be limited to entitles and persons meeting the criteria set forth in the Memorandum. ]*3. Company Information In connection with Advisor's performance of its duties hereunder, the Company shall (1) provide Advisor, on a timely basis, all information reasonably requested by the Advisor, and (2) make its officers and professionals available to Advisor and the Designated Underwriters at reasonable times and upon reasonable notice. 4. Confidential Information Advisor acknowledges that, in the course of performing its duties hereunder, it may obtain information relating to the Company which the Company has marked as confidential ("Confidential Information"). Advisor shall hold at all times, both during the term of this letter agreement and at all times thereafter, such Confidential Information in the strictest confidence, and shall not use such Confidential Information for any purpose, other than as may be reasonably necessary for the performance of its duties pursuant to this letter agreement, without the Company's prior written consent. Advisor shall not disclose any Confidential Information to any person or entity, other than to Advisor's employees or consultants as may be reasonably necessary for purposes of performing its duties hereunder, without the Company's prior written consent. The foregoing notwithstanding, the term "Confidential Information" shall not include information which (1) becomes generally available to the public, other than as a result of a breach hereof, (2) was available on a non-confidential basis prior to its disclosure to Advisor by the Company, or (3) becomes available to Advisor on a non-confidential basis from a source other than the Company, provided that such source is not bound by a confidentiality agreement with respect to such information. The foregoing notwithstanding, Advisor may disclose Confidential Information to the extent required by law, including court orders, subpoenas, civil investigative demands and interrogatories. *[5. Compensation As compensation for Advisor's efforts hereunder, the Company shall pay Advisor in immediately available funds upon the closing of the sale of the Securities by a Designated Underwriter ("the Closing") the portion of the gross proceeds from the sale of the Securities as determined in accordance with Exhibit ______ hereto. ]**[5. Compensation Based on Percentage of Offering Placed by Advisor In the event that at least 50% of the amount of capital that is committed to the Fund at the time of formation is committed by investors whom Advisor has first contacted on our behalf, then Advisor will be entitled to a placement fee of 2% of all capital committed to the Fund by those investors who are admitted to the Fund at the time of formation. In the event that less than 50% of the amount of capital that is committed to the Fund at the time of formation is committed by investors whom Advisor has first contacted on our behalf, then Advisor will be entitled to a placement fee of 2% of all capital committed to the Fund by those investors who are admitted to the Fund at the time of formation and who were first contacted by Advisor and shall not be entitled to any fee with respect to capital committed to the Fund by those investors who are admitted to the Fund at the time of formation and who were not first contacted by Advisor. ]**[6. Expense Reimbursement Regardless of whether a Closing occurs, the Company shall reimburse Advisor periodically for its reasonable out-of-pocket expenses (excluding compensation to Advisor's employees), including the fees and disbursements of Advisor's attorneys arising from Advisor's performance hereunder*[; provided, however, that the Company's liability for such out-of-pocket expenses shall not exceed $______]*. ]**[6. Retainer Whether or not the Offering is completed within the time limits of this engagement, Advisor shall be entitled to a retainer fee of $1,000 per month from the date hereof and through the termination of this engagement and shall bear all of its additional expenses without any obligation for repayment by the Company. ]**[7. Indemnification The Company shall indemnify and hold harmless Advisor, its members, officers, employees, consultants and agents (collectively the "Indemnified Parties") against all losses, liabilities, claims, damages and expenses whatsoever (including, but not limited to, all losses to the extent of the aggregate amount paid in settlement of litigation, commenced or threatened, or of any claim whatsoever, if such settlement is effected with the Company's written consent, which shall not be unreasonably withheld), and to reimburse the Indemnified Parties for all legal and other expenses incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever, whether or not resulting in any liability, to which the Indemnified Parties may become subject under any statute or at common law or otherwise, arising out of or based upon the offer and sale of the Securities or arising out of its acting as exclusive financial advisor hereunder. If for any reason the foregoing indemnifications are unavailable to any of the Indemnified Parties or are insufficient to hold such Indemnified Party harmless, then the Company shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and such Indemnified Party on the other hand but also the relative fault of the Company and such Indemnified Party, as well as any relevant equitable considerations. These indemnification provisions shall be binding upon and shall inure to the benefit of any successors, assigns, heirs and personal representatives of the Indemnified Parties. These indemnification provisions shall survive any termination of this letter agreement. ]**[7. Indemnification The Company warrants that the Memorandum will not contain, and during the course of the Offering the Company will not make, any untrue statement of any material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Advisor warrants that during the course of the Offering, it will not make any untrue statements of a material fact or omit to state a material fact required to be stated or necessary to make any statement made not misleading concerning the Offering or any matters set forth in or contemplated by the Memorandum. Each party hereto will indemnify and hold harmless the other party (including each of its directors, officers, employees, partners and agents) with respect to any liability (and actions in respect thereof) incurred by such other party by virtue of the indemnifying party's breach of the foregoing warranties and shall reimburse each indemnified party for any legal or other expenses reasonably incurred in connection with investigating or defending any such liability or action, provided that the indemnifying party shall have the right to control the defense of any claim giving rise to such liability and no such claim shall be settled without the consent of the indemnifying party. The foregoing provisions shall survive termination of this Agreement and the Offering and any investigation with respect thereto by any party hereto. In addition, Advisor will indemnify and hold harmless the Company (including its directors, officers, employees, partners and agents), on the terms and conditions set forth above, against all liability (and actions in respect thereof) arising out of or based upon any offering of interests in the Fund by Advisor which is in breach of any antifraud securities law or regulation applicable to the Offering or is made in a manner which is contrary to the specifications set forth in the Memorandum. ]*8. Other Engagements The Company acknowledges that Advisor is and will be acting as financial advisor to other business enterprises seeking to place securities in the United States and agrees that Advisor's provision of services to such enterprises shall not constitute a breach hereof or of any duty owed to the Company by virtue of this letter agreement. 9. Term This letter agreement is effective upon execution by the Company as provided below and shall continue in effect until terminated by either party. *[10. Termination Unless the Offering is sooner abandoned by the Company as provided above (which abandonment shall terminate this engagement), this engagement shall automatically terminate on the date that is one year from the date of this letter unless extended by the parties in writing, and may be sooner terminated by the Company in the following circumstances: Commencing on the date which is [spelled number of months] (______) months from the date hereof and at all times thereafter, the Company shall have the right to terminate this engagement on [spelled number of days] (______) days written notice to Advisor if (1) the Company has reasonable grounds to believe that Advisor is devoting less than its best efforts to locate investors for the Fund; or (2) Advisor has not identified new investor candidates for a period of [spelled number of days] (______) consecutive days and has not theretofore identified investors with the potential to invest capital in the Fund of at least $______; or (3) Advisor, by the conduct of its affairs with potential investors or with the Company, has given either the Company or investors reasonable grounds to believe that the Offering may not be successfully completed. ]**[10. Termination Either party may terminate this letter agreement at any time and for any reason, with or without cause, effective upon the giving of written notice of termination to the other party; provided, however, that Advisor shall be entitled to full compensation as determined pursuant to Section 3 for any Closing that occurs within one (1) year of the termination date, regardless of the reason for the termination. ]*11. General Provisions (a) This letter agreement shall be governed by and under the laws of the State of ______ without giving effect to conflicts of law principles. If any provision hereof is found invalid or unenforceable, that part shall be amended to achieve as nearly as possible the same effect as the original provision and the remainder of this letter agreement shall remain in full force and effect. (b) Any dispute arising under or in any way related to this letter agreement shall be submitted to binding arbitration by the American Arbitration Association in accordance with the Association's commercial rules then in effect. The arbitration shall be conducted in ______, ______. The arbitration shall be binding on the parties and the arbitration award may be confirmed by any court of competent jurisdiction. (c) This letter agreement constitutes the entire agreement and final understanding of the parties with respect to the subject matter hereof and supersedes and terminates all prior and/or contemporaneous understandings and/or discussions between the parties, whether written or verbal, express or implied, relating in any way to the subject matter hereof. Except for amendments of Exhibit ______ by Advisor as provided in Section 2 hereof, this letter agreement may not be altered, amended, modified or otherwise changed in any way except by a written agreement, signed by both parties. (d) Any notice or other communication pursuant hereto shall be given to a party at its address below its signature hereto by (1) personal delivery, (2) commercial overnight courier with written verification of receipt, or (3) registered or certified mail. If so mailed or delivered, a notice shall be deemed given on the earlier of the date of actual receipt or three (3) days after the date of authorized delivery. (e) This letter agreement may be executed in counterparts, each one of which shall constitute an original and all of which taken together shall constitute one document. The Company shall confirm that the foregoing is in accordance with its understanding by signing and returning to Advisor the enclosed copy of this letter agreement, which shall become a binding agreement upon Advisor's receipt. Advisor is delighted to accept this engagement and looks forward to working with the Company on this assignment. Sincerely, ______ By: ______, ______ ______ ______, ______ ______ AGREED AND ACCEPTED: [Sig Block Party 1] ______ ______, ______ ______
"Placement Letter Agreement"