Conflict Waiver Legal Services - "The Ultimate" by LgVIP


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									                                       [Logo Goes Here]
                                          [Company Name]
                                           [City, State, Zip]
                                      Telephone (000) 000-0000
                                         Fax (000) 000-0000


Via Electronic Mail

[City, State, Zip]

               RE:     Conflict Waiver

Dear Mr. ______________:

        [COMPANY] (the “Company”) has retained _____________________ (the “Firm”) to
perform legal services for the Company in connection SEC compliance and related matters. It is
presently anticipated that certain members of the Firm will engaging in a business transaction with
the Company comprising of certain promissory notes to be owed by the Company which are
convertible into shares of the Company’s stock (the “Convertible Note Transaction”). As such, the
Firm (or its members) may become a creditor of the Company and a potential equity holder. The
purpose of this correspondence is to disclose potential conflicts of interest to the Company resulting
from the Convertible Note Transaction based upon these circumstances. Whenever an attorney
enters into a business transaction with a client or acquire an ownership or other pecuniary interest
in connection with and potentially adverse to a client, there are potential conflicts of interest
which arise which must be disclosed to the client.

        This written disclosure is being provided pursuant to Rule 3-300 of the Rules of
Professional Conduct of the State Bar of _______________. The purpose of this letter is to
disclose to the Company, generally, where such conflicts might arise, and to obtain a waiver from
the Company of any such conflict if such a waiver is in the Company’s best interests. Rule 3-300
provides as follows:

           "Rule 3-300.        Avoiding Interests Adverse to Client.

           A member shall not enter into a business transaction with a client; or
Mr. _____________
Page 2

           knowingly acquire an ownership, possessory, security, or other
           pecuniary interest adverse to a client, unless each of the following
           requirements has been satisfied:

           (A) The transaction or acquisition and its terms are fair and reasonable
           to the client and are fully disclosed and transmitted in writing to the
           client in a manner which should reasonably have been understood by
           the client;

           (B) The client is advised in writing that the client may seek the advice
           of an independent lawyer of the client's choice and is given a
           reasonable opportunity to seek that advice; and

           (C) The client thereafter consents in writing to the terms of the
           transaction or the terms of the acquisition."

       The principal facts giving rise to the need for this Disclosure and Waiver of Potential
Conflicts are as follows: The Company has requested that the Firm provide legal services in
connection with SEC compliance issues and other matters pertaining to its business operations.
The Firm and/or its members (collectively referred to as the “Firm”), either individually or through
another entity, may invest money in the Company pursuant the Convertible Note Transaction. Such
circumstances create potential conflicts of interest between the Firm or its principals and the

       You understand that the Firm’s potential standing as a creditor or recipient and owner of
the Company's common stock creates a potential conflict of interest in our representation of the
Company, which conflict you waive by countersigning this letter, as further described below.
The potential conflict arises in that the Firm has a direct interest in the performance of the
Company, which could arguably cause the Firm to be a less disinterested provider of advice than
might otherwise be the case, at least in some instances. Because of its interests in the Company,
the Firm may take actions, or may refrain from taking actions, which they believe may benefit the
Firm, but may not be beneficial to the Company. For example, ownership in the form of common
stock might be seen as creating an incentive for the Firm to provide legal advice to encourage the
Company to take action which the Firm might view as favorable to the Firm’s economic interest
in the common stock, rather than in a fully disinterested fashion. Also, if the Firm or its
designees, were to sell the common stock on the open market, it may have an adverse effect on
the market price of the common stock.

        By countersigning this letter, the Company acknowledges and agrees that the Firm has
advised you that (1) the provision of legal services by the Firm related to transactions where the
Firm may also be a party as an investor; (2) the Firm’s potential investment in the Company; and
(3) the Firm’s potential receipt and ownership of common stock via conversion of promissory
Mr. _____________
Page 3

notes: all present potential conflicts of interest between the Company and the Firm. Moreover,
by countersigning this letter, the Company confirms that (a) it waives any potential conflicts
arising out of and consents to (1) the provision of legal services by the Firm in connection with
transactions where the Firm may also be a party as an investor; (2) the Firm’s investment in the
Company; and (3) the Firm’s receipt and ownership of common stock: (b) the Company’s
consent has been freely given; (c) the Company has had the opportunity to consult with
independent counsel of its own choice prior to countersigning this letter; and (d) it has fully
considered the conflicting interests that exist between the Company and the Firm.

          We urge you to seek the advice of independent legal counsel of your choice to discuss these
matters. Once you have done so, after taking the foregoing information into consideration, if the
Company wants the Firm to continue to provide legal representation, we request that the Company
sign and return to us a copy of this letter to confirm the following: (i) that the Company understands
that its interests may be adverse to and conflict with the interests of the Firm and its principals,
understands the nature
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