Private Placement Agreement Proposal Letter/Agreement (TEMPLATE)

Description

This is a standard private placement (fundraising) agreement letter template that can be used when proposing a finders fee for finding sources of equity, debt or other forms of capital for a client.

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Private placement, finders fee, fundraising, success fee, legal, agreement, contract

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posted:: 6/26/2009
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Public Domain

December 1, 2008

Dear : Beta Partners Co., Ltd. (“BP”) is pleased to act as exclusive financial advisor to (the “Company”) in connection with any Sale or Disposition of the Company to a third party purchaser or purchasers (the “Purchaser”) or with acquisition of financing. Please be advised that BP is acting as an independent financial advisor to the Company and that this engagement shall not be deemed to constitute a commitment by BP or any of its affiliates to provide financing or any other credit facilities to the Company. This letter agreement is to confirm our understanding with respect to our engagement. 1. Transaction. BP will assist the Company in identifying investors, Purchasers and/or Acquisition or Merger Candidates and in analyzing, structuring, negotiating and effecting the proposed Sale or Disposition of the Company, or the Acquisition of, or Merger with, one or more Acquisition or Merger Candidates, on the terms and conditions of this letter agreement. BP undertakes to use its reasonable best efforts to identify proposed Purchasers and/or Acquisition or Merger Candidates and structure proposed transactions for the Company; provided, however, that BP can offer no assurance that any proposed transaction will be consummated. 2. Fees, Expenses. As consideration for BP’s information and advisory services described above, the Company agrees to pay BP as follows: a) If, during the period BP is retained by the Company or within one year thereafter, (i) a letter of intent to buy the Company is received from a Purchaser, and (ii) the Company enters into an agreement with any such Purchaser identified by BP which subsequently results in a sale or disposition of all or part of the Company with such Purchaser, the Company will pay BP a transaction fee in an amount equal to 2.0% of the value of the transaction. If, during the period BP is retained by the Company or within one year thereafter, the Company raises financing (the “Financing”) with the assistance of BP from sources identified by BP the Company will pay BP a transaction fee of 3.0% of the principal amount of all Senior Debt raised; plus 4.0% of the principal amount of all Subordinated Debt raised; plus b) 1 of 4 5.0% of the principal amount of all Equity raised. All such fees will be payable at closing out of the proceeds of the Financing. Additionally, the Company agrees to reimburse BP promptly, upon request made from time to time, for its reasonable out-of-pocket expenses incurred in connection with BP’s (and its officers’, its other employees’, agents’ and advisors’) activities under this letter agreement (including the reasonable fees and disbursements of its legal counsel). Out-of-pocket expenses shall include, but not be limited to, reasonable travel, lodging and meal expenses, and long-distance telephone calls that have been or may be incurred by BP in connection with the proposed transaction. BP agrees to advise the Company of any out-of-pocket expenses to exceed $1,000.00 in advance of incurring the expense. 3. Information, Confidentiality. The Company will furnish BP (and will request that each prospective Purchaser or Acquisition or Merger Candidate with which the Company enters into negotiations furnish BP) with such information as BP believes appropriate to its assignment (all such information so furnished being the “Information”). The Company recognizes and confirms that BP (a) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated by this letter agreement without having independently verified the same, (b) does not assume responsibility for the accuracy or completeness of the Information and such other information available from generally recognized public sources, and (c) will not make an appraisal of any assets of the Company or any prospective Purchaser or Acquisition or Merger Candidate. Any written or oral advice provided by BP in connection with the Engagement will be exclusively for the benefit and use of the Company and its Board of Directors and, except as required by law or by order of a court of competent jurisdiction, may not be disclosed to any third party or circulated or referred to publicly (other than a proxy statement, offer to purchase or similar document, and other than in the course of litigation to which such advice is relevant) without our prior written consent, which consent shall not be unreasonably withheld. If any disclosure of BP’s advice is to be made in the course of litigation, the Company shall provide BP with such advance notice of any proposed disclosure as is reasonably necessary in order to permit BP to seek a court order or other appropriate remedy to prevent or limit the scope of such disclosure. As used herein, “Confidential Information” means all information about the Company or the prospective Purchaser or Acquisition or Merger Candidate, other than information which (i) is authorized in writing by the Company to be disclosed, (ii) was publicly known at the time of disclosure, (iii) subsequently becomes publicly known other than as a result of a disclosure by BP or its agents or advisors, or (iv) has become, or hereafter becomes, available to BP on a non-confidential basis from a source other than the Company, the Purchaser, the Acquisition or Merger Candidate or their respective advisors, provided that such source is not known by BP to be bound by a confidentiality agreement or other obligation or secrecy for the Company’s, the Purchaser’s, or the Acquisition or Merger Candidate’s benefit. 2 of 4 BP agrees to hold in confidence and not to disclose the Confidential Information to any third party except (a) as may be required by law or by order of a court of competent jurisdiction; (b) that BP may disclose Confidential Information to those of its officers, directors and employees and representatives of its agents and advisors who have a need to know such information in connection with BP’s activities in connection with the engagement and who have been informed of the confidential nature of such information and have agreed not to disclose such information otherwise than as permitted by this letter; and (c) to any prospective Purchaser or Acquisition or Merger Candidate of the Company which has signed a Confidentiality Agreement. In the event that BP is requested or required by law or legal process to disclose Confidential Information, BP will provide the Company with prompt notice of any such request or requirement so that the Company may seek a court order or other appropriate remedy to prevent or limit the scope of such disclosure. If failing the entry of a protective order, BP is, in the opinion of its counsel, legally compelled to disclose Confidential Information, BP may disclose that portion of the Confidential Information which its counsel advises that BP is compelled to disclose. 4. Independent Contractor. The Company acknowledges and agrees that BP has been retained to act solely as financial advisor to the Company. In such capacity, BP shall act as an independent contractor, and any duties of BP arising out of its engagement pursuant to this letter agreement shall be owed solely to the Company. 5. Termination, Survival. BP’s engagement hereunder may be terminated by either the Company or BP at any time upon thirty days written notice to that effect to the other party; it being understood that the provisions relating to the payment of fees and expenses, indemnification, limitations on the liability of any Indemnified Party, contribution, settlements, the status of BP as an independent contractor and the limitation as to whom BP shall owe any duties will survive any such termination. 6. Miscellaneous. Subject to any and all limitations or restrictions to the contrary set forth in the transaction documents or otherwise restricting the Company, the Company acknowledges that BP may, at its option and expense, on or after the date of closing of any Sale, Disposition, Acquisition or Merger of the Company or the related Financing, place an announcement in such newspapers and periodicals as it may choose, stating that BP has acted as the exclusive financial advisor to the Company in connection with such Sale, Disposition, Acquisition or Merger and/or the related Financing. The Company agrees that all written or oral advice (including any opinion) provided by BP pursuant to this Agreement is being provided solely for the benefit of the Board of Directors and senior management of the Company in connection with and for the purposes of its evaluation of the Transaction described herein, and are not on behalf of, and shall not be disclosed to, nor confer any rights or remedies upon, any other person or be used or relied upon for any other purpose, except as may otherwise be required by law. 3 of 4 No waiver, amendment or other modification of this letter agreement shall be effective unless in writing and signed by each party to be bound thereby. This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed in that state. Please confirm that the foregoing correctly sets forth our agreement by signing and returning to BP the duplicate copy of this letter agreement enclosed herewith. Very truly yours, Beta Partners Co., Ltd. By: < name > Managing Partner Accepted and Agreed to as of the date first written above: By: Chief Executive Officer 4 of 4