Finder's Fee Agreement
Draft a contract that compensates an introducer for sourcing opportunities while constraining scope to avoid broker-dealer registration, agency, or fiduciary status.
Prerequisites
- Parties — legal names, entity types, jurisdictions, addresses, signatories, authority.
- Opportunity scope — target type, industry, geography, deal size, exclusions.
- Compensation model — percentage, flat, tiers, caps, earnouts, payment timing.
- Regulatory posture — securities vs non-securities, licensing status, any exemptions.
- Exclusivity + term — exclusive or not, term length, termination rights, tail period.
- Confidentiality — NDA terms, permitted use, disclosure triggers.
- Dispute framework — governing law, venue/arbitration, fees.
Output Structure / Process
1) Definitions
| Term |
Definition |
| Client |
Entity receiving introductions |
| Finder |
Independent contractor providing introductions |
| Opportunity |
Defined category of target parties and transactions |
| Qualified Introduction |
Documented intro meeting stated criteria with Client acknowledgment |
| Transaction |
Definitive agreement or closing event triggering fees |
| Transaction Value |
Defined base for fee calculation |
| Fee |
Amount payable for a Qualified Introduction resulting in a Transaction |
| Tail Period |
Post-termination window for fee eligibility |
2) Parties and Recitals
- Identify each party with jurisdiction and address.
- Recite business purpose and scope of Opportunities.
- State Finder's network/experience basis for engagement.
3) Services and Limitations
- Finder's role limited to introductions and basic background information.
- Explicitly exclude negotiation, structuring, valuation, advice, and solicitation.
- No authority to bind Client or act as agent.
Finder Role Limitation.
Finder will solely identify and introduce potential Opportunities to Client.
Finder will not: (i) negotiate terms; (ii) provide legal, tax, investment,
or valuation advice; (iii) solicit offers to buy or sell securities; or
(iv) bind Client in any manner.
4) Exclusivity Matrix
| Scope |
Exclusive? |
Carve-outs |
| Industry |
Yes/No |
Existing relationships |
| Geography |
Yes/No |
Named exclusions |
| Opportunity Type |
Yes/No |
Client-initiated deals |
5) Compensation Formula
| Component |
Rule |
| Fee Base |
Transaction Value definition (include/exclude earnouts, escrows) |
| Rate |
% or flat; tiers if applicable |
| Trigger |
Signature, closing, or receipt of funds |
| Timing |
Pay within X days of trigger |
| Cap/Min |
Any fee cap or minimum |
| Allocation |
Multiple finders: priority or pro-rata rule |
6) Tail Period
| Tail Length |
Applies To |
Proof Required |
| X months |
Introduced parties |
Written introduction + Client acknowledgment |
Tail must be tied to a documented Qualified Introduction; define what constitutes sufficient proof.
7) Regulatory Gate
| Scenario |
Required Clause |
| Non-securities |
Confirm no securities solicitation; no transaction-based fees tied to securities |
| Securities-related |
Finder represents broker-dealer registration or exemption basis [VERIFY] |
| Foreign introductions |
FCPA/UK Bribery Act compliance representations |
| Regulated industry |
Industry-specific compliance (e.g., healthcare AKS [VERIFY], insurance licensing) |
Broker-Dealer Compliance.
Finder represents that the Services do not require broker-dealer registration
under federal or state law, or that Finder holds all required registrations
and licenses and will provide evidence upon request. [VERIFY]
Anti-Corruption.
Finder will comply with all applicable anti-corruption laws, including the
FCPA and UK Bribery Act, and will not offer or provide anything of value to
influence any decision or obtain improper advantage.
8) Confidentiality
- Define Confidential Information and standard exceptions.
- Use-only-for-performance restriction.
- Return/destroy on termination.
- Survival: trade secrets indefinite; other confidential info X years.
9) Representations and Compliance
- Authority, no conflicts, compliance with laws.
- No bribery, kickbacks, or improper payments.
- No misrepresentation of Client or Opportunity.
- Client performs independent due diligence.
10) Indemnity and Liability
- Mutual indemnities tied to breach, misconduct, or legal violations.
- Notice, defense control, cooperation mechanics.
- Liability cap with carve-outs for fraud, willful misconduct, confidentiality breach.
11) Disputes
- Option A — Arbitration: rules, seat, arbitrator count, fees, interim relief.
- Option B — Litigation: exclusive venue, consent to jurisdiction.
- Include attorneys' fees provision if desired.
12) Miscellaneous
- Independent contractor status; no employment or agency.
- Tax responsibility; 1099 reporting; no benefits.
- Assignment restrictions (Client may assign to affiliates).
- Entire agreement; amendments in writing.
- Notices with delivery methods and deemed receipt.
- Counterparts and e-signatures.
Guidelines
- Never imply agency, fiduciary duty, or authority to negotiate.
- Avoid transaction-based fees tied to securities unless broker-dealer registration is addressed [VERIFY].
- Define Transaction Value precisely; ambiguity here is the top fee-dispute source.
- Add state finder-fee statute references only if confirmed [VERIFY].
- If government entities or healthcare referrals are involved, include anti-kickback language [VERIFY].
- For multiple-finder scenarios, specify priority, pro-rata, and double-introduction resolution.
1---2name: finders-fee-agreement3description: Drafts U.S. corporate Finder's Fee Agreements that compensate introducers while constraining activities to avoid broker-dealer or agency status. Includes compensation mechanics, tail periods, exclusivity matrices, and regulatory gates for securities, anti-corruption, and licensing compliance. Use when drafting finder, introducer, referral-fee, or business-opportunity agreements in corporate development, M&A, or capital-raising contexts. Trigger keywords: finder's fee, introducer agreement, referral fee, business introduction, finder engagement, broker-dealer compliance.4license: Apache-2.05---67# Finder's Fee Agreement89Draft a contract that compensates an introducer for sourcing opportunities while constraining scope to avoid broker-dealer registration, agency, or fiduciary status.1011## Prerequisites12131. **Parties** — legal names, entity types, jurisdictions, addresses, signatories, authority.142. **Opportunity scope** — target type, industry, geography, deal size, exclusions.153. **Compensation model** — percentage, flat, tiers, caps, earnouts, payment timing.164. **Regulatory posture** — securities vs non-securities, licensing status, any exemptions.175. **Exclusivity + term** — exclusive or not, term length, termination rights, tail period.186. **Confidentiality** — NDA terms, permitted use, disclosure triggers.197. **Dispute framework** — governing law, venue/arbitration, fees.2021## Output Structure / Process2223### 1) Definitions2425| Term | Definition |26|---|---|27| Client | Entity receiving introductions |28| Finder | Independent contractor providing introductions |29| Opportunity | Defined category of target parties and transactions |30| Qualified Introduction | Documented intro meeting stated criteria with Client acknowledgment |31| Transaction | Definitive agreement or closing event triggering fees |32| Transaction Value | Defined base for fee calculation |33| Fee | Amount payable for a Qualified Introduction resulting in a Transaction |34| Tail Period | Post-termination window for fee eligibility |3536### 2) Parties and Recitals3738- Identify each party with jurisdiction and address.39- Recite business purpose and scope of Opportunities.40- State Finder's network/experience basis for engagement.4142### 3) Services and Limitations4344- Finder's role limited to introductions and basic background information.45- Explicitly exclude negotiation, structuring, valuation, advice, and solicitation.46- No authority to bind Client or act as agent.4748```text49Finder Role Limitation.50Finder will solely identify and introduce potential Opportunities to Client.51Finder will not: (i) negotiate terms; (ii) provide legal, tax, investment,52or valuation advice; (iii) solicit offers to buy or sell securities; or53(iv) bind Client in any manner.54```5556### 4) Exclusivity Matrix5758| Scope | Exclusive? | Carve-outs |59|---|---|---|60| Industry | Yes/No | Existing relationships |61| Geography | Yes/No | Named exclusions |62| Opportunity Type | Yes/No | Client-initiated deals |6364### 5) Compensation Formula6566| Component | Rule |67|---|---|68| Fee Base | Transaction Value definition (include/exclude earnouts, escrows) |69| Rate | % or flat; tiers if applicable |70| Trigger | Signature, closing, or receipt of funds |71| Timing | Pay within X days of trigger |72| Cap/Min | Any fee cap or minimum |73| Allocation | Multiple finders: priority or pro-rata rule |7475### 6) Tail Period7677| Tail Length | Applies To | Proof Required |78|---|---|---|79| X months | Introduced parties | Written introduction + Client acknowledgment |8081Tail must be tied to a documented Qualified Introduction; define what constitutes sufficient proof.8283### 7) Regulatory Gate8485| Scenario | Required Clause |86|---|---|87| Non-securities | Confirm no securities solicitation; no transaction-based fees tied to securities |88| Securities-related | Finder represents broker-dealer registration or exemption basis [VERIFY] |89| Foreign introductions | FCPA/UK Bribery Act compliance representations |90| Regulated industry | Industry-specific compliance (e.g., healthcare AKS [VERIFY], insurance licensing) |9192```text93Broker-Dealer Compliance.94Finder represents that the Services do not require broker-dealer registration95under federal or state law, or that Finder holds all required registrations96and licenses and will provide evidence upon request. [VERIFY]97```9899```text100Anti-Corruption.101Finder will comply with all applicable anti-corruption laws, including the102FCPA and UK Bribery Act, and will not offer or provide anything of value to103influence any decision or obtain improper advantage.104```105106### 8) Confidentiality107108- Define Confidential Information and standard exceptions.109- Use-only-for-performance restriction.110- Return/destroy on termination.111- Survival: trade secrets indefinite; other confidential info X years.112113### 9) Representations and Compliance114115- Authority, no conflicts, compliance with laws.116- No bribery, kickbacks, or improper payments.117- No misrepresentation of Client or Opportunity.118- Client performs independent due diligence.119120### 10) Indemnity and Liability121122- Mutual indemnities tied to breach, misconduct, or legal violations.123- Notice, defense control, cooperation mechanics.124- Liability cap with carve-outs for fraud, willful misconduct, confidentiality breach.125126### 11) Disputes127128- **Option A — Arbitration**: rules, seat, arbitrator count, fees, interim relief.129- **Option B — Litigation**: exclusive venue, consent to jurisdiction.130- Include attorneys' fees provision if desired.131132### 12) Miscellaneous133134- Independent contractor status; no employment or agency.135- Tax responsibility; 1099 reporting; no benefits.136- Assignment restrictions (Client may assign to affiliates).137- Entire agreement; amendments in writing.138- Notices with delivery methods and deemed receipt.139- Counterparts and e-signatures.140141## Guidelines142143- Never imply agency, fiduciary duty, or authority to negotiate.144- Avoid transaction-based fees tied to securities unless broker-dealer registration is addressed [VERIFY].145- Define Transaction Value precisely; ambiguity here is the top fee-dispute source.146- Add state finder-fee statute references only if confirmed [VERIFY].147- If government entities or healthcare referrals are involved, include anti-kickback language [VERIFY].148- For multiple-finder scenarios, specify priority, pro-rata, and double-introduction resolution.
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