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.