After a jury trial, the jury rendered a verdict in favor of NTV, which awarded it damages equivalent to consulting fees and awarded it three times as much damages under G.L.c. 93A. In response to motions after the trial, the court judge recognized the jury`s verdict and concluded that the Finder`s fee agreement was invalid and unenforceable because NTV was necessary, but did not register as a dealer broker. The problem is that some discoverers, especially „professional“ researchers, may be violating federal and state laws regarding basic titles. In NTV Management, Inc., v. Lightship Global Ventures, LLC, the Massachusetts Supreme Judicial Court overturned a lower court`s finding that a Finder`s Fee agreement was not enforceable, given that it was voided under Massachusetts and Federal securities laws, given that the Finder was not registered as a dealer-dealer. The Finder`s Fee agreement in question provided, like many such agreements, that Finder (NTV Management, Inc.) was to receive a commission related to the acquisition of capital from investors and/or lenders, which Lightship Global Ventures, LLC needs to acquire Salary.com. The agreement also provided that, under certain conditions, NTV would receive an advisory fee of $US 330,000 instead of a commission if Lightship did not use the sources of capital set up by NTV when acquiring Salary.com. After re-entering into its agreement with NTV, Lightship completed the acquisition of Salary.com using a source of capital not granted to it by NTV. Ultimately, Lightship took the position that NTV did not owe commission or consulting fees in connection with the acquisition of Salary.com, and NTV filed a lawsuit for the payment of the commission or, alternatively, the payment of the consulting fees. If you already have a Draft Finder`s Agreement and want to better understand it and see if it contains any non-standard clauses, you can have it checked quickly with LawGeex. This is what the indemnification clause of a finder`s Agreement looks like when it is highlighted by LawGeex: unfortunately, using the wrong type of Finder or the false type of Finder`s Agreement can lead to disaster. It is a common mistake among entrepreneurs and researchers that paying a tax in cash or equity is acceptable if the finder only makes introductions.
It`s not true. It is a myth maintained by entrepreneurs and discoverers who have not been taken. Apparently, a discoverer will expect him to be compensated for finding your money. An agreement between a company and a finder dealing with this remuneration (and other matters) is called a „Finder`s Agreement“. Under Massachusetts law, a person who „conducts securities transactions on behalf of others or on his or her own account“ must be registered as a broker (the federal law is similar). If such a natural or legal person is not registered, he or she cannot enforce a contract that is contrary to securities law. In deciding whether NTV`s agreement with Lightship should be complied with, the SJC examined whether the agreement triggered an obligation for NTV to register as a broker. To this end, the SJC conducted a two-part analysis, in which it stated: „(1) whether the instrument being traded is a `security` and, if so, (2) whether the conduct required in the contract amounts to `transacting`.
The SJC noted that the language of NTV`s agreement with Lightship was broad and undetermined as to the specific form of the transaction that would require such a capital raising and noted that „the contract did not require NTV to conduct transactions in `securities` at first sight.“ These figures are based on cash payments….