An investment introduction agreement is a legal document that is used to formalize the relationship between an investment intermediary and an investor. The agreement outlines the terms and conditions under which the intermediary will introduce the investor to investment opportunities or investment managers, and the compensation that the intermediary will receive for its services.
There are several key elements that are typically included in an investment introduction agreement. These elements include:
1. Parties: The agreement should identify the intermediary and the investor by name and address, and indicate that both parties have the legal capacity to enter into the agreement.
2. Scope of Services: The agreement should specify the types of investment opportunities or investment managers that the intermediary will introduce to the investor. This should include a description of the investment strategy, the expected rate of return, and any other relevant information.
3. Compensation: The agreement should outline the compensation that the intermediary will receive for its services. This may be a flat fee, a commission based on the amount of money invested, or a combination of both.
4. Representations and Warranties: The agreement should include representations and warranties from both parties. The intermediary should represent that it has the necessary licenses, permits, and registrations to provide its services, and that it will comply with all applicable laws and regulations. The investor should represent that it has the necessary financial resources and expertise to evaluate the investment opportunities that are presented.
5. Indemnification: The agreement should contain provisions for indemnification in the event that either party breaches the agreement or causes loss or damage to the other party.
6. Term and Termination: The agreement should specify the term of the agreement and the circumstances under which it may be terminated by either party.
7. Governing Law and Jurisdiction: The agreement should specify the governing law and jurisdiction that will apply in the event of any disputes between the parties.
In summary, an investment introduction agreement is an important document that formalizes the relationship between an investment intermediary and an investor. It is important for both parties to carefully review and negotiate the terms of the agreement to ensure that their interests are protected. By understanding the key elements of the agreement, investors can make informed decisions and protect their investments.