Special Purpose Entity / SPE

A special purpose entity (SPE) or, in Europe, special purpose vehicle (SPV) or, in other jurisdictions, financial vehicle corporation (FVC) is a legal entity (usually a limited company or limited partnership) created to fulfill narrow, specific or temporary objectives. SPEs are typically used by companies to isolate the firm from financial risk.

Normally a company will transfer assets to the SPE for management or use the SPE to finance a large project thereby achieving a narrow set of goals without putting the entire firm at risk. SPEs are also commonly used in complex financings to separate different layers of equity infusion. In addition, they are commonly used to own a single asset and associated permits and contract rights (such as an apartment building or a power plant), to allow for easier transfer of that asset. They are an integral part of public private partnerships common throughout Europe which rely on a project finance type structure.

A special purpose entity may be owned by one or more other entities and certain jurisdictions may require ownership by certain parties in specific percentages. Often it is important that the SPE not be owned by the entity on whose behalf the SPE is being set up (the sponsor). For example, in the context of a loan securitization, if the SPE securitisation vehicle were owned or controlled by the bank whose loans were to be secured, the SPE would be consolidated with the rest of the bank's group for regulatory, accounting, and bankruptcy purposes, which would defeat the point of the securitisation. Therefore many SPEs are set up as 'orphan' companies with their shares settled on charitable trust and with professional directors provided by an administration company to ensure that there is no connection with the sponsor.

Capital Markets

Today's capital markets are dynamic, complex and highly regulated. The emergence of modern technologies has been accompanied by dramatic increases in various types of financing. Expanding public markets and private capital sources have fueled the development of new companies and industries. With our understanding of the financial and regulatory complexities of venture capital, mezzanine and bridge financing, and public and private offerings, we help our business clients evaluate their financing alternatives, develop a strategic plan for accessing the capital markets and maximize their opportunities in the capital markets.

The Dr. Faisal Khazaal, LLD. Law Group, LP. focuses on assisting technology innovators, entrepreneurs and startup and emerging growth businesses with all aspects of capital identification, formation and strategic growth. We help our clients (i) develop a strategic plan for accessing the capital markets, (ii) identify and secure financing, and (iii) consummate investment transactions involving startup investments, mezzanine financings, initial public offerings, secondary offerings and financings in connection with mergers into public "shell" companies.

Successful businesses require capital to finance internal and external growth, and develop new products, technologies and business concepts. Given the central importance of capital in the establishment and growth of every business, The Dr. Faisal Khazaal, LLD. Law Group, LP. has made it a priority to ensure that sophisticated capital markets corporate finance and securities law capabilities are available when needed by our business clients.

Intellectual Property

At the Dr. Faisal Khazaal, LLD. Law Group, LP., we prefer to keep the number of attorneys involved in a transaction to a minimum. Nevertheless, if the need exists, we can and will call upon our affiliated firms with related legal talents to resolve critical issues for our clients. Special teams can be assembled by our corporate finance and securities attorneys to handle a variety of ancillary legal issues with dispatch and authority.

Today's marketplace puts a high priority on intellectual property rights. Companies know that patents, trademarks, copyrights and trade secrets are among their most valuable assets. In light of the substantial investment that businesses make in research and development and product awareness, we help our clients develop strategic growth and business plans that focus on the protection, exploitation and enforcement of intellectual property rights. The Dr. Faisal Khazaal, LLD. Law Group, LP.'s hands-on technical know-how in various technologies applicable to the e-commerce, telecommunications, medical device, digital content creation, digital encryption delivery, internet services, electronic component manufacturing and software industries, among others, is unparalleled among boutique law firms.

This experience, combined with our ability to call on affiliate firms, enables us to assist businesses in protecting their intellectual property rights.

Licensing & Copyright

In technology transfer, our technical experience brings an extra level of services to our clients when licensing is undertaken on a client's behalf, either as the prospective licensor or licensee. We are well versed in the necessity of having clear descriptions of the license grant, the mode of payment, and the infringement provisions, including who bears the cost of enforcement of a licensed patent, patent portfolio or other technology. Our representation has included addressing issues in the following areas:

Negotiating the license. We have represented clients in negotiations in a variety of circumstances ranging from negotiating the entire license based on client-provided parameters, to the drafting of the formal document and its timely and proper execution, to preparing the licensing document itself, all of which result, ultimately, in assisting clients in negotiating the most favorable terms and conditions.

Enforcing the license. Our attorneys' experiences in negotiating licenses and drafting documents places us in a position to advise clients on the nature and extent of enforcement, the likelihood of success, and the rights and remedies under the license document.

We have handled the negotiation, preparation and enforcement of licensing agreements on a wide range of technical subject matters.

Private Equity

For most technology innovators, entrepreneurs and startup and emerging growth companies, the private placement market is the first and principal source of financing.

As such, it is imperative that every financing be properly designed, valuations be carefully considered and capitalization structures developed with voting control, management ownership and future growth in mind. The Dr. Faisal Khazaal, LLD. Law Group, LP. has completed a wide variety of private placements on behalf of its clients, including seed and subsequent private financings, initial and secondary public offerings, retail and institutional placements, PIPE transactions, and mezzanine and bridge financing.

In effecting and closing such financings, we have also completed stock purchase agreements, registration rights agreements, lock-up agreements and all requisite Blue Sky and federal filings. We also provide opinions to public and private clients on issues relating to the private issuance of securities.

We have represented a very diverse group of issuers and "buy-side" participants in the private placement market, including venture capitalists, investment funds, and individual investors.

Public Offerings

Issuers and other participants in domestic and international transactions rely upon The Dr. Faisal Khazaal, LLD. Law Group, LP.'s depth of experience with public securities offerings and SEC reporting, including:

• Initial public offerings of common stock and other equity securities;
• Subsequent offerings of both common and preferred stock; and
• Private financings and the registration of securities in connection with mergers into public "shell" companies.
  
  The Dr. Faisal Khazaal, LLD. Law Group, LP. assists public clients in their efforts to understand and comply with the various reporting, disclosure and other requirements to which they are subject, including:
  
  
• Preparation of periodic reports for filing with the Securities & Exchange Commission and other state and federal regulatory bodies;
• Disclosure of material business developments;
• Assistance with proxy and information statements, as well as proxy contests;
• Compliance with insider trading, short-swing trading and beneficial ownership regulations;
• Adherence to applicable corporate governance procedures and rules and regulations; and
• Representations before the SEC, NASDAQ and state securities authorities.

Strategic Planning

The most successful acquisitions, financing, and strategic alliances are the result of careful planning. Consideration of U.S. laws, especially in the areas of securities regulation, intellectual property rights, corporate governance and shareholder rights are essential to developing a winning strategy.

The Dr. Faisal Khazaal, LLD. Law Group, LP. evaluates diverse companies involved in e-commerce and the internet, software development, telecommunications, information technology, manufacturing, distribution, retail services, entertainment and environmental technology to minimize risks and identify the variables involved in business combinations or acquisitions.

A thorough investigation of the proposed acquisition target, or strategic partner, is essential to determining the advisability of proceeding with a proposed transaction.

The Dr. Faisal Khazaal, LLD. Law Group, LP. simplifies and resolves regulatory issues that could impede a transaction and otherwise ensures client compliance with appropriate federal and state rules and regulations, particularly in the areas of corporate finance and securities. We understand regulatory structures and work closely with our affiliate law firms, when necessary, to obtain clearances quickly and economically.

In working as a team with venture investors, investment bankers, business managers and accounting advisors, we have structured numerous complex transactions. Our goal is to maximize operational investment and tax incentives, and to apply available risk management devices, without jeopardizing the closing of the transaction.

Venture Capital

We assist entrepreneurs and startup companies in developing strategic plans and identifying, negotiating the terms of and securing venture capital financing.

Venture capitalists have sought our advice in connection with structuring their funds and complying with applicable securities rules and regulations.

We help clients establish ownership structures and design financings that provide our clients with the best means for commercially exploiting their technology or business proposition.

Our representations, on behalf of issuers and venture capital and private equity funds, have included structuring initial and follow-on venture financings as well as preparing all offering materials necessary to ensure full disclosure and compliance with applicable state and federal securities rules and regulations.