AGREEMENT AND STATEMENT OF WORK August 21, 2007
Exhibit
10.27
AGREEMENT
AND STATEMENT OF WORK
August
21, 2007
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1.
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PARTIES:
This agreement is between Celsia Technologies, Inc. (Celsia) and
Core
Strategies, LLC. (Core)
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2.
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EFFECTIVE
DATES: This agreement will be effective from August 15, 2007 through
the
earlier of August 14, 2009 or, if terminated prior to that date under
section 9 of this agreement.
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3.
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PURPOSE:
Xxxxxx has asked Core to provide general management, sales management
and
marketing management services. The goal of these services to help
build
Celsia into a company which is profitable, scalable and valuable
to
investors.
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4.
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SCOPE
OF WORK: Core will provide the services of the following Core partners
to
Celsia:
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a.
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Xxxxxx
Xxxxxxxxxxx as Chief Executive Officer of Celsia, upon the approval
of the
Celsia board, on a full-time basis until at least August 20,
2008
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b.
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Xxxxxxxx
Xxxxxxxxx in the strategy and marketing area on a part-time
basis
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c.
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Xxxx
Xxxxxx in the sales area on a part-time
basis
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d.
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Potentially
other Core partners and affiliates as
required
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e.
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Core
will identify other employees for future assignments to be defined
as the
organization expands.
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Core
partners will work with existing Celsia employees to provide advice, plans,
and
executional management of those plans. They will travel, as required to
appropriate and required.
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5.
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CORE
DELIVERABLES:
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a.
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Core
will establish a regular series of functional management meetings
that
will be responsible for setting goals, assigning responsibilities
and
measuring progress in the key areas of the
business.
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b.
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Core
will provide specific functional plans for all management
areas.
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c.
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Core
will develop a set of metrics and milestones to measure the progress
of
each stage of its proposed business plans, including headcount
requirements. An initial turnaround-phase strategic plan will be
developed
within 90 days by the Core team. The objective of this plan will
be to
create a path for Celsia to breakeven on cashflow based on penetrating
its
currently-identified markets with the current set of technologies
it
controls. Later stage plans will identify growth strategies for Celsia
that may involve making additional investments to exploit a broader
set of
market opportunities.
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Page 2
of 4
12/6/2007
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Celsia/Core
Agreement and
SOW
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d.
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Core
will provide regular updates to the Celsia board of directors on
business
progress.
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e.
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Core
will provide a workspace in its Southern California office for Celsia
personnel to work from.
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f.
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Core
will provide market primary research services to Celsia as
required.
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6.
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CORE
COMPENSATION:
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a.
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Celsia
will pay a monthly base cash fee of $20,000 for the services Core
provides
under sections 4 and 5 above. Any changes will be approved by Xxxx
Xxxxxxx
and Xxxxxxx Xxxxxxx.
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b.
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Celsia
will reimburse Core for travel expenses in connection with its work.
Core
personnel travel will be guided by the Core Strategies Travel Policy,
described in the next section of this
agreement.
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c.
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When
providing market research services to Celsia, Core will provide fixed
bid
estimates for all work. Those estimates will include Core’s standard
profit margin for its work. Core will bid all work out competitively
when
it uses suppliers in connection of its market research. Core market
research estimates are provided with a contingency of plus/minus
10%.
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d.
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Celsia
will provide the Core team with options for 8,000,000 (8 million)
shares
of Celsia stock (NASDAQ BB: CSAT), as
follows:
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i.
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Xxxxxx
Xxxxxxxxxxx - options on 6 million
shares;
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ii.
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Core
Strategies, LLC - options on 2 million
shares.
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e.
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The
strike price of the options will be the price of CSAT common stock
as of
the effective date of this agreement. The vesting of these options
is as
follows:
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i.
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All
of the above options will vest on a regular quarterly schedule
(1/12th
of
the options shares will vest every quarter) UNLESS one of the following
events occurs, in which case accelerated vesting will
occur:
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ii.
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One-third
of the remaining unvested shares will vest when Celsia reaches cash
flow
break-even for a quarter.
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iii.
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One-third
of the remaining unvested shares will vest when Celsia exceeds
its revenue/profit forecasts (for a quarter) and we can demonstrate
that
we are moving into our growth-phase projections for revenue, margins
and
expenses.
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Page 3
of 4
12/6/2007
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Celsia/Core
Agreement and
SOW
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iv.
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One-third
of the remaining unvested shares will vest when Celsia wins 2 accounts
that will generate a minimum of $500,000 in profitable revenue over
the
subsequent 12 month period. (Note: A win is described as a committed
contract/DOU or purchase req. which forecasts a volume over 1 one
year
program and is reasonable to achieve if Celsia delivers on all
commitments.)
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v.
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In
the event the company is sold, or a change of control is deemed to
occur,
all unvested shares will immediately
vest.
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f.
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The
other specific terms of this options grant will be governed by the
options
plan under which they were
authorized.
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7.
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CORE
TRAVEL POLICY: All travel will be billed at cost, without mark-up
by Core.
Core personnel travel economy class for all flights unless authorized
by
Celsia’s CEO. All Core personnel are encouraged to use hotels, restaurants
and rental cars which economize client resources appropriately. Core
personnel using their own cars will be reimbursed at the current
IRS
allowable rate (as of this writing: $0.485 per mile), plus tolls
and
parking. Receipts for any expense over $25 (except mileage) will
be
provided as backup to Celsia.
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8.
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PAYMENT
METHOD AND TERMS: Celsia will pay the monthly cash fee to Core every
month
on the 15th
of
the month, for the service being provided in the following month.
(Illustration: Payment for work from August 15 - September 15 is
due
August 15.) Core will xxxx Xxxxxx for out-of-pocket expense reimbursement
twice a month, under separate invoice. Expense reimbursement will
be made
within 5 days of invoice receipt.
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9.
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TERMINATION:
This agreement terminates as of August 14, 2009. However, it may
be
terminated earlier, upon 60 day written notice by either party. Celsia
will continue to pay Core its agreed upon monthly base fee during
the
period from notification of termination through actual termination
of
services.
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10.
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RENEWAL:
This agreement may be renewed or extended upon mutual
agreement.
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11.
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DISPUTE
RESOLUTION: Both parties agree to attempt to resolve all issues relating
to this agreement as quickly and amicably as possible. In the event
a
mutually agreed resolution is not possible, both parties agree to
refer
the matter to a qualified, certified arbitrator through an accredited
arbitration organization (such as the American Arbitration Association).
Both parties agree that the decision of the arbitrator will be final
and
binding.
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Page 4
of 4
12/6/2007
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Celsia/Core
Agreement and
SOW
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12.
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GOVERNING
LAW: The laws of the State of California shall govern all matters
relating
to this agreement
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13.
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SEPARABILITY:
In the event that any part of this agreement is determined to be
invalid
or void, the remaining valid portions of the agreement are deemed
to
remain in effect.
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14.
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APPROVALS
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CELSIA,
INC.
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CORE
STRATEGIES, LLC
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By:
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/s/
Xxxxxxx Xxxxxxx
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By:
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/s/
Xxxxxxxx Xxxxxxxxx
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Title:
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Director
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Title:
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CEO
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Date:
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August
15, 2007
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Date:
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August
15, 2007
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Celsia,
Inc.
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Core
Strategies, LLC
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0000
Xxxxxxxx - Xxxxx 000
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00000
Xx Xxxxxx - Suite 103
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Miami,
FL 33131
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Laguna
Hills, CA 92653
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Attn:
Xxxx Xxxxxxx, Xxxxxxx Xxxxxxx,
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Attn:
Xxxxxxxx Xxxxxxxxx
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Board
members
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