Exhibit 10.1 Xxxxxx Xxxxx employment agreement
September 26, 2005
Xxxxxxx Xxxxxxxxx
Chief Executive Officer
BlueGate Corporation
000 Xxxxx Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
Houston, Texas
Dear Xxxxxxx:
Thank you for the opportunity to submit a proposal for contract CFO services.
The following is a list of additional services available from Clear Financial
Solutions, Inc. (Firm). We hope to exceed your expectations of service from our
firm by clearly identifying the services to be provided, their frequency, and
the objectives and limitations of such services. We have prepared this proposal
for services based our meetings with the management of Bluegate Corporation
(Client). None of the services provided can be relied upon to detect errors,
irregularities, or illegal acts that may exist. However, we will inform the
appropriate level of management of any material errors that come to
our attention or any irregularities or illegal acts that come to our attention,
unless they are clearly inconsequential.
We provide the following services for our clients:
[ ] Contract CFO Services
[ ] Strategic Planning
[ ] SEC Reporting Services
[ ] Business Process Re-engineering
[ ] Performance Measurement and Improvement
[ ] Procedures and Controls
[ ] Financial Analysis
[ ] Outsourced Accounting Services
You have requested that we perform Contract CFO Services for your company. We
anticipate that these services will be performed by Xxxxxx X. Xxxxx, CPA
(Consultant). Xx. Xxxxx may also utilize other staff members of the Firm. The
standard billing rates for our partners and staff are as follows:
Partner Level $165 per hour
Manager Level $125 per hour
Staff Level $75 per hour
Bookkeeper $50 per hour
In the course of performing these services we will do the following:
[ ] Review monthly financial statements;
[ ] Oversee internal controls;
Helping You Do More of What You Do Well!
0000 X. Xxxxxxxxx, #000 Phone 000 000 0000
Xxxxxxx, XX 00000-0000 Fax 000 000 0000
xxx.xxxxxxxxxxxxxxx.xxx E mail xxxxxx@xxxxxxxxxxxxxxx.xxx
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September 26, 2005
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[ ] Provide advice on the application of Generally Accepted Accounting
Principles;
[ ] Assist in the preparation of SEC filings;
[ ] Assist in the preparation of materials for the Client's auditors;
[ ] Provide advice on the structure of financing transactions and contracts; and
[ ] Other projects as requested by management
Consultant reports to the Chief Executive Officer and to the Audit Committee of
the Board of Directors. If an Audit Committee is not in place then the
Consultant reports to the Board of Directors. Consultant has the responsibility,
authority and freedom to report to the Audit Committee independent of
management.
Compensation
We estimate that 40 to 60 hours per month will be necessary to meet the needs of
Client at a cost of $6,600 to $9,900 per month. Should the amount of time
required to complete this project change, we will inform you promptly. Services
will be billed as incurred at the standard hourly rate of $165.00 per hour. Time
incurred in excess of the range of hours noted above will be billed at our
standard rate. If a payment is ever received more than 3 business days late,
then Client is obligated to remit a retainer of $7,500. The retainer will be
held until the end of the contract.
Payment will be due on the 1st of each month. Interest of 1.5% per month will be
charged on all outstanding balances. The payment due upon execution of this
contract is $6,600, which consists of a an estimated first month's fee of
$6,600. If Client becomes 30 days or more in arrears on payments to the Firm,
the Firm has the right to stop performing services under this contract.
Consultant will also be issued an option (the Option) to purchase 350,000 shares
of Client's common stock at an exercise price of $1.00 per share. The Option
will vest on a pro rate basis monthly over a period not to exceed 24 months and
expire at the end of no less than 5 years. The Option will be issued under
Client's 2005 Stock and Stock Option Plan.
Other
The Firm has not been engaged to provide, nor will it provide, any attestation
services, such as auditing, review or compilation services under this contract.
Client will reimburse Firm for reasonable expenses such as mileage, photocopies,
long distance, postage and supplies. The effective date of this contract is
October 1, 2005 and is for a period of one year. If the Client cancels the
contract or fails to perform for any reason, then it shall pay the Firm damages
equal to the balance that it would have paid had the contract been fully
performed. Unless canceled by either party with written notice sixty (60) days
prior to the end of the contract, the contract will automatically renew
for another twelve (12) month period with a 5% fee increase. The contract will
roll over automatically until canceled in writing by either party within sixty
(60) days notice prior to the end of the contract. The retainers will be applied
to the last months billing. Should the contract be renewed, the applicable
retainer shall be rolled forward and will apply to the last billing of the
renewed contract. If the firm is unable to perform due to circumstances beyond
its control, then the Firm is released from this contract
and the Firm has no liability under this agreement. Client may cancel this
contract with 60 days written notice.
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September 26, 2005
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Guarantee
Consultant represents and warrants to Company that all services, work and
deliverables to be performed hereunder shall be performed in a professional and
workmanlike manner to the highest industry standards. If any work does not meet
this standard, a fee accommodation can be arranged. Consultant makes no
guarantees or representations regarding any particular result or outcome based
on services provided.
Other Matters
Based upon the terms and conditions contained in this agreement, you are
engaging Consultant to perform business and management consulting services at
such places and times as may be reasonably agreed to by Consultant. It is
expressly understood and agreed that no provisions of this agreement, nor any
act of the parties, shall be interpreted to create any relationship between
Consultant and the Company other than that of independent contractor. Each party
agrees to keep confidential the proprietary information of the other party that
may be learned during the course of
providing or receiving services under this Agreement. Consultant agrees he will
not disclose any proprietary or confidential information acquired from the
Company under this agreement, including trade secrets, business plans and
confidential or other information which may be proprietary to the Company. This
Agreement shall commence on October 1, 2005 and shall continue indefinitely
until such time as either Consultant or the Company terminates the agreement as
provided below. The parties agree that either the Company or Consultant, through
written notice, may terminate Consultant's
engagement under this Agreement at any time for any reason or for no reason. The
Company shall process payments to Consultant bi-weekly for all undisputed
invoices presented by Consultant under this Agreement but in no case shall
Consultant be paid later than thirty (30) days after the receipt of such
undisputed invoices. In the case of a dispute, such representative as the
Company may designate will discuss the controversial items with Consultant and
attempt to resolve the dispute. The parties will attempt to resolve any
controversy or claim arising out of this Agreement by mediation prior
to commencing any legal action. The maximum recovery for any damages
attributable to work performed, regardless of the cause of action, will be
limited to the return of unearned fees paid to Consultant. All agreements
between the parties are contained in this document. There are no oral agreements
between the parties. This agreement is governed exclusively by Texas
substantive law without reference to Texas choice of law rules. The parties
agree that all disputes arising out of or related to this agreement must be
litigated
in the state district courts of Xxxxxx County, Texas, which the parties agree
shall be the exclusive forum for any and all litigation between them. The Client
expressly agrees that it is subject to personal jurisdiction in Texas for any
and all disputes between the parties. The Client further agrees that subject
matter jurisdiction for any and all disputes between the parties lies
exclusively in the Texas state courts.
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Please indicate your acceptance of the above understanding by signing below. A
copy is enclosed for your records. If your needs change during the year, the
nature of our services can be adjusted appropriately. Likewise, if you have
special projects with which we can assist, please let us know. We look forward
to a long-term and mutually-beneficial relationship with Bluegate
Corporation.
Sincerely,
Clear Financial Solutions, Inc. by
Xxxxxx Xxxxx, CPA
SMP
Reviewed and accepted:
Date
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President/Chief Executive Officer
