March 23, 1998
Xx. Xxxxxx X. Xxxxxxxxx
Chairman and Chief Executive Officer
Golf Ventures, Inc.
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx. FL 32801
Dear Xx. Xxxxxxxxx:
Agreement To Provide Services
This agreement is intended to describe the nature and scope of our services.
Audit
As agreed, we will audit the consolidated balance sheet of Golf Ventures, Inc.
and subsidiaries as of December 31, 1997 and the related statements of income,
stockholders' equity, and cash flows for the period then ending in accordance
with generally accepted auditing standards. The financial records and financial
statements are the responsibility of your Company's management.
Our responsibility is to express an opinion on the financial statements based on
our audit At the conclusion of our audit, we will submit to you a report
containing our opinion as to whether the financial statements, taken as a whole,
are fairly presented based on generally accepted accounting principles. If
during the course of our work it appears for any reason that we will not be in a
position to render an unqualified opinion on the financial statements, or that
our report will require an explanatory paragraph, we will discuss this with you.
We will design our audit to provide reasonable assurance of detecting errors or
fraud that would have a material effect on the financial statements. Our work
will be based primarily upon selected tests of evidence supporting the amounts
and disclosures in the financial statements and therefore, will not include a
detailed check of your Company' s transactions for the period. Accordingly, an
audit performed in accordance with generally accepted auditing standards is not
a guarantee of the accuracy of the financial statements, and there is a risk
that material errors or fraud may exist and not be detected by us. However, we
will inform you of any material errors or fraud that come to our attention.
If Golf Ventures, Inc. plans any reproduction or publication of our report, or
any portion of it, copies of masters' or printers' proofs of the entire document
should be submitted to us in sufficient time for our review.
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March 26, 1998
Page 15
In addition, the audited financial statements and our report thereon should not
be provided or otherwise made available to the recipients of any document to be
used in connection with the sale of securities without first submitting copies
of the document to us in sufficient time for our review.
As required by generally accepted auditing standards, we will request certain
written representations from management at the close of our audit to confirm
oral representations given to us and to indicate and document the continuing
appropriateness of such representations and reduce the possibility of
misunderstanding concerning matters that are the subject of the representations.
You agree that all records, documentation, and information we request in
connection with our audit will be made available to us, that all material
information will be disclosed to us, and that we will have full cooperation of
your personnel.
We also ask that your personnel, to the extent possible, prepare various
schedules and analyses for our staff. This assistance by your personnel will
serve to facilitate the progress of our work and minimize costs to you.
Other Services
We-are always available to meet with you and/or other executives at various
times throughout the year to discuss current business, operational, accounting,
and auditing matters affecting your Company. Whenever you feel such meetings are
desirable, please let us know. We are also prepared to provide services to
assist you in any of these areas. We will also be pleased, at your request, to
attend your directors' and stockholders' meetings.
Fees
We have determined a fee arrangement separately for the audits of U. S. Golf
Communities, Inc (Delaware) and subsidiaries; Golf Ventures, Inc.; and Pelican
Strand Development Corporation Our charges for U. S. Golf Communities, Inc.
(Delaware) and subsidiaries are expected to be $60,000 plus out-of-pocket
expenses. Our charges for Golf Ventures, Inc. and Pelican Strand Development
Corporation, in addition to our SEC department review of SEC filings, will be
based on hours incurred at the hourly rates listed below:
Hourly
Personnel Rates
Partners(1) $170
Senior associates 115
Associates 85
Paraprofessionals 50
Administrative staff 25
(1) Exclusive of national SEC specialists who have hourly rates
ranging from $200 - $300. We would anticipate the use of these
specialists in providing professional services to Golf
Venture, Inc. relating to the review of SEC filings such as
the December 31, 1997 lOK.
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March 26, 1998
Page 16
Our charges for professional services plus out-of-pocket and travel expenses
will be billed semimonthly with one-half of the total unpaid xxxxxxxx to be paid
by April 30, 1998 and the remainder to be paid by May 15, 1998. We require a
$10,000 advance payment upon the execution of this agreement.
The fee is based on the following assumptions: your personnel will prepare
certain schedules and analyses for us and make available to us documents for our
examination as and when requested; there will be no significant changes in the
internal accounting controls, accounting systems, key personnel, or structure of
the organization; there will be no significant acquisitions or disposals of
businesses; and there will not be any unanticipated increases in current
operations requiring significant additional audit time. Should we encounter any
unforeseen problems which will warrant additional time or expense, you will be
notified of the situation and, if possible, the added cost.
Our charges for other services will be agreed to separately.
Dispute Resolution Procedure
If any dispute, controversy or claim arises in connection with the performance
or breach of this agreement, either party may, upon written notice to the other
party, request facilitated negotiations. Such negotiations shall be assisted by
a neutral facilitator acceptable to both parties and shall require the best
efforts of the parties to discuss with each other in good faith their respective
positions and, respecting their different interests, to finally resolve such
dispute.
Each party may disclose any facts to the other party or to the facilitator which
it, in good faith, considers necessary to resolve the dispute. However, all such
disclosures will be deemed in furtherance of settlement efforts and will not be
admissible in any subsequent litigation against the disclosing party. Except as
agreed by both parties, the facilitator shall keep confidential all information
disclosed during negotiations. The facilitator shall not act as a witness for
either party in any subsequent arbitration between the parties.
Such facilitated negotiations shall conclude within sixty days from receipt of
the written notice unless extended by mutual consent. The parties may also agree
at any time to terminate or waive facilitated negotiations. The costs incurred
by each party in such negotiations will be borne by it; the fees and expenses of
the facilitator, if any, shall be borne equally by the parties.
If any dispute, controversy or claim arises in connection with the performance
or breach of this agreement and cannot be resolved by facilitated negotiations
(or the parties agree to waive that process), then such dispute, controversy or
claim shall be settled by arbitration in accordance with the laws of the State
of New York and the then current Arbitration Rules for Professional Accounting
and Related Disputes of the American Arbitration Association, except that no
pre-hearing discovery shall be permitted unless specifically authorized by the
Xx. Xxxxxx X. Xxxxxxxxx
March 26, 1998
Page 17
arbitration panel and shall take place in the city in which the BDO Xxxxxxx, LLP
office providing the relevant services exists, unless the parties agree to a
different locale.
Such arbitration shall be conducted before a panel of three persons, one chosen
by each party and the third selected by the two party-selected arbitrators. The
arbitration panel shall have no authority to award non-monetary or equitable
relief, and any monetary award shall not include punitive damages. The
confidentiality provisions applicable to facilitated negotiation shall also
apply to arbitration.
The award issued by the arbitration panel may be confirmed in a judgment by any
federal or state court of competent jurisdiction. All reasonable costs of both
parties, as determined by the arbitrators, including but not limited to (I) the
costs, including reasonable attorneys' fees, of the arbitration; (2) the fees
and expenses of the AAA and the arbitrators and (3) the costs, including
reasonable attorneys' fees, necessary to confirm the award in court shall be
borne entirely by the non-prevailing party (to be designated by the arbitration
panel in the award) and may not be allocated between the parties by the
arbitration panel.
* * * *
We believe the foregoing correctly sets forth our understanding, but if you have
questions, please let us know. If you find the arrangements acceptable, please
acknowledge your agreement to the understanding by signing and returning to us
the copy enclosed.
It is a pleasure for us to be of services to you. We look forward to many years
of pleasant association with you and your Golf Ventures, Inc.
Very truly yours,
BDO Xxxxxxx, LLP
Acknowledged:
By:_____________________
Title:___________________
Date:___________________
