Xxxxxx Street Associates
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
xxx.xxxxxxxxxxxx.xxx
January 6, 2005
Xxxxx X. Xxxxxxx
XRG Inc.
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Re: Engagement for Consulting Services
Dear Xx. Xxxxxxx:
This letter of agreement (AGREEMENT) will serve to confirm our agreement with
respect to the due diligence financial and operational review services Xxxxxx
Street Associates (WSA), will perform for XRG Inc. (CLIENT), as well as the fees
for our services, the method and timing of payments, and other terms and
conditions of the engagement. WSA remains an independent subcontractor to CLIENT
under this AGREEMENT.
1. The Consulting Services to be Provided
WSA will provide the following services (SERVICES):
a. review and have access to all financial statements and cash
management of CLIENT, including but not limited to, historical,
current and projected, as well as all books, records, bank account
statements, banking records, of CLIENT and subsidiaries of CLIENT;
b. make recommendations and supervise any reorganization of operations
of CLIENT;
WSA will have observational rights to all Board of Directors actions
and meetings of CLIENT.
2. Term of Engagement
This engagement shall commence on the date of this AGREEMENT. This
AGREEMENT will continue for an unspecified term.
3. Fees for SERVICES and Method of Payment
CLIENT shall pay WSA an hourly fee of one hundred dollars ($100).
CLIENT acknowledges that this is a discounted rate based on an
anticipated bulk hours on site at premises of CLIENT given the
SERVICES outlined in this AGREEMENT. Any portion of an hour will be
rounded up to the next highest quarter hour when billed. All hours for
travel and transit, locally and nationally, are billable under this
AGREEMENT.
WSA will limit xxxxxxxx and services to no more than ten thousand
dollars ($10,000) per month to CLIENT.
Upon execution of this AGREEMENT, CLIENT shall remit to WSA a retainer
(RETAINER) of five thousand dollars ($5,000). Due to the cash position
of CLIENT, this RETAINER will be replenished and maintained at WSA's
demand so that WSA is continuously drawing against such RETAINER when
rendering services to CLIENT. WSA may opt to bill CLIENT for services
rendered and maintain the RETAINER amount at the $5,000 level at all
times. Upon conclusion of this AGREEMENT, any balance unallocated for
services rendered to CLIENT by WSA will be paid back to CLIENT by WSA
within ten (10) business days of such conclusion.
Payment is due upon invoicing by WSA. Payment is to be remitted as per
the instructions on each invoice. If WSA is working on site at CLIENT
premises, WSA may opt to receive payment directly as opposed to having
payment mailed to WSA home offices in New York State. WSA will invoice
CLIENT at its discretion but no more than once weekly, and no less
than once monthly.
CLIENT will reimburse WSA for all out-of-pocket expenses incurred in
the ordinary course of servicing the CLIENT including air, rail, taxi
fare, highway tolls, car rental, parking, hotel, meals, all gratuities
for such, photocopies, postage,
January 6, 2005
Letter of Agreement
Page 2 of 3
etc. WSA will endeavor to keep all such expenses to reasonable levels.
Hotel Accommodations:
Hotel accommodations are not to exceed two hundred dollars ($200) per
night including local tax. In rare cases where WSA exceeds such limit,
CLIENT will be billed only up to such limit per night. Due to the
extended stay(s) required in the Tampa, Florida region by WSA for the
on site work, such other reasonable expenses as may be incurred by WSA
for cleaning and laundering, health and fitness clubs, weekend travel,
newspapers and publications, etc. may be billed to CLIENT at WSA's
discretion. WSA will in all cases endeavor to keep all such expenses
to the lowest reasonable level and will negotiate long term rates or
seek to get the lowest possible rate for such expenses. WSA will not
expense on any out of the ordinary levels for hotel accommodations,
nor will it accept the lowest possible level of quality available. All
such accommodations must meet the approval of WSA in its sole
discretion.
Administrative Support:
WSA will bill CLIENT for any WSA administrative support at its offices
at the rate of twenty five dollars ($25) per hour for any whole or
partial hour. Reimbursement for such expenses is due upon submission
by WSA to CLIENT of an expense reimbursement form along with original
receipts for all such expenditures.
Courier Services:
CLIENT will provide its own account number to be billed directly for
any express courier services necessary, whether conveyance originates
at CLIENT or at WSA offices for all CLIENT matters.
Meals:
Time spent consuming lunch or other meals on or off CLIENT premises
will be billable to CLIENT by WSA if CLIENT matters are addressed
during such meals.
Equity:
Equity in CLIENT will also be granted to WSA at a level to be
determined, and granted at the most favorable terms concurrent with
any other new share issues of CLIENT or most recent previous new share
issuances to date that WSA receives its shares in CLIENT.
4. On Site Provisions
CLIENT will furnish the following to WSA for on site work by WSA at
CLIENT offices and premises. Appropriate office space with desk,
chair, computer, printer, phone, FAX and internet access. Due to the
extended stays required to render the SERVICES, WSA may make outgoing
and receive incoming correspondence on all above modes on matters not
directly related to CLIENT matters. WSA will do so in a manner that
such does not materially impact WSA's productivity in rendering
SERVICES to CLIENT. However, WSA will not track time in such a
detailed manner that such time spent on non-CLIENT matters will be
deducted from hours spent at CLIENT premises.
5. Termination
CLIENT cannot terminate this agreement without WSA's approval.
6. Indemnification of Liabilities
CLIENT agrees to defend, indemnify and hold harmless WSA, its
officers, directors, principals, agents and employees from and against
any and all claims, losses, damages, liabilities, judgments, expenses
and costs (including reasonable attorney's fees and expenses) which
WSA may incur and/or require based upon the services rendered under
this AGREEMENT. This is inclusive for any titles, roles and officer
and/or director capacities that Xxxxxxx X. Xxxxx and/or WSA may
assume.
7. Governing Law
This agreement shall be governed and interpreted with the laws of the
State of New York, without regard to the conflict of interest
principles thereof or the actual domiciles of the parties hereto.
If the terms, conditions, services and method of payment of this agreement are
acceptable to XRG Inc., please indicate by executing and dating and sending via
facsimile transmission to me at 000-000-0000, and/or executing and dating two
copies of this engagement letter and returning one executed and dated copy to me
at the following address:
January 6, 2005
Letter of Agreement
Page 3 of 3
Xxxxxx Street Associates
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Sincerely,
Xxxxxxx X. Xxxxx
President
Xxxxxx Street Associates
Signed and accepted by:
XRG Inc.
X
Xx. Xxxxx X. Xxxxxxx Date
President
MTC/ej/339328
