March 14, 2008
March
14,
2008
Xxx
Xxxxx
Edgeline
Holdings, Inc.
0000
Xxxx
Xxxx Xxxxx, Xxxxx 000
Xxxxxxxx,
XX 00000
Dear
Xxxxxx:
It
is our
understanding that Edgeline Holdings, Inc. (the “Client”) would like to retain
Clear Financial Solutions, Inc. (the “Firm”) to provide it with contract CFO
services. We have prepared this proposal (hereinafter referred to as
the “Agreement”) based upon our understanding of your needs. If this
Agreement meets with your expectations, you will need to sign in the space
below
demonstrating your acceptance thereto.
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. 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 $200 per hour
Manager
Level $125 - $150 per
hour
Staff
Level $75 per hour
Bookkeeper $65
per hour
In
the
course of performing these services we will do the following:
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Ø
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Strategic
planning
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Review
monthly financial statements;
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Oversee
internal controls;
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Provide
bookkeeping services;
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Ø
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Provide
advice on the application of Generally Accepted Accounting
Principles;
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Provide
advice on the structure of financing transactions and contracts;
and
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Other
projects as requested by management
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Firm
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 Firm
reports to the Board of Directors. Firm has the responsibility,
authority and freedom to report to the Audit Committee independent of
management.
Please
be
aware, however, that 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 errors that come to
our
attention or any irregularities or illegal acts that come to our
attention.
1
You
have
also requested that we provide certain administrative support services for
Edgeline Holdings, Inc. While the company is in start up phase we
estimate that these costs will be as follows:
Service
Monthly Cost
Office
space
$200
Telephone
line $75
Telephone
answering $100
Computer
storage $100
Admin
support $65
per hour as utilized
Photocopy
and scan
services
$50 per hour as utilized
As
Client
grows as the use of these services increases, we will notify you in writing
of
any adjustment in these fee estimates on a quarterly basis.
Compensation
We
estimate that 12 hours per month will
be necessary to meet the needs of Client at a cost of $2,400 per
month. A deposit equal to one month’s fee is due upon the execution
of this contract.
In
addition In addition, Client will
issue to Xxxxxx X. Xxxxx the following options under Client’s 2007 Stock Option
Plan:
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1.
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An
option to purchase
50,000 shares of Client’s common stock at a price of $0.10 per
share, 50% vesting immediately and 50% vesting 12 months from March
6,
2008.
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2.
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An
option to purchase 50,000 shares of Client’s common stock at a price of
$0. 25 vesting 24 months from March 6,
2008.
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3.
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An
option to purchase 50,000 shares of Client’s common stock at a price of
$0. 25 vesting 36 months from March 6,
2008.
|
It
is
understood that the initial 25,000 options that are immediately vested cannot
be
sold for 12 months.
In
addition, the CEO will design an appropriate compensation plan for additional
funding and M&A efforts.
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 $200.00 per hour.
Wherever possible, the Firm will endeavor to utilize lower level staff in an
effort to reduce the cost of our services. Time
incurred in
excess of the range of hours noted above will be billed at our standard rate.
Client
will reimburse Firm for reasonable expenses such as mileage, photocopies, long
distance, postage and supplies.
Payment
will be due on the 1st of each month. Interest of 1.5% per
month will be charged on all outstanding balances. 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.
From
time to time the Firm may bring
technology or transaction to the attention of the Client. If a
transaction occurs as a result of these efforts, the Firm will be paid a fee
equal to 10% of the value of the technology or transaction.
Confidentiality
From
time
to time the Firm may bring technology or transactions to the attention of
Client. This information will be treated as confidential and may not
be shared with other parties for a period of three years without the express
written consent of the Firm. In addition Client agrees that all
communications regarding the aforementioned technology or transactions are
to be
made with the Firm without the express written consent of the Firm.
The
Firm
and its agents agree to treat the Client’s information as confidential.
2
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.
The
effective date of this contract is March 6, 2008 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 month’s 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.
Guarantee
Firm
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. Firm 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
Firm
to perform business and management consulting services at such places and times
as may be reasonably agreed to by Firm. 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 Firm 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. Firm 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 March 12, 2008 and shall continue indefinitely until such time
as
either Firm or the Company terminates the Agreement as provided
below. The Company shall process payments to Firm bi-weekly for all
undisputed invoices presented by Firm under this Agreement but in no case shall
Firm 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 Firm 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
Firm.
The
parties agree that this Agreement constitutes the entire Agreement between
the
Client and the Firm and that it supersedes any and all prior or contemporaneous
Agreements between the parties, either written or oral, with respect to the
transactions contemplated within this Agreement. This Agreement may be modified
or amended only by an instrument in writing and signed by all the parties to
this Agreement. Any waiver of the terms and conditions of this Agreement must
be
in writing and signed by all the parties to this Agreement and any such waiver
will not be construed as a waiver of any other terms and conditions of this
Agreement. A waiver by either party as to any particular breach will not
constitute or be considered as a waiver of any similar or other breach or
default thereafter.
The
Client expressly understands and agrees that the Firm, or any of its employees,
will not be prevented or barred from rendering services of the same nature
as or
a similar nature to those described in this Agreement, or of any nature
whatsoever, for or on behalf of any person, firm, corporation or entity other
than the Client regardless of the nature of the business of the other person,
The Client understands and agrees that the Firm will not be prevented or barred
from retaining other persons or entities to provide services of the same nature
as or similar nature to those described in this Agreement or of any nature
whatsoever.
3
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.
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 Edgeline Holdings, Inc.
Sincerely,
Clear
Financial Solutions, Inc. by
/s/
Xxxxxx Xxxxx
Xxxxxx
Xxxxx, CPA
SMP
Reviewed
and accepted:
/s/
J. Xxxxxxx Xxxxx
Date: 3/18/08
J.
Xxxxxxx
Xxxxx
President/Chief
Executive Officer
