Xx. Xxxxxxx Xxxxxx,
Online Stock Market, Inc.,
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000,
Xxx Xxxxxxx, XX 00000.
August 30, 1999.
Re: Engagement letter.
Dear Xx. Xxxxxx,
This statement is being furnished pursuant to SEC Rule 17a-4(i). This agreement
is intended to describe the nature and scope of services RND Resources, Inc.,
will render in connection with Online Stock Market, Inc., (the "Companies")
compliance consulting.
We are being retained by you to provide NASD compliance consulting services as
an outside service bureau.
Our services will include compliance maintenance activities which will include
maintenance of the procedures and compliance manual, development of internal
controls, NASD/SEC/DOC regulatory audit assistance, Y2000 planning and
implementation, trading compliance, continuing education (firm element) needs
assessment and plan preparation, annual compliance audit meeting, FINOP
responsibilities (without license)and phone assistance on operations.
We will also provide for monthly, FOCUS reports filing and review for Online
Stock Market, Inc., and assist with the preparation of year end certified audit.
With respect to any books and records maintained or preserved on behalf of you,
we hereby undertake to permit examination of such books and records at any time
or from time to time during regular business hours by representatives or
designees of the Securities and Exchange Commission and to promptly furnish to
said Commission or its designee true, correct, complete and current hard copy of
any or all or any part of such books and records.
COPY
Xx. Xxxxxxx Xxxxxx,
Online Stoek Market, Inc.,
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000,
Xxx Xxxxxxx, XX 00000
August 30, 1999.
Page two
Ordinarily our firm undertakes engagements on the basis of monthly retainers
that is computed based upon time involved at our customary hourly rates. The
ultimate fees billed, however, may increase from a packaged price, based upon
the novelty and difficulty of the matter, including factual and compliance items
presented; the turnaround time requested and the level of cooperation by all
concerned. We may also take into account other factors, such as the magnitude of
work, the skill required to perform, the amount of our resources involved, the
results obtained and the urgency or time limitations for performance. Our hourly
rates vary between $200 to $300 per hour.
Your monthly retainer quoted for the first twelve months of business is $3,500
per month.
We are always available to discuss expanding the scope of our engagement to
incorporate such matters as tax preparation for the associated hedge funds,
preparation of compiled financial statements and account statements for
investors, using Advent or similar software, for a negotiated fee.
Our statements are rendered in advance at monthly interval and are payable in
full upon presentation. We retain the right to not start work on your account
unless our retainer is paid in advance. Considering the time limitations of
compliance, we urge you to not wait for the presentation of our bills, as we
will not be responsible for late compliance filings caused by late payment of
our fees. We shall have the right to immediately suspend the performance of
services if your account is delinquent and withdraw, without notice, from
further work, regardless of the stage of our services.
Xx. Xxxxxxx Xxxxxx,
Online Stock Market, Inc.,
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000,
Xxx Xxxxxxx, XX 00000
August 30, 1999
Page three.
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 California and the then current Commercial Arbitration Rules of the American
Arbitration Association, except that no preheating discovery shall be permitted
unless specifically authorized by the arbitration panel, and shall take place in
Los Angeles, 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.
Xx. Xxxxxxx Xxxxxx,
Online Stock Market, Inc.,
August 30, 1999
Page four.
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 (1) the fees and expenses
of the AAA and the arbitrators and (2) 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.
While we recognize that this letter has a formal tone, please be assured that
the formality is intended only to ensure a complete understanding as to the
nature of our representation in order that we may establish a good relationship
in the future.
If the above terms of our engagement of you meet with your approval, we request
that you sign and date the enclosed copy of this letter where indicated, attach
a check made payable to RND Resources, Inc., for $3,500.
Very truly yours,
Xxxx Xxxxxxxx
The undersigned hereby accepts and approves of the foregoing engagement and
promises to pay RND Resources, Inc., or its assigns any and all sums due which
may arise pursuant to the terms and provisions of this engagement letter.
/s/ Xx. Xxxxxxx Xxxxxx
------------------------
Xx. Xxxxxxx Xxxxxx for
Online Stock Market, Inc.
