By signing your Consulting Fee Agreement (the “CFA”), you agree that this Master Services Agreement (this “MSA”) is agreed to, and incorporated by reference into, your CFA, as by and between your company (“Client”), and Pinnacle Minds, Inc. dba Smart ERC, whose address is 350 N. Lantana Street, Suite 229, Camarillo, CA 93010 (“Consultant”). Client and Consultant are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
1. GENERAL PROVISIONS
(a) Dispute Resolution. This MSA and the CFA are governed by, and will be construed and enforced by, the substantive and procedural laws of the State of California, without regard to conflict-of-law principles. The Parties agree that any controversy, dispute, or claim arising out of or relating to this MSA and/or the CFA, or the breach or threatened breach thereof, shall be resolved through the use of binding arbitration with the American Arbitration Association (“AAA”) before one neutral arbitrator in Los Angeles, California. Such arbitration shall be conducted under the AAA’s Commercial Arbitration Rules; provided, however, that to the extent any injunctive relief, provisional remedy, or petition to compel arbitration is sought, the Parties agree and acknowledge that this MSA and the CFA are made, and shall be deemed to have been performed, only in Los Angeles County, California, and that jurisdiction and venue for such purposes shall be solely and exclusively in the Superior Court of the State of California for Los Angeles County (and not in any other court). The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon either Party in accordance with applicable law in any court having jurisdiction thereof. The provisions of California Code of Civil Procedure sections 1283.05 are incorporated into this MSA and the CFA and made a part thereof.
(b) Limitation of Damages in Disputes. Client acknowledges and consents that Consultant, its personnel, its agents, and its assigns will not be held liable to Client or any other stakeholders for any costs, claims, or liabilities arising from and/or related to this MSA and/or the CFA for any individual nor combined amount exceeding the amount paid to Consultant by the Client under the CFA under any circumstances. Under no circumstances will Consultant, its personnel, its agents, and/or its assigns be liable for indirect, nominal, or punitive damages arising from or relating to this MSA or the CFA. This Limitation of Damages in Disputes will always apply to the greatest extent of any applicable laws.
(c) Advice of Counsel. In entering into the CFA, each Party has relied upon the advice of counsel or has been advised, and has had reasonable time and opportunity to consult counsel of its choosing regarding the content of this MSA and the CFA. Each Party represents and warrants that it has completely read, fully understands, and voluntarily accepts the terms of this MSA and the CFA.
(d) Successors and Assigns. Client shall not assign or transfer any rights, or delegate any duties, under this this MSA nor the CFA without Consultant’s prior written consent, and any attempted assignment, transfer, or delegation without such consent shall be voidable by Consultant. Notwithstanding the foregoing, in the event of any assignment, transfer, or delegation that is not voided by Consultant, this MSA and the CFA shall be fully binding upon Client’s transferees, assignees, and delegees. Consultant may assign this MSA and/or the CFA at any time.
(e) Severability. Whenever possible, each provision of this MSA and the CFA will be interpreted in such a manner as to be effective and valid under applicable law. If, however, any of the provisions contained in this MSA or the CFA are declared in a legal forum of competent jurisdiction to be fully or partially illegal, invalid, unlawful, unenforceable, or ineffective, the Parties agree that such part(s) or provision(s) shall be modified and reformed to achieve, to the maximum extent possible, the written intentions of the Parties herein. If modification of the fully or partially illegal, invalid, unlawful, unenforceable, or ineffective provision is not possible, such part(s) or provision(s) shall be deemed severable, such that the remainder of such provision(s), and all other provisions contained in this MSA and the CFA, shall remain valid and binding if the essential terms and conditions of this MSA and the CFA for each Party remain valid, binding, and enforceable.
(f) Waiver. No waiver of any breach of this MSA, nor the CFA, shall be construed to be, or shall be, a waiver of any other breach of this MSA or the CFA. No waiver shall be binding unless in writing and signed by the Party waiving the breach.
(g) Headings. Titles and paragraph headings used in this MSA and the CFA are for convenience of reference only, are not part of this MSA nor the CFA, and shall not affect the construction of or be taken into consideration in interpreting this MSA nor the CFA.
(h) Notices. For purposes of this MSA and the CFA, notices and all other communications required under this MSA and the CFA shall be in writing and shall be deemed to have been duly given when hand-delivered; sent by overnight courier; mailed by first-class, registered, or certified mail, return receipt requested, postage prepaid; or transmitted by email, in each case addressed as outlined in the signature page of the CFA.
(i) Attorneys’ Fees. In the event of any arbitration, action, or other legal proceeding (collectively, “Action”) commenced by any Party arising under or out of, in connection with, in respect of, or relating to this MSA and/or the CFA, the prevailing Party in such Action shall be entitled to recover its reasonable costs, expenses, and attorneys’ fees, expert fees, and court and/or arbitration costs/fees, incurred in the Action from the non-prevailing Party. Attorneys’ fees and other costs and fees incurred in connection with the enforcement of any judgment in respect of this MSA and/or the CFA are recoverable by the judgment creditor from the judgment debtor separately.
Without limiting Paragraph 1(f) hereof, if Consultant is required to hire an attorney for collection of any amount Client owes to Consultant, Client agrees to pay to Consultant upon demand in writing, in addition to the amount owed, all reasonable costs and expenses incurred by Consultant in connection with: the enforcement of this MSA and/or the CFA, collection of any amount due under the MSA and/or the CFA (whether or not any arbitration, lawsuit, or other legal proceeding has been commenced by the Consultant to enforce or collect such amount), or in successfully defending any counterclaim or other legal proceeding brought by Client contesting Consultant’s right to collect any outstanding amount due under the MSA and/or the CFA. Such reasonable costs and expenses include, without limitation: attorneys’ fees, expert fees and costs, travel costs, administrative fees and costs, arbitrator fees and costs, and court fees and costs.
(j) Joint and Several Liability. If Client’s payment obligations under this MSA and the CFA are guaranteed by a Guarantor, then Consultant shall have the right, but not the obligation, against Client and Guarantor regarding the enforcement of Consultant’s rights under this MSA and the CFA, in which case Client and Guarantor’s liability shall be joint and several.
(k) Cumulative Rights and Remedies. The rights and remedies provided for in this MSA and the CFA shall be cumulative; resorting to one right or remedy shall not preclude resorting to another or any other right or remedy provided for by law or in equity.
(l) Construction. Each Party has cooperated in the negotiation and preparation of this MSA and the CFA. Accordingly, this MSA and the CFA shall not be construed against any Party on the basis that the Party was the drafter.
(m) Entire Agreement. This MSA and the CFA constitute the entire agreement and final understanding between the Parties concerning the subject of the CFA and supersede all negotiations, representations, statements, promises, and agreements, whether existing, proposed, or otherwise, whether written or oral, concerning that subject, made on or before the Effective Date.
(n) Modification by Subsequent Agreement. This MSA and/or the CFA may be modified by subsequent agreement of the Parties only by an instrument in writing signed by the Parties that signed the CFA.
(o) Disclaimer of Warranties. Consultant makes no warranties of any kind for the Services, whether express or implied, oral or written. Nothing in this MSA, nor the CFA, and nothing in Consultant’s statements to Client shall be construed as a promise or guarantee about the outcome of the Services. There can be no assurance that Client will obtain any benefit in connection with the Services. Client acknowledges that Consultant has made no guarantee whatsoever regarding the successful completion of the Services or the outcome of this matter. Any expressions by Consultant regarding the likelihood of success or outcome are matters of opinion only, on which Client has not relied in any way or to any extent. If the Client obtains any Tax Credit Benefit but the IRS later determines, after an audit or otherwise, that Client is not entitled to receive the Tax Credit Benefit, in whole or in part, then, except as may be required in this MSA and/or the CFA, Consultant shall have no obligation to refund any part of Consultant’s Fee (as defined in the CFA) to Client.
(p) Indemnification. Client agrees to indemnify and hold harmless Consultant and Consultant’s shareholders, directors, officers, employees, affiliates, agents, representatives, and subcontractors, from and against any and all claims, suits, actions, causes of actions, losses, damages, liabilities, costs, and expenses, including reasonable attorneys’ fees, arising out of or relating to (i) the breach of any agreement, promise, representation, warranty, or covenant Client made in this MSA or the CFA; (ii) the negligent or willful acts or omissions of Client or any of Client’s shareholders, directors, officers, members, managers, employees, affiliates, agents, representatives, accountants, or subcontractors; (iii) the performance or non‐performance in supplying the Data to Consultant in connection with the performance of the Services; (iv) the failure of Client to follow all IRS guidelines in regards to the CARES Act; (v) the failure of Client to take into consideration any Tax Credit when preparing its federal income tax returns; or (vi) the failure of Client to file any required original or amended tax returns.
(q) Publicity. Unless Client has advised Consultant otherwise in writing in the CFA, Client agrees that Consultant may use Client’s name and logo on Consultant’s website (including a link to the home page of Client’s website) and in Consultant’s marketing materials for the limited purpose of referring to Client as a client of Consultant.
(r) Authority. Each individual signing the CFA, whether signed individually or on behalf of any person or entity, warrants and represents that he or she has full authority to so execute the CFA on behalf of the parties on whose behalf he or she so signs. Each separately acknowledges and represents that this representation and warranty is an essential and material provision of the CFA and shall survive execution and/or termination of the CFA.
(s) Electronic Signatures; Counterparts. Signatures transmitted by facsimile, email, “JPG,” “PDF,” or other electronic transmission shall be effective as original signatures. The CFA may be executed in multiple counterparts, including this MSA, which, when taken together, shall be considered a single completely signed instrument.
2. CONSULTING SERVICES
Consultant shall use its professional expertise to provide Client with, and only with, the following services (the “Services”):
· Review Client’s financial, payroll-related, and tax records and documents, as requested by Consultant, to determine whether Client is eligible for any Employee Retention Tax Credit(s) (“ERTC”) for 2020 and/or 2021, as outlined and regulated by the Coronavirus Aid Relief and Economic Stimulus Act (“CARES Act”), Internal Revenue Service (“IRS”) Notice 2021‐20, IRS Notice 2021‐23, IRS Notice 2021-49, and any other COVID‐19-related credits or incentives (the ERTC and any other COVID-19 related credit or incentive are referred to individually as a “Tax Credit” or, collectively, as “Tax Credits”) that may become available to Client during the Exclusivity Period (as defined in Paragraph 4 hereof);
· Provide a calculation of the Tax Credits that Consultant determines Client is entitled to receive, if any, based upon the Data (as defined in Paragraph 3 hereof) provided by Client;
· Prepare and provide to Client, for Client’s signature, a tax credit package comprising the completed required IRS forms with the final Tax Credit amounts Client is entitled to receive based upon IRS guidelines and other applicable law (“Tax Credit Package”); and
· As needed, assist Client in responding to any IRS notice regarding any Tax Credit (as defined in Paragraph 3 hereof) claimed by Client based on the Services or to any review by the IRS related thereto, and provide documentation requested by the IRS as part of such review.
3. CLIENT’S ADDITIONAL OBLIGATIONS
Without limiting any other obligations of Client under this MSA or the CFA, Client consents to the following additional obligations:
· Client shall submit to Consultant the necessary, complete, and accurate information, data, and documentation Consultant requires to provide the Services (the “Data”). Client understands, acknowledges, and warrants that Consultant is entitled to rely on the completeness, accuracy, and truthfulness of the Data in providing the Service. Client understands that Consultant will not proceed with the Services until Client provides Consultant with all of the Data.
· Client shall submit to Consultant all Data promptly after Consultant requests the Data.
· Client shall promptly execute all documents and instruments that Consultant may request from time-to-time, relating to any Tax Credit or Tax Credit Benefit.
· Client shall promptly execute all documents and instruments that Consultant may request from time to time, granting Consultant rights to make inquiries and/or obtain information and documents from the IRS relating to any Tax Credit or Tax Credit Benefit concerning Client.
· At Consultant’s sole option and direction, Client shall either (i) promptly submit to the IRS all documents required to claim the Tax Credit, or (ii) authorize Consultant to make such submission, in each case the date of such submission being defined as the “Submission Date”.
· If Client agrees to assign, sell, pledge, or otherwise transfer, any portion of Client’s Tax Credit to any Transferee, including any lender, Client shall give Consultant full and accurate notice of such agreement, and the terms thereof, within a maximum of five (5) business days after Client signing such agreement. Client expressly agrees that in the event Client fails to provide such notice, and within such time limit, then Consultant’s Fee shall be increased by a factor of fifteen percent (15%) or the maximum allowable by law, whichever is less.
· If Client receives any Tax Credit Benefit, Client shall give Consultant complete and accurate notice of such receipt within a maximum of five (5) business days after such receipt. Client expressly agrees that in the event Client fails to provide such notice then Consultant’s Fee shall be increased by a factor of fifteen percent (15%) or the maximum allowable by law, whichever is less. To avoid this fee increase, Consultant will enroll Client in its third-party tax monitoring service which enables Consultant to track the status of the Tax Credit Benefit. Client may opt out of such enrollment in the CFA, or withdraw such consent after enrollment as outlined in the CFA, under which circumstance Consultant will not waive this obligation of Client.
· If the IRS denies Client’s Tax Credit(s), in whole or in part, Client shall give Consultant full and accurate notice of such denial, including, without limitation, by providing a true and correct copy of all documentation Client receives from the IRS in that regard, within a maximum of five (5) business days after Client’s receipt of any such document.
· Client covenants and agrees that if Client, for any reason, refuses or fails to execute or submit to the IRS any document that is required to claim the Tax Credit or Tax Credit Benefit, Client shall be responsible for paying the entirety of Consultant’s Fee as if Client had obtained the entire amount of the Tax Credit that Consultant has determined Client is entitled to receive.
· Client understands and acknowledges that if Client claims any Tax Credit Benefit, then if, before filing any employment tax return claiming the Tax Credit Benefit, Client had filed any income tax return (for example, IRS Form 1120, 1120-S, 1120-F, 1065, etc.) deducting qualifying wages: (i) Client will be obligated to amend all such previously-filed income tax returns to which such Tax Credit Benefit relates to correct any overstated wage deduction, and to file all such amended tax returns as required by law, and Client covenants and agrees to file all such amended tax returns when Client claims such Tax Credit Benefit; and (ii) Consultant has no obligations regarding the preparation of such amended tax returns or the filing thereof.
4. EXCLUSIVE RIGHTS
Client grants Consultant the sole and exclusive right to provide services to Client relating to: the determination of whether Client is eligible for any Tax Credit; the determination of Tax Credit Client is entitled to receive based upon the Data; the preparation of a Tax Credit Package for Client; the provision of assistance to Client in responding to any IRS notice regarding any Tax Credit claimed by Client based on the Services, or to any review by the IRS related thereto, and the request and provision of documentation requested by the IRS as part of such review, as needed; the submission to the IRS, at Consultant’s sole option, of documents required to claim the Tax Credit; and the exclusive right to earn Consultant’s Fee, which exclusive rights shall begin on the Effective Date and end at 11:59:59 p.m. on the date that falls 30 months after the Submission Date (the “Exclusivity Period”). Client understands and acknowledges that the length of the Exclusivity Period is reasonable and required to account for any actual and/or potential processing delays caused by any IRS backlog. Client unconditionally and irrevocably agrees to notify Consultant of receipt of any Tax Credit Benefit and pay Consultant the Consultant’s Fee under Paragraph 3 hereof and the CFA, if: (a) at any time during the Exclusivity Period, Client receives any Tax Credit Benefit, irrespective of whether Client obtains the Tax Credit Benefit as a result of, in whole or in part, any Services whatsoever provided by Consultant, Client’s own effort, or the effort of anyone else; or (b) within 180 calendar days after the end of the Exclusivity Period, Client receives any Tax Credit Benefit as a result of, in whole or in part, any Services whatsoever that Consultant provided during the Exclusivity Period. Client shall have no right to terminate the CFA during the Exclusivity Period under any circumstances whatsoever.
Client hereby grants Consultant a lien on and a security interest in any funds comprising the Tax Credit Benefit and proceeds therefrom for the amount of Consultant’s Fee. Client hereby agrees that Consultant may take any actions, including but not limited to the filing of a lien and financing statement, required to perfect, protect, and maintain its security interest. Client understands and agrees that the filing of financing statements will grant Consultant a perfected, first priority security interest in the Tax Credit Benefit, any proceeds thereof, and any benefits conferred upon Client until Client has paid to Consultant the Consultant’s Fee.
5. TERMINATION BY CONSULTANT
In the event of a breach of this MSA and/or the CFA by Client, Consultant shall be entitled to immediately terminate the CFA, without any obligation to perform further Services. In the event of such termination, any compensation owed to Consultant shall be paid immediately, regardless of when Consultant terminates the CFA.
6. INDEPENDENT CONTRACTOR RELATIONSHIP
Consultant shall at all times act strictly as an independent contractor. Nothing in this MSA nor the CFA shall render Consultant an employee, partner, agent of, or joint venturer with Client for any purpose.
7. OWNERSHIP OF METHOD
Consultant will not transfer to Client the legal title or physical possession of the method employed by Consultant in the provision of the Service (the “Method”). Consultant owns all rights, title, and interest, including but not limited to copyright, patent, trade secret, and all other intellectual property rights in the Method, and any changes, modifications, or corrections to the Method. If Client is ever held or deemed to be the owner of any copyrights in the Method or any changes, modifications, or corrections to the Method, Client hereby irrevocably assigns to Consultant, exclusively, all such rights, title, and interest. Client agrees to execute all documents necessary to implement and confirm the intent and letter of this Paragraph 7. Client agrees that the Method contains valuable trade secrets and confidential information owned by Consultant or third parties. Client represents and warrants that neither Client nor any of Client’s shareholders, directors, officers, members, managers, employees, affiliates, agents, representatives, and subcontractors will, directly or indirectly, without the express written permission of Consultant’s CEO: (i) sell, lease, license, sublicense, or otherwise transfer the Method; (ii) duplicate, reproduce, or copy the Method; (iii) disclose, divulge, or otherwise make available to any third party the Method; (iv) decompile, disassemble, or otherwise analyze for reverse engineering purposes the Method; or (v) use the Method for any purpose other than as necessary for the completion of Services by Consultant.
8. DATA VERIFICATION
Client shall provide Consultant with complete and correct Data as required for the Services. Client shall be fully and solely responsible for the accuracy of all Data provided or not provided, including without limitation, for any IRS or other penalties and/or interest arising therefrom. By submitting the Data, Client represents, warrants, and agrees that Client: (i) has reviewed and approved the Data, and (ii) waives and releases any claim against Consultant arising out of any errors or omission in the Data that Client has not itself corrected or has not requested Consultant to correct. Client acknowledges that Consultant will rely upon the Data provided and agrees that Consultant will not be responsible for errors that result from its reliance on the Data. Client acknowledges that any request for corrections of Data after it is provided to Consultant will be considered special handling and that an additional fee may be charged, in which case Client agrees to pay such additional fee to Consultant promptly.
AAA – American Arbitration Association
Action – Any arbitration, administrative proceeding, or other legal proceeding commenced by any Party arising under or out of, in connection with, in respect of, or relating to this MSA and/or the CFA.
CARES Act – The Coronavirus Aid, Relief, and Economic Security Act.
CFA – Consultant Fee Agreement
Client – Your company or you, whichever is entitled to submit the ERTC claim.
Consultant – Pinnacle Minds, Inc.
Consultant’s Designee – A third party that Consultant may assign the payment of the Consultant’s fee.
Consultant’s Fee – The amount Client pays for the Services.
Data – The necessary, complete, and accurate information, digital records, and documentation Consultant requires to provide the Services.
Effective Date – The date on which Client and Consultant signed the CFA.
ERTC – Employee Retention Tax Credit.
Exclusivity Period – The period of time beginning on the Effective Date of the CSA and ending at 11:59:59 p.m. on the date that falls 30 months after the Submission Date.
Guarantee – The unconditional, unlimited, personal agreement of the Guarantor, if any, to be jointly and severally liable for all obligations of the Client under the CSA.
Guarantor – Any person or entity that agrees to be held liable for the obligations of the Client under the CSA, if applicable.
IRS – Internal Revenue Service
Method – The means, property, assets, and techniques employed by Consultant in the provision of the Service.
MSA – This Master Services Agreement.
Party or Parties – Either of Consultant or Client, or both if referring to Parties.
Services – All of the actions Consultant undertakes in Paragraph 2 of this MSA for or on behalf of Client.
Submission Date – The date on which Client or Consultant submits to the IRS all documents required to claim the Tax Credit
Tax Credit(s) – Any Tax Credit-related funds Client receives from the United States Treasury and/or IRS (including any interest amount) and/or any reduction of an existing balance Client owes to the United States government that results from the application of the Tax Credit against such balance.
Tax Credit Benefit – Any Tax Credit-related funds Client receives from the United States Treasury and/or IRS (including any interest amount), plus any forgiveness, offset, or reduction of Client’s existing balance or indebtedness Client owes to the United States or any government, that results from the application of the Tax Credit against such balance.
Tax Credit Package – The completed required IRS forms with the final Tax Credit amounts Client is entitled to receive based upon IRS guidelines and other applicable laws.
Transferee – The beneficiary third party of Client’s agreement to assign, sell, pledge, or otherwise transfer, any portion of Client’s Tax Credit to such third party, including any lender.