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Mannon Walters Engagement Letter Feb 2010

Mannon Walters Engagement Letter Feb 2010

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Published by Cliff Lyon

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Published by: Cliff Lyon on Apr 16, 2010
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04/11/2013

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PRIVATE AND CONFIDENTIAL
February 22, 2010Mr. Jim Nagle, CCIM Nagle Real Estate & Investment Advisors23679 Calabasas Rd., # 631Calabasas, CA 91302-1502Re: Preliminary Scoping visit to Mannon Walters on behalf of the Limited Partners inMannon L. Walters 2005 A-1 L.P.Mannon L. Walters 2005 A-2 L.P.Mannon Oil 2006 A L.P.Dear Mr. Nagle:Southwest Turnaround Support Services, LLC (“STSS”) is pleased to provide you with thisEngagement Letter which outlines the auditing and consulting services being offered to your clients, the limited partners in the three Mannon L. Walters Limited Partnerships listed above(“Limited Partnerships” or “Companies”). The scope of work is described below:I.SERVICES:As previously discussed, Southwest Turnaround Support Services, LLC (“STSS”) willconduct a Preliminary Review of all the documents associated with the 2005 and 2006investments in three oil & gas drilling partnerships which were sold as LimitedPartnership Units by Mannon L. Walters, LLC to your clients (the “Partners”). After reviewing the documents and schedules to be provided by you, STSS will meet withrepresentatives of Mannon L.Walters, LLC in Evansville, Indiana to discuss thetransactions and determine the current financial status of each partnership. The primary purpose of the meeting will be to determine the current status of the accounting recordsand to develop an appropriate audit plan or another course of action.The fee for this Preliminary Review will be $4,000 plus travel expenses (estimate at$1,000).
We require 50% of our fee plus 100% of the estimated travel expenses($3,000) paid in advance.
The balance will be due when our report on the preliminaryfindings is delivered to you. Forward the payment to:Southwest Turnaround Support Services, LLCc/o Daniel M. Steffens, Managing Member 4718 Yorkshire StreetSugar Land, Texas 77479
4718 YORKSHIRE STREET ● SUGAR LAND, TEXAS 77479 ●281-435-8874
281-265-2433 FAXwww.stsupportservices.com
 
In the event that the Partners, after reviewing the Preliminary Report determine that amore detailed audit or additional action is required, STSS agrees to provide a separateengagement letter to outline additional consulting and auditing services upon request.Services to be provided during this Preliminary Review (actual services may be adjusted based on the documentation to be provided by you and Mannon Walters).
a.
Review the three 2005 and 2006 transactions, classified as LimitedPartnerships.
 b.
Review all documents associated with the original transactions including thePrivate Placement Memorandums and any cash flow forecasts provided byMannon Walters.
c.
Discuss with Mannon Walters their responsibilities under the agreement tomanage the properties for the Limited Partners and their obligation to provided accurate and timely financial and reserve information.
d.
Prepare a listing of each property owned by each of the three LimitedPartnerships including a brief description of each property, historical netincome and cash flows (assuming the General Partner can provide suchdetail) and Mannon Walters’ future plans for each property.e.Review the most recent reserve reports for each of the three LimitedPartnerships.f.Review Land and Engineering Data available on the significant properties.
g.
Review the systems and processes used by Mannon Walters to meet their obligations under the management contract.
h.
Document preliminary findings
i.
Prepare report of findings with a recommended course of action and reviewthe report with Jim Nagle.
 j.
Work with Jim Nagle to determine a Go-Forward action plan.II.FEESFor the services described in Sections I, STSS will be paid on an hourly basis with ratesdetermined by the experience and skill level of the personnel used on the engagement.
STSS Partner $150.00
Joint Venture Auditor$ 90.00
Staff Accountant$ 60.00
Clerical Staff$ 40.00 STSS may use personnel provided by Aventine Hill Partners, Inc, with whom STSS has aStrategic Alliance Agreement in place.It is estimated that this Preliminary Scoping engagement will take 30 - 40 hours with allof the work being done by STSS Partners.
STSS agrees to cap their fees for thisPreliminary Scoping engagement at $4,000 plus actual travel expenses.
The actuallength of the engagement may be extended if the Partners elect to expand the scope
4718 YORKSHIRE STREET ● SUGAR LAND, TEXAS 77479 ●281-435-8874
281-265-2433 FAXwww.stsupportservices.com
 
 beyond what was discussed and outlined in Section I. STSS will promptly notify Jim Nagle if it determines the actual hours will exceed this estimate and additional fees will be required.III. EXPENSESSTSS will be reimbursed for all out of pocket expenses incurred by their personnelincluding travel costs for each round trip between Houston and Evansville, Indiana or other Mannon Walters locations. A per diem of $175.00/day/person will be charged for  personnel required to spend the night in Evansville. This per diem will cover all lodgingand meals.A detailed listing of expenditures and appropriate documentation will be provided to youwith the final invoice for the engagement.IV. TERM
The term of this Agreement shall be for sixty (60) days from the date of acceptance.STSS will have met its obligations under the Agreement by delivery of itspreliminary audit findings to the Partners.
V. TERMINATIONThe Partners may terminate STSS with or without cause at any time upon 48 hours bywritten notice, provided that any termination of STSS without cause shall not extinguishany rights of compensation that shall accrue prior to the termination or expiration,including any payments which are due through the initial term of this Agreement under Section II and Section III herein.VI. INDEMNIFICATIONIn addition to the fees which the Partners have agreed to pay STSS for the services to berendered hereunder, the Partners also agrees to indemnify and hold STSS harmlessagainst any claim or cause of action which may be asserted against it on account of theactions or conduct of the Partners. STSS shall act solely as an independent contractor of the Partners and the Partners shall not have the authority to control the time or manner inwhich STSS performs its services hereunder. STSS shall have no authority to bind thePartners in any manner, and hereby agrees to indemnify and hold the Partners harmlessagainst any claim or cause of action asserted against the Partners as a result of the actionsor conduct of STSS.
4718 YORKSHIRE STREET ● SUGAR LAND, TEXAS 77479 ●281-435-8874
281-265-2433 FAXwww.stsupportservices.com

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