On July 25, 2013, the Company entered into a Project Management Consulting Agreement and Contract by and between Prime Solutions, Inc. (“Prime") and Premier Alliance Group, Inc. (“Premier”), hereinafter referred to as the “Consulting and Management Agreement”, whereby Premier will serve in a: i) Senior Project Manager consulting, oversight and advisory role, ii) materials management, procurement, and delivery role, and, iii) will manage financial accountability of the Somers Contract (defined below). The revenue from the “Consulting and Management Agreement” is estimated to be approximately $6.0 million including the materials management, procurement, and delivery role. The “Consulting and Management Agreement” is in direct connection to Premier providing these duties and assisting Prime in their role as the Engineering, Procurement and Construction (“EPC”) contractor pursuant to Prime’s 7.4 MW Solar Project located in Somers, Connecticut (the “ Somers Contract ”).
In consideration for the roles and responsibilities undertaken by Premier described above pursuant to the “Consulting and Management Agreement”, Premier shall receive; i) a monthly project management / consulting fee; ii) a share of the Somers Contract profits, and iii) perform the complete role and responsibilities of procurement of substantially all materials for the Somers Contract.
Premier, pursuant to the “Consulting and Management Agreement”, agreed to co-sign Prime’s Performance Bond as Co-Indemnitor under the Somers Contract. Premier’s maximum liability exposure is limited to $1 million, if Prime were to fail to meet its contracted obligations. To secure this potential risk, Prime has executed a perfected Security Agreement with Premier, whereby Prime unconditionally and irrevocably, pledged, granted and hypothecated to Premier a majority equity interest in the fully diluted ownership of Prime, held in Escrow by Premier’s counsel. The Somers Contract and the “Consulting and Management Agreement” are anticipated to be completed on or before December 31, 2013.
