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Rehmann Engagement Letter Terms preparedness the Parties is able to provide. We expect that our clients may continue to look to us to assist them with these changes. To the extent any changes require us to increase the time required to provide the services described in this letter or to complete new tasks required by such changes, we reserve the right to adjust our fees appropriately. We will endeavor to advise the Parties of anticipated changes to our fees on a timely basis. In accordance with our Firm policies, work may be suspended if the Parties' account becomes 30 days or more overdue and will not be resumed until the account is paid in full or we have a definitive payment agreement approved by our Firm administrator in Saginaw, Michigan. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed even if we have not issued our report. The Parties will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket expenditures through the date of termination. Our terms and conditions impose a late charge of 1.5% per month, which is an annual percentage rate of 18%. Balances not paid within 30 days of the receipt of invoice are past due and a late charge of 1.5% will be applied to the entire past due amount. MAXIMUM LIABILITY - The Parties agrees that our maximum liability to the Parties for any negligent errors or omissions committed by us in the performance of the engagement will be limited to the amount of our fees for this engagement, except to the extent determined to result from our gross negligence or willful misconduct. CLAIMS - Because there are inherent difficulties in recalling or preserving information as the period after an engagement increases, the Parties agrees that, notwithstanding the statute of limitations of any particular State or U.S. Territory, any claim based on the engagement must be filed within 12 months after performance of our service, unless management has previously provided us with a written notice of a specific defect in our services that forms the basis of the claim. TERMINATION OF SERVICES - We reserve the right to suspend or terminate services for reasonable cause such as failure to pay our invoices on a timely basis or failure to provide adequate information in response to our inquiries necessary for successful performance of our services. Our engagement will be deemed to be completed upon written notification of termination, even if we have not completed the service and issued our report. The Parties are obligated to compensate us for the time expended to that point and to reimburse us for all out-of-pocket expenditures through the date of termination. We acknowledge the Parties' right to terminate our services at any time, and the Parties acknowledges our right to withdraw at any time, including, but not limited to, for example, instances where, in our judgment, (a) the conditions in the first paragraph of the "Audit Objective" section of this letter exist, (b) our independence has been impaired, (c) we can no longer rely on the integrity of management, or (d) management or the Audit Committee, if applicable fails to reasonably support our efforts to perform the engagement in accordance with what we believe is necessary to comply with professional standards, subject in either case to our right to payment for charges incurred to the date of termination or resignation. In the event that we determine to resign, and the Parties seeks damages allegedly resulting from such resignation, our maximum liability to the Parties in the event we are held liable because of such resignation shall be limited to the fees actually paid to us for current year work performed up to the date of resignation. INFORMAL ADVICE - As part of our engagement we may provide advice on operating, internal control over financial reporting and other matters that come to our attention. Informal advice is not considered to be a consulting service unless we have entered into a separate engagement. THIRD PARTY PROCEEDINGS - As a result of our prior or future services to the Parties, we might be requested or subpoenaed to provide testimony, information, or documents to management or a third party in a legal, administrative, mediation, or arbitration or similar proceeding in which we are not a party. If this occurs, our efforts in complying with such requests will be billable to the Parties as a separate engagement. We shall be entitled to compensation for our time at our standard hourly rates and reasonable reimbursement for our expenses (including our legal fees) in complying with this request. For all such requests, we will observe the confidentiality requirements of our profession and will notify management promptly of the request. This paragraph will survive the termination of this agreement for any reason, and will be binding upon successors to the Parties. PEER REVIEW - Our Firm, as well as other major accounting firms, participates in a "peer review" program covering our audit and accounting practices. This program requires that once every three years we subject our quality assurance practices to an examination by another accounting firm. As part of the process, the other firm will review a sample of our work. It is possible that the work we perform for the Parties may be selected by the other firm for their review. If it is, the other firm is bound by professional standards to keep all information confidential. If management objects to having the work we perform for the Parties reviewed by our peer reviewer, please notify us in writing. PROMOTIONAL MATERIALS - The Parties consents to Rehmann's use of your Parties name and a factual description of the services to be performed by Rehmann under this agreement in Rehmann's advertising and promotional materials and other proposal opportunities. MEDIATION - If any dispute arises among the parties hereto, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Rules for Professional Accounting and Related Services Disputes before resorting to binding arbitration or litigation. Costs of any mediation proceeding shall be shared equally by all parties. GOVERNING LAW - This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan, without regard to the principles of conflicts of law thereof. 2 130