Consulting Agreement Template

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In the world of business consulting, clarity is paramount. A well-structured consulting agreement template forms the backbone of a thriving consultant-client relationship, setting clear expectations, defining the scope of work, and providing a roadmap for the tasks ahead. But what exactly is a consulting agreement, and how does it shape professional engagements? Let’s delve deeper into this essential business document using a consulting agreement template as a guide.

What is a Consulting Agreement Template?

A Consulting Agreement Template is akin to a blueprint for a building, providing a structured framework that can be tailored to the specific needs of a project. This legally binding contract stipulates the terms and conditions for professional services exchanged between a consultant and a client, guaranteeing clear communication and legal safeguards for all involved.

The template encapsulates all necessary details to guide the business relationship, from the scope of work to payment terms, serving as the entire agreement between the parties.

Key Components of a Consulting Agreement

Just as a jigsaw puzzle is incomplete without every piece, a consulting agreement is only effective when it encompasses all key components. These components, ranging from:

  • the scope of work
  • payment terms
  • confidentiality
  • dispute resolution

Our team members work in synergy to create a comprehensive document that leaves no room for ambiguity, ensuring that all relevant information, including such other address details, is accurately captured.

Note: Create your agreement with an easy-to-use and professional online template by signing up for free today. Not only are there agreement and contract templates galore on Bonsai, but there's also a wide variety of business proposals, quotations, and invoice templates to help your business deliver professional looking documents.

Introduction & Scope

The Introduction & Scope section, acting as the compass of the agreement, kicks off the document by identifying the parties involved, giving a succinct description of the project, and laying out the consultant’s expected achievements. It dictates the trajectory of the consulting engagement by defining the objectives, deliverables, and project timeline.

Services Offered

The Services Offered section, forming the core of the consulting agreement, elucidates the specific tasks and deliverables the consultant commits to providing to the client. This section is essentially a pledge from the consultant, delineating exact duties and results expected, all in line with the relevant laws and regulations governing the consultant’s services, services performed, services provided, and other consulting services.

For instance, services offered by a consultant could include:

  • Strategic Planning: The consultant may provide guidance and expertise to help the client develop a comprehensive strategic plan, setting the direction for their business.
  • Process Improvement: The consultant could analyze current business processes and recommend improvements to increase efficiency and productivity.
  • Change Management: If the client is going through a significant change, such as a merger or a shift in business strategy, the consultant could offer support in managing this change effectively.
  • Financial Analysis: The consultant may offer services in analyzing the client's financial data, helping to improve profitability and make informed business decisions.
  • Training and Development: The consultant could develop and deliver training programs to enhance the skills and capabilities of the client's employees.
  • IT Consulting: If the consultant specializes in IT, they could provide services such as system implementation, data management, cybersecurity, and IT strategy development.
  • Marketing Strategy: The consultant could help the client develop and implement a marketing strategy to boost brand awareness and increase sales.
  • Human Resources Consulting: The consultant could offer services related to HR, such as talent acquisition, employee engagement, and compliance with labor laws.
  • Project Management: The consultant could manage specific projects, ensuring they are completed on time and within budget.
  • Customer Relationship Management: The consultant could help the client improve their relationships with customers, leading to increased customer satisfaction and loyalty.

In summary, the Services Offered section is a detailed outline of the consultant's responsibilities, ensuring all parties are clear about what is expected in the consulting engagement.

Payment Terms and Methods

The Payment Terms and Methods section, functioning as the financial pillar of the agreement, describes the agreed compensation structure, encapsulating fees, expenses, and payment schedules. It promotes mutual understanding of payment terms between both parties, thereby minimizing potential conflicts stemming from financial misinterpretations.

Invoicing, Taxes, and Other Financial Details

The Invoicing, Taxes, and Other Financial Details section delves into the intricacies of financial transactions, including invoice processing, tax responsibilities, and the management of other financial matters such as expenses incurred. Acting as a roadmap, this section navigates both parties through the financial aspects of the consulting engagement.

Confidentiality and Non-Disclosure

No consulting agreement is complete without a confidentiality agreement in the form of a Confidentiality and Non-Disclosure section. This clause acts as a protective shield, safeguarding confidential information shared between the parties. It lays out the obligations of both parties regarding confidentiality, ensuring that trade secrets and other sensitive information remain secure.

Rights, Data, and Intellectual Property

The Rights, Data, and Intellectual Property section of the consulting agreement, a vital component, handles matters concerning ownership and usage rights of materials produced during the consulting engagement. It explicates who possesses the copyright and patent rights to materials generated under the agreement and delineates the main considerations for intellectual property ownership.

Termination and Duration

The Termination and Duration section of a consulting agreement sets the lifespan of the contract and outlines how it can be ended. It specifies the agreement’s term, conditions for termination, and any notice requirements.

This section ensures that both parties, including the other party, understand the duration of the agreement and the procedures for termination.

Dispute Resolution and Governing Law

Acting as a safety net, the Dispute Resolution and Governing Law section of a consulting agreement elucidates the process for dispute resolution and the applicable law governing the agreement. This section helps to alleviate potential conflicts and guarantees that both parties understand their legal rights and obligations.

Types of Consulting Agreements

Just as there are different types of consultants, there are also different types of consulting agreements, each with its unique features and benefits. Understanding these differences can help you choose the agreement that best aligns with your needs, whether you’re a consultant or a client.

Different Forms of Consulting Agreements

There are several different forms of consulting agreements, each suited to different scenarios. These include:

The diversity in these templates is influenced by the specific demands of the industry or service provided, the project’s terms and conditions, consulting rates, and the defined scope of work, often based on the client’s request.

Retainer vs. Non-Retainer Agreements

Retainer and non-retainer consulting agreements represent two different approaches to structuring a consulting relationship. Each comes with its advantages and potential drawbacks. Understanding these differences can help you choose the right agreement for your specific needs.

Whether you’re an independent contractor seeking steady, predictable income or a client looking for flexibility and scope of work, understanding the distinctions between these two types of agreements is crucial.

There are other industries that work on retainer agreements, so if you're interested in more specific templates you can take a look at our other templates:

Crafting the Perfect Consulting Agreement

Constructing an ideal consulting agreement requires:

  • A blend of art and science
  • Delicately balancing legal terminology with clear, succinct language
  • Meticulous attention to detail
  • Profound comprehension of the project
  • A firm grasp of fairness.

Let’s delve into the essential elements that go into crafting a comprehensive and effective consulting agreement.

Importance of Clear Terms

The cornerstone of any effective consulting agreement lies in clarity. Lucid, well-ordained terms and conditions guarantee that both the consultant and the client comprehend their respective duties and responsibilities, fostering transparency, reducing potential disputes, and boosting the agreement’s overall efficacy.

Crafting an agreement with clear terms is like constructing a building with a strong foundation—it fortifies the entire structure, and such an agreement constitutes a solid base for any partnership.

Common Clauses in Consulting Agreements

From non-compete and confidentiality clauses to termination and scope of services, there are several common clauses that are typically included in a consulting agreement. These clauses are the building blocks of the agreement, each serving a unique purpose and collectively working to protect the interests of both the consultant and the client.

  • Non-compete Clauses: These clauses prevent the consultant from working with competitors or starting a competing business for a specified period after the agreement ends. They are designed to protect the client's proprietary information and trade secrets.
  • Confidentiality Clauses: These provisions ensure that sensitive information shared during the course of the engagement remains secure. It restricts the consultant from disclosing any confidential information to third parties.
  • Termination Clauses: These clauses specify the conditions under which the agreement can be terminated. It also outlines the notice requirements and any potential penalties for early termination.
  • Scope of Services Clauses: These clauses define the specific tasks, deliverables, and timeline for the project. It sets clear expectations for what the consultant is expected to deliver.
  • Payment Terms Clauses: These clauses outline the compensation structure, including fees, expenses, and payment schedules. It provides a clear understanding of how and when the consultant will be paid.
  • Dispute Resolution Clauses: These clauses specify the process to be followed if a dispute arises between the consultant and the client. It typically includes mechanisms like mediation or arbitration before resorting to litigation.
  • Governing Law Clauses: These clauses specify the jurisdiction's laws that will govern the agreement. It determines which state or country's laws will be used to interpret the contract and handle any legal disputes.

These clauses, when carefully drafted, form the backbone of a robust consulting agreement, ensuring a smooth and successful professional relationship between the consultant and the client.

Customizing Your Consulting Agreement

Customizing your consulting agreement is an essential step in the drafting process. It involves tailoring the agreement to align with the specific requirements of the project, ensuring that all relevant aspects are covered.

This process, much like tailoring a suit, ensures a perfect fit for both parties, enhancing the effectiveness and efficiency of the agreement.

Why Use a Pre-made Consulting Agreement Template?

In the dynamic domain of business consulting, efficiency reigns supreme. Utilizing a pre-made consulting agreement template can yield significant time and effort savings. These templates, offering a structured layout that encompasses all vital components of a standard agreement, provide a jumping-off point for swift customization to meet specific demands, without sacrificing legal safeguards or clarity.

Key Takeaways

  • A Consulting Agreement Template is a legally binding contract that outlines the terms and conditions of a professional services exchange between consultant and client.
  • It should include key components such as scope of work, payment terms, confidentiality & dispute resolution to ensure clarity.
  • A customized consulting agreement ensures legal protection & serves as reference point for conflict resolution in their relationship.
  • Ready to start? All you have to do is sign up to Bonsai, download, edit, and send your agreement to be electronically signed by your client.

Frequently Asked Questions

Why is a consulting agreement essential for both consultants and clients?

A consulting agreement serves as the blueprint for the professional relationship between a consultant and a client. It ensures clarity in terms of duties and responsibilities, provides legal protection, and serves as a reference point for conflict resolution.

Whether you’re a consultant or a client, having a well-crafted consulting agreement is crucial for a successful professional engagement, and the consultant agrees on its importance.

Can a consulting agreement be modified after it's signed?

Indeed, a consulting agreement can undergo modifications after signing. However, it’s mandatory that any alterations be mutually agreed upon and recorded in writing, with prior written consent from both parties. Be it a change in scope, budget, or timeline, clear documentation of all modifications, endorsed by both parties, is vital to uphold the agreement’s integrity.

What happens if one party breaches the consulting agreement?

In the unfortunate event of a breach of a consulting agreement, various legal remedies may be pursued. These could include filing a lawsuit for breach of contract, seeking damages, or pursuing other remedies as outlined in the agreement. It is essential to note that the specific consequences would vary depending on the terms of the agreement.

Frequently Asked Questions
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Consulting Agreement Template

Consulting Agreement

Consultant
First Name
Last Name
Acme LLC.
Client
First Name
Last Name
Corporation Corp.

This contract (the "Agreement") is between Client (the "Client") and Acme LLC (the "Contractor").

The Contract is dated [DATE BOTH PARTIES SIGN].

1. WORK AND PAYMENT.

1.1 Project. The Client is hiring the Contractor to do the following: provide professional expertise, guidance, and advice to assist the client in achieving their project goals

1.2 Schedule. The Contractor will begin work on [START DATE] and will continue until the work is completed. This Contract can be ended by either Client or Contractor at any time, pursuant to the terms of Section 6, Term and Termination.

1.3 Payment. The Client will pay the Contractor a rate of [PROJECT RATE](USD) per hour. Of this, the Client will pay the Contractor [DEPOSIT AMOUNT]  (USD) before work begins.

1.4 Expenses. The Client will reimburse the Contractor's expenses. Expenses do not need to be pre-approved by the Client.

1.5 Invoices. The Contractor will invoice the Client [INVOICE FREQUENCY]. The Client agrees to pay the amount owed within [X DAYS TO PAY]days of receiving the invoice. Payment after that date will incur a late fee of [LATE FEE PERCENTAGE]% per month on the outstanding amount.

1.6 Support. The Contractor will not provide support for any deliverable once the Client accepts it, unless otherwise agreed in writing.

2. OWNERSHIP AND LICENSES.

2.1 Client Owns All Work Product. As part of this job, the Contractor is creating “work product” for the Client. To avoid confusion, work product is the finished product, as well as drafts, notes, materials, mockups, hardware, designs, inventions, patents, code, and anything else that the Contractor works on—that is, conceives, creates, designs, develops, invents, works on, or reduces to practice—as part of this project, whether before the date of this Contract or after. The Contractor hereby gives the Client this work product once the Client pays for it in full. This means the Contractor is giving the Client all of its rights, titles, and interests in and to the work product (including intellectual property rights), and the Client will be the sole owner of it. The Client can use the work product however it wants or it can decide not to use the work product at all. The Client, for example, can modify, destroy, or sell it, as it sees fit.

2.2 Contractor's Use Of Work Product. Once the Contractor gives the work product to the Client, the Contractor does not have any rights to it, except those that the Client explicitly gives the Contractor here. The Client gives permission to use the work product as part of portfolios and websites, in galleries, and in other media, so long as it is to showcase the work and not for any other purpose. The Client does not give permission to sell or otherwise use the work product to make money or for any other commercial use. The Client is not allowed to take back this license, even after the Contract ends.

2.3 Contractor's Help Securing Ownership. In the future, the Client may need the Contractor's help to show that the Client owns the work product or to complete the transfer. The Contractor agrees to help with that. For example, the Contractor may have to sign a patent application. The Client will pay any required expenses for this. If the Client can’t find the Contractor, the Contractor agrees that the Client can act on the Contractor's behalf to accomplish the same thing. The following language gives the Client that right: if the Client can’t find the Contractor after spending reasonable effort trying to do so, the Contractor hereby irrevocably designates and appoints the Client as the Contractor's agent and attorney-in-fact, which appointment is coupled with an interest, to act for the Contractor and on the Contractor's behalf to execute, verify, and file the required documents and to take any other legal action to accomplish the purposes of paragraph 2.1 (Client Owns All Work Product).

2.4 Contractor's IP That Is Not Work Product. During the course of this project, the Contractor might use intellectual property that the Contractor owns or has licensed from a third party, but that does not qualify as “work product.” This is called “background IP.” Possible examples of background IP are pre-existing code, type fonts, properly-licensed stock photos, and web application tools. The Contractor is not giving the Client this background IP. But, as part of the Contract, the Contractor is giving the Client a right to use and license (with the right to sublicense) the background IP to develop, market, sell, and support the Client’s products and services. The Client may use this background IP worldwide and free of charge, but it cannot transfer its rights to the background IP (except as allowed in Section 11.1 (Assignment)). The Client cannot sell or license the background IP separately from its products or services. The Contractor cannot take back this grant, and this grant does not end when the Contract is over.

2.5 Contractor's Right To Use Client IP. The Contractor may need to use the Client’s intellectual property to do its job. For example, if the Client is hiring the Contractor to build a website, the Contractor may have to use the Client’s logo. The Client agrees to let the Contractor use the Client’s intellectual property and other intellectual property that the Client controls to the extent reasonably necessary to do the Contractor's job. Beyond that, the Client is not giving the Contractor any intellectual property rights, unless specifically stated otherwise in this Contract.

3. COMPETITIVE ENGAGEMENTS.

The Contractor won’t work for a competitor of the Client until this Contract ends. To avoid confusion, a competitor is any third party that develops, manufactures, promotes, sells, licenses, distributes, or provides products or services that are substantially similar to the Client’s products or services. A competitor is also a third party that plans to do any of those things. The one exception to this restriction is if the Contractor asks for permission beforehand and the Client agrees to it in writing. If the Contractor uses employees or subcontractors, the Contractor must make sure they follow the obligations in this paragraph, as well.

4. NON-SOLICITATION.

Until this Contract ends, the Contractor won’t: (a) encourage Client employees or service providers to stop working for the Client; (b) encourage Client customers or clients to stop doing business with the Client; or (c) hire anyone who worked for the Client over the 12-month period before the Contract ended. The one exception is if the Contractor puts out a general ad and someone who happened to work for the Client responds. In that case, the Contractor may hire that candidate. The Contractor promises that it won’t do anything in this paragraph on behalf of itself or a third party.

5. REPRESENTATIONS.

5.1 Overview. This section contains important promises between the parties.

5.2 Authority To Sign. Each party promises to the other party that it has the authority to enter into this Contract and to perform all of its obligations under this Contract.

5.3 Contractor Has Right To Give Client Work Product. The Contractor promises that it owns the work product, that the Contractor is able to give the work product to the Client, and that no other party will claim that it owns the work product. If the Contractor uses employees or subcontractors, the Contractor also promises that these employees and subcontractors have signed contracts with the Contractor giving the Contractor any rights that the employees or subcontractors have related to the Contractor's background IP and work product.

5.4 Contractor Will Comply With Laws. The Contractor promises that the manner it does this job, its work product, and any background IP it uses comply with applicable U.S. and foreign laws and regulations.

5.5 Work Product Does Not Infringe. The Contractor promises that its work product does not and will not infringe on someone else’s intellectual property rights, that the Contractor has the right to let the Client use the background IP, and that this Contract does not and will not violate any contract that the Contractor has entered into or will enter into with someone else.

5.6 Client Will Review Work. The Client promises to review the work product, to be reasonably available to the Contractor if the Contractor has questions regarding this project, and to provide timely feedback and decisions.

5.7 Client-Supplied Material Does Not Infringe. If the Client provides the Contractor with material to incorporate into the work product, the Client promises that this material does not infringe on someone else’s intellectual property rights.

6. TERM AND TERMINATION.

This Contract is ongoing until the work is completed. Either party may end this Contract for any reason by sending an email or letter to the other party, informing the recipient that the sender is ending the Contract and that the Contract will end in 7 days. The Contract officially ends once that time has passed. The party that is ending the Contract must provide notice by taking the steps explained in Section 11.4. The Contractor must immediately stop working as soon as it receives this notice, unless the notice says otherwise. The Client will pay the Contractor for the work done up until when the Contract ends and will reimburse the Contractor for any agreed-upon, non-cancellable expenses. The following sections don’t end even after the Contract ends: 2 (Ownership and Licenses); 3 (Competitive Engagements); 4 (Non-Solicitation); 5 (Representations); 8 (Confidential Information); 9 (Limitation of Liability); 10 (Indemnity); and 11 (General).

7. INDEPENDENT CONTRACTOR.

The Client is hiring the Contractor as an independent contractor. The following statements accurately reflect their relationship:

  • The Contractor will use its own equipment, tools, and material to do the work.
  • The Client will not control how the job is performed on a day-to-day basis. Rather, the Contractor is responsible for determining when, where, and how it will carry out the work.
  • The Client will not provide the Contractor with any training.
  • The Client and the Contractor do not have a partnership or employer-employee relationship.
  • The Contractor cannot enter into contracts, make promises, or act on behalf of the Client.
  • The Contractor is not entitled to the Client’s benefits (e.g., group insurance, retirement benefits, retirement plans, vacation days).
  • The Contractor is responsible for its own taxes.
  • The Client will not withhold social security and Medicare taxes or make payments for disability insurance, unemployment insurance, or workers compensation for the Contractor or any of the Contractor's employees or subcontractors.

8. CONFIDENTIAL INFORMATION.

8.1 Overview. This Contract imposes special restrictions on how the Client and the Contractor must handle confidential information. These obligations are explained in this section.

8.2 The Client’s Confidential Information. While working for the Client, the Contractor may come across, or be given, Client information that is confidential. This is information like customer lists, business strategies, research & development notes, statistics about a website, and other information that is private. The Contractor promises to treat this information as if it is the Contractor's own confidential information. The Contractor may use this information to do its job under this Contract, but not for anything else. For example, if the Client lets the Contractor use a customer list to send out a newsletter, the Contractor cannot use those email addresses for any other purpose. The one exception to this is if the Client gives the Contractor written permission to use the information for another purpose, the Contractor may use the information for that purpose, as well. When this Contract ends, the Contractor must give back or destroy all confidential information, and confirm that it has done so. The Contractor promises that it will not share confidential information with a third party, unless the Client gives the Contractor written permission first. The Contractor must continue to follow these obligations, even after the Contract ends. The Contractor's responsibilities only stop if the Contractor can show any of the following: (i) that the information was already public when the Contractor came across it; (ii) the information became public after the Contractor came across it, but not because of anything the Contractor did or didn’t do; (iii) the Contractor already knew the information when the Contractor came across it and the Contractor didn’t have any obligation to keep it secret; (iv) a third party provided the Contractor with the information without requiring that the Contractor keep it a secret; or (v) the Contractor created the information on its own, without using anything belonging to the Client.

8.3 Third-Party Confidential Information. It’s possible the Client and the Contractor each have access to confidential information that belongs to third parties. The Client and the Contractor each promise that it will not share with the other party confidential information that belongs to third parties, unless it is allowed to do so. If the Client or the Contractor is allowed to share confidential information with the other party and does so, the sharing party promises to tell the other party in writing of any special restrictions regarding that information.

9. LIMITATION OF LIABILITY.

Neither party is liable for breach-of-contract damages that the breaching party could not reasonably have foreseen when it entered this Contract.

10. INDEMNITY.

10.1 Overview. This section transfers certain risks between the parties if a third party sues or goes after the Client or the Contractor or both. For example, if the Client gets sued for something that the Contractor did, then the Contractor may promise to come to the Client’s defense or to reimburse the Client for any losses.

10.2 Client Indemnity. In this Contract, the Contractor agrees to indemnify the Client (and its affiliates and their directors, officers, employees, and agents) from and against all liabilities, losses, damages, and expenses (including reasonable attorneys’ fees) related to a third-party claim or proceeding arising out of: (i) the work the Contractor has done under this Contract; (ii) a breach by the Contractor of its obligations under this Contract; or (iii) a breach by the Contractor of the promises it is making in Section 5 (Representations).

10.3 Contractor Indemnity. In this Contract, the Client agrees to indemnify the Contractor (and its affiliates and their directors, officers, employees, and agents) from and against liabilities, losses, damages, and expenses (including reasonable attorneys’ fees) related to a third-party claim or proceeding arising out of a breach by the Client of its obligations under this Contract.

11. GENERAL.

11.1 Assignment. This Contract applies only to the Client and the Contractor. The Contractor cannot assign its rights or delegate its obligations under this Contract to a third-party (other than by will or intestate), without first receiving the Client’s written permission. In contrast, the Client may assign its rights and delegate its obligations under this Contract without the Contractor's permission. This is necessary in case, for example, another Client buys out the Client or if the Client decides to sell the work product that results from this Contract.

11.2 Arbitration. As the exclusive means of initiating adversarial proceedings to resolve any dispute arising under this Contract, a party may demand that the dispute be resolved by arbitration administered by the American Arbitration Association in accordance with its commercial arbitration rules.

11.3 Modification; Waiver. To change anything in this Contract, the Client and the Contractor must agree to that change in writing and sign a document showing their contract. Neither party can waive its rights under this Contract or release the other party from its obligations under this Contract, unless the waiving party acknowledges it is doing so in writing and signs a document that says so.

11.4 Notices.

(a) Over the course of this Contract, one party may need to send a notice to the other party. For the notice to be valid, it must be in writing and delivered in one of the following ways: personal delivery, email, or certified or registered mail (postage prepaid, return receipt requested). The notice must be delivered to the party’s address listed at the end of this Contract or to another address that the party has provided in writing as an appropriate address to receive notice.

(b) The timing of when a notice is received can be very important. To avoid confusion, a valid notice is considered received as follows: (i) if delivered personally, it is considered received immediately; (ii) if delivered by email, it is considered received upon acknowledgement of receipt; (iii) if delivered by registered or certified mail (postage prepaid, return receipt requested), it is considered received upon receipt as indicated by the date on the signed receipt. If a party refuses to accept notice or if notice cannot be delivered because of a change in address for which no notice was given, then it is considered received when the notice is rejected or unable to be delivered. If the notice is received after 5:00pm on a business day at the location specified in the address for that party, or on a day that is not a business day, then the notice is considered received at 9:00am on the next business day.

11.5 Severability. This section deals with what happens if a portion of the Contract is found to be unenforceable. If that’s the case, the unenforceable portion will be changed to the minimum extent necessary to make it enforceable, unless that change is not permitted by law, in which case the portion will be disregarded. If any portion of the Contract is changed or disregarded because it is unenforceable, the rest of the Contract is still enforceable.

11.6 Signatures. The Client and the Contractor must sign this document using Bonsai’s e-signing system. These electronic signatures count as originals for all purposes.

11.7 Governing Law. The laws of the state of [STATE] govern the rights and obligations of the Client and the Contractor under this Contract, without regard to conflict of law principles of that state.

11.8 Entire Contract. This Contract represents the parties’ final and complete understanding of this job and the subject matter discussed in this Contract. This Contract supersedes all other contracts (both written and oral) between the parties.

THE PARTIES HERETO AGREE TO THE FOREGOING AS EVIDENCED BY THEIR SIGNATURES BELOW.

Consultant
First Name
Last Name
Acme LLC.
Client
First Name
Last Name
Corporation Corp.