EXHIBIT 10.1

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BioLargo, Inc.

Engagement Agreement

 

 

Advisor   CFO 911 will be the exclusive accounting and financial advisor
(“Advisor”) responsible for completion of the project during the engagement (the
“Agreement”). Role   Advisor designates Charles K. Dargan II to act as the
Company’s Chief Financial Officer, overseeing all of BioLargo, Inc. (the
“Company”) financial management and accounting activities, including helping
design and oversee an efficient monthly accounting closing process, review of
the Company’s monthly financial statements and implementation of the Company’s
reporting on Form 10, liaison with the Company’s external accountants on a
monthly or quarterly basis and certifying the Company’s public financial
statements as the Company’s Chief Financial Officer. The Company accepts Charles
K. Dargan as its Chief Financial Officer. Term   One year commencing February 1,
2008 (the “Term”), with appropriate extensions as agreed to by the Advisor and
the Company. Notwithstanding the foregoing, either party may terminate this
Agreement upon 30 days’ written notice. Compensation:   The Advisor shall be
compensated as follows:   On an ongoing monthly basis over the Term, a fee of $
4,000 a month, payable in advance, for performing the services detailed above
(under the “Role” section) in those months where a 10K or 10q SEC financial
filing is not required. In those months where a 10K or 10Q SEC financial filing
is required, a fee of $8,000 a month will be paid for performing the services
detailed above. When filing the next 10K for March 31, 2008, based on the work
involved and the state of the 10K, an additional fee may be required, as
mutually agreed to by the Advisor and the Company.   In addition to the cash
compensation specified above, the Advisor will be issued stock options over the
Term, as follows:  

•     an option to purchase .50,000 shares of the Company’s common stock,
granted on February 1, 2008, at an exercise price equal to the closing price of
a share of the Company’s common stock on the grant date, such option to vest in
full 90 days after grant; and

 

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•     options to purchase 10,000 shares of the Company’s common stock, each such
option to be granted on the last day of each month commencing April 2008 and
ending January 2009, provided that this Agreement has not been terminated prior
to each such grant date, at an exercise price equal to the closing price of a
share of the Company’s common stock on each grant date, each such option to be
fully vested upon grant.

Expenses   Reimbursement of all authorized out-of-pocket expenses (including
fees and disbursements of professionals such as legal counsel, if required).
Indemnification   Customary indemnification normally accorded to accounting and
financial advisors shall hold harmless the Advisor from any losses, claims or
damages resulting from the Advisor’s services, except as delineated in the Chief
Financial Officer Certification requirements of the Sarbanes Oxley Act. A
separate indemnification agreement shall be executed in a form satisfactory to
the Advisor.   In the event the Advisor is called to testify, provide legal
support or be a witness on behalf of the Company for any event at any time, all
legal expenses and professional time will be reimbursed by the Company.
Arbitration   Any dispute between the Advisor and the Company regarding the
construction or application of the Agreement and the related services will, upon
a written request, be submitted to arbitration, and this arbitration shall
comply with and be governed by the provisions of the American Arbitration
Association and shall take place in Los Angeles, California. The prevailing
party shall be entitled to attorney fees and costs incurred in connection with
any such dispute.

 

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Governing Law   This Agreement shall be governed by the laws of the State of
California. Further, no change or modification of this Agreement shall be valid
or binding unless such change or modification shall be in writing.

AGREED TO AND ACCEPTED THIS 1st DAY OF FEBRUARY, 2008

 

CFO 911    BioLargo, Inc. 8055 W. Manchester Ave., Suite 405    2603 Main
Street, Ste. 1155 Playa del Rey, CA 90232    Irvine, CA 92614

 

By:  

/s/ Mr. Charles K. Dargan II

    By:  

/s/ Mr. Dennis Calvert

  Name:   Mr. Charles K. Dargan II     Name:   Mr. Dennis Calvert   Title:  
Principal     Title:   President  

 

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Scope Letter

The scope of the Agreement (the “Agreement”) dated as of February 1, 2008, by
and between CFO 911 (the “Advisor”) and BioLargo, Inc. (the “Company”) is
limited the details herein. The tasks to be performed as delineated herein are
to be completed within the term of the Agreement. The scope of the Agreement may
only be modified by written consent of both the Advisor and the Company.

The tasks are as follows:

 

  1. Review and establish the Company’s monthly accounting closing process for
the timely production of financial statements.

 

  2. Specific additional activities shall include but not be limited to:

 

  A. Review and implement production of the Company’s monthly financial
statements and quarterly and annual reporting on Forms 10Q and 10K,
respectively.

 

  B. Establish other financial and accounting processes, if requested, such as
budgeting, forecasting and the development of operating metrics.

 

  C. Act as the liaison with the Company’s eXternal accountants and the Audit
Committee of the Board of Directors,

 

  D. Certify the Company’s public financial statements as the Company’s Chief
Financial Officer.

 

  E, Transition to the permanent Chief Financial Officer, at the appropriate
time,

 

  F. Assistance with the design and implementation of internal controls in
accordance with the requirements of the Sarbanes-Oxley ACt of 2002, as amended,
end the rules and regulations of the Securities and Exchange Commission and the
various stock exchanges applicable to the Company.

 

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Caveats:

 

  1. The Company shall have a sufficient 10K or 10Q document with sufficient
disclosures, as mutually decided by the Company and the Advisor. If net, then an
additional fee will be charged as discussed in the Agreement.

 

  2. The Company shall also be successful in raising interim capital and
long-term equity capital as discussed with management, in order to maintain the
operations of the Company.

AGREED TO AND ACCEPTED THIS 1st DAY OF FEBRUARY, 2008

 

CFO 911    BioLargo, Inc. 8055 W. Manchester Ave., Suite 405    2603 Main
Street, Ste. 1155 Playa del Rey, CA 90232    Irvine, CA 92614

 

By:  

/s/ Mr. Charles K. Dargan II

    By:  

/s/ Mr. Dennis Calvert

  Name:   Mr. Charles K. Dargan II     Name:   Mr. Dennis Calvert   Title:  
Principal     Title:   President  

 

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