Exhibit 10.8


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5601 Granite Parkway, Suite 740

  	
  Plano, Texas 75024-6654

  	
  T 972.377.0300

  	
  F 972.377.0307

  	
  bvafirm.com

  	
   

  
	
   

  	
   

  	
  BUSINESS

  
	
   

  	
   

  	
  VALUATION

  
	
   

  	
   

  	
  ADVISORS

  



 


February 17, 2009


 


Board
of Directors of CLST Holdings, Inc.


17304
Preston Road, Suite 420


Dallas,
Texas 75252


 


Dear
Directors:


 


Pursuant
to our engagement letter dated December 17, 2008, you have requested that
Business Valuation Advisors LLC (“BVA”) provide an opinion (the “Opinion”) as
to the fairness, from a financial point of view, to the nonaffiliated
stockholders of CLST Holdings, Inc. (“CLST” or the “Company”) of the
consideration to be paid by CLST in the transaction discussed below (the “Transaction”).


 


The Transaction


 


We
understand that CLST Asset III, LLC, which is indirectly wholly owned by CLST,
is today consummating the acquisition of two receivable portfolios, Portfolio A
and Portfolio B, collectively referred to as the “Portfolios,” from Fair
Finance Company (“Fair”), Timothy S. Durham, and James F. Cochran (collectively,
the “Seller”). In connection with the Transaction, CLST will pay total
consideration of $3,594,354, with 50 percent being paid in cash, 25 percent
being paid in the form of newly issued shares of CLST common stock, and the
remaining 25 percent being financed with note payables to the Seller (the “Seller
Notes”). The Seller Notes relating to Portfolio A will be payable in 11
quarterly installments, each consisting of equal principal payments, plus all
interest accrued through such payment date at a rate of 4.0 percent plus the
London interbank offered rate (“LIBOR”). The Seller Notes relating to Portfolio
B will be payable in 21 quarterly installments, each consisting of equal
principal payments, plus all interest accrued through such payment date at a
rate of 4.0 percent plus LIBOR.


 


Scope of Analysis


 


In
connection with this Opinion, BVA conducted various procedures, investigations,
and financial analyses with respect to the preparation of our Opinion
including, but not limited to, the following:


 


	
  1.

  	
  Reviewed the Purchase and Sale Agreement
  (the “Purchase Agreement”) by and between the Seller and CLST;

  
	
  2.

  	
  Reviewed the Limited Liability Company
  Agreement of CLST Asset III, LLC;

  
	
  3.

  	
  Reviewed a memorandum from Whitley Penn LLP
  to the Company regarding net operating loss carry forwards;

  
	
  4.

  	
  Reviewed an internal balance sheet as of
  November 30, 2008 for CLST, which management represented to be the
  latest data available;

  



 

















 


	
  5.

  	
  Reviewed certain accounting entries
  provided by CLST management for CLST’s recent acquisition of the FCC Texas
  bulk portfolio;

  
	
  6.

  	
  Reviewed minutes of the Company’s Board of
  Directors meetings for the previous 12 months;

  
	
  7.

  	
  Reviewed summary information provided by
  Fair regarding the outstanding balances of the Portfolios as well as other
  statistics, such as weighted average remaining life, aging, and weighted
  average interest rate among others;

  
	
  8.

  	
  Reviewed detailed cash flow models provided
  by Fair management for the FCC Texas bulk portfolio and the Portfolios;

  
	
  9.

  	
  Reviewed investment memoranda prepared by
  Fair relating to the Portfolios;

  
	
  10.

  	
  Reviewed an offering circular for Fair
  dated July 24, 2008;

  
	
  11.

  	
  Reviewed sample contracts of the loans in
  the Portfolios provided by Fair;

  
	
  12.

  	
  Reviewed and analyzed information obtained
  from the capital markets;

  
	
  13.

  	
  Discussed the operations, financial
  conditions, future prospects, and projected operations and performance of
  CLST and the Portfolios with the management of CLST and Fair;

  
	
  14.

  	
  Reviewed certain publicly available and
  privately provided financial statements and other business and financial
  information of CLST, Fair, and the Portfolios, respectively, and the industry
  in which CLST and Fair operate;

  
	
  15.

  	
  Reviewed certain financial forecasts
  provided by CLST’s management relating to CLST future earnings;

  
	
  16.

  	
  Reviewed CLST’s historical trading price
  and trading volume for its publicly traded stock; and

  
	
  17.

  	
  Conducted such other analyses and
  considered such other factors as we deemed appropriate.

  



 


Limiting Conditions and Assumptions


 


This
Opinion is subject to the terms and conditions of our engagement letter. In
performing our analyses and rendering this Opinion, BVA, with your consent:


 


	
  1.

  	
  Relied upon the accuracy, completeness, and
  fair presentation in all material respects of any and all information
  obtained from public sources or provided to it from private sources,
  including the management of CLST and Fair. BVA did not independently verify
  such information;

  
	
  2.

  	
  Assumed that any estimates, forecasts,
  projections, and assumptions furnished to BVA were reasonably prepared and
  based upon the best currently available information and good faith judgment
  of the person furnishing such information and that such forecasts and
  projections are achievable as presented;

  
	
  3.

  	
  Assumed that the final versions of all
  documents reviewed in draft form by BVA conform in all material respects to
  the drafts reviewed;

  
	
  4.

  	
  Assumed that information supplied to BVA
  and representations and warranties made in the Purchase Agreement are
  substantially accurate;

  
	
  5.

  	
  Assumed that all of the conditions required
  to implement the Transaction will be satisfied and that the Transaction will
  be completed in accordance with the Purchase Agreement without any amendments
  thereto or any waivers of any terms or conditions thereof;

  
	
  6.

  	
  Relied upon the fact that the Board of
  Directors and CLST have been advised by counsel as to all legal matters with
  respect to the Transaction, including whether all procedures required by law
  to be taken in connection with the Transaction have been duly, validly and
  timely taken; and

  
	
  7.

  	
  Assumed that all governmental, regulatory
  or other consents and approvals necessary for the consummation of the
  Transaction will be obtained without any adverse effect on CLST, Fair, or the
  contemplated benefits expected to be derived in the Transaction.

  



 


2

















 


In
our analysis and in connection with the preparation of this Opinion, BVA has
made numerous assumptions with respect to industry performance, general
business, market and economic conditions and other matters, many of which are
beyond the control of any party involved in the Transaction. To the extent that
any of the foregoing assumptions or any of the facts on which this Opinion is
based prove to be untrue in any material respect, this Opinion cannot and
should not be relied upon.


 


BVA
did not make any independent evaluation of any of the forecasts or projections
with which it was furnished. This Opinion should not be construed as a
valuation opinion, credit rating, solvency opinion, an analysis of CLST’s or
Fair’s credit worthiness, tax advice, or accounting advice. BVA has not been
requested to, and did not, (a) initiate any discussions with, or solicit
any indications of interest from, third parties with respect to the
Transaction, the assets, businesses or operations of CLST, or any alternatives
to the Transaction, (b) negotiate the terms of the Transaction, and
therefore, BVA has assumed that such terms are the most beneficial terms, from
CLST’s perspective, that could, under the circumstances, be negotiated among
the parties to the Purchase Agreement and the Transaction, or (c) advise
the Board of Directors or any other party with respect to alternatives to the
Transaction. BVA has not made, and assumes no responsibility to make, any
representation, or render any opinion, as to any legal matter.


 


The
basis and methodology for this Opinion have been designed specifically for the
express purposes of the Board of Directors and may not translate to any other
purposes. This Opinion (a) does not address the merits of the underlying
business decision to enter into the Transaction versus any alternative strategy
or transaction; (b) is not a recommendation as to how the Board of
Directors or any stockholder should vote or act with respect to any matters
relating to the Transaction, or whether to proceed with the Transaction or any
related transaction, and (c) does not indicate that the consideration paid
is the best price possibly attainable under any circumstances; instead, it
merely states whether the consideration in the Transaction is within a range
suggested by certain financial analyses. The decision as to whether to proceed
with the Transaction or any related transaction may depend on an assessment of
factors unrelated to the financial analysis on which this Opinion is based.
This letter should not be construed as creating any fiduciary duty on the part
of BVA to any party.


 


BVA
has prepared this Opinion effective as of the date of this letter. This Opinion
is necessarily based upon market, economic, financial and other conditions as
they exist and can be evaluated as of the date hereof, and BVA disclaims any
undertaking or obligation to advise any person of any change in any fact or
matter affecting this Opinion which may come or be brought to the attention of
BVA after the date hereof. Notwithstanding and without limiting the foregoing,
in the event that there is any change in any fact or matter affecting this
Opinion after the date hereof and prior to the completion of the Transaction,
BVA reserves the right to change, modify or withdraw this Opinion.


 


This
Opinion, or excerpts thereof, may be included in any public filing distributed
to stockholders of the Company in connection with the Transaction or other
document required by law or regulation to be filed with the Securities and
Exchange Commission.


 


Except
as described above, this Opinion is not intended for general circulation or
publication, nor is it to be reproduced, used for any other purpose, or
distributed to third parties without our express written consent.


 


3

















 


BVA
has not had any material relationship with any party to the Transaction for
which compensation has been received or is intended to be received, nor is any
such material relationship or related compensation mutually understood to be
contemplated.


 


Conclusion


 


Based
upon and subject to the foregoing, BVA is of the opinion that as of the date
hereof, the consideration to be paid by CLST in the Transaction is fair, from a
financial point of view, to the nonaffiliated stockholders of the Company.


 


 


	
   

  	
  Respectfully
  submitted,

  
	
   

  	
   

  
	
   

  	
  /s/
  Business Valuation Advisors LLC

  
	
   

  	
  Business
  Valuation Advisors LLC

  



 


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