10.2 Fee Agreement for Professional Services with Xxxxxxx X. Xxxx
WEED & CO. L.P.
0000 XXXXXXXXX XXXXX, XXXXX 0000, XXXXXXX XXXXX, XXXXXXXXXX 00000-0000
TELEPHONE (000) 000-0000 FACSIMILE (000) 000-0000
WRITER'S DIRECT NUMBER
(949) 475-9086 ext. 6
June 26, 2001
Xx. Xxxxxx Xxxxxx
President
Xxxx Industries, Inc.
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Telephone 000.000.0000
Facsimile 818.702.7914
RE: Professional Services
Dear Xx. Xxxxxx:
The purpose of this letter is to set forth the terms and conditions that will
govern our relationship.
This agreement for professional services is between Xxxx Industries, Inc., a
Nevada corporation, ("Client") and Weed & Co. L.P. ("Weed").
Weed agrees to provide professional services to Client with respect to certain
capital formation, business strategy and legal affairs referred to Weed by
Client from time to time. This agreement is made to document the conditions and
guidelines that will govern the relationship between the parties. The initial
special projects involve the following items.
PROVIDE ASSISTANCE TO THE CLIENT ON SEC COMPLIANCE MATTERS, INCLUDING A SCHEDULE
14C INFORMATION STATEMENT TO CHANGE THE NAME OF THE CORPORATION; RELATED MINUTES
OF THE BOARD AND STOCKHOLDERS; PREPARATION AND FILING OF A FORM SB-2
REGISTRATION STATEMENT; AND OTHER PROJECTS REFERRED TO WEED FROM TIME TO TIME.
To protect both of the parties and to comply with professional obligations, we
have already discussed with each other and resolved any potential conflicts of
interest with present or former clients. The services that Weed will provide
shall be in accordance with the following terms and conditions:
PROFESSIONAL FEES
Fees will be based upon the reasonable value of Weed's services as determined in
accordance with the American Bar Association Model Code of Professional
Responsibility and the California & Texas Rules of Professional Conduct. Fees
will be based on the rates charged by Weed.
Weed's rate is $250 per hour. It is anticipated that Client and Weed will agree
on a fixed fee for special projects from time to time. The fixed fee
arrangements for special projects will be agreed to in writing from time to
time.
Client further understands that during the course of Weed's engagement, it may
be necessary or advisable to delegate various portions of this matter to others.
COSTS AND EXPENSES
Client understands that in the course of representation, it may be necessary for
Weed to incur certain costs or expenses. Client will reimburse Weed for certain
costs or expenses actually incurred and reasonably necessary for completing the
assigned matter, as long as the charges for costs and expenses are competitive
with other sources of the same products or services and approved by Client in
advance. More particularly, Client will reimburse Weed in accordance with the
following guidelines:
1. COMPUTER-RELATED EXPENSES - Client will reimburse Weed for computerized
research and research services. However, any charges over $500 per month will
require Client approval. Client also encourages Weed to utilize computer
services that will enable Weed to more efficiently manage the projects.
2. TRAVEL - Client will reimburse Weed for expenses in connection with out of
town travel. However, Client will only reimburse for economy class travel and,
where necessary, for the reasonable cost of a rental car. All related travel
expenses, i.e., lodging and meals, must be reasonable under the circumstances.
3. FILING FEES & COURT COSTS - Client will reimburse Weed for expenses incurred
in connection with filing fees and court costs, if any, but will not be
responsible for sanctions or penalties imposed due to the conduct of Weed.
BILLING
All bills will include a summary statement of the kinds of services rendered
during the relevant period. Client expects that Weed will maintain back-up
documentation for all expenses. Client expects to be billed monthly or at the
conclusion of each project and expects to pay Weed's invoices as described
below.
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PAYMENT
To initiate the relationship, Client agrees to deliver a cash retainer fee of
$5,000. As payment for professional services, Client agrees to pay monthly or at
the closing of any applicable transaction. Client shall pay Weed's out of pocket
costs promptly.
As payment for professional services, Client has proposed and Weed has agreed
that Client place a block of 20,000 shares of Client's stock in Weed's name. At
least once a month, Weed will send Client a statement for fees and costs. Unless
objection is made to the xxxx, sufficient stock, net of commission, shall then
be liquidated forthwith at the prevailing market rate to satisfy such statement.
In the course of Weed's representation of the Client, if all the stock is
liquidated, a new block of stock sufficient to cover projected fees, in an
amount contemporaneously agreed to by the parties, will again be placed with
Weed, under the terms and conditions outlined above. At the conclusion of Weed's
representation of Client and the payment of all final fees and costs, any unused
stock shall forthwith be returned to Client.
Client has agreed to promptly register such blocks of stock pursuant to a
registration statement filed at its own expense.
STOCK OPTION
As an incentive for Weed to represent the Client and to increase Weed's
proprietary interest in the success of the Client, thereby encouraging him to
maintain his relationship with the Company, the Client hereby grants to Weed
options to purchase shares of the Client's common stock. As an initial option,
the Client hereby grants Weed the right to purchase 150,000 shares of the
Client's common stock at a price of $6.00 per share. Further, every six months
following the date hereof that this agreement remains in effect, the Company
shall grant to Weed an option to purchase an additional 50,000 shares of
Client's common stock at a price equal to 125% of the average closing bid price
for the 10 days immediately prior to the date of the grant. All stock options
will expire unless exercised on or before May 31, 2005. The options granted will
not be subject to dilution (i.e. no adjustment to the number of shares or the
exercise price) based upon any reverse split of the Client's common stock.
Client has agreed to promptly register the shares of common stock underlying the
stock options at its own expense.
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INVOLVEMENT OF CLIENT
Client expects to be kept closely involved with the progress of Weed's services
in this matter. Weed will keep Client apprised of all material developments in
this matter, and will provide sufficient notice to enable a representative to
attend meetings, conferences, and other proceedings.
There may be times when Weed will need to obtain information from Client. All
requests for access to documents, employees or other information shall be
granted without unreasonable delay.
TERMINATION
Client shall have the right to terminate Weed's engagement by written notice at
any time. Weed has the same right to terminate this engagement, subject to an
obligation to give Client reasonable notice to permit it to obtain alternative
representation or services and subject to applicable ethical provisions. Weed
will be expected to provide reasonable assistance in effecting a transfer of
responsibilities to the new service provider.
DISPUTES
The laws of the State of California shall govern the interpretation of this
agreement, including all rules or codes of ethics that apply to the provision of
services. All disputes between Client and Weed arising out of this engagement
which cannot be settled, shall be resolved through binding arbitration in Orange
County, California in accordance with the rules for resolution of commercial
disputes, then in effect, of the American Arbitration Association, and judgment
upon the award may be entered in any Court having jurisdiction thereof. It is
further agreed that the arbitrators may, in their sole discretion, award
attorneys' fees to the prevailing party.
If the foregoing accurately reflects our agreement regarding professional
services, please sign and return a duplicate copy of this letter. Thank you in
advance for your prompt attention to this matter.
Very truly yours,
/s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx, Esq.
Managing Director/Special Projects
Approved and Agreed:
Xxxx Industries, Inc.
By: /s/ Xxxxxx Xxxxxx
-----------------
Name: Xxxxxx Xxxxxx
Title: President
Date: 6-26-01
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