10.2 Fee Agreement for Professional Services with Xxxxxxx X. Xxxx
[Letterhead of Weed & Co. LLP]
October 9, 2004
Xx. Xxxxxx Xxxxxxx
Chief Executive Officer
B2Digital, Inc.
0000 Xxxxxxxx Xxxx., Xxxxx X
Xxxxxxx Xxxxx, XX 00000
Telephone: 000.000.0000
Facsimile: 310.281.0042
email: xxxxxxxx@xxxxxxxx.xxx
RE: Fee Agreement for Professional Services
Dear Xx. Xxxxxxx:
The purpose of this letter is to memorialize a fee agreement for legal services.
This fee agreement is between B2Digital, Inc., a Delaware corporation ("BTWO"),
and Weed & Co. LLP, a California limited liability partnership ("Weed LLP").
Weed LLP shall render the following legal services described in Exhibit A
attached hereto and BTWO may engage Weed LLP on any new matters referenced in
Exhibit A in exchange for payment of fees determined in accordance with this
agreement. Weed LLP makes no promises or guarantees regarding the outcome of
matters upon which Weed LLP is engaged to represent BTWO.
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 LLP will
provide shall be in accordance with the following terms and conditions. We
advise you to seek the advice of independent counsel before signing this
agreement.
Professional Fees
Fees are based upon the reasonable value of Weed LLP'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
are based on the rates charged by Weed LLP.
Weed LLP's rate is $300 per hour. It is anticipated that BTWO and Weed LLP 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. Weed LLP's fees
will be paid in cash or as follows:
Initial Retainer
To commence the relationship and to insure the availability of Weed LLP, BTWO
shall provide a cash retainer of $4,000 and 2,000,000 shares (the "Retainer
Shares") of BTWO common stock issued with a Rule 144 legend in the name of
Xxxxxxx X. Xxxx within 10 days of signing this agreement.
Terms for Payment in Stock instead of Cash.
As a non-cash alternative form of payment for professional services, beginning
October 10, 2004, BTWO has proposed and Weed LLP has agreed that BTWO place an
initial block of 2,000,000 shares of BTWO's stock in Xxxxxxx X. Xxxx'x name, as
designee for Weed LLP. At least once a month, Weed LLP will send BTWO a
statement for fees and costs. Unless objection is made to the xxxx, sufficient
stock, net of commission, shall then be liquidated forthwith at the prevailing
market rate to satisfy such statement.
In the course of Weed LLP's representation of BTWO, if all the initial block of
stock is liquidated, a new block of stock sufficient to cover projected fees, in
an amount contemporaneously agreed to by the parties, will again be placed with
Weed LLP, under the terms and conditions outlined above. At the conclusion of
Weed LLP's representation of Client and the payment of all final fees and costs,
any unused stock shall forthwith be returned to BTWO.
BTWO has agreed to register such blocks of stock pursuant to a registration
statement filed at its own expense. The foregoing 2,000,000 shares are in
addition to the Retainer Shares.
BTWO shall cause any subsidiary or parent corporation to adopt and be bound by
this agreement and all its provisions.
Stock Option
As an incentive for Weed LLP to represent BTWO and to increase Weed LLP's
proprietary interest in the success of BTWO, thereby encouraging him to maintain
the relationship with BTWO, BTWO hereby grants to Xxxxxxx X. Xxxx, as designee
for Weed LLP options to purchase shares of BTWO common stock. As an initial
option, BTWO hereby grants Xxxxxxx X. Xxxx the right to purchase 2,000,000
shares of BTWO common stock at a price of three cents ($.03) per share.
Further, every six months following the date hereof that this agreement remains
in effect, BTWO shall grant to Xxxxxxx X. Xxxx an option to purchase an
additional 1,000,000 shares of BTWO 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 are non-transferable and will expire unless exercised
on or before December 31, 2010 or 5 years from the date of the grant, whichever
is later. BTWO has agreed to register the shares of common stock underlying the
stock options at its own expense.
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
BTWO's common stock. The stock options shall be exercisable in whole or in part
with a promissory note of less than 45 days duration or upon common "cashless
exercise" terms.
There may be risks inherent in the issuance of securities to Xxxxxxx X. Xxxx
and/or Weed LLP as compensation for services in lieu of cash. Such risks may
include that the securities may ultimately be worth more or less than the value
of our services or that by the exercise of our options, we may be in a position
earn more than our hourly rate or exert some degree of control over the company.
Further, the issuance of securities as compensation may dilute the percentage of
ownership of your existing shareholders in the company and change the value of
their shares. Moreover, the XXXX accounting treatment is frequently different
when a company issues securities in lieu of cash for services. This occurs when
shares are issued in exchange for services and the price of the shares
fluctuates during the service period. A declining share price may require the
company to issue additional securities to us and cause the company's income
statement to reflect higher expenses for professional services in subsequent
accounting periods than cash payment for services. Similarly, an increase in
the company's share price may cause the company's income statement to reflect
lower expenses for professional services in subsequent accounting periods than
cash payment for services.
The decision about whether or not to exercise any stock options is subject to
our control. In the past, although not required, this decision was made
following consultation with the company's management. It is anticipated that we
will continue to consult with management concerning the timing and amount of the
exercise of any stock options.
Costs and Expenses
BTWO understands that in the course of representation, it may be necessary for
Weed LLP to incur certain costs or expenses. BTWO will reimburse Weed LLP 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 BTWO in advance. More particularly, BTWO will reimburse Weed LLP in
accordance with the following guidelines:
1. Computer-Related Expenses - BTWO will reimburse Weed LLP for computerized
research and research services. However, any charges over $500 per month will
require approval. BTWO also encourages Weed LLP to utilize computer services
that will enable Weed LLP to manage the projects.
2. Travel - BTWO will reimburse Weed LLP for expenses in connection with out of
town travel. However, BTWO 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 - BTWO will reimburse Weed LLP 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 LLP.
BTWO shall pay and hold Weed LLP harmless from all such costs and expenses
incurred on BTWO's behalf. Weed LLP may, but shall not be obligated to, advance
funds on BTWO's behalf. In such event, BTWO agrees to reimburse Weed LLP upon
demand for the amounts advanced. Substantial outside fees (such as state filing
fees or SEC filing services) may be referred to BTWO for direct payment.
Billing
All bills will include a summary statement of the kinds of services rendered
during the relevant period. BTWO expects that Weed LLP will maintain back-up
documentation for all expenses. BTWO expects to be billed monthly or at the
conclusion of each project and agrees to pay Weed LLP's invoices within fifteen
days of receipt. Weed LLP shall xxxx in increments of one-quarter (1/4) hour
unless otherwise agreed in writing.
Delay in Payment
In the event that any of Weed LLP's bills remain unpaid for more than 30 days
after receipt by BTWO, Weed LLP shall have the right to discontinue rendering
further services to BTWO in connection with any matter then being handled for
BTWO by Weed LLP and to take appropriate action to collect such fees.
Involvement of BTWO
BTWO expects to be kept closely involved with the progress of Weed LLP's
services in this matter. Weed LLP will keep BTWO 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 LLP will need to obtain information from BTWO. All
requests for access to documents, employees, or other information shall be
granted without unreasonable delay.
Termination
BTWO shall have the right to terminate Weed LLP's engagement by written notice
at any time. Weed LLP has the same right to terminate this engagement, subject
to an obligation to give BTWO reasonable notice to permit it to obtain
alternative representation or services and subject to applicable ethical
provisions. Weed LLP 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 us arising out of this engagement that cannot be
settled shall be resolved in a federal or state court located in Orange County,
California.
Facsimile Execution of this Agreement is Binding
A facsimile, telecopy or other reproduction of this agreement may be executed by
one or more parties hereto and such executed copy may be delivered by facsimile
or similar instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties agree to execute an original of
this agreement as well as any facsimile, telecopy or other reproduction hereof.
If the foregoing accurately reflects our agreement regarding professional
services, please sign and return a duplicate copy of this letter by facsimile.
Thank you in advance for your prompt attention to this matter.
Very truly yours,
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Managing Partner
Approved and Agreed
B2Digital, Inc.
By: _/s/ Xxxxxx Xxxxxxx
---------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Executive Officer
Date: October 12, 2004
