EXHIBIT 10.105
FELDHAKE XXXXXXXXX LLP
ATTORNEYS AT LAW
[ LETTERHEAD ]
January 12, 2005
PRIVILEGED AND CONFIDENTIAL
[By Email - Original Regular Mail]
Hienergy Technologies, Inc.
c/o Xxxxxx X. Xxxxxxx, Ph.D.
0000 Xxxxx Xxxxxxx, Xxxx X
Xxxxxx, XX 00000
Xxxxxx X. Xxxxxxx, Ph.D.
0000 Xxxxx Xxxxxxx, Xxxx X
Xxxxxx, XX 00000
Re: Retention Agreement
Xxxxx Xxxxxxx, et al. v. Hienergy Technologies, Inc., et al.
Case No. SACV04-1226 GLT (JTLx) - USDC/Central -Southern Division
Gentlemen:
We appreciated the opportunity to meet with Xxxx and Xxx on Friday,
January 7, relative to the captioned suit against Hienergy Technologies, Inc.
("HIET") and our Firm's engagement as defense counsel. The purpose of this
correspondence is to memorialize the terms of our Firm's engagement, and to
serve as a formal written attorney-client fee contract ("Retention Agreement")
between XXXX and Xxxxxx X. Xxxxxxx, Ph.D. ("Client" or "you"), and the law
offices of Feldhake ? Xxxxxxxxx LLP, a California limited liability partnership
(the "Firm"). We are pleased to be afforded the opportunity to represent Xx.
Xxxxxxx and XXXX's interests, and we look forward to working with you, Xxxx and
Xxx on this matter and hopefully on future engagements as well.
FELDHAKE XXXXXXXXX LLP Hienergy Technologies, Inc.
ATTORNEYS AT LAW Xxxxxx X. Xxxxxxx, Ph.D.
Xxxxx Xxxxxxx, et al. v. Hienergy Technologies, et al.
January 12, 2005
Page 2
CONTRACTUAL AGREEMENT
Section 6148 of the California Business and Professions Code requires
attorneys to have written fee agreements with their clients under most
circumstances. While in letter form, this document is designed to serve as a
formal agreement. Please review all provisions carefully, including the appended
Additional Terms and Conditions (which are adopted and incorporated by reference
as part of this Retention Agreement), as they are intended to be contractual and
create mutual obligations. You should inquire of us or consult with separate
counsel regarding the terms, your rights and obligations, and any other matters
pertaining to our engagement or to entry into this Retention Agreement. In
executing this Retention Agreement, you are signifying that you understand the
provisions and agree to be bound by the terms recited.
SCOPE OF SERVICES
We have been engaged to represent the interests of HIET, a corporation,
and Xx. Xxxxxxx, an individual, as Defendants in a matter titled Xxxxx Xxxxxxx,
et al. v. Hienergy Technologies, Inc., et al., Case No. SACV04-1226 GLT (JTLx)
(the "Litigation"). Should the scope of this engagement change, that will be
reflected in a further letter expressly noting an intention to modify this
Retention Agreement or, if necessary, through a formal written Amendment. To the
extent appropriate based upon inquiries and the further services contemplated,
confirming letters may also issue from the Firm to you to memorialize specific
tasks which you request be undertaken pursuant to this Retention Agreement. The
Firm shall provide those legal services reasonably required to satisfy the
specific engagement, and shall take reasonable steps to keep you informed and to
respond to all inquiries. You, in turn, will cooperate with the Firm on the
engagement, making such disclosures and documents available as required, keeping
the Firm informed of all developments and material matters (including current
address and contact information), and otherwise complying with all terms of this
Retention Agreement.
LEGAL FEES
The compensation which the Firm shall receive for the representation of
your interests has been structured on an hourly basis, and you agree to pay the
Firm the sums billed monthly for time spent in providing services, including
reasonable travel time. It is presently anticipated that Xxxxxx Xxxxxxxx,
assisted by a junior associate as needed, will be principally involved in
providing the requested legal services. The Firm shall charge $400.00 for time
expended by Xxxxxx Xxxxxxxx, $365.00 per hour for time expended by other
partners, $290.00 per hour for time expended by associates, $150.00 per hour for
time expended by paralegal personnel, and $35.00 per hour for time expended by
non-attorney and non-paralegal staff on tasks beyond the scope of their normal
duties but necessary for your representation.
FELDHAKE XXXXXXXXX LLP Hienergy Technologies, Inc.
ATTORNEYS AT LAW Xxxxxx X. Xxxxxxx, Ph.D.
Xxxxx Xxxxxxx, et al. v. Hienergy Technologies, et al.
January 12, 2005
Page 3
RETAINER
The Firm will require a $5,000 retainer against anticipated costs,
which funds will be held in an attorney trust account.
COSTS AND EXPENSES
You agree to reimburse the Firm for all reasonable costs and expenses
as they are incurred in the rendition of legal services. These include, but are
not limited to, fees fixed by law, telephone calls, messenger and other delivery
fees, postage, facsimile (at $1.00/page) and photocopying (at $.25/page)
expenses, investigation expenses, filing costs, consultants' fees, travel and
lodging-related costs, reporters' fees, process servers' fees, expert witness
fees, and similar items. You authorize the Firm to incur all reasonable costs
necessary in the Firm's judgment. However, any single cost or expense obligation
in excess of $500.00 must be communicated and separately approved by you, absent
unusual circumstances requiring an immediate expenditure.
MONTHLY FEE AND COST STATEMENTS
The Firm will furnish you with monthly statements for fees and costs
incurred in the representation. The monthly statements will itemize the date of
service, the specific matter in which the service was provided, and provide a
description of the services rendered and the time expended (broken down into
six-minute increments). All costs, both internal and external, will be itemized
on the monthly statements to reflect those charges by category, amounts and
dates incurred or paid. You agree to pay the Firm's fees and costs on receipt of
the monthly statement. The Firm will, on overdue account balances, charge
interest at ten percent (10%) per annum on any unpaid balance. You also agree
and shall notify the Firm in writing if you dispute any entry for legal services
or costs on any statement. If you fail to do so within twenty (20) days of the
date of the statement, all such entries shall be deemed acknowledged as correct
as between you and the Firm and any later ability to protest billing entries is
waived. You shall also have the right to request a current bill at any time
covering the Firm's fees and costs to date, and the Firm shall provide such a
bill within ten (10) calendar days of the request.
FELDHAKE XXXXXXXXX LLP Hienergy Technologies, Inc.
ATTORNEYS AT LAW Xxxxxx X. Xxxxxxx, Ph.D.
Xxxxx Xxxxxxx, et al. v. Hienergy Technologies, et al.
January 12, 2005
Page 4
STOCK LIQUIDATION PROGRAM
HIET has advised us of its ability to immediately register free trading
shares pursuant to a Form S-8 filing for the purpose of establishing a payment
device for contemplated legal services on behalf of the corporation. In turn, to
avoid any claim of access to, or selling based upon insider information which
may be acquired as a consequence of our engagement, it has been agreed that an
orderly schedule for retirement of the fee and cost statements will be
established through self-liquidating provisions of a stock conveyance. In
specific, it is agreed that the company will allocate shares for legal fees and
costs. The shares will be free trading and capable of immediate liquidation at
the then-existing market price. Shares will be liquidated within ten (10) days
of receipt of an interim statement for services rendered in quantity sufficient
to satisfy the outstanding fees and costs regardless of the trading price.
Should the share number be required to be increased, HIET shall do so promptly
in order to assure that a stock-based liquidation program for the timely
retirement of statements for services rendered remains on schedule. HIET shall
have the right at any time to satisfy accounts through cash payments within ten
(10) days of receipt of the statements in lieu of through liquidation of free
trading stock.
ARBITRATION OF CLAIMS
If a dispute between you and the Firm arises over fees charged for
services, the controversy will be submitted to Binding Arbitration in accordance
with the rules of the California State Bar Fee Arbitration Program, as set forth
in California Business and Professions Code sections 6200 through 6206. Should a
dispute arise between you and the Firm over any aspect of the attorney-client
relationship other than the fees charged, including, without limitation, a claim
for breach of professional duty, all disputes will also be resolved by Binding
Arbitration. It is understood that any dispute as to any alleged breach of
professional duty (that is, as to whether any legal services rendered under this
agreement were allegedly unnecessary, unauthorized, omitted entirely, or were
improperly, negligently or incompetently rendered) will be determined by
submission to Binding Arbitration under California law, and not by a lawsuit or
resort to Court process except as California law provides for judicial review of
Arbitration proceedings. The Arbitrator or Arbitration Panel shall have the
authority to award to the prevailing party attorneys' fees, costs and interest
incurred. Any Arbitration Award may be served by mail upon either side and
personal service shall not be required. BOTH PARTIES TO THIS AGREEMENT, BY
ENTERING INTO IT, ARE GIVING UP THEIR CONSTITUTIONAL RIGHT TO HAVE ANY SUCH
DISPUTE DECIDED IN A COURT OF LAW BEFORE A JURY, AND INSTEAD ARE ACCEPTING THE
USE OF ARBITRATION.
FIRM INITIALS: /S/ HIET INITIALS: /S/
XX. XXXXXXX INITIALS: /S/
FELDHAKE XXXXXXXXX LLP Hienergy Technologies, Inc.
ATTORNEYS AT LAW Xxxxxx X. Xxxxxxx, Ph.D.
Xxxxx Xxxxxxx, et al. v. Hienergy Technologies, et al.
January 12, 2005
Page 5
INSURANCE
The California Business & Professions Code requires us to inform you
whether we maintain errors and omissions insurance coverage applicable to the
services to be rendered to you. We confirm that the Firm does maintain such
insurance coverage.
EFFECTIVE DATE
This Retention Agreement will take effect on full execution and
initialing, and the return to the Firm of a properly signed, executed and
initialed copy of this Retention Agreement, and will be retroactive to January
7, 2005, when the Firm first undertook services on your behalf.
* * * * * * * * * *
I have executed this letter, serving as a formal Retention Agreement,
on behalf of Feldhake ? Xxxxxxxxx LLP. Please signify your acknowledgment and
understanding of the terms presented, and of your having freely and voluntarily
entered into the contemplated retention, by dating and signing the original,
initialing each page of the incorporated Additional Terms and Conditions, and
returning the signed and initialed original to our office.
Yours very truly,
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx
RJF:csh
REVIEWED AND APPROVED:
---------------------
HIENERGY TECHNOLOGIES, INC.
Dated: 1/12/05 By: /s/ X. Xxxxxxx
------------------------------
[Signature]
Name: X. Xxxxxxx (print)
Title: CEO
XXXXXX X. XXXXXXX, Ph.D.
Dated: 1/12/05 By: /s/ X. Xxxxxxx
------------------------------
[Signature]
ADDITIONAL TERMS AND CONDITIONS
EFFECTIVE DATE OF AGREEMENT
This Retention Agreement will not take effect, and the Firm will have no
obligation to provide (or to continue to provide) legal services, until we have
received back from you a fully signed and initialed original (subject to the
Firm being entitled and reserving the right to seek compensation for the
reasonable value of the services provided in expectation and anticipation of
your execution of the Retention Agreement) and, if required, until you have
provided the retainer for legal services. Should this Retention Agreement not be
signed and returned to the Firm within ten (10) calendar days following the date
of transmittal to you, this Retention Agreement will be deemed withdrawn and the
subsequent execution will be of no force and effect (unless the delayed
execution and return is waived in writing by the Firm).
LEGAL FEES - BILLING, RATES AND ADJUSTMENTS
The Firm bills only for actual work. We employ a computer-based recordation and
invoicing system for all attorneys, paralegal and dedicated staff. The Firm has
no "minimums" to be billed to Client for certain tasks. The Firm reserves the
right, in its discretion, to utilize whichever attorneys and staff it deems best
suited to the tasks required, consistent with the competent and efficient
rendering of legal services. Rates for additional associates and staff who may
assist in this matter will vary depending upon the experience and background of
the individual attorneys and legal assistants. Hourly rates are also reviewed
and, when appropriate, adjusted to reflect increases in seniority and
experience, as well as inflationary factors. The Firm has an internal policy of
not raising its rates in a specific matter until that matter is complete, but on
an annual basis rates may be modified based upon unusual or unanticipated
circumstances, or a more extended or protracted engagement than originally
contemplated. Increases are ordinarily made on an annual basis, effective as of
the beginning of each calendar year, although increases may occur at other times
(notice of which will be forwarded to you).
NON-PAYMENT AND ATTORNEY FEE RECOVERY
The Firm depends upon its clients to satisfy legal fees and costs in accordance
with the provisions of the Retention Agreement. In the event you should fail to
do so, it may be necessary for the Firm to institute arbitration, litigation or
other proceedings in order to obtain compensation for services rendered. In any
action to enforce or interpret this Retention Agreement or in any proceeding
relating to the Firm's legal services in which the Firm elects to appear as its
own attorneys and without engaging outside counsel, it is understood and agreed
that the Firm shall be entitled to recover, and in addition to such other
amounts as may be due and owing from you to the Firm for services rendered, a
further sum reflecting the time expended by the Firm and the costs incurred in
connection with pursuing the Firm's rights. In addition, to the extent attorney
or staff time is incurred following up on payment(s) not timely made under this
Retention Agreement, that time and expense will also be billed and be due and
owing at the same rates recited.
FORUM SELECTION
In the event of any dispute between you and the Firm regarding the
interpretation of this Retention Agreement, the Firm's services, or the
performance of your duties and responsibilities, such dispute(s) may involve
arbitration proceedings as well as possible litigation between the parties. It
is understood by you that the Firm, in accepting and undertaking this
engagement, will be doing so on your behalf and working out of the Orange County
office, where legal work will primarily be done, responsible attorneys assigned,
communications with you undertaken, and all records maintained. In the event Fee
Arbitration proceedings are appropriate pursuant to statue or practice
guidelines, such proceedings are agreed between you and the Firm to occur before
the Orange County Bar Association ("OCBA") as an exclusive forum selection. You
and the Firm have also separately agreed to Binding Arbitration as to any
disputes between you and the Firm, and Orange County will be the exclusive forum
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FIRM INITIALS: /S/
HIET INITIALS: /S/
XX. XXXXXXX INITIALS: /S/
for the resolution of any dispute. To the extent judicial action is required to
compel arbitration, to confirm an award in arbitration, or to enforce the
Retention Agreement or pursue recoveries in arbitration, the exclusive forum for
such proceedings shall be the Superior Court for the County of Orange, State of
California. The Firm and you agree to these forum selections as appropriate in
light of the nature of the engagement and the location of the services to be
provided. To the extent you and the Firm agree to an alternate forum, such
agreement must be in writing and signed by representatives of both parties, with
each being free to give or withhold consent in his, her or its sole discretion.
DISCHARGE AND WITHDRAWAL
You may discharge the Firm at any time, without cause, and the Firm may withdraw
on thirty (30) days notice, without cause. The Firm may, for cause, seek to
immediately terminate this engagement and, if needed, take steps to promptly
withdraw as your counsel. Possible factors which may result in our withdrawal
include (but are not limited to) any breach of this Retention Agreement, refusal
to cooperate with the Firm or to follow the Firm's advice on any material
matter, failure to communicate, or any other fact or circumstance which renders
continued representation unlawful, unethical, infeasible, or adverse to your
best interests or potentially so. In the event that the Firm deems it necessary
to withdraw from Client's representation, you agree to execute all documents
necessary to effectuate the withdrawal.
CONCLUSION OF SERVICES
When the Firm concludes all the requested services, all unpaid charges shall
become immediately due and payable. Upon your written request, the Firm will
deliver to you its files along with any property or deposits in the Firm's
possession. The Firm reserves the right to make copies of all documents
necessary for office record-keeping purposes, and you agree to maintain the
transferred files in good condition and, on request, to allow the Firm access to
all transferred files in the event of a reasonable future need for access to the
files and records.
DISCLAIMER OF GUARANTEE
Nothing in this Retention Agreement, and nothing in the Firm's statements to you
will or should be construed as a promise or guarantee as to the outcome of any
representation. The Firm, directly and through any individual attorney, makes no
promises or guarantees regarding the outcome of the representation. The outcome
of any engagement cannot be accurately predicted, and any engagement in an
adversarial system is dependent upon a number of factors which precludes any
assurance as to the outcome and, in most cases, precludes percentage analyses or
reliable predictions of the probability of success or failure. Any comments
about the possible and probable outcome of the contemplated representation are,
and should be treated, as only the Firm's expressions of opinion and intended
effort on your behalf, as there is never a guaranteed result in any contested
matter. Furthermore, the Firm cannot make any guarantee as to the amount which
you will incur for attorneys' fees and costs in this matter, as those figures
will wholly depend on the time and effort required to be devoted to the matter.
The ultimate fees and costs that you will incur is dependent on numerous
factors, including the complexity of the issues as they develop, the extent and
nature of discovery required, and the approach the opposition takes to the case.
In addition, even the best estimates of anticipated legal fees and costs can be
impacted by the actions of other parties and their counsel, regulatory or legal
requirements, or the directives of a court or other judicial body. It is,
therefore, important that you understand that, if at any time the Firm gives
estimates as to costs or attorneys' fees anticipated, they are nothing more than
that, merely estimates. The factors mentioned above may cause the actual fees
and costs to vary substantially from any estimate given to you by the Firm.
9
FIRM INITIALS: /S/
HIET INITIALS: /S/
XX. XXXXXXX INITIALS: /S/
FUTURE WORK AND CLIENTS
It is understood and agreed that the Firm's representation of your interests in
this matter is for the specific purpose set forth in the Scope of Services
provision of this Retention Agreement, and you agree that the Firm may represent
parties in the future on matters that may be adverse to you, so long as such
future representation does not involve confidential information which the Firm
obtained from its representation of your interests pursuant to this Retention
Agreement.
FIRM - WITNESS FUNCTION
If personnel from the Firm are required to be witnesses, or requested by you to
be witnesses in a future matter relating to the Firm's work or activities for
you on this matter, you agree to and shall pay the Firm for the time and costs
it expends in accordance with the provisions of this Retention Agreement.
PRESERVATION OF FILES
The Firm has no duty to preserve and/or store any files in this matter after its
work on the matter is concluded. The Firm may store all or portions of the files
for so long as it determines to be appropriate, and may forward to you or purge
those portions of its files that it determines not to preserve.
NEGOTIATED AGREEMENT
Although this Retention Agreement represents a standard format employed by the
Firm, you acknowledge that the retention as well as the material terms have been
the subject of discussion and, as appropriate, negotiation before the final
version of your particular Retention Agreement was prepared for signature.
Accordingly, you and the Firm acknowledge that this Retention Agreement has been
negotiated and entered into "at arms length" and without any duress, pressure or
undue influence, and reflects a consensual relationship freely and voluntarily
entered into on mutually agreeable terms.
INTEGRATED AGREEMENT
You and the Firm expressly acknowledge and understand that this Retention
Agreement contains all terms of our agreement, and that there are no terms or
provisions, representations or warranties, or other matters affecting the
contemplated retention which are not a part of this document. You and the Firm
further acknowledge, understand and agree that this Retention Agreement may be
modified, changed, or superseded only by a subsequent writing signed by all
parties to this Retention Agreement.
10
FIRM INITIALS: /S/
HIET INITIALS: /S/
XX. XXXXXXX INITIALS: /S/
