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EXHIBIT 10B
FEE AGREEMENT WITH XXXXXXX X. XXXX
FEE AGREEMENT FOR PROFESSIONAL SERVICES
This agreement is between Scientific NRG, Incorporated. ("Client" or
"Company") whose address is 0000 Xxxxxxx Xxx, Xxxxxxxx, Xxxxxxxxxx 00000 and
Xxxxxxx X. Xxxx, of the firm Weed & Co. L.P. ("Attorney") whose address is 0000
XxxXxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
Attorney has agreed to provide legal services to Client with respect to
any and all legal matters or special projects referred to Attorney by Client
from time to time. This agreement is made in advance as to the conditions and
guidelines that will govern the relationship between the parties.
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 Attorney will provide shall be in accordance with the following terms and
conditions:
PROFESSIONAL FEES
Fees will be based upon the reasonable value of Attorney'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 Attorney.
Attorney's rate is $200 per hour. It is anticipated that Client and
Attorney 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 understands Attorney's billing rate may be reasonably adjusted
from time to time, but not more frequently than annually. Notice of any such
adjustments will be given within a reasonable time. Client further understands
that during the course of Attorney'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 Attorney to incur certain costs or expenses. Client will reimburse
Attorney for certain costs or expenses
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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. More particularly, Client will reimburse
Attorney in accordance with the following guidelines:
1. Computer-Related Expenses - Client will reimburse Attorney for
computerized research and research services. However, any charges over $500 per
month will require approval. Client also encourages Attorney to utilize computer
services that will enable Attorney to more efficiently manage the projects.
2. Travel - Client will reimburse Attorney for expenses in connection
with out of town travel. However, Client will only reimburse for economy class
travels (except for international travel which shall be business class) 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 Attorney 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
Attorney.
BILLING
All bills will include a summary statement of the kinds of services
rendered during the relevant period. Client expects that Attorney 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 Attorney's invoices as
described below.
PAYMENT
As payment for services and costs, Client has proposed and Attorney has
agreed, that Client place a block of 300,000 shares of free trading Company
stock in Attorney's name with a national securities broker. At least once a
month, Attorney will send Client a statement for fees and costs, with written
notice to the brokerage firm of the dollar amount of such statement. Unless
objection is made to the xxxx, sufficient Company stock, net of commission,
shall then be liquidated forthwith at the prevailing market rate to satisfy such
statement. Attorney has not been engaged to perform, nor will Attorney agree to
perform any services in connection with a capital raising transaction in
exchange for shares. The rules and regulations of the United States Securities
and Exchange Commission do not allow the use of a Form S-8 registration
statement under such circumstances. Any fees for services that are in connection
with a capital raising transaction shall be paid in cash.
In the course of Attorney's representation of the Company, if all the
stock is liquidated, a new block of stock sufficient to cover projected fees and
costs, in an amount contemporaneously
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agreed to by the parties, will again be placed with the brokerage firm, under
the terms and conditions outlined above. At the conclusion of Attorney'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
Form S-8 at its own expense and deliver such stock to the Attorney or brokerage
firm upon the filing and effectiveness of the Form S-8 Registration Statement.
STOCK OPTION
As an incentive for Attorney to represent the Client and to increase
Attorney's proprietary interest in the success of the Company, thereby
encouraging him to maintain his relationship with the Company, the Client hereby
grants to Attorney the option to purchase up to 1,000,000 shares of the Client's
common stock at a price of $.30 per share (the "Option"). The Option is
non-transferable and will expire unless exercised on or before December 31,
2004. Client has agreed to promptly register the shares of common stock
underlying the Stock Option on Form S-8 at its own expense.
INVOLVEMENT OF CLIENT
Client expects to be kept closely involved with the progress of
Attorney's services in this matter. Attorney will keep Client apprised of all
material developments in this matter, and, in the case of litigation or
administrative proceedings, will provide sufficient notice to enable a
representative to attend meetings, conferences, hearings and other proceedings.
A copy of all correspondence in the course of Attorney's services will be
forwarded to Client.
There may be times when Attorney will need to obtain information from
Client. All requests for access to documents, employees, or other information
shall be granted without unreasonable delay. At the conclusion of this matter,
all documents obtained shall be returned upon request.
TERMINATION
Client shall have the right to terminate Attorney's engagement by
written notice at any time. Attorney 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. Attorney will be expected to provide reasonable assistance
in effecting a transfer of responsibilities to the new firm.
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DISPUTES
The laws of the State of California shall govern the interpretation of
this agreement, including all rules or codes of ethics which apply to the
provision of services. Other than disputes involving fees, that are covered by
the Mandatory Fee Arbitration Statutes, all disputes between us arising out of
this agreement 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.
Dated: July 1, 1999
Client
Scientific NRG, Incorporated
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: President
Weed & Co. L.P.
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: General Partner
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