Exhibit 10.1
August 6, 2004
Xx. Xxxxx X. Sand, C.E.O & Chairman
Creative Recycling Technologies, Inc.
Ingen Technologies, Inc.
000 X. Xxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Tel. 000-000-0000
Tel. 000-000-0000
Fax 000-000-0000
RE: XXXX.XX
Dear Mr. Sand:
The purpose of this letter is to memorialize a fee agreement for legal services.
This fee agreement is between Creative Recycling Technologies, Inc., a Georgia
corporation, ("CRTZ") (subject to administrative dissolution by the Georgia
Secretary of State and counterparty to a Plan and Agreement of Merger with Ingen
Technologies, Inc., a Nevada corporation dated March 29, 2004), 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 CRTZ 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 CRTZ.
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 CRTZ 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, CRTZ
shall provide a cash retainer of $2,000 within 10 days of signing this
agreement.
TERMS FOR PAYMENT IN STOCK INSTEAD OF CASH.
As a non-cash alternative form of payment for professional services, beginning
August 10, 2004, CRTZ has proposed and Weed LLP has agreed that CRTZ place an
initial block of 500,000 shares of CRTZ's stock in Xxxxxxx X. Xxxx'x name, as
designee for Weed LLP. At least once a month, Weed LLP will send CRTZ a
statement for fees and costs. Unless objection is made to the xxxx, sufficient
stock, net of commission, shall then be liquidated forthwith at the prevailing
market rate to satisfy such statement.
In the course of Weed LLP's representation of CRTZ, if all the initial block of
stock is liquidated, a new block of stock sufficient to cover projected fees, in
an amount contemporaneously agreed to by the parties, will again be placed with
Weed LLP, under the terms and conditions outlined above. At the conclusion of
Weed LLP's representation of Client and the payment of all final fees and costs,
any unused stock shall forthwith be returned to CRTZ.
CRTZ has agreed to promptly register such blocks of stock pursuant to a
registration statement filed at its own expense.
CRTZ shall cause any subsidiary or parent corporation to adopt and be bound by
this agreement and all its provisions.
STOCK OPTION
As an incentive for Weed LLP to represent CRTZ and to increase Weed LLP's
proprietary interest in the success of CRTZ, thereby encouraging him to maintain
the relationship with CRTZ, CRTZ hereby grants to Xxxxxxx X. Xxxx, as designee
for Weed LLP options to purchase shares of CRTZ common stock. As an initial
option, CRTZ hereby grants Xxxxxxx X. Xxxx the right to purchase 1,000,000
shares of CRTZ common stock at a price of ten cents ($.10) per share. Further,
every six months following the date hereof that this agreement remains in
effect, CRTZ shall grant to Xxxxxxx X. Xxxx an option to purchase an additional
1,000,000 shares of CRTZ 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, 2008 or 5 years from the date of the grant, whichever is
later. CRTZ has agreed to promptly 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
CRTZ'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 & Co. 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
CRTZ understands that in the course of representation, it may be necessary for
Weed LLP to incur certain costs or expenses. CRTZ 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 CRTZ in advance. More particularly, CRTZ will reimburse Weed LLP in
accordance with the following guidelines:
1. COMPUTER-RELATED EXPENSES - CRTZ will reimburse Weed LLP for computerized
research and research services. However, any charges over $500 per month will
require approval. CRTZ also encourages Weed LLP to utilize computer services
that will enable Weed LLP to more efficiently manage the projects.
2. TRAVEL - CRTZ will reimburse Weed LLP for expenses in connection with out of
town travel. However, CRTZ 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 - CRTZ 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.
CRTZ shall pay and hold Weed LLP harmless from all such costs and expenses
incurred on CRTZ's behalf. Weed LLP may, but shall not be obligated to, advance
funds on CRTZ's behalf. In such event, CRTZ 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 CRTZ for direct payment.
BILLING
All bills will include a summary statement of the kinds of services rendered
during the relevant period. CRTZ expects that Weed LLP will maintain back-up
documentation for all expenses. CRTZ 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 CRTZ, Weed LLP shall have the right to discontinue rendering
further services to CRTZ in connection with any matter then being handled for
CRTZ by Weed LLP and to take appropriate action to collect such fees.
INVOLVEMENT OF CRTZ
CRTZ expects to be kept closely involved with the progress of Weed LLP's
services in this matter. Weed LLP will keep CRTZ 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 CRTZ. All
requests for access to documents, employees, or other information shall be
granted without unreasonable delay.
TERMINATION
CRTZ 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 CRTZ 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.
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
Creative Recycling Technologies, Inc.
By: /s/ Xxxxx X. Sand
Name: Xxxxx X. Sand
Title: Chairman & CEO
Date: August 20, 2004
EXHIBIT A
Weed LLP shall advise CRTZ on general corporate matters. Further, Weed LLP shall
assist, as necessary, with the CRTZ's efforts to become current with its
reporting obligations under the Securities Exchange Act of 1934, including but
not limited to all quarterly and annual reports for fiscal 2002, 2003 and 2004,
current reports on Form 8-K and proxy statements. Weed will undertake to revive
the corporate charter of CRTZ in the state of Georgia.
Weed LLP shall assist with the design, implementation and restructuring of CRTZ
as directed.
Weed LLP and CRTZ understand and agree that it may be 6-12 months before Weed
LLP is able to liquidate any of the shares being delivered by CRTZ under this
fee agreement. CRTZ agrees that Weed LLP shall hold the shares in trust and that
CRTZ's obligations for the payment of fees to Weed LLP shall not be fully
discharged until Weed LLP has been able to either (1) convert the CRTZ shares to
cash or (2) has applied the balance due and owing to Weed LLP for legal fees to
the exercise price of the stock options granted to Xxxxxxx X. Xxxx. To the
extent the net cash proceeds from the disposition of the CRTZ shares exceed the
then current balance due Weed LLP for legal fees, such cash shall be segregated
in the Weed LLP Trust Account for the payment of future invoices or returned to
CRTZ at the termination of the relationship.
Moreover, the delivery of shares and grant of stock options in the foregoing fee
agreement are based upon the following assumptions. There are approximately
84,000,000 shares of fully diluted CRTZ common stock issued and outstanding
after giving effect to the Plan of Merger between CRTZ and Ingen Technologies,
Inc.
