Exhibit (10)(2) Fee Agreement with Weed & Co. LLP
[Weed & Co. LLP Letterhead]
August 10, 2003
Marketing Worldwide Corporation
0000 XxxXxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
RE: FEE AGREEMENT
Greetings:
This fee agreement is between Marketing Worldwide Corporation, a Delaware
corporation ("MWW"), 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 MWW 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 MWW.
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 will be 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 will be based on the rates charged by Weed LLP.
Weed LLP's rate is $300 per hour. It is anticipated that MWW 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:
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Terms for Payment in Stock instead of Cash
As payment for professional services beginning January 1, 2004, MWW has proposed
and Weed LLP has agreed that MWW place an initial block of 100,000 shares of
MWW's stock in Xxxxxxx X. Xxxx'x name, as designee for Weed LLP. At least once a
month, Weed LLP will send MWW a statement for fees and costs. Unless objection
is made to the bill, sufficient stock, net of commission, shall then be
liquidated forthwith at the prevailing market rate to satisfy such statement.
MWW agrees that Weed LLP shall be entitled to keep all of the proceeds from the
sale of 200,000 shares of MWW stock previously issued/sold to Xxxxxxx X. Xxxx in
connection with the formation and initial capitalization of MWW and services of
Xxxxxxx X. Xxxx and Weed & Co. LLP through December 31, 2003.
In the course of Weed LLP's representation of MWW, 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 MWW.
MWW has agreed to promptly register such blocks of stock pursuant to a
registration statement filed at its own expense.
MWW 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 MWW and to increase Weed LLP's
proprietary interest in the success of MWW, thereby encouraging him to maintain
the relationship with MWW, MWW hereby grants to Xxxxxxx X. Xxxx, as designee for
Weed LLP options to purchase shares of MWW common stock. As an initial option,
MWW hereby grants Xxxxxxx X. Xxxx the right to purchase 250,000 shares of MWW
common stock at a price of $1.00 per share. Further, every six months following
the date hereof that this agreement remains in effect, MWW shall grant to
Xxxxxxx X. Xxxx an option to purchase an additional 50,000 shares of MWW 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. MWW 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
MWW'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.
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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
MWW understands that in the course of representation, it may be necessary for
Weed LLP to incur certain costs or expenses. MWW 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 MWW in advance. More particularly, MWW will reimburse Weed LLP in accordance
with the following guidelines:
1. COMPUTER-RELATED EXPENSES - MWW will reimburse Weed LLP for computerized
research and research services. However, any charges over $500 per month will
require approval. MWW also encourages Weed LLP to utilize computer services that
will enable Weed LLP to more efficiently manage the projects.
2. TRAVEL - MWW will reimburse Weed LLP for expenses in connection with out of
town travel. However, MWW 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 - MWW 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.
MWW shall pay and hold Weed LLP harmless from all such costs and expenses
incurred on MWW's behalf. Weed LLP may, but shall not be obligated to, advance
funds on MWW's behalf. In such event, MWW 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 MWW for direct payment.
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BILLING
All bills will include a summary statement of the kinds of services rendered
during the relevant period. MWW expects that Weed LLP will maintain back-up
documentation for all expenses. MWW 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 bill 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 MWW, Weed LLP shall have the right to discontinue rendering
further services to MWW in connection with any matter then being handled for MWW
by Weed LLP and to take appropriate action to collect such fees.
INVOLVEMENT OF MWW
MWW expects to be kept closely involved with the progress of Weed LLP's services
in this matter. Weed LLP will keep MWW 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 MWW. All
requests for access to documents, employees, or other information shall be
granted without unreasonable delay.
TERMINATION
MWW 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 MWW 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. Thank you in
advance for your prompt attention to this matter.
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Very truly yours,
/s/ April X. Xxxxxx
-------------------
April X. Xxxxxx, Partner
Weed & Co. LLP
Approved and Agreed
Marketing Worldwide Corporation
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: President
Date: August 15, 2003
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EXHIBIT A
Weed LLP shall advise MWW on general corporate matters. Further, Weed LLP shall
assist, as necessary, with the MWW's efforts to raise up to $2,500,000 and to
make MWW a publicly traded corporation, including the filing and amendment until
effectiveness of a registration statement on Form 10-SB or Form SB-2. From time
to time, Weed LLP will assist MWW with its SEC filings.
Weed LLP shall assist with the design, implementation and restructuring of MWW
as directed.
Weed LLP has agreed to prepare, file and respond to comments until a
registration statement on Form 10-SB or Form SB-2 has been declared effective or
withdrawn by the MWW for a fixed fee of $30,000. The fee is payable in cash or
shares as follows: $10,000 to begin work, $10,000 upon filing and $10,000 upon
effectiveness or October 15, 2003, whichever first occurs. MWW shall be
responsible for all accounting fees and XXXXX filing fees and services.
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