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EXHIBIT 10.4
Exhibit 10. Fee Agreement with Richard O. Weed
FEE AGREEMENT
This Fee Agreement is between Client and Lawyer as follows:
Client:
Name: DMI, Inc., a Colorado corporation
Address 2501 West Fifth Street
Santa Ana, CA 97703
Telephone (714) 571-1900
Facsimile (714)
Lawyer:
Richard O. Weed
Archer & Weed Special Project Counsel
5140 Birch Street, Suite 100
Newport Beach, CA 92660
Telephone (714) 760-7424
Facsimile (714) 475-9087
Lawyer has agreed to provide services to Client with respect to the following
matters. Legal research, strategy conferences and document preparation in
connection with proposed merger between Client and another company. Other
proposed activities include: preparation and filing with the SEC of the
company's proxy statement, preparation and filing of two Form S-8 registration
statements; electronic filing of June 30, 1996 Form 10-Q via Edgar; amendment to
Articles of Incorporation to implement reverse split of common stock; review and
prepare as necessary corporate minutes; and preparation of definitive Stock
Purchase Agreement and related documents between Client and target company.
Client and Lawyer have agreed to a fixed fee for these services with all such
services to be rendered before December 15, 1996. Out of pocket expenses will be
paid by Client at cost.
Lawyer may perform additional services for Client from time to time at Client's
request. Client agrees to pay Lawyer $160 per hour for these services. Out of
pocket expenses will be paid by Client at cost.
Lawyer and Client agree that Client, in its discretion, may elect to compensate
Lawyer in common stock of DMI, Inc., a Colorado corporation, instead of cash. As
payment for services, Client has suggested and Lawyer has agreed, that Client
place a block of 350,000 shares of free trading stock in Lawyer's name with a
national securities broker. 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
brokerage firm upon the filing and effectiveness of the Form S-8 Registration
Statement.
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At all times the fees will be based upon the reasonable value of Lawyer's
services as determined in accordance with the American Bar Association Model
Code of Professional Responsibility and the California State Code of
Professional Responsibility.
Costs and Expenses
Client understands that in the course of representation, it may be necessary for
Lawyer to incur certain costs or expenses. Client will reimburse Lawyer 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. More
particularly, Client will reimburse Lawyer in accordance with the following
guidelines:
1. Computer-Related Expenses - Client will reimburse Lawyer for computerized
research and research services. However, any charges over $500 per month will
require approval. Client also encourages Lawyer to utilize computer services
which will enable Lawyer to more efficiently manage this matter.
2. Travel - Client will reimburse Lawyer for expenses in connection with
out-of-town travel. However, Client 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 - Client will reimburse Lawyer 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 Lawyer.
Billing
Client expects to receive a statement monthly or at the conclusion of the
project. All bills will include a summary statement of the kinds of services
rendered during the relevant period. Client expects that Lawyer will maintain
back-up documentation for all expenses.
Involvement of Client
Client expects to be kept closely involved with the progress of Lawyer's
services in this matter. Lawyer 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 Lawyer's services will be forwarded to Client.
There may be times when Lawyer 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.
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Termination
Client shall have the right to terminate Lawyer's engagement by written notice
at any time. Lawyer 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. Lawyer will be expected to provide reasonable assistance in
effecting a transfer of responsibilities to the new firm
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. All disputes between us arising out of this engagement 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.
Facsimile Copies
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
of 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
Dated: October 7, 1996
Client
DMI, Inc.
/s/ Duncan MacDonald
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By: Duncan MacDonald
Its: President
Lawyer
/s/ Richard O. Weed
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Richard O. Weed