Is the batter out?

[Mark T. DeNucci, Sr.]

NFHS Rules: R1 on first with one out. B2, a right handed batter with a 1-1 count, squares to bunt and bunts the ball downward. The batted balls hits the playing surface in front of home plate and bounces upward over fair territory. B2 starts toward first base. B2 has one foot in the batters box and one foot in the air when the ball, while over fair territory, makes contact with the bat while B2 is still holding the bat. B2 did not make an attempt to strike the ball a second time. The ball becomes dead as soon as the ball strikes the bat the second time, BUT is B2 out because the ball was over fair territory even though he is still in the batter's box OR is this a foul ball?

MTD, Sr.