EXHIBIT 10.19-B
February 1, 2002
Xx. Xxxxxxx Xxxx
DUCT Utility Construction & Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Dear Xx. Xxxx
The purpose of this letter is to set forth the terms and conditions upon which
DUCT Utility Construction & Technologies, Inc. ("Company" or "DUCT") and their
subsidiaries and affiliates has agreed to engage Xxxxxxx, Pomeranz & Co.
("HPC"), to perform various services described in this letter. In order to
successfully complete this project, DUCT will need to work closely with HPC
throughout the term of the project. A description of the services, activities
and compensation are as follows:
Corporate Finance
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HPC will assist in structuring and coordinating the strategic and financing
activities primarily composed of the following activities:
o Perform general diligence activities o Review and provide feedback on
the business model.
o Review financial projections, assumptions and market dynamics.
o Review and provide feedback on the business / strategic plan to ensure
that the Company's business plan is sound and effectively communicated.
o Assist the Company in identifying strategic opportunities (primarily
consisting of financing strategies and acquisition opportunities).
As a result of the aforementioned activities HPC may be engaged to perform
additional services.
Compensation to HPC
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HPC shall receive a monthly advisory fee of $40,000 per month during the term of
this agreement. The term of the agreement will commence February 1st, 2002 and
will terminate on June 30th, 2002. In conjunction with the execution of this
agreement, HPC shall receive a warrant to purchase 200,000 shares of DUCT common
stock as additional compensation for its service. The warrant for the shares
shall be restricted as the company does not currently have an open registration
statement. Such shares shall have Piggy-Back Registration rights subject to
customary lockups and cutbacks per the underwriter. It is the intention of HPC
to maintain ownership of the shares throughout the course of what HPC
anticipates to be a long term-relationship.
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000.000.0000 o Fax: 000.000.0000
BROKER/DEALER o MEMBER NASD/SIPC
Payment of Costs and Expenses
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The Company shall reimburse HPC for all reasonable direct out-of-pocket costs
and expenses incident to the performance of its obligations under this
Agreement, however any expense in excess of $5,000 shall be pre-approved by the
Company.
Termination
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This letter agreement shall be terminable by either party upon thirty days prior
written notice to the other; provided that such termination will not excuse
Company from its obligation to compensate HPC for services completed in
accordance with the terms of this letter agreement; and provided further that
such termination would not relieve HPC of its confidentiality obligations in
accordance with the terms of this letter agreement.
No Agency; Indemnification
--------------------------
This letter agreement does not, and shall not be construed to create an agency
relationship between HPC and the Company and HPC agrees that it shall not hold
itself out as an agent of Company or attempt to bind Company with respect to any
third parties absent the prior written consent of DUCT. Company and HPC shall
indemnify and hold each other harmless against any claims, damages or
liabilities to which either party may become subject which arises out of the
conduct of the other in connection with this letter agreement unless such
claims, damages or liabilities arise from the gross negligence or willful
misconduct of the party seeking indemnification.
Disclosure
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The Company agrees to disclose the terms and conditions of this agreement any
offering documents related to capital transactions which involve HPC. HPC and/or
its affiliates may have current or future business relationships with Directors,
Officers, affiliates or Shareholders of DUCT beyond the scope of this agreement.
Lockup Agreement
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The Principals, Officers and Major shareholders agree to enter into a Lock-up
Agreement to be drafted and executed as soon as possible. The Lock-Up Agreement
will restrict the ability of the shareholders to sell their securities into the
marketplace.
00 Xxxxxxxxxx Xxxxxx x Xxxxx 000 x Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
000.000.0000 o Fax: 000.000.0000
BROKER/DEALER o MEMBER NASD/SIPC
Confidentiality
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Except as required to be disclosed by the matters contemplated by this letter
agreement or as required by applicable law, HPC shall keep confidential all
non-public information provided to it by the Company concerning their
proprietary rights and information, including but not limited to information
about it's operations, management, technology and development plans, and HPC
shall not disclose any such information to any third party, other than employees
of HPC and advisors to HPC as HPC determines necessary for HPC to carry out the
terms of this letter agreement. Under no circumstance however, shall HPC make
any such disclosure to any party engaged in a business or activity, which the
Company deems to be competitive to it. This confidentiality provision shall
survive the termination of this letter agreement for a period of three years.
The Company will pre-approve HPC relationships as well as Company references
that may be contacted regarding this project.
If the foregoing terms are acceptable, please execute the enclosed copy and
return it to our office in San Francisco. We look forward to being an integral
part of the growth and development of DUCT Utility Construction & Technologies,
Inc.
Sincerely,
Xxxxx Xxxxxxx
Xxxxxxx, Pomeranz & Co.
/S/ XXXXX XXXXXXX
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Agreed and Accepted:
/S/ XXXXXXX X. XXXX, CEO
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Xxxxxxx Xxxx
DUCT Utility Construction & Technologies, Inc
44 Xxxxxxxxxx Xxxxxx x Xxxxx 000 x Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
000.000.0000 o Fax: 000.000.0000
BROKER/DEALER o MEMBER NASD/SIPC
