EXHIBIT 99.1 LETTER OF ENGAGEMENT
XXXXX & COMPANY
--------------------------
BARRISTERS AND SOLICITORS*
Xxxxxx X. Xxxxx, B.A., LL.B., LL. M.*
January 20, 2005
Xx. Xxxxxxx Xxxxx President Armor Electric, Inc.
000 Xxxxx Xxxxx Xx, Xxxxx #000
Xxxxxx Xxxxx XX 00000
Telephone: (000) 000-0000
RE: LETTER OF ENGAGEMENT
Dear Xx. Xxxxx:
The purpose of this letter is to set forth the terms and conditions that will
govern our professional relationship.
This agreement for professional services is between Armor Electric, Inc. a
Florida corporation, and all of its subsidiaries, ("Client") and Xxxxx &
Company, Barristers and Solicitors ("Xxxxx & Co.") whose address is 000 Xxxxxx
Xxxxxx, Xxxxxxxxx, XX, X0X 0X0.
Xxxxx & Co. agrees to provide professional services to the Client with respect
to certain capital formation, business strategy and legal affairs referred to
Xxxxx & Co. by the Client from time to time. This agreement is made to document
the conditions and guidelines that will govern the relationship between the
parties.
Xxxxx & Co. is currently advising and assisting in the preparation and filing of
registration statements on Form S-8 and the preparation of the 2005 Stock Plan
and the 2005 Incentive Stock Option Plan.
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 Xxxxx & Co. will
provide shall be in accordance with the following terms and conditions.
--------------------------------------------------------------------------------
#702 - 777 Hornby Street Tel:(000) 000-0000
Vancouver, BC V6Z 1S2 Fax:(000) 000-0000
*Also of the California Bar
PROFESSIONAL FEES
Fees will be based upon the reasonable value of Xxxxx & Co.'s services as
determined in accordance with the American Bar Association Model Code of
Professional Responsibility and the California & British Columbia Rules of
Professional Conduct. Fees will be based on the rates charged by Xxxxx & Co..
My hourly fee is US$275 plus GST and PST, if applicable, and any expenses
related to the matter. Minor expenses include long distance telephone charges,
photocopying, delivery charges, faxes, etc. The hourly fee for my legal
assistant and my articling student is US$110.00 plus GST and PST, if applicable.
The Client further understands that during the course of Xxxxx & Co.'s
engagement, it may be necessary or advisable to delegate various portions of
this matter to others.
COSTS AND EXPENSES
The Client understands that in the course of representation, it may be necessary
for Xxxxx & Co. to incur certain costs or expenses. The Client will reimburse
Xxxxx & Co. 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 the Client in advance. More particularly, the Client will
reimburse Xxxxx & Co. in accordance with the following guidelines:
1. COMPUTER-RELATED EXPENSES - The Client will reimburse Xxxxx & Co. for
computerized research and research services. However, any charges over $500 per
month will require approval. The Client also encourages Xxxxx & Co. to utilize
computer services that will enable Xxxxx & Co. to more efficiently manage the
projects.
2. TRAVEL - The Client will reimburse Xxxxx & Co. for expenses in connection
with out of town travel. However, the 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 - The Client will reimburse Xxxxx & Co. 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
Xxxxx & Co.
BILLING
All bills will include a summary statement of the kinds of services rendered
during the relevant period. The Client expects that Xxxxx & Co. will maintain
back-up documentation for all expenses. The Client expects to be billed monthly
or at the conclusion of each project and expects to pay Xxxxx & Co.'s invoices
as described below.
PAYMENT
The Client shall pay Xxxxx & Co.'s out of pocket costs promptly. As payment for
professional services, the Client agrees to pay in cash or as follows.
The Client has agreed to pay outstanding fees in the amount of US$35,000 with
the issuance of 304,348 shares (based on the closing price of the stock on
January 20, 2005) of the common stock to Xxxxxx X. Xxxxx. The Client further
agrees that these shares will be registered on an S-8 Registration Statement.
As a retainer to be used for payment for services, the Client has proposed, and
Xxxxx & Co. has agreed, that the Client will place a block of 300,000 shares of
free trading stock in the name of Xxxxxx Xxxxx Law Corp. with a nationally known
securities broker-dealer. At least once a month, Xxxxx & Co. will send the
Client a statement for fees and costs, with written notice to the brokerage firm
of the dollar amount of such statement. Unless objection is made to the bill,
sufficient Client stock, net of commission, shall then be liquidated forthwith
at the prevailing market rate to satisfy such statement. Xxxxx & Co. has not
been engaged to perform, nor xxxx Xxxxx & Co. agree to perform any services in
connection with a capital raising transaction in exchange for shares registered
on Form S-8. The rules and regulations of the United States Securities and
Exchange Commission do not allow the use of a Form S-8 registration statement
under such circumstances. Any fees for services that are in connection with a
capital raising transaction shall be paid in cash or registered on another form
of registration statement.
In the course of Xxxxx & Co.'s representation of the Company, if all the stock
is liquidated, a new block of stock sufficient to cover projected fees and
costs, in an amount contemporaneously agreed to by the parties, will again be
placed with the brokerage firm, under the terms and conditions outlined above.
At the conclusion of Xxxxx & Co.'s representation of the Client and the payment
of all final fees and costs, any unused stock shall forthwith be returned to the
Client.
The Client has agreed to promptly register such blocks of stock pursuant to Form
S-8 or other applicable registration statement at its own expense and deliver
such stock to Xxxxx & Co. or brokerage firm upon the filing and effectiveness of
the registration statement.
INVOLVEMENT OF CLIENT
The Client expects to be kept closely involved with the progress of Xxxxx &
Co.'s services in this matter. Xxxxx & Co. will keep the Client 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 Xxxxx & Co. will need to obtain information from the
Client. All requests for access to documents, employees, or other information
shall be granted without unreasonable delay.
TERMINATION
The Client shall have the right to terminate Xxxxx & Co.'s engagement by written
notice at any time. Xxxxx & Co. has the same right to terminate this engagement,
subject to an obligation to give the Client reasonable notice to permit it to
obtain alternative representation or services and subject to applicable ethical
provisions. Xxxxx & Co. will be expected to provide reasonable assistance in
effecting a transfer of responsibilities to the new service provider.
If the foregoing accurately reflects your agreement with Xxxxx & Co. regarding
professional services, please sign and return a duplicate copy of this letter.
Thank you in advance for your prompt attention to this matter.
Yours very truly,
XXXXX & COMPANY
---------------------
per: Xxxxxx X. Xxxxx
Approved and Agreed:
Armor Electric, Inc.,
------------------
per: Xxxxxxx Xxxxx
President
