Exhibit 10.19

     
June 30, 2010
  CONFIDENTIAL

Edward P. Hennessey
Chairman and CEO
CleanTech BioFuels, Inc.
7386 Pershing Avenue
St. Louis, MO 63130

Dear Ed:

This Agreement (the “Agreement”) confirms the understanding between CleanTech
Biofuels, Inc., its subsidiaries, and affiliates (collectively, “Client” or the
“Company”) and Houlihan Smith & Company, Inc. (“Houlihan” or “Advisor”). We
understand that Management of the Company has requested assistance to explore a
range of strategic alternatives and/or transactions to maximize stakeholder
value. Following are the terms and conditions of this Agreement:

1)  
Engagement Scope and Services: Houlihan will provide the following services to
the Committee:

  a)  
Evaluate any strategic financing or transaction alternatives offered to the
Client and its stockholders by any party, including but not limited to:

  •  
Assisting and advising in the solicitation of proposals

  •  
Analysis and evaluation of proposals

  •  
Negotiation and structuring of proposals

  •  
Issuance of new debt or equity by the Client

  •  
Sale of a minority or controlling share of the Company’s issued and outstanding
equity

  •  
Sale of a material portion of the Company’s assets

  •  
Joint Venture or other business combination

For the purposes of this Agreement, the aforementioned strategic financing and
transaction alternatives will individually or collectively be referred to as
“Transaction” or “Transactions.” All parties who contact client regarding a
Transaction or become aware of Client’s desire to explore a Transaction during
the term of this Agreement shall be referred to as “Prospective Parties.” To
assure a coordinated effort, Client and Houlihan shall refer to one another all
Prospective Parties, including Client’s existing Prospective Parties.

2)  
Term. This Agreement shall be in effect for a period of one year beginning from
the date of this signed Agreement and continue thereafter until terminated by
either party upon thirty (30) days’ prior written notice.

3)  
Information. Client or its representatives shall furnish accurate and complete
financial and other information regarding Client’s business (collectively,
“Information”). Client represents and warrants that at all time such Information
shall be true and correct and will promptly inform Advisor of any changes in the
accuracy of Information or performance of the Client’s business. Advisor does
not assume responsibility for the accuracy or completeness of the Information,
will rely upon the Information and shall have no obligation to independently
verify the accuracy of the Information. Client may furnish Advisor with certain
information concerning Client that is confidential and proprietary in nature and
Advisor agrees that such information shall be treated as confidential (the
“Confidential Information”) during the term of the Agreement and for a period of
three (3) years following the termination of the Agreement.

 

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4)  
Fees. To compensate Advisor for its services pursuant to this Agreement, Client
agrees to pay Advisor the following fees:

Advisory Fee: Client agrees to pay Advisor a non-refundable fee of $30,000 (the
“Advisory Fee”). Payment of the Advisory Fee shall be made in three equal
payments of $10,000. The first payment shall be due upon execution of this
agreement, the second payment shall be due July 28, 2010, and the third payment
due August 28, 2010.

Success Fee: In the event that a Transaction is consummated with one or more
Prospective Parties, Client shall pay to Advisor a fee (“Success Fee”) as
follows:

  a)  
Senior and Subordinated Debt: Two-percent (2.0%) of the committed amount of any
senior and subordinated debt financing.

  b)  
Equity: Two-percent (2.0%) of the committed amount of any equity financing.

  c)  
Business Combination: Two-percent (2.0%) of the economic value received from any
business combination. Economic value is the total consideration paid by
Prospective Parties to the Client including, but not limited to, cash, notes
(including debt assumed by Prospective Parties), stock, contract payments (such
as employment, earn-outs determined by estimating the cumulative economic value
of Client’s and Prospective Parties’ forecast, rental, royalty, license) in
excess of historical amounts or prevailing arm’s length terms and company
property retained by the Client.

Notwithstanding the above fee schedule, a minimum fee of $200,000 shall be due
Advisor if Client closes a Transaction with a Prospective Party. During the
initial term of this agreement the Client shall not incur a success fee
obligation, either at the scheduled amount or the minimum amount noted in the
prior sentence, if it raises less than $250,000 in a single or in a series of
debt or equity financing Transactions with existing investors in the CleanTech
BioFuels. The Success Fee shall be paid in available funds by wire transfer to
Advisor immediately upon consummation of a Transaction during the term of this
Agreement or during the two year period following the termination of this
Agreement if such Transaction is consummated with any Prospective Parties.

5)  
Reimbursed Expenses. Client shall promptly reimburse Advisor for all reasonable
out-of-pocket expenses incurred by Advisor in connection with the matters
contemplated by this Agreement. Advisor shall obtain Client’s prior approval
before incurring any reimbursable expenses.

6)  
Indemnification. If Advisor or any person associated with Advisor becomes
involved in any way in any legal or administrative proceeding related to the
services performed hereunder, Client will indemnify, defend and hold Advisor and
any such person harmless from all damage and expenses (including reasonable
attorney’s fees and expenses and court costs) incurred in connection therewith,
except to the extent that a court having jurisdiction shall have determined in a
final judgment that such loss, claim, damage or liability resulted primarily
from the gross negligence, bad faith, illegal acts, willful misfeasance, or
reckless disregard of the obligations or duties of Advisor hereunder.

7)  
No Representations. Advisor makes no representations, expressed or implied, that
it will effect a Transaction of Client as a result of the services furnished
under this Agreement. The duties of Advisor shall not include legal or
accounting services, which shall be procured by Client at its own expense.

 

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8)  
Governing Law. The validity and interpretation of this agreement shall be
governed by the laws of the State of Illinois. The parties agree any legal
proceedings or actions shall be brought in and adjudicated by the courts of Cook
County Illinois.

9)  
Announcements. If a Transaction is consummated, Advisor may, at its option and
expense, claim appropriate credit for its Services to Client, including placing
a “tombstone” announcement in such newspapers and periodicals as it may select.
Client shall have the right to review and approve such communications prior to
public announcement, provided however that such approval shall not be
unreasonably withheld.

10)  
Authority. By signing this Agreement the signing party represents that he or she
has unconditional authority to enter into this Agreement on behalf of Client.
This is the entire agreement between the parties pertaining to its subject
matter and supersedes all prior agreements, representations and understandings
of the parties. No modification of this Agreement shall be binding unless agreed
in writing by the parties.

If you are in agreement with the foregoing, please so indicate by executing the
enclosed copy of this letter and returning it to us.

Very truly yours,

Houlihan Smith & Company, Inc.

Joseph C. Lunkes, Managing Director

Accepted and agreed to this      day of June 2010

CleanTech BioFuels, Inc.                                    
Mr. Edward P. Hennessey, Chairman and CEO

 

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