Document:

EXHIBIT 10.9

LETTER OF INTENT

STATE OF TEXAS )KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF BEXAR)

THAT Nutek, Inc. of 23792 Rockfield Blvd., Suite 140, Lake Forest, California
92630, as represented by its President and CEO, Mr. Murray Conradie, as
Purchaser, desires to purchase the herein described mineral acres, equipment,
and corporation, from P.R Maupin, 18211 Apache Springs Drive, San Antonio,
Texas, P.R. Maupin Profit Sharing Plan, P. R. Maupin, trustee, P.O. Box
17541, San Antonio, Texas 78217, The 3-K Trust, Charlotte Head, trustee, 9785
Westview Drive, Houston, Texas 77055, Mr. & Mrs. C. A. McCulloch, 2111 Linea
Del Pino, Houston, Texas 77077, Roy S. Miller, 4065 49th Ave. South, St.
Petersburg, Florida 33711, and Geodetic Associates, Inc., Richard V. Riddle,
President, 6140 3rd Ave. North, St. Petersburg, Florida 33710, as Sellers under
the terms and agreements described in this Letter of Intent, to-wit:

1.  Purchase of corporation known as Clipper Operating Co., Inc. and all of its
assets including, but not limited to, all office equipment, field equipment,
supplies, furniture, and lease operating agreements, by the purchase of all
shares in said corporation from its sole shareholder, P. R. Maupin.  Mr. Maupin
will warrant that said corporation is free and clear of any and all claims at
the time of sale and he will personally take responsibility for any such claims
that should arise against said corporation for the period prior to the date of
sale, said personal guarantee shall remain in effect for a period of one year
after the date of sale at which time said guarantee will automatically
terminate.

2.  Purchase of all leases, farm-outs, or mineral interests held by Sellers in
the Big Foot and Kyote fields of Frio and Atascosa Counties, Texas insofar as
they cover a seventy five percent (75%) net revenue interest (NRI).  Said NRI
would then become a one-hundred percent (100%) working interest (WI) with all
other interests being either royalty interest (RI) or overriding royalty
interest (ORR).  Said lands are described on Exhibit 'A' attached hereto and
made a part of this Letter for all purposes. Sellers will give a limited
warranty to purchaser of title "by and through assignors, but not
otherwise".

3.  Purchase of all of the personal property associated with the oil and gas
wells on the lands described on Exhibit 'A' hereto including, but not limited
to, all well equipment, spare equipment, tank batteries, lease winch truck,
chemical, and chemical storage tank.  Equipment will be sold "as is and with
all faults".

4.  Purchase of that certain four (4) inch gas pipeline which extends from the
Talley lease which is owned by the Sellers approx. four (4) miles west to the
sales point at the Virtex Petroleum Company, Inc. pipeline in the Big Foot West
field. Pipeline will be sold "as is and with all faults".

5. Purchase price:

A. Purchase of all shares of Clipper Operating Co., Inc. will be at a price
   of sixty seven thousand three hundred thirty dollars ($67,330.00)
   paid to the sole shareholder, P R. Maupin.

B. Purchase of all mineral acreage will be at a price of one hundred dollars
   ($100.00)per acre as set forth in Exhibit 'A' hereto. Total price will be
   four hundred sixty four thousand six hundred thirty five dollars
   ($464,635.00).

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C. Purchase of all equipment will be at market value as set forth in Exhibit
   'B' hereto. Total price will be eight hundred thirty three thousand
   nine hundred fifteen and no/100 dollars ($833,915.00).

D. Purchase of pipeline will be at market value as set forth in Exhibit 'C'
   hereto. Total price will be thirty six thousand seven hundred twenty and
   no/100 dollars ($36,720.00).

E.  Payment for purchase of B., C., and D. above will be made to Sellers as
set forth herein.

6.  Method of payment will be one-half in the stock of Nutek, Inc. and one-
half in cash.  The stock will be transmitted to sellers via overnight delivery
the day after closing in the same proportions as the disbursement of cash
set forth below. The cash for the purchase of the shares of Clipper Operating
Co., Inc. will be paid to P. R. Maupin by cashier's check at time of closing.
The cash for acreage, equipment and pipeline shall be paid to Clipper Operating
Co., Inc. for the benefit of Sellers to be accounted for and the net
divided three-eighths (3/8th's) to P. R. Maupin and one-eighth (1/8"') each
to the other Sellers.

7.  Date of closing shall be tentatively set as Tuesday, January 4th, 2000.
Said closing may be delayed by mutual consent for a period not to exceed
sixty (60) days.  It is agreed that the effective date of sale shall be the
first of January, 2000.

8.  Sellers will furnish Purchaser an independent geological report setting
forth the remaining reserves on the lands owned by Sellers.  Said report
shall be at the sole cost and expense of Sellers. Said report will be
transmitted to Purchaser by the 10th day of November, 1999, or as soon
thereafter as practicable.

9.  Sellers shall also furnish a business plan setting forth the proposed
development of the acreage as has been discussed between the parties.  This
will include, but not be limited to, the drilling of thirty new wells,
reworking those existing wells in which said reworking would enhance
production, and putting in a gas gathering system in order to connect casing
head gas from wells in the Big Foot Field to the pipeline. Said business plan
shall be initiated by Sellers but shall be finalized with agreement and
consultation of both parties.  The costs used for this plan will be those set
forth herein with the cost of drilling each new well to be based upon the cost
estimate set forth in Exhibit 'D'. The initial draft of said business plan
shall be transmitted to Purchaser not later than the 10th day of November,
1999, or as soon thereafter as practicable.

10.  Purchaser shall commit to obtain funding for said purchase and development
on a "best efforts" basis. This initial funding shall be based upon the
purchase as set forth herein; reworking a portion of the existing wells,
installing a gas gathering system, and the drilling of twenty (20) new
wells.  This funding is expected to cost approximately four million dollars
($4,000,000.00) with the cost of funding to be determined by Purchaser.
Purchaser shall keep Sellers informed of progress in this regard by
maintaining contact with P.R Maupin.

11.  Sellers agree not to represent these properties to any other party nor to
enter into discussions concerning a possible sale to any other party during
the term covered by the Letter of Intent.

12.  P.R. Maupin shall escort Murray Conradie, or his representative, on an
inspection of all leases and equipment prior to closing in order to confirm
condition.

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13.  The term of this Letter of Intent shall continue from this date until the
closing as set forth herein. Said closing and the term of this letter may be
extended for a period not to exceed sixty (60) days by mutual consent. This
Letter of Intent may be terminated by written agreement between the parties.

14.  The terms of this sale and the plans for development of the minerals
herein described are preliminary only and may be changed in the final terms of
sale which will be executed by all parties.

IN WITNESS WHEREOF, the parties have set their hands on the dates below with
the effective date of this Letter of Intent being the first day of November,
1999.

Purchaser:

Nutek, Inc.

By: /s/ Murray Conradie
----------------------------
Murray Conradie, President

Sellers:

By:  /s/ P.R. Maupin
----------------------------
P. R. Maupin, individually and as sole shareholder
Of Clipper Operating Co., Inc.

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                              EXHIBIT 'A'
                                ACREAGE

NOTE:	The Big Foot and Kyote fields are essentially the same field producing
from the Olmos sand with the Big Foot field being in Frio County, Texas
and producing from the Olmos B and D sands and the Kyote field being in
Atascosa County joining the Big Foot field to the east and producing from
the Olmos D sand only.

BIG FOOT FIELD, FRIO COUNTY

Ann Burns 20 ac.

Ann Burns A 689.43 ac.

Nowlin 93.765 ac.

Burns 637.25 ac. farmout (requires development)

Davidson 300 ac.

Foster 331.062

Jane Burns 80 ac.

Jane Burns 'A' 20 ac.

Jane Burns 'B' 80 ac.

Jane Burns 'C' 80 ac.

Jane Burns 'D' 80 ac.

Jane Burns 'E' 40 ac.

Jane Burns 'F' 20 ac.

Jane Burns 'G' 20 ac.

Shell - C. 80 ac.

Smith, et. al. 327.48 ac.

Talley 800 ac.

Total acreage in Frio Co. = 3,698.987 ac.

KYOTE FIELD, ATASCOSA COUNTY

Crowther 197.42 ac.

Hill 87.41 ac.

Rizik 180 ac.

Tomblin 129.24 ac.

Wright 353.31 ac.

Total acreage in Atascosa Co. = 947.38 ac.

Total acreage in Big Foot/Kyote fields = 4,646.367

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                           EXHIBIT 'B'

Market value of equipment for average well in field on pump or capable of
pumping (symbol P)

$ 3,920  3200' of 2 3/8's 8R upset tubing (1.20- 1.25/ft) $l.225 avg/ft
895	3200' of 5/8" sucker rods ($7/rod = 0.28/ft)
275	downhole pump and seating nipple
250  well head
50  polish rod
90  pumping tee and stuffing box
65	misc. wellhead equip. (valves, checks, bull plugs, etc...)
2,750  pumpjack (incl. base or skid)
990  1800' (avg.) of line pipe per well at $0.55/fl.
150  elec. motor (low rpm)
375	Electrical (sw. box, time clock, starter, coils, etc...)
$ 9,810	Total

Market value of equipment for average well in field for injection/flowing
(symbol F):

$ 3,920  3200' of 2 3/8's 8R upset tubing
800  packer (tension)
250 wellhead
75  master valve
65 misc. wellhead equip.
15  seating nipple
990  line pipe
85  electrical (sw. box and master disconnect only)

$ 6,200  Total

Additional equipment for injection wells (symbol I):
$  750  injection pump (small high pressure duplex) with skid
50	 elec. motor
290	 electrical (time clock, starter, coils. sws, etc...)
$ 1,190	 Total

Wells which are not completed (worked over) which are on the Foster and
Davidson
leases:

$ 2,750 Pumpjack (symbol PJ)
250 Welihead (symbol WH)
375 Electrical (symbol elec.)

VALUES, WELLS, AND DESCRIPTIONS (BY LEASE)

Big Foot Field, Frio Co.

Ann Burns
$ 9,810 no.1 well (P)
Ann Burns 'A'
$ 78,480 nos. lA through BA wells (P)
Bohl
$ 39,240 nos. 1, 2, 3, and 5 (P)
Davidson
$ 29,430
$  8,125
Foster
$ 19,620 nos. 3 and 3A (P)
$ 6,200 no.12 (F)
$ 13,500 nos. 1, lA,
$  1,875 nos. 2A, 5,
Jane Burns
$ 9,810 no.3(P)
Jane Burns 'A'
$ 6,200 no. lA (F)
Jane Burns 'B'
$ 19,620 nos. 3 and 4 (P)
$  7,390 no.2 (F + 1)
Jane Burns 'C'
$ 19,620 nos. 2 and 3 (P)
Jane Burns 'D'
$  9,810 no.1 (P)
Jane Burns 'E'
$ 19,620 nos. 1 and 2 (P)
Jane Burns 'F'
$  9,810 no. 1(P)
Jane Burns 'G'
$  6,200 no. lB (F)
nos. 3, 13, and 17(P)
nos. 1,4 through 12, 14, 15, and 16 (wri + elec)

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Shell - C
$  9,810 no.2(P)
$ 18,600 nos. 1, 3, and 4(F)
Smith, et al
$ 9,810 no. 1(P)
Talley
$ 186,390 nos. 1, 3, 4, 5, 7 through 13, 15, 17 through 22, and
24(P)
24,800 nos. 2, 14, 16, and 23 (F)

$563,770 Total for wells in the Big Foot Field

Kyote Field, Atascosa Co.

Crowther
$ 29,430 nos. 1, 2, and 3 (P)
Hill
$ 9,810 no. 1(P)
Rizik
$ 6,200 no. 1(F)
$ 9,810 no.2(P)
Tomblin
$ 19,620 no.1 and 2 (P)
Wright
$ 58,860 nos. 1, 3, 4, 6, 9, and 10(P)
$ 12,400 nos. 5 and 8 (F)

$146,130 Total for wells in the Kyote Field

Totals for wells;
$ 563,770 Big Foot Field
  146,130 Kyote Field

$ 709,900 Total for all wells

TANK BATTERIES (BY LEASE)

Market value of equipment in tank batteries:

$ 1,150	Steel tank 210 bbl welded (symbol 21 OT)
1,500		Steel tank 300 bbl welded (symbol 300T)
1,900		Steel tank 400 bbl welded (symbol 400T)
1,000		Fiberglass tank - avg. for both open and closed top (symbol f/g)
1,850		Avg. for steel Gunbarrel welded (symbol g/b)
900		Steel tank 250 bbl bolted (symbol 250T)
650		Steel tank 100 bbl welded for water use (symbol I OOT)
2,250		Steel heater/treater (symbol hit)

Note:	all tanks include stairs, landings, valves, and connections Big Foot
Field

Ann Burns
$ 4,000 (210T+g/b+fg)
Ann Burns 'A'
$ 7,000 (2x210T+2xg/b+Vg)
Bohi
$ 5,150 (2x210T+g/b+f/g)
Davidson
$ 7,200 (2x400T + 210T + hit)
Foster
$ 5,150 (2x210T+g/b+flg)
Jane Burns
$ 3,650 (210T+g/b+ lOOT)
Jane Burns 'A' - split with Jane Burns 'G'
$ 3,350 (300T+g/b)
Jane Burns 'B'
$ 3,050 (210T+250T+f!g)
Jane Burns 'C'
$ 4,000 (210T+g/b+~g)
Jane Burns 'D'
$ 3,650 (210T+g/b+ lOOT)
Jane Burns 'E'
$ 3,050 (210T+250T+f/g)
Jane Burns 'F'
$ 4,000 (210T+g/b+Vg)
Jane Burns 'G'
$ 1,500 (300T) - split with Jane Burns 'A'
Shell - C.
$ 4,850 (2x30OT + g,b)
Smith, et al
$ 3,000 (210T + g/b)
Talley
$ 10,700
(4x300T + 2xg/b + Vg)
$ 73,300 total for Big Foot tanks

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Kyote Field

Crowther
$ 4,000 (210T+g/b+fg)
Hill
$ 4,350
Rizik
$ 3,000 (2x300T)
Tomblin
$ 4,000
Wright -
$ 5,850
Wright
$ 9,200
$ 30,400 total for Kyote tanks

Total for all tanks
$ 73,300 Big Foot tanks
   30,400 Kyote tanks

$103,700 Total for all tanks

ELECTRICAL DISTRIBUTION (OVERALL)

Note that the electrical distribution system on the leases is owned and
maintained by the operator. It consists of approx. ten (10) miles of three
wire (3 phase) heavy gauge line.

Value is as follows:

$ 3,510 52,000' x 3 = 156,000' x $0.0225/ft
1,300 130 elec. poles at $10 ea.
350 approx. 390 insulator/connectors at $0.90 ca.

$ 5,160 Total

MAIN FLOW LINE ON TALLEY LEASE (NOT ACCOUNTED FOR BY WELL)

Note that there is a main flow line on the Talley lease as there is only one
tank battery on this lease which is on Hwy. 472. There is therefore a main
flowline which most of the wells on this lease are connected into.  The
value is as follows:

$ 2,250 approx. 3000 of 2 7/8's at $0.75/ft.

MISC. YARD EQUIPMENT (BURNS 'C' LEASE)

Clipper Operating Co., inc. maintains an equipment yard in the Big Foot Field
on the Burns 'C' lease. This is for storage of spare pans, chemical, pipe,
pumpjacks, etc.. The value of this equipment is as follows:

$  250 Steel storage bldg. (convened tank)
1,000	tank trailer (1000 gal.) for chemical storage
905 approx. 500 gal. (on hand as of this inventory) of paraffin chemical at
SI
 .8 l(gal. 1,500 one ton flatbed truck with 8,000 lb. winch for lease use
only (unlicensed)

3,750	large stock of pipe, rods, valves, parts, pipe racks, and misc. eq.

5,500	two pumpjacks (80,000 lb. gearboxes) - one needs bearing, but is
skidded

$12,905 Total

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TOTALS

$ 709,900 well equipment
  103,700 tanks
    5,160 electrical distribution
    2,250 main flowline on Talley
   12,905 equipment in yard

$ 833,915 Total value of equipment

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                              EXHIBIT 'C'

PIPELINE AND ASSOCIATED EQUIPMENT

The gas pipeline is a four inch (4") low pressure gas pipeline which runs from
the Clipper Operating Co., Inc. Talley lease to the main Virtex line approx.
four (4) miles west. It is on our leases except where it crosses underneath
State Hwy 472. Market value of line and associated equipment is as follows:

$ 34,320 20,800' at $1.65/ft.
800 low pressure separator
250 meter run
350 meter
300 hill opening 4" valves ($150 ea)
700 separator controls and misc. equipment

$ 36,720 TotalEXHIBIT 10.10  COMPENSATION PLAN

                       NuTek, Inc. COMPENSATION PLAN

     NuTek, Inc., for the purpose of providing corporate management with
compensation guidelines which will protect the shareholders "and the
corporation from excessive compensation payments while permitting the
corporation to attract and retain competent and loyal employees, hereby adopts
the following Compensation Plan.

                           INDEX
 I.    Definitions
 II.   Application, Interpretation, Amendment and Repeal
 III.  Administration
 IV.   Compensation Limitation
 V.    Compulsory (Contractual) Bonus Compensation
 VI.   Discretionary (Non-Contractual) Bonus Compensation
 VII.  Excluded Stock Option Plans
 VIII. Compensation Paid in Property
 IX.   Deferred Compensation
 X.    Profit Sharing and Pension Plan Contributions
 XI.   Fringe Benefits
 XII.  Business Travel and Entertainment Expenses

                        ARTICLE I
                       DEFINITIONS

In the interpretation of this Compensation Plan, the following words and terms
shall have the meanings set forth unless the context clearly requires
otherwise:

 1.1 "Board of Directors" shall mean the Board of Directors of NuTek,
Inc., a Nevada Corporation.

 1.2 "Commission-Based Compensation" shall mean all remuneration and
compensation calculated as a percentage of sales, revenue, income or other
variable basis selected to measure performance.

 1.3 "Compensation" shall mean remuneration/compensation paid by NuTek,
Inc. and its subsidiaries and its included affiliates.  The term shall include
cash (whether paid as Commission-Based Compensation or Fixed-Base Compensation),
compensation paid in property, fixed deferred compensation, and compensation
in the form of stock options not excluded under

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Article VII, but shall exclude indeterminate deferred compensation, 401(k)
contributions, and ESOP contributions.

 1.4 "Compensation Plan" shall mean this Compensation Plan, as amended.

 1.5 "401(k) contributions" shall mean contributions by an Employer pursuant
to a plan adopted pursuant to section 401(k) of the Internal Revenue Code.

 1.6 "Deferred Compensation" shall mean compensation payable with respect to
or earned or accrued in any employment year where payment of such compensation
is delayed to a subsequent time.

 1.7 "Employee" shall mean any person who receives compensation from
NuTek, Inc. and/or any of its subsidiaries or included affiliates for
more than forty (40) hours of service in any calendar quarter. The term shall
include leased employees but shall exclude any person who serves only as a
member of the Board of Directors or as a member of the Advisory Panel or is an
independent contractor.

 1.8 "Employer" shall mean NuTek, Inc. as defined in section 1.16
below.

 1.9 "ESOP Contributions" shall mean contributions by an Employer pursuant to
an employee stock ownership plan as described in section 4975(e) (7) of the
Internal Revenue Code.

 1.10 "Excluded Stock Option Plan" shall mean (a) non-cash deferred
compensation and (b) stock option plans adopted pursuant to Article VII of
this Compensation Plan.

 1.11 "Fixed Deferred Compensation payable only in cash" shall mean deferred
compensation which NuTek, Inc. must pay in a fixed amount of cash.

 1.12 "Fixed-Base Compensation" shall mean all periodic wages or salary, and
other time-based remuneration or compensation.

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 1.13 "Full Time" shall mean permanent employment for a minimum forty (40)
hour work week, excluding probationary and part-time employees.

 1.14 "Included Affiliates" shall mean joint ventures, partnerships, joint
operating entities, or similar non-subsidiary entities, where the affected
employees are compensated wholly or partly by NuTek, Inc. The
application of the term shall be determined with reference to the employee
under consideration; if the employee of the affiliate has received no
compensation from NuTek, Inc. during the calendar year then such
employee and his/her compensation shall not be within this Compensation Plan.

 1.15 "Indeterminate compensation" shall mean compensation (a) payable in a
presently indeterminate amount based upon so-called "phantom" securities, (b)
or other variable base for future determination of the amount of the
compensation, provided that the recipient cannot receive the compensation
(whether on redemption, repurchase, or disposition) for a period of at least
five (5) years after the date of the award or until death, retirement or
involuntary termination, whichever shall first occur.

 1.16 "NuTek, Inc." shall mean NuTek, Inc. and its subsidiaries and its
included affiliates, except for determination of "Board of Directors" in
Section 1.1 above.

 1.17 "Total Direct Compensation" shall mean, for any employment year, the sum
of all compensation, compulsory bonus compensation not excluded under Article
V, discretionary bonus compensation not excluded under Article VI, compensation
paid in property, and the annualized present value of all long-term incentive
grants not excluded under Articles VII, IX, and X, and all payments of fringe
benefits and expenses not excluded under Articles XI and XII.

                         ARTICLE II
       APPLICATION, INTERPRETATION, AMENDMENT AND REPEAL

 2.1 This Compensation Plan shall be effective, upon approval by the Board of
Directors, for the balance of the calendar year 2000 and shall continue in
effect until the next meeting of stockholders, at which time it shall be
presented to the

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stockholders for approval or rejection. If rejected, this Plan shall terminate
immediately following the meeting at which such rejection occurs. If approved
it shall continue in effect without further stockholder approval until December
31, 2005. This Compensation Plan shall be resubmitted to the stockholders for
approval of its retention for a further five year term at the Annual Meeting
in 2005 and each five years thereafter for successive effective terms of five
years.

 2.2 This Compensation Plan shall be applicable to all employees of
NuTek, Inc., including its subsidiaries and included affiliates and is
intended to limit the maximum compensation payable, while permitting the
corporation to attract and retain competent and loyal employees. Nothing
contained in this Compensation Plan is intended to limit the authority of the
Board of Directors and/or appropriate corporate management to negotiate and
establish compensation or the method, nature, or amount thereof, within such
maximum limitation or within the exclusions to the limitation; i.e., the
component methods of compensation, and the component amounts of compensation
within the limitation, shall be in the business judgment of the Board of
Directors.

 2.3 This Compensation Plan may be amended at any time, and from time to time,
upon recommendation of a majority of the Board of Directors approved by a
majority vote of the stockholders. Amendments shall be submitted separately;
i.e., individually. Any such amendment shall be effective as of the date of
adoption by the stockholders.

 2.4 If, when this Compensation Plan is resubmitted to the stockholders
pursuant to Paragraph 2.1, there are any amendments requiring approval under
Paragraph 2.3, the amendments shall be submitted separately from the Plan as
previously amended.

 2.5 If the Board of Directors shall determine that this Compensation Plan, as
a whole, is too restrictive and is inhibiting, limiting or frustrating the
Company from attracting and/or retaining competent and loyal employees, then
the Board of Directors may direct that the Compensation Plan be submitted to
the stockholders for repeal. Any proposed repeal shall be effective as of the
date of. approval thereof by majority vote of the stockholders.

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                            ARTICLE III
                           ADMINISTRATION

 3.1 The Board of Directors shall be responsible for administration of, and
compliance with, this Compensation Plan. The Board of Directors shall establish
such guidelines or policies, from time to time, to implement this Compensation
Plan and to provide oversight to assure compliance.

 3.2 The Board of Directors may establish a Compensation Committee, consisting
of such directors, officers, stockholders, employees and/or consultants as the
Board of Directors may determine from time to time. Such Committee and the
members thereof shall serve at the pleasure of the Board of Directors and shall
receive such compensation, consistent with this Compensation Plan, as the Board
shall determine. If such a Compensation Committee is established, the Board of
Directors may delegate to such Committee all authority not otherwise restricted
to itself, subject to such oversight rules as the Board of Directors may
determine. The members of the Committee shall elect a Chairman and a Secretary
from the Committee membership and shall hold meetings upon such notice, at such
place or places, and at such times as the Committee shall determine from time
to time. A majority of the members of the Committee shall constitute a quorum
for the transaction of business. All resolutions or other action taken by the
Committee shall be by majority vote of the members present or by majority
written consent. The Committee may employ such counsel, advisors, consultants,
accountants and actuaries as may be required in administering this Compensation
Plan. The Committee may adopt such rules as it deems necessary, desirable or
appropriate. The Committee and the individual members thereof shall be
indemnified by NuTek, Inc. against any and all liabilities arising by
reason of any act, or failure to act, made in good faith pursuant to the
provisions of this Compensation Plan, including expenses reasonably incurred
in the defense of any claim relating thereto or in the settlement thereof.

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 3.3 The Board of Directors shall itself specifically approve all employment
contracts, all bonus and incentive bonus plans, all commission schedules and
commission bonus schedules, and all compensation programs involving annual
compensation of One Hundred Thousand Dollars ($100,000) or more, although
authority to determine or negotiate or propose any such compensation may be
delegated to the Compensation Committee and to appropriate officers and
management employees.

 3.4 The Board of Directors and/or the Compensation Committee may delegate
authority to approve employment contracts, bonus and incentive bonus plans,
commission schedules and commission bonus schedules, and other compensation
programs involving annual compensation of less than One Hundred thousand
Dollars ($100,000) to appropriate officers and management employees.

                            ARTICLE IV
                       COMPENSATION LIMITATION

 4.1 No employee shall receive Total Direct Compensation for any year of
employment greater than twenty-five (25) times the wages paid to the lowest
paid full time employee, using the lowest hourly wage rate for a 40-hour week
for a 52-week year. Example: The lowest paid full time employee earns $6.72
per hour. For a 40-hour week, that is $268.80, which for a 52-week year is
$13,977.60. The limitation for Total Direct Compensation is $349,440,
calculated as 25 times $13,977.60.

 4.2 No employee who receives fixed-base compensation in excess of twelve and
one-half (12.5) times the hourly wage rate paid to the lowest paid full time
employee shall also receive commission-based compensation in an amount which,
when combined with the fixed-base compensation, exceeds the restriction under
4.1 above.

 4.3 Except as provided in 4.2 above, there shall be no limitation on
commission-based compensation payable to any employee of NuTek, Inc.
provided that the variable basis selected to measure the employee's performance
is reasonably related to such employee's responsibilities (ability to affect
such basis) and the commission calculation reasonably reflects such employee's

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contribution to the basis, and the commission rate is commercially reasonable.

 4.4 The limitations imposed by Paragraphs 4.1 and 4.2 shall be increased for
non-U.S. based employees to the extent that the cost-of-living at the non-U.S.
base exceeds the equivalent cost in the United states.

                            ARTICLE V
             COMPULSORY (CONTRACTUAL) BONUS COMPENSATION

 5.1 Except for compulsory (i.e., contractually required) bonus plans within
the schedule provided in Paragraph 5.2, all compulsory bonus plans shall be
included in the calculation of Total Direct Compensation for purposes of
Paragraphs 4.1 and 4.2 and the compensation limitation imposed therein.

 5.2 The Board of Directors may provide for compulsory bonuses to employees
otherwise limited under Paragraph 4.1 or 4.2 as a multiple of their fixed-base
income in accordance with a schedule based upon the pre-tax net earnings per
share provided that any such schedule does not exceed the following schedule:

 Net Income Before Taxes                 Increase as a
    Per Common Share                 Percent of Base Salary
 -----------------------             ----------------------
      $.00 - $.10                              5%
       .11 -  .20                             12.5%
       .21 -  .30                             22.5%
       .31 -  .40                             35%
       .41 -  .50                             50%
       .51 -  .60                             67.5%
       .61 -  .70                             87.5%
       .71 -  .80                            100%
       .81 -  .90                            125%
       .91 - 1.00                            150%
       over $1.00                            200% plus the permitted
                                                  in this schedule

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Example 1:  The Net Income before Taxes per Common Share is $3.65. The
fixed-base compensation is $100,000. The bonus is 667.5% of the fixed-base
compensation (200% plus 200% plus 200% plus 67.5%) or $667,500 for a combined
compensation of $767,500 ($100,000 fixed plus $667,500 bonus).

Example 2: The Net Income before Taxes per Common Share is $1.29. The
fixed-base compensation is $200,000. The bonus is 222.5% of the fixed-base
compensation (200% plus 22.5%) or $445,000 for a coined compensation of
$645,000 ($200,000 fixed plus $445,000 bonus).

In the foregoing examples it is assumed that the fixed-base compensation is
within the limitation imposed by Paragraph 4.1. The compensation limitation of
Paragraph 4.1 is inapplicable to the bonus calculated under the schedule and
to the combined compensation because the bonus is within Paragraph 5.2.

 5.3 The Board of Directors may provide compulsory (i.e., contractually
required) bonuses to employees who receive commission-based income which is not
subject to limitation under Paragraphs 4.1 or 4.2, provided that such bonuses
are pursuant to . a bonus program or schedule which is applicable to all such
commission-based compensation employees without discrimination and provided
that such bonus schedule is also commission-based compensation.

                          ARTICLE VI
       DISCRETIONARY (NON-CONTRACTUAL) BONUS COMPENSATION

 6.1 No employee who receives fixed-base compensation in excess of twelve and
one-half (12.5) times the hourly wage rate of the lowest paid full time
employee shall receive any discretionary bonus compensation, except as provided
in Paragraph 6.3, which, when combined with all fixed-base compensation and all
commission-based compensation, shall provide remuneration or compensation in
excess of twenty-five (25) times the hourly wage rate paid to the lowest paid
full-time employee.

 6.2 No employee who receives commission-based income which is not

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<PAGE>

subject to limitation under Paragraph 4.1 or 4.2 shall receive any bonus
except as provided in Paragraph 5.3 above.

 6.3 The Board of Directors may provide for discretionary bonuses to eligible
employees otherwise limited under Paragraph 4.1 or 4.2, provided that such
bonuses are within the schedule provided in Paragraph 5.2 above.

                        ARTICLE VII
                  EXCLUDED STOCK OPTION PLANS

 7.1 Except for stock option plans within the provisions of this Article VII,
all compensation paid pursuant to stock option plans shall be within the
limitation imposed in Article IV.

 7.2 The Board of Directors may establish one or more stock option plans for
incentive compensation purposes. To be within the exclusion afforded by this
Article, any such plan must provide either:

 7.2.a. An S & P indexed option plan with the following terms:

     (i) no more than forty percent (40') of the shares subject to option
under the plan shall be optioned in anyone calendar year;

     (ii) no option shall vest for a period of twenty-four months after grant
and the grantee must be an employee on the date of vesting (i.e., employment
continuity of twenty-four  months);

     (iii) the options granted shall have an exercise price which floats,
relating to the base price, indexed to the S & P 500 Index and the options
shall be subject to standard anti-dilution adjustments;

     (iv) upon initial grant, the options shall have a minimum exercise price,
which shall be the base price, equal to the fair market value of the shares
determined as the average of the closing bid and asked prices on the
immediately prior trading day;

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<PAGE>

     (v) no option shall be exercisable during the first twenty-four (24) months
after the date of grant and any option shall be exercisable for a period of
three (3) years after the date of vesting;
     (vi) a vested option shall be exercisable so long as the grantee shall
remain an employee, and in the event of death, termination of employment,
permanent disability, or retirement, shall be exercisable for a period of
ninety (90) days after such event, and if unexercised shall terminate;
     (vii) the exercise price shall be established on the first day after the
twenty-four (24) month period (the date on which the option shall vest) by
multiplying the base price (fair market value on the day of grant) by one (1)
plus any percentage increase in the S & p 500 Index since the day of grant. No
decrease shall be recognized and the exercise price shall never be less than
the fair market value on the day of grant.

      Example 1: On the day of grant, the fair market value of the
Nutek stock is $1.50 and the S & P 500 Index is 439.1. On the day when
the exercise price is fixed, the market price of the Nutek stock is
$2.50 and the S & P 500 Index is 543.2. The exercise price is $1.86, calculated
as $1.50 multiplied by 1.237, the increase in the S & P 500 Index plus 1. The
exercise price is less than the current Nutek stock market price.

     Example 2: On the day of grant, the fair market value of the Nutek
stock is $1.50 and the S & p 500 Index is 439.1. On the day when the exercise
price is fixed, the market price of the Nutek stock is $1.75 and the S
& p 500 Index is 543.2. The exercise price is $1.86, calculated as $1.50
multiplied by 1.237, the percentage increase in the S & p 500 Index plus 1.
The exercise price is more than the current Nutek stock market price.

     Example 3: On the day of grant, the fair market value of the Nutek
stock is $1.50 and the S & p 500 index is 439.1. On the day when the exercise
price is fixed, the S & p 500 Index is 430. The exercise price is $1.50 as no
decrease in the S & P 500 Index is recognized and no decrease below the

                             10
<PAGE>

fair market value on the day of grant is permitted.

 7.2.b. A stock option plan, indexed to a performance measure, such as sales,
production, net income, or earnings per share, with the following terms:

     (i) no more than forty percent (40') of the shares subject to option
under the plan shall be optioned in anyone calendar year;

     (ii) the options granted shall have an exercise price which floats,
relating to the base price, inversely (reciprocally) indexed to the
performance measure selected;

     (iii) upon initial grant, the options shall have a minimum exercise price,
which shall be the base price, equal to the fair market value of the shares
determined as the average of the closing bid and asked prices on the
immediately prior trading day;

     (iv) no option shall be exercisable during the first twenty-four (24)
months after the date of grant and the grantee must be an employee on the
date of vesting (i.e., employment continuity for twenty-four months);

     (v) the exercise price shall be established on the first day after the
twenty-four (24) month period (the date on which the option shall vest) by
multiplying the base price (fair market value on the day of grant) by one (1)
plus the inverse (reciprocal) percentage of improvement in the performance
measure selected since the day of grant.

     Example 1: On the day of grant, the fair market value of the Nutek
stock is $1.50 and the selected index, "gross sales", is $18,000,000. On the
day when the exercise price is fixed, the market price of the Nutek
stock is $2.50 and the gross sales are $28,000,000. The increase in "gross
sales" is $10,000,000 or 55.5% improvement. The inverse is 44.5% and the
exercise price is $2.17, calculated as the inverse in the improvement (1-
55.5%) plus 1. The exercise price is less than the current Nutek
stock market price.

                                 11
<PAGE>

     Example 2: On the day of grant, the fair market value of the Nutek
stock is $1.50 and the selected index, "net income before taxes", is
$18,000,000. On the day when the exercise price is fixed, the market price of
the Nutek stock is $1.75 and the "net income before taxes" is
$19,000,000 or 5.5% improvement. The inverse is 94.5% and the exercise price
is $2.92, calculated as the inverse in the improvement (1-5.5%) plus 1.  The
exercise price is greater than the current Nutek stock market price.

     Example 3: On the day of grant, the fair market value of the Nutek
stock is $1.50. On the day when the exercise price is fixed, the improvement
in the selected index is greater than 100%. The exercise price is $1.50 as no
decrease below the fair market value on the day of grant is permitted.

                       ARTICLE VIII
                COMPENSATION PAID IN PROPERTY

 8.1 When compensation is paid in property, the value of such property for
calculation of Total Direct compensation shall be the fair market value of
such property, net of. all liens and encumbrances assumed by the transferee,
as of the date of transfer.

                           ARTICLE IX
                      DEFERRED COMPENSATION

 9.1  The Board of Directors may provide for deferred compensation. However,
except as provided in Paragraph 9.2 all deferred compensation shall be included
in the calculation of Total Direct Compensation in the year in which the
payment is committed, without regard to its treatment for current accounting
or tax purposes, and not in the year in which paid.

 9.2 The Board of Directors may provide for indeterminate deferred compensation
which is not included within the limitation imposed in Paragraphs 4.1 and 4.2
provided that such indeterminate deferred compensation:

                              12
<PAGE>

     (i) does not vest without continued employment of at least twenty-four
(24) months after the date of grant;

     (ii) will not be paid by the corporation prior to at least five (5) years
after the date of the award or until death, retirement or involuntary
termination, whichever shall first occur; and

     (iii) is solely contingent on the ability of the corporation to make such
payments at the time due, without escrow, guarantee or surety thereof.

                           ARTICLE X
         PROFIT SHARING AND PENSION PLAN CONTRIBUTIONS

 10.1 Except as provided in this Article X, the current cost as paid or accrued
for any profit sharing or pension plan contributions shall be included to
determine compliance with the compensation limitation imposed by Article IV.

 10.2 Defined contribution profit sharing and pension plan contributions
proportionate to compensation, where the plan is applicable to all employees
not covered by a collective bargaining agreement, if non-discriminatory, shall
be excluded from the calculation of Total Direct Compensation.

 10.3 Contributions to 401(k) plans and ESOPs, where the plan is applicable to
all employees not covered by a collective bargaining agreement, if
non-discriminatory, shall be excluded from the calculation of Total Direct
Compensation.

                            ARTICLE XI
                          FRINGE BENEFITS

 11.1 Except as provided in this Article XI, the current cost as paid or
accrued of any special compensation or fringe benefits shall be included to
determine compliance with the compensation limitation imposed by Article IV.

                              13
<PAGE>

 11.2 Standard fringe benefits, generally available to all employees not
covered by a collective bargaining agreement, if nondiscriminatory, shall be
excluded from the calculation of Total Direct Compensation. Standard fringe
benefits shall include such items as sick pay, vacation pay, personal leave,
hospitalization/ medical/surgical/dental insurance, moving and relocation
expense reimbursement, child care, maternity leave and family leave.

 11.3 Special fringe benefits, or so-called "executive perks", available only
to a specific employee, or to a limited number of employees, such as providing
a company car, reimbursing for personal car/boat/airplane expenses, providing
of or reimbursement of personal, spousal or family social club/sports club,
country club/golf club/health club dues and expenses, etc., providing of or
reimbursement of spousal and/or dependent's travel expense, providing of or
reimbursement of legal expenses where not covered by corporate indemnification,
and use of corporate property for personal purposes, shall be included in
Total Direct Compensation. However, this provision shall not include (1)
expenses caused by executive position such as home security, bodyguards, special
reinforced vehicles, etc., nor (2) expenses for trade/business association
membership or business club expenses excludable under Article XII or approved
business expenses under Article XII, which shall not be included. Similarly,
executive perks, consistent with local (foreign) general practice, provided to
foreign-based employees, shall not be included in Total Direct Compensation.

 11.4 No fringe benefit paid or accrued pursuant to a plan approved by the
stockholders shall be included within Total Direct Compensation if such plan
according to its terms specifically excludes the benefits from the
calculation.

                          ARTICLE XII
        BUSINESS TRAVEL AND ENTERTAINMENT EXPENSES

 12.1 No non-accountable expense allowances shall be permitted.

 12.2 The Board of Directors shall establish, from time to time, a corporate
policy for reimbursable travel and entertainment expenses. Such policy shall
establish appropriate limits and

                                14
<PAGE>

standards, generally available to all employees and. without discrimination in
favor of executives or more highly compensated employees.

12.3 The Board of Directors may approve expenses for, or related to,
trade/business association memberships and business club expenses for selected
employees, provided that such expenses are reasonably related to such
employees' responsibilities and intended to primarily benefit NuTek,
Inc. rather than the specific employee(s). Authority for approval of such
expenses, subject to specific guidelines adopted by the Board of Directors,
may be delegated to the Compensation Committee, if any.

                                15
<PAGE>

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