PROJECT DEVELOPMENT AND MANAGEMENT AGREEMENT

Exhibit 10.45

PROJECT DEVELOPMENT AND
MANAGEMENT AGREEMENT

THIS AGREEMENT is entered into this 20 day of November, 2006, by and among Italian Tiles Technology, Inc., a         corporation,                                                          , individually and collectively referred to as “Manager,” and American Gres, Inc., a Delaware corporation herein referred to as “Owner.” and a wholly-owned subsidiary IWT Tesoro Corporation, a Nevada corporation.

WHEREAS, Manager has invested substantial time and efforts in the development of detailed plans and specifications for a fully equipped modern, technologically advanced porcelain and ceramic tile manufacturing facility in the United States, and

WHEREAS, Manager possesses the technical knowledge and necessary skills to affect the efficient and profitable development and operation of such manufacturing facility for porcelain and ceramic tiles (trade and cut tiles , mosaics, special items and decorative pieces, individually and collectively,  “Tiles”) , and

WHEREAS, Owner desires to engage Manager to develop, bring to production status and thereafter manage such Tiles manufacturing facility (“Facility”) , currently projected to be located in               , United States and

WHEREAS, Manager is willing to utilize all of its resources, expertise, experience, technical training and other skills, to effectuate the development and management of such Facility, and

WHEREAS, Owner desires to engage Manager on the terms and conditions below set forth,

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1.   PROJECT

Manager covenants to the Owner as follows: (i) Manager holds an option (“Option”), free and clear of any liens or encumbrances of any kind or nature (“Lien”) and will maintain such Option as such, or, as directed, assign such Option to Owner, to purchase the land described in Exhibit A attached hereto and made a part hereof ( the ‘Land”) upon which is proposed to be constructed certain improvements and buildings (all improvements, buildings, and land, inclusive of the Facility,  herein collectively called “Project”) as generally set forth and described in the TESORO PROJECT USA business plan to be attached hereto as Exhibit C and made a part hereof. (ii) the Land, which is not subject to any Lien and on which there is good and marketable title may be purchased upon exercise of the Option for $1,200,000; and (iii) at least each of and                                                          a development, production or manufacturing professional to be agreed by the parties, in addition to                        , will, on the

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commencement of the duties of Manager hereunder, be able to devote their full time attention and efforts to their obligations hereunder and their undertaking of such duties will not conflict with any contractual undertaking which any of them have to third persons or parties.  If any of the foregoing persons die or become disabled, then a replacement having like professional skills must be promptly advised to the Owner and provided by the Manager.  It is acknowledged by Manager that none of the individual parties will receive any compensation from the Owner except indirectly by reason of the payment of the fees set forth in Exhibit B, Parts I and II.

Upon assignment of the option to the Owner, the Manager will have no further interest therein and the payments made by the Manager to the seller of the Land and any legal fees ($20,100.00)  incurred by the Manager with respect to the Option shall be reimbursed to the Manager by the Owner.  The Owner shall pay any similarly billed but as yet unpaid legal fees directly. While the holder of the Option the Owner shall make the extension of Option payments to the seller of the Land.  The Owner shall make such payments to such seller of the Land and any other costs associated with holding such Option under the Option Agreement with the seller of the Land.  Except as provided above, the transfer of the Option to the Owner will be without additional costs or expense to Owner.

It is understood that currently the Option may be extended from month to month, beginning in November, 2006, until 11:59 P.M. on May 1, 2007, upon payment to the owner of the Land of the sum of $10,000 per month and the first of two of such payments will be applied to the purchase price of the Land and those thereafter will not be credited to the purchase price of the Land. Subject to the foregoing, and the conditions precedent set forth in Section 9.03, Owner desires to purchase the Land and to engage the Manager to design, develop and construct and then manage the Facility thereon.

The Manager further covenants to Owner that the Facility will have at least three presses, three glazing lines, 2 kilns and have a capacity for a third kiln and two additional presses and lines. Each of such installations will be capable of producing in three eight (8) hour shifts 5,000,000 square meters of quality Tiles per shift per annum no later than 12 months after the Owner secures financing for the Project at a full manufacturing capacity of 5,000,000 square meters per year and, starting within fifteen (15) months following the financial closing.

ARTICLE 2.   ENGAGEMENTAS DEVELOPER AND MANAGER

2.01.          Owner hereby retains Manager to serve as the manager of the Project from the date hereof until the end of the 60th month following the date the Owner secures the Financing. Manager accepts such engagement, as an independent contractor and in no other capacity, and shall perform the management duties and obligations and furnish the services in a proper,continuous and efficient manner in all respects and instances in accordance with this Agreement and the Exhibits attached hereto.

It is specifically understood by the Manager that Owner shall have no obligations hereunder until such time as Owner has secured the Financing and Manager is advised in writing by Owner to

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proceed with the Project. The individual parties named in Article 1 shall conduct all of their obligations hereunder from offices in                        and after construction has been completed at the Facility and be available at all times to Owner for discussions of any aspect of the Project. Concurrently with the payment to Manager of the $1 Million fee referred to in Exhibit B, the Manager shall deliver to the Owner all plans (engineering and otherwise), drawings, schematics, ideas, concepts and intellectual property, all equipment and machinery lists and specifications and such other materials as may be necessary for the build out and operation of the Project. Thereafter, all of the foregoing shall be owned by Owner free of Liens.

2.02           It is specifically understood that (i) the Project shall be managed by the Manager strictly in accordance with the design, development, construction, production processes and operational budgets prepared by the Manager and approved by the Owner attached to Exhibit D [the Project also includes purchasing and putting in place all machinery, equipment and systems (electrical and otherwise) necessary for the Facility and the Project]; and (ii) the Manager shall not incur any expense or cost for which the Owner shall be responsible except those which are in the budgets to be attached to Exhibit D.

2.03.          Manager shall design, supervise the construction of, and otherwise develop the Facility so it is of a size, have the functionality and realized production capacity within time parameters all in accordance with Exhibit D.  All negotiations undertaken in connection therewith shall be conducted by Manager, subject to securing the prior written approval of the Owner before executing or entering into any contract, or series of contracts, related in any manner to the Project with a value of more than $10,000.  Manager shall schedule and coordinate all construction activities, maintain personal contact with all general and subcontractors engaged in the development and construction of the Project.  All inquiries to Owner regarding any aspect of the development and construction of the Facility and all negotiations undertaken in connection therewith shall be conducted by the Manager. Manager shall obtain the prior written approval of Owner in each instance before executing, modifying, terminating, renewing, or otherwise amending any contract, or series of contracts, valued at more than $10,000. Wherever reference is made herein to an approval it shall be deemed to be required to be in writing. Manager shall secure in a timely manner all requisite licenses, permits and approvals from any governmental or regulatory body in order to develop the Project and build and operate the Facility.

2.04.          Manager shall assist Owner in the development and implementation of a comprehensive marketing program (including use of market aids such as brochures, presentation facilities, displays, models, renderings, signs, advertisements, news releases, newsletters, and entertainment) in accordance with Exhibit D, the budgets attached to Exhibit C and in a manner compatible with the quality of the Project. All marketing and other activities shall make clear thatthe Manager is not the owner of the Project or the Facility.

2.05.          Subject to the budgets agreed to by Owner, Manager is authorized and agrees to enlist the services of such other contractors as may be necessary or prudent to aid in the development of the Project.

2.06           Manager shall maintain complete records of all arrangements with such contractors and in respect to all aspects of the Project.

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2.07   (1)  Manager shall:

(a)   Maintain and provide all services to the Project in accordance with standards as agreed and acceptable to Owner, including, without limitation, maintenance of mechanical systems and equipment, and such other maintenance, alteration, and repair work as may be reasonably prudent or necessary, provided, however, the expense to be incurred for any one item or related series of items of maintenance, alteration, refurbishing, or repair shall not exceed the sum of $10,000, unless such expense is specifically approved by Owner, or is incurred under such circumstances as Manager shall reasonably deem to be an emergency. In an emergency where repairs are immediately necessary for the preservation and safety of the Project, or to avoid the suspension of any essential service to the Project, or to avoid danger to life or property, such emergency repairs shall be made by Manager at Owner’s cost without the prior approval of Owner, provided such emergency expenditure shall not exceed the sum of $100,000 per emergency.  When Manager learns of such emergency, Manager shall promptly telephone or wire Owner, and in no event later than twenty-four (24) hours after Manager learns of such emergency, notify Owner in writing of such emergency;

(b)          Obtain and keep in effect, at the expense of the Owner, such policies of insurance as required by Article 4 hereof and obtain and keep in effect, at Manager’s own expense, such policies of insurance as are required of Manager under the agreed Insurance Schedule attached as Exhibit F.

(c)          Make contracts on behalf of Owner for security services and maintenance, and other similar operating services as Manager or Owner (whose decision shall govern) shall deem necessary or prudent; such contracts shall provide for cancellation by Owner without penalty on thirty days prior written notice from Owner unless Owner has agreed otherwise in writing;

(d)          Make such action as may be necessary to comply with any and all laws, ordinances, regulations obligations, rules or requirements affecting the Project promulgated by any governmental body and/or boards of fire underwriters having jurisdiction over the Project, and

(e)          Purchase and make arrangements for the installation of all machinery, equipment, systems, tools, appliances, materials, and supplies to be used solely in connection with the Project.  When taking bids or issuing purchase orders, Manager shall act at all times in the best interest of Owner and shall be under a duty to secure for and credit to Owner any discounts, commissions, or rebates obtainable as a result of such purchases. None of such activities pursuant to this subparagraph shall be done other than in accordance with the budgets in Exhibit B.

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(2)           In addition to the above duties, Manager shall:

(a)           Provide regular and systematic inspections and oversight of the entire Project, included but not limited to all aspects of running and operating the plant facility and adjacent facilities owned by the Owner, subject to the policies, procedures, rules and regulations of the Owner and those required by applicable laws and regulations, including, but not limited to, human resources, OSHA, disability laws and environmental matters;

(b)           Comply with any requirements concerning the management or maintenance of the Project necessary for the effective and efficient construction or operation of the Facility or imposed upon Owner, including without limitation, the selection and supervision of all contractors or employees of Manager performing work or repair or capital expenditures or replacement work at the Project;

(c)           Keep Owner informed of the Project’s physical condition;

(d)           Maintain, in a manner customary and consistent with good accounting principles as requested from time to time by the Owner , a system of records and accounts to which shall be entered fully and accurately each and every financial and other transaction undertaken by Manager at Owner’s direction, such books and records to be maintained by Manager at Manager’s office located in the town where the Facility is to be located and after construction at the Facility, and all of such shall be available to Owner at all reasonable times. All of such records and accounts shall be maintained in a secure and confidential manner and provisions for back up and redundancy shall be in force and effect at all times;

(e)           Execute in time to file all forms, reports and returns required by law related to employment of personnel employed by Manager at the Project;

(f)            Promptly cause the issuance or transfer of any necessary business licenses and permits for the Project; and

(g)           Promptly investigate and make, subject to Owner’s approval in each instance, a complete and timely written report to the appropriate insurance company of all damages, accidents, or claims relating to the ownership, operation, and maintenance of the Project. No settlement of any claim shall be made without the Owner’s approval.

Manager is further authorized to:

(h)           Open an impress account only for the Project up to $2,500.00 with funds provided by Owner All proposed expenditures of any nature relating to the Project shall be sent to the Owner, with appropriate back up materials, for approval and payment.

(i)            Institute legal proceedings in the name of Owner to otherwise enforce the rights

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of Owner through legal means, subject, in each instance, to the prior written approval of Owner;

(j)            Negotiate for reduction in ad valorem or other taxes or assessments applicable to Project;

(k)           Obtain all necessary governmental approvals and permits and to take all necessary acts to comply with all laws, rules, ordinances, statutes, and regulations applicable to the Project and Facility; and

(l)            Do any other things on behalf of Owner consistent with this Agreement and necessary or appropriate, in the judgment of the Manager, for the Facility and the profitable operation of the Project on behalf of Owner.

(m)          Manager shall, subject to the budgets in Exhibit D and the approval of the Owner, including but not limited to all aspects of running and operating the plant facility and adjacent facilities owned by the Owner, subject to the policies, procedures, rules and regulations of the owner and those required by applicable laws and regulations, including, but not limited to, human resources, OSHA, disability laws, environmental and safety issues, and shall engage the services of such manufacturing, supervisory and other employees (technical and otherwise)  as may be necessary and prudent to aid in the conduct and management of the Project.  Manager agrees to maintain complete records in this regard consistent with subparagraph (d) above.  All employee costs, other than those which the Manager undertakes pursuant to Article 7.02, incurred as provided in the preceding sentence shall be paid for by the Owner.

(n)           Except for costs and expenses which this Agreement expressly requires Manager to bear, the costs and expenses of managing and maintaining the Project shall be borne by the Owner as though the Owner were directly managing the Project; however, Manager’s costs and expenses of employing persons to act on its behalf in the supervisory capacities required of it under this Agreement shall be borne by Manager.

2.07         In engaging any persons or entities to perform services in connection with the Project, all need be pre-qualified, have excellent references and professional backgrounds for the work or services to be performed and shall be licensed in all respects.

ARTICLE 3.   STANDARDS FOR MANAGER

In undertaking its duties hereunder,  Manager shall render continuous, diligent and competent service and care in performance of its responsibilities hereunder consistent with standards expected of a first class contractor, designer, manager and operations firm and shall at all times apply prudent and business practices consistent therewith.

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ARTICLE 4.   INSURANCE REPORTS AND CLAIMS

4.01         Manager shall be responsible for obtaining and maintaining certain insurance coverage as set forth in Exhibit F attached hereto and made a part hereof. Except where indicated on Exhibit F, all such insurance shall be for the benefit of the Owner as insured and be paid for by Owner.

4.02         Manager shall, at the Owner’s request,  prepare, execute, and file (or cause to be prepared, executed, and filed) such reports and documents and make all proper payments to comply with the provisions of the United States Social Security Act, unemployment compensation laws, workers’ compensation laws or similar laws in effect in the Project’s state as to all personnel employed by Manager in connection with the operation of the Project.

ARTICLE 5.   REPORTS AND STATEMENTS

Monthly Report

5.01.        At its expense, Manager shall prepare and furnish to Owner on or before the twenty-fifth of each month a written report of the status of Project for the preceding month. Each such report shall include:

(1) A discussion of the current status of the Project during the development stage, and of the production capacity and operations of the Project during the production/operation/ m