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 60 th
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 Projec
