EXHIBIT 10.2

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”), dated July 1, 2011, between TERRA
ENERGY & RESOURCE TECHNOLOGIES, INC., a Delaware corporation (“Employer”), and
Alexandre Agaian, an individual (“Employee”).

WITNESSETH:

WHEREAS, Employer desires the continued services of Employee and Employee
desires to be employed by Employer upon the terms and conditions hereinafter set
forth;

NOW THEREFORE, in consideration of the agreements herein contained, the parties
hereto agree as follows:

1.           EMPLOYMENT.  Employer hereby agrees to employ Employee, and
Employee hereby agrees to serve, as President of Employer and as a director
and/or executive of any of the Employer’s subsidiaries, for the Term of
Employment (as defined in Section 2).  Employee agrees to perform such services
as are customary for such offices.  Employee further agrees to use Employee’s
best efforts to promote the interest of Employer and to devote such of
Employee’s full business time and energies as are reasonably required during
normal business hours to the business and affairs of Employer during the Term of
Employment.  Effective July 1, 2011, the terms and conditions of this Agreement
shall supersede those pursuant to the employment agreement between the parties,
dated as of July 21, 2008, as may be amended or modified to date, and such prior
employment terms shall no longer operate; provided, however, that Employee
retains all rights as to any compensation and other monetary benefits due
thereunder but not yet paid.

2.           TERM OF EMPLOYMENT.  The employment period hereunder shall commence
on July 1, 2011 and shall continue until June 30, 2015 (the “Term of
Employment”), unless earlier terminated: (a) upon death of Employee; (b) at the
option of Employer upon 30 days’ prior written notice to Employee, in the event
Employee, by reason of physical injury or illness, is unable to materially
perform his duties hereunder for a continuous period of 120 days and has no
expectation of returning to work within a reasonable time thereafter; (c) on
three months’ prior written notice at the option of either Employee or the
Employer without cause; or (d) upon the discharge of Employee by the Board of
Directors of Employer for “cause” (as defined in Section 8 of this Agreement).

3.           COMPENSATION.

(a)           Base Salary.  As compensation for the services to be provided
hereunder and in consideration of Employee’s agreement not to compete as set
forth in Section 4, during the first year of employment hereunder, Employer
shall pay Employee an annual salary, payable bi-weekly, at the rate of Two
Hundred Forty Thousand Dollars ($240,000), less all applicable withholdings and
payroll taxes, and, thereafter for the reminder of the Term of Employment,

 
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Employer shall pay Employee an annual salary, payable bi-weekly, at the rate of
Three Hundred Thousand Dollars ($300,000), less all applicable withholdings and
payroll taxes.

(b)           Performance Based Bonus.  Employee shall be eligible for a cash
bonus in an amount of up to 200% of the Base Salary, payable upon achievement of
performance targets and thresholds to be established by the Board of Directors,
such as achievement of certain market price, business performance, or other
criteria, determined by the Board of Directors in its reasonable
discretion.  Upon achievement of 100%-120% of the performance target, the
Employer shall pay Employee a bonus equal to 100% of the Base Salary.  Upon
achievement of more than 120% of the performance target, the Employer shall pay
Employee a bonus of no less than 150% of the Base Salary, and up to, in the
discretion of the Board of the Directors, 200% of the Base Salary.  No
performance bonus will be payable in connection with achievement of less than
100% of the performance target.

(c)           Employee Benefits.  Notwithstanding anything to the contrary in
this Agreement, Employee shall be entitled to an annual performance bonus or
other bonus and an annual increase in salary as determined by the Board of
Directors from time to time.  Employee shall be entitled to the following fringe
benefits: (i) family medical and dental insurance (assuming eligibility) under
such group medical and dental insurance policies with insurance premiums not
exceeding $20,000 per year; (ii) twelve (12) sick days per year; (iii) three (3)
weeks vacation in each year fully worked; (iv) 10 holidays; and (v)
participation in such employee benefit plans, including 401(k) or similar
retirement plans, as Employer may adopt.

(d)           Payment Upon Early Termination.

(i)           In the event of early termination of employment for reason
specified in clause (d) of Section 2 above, Employer shall no longer be
obligated to make any payments of compensation to Employee or Employee’s estate
under this Agreement; provided, however, any compensation, salary and/or bonus
earned and/or vested for prior periods, but not yet paid, shall be paid by
Employer to Employee or Employee’s estate within 5 business days of such
termination; and further provided that no bonus pursuant to Section 3(b) of this
Agreement shall be payable if Employee was terminated for “cause” in accordance
with Section 8 of this Agreement.

(ii)           If Employer terminates Employee’s employment during the Term of
Employment for any reason other than those specified in clause (d) of Section 2
or in Section 8, Employer shall pay Employee a lump sum amount equal to three
(3) months of Employee’s Base Salary in effect at the time of termination,
calculated from the effective date of termination, payable within ten business
days of termination.  In addition, subject to the above, all fringe benefits
provided for herein, shall continue for three (3) months from the effective date
of termination of the employment of Employee, and all compensatory securities
granted to Employee shall vest (to the extent not earlier vested) on the date of
such termination.

(iii)           Following service of a notice during the Term of Employment by
either party for the reason specified in clause (c) of Section 2, Employer shall
have the right to

 
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require the Employee not to perform any services for the Employer until the
termination becomes effective, subject to payment to the Employee of the salary
for three (3) months.

(e)           Stock Options.  On July 1, 2011, Employer shall issue to Employee
stock options to purchase an aggregate of five million (5,000,000) shares of
Employer’s common stock (the “Options”), subject to vesting and exercisability
as follows:

(1)           2,000,000 options shall vest on July 1, 2011, and such options
shall be exercisable at $0.05 per share and shall expire on the fifth year
anniversary date of vesting;

(2)           1,000,000 options shall vest on July 1, 2012, and shall be
exercisable at $0.10 per share and shall expire on the fifth year anniversary
date of vesting;

(3)           1,000,000 options shall vest on July 1, 2013, and shall be
exercisable at $0.15 per share and shall expire on the fifth year anniversary
date of vesting; and

(4)           1,000,000 options shall vest on July 1, 2014, and shall be
exercisable at $0.20 per share and shall expire on the fifth year anniversary
date of vesting.

The vesting schedule is subject to the Employee’s continued employment at the
time of each vesting period subject to clause 3(d)(ii).  The Company intends to
file a registration statement covering the shares underlying all employee
options, and will include the Employee’s Options in such filing.

(f)           If Employee dies during the Term of Employment, Employer shall pay
to Employee’s estate the compensation that would otherwise be payable to
Employee pursuant to this Agreement.

(g)           Employee shall receive a one-time retention bonus of $20,000
payable within five business days of Employee’s first day of service under this
Agreement.

4.           COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY; CONFIDENTIALITY.

(a)           Covenant Not to Compete and Solicit.  During the Term of
Employment, Employee will not, within any jurisdiction in which Employer or any
affiliate conducts its business operations, or in any way materially competing
with Employer, directly or indirectly, own, manage, operate, control, be
employed by or participate in the ownership, management, operation or control
of, or be connected in any manner with, any business of the type or character
engaged in or competitive with that conducted by Employer.  The decision of
Employer’s Board of Directors as to what constitutes a competing business shall
be final and binding upon Employee, and such decision shall be made in good
faith, or as adjudicated in a court of law.  Employee confirms that the Employer
presently conducts business operations based on interpreting of various
modalities used in analyzing, reporting on and recommending sites for
exploration and recovery of natural resources.  For these purposes, ownership by
Employee or any affiliate of Employee of securities of a public company not in
excess of five percent (5%) of

 
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any class of such securities shall not be considered to be competition with
Employer.  Nothing herein shall prohibit Employee from holding securities in, or
serving on the board of directors of, a company that Employee was affiliated
with at the time of commencement of employment with the Company.

During his employment and during one year after termination of Employee’s
employment with Employer, Employee will not, in a capacity that Employee
performs for Employer pursuant to this Agreement, compete, directly or
indirectly, with Employer’s STeP® and Employer’s other proprietary technology
analysis business.  The term “not compete” as used herein shall mean that the
Employee shall not own, manage, operate, or be employed in a business
competitive with utilizing STeP® and Employer’s other proprietary technology.

For a period of one (1) year after termination of Employee’s employment with
Employer, except with Employer’s specific written permission, which shall not be
unreasonably withheld, Employee further agrees to refrain from interfering with
the employment relationship between Employer and its other employees, by
soliciting any of such individuals to participate in independent business
ventures and agrees to refrain from soliciting business from any client of
Employer’s (that became clients of Employer during the Term of Employment) for
Employee’s benefit or for any other entity, if such solicitation shall be in
direct competition with the Employer or materially harmful to the business of
Employer.

It is the desire and intent of the parties that if any provisions of this
Section 4(a) shall be adjudicated to be invalid or unenforceable, this Section
4(a) shall be deemed amended to delete therefrom such provisions or portion
adjudicated to be invalid or unenforceable, such amendment to apply only with
respect to the operation of this paragraph in the particular jurisdiction in
which such adjudication is made.

(b)           Intellectual Property.  During the Term of Employment, Employee
will disclose to Employer, all ideas, inventions and business plans developed by
Employee during such period which directly relate to the business of Employer,
including without limitation any such process, operation, product or improvement
which may be patentable or copyrightable.  Employee agrees that such will be the
property of Employer, and that Employee will, at Employer’s request and cost, do
whatever is necessary to secure the rights thereto by patent, copyright or
otherwise to Employer.

(c)           Confidentiality.  Employee agrees that during the term of his
employment and for five (5) years thereafter, other than for the purpose of
furtherance of the business of the Company, not to divulge to anyone (other than
Employer or any other persons employed or designated by Employer, which
designation has already been made by Employer to include that disclosure to the
Institute is specifically, and at all times, permitted) any knowledge or
information of any type whatsoever of a confidential nature relating to the
business of Employer or any of its subsidiaries or affiliates, including without
limitation all types of trade secrets (unless readily ascertainable from public
or published information or trade sources, required by law, or requested by
governmental body or an NGO, including NASD).  Employee further agrees

 
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not to disclose, publish or make use of any such knowledge or information of a
confidential nature without prior written consent of Employer.

5.           REIMBURSEMENT OF BUSINESS EXPENSES.  Employee shall be entitled to
be reimbursed for reasonable travel and other business related expenses incurred
in connection with Employee’s services to Employer pursuant to and during the
Term of Employment upon a basis consistent with the policies established or
announced by Employer.  Notwithstanding the foregoing, during the Term of
Employment, non-economy class air travel will be limited to intercontinental
flights only in business class.

6.           OTHER PRIVILEGES.

(a)           Cellular Phone.  During the Term of Employment, Employer agrees to
provide Employee with a cellular phone for business use at Employer’s cost and
expense.

(b)           Automobile.  During the term hereof, Employer agrees to reimburse
Employee for lease, insurance, parking, and gas expenses, on a 5/7 basis, in an
amount not to exceed in the aggregate $12,000 per year.

(c)           Spouse travel.  During the term hereof, Employer agrees to
reimburse Employee for the expenses of Employee’s spouse travel with the
Employee at Employee’s business trips two times per year (considered as
additional taxable income).

7.           BREACH BY EMPLOYEE.  Both parties recognize that the services to be
rendered under this Agreement by Employee are special, unique and extraordinary
in character, and that in the event of a breach by Employee of the terms and
conditions of this Agreement , or other than as allowed herein, performs
services during the Term of Employment for any person, firm, corporation or
other entity engaged in a competing line of business with Employer, and fails to
correct or substantially cure such breach within a reasonable time after receipt
of written notice to cure, the Employer shall be entitled to terminate this
agreement. In the event of breach of confidentiality, the Employer may seek an
injunction.

8.           TERMINATION FOR CAUSE.  Employer may terminate Employee for cause
at any time.  For purposes of this Agreement, an event or occurrence
constituting “cause” shall mean:

(a)           Employee’s continued willful failure or refusal after notice
thereof, to perform specific directives of Employer’s Board of Directors, which
shall not be illegal in nature, when such directives are consistent with the
scope and nature of Employee’s duties and responsibilities as set forth in
Section 1 and elsewhere herein and such failure or refusal is: (i) not corrected
within a reasonable time after receipt of written notice is sent by Employer’s
Board of Directors after resolution authorizing such notice; (ii) the direct
material cause of material damages to the Employer;

(b)           Employee’s conviction of a felony or of any crime involving moral
turpitude, fraud or misrepresentation and final resolution of all appeals
therefrom;

 
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(c)           Any court determination of gross or willful conduct of Employee
resulting in substantial loss to Employer, substantial damage to Employer’s
reputation or any material theft from Employer;

(d)           Other than by reason of physical injury or illness, a
determination of Employee’s material willful failure to perform the duties and
responsibilities under this Agreement causing material damage to Employer;

(f)           A determination of any material breach (not covered by any of the
clauses (a) through (d)) of any of the provisions of this Agreement, causing
material damage to Employer, and such breach was not cured within ten days, or
such other greater amount of time as is reasonable under the circumstances,
after written notice thereof is delivered to Employee by Employer.

9.           ASSIGNMENT.  This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Employee herein may
not be sold, transferred, assigned, pledged or hypothecated by either party,
including indirectly.  The rights and obligations of Employer hereunder shall be
binding upon and run in favor of the successors and assigns of
Employer.  Employee specifically consents to assignment of this Agreement by
Employer pursuant to any reorganization or business combination that Employer
may effect hereafter, except as limited or otherwise provided elsewhere in this
Agreement, and subject to such other provisions.

10.           GOVERNING LAW; CAPTIONS.  This Agreement contains the entire
agreement between the parties and shall be governed by the laws of the State of
New York.  It may not be changed orally, but only by agreement in writing signed
by the party against whom enforcement of any waiver, change, modification or
discharge is sought, and consented to in writing by the Board of Directors of
Employer.  Any dispute shall be resolved in the courts located in the County of
New York in the State of New York.  Section headings are for convenience or
reference only and shall not be considered a part of this Agreement.

11.           NOTICES.  Any notice or other communication required or permitted
hereunder shall be sufficiently given if delivered in person to Employer by
delivery to its Chairman of the Board of Directors or sent by telex, telecopy or
by registered or certified mail, postage prepaid, addressed as follows:

if to Employee, to:
the address on file with the Employer

if to Employer, to:
Attn.: Board of Directors
TERRA ENERGY & RESOURCE TECHNOLOGIES, INC.
99 Park Avenue, 16th Floor
New York, New York 10016
Fax: 917-591-5988

 
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12.           PRIOR AGREEMENTS.  This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto.

13.           Employer shall indemnify and hold harmless, the Employee to the
full extent allowed by law, for any claims, damages, losses, including attorneys
fees, if such claims, damages or losses are related to the employment hereunder,
save for the gross negligence or willful misconduct on the part of the Employee.

IN WITNESS WHEREOF, Employer has by its appropriate officer signed this
Agreement and Employee has signed this Agreement, on and as of the date and year
first above written.

TERRA ENERGY & RESOURCE TECHNOLOGIES, INC.

By:            /s/ Dmitry Vilbaum                                           
Name:            Dmitry Vilbaum
Title:            Chief Executive Officer

EMPLOYEE

/s/ Alexandre
Agaian                                                                 
Alexandre Agaian

 
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