EXHIBIT 10.5


 


CONFIDENTIALITY AND NON-COMPETITION AGREEMENT


 


This
Confidentiality and Non-Competition Agreement is entered into on this 17th
day of February, 2006 (“Effective Date”), by and between BioSource America,
Inc., a Texas corporation (hereinafter “Buyer”) and Resodyn Corporation, a
Delaware corporation (hereinafter “Resodyn”)


 


WHEREAS, Buyer on
even date of this Confidentiality and Non-Competition Agreement, is entering
into Asset Purchase Agreement with BIOsource Fuels, LLC, a Wisconsin limited liability
company (hereafter “Seller”) to purchase and acquire all of the assets of
Seller related to and used in connection with the synthesis of biodiesel and
other bio-fuels from animal and vegetable based fats, oils and greases (“the
Business”); and


 


NOW, THEREFORE,
for and in consideration of ten dollars paid in hand by Buyer to Resodyn, and
other good and valuable consideration paid by Buyer, the receipt and
sufficiency of which is hereby acknowledged, Resodyn and its principals enter
into this Confidentiality and Non-Competition Agreement and agree to the
covenants and agreements set forth herein as follows:


 


I.                              Covenant Not to Compete.


 


Neither Resodyn,
nor any principal of Resodyn, at any time from and after the Effective Date of
Asset Purchase Agreement and through the fifth anniversary of such Effective
Date, without the prior written consent of Buyer, will (i) directly or
indirectly engage in, manage, operate, control or participate in or be
connected in any manner with the ownership, management, operation or control of
any person or entity which is or proposes to be, directly or indirectly,
engaged or involved in Business; or (ii) acquire control of or assist or render
services (whether or not for compensation, or as an agent, advisor, consultant or
lender) to or for, any entity or individual involved in Business.


 


Nothing in this
Agreement shall prohibit Resodyn from working directly or indirectly with,
assisting, or providing services or products to any person or entity in the
Business that synthesizes or markets bio-fuel or biodiesel from animal and
vegetable based fats, oils, and greases as long as Resodyn’s work, assistance,
or services are not involved in the synthesis of biodiesel and other bio-fuels
as an end product from animal and vegetable based fats, oils, and greases.


 


Nothing in this
Agreement shall prohibit Resodyn from researching, developing, marketing,
selling, and engaging in the business of biochemical and chemical processes
involving chemistries, products or processes that use non-petroleum feedstock,
biodiesel or other bio-fuels from animal and vegetable based fats, oils and
greases in order to synthesize products, provided only that the end product of
Resodyn’s activities cannot be biodiesel or bio-fuel from animal and vegetable
based fats, oils, and greases.


 


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Resodyn
agrees that at any time from the Effective Date and through the fifth anniversary thereof, it will not
directly or indirectly through its actions or through the actions of a third
party, whether for its own benefit or for that of the third parry, take any
action, or advise or assist in taking any action, that impairs the goodwill of
Buyer, including but not limited to, actions that interfere with or damage the
relationships between Buyer and employees, customers, contractors, licensees
and suppliers of Buyer.


 


The
foregoing paragraphs:


 


shall
not prohibit Resodyn from owning in the aggregate less than two percent (2%) of
an entity which is engaged in the Business provided such entity is subject to
the reporting obligations of the Securities Exchange Act of 1934, as amended,
and provided any such investment has a value no greater than One Hundred
Thousand Dollars ($100,000.00).


 


None
of the foregoing paragraphs of this Section I shall prohibit Resodyn from:


 


(a.)          selling animal and vegetable based
fats, oil and greases for synthesis of bio-fuel or biodiesel;


 


(b.)          engaging in the design and
construction of a plant or plants for the synthesis of bio-fuel or biodiesel
pursuant to a license granted by Buyer;


 


(c.)          owning or operating a plant for the
synthesis of bio-fuel or biodiesel which has been designed and constructed by
Buyer;


 


(d.)          any activity that constitutes the
Business when such activity has been specifically authorized in a written
agreement with Buyer or performed at the written request of and on behalf of
Buyer; nor


 


(e.)          marketing or selling Biodiesel,
glycerin or any other product or by-product used in or resulting from the
synthesis of bio-fuel or biodiesel.


 


(f.)           using enzymes as catalysts for
esterification, using solid acid catalysts for esterification, or using solid
acid catalysts to dry methanol.


 


(g.)          working on and completing any
government funded research and development contracts dealing with new methods for biodiesel synthesis that do not include glycerolysis.


 


Resodyn is
expressly prohibited from:


 


(a)                                  representing
Biosource Fuels, LLC as a commercial viable entity actively engaged in the
business lines outlined in paragraphs (a.) through (e.) above;


 


(b)                                 any
representations on websites, in trade magazines, promotional brochures, company
literature or verbally that it can or will engage in any activities as defined
in paragraphs (a.) through (e.) above;


 


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(c)                                  any
representation, technology development, research, development, or business
arrangements that infringe upon any biodiesel or biofuels production technology
identified in:


 


(i)                                     U.S.
Patent Application Serial Number 10/776,740 filed 1/26/2004


 


(ii)                                  U.S.
Provisional Patent Application Serial Number 60,537,251 filed 1/15/2004


 


(iii)                               U.S.
Provisional Patent Application Serial Number 60,443,049 filed 1/27/2003


 


Seller agrees that
all existing Employee Non-Compete Agreements for past employees of any of the
Members of the Seller are declared null and void with respect to biodiesel or
biofuels production, production technology as it relates to this Agreement.


 


II.                            Confidential
Information.


 


Resodyn and Buyer
acknowledge that Seller has developed highly specialized and technical
knowledge with respect to the Business, including, but not limited to, (i)
information and technology relating to applications used to manufacture
biodiesel and other biofuels from animal and vegetable-based fats, oils and
greases including, but not limited, patent applications pending before the U.S.
Patent and Trademark Office; (ii) information relating to chemistry, process
methods, processing steps, processing times and conditions, costs of
processing, licensing fees, royalties and other technical or business sensitive
information relating to the Business; (iii) formulations, test results,
manufacturing and engineering specifications, production and manufacturing
information and know-how and other technical information relating to the
formulation or production of products or services of the Business; (iv)
information concerning products or services of the Business but not yet offered
for sale or license or offered for sale or license only on condition of
confidentiality; (v) information concerning pricing policies for the Business,
the prices charged in the Business to customers, the volume or order of such
customers, and other information concerning business transactions with
customers or proposed customers; (vi) customer lists for the Business; (vii)
financial information concerning the Business; (viii) information concerning
the marketing programs or strategies of the Business; and (ix) all other
confidential and proprietary information relating to the Business (“Confidential
Information”).  Confidential Information
shall not include information which is publicly available on Effective Date or
which becomes publicly available through no fault of Resodyn after Effective
Date (but only after such information becomes- publicly available).


 


Resodyn recognizes
that the integrity and value of the assets sold by Seller under the Asset
Purchase Agreement are dependent upon the confidentiality of the Confidential
Information and that the protection of the Confidential Information against unauthorized
disclosure or use is of critical importance to Buyer.  Resodyn agrees that it will not, without
the prior written authorization of Buyer, divulge to any person or entity,
directly or indirectly, any of the Confidential Information.


 


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If
Resodyn is subpoenaed, or is otherwise required by law to testify concerning
any Confidential Information, Resodyn agrees to promptly notify Buyer upon
receipt of a subpoena, or upon reasonable belief that such testimony shall be required
so that Buyer may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement.  In any event, Resodyn shall furnish only that
portion of the Confidential Information that it is advised by legal advisers to
be legally required and shall exercise reasonable best efforts to obtain
reliable assurance that confidential treatment shall be accorded the
Confidential Information.  Further,
Resodyn agrees not to oppose action by Buyer to obtain an appropriate
protective order or other reliable assurance that confidential treatment shall
be accorded the Confidential Information.


 


III.                           Acknowledgement
of Reasonableness and Enforcement.


 


Buyer and Resodyn
agree and stipulate that the agreements and covenants contained in this
Confidentiality and Non-Competition Agreement are fair and reasonable in light
of all of the facts and circumstances of the relationship between Buyer and
Seller including the consideration recited in the Asset Purchase Agreement.


 


Buyer and Resodyn
are aware that in certain circumstances courts have refused to enforce certain
agreements not to compete.  Therefore, in
furtherance of, and not in derogation of the provisions of this Confidentiality
and Non-Competition Agreement, Buyer and Resodyn agree that in the event a
court should decline to enforce any provision of this Confidentiality and
Non-Competition Agreement, then the provisions of this Confidentiality and
Non-Competition Agreement shall be modified or reformed in a manner which will
restrict Resodyn’s competition with Buyer to the maximum extent, as to time,
geography and business scope, consistent with the remaining terms of this
Agreement.


 


The parties agree
that if Resodyn violates the provisions of this Confidentiality and
Non-Competition Agreement, Buyer shall be entitled to recover any actual
damages that may be awarded at trial or in arbitration, as applicable, and not
reversed on appeal It is further agreed that Buyer, in addition to and without
limiting any other remedy or right that it may have, will have the right to an
injunction issued by a court of competent jurisdiction against any breach or
threatened breach of this Confidentiality and Non-Competition Agreement in
order to enjoin such breach.


 


IV.                           Miscellaneous


 


Resodyn
acknowledges that Buyer is granting to Seller, a collateral
assignment of this Confidentiality and Non-Competition Agreement to secure the
obligations of Buyer under the Asset Purchase Agreement and a promissory note
delivered thereunder, and Resodyn irrevocably consents to such assignment.


 


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This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.


 


The parties have caused this Agreement to be executed on this 17th day of February,
2006 as set forth below.


 


	
  RESODYN
  CORPORATION,

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Lawrence C. Farrar

  	
   

  
	
   

  	
  Lawrence C. Farrar

  
	
   

  	
  President

  
	
   

  
	
   

  
	
  Biosource America, Inc.,

  
	
   

  
	
   

  
	
  By:

  	
  /s/ J.D.
  McGraw

  	
   

  
	
   

  	
  J.D. McGraw

  
	
   

  	
  President

  



 


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