Document:

utec_ex10-5.htm

CONFIDENTIALITY, NON-DISLOCURE/NON-USE & SERVICES

AGREEMENT

THIS AGREEMENT is made this 15th day of March, 2008, by and between Bioenergy Applied Technology, LLC (BAT), (the Disclosing Party) a Nevada Registered Company, with place of business at 10805 Bernini Drive, Las Vegas, NV 89141 and UTEC Inc (the Recipient / Contractor) with a place
of business at 8500 SE Jayhawk Drive, Riverton, KS 66770, collectively “The Parties”.

RECITALS

	
A.
	
“The Parties” wish to conduct discussions and BAT wishes to hire Contractor to carry out define work programs on behalf of and funded by BAT, in connection with the matters below:

	
  
	
(i)
	
The gasification of coal, conversion of said gas to syngas, and eventual Fisher Tropsch processing of said syngas.

	
  
	
(ii)
	
The transfer, processing, manipulation, formulation and any other process related to transforming mined coal into a feed for the gasification process.

	
  
	
(iii)
	
Equipment assessment, designed, fabrication, operation, testing and evaluation of said equipment, either developed by BAT, purchased off-the –shelf from a third party or contemplated or otherwise requested by BAT.

	
  
	
(iv)
	
Novel hazardous and biological waste destruction equipment, including feeds, byproducts, skid mounting, operation, testing, definition or the balance of plant for said equipment.

	
  
	
(v)
	
The utilization of biofuels and bio-derived materials for the explosives industry, Fisher Tropsch streams as applied to commercial explosives, the use of tackifying systems, the use of biomass derived feeds as applied to explosives, the combination of coal fines and bio-derived fuels such as but not limited to glycerin, as applied to commercial explosives.

	
  
	
(vi)
	
Safety systems in the gasification, syngas generation and syngas transformation.

	
  
	
(vii)
	
Any additional topics, technology, and intellectual property the parties incorporate in the discussion

(the "Subject Matter"), either party will or may be disclosing to the other party certain Confidential Information (as hereinafter defined); and

	
B.
	
The parties are entering into this Agreement with respect to the Confidential Information.

NOW, THEREFORE, in consideration of such disclosure by Disclosing Party to Recipient, and other good and valuable consideration, Recipient agrees as follows:

1. Confidential Information. "Confidential Information" of a party means all information (whether written or oral) and materials which such party
("Disclosing Party"), including any employee or representative of such party, has furnished or may hereafter furnish to the other party ("Recipient") or its representatives relating in any way to the Subject Matter. A party's Confidential Information specifically includes, but is not limited to, such party's pricing, costs and other financial information, drawings, artwork, designs, formulations, processes, patent applications, research procedures, models, prototypes, samples, specifications, test results, analyses,
software, forecasts and studies. Notwithstanding the foregoing, Confidential Information of Disclosing Party does not include any information or materials which Recipient can clearly demonstrate (a) is or becomes generally

  

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available to the public other than as result of an unauthorized disclosure by Recipient or its Authorized Persons, (b) is or becomes available to Recipient or its Authorized Persons from a third party, other than on a confidential basis from Disclosing Party, which third party represents to Recipient that it is entitled to disclose such
information, (c) was known to Recipient or its Authorized Persons prior to receipt thereof by Recipient or its Authorized Persons from Disclosing Party, (d) is approved for release by the express written authorization of Disclosing Party, and then only after such approval and only for the purpose specified, or (e) is required by law or court order to be disclosed.

1.1 BAT’s Confidential Information shall mean all Inventions, Technical Data, Technical Information, Market Data, Market Information including but not limited to device and component configurations, dispensing techniques, processes, materials, apparatus, know-how, methods and
products, whether patented or unpatended, patentable or unpatentable, copyrighted or not copyrighted, copyrightable or not copyrightable; BAT’s business plans and business projections; its trade secrets and secret processes; its research plans and projects, engineering plans, specifications, processes, material formulations and techniques for the design and manufacture of equipment, its sources of supplies; its pricing policies; its cost information; its supplier and customer lists and contracts; its manufacturing
techniques; its applications and serve policies; its financial and sales performance data; its personnel information and policies; its software and software codes and any information that BAT has maintained as confidential that has not been made public, where it relates to BAT or to businesses which have an association with BAT or to which BAT has an obligation of confidentiality, and any information developed by Contractor in fulfilling the obligations undertaken by Contractor in this Agreement.

BAT shall have title to all Inventions and works made for hire made by Contractor in the performance of work under this Agreement, including title to patent applications filed for any Invention and patents relating to the Field which issue thereon an all copyright applications and all copyrights which issue thereon.

1.2 BAT shall have a complete and unlimited right to use and license all Inventions under this agreement.

1.3 The commercialization rights related to the Field are BAT’s and all employees, affiliates, agents or representatives of Contractor shall be required to agree in writing to respect such BAT rights.

1.4 Contractor’s obligations under this Agreement shall extend to all employees, affiliates, agents or representatives of Contractor, all of which shall be required to agree in writing to be bound by the terms and to fulfill the obligations set forth in this Agreement.

1.5 BAT, its designee or assignee, shall have sole authority to determine whether patent or copyright applications shall be filed, prosecuted or abandoned and shall have complete control over the filing or prosecuting of any patent or copyright applications.

1.6 Upon request by BAT, its designee or assignee, Contractor shall execute any instruments, documents, applications, or such other documents required by BAT to insure that all rights are conveyed to BAT, its designee or assignee, the rights in Inventions granted to it by this Agreement,
to enable BAT, its designee or assignee, to apply for and prosecute any and all patent or copyright applications anywhere in the world covering each Invention, or to enable BAT, its designee or assignee, to fulfill obligations to any third party to whom BAT has contract obligations, including the United States Government, further any litigation BAT is a party to in response to a commercial opportunity under this agreement, whether such obligations are direct or indirect through another contracting party.

  

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1.7 Contractor shall cooperate and assist BAT, its designee or assignee, in the preparation and prosecution of patent and copyright applications claiming inventions, authorship or ownership, or in the defense thereof, by supplying necessary technical information and examples, reviewing
and editing drafts of such applications, reviewing patent office actions and prior art cited therein, providing relative data necessary for filing proper responses to such office actions and reviewing and editing any responses prepared by BAT, its designee or assignee. No financial assistance will be required by the Contractor.

1.8 Any Invention, Technical data or Technical information will be exclusively owned by .

1.9 All creative works produced by Contractor relating to or arising out of in any way or in any connection with this Agreement or work done in connection with any Invention, Technical data or Technical information, shall be considered to have been prepared for BAT as part of and in
the course of Contractor’s activities under this Agreement, and any such work will be owned by BAT.

2. Confidentiality and Non-Use. Recipient shall keep or cause to be kept in strict confidence all Confidential Information of Disclosing Party
and shall not disclose it to anyone except to a limited group of its employees who are engaged in the evaluation of such Confidential Information in connection with the Subject Matter ("Authorized Persons"). Recipient will use such Confidential Information only in connection with the evaluation of the Subject Matter or for the purpose of fulfilling its duties and responsibilities pursuant to any written agreement between the parties pertaining to the Subject Matter. Recipient shall use at least the same degree
of care in safeguarding Confidential Information of Disclosing Party as Recipient uses for its own proprietary information of like importance, but in no event less than reasonable care. Each of the Authorized Persons of Recipient to whom Confidential Information of Disclosing Party is disclosed will be advised by Recipient of its confidential nature and of the terms of this Agreement. Upon Disclosing Party's written request, Recipient will either destroy or return to Disclosing Party all Confidential Information
of Disclosing Party which is in tangible form, including any copies thereof which Recipient or its Authorized Persons may have made, and Recipient will destroy all abstracts and summaries thereof and destroy or delete all references thereto in its documents. If Disclosing Party notifies Recipient in writing as to any of the Confidential Information of Disclosing Party which it does not wish copied, Recipient shall so comply.

3. Legal Requirement to Disclose. In the event that Recipient or anyone to whom Recipient transmits the Confidential Information of Disclosing
Party pursuant to this Agreement becomes legally compelled to disclose any of such Confidential Information, Recipient will provide Disclosing Party with prompt notice, if lawful, so that Disclosing Party may seek a protective order or other appropriate remedy or waive compliance with the provisions of this Agreement. If such protective order or other remedy is not obtained, or if Disclosing Party waives compliance with the provisions of this Agreement, Recipient will furnish only that portion of the Confidential
Information of Disclosing Party which Recipient is advised by its counsel is legally required to be furnished.

4. Remedies for Breach. Recipient recognizes that irreparable injury may result to Disclosing Party if Recipient breaches any provision of this
Agreement. Accordingly, if Recipient engages in any act in violation of any provision of this Agreement, Disclosing Party shall be entitled, in addition to such other remedies as may be available to it under applicable law, to an injunction prohibiting Recipient from engaging in any such act, or

  

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specifically enforcing the terms of this Agreement, as the case may be. Disclosing Party shall be entitled to recover from Recipient all costs and expenses, including reasonable attorneys' fees, incurred by Disclosing Party in any successful legal or equitable action taken by it to enforce the provisions of this Agreement.

5. Entire Agreement. This Agreement expresses the entire agreement between the parties respecting the Subject Matter, and shall not be modified
except by a writing signed by authorized representatives of the parties on or after the date hereof. Any future business arrangement the parties may enter into with respect to the Subject Matter shall be the subject of a separate written agreement between the parties. Nothing contained in this Agreement shall be construed as (a) requiring either party to disclose to the other party any particular information or (b) granting to either party a license, either express or implied, under any patent, copyright, trade
secret or other intellectual property right now or hereafter owned or used by the other party.

6. Term. Any Confidential Information shall be subject to the provisions of this Agreement for a period of five (5) years following the date of
this Agreement.

6.1 Upon termination of any Project or this Agreement, or at the request of BAT all parts, samples, prototypes ad similar items, as well as all writings, including but not limited to, electronic, optical or magnetic records, tapes or apparatus, notes, notebooks, drawings, specifications,
computer or data processing disks and tapes, schematics, marketing plans, financial plans and studies and reports prepared, complied or acquired by Contractor relating to BAT or its businesses, products, plans or proposals, including copies thereof, then in the possession of Contractor, or a related part, or of any person or entity associated with or related to Contractor, whether prepared by Contractor or others, shall be returned to BAT unless use of such materials was previously agreed to as part of a venture
created by the Contractor.

7. Represents/Warrants

Contractor represents, warrants and acknowledges to BAT as set forth below:

7.1 Neither the execution of this Agreement by Contractor nor the performance by Contractor of the duties under this Agreement constitutes a breach of any confidentiality agreement or any other contract to which Contractor may be a party.

7.2 Contractor is presently under no obligations to any third party which preclude entering into this Agreement and during the term of this Agreement, Contractor will enter into no agreement which would or could impose obligations upon Contractor in conflict with his obligations hereunder.

7.3 This Agreement is made with the Contractor as an Independent Contractor.

7.4 Contractor shall not, by virtue of this Agreement, become an employee or agent of BAT and shall have no authority to obligate BAT without the written permission of Dr. Fortunato Villamagna, CEO of BAT, LLC to any third party.

8. Services by Contractor

Contractor shall perform the following services, as mutually agreed upon between BAT and Contractor:

1. Conduct research and development work as contemplated, invented, directed and defined by BAT

2. Conduct the assessment of equipment, formulations, systems, and integrated processes as contemplated, invented, directed and defined by BAT

  

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3. Provide confidential reports to BAT

4. Assist BAT with any patent and IP protection activities BAT deems required to protect all inventions resulting from this work.

10. Compensation

BAT will compensate the Contractor on a monthly basis according to UTEC’s standard costs and payment terms for the services performed under Section 8 above. Contractor shall periodically invoice BAT after the services have been performed, with typical payment terms.

11. Governing Law. This Agreement shall be governed by the internal laws of the State of Nevada without regard to conflict of laws principles.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

	
BAT, LLC.
	
UTEC, Inc.

	  	  
	
/s/ Fortunato Villamagna
	
/s/ Suresh Subramanian

	
Name: Fortunato Villamagna
	
Name: Suresh Subramanian

	
Title: member
	
Title: President & Chief Operating Officer

	
Date: March 15, 2008
	
Date: March 15, 2008

  

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EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) dated as of June 1, 2009 between Dr. Fortunato Villamagna (“CEO”), and UTEC Inc., a Nevada Corporation (“the Company”) and its wholly and/or partially-owned subsidiaries and affiliates, now owned or to
be acquired in the future by The Company (The Company, subsidiaries and affiliates being hereinafter collectively referred to as the “Companies”), (Dr Fortunato Villamagna and UTEC Corporation being the “Parties” to this Agreement).

WHEREAS, CEO has previously been providing management services to manage the business and affairs of UTEC, Inc., and its subsidiary, UTEC Corporation pursuant to the terms of an agreement originally signed on July 1, 2008, and prior to that pursuant to the terms of a management agreement
(the “Red Stone Agreement”) dated December 8, 2006 and further amended on January 11, 2007, with Red Stone Management Services LLC. (“Red Stone”), a corporation owned by CEO,

AND WHEREAS, as of June 1, 2009 CEO wishes to enter into an agreement with UTEC Inc., and the Company wishes to enter into an agreement with F. Villamagna as Managing Director and Chief Executive Officer (“CEO”),

AND WHEREAS the parties agree that this AGREEMENT dated June 1, 2009 will supersede all previous agreements,

AND WHEREAS, the Board of Directors of the Company (the “Board”) have unanimously agreed, and hereby confirm, the appointment of Dr. Fortunato Villamagna to serve as the Chief Executive Officer and Managing Director of the Company, with authority to perform the day-to-day
management of the Company and its subsidiaries and affiliates, now owned or to be acquired in the future.

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants and agreements herein contained, the Parties agree as follows:

1.           CEO Duties.

a.           With support from the Secretary & Chairman or Co-Chairman, CEO shall operate and manage the Companies according to guidelines provided by the Board from time to time, and in so doing shall:

(i)           Interact with the Companies to establish operating goals, which will focus on profitability, customer satisfaction, asset management and other related benefits;

(ii)           Monitor operations and progress towards achieving the operating goals;

  

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(iii)           Recruit and supervise the senior management team for the Companies, which appointments shall be routinely approved by the Board.

(iv)           Create, develop and implement marketing plans for achievement of the operating goals at the Companies;

(v)           Provide assistance in the recruitment, supervision and training of the employees of the Companies.

(vi)           Supervise the accounting, human resources, management information services and administrative services required of the Companies for the management of the finances of the Companies, including, but not limited to, the establishment
of such lines of credit and other credit facilities as may be appropriate from time to time for the Companies and the maintenance of books and records for the Companies in accordance with generally accepted accounting principles and the Companies’ requirements;

(vii)           Perform all such other duties and responsibilities as may be required from time to time to operate the Companies in a businesslike manner pursuant to good practices and in compliance with all applicable laws.

(viii)           Provide an annual forecast prior to year-end and obtain the approval of the Board for the forecast, including anticipated capital outlays.

(ix)           Keep the Board advised of progress and problems.

b.           CEO shall make, or cause to be made, annual, or more frequent, reports to the Board concerning activities connected with the operation of Companies whenever requested by the Companies or the Board.  Such reports
shall include, without limitation, financial, market penetration, creditor relations, and customer satisfaction reports.

2.           Expenses.  CEO shall reimbursed for real, reasonable and customary costs and expenses incurred related to the operation of the company and conducting business activities as well as all
travel expenses incurred while conducting the business of the Companies.  All requests for reimbursement of expenses shall be submitted in accordance with the Companies’ expense reporting and reimbursement policies.

3.           Benefits.  In addition to a salary, the Company will offer CEO participation in usual and normal employee benefits, including social security benefits, health, accident and life insurance
(subject to CEO’s ability to qualify for such plans), annual paid vacation, workers compensation, and such other benefits as may be established from time to time by the Company appropriate to its executive employees.  These will be provided on a shared funding arrangement, which will be reviewed annually.  CEO’s entitlement to annual vacation beginning with each new calendar year will be four weeks per year.

  

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4.           Remuneration.  CEO shall be entitled to an annual salary and bonus to a maximum of $300,000.00 per annum.  The salary and bonus shall be calculated as follows:

	
  
	
a.
	
An annual salary payment of $200,000, payable in monthly installments in arrears and,

	
  
	
b.
	
A bonus of 50% of the annual pre-tax earnings before depreciation and amortization as set forth in the Company’s annual audited financial statements, subject to a maximum payment of $100,000 in any one year.

	
  
	
c.
	
A grant of stock options under the Employee & Director Stock Ownership Plan as approved from time to time by the Board, equal to at least twice the stock options granted to the next most senior employee of the company, generally expected to be the President of UTEC Corporation, and,

	
  
	
d.
	
A grant of stock options under the Employee & Director Stock Ownership Plan for CEO’s service as a Director of the Company, on the same basis as stock options are granted to each other Director.

All benefits issued under sections 3b through 3d are irrevocable,

One-half of the payments under section 3(b) may, under mutual agreement between the Board and the CEO, be made in options for, or in shares of, the Company, subject to an additional share allowance equal to 10% of the amount which would otherwise be payable in cash.

The Chairman or Co-Chairman will review CEO’s compensation annually in conjunction with CEO’s annual performance review, and any recommendations for changes will be made to the Board’s Compensation Committee for final approval.

5.           Term.  This Agreement shall commence as of the date hereof, and shall continue for a period of three years (“Initial Term”).  Thereafter, the Agreement shall be automatically
renewed for successive three-year periods.

6.           Termination.  CEO’s employment may be terminated by the Company in the event of;

	
  
	
a.
	
CEO’s death, or,

	
  
	
b.
	
CEO’s disability, such that CEO is unable to perform your duties on a full time basis for a period of six consecutive months as a result of incapacity or disability due to physical or mental illness, and you have failed to return to full time work within 30 days following written notice to do so, or,

	
  
	
c.
	
Cause, which for purposes of this Agreement shall mean:

  

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(i)
	
gross negligence, recklessness or willful misconduct in the performance of your duties hereunder;

	
  
	
(ii)
	
a charge of fraud or embezzlement, or conviction for any crime involving violence or moral turpitude;

	
  
	
(iii)
	
misuse, for personal gain or otherwise, of the assets of the company;

	
  
	
(iv)
	
failure to devote the majority of  CEO’s time and attention to the affairs of the company, pursuant to the terms of this Agreement

7.              Payment on Termination.  If this Agreement is terminated by the Company “for Cause” prior to the end of the Initial Term, CEO shall be entitled to the salary
and bonus to which he would otherwise have earned for the fiscal year in which the termination occurred, plus an amount equal to the salary specified in section 3(a), pro-rated for the remaining term of the Agreement. If this Agreement is not terminated for “Cause”, or if it is terminated Upon Corporate Capital transactions, “CEO” shall be entitled to receive compensation equal to the greater of (i) the period as enforced in section ten (10) of this agreement or (ii) two (2) years, of
remuneration (salary plus bonus plus options) that would be payable hereunder in this Agreement.  A “Corporate Capital Change” shall be defined as the event that the Company, its stockholders, or both, enter into a written agreement to dispose of all or substantially all of the assets or stock of the Company by means of a sale, merger, consolidation, reorganization, liquidation or similar transaction (other than a reorganization, merger or consolidation effected solely to change the Company's
name or state of incorporation), unless “CEO” accepts the position of “CEO” for the new entity. In the event the Company, its stockholders, or both terminate the “Corporate Capital Transaction” prior to successful completion, the “CEO’s” rights hereunder, including the Executive's rights to compensation, shall be determined as if the Company and its stockholders had not entered into the agreement to undertake the transaction.

8.           Exculpation.  CEO shall not be liable to the Companies or any officer, director, employee, or shareholder of Companies for honest mistakes of judgment, or for action or inaction, taken
reasonably and in good faith for a purpose that was reasonably believed to be in, or not opposed to, the best interests of Companies, or for losses due to such mistakes, action, or inaction.  CEO may consult with counsel and accountants in respect of any contemplated action or inaction, and be fully protected and justified in any action or inaction that is taken in accordance with the advice or opinion of such counsel or accountants.

9.           Proprietary and Confidential Information.  As an executive manager for the Company, CEO will be privy to proprietary information about the Company, its Shareholders, and all aspects of its
operations, plans and strategies.  All proprietary information shall be confidential and CEO agrees not to disclose it to others, nor use it in any way for CEO’s own benefit.

  

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10.           Agreement Not to Compete.   The CEO does not have a non-compete agreement. The company recognizes the CEO’s long record
of novel technology developments and commercialization, and recognizes that the CEO may from time to time develop systems outside the technology area currently being developed by the Company in conjunction with other groups either owned by CEO or in a consulting capacity. All such developments will be the property of CEO.

11.           General.

	
  
	
a.
	
Indemnification.  The Company and it’s respective affiliates, representatives, shareholders, parent(s) or subsidiary companies and respective directors, officers, employees, agents, successors and assigns shall indemnify CEO from and against any and all claims, orders, judgments, penalties, fines, remedies, losses, liabilities, costs and expenses (including, but not limited to, those arising directly
or indirectly out of or related in any manner to the death or injury of any person, injury/damage to property, court costs, litigation expenses or attorneys fees) sustained, asserted or claimed by any party as a result of, arising directly or indirectly from or related in any manner to the management of the Companies or the performance of CEO’s obligations under this Agreement.

	
  
	
b.
	
Governing Law.  THIS AGREEMENT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO, AND THE ENTIRE RELATIONSHIP BETWEEN THE PARTIES RELATING HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING CONFLICTS OF LAWS) OF THE STATE OF NEVADA.  THE PARTIES AGREE THAT THIS AGREEMENT SHALL BE FULLY PERFORMABLE IN CLARK COUNTY, NEVADA.

This Agreement is entered into and is effective as of the date first writen above.

UTEC Inc.

By:  /s/ Ken Liebscher

        Name: Ken Liebscher

        Title:   Secretary & Co-Chairman

By:  /s/ Fortunato Villamagna

        Name: Fortunato Villamagna

        Title:   CEO

 

 

 

  

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