Precision Systems Engineering
1954 East 7000 South
Salt Lake City, UT 84121
(801) 943-5555
Fax: (801) 943-5848
June 14, 1999
Dennis Engh, President
Utah Clay Technology Inc.
3985 South 2000 East
Salt Lake City, UT 84124
Subject: Engineering and Design of the Kaolin Facility
PSE Project No. 1998327
Dear Dennis:
I am writing you this letter to document the commitment being made by Precision
Systems Engineering (PSE) to support the efforts of UCT. As you are probably
aware, we have been working with Tony Lotito to help him come up with an
estimate for an installed cost for the Kaolin facility. This has taken minimal
effort but we are now about to commit some major effort to prepare for a visit
by UCT's process engineer, Mr. Tom Dombrowski.
To support UCT's financial requirements and meet the schedules, we see the
following efforts by PSE over the next 2 weeks:
1. Arrange for a quality-mining engineer to verify that the reserves are
existing. The cost is approximately $7,000 for this item, including his
airfare and living expenses.
2. Prepare preliminary PFD's and cost estimates for Tom to review and comment
on while he is here next week. We will prepare different scenarios to
review. This will cost approximately $5,200. The goal is to finalize a
workable PFD prior to Tom's departure Wednesday afternoon.
3. Coordinate with Hicom to see if their crusher will work in this
application. It is their plan to be here next week to work with Tom and
PSE. We will work with Hicom this week in preparation for next week. This
will cost approximately $1,300.
Exhibit 10.6
Page 1 of 4 Pages
<PAGE>
Engineering and Design of the Kaolin Facility
PSE Project No. 1998327
June 14, 1999
Page 2
Dennis, we are more then willing to commit to supporting UCT. We feel it makes
good business sense to let you know that these efforts, along with the efforts
we have expended prior to today, need to be recognized.
Now that we are bringing in an outside resource that will obligate PSE further,
we must have your written approval before proceeding further. Please acknowledge
the obligation that UCT has to PSE by signing below and faxing the executed
document back to PSE. The original will follow under separate cover.
It is a pleasure working with you and your associates at UCT.
Sincerely yours,
/s/ Merrill D. Shumway
Merrill D. Shumway
President
cc: Mike Vuich,
Ron Ostler
Mike McMullin
I acknowledge the efforts and cost by PSE for Utah Clay Technologies. Utah Clay
Technologies will commit to pay for these costs as the funds are raised. Whether
the funds are raised or not, I acknowledge this is an obligation by Utah Clay
Technologies to Precision Systems Engineering.
Signed: /s/ Dennis Engh, President Date: 6-18-99
---------------------------------- -------------
Dennis Engh
President
Exhibit 10.6
Page 2 of 4 Pages
<PAGE>
Utah Clay Technology, Inc.
3985 South 2000 East
Salt Lake City, UT
(801) 424-0223
Fax: (801) 272-7627
November 16, 1999
Mr. Merrill D. Shumway
President
Precision Systems Engineering
1954 East 7000 South
Suite 200
Salt Lake City, Utah 84121
Subject: Kaolin Processing Facility
Dear Mr. Shumway,
This letter will confirm the intent of Utah Clay Technologies, Inc., to enter
into a formal contact with Precision Systems Engineering to provide all
engineering, procurement and construction services required to obtain an
operating Kaolin Clay Processing Facility to be located in a yet undetermined
location within the State of Utah. The scope of work, contract completion dates,
contract type, and contract value will be determined at the time of contract
negotiation and execution. It is our intention to execute the contract within 60
days of this letter.
Precision Systems Engineering is authorized to proceed with the project under a
limited scope to provide services necessary to complete process design, retain
the outside consulting services of Mineral Resource Development Inc (MRDI) to
verify the mineral reserves and complete a feasibility study for presentation to
the finance community, to provide management and administration services in
support of the MRDI effort, retain outside consultants for support in state and
federal environmental and mining permitting, provide management and
administration services for support of the environmental and permitting efforts
and to determine the capital cost of the facility.
In the event that Utah Clay Technology, Inc. does not acquire the necessary
funding to execute a contract with Precision Systems Engineering, within the
above stated period, Utah Clay Technology Inc agrees to compensate Precision
Systems Engineering for services provided to the expiration date of the
execution period at the billing rate of personnel involved and all costs plus
fifteen percent (15%) for all items and outside services procured in connection
with performing services on the good faith promise of a contract execution.
Exhibit 10.6
Page 3 of 4 Pages
<PAGE>
UCT agrees to offer up to 400,000 shares of common stock to PSE at the rate of
$0.25 per share as partial payment of its existing debt to PSE. Should funding
not be acquired UCT agrees to offer additional stock as payment of debt.
We are looking forward to working with your firm on this very important project
and that together as a team; we can complete this project on schedule and within
budget.
Sincerely,
/s/ Dennis Engh
Dennis Engh
President
Exhibit 10.6
Page 4 of 4 Pages
