EXHIBIT 4.28
PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
OMISSIONS HAVE BEEN INDICATED BY ("***"), AND EACH PAGE CONTAINING CONFIDENTIAL
INFORMATION IS FOOTNOTED WITH THE PHRASE "FOIA CONFIDENTIAL TREATMENT." THE
OMITTED TEXT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
DATE - NOVEMBER 1, 2002
AGREEMENT BETWEEN *** AND VIM FOR THE EXTRACTION AND SALE OF SILICA
This Agreement dated this 1st day of November, 2002, for a term of five (5)
years, by and between VICTORVILLE INDUSTRIAL MINERALS, INC., (hereafter
designated as "VIM") whose mailing address is X.X. Xxx 000, Xxx Xxxxxx,
Xxxxxxxxxx, 00000 and ***.
WHEREAS, *** owns and/or controls a considerable amount of real property near
Oro Grande, California, upon which *** conducts Portland Cement manufacturing
operations and related activities (the "*** Oro Grande Property")
WHEREAS, certain portions of the *** Oro Grande Property contains certain
deposits of aggregates that *** does not intend to use in its manufacture of
Portland Cement;
WHEREAS, VIM desires to extract and purchase from *** such aggregates, and in
particular, silica material, from certain designated portions of said *** Oro
Grande Property; and
WHEREAS *** desires to permit the extraction and subsequent sale of such
aggregates and silica materials to VIM from said certain portions of the *** Oro
Grande Property;
WITNESSETH, that the parties hereto, in consideration of the mutual promises and
undertakings herein contained, mutually agree as follows:
1.) SCOPE OF SALE AND PURCHASE OF SILICA: VIM agrees to extract and purchase
silica from sections of the *** Oro Grande Property identified on Exhibit
"A" which is attached hereto and incorporated herein by reference (the
"Silica Land"). The parties acknowledge that although the *** Oro Grande
Property encompasses more real property than is designated on Exhibit "A"
as the Silica Land, (i) *** shall have no obligation to provide areas for
extraction other than the those agreed to as the Silica Land at the
execution of this Agreement and designated on Exhibit "A"; and (ii) VIM
shall have no right or obligation to conduct a silica operation and/or the
associated reclamation on any portion of the *** Oro Grande Property other
than the Silica Land designated and/or defined for such activity on Exhibit
"A" (and the designated access to the Silica Land in
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accordance with Section 16 hereof), or pursuant to the agreement in place
between *** and VIM dated October 1, 2001.
2.) RECLAMATION PLAN AND PERMITTING CONSISTENCY
The parties acknowledge that they will work cooperatively to bring
consistency to the reclamation plans and permits, if applicable, for the
work that VIM performs pursuant to this agreement and its agreement dated
October 1, 2001. To further this commitment, VIM and TXI shall continue to
meet with, and work with, the County of San Bernardino to realign the
boundaries for the reclamation plans depicted on the Exhibit "A" map as
follows:
First, VIM shall have the boundaries for the VIM Reclamation Plan for the
October 1, 2001 Agreement, hereinafter referred to as TXI-I, realigned to
have the green (TXI#1-A) and yellow (TXT#1-B) shaded areas marked within
TXI-I expanded to include the blue shaded area correspondently marked
TXI#1-C. The yellow area marked TXI#1-B is currently in both the VIM and
TXI Reclamation Plans and the blue TXI#1-C shaded area is not currently a
part of any reclamation plan. VIM agrees to modify the TXI-I plan with the
County of San Bernardino to include the blue shaded area TXI#1-C.
Second, VIM shall have the boundaries for its newly anticipated reclamation
plan for TXI-II conform to include the area shaded blue on the Exhibit "A"
and shown as TXI#2-A. The green and yellow areas marked TXI#2-B and TM#2-C
respectively shall remain within the purview of ***'s current reclamation
plan (84M-009). VIM will initiate TMI#2 mining in the TXI#2 B and C areas
and depending on the sequencing of VIM's Atlas Project, VIM may or may not
pursue the permitting and mining of TXI#2-A.
All haul roads, (and ingress and egress roads), of every type shall be
preserved pursuant to the agreements the parties have reached in the past,
and which are memorialized by their prior written agreements.
3.) CONDUCT OF OPERATIONS ON *** ORO GRANDE PROPERTY. Notwithstanding anything
herein to the contrary, VIM and *** each acknowledge that, at all times
during which VIM is conducting its silica operations and/or associated
reclamation on the Silica Land pursuant to this Agreement,
(i) *** shall be actively conducting its portland cement manufacturing
operations and related activities on portions of the *** Oro Grande
Property adjacent to and contiguous with the Silica Land; and
(ii) The designated daily access to the Silica Land shall be through a
portion of ***'s manufacturing operations and across roads heavily
used by *** in its manufacturing operations on the *** Oro Grande
Property; and
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(iii) *** has made no representation or warranty as to any conditions on or
pertaining to any portion of the *** Oro Grande Property, the Silica
Land and/or access to the Silica Land, and VIM accepts same "AS IS AND
WITH ALL FAULTS".
This provision shall survive the termination/expiration of this Agreement
for all purposes, including but not limited to determinations of
indemnification pursuant to Section 15(a) hereof.
4.) WARRANTY: VIM hereby affirmatively acknowledges that all silica extracted
and removed from the Silica Land by VIM is extracted and removed in an "AS
IS AND WITH ALL FAULTS" condition for all purchases (the extraction and
removal) of silica by VIM, pursuant to this Agreement, and that all sales
are final, and without (i) any expressed or implied warranties, of any type
or nature, as provided for by the Uniform Commercial Code; and/or (ii) any
expressed or implied warranties as to characteristics, specifications or
quality (environmental or otherwise) of the silica.
5.) QUANTITIES: ***
6.) TERM: This Agreement, commencing on the date of execution of the Agreement,
shall extend through November 1, 2007. *** shall not unreasonably withhold
its consent to extend the term of this Agreement to enable VIM to complete
contractual obligations it has entered into during the term of this
Agreement, and may extend beyond the expiration date. Notwithstanding the
foregoing, this Agreement may be terminated, with or without cause, by
either party upon six (6) months advanced written notice, from one party to
the other.
7.) PRICING: VIM shall pay *** for all silica extracted and removed from the
Silica Land in TXI I areas at a rate of $*** per ton. VIM shall pay ***
for all silica extracted and removed from the TXI II areas which fall
within the *** Reclamation Plan (TXI#2-B and TXI#2-C) at a rate of $*** per
ton and $*** per ton for silica removed from TXI#2 areas which will fall
under the VIM Reclamation Plan (area TX#2-A only) Refer to Exhibit "A" for
a location of the silica lands under this agreement. *** shall invoice VIM
on the basis of tonnage calculations provided in Section 8 below. Full
payment shall be made to *** at ***'s Oro Grande office within thirty (30)
days of VIM'S receipt of each monthly invoice.
8.) TONNAGE CALCULATIONS: Payment for tonnage of silica removed from the Silica
Land will be determined through the use of the applicable rate, provided
above, times the number of loads removed from the Silica Land by VIM, and
verified, as necessary, by *** as follows. Standard weight measurements
shall be derived in the following manner: An outside neutral contractor to
VIM and *** shall be hired to haul three loads; the loads to be loaded by
VIM. These loads will then be driven across VIM's certified scale, as well
as ***'s/TXI's certified scale. The net average of the three loads shall
determine the billing rate. This procedure will be repeated every six
months. The weight for each load
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established by this process shall be the weight per load for all xxxxxxxx
between the parties for the following six-month period of time.
VIM shall deliver to *** each month a written statement, setting forth by
weight the quantity of silica removed from the Silica Land. VIM shall keep
complete records of all silica removed from the Silica Land herein. VIM
further agrees that such records shall be subject to ***'s inspection, upon
twenty four (24) hours notice to VIM that *** requests such an inspection,
and upon a notice from *** to VIM indicating that such an inspection shall
occur only during VIM's reasonable and customary business hours of
operation. *** acknowledges and agrees that only those VIM business records
concerning this Agreement for the extraction of silica are open for ***'s
inspection. *** further acknowledges and agrees that any such inspection
shall not constitute a waiver by VIM of any applicable privileges that may
attach to such records, shall not constitute a waiver of the
confidentiality afforded to such records, if any, and shall not constitute
the waiver of the proprietary nature of such records, if any.
9.) INDEPENDENT CONTRACTOR: VIM is and shall remain an independent contractor
in the performance of the work, maintaining complete control of VIM's
workmen and operations. Neither VIM nor anyone employed or engaged by VIM
shall become an agent, representative, servant, or employee of *** in the
performance of the work or any part thereof.
10.) PERMITS/COMPLIANCE WITH LAWS: VIM shall be fully responsible for obtaining
all necessary environmental permits for its operations on the lands
identified in this agreement. VIM is also fully responsible for the
compliance of its operations with all applicable permits, rules,
regulations, and/or laws.
VIM, through execution of this agreement, agrees all work performed on the
*** Oro Grande Property will comply with the requirements applicable to the
approved *** Reclamation Plan (84M-009) dated February 23, 1984 on the ***
Oro Grande Property attached hereto, and incorporated herein by this
reference, as Exhibit "B" (hereinafter the "Exhibit "B" and/or "VIM'S
Obligation under the TXI Reclamation Plan") for purposes of the work to be
performed in areas which fall within the *** Reclamation Plan. VIM will
comply with applicable requirements of the VIM Reclamation Plan (97M-O1) in
areas which fall within this reclamation plan as defined in Exhibit "A".
*** will make available all necessary documentation to inform VIM of said
conditions of the *** Reclamation Plan (84M-009).
11.) CLEANUP: Unless otherwise agreed in writing by the parties at the time of
termination/expiration of this Agreement, within six (6) months after the
expiration/termination of this Agreement, VIM shall remove all equipment
and unused non-native materials provided for its work, and agrees to place
the Silica Land as described and/or depicted within Exhibit "A".
Furthermore, *** shall provide a location on its property for the placement
of mining waste materials according to the Exhibit "A".
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12.) DRUG-FREE WORK PLACE: VIM represents it maintains a drug free workplace
policy. As a result of this existing policy, VIM agrees to advise its
employees and the employees of its subcontractors and agents (hereinafter
for the purposes of this provision collectively referred to as "VIM
employees"), that: (i) it is the policy of *** that the use, possession,
sale, transfer, or purchase of illegal drugs on the *** Oro Grande
Property, is prohibited; (ii) entry onto the *** Oro Grande Property
constitutes the presence of an employee's vehicle on the *** Oro Grande
Property and/or any personal effects of an employee which the employee
brings with him or her while entering, on or leaving the *** Oro Grande
Property; and (iii) any employee who is found in violation of the policy or
who refuses to permit an inspection by an authorized representative of ***
may be removed and barred from the *** Oro Grande Property, at the
discretion of ***.
13.) SAFETY: While on the *** Oro Grande Property, VIM shall observe, and shall
cause its subcontractors and agents to observe, such safety rules as ***
shall prescribe as necessary for the protection of ***'s personnel and
property. ***'s Safety Book is attached hereto and is incorporated herein
as Exhibit "C." VIM acknowledges its receipt of this Safety Book. VIM
further affirms its own commitment to comply with its own safety procedures
and policies, as applicable to the work it shall be performing pursuant to
this Agreement. In addition, both parties affirm their commitment to comply
with all applicable MSHA and CAL/OSHA regulations applicable to each during
the term of this Agreement.
14.) INSURANCE: VIM acknowledges that it has and shall maintain, at its own
expense, for the duration of this Agreement (and shall require all of its
subcontractors to obtain, carry and maintain for the duration of this
Agreement), the following insurance coverage with following minimum limits:
(a) Workers Compensation as required by laws and regulations applicable to
and covering employees of VIM (or the subcontractor) engaged in the
performance of the work under this Agreement with the applicable
statutory limits, as well as employer's liability insurance with
minimum limits of $1,000,000.
(b) A General Liability Insurance Policy covering its operations for legal
liability it causes with minimum limits of $5,000,000.
(c) Automobile Liability of all owned and non-owned/hired vehicles with
minimum limits of $1,000,000.
All insurance coverage shall be obtained from one or more insurance
companies which have an A.M. Best rating of A- or better (or an equivalent
rating on an equivalent rating system).
All insurance policies shall contain a waiver of subrogation; and each
certificate shall name *** as an additional insured.
VIM agrees to notify *** in writing, at least thirty (30) days in advance
of any significant modification, expiration or cancellation of any such
insurance policies covering VIM'S
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actions and obligations under this Agreement, including but not limited to
modifications, expiration or cancellation of insurance coverage meeting the
minimum requirements set forth in this Section 14.
VIM acknowledges that on or before the execution of this Agreement, VIM
presented *** with a copy of a Certificate of Currency dated April 17, 2001
evidencing VIM'S then-current insurance coverage. Upon execution of this
Agreement, VIM shall furnish to *** the equivalent of a certificate of
insurance describing that the above insurances are in full force and
effect.
Notwithstanding anything herein to the contrary, VIM acknowledges that any
insurance coverage held by VIM shall not relieve or limit VIM's obligations
and/or liability pursuant to this Agreement, including but not limited to
the indemnification set forth in Section 15 hereof.
15.) INDEMNIFICATION AND DISPUTE RESOLUTION:
(a) Indemnification: ***.
(b) Dispute Resolution: Any dispute between the Parties arising out of or
relating to this Agreement (including, without limitation, its
creation, interpretation, enforcement or breach) or any document or
instrument referred to herein (a "Dispute") shall be resolved as
follows:
Settlement Negotiations: The Parties in good faith shall attempt to
settle any Disputes within thirty (30) days of receipt by one party
from the other of a notice to this effect. If such negotiations fail
to resolve the Dispute, the Parties shall proceed as set forth below.
Arbitration: Any Dispute which is not resolved through the settlement
negotiations provided for above shall be resolved by binding
arbitration before a qualified, experienced, unbiased, and neutral
arbitrator selected by the Parties. The arbitration shall be conducted
in the State of California and governed by the rules set forth in
California's Code of Civil Procedure sections 1281 et seq., (or
similarly enacted statutory guidelines for the handling of private
contractually-based arbitration proceedings). The Arbitrator shall
abide by California law in rendering his decision and shall determine
which Party is entitled to recover under this Agreement, and shall
provide for any other appropriate legal or equitable relief.
Jurisdiction, Venue and Choice of Law: Solely for purposes of this
Agreement, the Parties consent to jurisdiction in San Bernardino
County, California. Any disputes between the parties hereunder shall
be resolved, by and under the laws of the State of California without
regard to its choice of law provisions.
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16.) ACCESS: *** shall provide VIM access to the current extraction site through
the *** Oro Grande Property by means of a designated route or area. VIM
agrees that *** may reasonably limited its access to the area denoted on
Exhibit "A" and Exhibit "B" when necessary to 's ongoing operations, and/or
any modifications to its facilities or planned construction currently
anticipated to take place during the term of this agreement, , but may not
do so for more than any two day period of time. VIM further agrees it shall
provide *** with timely written notice of any changes VIM requests for a
different or modified access route, and that it shall not proceed to use a
different or modified access route without ***'s prior acknowledgement and
consent to the same, which consent by *** shall not be unreasonably
withheld. VIM shall provide *** with two days notice of any such proposed
change.
17.) FUGITIVE DUST CONTROL: VIM understands *** is required to mitigate fugitive
dust associated with any operations on the *** Oro Grande property. VIM
agrees to control fugitive dust emissions associated with its extraction,
processing, management and transportation of silica materials while on the
*** Oro Grande property, and , in particular, within the Silica Land.
18.) NOTICE: All notices given under this Agreement shall (unless otherwise
expressly provided herein) be in writing and signed by the party giving
such notice. it shall be deemed given when personally delivered, or five
(5) business days thereafter when deposited in the U.S. Mail, with proper
postage prepaid and addressed to the other party at its respective
following address, or at such other address as either party may hereafter
furnish by a notice given pursuant thereto:
If to ***: ***
Attn: ***
If to VIM: Victorville Industrial Minerals, Inc.
X.X. Xxx 000
Xxx Xxxxxx, XX. 00000
Attn: Xxxxxxxxxx Xxxxx, Mine Supervisor
19.) NO ASSIGNMENT: This Agreement, nor any obligation or right thereunder,
may not be assigned by VIM without ***'s express written consent, which
consent by *** shall not be unreasonably withheld.
20.) NO PARTNERSHIP, JOINT VENTURE OR PRINCIPAL-AGENT RELATIONSHIP: Nothing
contained in this Agreement, nor any acts of the parties, shall be
deemed by the parties to create the relationship of principal and
agent, or of employer and employee, or of partnership, or of joint
venture, or of any other association between the parties, and no
provisions in this Agreement are intended to create or constitute any
person a third party beneficiary hereof.
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21.) ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between
the parties on the subject matter contained herein and supersedes any prior
written or oral agreements or statements.
22.) MODIFICATIONS AND WAIVERS: All modifications to this Agreement must be in
writing and signed by the parties hereto. No provision of this Agreement
can be waived, except in writing, signed by the party waiving such
provision, nor shall failure to object to any breach of a provision of this
Agreement waive the right to object to a subsequent breach of the same or
any other provision.
23.) SEVERABILITY: If any provision of this Agreement shall, for any reason, be
held violative of any applicable law, and so much of said Agreement is held
to be unenforceable, then the invalidity of such a specific provision
herein shall not be held to invalidate any other provisions herein, and all
other provisions herein shall remain in full force and effect. Furthermore,
in lieu of such illegal, invalid, or unenforceable provision, there shall
be added automatically as a part of this Agreement a provision as similar
in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
24.) GOVERNING LAW AND COMPLIANCE WITH THE LAW: This Agreement shall be
interpreted under and enforced in accordance with, and subject to, the laws
of the State of California. Further, the parties agree that they shall
comply with all federal, state and municipal statutes, ordinances and
regulations that may apply to their respective operations, duties and
responsibilities under the terms of this Agreement, and for the duration of
this Agreement.
25.) NO CONSTRUCTION AGAINST THE AUTHOR: Each party warrants and represents that
it has participated fully in the negotiation, preparation and drafting of
this Agreement, and that the language used in this Agreement is a product
of that participation. The rule that an ambiguity in language is to be
construed against the author accordingly shall have no effect as to this
Agreement.
26.) HEADINGS: The captions to the several paragraphs hereof are not a part of
this Agreement and shall have no legal significance, but are merely guides
or labels to assist in locating and reading the paragraphs contained
herein.
27.) FURTHER ASSURANCES: Each party agrees to do any thing and sign any
documents, which are necessary and desirable to accomplish any of the
goals, terms or conditions of this Agreement.
28.) COUNTERPARTS: This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but of which together shall
constitute one and the same instrument
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29.)
IN WITNESS WHEREOF, *** and VIM have executed this Agreement on the day and
year first written above.
***
By. ***
------------------------------------
Name: ***
Title: ***
VICTORVILLE INDUSTRIAL MATERIALS INC.
By: /s/ Xxxxxxx Xxxxxxx 11/19/02
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Plant Manager, JHBP Fontana
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XXXXXXX "X" XXXXXX XXXXX
***
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Additional Notes:
The proposed TM #0 Xxxxx Xxxx, Xxxx Xxxx and possible use of the Comet Pit for
waste disposal to be included in ***'s reclamation plan. If this is not possible
per County of San Bernardino, then VIM to haul waste to TMI#1 Waste Dump.
VIM to initiate mining in the TXI#2-B and C areas for TXI#2 under TXI
Reclamation Plan. Depending on the sequencing of VIM's Atlas Project, VIM may or
may not permit and mine TXI#2-A.
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