July 7, 1997
Alabama Synfuel #1, Ltd.
c/o Covol Technologies, Inc.
0000 Xxxxx Xxxxxxxx Xxxx
Xxxx, Xxxx 00000
Covol Technologies, Inc.
0000 Xxxxx Xxxxxxxx Xxxx
Xxxx, Xxxx 00000
RE: Letter Amendment
Gentlemen:
Reference is made to the Alabama Project Purchase Agreement, dated as
of March 20, 1997 (the "Project Purchase Agreement'), by and among Alabama
Synfuel #1, Ltd. and Covol Technologies, Inc. as sellers, and Birmingham Syn
Fuel, LLC, as buyer. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Project Purchase Agreement.
1. Project Purchase Agreement. The parties to the Project Purchase
Agreement hereby amend the Project Purchase Agreement by:
a. deleting the language "; provided, further, Buyer shall not assume any
liability or obligation incurred by Covol under the Operation and
Maintenance Agreement" in Section 3.3 thereof;
b. deleting Sections 5.3(f) and 8.2(c) and Exhibit D in their entirety;
c. deleting the fourth paragraph of Exhibit A-1 thereto in its entirety
and deleting the number "*" in the third paragraph of Exhibit A-1 and
inserting the number "*" in place thereof;
d. deleting the language ", and all obligations of the Debtor to repay all
principal and accrued and unpaid interest not repaid prior to January
1, 2008 on amounts advanced as 'Deficit Loans' as described in Section
5.10 of the Operation and Maintenance Agreement" in Section 2 of
Exhibit A-2 thereto;
e. deleting the language ", except for transfers by Covol pursuant to and
in accordance with its duties under the Operation and Maintenance
Agreement" in Section 4(a)(1) of Exhibit A-2 thereto;
* Confidential material has been omitted from this Exhibit and filed separately
with the Commission.
f. deleting the last sentence of Section 4(f) of Exhibit A-2 thereto in
its entirety;
g. deleting Section 4(g) of Exhibit A-2 thereto in its entirety;
h. deleting the language "(a) the failure of the Secured Party (or any
affiliate thereof) to perform its obligations with respect to the
application of funds under the Operation and Maintenance Agreement, or
(b)" in Sections 9(a) and (b) Exhibit A-2 thereto;
i. deleting the language "If Assignee is not the "Operator" under the
Operation and Maintenance Agreement," in the first sentence and the
entirety of the last sentence, respectively, of Section 5 of Exhibit
A-3 thereto;
j. deleting the definition "Operation and Maintenance Agreement" in
Section 1 of Exhibit E thereto;
k. deleting the numbers "*" and "*" in Section 3.2 of Exhibit E thereto
and inserting in their place the numbers "*" and "*," respectively;
l. deleting the language "; provided, however, that the amount of all
payments of Royalties due and payable but for the application of this
paragraph shall accrue and bear interest at a rate per annum equal to
the rate of interest publicly announced by Xxxxxx Guaranty Trust
Company of New York in New York City from time to time as its "prime
rate" and be payable from net operating cash flow of Licensee;
provided, further, that all Royalties and interest accrued with respect
thereto shall be due and payable on January 1, 2008, or the
corresponding date under Section 29 of the 1986 Code in the event of an
extension of tax credits available under Section 29 of the 1986 Code"
in the second paragraph of Section 3.2 of Exhibit E thereto;
m. deleting the language "; provided, however, that the price which
Licensee shall pay for the proprietary binder material for any calendar
year during the term of this Agreement shall not increase above the
price paid for the proprietary binder material during the immediately
preceding year if the imposition of the price increase would require a
"Deficit Loan" under the Operation and Maintenance Agreement" in
Section 4.1.2 of Exhibit 2 thereto;
n. deleting the language "; provided, however, that out-of-pocket
operating costs incurred in connection with the production of
proprietary binder material by Licensee shall be included in the
calculation of "Costs" under the Operation and Maintenance Agreement"
in the last sentence of Section 4.2 of Exhibit E thereto;
o. deleting the last sentence of Section 8 of Exhibit E thereto;
p. amending and restating Section 9 of Exhibit E thereto in its entirety
to read as follows:
* Confidential material omitted Exhibit and filed separately with the
Commission.
2
Payments hereunder shall be subordinate in right of
payment to amounts due under the Promissory Note. In addition
to any rights of the Licensee under the Transaction Documents
and applicable law, any amounts owing to Licensee from either
Licensor or Vendor under any of the Transaction Documents may
be offset and applied toward the payment of any amounts, or
any part thereof, owing to the Licensor or Vendor, whether or
not such amounts shall be due and payable.
q. deleting the language "January 1, 2008" in Section 1(b) of Exhibit G
thereto, and inserting in its place "January 1, 2010."
2. Capital Contributions. Upon consummation of the transaction contemplated by
the Project Purchase Agreement, each of Birmingham Syn Fuel I, Inc. and
Birmingham Syn Fuel II, Inc. hereby agrees to make capital contributions to
Birmingham Syn Fuel LLC in an amount sufficient to pay amounts due and payable
under (i) the Non-Negotiable Promissory Note attached as Exhibit A-1 thereto,
and (ii) Section 3.2 of the License and Binder Purchase Agreement attached as
Exhibit E thereto.
This letter agreement may be executed in one or more counterparts, all
of which shall be considered one and the same letter agreement.
Very truly yours,
BIRMINGHAM SYN FUEL I, INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
BIRMINGHAM SYN FUEL II, INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
BIRMINGHAM SYN FUEL, LLC
By: /s/ Xxxxxxx Xxxxxx
----------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
3
PACIFICORP FINANCIAL SERVICES, INC.
By: /s/ Xxxxxxx Xxxxxx
----------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
ACCEPTED AND AGREED TO
AS OF THE DATE FIRST SET
FORTH ABOVE:
Alabama Synfuel #1, Ltd.
By:/s/ Xxxxx X. Xxxx
-------------------
Name: Xxxxx X. Xxxx
Title: President
Covol Technologies, Inc.
By:/s/ Xxxxx X. Xxxx
---------------------
Name: Xxxxx X. Xxxx
Title: President
4
