SECOND AMENDMENT TO AGREEMENT
This Second Amendment to Second Amended and Restated Agreement
("Amendment") is entered into as of February 10, 2004, in Santa Ana, California
by and between Valley Springs Mineral, LLC, a Nevada limited liability company
("Valley Springs") and VitroCo Incorporated, a Nevada corporation ("VitroCo"),
assignee from Hi-Tech Environmental Products, LLC, a Nevada limited liability
company ("Hi-Tech") and amends that certain Agreement dated as of April 5, 2002,
as amended by a First Amendment dated February 2, 2004 ("Agreement").
Capitalized terms which are not defined herein are used as they are defined in
the Agreement. In the case of any conflict between this Amendment and the
Agreement, the terms of the Amendment shall control.
1. For the calendar year 0000, Xxxxxx Xxxxxxx hereby waives the obligation
of VitroCo to purchase Mineral in amounts at least equal to the Minimum
Requirements, as provided in paragraph 3 of the First Amendment (i.e., the
purchase by VitroCo of Mineral in amounts at least equal to the Minimum
Requirements due February 29, 2004, June 30, 2004, September 30, 2004 and
December 15, 2004). The foregoing waiver shall not affect VitroCo's obligations
to pay for any Mineral actually purchased by VitroCo, as provided in the
Agreement. The obligation of VitroCo to Mineral in amounts at least equal to the
Minimum Requirements for periods after calendar year 2004 remains in full force
and effect. Any Mineral actually purchased by Hi-Tech from Valley Springs prior
to February 3, 2004 shall not apply to the purchase by VitroCo of Minerals in
amounts at least equal to the Minimum Requirements due December 1, 2005.
2. Except as provided herein, the Agreement remains unmodified and in full
force and effect.
In witness whereof, this Amendment was executed as of the date first
written above.
VALLEY SPRINGS: VITROCO:
VALLEY SPRINGS MINERAL, LLC, VITROCO INCORPORATED,
a Nevada limited liability company a Nevada corporation
By: Xxxx Xxx Xxxxx By: Xxxx Xxx Xxxxx
Its: Chairman/Manager Its: CEO and President
By: Xxxxxxx Xxxxxxxx
Its: Secretary
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FIRST AMENDMENT TO AGREEMENT
This First Amendment to Agreement ("Amendment") is entered into as of
February 3, 2004, in Santa Ana, California by and between Valley Springs
Mineral, a California limited liability company ("VALLEY SPRINGS") and Hi-Tech
Environmental Products, LLC, a Nevada limited liability company ("Hi-Tech") and
amends that certain Agreement dated as of April 5, 2002 ("Agreement").
Capitalized terms which are not defined herein are used as they are defined in
the Agreement. In the case of any conflict between this Amendment and the
Agreement, the terms of the Amendment shall control.
1. A new paragraph 12 is hereby added to the Agreement to read as follows:
"Right to Assign. VALLEY SPRINGS shall have the right to assign all
of its rights and obligations under this Agreement without the approval of
Hi-Tech. Hi-Tech shall have the right to assign its rights and obligations under
this Agreement to any Affiliate without the approval of VALLEY SPRINGS. Any
assignment which is not to an Affiliate shall be subject to the approval of
VALLEY SPRINGS, which may be withheld in VALLEY SPRINGS' reasonable discretion.
For purposes of this Agreement, The term "Affiliate" shall mean: any person or
entity which, directly or indirectly, through one or more intermediaries,
controls the contracting party or is controlled by the contracting party or is
under common control with persons who control the contracting party. The term
control, as used herein, means the possession, direct or indirect, of the power
to (i) vote 51% or more of the outstanding voting securities of such person or
entity; or (ii) otherwise direct management policies of such person by contract
or otherwise. No such assignment shall relieve the assigning party of any
liability under this Agreement. Any assignee of Hi-Tech's obligations, whether
an Affiliate or otherwise, shall execute such document reasonably required by
VALLEY SPRINGS to confirm that the assignee is assuming all of Hi-Tech's
obligations under the Agreement."
2. A new paragraph 13 is hereby added to the Agreement to read as follows:
"Non-Competition. Hi-Tech hereby agrees that until such time as
seventy five percent (75%) of the Mineral located on the Property is purchased
by Hi-Tech from VALLEY SPRINGS, and VALLEY SPRINGS receives payment therefore,
neither Hi-Tech nor any Affiliate will sell or otherwise distribute any other
product into the plastics or paint/coatings industries which is the same or
similar to the Mineral. For purposes of this paragraph 14, "same or similar"
includes both natural and man-made products which are an amorphous
aluminosilicate, or which act in a same or similar fashion to the Mineral (for
example, acts in accordance with the information contained in any patent
application now existing or filed in the future, whether or not such patent is
ever granted), or which Hi-Tech or an Affiliate sells or distributes to
distributors or customers in lieu of the Mineral. Hi-Tech has pre-existing
agreements with Enviro Investment Group, LLC ("EIG") and Red Rock Canyon
Mineral, LLC to mine and market for sale mineral which is substantially the same
as the Mineral owned by VALLEY SPRINGS. Hi-Tech may also enter into similar
agreements with other entities for additional mineral properties, provided that
the owner(s) of those properties consist of substantially the same individuals
who are the members of EIG, Red Rock and/or Valley Springs Mineral, LLC. The
foregoing are collective referred to as "Affiliated Mineral Entities". Mining
and marketing for sale of Mineral from any Affiliated Mineral Entity shall not
be deemed to be a breach of this paragraph 2.
If Hi-Tech locates properties with additional Mineral which is not
owned by Affiliated Mineral Entities (including properties which Hi-Tech may
purchase directly), then Hi-Tech shall have the right to mine from those
properties only sufficient Mineral to keep mining permits in full force and
effect, without being deemed to be in violation of this paragraph 13.
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This paragraph 3 is hereby deemed to amend paragraph 6 of the
Agreement."
3. A new paragraph 14 is hereby added to the Agreement to read as follows:
"Minimum Requirements - On or before the specific dates set forth
below, Hi-Tech shall purchase from VALLEY SPRINGS at least the following minimum
quantities of Mineral. For purposes of the Minimum Requirements, "purchase"
shall mean payment actually received by VALLEY SPRINGS on or before the
below-mentioned dates, irrespective of any other provision in the Agreement
which provides that Hi-Tech is only obligated to pay VALLEY SPRINGS upon sale by
Hi-Tech of the Mineral and receipt of the purchase price from its customer. If
Hi-Tech fails to do so, then Hi-Tech shall be in default under this Agreement,
as provided below. Any purchases in excess of the applicable minimums made
between respective purchase dates shall be applicable to the next purchase date.
Purchase Date Amount in Pounds
------------- ----------------
February 29, 2004 500,000
June 30, 2004 250,000
September 30, 2004 500,000
December 15, 2004 750,000
December 1, 2005 7,500,000
December 1, 2006 10,000,000
December 1, 2007 12,500,000
December 1, 2008 15,000,000
Each December 1 thereafter ten percent
(10%) in excess
of the prior
year's Minimum
Requirement
Any Mineral actually purchased by Hi-Tech from VALLEY SPRINGS prior
to January 1, 2004 shall not apply to the Minimum Requirements due February 29,
2004.
Any Mineral purchased from any Affiliated Mineral Entity shall be
credited against the Minimum Requirement hereunder."
4. Paragraph 10 of the Agreement entitled "Termination" is hereby amended
in its entirety to read as follows:
"Default. Hi-Tech shall be in default under this Agreement ("Event
of Default") if any of the following shall occur:
a. The failure by Hi-Tech to perform any monetary obligation under
this Agreement, which failure is not cured within fifteen (15) business days
after receipt of written notice from VALLEY SPRINGS;
b. The failure by Hi-Tech to perform any non-monetary obligation
under this Agreement, which failure is not cured within ten (10) business day
after receipt of written notice from VALLEY SPRINGS, except that if such
non-monetary failure cannot be reasonably cured within such ten (10) business
day period, Hi-Tech shall not be in default hereunder if it commences to cure
such failure within the ten (10) business day period, and thereafter completes
such cure with all due diligence;
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c. i) The making by Hi-Tech of any general arrangement or assignment
for the benefit of creditors; (ii) Hi-Tech becomes a "debtor" as defined in 11
U.S.C. 101 or any successor statute thereto (unless, in the case of petition
filed against Hi-Tech, the same is dismissed within sixty (60) days); (iii) the
appointment of a trustee or receiver to take possession of substantially all of
Hi-Tech's assets, where possession is not restored to Hi-Tech within sixty (60)
days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Hi-Tech's assets, where such seizure is not discharged
within sixty (60) days;
d. A breach of the provisions of paragraph 2 above, which shall not
be subject to cure by Hi-Tech;
e. The failure by Hi-Tech to timely purchase the Minimum
Requirements provided for in paragraph 3 above, which shall not be subject to
cure by Hi-Tech;
f. A default by Hi-Tech under any of the Agreements with the
Affiliated Mining Companies; or
g. A default by VitroCo Materials, LLC under that certain Royalty
Agreement with Hi-Tech being executed concurrently herewith.
Upon an Event of Default, VALLEY SPRINGS shall have all rights and
remedies available to it at law or in equity, including but not limited to the
immediate right to terminate this Agreement. Any sum which is not paid when due
shall bear interest at the maximum rate permitted by applicable law. No previous
waiver and no failure or delay by VALLEY SPRINGS in acting with respect to the
terms of this Agreement, shall constitute a waiver of any breach, default, or
failure of condition under this Agreement. Upon such termination of this
Agreement, Hi-Tech shall no longer have the right to mine any Mineral from the
Property, nor market for sale any Mineral previously mined from the Property and
not yet sold to a distributor or customer.
Upon an Event of Default and election by VALLEY SPRINGS to terminate
this Agreement, or any other termination of this Agreement, voluntary or
involuntary, VALLEY SPRINGS shall have the right, but not the obligation, to
contract with any employee or independent contractor of Hi-Tech, notwithstanding
any provision in any employment agreement or independent contractor agreement
which would otherwise limit such employee's or independent contractor's right to
contract with a competitor of Hi-Tech's. Hi-Tech hereby agrees to automatically
waive, without any additional documentation, any non-competition or similar
provision in any employment agreement or independent contractor agreement.
For determining the obligations attendant to a decision by
Hi-Tech, or its successors or assigns, to assume this contract pursuant to 11
U.S.C. Section 365, each and every provision contained in this document shall be
deemed non-severable, and this document, together with each of the following
documents, shall be deemed integral and non-severable and parts of a single
executory contract: (i) the Agreement between Red Rock Canyon Mineral, LLC and
Hi-Tech, (ii) the Agreement between Enviro Investment Group, LLC and Hi-Tech,
and (iii) the Royalty Agreement between Hi-Tech and VitroCo Materials, LLC."
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5. License of Mineral Technology. Concurrently herewith, Hi-Tech hereby
grants a present license to VALLEY SPRINGS, on a non-terminable, world-wide,
non-exclusive basis, royalty free and paid up, in perpetuity,, all technology,
know how and information which relates to the use of the Mineral, whether
created before or after the date of this Amendment ("Mineral Technology"). The
form of the license agreement is attached hereto as Exhibit A.
6. A new paragraph 16 is hereby added to the Agreement to read as follows:
"Indemnity. Hi-Tech represents and warrants that it is fully
familiar with the Mineral, that it has, and will continue, to perform research
and development relating to the Mineral and its application in various
industries. VALLEY SPRINGS has none of the foregoing expertise. Hi-Tech
indemnifies, defends, protects and holds harmless VALLEY SPRINGS, its manager,
members, successors and assigns, from any and all liabilities, losses, claims,
demands and expenses (including attorneys' fees, court costs and litigation
expenses) arising from Hi-Tech's obligations under this Agreement, the Mineral
generally, the mining, milling and sale of the Mineral, and claims from third
parties, including but not limited to distributors, purchasers or end users of
products containing Mineral (collectively, "Claims"), whether or not such
Claims, or any action or inaction which gave rise to a Claim, occurred before or
after this Agreement."
7. A new paragraph 16 is hereby added to the Agreement to read as follows:
"As is and Where is. HI-TECH ACKNOWLEDGES AND AGREES THAT THE
TRANSACTION CONTEMPLATED HEREBY SHALL BE AS IS, WHERE IS WITHOUT ANY WARRANTY OR
REPRESENTATION OF TITLE, EITHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND
WITHOUT ANY EXPRESS, IMPLIED, STATUTORY OR OTHER WARRANTY OR REPRESENTATION AS
TO THE CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, FREEDOM
FROM REDHIBITORY VICES OR DEFECTS, AND THAT ANY AND ALL INFORMATION THAT HI-TECH
HAS RECEIVED OR MAY RECEIVE FROM VALLEY SPRINGS OR ITS MANAGERS, MEMBERS,
OFFICERS, EMPLOYEES, CONSULTANTS OR AGENTS ("VALLEY SPRINGS' AGENTS") IS AND
SHALL BE FURNISHED TO HI-TECH WITHOUT WARRANTY OR REPRESENTATION BY VALLEY
SPRINGS OF ANY KIND, AND FURTHER THAT SUCH INFORMATION HAS AND WILL BE ACCEPTED
BY HI-TECH ON THE EXPRESS CONDITION THAT HI-TECH SHALL MAKE ITS OWN INDEPENDENT
VERIFICATION OF THE ACCURACY AND COMPLETENESS THEREOF. NEITHER HI-TECH NOR ITS
SUCCESSORS OR ASSIGNS SHALL ASSERT OR SEEK TO IMPOSE ANY CLAIM, LIABILITY, OR
OBLIGATION ON VALLEY SPRINGS ARISING OUT OF ANY INACCURACY OR INCOMPLETENESS OF
ANY INFORMATION FURNISHED TO HI-TECH BY VALLEY SPRINGS OR VALLEY SPRINGS'
AGENTS, AND HI-TECH, ITS SUCCESSORS AND ASSIGNS DO HEREBY RELINQUISH AND WAIVE
ALL SUCH CLAIMS, LIABILITIES AND OBLIGATIONS. NO PERSON ACTING ON BEHALF OF
VALLEY SPRINGS IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF HI-TECH
ACKNOWLEDGES THAT NO SUCH PERSON HAS MADE, TO HI-TECH ANY REPRESENTATION,
WARRANTY, GUARANTEE OR PROMISE, WHETHER ORAL OR WRITTEN, REGARDING THE
AGREEMENTS OR ANY MATTERS RELATING TO THE AGREEMENTS OR TO THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, AND ANY
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SUCH REPRESENTATION, WARRANTY, GUARANTEE OR PROMISE HERETOFORE OR HEREAFTER MADE
BY ANY PERSON WHICH IS NOT CONTAINED HEREIN SHALL NOT BE VALID OR BINDING UPON
VALLEY SPRINGS. HI-TECH ACKNOWLEDGES THAT VALLEY SPRINGS HAS EXPRESSLY
DISCLAIMED AND MADE NO WARRANTIES AS TO MERCHANTABILITY OF THE UNDERLYING
PROPERTIES, THE MINERALTHE MARKETABILITY THEREOF OR ITS SUITABILITY OR FITNESS
FOR ANY PARTICULAR USE. HI-TECH REPRESENTS AND WARRANTS TO VALLEY SPRINGS THAT
HI-TECH HAS MADE ITS OWN EXAMINATION, INSPECTION AND INVESTIGATION OF THE
UNDERLYING PROPERTY AND THE MINERAL WHICH IS THE SUBJECT MATTER THEREOF, AND ALL
MATTERS AS IT DEEMS NECESSARY OR APPROPRIATE. HI-TECH IS ENTERING INTO THIS
AGREEMENT BASED UPON THE RESULTS OF SUCH INSPECTIONS AND INVESTIGATIONS AND NOT
IN RELIANCE ON ANY STATEMENT, REPRESENTATION OR AGREEMENTS OF VALLEY SPRINGS NOT
CONTAINED IN THIS AGREEMENT. HI-TECH IS PURCHASING THE MINERAL IN ITS "AS IS"
AND "WHERE IS" CONDITION AND SUBJECT TO ANY AND ALL DEFECTS."
8. A new paragraph 17 is hereby added to the Agreement to read as
follows:
"Notice. Any notice which either party may desire to give to
the other party must be in writing and may be given by personal delivery, air
courier or by mailing the same by registered or certified mail, return receipt
requested (or by telecopy or e-mail if followed by one of the foregoing
methods), to the party to whom the notice is directed at the address of such
party hereinafter set forth, or such other address as the parties may hereafter
designate:
If to Valley Springs: Valley Springs Mineral, LLC
0 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxx, XX 00000
Attn: Xx. Xxxx Xxx Xxxxx, Chairman Manager
Telecopy No. (000) 000-0000
If to Hi-Tech Hi-Tech Environmental Products
0 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxx, XX 00000
Attn: Xx. Xxxx Xxx Xxxxx, President
Telecopy No. (000) 000-0000
9. A new paragraph 18 is hereby added to the Agreement to read as follows:
"Insurance. Hi-Tech shall maintain such types and amounts of
insurance as are reasonable and customary for the business proposed to be
conducted on the Property, and shall name VALLEY SPRINGS as an additional
insured on all such policies."
10. A new paragraph 19 is hereby added to the Agreement to read as
follows:
"Net Payments. All payments due Valley Springs shall not be reduced
by any taxes, whether sales, use, ad valorum or otherwise, fees or other
obligations, including royalties to third parties (all of which shall be the
obligation of Hi-Tech), other than the payment by Valley Springs' members of
income tax, which shall be paid by Valley Springs' members.
11. Paragraph 7 of the Agreement is hereby amended by adding the following
at the end thereof:
"Upon the request of VALLEY SPRINGS, Hi-Tech agrees to provide an
estoppel certificate, stating that this Agreement is unmodified and in full
force and effect, whether any defaults exist by either party."
12. No Other Modifications. Except as provided herein, the Agreement
remains unmodified and in full force and effect.
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In witness whereof, this Amendment was executed as of the date first
written above.
VALLEY SPRINGS: HI-TECH:
VALLEY SPRINGS MINERAL, LLC, HI-TECH ENVIRONMENTAL PRODUCTS, LLC
a Nevada limited liability company a Nevada limited liability company
By:____________________________ By:_______________________________
Its:______________________ Its:_________________________
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Exhibit A
Form of License Agreement
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