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 Red Rock Canyon Mineral, LLC, a Nevada limited liability company
("Red Rock") 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 2004, Red Rock 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 Red Rock 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.
RED ROCK: VITROCO:
RED ROCK CANYON MINERAL, LLC, VITROCO INCORPORATED,
a Nevada limited liability company a Nevada corporation
By: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Its: Chairman/Manager Its: CEO and President
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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 Red Rock Canyon
Mineral, a California limited liability company ("RED ROCK") 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. RED ROCK 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 RED ROCK. Any assignment
which is not to an Affiliate shall be subject to the approval of RED ROCK, which
may be withheld in RED ROCK's 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 RED ROCK 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 RED ROCK, and RED ROCK 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 ("RED ROCK") and Valley Springs Mineral, LLC to mine and market for sale
mineral which is substantially the same as the Mineral owned by RED ROCK.
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 RED ROCK,
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.
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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.
This paragraph 2 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 RED ROCK at least the following minimum
quantities of Mineral. For purposes of the Minimum Requirements, "purchase"
shall mean payment actually received by RED ROCK 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 RED ROCK 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 RED ROCK 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 RED ROCK;
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 RED ROCK, 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, RED ROCK 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 RED ROCK 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 RED ROCK to terminate this
Agreement, or any other termination of this Agreement, voluntary or involuntary,
RED ROCK 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 Enviro Investment Group, LLC and Hi-Tech,
(ii) the Agreement between Valley Springs Mineral, 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 RED ROCK, 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 15 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. RED ROCK has none of the foregoing expertise. Hi-Tech indemnifies,
defends, protects and holds harmless RED ROCK, 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 RED ROCK OR ITS MANAGERS, MEMBERS, OFFICERS,
EMPLOYEES, CONSULTANTS OR AGENTS ("RED ROCK'S AGENTS") IS AND SHALL BE FURNISHED
TO HI-TECH WITHOUT WARRANTY OR REPRESENTATION BY RED ROCK 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 RED ROCK
ARISING OUT OF ANY INACCURACY OR INCOMPLETENESS OF ANY INFORMATION FURNISHED TO
HI-TECH BY RED ROCK OR RED ROCK'S 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 RED ROCK 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 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 RED ROCK. HI-TECH ACKNOWLEDGES THAT RED ROCK 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 RED ROCK
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 RED ROCK 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."
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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 Red Rock: Red Rock Canyon Mineral, LLC
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, Chairman Manager
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Hi-Tech Hi-Tech Environmental Products
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, President
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
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 RED ROCK 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 Red Rock 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 Red Rock's members of income tax, which
shall be paid by Red Rock's members.
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11. Paragraph 7 of the Agreement is hereby amended by adding the following
at the end thereof:
"Upon the request of RED ROCK, 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.
RED ROCK: HI-TECH:
RED ROCK CANYON 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
License Agreement
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