exv10w46



 





Exhibit 10.46




AGREEMENT




BETWEEN




RENEGY, LLC
MANUFACTURER




AND




 LONG BEACH SHAVINGS CO., INC.,

BUYER




 









 





AGREEMENT



This agreement is entered into on March 30, 2007,




	 	 	 	 	 
	 

	 	BETWEEN
	 	RENEGY, LLC,
	 

	 	 	 	an Arizona limited liability company 
	 

	 	 	 	(Manufacturer)
	 
	 	 	 	 
	 

	 	AND
	 	LONG BEACH SHAVINGS CO., INC.,
	 

	 	 	 	a California corporation
	 

	 	 	 	(Buyer).





The parties agree as follows:




1. BACKGROUND



This agreement is based on the following background:





	 	A.	 	Manufacturer produces wood shavings at its plant in Snowflake, Arizona.
	 
	 	B.	 	Buyer desires to purchase baled wood shavings from Manufacturer.





2. MANUFACTURE, SALE AND PURCHASE OF THE BALES





	 	A.	 	During each month during the term of this agreement, Manufacturer shall
produce 35,000 bagged and palletized bales of wood shavings for Buyer as follows:






	 	(1)	 	The wood shavings shall be manufactured from pine logs. Initially, not
more
than 40% of each bale shall be shavings from dry logs, with the balance
consisting of shavings from green logs. Manufacturer shall use its best efforts to
decrease the content of dry logs to zero, with the entire bale consisting of
shavings from green logs.
	 
	 	(2)	 	Each bale shall be twelve cubic feet and shall be of those dimensions
determined
by Buyer.





2









 






	 	(3)	 	Each bale shall be wrapped in a plastic bag. The bags shall be furnished by
Manufacturer at its sole cost and expense. Buyer shall provide the artwork to be
printed on the bags by Manufacturer. Manufacturer shall print all information
on the bags required by governmental agencies.
	 
	 	(4)	 	The wrapped bales shall be palletized. Each pallet shall be stretch wrapped.
Manufacturer shall furnish the pallets and stretch wrap, the cost thereof shall be
shared equally by Manufacturer and Buyer. Manufacturer shall invoice Buyer
for its proportionate share of such costs monthly, by the tenth day of the
succeeding month, which shall be paid within thirty days following receipt.
Accompanying each invoice shall be copies of all purchase orders, invoices and
the like documenting the costs to Manufacturer.
	 
	 	(5)	 	Subject to force majeuere events as discussed in Paragraph 4 below,
Manufacturer shall maintain a sufficient inventory to enable it to deliver the
bales to Buyer in approximately equal numbers on each business day during the
term of this agreement, unless the parties agree to a different delivery schedule
in writing.
	 
	 	(6)	 	Manufacturer shall use its best efforts to ensure that each bale delivered to Buyer
conforms to the provisions of this agreement. Buyer understands that in the
normal course of manufacturing the wood shavings insubstantial amounts of
foreign material may be included in any particular bale, which shall not
constitute a default under this agreement. Buyer shall notify Manufacturer of
any substantial non-conformities and Manufacturer shall promptly undertake
corrective procedures.






	 	B.	 	During each month during the term of this agreement, Buyer shall purchase the bales from
Manufacturer as follows:






	 	(1)	 	The minimum monthly purchase shall total 35,000 bales. The purchase price
shall be $3.55 per bale, fob Manufacturer’s plant in Snowflake, Arizona. Buyer
shall pay Manufacturer all invoices submitted for the month by the tenth day of
each following month.
	 
	 	(2)	 	In the event Manufacturer produces additional bales of wood shavings, Buyer
shall have the first right of refusal to purchase them at $3.55 per bale, fob
Manufacturer’s plant in Snowflake, Arizona, provided the bales are
manufactured in accordance with ¶A, above. =Buyer shall pay Manufacturer all
invoices submitted for the month by the tenth day of each following month.





3









 





3. ADJUSTMENT OF PURCHASE PRICE



Commencing October 1, 2008, and continuing each year thereafter, the purchase price for the bales
set forth in ¶2.B(1), namely $3.55, shall be adjusted for the next twelve months (October 1 –September 30) by the same percentage the Consumer Price Index, All Urban Consumers, West Region
(1982-84=100) for the July immediately prior to the applicable October 1 increases, if at all,
above that for July 2007. In no event shall the annual adjustment be less than $0.04 nor more than
$-0,14 per bale.




4. MANUFACTURER’S FAILURE TO PERFORM



To the extent that any three month period during the term of this agreement ending on December 31,
March 31, June 30 or September 30, Manufacturer has delivered less than a total of 105,000 bales,
Manufacturer shall deliver during the succeeding three months the total of the deficit. The
deficit shall be eliminated only to the extent that Manufacturer delivers more than 105,000 bales
during the succeeding three months. If Manufacturer does not eliminate the deficit for any given
three month period during the immediately succeeding three month period, Buyer may cancel this
agreement, and shall be released from any liability to Manufacturer other than for payment of
those bales previously delivered in accordance with this agreement. Buyer understands,
acknowledges and agrees that force majeure events may occur that are outside of Manufacturer’s
control, which may affect Manufacturer’s ability to deliver the bales. If such an event occurs
that prevents Manufacturer from delivering its minimal monthly number of bales, Manufacturer shall
not be in default, but shall use its best efforts to make up any deficit caused by such force
majeure event during the succeeding months.




5. INDEMNIFICATION





	 	A.	 	The parties acknowledge that Manufacturer is responsible to assure that each bale contains no
less than twelve cubic feet of shavings and that the information printed on the each bag in
which the bale is placed is complete and accurate. Manufacturer shall indemnify and hold Buyer
harmless against all claims arising from a bale containing less than twelve cubic feet of
shavings or the information on a bag in which the bale is placed being incomplete or
inaccurate. Manufacturer shall further indemnify and hold Buyer harmless against all costs,
attorney fees, expenses, and liabilities incurred in the defense of any such claim or any
action or proceedings brought thereon. In the event any action or proceeding is brought
against Buyer by reason of any such claim, Manufacturer, upon notice from Buyer, shall defend
the same at Manufacturer’s expense by counsel satisfactory to Buyer.





4









 






	 	B.	 	The parties acknowledge that once the bales have been delivered to Buyer, Manufacturer is no
longer in possession or control of them. Buyer shall indemnify and hold Manufacturer harmless
against all claims arising from a bale containing less than twelve cubic feet of shavings
because a portion of the content has been removed. Buyer shall further indemnify and hold
Manufacturer harmless against all costs, attorney fees, expenses, and liabilities incurred in
the defense of any such claim or any action or proceedings brought thereon. In the event any
action or proceeding is brought against Manufacturer by reason of any such claim, Buyer, upon
notice from Manufacturer, shall defend the same at Buyer’s expense by counsel satisfactory to
Manufacturer.





6. TERM





	 	A.	 	The initial term of this agreement shall be five years, commencing on October 1, 2007,
and ending on September 30, 2012.
	 
	 	B.	 	Commencing October 1, 2012, and annually thereafter, the term of this agreement shall
be extended one year unless either party notifies the other, in writing by no later than the previous June 30, of its intention not to further extend the term of this agreement.





7. ADDITIONAL ACTS



The parties shall take all actions and sign and deliver all documents necessary or appropriate to
complete the transaction contemplated by this agreement.




8. PAYMENT OF COSTS AND EXPENSES



Each party shall pay its own fees of professionals and other expenses incurred by it in conjunction
with the preparation and delivery of this agreement and all documents prepared in conjunction with
it.




9. NOTICES



All notices, requests, demands or other communications (collectively, “Notice”) required or
permitted under this Agreement shall be in writing and may be personally delivered or sent by fax
or transmitted by nationally recognized overnight carrier (e.g., Federal Express, UPS) or by
certified mail, return =receipt requested,-postage prepaid, addressed as follows:




	 	 	 
	Manufacturer:

	 	RENEGY, LLC 

4764 W. Hwy. 277 Apache Railway






5









 





	 	 	 	 	 	 	 
	 

	 	 	 	Snowflake, AZ 85937

Attn: Bob Worsley

                     Or, if by personal delivery or courier to:
	 	 
	 
	 	 	 	 	 	 
	 	 	Same as above
	 
	 	 	 	 	 	 
	 

	 	 	 	Phone: (480) 218-8880


Fax: (480) 718-7977

Email: bobworsley@yahoo.com	 	 
	Buyer:
	 	 	 	 	 	 
	 

	 	 	 	Long Beach Savings Co, Inc.


Post Office Box 1020

Long Beach, CA 90801

  or, if by personal delivery:

20915 Lamberton Avenue

Long Beach, CA 90810

Phone: (310) 639-1145

Fax: (310) 639-9232

Email: sales@lbsc.com	 	 





or such other address as a party may designate, in writing, from time to time.




10. ASSIGNMENT



Neither Party shall assign any right or interest in this Agreement without the prior written
consent of the other party. Any purported assignment without such prior written consent
shall be void.




11. APPLICABLE LAW



This Agreement together with all attachments and exhibits shall be governed by, and construed and
enforced in accordance with, the internal substantive laws of the State of Arizona (without
reference to choice of law principles).




12. CORPORATE AUTHORITY



Each party represents that the person signing this agreement on its behalf is authorized to execute
this agreement.




6









 





13. SEVERABILITY



In the event any provision of this agreement or the application of any of its provisions to any
party or circumstance is held invalid or unenforceable, the remainder of this agreement and the
application of its provisions to other parties or circumstances shall remain valid and in full force
and effect.




14. RECOVERY OF LITIGATION COSTS




     In any legal action, arbitration or alternate dispute resolution proceeding based upon or
concerning this agreement, the successful or prevailing party shall be entitled to recover its
actual attorney fees and costs incurred in that action or proceeding, in addition to all other
relief to which it is entitled, regardless of whether the proceeding is concluded by
settlement, award or judgment.



15. FURTHER ACTS




     The parties agree to execute promptly such other documents and perform such other acts as
may be reasonably necessary to carry out the purpose and intent of this Agreement.



17. ENTIRE AGREEMENT




     This Agreement constitutes the entire agreement between Manufacturer and Buyer and shall
not be modified or amended except in a written document signed by Manufacturer and Buyer. Any
prior agreements or understandings between Manufacturer and Buyer are superseded and replaced
by this Agreement and are hereby rendered null and void. Except as otherwise specifically
provided in this Agreement, neither Buyer nor Manufacturer has made any representations,
warranties or agreements by or on behalf of either party. No agreements, warranties or
representations not expressly contained in this Agreement shall bind either Buyer or
Manufacturer.



18. LIMITED WARRANTY




     Manufacturer warrants that the each bale will contain wood shavings in the amounts and of
the quality discussed in this Agreement. The warranty does not cover any physical damage to a
bale after it leaves the Snowflake plant. Any charges for freight, removal, and shipping from
the Snowflake plant shall be the responsibility of the Buyer. The purposes to which the Buyer
and its ultimate end users and purchasers put the wood shavings is out of Manufacturer’s
control.



7









 





	 	 	 	 	 
	MANUFACTURER:

	 	RENEGY, LLC
	 	 
	 

	 	an Arizona limited liability company	 	 
	 
	 	 	 	 
	 

	 	/s/ Robert M. Worsley	 	 
	 

	 	 	 	 
	 

	 	by Robert M. Worsley	 	 
	 

	 	its Manager	 	 
	 
	 	 	 	 
	BUYER:

	 	LONG BEACH SHAVINGS CO., INC.,	 	 
	 

	 	a California corporation	 	 
	 
	 	 	 	 
	 

	 	/s/ Jack Price,	 	 
	 

	 	 	 	 
	 

	 	by Jack Price,	 	 
	 

	 	its President	 	 







8