EXHIBIT 10.4
SECOND
ADDENDUM
TO
NATURAL GAS
SALES AGREEMENT
BY AND BETWEEN
BIG APPLE ENERGY LLC
AS SELLER
AND
U.S. GAS & ELECTRIC, INC.
AS BUYER
DATED: JUNE 9, 2005
ADDENDUM TO SALES AGREEMENT
This Addendum ("Addendum") dated June 9, 2005 is entered into by and
between Big Apple Energy, LLC, a Nevada limited liability company with a place
of business at 00 Xxxxx Xxxxxx, Xxxxxxx, X.X. 00000 ("Seller") and U.S. Gas &
Electric, Inc., a Delaware corporation with a place of business at 000 X.X.
000xx Xxxxxx, Xxxxxxxxx 5, North Xxxxx Xxxxx, Xxxxxxx, 00000 ("Buyer").
RECITALS:
WHEREAS, Seller and Buyer previously entered into an agreement entitled
"Natural Gas Sales Agreement", dated February 25, 2003, and an addendum thereto
dated August 4, 2004 (collectively the "Agreement" except where reference
thereto clearly requires reference to the agreement dated February 25, 2003);
WHEREAS, Seller is attempting to secure a Supply Agreement (defined below)
with a Wholesale Supplier (defined below), as an alternative to the existing
accounts receivable financing agreement that Buyer currently has in place;
WHEREAS, the parties wish to amend the Agreement; and
WHEREAS, this Addendum and the Agreement are acceptable to all of the
parties hereto;
NOW THERFORE, in consideration of the above premises and mutual covenants,
agreements, representations and warranties herein contained, and other good and
valuable consideration exchanged by the parties hereto, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
The Recitals above are true, accurate and incorporated herein by this reference.
The Agreement is incorporated herein by this reference, except whenever and
wherever any term, condition or obligation of the Agreement conflicts with this
Addendum, this Addendum shall prevail.
SECTION 1. DEFINITIONS
For purposes of this Addendum, the following terms shall have the
respective meanings given to them below:
1.1 "Wholesale Supplier" shall mean an entity, with which Seller, or
parties working in conjunction with Seller, has helped Buyer negotiate and
execute a Supply Agreement.
1.2 "Supply Agreement" shall mean a long-term supply and credit agreement
between Buyer and Wholesale Supplier to provide natural gas supply and credit
for said purchases of natural gas and any subsequent extensions or revisions
thereto.
SECTION 2. BILLING, PAYMENT AND PRICING
2.1 Billing and Payment
Section 1 of the Agreement shall be deleted in its entirety, and it shall
be replaced by the following:
1. Sale and Purchase. Seller will act as Buyer's agent in the purchase of
natural gas from the Wholesale Supplier under the Supply Agreement. Seller will
be responsible for transportation of the natural gas to the Delivery Point(s).
Buyer will be responsible for transportation of the natural gas from the
Delivery Point(s). Buyer and Seller will cooperate to ensure that nominations
are made timely to all transporters and reflect actual expected deliveries and
receipts. If either party becomes aware of any reason why the nominated volumes
may not be delivered or taken, that party shall notify the other party as soon
as possible. The parties will cooperate to ensure that corrected nominations are
provided to all transporters as soon as possible. The parties will use
reasonable efforts to avoid causing pipeline imbalances and to determine the
cause of any imbalance for which a penalty may be imposed. The party responsible
for causing an imbalance penalty will pay or reimburse the other party for such
penalty regardless whether it is the shipper on the pipeline.
2.2 Term
Section 4 of the Agreement shall be deleted in its entirety and it shall be
replaced by the following:
4. Term. This Agreement shall be coterminous with the Supply Agreement
except that after three (3) years, Seller may renegotiate the pricing terms of
the Agreement.
2.3 Pricing
Section 6 of the Agreement shall be deleted in its entirety and it shall be
replaced by the following:
6. Price. For natural gas delivered at the Delivery Point(s), Buyer will
pay Seller $0.15 per decatherm for all gas scheduled and nominated by Seller on
behalf of Buyer under the Supply Agreement. Buyer will also pay Seller for all
taxes Seller incurs (including sales, use, distribution, or other taxes, but
excluding income taxes) and any attorney's fees incurred in collecting any
amounts that Buyer owes under this Agreement. Seller shall maintain a re-sale
license exempting Seller from sales tax on natural gas purchases.
2.4 Transportation
Section 9 of the Agreement shall be deleted in its entirety and it shall be
replaced by the following:
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9. Transportation. Intentionally Deleted
SECTION 10. MISCELLANEOUS
10.1 Term.
(a) This Addendum shall become effective as of the date that Seller enters
into a Supply Agreement with the Wholesale Supplier.
10.2 Interpretative Provisions.
(a) All terms used herein which are defined in Article 1 or Article 9 of
the UCC shall have the meanings given therein unless otherwise defined in this
Addendum.
(b) All references to the plural herein shall also mean the singular and to
the singular shall also mean the plural unless the context otherwise requires.
(c) All references to Buyer and Seller pursuant to the definitions set
forth in the recitals hereto, or to any other person herein, shall include their
respective successors and assigns.
(d) The words "hereof", "herein", "hereunder", "this Addendum" and words of
similar import when used in this Addendum shall refer to this Addendum as a
whole and not any particular provision of this Addendum and as this Addendum now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
(e) The word "including" when used in this Addendum shall mean "including,
without limitation."
(f) Any accounting term used in this Addendum shall have, unless otherwise
specifically provided herein, the meaning customarily given in accordance with
GAAP, and all financial computations hereunder shall be computed unless
otherwise specifically provided herein, in accordance with GAAP as consistently
applied.
(f) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including", the words "to" and
"until" each mean "to but excluding" and the word "through" means "to and
including".
(g) Unless otherwise expressly provided herein, (i) references herein to
any agreement, document or instrument shall be deemed to include all subsequent
amendments, modifications, supplements, extensions, renewals, restatements or
replacements with respect thereto, but only to the extent the same are not
prohibited by the terms hereof, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, recodifying, supplementing or interpreting
the statute or regulation.
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(h) The captions and headings of this Addendum are for convenience of
reference only and shall not affect the interpretation of this Addendum.
10.3 Partial Invalidity. If any provision of this Addendum is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Addendum as a whole, but this Addendum shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
10.4 Successors. This Addendum and any other document referred to herein or
therein shall be binding upon and inure to the benefit of and be enforceable by
Seller, Buyer and their respective successors and permitted assigns. Neither
party may assign its rights and delegate its obligations under this Addendum
without the advance written consent of the other party.
10.5 Entire Agreement. This Addendum, any supplements hereto or thereto,
and any instruments or documents delivered or to be delivered in connection
herewith or therewith represents the entire agreement and understanding
concerning the subject matter hereof and thereof between the parties hereto, and
except as provided herein, supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written. In the event of any inconsistency between the terms of this
Addendum and any schedule or exhibit hereto, the terms of this Addendum shall
govern.
10.6 Counterparts, Etc. This Addendum may be executed in any number of
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of this Addendum by telefacsimile shall have the same force and
effect as the delivery of an original executed counterpart of this Addendum. Any
party delivering an executed counterpart of any such agreement by telefacsimile
shall also deliver an original executed counterpart, but the failure to do so
shall not affect the validity, enforceability or binding effect of such
agreement.
10.7 Ratification. Except as hereinabove modified and amended, and to the
extent modified and amended, the Agreement, as modified and amended by this
Addendum is hereby ratified and confirmed in all respects.
IN WITNESS WHEREOF, Seller and Buyer have caused these presents to be duly
executed as of the day and year first above written.
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SELLER BUYER
Big Apple Energy LLC U.S. Gas & Electric, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------- ------------------------------------
Xxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx
Managing Member Chairman & CEO
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