This Amendment is made as of June 18, 1999 by and among the following parties:
Penn Octane Corporation and P.M.I. Trading Limited. The two foregoing parties
are parties to a contain LPG Mix Purchase Agreement, dated as of September 28,
1998, under DTIR-073-98, concerning the purchase of LPG Mix (90% propane and 10%
commercial butane) EXW Brownsville, TX, at Penn Octane's loading rack (the "LPG
Mix Agreement").
Witnesseth:
Whereas, both Parties desire to extend the term of the Contract and to reflect
an increment in the price for volumes of LPG Mix exceeding 7,000,000 gal in
summer and 9,000,000 gal in winter.
Nowtherefore, both parties hereby agree to amend the "LPG Mix Agreement' as
specified below.
1. (5) TERM
----
IT SAYS:
"UNLESS EITHER PARTY BREACHES ITS OBLIGATION UNDER THIS AGREEMENT, THE TERM
SHALL BE ONE YEAR COMMENCING ON OCTOBER 1ST, 1998 AND CONCLUDING ON SEPTEMBER
30, 1998.
IN CASE SELLER OBTAINS LEGAL RIGHTS TO IMPORT PROPANE INTO MEXICO OR/AND IF
XXXXXX BASIN STARTS PRODUCING, THEN EITHER PARTY SHALL HAVE THE RIGHT TO NOTIFY
THE OTHER PARTY ITS INTENTION TO BEGIN A RENEGOTIATION PROCESS OF THIS CONTRACT.
SUCH RENEGOTIATION PROCESS SHALL START NO LATER THAN 10 DAYS AFTER THE
NOTIFICATION IS GIVEN. RENEGOTIATION PROCESS CAN NOT ENDURE MORE THAN 90 DAYS.
IF AN AGREEMENT IS REACHED DURING THE RENEGOTIATION PROCESS THIS CONTRACT SHALL
BE MODIFIED BY MUTUALLY AGREEMENT, OTHERWISE EITHER PARTY SHALL HAVE THE RIGHT
TO CANCEL.
It shall say:
"UNLESS EITHER PARTY BREACHES ITS OBLIGATION UNDER THIS AGREEMENT, THE TERM
SHALL BE EIGHTEEN MONTHS COMMENCING ON OCTOBER 1ST, 1998 AND CONCLUDING ON MARCH
31, 2000.
IN CASE SELLER OBTAINS LEGAL RIGHTS TO IMPORT PROPANE INTO MEXICO OR/AND IF
XXXXXX BASIN STARTS PRODUCING, THEN EITHER PARTY SHALL HAVE THE RIGHT TO NOTIFY
THE OTHER PARTY ITS INTENTIONS TO BEGIN A RENEGOTIATION PROCESS OF THIS
CONTRACT. SUCH RENEGOTIATION PROCESS SHALL START NO LATER THAN 10 DAYS AFTER
THE NOTIFICATION IS GIVEN. RENEGOTIATION PROCESS CAN NOT ENDURE MORE THAN 30
DAYS. IF AN AGREEMENT IS REACHED DURING THE RENEGOTIATION PROCESS THIS CONTRACT
SHALL BE MODIFIED BY MUTUALLY AGREEMENT, OTHERWISE EITHER PARTY SHALL HAVE THE
RIGHT TO CANCEL."
2. (6) VOLUMES
-------
It says:
"6.1. BUYER WILL SCHEDULE, PURCHASE AND ACCEPT AND SELLER WILL DELIVER AN ANNUAL
VOLUME OF "LPG MIX" EQUAL TO 81,180,000 GALLONS +/- 15% AT BUYER'S OPTION,
COMPLYING WITH THE FOLLOWING MINIMUM MONTHLY VOLUMES:
SUCH VOLUMES TO BE REFERRED HEREIN AS "MINIMUM MONTHLY VOLUME"
--------------------------
SEASONALITY IS DEFINED AS DESCRIBED BELOW:
-----------------------------------------------
WINTER SEASON SHALL MEAN THE PERIOD FROM OCTOBER 1998 THROUGH MARCH 1999.
--------------
SUMMER SEASON SHALL MEAN THE PERIOD FROM APRIL 1999 THROUGH SEPTEMBER 1999."
--------------
It shall say:
"6.1. BUYER WILL SCHEDULE, PURCHASE AND ACCEPT AND SELL WILL DELIVER AN ANNUAL
VOLUME OF "LPG MIX" EQUAL TO 134,120,000 GALLONS +/- 15% AT BUYER'S OPTION,
COMPLYING WITH THE FOLLOWING MINIMUM MONTHLY VOLUMES:
SEASONALITY IS DEFINED AS DESCRIBED BELOW:
-----------------------------------------------
WINTER SEASON SHALL MEAN THE PERIOD FROM OCTOBER 1998 THROUGH MARCH 1998, AND
--------------
THE PERIOD FROM OCTOBER 1999 THROUGH MARCH 2000.
SUMMER SEASON SHALL MEAN THE PERIOD FROM APRIL 1999 THROUGH SEPTEMBER 1999."
--------------
3. Both parties Agree that all the volume loaded during any month shall be
used to compute the service cost with the formula described in section 8.4.
4. In Clause (7) PRICE, Section 7.3 shall be included as per the following
-----
wording:
"7.3. THE VOLUME EXCEEDING 7,000,000 GAL IN JUNE 1999, SHALL HAVE A PREMIUM OF
____ USD/GAL TO THE VOLUME OF THE COMMODITY. DURING ANY OTHER MONTH AFTER JULY
1999, THE VOLUME EXCEEDING 7,000,000 GAL IN SUMMER AND 9,000,000 GAL IN WINTER
SHALL HAVE A PREMIUM OF ____ USD/GAL TO THE VOLUME OF THE COMMODITY."
- 2 -
5. Clause (23) YEAR 2000 COMPLIANCE. Shall be included as per the following
---------------------
wording:
"(23) YEAR 2000 COMPLIANCE.
EACH OF SELLER AND BUYER REPRESENTS AND WARRANTS THAT IT WILL USE REASONABLE
BEST EFFORTS TO ENSURE THAT THE SUPPLY OF THE PRODUCT BY SELLER SOLD UNDER THIS
AGREEMENT, INCLUDING DELIVERIES BY SELLER TO BUYER, AND BUYER'S ACCEPTANCE OF
THE PRODUCT AND PAYMENT OF THE PURCHASE PRICE, SHALL BE YEAR 2000 COMPLIANT AND
GLOBAL POSITIONING SYSTEM ROLLOVER COMPLIANT, INCLUDING, BUT NOT LIMITED TO,
ACCURATELY PROCESSING DATE/TIME DATA (INCLUDING, BUT NOT LIMITED TO,
CALCULATING, COMPARING, AND SEQUENCING), FROM, INTO, AND BETWEEN THEN TWENTIETH
AND TWENTY FIRST CENTURIES, THE YEARS 1999 AND 2000, THE CHANGE OF DATE FROM
AUGUST 21, 1999 TO AUGUST 22, 1999, AND LEAP YEAR CALCULATIONS."
6. The "LPG Mix Agreement" is amended only in the terms specified above.
There are not other changes or amendments thereto. As so amended, the "LPG Mix
Agreement" continues in effect according to its terms.
Failing receipt any objection to the above by June 30, 1999, at 10:00 a.m., we
shall consider to foregoing as final and binding.
Xxxxxxxx Xxxxx Agree by
Authorized Officer Xxxxx Xxxxxxxxxxx
Penn Octane Corporation
LFV
- 3 -
