Exhibit 10.2
▇▇▇-▇▇-▇▇▇/▇▇
▇▇▇▇-▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇ LPG MIX PURCHASE AND SALES AGREEMENT
BETWEEN
RIO VISTA ENERGY PARTNERS L.P. AND P.M.I. TRADING LIMITED
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This Matamoros LPG Mix Purchase and Sales Agreement (the "Agreement"), made and
entered into as of June 4th, 2005, by and between Rio Vista Energy Partners
L.P., a corporation organized under the laws of the State of Delaware, United
States of America, having its principle place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America ("Seller") and P.M.I.
Trading Limited, a corporation organized under the laws of Ireland, having the
administration of its business and place of address at ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇; Torre ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, in Mexico City, Mexico
("Buyer") (each of Buyer and Seller, "Party" and, collectively, the "Parties").
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements hereinafter set forth, the Parties herby agree as
follows:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
"Affiliate" shall mean, with respect to any Person, any other Person
controlling, controlled by, or under common control with such Person;
"Agreement" shall mean this Agreement, Including all Exhibits attached
Hereto, as the same may be amended, modified or supplemented from time to
time;
"Alternative Delivery Point" shall mean Seller's terminal located at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ of ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America.;
"ASTM" shall mean the American Society for Testing and Materials;
"Banking Day" shall mean any day on which the banks are open for business
in the jurisdiction in which payment is to be made;
"Butane" shall comply with the specifications set forth by the GPA;
"Buyer's Representatives" shall mean Pemex-Gas y Petroquimica Basica's
personnel authorized to supervise the operations described in this
Agreement at the Delivery Point or at the Alternative Delivery Point;
"DDU" shall mean Delivered Duty Unpaid, according to incoterms 2000;
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"Day" shall mean a twenty-four (24) hour period, starting at zero hours
local time in Matamoros on the morning of each calendar day and ending at
zero hours local time in Matamoros on the morning of the following calendar
day;
"Delivery Point" shall mean Seller's terminal located at ▇▇▇▇. Sendero
Nacional Km. 9, desviacion ▇▇▇▇. La ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ Km. 3.4, desviacion
brecha 22 s/n (a 500 mts.), Ejido La ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇;
"Exhibit A" contains the Product specifications;
"FCA" shall mean Free Carrier, according to incoterms 2000;
"Gallon(s)" shall mean one (1) U.S. standard gallon of two hundred and
thirty one (231) cubic inches at sixty degrees Farenheit (60 degrees F);
"GPA" shall mean Gas Processors Association;
"Injection Point" shall mean Seller's terminal located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America;
"Product" shall mean the LPG Mix meeting the specification parameters set
forth in EXHIBIT A
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"Mexico" shall mean the United Mexican States;
"MMgal" shall mean millions of Gallons;
"Month" shall mean a calendar month;
"Person" shall mean an individual, partnership, company, firm, trust,
joint venture, unincorporated organization or government or any department
or agency thereof;
"PGPB" shall mean Pemex-Gas y Petroquimica Basica;
"Products" shall mean Product, Butane or Propane, as the context dictates;
"Propane" shall comply with the specifications set forth by the GPA;
"U.S. Dollars" or "U.S.$" shall mean dollars of the United States of
America;
"U.S." shall mean the United States of America.
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ARTICLE II
PURPOSE; TERM
2.01 PURPOSE. Seller agrees to sell, transfer, convey and deliver to
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Buyer and Buyer agrees to purchase and accept receipt of from Seller, Products
in such volumes as specified in, and otherwise in accordance with the terms and
conditions of, this Agreement.
2.02 TERM. Unless earlier terminated in accordance with this Agreement,
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the term of this Agreement (the "Term") shall commence on June 4th, 2005 (the
"Effective Date") and end on March 31st, 2006.
ARTICLE III
PRODUCT
3.01 PRODUCT SPECIFICATIONS. Products shall, at all times meet the
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specification parameters set forth in Exhibit A.
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3.02 PRODUCT QUANTITY. In accordance with the following table:
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3.5 MMgal per Month FROM JUNE 1st, ▇▇▇▇ (▇) ▇▇▇▇▇▇▇
AUGUST 31st, 2005
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6.0 MMgal per Month FROM SEPTEMBER 1st THROUGH
+/- 5% at Buyer's option SEPTEMBER 30th, 2005.
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9.0 MMgal per Month FROM OCTOBER 1st THROUGH
+/- 10% at Buyer's option OCTOBER 31st, 2005.
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13.0 MMgal per Month FROM NOVEMBER 1st, 2005 THROUGH
+/- 10% at Buyer's option FEBRUARY 28th, 2006.
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9.0 MMgal per Month FROM MARCH 1st THROUGH
+/- 10% at Buyer's option MARCH 31st, 2006.
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1) Monthly volume for June 2005, shall be prorated during the delivery period
(June 4th through June 30th, 2005) on the basis of 3,500,000 Gallons of LPG Mix.
Ten (10) Days prior to the beginning of each Month, Buyer shall inform to Seller
the volume to be delivered on such Month ("Nominated Volume").
3.02.1 EARLY TERMINATION. If this Agreement is terminated by
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either Party prior to the expiration of the Term in accordance with the terms
and conditions of this Agreement, Nominated Volume shall be prorated through the
termination date on the basis of the Article 3.02.
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3.03 BUYER'S SHORTFALL.
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3.03.1 SHORTFALL OCCURRENCE. A shortfall attributable to Buyer
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(the "Buyer's Shortfall") shall occur when the volume of Product actually
delivered by Seller and lifted by Buyer during any Month of the Term at the
Delivery Point (or Alternative Delivery Point, if Buyer exercises its option to
take delivery at the Alternative Delivery Point) (the "Actual Volume") is less
than the Nominated Volume, provided, however, that a Buyer's Shortfall shall not
be deemed to have occurred in the event Buyer fails to take delivery of the
Nominated Volume due to Seller's fault or non-compliance with this Agreement,
including without limitation, Seller's failure to deliver the Nominated Volume,
the provision of non-compliant Product, or Seller's inability to deliver Product
to the Delivery Point (or Alternative Delivery Point, if Buyer exercises its
option to take delivery at the Alternative Delivery Point), and any such volumes
not delivered by Seller shall be deducted from the Shortfall Computation, as
defined below.
3.03.2 SHORTFALL COMPUTATION. A Buyer's Shortfall shall be the
----------------------
positive difference between the Nominated Volume and the Actual Volume (the
"Buyer's Shortfall Volume"), provided, however, that should Buyer fail to take
delivery of the Nominated Volume during the Term due to Seller's fault or
non-compliance with the Agreement, including without limitation, Seller's
failure to deliver the Nominated Volume, the provision of non-compliant Product,
or Seller's inability to deliver Product to the Delivery Point (or Alternative
Delivery Point, if Buyer exercises its option to take delivery at the
Alternative Delivery Point), then the Nominated Volume shall be reduced by the
amount of Product not delivered by Seller.
3.03.3 SHORTFALL POTENTIAL COMPENSATION. If a Buyer's Shortfall
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occurs, Buyer shall make its best efforts with no obligation or whatsoever, to
receive the Buyer's Shortfall Volume during one or more of the following Months
on the basis of Article 3.02.
3.04 PRODUCT QUALITY AND QUANTITY INSPECTIONS. Buyer and Seller shall
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appoint and independent inspection company mutually agreeable to Buyer and
Seller (the "Inspector") to determine quality and quantity of the Product at the
Delivery Point. The inspector's findings shall be final and binding on the
Parties in the absence of fraud, bad faith or gross error. Buyer shall pay the
gross amount of the Inspector's fees, however, Seller agrees that Buyer shall
monthly deduct the amount of U.S. $8,500.00 from amounts due to Seller, such
amount representing Seller's share of the Inspector's fees.
3.04.1 PRODUCT QUALITY INSPECTION. All Product shall be monitored
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to ensure compliance with the specification parameters in Exhibit A.
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Determination of quality shall follow the procedures set forth in the latest
revision of ASTM procedures (the "Compliance Procedures"). A sample of Product
will be drawn in accordance with the Compliance Procedures (the "Sampling") by
the Inspector at the Injection Point for every 50,000 Gallons injected at the
Injection Point. A gas chromatography ("GC") analysis (as defined hereunder)
shall be performed by the Inspector on the sample in
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accordance with the ASTM D-2163 method to assess the sample's compliance with
the specification parameters in Exhibit A. If the sample analysis is found to be
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non-compliant, the entire 50,000 Gallons of Product from which the sample was
taken will be deemed non-compliant (the "Non-Compliant Product"), and the
Inspector shall immediately notify both Parties. All Non-Compliant Product shall
be deemed not delivered and Buyer shall not be responsible for payment nor for
any Shortfall Payment. Seller shall use its best efforts to dispose of any
Non-Compliant Product promptly upon notification of its non-compliance by the
Inspector and shall be responsible for any and all costs and liabilities
relating to or arising from the Non-Compliant Product. The gas chromatograph
utilized shall be calibrated in accordance with the latest ASTM and GPA
procedures.
3.04.2 PRODUCT QUANTITY INSPECTION. The Inspector shall determine
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the quantity of Product for payment purposes as follows:
(a) Each empty tank truck shall be weighed on the platform scale at the
Delivery Point/Alternative Delivery Point, or an alternative independent
platform scale mutually acceptable to the Parties. Once Product is completely
loaded onto the tank trucks, such tank truck will be weighed at the same
platform scale upon its departure. The weight obtained by the differential
between these two measurements shall be converted into volume in Gallons and
corrected at 60 degrees F in accordance with the Compliance Procedures, through
the determination of the specific gravity through gas chromatograph provided by
Seller or by Inspector. The Inspector shall take samples at the Delivery Point
(at the Micromotion measurement device installed at the connection point between
Seller's pipeline and the Delivery Pont) for every 50,000 Gallons received at
the Delivery Point. The gas chromatograph utilized shall be calibrated in
accordance with the latest ASTM and GPA procedures.
(b) Seller's terminal platform scale at the Delivery Point/ Alternative
Delivery Point will be tested and adjusted for accuracy and least once every
sixty (60) Days. Seller will be required to comply with the calibration and
certification procedures adopted by Mexican authorities in accordance with
Official Standards (NOM-010-SCFI-1994 (1999)). Buyer's Representative and
Inspector may witness the calibration and certification procedures. Seller shall
provide Buyer via fax a copy of the above-mentioned certificates. If Seller's
terminal platform scale at the Delivery Point/Alternative Delivery Point is
used, and/or any claim is received by Buyer from PGPB, Buyer reserves the
following rights: To execute evaluation procedures on a random basis sending
tank trucks to an independent scale to test the accuracy of such scale and
recover damages from Seller for any discrepancy found.
(c) If Seller's platform scale at the Delivery Point/ Alternative
Delivery Point is not suitable for the service due to non-compliance with the
above-mentioned Official Standards and an independent platform scale is used,
the Parties will share equally the cost of weighing the tank trucks before and
after loading.
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(d) If Seller at any time replaces the platform scales at its terminal at
the Delivery Point/Alternative Delivery Point, such new scales shall be used to
weigh all tank trucks receiving Product at the Delivery Point/Alternative
Delivery Point, and shall be operated and maintained in accordance with the
above provisions. Seller shall be responsible for all costs expenses associated
with such new scales.
(e) For customers and inventory-management purposes, Product pumped
through Seller's pipeline from the Injection Point to the Delivery Point shall
be measured on a daily basis at the Micromotion measurement device installed at
the Delivery Point. Readings by such device shall be registered by the
Inspector, Mexican authorities, PGPB's customs broker, Buyer's Representative
and Seller's representative. A reading of the quantity of Product pumped will be
calculated on the basis of the differential between the readings taken at 00:00
hrs. and the reading taken the previous Day at 00:00 hrs., converted to volume
in Gallons and corrected at 60 degrees F, through the determination of the
specific gravity by samples taken at the Delivery Point (at the Micromotion
measurement device installed at the connection point between Seller's pipeline
and the Delivery Point) for every 50,000 Gallons received at the Delivery Point,
through GC.
Additionally, for verification and customs purposes, Product pumped through
Seller's pipeline form the Injection Point to the Delivery Point shall be
measured on a weekly basis every Monday at the Micromotion measurement device
installed at the Delivery Point. Readings by such device shall be witnessed by
the Inspector, Mexican authorities, PGPB's customs broker, Buyer's
Representative and Seller's representative. A reading of the quantity of Product
pumped will be calculated on the basis of the differential between the current
reading and the reading taken the previous Monday at the same time converted to
volume in Gallons and corrected at 60 degrees F, through the determination of
the specific gravity by samples taken at the Delivery Point (at the Micromotion
measurement device installed at the connection point between Seller's pipeline
and the Delivery Point) for every 50,000 Gallons received at the Delivery Point
on the immediate preceding five (5) Days, through GC. The inspector shall take
line samples and shall test the batch pumped at the time of the readings.
3.05 SELLER'S FAILURE TO DELIVER NOMINATED VOLUME. In the event Seller
---------------------------------------------
fails to delivery the Nominated Volume by Buyer in the accordance with Article
3.02 of this Agreement ("Seller's Shortfall"), then Seller agrees that Buyer
shall be entitled to purchase substitute product in an amount equal to the
difference between the Nominated Volume and the Actual Volume delivered by
Seller ("Seller's Shortfall Volume"). The aforementioned, however,
notwithstanding Buyer's right to exercise any right or remedy provided under the
Agreement or otherwise.
ARTICLE IV
PRODUCT DELIVERY; TRANSFER OF TITLE; CUSTODY
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RISK OF LOSS AND CONTAMINATION
4.01 PRODUCT DELIVERED AT DELIVERY POINT. Product shall be delivered
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DDU at the scale exit of the Delivery Point. Title of Product shall pass from
Seller to Buyer at the point in the Seller's pipeline where Product passes into
Mexico at the U.S./Mexico border in Matamoros, Tamaulipas, Mexico. The custody,
risk of loss and contamination with respect to Product shall pass from Seller to
Buyer at the scale exit of the Delivery Point.
4.02 PRODUCT DELIVERED AT THE ALTERNATIVE DELIVERY POINT. If, by reason
----------------------------------------------------
of a programmed maintenance or an event different from Force Majeure at the
Delivery Point, Seller is not able to deliver Product at the Delivery Point,
Buyer shall have the option of loading Product at the Alternative Delivery
Point, in which case Buyer shall so notify to Seller. The Product shall be then
delivered FCA at the scale exit of the Alternative Delivery Point. Title of
Product shall pass from Seller to Buyer as the Product passes the flange
connecting the Seller's Alternative Delivery Point with Buyer's tank trucks.
Custody, risk of loss and contamination with respect to Product shall pass from
Seller to Buyer at the scale exit of the Alternative Delivery Point.
For Product delivered at the Alternative Delivery Point, Buyer shall nominate
tank truck transportation services. Seller shall discount the Service Fee,
described in Article 5.01, by an amount equal to the transportation costs
incurred by Buyer, such transportation costs to be determined based on the
prevailing market conditions at the time that Buyer must arrange for
transportation and as mutually agreed by the Parties.
In the event of a Force Majeure condition at the Delivery Point, Buyer shall
also have the option of loading Product at the Alternative Delivery Point. The
Parties agree that in this event, Seller shall discount from the Product's price
(including the Service Fee), as set forth in Article 5.01, an amount equal to
the operational costs of the terminal at the Delivery Point plus costs related
to the transportation of Product through Seller's pipeline from the Alternative
Delivery Point to the Delivery Point. Seller shall inform Buyer of its
calculation of the amounts to be discounted, such final discount amount to be
mutually agreed between the Parties.
In the event Buyer elects not to exercise its option to take delivery at the
Alternative Delivery Point, Seller shall still be obligated to deliver to Buyer
the volume nominated by Buyer in accordance with Section 3.02 and shall be
liable for any Seller's Shortfall, in accordance with Section 3.05.
ARTICLE V
PRICING; INVOICING; PAYMENT TERMS
5.01 PRICE OF PRODUCT; SERVICE FEES. Product pricing shall be
-----------------------------------
calculated monthly in accordance with the Propane and Butane content of the
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mix actually received by Buyer. Price shall be the sum of (i) the average price
of Propane multiplied by its actual fraction and Butane multiplied by its actual
fraction during the delivery Month as published by OPIS (Oil Price Information
Service) for Mont Belvieu non-TET daily spot postings, and (ii) a premium (the
"Service Fee") of U.S. $_____ per Gallon of Product delivered during the Term;
it being understood that in no event the Butane component shall be greater than
10%.
The estimated prices (the "Estimated Prices") to be used for interim invoicing
purposes shall be determined in accordance with the foregoing paragraph of this
Section 5.01 (including the Service Fee), except that the price of Product shall
be based on the closing posting price of the Mt. Belvieu non-TET as of the fifth
Day prior to the delivery Month in which a posting price is published assuming
ninety percent (90%) of Propane and ten percent (10%) normal Butane. At the end
of the delivery Month, an adjustment shall be made so as to reflect the
differences between the Estimated Prices as invoiced and the actual Month-end
prices as computed in the foregoing paragraph (the "Month-End True Up").
5.02 INVOICING. Seller shall invoice and send Buyer every Friday, the
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total volume loaded during the immediately proceeding week, using the Estimated
Prices (the "Estimated Invoices"); as set forth under Article 5.01.
The Month-End True Up shall be invoiced (the "True Up Invoice") at the end
of the delivery Month. This True Up Invoice shall include (i) the volume
delivered from the Seller to Buyer, and (ii) the realized price as per Section
5.01. The True Up Invoice must contain a deduction of US$8,500, representing
Seller's payment of its share of Inspector's fees, as provided under Article
3.04.
All invoices shall comply with Buyer's treasury policies and shall be sent
in original to Buyer's financial contact set forth in the notice provision of
this Agreement Neither faxed nor copied invoices will be acceptable to Buyer.
5.03 PAYMENT TERMS. Payments shall be made by Buyer in net U.S. Dollars
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without set-off, deduction or counterclaim, and by wire transfer to Seller's
designated account, as follows.
5.03.1 ESTIMATED INVOICES PAYMENT. Payment of each of the
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Estimated invoices shall be made by Buyer in net U.S. Dollars without set-off,
deduction or counterclaim, and by wire transfer to Seller's designated account,
ten (10) Days after the date on which such Estimated Invoices are received by
Buyer. In case that payment date falls on a Sunday or holiday, then payment date
will be the next Banking Day. In case that payment date falls on a Saturday,
then payment date will be the prior Banking Day.
5.03.2 TRUE UP INVOICE PAYMENT. Payment of any amount due, either
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from Buyer to Seller of from Seller to Buyer shall be made in U.S. Dollars
within ten (10) Days after receipt of the original invoice. In case that payment
date falls on a Sunday or holiday, then payment date will be the next
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Banking Day. In case that payment date falls on a Saturday, then payment date
will be the prior Banking Day.
5.03.3 OTHER PAYMENTS. Except as provided in Articles 5.03.1,
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5.03.2 above, and amount due from one Party to the other shall be paid in U.S.
Dollars within ten (10) Days after receipt of the original invoice. In case that
payment date falls on a Sunday or holiday, then payment date will be the next
Banking Day. In case that payment date falls on a Saturday, then payment date
will be the prior Banking Day.
5.03.4 OFFICE EXPENSES. Seller shall provide Buyer with a list
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detailing certain expenses which Buyer shall be liable for and which may include
telephone, telefax, cleaning and secretarial services, as well as expenses
incurred by Buyer's Representatives supervising receipt of the Product
deliveries at the Delivery Point. Buyer's Representatives must approve such
detailed list. Seller shall invoice Buyer at the end of the Month U.S. $2,500
for such expenses, and Buyer shall pay Seller within twelve (12) Days after
receipt of the original invoice at Buyer's offices. If payment date falls on a
weekend or U.S. or Mexican holiday, payment shall be made on the following
Banking Day. Extraordinary expenses shall be mutually agreed by the Parties.
5.03.5 LATE PAYMENTS. If either Party does not make timely payment
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of any amount due under this Agreement, then any such late payment shall accrue
interest at a rate equal to the Prime Rate announced by Citibank N.A., New York,
New York, U.S., pro-rated for the number of days a payment is late. If either
Party, for any reason disputes an amount which is invoiced or claimed to be
owed, then such Party shall promptly pay the undisputed amount to the extent
that such amount is undisputed. Buyer and Seller shall resolve the disputed
amount, and a replacement invoice shall be issued and payment of the replacement
invoice shall be made in accordance with Article 5.03. The failure of a Party to
object to an invoice within ten (10) Days after receipt of the invoice shall
terminate the Party's right to contest the amount stated. If a timely objection
is raised and not resolved within thirty (30) Days thereafter, the dispute may
then be submitted to the American Arbitration Association through its expected
arbitration procedures.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Seller hereby represents and warrants to Buyer as follows:
6.01 ORGANIZATION AND QUALIFICATION. Seller is a corporation duly
---------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own and operate its assets and properties and to carry on its
business as currently conducted. Seller is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction where the
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ownership or operation of its assets and properties or the conduct of its
business requires such qualification.
6.02 CORPORATE AUTHORIZATION. Seller has full corporate power and
-------------------------
authority to execute and deliver this Agreement, and to perform its obligations
hereunder. The execution, delivery, and performance by Seller of this Agreement
has been duly and validly authorized and no additional corporate authorization
or consent is required in connection with the execution, delivery and
performance by it of this Agreement.
6.03 CONSENTS AND APPROVALS. No consent, approval, waiver or
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authorization is required to be obtained by Seller from, and no notice or filing
is required to be given by Seller or made by Seller with, any federal, state,
local or foreign governmental authority or other person in connection with the
execution, delivery and performance of this Agreement.
6.04 NON-CONTRAVENTION. The execution, delivery and performance by
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Seller of this Agreement, and the consummation of the transactions contemplated
hereby, do not and will not (i) violate any provision of the organizational
documents of Seller; (ii) conflict with, or result in the breach of, or
constitute a default under, or result in the termination, cancellation or
acceleration (whether after the filing of notice or the lapse of time or both)
of any right or obligation of Seller under, or to a loss of any benefit to which
Seller is entitled under any contract; or (iii) or result in a breach of or
constitute a default under any law of any court or governmental authority to
which Seller is subject.
6.05 BLINDING EFFECT. This Agreement constitutes a valid and legally
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binding obligation of Seller enforceable against Seller in accordance with the
terms of this Agreement, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
Buyer hereby represents and warrants to Seller as follows
6A.01 ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly
---------------------------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own and operate its assets and properties and to carry on its
business as currently conducted. Buyer is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction where the
ownership or operation of its assets and properties or the conduct of its
business requires such qualification.
6A.02 CORPORATE AUTHORIZATION. Buyer has full corporate power and
-------------------------
authority to execute and deliver this Agreement, and to perform its obligations
hereunder. The execution, delivery and performance by Buyer of this Agreement
has been duly and validly authorized and no additional corporate authorization
or consent is required in connection with the execution, delivery and
performance by it or this Agreement.
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6A.03 CONSENTS AND APPROVALS. No consent, approval, waiver or
-------------------------
authorization is required to be obtained by Buyer from, and no notice or filing
is required to be given by Buyer or made by Buyer with, any federal, state,
local or foreign governmental authority or other person in connection with the
execution, delivery and performance of this Agreement.
▇▇.▇▇ ▇▇▇-▇▇▇▇▇▇▇▇▇▇▇▇▇. The execution, delivery, and performance by
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Buyer of this Agreement, and the consummation of the transactions contemplated
hereby, do not and will not (i) violate and provision of the organizational
documents of Buyer; (ii) conflict with, or result in the breach of, or
constitute a default under, or result in the termination, cancellation or
acceleration (whether after the filing of notice or the lapse of time or both)
of any right or obligation of Buyer under, or to a loss of any benefit to which
Buyer is entitled under, and contract; or (iii) or results in a breach of or
constitute a default under any law of any court or governmental authority to
which Buyer is subject.
6A.05 BINDING EFFECT. This Agreement constitutes a valid and legally
----------------
binding obligation of Buyer enforceable against Buyer in accordance with the
terms of this Agreement, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
ARTICLE VII
TERMINAL-RELATED PROVISIONS; REGULATORY COMPLIANCE
7.01 TERMINAL SAFETY. Buyer will comply, and will cause Buyer's
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Representatives entering into the Delivery Point (or the Alternative Delivery
Point, if such is the case) to comply, with all applicable terminal safety and
health regulations. Seller will execute on its name, pay for, and furnish to
Buyer prior to accepting any Product at the Delivery Point (or the Alternative
Delivery Point, if such is the case), all information (including applicable
material safety data sheets), documents, labels, placards, container, and other
materials which may be required to be furnished by Buyer by statutes,
ordinances, rules or regulations of any public authority relating to the
describing, packaging, receiving, storing, handling, or shipping of Product at
or from the Delivery Point (or the Alternative Delivery Point, if such is the
case). Seller shall provide such information at the execution of this Agreement.
7.02 LOADING Seller will provide loading services at the Delivery Point
-------
(or the Alternative Delivery Point, if such is the case) seven (7) Days a week,
twenty-four (24) hours per Day. If the Parties determine that it is not
necessary to have personnel 24 hours a Day based upon operational experience
developed on site, hours of service shall be subject to availability of Buyer's
Representatives to dispatch Product from the Delivery Point (or the Alternative
Delivery Point, if such is the case).
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Seller will provide Buyer, in addition to the Inspector's report, with a
daily activity report specifying the quantity (weight and volume) and quality of
Product delivered to Buyer at the Delivery Point (or the Alternative Delivery
Point, if such is the case).
7.03 SPILL/ENVIRONMENTAL POLLUTION. If any Propane and/or Butane or
-------------------------------
Product spill or other environmental polluting discharge occurs in connection
with or relating to any Product prior to delivery of such Product, all
containment and clean-up operations (including those required by any
governmental authority), shall be at Seller's expense.
If such spill or environment polluting discharge occurs after delivery at
the Delivery Point (or the Alternative Delivery Point, is such is the case),
Buyer authorizes Seller to commence containment of clean-up operations as deemed
appropriate or necessary by Seller or as may be required by any governmental
authority. Seller will notify Buyer immediately of such operations, Seller shall
have the right to direct all containment and clean-up operations.
All costs of containment and clean-up for any spill or environmental
pollution will be borne by the Party responsible for such spill or environmental
pollution, and such Party shall indemnify and hold harmless the other Party from
any and all expenses, claims, liabilities, damages, penalties, fines and other
costs (including, without limitation, attorneys' fees) resulting from or related
to such incident.
7.04 TERMINAL REGULATORY COMPLIANCE. Seller warrants that the terminals
-------------------------------
at the Delivery Point and the Alternative Delivery Point, respectively comply,
and covenants that such terminals will comply at all times during the Term of
the Agreement, with all local, state and federal laws, rules or regulations
applicable to terminals, including without limitation, all such laws, rules or
regulations concerning permits and insurance required for owning, leasing,
using, or operating a terminal at the Delivery Point or Alternative Delivery
Point.
ARTICLE VIII
CHANGE OF CIRUMSTANCES
----------------------
The deregulation of the Mexican LPG market shall constitute a Change of
Circumstance under this Agreement. In case of any change in the regulation of
the LPG Market in Mexico that allows free importation to private companies, any
party shall have the right to notify the other party its desire to reduce the
quantity stated in this Agreement or its desire to terminate this Agreement in
advance. The negotiation process shall last no more that thirty (30) Days. If,
by the end of such period the parties do not reach a mutual consent, this
Agreement shall be deemed as terminated.
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ARTICLE IX
MISCELLANEOUS
-------------
9.01 NOTICES. All notices or other communications hereunder shall be
--------
deemed to have been duly given and made if in writing and if served by personal
delivery upon the Party for whom it is intended, if delivered by registered or
certified mail, return receipt requested, or by a national courier service, or
if sent by telecopier; provided that the telecopy is promptly confirmed by
telephone confirmation thereof, to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:
BUYER: P.M.I. TRADING LIMITED
ADDRESS: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇
Col. Huasteca
▇▇▇▇▇ ▇▇▇▇▇▇ D.F.
Commercial Contact
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ / ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ / ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇/0158/0240/ (▇▇▇) ▇▇▇-▇▇▇▇/0158/0240
Telex No.: ▇▇▇▇▇▇▇
Fax No.: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇ / (▇▇▇) ▇▇▇-▇▇▇▇
Operations Contact
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇/0142/0119/ (▇▇▇) ▇▇▇-▇▇▇▇/0142/0119
Telex No.: ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇
Fax No.: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇ / (▇▇▇) ▇▇▇-▇▇▇▇
Financial Contact
Name: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇/0077 / (▇▇▇) ▇▇▇-▇▇▇▇/0077
Telex No.: 1773671-1773509
Fax No.: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇ / (▇▇▇) ▇▇▇-▇▇▇▇
SELLER: RIO VISTA ENERGY PARTNERS L.P.
ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇. ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Commercial Contacts
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇
Fax No.: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇
Operations Contact
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇
Fax No.: (▇▇-▇▇) ▇▇▇▇-▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇ ▇▇▇▇
Carretera La ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇ KM. 3.4
La ▇▇▇▇▇▇, Tamaulipas
Financial Contact
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
9.02 AMENDMENT; WAIVER. Any provision of this Agreement may be amended
------------------
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by Buyer and Seller, or in the case of a waiver, by
the Party against whom the waiver is to be effective. In the event of any such
attempted assignment or delegation by any Party without the consent of the other
Party, such Party shall have the right, without prejudice to any other rights or
remedies it may have hereunder or otherwise, to terminate the Agreement
effective immediately upon notice to the other Party.
No failure or delay by any Party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
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9.03 ASSIGNMENT. No party to this Agreement may assign any of its
-----------
rights or obligations under this Agreement without the prior written consent of
the other Party hereto, which consent shall not be unreasonably withheld.
9.04 ENTIRE AGREEMENT. This Agreement (including all Exhibits hereto)
------------------
contains the entire agreement between the Parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
oral or written, with respect to such matters.
9.05 FULFILLMENT OF OBLIGATIONS. Any obligation of any Party to any
-----------------------------
other Party under this Agreement, which obligation is performed, satisfied or
fulfilled by an Affiliate of such Party, shall be deemed to have been performed,
satisfied or fulfilled by such Party.
9.06 PARTIES IN INTEREST. This Agreement shall inure to the benefit of
---------------------
and be binding upon the Parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer upon any Person other than Buyer, Seller or their respective successors
or permitted assigns, any rights or remedies under or by reason of this
Agreement.
9.07 DISCLOSURE. Notwithstanding anything herein to the contrary, each
-----------
of the Parties hereby agrees with the other Party or Parties hereto that, except
as may be required to comply with the requirements of any applicable Laws and
the rules and regulations of any stock exchange upon which the securities of one
of the Parties is listed, no press release or announcement or communication of
any kind shall ever, whether prior to or subsequent to the execution of this
Agreement, be made or caused to be made concerning the execution, performance or
terms of this Agreement unless specifically approved in advance by all Parties
hereto.
9.8 EXPENSES. Except as otherwise expressly provided in this Agreement,
---------
whether or not the transactions contemplated by this Agreement are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the Party incurring such
expenses.
9.09 GOVERNING LAW. This agreement shall be governed by, and construed
---------------
in accordance with the internal laws of the state of New York without regard to
its conflicts of law principals.
9.10 ARBITRATION. Any and all disputes, claims or controversies arising
------------
under or relating to this Agreement shall be settled by arbitration administered
by the American Arbitration Association ("AAA") under its International
Arbitration Rules. The place of the arbitration shall be New York City, New
York, U.S. The Parties agree that the number of arbitrators shall be three. Each
Party shall nominate a neutral and independent arbitrator, and the two
arbitrators so appointed shall appoint the third neutral and independent
arbitrator, who shall act as the Chairperson. If the arbitrators selected by the
Parties are unable or fail to agree upon the third arbitrator, the third
arbitrator
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shall be selected by the AAA. The award shall be in writing, shall be signed by
a majority of the arbitrators, and shall include a statement regarding the
reasons for the disposition of any claim. A judgment of the court having
jurisdiction may be entered on the award. Except as may be required by law,
neither a Party nor an arbitrator may disclose the existence, content, or
results of any arbitration hereunder without the prior written consent of both
Parties.
9.11 COUNTERPARTS. This Agreement may be executed in one or more
-------------
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.
9.12 HEADINGS. The heading references herein and the table of contents
---------
hereto are for convenience purposes only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
9.13 SEVERABILITY. The provisions of this Agreement shall be deemed
-------------
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefore in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
9.14 THIRD PARTY BENEFICIARIES. Nothing in the Agreement is intended or
--------------------------
shall be construed to confer upon or give to any Person or entity any rights as
a third party beneficiary of the Agreement or any part thereof.
9.15 TAXES. Each Party shall be responsible for paying any taxes,
------
duties, fees or whichever other similar to which they are obliged to pay in
accordance with the applicable law.
9.16 OTHER TERMS AND CONDITIONS. Except as would conflict or except as
----------------------------
otherwise provided in this Agreement, Incoterms 2000 for DDU and FCA shall
apply. In no event shall the United Nations Convention for the International
Sales of Goods apply to this Agreement.
9.17 FORCE MAJEURE. Neither Party shall be liable for demurrage,
---------------
losses, damages, claims or demands of any nature arising out of delays or
defaults in performance under the Agreement due to any unforeseeable impediment
beyond the reasonable control of the Parties ("Force Majeure"), which shall
include, but not be limited to: acts of god or public enemy: floods or fire:
hostilities of war (whether declared or undeclared); blockades; labor
disturbances; strikes; riots; insurrections or civil commotion; quarantine
restrictions or epidemics; electrical shortages or blackouts; earthquakes;
tides,
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storms or bad weather; accidents; breakdown or injury to Buyer's (or Seller's)
facilities; or laws; decrees, regulations, orders or other directives or actions
of either general or particular application of the government of Mexico or the
U.S. or any agency thereof or of a person or authority purporting to act
therefore, or request of any such person or authority. Any Party claiming Force
Majeure shall promptly notify the other of the occurrence of the event of Force
Majeure relied upon and shall estimate the length of time that the Force Majeure
condition is expected to continue. Such Party shall also promptly notify other
Party of the cessation of the Force Majeure condition. Nothing in this Article
shall relieve Buyer of its obligation to pay in full for product sold and
effectively delivered and to pay all other amounts due to Seller under the
Agreement.
The occurrence of an event of Force Majeure shall not operate to extend the
period of this Agreement. Should any such event curtail or suspend the
performance of either Party hereunder for a period in excess of seven (7) Days,
either Party shall have the right to terminate this Agreement upon notice to the
other Party.
If, as a result of Force Majeure, Seller at any time does not have
available a sufficient amount of Product to be sold to Buyer, Seller shall be
obligated to equally prorate the available amount it holds for export among its
customers, including Buyer, or shall make reasonable commercial efforts to
purchase Product from any third party to sell to Buyer.
9.18 CONFIDENTIALITY. The Parties agree to keep all terms and
----------------
conditions of this Agreement private and confidential except to the extent that
disclosure is required under any rule or regulation to which the Party shall be
subject.
9.19 LIMITATION OF LIABILITY. Neither Party shall be liable for
--------------------------
special, indirect, incidental or consequential damages.
9.20 APPLICABILITY OF SECTIONS 362(B)(6) AND 556. The Parties
acknowledge and agree that this Agreement is subject to Buyer's rights under 11
U.S.C. Sec.Sec. 362 (b)(6) and 556. In that regard, the Parties acknowledge and
agree that:
(a) The Product is a "commodity" within the definition set forth in 7
U.S.C. Sec. 1(a)(4) and 11 U.S.C. Sec. 761(8), and is the subject of dealing in
the forward contract trade.
(b) This Agreement is a "forward contract" within the definition set forth
in 11 U.S.C. Sec. 101(25) for the purchase, sale or transfer of a commodity.
(c) This Agreement has a maturity date of more than two Days after this
Agreement is entered into.
(d) Buyer and Seller are each a "forward contract merchant" within the
definition set forth in 11 U.S.C. Sec. 101(26).
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(e) The contractual termination rights set forth in Sections 10(a) and (b)
hereof are conditions of the kind specified in 11 U.S.C. Sec. 365(e)(1).
(f) The Parties therefore acknowledge and agree that this Agreement may be
terminated by Buyer, in accordance with Sections 10(a) and (b) hereof, upon the
commencement of a bankruptcy case or insolvency proceeding by, or against,
Seller under and Chapter of Title 11 of the United States Code or any other
applicable insolvency, or similar, law.
ARTICLE X
TERMINATION
TERMINATION FOR VARIOUS EVENTS. Notwithstanding anything herein to the contrary,
-------------------------------
either Party may (in addition to any other rights or remedies provided to the
other Party under this Agreement) terminate this Agreement, effective
immediately upon notice to the other Party, if any of the following events
occurs, and no alternative payment arrangement has been made to secure payment
to the terminating Party:
(a) The other Party (or any guarantor of the other Party's
obligations hereunder) institutes proceeding to be adjudged bankrupt
or insolvent, seeks or suffers reorganization under court order, seeks
the benefit of any law for the relief of debtors, makes an assignment
for the benefit of creditors, admits in writing its inability to pay
its debts generally when become due, or performs any other generally
recognized act of insolvency or bankruptcy, or there shall be declared
a moratorium on the payment of the other Party's (or such guarantor's)
debts;
(b) There is entered any decree or order by a court adjudging the
other Party (or any guarantor of any of the other Party's
obligations hereunder) bankrupt or insolvent, approving a petition for
reorganization, approving a patition seeking the benefit of any law
for the relief of debtors, appointing a receiver, or decreeing or
ordering the winding-up or liquidation of the other Party's (or such
guarantor's) affairs;
(c) Any law, rule, regulation or decree of any competent authority
restricts the ability of the other Party (or any guarantor of any of
the other Party's obligations hereunder) to obtain U.S. Dollars for
payments to be made under the Agreement (or any guaranty); and
(d) Any material representation or material warranty made by the
other Party (or any guarantor of any of the other Party's obligations
hereunder) hereunder or otherwise proves to be false or incorrect in
any material respect.
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(e) Buyer recognizes that Seller has entered into negotiations to
evaluate the sale of substantially all of it assets. Such negotiations
include the assignment of Seller's long term supply agreements
involving the sale and delivery of LPG to Seller's terminals in
Matamoros, Mexico and or Brownsville, that Buyer shall have at all
times the right to terminate this Agreement in its sole discretion, if
Buyer considers that the assignment of the Agreement to the asset
purchaser would materially affect reliable supply of LPG to Buyer, or
if such attempted assignment or delegation by Seller is done without
Buyer's prior written consent. In such event, Buyer shall further have
the right to exercise any rights or remedies it may have hereunder or
otherwise.
In witness whereof, the parties have duly executed this agreement as of June
4th, 2005.
RIO VISTA ENERGY PARTNERS L.P. P.M.I. TRADING LIMITED
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------- ---------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Title:
President Signatory
------------------------- ---------------------
EXHIBIT "A"
-----------
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Exhibit "A"
-----------
PRODUCT SPECIFICATIONS
------------------------------------------------------------------------------
TEST/ SPECIFICATION UNITS METHOD
----- ------------- ----- ------
COMPONENT
---------
------------------------------------------------------------------------------
PROPANE 90 MIN %VOL GC (ASTM
D 2163-
91)
------------------------------------------------------------------------------
BUTANE 10 MAX %VOL GC (ASTM
D-2163-
91)
------------------------------------------------------------------------------
ETHANE 2 MAX %VOL GC (ASTM
D-2163-
91)
------------------------------------------------------------------------------
BUTYLENE 1 MAX %VOL GC (ASTM D
-2163-91)
------------------------------------------------------------------------------
PROPYLENE 2 MAX %VOL GC (ASTM
D-2163-
91)
------------------------------------------------------------------------------
PENTANES & 2 MAX %VOL GC (ASTM
HEAVIES D-2163-
91)
------------------------------------------------------------------------------
VAPOR 200 MAX PSIG ASTM D-
PRESSURE 1267-95
AT 100 F DEG. OR
GC (ASTM
D-2163-
91)
------------------------------------------------------------------------------
SPECIFIC - ASTM D-
GRAVITY 1657 OR
GC (ASTM
D-2163-
91)
ASTM D-
2598-96
------------------------------------------------------------------------------
CORROSION 1 ▇▇▇▇ ▇-
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇-▇▇
▇▇ ▇▇▇ ▇ ▇▇▇.
------------------------------------------------------------------------------
OTHER NONE
DELETERIOUS
SUBSTANCES
------------------------------------------------------------------------------
ODORIZATION PRODUCT
SHALL BE
ODORIZED
(STENCHED)
AS PER
OFFICIAL U.S.
AND MEXICAN
REGULATIONS
------------------------------------------------------------------------------
Notes: GC: Gas chromatograph
Propane content; propane + ethane + propylene
Butane content: normal butane + butylenes + pentane and heavies
Determination of quality shall follow the latest revision of ASTM
procedure.
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