June 1, 1995
Powerine Oil Company
12354 Lakeland Road
Santa Fe Springs, California 90670
Attention: A.L. Gualtieri
Castle Energy Corporation
100 Matsonford Road
One Radnor Corporate Center
Suite 250
Radnor, Pennsylvania 19087
Attention: Joseph L. Castle II
Indian Powerine L.P.
c/o Castle Energy Corporation
100 Matsonford Road
One Radnor Corporate Center
Suite 250
Radnor, Pennsylvania 19087
CEC, Inc.
c/o Castle Energy Corporation
100 Matsonford Road
One Radnor Corporate Center
Suite 250
Radnor, Pennsylvania 19087
Gentlemen:
We refer to that certain Powerine Petroleum Sale and Storage Agreement
dated April 8, 1995 between Wickland Oil Company and Powerine Oil Company, as
amended to date (the "Agreement"). Capitalized terms used herein but not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement.
The parties hereto supplementally agree as follows:
1. Hedging. Section 16 of Schedule C is hereby amended to read in
full as follows:
"Hedging. During the term of this Agreement, Wickland shall engage in a
hedging program mutually agreeable to both parties to hedge all barrels of
Wickland-Owned crude oil, Feed Stocks and Intermediate Products. Powerine shall
pay to Wickland all costs associated with such hedging program on a daily basis
as follows: Wickland shall submit an invoice to Powerine on a daily basis
showing hedging costs (including margin calls) or credits, as the case may be,
and on the next business day Powerine shall pay Wickland by wire transfer its
costs set forth on such daily invoice, or Wickland shall pay Powerine by wire
transfer on the next business day for any credit shown on such invoice as
applicable. Powerine shall otherwise pay to Wickland all costs associated with
such hedging program including, without limitation, interest, brokers' fees and
losses attributable to imperfect hedging.
2. Pricing Amendments. The following pricing amendments shall be
effective as of the inception of this Agreement:
(a) The price of Propane as set forth on Exhibit A, Schedule 1,
page 2; Exhibit D, Schedule 1, page 1; and Exhibit D, Schedule 3, page 1 shall
be as follows: The lower of (i) low of spot range LA each business day per OPIS,
and (ii) 95% of Warren El Segundo posted price.
(b) The market price of Heavy Coker Gas Oil on Exhibit A, Schedule
1, page 1 shall be as follows: Low of "380-C Bunker (per ton) price as per
Platts Tuesday Bunkerwire divided by 6.325". All references to OPIS in the
pricing of Decant Oil, Bunker C Fuel Oil (Ex Cutter), Heavy Coker Gas Oil and
Cutter Stock on Exhibit A, Schedule 1, page 2; Exhibit C, Schedule 2, page 2;
and Exhibi D, Schedule 1, page 1 shall be deemed to refer to Platts Tuesday
Bunkerwire.
(c) On Exhibit D, Schedule 2, page 1, the component "Unifinite"
shall be deemed added under Gasoline Components and Finished Products, with the
following prices under the applicable headings: 3.78 6.30 2.94 0.25 .10.
(d) On Exhibit D, Schedule 3, pages 1 and 2, the same changes to
the description of market price for propane, Decant Oil, Bunker C Fuel Oil (Ex
Cutter) and Cutter Stock shall be made as set forth in clause (b) above.
3. Personnel. Powerine agrees that marketing information from
Robert Mills will be available to Wickland at no additional charge. During the
term of this Agreement, Powerine shall cause Mr. Mills not to engage in
marketing activities respecting commodities. The provisions of Wickland's letter
to Powerine dated May 2, 1995 regarding personnel matters shall remain in full
force and effect. Wickland's letter dated May 17, 1995 respecting personnel
matters shall be deemed rescinded.
4. Invoicing. The provisions of Sections 13(b)(i)(A) and
13(c)(i)(A) are hereby amended to add the following sentence: "Invoices for
weekend deliveries shall be submitted as of 05:00 Saturday and 05:00 Sunday and
payment will be due Wickland and Powerine respectively in accordance with
Section 13(b)(ii) following such dates.
5. Notice of Refinancing. Powerine's notice of refinancing to
Wickland dated May 12, 1995 is hereby rescinded.
Kindly acknowledge your agreement to the foregoing by signing this
letter where indicated below. This Agreement will be effective when signed by
all parties.
Very truly yours,
Wickland Oil Company,
a California corporation
By: /s/ Robert L. Sanz
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Robert L. Sanz, Vice President
Supply and Marketing
Agreed:
Powerine Oil Company,
a California corporation
/s/ A. L. Gualtieri
---------------------------
A.L. Gualtieri
President and CEO
Castle Energy Corporation,
a Delaware corporation
/s/ Joseph L. Castle II
----------------------------
Joseph L. Castle II
Chairman of the Board and
Chief Executive Officer
Indian Powerine L.P.,
an Illinois limited partnership
By: IP Oil Co., Inc.,
an Illinois corporation,
its general partner
By: /s/ Joseph L. Castle II
----------------------------
Its:
CEC, Inc.,
a Delaware corporation
By: /s/ Joseph L. Castle II
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Its: