Exhibit 10.3


 




	
  GE Energy

  	
   

  	
  Mario
  Gomez-Blanco, Project Manager

  






 


November 19, 2009


Durkin Ledgard


General Counsel


BPZ Energy, Inc.


580 Westlake Park Blvd., Suite 525


Houston, TX 77079


 


SUBJECT: Empresa Electrica
Nueva Esperanza — Caleta Cruz Contract


Notice: Amendment Contract
CMS 705100, CF20304


 


Dear Mr. Ledgard:


 


In connection with the CMS
705100 Contract dated September 26, 2008, by and between the Consortium of
GE Packaged Power, Inc. and GE International Inc. Sucursal de Peru
(collectively, “Seller”) and Empresa Electrica Nueva Esperanza S.R.L. (“Buyer”),
as amended by the Amendment Agreement (the “Amendment”) between Buyer and
Seller dated January 23, 2009 (collectively, the “Contract”), based on our
recent discussions concerning the extended time-line for BPZ’s power
project  in Peru, and BPZ’s desire to
defer certain payment obligations for a period of time, the undersigned hereby
agree to the following terms of this Letter Agreement:


 


1.               In accordance with the terms
of the Amendment, Buyer shall make Milestone Payment 5 in the amount of
$3,508,142.86 in immediately available funds on or before November 20,
2009.


 


2.               Buyer shall make a partial
Milestone Payment 6 in the amount of $1,000,000.00 in immediately available
funds on or before December 15, 2009, followed by a payment of remaining
balance of Milestone Payment 6 in the amount of $2,508,142.86 in immediately
available funds on or before March 26, 2010.


 


3.               Buyer shall resume monthly
payments on or before April 15, 2010 in accordance with attached revised
Contract Attachment 9 — Payment Schedule and Contract Attachment 12 —
Termination Schedule.


 


4.               The deadline for Buyer to
make final payment on outstanding balance in the amount of $20,710,214.28 in
immediately available funds shall be on or before December 1, 2010
maintaining contract pricing on all three units of $17,155,000.00 as per the
Contract. Buyer acknowledges and agrees that if Buyer locates a partner for
this project and obtains financing prior to this December 1, 2010
deadline, then the Buyer shall pay to Seller this final payment within seven (7) calendar
days of obtaining the financing and funding.


 


5.               The Equipment will be
delivered upon receipt of the final payment or as may otherwise be mutually
agreed between Buyer and Seller in accordance with the delivery terms
stipulated in the Contract. Should the parties not reach agreement prior to December 1,
2010, then the 


 

















 


Contract shall terminate and
all funds paid by Buyer shall be used as termination fees to Seller.


 


6.               The Seller shall not be
subject to any of the Liquidated Damages specified in the Contract under Article 9
— Schedule and Liquidated Damages for Delay.


 


7.               Failure to make any of the
payments in full on the applicable due date, as stipulated above, shall result
in immediate termination of the Contract without any additional notice or cure
period.


 


8.               All terms not otherwise
defined in this Letter Agreement shall be as defined in the Contract. Except as
modified in this Letter Agreement, all other terms and conditions of the
Contract shall continue to apply, except that the parties agree and acknowledge
that several provisions of the Contract, including, but not limited to, certain
Definitions;: Section 6.1, Payment Schedule: 6.2,  Payment Security: 8.2, Delivery: 9.2, Schedule
Delivery Date: 13.4 Advance Notice of Readiness to Ship and Inspection and
14.1, Warranty; and Attachment 4 require revision in order to effectuate the
parties’ intent as set forth in this Letter Agreement, and the Parties agree to
promptly negotiate and complete such revisions by November 30, 2009.


 


 


	
  Sincerely,

  	
   

  	
  Acknowledged and agreed

  
	
   

  	
   

  	
  Empresa Electrica

  
	
   

  	
   

  	
  Nueva Esperanza S.R.L.

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  /s/ Mario Gomez-Blanco

  	
   

  	
  /s/ Rafael Zoeger

  
	
  Mario Gomez-Blanco

  	
   

  	
  Rafael Zoeger

  
	
  Project Manager Americas+

  	
   

  	
  General Manager

  
	
  GE Package
  Power, Inc.

  	
   

  	
  November 20, 2009

  
	
  November 20, 2009

  	
   

  	
   

  



 

















 


Attachment
9 -Payment Schedule


Payment Schedule


 


	
  Payment* Date

  	
   

  	
  Unit
  1

  	
   

  	
  Unit
  2

  	
   

  	
  Unit
  3

  	
   

  	
  Total

  	
   

  	
  Inv.

  	
   

  	
  Inv.
  Amounts

  	
   

  
	
  Price

  	
   

  	
  $

  	
  17,155,000.00

  	
   

  	
  $

  	
  17,155,000.00

  	
   

  	
  $

  	
  17,155,000.00

  	
   

  	
  $

  	
  51,465,000.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 26, 2008

  	
   

  	
  $

  	
  1,715,500.00

  	
   

  	
  $

  	
  1,715,500.00

  	
   

  	
  $

  	
  1,715,500.00

  	
   

  	
  $

  	
  5,146,500.00

  	
   

  	
  1

  	
   

  	
  $

  	
  5,146,500.00

  	
   

  
	
  October 15, 2008

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  2

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  
	
  November 15, 2008

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  2,287,333.34

  	
   

  	
  3

  	
   

  	
  $

  	
  2,287,333.34

  	
   

  
	
  December 15, 2008

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  3,431,000.01

  	
   

  	
  4

  	
   

  	
  $

  	
  3,431,000.01

  	
   

  
	
  November 20, 2009

  	
   

  	
  $

  	
  1,175,809.52

  	
   

  	
  $

  	
  1,169,380.95

  	
   

  	
  $

  	
  1,162,952.38

  	
   

  	
  $

  	
  3,508,142.85

  	
   

  	
  5

  	
   

  	
  $

  	
  3,508,142.85

  	
   

  
	
  December 15, 2009

  	
   

  	
  $

  	
  333,333.34

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  6

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  
	
  March 26, 2010

  	
   

  	
  $

  	
  836,047.61

  	
   

  	
  $

  	
  836,047.62

  	
   

  	
  $

  	
  836,047.62

  	
   

  	
  $

  	
  2,508,142.85

  	
   

  	
  7

  	
   

  	
  $

  	
  2,508,142.85

  	
   

  
	
  April 15, 2010

  	
   

  	
  $

  	
  166,666.67

  	
   

  	
  $

  	
  166,666.67

  	
   

  	
  $

  	
  166,666.66

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  8

  	
   

  	
  $

  	
  500,000.00

  	
   

  
	
  May 1, 2010

  	
   

  	
  $

  	
  166,666.67

  	
   

  	
  $

  	
  166,666.66

  	
   

  	
  $

  	
  166,666.67

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  9

  	
   

  	
  $

  	
  500,000.00

  	
   

  
	
  June 1, 2010

  	
   

  	
  $

  	
  333,333.34

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  10

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  
	
  July 1, 2010

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  333,333.34

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  11

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  
	
  August 1, 2010

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  1,500,000.00

  	
   

  	
  12

  	
   

  	
  $

  	
  1,500,000.00

  	
   

  
	
  September 1, 2010

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  1,500,000.00

  	
   

  	
  13

  	
   

  	
  $

  	
  1,500,000.00

  	
   

  
	
  October 1, 2010

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  3,000,000.00

  	
   

  	
  14

  	
   

  	
  $

  	
  3,000,000.00

  	
   

  
	
  November 1, 2010

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  3,000,000.00

  	
   

  	
  15

  	
   

  	
  $

  	
  3,000,000.00

  	
   

  
	
  RTS** Unit 1 December 1, 2010

  	
   

  	
  $

  	
  5,753,309.51

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  5,753,309.51

  	
   

  	
  15

  	
   

  	
  $

  	
  5,753,309.51

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  —

  	
   

  	
  14

  	
   

  	
  $

  	
  —

  	
   

  
	
  RTS** Unit 2 December 1, 2010

  	
   

  	
   

  	
   

  	
  $

  	
  6,903,404.76

  	
   

  	
   

  	
   

  	
  $

  	
  6,903,404.76

  	
   

  	
  16

  	
   

  	
  $

  	
  6,903,404.76

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  17

  	
   

  	
  $

  	
  —

  	
   

  
	
  RTS** Unit 3 December 1, 2010

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  8,053,500.01

  	
   

  	
  $

  	
  8,053,500.01

  	
   

  	
  18

  	
   

  	
  $

  	
  8,053,500.01

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  17,245,000.00

  	
   

  	
  $

  	
  17,245,000.00

  	
   

  	
  $

  	
  17,245,000.00

  	
   

  	
  $

  	
  51,735,000.00

  	
   

  	
  TOT

  	
   

  	
  $

  	
  51,735,000.00

  	
   

  



 






Note:


*Payments shall be made by wire transfer directly to
Seller’s bank unsing wire trasfer information below


** Payments shall be made no later than 5 Days after
issuance of Notice of Readiness to Ship.


 

















 


Attachment 12 -Termination Schedule


Termination Schedule


 


	
   

  	
   

  	
  Unit 1

  	
   

  	
  Unit 2

  	
   

  	
  Unit 3

  	
   

  	
  Total

  	
   

  
	
  On or
  Before the Below Date

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  September 26, 2008

  	
   

  	
  $

  	
  1,715,500.00

  	
   

  	
  $

  	
  1,715,500.00

  	
   

  	
  $

  	
  1,715,500.00

  	
   

  	
  $

  	
  5,146,500.00

  	
   

  
	
  October 15, 2008

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  6,290,166.67

  	
   

  
	
  November 15, 2008

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  8,577,500.01

  	
   

  
	
  December 15, 2008

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  1,143,666.67

  	
   

  	
  $

  	
  12,008,500.02

  	
   

  
	
  November 20, 2009

  	
   

  	
  $

  	
  1,175,809.52

  	
   

  	
  $

  	
  1,169,380.95

  	
   

  	
  $

  	
  1,162,952.38

  	
   

  	
  $

  	
  15,516,642.87

  	
   

  
	
  December 15, 2009

  	
   

  	
  $

  	
  333,333.34

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  16,516,642.87

  	
   

  
	
  March 26, 2010

  	
   

  	
  $

  	
  836,047.61

  	
   

  	
  $

  	
  836,047.62

  	
   

  	
  $

  	
  836,047.62

  	
   

  	
  $

  	
  19,024,785.72

  	
   

  
	
  April 15, 2010

  	
   

  	
  $

  	
  166,666.67

  	
   

  	
  $

  	
  166,666.67

  	
   

  	
  $

  	
  166,666.66

  	
   

  	
  $

  	
  19,524,785.72

  	
   

  
	
  May 1, 2010

  	
   

  	
  $

  	
  166,666.67

  	
   

  	
  $

  	
  166,666.66

  	
   

  	
  $

  	
  166,666.67

  	
   

  	
  $

  	
  20,024,785.72

  	
   

  
	
  June 1, 2010

  	
   

  	
  $

  	
  333,333.34

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  21,024,785.72

  	
   

  
	
  July 1, 2010

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  333,333.34

  	
   

  	
  $

  	
  333,333.33

  	
   

  	
  $

  	
  22,024,785.72

  	
   

  
	
  August 1, 2010

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  23,524,785.72

  	
   

  
	
  September 1, 2010

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  500,000.00

  	
   

  	
  $

  	
  25,024,785.72

  	
   

  
	
  October 1, 2010

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  28,024,785.72

  	
   

  
	
  November 1, 2010

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  1,000,000.00

  	
   

  	
  $

  	
  31,024,785.72

  	
   

  
	
  RTS Unit 1 December 1, 2010

  	
   

  	
  $

  	
  5,753,309.51

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  36,778,095.23

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  RTS Unit 2 December 1, 2010

  	
   

  	
   

  	
   

  	
  $

  	
  6,903,404.76

  	
   

  	
   

  	
   

  	
  $

  	
  43,681,499.99

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  RTS Unit 3 December 1, 2010

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  8,053,500.01

  	
   

  	
  $

  	
  51,735,000.00