<PAGE> 1
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-13584
ENRON GLOBAL POWER & PIPELINES L.L.C.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0456366
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 CLAY STREET, SUITE 1800
HOUSTON, TEXAS 77002
(Address of principal executive offices) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 853-6220
------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
Indicate the number of shares outstanding of each of the issuer's classes of
common shares, as of the latest practicable date:
<TABLE>
<CAPTION>
CLASS OUTSTANDING AS OF JULY 31, 1997
----- -------------------------------
<S> <C>
Common Shares 26,018,602 shares
</TABLE>
===============================================================================
<PAGE> 2
ENRON GLOBAL POWER & PIPELINES L.L.C.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NO.
----
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income -- Three Months
Ended June 30, 1997 and 1996 and Six Months Ended
June 30, 1997 and 1996 ............................................. 1
Consolidated Balance Sheets -- June 30, 1997 and
December 31, 1996 .................................................. 2
Consolidated Statements of Cash Flows -- Six Months
Ended June 30, 1997 and 1996 ....................................... 3
Consolidated Statements of Changes in Shareholders'
Equity -- Six Months Ended June 30, 1997 ........................... 4
Notes to Consolidated Financial Statements .......................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................. 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders ............................................................. 22
Item 5. Other Matters .................................................. 22
Item 6. Exhibits and Reports on Form 8-K ............................... 22
</TABLE>
i
<PAGE> 3
ENRON GLOBAL POWER & PIPELINES L.L.C.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- -----------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C>
Technical Assistance Fees $ 2,954 $ 2,803 $ 5,850 $ 5,308
Equity in Earnings of Unconsolidated Subsidiaries:
Pipeline Operations 6,761 7,674 14,825 16,529
Power Operations 4,010 4,132 8,427 7,657
-------- -------- -------- --------
Equity in Earnings and Technical Assistance Fees 13,725 14,609 29,102 29,494
General and Administrative Expenses (1,600) (1,314) (3,279) (2,911)
Taxes Other Than Income (201) (150) (306) (293)
Interest Expense (407) -- (1,343) (1)
Interest Income 1,537 650 2,559 975
Other Income (Expense), Net 507 (1,119) 1,464 (1,855)
-------- -------- -------- --------
Income Before Income Taxes 13,561 12,676 28,197 25,409
Income Tax (Expense) Benefit (562) (1,101) 2,810 (2,313)
-------- -------- -------- --------
Net Income $ 12,999 $ 11,575 $ 31,007 $ 23,096
======== ======== ======== ========
Net Income Per Common Share $ 0.50 $ 0.48 $ 1.22 $ 0.96
======== ======== ======== ========
Average Number of Common Shares Used in Computation 26,001 24,051 25,431 24,024
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE> 4
ENRON GLOBAL POWER & PIPELINES L.L.C.
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
--------- ---------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 47,895 $ 24,582
Accounts receivable 9,734 6,301
Dividends receivable 10,027 ---
Current portion of notes receivable 1,413 1,394
Other current assets 912 404
--------- ---------
Total Current Assets 69,981 32,681
--------- ---------
Investments in and Advances to Unconsolidated 284,943 298,530
Subsidiaries
Notes Receivable 16,100 12,111
Other 2,299 521
--------- ---------
Total Assets $ 373,323 $ 343,843
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $16,371 $11,277
Accrued taxes 1,646 1,488
Current portion of note payable -- 36,583
-- ------
Total Current Liabilities 18,017 49,348
--------- ---------
Deferred Income Taxes 364 4,301
Notes Payable 22,892 24,750
Commitments and Contingencies (Note 9)
Shareholders' Equity
Common Shares, no par value,
200,000,000 shares authorized
and 26,018,402 and 24,392,352
shares issued and outstanding, respectively 268,020 219,816
Retained earnings 64,030 45,628
--------- ---------
Total Shareholders' Equity 332,050 265,444
--------- ---------
Total Liabilities and Shareholders' Equity $ 373,323 $ 343,843
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 5
ENRON GLOBAL POWER & PIPELINES L.L.C.
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Reconciliation of net income to net cash flows from
operating activities
Net income $ 31,007 $ 23,096
Equity in earnings of unconsolidated subsidiaries (23,252) (24,186)
Distributions from unconsolidated subsidiaries 26,812 16,249
Deferred income taxes (3,937) 992
Changes in components of working capital:
Accounts receivable (3,433) 132
Accounts payable 5,094 1,056
Accrued taxes 158 (919)
Other, net (2,251) 1,587
--------- ---------
Net Cash Flows from Operating Activities 30,198 18,007
--------- ---------
Cash Flows from Investing Activities:
Loan to unconsolidated subsidiary (4,043) --
--------- ---------
Net Cash Flows Used in Investing Activities (4,043) --
--------- ---------
Cash Flows From Financing Activities:
Common shares issued 48,204 179
Loan from parent 4,043 --
Loan from affiliate 5,374 --
Payment of long-term debt (47,858) --
Dividends paid (12,605) (9,526)
--------- ---------
Net Cash Flows Used in Financing Activities (2,842) (9,347)
--------- ---------
Increase in Cash and Cash Equivalents 23,313 8,660
Cash and Cash Equivalents, Beginning of Period 24,582 23,364
--------- ---------
Cash and Cash Equivalents, End of Period $ 47,895 $ 32,024
========= =========
Supplemental Cash Flow Information:
Cash Paid for Income Taxes $ 1,086 $ 2,272
========= =========
Cash Paid for Interest $ 1,333 $ --
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 6
ENRON GLOBAL POWER & PIPELINES L.L.C.
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
-----------------------------------------------
COMMON RETAINED
SHARES EARNINGS TOTAL
-------- -------- --------
<S> <C> <C> <C>
Balance at December 31, 1996 $219,816 $45,628 $265,444
Net income -- 31,007 31,007
Dividends -- (12,605) (12,605)
Exercise of purchase option by Enron Corp. 47,000 -- 47,000
Issuances for share options 1,204 -- 1,204
-------- -------- --------
Balance at June 30, 1997 (Unaudited) $268,020 $ 64,030 $332,050
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 7
ENRON GLOBAL POWER & PIPELINES L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
ENRON GLOBAL POWER & PIPELINES L.L.C.
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION
Enron Global Power & Pipelines L.L.C., a Delaware limited liability company,
and its wholly owned subsidiaries (EPP), own interests in natural gas pipeline
systems in Argentina and Colombia, two power plants in the Philippines, a power
plant in Guatemala and a power plant in the Dominican Republic. EPP's pipeline
operations in Argentina are conducted through its wholly owned subsidiary,
Enron Pipeline Company -- Argentina S.A. (EPCA). EPCA owns 331/3% of Compania
de Inversiones de Energia S.A. (CIESA), which in turn owns 70% of
Transportadora de Gas del Sur S.A. (TGS), the entity that owns the pipeline
system. EPP's pipeline operations in Colombia are conducted through its 49%
limited partnership interest in Centragas -- Transportadora de Gas de la Region
Central de Enron Development & Cia., S.C.A. (Centragas). EPP's power operations
in the Philippines are conducted through its wholly owned subsidiary, Enron
Power Philippines Corp. (EPPC). EPPC owns 50% of the outstanding stock of Subic
Power Corp. (SPC) and Batangas Power Corp. (BPC), the entities that own the
respective power plants. The Guatemala power operations are conducted through
EPP's 50% ownership interest in Puerto Quetzal Power Corp. EPP's Dominican
Republic power operations are conducted through its 50% partnership interest in
Smith/Enron Cogeneration Limited Partnership (SECLP) and Smith/Enron O&M
Limited Partnership (SEOM).
2. ACQUISITIONS
General
Acquisitions of projects from Enron Corp. or its affiliates (collectively,
Enron) are transactions between entities under common control that are
accounted for similar to the pooling of interests method of accounting using
the historical carryover basis and restating historical results to include the
results of acquired projects. There were no acquisitions during the six months
ended June 30, 1997.
CIESA
The acquisition of an additional interest in CIESA from a third party occurred
in July 1996. Detailed below are summarized pro forma results of operations for
EPP as though the acquisition of CIESA had occurred on January 1, 1996.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1996
------------------- --------------------
<S> <C> <C>
Equity in Earnings and
Technical Assistance Fees $ 16,554 $ 33,376
Net Income 12,632 25,208
Net Income per Common Share $ 0.53 $ 1.05
</TABLE>
Centragas
During 1996, EPP recorded approximately $4.7 million of equity in earnings from
Centragas, approximately $2.8 million of which related to an early completion
bonus. In accordance with the Transportation Services Contract dated May 12,
1994, between Centragas and Empresa Colombiana de Petroleos (Ecopetrol), the
state-owned oil company of Colombia, Ecopetrol was obligated to pay to
Centragas an early completion bonus if certain conditions
5
<PAGE> 8
ENRON GLOBAL POWER & PIPELINES L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
were satisfied. Centragas believed that all of these conditions were satisfied;
however, Ecopetrol contested certain aspects of the early completion bonus.
Centragas asserted its claim to such bonus through an amicable compoundment
dispute resolution process whereby an independent engineering firm, chosen by
Centragas and Ecopetrol, would decide the issue. On June 4, 1997, the
independent engineering firm resolved the dispute in favor of Ecopetrol. As a
result of this decision, EPP recorded a $1.9 million net reduction to equity in
earnings from Centragas in the first six months of 1997.
3. BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared by
EPP without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, the consolidated financial statements reflect
all adjustments which are, in the opinion of management, necessary for a fair
presentation of the financial results for the interim periods. Certain
information and notes normally included in financial statements prepared in
accordance with generally accepted accounting principles (GAAP) have been
condensed or omitted pursuant to such rules and regulations. However, EPP
believes that the disclosures are adequate to make the information presented
not misleading. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in EPP's Annual Report on Form 10-K for the year ended December 31,
1996.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from the
estimates.
EPP records as cash equivalents all highly liquid short-term investments with
original maturities of three months or less. From time to time, EPP invests
excess funds with Enron under promissory notes payable on demand at market
interest rates. At June 30, 1997, approximately $46.9 million was invested
under such notes. Such amounts are classified as cash equivalents.
All monetary amounts presented in tables herein are expressed in thousands,
except per share amounts.
Certain prior period amounts have been reclassified to conform with the
current presentation.
4. SHAREHOLDERS' EQUITY
On March 5, 1997, Enron exercised an option, which was granted to Enron in
connection with Enron providing the financing for the additional EPP interest
in CIESA acquired in July 1996 (the Option) (see Note 2). The Option allowed
Enron to purchase $47.0 million of EPP common shares at the average market
price for the 20 trading days immediately preceding the second trading day
prior to the exercise (approximately 1.6 million EPP common shares). A portion
of the proceeds was used to repay the $36.6 million note payable to Enron (see
Note 6).
On June 16, 1997, EPP paid a quarterly cash dividend of $0.25 per share.
5. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED SUBSIDIARIES
EPP's investments in and advances to unconsolidated subsidiaries and the
changes in such balances are as follows:
<TABLE>
<CAPTION>
PIPELINE POWER TOTAL
-------- ----- -----
<S> <C> <C> <C>
Balance at December 31, 1996 $198,204 $100,326 $298,530
Equity in Earnings 14,825 8,427 23,252
Distributions Declared (10,027) -- (10,027)
Distributions Made (18,812) (8,000) (26,812)
-------- -------- --------
Balance at June 30, 1997 $184,190 $100,753 $284,943
-------- -------- --------
</TABLE>
6
<PAGE> 9
ENRON GLOBAL POWER & PIPELINES L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
At June 30, 1997, EPP's share of undistributed earnings of its pipeline and
power subsidiaries totaled approximately $6.3 million and $22.1 million,
respectively. At June 30, 1997, SECLP has undistributed earnings of $6.2
million and is precluded from making distributions due to arrearages on
principal and interest payments related to the cost overrun loans (COLs) (see
Note 8) and maintenance funding requirements.
In the first six months of 1997, EPPC received $6.5 million in dividends from
its Philippine power operations, EPCA received $14.2 million in dividends from
CIESA and EPP received $1.5 million in dividends from its Guatemala power plant
operations. During the first six months of 1997, Centragas declared dividends
of approximately $29.9 million, approximately $4.6 million of which was
received during the first six months of 1997 and $10.0 million of which is
expected to be received by EPP incrementally through December 1997. Equity in
earnings are net of amortization of excess investment related to CIESA and
SECLP/SEOM.
6. NOTES PAYABLE
On March 5, 1997, EPP received $47.0 million in connection with the exercise
of Enron's option to acquire EPP common shares (see Note 4). EPP used a portion
of the proceeds from the exercise of the option to repay the $36.6 million note
payable to Enron.
In the first six months of 1997, EPP borrowed $4.0 million from Enron to loan
to SECLP (see Note 8).
In the first six months of 1997, EPCA repaid $11.3 million of the $24.8
million borrowed from Centragas, predominantly with proceeds from repayment of
loans made to, and a loan from, Enron in the amount of $5.9 million and $5.4
million, respectively (see Note 3).
On July 22, 1997, EPCA repaid the $5.4 million loan to Enron.
7. SUPPLEMENTAL CASH FLOW INFORMATION
The first six months of 1996 include the issuance of approximately 3.5 million
EPP common shares in exchange for assets with a carryover basis totaling $62.5
million related to the acquisitions of Centragas, SECLP and SEOM. There were no
noncash transactions in the first six months of 1997.
8. NOTES RECEIVABLE
In the first six months of 1997, EPP loaned approximately $8.6 million to
Enron in the form of a note receivable. The note bore interest at 5.4% payable
quarterly and was payable on demand. The note was converted to the one-month
London Interbank Offering Rate with principal due on demand and is included in
cash and cash equivalents (see Note 3).
During the first six months of 1997, EPP made additional COLs to SECLP in the
amount of $4.0 million for construction-related items. As of June 30, 1997, the
COLs and past due interest payments total in the aggregate $14.6 million. The
COLs bear interest at 13.5% and are due in semiannual principal and interest
payments through December 15, 2005. As of June 30, 1997, past due principal and
interest on the COLs total $1.7 million and $1.6 million, respectively, of the
$14.6 million and bear interest at 15.5%.
In July 1997, EPP made additional COLs to SECLP in the amount of $0.3 million
with the same terms as the previous COLs.
9. COMMITMENTS AND CONTINGENCIES
EPP and subsidiaries, in the ordinary course of business, are defendants in
various lawsuits and administrative proceedings before various courts and
governmental agencies. Management believes that the final outcome of these
7
<PAGE> 10
ENRON GLOBAL POWER & PIPELINES L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
proceedings, individually and in the aggregate, will not have a material
adverse impact on EPP's financial position or results of operations.
Argentina
GdE Request
TGS received and denied a request from Gas del Estado S.E. (GdE), a company
owned and operated by the Argentine government, for the reimbursement of
approximately $23 million paid by GdE under purchase orders issued for the
construction of two compressor plants. GdE submitted this matter for resolution
to Ente Nacional Regulador del Gas (ENARGAS), the Argentine federal gas
regulatory entity, but ENARGAS concluded that it lacks jurisdiction to
adjudicate the dispute. In April 1996, GdE filed a legal action seeking
reimbursement from TGS of the $23 million. TGS has accrued approximately $4.8
million as property, plant and equipment based on its estimate of construction
costs of similar plants. TGS has thoroughly answered the demand and is refusing
the claim.
TGS has filed a claim against GdE and the Argentine government seeking the
reimbursement of amounts paid by TGS in connection with the registration and
payment of certain easements. On October 7, 1996, the Executive Branch, through
Decree No. 1,136/96, created a contribution fund, as provided for in the
license to transport natural gas through the southern Argentine gas pipeline
system granted to TGS in December 1992, to assume GdE's obligations for paying
easements and any other compensation to land owners for an initial five-year
period, beginning with privatization. ENARGAS has started managing the above
mentioned fund, which is financed by a special charge included in the
transportation rates and reimbursed to ENARGAS. TGS expects to recover the
amounts paid related to such easement. As of June 30, 1997, the total amount
sought by TGS is approximately $3.4 million.
Regulatory Matters
On July 4, 1997, ENARGAS announced its resolution covering the base natural
gas transportation tariffs of TGS for the five-year period commencing January
1, 1998. The ENARGAS resolution included an up-front, one-time tariff reduction
of 6.5% for the efficiency factor and the framework by which TGS will promote
and price future systems expansions. The resolution did not address the
investment factor nor other proposals which could partially mitigate the impact
of the rate reduction.
Under the Argentine Natural Gas Act, every five years ENARGAS is required to
review the tariffs charged for regulated transportation services with the use
of an incentive tariff methodology. The methodology provides for the derivation
of an efficiency factor and an investment factor. The efficiency factor, which
is a reduction to transporters' base tariff rates, is a sharing mechanism
between the transporters and their customers resulting from specific,
quantifiable efficiencies identified by ENARGAS. The investment factor, which
is an increase to the transporters' base tariff, is a funding mechanism
designed to recover the incremental investment in and return on ENARGAS-
approved expansions to be undertaken by the transporter during the established
period.
EPP believes that the concepts ENARGAS has applied are inconsistent with the
letter and spirit of the regulatory framework which was intended to encourage
operational efficiencies. EPP will continue to work with TGS to evaluate the
resolution and its impact on planned future investments.
Dominican Republic
SECLP is currently involved in an International Chamber of Commerce
arbitration proceeding against Corporacion Dominicana de Electricidad (CDE),
the government agency which provides electric services to the Dominican
Republic, and the Dominican Republic Government (DR Government). In SECLP's
earlier pleadings in the arbitration proceedings, SECLP has formally alleged
that CDE owes approximately $19.4 million in past due amounts under the
Electric Energy Supply and Sales Contract dated July 26, 1993, as amended,
among SECLP, CDE and the DR Government (Puerto Plata Energy Supply Contract), a
claim which CDE disputes. SECLP has
8
<PAGE> 11
ENRON GLOBAL POWER & PIPELINES L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
reserved the right to update its pleadings prior to a final arbitration hearing
date to include the then current amount of the alleged receivable. As of July
31, 1997, SECLP believes that the total receivable is approximately $30
million. CDE has alleged that SECLP owes approximately $13.6 million in delay
damages to CDE pursuant to the Puerto Plata Energy Supply Contract. In addition
to CDE's claims, the DR Government has alleged that its guaranty of CDE's
obligations under the Puerto Plata Energy Supply Contract and the $24 million
letter of credit furnished by the DR Government are void because such
commitments were not approved by the Congress of the Dominican Republic. At the
request of the DR Government, the arbitration tribunal has requested that SECLP
refrain from drawing on the letter of credit while the arbitration is underway.
In the arbitration proceeding, SECLP has denied the claims of CDE and the DR
Government and is defending against such claims, which defense includes the
fact that the claim for delay damages was previously waived by CDE and the DR
Government in an earlier contractual undertaking. SECLP believes that it has
strong legal and factual defenses and is vigorously pursuing its claims
against, as well as contesting the claims brought by CDE and the DR Government.
SECLP anticipates a decision by the arbitration panel by the end of 1997. While
the arbitration proceeding is ongoing, SECLP and CDE have begun informal and
preliminary discussions to negotiate a settlement of their dispute. Although no
assurances can be given, EPP believes that the ultimate resolution of this
matter will not have a material adverse effect on EPP's financial position or
results of operations.
On October 5, 1994, Hotelera del Atlantico, S.A. (Hotelera), the owner of a
hotel located near the Puerto Plata Plant in the Dominican Republic (Puerto
Plata Plant), initiated an action against SECLP in the Dominican Republic,
requesting damages in excess of 1.5 billion pesos (approximately $108 million
based on a conversion rate of 13.83 pesos/U.S. dollar) and a penalty of 50,000
pesos (approximately $3,600) for each day SECLP continued to operate the Puerto
Plata Plant after the action was initiated. Hotelera alleges that physical
damage and nuisance were caused to the hotel by the operation of the Puerto
Plata Plant prior to December 15, 1994. On December 15, 1994, an agreement
between the parties was reached and a settlement agreement was signed
(Settlement Agreement). However, on September 4, 1995, Hotelera filed a
petition with the Dominican Republic Council of Reconciliation and Arbitration
alleging, among other things, that the environmental guidelines of the World
Bank had not been followed by SECLP as agreed to in the Settlement Agreement.
SECLP has no reason to believe that it has not complied with the World Bank
guidelines and is aggressively defending against such claims. While Enron has
agreed to indemnify EPP from any changes in investment value due to the
financial impact to the project of the Hotelera dispute, an adverse decision in
the Hotelera dispute may impact EPP's earnings from SECLP. Although no
assurances can be given, EPP believes that the ultimate resolution of this
matter will not have a material adverse effect on EPP's financial position or
results of operations.
SECLP, General Electric Company (GE), Raytheon Engineers & Constructors
(Raytheon), Enron Power Construction Company and certain subcontractors and
insurers have been involved in discussions covered by a confidentiality
arrangement relating to claims arising from the design, construction, start-up,
testing and operation of the Puerto Plata Plant. A settlement of claims has
been agreed to between SECLP, GE and Raytheon. While Enron has agreed to
indemnify EPP from any changes in the investment value due to the potential
financial impact of these settlements on the project, the settlements could
impact EPP's earnings from SECLP. Although no assurances can be given, EPP
believes that the ultimate resolutions of these matters will not have a
material adverse effect on EPP's financial position or results of operations.
Enron is obligated to fund certain amounts to SECLP associated with
construction-related items and other issues. Pursuant to the purchase
arrangement regarding SECLP between subsidiaries of Enron and EPP, if required
to fund such amounts, Enron will loan funds as COLs to SECLP through EPP. The
Purchase Agreement among EPP, Enron International Inc. and Enron Holding
Company L.L.C. dated June 17, 1996, includes provisions that may require an
adjustment to the purchase price by December 31, 1997, depending upon the
resolution of certain contingencies, including the final amount of additional
COLs and collection of certain receivables ($2.8 million) by SECLP from CDE.
Any purchase price adjustments may be settled in EPP common shares or cash.
Although no assurances can be given, EPP believes that the ultimate resolution
of this matter will not have a material adverse effect on EPP's financial
position or results of operations.
9
<PAGE> 12
ENRON GLOBAL POWER & PIPELINES L.L.C.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Philippines
At June 30, 1997, BPC had a value added tax (VAT) receivable of approximately
$6.0 million. The realization of the VAT receivable requires the attainment of
VAT exemption from the Bureau of Internal Revenue (BIR), the Philippine tax
authority. BPC received confirmation of VAT exemption through BIR ruling No.
43-97 dated May 15, 1997. EPP believes that the VAT receivable will be realized
either as a credit against future tax liabilities or a refund from BIR and/or
National Power Corporation, the primary electric power supplier in the
Philippines, and that the full amount of the VAT receivable will be recovered.
10. DEFERRED INCOME TAXES
During the first six months of 1997, EPP reversed a reserve of approximately
$4.0 million for certain Philippine withholding taxes based upon the repeal of
a U.S. tax law which enabled EPP to alter its tax planning strategies. Under
the new strategies, EPP believes that such cash will ultimately be received
without incurring such withholding taxes and, accordingly, management believes
that a liability for such withholding taxes is no longer required.
11. DERIVATIVE FINANCIAL INSTRUMENTS
During the first six months of 1997, EPP entered into forward purchase
contracts (Contracts) on Colombian pesos with a notional value of $24.6 million
scheduled to settle between late 1997 and early 1998. EPP entered into these
Contracts to offset potential fluctuations in planned equity earnings from
Centragas resulting from changes in the peso exchange rate. Such changes can
cause U.S. GAAP income to vary by impacting Colombian tax expense and foreign
exchange gains or losses on peso-denominated monetary assets and liabilities.
These Contracts do not hedge specific transactions, assets or liabilities and,
accordingly, are marked to market with gains or losses reported as other income
(expense), net. Gains or losses on the termination, sale or maturity of these
Contracts will be reported as other income (expense), net. These Contracts
generated approximately $1.4 million of income during the first six months of
1997, which is included in other income (expense), net.
12. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share" effective for interim and annual periods beginning after December 15,
1997. This statement replaces primary earnings per share (EPS) with a newly
defined basic EPS and modifies the computation of diluted EPS. EPP's basic and
diluted EPS computed using the requirements of SFAS No. 128 are the same as the
currently disclosed primary EPS amounts.
13. PROPOSED MERGER
On May 14, 1997, Enron submitted an offer to the Oversight Committee (composed
of three non-Enron-affiliated directors) of the Board of Directors of EPP
whereby Enron would purchase for $32 per share all outstanding EPP common
shares not already owned by Enron. Under the proposal, Enron would issue Enron
common shares in exchange for the EPP common shares. The merger proposal is
currently being evaluated by EPP's Oversight Committee.
10
<PAGE> 13
ENRON GLOBAL POWER & PIPELINES L.L.C.
PART I. FINANCIAL INFORMATION (CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PRIMARY ASSETS AND SOURCES OF EARNINGS AND CASH
The primary assets of Enron Global Power & Pipelines L.L.C. ("EPP"), a
Delaware limited liability company which is approximately 52% owned by Enron
Corp. (together with its subsidiaries, "Enron") at June 30, 1997, are its
interests in 50% or less owned companies ("Project Companies"), which it holds
directly or indirectly through wholly owned subsidiaries. EPP accounts for its
interests in the Project Companies under the equity method of accounting and
records its proportionate share of the earnings or losses of the Project
Companies. The operations of the Project Companies are EPP's primary source of
earnings. EPP also receives technical assistance fees, paid by Project
Companies to certain wholly owned subsidiaries of EPP, primarily by
Transportadora de Gas del Sur S.A. ("TGS") to Enron Pipeline Company --
Argentina S.A. ("EPCA"). Dividends paid by the Project Companies are EPP's
primary source of cash. Declaration and payment of such dividends are at the
sole discretion of the boards of directors of the Project Companies and are
subject to certain restrictions, including, among others, each Project
Company's operating profitability, restrictions on the distribution of cash
under applicable credit agreements and government imposed currency
restrictions. See "Liquidity and Capital Resources of EPP -- Primary Sources of
Cash" for further discussion regarding cash.
RESULTS OF OPERATIONS OF EPP
GENERAL
For the six months ended June 30, 1997, EPP's equity in earnings and technical
assistance fees from its Argentine and Philippine operations constituted
approximately 70% and 17%, respectively, of EPP's equity in earnings and
technical assistance fees. As of June 30, 1997, Argentine and Philippine assets
accounted for approximately 49% and 19%, respectively, of EPP's assets. As a
result, if the Argentine or Philippine operations were materially and adversely
affected, EPP's financial condition and results of operations could be
materially and adversely affected. See "Pipeline Operations" and "Power
Operations" below for the results of operations of EPP's Project Companies.
Acquisitions of projects from Enron are transactions between entities under
common control that are accounted for similar to the pooling of interests
method of accounting using the historical carryover basis and restating
historical results to include the results of acquired projects. There were no
acquisitions during the six months ended June 30, 1997.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 VS. THE THREE
MONTHS ENDED JUNE 30, 1996
EQUITY IN EARNINGS AND TECHNICAL ASSISTANCE FEES. Equity in earnings and
technical assistance fees decreased $0.9 million (6%) in the second quarter of
1997 compared to the second quarter of 1996. The decrease is primarily due to
decreased earnings in Centragas -- Transportadora de Gas de la Region Central
de Enron Development & Cia., S.C.A. ("Centragas") attributable to the reversal
of the early completion bonus from the unfavorable amicable compoundment
decision (see Note 2 to EPP's financial statements and notes thereto). This
decrease was partially offset by earnings resulting from the increased
ownership in Compania de Inversiones de Energia S.A. ("CIESA").
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $0.3 million (22%) during the second quarter of 1997 compared to the
second quarter of 1996 primarily as a result of the expiration of an agreement
requiring reimbursement of certain expenses.
11
<PAGE> 14
INTEREST EXPENSE. Interest expense increased $0.4 million (100%) during the
second quarter of 1997 compared to the second quarter of 1996 primarily due to
interest expense associated with the debt incurred in obtaining the additional
ownership of CIESA in July 1996.
INTEREST INCOME. Interest income increased $0.9 million (136%) during the
second quarter of 1997 compared to the second quarter of 1996 primarily due to
interest earned from the Dominican Republic cost overrun loans (see Note 8 to
EPP's financial statements and notes thereto).
OTHER INCOME (EXPENSE), NET. Other income (expense), net, represented income
of $0.5 million for the second quarter of 1997 and expense of $1.1 million for
the second quarter of 1996. The $0.5 million of income in 1997 was primarily
attributable to a gain recognized from forward contracts used to mitigate
foreign exchange risk in Colombia. The 1996 expense primarily represents
acquisition costs incurred for the Colombia and the Dominican Republic
projects.
INCOME TAX (EXPENSE) BENEFIT. The income of EPP is not taxable to EPP;
however, EPCA and Enron Power Philippines Corp. ("EPPC"), both wholly owned
subsidiaries of EPP, are taxable entities in their respective local
jurisdictions. The effective tax rate paid by these subsidiaries is less than
the statutory rate because a majority of the income of these subsidiaries
relates to ownership of equity investments, which is not subject to tax;
however, EPCA is subject to taxes (currently 33%) primarily on the technical
assistance fees received from TGS, net of interest expense. Dividends paid to
EPP from Centragas are subject to certain withholding taxes of 7%.
Income tax expense decreased $0.5 million (49%) for the second quarter of 1997
compared to the second quarter of 1996 primarily due to the elimination of
certain Philippine withholding taxes after the one-time reversal of a reserve
for certain Philippine withholding taxes in the first quarter of 1997. This
reversal of a reserve for certain Philippine withholding taxes was based upon
the repeal of a U.S. tax law which enabled EPP to alter its tax planning
strategies. Under the new strategies, EPP believes that such cash will
ultimately be received without incurring these withholding taxes and,
accordingly, management believes that a liability for these withholding taxes
is no longer required.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 VS. THE SIX MONTHS
ENDED JUNE 30, 1996
EQUITY IN EARNINGS AND TECHNICAL ASSISTANCE FEES. Equity in earnings and
technical assistance fees decreased $0.4 million (1%) in the first six months
of 1997 compared to the first six months of 1996. The decrease is primarily due
to decreased earnings in Centragas attributable to the reversal of the early
completion bonus from the unfavorable amicable compoundment decision (see Note
2 to EPP's financial statements and notes thereto). This decrease was partially
offset by the earnings resulting from the increased ownership in CIESA and
increased earnings in the Philippines. The increased earnings in the
Philippines are primarily a result of increased revenues due to more efficient
operations.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $0.4 million (13%) for the first six months of 1997 compared to the
first six months of 1996 primarily as a result of the expiration of an
agreement requiring reimbursement of certain expenses.
INTEREST EXPENSE. Interest expense increased $1.3 million (100%) for the first
six months of 1997 compared to the first six months of 1996 primarily due to
interest expense associated with the debt incurred in obtaining the additional
ownership of CIESA in July 1996.
INTEREST INCOME. Interest income increased $1.6 million (162%) for the first
six months of 1997 compared to the first six months of 1996 primarily due to
interest earned from the Dominican Republic cost overrun loans (see Note 8 to
EPP's financial statements and notes thereto).
OTHER INCOME (EXPENSE), NET. Other income (expense), net, represented income
of $1.5 million for the first six months of 1997 and expense of $1.9 million
for the first six months of 1996. The $1.5 million of income in
12
<PAGE> 15
1997 was primarily attributable to a gain recognized from forward contracts
used to mitigate foreign exchange risk in Colombia. The 1996 expense primarily
represents acquisition costs incurred for the Colombia and the Dominican
Republic projects.
INCOME TAX (EXPENSE) BENEFIT. Income taxes decreased $5.1 million for the
first six months of 1997 compared to the first six months of 1996 primarily due
to the one-time reversal of a reserve for certain Philippine withholding taxes
and the elimination of accrued Philippine withholding taxes after the one-time
reversal in the first quarter of 1997 based upon the repeal of a U.S. tax law
which enabled EPP to alter its tax planning strategies. Under the new
strategies, EPP believes that such cash will ultimately be received without
incurring these withholding taxes and, accordingly, management believes that a
liability for these withholding taxes is no longer required.
LIQUIDITY AND CAPITAL RESOURCES OF EPP
PRIMARY CASH REQUIREMENTS
The primary cash requirements of EPP include the payment of dividends to its
shareholders and the payment of general and administrative expenses, including
salaries, overhead, debt service obligations and costs incurred under the
Administrative Services and Cost Sharing Agreements between Enron and EPP. EPP
may also use cash to satisfy its payment obligations, if any, under various
shareholder and credit agreements relating to the Project Companies and under a
Master Contribution Agreement among EPP, Enron and certain of their
subsidiaries (the "Contribution Agreement"). Pursuant to the Contribution
Agreement, Enron maintains certain commitments on behalf of EPP for the benefit
of certain Project Companies, as required by project lenders and certain other
third parties. In most instances, EPP has agreed to indemnify Enron against
liabilities that may be incurred under such commitments. Although these
indemnity obligations could result in certain otherwise nonrecourse liabilities
becoming recourse to EPP, EPP believes the events which would trigger liability
are remote, and therefore does not expect these obligations to create any
additional liability. If, however, EPP were required to make significant
payments to Enron under the Contribution Agreement, EPP believes it would have
adequate cash resources, would be able to obtain financing for such payments
from Enron or other sources or would be able to cause its subsidiaries to pay
to EPP cash dividends sufficient to make such payments. However, there can be
no assurance that sufficient cash, dividends or funds from other sources would
be available for such purpose.
On June 16, 1997, EPP paid a quarterly dividend of approximately $6.5 million,
or $0.25 per share.
PRIMARY SOURCES OF CASH
Primary sources of cash for EPP consist of cash on hand, dividends from the
Project Companies, technical assistance fees and long-term loans of project
cash balances which are currently restricted by local regulations from being
declared as dividends. The ability of the Project Companies to pay dividends
will be dependent on the future earnings and debt repayment obligations of such
subsidiaries, dividend restrictions included in credit agreements at the
project level, applicable currency restrictions, income and other taxes,
applicable laws and the declaration of dividends by the boards of directors of
each of the Project Companies. Project financings typically require that
certain cash reserves be established at each Project Company and that certain
additional capital and legal requirements be satisfied before the Project
Company may pay dividends to its shareholders. However, each of EPP's
subsidiaries has a stated dividend policy, set forth in its shareholders
agreement, of maximizing after-tax cash distributions to shareholders after
taking into consideration capital requirements and applicable legal
requirements. In the future, the Project Companies may also borrow funds or
otherwise accept encumbrances on their earnings resulting in further possible
constraints on their ability to pay dividends to EPP.
On March 5, 1997, EPP received $47.0 million in connection with the exercise
by Enron of its option to acquire EPP common shares ("Common Shares"). EPP used
a portion of the proceeds from this option exercise to repay a $36.6 million
note payable to Enron.
13
<PAGE> 16
In the first six months of 1997, EPP loaned approximately $8.6 million to
Enron in the form of a note receivable. The note bore interest at 5.4% payable
quarterly and was payable on demand. The note was converted to the one-month
London Interbank Offering Rate with principal due on demand.
During the first six months of 1997, EPP made additional COLs to SECLP in the
amount of $4.0 million for construction-related items. As of June 30, 1997, the
COLs and past due interest payments total in the aggregate $14.6 million. The
COLs bear interest at 13.5% and are due in semiannual principal and interest
payments through December 15, 2005. As of June 30, 1997, past due principal and
interest on the COLs total $1.7 million and $1.6 million, respectively, of the
$14.6 million and bear interest at 15.5%.
In the first six months of 1997, Subic Power Corp. ("Subic") and Batangas
Power Corp. ("Batangas") paid $3.0 million and $10.0 million in dividends,
respectively, of which EPPC received approximately $6.5 million. EPCA received
approximately $14.2 million in dividends from CIESA in the first six months of
1997. EPP received approximately $1.5 million in dividends from Puerto Quetzal
Power Corp. ("PQPC") in the first six months of 1997. During the first six
months of 1997, Centragas declared dividends of approximately $29.9 million,
approximately $4.6 million of which was received during the first six months of
1997 and $10.0 million of which is expected to be received by EPP incrementally
through December 1997. SECLP and SEOM paid no dividends during the first six
months of 1997.
LONG-TERM FINANCING POLICY
EPP's business strategy is to generate long-term growth in earnings per share,
dividends and cash flow by acquiring interests in additional power and natural
gas pipeline projects from Enron and third parties. EPP currently expects to
fund any such acquisitions from Enron by issuing additional Common Shares and
to fund acquisitions from third parties with Common Shares, cash or debt. EPP
believes that it will have sufficient cash to meet its obligations for the
foreseeable future.
RECENT EVENTS
On July 4, 1997, Ente Nacional Regulador del Gas ("ENARGAS"), the Argentine
federal gas regulatory entity, announced its resolution covering the base
natural gas transportation tariffs of TGS for the five-year period commencing
January 1, 1998. The ENARGAS resolution included an up-front, one-time tariff
reduction of 6.5% for the efficiency factor and the framework by which TGS will
promote and price future systems expansions. The resolution did not address
the investment factor nor other proposals which could partially mitigate the
impact of the rate reduction (see Note 9 to EPP's financial statements and
notes thereto).
EPP and TGS are presently analyzing various options that could mitigate the
negative impact of the rate reduction. Accordingly, the final impact of the
ENARGAS resolution on the future revenues and net income of TGS and EPP,
respectively, has not been determined.
PIPELINE OPERATIONS
Equity in earnings of the pipeline operations represents EPP's 331/3% interest
in CIESA (increased from 25% on July 31, 1996), which owns 70% of TGS, and
EPP's 49% interest in Centragas, which EPP acquired in May 1996 and which began
full commercial operation in February 1996. See "Results of Operations of
EPP -- General."
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 VS. THE THREE
MONTHS ENDED JUNE 30, 1996
Presented below is a summary of income statement information for the combined
pipeline operations of CIESA and Centragas for the second quarter of 1997 and
1996 on a U.S. Generally Accepted Accounting Principles ("GAAP"), historical
U.S. dollar, 100% basis. See "Results of Operations of EPP -- General."
14
<PAGE> 17
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
--------
1997 1996
--------- --------
(IN THOUSANDS)
<S> <C> <C>
Gas transportation revenues $ 98,855 $104,932
Gas processing revenues 12,557 11,779
--------- --------
Total Revenues 111,412 116,711
Operating, administrative and selling expenses (33,405) (33,562)
Interest income 1,715 1,793
Interest expense, net of capitalized interest (20,840) (22,287)
Other income (327) (294)
--------- --------
Income Before Minority Interest and Income Taxes 58,555 62,361
Minority interest (12,785) (12,551)
Income tax expense (22,351) (22,337)
--------- --------
Net Income $ 23,419 $ 27,473
========= ========
EPP's Equity in Earnings of Pipeline Operations $ 6,761 $ 7,674
========= ========
</TABLE>
GAS TRANSPORTATION REVENUES. Transportation revenues decreased $6.1 million
(6%) for the second quarter of 1997 compared to the second quarter of 1996.
Transportation revenues of Centragas decreased $9.6 million during the second
quarter of 1997 primarily as a result of the reversal of the early completion
bonus recorded in the second quarter of 1996 (see Note 2 to EPP's financial
statements and notes thereto). Transportation revenues at TGS increased $3.5
million during the second quarter of 1997 primarily as a result of the
extension of certain firm transportation agreements and the 1.5% increase in
tariff rates effective July 1, 1996.
GAS PROCESSING REVENUES. During the second quarter of 1997 as compared to the
second quarter of 1996, processing revenues increased by $0.8 million (7%)
primarily due to increased prices and volumes of natural gas liquids. Improved
operating efficiencies in Argentina during the first quarter of 1997 provided
the increased volume of natural gas liquids. Centragas does not generate any
processing revenues.
OPERATING, ADMINISTRATIVE AND SELLING EXPENSES. Operating, administrative and
selling expenses remained relatively unchanged from the second quarter of 1996
compared to the second quarter of 1997.
INTEREST INCOME. Interest income remained relatively unchanged from the second
quarter of 1996 compared to the second quarter of 1997. Interest income at TGS
and CIESA decreased $0.8 million primarily due to lower average short-term
investment balances and lower interest rates during the second quarter of 1997.
Interest income at Centragas increased $0.7 million during the second quarter
of 1997 primarily as a result of loans made to affiliates.
INTEREST EXPENSE, NET OF CAPITALIZED INTEREST. Interest expense, net of
capitalized interest, decreased $1.4 million (6%) for the second quarter of
1997 compared to the second quarter of 1996 primarily due to decreases at TGS
and CIESA ($1.4 million). The decrease in interest expense, net of capitalized
interest, at TGS and CIESA for the second quarter of 1997 was primarily a
result of lower interest rates at TGS (partially offset by increased average
debt outstanding), lower interest rates at CIESA from debt refinancing (see
"Liquidity and Capital Resources of Pipeline Operations") and increased
capitalized interest at TGS from increased capital expenditures.
INCOME TAX EXPENSE. The statutory tax rate in Argentina is 33% of taxable net
income, calculated according to Argentine tax regulations which differ in
certain respects from accounting practices followed under Argentine GAAP for
the preparation of financial statements. The statutory tax rate in Colombia is
35% of taxable net income, calculated according to Colombian tax regulations.
The effective tax rate for Centragas differs from the statutory tax rate
primarily due to the taxable effects of inflation and foreign currency exchange
fluctuations under Colombian tax regulations, which are eliminated for U.S.
GAAP reporting. Fluctuations in the value of the Colombian peso will result in
increases or decreases in local income taxes.
15
<PAGE> 18
Income tax expense remained relatively unchanged from the second quarter of
1996 compared to the second quarter of 1997. Income tax expense at TGS and
CIESA increased $3.8 million during the second quarter of 1997 as a result of
the increase in the Argentina statutory income tax rate from 30% to 33% in
September 1996 and increased taxable income. Income tax expense at Centragas
decreased $3.8 million during the second quarter of 1997 primarily as a result
of the reversal of the early completion bonus (see Note 2 to EPP's financial
statements and notes thereto).
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 VS. THE SIX MONTHS
ENDED JUNE 30, 1996
Presented below is a summary of income statement information for the combined
pipeline operations of CIESA and Centragas for the first six months of 1997 and
1996 on a U.S. GAAP, historical U.S. dollar, 100% ownership basis. See "Results
of Operations of EPP -- General."
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------
1997 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Gas transportation revenues $204,024 $205,963
Gas processing revenues 21,102 22,725
-------- --------
Total Revenues 225,126 228,688
Operating, administrative and selling expenses (66,082) (66,337)
Interest income 2,908 3,364
Interest expense, net of capitalized interest (41,909) (42,582)
Other income 228 1,065
-------- --------
Income Before Minority Interest and Income Taxes 120,271 124,198
Minority interest (25,054) (25,280)
Income tax expense (47,262) (41,554)
-------- --------
Net Income $ 47,955 $ 57,364
======== ========
EPP's Equity in Earnings of Pipeline Operations $ 14,825 $ 16,529
======== ========
</TABLE>
GAS TRANSPORTATION REVENUES. Transportation revenues decreased $1.9 million
(1%) for the first six months of 1997 compared to the first six months of 1996.
Transportation revenues at Centragas decreased $10.5 million during the first
six months of 1997 primarily as a result of the reversal of the early
completion bonus recorded in the first six months of 1996 (see Note 2 to EPP's
financial statements and notes thereto). Transportation revenues at TGS
increased $8.6 million during the first six months of 1997 primarily as a
result of the extension of certain firm transportation agreements and the 1.5%
increase in tariff rates effective July 1, 1996.
GAS PROCESSING REVENUES. During the first six months of 1997 as compared to
the first six months of 1996, processing revenues decreased by $1.6 million
(7%) primarily due to scheduled plant maintenance at the Cerri Complex in
Argentina during the first quarter of 1997. This decrease was partially offset
by increased prices and volumes in the second quarter of 1997. Improved
operating efficiencies provided the increased volume of natural gas liquids.
OPERATING, ADMINISTRATIVE AND SELLING EXPENSES. Operating, administrative and
selling expenses decreased $0.3 million (less than 1%) during the first six
months of 1997 compared to the first six months of 1996. Operating,
administrative and selling expenses decreased $1.5 million at TGS during the
first six months of 1997 primarily as a result of reductions in labor and
operating costs attained through improved operating efficiencies. The reduction
in operating costs was partially offset by increased depreciation expense
related to increased capital expenditures at TGS. Operating, administrative and
selling expenses increased $1.2 million at Centragas during the first six
months of 1997 primarily due to a full period of commercial operations during
1997 with commercial operations commencing on February 24, 1996.
16
<PAGE> 19
INTEREST INCOME. Interest income decreased $0.5 million (14%) during the first
six months of 1997 compared to the same period in 1996. Interest income at TGS
and CIESA decreased $1.5 million during the first six months of 1997 primarily
due to lower average short-term investment balances and lower interest rates at
TGS and CIESA. This decrease was partially offset by an increase in interest
income at Centragas ($1.0 million), which was primarily attributable to loans
made to affiliates.
INTEREST EXPENSE, NET OF CAPITALIZED INTEREST. Interest expense, net of
capitalized interest, decreased $0.7 million (2%) for the first six months of
1997 compared to the first six months of 1996. Interest expense, net of
capitalized interest, decreased $1.4 million at TGS and CIESA during the first
six months of 1997 primarily due to lower interest rates and increased
capitalized interest from increased capital expenditures. Interest expense, net
of capitalized interest, increased $0.7 million at Centragas during the first
six months of 1997 primarily as a result of a full period of commercial
operations during 1997 with commercial operations commencing on February 24,
1996.
INCOME TAX EXPENSE. Income tax expense in the first six months of 1997
increased $5.7 million (14%) compared to the first six months of 1996. Income
tax expense at TGS and CIESA increased $7.5 million during the first six months
of 1997 primarily due to the impact of the increase in the Argentina statutory
income tax rate from 30% to 33% in September 1996 and increased taxable income
in Argentina. Income tax expense at Centragas decreased $1.8 million during the
first six months of 1997 primarily due to the reversal of the early completion
bonus (see Note 2 to EPP's financial statements and notes thereto).
LIQUIDITY AND CAPITAL RESOURCES OF PIPELINE OPERATIONS
As of June 30, 1997, TGS had access to approximately $300 million under a
global program to issue up to $500 million of debt securities. In addition, TGS
had access to $200 million of debt securities under a shelf registration
statement filed with the Securities and Exchange Commission during 1996.
In January and February 1997, the board of directors and shareholders of TGS,
respectively, approved the creation of a new global program for the issuance of
short-term debt securities for a maximum amount of $150 million. As of June 30,
1997, TGS had $150 million outstanding at 5.80% under these issuances, which
have been classified as long-term debt since TGS has the ability to and intends
to refinance these securities throughout the five-year term of the new global
program.
On April 22, 1997, CIESA issued a five year $220 million debt security at the
three month London Interbank Offering Rate ("LIBOR") plus 2% for the first two
years, stepping up to LIBOR plus 2.70% thereafter. CIESA used these proceeds to
retire a $220 million bridge credit facility.
TGS believes that cash flows from operations supplemented with external debt
financing will provide sufficient liquidity to fund its capital expenditures,
pay dividends, cover its debt service and provide sufficient working capital.
As of June 30, 1997, CIESA's total capitalization amounted to $1.5 billion.
Total capitalization was comprised of debt of $897 million, shareholders'
equity of $379 million and minority interest of $272 million. Debt as a
percentage of total capitalization increased from 55% at December 31, 1996, to
58% at June 30, 1997.
Future capital expenditures for Centragas are expected to be minimal.
Centragas expects to meet cash requirements using cash flows from operations.
RECENT EVENTS
On July 4, 1997, ENARGAS announced its resolution covering the base natural
gas transportation tariffs of TGS for the five-year period commencing January
1, 1998. The ENARGAS resolution included an up-front, one-time tariff
reduction of 6.5% for the efficiency factor and the framework by which TGS will
promote and price future
17
<PAGE> 20
systems expansions. The resolution did not address the investment factor nor
other proposals which could partially mitigate the impact of the rate reduction
(see Note 9 to EPP's financial statements and notes thereto).
TGS is presently analyzing various options that could mitigate the negative
impact of the rate reduction. Accordingly, the final impact of the ENARGAS
resolution on the future revenues and net income of TGS has not been
determined.
POWER OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 VS. THE THREE
MONTHS ENDED JUNE 30, 1996
Presented below is a summary of income statement information for the combined
power operations of the Philippine power plants located in Subic Bay ("Subic
Plant") and Batangas ("Batangas Plant") with the Puerto Quetzal Plant in
Guatemala ("Puerto Quetzal Plant") and the Puerto Plata Plant in the Dominican
Republic ("Puerto Plata Plant") for the first quarter of 1997 and 1996 on a
U.S. GAAP, historical U.S. dollar, 100% basis. See "Results of Operations of
EPP -- General."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
--------
1997 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Capacity revenues $ 32,840 $ 33,351
Variable revenues 22,909 16,173
-------- --------
Total Revenues 55,749 49,524
Fuel cost (17,648) (11,749)
Operating and administrative expenses (11,093) (9,635)
Depreciation and amortization expense (8,258) (8,868)
-------- --------
Net Operating Income 18,750 19,272
Interest expense, net (9,188) (9,494)
Other expense, net (584) (403)
-------- --------
Income Before Income Taxes 8,978 9,375
Income tax expense (1,025) (914)
-------- --------
Net Income $ 7,953 $ 8,461
======== ========
EPP's Equity in Earnings of Power Operations $ 4,010 $ 4,132
======== ========
</TABLE>
REVENUES. A significant portion of each Project Company's revenue is
attributable to payments tied to the capacity of the respective plant, whether
on annual availability (the Subic and Batangas Plants) or an annual capacity
test (the Puerto Quetzal and Puerto Plata Plants). Capacity revenues remained
relatively unchanged from the second quarter of 1996 to the second quarter of
1997.
The second type of payment, an energy fee, varies directly with actual output
and, under the current cost structures of the plants, essentially covers
variable costs. Total variable revenues increased $6.7 million (42%) in the
second quarter of 1997 compared to the second quarter of 1996. Variable
revenues increased at the Puerto Plata Plant ($6.2 million) in the second
quarter of 1997 primarily as a result of increased output. Variable revenues
increased at the Puerto Quetzal Plant ($0.5 million) for the second quarter of
1997 primarily due to increased fuel costs. Variable revenues remained
relatively unchanged for the second quarter of 1997 at the Subic and Batangas
Plants.
FUEL COST. Fuel cost is the expense for the fuel burned at the Puerto Quetzal
and Puerto Plata Plants. An Enron affiliate supplies fuel to these plants at
market-based rates. Total fuel cost increased $5.9 million (50%) for the second
quarter of 1997 compared to the second quarter of 1996. Fuel cost at the Puerto
Plata Plant increased $5.2 million for the second quarter of 1997 primarily due
to the increased output discussed above. Fuel cost at the Puerto Quetzal Plant
increased $0.7 million for the second quarter of 1997 primarily due to the
higher fuel prices discussed
18
<PAGE> 21
above. Fuel is provided to the Subic and Batangas Plants by their customer,
National Power Corporation, at no cost to these plants.
OPERATING AND ADMINISTRATIVE EXPENSES. Operating and administrative expenses
increased $1.5 million (15%) in the second quarter of 1997 compared to the
second quarter of 1996. The increase was primarily due to increased operating
and administrative expenses of the Puerto Plata Plant ($1.7 million) and the
Batangas Plant ($0.5 million), partially offset by decreased operating and
administrative expenses at the Subic Plant ($0.7 million). The increase in
operating and administrative expenses at the Puerto Plata Plant for the second
quarter of 1997 was primarily due to increased legal fees associated with the
arbitration with Corporacion Dominicana de Electricidad ("CDE"), the government
agency which provides electric services to the Dominican Republic (see Note 9
to EPP's financial statements and the notes thereto) and maintenance costs. The
increase in operating and administrative expenses at the Batangas Plant for the
second quarter of 1997 was primarily the result of increased maintenance costs.
The decrease in operating and administrative expenses for the second quarter of
1997 at the Subic Plant was primarily due to lower maintenance costs.
DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization expense
decreased $0.6 million (7%) in the second quarter of 1997 compared to the
second quarter of 1996. The decrease was due primarily to lower depreciation
and amortization expense at the Puerto Plata Plant ($0.5 million).
INTEREST EXPENSE, NET. Interest expense, net, decreased $0.3 million (3%) in
the second quarter of 1997 compared to the second quarter of 1996. Interest
expense, net, decreased at the Batangas, Subic and Puerto Quetzal Plants for
the second quarter of 1997 ($0.4 million, $0.3 million and $0.1 million,
respectively) primarily due to lower outstanding debt balances. These decreases
were partially offset by the increase in interest expense, net, at the Puerto
Plata Plant ($0.5 million) in the second quarter of 1997, primarily
attributable to increased interest expense on the cost overrun loans (see Note
8 to EPP's financial statements and notes thereto).
INCOME TAX EXPENSE. Income tax expense is the tax on the power plants in their
respective local jurisdictions. On an aggregate basis, the effective tax rate
for the Subic and Batangas Plants is less than the statutory rate due to the
Subic and Batangas Plants being granted certain income tax holidays and
concessions. PQPC is organized as a U.S. domiciled company with a foreign
branch office. SECLP has been granted an income tax holiday for the life of the
project. Income tax expense increased $0.1 million (12%) for the second quarter
of 1997 compared to the second quarter of 1996 primarily due to an increase at
the Puerto Quetzal Plant primarily attributable to increased taxable income.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 VS. THE SIX MONTHS
ENDED JUNE 30, 1996
Presented below is a summary of income statement information for the combined
power operations of the Subic, Batangas, Puerto Quetzal and Puerto Plata Plants
for the first six months of 1997 and 1996 on a U.S. GAAP, historical U.S.
dollar, 100% ownership basis. See "Results of Operations of EPP -- General."
19
<PAGE> 22
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------
1997 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Capacity revenues $ 65,556 $ 63,325
Variable revenues 45,407 37,524
-------- --------
Total Revenues 110,963 100,849
Fuel cost (34,829) (27,637)
Operating and administrative expenses (20,390) (18,193)
Depreciation and amortization expense (16,963) (17,741)
-------- --------
Net Operating Income 38,781 37,278
Interest expense, net (18,298) (18,241)
Other expense, net (1,246) (1,148)
-------- --------
Income Before Income Taxes 19,237 17,889
Income tax expense (2,489) (2,180)
-------- --------
Net Income $ 16,748 15,709
======== ========
EPP's Equity in Earnings of Power Operations $ 8,427 $ 7,657
======== ========
</TABLE>
REVENUES. Capacity revenues increased $2.2 million (4%) in the first six
months of 1997 compared to the first six months of 1996. Capacity revenues
increased at the Puerto Plata Plant ($1.0 million) in the first six months of
1997 primarily due to a full period of commercial operations during 1997 with
commercial operations commencing on January 15, 1996. Capacity revenues
increased $0.5 million and $0.3 million at the Subic and Batangas Plants,
respectively, in the first six months of 1997 primarily due to more efficient
operations. Capacity revenues increased $0.4 million at the Puerto Quetzal
Plant in the first six months of 1997 primarily due to the annual price
increase per the contract with the customer effective each February.
Total variable revenues increased $7.9 million (21%) for the first six months
of 1997 compared to the first six months of 1996 primarily due to the increase
at the Puerto Plata Plant ($8.1 million), partially offset by the decrease at
the Puerto Quetzal Plant ($0.5 million). The increase at the Puerto Plata Plant
in the first six months of 1997 was primarily a result of increased output. The
decrease at the Puerto Quetzal Plant in the first six months of 1997 was
primarily attributable to lower fuel prices. Variable revenues remained
relatively unchanged for the first six months of 1997 at the Subic and Batangas
Plants.
FUEL COST. Total fuel cost increased $7.2 million (26%) for the first six
months of 1997 compared to the first six months of 1996 primarily as a result
of the increase in fuel cost at the Puerto Plata Plant. Fuel cost at the Puerto
Plata Plant increased $7.0 million for the first six months of 1997 primarily
due to the increased output discussed above.
OPERATING AND ADMINISTRATIVE EXPENSES. Operating and administrative expenses
increased $2.2 million (12%) in the first six months of 1997 compared to the
first six months of 1996. The increase was primarily due to increased operating
and administrative expenses of the Puerto Plata Plant ($3.4 million) and the
Batangas Plant ($0.3 million), partially offset by decreased operating and
administrative expenses at the Subic Plant ($0.9 million) and the Puerto
Quetzal Plant ($0.6 million). The increase in operating and administrative
expenses at the Puerto Plata Plant for the first six months of 1997 was
primarily due to increased legal fees associated with the CDE arbitration (see
Note 9 to EPP's financial statements and the notes thereto) and maintenance
costs. The increase in operating and administrative expenses at the Batangas
Plant for the first six months of 1997 was primarily attributable to increased
insurance and maintenance costs. The decrease in operating and administrative
expenses at the Subic and Puerto Quetzal Plants for the first six months of
1997 were primarily a result of decreased maintenance costs.
DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization expense
decreased $0.8 million (4%) in the first six months of 1997 compared to the
first six months of 1996. The decrease was primarily due to lower depreciation
and amortization expense at the Puerto Plata Plant ($0.8 million).
20
<PAGE> 23
INTEREST EXPENSE, NET. Interest expense, net, remained relatively unchanged
from the first six months of 1996 compared to the first six months of 1997.
Interest expense, net, decreased $0.6 million, $0.4 million and $0.2 million at
the Batangas, Subic and Puerto Quetzal Plants, respectively, in the first six
months of 1997 primarily due to lower outstanding debt balances. Interest
expense, net, increased $1.3 million at the Puerto Plata Plant in the first six
months of 1997 primarily as a result of increased interest expense on the cost
overrun loans (see Note 8 to EPP's financial statements and notes thereto).
INCOME TAX EXPENSE. Income tax expense increased $0.3 million (14%) for the
first six months of 1997 compared to the first six months of 1996 primarily as
a result of an increase at the Puerto Quetzal Plant primarily attributable to
increased taxable income.
LIQUIDITY AND CAPITAL RESOURCES OF POWER OPERATIONS
Capital expenditures for the power plant operations are expected to be
insignificant in 1997. The power plant operations expect to meet short and
long-term liquidity needs using cash flows from operations. If a specific power
plant has short-term liquidity needs that cannot be met with cash flows from
operations, it is expected that such plant would borrow or be advanced the
necessary funds from an affiliated company.
INFORMATION REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Although EPP
believes that its expectations are based on reasonable assumptions, it can give
no assurance that its goals will be achieved. Important factors that could
cause actual results to differ materially from those in the forward looking
statements herein include political developments in foreign countries, the
timing and success of Enron's efforts to develop international power, pipeline
and other infrastructure projects and conditions of the capital markets and
equity markets during the periods covered by the forward looking statements.
21
<PAGE> 24
ENRON GLOBAL POWER & PIPELINES L.L.C.
PART II.
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER MATTERS
On May 16, 1997, EPP announced that Enron had identified a proposed 116-
megawatt, natural gas-fired combined heat and power plant in Nowa Sarzyna,
Poland, as a designated development project for EPP's project portfolio. Under
the Purchase Right Agreement between EPP and Enron, designated development
projects must be offered by Enron to EPP at prices which meet certain projected
minimum earnings, cash flow and internal rate of return criteria. With the
addition of this Poland project as a designated development project, four Enron
projects (Dabhol, India; Hainan Island, China; Nowa Sarzyna, Poland; and
Trakya, Turkey) are now designated development projects which Enron will offer
to EPP on terms specified in the Purchase Right Agreement.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.1 Firm Transportation Service Agreement FT-37, between TGS and Gas
Natural BAN S.A. commencing May 22, 1996, with English
translation.
10.2 Firm Transportation Service Agreement FT-38, between TGS and
MetroGas S.A. commencing July 25, 1996, with English translation.
10.3 Firm Transportation Service Agreement FT-40, between TGS and
Camuzzi Gas Pampeana S.A. commencing June 28, 1996, with English
translation.
10.4 US$220,000,000 Note Purchase Agreement dated as of April 18,
1997, among CIESA, Banco Supervielle Societe Generale S.A.,
Goldman, Sachs & Co. and Societe Generale as Arrangers, the
Managing Agents named therein, the CoAgents named therein, the
Lead Managers named therein, the Administrative Agent named
therein and the Purchasers named therein.
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
22
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ENRON GLOBAL POWER & PIPELINES L.L.C.
(Registrant)
Date: August 5, 1997 By /s/ RODNEY L. GRAY
------------------
Rodney L. Gray
Chairman and Chief Executive Officer
Date: August 5, 1997 By /s/ KURT S. HUNEKE
------------------
Kurt S. Huneke
President and Chief Financial Officer
23
<PAGE> 26
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- -------
<S> <C>
10.1 Firm Transportation Service Agreement FT-37, between TGS and Gas Natural
BAN S.A. commencing May 22, 1996, with English translation.
10.2 Firm Transportation Service Agreement FT-38, between TGS and MetroGas
S.A. commencing July 25, 1996, with English translation.
10.3 Firm Transportation Service Agreement FT-40, between TGS and Camuzzi Gas
Pampeana S.A. commencing June 28, 1996, with English translation.
10.4 US$220,000,000 Note Purchase Agreement dated as of April 18, 1997, among
CIESA, Banco Supervielle Societe Generale S.A., Goldman, Sachs & Co. and
Societe Generale as Arrangers, the Managing Agents named therein, the
CoAgents named therein, the Lead Managers named therein, the
Administrative Agent named therein and the Purchasers named therein.
27 Financial Data Schedule
</TABLE>
24
<PAGE> 1
GASNATURAL
Buenos Aires, 22 de mayo de 1996
Senores
Transportadora de Gas del Sur S.A.
Presente
De nuestra consideracion:
Tenemos el agrado de dirigirnos a Uds. con el
objeto de efectuarles una Oferta para el Servicio de Transporte Firme,
propuesta que, de aceptarse, se regira por los terminos y condiciones que se
detallan a continuacion:
CONTRATO DE SERVICIO DE TRANSPORTE FIRME
No. TF-37
ARTICULO I
SERVICIOS DE TRANSPORTE DE GAS
1. Sujeto al Reglamento y estipulaciones del presente Contrato y las
Condiciones Especiales del Transportista para et Transporte Firme (TF), Gas
Natural BAN S.A. (en adelante "el Cargador") acuerda entregar, o hacer entregar
a Transportadora de Gas del Sur S.A. (en adelante "el Transportista"), Gas para
su transporte y el Transportista acuerda recibir, transportar y restituir Gas
al Cargador o por cuenta del Cargador a quien este designe, sobre una base de
Servicio de Transporte Firme (TF) las capacidades de transporte indicadas en el
Apendice B en m3/dia de 9300 Kcal/m3 (la "Capacidad Contratada").-
2. El servicio de transporte prestado por el presente no estara sujeto a
reduccion ni interrupcion por parte del Transportista con excepcion de lo
previsto en el Articulo 11 de las Condiciones Generales del Reglamento del
Transportista aprobado por el Ente National Regulador de Gas y sus futuras
modificaciones, el que junto con las Condiciones Especiales del Servicio TF
forman parte del presente como Apendice A (en adelante "el Reglamento").-
3. El Cargador tendra la opcion de incrementar la Capacidad Contratada en la
fecha y cantidad maxima que a continuacion se detalla:
<TABLE>
<CAPTION>
Fecha de la Opcion Cantidad M axima
------------------ -----------------
(en m3/dia a 9300 Kcal/m3)
<S> <C> <C>
Opcion No. 1 23/05/1996 400,000
Opcion No. 2 01/07/1996 (2/6/96) 200,000
Opcion No. 3 15/05/1997 (15/11/96) 400,000
</TABLE>
4. La Opcion No. 1 de incrementar la Capacidad Contratada se entender a
ejercida por el Cargador contra la aceptacion de la presente Oferta de Servicio
de Transporte Firme por parte del transportista.
1
GAS NATURAL BAN S.A.
Isabel la Calolica 939
C.P. 1269 Buenos Aires
Tel.: 303-1380/1402
Fax: 303-1410
<PAGE> 2
Si el Cargador decide ejercer la Opcion No. 2, de incrementar la Capacidad
Contratada, deber a comunicar tal decision con por lo menos 30 dias de
anticipacion a la Fecha de la Opcion No. 2. Si el Cargador no comunica la
Transportista su decision de ejercer dicha opcion, la misma quedara sin
efecto.-
Si el Cargador decide ejercer la Opcion No. 3, de incrementar la Capacidad
Contratada, debera comunicar tal decision con por lo menos 180 dias de
anticipacion a la Fecha de la Opcion No. 3. Si el Cargador no comunica la
Transportista su decision de ejercer dicha opcion, la misma quedar a sin
efecto.-
5. El Cargador tendra derecho a optar por reducir la Capacidad Contratada
hasta una cantidad igual o menor alas cantidades maximas que a continuacion se
indican, reducciones que se haran efectivas a partir de las fechas que aqui se
senalan:
<TABLE>
<CAPTION>
Fecha de la Opcion Cantidad Maxima
------------------ -----------------
(en m3/dia a 9300 Kcal/m3)
<S> <C> <C>
Opcion No. 4 31/08/1996 200,000
Opcion No. 5 15/09/1996 400,000
Opcion No. 6 15/09/1997 400,000
Opcion No. 7 01/05/1998 1,241,250
Opcion No. 8 01/05/2000 1,241,250
</TABLE>
6. El Cargador solo podra hacer uso de la Opcion No. 4 indicada en el
apartado precedente, si previamente ha hecho uso de la Opcion No. 2, segun
lo previsto en el apartado 3. del presente, y comunica al Transportista su
decision de reducir la Capacidad Contratada con por lo menos siete (7) dias de
anti cipacion a la fecha prevista en la Opcion No. 4 del apartado 5 .-
Del mismo modo el Cargador solo podra hacer uso de la Opcion No. 5
indicada en el apartado precedente, si previamente ha hecho uso de la Opcion
No. 1, segun lo previsto en el apartado 3. del presente, y comunica al
Transportista su decision de reducir la Capacidad Contratada con por lo menos
siete (7) dias de anticipacion a la fecha prevista en la Opcion No. 5 del
apartado 5.-
Asimismo, el Cargador solo podra hacer uso de la Opcion No. 6 indicada
en el apartado precedente, si previamente ha hecho uso de la Opcion No. 3,
segun lo previsto en el apartado 3. del presente, y comunica al Transportista
su decision de reducir la Capacidad Contratada con por lo menos siete (7) dias
de anticipacion a la fecha prevista en la Opcion No. 6 del apartado 5 .-
Si el Cargador decide ejercer alguna de las opciones de reduccion de la
Capacidad Contratada identificadas como Opcion No. 7 o No. 8 en el apartado
5., debera comunicar tal decision al Transportista con por io menos ciento
ochenta (180) dias de anticipacion a cada una de las fechas previstas en dicho
apartado, debiendo ademas indicar el volumen de la reduccion pretendida. Si el
Cargador no comunicase al Transportista su decision de ejercer cada una de las
opciones de reduccion de la Capacidad Contratada en tiempo y forma, no podra
hacer uso de esas opciones en el futuro.-
7. El Cargador tendra derecho a optar por reducir a partir del dia 1 de
noviembre de 1996 y por un plazo maximo de sesenta (60) dias la Capacidad
Contratada hasta una cantidad m axima de 800.000 m3/dia a 9300 Kcal/m3. El
Cargador solo podra hacer uso de dicha opcion si comunica al Transportista su
decision de reducir la Capacidad Contratada con por lo menos quince (15) dias
de anticipacion a la fecha prevista.
8. En caso de que el Cargador ejerza las opciones de incrementar y/o de reducir
la Capacidad Contratada, la capacidad asi incrementada o reducida sera la
nueva Capacidad Contratada.-
<PAGE> 3
ARTICULO II
PUNTO (S) DE RECEPCION
El Cargador entregara o hara entregar el Gas en el (los) Punto (s) de
Recepcion designados en el Apendice B, adjunto al presente y que forma parte
del mismo mediante la referencia aqui expresada, auna presion suficiente para
permitir el ingreso del gas en el sistema de gasoductos del Transportista,
tomando en cuenta las presiones variables que pudieren en cada momento existir
en tal sistema y en cada Punto de Recepcion. Tal presion del gas entregado o
hecho entregar por el Cargador no excedera la(s) presion(es) operativa(s)
maxima(s) especificada(s) por el Transportista en el Apendice B, para cada
Punto de Recepcion. En el caso de que la(s) presion(es) operativa(s)
maxima(s) del sistema de gasoductos del Transportista, en el (los) Punto(s) de
Recepcion bajo el presente, fuere(n) incrementada(s) o disminuida(s), la(s)
presion(es) maxima(s) permitida(s) del gas entregado o hecho entregar por el
Cargador al Transportista en el (los) Punto(s) de Recepcion sera(n)
correlativamente incrementada(s) o disminuida(s) previa notificacion escrita
del Transportista al Cargador con por lo menos un (1) ano de anticipacion.-
Si el transportista decide variar la presion en algun Punto de Recepcion en
mas de un 2% dar a aviso de tal variacion al Cargador o a la persona que el
Cargador indique, con por lo menos 8 (ocho) horas de anticipacion.
ARTICULO III
PUNTO (S) DE ENTREGA
1. La Cantidad de Entrega sera igual al total de la Cantidad de Gas
efectivamente entregada por el Cargador al Transportista en los Puntos de
Recepcion con deduccion de las Cantidades queen concepto de Combustible y
mermas retenga el Transportista segcn lo establece el Reglamento, en cada
periodo facturado.-
2. El Transportista restituir a diariamente al Cargador o a un tercero por
cuenta del Cargador una cantidad de Gas igual a la Cantidad de Entrega bajo el
presente en el (los) Punto(s) de Entrega y a la(s) presion(es) indicados en el
Apendice Cadjunto al presente y que forma parte del mismo mediante la
referencia aqui expresada.-
ARTICULO IV
PLAZO DEL CONTRATO
Este contrato entrara en vigencia a partir de las 6.00 horas del dia 23 de
mayo de 1996 y permanecera en plena vigencia hasta las 6.00 horas del dia 1 de
mayo del 2003, y de alli en adelante sera renovado en forma automatica por
periodos sucesivos de 1 (un) Ano de Contrato salvo que el Transportista o el
Cargador resuelvan rescindirlo, en cuyo caso, deberan notificar a la otra
parte, en forma fehaciente, su voluntad rescisoria con por lo menos 90 dias de
anticipacion al vencimiento del plazo respectivo.-
ARTICULO V
PRECIO Y FACTURACION
1. El Cargador pagara al Transportista en el domicilio del Transportista por
el Servicio de Transporte Firme desde los Puntos de Recepcion hasta los Punlos
de Entrega una suma de dinero que sera establecida de conforrnidad con las
Tarifas del Transportista para el TF, y las disposiciones aplicables del
Reglamento vigentes en cada momento.-
El precio del servicio quedara sujeto alas modificaciones que surjan de los
Cuadros Tarifarios aprobados por el Ente a partir de la vigencia de los mismos.
3
<PAGE> 4
2. Las facturas, ademas de la Tarifa por el servicio prestado, emanadas del
Transportista incluiran los restantes cargos que, segun las Condiciones
Generales y Condiciones Especiales del Reglamento, son a cargo del Cargador.
ARTICULO VI
TERMINACION ANTICIPADA E INCUMPLIMIENTOS
La mora en el cumplimiento de obligaciones a su vencimiento sera automatica,
y sin necesidad de interpelacion.
Cualquier incumplimiento contractual podra dar lugar, a voluntad de la parte
cumplidora, a la terminacion del contrato, observandose al respecto lo
establecido en las Condiciones Generales y Condiciones Especiales del
Reglamento.
ARTICULO VII
CESION
Salvo norma legal, ninguna de las partes podra ceder el presente Contrato, en
todo o en parte, sin el previo y expreso consentimiento de la otra parte,
manifestado por escrito, el que no sera irrazonablemente denegado.
ARTICULO VIII
MISCELANEA
1. La interpretacion y ejecucion de este contrato se efectuar an de acuerdo con
las leyes presentes y futuras de la Republica Argentina.
2. Este contrato vincular a y regira a las partes del presente y sus
respectivos sucesores y cesionarios.
3. Las notificaciones a la otra parte se practicaran por escrito y se tendran
por debidamente entregadas en los siguientes domicilios:
(a) Al Transportista en: Don Bosco No. 3672 - 7th (seventh) degree piso -
Capital Federal.-
(b) Al Cargador en: Isabel La Catolica No. 939 - 1st (first) piso - Capital
Federal.-
Tales domicilios podran ser eventualmente modificados, debiendose notificar
debidamente a la otra parte por correo certificado.-
4. Ambas partes aceptan que si el Cargador no utilizase eficientemente la
Capacidad Contratada, el Ente Nacional Regulador del Gas de conformidad con las
normas reglamentarias podra asignar la parte no utilizada o deficientemente
utilizada, quedando en tal caso reducida la Capacidad Contratada a la capacidad
asi reducida.-
5. Las partes acuerdan que la entrada en vigencia del presente Contrato
reemplazara y hara finalizar automaticamente al Contrato No. TF-25.-
La presente Oferta sera considerada aceptada si esa Transportista acepta
nuestra primera solicitud de servicio (art. 23 del Reglamento de Servicio del
Transportista) con imputacion a la presente, para la prestacion del Servicio de
Transporte Firme No. TF-37, o la presenta al Ente Nacional Regulador del
Gas (ENARGAS), lo que ocurra primero.-
4
<PAGE> 5
Asimismo, acusamos recibo de la copia de la Resolucion No. 3/93 del ENARGAS que
nos remitieran en cumplimiento de lo dispuesto en el Art. 3 de la misma.-
Sin otro particular los saludamos muy atentamente.-
Por Gas Natural BAN, S.A.
/s/
---------------------------
<PAGE> 6
APENDICE B
CONTRATO DE SERVICIO DE TRANSPORTE FIRME No. 37
entre
TRANSPORTADORA DE GAS DEL SUR S.A.
y
GAS NATURAL BAN S.A.
1. RUTANEUQUEN-GBA
PRESION MAXIMA: Gasoducto Neuba I = 60,0 Kg/cm2 M.
Gasoducto Neuba II = 68,5 Kg/cm2 M.
PUNTOS DE RECEPCION: Son todos los Puntos de Recepcion dentro de la Zona de
Recepcion Neuquen. El Cargador designara cada cierto tiempo y de acuerdo con
los procedimientos establecidos al efecto por el Transportista y el Reglamento,
los puntos dentro de la Zona de Recepcion Neuquen en que el gas sera puesto a
disposicion del Transportista por el Cargador.
CANTIDAD DIARIA: Una cantidad de gas total de 6,375,000 m3 de 9300 Kcal/m3,
(mia combustible y mermas) desde las Zona de Recepcion.
2. RUTA NEUQUEN-BAHIA BLANCA
PRIESION MAXIMA: Gasoducto Neuba I = 60,0 Kg/cm2 M.
Gasoducto Neuba II = 68,5 Kg/cm2 M.
PUNTOS DE RECEPCION: Son todos los Puntos de Recepcion dentro de la Zona de
Recepcion Neuquen. El Cargador designara cada cierto tiempo y de acuerdo con
los procedimientos establecidos al efecto por el Transportista y el Reglamento,
los puntos dentro de la Zona de Recepcion Neuquen en que el gas sera puesto a
disposicion del Transportista por el Cargador.
CANTIDAD DIARIA: Una cantidad de gas total de 434,202 m3 de 9300 Kcal/m3, (mas
combustible y mermas) desde las Zona de Recepcion.
2. RUTA BAHIA BLANCA-GBA
PRESION MAXIMA: Complejo Cerri = 60,0 Kg/cm2 M.
ZONA DE RECEPCION: Bahia Blanca
PUNTOS DE RECEPCION: P.M. No. 916 - Transferencias Zonas BAN.
CANTIDAD DIARIA: Una cantidad de gas total de 425,000 m3 de 9300 Kcal/ m3,(mas
combustible y mermas) desde las Zona de Recepcion.
6
<PAGE> 7
APENDICE C
CONTRATO DE SERVICIO DE TRANSPORTE FIRME NO. 37
entre
TRANSPORTADORA DE GAS DEL SUR S.A.
y
GAS NATURAL BAN S.A.
SUB - ZONA BAHIA BLANCA
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Punto de Nombre del Punto Presion Minima
Medicion Numero (Kg/cm2)
- --------------------------------------------------------------------
<S> <C> <C>
P.M. No. 916 Transferencias Zonas - BAN 30,0
- --------------------------------------------------------------------
P.M. No. 308 Complejo Cerri - RTP 30,0
- --------------------------------------------------------------------
</TABLE>
CANTIDAD MAXIMA DE ENTREGA DIARIA: Una cantidad de gas que totalice 434,202 m3
de 9300 Kcal/m3.
SUB - ZONA GBA
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Punto de Nombre del Punto Presion Minima
Medicion Numero (Kg/cm2)
- --------------------------------------------------------------------------------
<S> <C> <C>
P.M. No. 184 Suipacha 27,0
P.M. No. 229 Marcos Paz 25,0
P.M. No. 230 SACAAN- Panificadora Ituzaingo 22,0
P.M. No. 231 Hospital SOMMER 24,0
P.M. No. 251 Camara Moreno III 21,0
P.M. No. 252 Camara Moreno II 21,0
P.M. No. 236 Viejo Cedro 22,0
P.M. No. 237 Camara Del Viso II 22,0
P.M. No. 260 Las Heras 25,0
P.M. No. 254 San Diego 21,0
P.M. No. 243 Universidad de Belgrano 21,0
P.M. No. 240 Planta General Rodriguez 22,0
P.M. No. 239 Planta General Pacheco 20,0
P.M. No. 304 Tortuguitas 20,0
P.M. No. 323 Planta Peak Shaving 22,0
- --------------------------------------------------------------------------------
</TABLE>
CANTIDAD MAXIMA DE ENTREGA DIARIA: Una cantidad de gas que totalice entre todos
los Puntos de Entrega 6,800,000 m3 de 9300 Kcal/m3.
7
<PAGE> 8
TRANSLATION
Buenos Aires, May 22nd, 1996
Messrs.
Transportadora de Gas del Sur S.A.
Dear Sirs:
This is to inform you that we wish to submit to your consideration an Offer for
Firm Transportation Service, which proposal, if accepted, will be governed by
the following terms and conditions:
FIRM TRANSPORTATION SERVICE AGREEMENT
FT - 37
SECTION I
GAS TRANSPORTATION SERVICES
1. Subject to the Service Regulations and provisions hereof and to
Transporter's Special Conditions for Firm Transportation (FT), Gas Natural BAN
S.A. (hereinafter referred to as the "Shipper") agrees to deliver, or to cause
to be delivered to Transportadora de Gas del Sur S.A. (hereinafter referred to
as the "Transporter"), Gas to be transported and Transporter agrees to receive,
transport and return Gas to Shipper or to its designee on its behalf, on a Firm
Transportation Service basis (FT) the contracted transportation capacities
shown in Exhibit B in m(3)/day of 9300 Kcal/m(3) (the "Contracted Capacity").
2. The transportation service rendered hereunder will not be subject to
reduction or interruption by the Transporter except as provided in Section 11
of the Special Conditions of the Transporter's Service Regulations approved by
the National Gas Regulatory Entity and the future amendments thereto, which
together with the Special Conditions for the FT Service are made part hereof as
Exhibit A (hereinafter referred to as the "Regulations").
3. Shipper may elect to increase the Contracted Capacity on the following date
and in the following maximum amount:
<TABLE>
<CAPTION>
DATE OF OPTION MAXIMUM AMOUNT
(IN M(3)/DAY OF 9300 KCAL/M(3))
- ---------------------------------------------------------------------------
<S> <C> <C>
Option No. 1 05/23/1996 400,000
Option No. 2 07/01/1996 200,000
Option No. 3 05/15/1997 400,000
</TABLE>
4. Option No. 1 to increase Contracted Capacity will be deemed exercised by
Shipper against acceptance of this Offer of Firm Transportation Service by the
transporter.
<PAGE> 9
2
If Shipper elects to exercise Option No. 2 to increase Contracted Capacity, it
will have to give notice thereof at least 30 days prior to the Date of Option
No. 2. In the event Shipper fails to notify Transporter its intention to
exercise such option, the same will be annulled.
If Shipper elects to exercise Option No. 3 to increase Contracted Capacity,
Shipper will have to give notice thereof at least 180 days prior to the Date of
Option No. 3. In the event Shipper fails to notify Transporter its intention to
exercise such option, the same will be annulled.
5. Shipper will be entitled to elect to reduce Contracted Capacity up to an
amount equal to or lesser than the following maximum amounts, which reduction
will be effective as from the dates set forth herein:
<TABLE>
<CAPTION>
DATE OF OPTION MAXIMUM AMOUNT
(IN M(3)/DAY OF 9300 KCAL/M(3))
- --------------------------------------------------------------------------------
<S> <C> <C>
Option No. 4 08/31/1996 200,000
Option No. 5 09/15/1996 400,000
Option No. 6 09/15/1997 400,000
Option No. 7 05/01/1998 1,241,250
Option No. 8 05/01/2000 1,241,250
</TABLE>
6. Shipper will only be entitled to use Option No. 4 set forth in the above
paragraph if it has previously used Option No. 2, in accordance with the
provisions of paragraph 3 hereof, and notifies Transporter its intention to
reduce Contracted Capacity at least seven (7) days prior to the date set forth
in Option No. 4 of paragraph 5.
Similarly, Shipper will only be entitled to use Option No. 5 set forth in the
above paragraph if it has previously used Option No. 1, in accordance with the
provisions of paragraph 3 hereof, and notifies Transporter its intention to
reduce Contracted Capacity at least seven (7) days prior to the date set forth
in Option No. 5 of paragraph 5.
Similarly, Shipper will only be entitled to use Option No. 6 set forth in the
above paragraph if it has previously used Option No. 3, in accordance with the
provisions of paragraph 3 hereof, and notifies Transporter its intention to
reduce Contracted Capacity at least seven (7) days prior to the date set forth
in Option No. 6 of paragraph 5.
In the event Shipper decides to exercise any of the options to reduce
Contracted Capacity identified as Option No. 7 or No. 8 in paragraph 5, Shipper
will have to give notice thereof to Transporter at least 180 days prior to each
date set forth in such paragraph, stating, in addition, the volume of the
proposed reduction. In the event Shipper fails to duly notify Transporter its
intention to exercise each of the options to reduce Contracted Capacity,
Shipper will not be entitled to use such options subsequently.
<PAGE> 10
3
7. Shipper will be entitled to elect to reduce as from November 1st, 1996 and
during no less than sixty (60) days the Contracted Capacity up to a maximum
amount of 800,000 m(3)/day at 9300 Kcal/m(3). Shipper will be entitled to use
such Option only if it notifies Transporter its intention to reduce Contracted
Capacity no less than fifteen (15) days prior to the scheduled date.
4. In case Shipper exercises the option to increase and/or reduce the
Contracted Capacity, the capacity so increased or reduced will be the new
Contracted Capacity.
SECTION II
RECEIPT POINT(S)
Shipper will deliver or cause to be delivered the Gas at the Receipt Point(s)
shown in Exhibit B attached hereto and made part hereof by this reference, at a
pressure sufficient to allow the gas to enter the Transporter's pipeline
system, taking into account the variable pressures prevailing on such system
and at each Receipt Point. Such pressure of the gas delivered or caused to be
delivered by Shipper shall not exceed the maximum operating pressure(s) set
forth by the Transporter for each Receipt Point in Exhibit B. In the event the
maximum operating pressure(s) of the Transporter's pipeline system at the
Receipt Point(s) hereunder were increased or reduced, the maximum allowed
pressure(s) of the gas delivered or caused to be delivered by Shipper to
Transporter at the Receipt Point(s) shall be increased or reduced in the same
proportion provided the Transporter gives Shipper at least one (1) year prior
written notice.
In the event the transporter decides to vary pressure in any Receipt Point by
more than 2%, the transporter will notify such variation to Shipper or such
person as Shipper designates, at least eight (8) hours before such event.
SECTION III
DELIVERY POINT(S)
1. The Delivery Amount shall be equal to the total Amount of Gas effectively
delivered by Shipper to Transporter at the Receipt Point after deducting the
Amount of Fuel and shrinkage retained by Transporter in accordance with the
Regulations, in each invoiced period.
2. Transporter will daily return to Shipper, or to a third party on behalf of
Shipper an amount of Gas equal to the Delivery Amount hereunder at the Delivery
Point(s) and at the pressure(s) set forth in Exhibit C attached hereto and made
part hereof by this reference.
SECTION IV
TERM OF AGREEMENT
<PAGE> 11
4
This Agreement shall be effective as from 6.00 a.m. on May 23rd, 1996 and it
shall remain in full force up to 6.00 a.m. on May 1st, 2003; and thereafter it
will be automatically renewed for successive one (1) year periods until
Transporter or Shipper terminates it by providing at least 90 days prior
written notice.
SECTION V
PRICE AND BILLING
1. Shipper shall pay to Transporter at the Transporter's domicile, for the
Firm Transportation Service rendered from the Receipt Points to the Delivery
Points, a money amount that will be established in accordance with the
Transporter's Rate for Firm Transportation, and the applicable provisions of
the Regulations then in effect.
The service price shall be subject to the modifications of the Rate Sheets
approved by the Entity as from their effective date.
2. In addition to the rate for the service rendered, the invoices issued by
Transporter shall include the remaining charges that according to the General
Conditions and the Special Conditions of the Regulations are to be borne by
Shipper.
SECTION VI
EARLY TERMINATION AND DEFAULTS
Default in the performance of the obligations on their maturity dates shall be
automatic and no demand shall be required.
Any contractual default may cause the early termination of this Firm
Transportation service at the non-defaulting party's option and the procedure
set forth in the General Conditions and the Special Conditions of the
Regulations for such purpose shall be followed.
SECTION VII
ASSIGNMENT
Unless otherwise provided by law, neither party hereof shall be entitled to
assign in whole or in part this Agreement, without the prior and express
written consent of the other party, which consent shall not be unreasonably
denied.
SECTION VIII
MISCELLANEOUS
1. The interpretation and execution of this agreement shall be made in
accordance with the laws of the Argentine Republic now or hereinafter in
effect.
2. This agreement shall be binding for, and shall govern the parties hereto
and their respective successors and assignees.
<PAGE> 12
5
3. Notices to the other party shall be in writing and shall be deemed duly
given when sent to the other party at the following domiciles:
(a) To Transporter at: Don Bosco 3672 - 7o piso - Capital Federal.
(b) To Shipper at: Isabel La Catolica 939 - 1o piso - Capital Federal.
Such domiciles may be modified from time to time, by sending the other party a
due notice by registered mail.
4. Both parties acknowledge that if Shipper does not make an efficient use of
the Contracted Capacity, the National Gas Regulatory Entity, in accordance with
regulatory rules, shall allocate the portion not used or deficiently used, and
in such event the capacity so reduced will become the Contracted Capacity.
5. Both parties hereto agree that on the effective date hereof this Agreement
replaces and automatically terminates Agreement FT-25.
This Offer will be considered accepted if Transporter accepts our first service
application (Section 23 of the Service Regulation) to be allocated to the Firm
Transportation Service No. FT-37, or said Transporter files the Offer with the
National Gas Regulatory Entity (ENARGAS), whichever occurs earlier.
We also acknowledge receipt of a copy of Resolution No. 3/93 of the ENARGAS
sent to us in compliance with the provisions of Section 3 thereof.
Truly yours,
By Gas Natural BAN, S.A.
There are two illegible signatures.
<PAGE> 13
6
EXHIBIT B
FIRM TRANSPORTATION SERVICE AGREEMENT No. 37
between
TRANSPORTADORA DE GAS DEL SUR S.A.
and
GAS NATURAL BAN S.A.
1. NEUQUEN ROUTE - GBA
MAXIMUM PRESSURE:
Neuba I Pipeline = 60.0 Kg/cm(2) M
Neuba II Pipeline = 68.5 Kg/cm(2) M
RECEIPT POINTS: Are all the Receipt Points within the Neuquen Receipt Zone.
Shipper will indicate from time to time and according to the procedure set
forth by Transporter to such effect and the Regulations, the points within the
Neuquen Receipt Zone where the gas shall be made available by Shipper to
Transporter. DAILY AMOUNT: An aggregate amount of gas of 6,375,000 m(3) of
9300 Kcal/m(3), (plus fuel and shrinkages) from the Receipt Zone.
2. NEUQUEN ROUTE - BAHIA BLANCA
MAXIMUM PRESSURE:
Neuba I Pipeline = 60.0 Kg/cm(2) M
Neuba II Pipeline = 68.5 Kg/cm(2) M
RECEIPT POINTS: Are all the Receipt Points within the Neuquen Receipt Zone.
Shipper will indicate from time to time and according to the procedure set
forth by Transporter to such effect and the Regulations, the points within the
Neuquen Receipt Zone where the gas shall be made available by Shipper to
Transporter. DAILY AMOUNT: An aggregate amount of gas of 434,202 m(3) of 9300
Kcal/m(3), (plus fuel and shrinkages) from the Receipt Zone.
2. BAHIA BLANCA ROUTE - GBA
MAXIMUM PRESSURE
Cerri Complex = 60.0 Kg/cm(2) M
RECEIPT ZONE: Bahia Blanca
RECEIPT POINT: P.M. No 916 - Transfers BAN Zone.
DAILY AMOUNT: An aggregate amount of gas of 425,000 m(3) of 9300 Kcal/m(3),
(plus fuel and shrinkages) from the Receipt Zone.
<PAGE> 14
7
EXHIBIT C
FIRM TRANSPORTATION SERVICE AGREEMENT No. 37
between
TRANSPORTADORA DE GAS DEL SUR S.A.
and
GAS NATURAL BAN S.A.
BAHIA BLANCA SUB-ZONE
<TABLE>
<CAPTION>
MEASUREMENT POINT NO. NAME OF THE POINT MINIMUM PRESSURES
(KG/CM(2))
- ------------------------------------------------------------------------------
<S> <C> <C>
P.M. No 916 Zone Transfers - BAN 30.0
P.M. No 308 Cerri Complex - RTP 30.0
</TABLE>
MAXIMUM AMOUNT OF DAILY DELIVERY: An amount of gas totaling 434,202 m(3) of
9300 Kcal/m(3).
GBA SUB-ZONE
<TABLE>
<CAPTION>
MEASUREMENT POINT NO. NAME OF THE POINT MINIMUM PRESSURES
(KG/CM(2))
- --------------------------------------------------------------------------------
<S> <C> <C>
P.M. No 184 Suipacha 27.0
P.M. No 229 Marcos Paz 25.0
P.M. No 230 SACAAN - Panificadora Ituzaingo 22.0
P.M. No 231 Hospital SOMMER 24.0
P.M. No 251 Camara Moreno III 21.0
P.M. No 252 Camara Moreno II 21.0
P.M. No 236 Viejo Cedro 22.0
P.M. No 237 Camara Del Viso II 22.0
P.M. No 260 Las Heras 25.0
P.M. No 254 San Diego 21.0
P.M. No 243 Universidad de Belgrano 21.0
P.M. No 240 General Rodriguez Plant 22.0
P.M. No 239 General Pacheco Plant 20.0
P.M. No 304 Tortuguitas 20.0
P.M. No 323 Peak Shaving Plant 22.0
</TABLE>
MAXIMUM AMOUNT OF DAILY DELIVERY: An amount of gas totaling between all
Delivery Points 6,800,000 m(3) of 9300 Kcal/m(3).
There follows Notarial Proceedings No. 004013260
There is an illegible signature and an illegible seal on all pages.
<PAGE> 1
BUENOS AIRES, 15 DE MARZO DE 1996
SENORES
TRANSPORTADORA DE GAS
DEL SUR S.A.
PRESENTE
DE NUESTRA CONSIDERACION:
TENEMOS EL AGRADO DE DIRIGIRNOS A UDS. CON EL OBJETO DE EFECTUARLES UNA
OFERTA PARA EL SERVICIO DE TRANSPORTE FIRME, PROPUESTA QUE, DE ACEPTARSE, SE
REGIRA POR LOS TERMINOS Y CONDICIONES QUE SE DETALLAN A CONTINUACION:
SERVICIO DE TRANSPORTE FIRME
TF - 38
ARTICULO I
SERVICIOS DE TRANSPORTE DE GAS
1. Sujeto al Reglamento y estipulaciones del presente y las Condiciones
Especiales del Transportista para el Transporte Firme (TF), MetroGas S.A. (en
adelante "el Cargador") acuerda entregar, o hacer entregar a Transportadora de
Gas del Sur S.A. (en adelante "el Transportista"), Gas para su transporte y el
Transportista acuerda recibir, transportar y restituir Gas al Cargador o por
cuenta del Cargador a quien este designe, sobre una base de Servicio de
Transporte Firme (TF) una capacidad de transporte no menor a una cantidad de
quinientos cuarenta mil metros cubicos equivalentes de 9300 Kcal/m3 (en
adelante la "Capacidad a Transportar").-
2. El servicio de transporte prestado por el presente no estara sujeto a
reduccion ni interrupcion por parte del Transportista con excepcion de lo
previsto en el Articulo 11 de las Condiciones Generales del Reglamento del
Transportista aprobado por el Ente Nacional Regulador de Gas y sus futuras
modificaciones, el que junto con laslas Condiciones Especiales del Servicio TF
forman parte del presente como Apendice A (en adelante "el Reglamento").-
3.
3.1 El Cargador podra reducir el dia 1 degree de mayo del ano 2004 hasta un
treinta por ciento (30%) de la Capacidad a Transportar que tenga reservada
a dicha fecha en merito del presente Servicio de Transporte Firme TF-38 .-
3.2 El Cargador, a fin de ejercer el derecho a la reduccion prevista
precedentemente, debera comunicar en forma fehaciente tal decision al
Transportista con una antelacion no menor a ciento ochenta (180) dias al
<PAGE> 2
dia 1st (First) de mayo del ano 2004, debiendo ademas indicar la capacidad
de transporte que pretenda reducir.-
3.3 Si el Cargador no comunicase al Transportista, en tiempo y forma, su
decision de reducir la Capacidad a Transportar, no podra hacer uso de ese
derecho en lo sucesivo.-
4. Si el Cargador decide ejercer la opcion de reducir la Capacidad a
Transportar, la capacidad asi reducida sera la nueva Capacidad a Transportar.-
ARTICULO II
PUNTO (S) DE RECEPCION
El Cargador entregara o hara entregar el Gas en el (los) Punto (s) de Recepcion
designados en el Apendice B, adjunto al presente y que forma parte del mismo
mediante la referencia aqui expresada, a una presion suficiente para permitir
el ingreso del gas en el sistema de gasoductos del Transportista, tomando en
cuenta las presiones variables que pudieren en cada momento existir en tal
sistema y en cada Punto de Recepcion. Tal presion del gas entregado o hecho
entregar por el Cargador no excedera la(s) presion(es) operativa(s) maxima(s)
especificada(s) por el Transportista en el Apendice B, para cada Punto de
Recepcion. En el caso de que la(s) presion(es) operativa(s) maxima(s) del
sistema de gasoductos del Transportista, en el (los) Punto(s) de Recepcion bajo
el presente, fuere(n) incrementada(s) o disminuida(s), la(s) presion(es)
maxima(s) operativa(s) del gas entregado o hecho entregar por el Cargador al
Transportista en el (los) Punto(s) de Recepcion sera(n) correlativamente
incrementada(s) o disminuida(s) previa notificacion escrita del Transportista
al Cargador con por lo menos un (1) ano de anticipacion.-
En caso que el Cargador no pueda cumplir con la(s) nueva(s) presion(es)
maxima(s) permitida(s) del gas entregado o hecho entregar por el Cargador al
Transportista en el (los) Punto(s) de Recepcion, informada por el
Transportista, conforme a lo senalado en el parrafo anterior, el Cargador y el
Transportista se reuniran a fin de encontrar una solucion conjuntamente. Hasta
que ello no suceda el Transportista no modificara la(s) presion(es) maxima(s)
permitida(s).-
ARTICULO III
PUNTO (S) DE ENTREGA
1. El Transportista restituira diariamente al Cargador o a un tercero por
cuenta del Cargador una cantidad de gas igual a la Cantidad de Entrega bajo el
presente en el (los) Punto(s) de Entrega y a la(s) presion(es) indicados en el
Apendice C adjunto al presente y que forma parte del mismo mediante la
referencia aqui expresada.-
2
<PAGE> 3
2. La Cantidad de Entrega sera igual al total de la cantidad de gas
efectivamente entregada por el Cargador al Transportista en los Puntos de
Recepcion con deduccion de las cantidades que en concepto de combustible y
mermas retenga el Transportista segun lo establece el Reglamento, en cada
periodo facturado.-
ARTICULO IV
PLAZO
El presente servicio de Transporte Firme entrara en vigencia a partir de las
6.00 horas del dia 1st (First) de enero de 1998, y permanecera en plena vigencia
hasta las 6.00 horas del dia 1st (First) de mayo de 2014, y de alli en adelante
sera renovado en forma automatica por periodos sucesivos de 1 (un) ano salvo
que el Transportista o el Cargador resuelvan rescindirlo, en cuyo caso, deberan
notificar a la otra parte, en forma fehaciente, su voluntad rescisoria con por
lo menos 90 dias de anticipacion al vencimiento del plazo respectivo.-
ARTICULO V
PRECIO Y FACTURACION
1. El Cargador pagara al Transportista en el domicilio del Transportista por el
servicio de Transporte Firme desde los Puntos de Recepcion hasta los Puntos de
Entrega una suma de dinero que sera establecida de conformidad con las Tarifas
del Transportista para el TF, y las disposiciones aplicables del Reglamento
vigentes en cada momento.-
El precio del servicio quedara sujeto a las modificaciones que surjan de los
Cuadros Tarifarios aprobados por el Ente a partir de la vigencia de los
mismos.-
2. Las facturas, ademas de la Tarifa por el servicio prestado, emanadas del
Transportista incluiran los restantes cargos que, segun las Condiciones
Generales y Condiciones Especiales del Reglamento, son a cargo del Cargador.-
ARTICULO VI
TERMINACION ANTICIPADA E INCUMPLIMIENTOS
La mora en el cumplimiento de obligaciones a su vencimiento sera automatica, y
sin necesidad de interpelacion.-
Cualquier incumplimiento podra dar lugar, a voluntad de la parte cumplidora, a
la terminacion del presente servicio de Transporte Firme, observandose al
respecto lo establecido en las Condiciones Generales y Condiciones Especiales
del Reglamento.-
3
<PAGE> 4
ARTICULO VII
CESION
Ninguna de las partes podra ceder el presente, en todo o en parte, sin el
previo y expreso consentimiento de la otra parte, manifestado por escrito.-
ARTICULO VIII
MISCELANEA
1. La interpretacion y ejecucion del presente se efectuara de acuerdo con las
leyes presentes y futuras de la Republica Argentina.-
2. Este servicio de Transporte Firme vinculara y regira a las partes de la
presente y sus respectivos sucesores y cesionarios.-
3. Las notificaciones a la otra parte se practicaran por escrito y se tendran
por debidamente entregadas en los siguientes domicilios:
(a) Al Transportista en: Don Bosco No. 3672 - 7th (Seventh) piso - Capital
Federal.-
(b) Al Cargador en: Av. Montes de Oca No. 1120 - Capital Federal.-
Tales domicilios podran ser eventualmente modificados, debiendose notificar
debidamente a la otra parte por correo certificado.-
4. Ambas partes aceptan que si el Cargador no utilizase eficientemente la
Capacidad a Transportar, el Ente Nacional Regulador del Gas de conformidad con
las normas reglamentarias podra asignar la parte no utilizada o deficientemente
utilizada, quedando en tal caso reducida la Capacidad a Transportar a la
capacidad asi reducida.-
5. Sin perjuicio de lo establecido en el articulo 1, punto 3 del presente, el
Cargador renunciara a cualquier otra opcion que pudiera tener para reducir la
Capacidad a Transportar de conformidad con los Contratos de Servicio de
Transporte Firme celebrados con el Transportista. Sin embargo, en el caso que
cualquiera de los clientes del Cargador dejara de contratar con el mismo para
hacerlo:
i)directamente con el Transportista mediante un Contrato de Transporte Firme, o
ii) con Comercializadores que contraten Transporte Firme con el Transportista,
o
iii) con Productores que contraten Transporte Firme con el Transportista, o
4
<PAGE> 5
iv) con cualquier combinacion de Comercializadores y Productores que contraten
Transporte Firme con el Transportista;
en cualquiera de estos casos, el Cargador podra ejercer la opcion de reducir
capacidad, pero en ningcn caso la reduccion sera mayor que la cantidad que el
cliente del Cargador dejo de contratar con el mismo. A los efectos de
determinar la capacidad de transporte contratada que el Cargador tendra derecho
a liberar en caso que cualquiera de los clientes del cargador dejara de
contratar con el mismo, dicha capacidad a liberar sera igual al maximo de los
consumos reales de Gas de dicho cliente durante los doce meses anteriores a su
desvinculacion efectiva del Cargador para contratar con un tercero o el tiempo
que correspondiera si la relacion contractual entre el Cargador y su cliente
fuera menor a doce meses, menos la Capacidad a Transportar que dicho cliente
mantuviera con el Cargador.-
Si el Cargador decidiera ejercitar dicha opcion, notificara dicha decision al
Transportista dentro de los treinta dias posteriores a la fecha en que
recibiera la notificacion de su cliente comunicandole su intencion de dejar de
contratar todo o parte de los servicios del Cargador.-
Vencido dicho plazo sin que el Transportista haya recibido la citada
notificacion, el Cargador no podra en el futuro ejercer tal opcion. Si, por el
contrario, el Cargador comunica que va a ejercer la opcion, entonces, la
reduccion total o parcial de la Capacidad a Transportar se producira a partir
del momento en que el cliente dejara de recibir esos servicios del Cargador.-
6. Antes de iniciar cualquier proyecto de ampliacion de capacidad, el
Transportista notificara por escrito al Cargador de tal intencion. Dentro de
los treinta dias de recibida dicha notificacion, el Cargador debera comunicar
al Transportista por escrito su intencion de liberar Capacidad a Transportar en
la zona donde el Transportista desarrollara su proyecto de expansion.-
7. Las partes acuerdan que la entrada en vigencia del presente Contrato
reemplazara, y hara finalizar automaticamente el Contrato TF-35.-
LA PRESENTE OFERTA SERA CONSIDERADA ACEPTADA SI ESA TRANSPORTISTA
ACEPTA NUESTRA PRIMERA SOLICITUD DE SERVICIO (ART. 23 DEL REGLAMENTO DEL
SERVICIO DEL TRANSPORTISTA) CON IMPUTACION A LA PRESENTE, PARA LA PRESTACION
DEL SERVICIO DE TRANSPORTE FIRME NO. (Number) TF-38, O LA PRESENTA AL ENTE
NACIONAL REGULADOR DEL GAS (ENARGAS), LO QUE OCURRA PRIMERO.-
ASIMISMO, ACUSAMOS RECIBO DE LA COPIA DE LA RESOLUCION NO. (Number) 3/93
DEL ENARGAS QUE NOS REMITIERAN EN CUMPLIMIENTO DE LO DISPUESTO EN EL ART. 3 DE
LA MISMA.-
SIN OTRO PARTICULAR LOS SALUDAMOS MUY ATENTAMENTE.-
POR METROGAS S.A.
- ------------------------------- ----------------------------------
ING. FERNANDO SARTI DR. EDUARDO ZAPATA
DIRECTOR DE GRANDES CLIENTES DIRECTOR DE ASUNTOS LEGALES
Y RELACIONES INSTITUCIONALES
5
<PAGE> 6
APENDICE B
DEL
SERVICIO DE TRANSPORTE FIRME TF-38
ENTRE
TRANSPORTADORA DE GAS DEL SUR S.A.
Y
METROGAS S.A.
PRESION MAXIMA:
Gasoducto Neuba II = 68,5 Kg/cm(2) M.
Gasoducto Neuba = 60,0 Kg/cm(2) M.
PUNTOS DE RECEPCION:
Son todos los Puntos de Recepcion dentro de las Zona de Recepcion Neuquen. El
Cargador designara cada cierto tiempo y de acuerdo con los procedimientos
establecidos al efecto por el Transportista y el Reglamento, los puntos dentro
de las Zona de Recepcion Neuquen en que el gas sera puesto a disposicion del
Transportista por el Cargador.-
CANTIDAD DIARIA:
Una cantidad de gas total de quinientos cuarenta mil (540.000) metros cubicos
equivalentes de 9300 Kcal/m(3), (mas combustible y mermas) desde las Zona de
Recepcion Neuquen.-
7
<PAGE> 7
APENDICE C
DEL
SERVICIO DE TRANSPORTE FIRME TF-38
ENTRE
TRANSPORTADORA DE GAS DEL SUR S.A.
Y
METROGAS S.A.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PUNTO DE MEDICION NcMERO NOMBRE DEL PUNTO PRESION MINIMA
(KG/CM(2))
- --------------------------------------------------------------------------------
<S> <C> <C>
210 Hogar de Ancianos Donselaar 20
224 Planta Ezeiza 20
227 Planta Buchannan 20
228 Planta Gutierrez 20
239 (*) Planta General Pacheco 20
- --------------------------------------------------------------------------------
</TABLE>
(*) La capacidad del Transportista de entregar Gas en este Punto de Entrega
esta sujeta a la disponibilidad de esa capacidad en consideracion del
cumplimiento por el Transportista del Contrato para el Servicio de Transporte
Firme con Gas Natural BAN S.A. en tal Punto de Entrega.-
CANTIDAD MAXIMA DE ENTREGA DIARIA: Una cantidad de gas que totalice entre todos
los Puntos de Entrega 540,000m(3) de 9300 Kcal/m(3). La cantidad maxima de
entrega diaria en cada Punto de Entrega estara limitada a la capacidad maxima
de diseno de cada Punto de Entrega o la que en el futuro fijen las Partes.-
8
<PAGE> 8
TRANSLATION
Buenos Aires, July 25th, 1996
Messrs.
Transportadora de Gas del Sur S.A.
Dear Sirs:
This is to inform you that we wish to submit to your consideration an Offer for
Firm Transportation Service, which proposal, if accepted, will be governed by
the following terms and conditions:
FIRM TRANSPORTATION SERVICE FT - 38
SECTION I
GAS TRANSPORTATION SERVICES
1. Subject to the Service Regulations and provisions hereof and to
Transporter's Special Conditions for Firm Transportation (FT), MetroGas S.A.
(hereinafter referred to as the "Shipper") agrees to deliver, or to cause to be
delivered to Transportadora de Gas del Sur S.A. (hereinafter referred to as the
"Transporter"), Gas to be transported and Transporter agrees to receive,
transport and return Gas to Shipper or to its designee on its behalf, on a Firm
Transportation Service basis (FT) a contracted transportation capacity of no
less than a total maximum amount of 540,000 m(3) per day equivalent to 9300
Kcal/m(3) (hereinafter referred to as the "Contracted Capacity").
2. The transportation service rendered hereunder will not be subject to
reduction or interruption by the Transporter except as provided in Section 11
of the Special Conditions of the Transporter's Service Regulations approved by
the National Gas Regulatory Entity and the future amendments thereto, which
together with the Special Conditions for the FT Service are made part hereof as
Exhibit A (hereinafter referred to as the "Regulations").
3.
3.1 On May 1st, 2004 Shipper will be entitled to reduce up to thirty per cent
(30%) of the Contracted Capacity already reserved as of such date as provided
for under this Firm Transportation Service FT-38.
3.2 Shipper, in order to exercise the right to the above mentioned reduction,
will be required to duly notify such decision to Transporter no less than one
hundred and eighty (180) days prior to May 1st, 2004, indicating also the
intended reduction in transportation capacity.
3.3 In case Shipper fails to duly notify Transporter its intention to reduce
the Contracted Capacity, Shipper will not be entitled to use such right
subsequently.
<PAGE> 9
2
4. In case Shipper resolves to exercise the option to reduce the Contracted
Capacity, the capacity so reduced will be the new Contracted Capacity.
SECTION II
RECEIPT POINT(S)
Shipper will deliver or cause to be delivered the Gas at the Receipt Point(s)
shown in Exhibit B attached hereto and made part hereof by this reference, at a
pressure sufficient to allow the gas to enter the Transporter's pipeline
system, taking into account the variable pressures prevailing on such system
and at each Receipt Point. Such pressure of the gas delivered or caused to be
delivered by Shipper shall not exceed the maximum operating pressure(s) set
forth by the Transporter for each Receipt Point in Exhibit B. In the event the
maximum operating pressure(s) of the Transporter's pipeline system at the
Receipt Point(s) hereunder were increased or reduced, the maximum allowed
pressure(s) of the gas delivered or caused to be delivered by Shipper to
Transporter at the Receipt Point(s) shall be increased or reduced in the same
proportion provided the Transporter gives Shipper at least one (1) year prior
written notice.
In the event Shipper is not able to comply with the new maximum allowed
pressure(s) of the gas delivered or caused to be delivered by Shipper to
Transporter at the Receipt Point(s), notified by the Transporter, in accordance
with the above paragraph, Shipper and Transporter shall meet in order to find a
solution. Until such time, Transporter shall not modify the maximum allowed
pressure(s).
SECTION III
DELIVERY POINT(S)
1. Transporter will daily return to Shipper, or to a third party on behalf of
Shipper an amount of gas equal to the Delivery Amount hereunder at the Delivery
Point(s) and at the pressure(s) set forth in Exhibit C attached hereto and made
part hereof by this reference.
2. The Delivery Amount shall be equal to the total amount of gas effectively
delivered by Shipper to Transporter at the Receipt Point after deducting the
amount of fuel and shrinkage retained by Transporter in accordance with the
Regulations, in each invoiced period.
SECTION IV
TERM
This Firm Transportation service shall be effective as from the commissioning
of the power generating plant of Perez Companc S.A. (located near the City of
Buenos Aires) and upon transfer of the agreement FT-36 in favor thereof, but
not before 6.00 a.m. on January 1st, 1998 and it shall remain in full force up
to 6.00 a.m. on May 1st, 2014; and thereafter it will be automatically renewed
for successive one (1) year periods until Transporter or Shipper terminates it
by providing at least 90 days prior written notice.
<PAGE> 10
3
SECTION V
PRICE AND BILLING
1. Shipper shall pay to Transporter at the Transporter's domicile, for the
firm transportation service rendered from the Receipt Points to the Delivery
Points, a money amount that will be established in accordance with the
Transporter's Rate for Firm Transportation, and the applicable provisions of
the Regulations then in effect.
The service price shall be subject to the modifications of the Rate Sheets
approved by the Entity as from their effective date.
2. In addition to the Rate for the service rendered, the invoices issued by
Transporter shall include the remaining charges that according to the General
Conditions and the Special Conditions of the Regulations are to be borne by
Shipper.
SECTION VI
EARLY TERMINATION AND DEFAULTS
Default in the performance of the obligations on their maturity dates shall be
automatic and no demand shall be required.
Any contractual default may cause the early termination of this Firm
Transportation service at the non-defaulting party's option and the procedure
set forth in the General Conditions and the Special Conditions of the
Regulations for such purpose shall be followed.
SECTION VII
ASSIGNMENT
Neither party hereof shall be entitled to assign in whole or in part this Firm
Transportation service, without the prior and express written consent of the
other party.
SECTION VIII
MISCELLANEOUS
1. The interpretation and execution of this Firm Transportation service shall
be made in accordance with the laws of the Argentine Republic now or
hereinafter in effect.
2. This Firm Transportation service shall be binding for, and shall govern the
parties hereto and their respective successors and assignees.
3. Notices to the other party shall be in writing and shall be deemed duly
given when sent to the other party at the following domiciles:
(a) To Transporter at: Don Bosco 3672 - 7o piso - Capital Federal.
<PAGE> 11
4
(b) To Shipper at: Av. Montes de Oca 1120 - Capital Federal.
Such domiciles may be modified from time to time, by sending the other party a
due notice by registered mail.
4. Both parties acknowledge that if Shipper does not make an efficient use of
the Contracted Capacity, the National Gas Regulatory Entity, in accordance with
regulatory rules, shall allocate the portion not used or deficiently used, and
in such event the capacity so reduced will become the Contracted Capacity.
5. Notwithstanding the provisions under Article 1, paragraph 3 hereof, Shipper
will waive any other option it may have to reduce the Contracted Capacity under
the provisions of the Firm Transportation Service Agreements entered with
Transporter. However, in the event any of Shipper's customers fails to enter an
agreement with it and enters an agreement: i) directly with Transporter under a
Firm Transportation Agreement, or ii) with Merchants entering a Firm
Transportation Agreement with Transporter, or iii) with Producers entering a
Firm Transportation Agreement with Transporter, or iv) with any combination of
Merchants and Producers entering a Firm Transportation Agreement with
Transporter;
in any such event, Shipper may elect to reduce the capacity, but in no such
event the reduction will be higher than the amount that Shipper's customer
failed to contract with Shipper. For the purposes of establishing contracted
transportation capacity that Shipper will be entitled to release in the event
that any of its customers fails to enter agreements with Shipper, the capacity
to be released shall be equal to the maximum amount of Gas actually used by
such customer during the twelve month period prior to its effective separation
from Shipper in order to enter an agreement with a third party or such time
period as may be relevant should the contractual relationship between Shipper
and customer be less than twelve months, less the Contracted Capacity engaged
by such customer with Shipper.
In the event Shipper intends to exercise such option, Shipper will notify such
election to Transporter within thirty days from the date of receipt of a
notification from its customer stating its intention to terminate in whole or
in part the engagement of Shipper's services.
Upon the expiry of such period if Transporter has not received such
notification, Shipper will not be able to exercise such option in the future.
However, on the contrary, if Shipper notifies his intention to exercise the
option, then the total or partial reduction of the Contracted Capacity will be
effective as of the time the customer ceases to receive such services from
Shipper.
6. Prior to the commencement of any capacity increase project, Transporter
shall give notice thereof in writing to Shipper. Within thirty days of the
receipt of such notification, Shipper shall notify Transporter in writing its
intention to release Contracted Capacity in the zone where Transporter will
develop its expansion project.
<PAGE> 12
5
7. Both parties hereto agree that on the effective date hereof this Agreement
replaces and automatically terminates Agreement FT-35.
This Offer will be considered accepted if Transporter accepts our first service
application (Section 23 of the Service Regulation) to be allocated to the Firm
Transportation Service No. FT-38, or said Transporter files the Offer with the
National Gas Regulatory Entity (ENARGAS), whichever occurs earlier.
We also acknowledge receipt of a copy of Resolution No. 3/93 of the ENARGAS
sent to us in compliance with the provisions of Section 3 thereof.
Truly yours,
By MetroGas S.A.
There follows an illegible signature.
Bill Adamson
General Director
<PAGE> 13
6
EXHIBIT B
FIRM TRANSPORTATION SERVICE FT-38
between
TRANSPORTADORA DE GAS DEL SUR S.A.
and
METROGAS S.A.
MAXIMUM PRESSURE:
Neuba II Pipeline = 68.5 Kg/cm(2) M
Neuba Pipeline = 60.0 Kg/cm(2) M
RECEIPT POINTS:
Are all the Receipt Points within the Neuquen Receipt Zone. Shipper will
indicate from time to time and according to the procedure set forth by
Transporter to such effect and the Regulations, the points within the Neuquen
Receipt Zone where the gas shall be made available by Shipper to Transporter.
DAILY AMOUNT: An aggregate amount of gas of 540,000 m(3) equivalent to 9300
Kcal, (plus fuel and shrinkages) from the Neuquen Receipt Zone.
<PAGE> 14
7
EXHIBIT C
FIRM TRANSPORTATION SERVICE FT-38
between
TRANSPORTADORA DE GAS DEL SUR S.A.
and
METROGAS S.A.
<TABLE>
<CAPTION>
MEASUREMENT POINT NO. NAME OF THE POINT MINIMUM PRESSURES
(KG/CM(2))
- --------------------------------------------------------------------------------
<S> <C> <C>
210 Donselaar Retirement Home 20
224 Ezeiza Plant 20
227 Buchannan Plant 20
228 Gutierrez Plant 20
239 (*) General Pacheco Plant 20
</TABLE>
(*) Transporter's capacity to deliver Gas in this Delivery Point depends on
the availability of such capacity considering the performance by Transporter of
the Firm Transportation Service Agreement entered with Gas Natural BAN S.A. in
such Delivery Point.
MAXIMUM AMOUNT OF DAILY DELIVERY: An amount of gas totaling between all
Delivery Points 540,000 m(3) of 9300 Kcal/m(3). Maximum amount of daily
delivery in each Delivery Point will be limited to the maximum designed capacity
of each Delivery Point or such capacity as shall be agreed by the Parties in the
future.
There are several illegible signatures on every page.
<PAGE> 1
Buenos Aires, 28 de junio de 1996.
M/SR/at/
SENORES
TRANSPORTADORA DE GAS DEL SUR S.A.
DON BOSCO 3672. 7th (Seventh) PISO.
PRESENTE
De nuestra consideracion:
TENEMOS EL AGRADO DE DIRIGIRNOS A UDS. CON EL OBJETO DE OFRECERLES
CELEBRAR UN CONTRATO DE SERVICIO DE TRANSPORTE FIRME, OFRECIMIENTO QUE, DE
ACEPTARSE, SE REGIRA POR LOS TERMINOS Y CONDICIONES QUE SE DETALLAN A
CONTINUACION:
CONTRATO DE SERVICIO DE TRANSPORTE FIRME
TF - 40
ARTICULO I
SERVICIOS DE TRANSPORTE DE GAS
1. Sujeto al Reglamento y estipulaciones del presente contrato y las
Condiciones Especiales del Transportista para el Transporte Firme (TF), Camuzzi
Gas Pampeana S.A. (en adelante "el Cargador") acuerda entregar, o hacer
entregar a Transportadora de Gas del Sur S.A. (en adelante "el Transportista"),
Gas para su transporte y el Transportista acuerda recibir, transportar y
restituir Gas al Cargador o por cuenta del Cargador a quien este designe, sobre
una base de Servicio de Transporte Firme (TF) una capacidad contratada de
transporte no menor a una cantidad de m3 por dia indicada en el Apendice D
adjunto al presente e incorporado al mismo mediante esta referencia (la
"Capacidad Contratada").-
1
<PAGE> 2
2. El servicio de transporte prestado por el presente no estara sujeto a
reduccion ni interrupcion por parte del Transportista con excepcion de lo
previsto en el Articulo 11 de las Condiciones Generales del Reglamento del
Transportista aprobado por el Ente Nacional Regulador de Gas y sus futuras
modificaciones, el que junto con las Condiciones Especiales del Servicio TF
forman parte del presente como Apendice A (en adelante "el Reglamento").-
ARTICULO II
PUNTO (S) DE RECEPCION
El Cargador entregara o hara entregar el Gas en el (los) Punto (s) de Recepcion
designados en el Apendice B, adjunto al presente y que forma parte del mismo
mediante la referencia aqui expresada, a una presion suficiente para permitir
el ingreso del gas en el sistema de gasoductos del Transportista, tomando en
cuenta las presiones variables que pudieren en cada momento existir en tal
sistema y en cada Punto de Recepcion. En caso que la(s) presion(es)
operativa(s) maxima(s) del sistema de gasoductos del Transportista, en el (los)
Punto(s) de Recepcion bajo el presente, fuere(n) incrementada(s) o
disminuida(s), la(s) presion(es) maxima(s) permitida(s) del gas entregado o
hecho entregar por el Cargador al Transportista en el (los) Punto(s) de
Recepcion sera(n) correlativamente incrementada(s) o disminuida(s) previa
notificacion escrita del Transportista al Cargador con por lo menos 30
(treinta) dias de anticipacion.-
Si el Transportista decide variar la presion en algun Punto de Recepcion en mas
de un 2 % dara aviso de tal variacion al Cargador o a la persona que el
Cargador indique, con por lo menos 8 (ocho) horas de anticipacion.-
ARTICULO III
PUNTO (S) DE ENTREGA
1. El Transportista restituira diariamente al Cargador o a un tercero por
cuenta del Cargador una cantidad de Gas igual a la Cantidad de Entrega bajo el
presente en el (los) Punto(s) de Entrega y a la(s) presion(es) indicados en el
Apendice C adjunto al presente y que forma parte del mismo mediante la
referencia aqui expresada.-
2. La Cantidad de Entrega sera igual al total de la Cantidad de Gas
efectivamente entregada por el Cargador al Transportista en los Puntos de
Recepcion con deduccion de las Cantidades que en concepto de Combustible y
mermas retenga el Transportista segun lo establece el Reglamento.-
2
<PAGE> 3
ARTICULO IV
PLAZO DEL CONTRATO
Este contrato entrara en vigencia a partir de las 6.00 horas del dia 1st (First)
de julio de 1996, y permanecera en plena vigencia hasta las 6.00 horas de las
fechas especificadas en el Apendice D, por las cantidades alli establecidas.-
Operado el vencimiento de alguno de los plazos de vigencia especificados en el
Apendice D, la obligacion de transportar en forma firme la Capacidad Contratada
respectiva sera renovada en forma automatica por periodos sucesivos de un (1)
Ano de Contrato salvo que, el Transportista o el Cargador, resuelvan rescindir
la obligacion vencida, en cuyo caso deberan notificar a la otra parte, en forma
fehaciente, su voluntad rescisoria con por lo menos noventa (90) dias de
anticipacion al vencimiento de cada una de esas obligaciones.-
ARTICULO V
PRECIO Y FACTURACION
1. El Cargador pagara al Transportista en el domicilio del Transportista por el
Servicio de Transporte Firme desde los Puntos de Recepcion hasta los Puntos de
Entrega una suma de dinero que sera establecida de conformidad con las Tarifas
del Transportista para el TF, y las disposiciones aplicables del Reglamento
vigentes en cada momento.-
El precio del servicio quedara sujeto a las modificaciones que surjan de los
Cuadros Tarifarios aprobados por el Ente a partir de la vigencia de los
mismos.-
2. Las facturas, ademas de la Tarifa por el servicio prestado, emanadas del
Transportista incluiran los restantes cargos que, segun las Condiciones
Generales y Condiciones Especiales del Reglamento, son a cargo del Cargador.-
ARTICULO VI
TERMINACION ANTICIPADA E INCUMPLIMIENTOS
La mora en el cumplimiento de obligaciones a su vencimiento sera automatica, y
sin necesidad de interpelacion. En caso de mora el Cargador debera los
intereses previstos en las Condiciones Generales.-
Cualquier incumplimiento contractual podra dar lugar, a voluntad de la parte
cumplidora, a la terminacion del contrato, observandose al respecto lo
3
<PAGE> 4
establecido en las Condiciones Generales y Condiciones Especiales del
Reglamento.-
ARTICULO VII
CESION
Ninguna de las partes podra ceder el presente Contrato, en todo o en parte,
sin el previo y expreso consentimiento de la otra parte, manifestado por
escrito.-
ARTICULO VIII
MISCELANEA
1. La interpretacion y ejecucion de este contrato se efectuaran de acuerdo con
las leyes presentes y futuras de la Republica Argentina.-
2. Este contrato vinculara y regira a las partes del presente y sus respectivos
sucesores y cesionarios.-
3. Las notificaciones a la otra parte se practicaran por escrito y se tendran
por debidamente entregadas en los siguientes domicilios:
(a Al Transportista en: Don Bosco No. 3672 7th (Seventh) piso - Capital
Federal - Atencion Direccion de Marketing.-
(b) Al Cargador en: Av. Davila No. 240 3rd (Third) piso - Capital
Federal.-
Tales domicilios podran ser eventualmente modificados, debiendose notificar
debidamente a la otra parte por correo certificado.-
4. Ambas partes aceptan que si el Cargador no utilizase eficientemente la
Capacidad Contratada, el Ente Nacional Regulador del Gas de conformidad con las
normas reglamentarias podra asignar la parte no utilizada o deficientemente
utilizada, quedando en tal caso reducida la Capacidad Contratada a la capacidad
asi reducida.-
5. El Cargador por la presente acuerda renunciar a cualquier opcion que pueda
tener para reducir la Capacidad Contratada de conformidad con los Contratos de
Servicio de Transporte Firme celebrados con el Transportista, en aquellas zonas
en las cuales contrata capacidad de transporte firme conforme el presente
Contrato. Sin embargo, en el caso que cualquiera de los clientes del Cargador
que figuran en el Apendice E (adjunto al presente e incorporado al mismo
mediante esta referencia), deje de contratar con el mismo para hacerlo con:
4
<PAGE> 5
i) el Transportista mediante Contrato de Transporte Firme, o
ii) Comercializadores que contraten o hayan contratado Transporte Firme con el
Transportista, o
iii) Productores que contraten o hayan contratado Transporte Firme con el
Transportista, o
iv) cualquier combinacion de Comercializadores y Productores que contraten o
hayan contratado Transporte Firme con el Transportista, o
v) otros Cargadores que contraten o hayan contratado Transporte Firme con el
Transportista,
En cualquiera de estos casos, el Cargador puede ejercer la opcion de reducir su
Capacidad Contratada de Transporte Firme con el Transportista, pero en ningun
caso la reduccion sera mayor que la cantidad que el cliente del Cargador haya
contratado bajo alguna de las modalidades mencionadas en los incisos i) al v)
de este mismo articulo. La cantidad de metros cubicos de capacidad de
Transporte Firme de gas que el Cargador podra reducir segun este contrato, no
podra exceder las que figuran en el Apendice E para cada cliente del Cargador y
el plazo de la reduccion no podra superar el plazo de vigencia del servicio
contratado por el Cliente bajo alguna de las modalidades mencionadas en los
incisos i) al v).
Si el Cargador decide ejercitar dicha opcion, notificara dicha decision al
Transportista dentro de los noventa (90) dias posteriores a la fecha en que
recibiera la notificacion de su cliente comunicandole su intencion de dejar de
contratar todo o parte de los servicios del Cargador.-
Vencido dicho plazo sin que el Transportista haya recibido dicha notificacion,
el Cargador no podra en el futuro ejercer tal opcion. Si, por el contrario, el
Cargador comunica que va a ejercer la opcion, entonces, la reduccion total o
parcial de la Capacidad Contratada se producira a partir del momento en que el
cliente deje de recibir esos servicios del Cargador.-
6. Antes de iniciar cualquier ampliacion de su sistema de transporte que
implique un aumento de capacidad en la zona de entrega del Cargador, el
Transportista notificara por escrito al Cargador de tal intencion. Dentro de
los treinta dias de recibida dicha notificacion, el Cargador debera comunicar
al Transportista por escrito su intencion de liberar Capacidad Contratada en la
zona donde el Transportista desarrollara su expansion, indicando el plazo de
la reduccion.- La capacidad que el Cargador tendra derecho a liberar no debera
ser superior al incremento de capacidad originado por la expansion.- El
Transportista, antes de comenzar la expansion podra ofrecer a terceros todo o
parte de la Capacidad Contratada que el Cargador libere.-
7. Las partes acuerdan que la entrada en vigencia del presente Contrato hara
caducar automaticamente el Contrato TF-28.-
5
<PAGE> 6
LA PRESENTE OFERTA SERA CONSIDERADA ACEPTADA SI ESA TRANSPORTISTA ACEPTA
NUESTRA PRIMERA SOLICITUD DE SERVICIO (ART. 23 DEL REGLAMENTO DE SERVICIO DEL
TRANSPORTISTA) CON IMPUTACION AL CONTRATO PARA LA PRESTACION DEL SERVICIO DE
TRANSPORTE FIRME NO. TF-40, O LA PRESENTA AL ENTE NACIONAL REGULADOR DEL
GAS (ENARGAS), LO QUE OCURRA PRIMERO. ASIMISMO, ACUSAMOS RECIBO DE LA COPIA DE
LA RESOLUCION NO. 3/93 DEL ENARGAS QUE NOS REMITIERAN EN CUMPLIMIENTO DE
LO DISPUESTO EN EL ART. 3 DE LA MISMA.
SIN OTRO PARTICULAR LOS SALUDAMOS MUY ATENTAMENTE.
POR CAMUZZI GAS PAMPEANA S.A.
--------------------------
APODERADO
6
<PAGE> 7
APENDICE B
DEL
CONTRATO DE SERVICIO DE TRANSPORTE FIRME
ENTRE
TRANSPORTADORA DE GAS DEL SUR S.A.
Y
CAMUZZI GAS PAMPEANA S.A.
PUNTOS DE RECEPCION: Son todos los Puntos de Recepcion dentro de las Zonas de
Recepcion. El Cargador designara cada cierto tiempo y de acuerdo con los
procedimientos establecidos al efecto por el Transportista y el Reglamento, los
puntos dentro de las Zonas de Recepcion en que el gas sera puesto a disposicion
del Transportista por el Cargador.
CANTIDAD DIARIA: Una cantidad de gas total en m3 equivalentes de 9300 Kcal, de
acuerdo con el detalle indicado en el Apendice D, (mas combustible y mermas)
desde las Zonas de Recepcion.
7
<PAGE> 8
APENDICE C
DEL
CONTRATO DE SERVICIO DE TRANSPORTE FIRME
ENTRE
TRANSPORTADORA DE GAS DEL SUR S.A. Y
CAMUZZI DE GAS PAMPEANA S.A.
<TABLE>
<CAPTION>
=========================================================================================
PUNTO DE NOMBRE DEL PUNTO SUB-ZONA PRESION
MEDICION MINIMA
(NUMERO) (KG / CM2)
=========================================================================================
<S> <C> <C> <C>
081 Medanos Bahia Blanca 25
- -----------------------------------------------------------------------------------------
0148 YPF Rio Colorado Bahia Blanca 25
- -----------------------------------------------------------------------------------------
0149 J.C. Couste Bahia Blanca 25
- -----------------------------------------------------------------------------------------
0150 YPF Algarrobo Bahia Blanca 25
- -----------------------------------------------------------------------------------------
0151 Frigorifico Pilotti Bahia Blanca 25
- -----------------------------------------------------------------------------------------
0152 Salitral de la Vidriera Bahia Blanca 25
- -----------------------------------------------------------------------------------------
0163 Planta Cerri - Consumos Zonales Bahia Blanca 37
- -----------------------------------------------------------------------------------------
0295 Villarino - Patagones Bahia Blanca 25
- -----------------------------------------------------------------------------------------
0269 Camara 57 Bahia Blanca 35
- -----------------------------------------------------------------------------------------
0270 Camara Norte Bahia Blanca 35
- -----------------------------------------------------------------------------------------
0271 Puerto Rosales Bahia Blanca 30
- -----------------------------------------------------------------------------------------
0279 Camara 24 Bahia Blanca 30
- -----------------------------------------------------------------------------------------
0308 Complejo Cerri RTP Bahia Blanca 35
- -----------------------------------------------------------------------------------------
0906 Transferencia al TI-12 Bahia Blanca 37
- -----------------------------------------------------------------------------------------
0167 Transferencia Puan - La Pampa Buenos Aires 50
- -----------------------------------------------------------------------------------------
0168 CASBAS Buenos Aires 30
- -----------------------------------------------------------------------------------------
0169 Alsina - Guamini Buenos Aires 30
- -----------------------------------------------------------------------------------------
0170 Saliquelo Buenos Aires 30
- -----------------------------------------------------------------------------------------
0171 C. 30 de Agosto Buenos Aires 30
- -----------------------------------------------------------------------------------------
0172 Pellegrini - 3 Lomas (0247) Buenos Aires 30
- -----------------------------------------------------------------------------------------
0174 Salazar Buenos Aires 25
- -----------------------------------------------------------------------------------------
0176 Herrera - Vega Buenos Aires 30
- -----------------------------------------------------------------------------------------
0178 Nueve de Julio Buenos Aires 25
- -----------------------------------------------------------------------------------------
0179 Carlos Casares Buenos Aires 30
- -----------------------------------------------------------------------------------------
0180 25 de Mayo (0248) Buenos Aires 25
- -----------------------------------------------------------------------------------------
0181 Bragado (0248) Buenos Aires 25
- -----------------------------------------------------------------------------------------
0182 Alberti Buenos Aires 30
- -----------------------------------------------------------------------------------------
0183 Chivilcoy Buenos Aires 30
- -----------------------------------------------------------------------------------------
0185 Cabildo Buenos Aires 25
- -----------------------------------------------------------------------------------------
0186 YPF San Roman Buenos Aires 25
- -----------------------------------------------------------------------------------------
0187 Coronel Dorrego Buenos Aires 25
- -----------------------------------------------------------------------------------------
0190 Tres Arroyos Buenos Aires 30
- -----------------------------------------------------------------------------------------
0191 Gonzalez Chavez Buenos Aires 25
- -----------------------------------------------------------------------------------------
0192 De La Garma Buenos Aires 25
=========================================================================================
</TABLE>
8
<PAGE> 9
APENDICE C
DEL
CONTRATO DE SERVICIO DE TRANSPORTE FIRME
ENTRE
TRANSPORTADORA DE GAS DEL SUR S.A. Y
CAMUZZI DE GAS PAMPEANA S.A.
<TABLE>
=========================================================================================
<S> <C> <C> <C>
0193 Benito Juarez Buenos Aires 25
- -----------------------------------------------------------------------------------------
0196 Cabecera Barker - Necochea Buenos Aires 30
- -----------------------------------------------------------------------------------------
0197 TurboGas DEBA Buenos Aires 20
- -----------------------------------------------------------------------------------------
0198 Estancia Los Manantiales Buenos Aires 20
- -----------------------------------------------------------------------------------------
0199 Chillar Buenos Aires 20
- -----------------------------------------------------------------------------------------
0200 Maria Ignacia Vela Buenos Aires 30
- -----------------------------------------------------------------------------------------
0201 Derivacion Barker Buenos Aires 35
- -----------------------------------------------------------------------------------------
0202 Tandil B.O.6 Buenos Aires 35
- -----------------------------------------------------------------------------------------
0203 El Chourron Buenos Aires 35
- -----------------------------------------------------------------------------------------
0204 Rauch Buenos Aires 25
- -----------------------------------------------------------------------------------------
0205 General Belgrano Buenos Aires 25
- -----------------------------------------------------------------------------------------
0206 YPF Las Flores Buenos Aires 25
- -----------------------------------------------------------------------------------------
0207 Chascomus Buenos Aires 25
- -----------------------------------------------------------------------------------------
0208 Ranchos Buenos Aires 25
- -----------------------------------------------------------------------------------------
0209 Brandsen Buenos Aires 25
- -----------------------------------------------------------------------------------------
0211 YPF El Mauleon Buenos Aires 30
- -----------------------------------------------------------------------------------------
0214 Olavarria I Buenos Aires 28
- -----------------------------------------------------------------------------------------
0215 Olavarria II Buenos Aires 28
- -----------------------------------------------------------------------------------------
0216 Colonia Hinojo Buenos Aires 25
- -----------------------------------------------------------------------------------------
0217 Tapalque Buenos Aires 25
- -----------------------------------------------------------------------------------------
0218 General Alvear Buenos Aires 25
- -----------------------------------------------------------------------------------------
0219 Saladillo Buenos Aires 25
- -----------------------------------------------------------------------------------------
0220 Roque Perez Buenos Aires 25
- -----------------------------------------------------------------------------------------
0221 Navarro Buenos Aires 25
- -----------------------------------------------------------------------------------------
0222 Empalme Lobos Buenos Aires 25
- -----------------------------------------------------------------------------------------
0242 Jephener Buenos Aires 30
- -----------------------------------------------------------------------------------------
0244 Indio Rico (Localidad) Buenos Aires 30
- -----------------------------------------------------------------------------------------
0247 C. 30 de Agosto (168-171-172-173) Buenos Aires 30
- -----------------------------------------------------------------------------------------
0248 C. Bragado - 25 de Mayo (180-181) Buenos Aires 30
- -----------------------------------------------------------------------------------------
0249 C. Chascomus - Ranchos (207-208) Buenos Aires 30
- -----------------------------------------------------------------------------------------
0259 Club de Campo La Martona Buenos Aires 20
- -----------------------------------------------------------------------------------------
0268 GNC General Belgrano Buenos Aires 40
- -----------------------------------------------------------------------------------------
0275 P. Avicola SAPRA Buenos Aires 30
- -----------------------------------------------------------------------------------------
0290 A. Brandsen - Jephener Buenos Aires 30
- -----------------------------------------------------------------------------------------
0294 Loma Verde Buenos Aires 30
- -----------------------------------------------------------------------------------------
0296 Gto. Buchanan - La Plata Buenos Aires 25
- -----------------------------------------------------------------------------------------
0310 Felipe Sola - Darregueira Buenos Aires 30
- -----------------------------------------------------------------------------------------
0318 Camara Henderson Buenos Aires 30
- -----------------------------------------------------------------------------------------
903 Transferencia al ED-04 Buenos Aires 30
- -----------------------------------------------------------------------------------------
909 Transferencia al TI-23 Buenos Aires 30
=========================================================================================
</TABLE>
9
<PAGE> 10
CANTIDAD MAXIMA DE ENTREGA DIARIA: Una cantidad de gas que totalice entre todos
los Puntos de Entrega la suma de las cantidades especificadas en el Apendice D.
La cantidad maxima de entrega diaria en cada Punto de Entrega estara limitada a
la capacidad maxima de diseno de cada Punto de Entrega o la que en el futuro
fijen las partes.
APENDICE D
DEL
CONTRATO DE SERVICIO DE TRANSPORTE FIRME
ENTRE
TRANSPORTADORA DE GAS DEL SUR S.A.
Y
CAMUZZI GAS PAMPEANA S.A.
<TABLE>
<CAPTION>
================================================================================
ZONA DE ZONA DE ENTREGA CANTIDAD VENCIMIENTO
RECEPCION CONTRATADA (*)
================================================================================
<S> <C> <C> <C>
Santa Cruz Bahia Blanca 200.000 01/10/1996
- --------------------------------------------------------------------------------
Neuquen Buenos Aires 300.000 01/10/1996
- --------------------------------------------------------------------------------
Tierra del Fuego Bahia Blanca 415.000 01/05/2003
- --------------------------------------------------------------------------------
Tierra del Fuego Buenos Aires 626.000 01/05/2003
- --------------------------------------------------------------------------------
Santa Cruz Bahia Blanca 533.000 01/05/2003
- --------------------------------------------------------------------------------
Santa Cruz Buenos Aires 401.000 01/05/2003
- --------------------------------------------------------------------------------
Neuquen Bahia Blanca 620.500 01/05/2003
- --------------------------------------------------------------------------------
Neuquen Buenos Aires 1.909.500 01/05/2003
- --------------------------------------------------------------------------------
Neuquen Bahia Blanca 750.000 01/03/2004
- --------------------------------------------------------------------------------
Neuquen Buenos Aires 400.000 01/05/2004
- --------------------------------------------------------------------------------
Neuquen Buenos Aires 17.500 01/08/1999
- --------------------------------------------------------------------------------
Neuquen Buenos Aires 7.500 01/03/2000
- --------------------------------------------------------------------------------
Tierra del Fuego Bahia Blanca 415.000 01/05/2009
- --------------------------------------------------------------------------------
Tierra del Fuego Buenos Aires 626.000 01/05/2009
- --------------------------------------------------------------------------------
Santa Cruz Bahia Blanca 533.000 01/05/2009
- --------------------------------------------------------------------------------
Santa Cruz Buenos Aires 401.000 01/05/2009
- --------------------------------------------------------------------------------
Neuquen Bahia Blanca 1.370.500 01/05/2009
- --------------------------------------------------------------------------------
Neuquen Buenos Aires 2.334.500 01/05/2009
================================================================================
</TABLE>
(*) expresada en metros cubicos equivalentes de 9300 Kcal / m3
10
<PAGE> 11
APENDICE E
DEL
CONTRATO DE SERVICIO DE TRANSPORTE FIRME
ENTRE
TRANSPORTADORA DE GAS DEL SUR S.A. Y
CAMUZZI GAS PAMPEANA S.A.
<TABLE>
<CAPTION>
================================================================================
CLIENTE DEL CARGADOR SUBZONA DE CONSUMO DIARIO
ENTREGA ASIGNADO (*)
================================================================================
<S> <C> <C>
Aceros Bragado Buenos Aires 25.587
- --------------------------------------------------------------------------------
Cantera Cerro Negro Buenos Aires 118.786
- --------------------------------------------------------------------------------
Celulosa Cnel. Suarez Buenos Aires 19.532
- --------------------------------------------------------------------------------
Cementos Avellaneda Buenos Aires 263.802
- --------------------------------------------------------------------------------
Cementos San Martin Buenos Aires 324.214
- --------------------------------------------------------------------------------
Ceramica Fanelli Buenos Aires 17.065
- --------------------------------------------------------------------------------
Ceramica San Lorenzo Buenos Aires 96.802
- --------------------------------------------------------------------------------
Dekalb Buenos Aires 9.167
- --------------------------------------------------------------------------------
Edelap Buenos Aires 400.915
- --------------------------------------------------------------------------------
ESEBA- Mar del Plata Buenos Aires 871.433
- --------------------------------------------------------------------------------
ESEBA-Necochea Buenos Aires 1.045.423
- --------------------------------------------------------------------------------
Interpak Buenos Aires 38.180
- --------------------------------------------------------------------------------
Ipako Buenos Aires 51.552
- --------------------------------------------------------------------------------
Kicsa- C & K Buenos Aires 47.579
- --------------------------------------------------------------------------------
Loimar Buenos Aires 24.636
- --------------------------------------------------------------------------------
Loma Negra Barker Buenos Aires 528.822
- --------------------------------------------------------------------------------
Loma Negra Olavarria Buenos Aires 638.745
- --------------------------------------------------------------------------------
Losa Buenos Aires 41.915
- --------------------------------------------------------------------------------
Mafissa Buenos Aires 86.265
- --------------------------------------------------------------------------------
Malteria Quilmes Buenos Aires 19.434
- --------------------------------------------------------------------------------
Malteria Pampa Buenos Aires 24.529
- --------------------------------------------------------------------------------
Materia Buenos Aires 20.362
- --------------------------------------------------------------------------------
Palmar Buenos Aires 19.332
- --------------------------------------------------------------------------------
Petr. Gral. Mosconi Buenos Aires 466.763
- --------------------------------------------------------------------------------
Polibutenos Buenos Aires 27.021
- --------------------------------------------------------------------------------
Propulsora Buenos Aires 66.729
- --------------------------------------------------------------------------------
YPF- Destileria Buenos Aires 1.002.299
- --------------------------------------------------------------------------------
YPF- El Mauleon Buenos Aires 15.647
- --------------------------------------------------------------------------------
YPF- Newton Buenos Aires 11.827
- --------------------------------------------------------------------------------
YPF- San Roman Buenos Aires 13.453
- --------------------------------------------------------------------------------
ESEBA- Bahia Blanca Bahia Blanca 2.372.369
- --------------------------------------------------------------------------------
ESSO Bahia Blanca 58.902
- --------------------------------------------------------------------------------
Liquid Carbonic Bahia Blanca 3.436
- --------------------------------------------------------------------------------
Petroquimica BB Bahia Blanca 397.697
- --------------------------------------------------------------------------------
OLDELVAl ALG/SALIT/La Adela Bahia Blanca 80.000
- --------------------------------------------------------------------------------
Induclor Bahia Blanca 49.123
- --------------------------------------------------------------------------------
Monomeros Vinilicos Bahia Blanca 117.506
- --------------------------------------------------------------------------------
EBYTEM- YPF ROS. Bahia Blanca 23.719
================================================================================
</TABLE>
(*) expresada en metros cubicos equivalentes de 9300 Kcal / m(3)
11
<PAGE> 12
TRANSLATION
Buenos Aires, June 28th, 1996
Messrs.
Transportadora de Gas del Sur S.A.
Don Bosco 3672, 7o piso
Dear Sirs:
This is to inform you that we wish to submit to your consideration an offer to
enter into a Firm Transportation Service Agreement, which proposal, if
accepted, will be governed by the following terms and conditions:
FIRM TRANSPORTATION SERVICE AGREEMENT
FT - 40
SECTION I
GAS TRANSPORTATION SERVICES
1. Subject to the Service Regulations and provisions hereof and to
Transporter's Special Conditions for Firm Transportation (FT), Camuzzi Gas
Pampeana S.A. (hereinafter referred to as the "Shipper") agrees to deliver, or
to cause to be delivered to Transportadora de Gas del Sur S.A. (hereinafter
referred to as the "Transporter"), Gas to be transported and Transporter agrees
to receive, transport and return Gas to Shipper or to its designee on its
behalf, on a Firm Transportation Service basis (FT) a contracted transportation
capacity of no less than the amount of cubic meters per day shown in Exhibit D
attached hereto and made part hereof by this reference (the "Contracted
Capacity").
2. The transportation service rendered hereunder will not be subject to
reduction or interruption by the Transporter except as provided in Section 11
of the Special Conditions of the Transporter's Service Regulations approved by
the National Gas Regulatory Entity and the future amendments thereto, which
together with the Special Conditions for the FT Service are made part hereof as
Exhibit A (hereinafter referred to as the "Regulations").
SECTION II
RECEIPT POINT(S)
Shipper will deliver or cause to be delivered the Gas at the Receipt Point(s)
shown in Exhibit B attached hereto and made part hereof by this reference, at a
pressure sufficient to allow the gas to enter the Transporter's pipeline
system, taking into account the variable pressures prevailing on such system
and at each Receipt Point. Such pressure of the gas delivered or caused to be
delivered by Shipper shall not exceed the maximum operating pressure(s) set
forth by the Transporter for each Receipt Point in Exhibit B. In the event the
maximum operating pressure(s) of the Transporter's pipeline system at the
Receipt Point(s)
<PAGE> 13
2
hereunder were increased or reduced, the maximum allowed pressure(s) of the gas
delivered or caused to be delivered by Shipper to Transporter at the Receipt
Point(s) shall be increased or reduced in the same proportion provided the
Transporter gives Shipper at least thirty (30) days prior written notice.
In the event the Transporter decides to vary pressure in any Receipt Point by
more than 2%, the Transporter will notify such variation to Shipper or such
person as Shipper designates, at least eight (8) hours before such event.
SECTION III
DELIVERY POINT(S)
1. Transporter will daily return to Shipper, or to a third party on behalf of
Shipper an amount of gas equal to the Delivery Amount hereunder at the Delivery
Point(s) and at the pressure(s) set forth in Exhibit C attached hereto and made
part hereof by this reference.
2. The Delivery Amount shall be equal to the total amount of gas effectively
delivered by Shipper to Transporter at the Receipt Points after deducting the
amount of fuel and shrinkage retained by Transporter in accordance with the
Regulations.
SECTION IV
TERM OF THE AGREEMENT
This agreement shall be effective as from 6.00 a.m. on July 1st, 1996 and it
shall remain in full force up to 6.00 a.m. on the dates set forth in Exhibit
D, for the amounts set forth therein. Upon expiry of any of the terms specified
in Exhibit D, the obligation of firm transportation of the respective
Contracted Capacity will be automatically renewed for successive one (1) year
periods until Transporter or Shipper terminates the matured obligation by
providing at least 90 days written notice prior to the maturity of each such
obligation.
SECTION V
PRICE AND BILLING
1. Shipper shall pay to Transporter at the Transporter's domicile, for the
firm transportation service rendered from the Receipt Points to the Delivery
Points, a money amount that will be established in accordance with the
Transporter's Rate for Firm Transportation, and the applicable provisions of
the Regulations then in effect.
The service price shall be subject to the modifications of the Rate Sheets
approved by the Entity as from their effective date.
2. In addition to the rate for the service rendered, the invoices issued by
Transporter shall include the remaining charges that according to the General
Conditions and the Special Conditions of the Regulations are to be borne by
Shipper.
<PAGE> 14
3
SECTION VI
EARLY TERMINATION AND DEFAULTS
Default in the performance of the obligations on their maturity dates shall be
automatic and no demand shall be required. In the event of default Shipper will
pay interest as provided in the General Conditions.
Any contractual default may cause the early termination of this Firm
Transportation service at the non-defaulting party's option and the procedure
set forth in the General Conditions and the Special Conditions of the
Regulations for such purpose shall be followed.
SECTION VII
ASSIGNMENT
Neither party hereof shall be entitled to assign in whole or in part this
Agreement, without the prior and express written consent of the other party.
SECTION VIII
MISCELLANEOUS
1. The interpretation and execution of this agreement shall be made in
accordance with the laws of the Argentine Republic now or hereinafter in
effect.
2. This agreement shall be binding for, and shall govern the parties hereto
and their respective successors and assignees.
3. Notices to the other party shall be in writing and shall be deemed duly
given when sent to the other party at the following domiciles:
(a) To Transporter at: Don Bosco 3672 - 7o piso - Capital Federal - Attention:
Direccion de Marketing.
(b) To Shipper at: Av. Davila 240 - 3o piso - Capital Federal.
Such domiciles may be modified from time to time, by sending the other party a
due notice by registered mail.
4. Both parties acknowledge that if Shipper does not make an efficient use of
the Contracted Capacity, the National Gas Regulatory Entity, in accordance with
regulatory rules, shall allocate the portion not used or deficiently used, and
in such event the capacity so reduced will become the Contracted Capacity.
5. Shipper hereby waives any other option it may have to reduce the Contracted
Capacity under the provisions of the Firm Transportation Service Agreements
entered with Transporter, in those zones in which it engages contracted
capacity of firm transportation
<PAGE> 15
4
under this Agreement. However, in the event any of Shipper's customers included
in Exhibit E (attached hereto and made part hereof by this reference) fails to
enter an agreement with it and enters an agreement with:
i) Transporter under a Firm Transportation Agreement, or
ii) Merchants that enter or have entered a Firm Transportation Agreement with
Transporter, or
iii) Producers that enter or have entered a Firm Transportation Agreement with
Transporter, or
iv) any combination of Merchants and Producers that enter or have entered a
Firm Transportation Agreement with
Transporter;
v) other Shippers that enter or have entered a Firm Transportation Agreement
with Transporter,
In any such event, Shipper may elect to reduce its Contracted Capacity of Firm
Transportation with Transporter, but in no such event the reduction will be
higher than the amount that Shipper's customer has contracted for under any of
the arrangements mentioned in subparagraphs i) through v) above. The amount of
cubic meters of firm transportation capacity of gas that Shipper will be
entitled to reduce under this agreement, shall in no way exceed those shown in
Exhibit E for each of Shipper's customers and the term of the reduction shall
in no way exceed the duration of the service contracted for by the Customer
under any of the arrangements mentioned in subparagraphs i) through v) above.
In the event Shipper intends to exercise such option, Shipper will notify such
election to Transporter within ninety (90) days from the date of receipt of a
notification from its customer stating its intention to terminate in whole or
in part the engagement of Shipper's services.
Upon the expiry of such period if Transporter has not received such
notification, Shipper will not be able to exercise such option in the future.
However, on the contrary, if Shipper notifies his intention to exercise the
option, then the total or partial reduction of the Contracted Capacity will be
effective as of the time the customer ceases to receive such services from
Shipper.
6. Prior to the commencement of any increase in its transportation system
implying an increase in the capacity in the delivery zone of Shipper,
Transporter shall give notice thereof in writing to Shipper. Within thirty days
of the receipt of such notification, Shipper shall notify Transporter in
writing its intention to release Contracted Capacity in the zone where
Transporter will develop its expansion project, stating the term for the
reduction. The capacity that Shipper will be entitled to release shall not
exceed the increase in capacity resulting from the expansion. Prior to the
commencement of the expansion, Transporter shall be entitled to offer all or
any part of the Contracted Capacity released by Shipper to third parties.
7. Both parties hereto agree that on the effective date hereof this Agreement
shall automatically terminate Agreement FT-28.
<PAGE> 16
5
This Offer will be considered accepted if Transporter accepts our first service
application (Section 23 of the Service Regulation) to be allocated to the Firm
Transportation Service Agreement No. FT-40, or said Transporter files the Offer
with the National Gas Regulatory Entity (ENARGAS), whichever occurs earlier.
We also acknowledge receipt of a copy of Resolution No. 3/93 of the ENARGAS
sent to us in compliance with the provisions of Section 3 thereof.
Truly yours,
By Camuzzi Gas Pampeana S.A.
There are two illegible signatures.
Attorney
<PAGE> 17
6
EXHIBIT B
FIRM TRANSPORTATION SERVICE AGREEMENT
between
TRANSPORTADORA DE GAS DEL SUR S.A.
and
CAMUZZI GAS PAMPEANA S.A.
RECEIPT POINTS: Are all the Receipt Points within the Receipt Zones. Shipper
will indicate from time to time and according to the procedure set forth by
Transporter to such effect and the Regulations, the points within the Receipt
Zones where the gas shall be made available by Shipper to Transporter.
DAILY AMOUNT: An aggregate amount of gas in m(3) equivalent to 9300 Kcal, as per
schedule set forth in Exhibit D, (plus fuel and shrinkages) from the Receipt
Zones.
<PAGE> 18
7
EXHIBIT C
FIRM TRANSPORTATION SERVICE AGREEMENT
between
TRANSPORTADORA DE GAS DEL SUR S.A.
and
CAMUZZI DE GAS PAMPEANA S.A.
<TABLE>
<CAPTION>
MEASUREMENT NAME OF THE POINT SUB-ZONE MINIMUM PRESSURES
(POINT NUMBER) (BAR)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
081 Medanos Bahia Blanca 25
0148 YPF Rio Colorado Bahia Blanca 25
0149 J.C. Couste Bahia Blanca 25
0150 YPF Algarrobo Bahia Blanca 25
0151 Frigorifico Pilotti Bahia Blanca 25
0152 Salitral de la Vidriera Bahia Blanca 25
0163 Cerri Plant - Consumos Zonales Bahia Blanca 37
0295 Villarino - Patagones Bahia Blanca 25
0269 Camara 57 Bahia Blanca 35
0270 Camara Norte Bahia Blanca 35
0271 Puerto Rosales Bahia Blanca 30
0279 Camara 24 Bahia Blanca 30
0308 Cerri Complex RTP Bahia Blanca 35
0906 Transfer to Tl-12 Bahia Blanca 37
0167 Puan Transfer - La Pampa Buenos Aires 50
0168 CASBAS Buenos Aires 30
0169 Alsina - Guamini Buenos Aires 30
0170 Saliquelo Buenos Aires 30
0171 C. 30 de Agosto Buenos Aires 30
0172 Pellegrini - 3 Lomas (0247) Buenos Aires 30
0174 Salazar Buenos Aires 25
0176 Herrera - Vega Buenos Aires 30
0178 Nueve de Julio Buenos Aires 25
0179 Carlos Casares Buenos Aires 30
0180 25 de Mayo (0248) Buenos Aires 25
0181 Bragado (0248) Buenos Aires 25
0182 Alberti Buenos Aires 30
0183 Chivilcoy Buenos Aires 30
0185 Cabildo Buenos Aires 25
0186 YPF San Roman Buenos Aires 25
0187 Coronel Dorrego Buenos Aires 25
0190 Tres Arroyos Buenos Aires 30
0191 Gonzalez Chavez Buenos Aires 25
0192 De La Garma Buenos Aires 25
0193 Benito Juarez Buenos Aires 25
0196 Cabecera Barker-Necochea Buenos Aires 30
0197 TurboGas DEBA Buenos Aires 20
0198 Estancia Los Manantiales Buenos Aires 20
0199 Chillar Buenos Aires 20
0200 Maria Ignacia Vela Buenos Aires 30
0201 Derivacion Barker Buenos Aires 35
</TABLE>
<PAGE> 19
8
<TABLE>
<S> <C> <C> <C>
0202 Tandil B.O.6 Buenos Aires 35
0203 El Chourron Buenos Aires 35
0204 Rauch Buenos Aires 25
0205 General Belgrano Buenos Aires 25
0206 YPF Las Flores Buenos Aires 25
0207 Chascomcs Buenos Aires 25
0208 Ranchos Buenos Aires 25
0209 Brandsen Buenos Aires 25
0211 YPF El Mauleon Buenos Aires 30
0214 Olavarria I Buenos Aires 28
0215 Olavarria II Buenos Aires 28
0216 Colonia Hinojo Buenos Aires 25
0217 Tapalque Buenos Aires 25
0218 General Alvear Buenos Aires 25
0219 Saladillo Buenos Aires 25
0220 Roque Perez Buenos Aires 25
0221 Navarro Buenos Aires 25
0222 Empalme Lobos Buenos Aires 25
0242 Jephener Buenos Aires 30
0244 Indio Rico (Localidad) Buenos Aires 30
0247 C.30 de Agosto(168-171-172-173) Buenos Aires 30
0248 C. Bragado-25 de Mayo (180-181) Buenos Aires 30
0249 C. Chascomcs-Ranchos (207-208) Buenos Aires 30
0259 Club de Campo La Martona Buenos Aires 20
0268 GNC General Belgrano Buenos Aires 40
0275 P.Agricola Sapra Buenos Aires 30
0290 A. Brandsen-Jephener Buenos Aires 30
0294 Loma Verde Buenos Aires 30
0296 Gto. Buchanan-La Plata Buenos Aires 25
0310 Felipe Sola-Darregueira Buenos Aires 30
0318 Camara Henderson Buenos Aires 30
903 Transfer to ED-04 Buenos Aires 30
909 Transfer to TI-23 Buenos Aires 30
</TABLE>
MAXIMUM AMOUNT OF DAILY DELIVERY: An amount of gas totaling between all
Delivery Points the sum of the amounts set forth in Exhibit D. Maximum amount
of daily delivery in each Delivery Point will be limited to the maximum
designed capacity of each Delivery Point or such capacity as shall be agreed by
the Parties in the future.
<PAGE> 20
9
EXHIBIT D
FIRM TRANSPORTATION SERVICE AGREEMENT
between
TRANSPORTADORA DE GAS DEL SUR S.A.
and
CAMUZZI DE GAS PAMPEANA S.A.
<TABLE>
<CAPTION>
RECEIPT ZONE DELIVERY ZONE CONTRACTED AMOUNT(*) MATURITY
- -------------------------------------------------------------------------
<S> <C> <C> <C>
Santa Cruz Bahia Blanca 200,000 10/01/1996
Neuquen Buenos Aires 300,000 10/01/1996
Tierra del Fuego Bahia Blanca 415,000 05/01/2003
Tierra del Fuego Buenos Aires 626,000 05/01/2003
Santa Cruz Bahia Blanca 533,000 05/01/2003
Santa Cruz Buenos Aires 401,000 05/01/2003
Neuquen Bahia Blanca 620,500 05/01/2003
Neuquen Buenos Aires 1,909,500 05/01/2003
Neuquen Bahia Blanca 750,000 03/01/2004
Neuquen Buenos Aires 400,000 05/01/2004
Neuquen Buenos Aires 17,500 08/01/1999
Neuquen Buenos Aires 7,500 03/01/2000
Tierra del Fuego Bahia Blanca 415,000 05/01/2009
Tierra del Fuego Buenos Aires 626,000 05/01/2009
Santa Cruz Bahia Blanca 533,000 05/01/2009
Santa Cruz Buenos Aires 401,000 05/01/2009
Neuquen Bahia Blanca 1,370,500 05/01/2009
Neuquen Buenos Aires 2,334,500 05/01/2009
</TABLE>
(*) stated in cubic meters equivalent to 9300 Kcal/m(3).
<PAGE> 21
10
EXHIBIT E
FIRM TRANSPORTATION SERVICE AGREEMENT
between
TRANSPORTADORA DE GAS DEL SUR S.A.
and
CAMUZZI DE GAS PAMPEANA S.A.
<TABLE>
<CAPTION>
SHIPPER'S CUSTOMER DELIVERY SUB-ZONE DAILY CONSUMPTION ALLOCATED(*)
- --------------------------------------------------------------------------------
<S> <C> <C>
Aceros Bragado Buenos Aires 25,587
Cantera Cerro Negro Buenos Aires 118,786
Celulosa Cnel. Suarez Buenos Aires 19,532
Cementos Avellaneda Buenos Aires 263,802
Cementos San Martin Buenos Aires 324,214
Ceramica Fanelli Buenos Aires 17,065
Ceramica San Lorenzo Buenos Aires 96,802
Dekalb Buenos Aires 9,167
Edelap Buenos Aires 400,915
ESEBA-Mar del Plata Buenos Aires 871,433
ESEBA-Necochea Buenos Aires 1,045,423
Interpak Buenos Aires 38,180
Ipako Buenos Aires 51,552
Kicsa-C & K Buenos Aires 47,579
Loimar Buenos Aires 24,636
Loma Negra Barker Buenos Aires 528,822
Loma Negra Olavarria Buenos Aires 638,745
Losa Buenos Aires 41,915
Mafissa Buenos Aires 86,265
Malteria Quilmes Buenos Aires 19,434
Malteria Pampa Buenos Aires 24,529
Materia Buenos Aires 20,362
Palmar Buenos Aires 19,332
Petr. Gral. Mosconi Buenos Aires 466,763
Polibutenos Buenos Aires 27,021
Propulsora Buenos Aires 66,729
YPF-Destileria Buenos Aires 1,002,299
YPF-El Mauleon Buenos Aires 15,647
YPF-Newton Buenos Aires 11,827
YPF-San Roman Buenos Aires 13,453
ESEBA-Bahia Blanca Bahia Blanca 2,372,369
ESSO Bahia Blanca 58,902
Liquid Carbonic Bahia Blanca 3,436
Petroquimica BB Bahia Blanca 397,697
OLDELVAI ALG/SALIT/La Adela Bahia Blanca 80,000
Induclor Bahia Blanca 49,123
Monomeros Vinilicos Bahia Blanca 117,506
EBYTEM-YPF ROS. Bahia Blanca 23,719
</TABLE>
(*) stated in cubic meters equivalent to 9300 Kcal/m(3).
<PAGE> 22
11
There are several illegible signatures on every page.
There follows Notarial Proceedings No. 004196277
There is an illegible signature and an illegible seal on all pages.
<PAGE> 1
US$220,000,000 NOTE PURCHASE AGREEMENT
among
COMPANIA DE INVERSIONES DE ENERGIA S.A.,
as Issuer
BANCO SUPERVIELLE SOCIETE GENERALE S.A.
GOLDMAN, SACHS & CO.
SOCIETE GENERALE,
as Arrangers
BANK OF MONTREAL
BANQUE EUROPEENNE POUR L'AMERIQUE LATINE (BEAL) S.A.
DRESDNER BANK LUXEMBOURG S.A.,
as Managing Agents
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
CIBC INC.
BANCO DE LA PROVINCIA DE BUENOS AIRES - GRAND CAYMAN BRANCH
TORONTO DOMINION (TEXAS), INC.
BANK OF BOSTON TRUST COMPANY (BAHAMAS) LIMITED
ING BANK, N.V.,
as Co-Agents
ROYAL BANK OF CANADA,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
CREDITANSTALT-BANKVEREIN,
BANCA COMMERCIALE ITALIANA - NEW YORK BRANCH, and
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY,
as Lead Managers
RIOBANK INTERNATIONAL and
REPUBLIC NATIONAL BANK OF NEW YORK (URUGUAY) S.A.,
as Managers
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Administrative Agent
and
the Purchasers named herein
------------------
Dated as of April 18, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Purchase of the Notes . . . . . . . . . . . . . . . . . . . . . . 2
2. Certain Defined Terms; Accounting Terms; Terms of the Notes;
Certain References. . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Closing and Delivery of Notes . . . . . . . . . . . . . . . . . . . 9
4. Representations and Warranties of the Issuer . . . . . . . . . . . . 10
5. Representations, Warranties and Agreements of the Purchasers . . . 11
6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8. Conditions Precedent to Closing . . . . . . . . . . . . . . . . . . 13
9. The Administrative Agent . . . . . . . . . . . . . . . . . . . . . . 15
(a) Authorization and Action . . . . . . . . . . . . . 15
(b) Administrative Agent's Reliance, Etc. . . . . . . . 16
(c) Societe Generale and Affiliates . . . . . . . . . . 16
(d) Purchaser Credit Decision . . . . . . . . . . . . . 17
(e) Indemnification . . . . . . . . . . . . . . . . . . 17
(f) Successor Administrative Agent . . . . . . . . . . 17
(g) Arrangers, Managing Agents, Co-Agents, Lead
Managers and Managers . . . . . . . . . . . . . . . 18
(h) Failure of Issuer to Pay in Full . . . . . . . . . 18
10. Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11. Notices, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12. No-Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . 19
13. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 19
14. Right of Set-off and Break Funding Costs . . . . . . . . . . . . . . 21
</TABLE>
ii
<PAGE> 3
<TABLE>
<S> <C> <C>
15. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
16. Assignments and Participations . . . . . . . . . . . . . . . . . . . 22
17. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . 24
18. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
19. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . 25
20. Submission to Jurisdiction; Service of Process . . . . . . . . . . . 25
21. Waiver of Sovereign Immunity . . . . . . . . . . . . . . . . . . . . 26
22. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . 26
23. Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . 27
24. Use of English Language . . . . . . . . . . . . . . . . . . . . . . 27
25. Titles and Headings . . . . . . . . . . . . . . . . . . . . . . . . 27
26. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . 28
27. Warranties and Agreements to Continue . . . . . . . . . . . . . . . 28
</TABLE>
EXHIBIT A Fiscal Agency Agreement
EXHIBIT B Notice of Closing
EXHIBIT C Form of Assignment and Acceptance
EXHIBIT D Form of legal opinion of independent Argentine
counsel for the Issuer
EXHIBIT E Form of legal opinion of special Argentine counsel
for the Administrative Agent
EXHIBIT F Form of legal opinion of special New York counsel for
the Administrative Agent
SCHEDULE I Purchasing Offices and Addresses for Notices
______________________________
Note: This table of contents shall not be deemed to be a part of the Note
Purchase Agreement for any purpose.
<PAGE> 4
COMPANIA DE INVERSIONES DE ENERGIA S.A.
US$220,000,000 AGGREGATE PRINCIPAL AMOUNT OF
FLOATING RATE NOTES DUE APRIL 22, 2002
NOTE PURCHASE AGREEMENT
dated as of April 18, 1997
BY AND BETWEEN
(1) COMPANIA DE INVERSIONES DE ENERGIA S.A., a sociedad anonima organized
under the laws of the Republic of Argentina (the "Issuer"); and
(2) BANCO SUPERVIELLE SOCIETE GENERALE S.A.,
GOLDMAN, SACHS & CO. and
SOCIETE GENERALE, as Arrangers (the "Arrangers"); and
(3) BANK OF MONTREAL,
BANQUE EUROPEENNE POUR L'AMERIQUE LATINE (BEAL) S.A. and
DRESDNER BANK LUXEMBOURG S.A., as Managing Agents (the "Managing
Agents"); and
(4) MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
CIBC INC.,
BANCO DE LA PROVINCIA DE BUENOS AIRES - GRAND CAYMAN BRANCH,
TORONTO DOMINION (TEXAS), INC.,
BANK OF BOSTON TRUST COMPANY (BAHAMAS) LIMITED and
ING BANK N.V., as Co-Agents (the "Co-Agents"); and
(5) ROYAL BANK OF CANADA,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
CREDITANSTALT-BANKVEREIN,
BANCA COMMERCIALE ITALIANA - NEW YORK BRANCH and
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY, as Lead Managers (the "Lead
Managers"); and
-1-
<PAGE> 5
(6) RIOBANK INTERNATIONAL and
REPUBLIC NATIONAL BANK OF NEW YORK (URUGUAY) S.A., as Managers (the
"Managers"); and
(7) The firms listed as Purchasers on the signature page hereto (the
"Purchasers"); and
(8) SOCIETE GENERALE, SOUTHWEST AGENCY, as Administrative Agent (the
"Administrative Agent").
WHEREAS:
(A) The Issuer has duly authorized and has determined to create
and issue US$220,000,000 aggregate principal amount of Floating Rate Notes due
April 22, 2002 (the "Notes") on the Closing Date hereinafter specified; and
(B) The Arrangers have arranged for the purchase of the Notes by
the Purchasers, who desire to purchase such Notes; and
(C) The Administrative Agent wishes to undertake the duties
herein specified on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, the parties hereto hereby agree as follows:
1. Purchase of the Notes.
Upon and subject to the terms and conditions of this Note Purchase
Agreement (this "Agreement"), at the Closing (as defined herein) the Issuer
agrees to issue and to sell to each of the Purchasers, and each Purchaser
severally agrees to purchase, Notes in an amount not to exceed the amount set
forth opposite each Purchaser's name on the signature pages hereof (or, if such
Purchaser has entered into any Assignment and Acceptance, the amount set forth
for such Purchaser in the Register maintained by the Administrative Agent
pursuant to Section 16) (each such amount, the Commitment" of such Purchaser),
at a purchase price of one hundred percent (100%) of the principal amount of
the Notes (the "Issue Price").
-2-
<PAGE> 6
2. Certain Defined Terms; Accounting Terms; Terms of the Notes;
Certain References.
(a) As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
"Additional Amounts" has the meaning specified in Section 6(b).
"Administrative Agent" has the meaning specified in the
introductory paragraph hereof.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at Societe
Generale, New York Branch at 1221 Avenue of the Americas, New York, New York
10020, ABA No. 026004226 for credit to Account No. 9035699, Reference CIESA.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For purposes of this definition, the term "control"
(including the terms "controlling", "controlled by" and "under common control
with") of a Person means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise;
provided, however, that as to Perez Companc S.A., "affiliate" shall not include
the controlling shareholders of Perez Companc S.A. or Persons that are
controlled, directly or indirectly, by such controlling shareholders but are
not controlled directly or indirectly by Perez Companc S.A.
"Agreement" means this Note Purchase Agreement.
"Argentina" means the Republic of Argentina.
"Argentine Financial Reporting" has the meaning assigned in
paragraph (c) of this Section 2.
"Arrangers" has the meaning specified in the introductory paragraph
hereof.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Purchaser and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit C hereto.
"Availability Period" means the period from and including the
Effective Time to and including the Termination Date.
-3-
<PAGE> 7
"Bonex" has the meaning specified in Section 22(b).
"Closing" means the issuance and sale of the Notes by the Issuer to
the Purchasers, and the purchase of the Notes by the Purchasers from the
Issuer, pursuant to Sections 1 and 3.
"Closing Date" means the Eurodollar Business Day within the
Availability Period specified in the Notice of Closing as the date upon which
the Issuer will sell and the Purchasers will purchase the Notes hereunder.
"CNV" has the meaning specified in paragraph (c) of this Section 2.
"Co-Agents" has the meaning specified in the introductory paragraph
hereof.
"Commitment" has the meaning specified in Section 1.
"Confidential Information" means oral or written information that
the Issuer designates as confidential and furnishes to the Administrative Agent
or any Arranger, Managing Agent, Co-Agent, Lead Manager, Manager or Purchaser
or to any agent or representative thereof, but does not include any such
information that is or becomes generally available to the public or that is or
becomes available to the Administrative Agent or such Arranger, Managing Agent,
Co-Agent, Lead Manager, Manager or Purchaser from a source other than the
Issuer or any Arranger, Managing Agent, Co-Agent, Lead Manager, Manager or
Purchaser or another Person that is subject to an obligation to keep such
information confidential.
"Dollars", "US$" and "$" means the lawful currency of the United
States of America.
"Domestic Business Day" means a day of the year on which banks are
not required or authorized by law to close in New York City.
"Effective Time" has the meaning specified in Section 15.
"Eligible Assignee" means (i) a Purchaser; (ii) an Affiliate of a
Purchaser; (iii) a commercial bank organized under the laws of any country that
is a member of the Organization for Economic Cooperation and Development or has
concluded special lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow or of the Bahamas or the
Cayman Islands, or a political subdivision of any thereof, and having a
combined capital and surplus of at least US$100,000,000, or an Affiliate of
such a commercial bank; (iv) the central bank of any country that is a member
of the Organization for Economic Cooperation and Development; (v) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in debt
-4-
<PAGE> 8
securities or commercial loans in the ordinary course of its business and
having a combined capital and surplus of at least US$100,000,000; provided,
that any Person referred to in clause (iii), (iv) or (v) above shall have been
approved in writing by the Issuer, such approval not to be unreasonably
withheld or delayed; and (vi) any other Person approved by the Administrative
Agent and the Issuer; provided, however, that neither the Issuer nor an
Affiliate of the Issuer shall qualify as an Eligible Assignee.
"Environmental Action" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of liability,
investigation (known to the Issuer), proceeding, consent order or consent
agreement relating in any way to any Environmental Law, Environmental Permit or
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment, including, without limitation, (a) by any
governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions or damages and (b) by any governmental or
regulatory authority or any third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief available
under Argentine law.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance having the force of law
in Argentina and relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"Eurodollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Domestic Business Day, for the next preceding
Domestic Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Domestic Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fiscal Agent" has the meaning specified in the introductory
paragraph of the Fiscal Agency Agreement and as otherwise provided in Sections
3 and 13 of such agreement.
-5-
<PAGE> 9
"Fiscal Agency Agreement" means the agreement among and between the
Issuer and Societe Generale, Southwest Agency (as Fiscal Agent, Paying Agent,
Transfer Agent and Co-Registrar) and Banco Supervielle Societe Generale S.A.
(as Paying Agent, Transfer Agent and Registrar), dated April 18, 1997, and
attached hereto as Exhibit A.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminate under any Environmental Law.
"Holder" means a registered holder of one or more Notes.
"Holding Office" means, with respect to any Purchaser, the office
of such Purchaser specified from time to time in writing to the Issuer and the
Administrative Agent.
"Indemnified Party" has the meaning specified in Section 13(b).
"Information Memorandum" means the Confidential Information
Memorandum entitled "CIESA: Compania de Inversiones de Energia S.A B
US$220,000,000 Floating Rate Notes", dated December 1996, and used by the
Arrangers in connection with the transactions contemplated by this Agreement.
"Interest Period" means the period commencing on the Closing Date
and ending on the last day of the period selected by the Issuer in accordance
with Section 4 of the Notes and pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Issuer in accordance with Section 4 of the Notes and pursuant
to the provisions below. The duration of each such Interest Period shall be
three or six months, as the Issuer may, upon notice received by the Fiscal
Agent not later than 12:00 Noon (New York City time) on the third Eurodollar
Business Day prior to the first day of such Interest Period, select; provided,
however, that:
(i) the Issuer may not select any Interest Period that
begins before and ends after an Interest Step-up Date or the
Maturity Date;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Eurodollar Business Day, the
last day of such Interest Period shall be extended to occur on the
next succeeding Eurodollar Business Day, provided, however, that,
if such extension would cause the last day of such Interest Period
to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Eurodollar
Business Day; and
-6-
<PAGE> 10
(iii) whenever the first day of any Interest Period occurs on
a day of a calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such calendar
month by the number of months in such Interest Period, such
Interest Period shall end on the last Eurodollar Business Day of
such succeeding calendar month.
"Interest Step-up Date" means the one-year, two-year and three-year
anniversaries of the Original Issuance Date; provided, however, that:
(i) whenever an Interest Step-up Date would otherwise occur
on a day other than a Eurodollar Business Day, such Interest Step-
up Date shall be extended to occur on the next succeeding
Eurodollar Business Day, provided, however, that, if such extension
would cause such Interest Step-up Date to occur in the next
following calendar month, such Interest Step-up Date shall occur on
the next preceding Eurodollar Business Day; and
(ii) if the Original Issuance Date occurs on a day of a
calendar month for which there is no numerically corresponding day
in the calendar month that succeeds such calendar month by the
number of months specified above in respect of an Interest Step-up
Date, such Interest Step-up Date shall occur on the last Eurodollar
Business Day of such succeeding calendar month.
"Issue Price" has the meaning specified in Section 1.
"Issuer" has the meaning specified in the introductory paragraph
hereof.
"Lead Managers" has the meaning specified in the introductory
paragraph hereof.
"Managers" has the meaning specified in the introductory paragraph
hereof.
"Managing Agents" has the meaning specified in the introductory
paragraph hereof.
"Maturity Date" means the five-year anniversary of the Original
Issuance Date.
"Notes" has the meaning specified in the introductory paragraph
hereof.
"Notice of Closing" has the meaning specified in Section 3(a).
"Original Issuance Date" means the date upon which the Issuer
initially issues the Notes, which shall be a Eurodollar Business Day.
-7-
<PAGE> 11
"Other Taxes" has the meaning specified in Section 6(a).
"Outstanding" has the meaning specified in Section 15(f) of the
Fiscal Agency Agreement.
"Person" means an individual, partnership, corporation (including a
business trust) joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"Personal Property Tax" has the meaning specified in Section 6(a).
"Purchasers" has the meaning specified in the introductory
paragraph hereof.
"QIB" has the meaning specified in Section 5(b).
"Register" has the meaning specified in Section 16(c).
"Regulation S Purchaser" has the meaning specified in Section 5(b).
"Required Purchasers" means at any time Purchasers holding more
than 50% of the then aggregate unpaid principal amount of the Outstanding Notes
then held by all Purchasers, or, if no Notes are Outstanding at the time,
Purchasers holding more than 50% of the Commitments.
"Securities Act" has the meaning specified in Section 5(a).
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in
which) more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in distributions from such
limited liability company, partnership or joint venture or (c) the beneficial
interest in such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"Taxes" has the meaning specified in Section 6(a).
"Term Loan Agreement" has the meaning specified in Section 7(a).
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of
-8-
<PAGE> 12
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such a contingency.
(b) In this Agreement in the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".
(c) Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with generally accepted accounting principles as
prescribed from time to time by the Argentine Comision Nacional de Valores (the
"CNV"). ("Argentine Financial Reporting").
(d) In this Agreement, except to the extent that the context
otherwise requires, (i) references to any document or agreement, including this
Agreement, shall be deemed to include references to such document or agreement
as amended, supplemented or replaced from time to time in accordance with its
terms and (where applicable) subject to compliance with the requirements set
forth therein, and (ii) unless otherwise specified, references to Sections,
clauses and Exhibits are references to Sections and clauses of, and Exhibits
to, this Agreement.
3. Closing and Delivery of Notes.
(a) The Closing shall be made on notice, given not later than
11:00 A.M. (New York City time) on the third Eurodollar Business Day prior to
the Closing Date by the Issuer to the Administrative Agent, which shall give to
each Purchaser notice thereof promptly (and in any event not later than one
Eurodollar Business Day after receipt by the Administrative Agent of such
notice). Such notice of the Closing (the "Notice of Closing") shall be in
substantially the form of Exhibit B hereto, specifying therein the requested
(i) Closing Date and (ii) initial Interest period.
(b) Each Purchaser shall, before 9:00 A.M. (New York City time)
on the Closing Date, make available for the account of its Holding Office to
the Administrative Agent at the Administrative Agent's Account, in same day
funds, such Purchaser's ratable portion of the purchase price of the Notes
being issued at the Closing. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Section 8,
the Administrative Agent will make such funds available to the Issuer at the
Administrative Agent's address referred to in Section 11.
(c) Each Purchaser hereby appoints the Administrative Agent
(which may act through agents including First Trust National Association) as
its agent to receive its Notes at the Closing and promptly following the
Closing to deliver such Notes to the account at The Depository Trust Company
specified by such Purchaser on its signature page to this Agreement.
-9-
<PAGE> 13
(d) The Notice of Closing shall be irrevocable and binding on the
Issuer. The Issuer shall indemnify each Purchaser against any loss, cost or
expense incurred by such Purchaser as a result of any failure to fulfill on or
before the Closing Date specified in the Notice of Closing the applicable
conditions set forth in Section 8, including, without limitation, any loss (but
not including loss of anticipated profits), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Purchaser to purchase its Commitment as part of the Closing when such purchase,
as a result of such failure, is not made on such date.
(e) Unless the Administrative Agent shall have received notice
from a Purchaser prior to the Closing Date that such Purchaser will not make
available to the Administrative Agent such Purchaser's ratable portion of the
purchase price of the Notes being issued at the Closing, the Administrative
Agent may assume that such Purchaser has made such portion available to the
Administrative Agent on the Closing Date in accordance with paragraph (a) of
this Section 3 and the Administrative Agent may, in reliance upon such
assumption, make available to the Issuer on such date a corresponding amount.
If and to the extent that such Purchaser shall not have so made such ratable
portion available to the Administrative Agent, such Purchaser and the Issuer
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Issuer until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Issuer, the
interest rate applicable at the time to the Notes and (ii) in the case of such
Purchaser, the Federal Funds Rate. If such Purchaser shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Purchaser's purchase as part of the Closing for purposes of
this Agreement.
(f) The failure of any Purchaser to purchase its Commitment shall
not relieve any other Purchaser of its obligation, if any, hereunder to
purchase its Commitment on the Closing Date, but no Purchaser shall be
responsible for the failure of any other Purchaser to purchase its Commitment
on the Closing Date.
(g) At the Closing, the Notes shall be issued in registered form
without coupons and shall be in substantially the form set forth in Exhibit A
to the Fiscal Agency Agreement and shall be entitled to the benefits of the
Fiscal Agency Agreement.
4. Representations and Warranties of the Issuer.
As a condition to the agreement of the Purchasers to purchase the
Notes and in consideration of such agreement, the Issuer hereby makes to each
other party to this Agreement, as of the date hereof and as of the Closing
Date, the representations and
-10-
<PAGE> 14
warranties contained in Section 8 of the Fiscal Agency Agreement, including
such representations and warranties, mutatis mutandis, as applied to this
Agreement and the transactions contemplated hereby.
5. Representations, Warranties and Agreements of the Purchasers.
As a condition to the agreement of the Issuer to sell the Notes and
in consideration of such agreement, each Purchaser hereby represents and
warrants to, and agrees with, the Issuer, as of the Closing Date, as follows:
(a) The Purchaser is purchasing the Notes for its own account and
not with a view to a distribution thereof within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"); and the Purchaser has
sufficient knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks of an investment in the Notes and is
able and prepared to bear the economic risk of investing in and holding such
Notes.
(b) The Purchaser (i) is, or is a branch or wholly owned
subsidiary of, a "qualified institutional buyer" (a "QIB") within the meaning
of Rule 144A under the Securities Act, or (ii) is a non-U.S. person that is
located outside the United States and is purchasing the Notes in an offshore
transaction within the meaning of Regulation S under the Securities Act (a
"Regulation S Purchaser").
(c) The Purchaser acknowledges that the Notes have not been and
will not be registered under the Securities Act or any state securities or blue
sky laws, and, accordingly, the Purchaser may not offer, sell, pledge,
hypothecate or otherwise transfer any Notes, directly or indirectly, except
pursuant to an applicable exemption from registration under the Securities Act
and in accordance with the provisions of the Notes and Fiscal Agency Agreement.
(d) Each Purchaser covenants and agrees that it will resell Notes
only in amounts of US$1,000,000 or more.
(e) The Purchaser agrees that upon any transfer by it of any
beneficial interest in a Note it shall promptly notify the Administrative Agent
so that such transfer may be noted in the Register. Such notice shall include
the principal amount of Notes so transferred, the date of transfer, and the
identity of the transferee.
-11-
<PAGE> 15
6. Taxes.
(a) For the purposes of this Section 6, the following terms have
the following meanings:
"Taxes" means any and all present and future taxes, duties, levies,
imposts, deductions, charges or withholdings of any nature with
respect to any payment by the Issuer pursuant to this Agreement and
all liabilities with respect thereto imposed by the Republic of
Argentina or any political subdivision or taxing authority thereof
or therein (including, without limitation, the Argentine Personal
Property Tax established by Argentine Law No. 23,966 as amended and
implemented (the "Personal Property Tax")). For the avoidance of
doubt "taxes" as defined in this paragraph do not include net
income taxes imposed on any Purchaser by reason of its investment
in Notes.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise, property or value added taxes, or
similar charges or levies which arise from any payment made
pursuant to this Agreement or from the execution, delivery,
registration or enforcement of, or otherwise with respect to, this
Agreement imposed by the Republic of Argentina or any political
subdivision or taxing authority thereof or therein.
(b) Any and all payments by the Issuer hereunder shall be made
free and clear of and without deduction or withholding for any Taxes or Other
Taxes. If the Issuer shall be required by law to deduct or withhold any Taxes
or Other Taxes from or in respect of any sum payable hereunder, (i) the sum
payable shall be increased by such additional amounts ("Additional Amounts") as
may be necessary so that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional sums payable
under this Section 6), the Purchaser receives an amount equal to the sum it
would have received had no such deductions or withholdings been made, (ii) the
Issuer shall make such deductions or withholdings and (iii) the Issuer shall
pay the full amount deducted or withheld to the relevant taxation authority or
other authority in accordance with applicable law.
(c) Subject to the compliance by each Purchaser and the
Administrative Agent with the covenant in paragraph (e) of this Section 6, the
Issuer shall indemnify each Purchaser and the Administrative Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any taxes
imposed by any jurisdiction on amounts payable under this Section 6, whether or
not correctly or legally imposed or asserted, imposed on or paid by such
Purchaser or the Administrative Agent, as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This
-12-
<PAGE> 16
indemnification shall be made within thirty (30) days from the date such
Purchaser or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Within thirty (30) days after the date of any payment of
Taxes or Other Taxes, the Issuer shall furnish to the Administrative Agent, at
its address referred to in Section 11, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Each Purchaser and the Administrative Agent shall, at the
request of the Issuer, use reasonable efforts (consistent with applicable legal
and regulatory restrictions) (i) to file any certificate or document requested
by the Issuer if the making of such a filing would eliminate or reduce any
Additional Amounts payable to or for the account of such Purchaser or the
Administrative Agent pursuant to this Section 6 that may thereafter accrue and
would not, in the judgment of such Purchaser or the Administrative Agent,
require such Purchaser or the Administrative Agent to disclose any confidential
or proprietary information or be otherwise disadvantageous to such Purchaser or
the Administrative Agent and (ii) to transfer its Notes to a different Holding
Office if such transfer will avoid the need for payment of Additional Amounts
under this Section 6 and will not, in the sole judgment of such Purchaser, be
otherwise disadvantageous to such Purchaser.
The Issuer hereby waives any right it may have under Argentine law
to seek reimbursement (by way of any legal means available to the Issuer,
including, without limitation, deduction from payments of principal or interest
on the Notes) from any Holder or beneficial owner of any interest in a Note or
rights in respect thereof of any amounts paid by the Issuer under the Personal
Property Tax.
7. Covenants.
(a) The Issuer will use the net proceeds received by it from the
sale of the Notes for the repayment of indebtedness outstanding under its
US$220,000,000 Term Loan Agreement, dated as of May 15, 1996, as amended
(the "Term Loan Agreement").
(b) For so long as a Purchaser is the Holder of Notes, the Issuer
shall provide to it such information respecting the Issuer or any of its
Subsidiaries as such Purchaser though the Administrative Agent may from
time to time reasonably request in writing.
8. Conditions Precedent to Closing.
The obligation of each Purchaser to purchase Notes in an amount up
to the amount of its Commitment on the Closing Date shall be subject to the
satisfaction of the following conditions precedent:
-13-
<PAGE> 17
(a) There shall exist no significant disruption in the
international financial markets or in the Argentine financial market
which, in the reasonable judgment of the Purchasers, could be reasonably
expected to materially adversely affect the ability of the Issuer to meet
its obligations under this Agreement or the Notes in accordance with
their terms.
(b) Nothing shall have come to the attention of the Purchasers
during the course of their due diligence investigation to lead them to
believe that the Information Memorandum was or has become misleading,
incorrect or incomplete in any material respect; without limiting the
generality of the foregoing, the Purchasers shall have been given such
access to the management, records, books of account, contracts and
properties of the Issuer and its Subsidiaries as they shall have
requested.
(c) The representations and warranties incorporated by reference
in Section 4 of this Agreement shall be correct on and as of the Closing
Date as though made on and as of such date, and the Administrative Agent
shall have received for the account of each Purchaser a certificate to
such effect signed by a duly authorized officer of the Issuer, dated the
Closing Date.
(d) The Administrative Agent shall have received the Notice of
Closing as required by Section 3.
(e) The Administrative Agent shall have received on or before the
Closing Date the following, each dated the Closing Date, in form and
substance satisfactory to the Administrative Agent and (except for the
Notes) in sufficient copies for each Purchaser:
i) Certified copies of (A) the resolutions of the shareholders
of the Issuer and of the Board of Directors of the Issuer
approving this Agreement, the Notes and the Fiscal Agency
Agreement and (B) all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to this Agreement, the Notes and the Fiscal Agency
Agreement.
ii) A certificate of the President or an authorized officer of
the Issuer certifying the names and true signatures of the
officers of the Issuer authorized to sign this Agreement, the
Notes and the Fiscal Agency Agreement and the other documents
to be delivered hereunder, which certificate shall certify
the names and signatures of at least one Director (a member
of the Issuer's Board of Directors) and one Syndic (a member
of the Issuer's Supervisory Committee) authorized to sign the
Notes.
-14-
<PAGE> 18
iii) A favorable opinion of Eduardo Ojea Quintana, Director of
Legal Affairs of the Issuer, and/or a favorable opinion of
independent Argentine counsel for the Issuer, which between
them shall address the matters set forth in Exhibit D hereto
and such other matters as any Purchaser through the
Administrative Agent may reasonably request.
iv) A favorable opinion of Bruchou, Fernandez Madero & Lombardi,
special Argentine counsel for the Administrative Agent,
substantially in the form of Exhibit E hereto and as to such
other matters as any Purchaser through the Administrative
Agent may reasonably request.
v) A favorable opinion of Sullivan & Cromwell, special New York
counsel for the Administrative Agent, substantially in the
form of Exhibit F hereto and as to such other matters as any
Purchaser though the Administrative Agent may reasonably
request.
vi) Written confirmation from the agent for service of process
named in Section 20 that it agrees to act as such.
vii) A copy of the resolutions by the CNV and the Buenos Aires
Stock Exchange, respectively, approving the public offer of
the Notes in Argentina and the listing of the Notes on such
Exchange and of any correspondence with the CNV or the Buenos
Aires Stock Exchange relating to the conditions to which such
approval or listing may be subject.
viii) Such other documents relating to any of the matters
contemplated herein as the Administrative Agent or any
Purchaser may reasonably request.
9. The Administrative Agent.
(a) Authorization and Action. Each Purchaser hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by this Agreement (including, without limitation,
collection of any amounts due to any Purchaser hereunder), the Administrative
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Required Purchasers, and such instructions shall be binding upon all
Purchasers; provided, however, that the Administrative Agent shall not be
required to take any action that exposes the Administrative Agent to
-15-
<PAGE> 19
personal liability or that is contrary to this Agreement or applicable law.
The Administrative Agent agrees to give to each Purchaser prompt notice of each
notice given to it by the Issuer pursuant to the terms of this agreement.
(b) Administrative Agent's Reliance, Etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement, except for its or their own gross
negligence or willful misconduct. The Administrative Agent shall perform any
duties hereunder either directly or by or through agents or attorneys and the
Administrative Agent shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it hereunder.
Without limitation of the generality of the foregoing, the Administrative
Agent: (i) may treat the payee of any amount hereunder as the Purchaser
hereunder until the Administrative Agent receives and accepts an Assignment and
Acceptance entered into by such payee, as assignor, and an Eligible Assignee,
as assignee, as provided in Section 16; (ii) may consult with legal counsel
(including counsel for the Issuer), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any
Purchaser and shall not be responsible to any Purchaser for any statements,
warranties or representations (whether written or oral) made in or in
connection with this Agreement, the Notes or the Fiscal Agency Agreement; (iv)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement, the
Notes or the Fiscal Agency Agreement on the part of the Issuer or to inspect
the property (including the books and records) of the Issuer; (v) shall not be
responsible to any Purchaser for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, the Notes
or the Fiscal Agency Agreement or any other instrument or document furnished
pursuant hereto or thereto; and (vi) shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier, telegram or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
(c) Societe Generale and Affiliates. With respect to its
Commitment and the Notes issued to it, Societe Generale shall have the same
rights and powers under this Agreement as any other Purchaser and may exercise
the same as though it were not the Administrative Agent; and the term
"Purchaser" or "Purchasers" shall, unless otherwise expressly indicated,
include Societe Generale in its individual capacity. Societe Generale and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, the Issuer, any of its Subsidiaries and any
Person who may do business with or own securities of the Issuer or any such
Subsidiary, all as if Societe Generale were not the Administrative Agent and
without any duty to account therefor to the Purchasers.
-16-
<PAGE> 20
(d) Purchaser Credit Decision. Each Purchaser acknowledges that
it has, independently and without reliance upon any Arranger, Managing Agent,
Co-Agent, Lead Manager or Manager, the Administrative Agent or any other
Purchaser and based on the financial statements referred to in the
representations and warranties incorporated by reference in Section 4 and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and to purchase
Notes. Each Purchaser also acknowledges that it will, independently and
without reliance upon any Arranger, Managing Agent, Co-Agent, Lead Manager, or
Manager, the Administrative Agent or any other Purchaser and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement or under the Notes.
(e) Indemnification. The Purchasers agree to indemnify the
Arrangers, the Administrative Agent and their Affiliates (to the extent not
reimbursed by the Issuer), ratably according to the respective principal
amounts of the Notes then held by each of them (or if no Notes are at the time
outstanding, ratably according to the respective amounts of their Commitments),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against any Arranger, or the Administrative Agent in any way relating to or
arising out of this Agreement or any action taken or omitted by any Arranger,
or the Administrative Agent under this Agreement, provided that no Purchaser
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Administrative
Agent or of any Arranger. Without limitation of the foregoing, each Purchaser
agrees to reimburse the Arrangers, and the Administrative Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including counsel
fees) incurred by the Arrangers, or the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, to the extent that the Arrangers or the Administrative Agent are not
reimbursed for such expenses by the Issuer.
(f) Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Purchasers and the
Issuer and may be removed at any time with or without cause by the Required
Purchasers. Upon any such resignation or removal, the Required Purchasers
shall have the right to appoint a successor Administrative Agent subject to the
approval of the Issuer, such approval not to be unreasonably withheld or
delayed. If no successor Administrative Agent shall have been so appointed by
the Required Purchasers, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's giving of notice of resignation
or the Required Purchasers' removal of the retiring Administrative Agent, then
the retiring Administrative Agent may, on behalf of the Purchasers, appoint a
successor Administrative Agent, which
-17-
<PAGE> 21
shall be a commercial bank having a combined capital and surplus of at least
US$100,000,000 and acting through a branch located in the United States. Upon
the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
(g) Arrangers, Managing Agents, Co-Agents, Lead Managers and
Managers. The Arrangers, Managing Agents, Co-Agents, Lead Managers and
Managers in such capacities shall have no duties or obligations under or in
connection with this Agreement.
(h) Failure of Issuer to Pay in Full. Unless the Administrative
Agent shall have received notice from the Issuer prior to the date on which any
payment is due to the Purchasers hereunder that the Issuer will not make such
payment in full, the Administrative Agent may assume that the Issuer has made
such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Purchaser on such due date an amount equal to the amount
then due such Purchaser. If and to the extent the Issuer shall not have so
made such payment in full to the Administrative Agent, each Purchaser shall
repay to the Administrative Agent forthwith on demand such amount distributed
to such Purchaser together with interest thereon, for each day from the date
such amount is distributed to such Purchaser until the date such Purchaser
repays such amount to the Administrative Agent, at the Federal Funds Rate.
10. Amendments, Etc.
No amendment or waiver of any provision of this Agreement nor
consent to any departure by the Issuer therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Required
Purchasers, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Purchasers, do any of the following: (a) waive any of the
conditions specified in Section 8, (b) increase the Commitments of the
Purchasers or subject the Purchasers to any additional obligations, (c) reduce
any amounts payable hereunder, (d) postpone any date fixed for the payment of
any amounts payable hereunder, (e) change the percentage of the Commitments, or
the number of Purchasers, that shall be required for the Purchasers or any of
them to take any action hereunder or (f) amend this Section 10; provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent or the Arrangers in addition to the
Purchasers required above to take such action, affect the rights or duties of
the Administrative
-18-
<PAGE> 22
Agent or the Arrangers, as the case may be, under this Agreement; and provided,
further, that no amendment to Section 14 of this Agreement that is adverse to
Holders of Notes shall be effective unless approved by Holders of more than 50%
in aggregate principal amount of the Notes at the time Outstanding present or
represented at a meeting of such Holders at which a quorum is present (the
procedures relating to such meeting being the same as those set forth in
Section 15 of the Fiscal Agency Agreement).
11. Notices, Etc.
All notices and other communications provided for hereunder shall
be in writing (including telecopier, telegraphic or telex communication) and
mailed, telecopied, telegraphed, telexed or delivered, if to the Issuer, at its
address at Don Bosco 3672, piso 5, Buenos Aires, Argentina, Telephone No.
(541) 865-9076, Telecopier No. (541) 865-7154, Attention: Mr. Jorge Garcia; if
to any Purchaser listed on Schedule I hereto, at its address for notices
specified opposite its name on such Schedule; if to any other Purchaser, at its
address for notices specified in the Assignment and Acceptance pursuant to
which it became a Purchaser; and if to the Administrative Agent, at its address
at 2001 Ross Avenue, Suite 4800, Dallas, Texas 75201, Telephone No. (214) 979-
2767, Telecopier No. (214) 754-0171, Attention: Angela Aldridge; or, as to the
Issuer or the Administrative Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Issuer and the Administrative Agent. All such notices
and communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mail, telecopied, delivered to the telegraph
company or confirmed by telex answerback, respectively, except that notices and
communications to the Administrative Agent shall not be effective until
received by the Administrative Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
12. No-Waiver; Remedies.
No failure on the part of any Purchaser or the Administrative Agent
to exercise, and no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
-19-
<PAGE> 23
13. Costs and Expenses.
(a) The Issuer agrees to pay promptly all reasonable costs and
expenses of the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement and the other documents to be delivered hereunder, including, without
limitation, (A) all reasonable due diligence, syndication (including printing,
distribution and bank meetings), transportation, computer, duplication,
appraisal, consultant, and audit expenses and (B) the reasonable fees and
expenses of counsel for the Administrative Agent with respect thereto and with
respect to advising the Administrative Agent as to its rights and
responsibilities under this Agreement. The Issuer further agrees to pay on
demand all reasonable costs and expenses of the Administrative Agent and the
Purchasers, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Notes and the other
documents to be delivered hereunder, including, without limitation, reasonable
fees and expenses of counsel for the Administrative Agent and each Purchaser in
connection with the enforcement of rights under this Section 13(a).
(b) The Issuer agrees to indemnify and hold harmless the
Administrative Agent, each Arranger, each Managing Agent, each Co-Agent, each
Lead Manager, each Manager and each Purchaser and each of their Affiliates and
their officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to, or in
connection with (i) the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the sale
of the Notes or (ii) the actual or alleged presence of Hazardous Materials on
any property of the Issuer or any of its Subsidiaries or any Environmental
Action relating in any way to the Issuer or any of its Subsidiaries, in each
case whether or not such investigation, litigation or proceeding is brought by
the Issuer, its directors, shareholders or creditors or an Indemnified Party or
any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated, except to
the extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct, provided,
however, that the Issuer shall not be obligated to pay the fees and expenses of
more than one counsel (plus one Argentine counsel if required) for all of the
indemnified parties.
Promptly after receipt by an Indemnified Party under paragraph (b)
above of notice of the commencement of any action, such Indemnified Party will,
if a claim in respect thereof is to be made against the Issuer under paragraph
(b) above, notify the Issuer of the commencement thereof; but the omission so
to notify the Issuer will not relieve it from any liability which it may have
to any Indemnified Party otherwise than under paragraph (b)
-20-
<PAGE> 24
above. In case any such action is brought against any Indemnified Party and it
notifies the Issuer of the commencement thereof, the Issuer will be entitled to
participate therein, and to the extent that it may wish, to assume the defense
thereof, with counsel satisfactory to such Indemnified Party (who shall not,
except with the consent of the Indemnified Party, be counsel to the Issuer),
and after notice from the Issuer to such Indemnified Party of its election to
assume the defense thereof, the Issuer will not be liable to such Indemnified
Party under this paragraph for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation at the request or with the consent of
the Issuer. The Issuer shall not, without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld, effect any
settlement of any pending or threatened action in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party unless such settlement includes an
unconditional release of such Indemnified Party from all liability on any
claims that are the subject matter of such action. The Issuer shall not be
required to indemnify an Indemnified Party for the amount paid or payable by
the Indemnified Party in the settlement of any claim, action, proceeding or
investigation undertaken without the written consent of the Issuer, which
consent shall not be unreasonably withheld.
(c) Without prejudice to the survival of any other agreement of
the Issuer hereunder, the agreements and obligations of the Issuer contained in
Section 6 and this Section 13 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
14. Right of Set-off and Break Funding Costs.
(a) The Issuer hereby agrees with each Purchaser for its benefit
and expressly for the benefit of each subsequent Holder of Notes that, upon the
occurrence and during the continuance of any Event of Default and following the
making of the request or the granting of the consent specified by Paragraph 13
of the Notes to authorize the Fiscal Agent to declare the Notes due and payable
pursuant to the provisions of Paragraph 13 of the Notes, each Holder shall be
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
provisional or final) at any time held and other indebtedness at any time owing
by such Holder to or for the credit or the account of the Issuer against any
and all of the obligations of the Issuer now or hereafter existing under this
Note, whether or not such Holder shall have made any demand under the Notes and
although such obligations may be unmatured. The rights of each Holder under
this Paragraph 14 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Holder may have.
(b) The Issuer hereby agrees with each Purchaser for its benefit
and expressly for the benefit of each subsequent Holder of Notes that, if any
payment of principal of any Note is made by the Issuer to or for the account of
a Holder of Notes other than on the
-21-
<PAGE> 25
last day of the Interest Period for such Note as a result of a payment pursuant
to Paragraph 8 of the Notes, acceleration of the maturity of the Notes pursuant
to Paragraph 13 of the Notes or for any other reason, the Issuer shall, within
five (5) days of receipt of a demand by such Holder (with a copy of such demand
to the Administrative Agent and the Paying Agent), pay to the Paying Agent for
the account of such Holder any amounts required to compensate such Holder for
any additional losses, costs or expenses that it may reasonably incur as a
result of such payment, including, without limitation, any loss (but not
including loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by any
Holder to fund or hold such Note; provided, however, that such additional
losses, costs or expenses are set forth in reasonable detail in a certificate
of an appropriate officer of such Holder and delivered to the Issuer.
(c) Without prejudice to the survival of any other agreement of
the Issuer hereunder, the agreements and obligations of the Issuer contained in
this Section 14 shall survive the payment in full of principal, interest and
all other amounts payable under the Notes and shall be binding on the Issuer
regardless of any investigation thereof or reliance thereon by any Holder of
Notes.
15. Binding Effect.
This Agreement shall become effective when it shall have been
executed by the Issuer and the Administrative Agent and when the Administrative
Agent shall have been notified by each Arranger, Managing Agent, Co-Agent, Lead
Manager, Manager and Purchaser that such Arranger, Managing Agent, Co-Agent,
Lead Manager, Manager and Purchaser has executed it (the "Effective Time") and
thereafter shall be binding upon and inure to the benefit of the Issuer, the
Administrative Agent, each Arranger, Managing Agent, Co-Agent, Lead Manager,
Manager and Purchaser and their respective successors and assigns, except that
the Issuer shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Purchasers.
16. Assignments and Participations.
(a) Each Purchaser may assign to one or more institutions all or
a portion of its Commitment under this Agreement; provided, however, that (i)
each such assignment shall be to an Eligible Assignee and (ii) the parties to
each such assignment shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register, an Assignment and Acceptance
subject to such assignment and a processing and recordation fee of US$2,500;
and provided further, that no such assignment may be made if the Issuer shall
be required by virtue of laws and regulations in effect immediately after such
assignment to pay any additional amount under Section 6 that is greater than
the amount it would have been required to pay had such assignment not been
made. Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights
-22-
<PAGE> 26
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Purchaser hereunder and
(y) the assigning Purchaser thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of an assigning Purchaser's Commitment under this
Agreement, such Purchaser shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
assigning Purchaser thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Purchaser makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
pursuant hereto; (ii) such assigning Purchaser makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Issuer or the performance or observance by the Issuer of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4 and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon
any Arranger, any Managing Agent, any Co-Agent, any Lead Manager, any Manager,
the Administrative Agent, such assigning Purchaser or any other Purchaser and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Purchaser.
(c) The Administrative Agent shall maintain at its address
referred to in Section 11 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Purchasers and the Commitment of each Purchaser from time to
time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Issuer, the
Administrative Agent and the Purchasers may treat each Person whose name is
recorded in the Register as a Purchaser hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Issuer or any
Purchaser at any reasonable time and from time to time upon reasonable prior
notice.
-23-
<PAGE> 27
(d) Upon its receipt of a completed Assignment and Acceptance
executed by an assigning Purchaser and an assignee, the Administrative Agent
shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Issuer.
(e) Each Purchaser may sell participations to one or more
entities (other than the Issuer or any of its Affiliates) in or to all or a
portion of its Commitment under this Agreement; provided, however, that (i)
such Purchaser's Commitment to the Issuer hereunder shall remain unchanged,
(ii) such Purchaser shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Purchaser shall remain a
Purchaser for all purposes of this Agreement, (iv) the Issuer, the
Administrative Agent and the other Purchasers shall continue to deal solely and
directly with such Purchaser in connection with such Purchaser's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement, or any consent to any departure by the Issuer
therefrom.
(f) Any Purchaser may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
16, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Issuer furnished to such Purchaser
by or on behalf of the Issuer; provided that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information relating to the
Issuer received by it from such Purchaser.
(g) Notwithstanding any other provision set forth in this
Agreement, any Purchaser may at any time create a security interest in all or
any portion of its rights under this Agreement and under any related Note in
favor of any Federal Reserve Bank in accordance with Regulation A of the Board
of Governors of the Federal Reserve System.
17. Confidentiality.
Neither the Administrative Agent nor any Arranger, Managing Agent,
Co-Agent, Lead Manager, Manager or Purchaser shall disclose any Confidential
Information to any other Person without the written consent of an authorized
officer of the Issuer, other than (a) to the Administrative Agent's or such
Arranger's, Managing Agent's, Co-Agent's, Lead Manager's, Manager's or
Purchaser's Affiliates and their officers, directors, employees, agents and
advisors who have a need to know such information and, as contemplated by
Section 16(f), to actual or prospective assignees and participants, and then
only on a confidential basis, (b) as required by any law, rule or regulation or
judicial process and (c) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking; provided, however,
that if the Administrative Agent or any Arranger, Managing Agent, Co-Agent,
Lead Manager, Manager or Purchaser is required to disclose any
-24-
<PAGE> 28
Confidential Information pursuant to clause (b) or (c) above, it shall give
notice thereof to the Issuer prior to making such disclosure and shall use
reasonable efforts to cooperate with the Issuer (at the Issuer's expense) in
the Issuer's attempt to seek a protective order with respect to such disclosure
or to limit such required disclosure.
18. Governing Law.
This Agreement will be governed by and construed in accordance with
the laws of the State of New York.
19. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be an original and all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
20. Submission to Jurisdiction; Service of Process.
(a) The Issuer hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and of
any New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. The Issuer irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(b) The Issuer hereby irrevocably designates, appoints,
authorizes and empowers as its agent for service of process, CT Corporation
System at its offices currently located at 1633 Broadway, New York, New York
10019 to accept and acknowledge for and on behalf of the Issuer service of any
and all process, notices or other documents that may be served in any suit,
action or proceeding relating hereto in any New York state or Federal court
sitting in the State of New York.
(c) In lieu of service upon its agent, the Issuer consents to
process being served in any suit, action or proceeding relating hereto, to the
extent permitted by applicable law, by mailing a copy thereof by registered or
certified air mail, postage prepaid, return receipt requested, to its address
designated pursuant to Section 11. To the extent permitted by applicable law,
each party hereto agrees that such service (1) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(2) shall be taken and held to be valid personal service upon and personal
delivery to it.
-25-
<PAGE> 29
(d) Nothing in this Section 20 shall affect the right of any
party hereto to serve process in any manner permitted by law, or limit any
right that any party hereto may have to bring proceedings against any other
party hereto in the courts of any jurisdiction or to enforce in any lawful
manner a judgment obtained in one jurisdiction in any other jurisdiction.
(e) The Issuer agrees that a final judgment against it shall be
final and conclusive and may be enforced in any other jurisdiction other than
any New York State court sitting in New York City or any United States Federal
District court in the Southern District of New York, and that a certified or
otherwise duly authenticated copy of the judgment shall be conclusive evidence
of the fact and amount of its indebtedness.
21. Waiver of Sovereign Immunity.
To the extent that the Issuer has or hereafter may be entitled to
claim or may acquire, for itself or any of its assets, any immunity from suit,
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, or
otherwise) with respect to itself or its property, it hereby irrevocably waives
such immunity in respect of its obligations hereunder and under the Notes to
the fullest extent permitted by applicable law and, without limiting the
generality of the foregoing, agrees that the waivers set forth in this Section
shall be effective to the fullest extent now or hereafter permitted under the
Foreign Sovereign Immunities Act of 1976 of the United States and are intended
to be irrevocable for purposes of such Act to the extent permitted thereby.
22. Judgment Currency.
(a) If for the purposes of enforcing the obligations of the
Issuer hereunder it is necessary to convert a sum due from the Issuer in
Dollars into another currency, the parties hereto agree, to the fullest extent
permitted by applicable law, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Purchasers could
purchase Dollars with such currency at or about 11:00 A.M. (New York City time)
on the Domestic Business Day preceding that on which final judgment is given.
To the fullest extent permitted by applicable law, the obligations in respect
of any sum due to the Administrative Agent or any Purchaser hereunder shall,
notwithstanding any adjudication expressed in a currency other than Dollars, be
discharged only to the extent that on the Domestic Business Day following
receipt by the Administrative Agent or such Purchaser of any sum adjudged to be
so due in such other currency the Administrative Agent or such Purchaser may in
accordance with normal banking procedures purchase Dollars with such other
currency; if the amount of Dollars so purchased is less than the sum originally
due to the Administrative Agent or such Purchaser in Dollars, the Issuer
agrees, to the fullest extent permitted by applicable law, as a separate
obligation and notwithstanding any such adjudication, to indemnify the
Administrative Agent or such Purchaser against such loss, and
-26-
<PAGE> 30
if the amount of Dollars so purchased exceeds the sum originally due to the
Administrative Agent or such Purchaser, the Administrative Agent or such
Purchaser shall remit such excess to the Issuer.
(b) All amounts due hereunder and under the Notes shall be
payable in Dollars. If due to exchange controls in the Republic of Argentina
or restrictions on the transfer of foreign currency outside the Republic of
Argentina or for any other reason the Issuer shall be prevented from paying
when due in Dollars any amount owing hereunder, the Issuer shall deliver to the
Administrative Agent External Bonds of the Republic of Argentina or any other
debt securities issued by the Republic of Argentina denominated in Dollars
("Bonex") in an amount sufficient for the Administrative Agent to acquire from
the sale thereof in New York City such amount of Dollars net of any
commissions, fees or other costs. The Administrative Agent shall sell such
Bonex promptly after their delivery to it and, in any event, within 30 days
after each such delivery, unless the Issuer shall, at the Administrative
Agent's request, otherwise agree in writing. The Issuer's obligations
hereunder and under the Notes shall be discharged on account of any such
delivery and sale only to the extent of the net Dollars received by the
Administrative Agent therefrom and only on the date of such receipt.
23. Waiver of Jury Trial.
Each of the Issuer, the Administrative Agent, the Arrangers, the
Managing Agents, the Co-Agents, the Lead Managers, the Managers and the
Purchasers hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the Notes or the actions of the
Administrative Agent or any Arranger, Managing Agent, Co-Agent, Lead Manager,
Manager or Purchaser in the negotiation, administration, performance or
enforcement thereof.
24. Use of English Language.
Any translation of this Agreement or any Note into another language
shall have no interpretive effect. All documents or notices to be delivered
pursuant to or in connection with this Agreement shall be in the English
language or, if any such document or notice is not in the English language,
accompanied by an English translation thereof (except for the notes to the
Issuer's quarterly financial statements which may be in the Spanish language),
and the English language version of any such document or notice shall control
for purposes hereof, provided, however, that the Spanish version of this
Agreement or the Notes, or the certified translations of all documents or
notices to be delivered pursuant to or in connection with this Agreement or the
Fiscal Agency Agreement shall prevail for purposes of CNV regulation and
supervision.
-27-
<PAGE> 31
25. Titles and Headings.
The titles and headings of sections of this Agreement are intended
for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
26. Further Assurances.
At any time and from time to time, upon the request of the
Administrative Agent, the Issuer shall execute, deliver and acknowledge or
cause to be executed, delivered and acknowledged, such further documents and
instruments and do such other acts and things as the Administrative Agent may
reasonably request in order to fully effect the purposes of this Agreement, and
any other agreements, instruments and documents delivered pursuant hereto or in
connection with the Notes.
27. Warranties and Agreements to Continue.
Notwithstanding anything herein to the contrary, the respective
representations, warranties and agreements of the Issuer and the Purchaser
contained in this Agreement shall remain in full force and effect regardless of
any investigation (or any statement as to the results of any investigation)
made by or on behalf of the Purchaser or the Issuer and shall survive delivery
of the Notes.
-28-
<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
COMPANIA DE INVERSIONES DE ENERGIAS. S.A.
By:/S/
----------------------------------------------------
Name:
Title:
-29-
<PAGE> 33
GOLDMAN, SACHS & CO.,
as Arranger
By: /S/ Charles B. Seelig, Jr.
---------------------------------------------------
Name: Charles B. Seelig, Jr.
Title: Managing Director
GOLDMAN, SACHS & CO.,
as Purchaser* Commitment: US$15,000,000
By: /S/ Charles B. Seelig, Jr.
---------------------------------------------------
Name: Charles B. Seelig, Jr.
Title: Managing Director
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[X] a QIB [ ] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE COMPLETED.
DTC Participant that is to receive Notes: Goldman, Sachs & Co.
DTC Participant Number: 005
Agent Internal Account Number
for DTC Participant: 00005
-30-
<PAGE> 34
SOCIETE GENERALE,
as Arranger
By: /S/ Juan Carlos Albizzat
--------------------------------------------
Name: Juan Carlos Albizzat
Title: Gerente Central de Riesgos
By: /S/ Artura Sappia
--------------------------------------------
Name: Artura Sappia
Title: Banca Corportavia Director
SOCIETE GENERALE,
as Purchaser* Commitment:US$25,000,000
By: /S/ Juan Carlos Albizzati
--------------------------------------------
Name: Juan Carlos Albizzati
Title: Gerente Central de Riesgos
By: /S/ Arturo Sappia
--------------------------------------------
Name: Arturo Sappia
Title: Banca Corporativa Director
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ___________
-31-
<PAGE> 35
BANCO SUPERVIELLE
SOCIETE GENERALE S.A.,
as Arranger
By: /S/ Juan Carlos Albizzati
--------------------------------------------
Name: Juan Carlos Albizzati
Title: Gerente Central de Riesgos
By: /S/ Arturo Sappia
--------------------------------------------
Name: Arturo Sappia
Title: Banca Corporativa Director
BANCO SUPERVIELLE
SOCIETE GENERALE S.A.,
as Purchaser* Commitment: US$5,000,000
By: /S/ Juan Carlos Albizzati
--------------------------------------------
Name: Juan Carlos Albizzati
Title: Gerente Central de Riesgos
By: /S/ Arturo Sappia
--------------------------------------------
Name: Arturo Sappia
Title: Banca Corporativa Director
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ___________
-32-
<PAGE> 36
BANK OF MONTREAL,
as Managing Agent
By: /S/ Natasha Glossop
--------------------------------------------
Name: Natasha Glossop
Title: Director, U.S. Corporate Banking
BANK OF MONTREAL,
as Purchaser* Commitment:US$13,000,000
By: /S/ Natasha Glossop
--------------------------------------------
Name: Natasha Glossop
Title: Director, U.S. Corporate Banking
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[X] a QIB [ ] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: 2697
DTC Participant Number: 2697
Agent Internal Account Number
for Participant Bank: 2074607
-33-
<PAGE> 37
BANQUE EUROPEENNE POUR L'AMERIQUE
LATINE (BEAL) S.A.,
as Managing Agent
By: /S/ F. Adam
--------------------------------------------
Name: F. Adam
Title:
By: /S/ Klaus Kroger
--------------------------------------------
Name: Klaus Kroger
Title: Director General
BANQUE EUROPEENNE POUR L'AMERIQUE
LATINE (BEAL) S.A.,
as Purchaser* Commitment:US$17,000,000
By: /S/ F. Adam
--------------------------------------------
Name: F. Adam
Title:
By: /S/ Klaus Kroger
--------------------------------------------
Name: Klaus Kroger
Title: Director General
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: Chase Manhattan Bank as
agent for Euroclear
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ___________
-34-
<PAGE> 38
DRESDNER BANK LUXEMBOURG S.A.,
as Managing Agent
By: /S/ Dr. A. Glaesner
--------------------------------------------
Name: Dr. A. Glaesner
Title: Legal Advisor
By: /S/ Ulrike Nitsch
--------------------------------------------
Name: Ulrike Nitsch
Title: Syndications Officer
DRESDNER BANK LUXEMBOURG S.A.,
as Purchaser* Commitment:US$14,000,000
By: /S/ Dr. A. Glaesner
--------------------------------------------
Name: Dr. A. Glaesner
Title: Legal Advisor
By: /S/ Ulrike Nitsch
--------------------------------------------
Name: Ulrike Nitsch
Title: Synidacations Officer
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ____________
Agent Internal Account Number
for Participant Bank: ___________
-35-
<PAGE> 39
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
as Co-Agent
By: /S/ Andrew Rodrigues Libory
--------------------------------------------
Name: Andrew Rodrigues Libory
Title: Vice President
J.P. MORGAN SECURITIES LIMITED,
as Purchaser* Commitment:US$13,000,000
By: /S/ M. L. MORENO
--------------------------------------------
Name: M. L. Moreno
Title: Vice President
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ____________
Agent Internal Account Number
for Participant Bank: ___________
-36-
<PAGE> 40
CIBC INC.,
as Co-Agent
By: /S/ Michael A. G. Corkum
--------------------------------------------
Name: Michael A. G. Corkum
Title: Authorized Signatory
CIBC INC.,
as Purchaser* Commitment:US$11,000,000
By: /S/ Michael A. G. Corkum
--------------------------------------------
Name: Michael A. G. Corkum
Title: Authorized Signatory
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[X] a QIB [ ] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ____________
-37-
<PAGE> 41
BANCO DE LA PROVINCIA DE BUENOS AIRES - GRAND
CAYMAN BRANCH,
as Co-Agent
By: /S/ Marcela de Ng
--------------------------------------------
Name: Marcela de Ng
Title:
By: /S/ Eduardo E. Caro
--------------------------------------------
Name: Eduardo E. Caro
Title:
BANCO DE LA PROVINCIA DE BUENOS AIRES - GRAND
CAYMAN BRANCH,
as Purchaser* Commitment:US$11,000,000
By: /S/ Marcela de Ng
--------------------------------------------
Name: Marcela de Ng
Title:
By: /S/ Eduardo E. Caro
--------------------------------------------
Name: Eduardo E. Caro
Title:
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ____________
Agent Internal Account Number
for Participant Bank: ____________
-38-
<PAGE> 42
TORONTO DOMINION (TEXAS), INC.,
as Co-Agent
By: /S/ Neva Nesbitt
--------------------------------------------
Name: Neva Nesbitt
Title: Vice President
TORONTO DOMINION (TEXAS), INC.,
as Purchaser* Commitment:US$11,000,000
By: /S/ Neva Nesbitt
--------------------------------------------
Name: Neva Nesbitt
Title: Vice President
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[X] a QIB [ ] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: TD Trust Co.
DTC Participant Number: 2491
Agent Internal Account Number
for Participant Bank: 5205-336-9001
-39-
<PAGE> 43
BANK OF BOSTON TRUST COMPANY
(BAHAMAS) LIMITED,
as Co-Agent
By: /S/ Armando Gonzalez
--------------------------------------------
Name: Armando Gonzalez
Title: Attorney in Fact
BANK OF BOSTON TRUST COMPANY
(BAHAMAS) LIMITED,
as Purchaser* Commitment:US$11,000,000
By: /S/ Armando Gonzalez
--------------------------------------------
Name: Armando Gonzalez
Title: Attorney in Fact
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ___________
-40-
<PAGE> 44
ING BANK, N.V.,
as Co-Agent
By: /S/
--------------------------------------------
Name:
Title:
ING BANK, N.V.,
as Purchaser* Commitment:US$11,000,000
By: /S/
--------------------------------------------
Name:
Title:
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ___________
-41-
<PAGE> 45
ROYAL BANK OF CANADA,
as Lead Manager
By: /S/ W. R. Cameron
--------------------------------------------
Name: W. R. Cameron
Title: Regional Manager
ROYAL BANK OF CANADA,
as Purchaser* Commitment:US$10,000,000
By: /S/ W. R. Cameron
--------------------------------------------
Name: W. R. Cameron
Title: Regional Manager
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ___________
-42-
<PAGE> 46
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Lead Manager
By: /S/ Alberto Ruppini
--------------------------------------------
Name: Alberto Ruppini
Title: Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
as Purchaser* Commitment:US$10,000,000
By: /S/ Alberto Ruppini
--------------------------------------------
Name: Alberto Ruppini
Title: Vice President
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[X] a QIB [ ] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ____________
Agent Internal Account Number
for Participant Bank: ____________
-43-
<PAGE> 47
CREDITANSTALT-BANKVEREIN,
as Lead Manager
By: /S/ M. A. Bowles
--------------------------------------------
Name: M. A. Bowles
Title: Senior Manager
By: /S/ D. Gayler
--------------------------------------------
Name: D. Gayler
Title: Manager
CREDITANSTALT-BANKVEREIN,
as Purchaser* Commitment:US$10,000,000
By: /S/ M. A. Bowles
--------------------------------------------
Name: M. A. Bowles
Title: Senior Manager
By: /S/ D. Gayler
--------------------------------------------
Name: D. Gayler
Title: Manager
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: Northern Trust Company
DTC Participant Number: 249
Agent Internal Account Number
for Participant Bank: Custodian A/C 17-95023
-44-
<PAGE> 48
BANCA COMMERCIALE ITALIANA -
NEW YORK BRANCH,
as Lead Manager
By: /S/ E. Bermant
--------------------------------------------
Name: E. Bermant
Title: FVP/Deputy Manager
By: /S/ J. Dickerhof
--------------------------------------------
Name: J. Dickerhof
Title: Vice President
BANCA COMMERCIALE ITALIANA -
NEW YORK BRANCH,
as Purchaser* Commitment:US$10,000,000
By: /S/ E. Bermant
--------------------------------------------
Name: E. Bermant
Title: FVP/Deputy Manager
By: /S/ J. Dickerhof
--------------------------------------------
Name: J. Dickerhof
Title: Vice President
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[X] a QIB [ ] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: Chase N. Y.
DTC Participant Number: 930 Agent Bank #80930
Agent Internal Account Number
for Participant Bank: BCI N - Y BS 27714-07
-45-
<PAGE> 49
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY,
as Lead Manager
By: /S/ Jun Wantanabe
--------------------------------------------
Name: Jun Wantanabe
Title: Senior Vice President
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY,
as Purchaser* Commitment:US$10,000,000
By: /S/ Jun Wantanabe
--------------------------------------------
Name: Jun Wantanabe
Title: Senior Vice President
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[X] a QIB [ ] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: Bank of Newk, NYC
DTC Participant Number: 2535
Agent Internal Account Number
for Participant Bank: not applicable
-46-
<PAGE> 50
RIOBANK INTERNATIONAL,
as Manager
By: /S/ Marta Avellaneda
--------------------------------------------
Name: Marta Avellaneda
Title: Attorney in Fact
By: /S/ Carmen Murillo
--------------------------------------------
Name: Carmen Murillo
Title: Manager
RIOBANK INTERNATIONAL,
as Purchaser* Commitment: US$5,000,000
By: /S/ Marta Avellaneda
--------------------------------------------
Name: Marta Avellaneda
Title: Attorney in Fact
By: /S/ Carmen Murillo
--------------------------------------------
Name: Carmen Murillo
Title: Manager
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [X] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ___________
-47-
<PAGE> 51
REPUBLIC NATIONAL BANK OF NEW YORK
(URUGUAY) S.A.,
as Manager
By: /S/ Josef Rebolski
--------------------------------------------
Name: Josef Rebolski
Title: Vice President
By: /S/ Juan Varesi
--------------------------------------------
Name: Juan Varesi
Title: Vice President
REPUBLIC NATIONAL BANK OF NEW YORK
(URUGUAY) S.A.,
as Purchaser* Commitment: US$3,000,000
By: /S/ Josef Rebolski
--------------------------------------------
Name: Josef Rebolski
Title: Vice President
By: /S/ Juan Varesi
--------------------------------------------
Name: Juan Varesi
Title: Vice President
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[ ] a QIB [x] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: ___________
DTC Participant Number: ___________
Agent Internal Account Number
for Participant Bank: ___________
-48-
<PAGE> 52
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Administrative Agent
By: /S/ Mark A. Cox
--------------------------------------------
Name: Mark A. Cox
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Purchaser* Commitment: US$5,000,000
By: /S/ Mark A. Cox
--------------------------------------------
Name: Mark A. Cox
Title: Vice President
________________
* In accordance with Section 5(b) hereof, Purchaser is [check one]:
[X] a QIB [ ] a Regulation S Purchaser
NOTE: THE FOLLOWING ESSENTIAL SETTLEMENT RELATED INFORMATION MUST BE
COMPLETED.
DTC Participant that is to receive Notes: Societe Generale Securities Corp.
DTC Participant Number: 5242
Agent Internal Account Number
for Participant Bank: 95366
-49-
<PAGE> 53
EXHIBIT A
FISCAL AGENCY AGREEMENT
<PAGE> 54
===============================================================================
FISCAL AGENCY AGREEMENT
among
COMPANIA DE INVERSIONES DE ENERGIA S.A.
as Issuer
and
SOCIETE GENERALE, SOUTHWEST AGENCY
as Fiscal Agent, Paying Agent, Transfer Agent and Co-Registrar
and
BANCO SUPERVIELLE SOCIETE GENERALE S.A.
as Paying Agent, Transfer Agent and Registrar
-------------------------------------
Dated as of April 18, 1997
-------------------------------------
US$220,000,000
Floating Rate Notes Due April 22, 2002
===============================================================================
<PAGE> 55
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Definitions and Accounting Terms...................................... 1
(a) Certain Defined Terms........................................ 1
(b) Computation of Time Periods.................................. 6
(c) Accounting Terms............................................. 6
2. The Securities........................................................ 6
(a) General...................................................... 6
(b) Forms of Securities.......................................... 7
(c) Book-Entry Provisions........................................ 8
(d) Denominations................................................ 10
3. Fiscal Agent; Other Agents............................................ 10
4. Authentication........................................................ 11
5. Payment and Cancellation.............................................. 12
(a) Payment...................................................... 12
(b) Certification................................................ 12
(c) Withholding; Payment of Additional Amounts................... 12
(d) Cancellation................................................. 13
(e) References to Include Additional Amounts..................... 13
6. Global Securities..................................................... 13
7. Registration, Transfer and Exchange of Securities..................... 15
8. Representations and Warranties of the Issuer.......................... 21
(a) Corporate Existence and Power................................ 21
(b) Corporate Authorization; No Contravention.................... 21
(c) Government Authorization..................................... 21
(d) Binding Effect............................................... 21
(e) Filings...................................................... 21
(f) Financial Information........................................ 22
(g) Litigation................................................... 22
(h) Defaults..................................................... 22
(i) Environmental Matters........................................ 22
(j) Taxes........................................................ 23
(k) Regulatory Restrictions on Issuance.......................... 23
</TABLE>
-ii-
<PAGE> 56
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
(l) Rank of Obligations.......................................... 23
(m) No Immunity; Proper Legal Form............................... 23
(n) Full Disclosure.............................................. 24
(o) Compliance with Laws......................................... 24
(p) Subsidiaries................................................. 24
9. Acknowledgement of Reliance........................................... 24
10. Delivery of Certain Information....................................... 24
(a) Rule 144A Information........................................ 24
(b) Periodic Reports............................................. 25
11. Conditions of Fiscal Agent's Obligations.............................. 25
(a) Compensation and Indemnity................................... 25
(b) Agency....................................................... 26
(c) Advice of Counsel............................................ 26
(d) Reliance..................................................... 26
(e) Interest in Securities, etc.................................. 26
(f) Non-Liability for Interest................................... 27
(g) Certifications............................................... 27
(h) No Implied Obligations....................................... 27
(i) Recitals; Representations.................................... 27
(j) Orders, Certificates, etc.................................... 27
12. Indemnification....................................................... 27
13. Resignation and Appointment of Successor.............................. 28
(a) Fiscal Agent and Paying Agent................................ 28
(b) Resignation.................................................. 28
(c) Successors................................................... 28
(d) Acknowledgement.............................................. 29
(e) Merger, Consolidation, etc................................... 29
14. Payment of Taxes...................................................... 30
15. Meetings of Holders; Modification and Waiver.......................... 31
(a) Calling Meetings............................................. 31
(b) Persons Entitled to Vote at Meetings......................... 32
(c) Required Quorums............................................. 33
(d) Amendments................................................... 33
(e) Binding Nature of Amendments, Notices, Notations, etc........ 34
</TABLE>
-iii-
<PAGE> 57
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
(f) "Outstanding" Defined........................................ 34
(g) Determination of Voting Rights; Conduct of Meetings.......... 35
16. Notice of Default..................................................... 36
17. Governing Law......................................................... 36
18. Notices, Etc.......................................................... 36
19. Submission to Jurisdiction; Service of Process........................ 37
20. Waiver of Sovereign Immunity.......................................... 38
21. Judgment Currency..................................................... 38
22. Waiver of Jury Trial.................................................. 39
23. Confidentiality....................................................... 39
24. Use of English Language............................................... 39
25. Headings.............................................................. 40
26. Counterparts.......................................................... 40
</TABLE>
EXHIBIT A Form of Note
EXHIBITS B-E Forms of Transfer Certificates
SCHEDULE I Schedule of certain Holder addresses
------------------------------
Note: This table of contents shall not be deemed to be a part of the Fiscal
Agency Agreement for any purpose.
-iv-
<PAGE> 58
FISCAL AGENCY AGREEMENT, dated as of April 18, 1997, among COMPANIA DE
INVERSIONES DE ENERGIA S.A., a sociedad anonima organized under the laws of the
Republic of Argentina (the "Issuer"), SOCIETE GENERALE, SOUTHWEST AGENCY, as
Fiscal Agent, Paying Agent, Transfer Agent and Co-Registrar (in such
capacities, the "Fiscal Agent", the "Paying Agent", the "Transfer Agent" and
the "Co-Registrar", respectively) and BANCO SUPERVIELLE SOCIETE GENERALE S.A.,
as Paying Agent, Transfer Agent and Registrar (as defined below).
1. Definitions and Accounting Terms.
(a) Certain Defined Terms. As used in this Agreement, including the
Exhibits hereto, except as otherwise expressly provided or unless the context
otherwise requires, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Additional Amounts" has the meaning specified in Paragraph 7(b) of
the Form of Note.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person. For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by contract or otherwise; provided,
however, that as to Perez Companc S.A., "affiliate" shall not include the
controlling shareholders of Perez Companc S.A. or Persons that are controlled,
directly or indirectly, by such controlling shareholders but are not controlled
directly or indirectly by Perez Companc S.A.
"Agent Members" has the meaning specified in Section 2(b).
"Agents" has the meaning specified in Section 3.
"Applicable Procedures" has the meaning specified in Section 7(b)(ii).
"Argentine Financial Reporting" has the meaning specified in Section
1(c).
"Authorized Officers" has the meaning specified in Section 2(b).
"Bonex" has the meaning specified in Section 21(b).
"Cedel Bank" means Cedel Bank, societe anonyme.
<PAGE> 59
"CNV" means the Comision Nacional de Valores of the Republic of
Argentina.
"Co-Registrar" has the meaning specified in Section 3.
"Commission" has the meaning specified in Section 10(b).
"Confidential Information" means oral or written information that the
Issuer furnishes to the Fiscal Agent or any Holder or to any agent or
representative thereof designated as confidential, but does not include any
such information that is or becomes generally available to the public or that
is or becomes available to the Fiscal Agent or such Holder from a source other
than the Issuer or any Holder or another Person that is subject to an
obligation to keep such information confidential.
"Consolidated" refers to the consolidation of accounts in accordance
with Argentine Financial Reporting.
"Corporate Trust Agent" has the meaning specified in Section 3.
"Corporate Trust Office" has the meaning specified in Section 3.
"Debt" means, with respect to any Person, (a) any liability of such
Person (1) for borrowed money, or under any reimbursement obligation relating
to a letter of credit, or (2) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind (other than a
trade payable or a current liability arising in the ordinary course of
business), or (3) for the payment of money relating to any obligations under
any capital lease of real or personal property which has been recorded as a
capitalized lease obligation; (b) all redeemable capital stock issued by such
Person having a redemption date prior to the Maturity Date of the Notes (the
amount of Debt being represented by any involuntary liquidation preference plus
accrued and unpaid dividends); (c) any liability of others described in the
preceding clause (a) that the Person has guaranteed or that is otherwise its
legal liability; and (d) (without duplication) any amendment, modification,
deferral, renewal, extension or refunding of any liability of the types
referred to in clauses (a), (b) and (c) above. For purposes of determining any
particular amount of Debt under this definition, guarantees of (or obligations
with respect to letters of credit supporting) Debt otherwise included in the
determination of such amount shall not also be included.
"Dollars", "US$" and "$" means the lawful currency of the United
States.
"Domestic Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City.
-2-
<PAGE> 60
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance having the force of law
in Argentina and relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Euroclear" means the Euroclear System.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Events of Default" has the meaning specified in Paragraph 13 of the
Notes.
"Exchange Act" means the Securities Exchange Act of 1934.
"Fiscal Agent" has the meaning specified in Section 3.
"Frozen Argentine Financial Reporting" means the generally accepted
accounting principles as presented by the CNV applied in the preparation of the
Issuer's financial statements as at and for the year ended December 31, 1995
heretofore delivered to the Fiscal Agent.
"Global Securities" has the meaning specified in Section 2(c).
"Governmental Authority" means any government or any state, department
or other political subdivision thereof, or any governmental body, agency,
authority (including, without limitation, any central bank or taxing authority)
or instrumentality (including, without limitation, any court or tribunal)
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government and any corporation, partnership or
other entity directly or indirectly owned by or subject to the control of any
of the foregoing.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminate under any Environmental Law.
-3-
<PAGE> 61
"Holders" means each registered holder of one or more Notes.
"Interest Payment Date" has the meaning specified on the face of the
form of Note attached hereto as Exhibit A.
"Issuer" has the meaning specified in the introductory paragraph
hereof.
"Legend" has the meaning specified in Section 6(b).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property.
"Material Adverse Change" means any material adverse change in the
financial condition, business, properties or results of operations of the
Issuer or the Issuer and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition, business, properties or results of operations of the
Issuer or the Issuer and its Subsidiaries taken as a whole which could
reasonably be expected to affect materially and adversely the Issuer's ability
to perform its obligations hereunder and under the Notes, including the ability
to pay in a timely manner or (b) the rights and remedies of the Fiscal Agent or
Holders under this Agreement or the Notes.
"Maturity Date" means the five-year anniversary of the Original
Issuance Date.
"Negotiable Obligations Law" has the meaning in Section 2(a) hereof.
"Note" means a promissory note of the Issuer payable to the order of
any Holder, in substantially the form of Exhibit A hereto.
"Original Issuance Date" means the Eurodollar Business Day upon which
the Issuer will initially issue the Notes.
"Other Taxes" has the meaning specified in Section 14 hereof.
"Outstanding" has the meaning specified in Section 15(f).
"Paying Agent" has the meaning specified in Section 3.
-4-
<PAGE> 62
"Person" means an individual, partnership, corporation (including a
business trust) joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
"Personal Property Tax" has the meaning specified in Section 14(a).
"Purchase Agreement" has the meaning specified in Section 2(b).
"Purchasers" has the meaning specified in Section 2(b).
"Register" has the meaning specified in Section 7.
"Registrar" has the meaning specified in Section 3.
"Regulation S" has the meaning specified in Section 2(b).
"Regulation S Global Note" has the meaning specified in Section 2(b).
"Republic" means the Republic of Argentina.
"Responsible Officer" has the meaning specified in Section 15(f).
"Restricted Definitive Securities" has the meaning specified in
Section 7(c).
"Restricted Period" has the meaning specified in Section 2(b).
"Restricted Global Note" has the meaning specified in Section 2(b).
"Rule 144A" has the meaning specified in Section 2(b).
"Rule 144A Information" has the meaning specified in Section 10(a).
"Security" means a promissory note of the Issuer payable to the order
of any Holder, in substantially the form of Exhibit A hereto.
"Securities Act" has the meaning specified in Section 2(b).
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in distributions from such
limited liability
-5-
<PAGE> 63
company, partnership or joint venture or (c) the beneficial interest in such
trust or estate is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more of its other Subsidiaries or by one
or more of such Person's other Subsidiaries.
"Taxes" has the meaning specified in Section 14 hereof.
"TGS" means Transportadora de Gas del Sur S.A.
"TGS License" means the 35-year license granted by the Argentine
Government to the Issuer to operate the southern gas transportation network in
the Republic of Argentina.
"Transfer Agent" has the meaning specified in Section 3.
"United States" means the United States of America, including the
states and the District of Columbia, but excluding its territories and
possessions.
"Unrestricted Global Note" has the meaning specified in Section 2(b).
"U.S. Depositary" has the meaning specified in Section 2(b).
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
(b) Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding".
(c) Accounting Terms. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared in accordance with generally
accepted accounting principles as presented from time to time by the CNV
("Argentine Financial Reporting").
2. The Securities.
(a) General. This Agreement is made in respect of US$220,000,000
aggregate principal amount of Floating Rate Notes Due April 22, 2002 of the
Issuer (the "Notes" or the "Securities"). The Notes will constitute
Obligaciones Negociables under
-6-
<PAGE> 64
Argentine Law No. 23,576, as amended (the "Negotiable Obligations Law") and
will be entitled to the benefits set forth therein and will be subject to the
procedural requirements thereof. In particular, in the event of a default by
the Issuer in the payment of any amount due under any Note, the Holder of such
Note will be entitled to take summary judicial proceedings (accion ejecutiva)
to recover payment of any such amount. The Notes will constitute unsecured and
unsubordinated obligations of the Issuer and will rank pari passu and without
any preference among themselves. The payment obligations of the Issuer under
the Notes, except as is or may be provided by Argentine law, will at all times
rank at least equally in priority of payment with all other present and future
unsecured and unsubordinated obligations of the Issuer from time to time
outstanding.
(b) Forms of Securities. The Notes are being offered and sold by the
Issuer pursuant to a Purchase Agreement, dated as of April 18, 1997 (the
"Purchase Agreement"), among the Issuer, Societe Generale, Banco Supervielle
Societe Generale S.A. and Goldman, Sachs & Co., as Arrangers, Bank of Montreal,
Banque Europeenne pour l'Amerique Latine (BEAL) S.A. and Dresdner Bank
Luxembourg S.A., as Managing Agents, Morgan Guaranty Trust Company of New York,
CIBC Inc., Banco de la Provincia de Buenos Aires - Grand Cayman Branch, Toronto
Dominion (Texas), Inc., Bank of Boston Trust Company (Bahamas) Limited and ING
Bank, N.V., as Co-Agents, Royal Bank of Canada, Bank of America National Trust
and Savings Association, Creditanstalt-Bankverein, Banca Commerciale Italiana -
New York Branch and The Industrial Bank of Japan Trust Company, as Lead
Managers, Riobank International and Republic National Bank of New York, as
Managers, Societe Generale, Southwest Agency, as Administrative Agent, and the
Purchasers named therein (the "Purchasers"), to which reference is hereby made
for certain provisions applicable to Purchasers and subsequent Holders of
Notes. The Notes are being issued to Purchasers that are qualified
institutional buyers within the meaning of Rule 144A ("Rule 144A") under the
United States Securities Act of 1933, as amended (the "Securities Act") in the
form of a global Note (the "Restricted Global Note") in definitive, fully
registered form without interest coupons, and to Purchasers that are non-U.S.
Persons purchasing in an offshore transaction in reliance on Regulation S
("Regulation S") under the Securities Act in the form of a global Note (the
"Regulation S Global Note") in definitive, fully registered form without
interest coupons. The Notes shall be substantially in the form of Exhibit A
hereto, with such applicable legends as are provided for in Exhibit A.
The Restricted Global Note shall be deposited on behalf of the holders
thereof with the Fiscal Agent, in the Borough of Manhattan, The City of New
York, as custodian for The Depository Trust Company (hereinafter, the "U.S.
Depositary") and registered in the name of a nominee of the U.S. Depositary,
duly executed by the Issuer and authenticated by the Fiscal Agent as
hereinafter provided. The aggregate principal amount of the Restricted Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Fiscal Agent, as custodian for the U.S. Depositary, or of the
U.S. Depositary or its nominee, as the case may be, as hereinafter provided.
-7-
<PAGE> 65
The Regulation S Global Note shall be deposited on behalf of the
holders thereof with the Fiscal Agent, at its New York office, as custodian for
the U.S. Depositary and registered in the name of a nominee of the U.S.
Depositary, duly executed by the Issuer and authenticated by the Fiscal Agent
as hereinafter provided, for credit to the accounts of such holders (or to such
other accounts as they may direct) at Morgan Guaranty Trust Company of New
York, Brussels office as operator of the Euroclear System ("Euroclear") or
Cedel Bank, societe anonyme ("Cedel Bank"). Until the termination of the
Restricted Period (as defined below) with respect to the offer and sale of the
Notes, interests in the Regulation S Global Note may only be held by members of
or participants in, the U.S. Depositary ("Agent Members") for Euroclear and
Cedel Bank. After such time as the Restricted Period shall have terminated, the
Regulation S Global Note shall be referred to herein as the "Unrestricted
Global Note". The aggregate principal amount of the Regulation S Global Note
and the Unrestricted Global Note may from time to time be increased or
decreased by adjustments made on the records of the Fiscal Agent, as custodian
for the U.S. Depositary, or of the U.S. Depositary or its nominee, as the case
may be, as hereinafter provided. As used herein, the term "Restricted Period"
means the period beginning on and including the later of (i) the day that
Goldman, Sachs & Co. and Societe Generale advise the Issuer and the Fiscal
Agent in writing is the day on which the Notes are first offered to persons
other than distributors (as defined in Regulation S) in reliance on Regulation
S and (ii) the day on which the closing for the offering of the Notes occurs,
and ending upon notice from the Issuer to the Fiscal Agent and the Holders in
writing that such restricted period has ended.
All Notes shall be executed manually or, if previously authorized by
the CNV, in facsimile on behalf of the Issuer by at least one Director and one
member of the Supervisory Committee of the Issuer (collectively referred to
herein as the "Authorized Officers"), notwithstanding that such officers, or
any of them, shall have ceased, for any reason, to hold such offices prior to
the authentication and delivery of such securities or did not hold such offices
at the date of any such securities. The names, titles and specimen signatures
of such officers will be certified to the Fiscal Agent in writing. The
Securities may also have such additional provisions, omissions, variations or
substitutions as are not inconsistent with the provisions of this Agreement,
and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon as may be required to comply with any
law or with any rules made pursuant thereto or with the rules of any securities
exchange or governmental agency or as may, consistently herewith, be determined
by the Authorized Officers executing such Securities, as the case may be, as
conclusively evidenced by their execution thereof. All Securities shall be
otherwise substantially identical except as to denomination and as provided
herein.
(c) Book-Entry Provisions. (i) This Section 2(c)(i) shall apply only
to Securities in global form ("global Securities") deposited with or on behalf
of the U.S. Depositary.
-8-
<PAGE> 66
The Issuer shall execute and the Fiscal Agent, upon the written order
or orders of the Issuer, shall, in accordance with this Section 2(c),
authenticate and deliver one or more global Securities that (A) shall be
registered in the name of the U.S. Depositary or its nominee, (B) shall be
delivered by the Fiscal Agent to the U.S. Depositary or pursuant to the U.S.
Depositary's instruction, or to itself as custodian for the U.S. Depositary, in
either case, as specified in the written order or orders of the Issuer, (C)
shall be issued with or without the Legend (as defined in Section 6(b) below)
as determined by the Issuer as evidenced by the Issuer's execution thereof and
(D) shall bear legends substantially to the following effect:
"Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York Corporation (55 Water Street, New
York, New York) ("DTC"), to the Issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein".
"This Note is a global Note within the meaning of the Fiscal Agency
Agreement referred to above. This global Note may not be exchanged, in
whole or in part, for a Note registered in the name of any person other
than DTC or a nominee thereof, except in the limited circumstances set
forth in Section 6 of the Fiscal Agency Agreement, and may not be
transferred, in whole or in part, except in accordance with the
restrictions set forth in Section 7(b) of the Fiscal Agency Agreement.
Beneficial interests in this global Note may not be transferred except in
accordance with Section 7(b) of the Fiscal Agency Agreement."
Neither any Agent Members nor any other persons on whose behalf Agent
Members may act (including Euroclear and Cedel Bank and account holders and
participants therein) shall have any rights under this Fiscal Agency Agreement
with respect to any global Note registered in the name of the U.S. Depositary
or any nominee thereof, or under any global Note, and the U.S. Depositary or
such nominee, as the case may be, may be treated by the Issuer, the Fiscal
Agent, and any agent of the Issuer or the Fiscal Agent as the absolute owner of
such global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuer, the Fiscal Agent, or any agent of the
Issuer or the Fiscal Agent, from giving effect to any written certification,
proxy or other authorization furnished by the U.S. Depositary or impair, as
between the U.S. Depositary and its Agent Members and any other person on whose
behalf the Agent Member may act, the operation of customary practices governing
the exercise of the rights of any Holder.
-9-
<PAGE> 67
(ii) This Section 2(c)(ii) shall apply only to the Regulation S Global
Note and the Unrestricted Global Note.
The provisions of the "Operating Procedures of the Euroclear System"
and the "Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel Bank, respectively,
shall be applicable to the global Note insofar as interests in the global Note
are held by the Agent Members for Euroclear or Cedel Bank. Account holders or
participants in Euroclear and Cedel Bank shall have no rights under this Fiscal
Agency Agreement with respect to the global Note, and the nominee of the U.S.
Depositary may be treated by the Issuer, the Fiscal Agent, and any agent of the
Issuer or the Fiscal Agent as the owner of the global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Issuer, the Fiscal Agent, or any agent of the Issuer or the Fiscal Agent, from
giving effect to any written certification, proxy or other authorization
furnished by the U.S. Depositary or impair, as between the U.S. Depositary and
its Agent Members, the operation of customary practices governing the exercise
of the rights of any Holder.
(d) Denominations. The Securities shall be issuable in the
denominations set forth in the form of Note attached as Exhibit A hereto.
3. Fiscal Agent; Other Agents.
The Issuer hereby appoints Societe Generale, Southwest Agency, having
a corporate trust office at Societe Generale, New York Branch, in the Borough
of Manhattan, The City of New York (the "Corporate Trust Office"), as fiscal
agent of the Issuer in respect of the Securities upon the terms and subject to
the conditions herein set forth, and Societe Generale, Southwest Agency hereby
accepts such appointment. Societe Generale, Southwest Agency and any successor
or successors as such fiscal agent qualified and appointed in accordance with
Section 13 hereof, are herein called the "Fiscal Agent". The Fiscal Agent shall
have the powers and authority granted to and conferred upon it in the
Securities and hereby and such further powers and authority to act on behalf of
the Issuer as may be mutually agreed upon by the Issuer and the Fiscal Agent in
writing. The Fiscal Agent may perform any duties hereunder either directly or
by or through agents or attorneys and the Fiscal Agent shall not be responsible
for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder. The Fiscal Agent will accept deliveries of
Securities for payment and transfer at the offices of its corporate trust
agent, which agent is initially First Trust New York, National Association, 100
Wall Street, Suite 1600, New York, New York 10005 (including any successor
corporate trust agents, the "Corporate Trust Agent"). The Fiscal Agent, at its
Corporate Trust Office and at the office of its Corporate Trust Agent, and the
Issuer, at its offices in Buenos Aires, Argentina, shall each keep a copy of
this Agreement available for inspection during normal business hours.
-10-
<PAGE> 68
All of the terms and provisions with respect to such powers and authority
contained in the Securities are subject to and governed by the terms and
provisions hereof.
The Issuer may, at its discretion, appoint one or more agents (a
"Paying Agent" or "Paying Agents") for the payment (subject to applicable laws
and regulations) of the principal of and any interest on the Securities, and
one or more agents (a "Transfer Agent" or "Transfer Agents") for the transfer
and exchange of Securities, at such place or places as the Issuer may determine
(as used herein, "Agents" shall refer to the Fiscal Agent, the Transfer Agent
or Agents and the Paying Agent or Agents); provided, however, that the Issuer
shall at all times maintain a Paying Agent and Transfer Agent (i) in the
Borough of Manhattan, The City of New York (which Paying Agent and Transfer
Agent may be the Fiscal Agent), and (ii) in the city of Buenos Aires,
Argentina. The Issuer hereby initially appoints Societe Generale, Southwest
Agency, as Paying Agent, Transfer Agent, authenticating agent and securities
Co-Registrar ("the Co-Registrar"), and Societe Generale, Southwest Agency
hereby accepts such appointments. The Issuer hereby initially appoints Banco
Supervielle Societe Generale S.A. as Paying Agent and Transfer Agent in
Argentina and as securities registrar ("Registrar") and Banco Supervielle
Societe Generale S.A. hereby accepts such appointments. The Issuer shall
promptly notify the Fiscal Agent in writing of the name and address of any
other Paying Agent or Transfer Agent appointed by it and of the country or
countries in which a Paying Agent or Transfer Agent may act in that capacity,
and will notify the Fiscal Agent of the resignation or termination of any
Paying Agent or Transfer Agent. Subject to the provisions of Section 13(c)
hereof, the Issuer may vary or terminate the appointment of any such Paying
Agent or Transfer Agent at any time and from time to time upon giving not less
than 60 days' notice to such Paying Agent or Transfer Agent, as the case may
be, and to the Fiscal Agent. The Paying Agent and Transfer Agent shall have the
powers and authority granted to and conferred upon each of them in the
Securities and hereby and such further powers and authority to act on behalf of
the Issuer as may be mutually agreed upon by the Issuer and either of them.
Any Paying Agent or Transfer Agent and the Registrar and the
Co-Registrar may each perform any of their respective duties hereunder either
directly or by or through agents or attorneys and each such Paying Agent,
Transfer Agent, Registrar or Co-Registrar shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
The Issuer shall provide to the Fiscal Agent or its designee, upon
request from time to time, such information regarding persons holding interests
in the Notes through the U.S. Depositary as may be available to the Issuer from
the U.S. Depositary.
-11-
<PAGE> 69
4. Authentication.
The Fiscal Agent is authorized, upon receipt of Securities duly
executed on behalf of the Issuer for the purposes of the original issuance of
Securities, (i) to authenticate said Securities in an aggregate principal
amount not in excess of US$220,000,000 and to deliver said Securities in
accordance with the written order or orders of the Issuer signed on its behalf
by an Authorized Officer and (ii) thereafter to authenticate and deliver
Securities in accordance with the provisions therein or hereinafter set forth.
The Fiscal Agent shall at all times act as the sole authenticating
agent for the authentication of Securities hereunder.
5. Payment and Cancellation.
(a) Payment. For so long as the Fiscal Agent is acting as a Paying
Agent hereunder, the Issuer shall provide to the Fiscal Agent, for credit to
Account No. 9035699, Reference CIESA, ABA 026004226, or to such other account
the Fiscal Agent may reasonably designate, in immediately available funds at or
prior to 11:00 A.M. (New York City time) on each date on which a payment of
principal of or any interest on the Securities shall become due, as set forth
in the text of the Securities, such amount, in such U.S. coin or currency, as
is necessary to make such payment, and the Issuer hereby authorizes and directs
the Fiscal Agent from funds so provided to it to make or cause to be made
payment of the principal of and any interest, as the case may be, on the
Securities as set forth herein and in the text of said Securities; provided
that payment of interest on the Securities may be made directly by the Issuer
by check mailed to the person entitled thereto as provided in the text of the
Securities and the Fiscal Agent shall have no responsibility with respect to
any funds so provided by the Issuer; provided, further, that any payment to be
made in respect of global Securities may be made in any manner agreed upon by
the Issuer and the U.S. Depositary. The Issuer shall provide notice to the
Fiscal Agent at least 10 days prior to any Interest Payment Date of those
persons to whom the Issuer is making such direct payments. The Fiscal Agent
shall arrange directly with any other Paying Agent who may have been appointed
by the Issuer pursuant to the provisions of Section 3 hereof for the payment
from funds so paid by the Issuer of the principal of and any interest on the
Securities as set forth herein and in the text of said Securities.
Notwithstanding the foregoing, the Issuer may provide directly to a Paying
Agent funds for the payment of the principal thereof and interest payable
thereon under an agreement with respect to such funds containing substantially
the same terms and conditions set forth in this Section 5(a) and in Section
11(b) hereof; and the Fiscal Agent shall have no responsibility with respect to
any funds so provided by the Issuer to any such Paying Agent.
-12-
<PAGE> 70
Payments of principal of and interest on the Notes shall be made to
the person shown in the Register as the owner of such Note (each such person
being referred to herein as a "Registered Holder" or "Holder") in the manner
set forth in the Notes.
(b) Certification. The Issuer shall provide each Paying Agent and any
withholding agent under relevant tax regulations with copies of each
certificate received by the Issuer from a Holder or beneficial owner of a Note
pursuant to Paragraph 7(b) of the Notes. Each such Paying Agent and withholding
agent shall retain each such certificate received by it for so long as any Note
is Outstanding (as defined in Section 15(f) hereof) and in no event for less
than four years after its receipt, and for such additional period thereafter,
as requested by the Issuer in writing, as such certificate may become material
in the administration of applicable tax laws.
(c) Withholding; Payment of Additional Amounts. In respect of the
Securities issued hereunder, at least 10 days prior to the first date of
payment of interest on the Securities and at least 10 days prior to each date,
if any, of payment of principal or interest thereafter if there has been any
change with respect to the matters set forth in the below-mentioned
certificate, the Issuer will furnish each Paying Agent with a certificate of an
Authorized Officer instructing such Paying Agent whether such payment of
principal of or any interest on such Securities shall be made without deduction
or withholding for or on account of any tax, duty, assessment or other
governmental charge (other than in respect of backup withholding, or any
similar obligation to withhold or deduct, under the laws of the United States
of America). If any such deduction or withholding shall be required, then such
certificate shall specify, by country, the amount, if any, required to be
withheld on such payment to holders of such Securities, and the Issuer shall
certify that it will pay such deduction or withholding to the appropriate
governmental or taxing authorities in a timely manner and will pay or cause to
be paid to such Paying Agent Additional Amounts, if any, required by the terms
of such Securities to be paid. In the absence of any such certificate each
Paying Agent may assume that no such deduction or withholding shall be
required. The Issuer agrees to indemnify each Paying Agent for, and to hold
each harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part arising out of or in connection with
actions taken or omitted by it in reliance on any certificate furnished
pursuant to this Section 5(c) or not furnished. The provisions of this Section
5(c) shall survive payment of the Securities, the resignation or removal of any
Paying Agent and/or the termination of this Agreement.
(d) Cancellation. All Securities delivered to the Fiscal Agent (or any
other Agent appointed by the Issuer pursuant to Section 3 hereof) for payment,
redemption, registration of transfer or exchange or for cancellation as
provided herein or in the Securities shall be marked "canceled" and, in the
case of any other such Agent, forwarded to the Fiscal Agent. In addition, the
Issuer may at any time deliver to the Fiscal Agent for cancellation any
Securities owned by the Issuer or any of its affiliates whether obtained
through open-market purchase or otherwise. All such Securities shall be
destroyed by the Fiscal
-13-
<PAGE> 71
Agent or such other person as may be jointly designated by the Issuer and the
Fiscal Agent, which shall thereupon furnish certificates of such destruction to
the Issuer.
(e) References to Include Additional Amounts. All references in this
Agreement to principal and interest in respect of Securities shall, unless the
context otherwise requires, be deemed to mean and include all Additional
Amounts, if any, payable in respect thereof as set forth in the text of the
Securities.
6. Global Securities.
(a) A global Note deposited with the U.S. Depositary, pursuant to
Section 2(c) hereof shall be transferred to the beneficial owners thereof if
(i) the U.S. Depositary notifies the Issuer that it is unwilling or unable to
continue as U.S. Depositary for all global Securities, and a successor
depository is not appointed by the Issuer within 90 days of such notice, (ii)
the Issuer delivers to the Fiscal Agent a written notice executed by an
Authorized Officer that all global Securities shall be transferred to the
beneficial owners thereof or (iii) an Event of Default (as defined in paragraph
13 of the form of Note attached as Exhibit A hereto) has occurred and is
continuing with respect to the Securities.
(b) Any global Note that is transferable to the beneficial owners
thereof pursuant to this Section 6 shall be surrendered by the U.S. Depositary
to the Transfer Agent located in the Borough of Manhattan, The City of New
York, to be so transferred, in whole or from time to time in part, without
charge, and the Fiscal Agent shall authenticate and deliver, upon such transfer
of each portion of such global Note, an equal aggregate principal amount of
Securities of authorized denominations. Any portion of a global Note
transferred pursuant to this Section 6 shall be executed, authenticated and
delivered only in the denominations specified in the form of Note attached as
Exhibit A hereto and registered in such names as the U.S. Depositary shall
direct. Any Note delivered in exchange for the Restricted Global Note or the
Regulation S Global Note or any portion thereof shall, unless otherwise agreed
by the Issuer and the holder of the Note, bear the legend regarding transfer
restrictions applicable to the Restricted Global Note set forth in the form of
Note attached as Exhibit A hereto (the "Legend"). In implementing the foregoing
provisions of this paragraph, the parties agree to apply such procedures as may
be adopted from time to time by the U.S. Depositary in respect of such
exchanges and as are substantially consistent with such provisions.
In the event of any exchange of all or a portion of a global Note for
definitive registered Securities as provided in the immediately preceding
paragraph, the Fiscal Agent shall reduce the aggregate principal amount of the
global Note in accordance with the procedures of the U.S. Depositary to reflect
such exchange.
-14-
<PAGE> 72
(c) Subject to the provisions of Section 2(c) above, the registered
holder may grant proxies and otherwise authorize any person, including Agent
Members and persons that may hold interests through Agent Members, to take any
action which a Holder is entitled to take under this Fiscal Agency Agreement or
the Notes.
(d) If a Note is issued in exchange for any portion of a global Note
after the close of business at the office or agency where such exchange occurs
on any record date and before the opening of business at such office or agency
on the relevant interest payment date, interest will not be payable on such
interest payment date in respect of such Note, but will be payable on such
interest payment date only to the person to whom interest in respect of such
portion of such global Note is payable.
7. Registration, Transfer and Exchange of Securities.
(a) The Fiscal Agent, as agent of the Issuer for the purpose and as
Co-Registrar, shall cause its Corporate Trust Agent to maintain, in the Borough
of Manhattan, The City of New York, a register of Notes for the registration
and registration of transfers of Notes (the "Register"). The Registrar in
Argentina will also keep a Register for the same purposes. The Register will
show the amount of the Notes, the date of issue, all subsequent transfers and
changes of ownership in respect thereof and the names, tax identification
numbers (if relevant to a specific Holder) and the addresses of the Holders of
the Notes and any payment instructions with respect thereto (if different from
a Holder's registered address). The Register will also include notations as to
whether the Notes have been paid or canceled, and, in the case of mutilated,
destroyed, stolen or lost Notes, whether such Notes have been replaced. In the
case of the replacement of any of the Notes, the Register will include
notations of the Note so replaced, and the Note issued in replacement thereof.
In the case of the cancellation of any Notes, the Register will include
notations of the Note so canceled and the date on which such Note was canceled.
Each of the Registrar and the Co-Registrar shall at all reasonable times during
office hours make the Register available to the Issuer or any Person authorized
by the Issuer in writing for inspection and for the taking of copies thereof or
extracts therefrom, and at the expense and direction of the Issuer the
Co-Registrar shall deliver to such Persons all lists of Holders, their
addresses and amounts of such holdings as they may request.
The Register shall be in written form in the English language or in
any other form capable of being converted into such form within a reasonable
time.
As long as it is required by Argentine law or by the CNV, the
Registrar will keep a duplicate of the Register in the Spanish language in
Argentina.
-15-
<PAGE> 73
The Co-Registrar shall give prompt notice to the Registrar, and the
Registrar shall likewise give prompt notice to the Co-Registrar, of any
registration of ownership, exchange or transfer of Notes.
Subject to the further provisions of this Section 7, upon presentation
for transfer of any Note at the office of the Transfer Agent located in the
Borough of Manhattan, The City of New York, accompanied by a written instrument
of transfer in the form approved by the Issuer (it being understood that, until
notice to the contrary is given to Holders, the Issuer shall be deemed to have
approved the form of instrument of transfer, if any, printed on any Note),
executed by the Holder, in person or by such Holder's attorney thereunto duly
authorized in writing, such Note shall be transferred upon the Register, and a
new Note of like tenor shall be authenticated and issued in the name of the
transferee.
(b) Notwithstanding any provision to the contrary herein, so long as a
global Note remains Outstanding (as defined in Section 15(f) hereof) and is
held by or on behalf of the U.S. Depositary, transfers of such global Note, in
whole or in part, shall only be made in accordance with Section 6 and this
Section 7(b).
(i) Subject to Clauses (ii) through (v) of this Section 7(b),
transfers of a global Note shall be limited to transfers of such global
Note in whole, but not in part, to nominees of the U.S. Depositary or to a
successor of the U.S. Depositary or such successor's nominee; provided
that this clause (i) shall not prohibit any transfer of a Note that is
issued in exchange for a global Note but is not itself a global Note.
(ii) If a holder of a beneficial interest in the Restricted Global
Note deposited with the U.S. Depositary wishes at any time prior to the
termination of the Restricted Period to exchange its interest in such
Restricted Global Note for an interest in the Regulation S Global Note, or
to transfer its interest in such Restricted Global Note to a person who
wishes to take delivery thereof in the form of an interest in the
Regulation S Global Note, such holder may, subject to the rules and
procedures of the U.S. Depositary, Euroclear and Cedel, in each case to
the extent applicable (the "Applicable Procedures") exchange or transfer
such interest for an equivalent beneficial interest in the Regulation S
Global Note. Upon receipt by the Fiscal Agent, as Transfer Agent, at the
office of its Corporate Trust Agent of (1) instructions given in
accordance with the Applicable Procedures from an Agent Member directing
the Fiscal Agent to credit or cause to be credited a beneficial interest
in the Regulation S Global Note in an amount equal to the beneficial
interest in the Restricted Global Note to be exchanged or transferred, (2)
a written order given in accordance with the Applicable Procedures
containing information regarding the Euroclear or Cedel Bank account to be
credited with such increase and the name of such account, and (3) a
certificate in the form of Exhibit B attached hereto given by the holder
of such beneficial interest stating that the exchange or transfer of such
interest has been made in compliance with the transfer restrictions
-16-
<PAGE> 74
applicable to the Securities and pursuant to and in accordance with
Regulation S, the Fiscal Agent, as Transfer Agent, shall instruct the U.S.
Depositary to reduce the Restricted Global Note by the aggregate principal
amount of the beneficial interest in the Restricted Global Note to be so
exchanged or transferred and to increase the principal amount of the
Regulation S Global Note by the aggregate principal amount of the
beneficial interest in the Restricted Global Note to be so exchanged or
transferred, and to credit or cause to be credited to the account of the
person specified in such instructions (who shall be the Agent Member for
Euroclear or Cedel Bank, or both, as the case may be) a beneficial
interest in the Regulation S Global Note equal to the reduction in the
principal amount of the Restricted Global Note.
(iii) If a holder of a beneficial interest in the Restricted Global
Note deposited with the U.S. Depositary wishes at any time after the
termination of the Restricted Period to exchange its interest in such
Restricted Global Note for an interest in the Unrestricted Global Note, or
to transfer its interest in such Restricted Global Note to a person who
wishes to take delivery thereof in the form of an interest in the
Unrestricted Global Note, such holder may, subject to the rules and
procedures of the U.S. Depositary, exchange or transfer such interest for
an equivalent beneficial interest in the Unrestricted Global Note. Upon
receipt by the Fiscal Agent, as Transfer Agent, at the office of its
Corporate Trust Agent of (1) instructions given in accordance with the
Applicable Procedures from an Agent Member directing the Fiscal Agent to
credit or cause to be credited a beneficial interest in the Unrestricted
Global Note in an amount equal to the beneficial interest in the
Restricted Global Note to be exchanged or transferred, (2) a written order
given in accordance with the Applicable Procedures containing information
regarding the participant account of the U.S. Depositary and, in the case
of a transfer pursuant to and in accordance with Regulation S, the
Euroclear or Cedel Bank account to be credited with such increase and (3)
a certificate in the form of Exhibit C attached hereto given by the holder
of such beneficial interest stating that the exchange or transfer of such
interest has been made in compliance with the transfer restrictions
applicable to the Securities and (A) pursuant to and in accordance with
Regulation S or (B) pursuant to and in accordance with Rule 144 under the
Securities Act, the Fiscal Agent, as Transfer Agent, shall instruct U.S.
Depositary to reduce the principal amount of the Restricted Global Note
and to increase the principal amount of the Unrestricted Global Note by
the aggregate amount of the beneficial interest in the Restricted Global
Note to be so exchanged or transferred, and to credit or cause to be
credited to the account of the person specified in such instructions a
beneficial interest in the Unrestricted Global Note equal to the reduction
in the principal amount of the Restricted Global Note.
(iv) If a holder of a beneficial interest in the Regulation S Global
Note or the Unrestricted Global Note deposited with the U.S. Depositary
wishes at any time to exchange its interest in such Regulation S Global
Note or Unrestricted Global Note for an interest in the Restricted Global
Note, or to transfer its interest in such
-17-
<PAGE> 75
Regulation S Global Note or Unrestricted Global Note to a person who
wishes to take delivery thereof in the form of an interest in the
Restricted Global Note, such holder may, subject to the Applicable
Procedures, exchange or transfer such interest for an equivalent
beneficial interest in the Restricted Global Note. Upon receipt by the
Fiscal Agent, as Transfer Agent, at the office of its Corporate Trust
Agent of (1) instructions given in accordance with the Applicable
Procedures, from Euroclear or Cedel Bank or an Agent Member of the U.S.
Depositary, as the case may be, directing the Fiscal Agent, as Transfer
Agent, to credit or cause to be credited a beneficial interest in the
Restricted Global Note equal to the beneficial interest in the Regulation
S Global Note or the Unrestricted Global Note to be exchanged or
transferred, such instructions to contain information regarding the Agent
Member's account with the U.S. Depositary to be credited with such
increase, and, with respect to an exchange or transfer of an interest in
the Unrestricted Global Note, information regarding the Agent Member's
account with the U.S. Depositary to be debited with such decrease, and,
with respect to an exchange or transfer of an interest in the Regulation S
Global Note, information regarding the Euroclear or Cedel Bank account, as
the case may be, to be debited with such decrease, and (2) with respect to
an exchange or transfer of an interest in the Regulation S Global Note
(but not the Unrestricted Global Note) for an interest in the Restricted
Global Note, a certificate in the form of Exhibit D attached hereto given
by the holder of such beneficial interest and stating that the person
transferring such interest in the Regulation S Global Note reasonably
believes that the person acquiring such interest in the Restricted Global
Note is a qualified institutional buyer (as defined in Rule 144A) and is
obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A, the Fiscal Agent, as Transfer Agent shall
instruct the U.S. Depositary to reduce the Regulation S Global Note or the
Unrestricted Global Note, as the case may be, by the aggregate principal
amount of the beneficial interest in the Regulation S Global Note or the
Unrestricted Global Note to be exchanged or transferred, and to credit or
cause to be credited to the account of the person specified in such
instructions a beneficial interest in the Restricted Global Note equal to
the reduction in the principal amount of the Regulation S Global Note or
the Unrestricted Global Note, as the case may be.
(v) In the event that a global Note or any portion thereof is
exchanged for Securities other than global Securities, such other
Securities may in turn be exchanged (on transfer or otherwise) for
Securities that are not global Securities or for beneficial interests in a
global Note (if any is then Outstanding (as defined in Section 15(f)
hereof)) only in accordance with such procedures, which shall be
substantially consistent with the provisions of clauses (i) through (iv)
above (including the certification requirements intended to ensure that
transfers of beneficial interests in a global Note comply with Rule 144A,
Rule 144 or Regulation S under the Securities Act, as the case may be) and
any Applicable Procedures as may from time to time be adopted by the
Issuer and the Fiscal Agent.
-18-
<PAGE> 76
(vi) Until the termination of the Restricted Period, interests in the
Regulation S Global Note may be held only through Agent Members acting for
and on behalf of Euroclear and Cedel Bank, provided that this clause (vi)
shall not prohibit any transfer in accordance with Section 7(b)(iv)
hereof.
(c) Unless otherwise agreed by the Issuer and a holder of the
Securities, definitive, certificated Securities issued in exchange for either
the Regulation S Global Note or the Restricted Global Note will bear the
Legend. If a holder of definitive, certificated Securities that bear or are
required to bear the Legend ("Restricted Definitive Securities" or "Restricted
Definitive Notes") wishes at any time to transfer such Restricted Definitive
Securities or to exchange such Restricted Definitive Securities, such exchange
or transfer may be effected only in accordance with the provisions of this
Section 7(c). Upon the receipt by the Fiscal Agent, as Transfer Agent, at the
office of its Corporate Trust Agent in The City of New York of (i) a Restricted
Definitive Note accompanied by a written and executed instrument of transfer or
exchange as provided in Section 7(a) and (ii) a certificate from the holder
thereof in the form of Exhibit E attached hereto to the effect that such
Restricted Definitive Note is being exchanged by the holder thereof, without
transfer, or such Restricted Definitive Note is being transferred pursuant to
an exemption from registration in accordance with Rule 144A, Rule 144 or
Regulation S under the Securities Act, the Fiscal Agent shall register the
transfer of such Restricted Definitive Note or exchange such Restricted
Definitive Note for an equal principal amount of Restricted Definitive
Securities of other authorized denominations.
To permit registrations of transfers and exchanges, the Issuer shall
execute and the Fiscal Agent shall authenticate and deliver definitive
Securities at the Fiscal Agent's or any Transfer Agent's request. Securities
shall be dated the date of their authentication by the Fiscal Agent. All
Securities issued upon any registration of transfer or exchange of Securities
shall be the valid obligations of the Issuer, evidencing the same debt, and the
applicable provisions of this Fiscal Agency Agreement shall apply equally
thereto, as the Securities surrendered upon such registration of transfer or
exchange. Notwithstanding anything to the contrary herein contained, such new
Securities shall be so dated that neither gain nor loss in interest shall
result from such transfer or exchange.
(d) If a holder of a definitive, certificated Note requests that such
Note be transferred to the U.S. Depositary so that such holder's ownership
interest in such Note will consist of a beneficial interest in a global Note,
the Transfer Agent shall effect such transfer, subject to such holder or
transferee, as the case may be, having established, to the reasonable
satisfaction of the Issuer and the U.S. Depositary, if so requested by either
of them, that such holder or transferee, as the case may be, is qualified to
hold such interest in the Restricted Global Note, Regulation S Global Note or
Unrestricted Global Note (if any), as the case may be, through a participant in
the U.S. Depositary's system and such holder or transferee, as the case may be,
meets any other requirements of the U.S. Depositary, Euroclear or Cedel Bank.
Subject to the foregoing, the Transfer Agent located in the Borough of
Manhattan, The City
-19-
<PAGE> 77
of New York, shall cancel such Note and shall endorse on the schedule affixed
to the global Note (or on a continuation of the schedule affixed to the global
Note) and made a part thereof an appropriate notation evidencing the date of
such transfer and an increase in the principal amount of the global Note equal
to the principal amount of such Note. Such transfer will be subject to
certification requirements substantially consistent with the provisions of
Section 7(b)(ii) through (iv) to ensure that such transfer complies with Rule
144A, Rule 144 or Regulation S under the Securities Act, as the case may be.
(e) Successive registrations and registrations of transfers as
aforesaid may be made from time to time as desired, and each such registration
shall be noted on the Register. No service charge shall be made for any
registration of transfer or exchange of the Securities, but the Issuer may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith and any other amounts required to be
paid by the provisions of the Securities.
(f) Any Transfer Agent appointed pursuant to Section 3 hereof shall
provide to the Fiscal Agent such information as the Fiscal Agent may reasonably
require in connection with the delivery by such Transfer Agent of Securities
upon transfer or exchange of Securities.
(g) No Transfer Agent shall be required to make registrations of
transfer or exchange of Securities during any periods designated in the text of
the Securities as periods during which such registrations of transfer and
exchange may not be made.
(h) Upon the transfer, exchange or replacement of Securities not
bearing the Legend, the Fiscal Agent shall authenticate and deliver Securities
that do not bear the Legend. Upon the transfer, exchange or replacement of
Securities bearing the Legend (including transfer, exchange or replacement of
the Restricted Global Note and the Regulation S Global Note), or upon specific
request for removal of the Legend on a Note, the Fiscal Agent shall
authenticate and deliver only Securities that bear the Legend, or shall refuse
to remove such Legend, as the case may be, unless there is delivered to the
Issuer such satisfactory evidence, which may include an opinion of counsel, as
may be reasonably required by the Issuer that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure compliance
with the provisions of the Securities Act. Upon provision of such satisfactory
evidence, the Fiscal Agent, at the written direction of the Issuer, shall
authenticate and deliver a Note that does not bear the Legend or shall increase
the principal amount of the Unrestricted Global Note, as the case may be. If a
Legend is removed from the face of a Note and the Note is subsequently held by
the Issuer or an affiliate of the Issuer, the Issuer shall cause the Legend to
be reinstated. The Issuer shall immediately notify the Fiscal Agent in writing
if, after the Legend has been so removed, a Note is transferred to the Issuer
or an affiliate of the Issuer and is presented to be registered in the name of
any of them.
-20-
<PAGE> 78
(i) Prior to the satisfaction of the applicable requirements for
registration of transfer of this Section 7, the Issuer and the Fiscal Agent may
deem and treat the registered holder of any Note as the absolute owner of such
Note for the purpose of receiving payment of the principal of or interest on
such Note and for all other purposes whatsoever, whether or not such Note shall
be overdue, and neither the Issuer nor the Fiscal Agent shall be affected by
notice to the contrary.
8. Representations and Warranties of the Issuer. The Issuer
represents and warrants as follows:
(a) Corporate Existence and Power. Each of the Issuer and TGS is a
corporation duly organized and validly existing under the laws of the
Republic of Argentina, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted except for such licenses,
authorizations, consents and approvals the failure to have which in the
aggregate could not reasonably be expected to have a Material Adverse
Effect.
(b) Corporate Authorization; No Contravention. The execution,
delivery and performance by the Issuer of this Agreement and the Notes are
within the corporate power of the Issuer, have been duly authorized by all
necessary corporate action, do not contravene, any provision of applicable
law or regulation, including without limitation Regulations G, T, U or X
of the Board of Governors of the Federal Reserve System, and do not
contravene or constitute a default under the charter, by-laws or other
constitutive documents of the Issuer, or any agreement, judgment,
injunction, order, decree or other instrument binding upon the Issuer or
of the TGS License or result in the creation or imposition of any Lien on
any asset of the Issuer.
(c) Government Authorization. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required to be obtained or made by the Issuer for the execution, delivery
and performance by the Issuer of this Agreement or the Notes, including,
without limitation, any governmental authorization, license, approval or
consent by exchange control regulations to enable the Issuer punctually to
pay its obligations under this Agreement or the Notes in Dollars at the
office of the Fiscal Agent specified pursuant to Section 18 other than any
such authorization, approval, action, notice or filing which has been
obtained or made, as the case may be, prior to the Original Issuance Date
and is in full force and effect on the Original Issuance Date.
(d) Binding Effect. This Agreement constitutes a valid and binding
agreement of the Issuer and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding
obligation of the Issuer, in each case, enforceable in accordance with its
terms, subject to bankruptcy,
-21-
<PAGE> 79
insolvency or other similar laws affecting creditors' rights generally and
by general principles of equity.
(e) Filings. It is not necessary in order to ensure the validity,
enforceability, priority or admissibility in evidence in proceedings of
this Agreement or the Notes in New York or any other relevant jurisdiction
that this Agreement, the Notes or any other document be filed or
registered with any authority in the Republic of Argentina or elsewhere,
except for certified translations of any foreign language document as
required by Argentine law, or that any tax be paid in respect thereof,
with the exception of the judicial tax in force in the Republic of
Argentina applicable to actions brought before Argentine courts and of the
stamp tax in force in certain provinces of the Republic of Argentina
applicable to actions brought before such Argentine provinces' courts and
to agreements and/or acts entered into or performed in such provinces.
(f) Financial Information. The consolidated financial statements of
the Issuer as at and for the year ended December 31, 1995 as heretofore
delivered to the Fiscal Agent have been prepared in accordance with Frozen
Argentine Financial Reporting except as stated therein and present fairly
the financial position of the Issuer as at the end of, and the results of
its operations for, the financial periods to which they relate; as at
September 30, 1996 the Issuer did not have any significant liabilities
(contingent or otherwise) or any unrealized or anticipated losses which
are not disclosed by or reserved against in such financial statements; and
there has been no Material Adverse Change since September 30, 1996.
(g) Litigation. There is no action, suit or proceeding pending or, to
the knowledge of the Issuer, threatened against or affecting the Issuer or
any of its Subsidiaries before any court or arbitrator or any governmental
body, agency or official in which there is a likelihood of an adverse
decision which could reasonably be expected to have a Material Adverse
Effect or which draws into question the validity or enforceability of this
Agreement or the Notes.
(h) Defaults. Neither the Issuer nor any of its Subsidiaries is in
default under any law, regulation, judgment, order, authorization,
agreement or obligation applicable to it or any of its assets or revenues,
the consequences of which default could reasonably be expected to have a
Material Adverse Effect. No Event of Default or event which, with the
giving of notice or lapse of time or both would constitute an Event of
Default, and none will result from the issuance of the Notes or the
performance by the Issuer of its obligation under this agreement or the
Notes.
(i) Environmental Matters. In the ordinary course of business, the
Issuer's operating Subsidiaries conduct an ongoing review of the effect of
Environmental Laws on such operating Subsidiaries' business, operations
and
-22-
<PAGE> 80
properties, in the course of which such operating Subsidiaries identify
and evaluate associated liabilities and costs of compliance with
environmental protection standards imposed by Argentine law. On the basis
of such review, the Issuer has concluded that, as of the date hereof, such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, could not reasonably be expected to have a Material
Adverse Effect.
(j) Taxes. (i) The Issuer has filed all income tax returns and all
other material tax returns which are required to be filed by it and has
paid all taxes shown to be due pursuant to such returns or pursuant to any
assessment received by the Issuer other than any such taxes that (A) are
being contested in good faith by an appropriate proceeding and for which
reserves have been established in accordance with Argentine Financial
Reporting or (B) in the aggregate do not exceed US$5,000,000. The charges,
accruals and reserves on the books of the Issuer and its Subsidiaries in
respect of taxes or other governmental charges, in the opinion of the
Issuer, have been made in accordance with Argentine Financial Reporting.
(ii) If the conditions of Section 36 of the Negotiable Obligations
Law are satisfied with respect to the Notes, the performance by the Issuer
of its payment obligations under the Notes are exempt from all taxes,
levies, imposts, deductions, charges and withholdings imposed by any
Governmental Authority of the Republic of Argentina. The Issuer is
permitted under applicable Argentine law to pay any additional amounts
payable under Section 14 hereof and under Paragraph 7 of the Notes.
(k) Regulatory Restrictions on Issuance. The Issuer is not an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or otherwise subject to
any regulatory scheme which restricts its ability to incur debt.
(l) Rank of Obligations. The obligations of the Issuer under this
Agreement and the Notes to pay the principal of and interest on the Notes
and any and all other amounts due hereunder constitute direct and
unconditional obligations of the Issuer and will rank at all times at
least pari passu in right of payment with all other unsecured,
unsubordinated Debt of the Issuer at any time outstanding.
(m) No Immunity; Proper Legal Form. This Agreement and the Notes are
in proper legal form under the laws of the Republic of Argentina for the
enforcement thereof in accordance with their respective terms against the
Issuer under such laws in the courts of the Republic of Argentina. Neither
the Issuer nor any of its revenues, assets or properties have any right of
immunity, on the ground of sovereignty or otherwise, from service of
process or the jurisdiction of any court in connection with
-23-
<PAGE> 81
any suit, action or proceeding arising out of or relating to its
obligations under this Agreement or the Notes or from the execution or
enforcement of any judgment resulting therefrom, and if the Issuer or any
of its revenues, assets or properties should become entitled to any such
right of immunity, the Issuer has effectively waived such right pursuant
to Section 20 of this Agreement. The obligations of the Issuer under this
Agreement and the Notes may be enforced (by judgment and levy) in
accordance with their respective terms in a proceeding at law in any
competent court in the Republic of Argentina at the suit of any Holder,
provided, however, that (i) if this Agreement or the Notes are enforced
before the courts of the City of Buenos Aires, the payment of a court tax
of 3% on the amount of the claim is required, and (ii) an official Spanish
translation of this Agreement or the Notes, as the case may be, is
required to be an action thereon in the courts of the Republic of
Argentina, and provided, further, that, pursuant to Law No. 24,573 and its
regulatory decree No. 1021/95, as of April 25, 1996, certain obligatory
mediation procedures must be exhausted prior to the initiation of lawsuits
in the Republic of Argentina, with the exception, among others, of
bankruptcy and executory proceedings, which executory proceedings include
the enforcement of foreign judgments, in which case mediation procedures
remain optional for the plaintiff. Subject to the foregoing, any judgment
against the Issuer of a state or Federal court in the State of New York,
United States, which satisfies the requirements of Articles 517 through
519 of Law 17.454, as amended (Argentine National Code of Civil and
Commercial Procedures), is capable of being enforced in the courts of the
Republic of Argentina.
(n) Full Disclosure. The information contained in the Confidential
Information Memorandum entitled "CIESA: Compania de Inversiones de Energia
S.A.", dated December, 1996, relating to the initial offering and sale of
the Notes was true and accurate in all material respects on the date as of
which such information is stated and in light of the circumstances under
which such information was provided.
(o) Compliance with Laws. The Issuer and its Subsidiaries are in
compliance with all applicable laws, ordinances, rules, regulations and
Governmental Authorities (including without limitation social security
laws, retirement and pension fund laws, Environmental Laws, and applicable
gas industry rules and regulations), noncompliance with which could
reasonably be expected to have a Material Adverse Effect.
(p) Subsidiaries. As of the date of this Agreement, the Issuer's only
Subsidiary is TGS.
9. Acknowledgment of Reliance. The Issuer acknowledges that each of
the Holders and the Fiscal Agent has entered into this Agreement in reliance
upon the representations and warranties contained in Section 8 hereof.
-24-
<PAGE> 82
10. Delivery of Certain Information.
(a) Rule 144A Information. For so long as any of the Securities remain
Outstanding and are "restricted securities" within the meaning of Rule 144(a)
under the Securities Act, if at any time when the Issuer is not subject to
Section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to
Rule 12g3-2(b) under the Exchange Act, upon the request of a holder or
beneficial owner of a Note, the Issuer will promptly furnish or cause to be
furnished "Rule 144A Information" (as defined below) to such holder or
beneficial owner, to a prospective purchaser of such Note designated by such
holder or beneficial owner or to the Fiscal Agent for delivery to such holder
or beneficial owner or a prospective purchaser designated by such holder or
beneficial owner, as the case may be, in order to permit compliance by such
holder or beneficial owner with Rule 144A under the Securities Act in
connection with the resale of such Note by such holder or beneficial owner.
"Rule 144A Information" shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).
(b) Periodic Reports. So long as any Securities are Outstanding, the
Issuer will furnish or cause to be furnished to holders of Securities and to
the Fiscal Agent as soon as available (i) at any time when the Issuer is
subject to Section 13 or 15(d) of the Exchange Act, copies (in English) of
their annual and interim reports and of each report filed by either of them
with the United States Securities and Exchange Commission (the "Commission")
under the Exchange Act and (ii) at any time when the Issuer is not subject to
Section 13 or 15(d) of the Exchange Act, copies of all information filed by the
Issuer with the Buenos Aires Stock Exchange and all information (if any)
furnished to the Commission pursuant to Rule 12g3-2(b) under the Exchange Act
by the Issuer and, if not included therein, copies of annual and interim
reports (in English) to shareholders, to the extent they are prepared, which
include annual audited financial statements (together with notes thereto and a
report thereon by an independent accountant) and unaudited interim financial
statements (together with notes thereto) prepared, in each case, in accordance
with generally accepted accounting principles as applied by the Issuer, as the
case may be.
11. Conditions of Fiscal Agent's Obligations.
Each Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following, to all of which the Issuer agrees
and to all of which the rights of holders and owners of beneficial interests
from time to time of Securities are subject:
(a) Compensation and Indemnity. Each of the Agents shall be entitled
to compensation as agreed with the Issuer in writing for all services rendered
by it, and the Issuer agrees promptly to pay such compensation and to reimburse
each such Agent for the
-25-
<PAGE> 83
reasonable invoiced out-of-pocket expenses (including reasonable counsel fees)
incurred by it in connection with its services hereunder. The Issuer also
agrees to indemnify each of the Agents for, and to hold each harmless against,
any loss, liability or expense (including, without limitation, the reasonable
fees and expenses of its legal counsel), incurred without negligence or bad
faith, arising out of or in connection with its acting as such Agent hereunder,
as well as the reasonable costs and expenses of defending against any claim of
liability in connection with its acting in its capacity as Agent hereunder,
provided that such Agent has given the Issuer prompt written notice of any
claim in respect of which it intends to seek indemnity hereunder. The
obligations of the Issuer with respect to the payment of counsel fees pursuant
to this Section 11(a) shall be limited to fees of one counsel for all
indemnified parties to the extent that there is a common claim. The obligations
of the Issuer under this Section 11(a) shall survive payment of all the
Securities, the resignation or removal of any Agent hereunder and/or the
termination of this Agreement.
(b) Agency. In acting under this Agreement and in connection with the
Securities, the Agents are acting solely as agents of the Issuer and do not
assume any obligation or relationship of agency or trust, for or with any of
the owners or holders of the Securities, except that all funds held by the
Fiscal Agent or any Paying Agent for the payment of principal of and any
interest on the Securities shall be held in trust for such owners or holders,
as the case may be, as set forth herein and in the Securities; provided,
however, that monies held in respect of the Securities remaining unclaimed at
the end of two years after the principal of all the Securities shall have
become due and payable (whether at maturity, upon call for redemption or
otherwise) and monies sufficient therefor shall have been duly made available
for payment shall, together with any interest made available for payment
thereon, be repaid to the Issuer. Upon such repayment, the aforesaid trust with
respect to the Securities shall terminate and all liability of the Fiscal Agent
and Paying Agents with respect to such funds shall thereupon cease.
(c) Advice of Counsel. Each of the Agents may consult with its
respective counsel or other counsel satisfactory to it, and the opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken or suffered by it hereunder in good faith and without
negligence and in accordance with such opinion.
(d) Reliance. Each Agent shall be protected and shall incur no
liability for or in respect of any action taken or omitted to be taken or any
thing suffered by it in reliance upon any Note, notice, direction, consent,
certificate, affidavit, statement, or other paper or document believed by it,
in good faith and without negligence, to be genuine and to have been passed or
signed by the proper parties.
(e) Interest in Securities, etc. The Fiscal Agent, any Paying Agent or
Transfer Agent and their respective officers, directors and employees may
become the owners of, or acquire any interest in, any Securities, with the same
rights that they would have if they were not the Fiscal Agent, such other
Paying Agent or Transfer Agent or such
-26-
<PAGE> 84
person, and may engage or be interested in any financial or other transaction
with the Issuer, and may act on, or as depository, trustee or agent for, any
committee or body of holders of Securities or other obligations of the Issuer,
as freely as if they were not the Fiscal Agent, such other Paying Agent or
Transfer Agent or such person.
(f) Non-Liability for Interest. Subject to any agreement in writing
between the Issuer and the Fiscal Agent or Paying Agent to the contrary, the
Fiscal Agent or Paying Agent shall not be under any liability for interest on
monies at any time received by it pursuant to any of the provisions of this
Agreement or the Securities.
(g) Certifications. Whenever in the administration of this Agreement
any Agent shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder or thereunder, such Agent
(unless other evidence be herein specifically prescribed) may, in the absence
of bad faith or negligence on its part, rely upon a certificate signed by an
Authorized Officer of the Issuer, as the case may be, and delivered to such
Agent.
(h) No Implied Obligations. The duties and obligations of each Agent
shall be determined solely by the express provisions of this Agreement, and
each Agent shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against such Agent.
(i) Recitals; Representations. The recitals contained herein and in
the Securities (except in the Fiscal Agent's certificate of authentication on
the Securities) shall be taken as the statements of the Issuer, and none of the
Agents assumes any responsibility for the correctness of the same. None of the
Agents makes any representation as to the validity or sufficiency of this
Agreement, any offering materials or the Securities, except, with respect to
the Fiscal Agent only, for the Fiscal Agent's due authorization, execution and
delivery of this Agreement. None of the Agents shall be accountable for the use
or application by the Issuer of the proceeds of any Securities.
(j) Orders, Certificates, etc. Unless herein or in the Securities
otherwise specifically provided, any order, certificate, notice, request,
direction or other communication from the Issuer made or given by it under any
provision of this Agreement shall be sufficient if signed by an Authorized
Officer or any attorney-in-fact of the Issuer.
-27-
<PAGE> 85
12. Indemnification.
The Holders agree to indemnify the Agents and their Affiliates (to the
extent not reimbursed by the Issuer), ratably according to the respective
principal amounts of the Notes then held by each of them, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against any Agent
in any way relating to or arising out of this Agreement or any action taken or
omitted by any Agent under this Agreement, provided that no Holder shall be
liable for (and shall promptly reimburse the Issuer for, upon a disposition so
finding) any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from any Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Holder agrees to reimburse the Agents
promptly after demand for its ratable share of any reasonable out-of-pocket
expenses (including reasonable counsel fees) incurred by the Agents in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that the Agents are not
reimbursed for such expenses by the Issuer.
13. Resignation and Appointment of Successor.
(a) Fiscal Agent and Paying Agent. The Issuer agrees, for the benefit
of the holders from time to time of the Securities, that there shall at all
times be a Fiscal Agent hereunder which shall be a bank or trust company
organized or licensed and doing business under the laws of the United States of
America or the State of New York, in good standing and having an established
place of business in the Borough of Manhattan, The City of New York, and
authorized under such laws to exercise corporate trust powers, until all the
Securities authenticated and delivered hereunder (i) shall have been delivered
to the Fiscal Agent for cancellation or (ii) become due and payable and monies
sufficient to pay the principal of and any interest on the Securities shall
have been made available for payment and either paid or returned to the Issuer
as provided herein and in such Securities.
(b) Resignation. The Fiscal Agent may at any time resign by giving
written notice to the Issuer of such intention on its part, specifying the date
on which its desired resignation shall become effective, provided that such
date shall not be less than three (3) months from the date on which such notice
is given, unless the Issuer agrees to accept shorter notice. The Fiscal Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed on behalf of the Issuer and specifying such removal and the date
when it shall become effective. Notwithstanding the dates of effectiveness of
-28-
<PAGE> 86
resignation or removal, as the case may be, to be specified in accordance with
the preceding sentences, such resignation or removal shall take effect only
upon the appointment by the Issuer, as hereinafter provided, of a successor
Fiscal Agent (which, to qualify as such, shall be a bank or trust company
organized or licensed and doing business under the laws of the United States of
America or of the State of New York, in good standing and having and acting
through an established place of business in the Borough of Manhattan, The City
of New York, authorized under such laws to exercise corporate trust powers and
having a combined capital and surplus in excess of US$100,000,000) and the
acceptance of such appointment by such successor Fiscal Agent.
(c) Successors. In case at any time the Fiscal Agent (or any Paying
Agent if such Paying Agent is the only Paying Agent located in a place where,
by the terms of the Securities or this Agreement, the Issuer is required to
maintain a Paying Agent) shall resign, or shall be removed, or shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or shall file
a voluntary petition in bankruptcy or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver of all or any substantial
part of its property, or shall admit in writing its inability to pay or meet
its debts as they severally mature, or if a receiver of it or of all or any
substantial part of its property shall be appointed, or if an order of any
court shall be entered approving any petition filed by or against it under the
provisions of applicable receivership, bankruptcy, insolvency, reorganization
or other similar legislation, or if any public officer shall take charge or
control of it or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Fiscal Agent or Paying Agent, as the
case may be, qualified as aforesaid, shall be appointed by the Issuer by an
instrument in writing, filed with the successor Fiscal Agent or Paying Agent,
as the case may be, and the predecessor Fiscal Agent or Paying Agent, as the
case may be. Upon the appointment as aforesaid of a successor Fiscal Agent or
Paying Agent, as the case may be, and acceptance by such successor of such
appointment, the Fiscal Agent or Paying Agent, as the case may be, so succeeded
shall cease to be Fiscal Agent or Paying Agent, as the case may be, hereunder.
If no successor Fiscal Agent or other Paying Agent, as the case may be, shall
have been so appointed by the Issuer and shall have accepted appointment as
hereinafter provided, and, in the case of such other Paying Agent, if such
other Paying Agent is the only Paying Agent located in a place where, by the
terms of the Securities or this Agreement, the Issuer is required to maintain a
Paying Agent, then any holder of a Note who has been a bona fide holder of a
Note for at least six months (which Note, in the case of such other Paying
Agent, is one of the Securities referred to in this sentence), on behalf of
himself and all others similarly situated, or the Fiscal Agent, may petition
any court of competent jurisdiction for the appointment of a successor agent.
The Issuer shall give prompt written notice to each other Paying Agent of the
appointment of a successor Fiscal Agent.
(d) Acknowledgment. Any successor Fiscal Agent appointed hereunder
shall execute, acknowledge and deliver to its predecessor and to the Issuer an
instrument accepting such appointment hereunder, and thereupon such successor
Fiscal Agent, without
-29-
<PAGE> 87
any further act, deed or conveyance, shall become vested with all the
authority, rights, powers, trusts, immunities, duties and obligations of such
predecessor with like effect as if originally named as Fiscal Agent hereunder,
and such predecessor, upon payment of its compensation and reimbursement of its
disbursements then unpaid, shall thereupon become obligated to transfer,
deliver and pay over, and such successor Fiscal Agent shall be entitled to
receive, all monies, securities, books, records or other property on deposit
with or held by such predecessor as Fiscal Agent hereunder.
(e) Merger, Consolidation, etc. Any corporation into which the Fiscal
Agent hereunder may be merged, or any corporation resulting from any merger,
conversion or consolidation to which the Fiscal Agent shall be a party, or any
corporation to which the Fiscal Agent shall sell or otherwise transfer all or
substantially all the assets and business of the corporate trust business of
the Fiscal Agent, provided that it shall be qualified as aforesaid, shall be
the successor Fiscal Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
14. Payment of Taxes.
(a) The Issuer will pay all Taxes which may be imposed by the Republic
of Argentina with respect to this Agreement or the issuance of the Securities.
For the purposes of this Section 14, the following terms have the
following meanings:
"Taxes" means any and all present and future taxes, duties, levies,
imposts, deductions, charges or withholdings of any nature with respect to
any payment by the Issuer pursuant to this Agreement or under any Note and
all liabilities with respect thereto imposed by the Republic of Argentina
or any political subdivision or taxing authority thereof or therein
(including, without limitation, the Argentine Personal Property Tax
established by Argentine Law No. 23,966 as amended and implemented (the
"Personal Property Tax")). For the avoidance of doubt, "taxes" as defined
in this paragraph do not include net income taxes imposed on any Holder by
reason of its investment in Notes.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise, property or value added taxes, or similar charges or
levies which arise from any payment made pursuant to this Agreement or
under any Note or from the execution, delivery, registration or
enforcement of, or otherwise with respect to, this Agreement or any Note
imposed by the Republic of Argentina or any political subdivision or
taxing authority thereof or therein.
-30-
<PAGE> 88
(b) Any and all payments by the Issuer under this Agreement or under
the Notes shall be made free and clear of and without deduction or withholding
for any Taxes or Other Taxes. If the Issuer shall be required by law to deduct
or withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder or under any Note, (i) the sum payable shall be increased by such
additional amounts ("Additional Amounts") as may be necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section 14), the
Paying Agent receives an amount equal to the sum it would have received had no
such deductions or withholdings been made, (ii) the Issuer shall make such
deductions or withholdings and (iii) the Issuer shall pay the full amount
deducted or withheld to the relevant taxation authority or other authority in
accordance with applicable law.
(c) Subject to the compliance by each Holder and each Agent with the
covenant in Section 14(e), the Issuer shall indemnify each Holder and each
Agent for the full amount of Taxes or Other Taxes (including, without
limitation, any taxes imposed by any jurisdiction on amounts payable under this
Section 14, whether or not correctly or legally imposed or asserted, imposed on
or paid by such Holder or Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such
Holder or Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Issuer shall furnish to the Fiscal Agent the original or a certified
copy of a receipt evidencing payment thereof.
(e) Each Holder and each Agent shall, at the request of the Issuer,
use reasonable efforts (consistent with applicable legal and regulatory
restrictions) to file any certificate or document requested by the Issuer if
the making of such a filing would eliminate or reduce any Additional Amounts
payable to or for the account of any Holder or Agent pursuant to this Section
14 that may thereafter accrue and would not, in the judgment of such Holder or
Agent, require such Holder or Agent to disclose any confidential or proprietary
information or be otherwise disadvantageous to such Holder or Agent.
The Issuer hereby waives any right it may have under Argentine law to
seek reimbursement (by way of any legal means available to the Issuer,
including, without limitation, deduction from payments of principal or interest
on the Notes) from the Holders or beneficial owner of any interest therein or
rights in respect thereof of any amounts paid by the Issuer under the Personal
Property Tax.
-31-
<PAGE> 89
15. Meetings of Holders; Modification and Waiver.
(a) Calling Meetings. The Fiscal Agent or the Issuer shall, upon the
request of the Holders of at least five percent in aggregate principal amount
of the Notes at the time Outstanding, or the Issuer or the Fiscal Agent at its
discretion, may, call a meeting of the Holders at any time and from time to
time, to make, give or take any request, demand, authorization, direction,
notice, consent, waiver or other action provided by the Notes to be made, given
or taken by the Holders. With respect to all matters not contemplated in the
Fiscal Agency Agreement, meetings of Holders shall be held in accordance with
the Negotiable Obligations Law. The meetings shall be held in Buenos Aires;
provided, however, that the Issuer or the Fiscal Agent shall hold any such
meetings simultaneously in Buenos Aires and in The City of New York by any
means of telecommunication which permits the participants to hear and to speak
to each other. In any case, subject to the foregoing, meetings shall be held at
such time and at such place as the Issuer or the Fiscal Agent shall determine.
If a meeting is being held pursuant to a request of Holders, the agenda for the
meeting shall be as determined in the request and such meeting shall be
convened within forty (40) days from the date such request is received by the
Fiscal Agent or the Issuer, as the case may be. Meetings called to adopt a
resolution are subject to a first and second call, the second to occur upon the
failure of the first. Notice of any meeting of Holders (which shall include the
date, place and time of the meeting, the agenda therefor and the requirements
to attend) shall be given, in the case of a first call, not less than ten (10)
days nor more than thirty (30) days prior to the date fixed for the meeting
and, in the case of a second call notice will be given not less than eight days
prior to the date of such meeting. Each such notice shall be given in the
Official Gazette of Argentina and, while there are Holders domiciled in
Argentina, in a newspaper having general circulation in Argentina and also in
the manner provided for hereunder and any publication of such notices shall be,
in the case of a first call, for five consecutive business days in each place
of publication and, in the case of a second call, for three consecutive
business days in each place of publication. In addition, the Fiscal Agent shall
transmit such notice to each Holder at its address on the register maintained
pursuant to Paragraph 3 on the reverse of this Note.
Both the first and second call for a meeting of Holders may be called
simultaneously, in which case the second call, upon the failure of the first,
may be held within an hour of the first. Each Note will entitle the Holder
thereof to one vote per unit of principal amount of the currency in which such
Note has been issued in any Holders' meeting.
In case at any time the Holders of at least 5% in aggregate principal
amount of the Notes at the time Outstanding shall have requested the Fiscal
Agent or the Issuer to call a meeting of the Holders for any purpose specified
in the Notes, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and neither the Fiscal Agent nor the
Issuer shall have made the first publication of the notice of such meeting and
mailed notice of such meeting to Holders within forty (40) days after receipt
of
-32-
<PAGE> 90
such request or shall thereafter have proceeded to cause the meeting to be
held, then the Holders of the Notes in the amount above specified may request
the CNV or the relevant courts to convene such meeting.
Any meeting of Holders duly called at which a quorum is present may be
adjourned once to a date within thirty (30) days from the date of such meeting
by persons entitled to vote a majority in principal amount of the Notes
represented at the meeting; and the meeting may be held as so adjourned without
further notice.
(b) Persons Entitled to Vote at Meetings. To be entitled to vote at
any meeting of Holders, a person shall be (1) a Holder, or (2) a person duly
appointed by an instrument in writing as proxy for a Holder or Holders by such
Holder or Holders.
The only persons who shall be entitled to be present or to speak at
any meeting of Holders shall be the persons entitled to vote at such meeting,
any representatives of the Fiscal Agent and any representatives of the Issuer.
Decisions shall be made by the affirmative vote of the Holders of more than 50%
in aggregate principal amount of the Notes at the time Outstanding present or
represented at a meeting of such Holders at which a quorum is present;
provided, however, that the unanimous consent or the unanimous affirmative vote
of the Holders shall be required to adopt a valid decision on any of the
matters specified in the following four clauses:
(i) change the Maturity Date of the principal of, or any instalment
of principal or interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof or reduce the amount of the principal of any Security
which would be due and payable upon a declaration of acceleration of the
Maturity Date thereof, or the coin or currency in which, any Security or
any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Maturity Date thereof (or, in the case of redemption, on or after the
redemption date), or
(ii) reduce the percentage in principal amount of Outstanding Notes,
the consent of whose Holders is required for any waiver (of compliance
with certain provisions of this Agreement or certain defaults hereunder
and their consequences) provided for in this Agreement, or
(iii) reduce the percentage in principal amount of the Outstanding
Securities, the consent of the Holders of which is required for the
adoption of a resolution at a meeting of Holders held pursuant to this
Section 15, or the quorum required at any such meeting of Holders at which
a resolution is adopted or the percentage in principal amount of
Outstanding Securities the Holders of which are entitled to request the
calling of a meeting of Holders, or
-33-
<PAGE> 91
(iv) modify any of the provisions of this Section 15, except to
increase any such percentage or to provide that certain provisions of this
Agreement cannot be modified or waived without the consent of the Holder
of each Outstanding Security affected thereby.
(c) Required Quorums. Required Quorums. The quorum at any meeting to
adopt a resolution with respect to the Securities will be Persons who are
Holders of or who represent at least 60% in aggregate principal amount of the
Outstanding Securities; provided, however, that at any such reconvened meeting
adjourned for lack of the requisite quorum, the quorum will be Persons holding
or representing at least 30% aggregate principal amount of the Securities at
the time Outstanding. Any instrument given by or on behalf of any Holder in
connection with any consent to any such waiver or change will be irrevocable
once given and will be conclusive and binding on all subsequent Holders of such
Security.
(d) Amendments. Amendments. The Issuer and the Fiscal Agent may,
without the vote or consent of any Holder, amend this Agreement or the Notes
for the purpose of (a) adding to the covenants of the Issuer for the benefit of
the Holders, or (b) surrendering any right or power conferred upon the Issuer,
or (c) securing the Notes pursuant to the requirements hereof, thereof or
otherwise, or (d) evidencing the succession to the Issuer and the assumption by
such successor of the covenants and obligations of the Issuer herein and in the
Notes as permitted by this Agreement and the Notes, or (e) modifying the
restrictions on, and procedures for, resale and other transfers of the Notes to
the extent required by any change in applicable law or regulation (or the
interpretation thereof) or in practices relating to the resale or transfer of
restricted securities generally, or (f) accommodating the issuance, if any, of
Notes in book-entry or certificated form and matters related thereto, or (g)
curing any ambiguity or curing, correcting or supplementing any provision
contained herein or in the Notes in a manner which does not adversely affect
the interest of a Holder in any material respect, or (h) effecting any
amendment which the Issuer and the Fiscal Agent may determine and which shall
not adversely affect the interest of any Holder.
It shall not be necessary for the vote or consent of the Holders to
approve the particular form of any proposed modification, amendment,
supplement, request, demand, authorization, direction, notice, consent, waiver
or other action but it shall be sufficient if such vote or consent shall
approve the substance thereof.
The Fiscal Agent shall incur no liability in relying upon written
advice of counsel, who may be counsel to the Issuer, or a certificate of an
Authorized Officer of the Issuer, as conclusive evidence that (i) any amendment
of this Agreement or the Notes pursuant to this Section 15 and Paragraph 17 of
the Notes complies with the provisions of the Notes and this Agreement and (ii)
the Fiscal Agent is authorized by the terms of the Notes and this Agreement to
execute such amendment.
-34-
<PAGE> 92
(e) Binding Nature of Amendments, Notices, Notations, etc. Except as
provided above, any modifications, amendments or waivers to the terms and
conditions of the Securities will be conclusive and binding on all Holders,
whether or not they have given such consent or were present at any meeting, and
whether or not notation of such modifications, amendments or waivers is made
upon the Securities if duly passed at a meeting convened and held in accordance
with the provisions of the Negotiable Obligations Law. Notice of any
modification or amendment of, supplement to, or request, demand, authorization,
direction, notice, consent, waiver or other action with respect to the
Securities or this Agreement (other than for purposes of curing any ambiguity
or of curing, correcting or supplementing any defective provision hereof or
thereof) shall be given to each Holder affected thereby, in all cases as
provided in the Securities.
(f) "Outstanding" Defined. For purposes of the provisions of this
Agreement and the Securities, any Note authenticated and delivered pursuant
to this Agreement shall, as of any date of determination, be deemed to be
"Outstanding", except:
(i) Securities theretofore canceled by the Fiscal Agent or delivered
to the Fiscal Agent for cancellation;
(ii) Securities which have been called for redemption in accordance
with their terms or which have become due and payable at maturity or
otherwise and with respect to which monies sufficient to pay the principal
thereof and any interest thereon shall have been paid or duly provided
for;
(iii) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to this
Agreement; or
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
for quorum purposes or have consented to or voted in favor of any request,
demand, authorization, direction, notice, consent, waiver, amendment,
modification or supplement hereunder, Securities owned directly or indirectly
by the Issuer or any of its affiliates shall be disregarded and deemed not to
be Outstanding; except that, in determining whether the Fiscal Agent shall be
protected in making such calculation or in relying upon any such request,
demand, authorization, direction, notice, consent, waiver, amendment,
modification or supplement, only Securities which a Responsible Officer of the
Fiscal Agent knows to be so owned shall be disregarded. "Responsible Officer"
of the Fiscal Agent shall mean any officer within the corporate trust
department of the Fiscal Agent located at the Fiscal Agent's Corporate Trust
Office.
(g) Determination of Voting Rights; Conduct of Meetings. The Fiscal
Agent may make such reasonable and customary regulations as it may deem
advisable for any meeting of Holders in regard to the proof of appointment of
proxies in respect of the Holders, the record date for determining the
registered owners of Notes who are entitled to
-35-
<PAGE> 93
vote at such meeting (which record date shall be set forth in the notice
calling such meeting and which shall not be less than 30 nor more than 60 days
prior to such meeting) the adjournment of such meeting, the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall deem appropriate. The
appointment of any proxy shall be proved by having the signature of the person
executing the proxy certified by a court, a notary public or a bank; provided,
however, that the members of the Board of Directors, Syndics and employees of
the Issuer cannot act as proxy for the Holders. The chairman of the meeting
shall be the Fiscal Agent or a Syndic, or, if the Fiscal Agent or a Syndic can
not act as chairman, a representative of the Company's supervising authority
(which currently is the CNV), or a person appointed by a court. The chairman of
the meeting shall have no right to vote, except as a Holder or proxy. A record
of the proceedings of each meeting of Holders shall be prepared, and one copy
of such record shall be delivered to the Issuer and another to the Fiscal Agent
to be preserved by the Fiscal Agent.
16. Notice of Default.
The Fiscal Agent shall, to the extent required by the Issuer in
accordance with Paragraph 13 of the form of Note attached as Exhibit A hereto,
give written notice of the occurrence of any Event of Default (as defined in
such Paragraph 13) by the Issuer to the Holders promptly after receipt of
notice thereof from the Issuer.
17. Governing Law.
The Negotiable Obligations Law will govern the requirements for the
Notes to qualify as negotiable obligations thereunder while such law, together
with Argentine Law No 19,550, as amended (the "Argentine Business Corporations
Law"), and other applicable Argentine laws and regulations, will govern the
capacity and corporate authorization of the Issuer to execute and deliver the
Notes and the approval of the public offering of Notes by the CNV. All other
matters in respect of the Notes will be governed by and construed in accordance
with the law of the State of New York, United States of America.
18. Notices, Etc.
All notices and other communications provided for hereunder, except as
herein otherwise specifically provided, shall be in writing (including
telecopier, telegraphic
-36-
<PAGE> 94
or telex communication) and mailed, telecopied, telegraphed, telexed or
delivered, if to the Issuer, at its address at Don Bosco 3672, piso 5, Buenos
Aires, Argentina, Telephone No. (541) 865-9076, Telecopier No. (541) 865-7154,
Attention: Jorge Garcia; if to any initial Holder, at its address for notices
specified opposite its name in Schedule I hereto; if to any other Holder, at
its address for notices specified in the Register; and if to the Fiscal Agent,
at its address at 2001 Ross Avenue, Suite 4800, Dallas, Texas 75201, Telephone
No. (214) 979-2767, Telecopier No. (214) 754-0171, Attention: Angela Aldridge;
or, as to the Issuer or the Fiscal Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Issuer and the Fiscal Agent. All such notices and
communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mail, telecopied, delivered to the telegraph
company or confirmed by telex answerback, respectively, except that notices and
communications to the Fiscal Agent pursuant to Sections 8 and 9 hereof and
under the Notes shall not be effective until received by the Fiscal Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.
If the Fiscal Agent shall receive any notice or demand addressed to
the Issuer by a Holder, the Fiscal Agent shall promptly forward such notice or
demand to the Issuer.
19. Submission to Jurisdiction; Service of Process.
(a) The Issuer hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement, the Notes or the
transactions contemplated hereby. The Issuer irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(b) The Issuer hereby irrevocably designates, appoints, authorizes and
empowers as its agent for service of process, CT Corporation System at its
offices currently located at 1633 Broadway, New York, New York 10019 to accept
and acknowledge for and on behalf of the Issuer service of any and all process,
notices or other documents that may be served in any suit, action or proceeding
relating hereto in any New York state or Federal court sitting in the State of
New York.
(c) In lieu of service upon its agent, the Issuer consents to process
being served in any suit, action or proceeding relating hereto, to the extent
permitted by applicable
-37-
<PAGE> 95
law, by mailing a copy thereof by registered or certified air mail, postage
prepaid, return receipt requested, to its address designated pursuant to
Section 18 hereof. To the extent permitted by applicable law, each party hereto
agrees that such service (1) shall be deemed in every respect effective service
of process upon it in any such suit, action or proceeding and (2) shall be
taken and held to be valid personal service upon and personal delivery to it.
(d) Nothing in this Section 19 shall affect the right of any party
hereto to serve process in any manner permitted by law, or limit any right that
any party hereto may have to bring proceedings against any other party hereto
in the courts of any jurisdiction or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.
(e) The Issuer agrees that a final judgment against it shall be final
and conclusive and may be enforced in any other jurisdiction other than any New
York State court sitting in New York City or any United States Federal District
court in the Southern District of New York, and that a certified or otherwise
duly authenticated copy of the judgment shall be conclusive evidence of the
fact and amount of its indebtedness.
20. Waiver of Sovereign Immunity.
To the extent that the Issuer has or hereafter may be entitled to
claim or may acquire, for itself or any of its assets, any immunity from suit,
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, or
otherwise) with respect to itself or its property, it hereby irrevocably waives
such immunity in respect of its obligations hereunder and under the Notes to
the fullest extent permitted by applicable law and, without limiting the
generality of the foregoing, agrees that the waivers set forth in this Section
shall be effective to the fullest extent now or hereafter permitted under the
Foreign Sovereign Immunities Act of 1976 of the United States and are intended
to be irrevocable for purposes of such Act to the extent permitted thereby.
21. Judgment Currency.
(a) If for the purposes of enforcing the obligations of the Issuer
under the Fiscal Agency Agreement or hereunder it is necessary to convert a sum
due from the Issuer in Dollars into another currency, the parties hereto agree,
to the fullest extent permitted by applicable law, that the rate of exchange
used shall be that at which in accordance with normal banking procedures the
Holders could purchase Dollars with such currency at or about 11:00 A.M. (New
York City time) on the Domestic Business Day preceding that on which final
judgment is given. To the fullest extent permitted by applicable law, the
obligations in respect of any sum due to the Fiscal Agent or any Holder under
the Fiscal
-38-
<PAGE> 96
Agency Agreement or hereunder shall, notwithstanding any adjudication expressed
in a currency other than Dollars, be discharged only to the extent that on the
Domestic Business Day following receipt by the Fiscal Agent or such Holder of
any sum adjudged to be so due in such other currency the Fiscal Agent or such
Holder may in accordance with normal banking procedures purchase Dollars with
such other currency; if the amount of Dollars so purchased is less than the sum
originally due to the Fiscal Agent or such Holder in Dollars, the Issuer
agrees, to the fullest extent permitted by applicable law, as a separate
obligation and notwithstanding any such adjudication, to indemnify the Fiscal
Agent or such Holder against such loss, and if the amount of Dollars so
purchased exceeds the sum originally due to the Fiscal Agent or such Holder,
the Fiscal Agent or such Holder shall remit such excess to the Issuer.
(b) All amounts due under the Fiscal Agency Agreement and hereunder
shall be payable in Dollars. If due to exchange controls in the Republic of
Argentina or restrictions on the transfer of foreign currency outside the
Republic of Argentina or for any other reason the Issuer shall be prevented
from paying when due in Dollars any amount owing under the Fiscal Agency
Agreement or hereunder, the Issuer shall deliver to the Fiscal Agent External
Bonds of the Republic of Argentina denominated in Dollars ("Bonex") in an
amount sufficient for the Fiscal Agent to acquire from the sale thereof in New
York City such amount of Dollars net of any commissions, fees or other costs.
The Fiscal Agent shall sell such Bonex promptly after their delivery to it and,
in any event, within 30 days after each such delivery, unless the Issuer shall,
at the Fiscal Agent's request, otherwise agree in writing. The Issuer's
obligations under the Fiscal Agency Agreement and hereunder shall be discharged
on account of any such delivery and sale only to the extent of the net Dollars
received by the Fiscal Agent therefrom and only on the date of such receipt.
22. Waiver of Jury Trial.
Each of the Issuer, each Agent and the Holders hereby irrevocably
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to
this Agreement or the Notes or the actions of the Fiscal Agent or any Holder in
the negotiation, administration, performance or enforcement thereof.
23. Confidentiality.
No Agent shall disclose any Confidential Information to any other
Person without the consent of the Issuer, other than (a) to another Agent or to
any Holder or to such Holder's Affiliates and their officers, directors,
employees, agents and advisors who have a need to know such information and to
actual or prospective transferees of Notes, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process
-39-
<PAGE> 97
and (c) as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking; provided, however, that if any Agent is
required to disclose any Confidential Information pursuant to clause (b) or (c)
above, it shall give notice thereof to the Issuer prior to making such
disclosure and shall use reasonable efforts to cooperate with the Issuer (at
the Issuer's expense) in the Issuer's attempt to seek a protective order with
respect to such disclosure or to limit such required disclosure.
24. Use of English Language.
Any translation of this Agreement into another language shall have no
interpretive effect. All documents or notices to be delivered pursuant to or in
connection with this Agreement shall be in the English language or, if any such
document or notice is not in the English language, accompanied by an English
translation thereof (except for the notes to the Issuer's quarterly financial
statements which may be in the Spanish Language), and the English language
version of any such document or notice shall control for purposes hereof,
provided, however, that the Spanish version of the Notes, or the certified
translations of all documents or notices to be delivered pursuant to or in
connection with this Agreement shall prevail for purposes of CNV regulation and
supervision.
25. Headings.
The section headings herein are for convenience only and shall not
affect the construction hereof.
26. Counterparts.
This Agreement may be executed in one or more counterparts, and by
each party separately on a separate counterpart, and each such counterpart when
executed and delivered shall be deemed to be an original. Such counterparts
shall together constitute one and the same instrument.
-40-
<PAGE> 98
IN WITNESS WHEREOF, the parties hereto have executed this Fiscal
Agency Agreement as of the date first above written.
COMPANIA DE INVERSIONES DE ENERGIA S.A.
By /s/
-------------------------------------
Name:
Title:
SOCIETE GENERALE, SOUTHWEST AGENCY
as Fiscal Agent
By /s/ MARK A. COX
-------------------------------------
Name: Mark A. Cox
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
as Paying Agent
By /s/ MARK A. COX
-------------------------------------
Name: Mark A. Cox
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
as Transfer Agent
By /s/ MARK A. COX
-------------------------------------
Name: Mark A. Cox
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
as Co-Registrar
By /s/ MARK A. COX
-------------------------------------
Name: Mark A. Cox
Title: Vice President
-41-
<PAGE> 99
BANCO SUPERVIELLE
SOCIETE GENERALE S.A.,
as Paying Agent
By /s/
-------------------------------------
Name:
Title:
BANCO SUPERVIELLE
SOCIETE GENERALE S.A.,
as Transfer Agent
By /s/
-------------------------------------
Name:
Title:
BANCO SUPERVIELLE
SOCIETE GENERALE S.A.,
as Registrar
By /s/
-------------------------------------
Name:
Title:
-42-
<PAGE> 100
EXHIBIT A
FORM OF NOTE
[INCLUDE IF NOTE IS A GLOBAL NOTE -- THIS NOTE IS A GLOBAL NOTE WITHIN
THE MEANING OF THE FISCAL AGENCY AGREEMENT REFERRED TO HEREINAFTER. THIS GLOBAL
NOTE MAY NOT BE EXCHANGED, IN WHOLE OR IN PART, FOR A NOTE REGISTERED IN THE
NAME OF ANY PERSON OTHER THAN A DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES SET FORTH IN SECTION 6 OF THE FISCAL AGENCY AGREEMENT,
AND MAY NOT BE TRANSFERRED, IN WHOLE OR IN PART, EXCEPT IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 7(B) OF THE FISCAL AGENCY AGREEMENT.
BENEFICIAL INTERESTS IN THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH SECTION 7(B) OF THE FISCAL AGENCY AGREEMENT.]
[INCLUDE IF NOTE IS A GLOBAL NOTE -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (55 WATER STREET, NEW YORK, NEW YORK), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
[The following is the form of legend to be included on Restricted Global Note,
Regulation S Global Note and restricted definitive Notes (unless, pursuant to
section 7(h) of the Fiscal Agency Agreement, the Issuer determines that the
legend may be removed)]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
A-1
<PAGE> 101
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
A-2
<PAGE> 102
COMPANIA DE INVERSIONES DE ENERGIA S.A.
Incorporated in Argentina as a sociedad anonima
(a corporation with limited liability) on December 14, 1992,
having legal domicile at Don Bosco 3672, piso 5, Buenos
Aires, Argentina, registered with the Public
Registry of
Buenos Aires on December 21, 1992, under the
No. 12,484, Book No.112, Volume "A" of
Sociedades Anonimas with a term
expiring on December 4, 2091.
Floating Rate Notes Due April 22, 2002
No. ___________ Principal Amount: up to US$220,000,000
CUSIP: ___________
COMPANIA DE INVERSIONES DE ENERGIA S.A., a sociedad anonima
organized, existing and incorporated under the laws of the Republic of
Argentina (herein called the "Issuer", which term includes any successor Person
under the Fiscal Agency Agreement hereinafter referred to), for value received,
hereby promises to pay to _____________ or registered assigns, [the principal
sum of ________________ United States dollars (US$_______________)*] on April
22, 2002 (the "Maturity Date") and, in accordance with the applicable
provisions on the reverse of this Note, to pay interest thereon from April 22,
1997 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, in arrears on the last day of each Interest Period
and, if such Interest Period has a duration of more than three months, on the
three-month anniversary of the first day of such Interest Period, and on the
Maturity Date or any earlier Redemption Date, commencing July 22, 1997 (each an
"Interest Payment Date"), at the interest rate determined in accordance with
Paragraphs 5 through 6 on the reverse of this Note, until the principal hereof
is paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Fiscal Agency Agreement hereinafter referred to, be paid to the person (the
"Registered Holder" or "Holder") in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the third
Eurodollar Business Day next preceding such Interest Payment Date (each a
"Regular Record Date"). Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
- ---------
* In global Securities, the bracketed language will be replaced by "such
principal sum, not exceeding two hundred twenty million United States
dollars (US$220,000,000), as is duly endorsed in the third column of
Schedule A attached to this certificate."
A-3
<PAGE> 103
Record Date and may either be paid to the person in whose name this Note (or
one or more predecessor Notes) is registered at the close of business on a
special record date for the payment of such interest to be fixed by the Issuer,
notice whereof shall be given to Holders not less than ten (10) days prior to
such special record date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange.
All computations of interest shall be made by the Fiscal Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest is payable. Each determination by the Fiscal Agent of
an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
Payments of principal and of interest on this Note shall be payable at
the agencies of the Issuer in the Borough of Manhattan, The City of New York
and in the city of Buenos Aires, Argentina, each maintained for such purpose,
and at the offices of such other Paying Agents as the Issuer shall have
appointed pursuant to the Fiscal Agency Agreement. Payments of principal of the
Notes shall be made against surrender of the Notes. In addition, payments of
interest on this Note may, at the option of the Issuer, be made, in accordance
with the foregoing and subject to applicable laws and regulations, by check
mailed on or before the due date for such payment to the person entitled
thereto at such person's address appearing on the aforementioned register.* The
Issuer covenants that until this Note has been delivered to the Fiscal Agent
for cancellation, or monies sufficient to pay the principal of and interest on
this Note have been duly provided for as provided herein, it will at all times
maintain offices or agencies in the Borough of Manhattan, The City of New York
for the payment of the principal of and interest on the Notes as herein
provided.
This Note constitutes an Obligacion Negociable under Argentine Law No.
23,576, as amended (the "Negotiable Obligations Law"), is entitled to the
benefits set forth therein and is subject to the procedural requirements
thereof. In the case of an occurrence of a default by the Issuer in the payment
of any amount due under this Note, the Holder of this Note is entitled to take
summary judicial proceedings (accion ejecutiva) to recover payment of any such
amount.
This Note is issued in the English language and contains a Spanish
translation of its original English text. The Issuer certifies that the Spanish
text of this Note is a true and accurate translation.
- ---------
* In global Securities, include the following bracketed language:
[; provided that any payment to be made in respect of this Note shall be
made in the manner agreed upon by the Issuer and the U.S. Depositary for
this Note.]
A-4
<PAGE> 104
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Note has been issued pursuant to a resolution of an extraordinary
meeting of stockholders of the Issuer passed on December 13, 1996, and
resolutions of the Board of Directors of the Issuer passed on December 13, 1996
and April 15, 1997.
Unless the certificate of authentication hereon has been executed by
the Fiscal Agent by manual signature of one of its authorized officers, this
Note shall not be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:
COMPANIA DE INVERSIONES DE ENERGIA S.A.
By
------------------------------------
Name:
Title: Director
By
------------------------------------
Name:
Title: Syndic
This is one of the Notes referred to in the within-mentioned Fiscal
Agency Agreement.
SOCIETE GENERALE, SOUTHWEST AGENCY
as Fiscal Agent
By FIRST TRUST NATIONAL ASSOCIATION
as Authenticating Agent
By
------------------------------------
Authorized Signatory
A-5
<PAGE> 105
FORM OF REVERSE
1. General. (a) This Note is one of a duly authorized issue of
Floating Rate Notes Due April 22, 2002 of the Issuer (the "Notes" or the
"Securities"), limited in aggregate principal amount to US$220,000,000 and
issued in accordance with a Fiscal Agency Agreement, dated as of April 18, 1997
(the "Fiscal Agency Agreement"), between the Issuer, Societe Generale,
Southwest Agency, as Fiscal Agent, Paying Agent, Transfer Agent and
Co-Registrar (herein called, in each such capacity, the "Fiscal Agent", the
"Paying Agent", the "Transfer Agent" or the "Co-Registrar", which terms include
any successor or successors in each such capacity under the Fiscal Agency
Agreement), and Banco Supervielle Societe Generale S.A., as Paying Agent,
Transfer Agent and Registrar in Argentina (herein called, in each such
capacity, the "Paying Agent", the "Transfer Agent" or "Registrar", which terms
include any successor or successors in each such capacity under the Fiscal
Agency Agreement), to which Fiscal Agency Agreement reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Issuer, the Fiscal Agent, the Registrar, the
Co-Registrar and the Holders and of the terms upon which the Notes are, and are
to be, authenticated and delivered. Copies of the Fiscal Agency Agreement are
on file and available for inspection at the office or agency of the Fiscal
Agent in the Borough of Manhattan, The City of New York and at the offices of
the Issuer in the city of Buenos Aires, Argentina. Capitalized terms used
herein which are defined in the Fiscal Agency Agreement but not otherwise
defined herein shall have the meanings assigned to such terms in the Fiscal
Agency Agreement.
(b) Rank of Obligations. This Note and all other such Notes constitute
unsecured and unsubordinated obligations of the Issuer and rank pari passu and
without any preference among themselves. The payment obligations of the Issuer
under this and all other such Notes, except as is or may be provided by
Argentine law, rank at least equally in priority of payment with all other
present and future unsecured and unsubordinated obligations of the Issuer from
time to time outstanding.
(c) Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding".
(d) Accounting Terms. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared in accordance with generally
accepted accounting principles as presented from time to time by the CNV
("Argentine Financial Reporting").
(e) Certain Defined Terms. Capitalized terms that are used but not
defined herein have the respective meanings assigned in the Fiscal Agency
Agreement. As used in this Note, except as otherwise expressly provided or
unless the context otherwise requires,
A-6
<PAGE> 106
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"Additional Amounts" has the meaning specified in Paragraph 7(b).
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person. For purposes of this definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by contract or otherwise provided,
however, that as to Perez Companc S.A., "affiliate" shall not include the
controlling shareholders of Perez Companc S.A. or Persons that are controlled,
directly or indirectly, by such controlling shareholders but are not controlled
directly or indirectly by Perez Companc S.A.
"Alternate Eurodollar Rate" means, for any for any Interest Period, an
interest rate per annum equal to the rate per annum obtained by dividing (a)
the average (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum, if such average is not such a multiple) of the rate per annum at which
deposits in Dollars are offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Eurodollar Business Days before the
first day of such Interest Period in an amount substantially equal to the
principal amount of the Outstanding Notes held by such Reference Bank for a
period equal to such Interest Period by (b) a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage for such Interest Period. The Alternate
Eurodollar Rate for any Interest Period shall be determined by the Fiscal Agent
on the basis of applicable rates furnished to and received by the Fiscal Agent
from the Reference Banks two Eurodollar Business Days before the first day of
such Interest Period, subject, however, to the provisions of Paragraph 6 of the
Notes.
"Alternative Basis Interest Rate" has the meaning specified in
Paragraph 6(d).
"Applicable Eurodollar Rate" has the meaning specified in Paragraph
6(c).
"Argentine Business Corporations Law" has the meaning specified in
Paragraph 24.
"Argentine Financial Reporting" has the meaning specified in Paragraph
1(d).
"Argentine Business Corporations Law" has the meaning specified in
Paragraph 24.
"Bonex" has the meaning specified in Paragraph 20(b).
A-7
<PAGE> 107
"Change of Control" has the meaning specified in Paragraph 9(a).
"CNV" means the Comision Nacional de Valores of the Republic of
Argentina.
"Consolidated" refers to the consolidation of accounts in accordance
with Argentine Financial Reporting; except that in Paragraph 12 such term
refers to the consolidation of accounts in accordance with Frozen Argentine
Financial Reporting.
"Consolidated Net Worth" means at any date the difference between
total assets and total liabilities, as the same would appear on a consolidated
balance sheet of the Issuer and its Subsidiaries at such date prepared in
accordance with Frozen Argentine Financial Reporting.
"Court Days" means any day on which courts in the Republic of
Argentina are open for working on ordinary matters, as provided by Article 152
of the National Code of Civil and Commercial Proceedings and the regulations
referred to therein.
"Debt" means, with respect to any Person, (a) any liability of such
Person (1) for borrowed money, or under any reimbursement obligation relating
to a letter of credit, or (2) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in connection with the
acquisition of any businesses, properties or assets of any kind (other than a
trade payable or a current liability arising in the ordinary course of
business), or (3) for the payment of money relating to any obligations under
any capital lease of real or personal property which has been recorded as a
capitalized lease obligation; (b) all redeemable capital stock issued by such
Person having a redemption date prior to the Maturity Date of the Notes (the
amount of Debt being represented by any involuntary liquidation preference plus
accrued and unpaid dividends); (c) any liability of others described in the
preceding clause (a) that the Person has guaranteed or that is otherwise its
legal liability; and (d) (without duplication) any amendment, modification,
deferral, renewal, extension or refunding of any liability of the types
referred to in clauses (a), (b) and (c) above. For purposes of determining any
particular amount of Debt under this definition, guarantees of (or obligations
with respect to letters of credit supporting) Debt otherwise included in the
determination of such amount shall not also be included.
"Domestic Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City.
"EBITDA" of any Person means, for any period, net income (or net loss)
(excluding extraordinary gains or losses) plus the sum of (a) interest expense,
(b) income and asset tax expense, (c) depreciation expense and (d) amortization
expense, in each case to the extent deducted in the computation of such net
income, all as determined in accordance with Frozen Argentine Financial
Reporting.
A-8
<PAGE> 108
"Election Date" has the meaning specified in Paragraph 4(a).
"Enron Group" shall mean, collectively, Enron Corp., a Delaware
corporation, its successors by merger, consolidation, or other reorganization
or business combination, and any corporation, limited liability company,
partnership, venture, business trust or other entity or any individual
"controlling", "controlled by" or "under common control with" (as such terms in
quotations are defined in Rule 405 under the Securities Act) Enron Corp.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance having the force of law
in Argentina and relating to pollution or protection of the environment,
health, safety or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"Eurodollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Eurodollar Margin" means, as of any date, a percentage per annum as
set forth below:
<TABLE>
<CAPTION>
===============================================================================
Period Eurodollar Margin
===============================================================================
<S> <C>
From and including the Original Issuance Date to but
excluding the first Interest Step-up Date 2.00%
- -------------------------------------------------------------------------------
From and including the first Interest Step-up Date to
but excluding the second Interest Step-up Date 2.40%
- -------------------------------------------------------------------------------
From and including the second Interest Step-up Date to
but excluding the third Interest Step-up Date 2.60%
- -------------------------------------------------------------------------------
From and including the third Interest Step-up Date to
but excluding the Maturity Date 2.70%
===============================================================================
</TABLE>
"Eurodollar Rate" means, for any Interest Period, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the LIBOR Rate by
(b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for
such Interest Period.
"Eurodollar Rate Reserve Percentage" for any Interest Period means the
reserve percentage applicable two Eurodollar Business Days before the first day
of such Interest Period under regulations issued from time to time by the Board
of Governors of the
A-9
<PAGE> 109
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities having a term equal to such Interest Period.
"Events of Default" has the meaning specified in Paragraph 13.
"Exchange Act" has the meaning specified in Paragraph 10(n).
"Fiscal Agency Agreement" has the meaning specified in Paragraph 1(a).
"Fiscal Agent" has the meaning specified in Paragraph 1(a).
"Frozen Argentine Financial Reporting" means the generally accepted
accounting principles as presented from time to time by the CNV and applied in
the preparation of the Issuer's financial statements as at and for the year
ended December 31, 1995 heretofore delivered to the Fiscal Agent.
"Hazardous Materials" means (a) petroleum and petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminate under any Environmental Law.
"Holders" means each registered holder of one or more Notes.
"Interest Payment Date" has the meaning specified on the face of this
Note.
"Interest Period" means the period commencing on the Original Issuance
Date and ending on the last day of the period selected by the Issuer pursuant
to the provisions below and, thereafter, each subsequent period commencing on
the last day of the immediately preceding Interest Period and ending on the
last day of the period selected by the Issuer pursuant to the provisions below.
The duration of each such Interest Period shall be three or six months, as the
Issuer may, upon notice received by the Fiscal Agent not later than 12:00 Noon
(New York City time) on the third Eurodollar Business Day prior to the first
day of such Interest Period, select; provided, however, that:
(i) the Issuer may not select any Interest Period that begins
before and ends after an Interest Step-up Date or the Maturity Date;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Eurodollar Business Day, the
last day of such
A-10
<PAGE> 110
Interest Period shall be extended to occur on the next succeeding
Eurodollar Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall
occur on the next preceding Eurodollar Business Day; and
(iii) whenever the first day of any Interest Period occurs on a
day of a calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such calendar
month by the number of months equal to the number of months in such
Interest Period, such Interest Period shall end on the last
Eurodollar Business Day of such succeeding calendar month.
"Interest Step-up Date" means the one-year, two-year and three-year
anniversaries of the Original Issuance Date; provided, however, that:
(i) whenever an Interest Step-up Date would otherwise occur on a
day other than a Eurodollar Business Day, such Interest Step-up Date
shall be extended to occur on the next succeeding Eurodollar Business
Day, provided, however, that, if such extension would cause such
Interest Step-up Date to occur in the next following calendar month,
such Interest Step-up Date shall occur on the next preceding
Eurodollar Business Day; and
(ii) if the Original Issuance Date occurs on a day of a calendar
month for which there is no numerically corresponding day in the
calendar month that succeeds such calendar month by the number of
months specified above in respect of an Interest Step-up Date, such
Interest Step-up Date shall occur on the last Eurodollar Business Day
of such succeeding calendar month.
"Issuer" has the meaning specified on the face of this Note.
"LIBOR Rate" means, for any particular Interest Period, the rate per
annum determined (any such determination to be conclusive, absent manifest
error) on the basis of the offered rates for Eurodollar deposits for a period
equal to such Interest Period appearing on the Telerate Screen Page 3750 (or
the successor page reference thereto) as of approximately 11:00 a.m. (London
time) two Eurodollar Business Days before the first day of such Interest
Period. If at least two such offered rates appear on the Telerate Screen Page
3750 or associated pages, the rate in respect of such interest determination
date will be the arithmetic mean of such offered rates unless otherwise
averaged.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien
A-11
<PAGE> 111
or retained security title of a conditional vendor and any easement,
right of way or other encumbrance on title to real property.
"Material Adverse Effect" means a material adverse effect on (a) the
financial condition, business, properties or results of operations of the
Issuer or the Issuer and its Subsidiaries taken as a whole which could
reasonably be expected to affect materially and adversely the Issuer's ability
to perform its obligations hereunder and under the Fiscal Agency Agreement,
including the ability to pay in a timely manner or (b) the rights and remedies
of the Fiscal Agent or Holders under the Fiscal Agency Agreement or the Notes.
"Maturity Date" has the meaning specified on the face of this Note.
"Notes" has the meaning specified in Paragraph 1(a).
"Notice of Interest Period Election" has the meaning specified in
Paragraph 4(a).
"Original Issuance Date" means the Eurodollar Business Day upon which
the Issuer initially issued the Notes.
"Other Taxes" has the meaning specified in Paragraph 7(b).
"Outstanding" has the meaning specified in Paragraph 17(f).
"Perez Companc Group" shall mean, collectively, Perez Companc S.A., an
Argentine corporation, its successors by merger, consolidation, or other
reorganization or business combination, and any corporation, partnership,
venture, business trust or other entity or any individual or "controlled by "
(as such terms in quotations are defined in Rule 405 under the Securities Act)
Perez Companc S.A.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced which shall not have been stayed or dismissed within 30 Court
Days of the commencement thereof (unless contested in good faith, in which case
it shall be discharged within 30 Eurodollar Business Days after final
adjudication): (a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Paragraph 10(c) of the
Notes; (b) Liens imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the ordinary
course of business; (c) pledges or deposits to secure obligations under
workers' compensation laws or similar legislation or to secure public or
statutory obligations; and (d) easements, rights of way and other encumbrances
on title to real property that do not render title to the property encumbered
thereby unmarketable or materially adversely affect the use of such property
for its present purposes.
A-12
<PAGE> 112
"Permitted Shareholder Loan" means a loan, evidenced by a note or
other evidence of indebtedness, from the Issuer to a member of the Enron Group
or the Perez Companc Group and having the following terms:
(i) either the borrower or the guarantor of the loan under an
unconditional and irrevocable guarantee has a credit rating
covering its senior unsecured indebtedness from one U.S.
nationally recognized statistical rating organization that is at
least as high the rating covering the senior unsecured
indebtedness of Perez Companc S.A. (in the case of a member of
the Perez Companc Group) or Enron Corp. (in the case of a member
of the Enron Group), and ;
(ii) the maturity shall be not later than the Maturity Date;
(iii) the indebtedness shall be subject to mandatory repayment upon:
(A) a decline in the rating accorded to the senior unsecured
debt of the borrower or a guarantor of the loan by any U.S.
nationally recognized statistical rating organization to a level
below the level accorded to senior unsecured debt of Perez
Companc S.A. (in the case of a member of the Perez Companc
Group) or Enron Corp. (in the case of a member of the Enron
Group), or in any case to a level below that accorded to the
senior unsecured debt of TGS on the Original Issuance Date;
(B) any Event of Default, or event which with the giving of
notice or the lapse of time would become an Event of Default,
under the Notes; or
(C) a Change of Control; or
(D) the borrower and the related guarantor, if any, cease to
own, directly or indirectly, an equity interest in the Issuer;
and
(iv) other customary terms and conditions, including a market rate of
interest and customary events of default and remedies therefor;
(v) the obligations of the debtor and the guarantor, if any, under
such loan shall not be transferable or delegable to any other
Person;
"Person" means an individual, partnership, corporation (including a
business trust) joint stock company, trust, unincorporated association, joint
venture, limited liability company or other entity, or a government or any
political subdivision or agency thereof.
A-13
<PAGE> 113
"Personal Property Tax" has the meaning specified in Paragraph 7(b).
"Prepayment Date" has the meaning specified in Paragraph 9(a).
"Reference Banks" means the principal London offices of Societe
Generale and Bank of Montreal, and Dresdner Bank Luxembourg S.A..
"Registrar" has the meaning specified in Paragraph 1(a).
"Regular Record Date" has the meaning specified on the face of this
Note.
"Required Holders" has the meaning specified in Paragraph 6(d).
"Responsible Officer" has the meaning specified in Paragraph 17(f).
"Rule 144A Information" has the meaning specified in Paragraph 10(n).
"Securities Act" has the meaning specified in Paragraph 10(n).
"Significant Subsidiary" means a Subsidiary, including its
Subsidiaries, which meets the following conditions:
(1) the Issuer's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 20 percent of the total assets of the Issuer
and its Subsidiaries consolidated as of the end of the most recently completed
fiscal year; or
(2) the Issuer's and its other Subsidiaries' proportionate share of
the total assets (after intercompany eliminations) of the Subsidiary (and after
deducting the principal amount of outstanding debt of such Subsidiary the
proceeds of which were used to finance the operations of such Subsidiary and
have not been onlent to any other Person) exceeds 20 percent of the total
assets of the Issuer and its Subsidiaries consolidated as of the end of the
most recently completed fiscal year.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in distributions from such
limited liability company, partnership or joint venture or (c) the beneficial
interest in such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
A-14
<PAGE> 114
"Taxes" has the meaning specified in Paragraph 7(b).
"Temporary Cash Investment" means any Dollar or Argentine peso
denominated Investment in (i) direct obligations of the United States, the
Republic of Argentina or any agency of either of them, or obligations
guaranteed by the United States, the Republic of Argentina or any agency of
either of them, (ii) commercial paper rated at least A-1 by Standard & Poor's
Ratings Group and P-1 by Moody's Investors Service, Inc., (iii) time deposits
with (including certificates of deposit issued by) any initial Purchaser named
in the Note Purchase Agreement, (iv) time deposits with (including certificates
of deposit issued by) any office located in the United States of any bank or
trust company which is organized under the laws of the United States or any
state thereof and has capital, surplus and undivided profits aggregating at
least $1,000,000,000, (v) time deposits with (including certificates of deposit
issued by) any Argentine office of any bank or trust company listed on Schedule
I hereto, (vi) repurchase agreements with respect to securities described in
clause (i) above entered into with an office of a bank or trust company meeting
the criteria specified in clause (iv) or (v) above, and (vii) promissory notes
or other Debt of a Person that is a member of the Enron Group or the Perez
Companc Group, but only (A) in circumstances and for so long as the payment of
dividends by the Issuer to a shareholder that is a member of the Enron Group or
the Perez Companc Group, as the case may be, is illegal or impracticable due to
the imposition or exchange controls or other legal restrictions and (B) to the
extent that the Issuer would otherwise be permitted to pay dividends.
"TGS" means Transportadora de Gas del Sur S.A.
"Total Capitalization" means at any date the sum of (i) Consolidated
Debt of the Issuer at such date and (ii) Consolidated Net Worth of the Issuer
at such date, all as determined in accordance with Frozen Argentine Financial
Reporting.
"United States" means the United States of America, including the
states and the District of Columbia, but excluding its territories and
possessions.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
2. Form and Denomination. The Securities are issuable only in fully
registered non-endorsable form. The Securities are issuable only in minimum
denominations of US$100,000 and integral multiples above that amount.
A-15
<PAGE> 115
3. Registration, Transfer and Exchange. The Issuer shall maintain in
the city of Buenos Aires, Argentina an agency where Securities may be
surrendered for registration of transfer or exchange. For such purpose the
Issuer has initially appointed Banco Supervielle Societe Generale S.A. as its
agent in the city of Buenos Aires, and has agreed to cause to be kept at such
offices a register in which, subject to such reasonable regulations as it may
prescribe, the Issuer will provide for the registration of Securities and
registration of transfers of Securities. The Issuer reserves the right to vary
or terminate the appointment of any security registrar or transfer agent or to
appoint additional or other registrars or transfer agents or to approve any
change in the office through which any security registrar or any transfer agent
acts, provided that there will at all times be a security co-registrar in the
Borough of Manhattan, The City of New York and a security registrar in the city
of Buenos Aires, Argentina. The Issuer shall cause notice of any resignation,
termination or appointment of any Paying Agent or Transfer Agent located in the
Borough of Manhattan, The City of New York or in the city of Buenos Aires,
Argentina or of the Fiscal Agent and of any change in the office through which
any such Agent will act to be provided to Holders.
Subject to the restrictions set forth in the Fiscal Agency Agreement,
the transfer of a Note is registrable on the aforementioned register upon
surrender of such Note at any agency maintained by the Issuer for such purpose
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing. Upon such surrender of this Note
for registration of transfer, the Issuer shall execute, and the Fiscal Agent
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities, dated the date of authentication
thereof, of any authorized denominations and of a like aggregate principal
amount.
Subject to the restrictions set forth in the Fiscal Agency Agreement,
at the option of the Holder upon request confirmed in writing, Securities may
be exchanged for Securities of any authorized denominations and aggregate
principal amount upon surrender of the Securities to be exchanged at any agency
maintained by the Issuer for such purpose. Whenever any Securities are so
surrendered for exchange, the Issuer shall execute, and the Fiscal Agent shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive. Any registration of transfer or exchange will be
effected upon the Issuer being satisfied with the documents of title and
identity of the person making the request and subject to such reasonable
regulations as the Issuer may from time to time determine.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits, as the Securities surrendered upon
such registration of transfer or exchange. No service charge shall be made for
any registration of transfer or exchange, but the Issuer may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
A-16
<PAGE> 116
Prior to due presentment of this Note for registration of transfer,
the Issuer, the Fiscal Agent and any agent of the Issuer or the Fiscal Agent
may treat the person in whose name this Note is registered on the register of
Holders of Notes as the absolute owner hereof for all purposes, whether or not
this Note be overdue, and neither the Issuer nor the Fiscal Agent nor any such
agent shall be affected by notice to the contrary.
No payments of principal of and any interest and Additional Amounts on
Notes shall be made unless presentation or claim for payment is made within a
period of three years following the relevant payment date.
4. Interest Periods. (a) The initial Interest Period shall commence on
the Original Issuance Date and shall end on July 22, 1997. Thereafter, the
Issuer may from time to time elect the duration of Interest Periods, which
election shall be effective on the last day of the then current Interest Period
(an "Election Date"). Each such election shall be made by the Issuer by
delivering a notice (a "Notice of Interest Period Election") to the Fiscal
Agent not later than 12:00 Noon (New York City time) at least three Eurodollar
Business Days before the relevant Election Date. Each Notice of Interest Period
Election shall specify:
(i) such Election Date; and
(ii) the duration of the Interest Period that will commence on such
Election Date.
Each Interest Period specified in a Notice of Interest Period Election shall
comply with the provisions of the definition of Interest Period.
(b) Upon receipt of a Notice of Interest Period Election, such notice
shall not thereafter be revocable by the Issuer and the Fiscal Agent shall
promptly (and in any event not later than one Eurodollar Business Day after
receipt by the Fiscal Agent of such notice) notify each Holder of the contents
thereof.
(c) If the Issuer (i) fails to deliver a timely Notice of Interest
Period Election to the Fiscal Agent electing an Interest Period as provided in
this Paragraph 4 and (ii) has not theretofore delivered a notice of prepayment
relating to the full amount of all Notes outstanding, then the Issuer shall be
deemed to have given the Fiscal Agent a Notice of Interest Period Election
electing an Interest Period of three months (or, if such Interest Period would
be shortened thereby, ending on the next succeeding Interest Step-up Date),
which Interest Period shall commence on the last day of the then current
Interest Period.
A-17
<PAGE> 117
5. Interest. (a) Scheduled Interest. Subject to Paragraph 5(b), the
Issuer shall pay interest on the unpaid principal amount of each Note held by
each Holder from the Original Issuance Date until the Maturity Date, at a rate
per annum equal at all times during each Interest Period to the sum of (x) the
Applicable Eurodollar Rate for such Interest Period plus (y) the Eurodollar
Margin in effect from time to time.
(b) Default Interest. Any principal of or overdue interest on any Note
that is not paid when due shall bear interest from the due date therefor (i)
until the earlier of the Maturity Date and the date such amount shall be paid
in full at a rate per annum equal at all times to the sum of (x) the Applicable
Eurodollar Rate then in effect plus (y) the Eurodollar Margin then in effect
plus (z) 2% and (ii) on and after the Maturity Date until such amount shall be
paid in full at a rate per annum equal at all times to the sum of (A) the
Applicable Eurodollar Rate computed for the one-month period beginning with the
Maturity Date and for successive one-month periods as though each were an
Interest Period plus (B) 4.40%. Interest under this paragraph 5(b) shall be
payable on demand and on the date the relevant overdue amount shall be paid in
full.
6. Interest Rate Determination. (a) The interest rate shall be equal
to the Eurodollar Rate.
(b) In the event that the Fiscal Agent is unable to determine the
Eurodollar Rate, the Fiscal Agent shall solicit from each Reference Bank Agent
timely information for the purpose of determining each Alternate Eurodollar
Rate. If any one or more of the Reference Banks shall not furnish such timely
information to the Fiscal Agent for the purpose of determining any such
Alternate Eurodollar Rate, the Fiscal Agent shall determine such Alternate
Eurodollar Rate on the basis of timely information furnished by the remaining
Reference Banks or if none of such information is available on a timely basis
for the Interest Period requiring an Applicable Eurodollar Rate determination,
the Fiscal Agent shall use for Interest Period the Applicable Eurodollar Rate
most recently determined by the Fiscal Agent and in effect for the most recent
Interest Period.
(c) The Eurodollar Rate or Alternate Eurodollar Rate as determined
pursuant to this Paragraph 6 shall be the applicable Eurodollar Rate
("Applicable Eurodollar Rate") for the relevant Interest Period.
(d) If on or prior to the first day of any Interest Period the Holders
of Notes holding more than 50% of the then aggregate unpaid principal amount of
the outstanding Notes then held by the Holders (the "Required Holders") advise
the Fiscal Agent that the Applicable Eurodollar Rate will not adequately and
fairly reflect the cost to such Holders of purchasing and holding their Notes
during such Interest Period, the Fiscal Agent shall forthwith give notice
thereof to the Issuer and all other Holders. During the 30 days next succeeding
the giving of such notice, the Issuer and the Required Holders shall negotiate
in
A-18
<PAGE> 118
good faith in order to arrive at a mutually satisfactory alternative basis
for computing interest on the Notes (the "Alternative Basis Interest Rate")
which shall be payable in connection with such Interest Period in order to
compensate the Holders for the inadequate interest rate resulting from the
occurrence of the conditions specified in the first sentence of this Paragraph
6(d). If within such 30-day period, the Issuer and the Required Holders agree
in writing upon the Alternative Basis Interest Rate, such Alternative Basis
Interest Rate shall be payable to all Holders in respect of their holdings of
Notes from the commencement of, and only for, the duration of such Interest
Period. If the Issuer and the Required Holders fail to agree upon such
Alternative Basis Interest Rate within such 30-day period, the Alternative
Basis Interest Rate in connection with such Interest Period payable to each
Holder for such Interest Period shall be such Alternative Basis Interest Rate
as such Holder shall determine (in a certificate delivered by such Holder to
the Fiscal Agent setting forth the basis of the computation of such amount,
which certificate shall be conclusive and binding for all purposes, absent
manifest error) to be necessary to compensate such Holder for its cost of
obtaining (in good faith and using commercially reasonable efforts to minimize
the interest cost to the Issuer) as of the commencement of such Interest Period
funds for such Interest Period in an amount equal to the principal amount of
such Holder's Outstanding Notes plus the Eurodollar Margin. The Fiscal Agent
shall notify the Issuer of each such determination as promptly as practicable;
provided, however, that the Issuer shall not be required to compensate any
Holder to the extent that such Holder's cost of obtaining (in good faith and
using commercially reasonable efforts to minimize the interest cost to the
Issuer) funds for any period was increased by virtue of the Holder's failure to
give notice to the Issuer within 90 days of becoming aware that the Applicable
Eurodollar Rate would not adequately and fairly reflect the cost to such Holder
of funding, owning or holding its Notes during such Interest Period.
As the negotiations described in the preceding subparagraph (d) of
this Paragraph 6 and any resulting Alternative Basis Interest Rate are intended
for the sole direct benefit of the Holders, the Issuer expressly covenants and
acknowledges (i) that as a result of any such negotiations the Holders shall
not receive a lower rate of interest on the Notes than the Holders would have
received had there not been such negotiations, and (ii) that such negotiations
shall in no event cause, justify or give rise to any delay or reduction in the
payment of interest, principal or other amounts payable by the Issuer under the
Notes, the Fiscal Agency Agreement or the Purchase Agreement.
7. Payment of Amounts. (a) If, due to either (A) the introduction of
or any change in or in the interpretation of any law or regulation or (B) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law and whether
applicable to a Holder directly or as a member of a consolidated group), there
shall be any increase in the cost to any Holder, of owning, holding or
maintaining its Notes or a reduction in the amount of any sum received or
receivable by such Holder under this Note, by an amount deemed by such Holder
to be material, within 20
A-19
<PAGE> 119
days after demand by such Holder pursuant to clauses (ii) and (iii) of this
Paragraph 7(a), the Issuer shall from time to time, pay to the Fiscal Agent for
the account of such Holder additional amounts sufficient to compensate such
Holder for such increased cost or reduction from and after the date of the
notice specified in clause (ii) of this Paragraph 7(a). A certificate as to the
amount of such increased cost or reduction, submitted to the Issuer and the
Fiscal Agent by such Holder, shall be conclusive and binding for all purposes,
absent manifest error. Notwithstanding the foregoing, the Issuer shall not be
required to make any payment under this Paragraph 7(a) in respect of increased
costs consisting of reserve requirements in respect of Eurocurrency Liabilities
or in respect of which the Issuer is required to make a payment under Paragraph
7(b).
(i) Each Holder which is an institutional investor will, before
requesting compensation for additional amounts pursuant to this Paragraph
7(a), use its reasonable efforts to transfer its Notes to a different
Holding Office if such transfer will avoid the need for compensation for
such additional amounts and will not, in the sole judgment of such Holder,
be otherwise disadvantageous to such Holder.
(ii) Each Holder, as defined below, will promptly notify the Issuer
and the Fiscal Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Holder to compensation
pursuant to this Paragraph 7(a).
(iii) The Issuer shall not be required to increase the amount of any
payment due to a Holder as provided by clause (i) above (A) if the cost or
reduction in respect of which such increase arises results solely from a
requirement which is applicable to the relevant Holder by reason of its
financial condition and which is not of general application to similar
Persons of a similar type in similar circumstances in the same
jurisdiction, or (B) to the extent that such payment was increased by
virtue of the Holder's failure to give notice to the Issuer within 90 days
of becoming aware of the requirements that gave rise to such obligation to
pay such additional amount.
(b) For the purposes of this Paragraph 7(b), the following terms have the
following meanings:
"Taxes" means any and all present and future taxes, duties, levies,
imposts, deductions, charges or withholdings of any nature with respect to
any payment by the Issuer pursuant to the Fiscal Agency Agreement or under
any Note and all liabilities with respect thereto imposed by the Republic
of Argentina or any political subdivision or taxing authority thereof or
therein (including, without limitation, the Argentine Personal Property
Tax established by Argentine Law No. 23,966 as amended and implemented
(the "Personal Property Tax")). For the avoidance of
A-20
<PAGE> 120
doubt "taxes" as defined in this paragraph do not include net income
taxes imposed on any Holder by reason of its investment in Notes.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise, property or value added taxes, or similar charges or
levies which arise from any payment made pursuant to the Fiscal Agency
Agreement or under any Note or from the execution, delivery, registration
or enforcement of, or otherwise with respect to, the Fiscal Agency
Agreement or any Note imposed by the Republic of Argentina or any
political subdivision or taxing authority thereof or therein.
(i) Any and all payments by the Issuer under the Notes shall be
made free and clear of and without deduction or withholding for any Taxes
or Other Taxes. If the Issuer shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
under the Fiscal Agency Agreement or under any Note, (i) the sum payable
shall be increased by such additional amounts ("Additional Amounts") as
may be necessary so that after making all required deductions and
withholdings (including deductions and withholdings applicable to
additional sums payable under this Paragraph 7), the Paying Agent receives
an amount equal to the sum it would have received had no such deductions
or withholdings been made, (ii) the Issuer shall make such deductions or
withholdings and (iii) the Issuer shall pay the full amount deducted or
withheld to the relevant taxation authority or other authority in
accordance with applicable law.
(ii) Subject to the compliance by each Holder with the covenant in
clause (iv) of this Paragraph 7(b), the Issuer shall indemnify each Holder
for the full amount of Taxes or Other Taxes (including, without
limitation, any taxes imposed by any jurisdiction on amounts payable under
this Paragraph 7(b), whether or not correctly or legally imposed or
asserted, imposed on or paid by such Holder and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within thirty (30) days from
the date such Holder makes written demand therefor.
(iii) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes, the Issuer shall furnish to the Fiscal Agent the original
or a certified copy of a receipt evidencing payment thereof.
(iv) Each Holder or beneficial owner of this Note shall, at the
request of the Issuer, use reasonable efforts (consistent with applicable
legal and regulatory restrictions) to (i) file any certificate or document
requested by the Issuer or to provide the Issuer with such information as
may be reasonably requested by the Issuer if the making of such a filing
or the provision of such information would eliminate or reduce any
Additional Amounts payable to or for the account of any Holder pursuant to
this Paragraph 7 that may thereafter accrue and would not, in the
A-21
<PAGE> 121
judgment of such Holder, require such Holder to disclose any confidential
or proprietary information or be otherwise disadvantageous to such Holder,
and (ii) in the case of Holders which are institutional investors, to
transfer its Notes to a different Holding Office if such transfer will
avoid the need for payment of Additional Amounts under this Paragraph 7
and will not, in the sole judgment of such Holder be otherwise
disadvantageous to such Holder.
The Issuer hereby waives any right it may have under Argentine law to
seek reimbursement (by way of any legal means available to the Issuer,
including, without limitation, deduction from payments of principal or
interest on the Notes) from the Holders or beneficial owner of any
interest therein or rights in respect thereof of any amounts paid by the
Issuer under the Personal Property Tax.
(v) Without prejudice to the survival of any other agreement of the
Issuer hereunder, the agreements and obligations of the Issuer contained
in this Paragraph 7(b) shall survive the payment in full of principal,
interest and all other amounts payable under the Notes.
8. Optional Prepayment. (a) The Issuer may, upon at least ten (10)
days' notice to the Fiscal Agent stating the proposed date and aggregate
principal amount of the redemption, and if such notice under this Paragraph 8
is given the Issuer shall, repay Notes outstanding at any time, in whole or in
part, at a redemption price of 100.5% of the principal amount until the first
anniversary of the Original Issuance Date and 100% of the principal amount
thereafter, provided that each partial prepayment shall be an aggregate
principal amount of US$5,000,000 or an integral multiple of US$1,000,000 in
excess thereof. Each prepayment made by the Issuer pursuant to this Paragraph 8
shall be applied to prepay ratably the Notes of the Holders and each Holder
shall receive equal treatment under this Paragraph 8.
(b) Notices to redeem Notes shall be given to Holders in writing
mailed, first-class postage prepaid, to each Holder of Notes so to be redeemed,
at each such Holder's address as it appears in the register hereinabove
referred to and otherwise as required by the Negotiable Obligations Law or any
other Argentine applicable regulation. Such notice will be given once not more
than thirty (30) days nor less than fifteen (15) days prior to the date fixed
for redemption. If by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impracticable to give notice to the
Holders in the manner prescribed herein, then such notification in lieu thereof
as shall be made by the Issuer or by the Fiscal Agent shall constitute
sufficient provision of such notice, if such notification shall, so far as may
be practicable, approximate the terms and conditions of the mailed notice in
lieu of which it is given. Neither the failure to give notice nor any defect in
any notice given to any particular Holder shall affect the sufficiency of any
notice with respect to other Notes. Such notices will be deemed to have been
given on the date of mailing. Notices to redeem
A-22
<PAGE> 122
Notes shall specify the date fixed for redemption, the applicable redemption
price, the place or places of payment, that payment will be made upon
presentation and surrender of the Notes to be redeemed, that interest accrued
to the date fixed for redemption (unless such date is an Interest Payment
Date), together with any Additional Amounts which would otherwise be payable,
will be paid as specified in said notice, and that on and after said date
interest thereon will cease to accrue.
9. (a) Prepayment on Change of Control. (i) In the event of a Change
of Control (as defined below), the Holder of this Note shall have the right to
require the Issuer to prepay its Notes, in whole or in part, at a purchase
price equal to 100% of the principal amount, on the date that is forty-five
(45) days following a Change in Control (the "Prepayment Date"). A "Change of
Control" for purposes of this Note will be deemed to have occurred on the date
on which the Enron Group and the Perez Companc Group, cease (individually or
collectively and irrespective of the relative proportional ownership of voting
interests of either) to have the power to direct in the aggregate the vote of
at least 50.1% of the voting capital stock of the Issuer.
(ii) To be repaid at the option of the Holder, this Note, with the
"Option to Elect Prepayment" form hereon duly completed by the Holder,
must be received by the Issuer not earlier than thirty (30) days nor later
than fifteen (15) days prior to the date fixed for prepayment. If less
than the entire principal amount of a Note is to be prepaid in accordance
with the provisions of this Paragraph 9(a), the principal amount of such
Note, in increments of $1,000, and the denomination or denominations or
the Note or Notes to be issued to the Holder for the portion of the
principal amount of such Note that is not to be prepaid must be specified.
Exercise of the prepayment option by the Holder shall be irrevocable
unless waived by the Issuer.
(iii) If a Note shall have been surrendered as provided in this
Paragraph, such Note, or the portion thereof so specified to be prepaid,
shall become due and payable and shall be paid by the Issuer on the
Prepayment Date and shall be paid by the Issuer on the Prepayment Date,
and on and after the Prepayment Date (unless the Issuer shall default in
the payment of such Note on such Prepayment Date), interest on such Note
or the portion hereof to be prepaid, as the case may be, shall cease to
accrue.
(b) Prepayment upon Certain Changes in Law. (i) If, on or after the
date of this Note, the adoption of any applicable law, rule or regulation, or
any change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank, the Superintendencia de Seguros de la Nacion, the Superintendencia de
AFJPs or comparable agency charged with the interpretation or administration
thereof, or compliance by any Holder with any request or
A-23
<PAGE> 123
directive (whether or not having the force of law) of any such authority,
central bank, the Superintendencia de Seguros de la Nacion, the
Superintendencia de AFJPs or comparable agency shall make it unlawful or
impossible for any Holder to hold, own or maintain its Note and such Holder
shall so notify the Fiscal Agent, the Issuer shall promptly prepay in full the
then outstanding principal amount of such Note, together with accrued interest
thereon, upon presentation thereof by such Holder. If it is lawful for such
Holder to hold, own and maintain its Note through the last day of the Interest
Period then applicable to such Note, such prepayment shall be due on such last
day.
(ii) Before giving any notice to the Fiscal Agent pursuant to this
Paragraph 9(b), Holders shall designate a different Holding Office if such
designation will avoid the need for giving such notice and will not, in the
sole judgment of such Holder, be otherwise disadvantageous to such Holder.
10. Affirmative Covenants. So long as any Note shall remain unpaid,
the Issuer shall:
(a) Payment of Principal, Interest and Fees. Pay, when or before due,
all principal, interest and fees to be paid hereunder and under any Note.
(b) Compliance with Laws, Etc. Comply, and cause each of its
Significant Subsidiaries to comply, in all material respects, with all
applicable laws, ordinances, rules, regulations and requirements of
Governmental Authorities (including, without limitation, Environmental
Laws, social security laws, retirement and pension fund laws and the rules
and regulations thereunder) except where the necessity of compliance
therewith is being contested in good faith by appropriate proceedings or
where noncompliance therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(c) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Significant Subsidiaries to pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Issuer nor any of its Significant Subsidiaries
shall be required to pay or discharge any such tax, assessment, charge or
claim that (A) is being contested in good faith and by proper proceedings
and as to which appropriate reserves are being maintained in accordance
with Argentine Financial Reporting, or (B) together with all other unpaid
taxes, assessments, charges and claims covered within this clause (B) do
not exceed US$7,500,000 unless and until any Lien resulting therefrom
attaches to its property and becomes enforceable against its other
creditors.
A-24
<PAGE> 124
(d) Maintenance of Insurance. Cause each of its Significant
Subsidiaries to keep at all times all of its properties which are of an
insurable nature insured against loss or damage with insurers believed by
such Significant Subsidiary to be responsible to the extent that property
of similar characteristics is usually so insured by gas transportation
companies (whether within or outside the Republic of Argentina) as
required under rules and regulation applicable to gas transportation
companies in Argentina; provided, further, that this covenant shall not in
any event require a Significant Subsidiary to maintain insurance on its
pipeline assets to the extent they do not pass under rivers or other
bodies of water, and provided, however, that the management of such
Significant Subsidiary may in any event increase the amount of any
deductible or other retention of risk by such Significant Subsidiary or
reduce the level of insurance cover if it shall determine in good faith
that such actions are in the best interests of such Significant Subsidiary
and not materially adverse to the interests of the Holders. Upon request
of the Fiscal Agent, the Issuer will furnish to it for distribution to the
Holders copies of the information provided annually by it or its
Significant Subsidiaries to Argentine regulatory agencies as to the
insurance so carried.
(e) Conduct of Business and Preservation of Corporate Existence, Etc.
Preserve and maintain, and cause each of its Significant Subsidiaries to
preserve and maintain, its corporate existence, rights (charter and
statutory) and franchises; provided, however, that the Issuer and its
Significant Subsidiaries may consummate any merger or consolidation
permitted under Paragraph 11(b), and provided, further, that neither the
Issuer nor any of its Significant Subsidiaries shall be required to
preserve any right or franchise if the Board of Directors of the Issuer or
such Significant Subsidiary shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Issuer or
such Significant Subsidiary, as the case may be, and that the loss thereof
is not expected to have a Material Adverse Effect on the Issuer or such
Significant Subsidiary.
(f) Maintenance of Governmental Approvals. Maintain, and cause its
Significant Subsidiaries to maintain, in full force and effect all such
authorizations as are referred to in Sections 8(a) and (c) of the Fiscal
Agency Agreement.
(g) Keeping of Books. Keep, and cause each of its Significant
Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the
assets and business of the Issuer and each such Significant Subsidiary in
accordance with Argentine Financial Reporting.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Significant Subsidiaries to maintain and preserve, all of its
tangible properties that are used or useful in the conduct of its business
in good condition, repair and working order and supplied with all
necessary equipment and cause to be made all
A-25
<PAGE> 125
necessary renewals, replacements and improvements thereof, all as in the
judgment of the Issuer or such Significant Subsidiary may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, provided, however, that covenants
will not prevent the Issuer or such Significant Subsidiary from
discontinuing the operation or maintenance of any of such properties if
such discontinuance is, as determined by the Board of Directors or
responsible officers of the Issuer or such Significant Subsidiary in good
faith, desirable in the conduct of the business of the Issuer and its
Significant Subsidiaries taken as a whole and not reasonably expected to
have a Material Adverse Effect on the Issuer and its Significant
Subsidiaries taken as a whole.
(i) [Reserved]
(j) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, any transaction otherwise permitted under the
Fiscal Agency Agreement with any stockholder of the Issuer or any
Affiliate of such stockholder which is not the Issuer or one of its
Subsidiaries on terms that are no less favorable to the Issuer or such
Subsidiary than it would obtain in a comparable arm's-length transaction
with a Person not such a stockholder or Affiliate.
(k) Reporting Requirements. Furnish to the Fiscal Agent:
(i) as soon as available and in any event within seventy (70)
days after the end of each of the first three quarters of each fiscal
year of the Issuer, Consolidated balance sheets of the Issuer and its
Subsidiaries as of the end of such quarter and Consolidated
statements of income and cash flows of the Issuer and its
Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, duly certified
(subject to year-end audit adjustments) by the chief financial
officer of the Issuer as having been prepared in accordance with
Argentine Financial Reporting, and accompanied by a certificate of
the chief financial officer of the Issuer setting forth in reasonable
detail the calculations necessary to demonstrate compliance with
Paragraph 12, provided that in the event of any change in Argentine
Financial Reporting used in the preparation of such financial
statements from Frozen Argentine Financial Reporting, the Issuer
shall also provide, if necessary for the determination of compliance
with Paragraph 12, a statement of reconciliation conforming such
financial statements to Frozen Argentine Financial Reporting;
(ii) as soon as available and in any event within 120 days after
the end of each fiscal year of the Issuer, a copy of the annual
audited financial statements for such year for the Issuer and its
Subsidiaries, containing Consolidated balance sheets of the Issuer
and its Subsidiaries as of the end
A-26
<PAGE> 126
of such fiscal year and Consolidated statements of income and cash
flows of the Issuer and its Subsidiaries for such fiscal year, in
each case accompanied by an opinion of Pistrelli, Diaz y Asociados or
other independent public accountants of recognized international
standing, and accompanied by a certificate of the chief financial
officer of the Issuer setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Paragraph 12,
provided that in the event of any change in Argentine Financial
Reporting used in the preparation of such financial statements from
Frozen Argentine Financial Reporting, the Issuer shall also provide,
if necessary for the determination of compliance with Paragraph 12, a
statement of reconciliation conforming such financial statements to
Frozen Argentine Financial Reporting;
(iii) as soon as possible and in any event within five days
after becoming aware of the occurrence of each Default continuing on
the date of such statement, a statement of the chief financial
officer of the Issuer setting forth details of such Default and the
action that the Issuer has taken and proposes to take with respect
thereto; and
(iv) promptly after the commencement thereof, notice of all
material actions and proceedings before any court, governmental
agency or arbitrator affecting the Issuer or any of its Significant
Subsidiaries of the type described in Section 8(g) of the Fiscal
Agency Agreement; and
(l) Maintenance of TGS Shares. Maintain the direct ownership of at
least 51% of the Voting Stock of TGS.
(m) Notice of Change of Control. Provide written notice to the Fiscal
Agent and to each Holder of any Change of Control within ten Domestic
Business Days following such Change of Control.
(n) Provision of Information. For so long as any Notes remain
Outstanding and are "restricted securities" within the meaning of Rule
144(a) under the Securities Act of 1933, as amended (the "Securities
Act"), if at any time when the Issuer is neither subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") nor exempt from reporting pursuant to Rule 12g3-2(b) under the
Exchange Act, upon the request of a Holder or beneficial owner of a Note,
the Issuer will promptly furnish or cause to be furnished "Rule 144A
Information" (as defined below) to such Holder or beneficial owner, to a
prospective purchaser of such Note designated by such Holder or beneficial
owner or to the Fiscal Agent for delivery to such Holder or beneficial
owner or a prospective purchaser designated by such Holder or beneficial
owner, as the case may be, in order to permit compliance by such Holder or
beneficial owner with Rule 144A
A-27
<PAGE> 127
under the Securities Act in connection with the resale of such Note by
such Holder or beneficial owner. "Rule 144A Information" shall be such
information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
11. Negative Covenants. So long as any Note shall remain unpaid, the
Issuer will not:
(a) Negative Pledge. Create, assume or suffer to exist any Lien upon
the whole or any part of its properties, whether now owned or hereafter
acquired, to secure (i) any of its Debt or (ii) the Debt of any other
Person, without at the same time or prior thereto extending to the Notes
and the obligations of the Issuer hereunder the same security equally and
ratably therewith (or, at the option of the Issuer, prior thereto) as long
as such Lien shall remain in effect, except for:
(A) purchase money Liens created or arising over any property
which is acquired, constructed or created by the Issuer but only if
(i) such Lien secures only principal amounts (not exceeding the cost
of such acquisition, construction or creation) raised for the
purposes of such acquisition, construction or creation, together with
any costs, expenses, interest and fees incurred in relation thereto,
(ii) such Lien is created or arises on or before ninety (90) days
after the completion of such acquisition, construction or creation
and (iii) such Lien is confined solely to the property so acquired,
constructed or created;
(B) Liens over any property at the time of the acquisition of
such property by the Issuer, which Liens were not created in
connection with such acquisition;
(C) Liens in existence on the Original Issuance Date;
(D) Liens described in paragraph (A), (B) or (C) above and
renewed or extended upon the renewal, extension, refinancing or
replacement of the Debt secured thereby, provided that there is no
increase in the principal amount of the Debt secured thereby over the
original principal amount thereof or guaranteed thereby;
(E) Permitted Liens; or
(F) Liens not described in paragraphs (A) through (E) above
securing Debt as well as related costs, expenses, interest and fees
in relation to an
A-28
<PAGE> 128
aggregate principal or face amount at any date which does not exceed
US$10,000,000.
(b) Mergers, Etc. (i) Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to, any Person, unless:
(A) in the case the Issuer shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Issuer is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties
and assets of the Issuer substantially as an entirety shall be a
legal entity, shall be organized and validly existing under the laws
of the Republic of Argentina and shall expressly assume the due and
punctual payment of the principal of and any premium and interest on
all the Notes and the performance or observance of every covenant of
this Note on the part of the Issuer to be performed or observed; and
(B) if a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Issuer
would become subject to a Lien, which would not be permitted by this
Note, the Issuer or such successor Person, as the case may be, shall
take such steps as shall be necessary effectively to secure the Notes
equally and ratably with (or prior to) all debt secured thereby;
or (ii) permit any of its Subsidiaries to merge or consolidate with or
into, or convey, transfer or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person,
except that:
(A) any Subsidiary of the Issuer may merge or consolidate with
or into, or dispose of assets to, any other Subsidiary of the Issuer,
and except that any Subsidiary of the Issuer may merge into or
dispose of assets to the Issuer; and
(B) TGS may merge or consolidate with or into, or convey,
transfer or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to, any Person, provided,
however, that the Person formed by such consolidation or into which
TGS is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Issuer
substantially as an entirety shall be a legal entity, shall be
A-29
<PAGE> 129
organized and validly existing under the laws of the Republic of
Argentina, and provided, further, that after giving effect to such
transaction, the credit rating or ratings of TGS's securities by any
nationally recognized U.S. statistical rating organization shall not
be lowered as a result of such transaction;
provided, in any case referred to in clause (i) or (ii) above, that
immediately after giving effect to the transaction and treating any Debt
which becomes an obligation of the Issuer or any Subsidiary as a result of
such transaction as having been incurred by the Issuer or such Subsidiary
at the time of such transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing.
(c) Investments. Hold, make or acquire any Investment in any Person
other than:
(i) Investments in Persons that are Subsidiaries, provided,
however, that Investments in Subsidiaries other than TGS do not cause
such Subsidiaries to become, individually or in the aggregate, a
Significant Subsidiary.
(ii) Temporary Cash Investments maturing within one year from
the date of acquisition thereof by the Issuer or a Subsidiary of the
Issuer;
(iii) Permitted Shareholder Loans;
(iv) any Investments not otherwise permitted by the foregoing
clauses of this Paragraph if, immediately after such Investment is
made or acquired, the aggregate net book value of all Investments
permitted by this clause (iii) does not exceed US$20,000,000 (or its
equivalent in any other currencies, each such equivalent to be
determined at the time of making such investment and not to be
affected by subsequent changes in exchange rates); and
(v) any purchase of the shares of the Issuer by the Issuer or
any of its Subsidiaries.
(d) Restricted Payments. Purchase or redeem any of its issued shares
or reduce its share capital, make a distribution of assets or other
capital distribution to its shareholders, declare or pay any dividend or
make any other distribution to its shareholders or repay any shareholders'
loans if immediately before becoming legally obligated to take any such
action an Event of Default exists or would exist if such action were taken
at such time.
A-30
<PAGE> 130
(e) Change in Business. Make any material change in the nature or
scope of its business as carried on at the date hereof, provided, however,
that the creation of new Subsidiaries by the Issuer or any Subsidiary
after the date hereof and the operation of such new Subsidiaries shall not
be considered a material change within the meaning of this clause for so
long as such new Subsidiaries do not, individually or in the aggregate,
constitute a Significant Subsidiary with respect to the Issuer; provided,
further, that the creation or operation of Subsidiaries that are
principally engaged in the natural gas business (including transportation
but for the avoidance of doubt excluding exploration and production)
carried on by Subsidiaries of the Issuer on the date hereof shall be
deemed not to violate this paragraph (e) regardless of the size of such
Subsidiaries.
12. Financial Covenants. So long as any Note shall remain unpaid, the
Issuer will, as determined in accordance with Frozen Argentine Financial
Reporting:
(a) Leverage Ratio. Maintain a ratio of Consolidated Debt of the
Issuer to Total Capitalization not greater than 0.60 to 1.0.
(b) Fixed Charge Coverage Ratio. Maintain a ratio of (A) Consolidated
EBITDA of the Issuer for the four fiscal quarters ending on the later of
(i) March 31, 1997 and (ii) the date of the most recent Consolidated
balance sheet of the Issuer delivered to the Holders pursuant to Paragraph
10(k) to (B) the sum of Consolidated interest (including amortization of
debt discount) expense and Consolidated rental expense of the Issuer
deducted in the computation of the Issuer's Consolidated net income for
such four fiscal quarters of not less than 2.5 to 1.0.
13. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) The Issuer shall fail to pay any principal of any Note when the
same becomes due and payable; or the Issuer shall fail to pay any interest
on any Note or make any other payment of fees or other amounts payable
under the Fiscal Agency Agreement or any Note within three Domestic
Business Days after the same becomes due and payable; or
(b) Any representation or warranty made by the Issuer in Section 8 of
the Fiscal Agency Agreement shall prove to have been incorrect in any
material respect when made; or
(c) (i) The Issuer shall fail to perform or observe any term,
covenant or agreement contained in Paragraph 10(l), Paragraph 11 or
Paragraph 12, or (ii) the
A-31
<PAGE> 131
Issuer shall fail to perform or observe any other term, covenant or
agreement contained in the Fiscal Agency Agreement (other than Paragraph
10(a)) on its part to be performed or observed if such failure shall
remain unremedied for fifteen (15) days after written notice thereof shall
have been given to the Issuer by the Fiscal Agent; or
(d) The Issuer or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in a
principal amount of at least US$10,000,000 in the aggregate (but excluding
Debt outstanding hereunder) of the Issuer or such Subsidiary (as the case
may be), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any
event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate the
maturity of such Debt; or any such Debt shall be declared to be due and
payable, or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or an
offer to prepay, redeem, purchase or defease such Debt shall be required
to be made, in each case prior to the stated maturity thereof; or
(e) The Issuer or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
the Issuer or any of its Subsidiaries seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
removal of management and the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of
its property and, in the case of any such proceeding instituted against it
(but not instituted by it), either such proceeding shall remain
undismissed or unstayed for a period of thirty (30) consecutive Court Days
following notice thereof to the Issuer, or any of the actions sought in
such proceeding (including, without limitation, the entry of an order for
relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any sub part of its property) shall
occur; or the Issuer or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection
(e). Notwithstanding the foregoing, a petition seeking to adjudicate the
Issuer or any of its Subsidiaries bankrupt or insolvent shall not
constitute an Event of Default under this paragraph (e) if the sole basis
upon which such proceeding is commenced is the failure or alleged failure
of the Issuer or such Subsidiary to make
A-32
<PAGE> 132
payments with respect to Debt in circumstances that would not constitute
an Event of Default under paragraph (d) above; or
(f) Any judgment or order for the payment of money in excess of
US$10,000,000 shall be rendered against the Issuer or any of its
Subsidiaries and either (i) if no stay of enforcement of such judgment or
order, by reason of pending appeal, payment or otherwise, shall be in
effect, enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of thirty
(30) consecutive Court Days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal, payment or otherwise,
shall not be in effect; or
(g) The TGS License shall be revoked or suspended and, in the case of
a suspension, such suspension remains in effect for a period of thirty
(30) consecutive days;
then, and in any such event, the Fiscal Agent shall at the request, or may with
the consent, of Holders of or who represent at least 60% in aggregate principal
amount of the Outstanding Notes, by notice to the Issuer, declare the Notes,
all interest thereon and all other amounts payable under the Notes to be
forthwith due and payable, whereupon the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby
expressly waived by the Issuer; provided, however, that in case of Events of
Default specified in clause (e) above with respect to the Issuer, the Notes,
all such interest and all such amounts shall automatically become and be due
and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Issuer.
14. Notice of Default. The Fiscal Agent shall give notice to the
Issuer under Paragraph 13(c)(ii) promptly upon being requested to do so by any
Holder and shall thereupon notify all the Holders thereof.
15. Mutilated, Destroyed and Lost Notes. In case this Note shall
become mutilated, defaced, destroyed, lost or stolen, the Issuer will execute
and the Fiscal Agent shall authenticate and deliver a new Note, having a number
not contemporaneously outstanding, of like tenor (including the same date of
issuance) and equal principal amount, registered in the same manner, dated the
date of its authentication and bearing interest from the date to which interest
has been paid on this Note, in exchange and substitution for this Note (upon
surrender and cancellation thereof) or in lieu of and substitution for this
Note. In the case where this Note is destroyed, lost or stolen, the applicant
for a substituted Note shall furnish to the Issuer and the Fiscal Agent such
security or indemnity as may be required by them to save each of them harmless,
and, in every case of destruction, loss or theft of this
A-33
<PAGE> 133
Note, the applicant shall also furnish to the Issuer and the Fiscal Agent
satisfactory evidence of the destruction, loss or theft of this Note and of the
ownership thereof. The Fiscal Agent shall authenticate any such substituted
Note and deliver the same only upon written request or authorization of the
Issuer. Upon the issuance of any substituted Note, the Issuer may require the
payment by the Holder thereof of a sum sufficient to cover fees and expenses
connected therewith. In case this Note has matured or is about to mature and
shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer
may, instead of issuing a substitute Note, pay or authorize the payment of the
same (without surrender thereof except if this Note is mutilated or defaced)
upon compliance by the Holder with the provisions of this Paragraph 15, as
hereinabove set forth.
16. [Reserved]
17. Meetings of Holders; Modification and Waiver.
(a) The Fiscal Agent or the Issuer shall, upon the request of the
Holders of at least five percent in aggregate principal amount of the Notes at
the time Outstanding, or the Issuer or the Fiscal Agent at its discretion, may,
call a meeting of the Holders at any time and from time to time, to make, give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided by the Notes to be made, given or taken by the
Holders. With respect to all matters not contemplated in the Fiscal Agency
Agreement, meetings of Holders shall be held in accordance with the Negotiable
Obligations Law. The meetings shall be held in the city of Buenos Aires,
Argentina; provided, however, that the Issuer or the Fiscal Agent may determine
to hold any such meetings simultaneously in Buenos Aires and in The City of New
York by any means of telecommunication which permits the participants to hear
and to speak to each other. In any case, subject to the foregoing, meetings
shall be held at such time and at such place as the Issuer or the Fiscal Agent
shall determine. If a meeting is being held pursuant to a request of Holders,
the agenda for the meeting shall be as determined in the request and such
meeting shall be convened within forty (40) days from the date such request is
received by the Fiscal Agent or the Issuer, as the case may be. Meetings called
to adopt a resolution are subject to a first and second call, the second to
occur upon the failure of the first. Notice of any meeting of Holders (which
shall include the date, place and time of the meeting, the agenda therefor and
the requirements to attend) shall be given, in the case of a first call, not
less than ten (10) days nor more than thirty (30) days prior to the date fixed
for the meeting and, in the case of a second call notice will be given not less
than eight days prior to the date of such meeting. Each such notice shall be
given in the Official Gazette of Argentina and, while there are Holders
domiciled in Argentina, in a newspaper having general circulation in Argentina
and also in the manner provided for hereunder and any publication of such
notices shall be, in the case of a first call, for five consecutive business
days in each place of publication and, in the case of a second call, for three
consecutive business days in each place of publication.
A-34
<PAGE> 134
Both the first and second call for a meeting of Holders may be called
simultaneously, in which case the second call, upon the failure of the first,
may be held within an hour of the first. Each Note will entitle the Holder
thereof to one vote per unit of principal amount of the currency in which such
Note has been issued in any Holders' meeting.
In case at any time the Holders of at least 5% in aggregate principal
amount of the Notes at the time Outstanding shall have requested the Fiscal
Agent or the Issuer to call a meeting of the Holders for any purpose specified
in the Notes, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and neither the Fiscal Agent nor the
Issuer shall have made the first publication of the notice of such meeting and
mailed notice of such meeting to Holders within forty (40) days after receipt
of such request or shall thereafter have proceeded to cause the meeting to be
held, then the Holders of the Notes in the amount above specified may request
the CNV or the relevant courts to convene such meeting.
Any meeting of Holders duly called at which a quorum is
present may be adjourned once to a date within thirty (30) days from the date
of such meeting by persons entitled to vote a majority in principal amount of
the Notes represented at the meeting; and the meeting may be held as so
adjourned without further notice.
(b) Persons Entitled to Vote at Meetings. To be entitled to vote at
any meeting of Holders, a person shall be (1) a Holder, or (2) a person duly
appointed by an instrument in writing as proxy for a Holder or Holders by such
Holder or Holders.
The only persons who shall be entitled to be present or to speak at
any meeting of Holders shall be the persons entitled to vote at such meeting,
any representatives of the Fiscal Agent and any representatives of the Issuer.
Decisions shall be made by the affirmative vote of the Holders of more than 50%
in aggregate principal amount of the Notes at the time Outstanding present or
represented at a meeting of such Holders at which a quorum is present;
provided, however, that the unanimous consent or the unanimous affirmative vote
of the Holders shall be required to adopt a valid decision on any of the
matters specified in the following four clauses:
(i) change the Maturity Date of the principal of, or any instalment
of principal or interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof or reduce the amount of the principal of any Note which
would be due and payable upon a declaration of acceleration of the
Maturity thereof, or the coin or currency in which, any Note or any
premium or interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Maturity Date
thereof (or, in the case of redemption, on or after the Redemption Date),
or
A-35
<PAGE> 135
(ii) reduce the percentage in principal amount of Outstanding Notes,
the consent of whose Holders is required for any waiver (of compliance
with certain provisions of the Fiscal Agency Agreement or certain defaults
under the Notes and their consequences) provided for herein or in the
Fiscal Agency Agreement, or
(iii) reduce the percentage in principal amount of the Outstanding
Notes, the consent of the Holders of which is required for the adoption of
a resolution at a meeting of Holders held pursuant to this Paragraph 17,
or the quorum required at any such meeting of Holders at which a
resolution is adopted or the percentage in principal amount of Outstanding
Notes the Holders of which are entitled to request the calling of a
meeting of Holders, or
(iv) modify any of the provisions of this Paragraph 17, except to
increase any such percentage or to provide that certain provisions of the
Notes or the Fiscal Agency Agreement cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby.
(c) The quorum at any meeting to adopt a resolution with respect to
the Notes will be Persons who are Holders of or who represent at least 60% in
aggregate principal amount of the Outstanding Notes; provided, however, that at
any such reconvened meeting adjourned for lack of the requisite quorum, the
quorum will be Persons holding or representing at least 30% aggregate principal
amount of the Notes at the time Outstanding. Any instrument given by or on
behalf of any Holder in connection with any consent to any such waiver or
change will be irrevocable once given and will be conclusive and binding on all
subsequent Holders of such Note.
(d) The Issuer and the Fiscal Agent may, without the vote or consent
of any Holder, amend the Fiscal Agency Agreement or the Notes for the purpose
of (a) adding to the covenants of the Issuer for the benefit of the Holders, or
(b) surrendering any right or power conferred upon the Issuer, or (c) securing
the Notes pursuant to the requirements hereof, thereof or otherwise, or (d)
evidencing the succession to the Issuer and the assumption by such successor of
the covenants and obligations of the Issuer herein and in the Notes as
permitted by the Fiscal Agency Agreement and the Notes, or (e) modifying the
restrictions on, and procedures for, resale and other transfers of the Notes to
the extent required by any change in applicable law or regulation (or the
interpretation thereof) or in practices relating to the resale or transfer of
restricted securities generally, or (f) accommodating the issuance, if any, of
Notes in book-entry or certificated form and matters related thereto, or (g)
curing any ambiguity or curing, correcting or supplementing any provision
contained in the Fiscal Agency Agreement or in the Notes in a manner which does
not adversely affect the interest of a Holder in any material respect, or (h)
effecting any amendment which the Issuer and the Fiscal Agent may determine and
which shall not adversely affect the interest of any Holder.
A-36
<PAGE> 136
It shall not be necessary for the vote or consent of the Holders to
approve the particular form of any proposed modification, amendment,
supplement, request, demand, authorization, direction, notice, consent, waiver
or other action but it shall be sufficient if such vote or consent shall
approve the substance thereof.
The Fiscal Agent shall incur no liability in relying upon written
advice of counsel, who may be counsel to the Issuer, or a certificate of an
Authorized Officer of the Issuer, as conclusive evidence that (i) any amendment
of the Fiscal Agency Agreement or the Notes pursuant to this Paragraph 17
complies with the provisions of the Notes and the Fiscal Agency Agreement and
(ii) the Fiscal Agent is authorized by the terms of the Notes and the Fiscal
Agency Agreement to execute such amendment.
(e) Binding Nature of Amendments, Notices, Notations, Etc. Except as
provided above, any modifications, amendments or waivers to the terms and
conditions of the Notes will be conclusive and binding on all Holders, whether
or not they have given such consent or were present at any meeting, and whether
or not notation of such modifications, amendments or waivers is made upon the
Notes if duly passed at a meeting convened and held in accordance with the
provisions of the Negotiable Obligations Law. Notice of any modification or
amendment of, supplement to, or request, demand, authorization, direction,
notice, consent, waiver or other action with respect to the Notes or the Fiscal
Agency Agreement (other than for purposes of curing any ambiguity or of curing,
correcting or supplementing any defective provision hereof or thereof) shall be
given to each Holder of Notes affected thereby.
(f) "Outstanding" Defined. For purposes of the provisions of the
Fiscal Agency Agreement and the Notes, any Note authenticated and delivered
pursuant to the Fiscal Agency Agreement shall, as of any date of determination,
be deemed to be "Outstanding", except:
(i) Notes theretofore canceled by the Fiscal Agent or delivered to
the Fiscal Agent for cancellation;
(ii) Notes which have been called for redemption in accordance with
their terms or which have become due and payable at maturity or otherwise
and with respect to which monies sufficient to pay the principal thereof
and any interest thereon shall have been paid or duly provided for;
(iii) Notes in lieu of or in substitution for which other Notes shall
have been authenticated and delivered pursuant to the Fiscal Agency
Agreement; or
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Notes are present at a meeting of Holders for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice,
A-37
<PAGE> 137
consent, waiver, amendment, modification or supplement hereunder, Notes owned
directly or indirectly by the Issuer or any of its affiliates shall be
disregarded and deemed not to be Outstanding; except that, in determining
whether the Fiscal Agent shall be protected in making such calculation or in
relying upon any such request, demand, authorization, direction, notice,
consent, waiver, amendment, modification or supplement, only Notes which a
Responsible Officer of the Fiscal Agent knows to be so owned shall be
disregarded. "Responsible Officer" of the Fiscal Agent shall mean any officer
within the corporate trust department of the Fiscal Agent located at the Fiscal
Agent's Corporate Trust Office.
(g) Determination of Voting Rights; Conduct of Meetings. The Fiscal
Agent may make such reasonable and customary regulations as it may deem
advisable for any meeting of Holders in regard to the proof of appointment of
proxies in respect of the Holders, the record date for determining the
registered owners of Notes who are entitled to vote at such meeting (which
record date shall be set forth in the notice calling such meeting and which
shall not be less than thirty (30) nor more than sixty (60) days prior to such
meeting), the adjournment of such meeting, the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate. The appointment of any
proxy shall be proved by having the signature of the person executing the proxy
certified by a court, a notary public or a bank; provided, however, that the
members of the Board of Directors, Syndics and employees of the Issuer cannot
act as proxy for the Holders. The chairman shall be the Fiscal Agent or a
Syndic or, if the Fiscal Agent or a Syndic can not act as chairman, a
representative of the Company's supervising authority (which currently is the
CNV) or a person appointed by a court. The chairman of the meeting shall have
no right to vote, except as a Holder or proxy. A record of the proceedings of
each meeting of Holders shall be prepared, and one copy of such record shall be
delivered to the Issuer and another to the Fiscal Agent to be preserved by the
Fiscal Agent.
18. Submission to Jurisdiction; Service of Process. (a) The Issuer
hereby submits to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York State court
sitting in New York City for purposes of all legal proceedings arising out of
or relating to the Notes. The Issuer irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(b) The Issuer hereby irrevocably designates, appoints, authorizes and
empowers as its agent for service of process, CT Corporation System at its
offices currently located at 1633 Broadway, New York, New York 10019 to accept
and acknowledge for and on behalf of the Issuer service of any and all process,
notices or other documents that may
A-38
<PAGE> 138
be served in any suit, action or proceeding relating hereto in any New York
state or Federal court sitting in the State of New York.
(c) In lieu of service upon its agent, the Issuer consents to process
being served in any suit, action or proceeding relating hereto, to the extent
permitted by applicable law, by mailing a copy thereof by registered or
certified air mail, postage prepaid, return receipt requested, to its address
specified in Section 18 of the Fiscal Agency Agreement. To the extent permitted
by applicable law, each party to the Fiscal Agency Agreement agrees that such
service (1) shall be deemed in every respect effective service of process upon
it in any such suit, action or proceeding and (2) shall be taken and held to be
valid personal service upon and personal delivery to it.
(d) Nothing in this Paragraph 18 shall affect the right of any party
to the Fiscal Agency Agreement to serve process in any manner permitted by law,
or limit any right that any party hereto may have to bring proceedings against
any other party hereto in the courts of any jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other
jurisdiction.
(e) The Issuer agrees that a final judgment against it shall be final
and conclusive and may be enforced in any other jurisdiction other than any New
York State court sitting in New York City or any United States Federal District
court in the Southern District of New York, and that a certified or otherwise
duly authenticated copy of the judgment shall be conclusive evidence of the
fact and amount of its indebtedness.
19. Waiver of Sovereign Immunity. To the extent that the Issuer has or
hereafter may be entitled to claim or may acquire, for itself or any of its
assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or its
property, it hereby irrevocably waives such immunity in respect of its
obligations under the Fiscal Agency Agreement and under the Notes to the
fullest extent permitted by applicable law and, without limiting the generality
of the foregoing, agrees that the waivers set forth in this Paragraph shall be
effective to the fullest extent now or hereafter permitted under the Foreign
Sovereign Immunities Act of 1976 of the United States and are intended to be
irrevocable for purposes of such Act to the extent permitted thereby.
20. Judgement Currency. (a) If for the purposes of enforcing the
obligations of the Issuer under the Notes it is necessary to convert a sum due
from the Issuer in Dollars into another currency, the parties to the Fiscal
Agency Agreement agree, to the fullest extent permitted by applicable law, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Holders could purchase Dollars with such currency at or
about 11:00 A.M. (New York City time) on the Domestic Business Day
A-39
<PAGE> 139
preceding that on which final judgment is given. To the fullest extent
permitted by applicable law, the obligations in respect of any sum due to any
Holder under the Notes shall, notwithstanding any adjudication expressed in a
currency other than Dollars, be discharged only to the extent that on the
Domestic Business Day following receipt by such Holder of any sum adjudged to
be so due in such other currency such Holder may in accordance with normal
banking procedures purchase Dollars with such other currency; if the amount of
Dollars so purchased is less than the sum originally due to such Holder in
Dollars, the Issuer agrees, to the fullest extent permitted by applicable law,
as a separate obligation and notwithstanding any such adjudication, to
indemnify such Holder against such loss, and if the amount of Dollars so
purchased exceeds the sum originally due to such Holder, such Holder shall
remit such excess to the Issuer.
(b) All amounts due under the Notes shall be payable in Dollars. If
due to exchange controls in the Republic of Argentina or restrictions on the
transfer of foreign currency outside the Republic of Argentina or for any other
reason the Issuer shall be prevented from paying when due in Dollars any amount
owing under the Notes, the Issuer shall deliver to the Paying Agent External
Bonds of the Republic of Argentina or any other debt securities issued by the
Republic of Argentina denominated in Dollars ("Bonex") in an amount sufficient
for the Paying Agent to acquire from the sale thereof in The City of New York
such amount of Dollars net of any commissions, fees or other costs. The Paying
Agent shall sell such Bonex promptly after their delivery to it and, in any
event, within thirty (30) days after each such delivery, unless the Issuer
shall, at the Paying Agent's request, otherwise agree in writing. The Issuer's
obligations under the Notes shall be discharged on account of any such delivery
and sale only to the extent of the net Dollars received by the Paying Agent
therefrom and only on the date of such receipt.
21. Obligation Absolute. No reference herein to the Fiscal Agency
Agreement and no provision of this Note or of the Fiscal Agency Agreement shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on this Note at the times,
place and rate, and in the coin or currency, herein prescribed.
22. Waiver of Jury Trial. Each of the Issuer, the Fiscal Agent and the
Holders hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to the Notes or the actions of the Fiscal Agent or
any Holder in the negotiation, administration, performance or enforcement
thereof.
23. Use of English Language. Any translation of this Note into another
language shall have no interpretive effect. All documents or notices to be
delivered pursuant
A-40
<PAGE> 140
to or in connection with the Fiscal Agency Agreement shall be in the English
language or, if any such document or notice is not in the English language,
accompanied by an English translation thereof (except for the notes to the
Issuer's quarterly financial statements which may be in the Spanish language),
and the English language version of any such document or notice shall control
for purposes hereof, provided, however, that the Spanish version of this Note,
or the certified translations of all documents or notices to be delivered
pursuant to or in connection with the Fiscal Agency Agreement shall prevail for
purposes of CNV regulation and supervision.
24. Governing Law. The Negotiable Obligations Law will govern the
requirements for the Notes to qualify as negotiable obligations thereunder
while such law, together with Argentine Law No. 19,550, as amended (the
"Argentine Business Corporations Law"), and other applicable Argentine laws and
regulations, will govern the capacity and corporate authorization of the Issuer
to execute and deliver the Notes and the approval of the public offering of
Notes by the CNV. All other matters in respect of the Notes will be governed by
and construed in accordance with the law of the State of New York, United
States of America.
25. Visitation Rights. On five (5) days' notice, the Issuer shall
permit the Fiscal Agent, Agent, any Holder, or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, the Issuer and any of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Issuer
and any of its Subsidiaries with any of their officers or directors and with
their independent certified public accountants; provided, however, that the
Issuer has a right to be present at any such meetings with such certified
public accountants; and provided further that the Issuer shall not be required
by this Section 25 to discuss or disclose information which would violate
General Resolution No. 227 of the CNV or other applicable securities laws of
Argentina or the United States.
A-41
<PAGE> 141
[FORM OF THE REVERSE OF DEFINITIVE NOTES]
<TABLE>
<CAPTION>
ID No. and Tax
Name of Signature and No. ("CUIT")
Registered Date of Seal of of Registered
Holder(1) Liens Registration Registrar Holder(2)
<S> <C> <C> <C> <C>
- ---------- ---------- ------------ ------------- --------------
- ---------- ---------- ------------ ------------- --------------
- ---------- ---------- ------------ ------------- --------------
- ---------- ---------- ------------ ------------- --------------
</TABLE>
- ---------
* Legal name of entity or full name of individuals.
** Only applicable if the Holder is an individual or entity whose residence
or domicile is in Argentina.
A-42
<PAGE> 142
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE:
------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
the within Note of Compania de Inversiones de Energia S.A. and hereby does
irrevocably constitute and appoint
- -------------------------------------------------------------------------------
to transfer the said Note on the books of the within-named Issuer, with full
power of substitution in the premises.
Dated:
-----------------
----------------------------------------
Notice: The signature to this assignment
must correspond with the name as written
upon the face of the certificate in
every particular without alteration or
enlargement or any change whatever.
F-1
<PAGE> 143
SCHEDULE I
(Pursuant to the definition of Temporary Cash Investment in Section 1(e))
Banque Europeenne pour l=Amerique Latine (BEAL) S.A.
Banque Nationale de Paris
The First National Bank of Boston
Chase Manhattan Bank
Citibank
Deutsche Bank
Banco Frances del Rio de la Plata
Banco de Galicia y Buenos Aires
Banco Holandes Unido
Lloyd's Bank
Morgan Guaranty Trust Company of New York.
Banco de la Nacion Argentina
Banco de la Provincia de Buenos Aires
Banco Rio de la Plata
Banco Roberts
Banco Sudameris
Banco Supervielle Societe Generale S.A.
S-1
<PAGE> 144
[TO BE INCLUDED IN GLOBAL NOTES]
SCHEDULE II
CHANGES IN PRINCIPAL AMOUNT OF GLOBAL NOTE
<TABLE>
<CAPTION>
Amount
of increase Principal
(decrease) in amount of this global
principal amount of Note following such Notation made
Date this global increase on behalf of the
Made Note (decrease) Fiscal Agent
<S> <C> <C> <C>
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
- -------------- ------------------- --------------------- ----------------
</TABLE>
S-2
<PAGE> 145
EXHIBIT B
FORM OF TRANSFER CERTIFICATE
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RESTRICTED GLOBAL
NOTE TO REGULATION S GLOBAL NOTE
(Transfers Pursuant to ' 7(b)(ii)
of the Fiscal Agency Agreement)
Societe Generale, Southwest Agency,
as Fiscal and Transfer Agent,
2001 Ross Avenue, Suite 4800,
Dallas, Texas 75201
Re: Compania de Inversiones de Energia S.A.
US$220,000,000 Floating Rate Notes
Due April 22, 2002 (the "Notes")
Reference is hereby made to the Fiscal Agency Agreement dated as of
April 18, 1997 (the "Fiscal Agency Agreement") among Compania de Inversiones de
Energia S.A., as Issuer, Societe Generale, Southwest Agency, as Fiscal Agent,
Co-Registrar, Paying Agent and Transfer Agent, and Banco Supervielle Societe
Generale S.A., as Registrar, Paying Agent and Transfer Agent. Capitalized terms
used but not defined herein shall have the meanings given to them in the Fiscal
Agency Agreement.
This letter relates to US$____________ principal amount of Notes which
are held in the form of the Restricted Global Note (CUSIP No. 20444TAA6) with
the U.S. Depositary in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested an exchange or transfer of such
beneficial interest for an interest in the Regulation S Global Note (CUSIP No.
P30564AA9) to be held with [Euroclear] [Cedel Bank] (Common Code 7551266)
through the U.S. Depositary.
In connection with such request and in respect of such Notes, the
Transferor does hereby certify that such exchange or transfer has been effected
in accordance with the transfer restrictions set forth in the Notes and
pursuant to and in accordance with Regulation S under the Securities Act, and
accordingly the Transferor does hereby certify that:
(1) the offer of the Notes was not made to a person in the United
States,
B-1
<PAGE> 146
[(2) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the transferee was outside the United
States,]*
[(2) the transaction was executed in, on or through the facilities of
a designated offshore securities market and neither the Transferor nor any
person acting on its behalf knows that the transaction was pre-arranged
with a buyer in the United States,]*
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable,
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act, and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above was held with the U.S. Depositary through
Euroclear or Cedel Bank or both (Common Code 7551266).
This Certificate and the statements contained herein are made for your
benefit and the benefit of the Issuer.
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated: ,
--------------- ----
- ---------
* Insert one of these two provisions, which come from the definition of
"offshore transaction" in Regulation S.
B-2
<PAGE> 147
EXHIBIT C
FORM OF TRANSFER CERTIFICATE
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER FROM RESTRICTED GLOBAL
NOTE TO UNRESTRICTED GLOBAL NOTE
(Transfers pursuant to ' 7(b)(iii)
of the Fiscal Agency Agreement)
Societe Generale, Southwest Agency,
as Fiscal and Transfer Agent,
2001 Ross Avenue, Suite 4800,
Dallas, Texas 75201
Re: Compania de Inversiones de Energia S.A.
US$220,000,000 Floating Rate Notes
Due April 22, 2002 (the "Notes")
Reference is hereby made to the Fiscal Agency Agreement dated as of
April 18, 1997 (the "Fiscal Agency Agreement") among Compania de Inversiones de
Energia S.A., as Issuer, Societe Generale, Southwest Agency, as Fiscal Agent,
Co-Registrar, Paying Agent and Transfer Agent, and Banco Supervielle Societe
Generale S.A., as Registrar, Paying Agent and Transfer Agent. Capitalized terms
used but not defined herein shall have the meanings given to them in the Fiscal
Agency Agreement.
This letter relates to US$_____________ principal amount of Notes
which are held in the form of the Restricted Global Note (CUSIP No. 20444TAA6)
with the U.S. Depositary in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested an exchange or transfer of such
beneficial interest in the Notes for an interest in the Unrestricted Global
Note (CUSIP No. _________).
In connection with such request, and in respect of such Notes, the
Transferor does hereby certify that such exchange or transfer has been effected
in accordance with the transfer restrictions set forth in the Notes and, (i)
with respect to transfers made in reliance on Regulation S under the Securities
Act, the Transferor does hereby certify that:
(1) the offer of the Notes was not made to a person in the United
States,
C-1
<PAGE> 148
[(2) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on its
behalf reasonably believed that the transferee was outside the United
States,]*
[(2) the transaction was executed in, on or through the facilities of
a designated offshore securities market and neither the Transferor nor any
person acting on its behalf knows that the transaction was pre-arranged
with a buyer in the United States,]*
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable,
and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
and (ii) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Notes are being
transferred in a transaction permitted by Rule 144 under the Securities Act.
This Certificate and the statements contained herein are made for your
benefit and the benefit of the Issuer.
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated: ,
--------------- ----
- ---------
* Insert one of these two provisions, which come from the definition of
"offshore transaction" in Regulation S.
C-2
<PAGE> 149
EXHIBIT D
FORM OF TRANSFER CERTIFICATE
FORM OF TRANSFER CERTIFICATE
FOR TRANSFER OR EXCHANGE FROM REGULATION S GLOBAL
NOTE TO RESTRICTED GLOBAL NOTE
(Transfers Pursuant to ' 7(b)(iv)
of the Fiscal Agency Agreement)
Societe Generale, Southwest Agency,
as Fiscal and Transfer Agent,
2001 Ross Avenue, Suite 4800,
Dallas, Texas 75201
Re: Compania de Inversiones de Energia S.A.
US$220,000,000 Floating Rate Notes
Due April 22, 2002 (the "Notes")
Reference is hereby made to the Fiscal Agency Agreement dated as of
April 18, 1997 (the "Fiscal Agency Agreement") among Compania de Inversiones de
Energia S.A., as Issuer, Societe Generale, Southwest Agency, as Fiscal Agent,
Co-Registrar, Paying Agent and Transfer Agent, and Banco Supervielle Societe
Generale S.A., as Registrar, Paying Agent and Transfer Agent. Capitalized terms
used but not defined herein shall have the meanings given to them in the Fiscal
Agency Agreement.
This letter relates to US$_____________ principal amount of Notes
which are held in the form of the Regulation S Global Note (CUSIP No.
P30564AA9) with [Euroclear] [Cedel Bank]* (Common Code 7551266) through the
U.S. Depositary in the name of [insert name of transferor] (the "Transferor").
The Transferor has requested an exchange or transfer of such beneficial
interest in the Notes for an interest in the Restricted Global Note.
In connection with such request, and in respect of such Notes, the
Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii)
Rule 144A under the Securities Act to a transferee that the Transferor
reasonably believes is purchasing the Notes for its own account or an account
with respect to which the transferee exercises sole investment discretion and
the
- ---------
* Select appropriate depositary.
D-1
<PAGE> 150
transferee and any such account is a "qualified institutional buyer" within the
meaning of Rule 144A, in each case in a transaction meeting the requirements of
Rule 144A and in accordance with any applicable securities laws of any state of
the United States or any other jurisdiction.
This Certificate and the statements contained herein are made for your
benefit and the benefit of the Issuer.
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated: ,
--------------- ----
D-2
<PAGE> 151
EXHIBIT E
FORM OF TRANSFER CERTIFICATE
FORM OF TRANSFER CERTIFICATE
FOR EXCHANGE OR TRANSFER OF
RESTRICTED DEFINITIVE NOTE
(Transfers and exchanges pursuant to ' 7(c)
of the Fiscal Agency Agreement)
Societe Generale, Southwest Agency,
as Fiscal and Transfer Agent
2001 Ross Avenue, Suite 4800,
Dallas, Texas 75201
Re: Compania de Inversiones de Energia S.A.
US$220,000,000 Floating Rate Notes
Due April 22, 2002 (the "Notes")
Reference is hereby made to the Fiscal Agency Agreement dated as of
April 18, 1997 (the "Fiscal Agency Agreement") among Compania de Inversiones de
Energia S.A., as Issuer, Societe Generale, Southwest Agency, as Fiscal Agent,
Co-Registrar, Paying Agent and Transfer Agent, and Banco Supervielle Societe
Generale S.A., as Registrar, Paying Agent and Transfer Agent. Capitalized terms
used but not defined herein shall have the meanings given to them in the Fiscal
Agency Agreement.
This letter relates to US$_________ principal amount of Restricted
Definitive Notes held in definitive form by [insert name of transferor] (the
"Transferor"). The Transferor has requested an exchange or transfer of such
Notes.
The Transferor does hereby certify as follows:
[check one]
[ ](a) The Notes are being transferred in accordance with Rule 144A
under the Securities Act of 1933, as amended (the "Securities
Act").
[ ](b) The Notes are being transferred in an offshore transaction in
accordance with Rule 904 of Regulation S under the Securities
Act.
E-1
<PAGE> 152
[ ](c) The Notes are being transferred in accordance with Rule 144
under the Securities Act.
[ ](d) The Notes are being exchanged without transfer of record or
beneficial ownership.
This Certificate and the statements contained herein are made for your
benefit and the benefit of the Issuer.
[Insert Name of Transferor]
By:
------------------------------------
Name:
Title:
Dated: ,
--------------- ----
E-2
<PAGE> 153
SCHEDULE I
SCHEDULE OF
CERTAIN HOLDER
ADDRESSES
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
PURCHASING OFFICE:
Banque Europeenne pour l'Amerique Latine Rue de l'Association 59
(BEAL) S.A. B-1000 Brussels
BELGIUM
Attn: Frederic Adam/J.C. T'Serclaes
Telephone No.: 011-322-229-2020
Facsimile No.: 011-322-229-2065/35
NOTICES: Same as above and
Tte. Juan D. Peron, 338
(1038) Buenos Aires
ARGENTINA
Attn: Diego Garcia del Rio
Telephone No.: 011-541-342-8666
Facsimile No.: 011-541-334-9174
Dresdner Bank Luxembourg S.A
PURCHASING OFFICE:
26, rue du Marche-aux-Herbes
L-2097 Luxembourg
LUXEMBOURG
Attn: Risk Management
Telephone No.: 011-352-4760-1
Facsimile No.: 011-352-4760-565
NOTICES:
Attn: Administrative Department
Telephone No.: 011-352-4760-1
Facsimile No.: 011-352-4760-565
</TABLE>
1
<PAGE> 154
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
CIBC Inc. PURCHASING OFFICE:
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, GA 30339
UNITED STATES OF AMERICA
Attn: Kathryn McGovern
Telephone No.: (770) 319-4821
Facsimile No.: (770) 319-4950
NOTICES:
Same
Banco de la Provincia de Buenos Aires - PURCHASING OFFICE:
Grand Cayman Branch P.O. Box 6-4592
El Dorado
Panama
REPUBLIC OF PANAMA
NOTICES:
Edificio Banco Exterior, Piso 22
Avenida Balboa
Panama
REPUBLIC OF PANAMA
Attn: Eduardo E. Caro/Marcela de Ng
Telephone No.: 011-507-227-2167/2168
Facsimile No.: 011-507-225-0431
</TABLE>
2
<PAGE> 155
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Riobank International PURCHASING OFFICE:
Kirk House, 4th Floor
P.O. Box 323 13-SMB
Grand Cayman
CAYMAN ISLANDS
Attn: N/A
Telephone No.: 011-345-945-5507
Facsimile No.: 011-345-945-5509
NOTICES:
Bartolome Mitre 480, 8 Piso
1036 Buenos Aires
ARGENTINA
Attn: Ricardo Rodriguez
Telephone No.: 011-541-340-1173
Facsimile No.: 011-541-340-1164
Bank of America National Trust and Savings
Association PURCHASING OFFICE:
500 Ellinwood Way, Suite 100
Pleasant Hill, CA 94523
UNITED STATES OF AMERICA
Telephone No.: (510) 603-3120
Facsimile No.: (510) 603-3142
NOTICES:
(simultaneously to both of the following):
500 Ellinwood Way, Suite 100
Pleasant Hill, CA 94523
UNITED STATES OF AMERICA
Attn: Swan Oey
Telephone No.: (510) 603-3120
Facsimile No.: (510) 603-3142
and
Attn: Ingrid Marcarian
25 de Mayo 537
1002 Buenos Aires
ARGENTINA
Telephone No.: 011-541-319-2652
Facsimile No.: 011-541-313-0476
</TABLE>
3
<PAGE> 156
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Bank of Montreal PURCHASING OFFICE:
700 Louisiana, Suite 4400
Houston, TX 77002
UNITED STATES OF AMERICA
Attn: Natasha Glossop
Telephone No.: (713) 546-9752
Facsimile No.: (713) 223-4007
NOTICES:
Same as above
and
Attn: Neelam Dass/Farid Ali
Telephone No.: (312) 750-3727
Facsimile No.: (312) 750-6061
Creditanstalt - Bankverein PURCHASING OFFICE:
125 London Wall
London EC2Y 5DD
UNITED KINGDOM
Attn: Gavin Burke
Telephone No.: 011-44-171-417-4879
Facsimile No.: 011-44-171-417-4803/4804
NOTICES:
Same as above
and
Attn: Adrian Beckett/Julie Bentley
Telephone No.: 011-44-171-417-4834/4837
Facsimile No.: 011-44-171-417-4803/4804
</TABLE>
4
<PAGE> 157
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Goldman, Sachs & Co. PURCHASING OFFICE:
c/o Goldman, Sachs & Co.
85 Broad Street, 6th Floor
New York, NY 10004
UNITED STATES OF AMERICA
Attn: Kathy King
Telephone No.: (212) 902-1040
Facsimile No.: (212) 902-4597
NOTICES:
Same as above
Industrial Bank of Japan Trust Company PURCHASING OFFICE:
1251 Avenue of the Americas
New York, New York 10020-1104
UNITED STATES OF AMERICA
Attn: Steven Fineberg
Telephone No.: (212) 282-4060
Facsimile No.: (212) 282-4480
NOTICES:
Attn: Atsushi Kawai
Telephone No.: (212) 309-6521
Facsimile No.: (212) 949-0134
</TABLE>
5
<PAGE> 158
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
ING Bank N.V. PURCHASING OFFICE:
Curacao Branch
Zeelandia Commercial Center
Kaya W.F.G. (Jombi)
Mensing 14
P.O. Box 3895
Willemstad - Curacao
NETHERLANDS ANTILLES
Attn: Harry Kampschoer
Telephone No.: 011-599-9-327-000
Facsimile No.: 011-599-9-327-502
NOTICES:
c/o ING Bank N.V. Buenos Aires
Ing. Butty 220, Piso 22
(1300) Capital Federal
ARGENTINA
Attn: Norma Messina/Alejandra Losada
Telephone No.: 011-541-310-4700/4850
Facsimile No.: 011-541-314-5210
J.P. Morgan Securities Limited PURCHASING OFFICE:
International Banking Facility
New York, NY
UNITED STATES OF AMERICA
Telephone No.: (302) 634-4267
NOTICES:
Corrientes 411
1043 Buenos Aires
ARGENTINA
Attn: Gabriel Micheletti (Business Matters)
Telephone No.: 011-541-348-7345
Facsimile No.: 011-541-348-7228
Eduardo Menutti (Administrative Matters)
Telephone No.: 011-541-348-7309
Facsimile No.: 011-541-348-7228
</TABLE>
6
<PAGE> 159
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Toronto Dominion (Texas) Inc. PURCHASING OFFICE:
909 Fannin Street, Suite 1700
Houston, Texas 77010
UNITED STATES OF AMERICA
Attn: Neva Nesbitt
Telephone No.: (713) 653-8261
Facsimile No.: (713) 951-9921
NOTICES:
Same as above
and
The Toronto-Dominion Bank
31 West 52nd Street
New York, NY
UNITED STATES OF AMERICA
Attn: David Silverstein/Deborah Gravinese
Telephone No.: (212) 468-0774/0777
Facsimile No.: (212) 262-1929
PURCHASING OFFICE:
Bank of Boston Trust Company (Bahamas) Charlotte House
Limited P.O. Box N-3930
Nassau
BAHAMAS
Telephone No.: (809) 322-8531
NOTICES:
For business/credit issues:
Attn: Helena Radzyminzki/Adriana Cimini
Telephone No.: 011-541-346-3255/3140
Facsimile No.: 011-541-346-3245
For administrative issues:
100 Rustcraft Road, MA-DED-74-02-02D
Dedham, MA 02026
UNITED STATES OF AMERICA
Attn: John Kelly/Dorrane Langent
Telephone No.: (617) 467-2081/2099
Facsimile No.: (617) 467-2094
</TABLE>
7
<PAGE> 160
<TABLE>
<CAPTION>
NAME OF INITIAL PURCHASER PURCHASING OFFICE AND ADDRESS FOR NOTICES
- ------------------------- -----------------------------------------
<S> <C>
Banca Commerciale Italiana - PURCHASING OFFICE:
New York Branch One William Street
New York, New York 10004
UNITED STATES OF AMERICA
Attn: Jack Dickerhof
Telephone No.: (212) 607-3500/3896
Facsimile No.: (212) 809-2124
Republic National Bank of New York NOTICES:
Same as above
PURCHASING OFFICE:
Republic National Bank of New York
(Uruguay) S.A.
Attn: Josef Rebalski
Telephone No.: 011-5982-95-3395
Facsimile No.: 011-5982-96-0125
NOTICES:
For business/credit issues:
Bartolome Mitre 343
(1036) Capital Federal
ARGENTINA
Attn: Marcelo Degrossi
Telephone No.: 011-541-349-1600
Facsimile No.: 011-541-112-259
For administrative issues:
Attn: Josef Rebalski
Telephone No.: 011-5982-95-3395
Facsimile No.: 011-5982-96-0125
</TABLE>
8
<PAGE> 161
<TABLE>
<CAPTION>
Name of Initial purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Societe Generale, Southwest Agency PURCHASING OFFICE:
2001 Ross Avenue
Suite 4800
Dallas, TX 75201
UNITED STATES OF AMERICA
Attn: Angela Aldridge
Telephone No.: (214) 979-2767
Facsimile No.: (214) 754-0171
NOTICES:
Same as above
Royal Bank of Canada PURCHASING OFFICE:
Financial Square
New York, New York 10005-3531
UNITED STATES OF AMERICA
Attn: Kenneth Bender
Telephone No.: (212) 428-6503
Facsimile No.: (212) 269-4378
NOTICES:
Attn: Sharon Peters
Telephone No.: (212) 428-6369
Facsimile No.: (212) 269-2372
</TABLE>
9
<PAGE> 162
EXHIBIT B
NOTICE OF CLOSING
NOTICE OF CLOSING
Societe Generale, Southwest Agency,
as Administrative Agent for the Purchasers parties
to the Purchase Agreement referred to below
April 17, 1997
Attention:
Ladies and Gentlemen:
The undersigned, Compania de Inversiones de Energia S.A.,
refers to the Purchase Agreement, dated as of April 18, 1997 (as amended or
modified from time to time, the "Purchase Agreement"; the terms defined therein
being used herein as therein defined), among the undersigned, certain
Arrangers, Managing Agents, Co-Agents, Lead Managers, Managers and Purchasers
parties thereto and Societe Generale, Southwest Agency, Dallas, Texas, as
Administrative Agent for said Purchasers, and hereby gives you notice,
irrevocably, pursuant to Section 3 of the Purchase Agreement, that the
undersigned hereby requests the Closing (the "Proposed Closing") under the
Purchase Agreement, and in that connection sets forth below the information
relating to the Proposed Closing as required by Section 3(a) of the Purchase
Agreement:
(i) The Eurodollar Business Day of the Proposed Closing is
April 22, 1997.
(ii) The aggregate amount of the Proposed Closing is US$220
Million.
(iii) The initial Interest Period is [check one]:
[ ] 3 months / [ ] 6 months and shall end on
________ __, 1997.
The undersigned hereby certifies that the representations and
warranties contained in Section 4 of the Purchase Agreement and Section 8 of
the Fiscal Agency Agreement are correct on and as of the date hereof as though
made on and as of such date.
Very truly yours,
Compania de Inversiones de Energia S.A.
By: By:
------------------------------ -------------------------------------
Name: Name:
--------------------------- ----------------------------------
Title: Title:
------------------------ -------------------------------
<PAGE> 163
EXHIBIT C
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Purchase Agreement dated as of April
18, 1997 (as amended or modified from time to time, the "Purchase Agreement")
among Compania de Inversiones de Energia S.A., a sociedad anonima organized
under the laws of the Republic of Argentina (the "Issuer"), the Arrangers,
Managing Agents, Co-Agents, Lead Managers, Managers and Purchasers named
therein (as defined in the Purchase Agreement) and Societe Generale, Southwest
Agency, as administrative agent for the Purchasers (the "Administrative
Agent"). Except as otherwise defined herein, terms used herein have the
meanings assigned to them in the Purchase Agreement.
The "Assignor" and the "Assignee" referred to on Schedule 1
hereto agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and
the Assignee hereby purchases and assumes from the Assignor, a
Commitment under the Purchase Agreement as of the date hereof equal to
the percentage interest specified on Schedule 1 hereto of the
Assignor's total Commitment under the Purchase Agreement. After giving
effect to such sale and assignment, the amount of the Assignee's
Commitment will be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it has full
power and authority to assign the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Purchase Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Purchase Agreement or any other instrument
or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Issuer or the performance or
observance by the Issuer of any of its obligations under the Purchase
Agreement or any other instrument or document furnished pursuant
thereto.
3. The Assignee (i) confirms that it has received a copy of
the Purchase Agreement (including all Exhibits thereto), together with
copies of the financial statements referred to in Section 4 of the
Purchase Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, any
Arranger, any Managing Agent, any Co-Agent, any Lead Manager, any
Manager or the Assignor or any other Purchaser and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in
-1-
<PAGE> 164
taking or not taking action under the Purchase Agreement; (iii)
confirms that it is an Eligible Assignee; (iv) appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Purchase Agreement as
are delegated to the Administrative Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental
thereto; and (v) agrees that it will perform in accordance with their
terms all of the obligations that by the terms of the Purchase
Agreement are required to be performed by it as a Purchaser.
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective
date for this Assignment and Acceptance (the "Effective Date") shall be
the date of acceptance hereof by the Administrative Agent, unless
otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the
Administrative Agent, as of the Effective Date, (i) the Assignee shall
be a party to the Purchase Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a
Purchaser thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Purchase Agreement.
6. Upon such acceptance and recording by the
Administrative Agent, from and after the Effective Date, the
Administrative Agent shall make all payments under the Purchase
Agreement to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Purchase Agreement for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of Schedule 1 to
this Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
-2-
<PAGE> 165
Schedule 1
to
Assignment and Acceptance
<TABLE>
<S> <C>
Percentage interest assigned: ___________%
Assignee's Commitment: $__________
Aggregate principal amount of Assignor's Commitment: $__________
Aggregate principal amount of Assignor's Commitment assigned: $__________
Aggregate principal amount of Assignor's Commitment not assigned: $__________
Effective Date:* __________________, 199_
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
[NAME OF ASSIGNOR], as Assignor
By:
-----------------------------------
Name:
Title:
Dated: , 199
---------------- --
[NAME OF ASSIGNEE], as Assignee
By:
-----------------------------------
Name:
Title:
Lending Office:
[Address]
Address for Notices:
[Address]
</TABLE>
- -----------------
* This date should be no earlier than five Business Days after the delivery of
this Assignment and Acceptance to the Administrative Agent.
-i-
<PAGE> 166
Accepted [and Approved]* this
_______ day of __________________, 199_
SOCIETE GENERALE, SOUTHWEST AGENCY,
as Administrative Agent
By:
-----------------------------------
Name:
Title:
[Approved this ______ day
of ____________________, 199_
COMPANIA DE INVERSIONES DE ENERGIA S.A.
By:
-----------------------------------
Name:
Title: ]**
- ----------------
* Required if the Assignee is an Eligible Assignee under clause (vi) of the
definition of "Eligible Assignee".
** Required if the Assignee is an Eligible Assignee under clause (iii), (iv),
(v) or (vi) of the definition of "Eligible Assignee".
-ii-
<PAGE> 167
EXHIBIT D
FORM OF OPINION OF INDEPENDENT
ARGENTINE COUNSEL FOR THE ISSUER
[LETTERHEAD OF MARVAL, O'FARRELL & MAIRAL]
April 22, 1997
To the Purchasers, Arrangers, Managing Agents,
Co-Agents, Lead Managers, Managers
and Administrative Agent Referred to Below
c/o Societe Generale, Southwest Agency,
Dallas, Texas, as Administrative Agent
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
USA
Dear Sirs:
We have acted as Argentine counsel to Compania de Inversiones
de Energia S.A. (the "Issuer") in connection with (i) the execution of the
Purchase Agreement, dated as of April 18, 1997 (the "Purchase Agreement") among
the Issuer, Societe Generale, Banco Supervielle Societe Generale S.A. and
Goldman, Sachs & Co., as Arrangers (the "Arrangers"), Bank of Montreal, Banque
Europeenne pour l'Amerique Latine (BEAL) S.A. and Dresdner Bank Luxembourg
S.A., as Managing Agents (the "Managing Agents"), Morgan Guaranty Trust Company
of New York, CIBC Inc., Banco de la Provincia de Buenos Aires - Grand Cayman
Branch, Toronto Dominion (Texas), Inc., Bank of Boston Trust Company (Bahamas)
Limited and ING Bank, N.V., as Co-Agents (the "Co-Agents"), Royal Bank of
Canada, Bank of America National Trust and Savings Association,
Creditanstalt-Bankverein, Banca Commerciale Italiana - New York Branch and The
Industrial Bank of Japan Trust Company, as Lead Managers (the "Lead Managers"),
RioBank International and Republic National Bank of New York (Uruguay) S.A., as
Managers (the "Managers"), Societe Generale, Southwest Agency, as
Administrative Agent (the "Administrative Agent"), and the Purchasers named
therein (the "Purchasers"), (ii) the execution of the Fiscal Agency Agreement,
dated as of April 18, 1997 (the "Fiscal Agency Agreement") among the Issuer,
Societe Generale, Southwest Agency, as Fiscal Agent, Paying Agent, Transfer
Agent and Registrar, Societe Generale, Southwest Agency as Paying Agent,
Transfer Agent and Co-Registrar, and Banco Supervielle Societe Generale S.A. as
Paying Agent, Transfer Agent and Registrar and (iii) and the issuance and sale
by the Issuer to the Purchasers of US$220,000,000 aggregate principal amount of
Floating Rates Notes
-1-
<PAGE> 168
due April 22, 2002 of the Issuer (the "Notes"), entitled to the benefits of the
Fiscal Agency Agreement. Except as otherwise defined herein, terms defined in
the Purchase Agreement, the Fiscal Agency Agreement or the Notes, as the case
may be, are used herein as defined therein.
In rendering the opinions expressed below, we have examined
the following agreements, instruments and other documents:
(a) copies of the Purchase Agreement and the Fiscal Agency
Agreement, including the form of Note and other
Exhibits thereto;
(b) a copy of the by-laws ("estatutos") of the Issuer, as
amended;
(c) a resolution of the board of directors of the Issuer
dated April 15, 1997; and
(d) such records of the Issuer and such other documents as
we have deemed necessary as a basis for the opinions
expressed below.
In our examination, we have assumed the genuineness of all
signatures (other than signatures on behalf of the Issuer), the authenticity of
all documents submitted to us as originals and the conformity with authentic
original documents of all documents submitted to us as copies, and have found
nothing to indicate that such assumptions are not fully justified. We have
also assumed that the Purchase Agreement the Fiscal Agency Agreement have been
duly executed and delivered by all parties thereto (other than the Issuer), in
each case pursuant to due authorization.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that:
1. Each of the Issuer and TGS has been duly organized and is
validly existing as a "sociedad anonima" in good standing under the laws of the
Republic of Argentina ("Argentina") and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals required
to conduct its business as now conducted except for such licenses,
authorizations, consents and approvals the failure to have which, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
2. The execution, delivery, and performance by the Issuer of
the Purchase Agreement, the Fiscal Agency Agreement and the Notes are within
the corporate power of the Issuer, have been duly authorized by all necessary
corporate action, and will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any
provision of applicable law or regulation or of the charter, by-laws or other
constitutive documents of the Issuer or, to our knowledge, of any agreement,
judgment,
-2-
<PAGE> 169
injunction, order, decree or other instrument binding upon the Issuer or, to
our knowledge, result in the creation or imposition of any Lien on any asset of
the Issuer.
3. Other than the authorization of the public offering of the
Notes by the Comision Nacional de Valores, or for the listing of the Notes on
the Buenos Aires Stock Exchange, which have been duly obtained and remain in
full force and effect as of the date of this opinion, no authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority is required to be obtained or made by the Issuer for the execution,
delivery and performance by the Issuer of the Purchase Agreement, the Fiscal
Agency Agreement or the Notes, including, without limitation, any governmental
authorization, license, approval or consent required by exchange control
regulations to enable the Issuer punctually to pay its obligations under the
Purchase Agreement, the Fiscal Agency Agreement or the Notes in U.S. Dollars at
the applicable office specified pursuant to the Purchase Agreement, the Fiscal
Agency Agreement or the Notes, respectively.
4. Other than any filings required or agreed to be filed for
the authorization of the public offering of the Notes by the Comision Nacional
de Valores, or for the listing of the Notes on the Buenos Aires Stock Exchange,
all of which have been duly filed in accordance with applicable law and remain
in full force and effect as of the date of this opinion, it is not necessary in
order to ensure the validity, enforceability, priority or admissibility in
evidence of the Purchase Agreement, the Fiscal Agency Agreement or the Notes in
Argentina that the Purchase Agreement, the Fiscal Agency Agreement, the Notes
or any other document be filed or registered with any authority in Argentina or
that any tax be paid in respect thereof, with the exception of the judicial tax
in force in Argentina applicable to actions brought before Argentine courts.
5. To our knowledge, there is no action, suit or proceeding
pending against the Issuer or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which, as of the
date hereof, there is a likelihood of an adverse decision which could
reasonably be expected materially adversely to affect the business, condition
(financial or otherwise), results of operations or prospects of the Issuer and
its Subsidiaries taken as a whole or which in any manner draws into question
the validity or enforceability of the Purchase Agreement, the Fiscal Agency
Agreement or the Notes.
6. The execution and delivery of the Purchase Agreement, the
Fiscal Agency Agreement and the Notes and the performance by the Issuer of its
obligations under the Purchase Agreement, the Fiscal Agency Agreement and the
Notes are not subject to taxes, levies, imposts, deductions, charges and
withholdings imposed by any Governmental Authority, except that all payments of
interest under the Purchase Agreement, the Fiscal Agency Agreement and the
Notes to Holders who are purchasing or holding their Notes through Holding
Offices located in Argentina are subject to value added tax at a rate of 21%,
and that fees paid for services other than advisory services are not subject to
withholding taxes if they are paid for services rendered by non-Argentine
residents outside of Argentina. The Issuer is permitted under applicable
Argentine law to pay any additional amounts
-3-
<PAGE> 170
payable under Section 6 of the Purchase Agreement, Sections 5 and 14 of the
Fiscal Agency Agreement and Paragraphs 6 and 7 of the Notes.
7. The obligations of the Issuer under the Purchase
Agreement, the Fiscal Agency Agreement and the Notes to pay the principal of
and interest on the Notes and any and all other amounts due under the Purchase
Agreement, the Fiscal Agency Agreement and the Notes constitute direct and
unconditional obligations of the Issuer and will rank at all times at least
pari passu in right of payment with all other unsecured, unsubordinated Debt of
the Issuer at any time outstanding.
8. The Purchase Agreement, the Fiscal Agency Agreement and
the Notes are in proper legal form under the laws of Argentina for the
enforcement thereof in accordance with their respective terms against the
Issuer under such laws in the courts of Argentina. Neither the Issuer nor any
of its revenues, assets or properties have any right of immunity, on the ground
of sovereignty or otherwise, from service of process or the jurisdiction of any
court in connection with any suit, action or proceeding arising out of or
relating to its obligations under the Purchase Agreement, the Fiscal Agency
Agreement or the Notes or from the execution or enforcement of any judgment
resulting therefrom, and if the Issuer or any of its revenues, assets or
properties should become entitled to any such right of immunity, the Issuer has
effectively waived such right pursuant to Section 21 of the Purchase Agreement,
Section 20 of the Fiscal Agency Agreement and Paragraph 19 of the Notes. The
obligations of the Issuer under the Purchase Agreement, the Fiscal Agency
Agreement and the Notes may be enforced (by judgment and levy) in accordance
with their respective terms in a proceeding at law in any competent court in
Argentina at the suit of any Purchaser or Holder, provided, however, that (i)
if the Purchase Agreement or the Fiscal Agency Agreement or the Notes is
enforced before the courts of the City of Buenos Aires, the payment of a court
tax of 3% on the amount of the claims is required, and (ii) an official Spanish
translation of the Purchase Agreement or the Fiscal Agency Agreement or the
Notes, as the case may be, is required to bring an action thereon in the courts
of Argentina, and provided, further, that, pursuant to Argentine Law No. 24,573
and its regulatory decree No. 1021/95, certain obligatory mediation procedures
must be exhausted prior to the initiation of lawsuits in Argentina, with the
exception, among others, of bankruptcy and executory proceedings, which
executory proceedings include the enforcement of foreign judgments, in which
case mediation procedures remain optional for the plaintiff; upon failure of
the mediation, proceedings may be instituted before such courts of Argentina;
provided, however that the minutes of the mediation must be submitted before
such courts. Subject to the foregoing, any judgment against the Issuer of a
state or Federal court in the State of New York, United States, which satisfies
the requirements of Articles 517 through 519 of Argentine Law No. 17,454, as
amended by Argentine Law No. 22,434 (National Code of Civil and Commercial
Procedures) namely, that (i) the judgment, which must be final in the
jurisdiction where rendered, was issued by a court competent in accordance with
the Argentine laws regarding conflicts of law and jurisdiction and resulted
from a personal action, or an "in rem" action with respect to personal property
which is transferred to Argentine territory during or after prosecution of the
foreign action; (ii) the defendant against
-4-
<PAGE> 171
whom enforcement of the judgment is sought was personally served with the
summons and, in accordance with due process of law, was given an opportunity to
defend against the foreign action; (iii) the judgment must be valid in the
jurisdiction where rendered and its authenticity must be established in
accordance with the requirements of Argentine law; (iv) the judgment does not
violate the principles of public policy of Argentine law; and (v) the judgment
is not contrary to prior or simultaneous judgment of an Argentine court; is
capable of being enforced in the courts of Argentina.
9. The Purchase Agreement and the Fiscal Agency Agreement
have been duly executed and delivered by the Issuer, and the Notes have been
duly authorized, executed, issued and delivered. Under conflicts of law
principles of Argentina, the stated choice of New York law to govern the
Purchase Agreement, the Fiscal Agency Agreement and the Notes will, except to
the extent Argentine law is the stated choice of law in the Purchase Agreement,
the Fiscal Agency Agreement or the Notes, as the case may be, be honored by the
courts of Argentina, and the Purchase Agreement, the Fiscal Agency Agreement
and the Notes will be construed in accordance with, and will be treated as
being governed by, the law of New York. However, if the Purchase Agreement,
the Fiscal Agency Agreement or the Notes were stated to be governed by and
construed in accordance with the law of Argentina to the full or partial
exclusion of New York law, or if a court of Argentina were to apply the law of
Argentina to the Purchase Agreement, the Fiscal Agency Agreement or the Notes
to the full or partial exclusion of New York law, the Purchase Agreement, the
Fiscal Agency Agreement and the Notes would nevertheless constitute legal,
valid and binding obligations of the Issuer enforceable against the Issuer in
accordance with their terms.
The opinion expressed in the second sentence of paragraph 10
above is subject to the qualifications that (i) the remedy of specific
performance or the issue of an injunction is subject to the discretion of the
courts and (ii) enforcement of the Purchase Agreement, the Fiscal Agency
Agreement and the Notes may be limited by bankruptcy, insolvency, liquidation,
reorganization and other laws of general application relating to or affecting
the rights of creditors as well as by general principles of law regarding
fairness and equitable exercise of rights (including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing).
The foregoing opinions are limited to matters involving the
law of Argentina, and we do not express any opinion as to the laws of any other
jurisdiction.
This opinion letter is provided to you and, without our prior
written consent in each instance, may not be relied upon by any Person other
than a Purchaser for any purpose and then only in connection with the
transactions contemplated by the Purchase Agreement.
Marval, O'Farrell & Mairal
--------------------------
-5-
<PAGE> 172
EXHIBIT E
FORM OF OPINION OF SPECIAL
ARGENTINE COUNSEL FOR THE
ADMINISTRATIVE AGENT
[LETTERHEAD OF BRUCHOU, FERNANDEZ MADERO & LOMBARDI]
Buenos Aires, April 22, 1997
To: the Purchasers, Arrangers, Managing Agents,
Co-Agents, Lead Managers, Managers
and Administrative Agent
parties to the Purchase Agreement
referred to below
c/o Societe Generale, Southwest Agency,
2001 Ross Avenue, Suite 4800
Dallas, Texas, as Administrative Agent
RE: COMPANIA DE INVERSIONES DE ENERGIA S.A.
US$220,000,000 FLOATING RATE NOTES DUE
APRIL 22, 2002
Dear Sirs:
1. INTRODUCTION
We have acted as special legal advisers in the Republic of Argentina
("Argentina") for Societe Generale, Southwest Agency, Dallas, Texas, as
Administrative Agent (the "Administrative Agent"), in connection with the
Purchase Agreement dated as of April 18, 1997 (the "Purchase Agreement"), among
Compania de Inversiones de Energia S.A. (the "Issuer"), the Arrangers, Managing
Agents, Co-Agents, Lead Managers, Managers and Purchasers listed on the
signature pages thereof and the Administrative Agent and the issuance and sale
to the Purchasers pursuant to the Purchase Agreement of US$220,000,000
aggregate principal amount of Floating Rate Notes due April 22, 2002 (the
"Notes") of the Issuer, entitled to the benefits of the Fiscal Agency
Agreement, dated as of April 18, 1997 (the "Fiscal Agency Agreement"), among
the Issuer, Societe Generale, Southwest Agency, as Fiscal Agent (the "Fiscal
Agent"), Paying Agent, Transfer Agent and Co-Registrar, and Banco Supervielle
Societe Generale S.A., as Paying Agent, Transfer Agent and Registrar.
-1-
<PAGE> 173
Except as otherwise expressly provided herein, terms defined in the Purchase
Agreement, the Fiscal Agency Agreement or the Notes, as the case may be, are
used herein as therein defined.
2. DOCUMENTS
For the purpose of rendering the opinions expressed below, we have
examined the following agreements, instruments and other documents:
(a) copies of each of the Purchase Agreement and the Fiscal Agency
Agreement including the form of the Notes and other Exhibits
thereto;
(b) a copy of the by-laws ("estatutos") of the Issuer and TGS, as
amended;
(c) certified copies of the resolutions of the shareholders'
meetings of the Issuer dated December 13, 1996 and of the
board of directors of the Issuer dated December 13, 1996 and
April 15, 1997; and
(d) such records of the Issuer and TGS and such other documents as
we have deemed necessary as a basis for the opinions expressed
below.
3. ASSUMPTIONS
For the purpose of this opinion, we have assumed (without making any
investigation thereof):
(a) the completeness and the conformity to originals of all
documents submitted to us as copies and the authenticity of
all documents submitted to us as originals;
(b) the genuineness of all signatures on the documents submitted
to us;
(c) the capacity, power and authority of all parties (other than
the Issuer) to enter into, and the due execution and delivery
by such parties of, the Purchase Agreement, the Fiscal Agency
Agreement and the Notes; and
(d) that there are no provisions of the laws of any jurisdiction
outside Argentina which would have any implication on the
opinion we express.
The opinions set out in this letter relate only to the laws of
Argentina as in force at the date hereof. This opinion is governed by, and
shall be construed in accordance with, the laws of Argentina.
-2-
<PAGE> 174
4. OPINIONS
Based upon and subject to the foregoing and subject to the comments and
qualifications set forth below, and having considered such questions of law as
we have deemed necessary as a basis for the opinions expressed below, we are of
the opinion that:
1. Each of the Issuer and TGS is a "sociedad anonima", duly organized,
validly existing and operating under the laws of Argentina, and has all
corporate powers required to conduct its business as now conducted.
2. The Issuer has full power and authority to enter into and perform its
obligations under the Purchase Agreement, the Fiscal Agency Agreement and the
Notes, and to issue the full amount thereunder and it has taken all corporate
action necessary to authorize the execution, delivery and performance of the
Purchase Agreement, the Fiscal Agency Agreement and the Notes in accordance
with their terms, and none of the execution, delivery or performance of its
obligations and duties under the Purchase Agreement, the Fiscal Agency
Agreement or the Notes will violate any applicable law, rule or regulation of
Argentina or cause any limit contained in the Issuer's Estatutos placed on the
powers of the Issuer and/or its directors to be exceeded.
3. Other than the authorization of the public offering of the Notes by the
Argentine Comision Nacional de Valores, or for the listing of the Notes on the
Buenos Aires Stock Exchange which have been duly obtained and remain in full
force and effect as of the date of this opinion, no authorization, approval or
consent of (including any exchange control approval), and no filing or
registration with, any governmental or regulatory authority or agency of
Argentina is required on the part of the Issuer for the execution, delivery or
performance by the Issuer of the Purchase Agreement, the Fiscal Agency
Agreement or the Notes, or to punctually pay its obligations thereunder at the
office of the Fiscal Agent specified pursuant to Section 3 of the Fiscal Agency
Agreement.
4. Other than any filings required by or agreed to be filed with the
Argentine Comision Nacional de Valores, for the authorization of the public
offering of the Notes or the Buenos Aires Stock Exchange for the listing of the
Notes on such Exchange, all of which have been duly filed in accordance with
applicable law and remain in full force and effect as of the date of this
opinion, it is not necessary in order to ensure the validity, enforceability,
priority or admissibility in evidence of the Purchase Agreement, the Fiscal
Agency Agreement or the Notes in Argentina that the Purchase Agreement, the
Fiscal Agency Agreement, the Notes or any other document be filed or registered
with any authority in Argentina, and no Argentine taxes are required to be paid
and no notarization is required, for the validity and enforceability thereof,
except that: (A) if the Purchase Agreement, the Fiscal Agency Agreement and/or
the Notes are enforced before the courts of the City of Buenos Aires: (i) the
payment of a court tax of 3% on the amount of the claim is required; and (ii)
certain mandatory mediation procedures must be exhausted prior to the
initiation of lawsuits, with
-3-
<PAGE> 175
the exception, among others, of bankruptcy and some executory proceedings
including claims under Article 29 of the Argentine Negotiable Obligations Law
No. 23,576, as amended, and the enforcement of foreign judgements, in which
case mediation remains optional for the plaintiff; and (B) an official Spanish
translation of any such documents is required to bring an action thereon in the
courts of Argentina.
5. No stamp or other issuance or transfer taxes or duties and no capital
gains, income, withholding or other taxes are payable by or on behalf of the
Purchasers to Argentina or to any political subdivision or taxing authority
thereof or therein in connection with the sale and delivery by the Purchasers
of the Notes. This opinion is subject to the qualification that the Purchasers
located in Argentina would be subject to income tax in respect of the fees or
any commission payable to such Purchasers under the Note Purchase Agreement to
the extent that the Notes are sold in Argentina pursuant to the Note Purchase
Agreement, and that the Fiscal Agent, the Registrar and the other Agents which
are part of the Fiscal Agency Agreement would be subject to such tax to the
extent that services under the Fiscal Agency Agreement are performed in
Argentina;
Assuming that the conditions of Article 36 of the Argentine Negotiable
Obligations Law No. 23,576, as amended, will be satisfied with respect to the
Notes, there is no income, stamp or other tax, duty, impost, deduction or other
charge imposed (whether by withholding or otherwise) by Argentina (including
any political subdivision thereof) or any Argentine governmental agency or
other Argentine governmental or taxing authority or agency on or by virtue of
the execution or delivery by the Issuer of the Notes;
6. Except as otherwise provided by mandatory provisions of Argentine Law,
the obligations of the Issuer under the Purchase Agreement, the Fiscal Agency
Agreement and the Notes will rank in right of payment at least pari passu with
all other unsecured, unsubordinated obligations of the Issuer at any time
outstanding. Such obligations will be subject to any laws from time to time in
effect relating to insolvency, bankruptcy or liquidation or any other laws
affecting generally the enforcement of creditors' rights.
7. The Purchase Agreement, the Fiscal Agency Agreement and the Notes
constitute, to the extent they are valid and enforceable under New York law,
legal, valid and binding obligations of the Issuer, are in proper legal form
under the law of Argentina and enforceable against the Issuer in accordance
with their terms except that for enforcement in Argentina of the Purchase
Agreement and the Fiscal Agency Agreement a translation into Spanish by an
Argentine registered translator is required. The Issuer is subject to civil
and commercial law with respect to its obligations under the Purchase
Agreement, the Fiscal Agency Agreement and the Notes. The execution, delivery
and performance by the Issuer of the Purchase Agreement, the Fiscal Agency
Agreement and the Notes constitute private and commercial activities rather
than public or governmental acts. Neither the Issuer nor any of its properties
or revenues enjoy any right of immunity from suit, court jurisdiction,
judgment, attachment (whether before or after judgment), set-off or execution
of a judgment or from any other legal process or remedy relating to the
obligations of the Issuer under the Purchase
-4-
<PAGE> 176
Agreement, the Fiscal Agency Agreement or the Notes, and the waivers of
immunity contained in Section 21 of the Purchase Agreement, Section 20 of the
Fiscal Agency Agreement and Paragraph 19 of the Notes are irrevocably binding
on the Issuer.
8. The Purchase Agreement, the Fiscal Agency Agreement and the Notes have
been duly executed and delivered by the Issuer. Under conflicts of law
principles of Argentina, the stated choice of New York law to govern the
Purchase Agreement, the Fiscal Agency Agreement and the Notes will, except to
the extent Argentine law is the stated choice of law in the Purchase Agreement,
the Fiscal Agency Agreement or the Notes, as the case may be, be honored by the
courts of Argentina, and the Purchase Agreement, the Fiscal Agency Agreement
and the Notes will be construed in accordance with, and will be treated as
being governed by, the law of New York. However, if the Purchase Agreement,
the Fiscal Agency Agreement and/or the Notes were stated to be governed by and
construed in accordance with the law of Argentina to the full or partial
exclusion of New York law, or if a court in Argentina were to apply the law of
Argentina to the Purchase Agreement, the Fiscal Agency Agreement and the Notes
to the full or partial exclusion of New York law, the Purchase Agreement, the
Fiscal Agency Agreement and the Notes would nevertheless constitute, to the
extent they are valid and enforceable under New York law, the legal, valid and
binding obligations of the Issuer enforceable against the Issuer in accordance
with their terms.
9. Under the laws of Argentina, the Issuer has validly submitted to the
jurisdiction of the courts in and of the United States District Court for the
Southern District of New York and of any court of the State of New York sitting
in New York City, USA, and a judgment of any such court obtained after service
of process made in accordance with the laws of the jurisdiction of the
judgment-rendering court, would be enforceable in the courts of Argentina
without further review on the merits; provided, however, that the following
requirements of Article 517 of Argentine Law No. 17,454, as amended (National
Code of Civil and Commercial Proceedings), are met: (i) the judgment, which
must be final in the jurisdiction where rendered, was issued by a court with
jurisdiction pursuant to Argentine laws on international jurisdiction and
results from a personal action or an in rem action with respect to personal
property which was transferred to the territory of Argentina during or after
the prosecution of the foreign action; (ii) the defendant against whom
enforcement of the judgment is sought was personally served with the summons
and, in accordance with due process of law, was given an opportunity to defend
against the foreign action; (iii) the judgment must be valid in the
jurisdiction where rendered and its authenticity must be established in
accordance with the requirements of Argentine law; (iv) the judgment does not
violate the principles of public policy of Argentine law; and (v) the judgment
is not contrary to a prior or simultaneous judgment of an Argentine court.
10. Under the laws of Argentina the courts of Argentina have jurisdiction
to adjudicate any action relating to the Purchase Agreement, the Fiscal Agency
Agreement and/or the Notes brought against the Issuer in such courts by any
Agent or any Purchaser or any Holder of a Note.
-5-
<PAGE> 177
11. Neither the execution, delivery and performance of the Purchase
Agreement or the Fiscal Agency Agreement, nor the enforcement of either
thereof, will (without more) cause any Agent or any Purchaser to be deemed to
be doing business in Argentina.
The foregoing opinions are, however, subject to certain
qualifications, namely:
(a) nothing herein is to be taken as an indication that the remedy
of an order for specific performance or the issue of an
injunction would be available in a court in Argentina, since
such remedies are available only at the discretion of the
courts; and
(b) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization and other laws of general
application relating to or affecting the rights of creditors
as well as by general principles of law regarding fairness and
equitable exercise of rights (including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing).
In rendering the opinions expressed herein, we have, with your
approval, relied without independent investigation as to all matters governed
by or involving conclusions under New York or United States federal law, upon
the opinion (including the qualifications, assumptions and limitations
expressed therein) of Sullivan & Cromwell, special New York counsel to the
Administrative Agent, of even date herewith.
This opinion is given for your sole benefit in connection with
the transactions contemplated by the Purchase Agreement and the Fiscal Agency
Agreement. This opinion is not to be disclosed to any other person nor is it
to be relied upon by any other person or for any other purpose or quoted or
referred to in any public document without our prior written consent.
Very truly yours,
-------------------------------------
Javier Errecondo
-6-
<PAGE> 178
EXHIBIT F
FORM OF OPINION OF SPECIAL
NEW YORK COUNSEL FOR THE
ADMINISTRATIVE AGENT
April 22, 1997
To the Purchasers, Arrangers, Managing Agents,
Co-Agents, Lead Managers, Managers and the
Administrative Agent Referred to Below,
c/o Societe Generale, Southwest Agency,
Dallas, Texas, as Administrative Agent,
2001 Ross Avenue, Suite 4800,
Dallas, Texas 75201.
Ladies and Gentlemen:
We have acted as special New York counsel for Societe
Generale, Southwest Agency (the "Administrative Agent") in connection with the
preparation, execution and delivery of the Purchase Agreement, dated as of
April 18, 1997 (the "Purchase Agreement"), among Compania de Inversiones de
Energia S.A. (the "Issuer"), the Arrangers, Managing Agents, Co-Agents, Lead
Managers, Managers and Purchasers listed on the signature pages thereof and
Societe Generale, Southwest Agency, as Administrative Agent and the issuance
and sale to the Purchasers pursuant to the Purchase Agreement of US$220,000,000
aggregate principal amount of Floating Rate
<PAGE> 179
To the Purchasers, et al. -2-
Notes due April 22, 2002 (the "Notes") of the Issuer, entitled to the benefits
of the Fiscal Agency Agreement, dated as of April 18, 1997 (the "Fiscal Agency
Agreement"), among the Issuer, Societe Generale, Southwest Agency, as Fiscal
Agent, Paying Agent, Transfer Agent and Co-Registrar (the "Fiscal Agent") and
Banco Supervielle Societe Generale S.A., as Paying Agent, Transfer Agent and
Registrar. Terms defined in the Purchase Agreement and the exhibits thereto
are used herein as therein defined.
As such counsel, we have examined such certificates and other
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such
examination, it is our opinion that:
(1) Assuming that each of the Purchase Agreement, the
Fiscal Agency Agreement and the Notes has been duly authorized,
executed and delivered by each of the parties thereto, each of the
Purchase Agreement, the Fiscal Agency Agreement and the Notes
constitutes a valid and legally binding obligation of the Issuer
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization,
<PAGE> 180
To the Purchasers, et al. -3-
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(2) No regulatory consents, authorizations, approvals or
filings are required to be obtained or made by the Issuer on or prior
to the date hereof under the Federal laws of the United States or the
laws of the State of New York for the execution and delivery by the
Issuer of the Purchase Agreement, the Fiscal Agency Agreement or the
Notes or for the issuance and sale of the Notes in accordance with the
Purchase Agreement.
(3) The Issuer is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
With respect to our opinion in (1) above, we express no
opinion as to the validity or enforceability of provisions in the Purchase
Agreement or Fiscal Agency Agreement insofar as they may purport to indemnify
parties for violations of the Federal securities laws.
The foregoing opinion is limited to the Federal laws of the
United States, and the laws of the State of New York,
<PAGE> 181
To the Purchasers, et al. -4-
and we are expressing no opinion as to the effect of the laws of any other
jurisdiction.
With your approval, we have assumed that the Issuer has been
duly incorporated and is an existing corporation in good standing under the
laws of the Republic of Argentina and that the execution and delivery of the
Purchase Agreement, the Fiscal Agency Agreement and the Notes by the Issuer,
and the performance by the Issuer of its obligations thereunder, will comply
with all applicable law and with each requirement or restriction imposed by the
Issuer's by-laws or by any court or governmental body having jurisdiction over
the Issuer, its properties or its activities (other than the Federal government
of the United States of America and the State of New York), and will not result
in a default under or breach of any agreement or instrument binding on the
Issuer.
Also with your approval, we have assumed that the Fiscal
Agency Agreement has been duly authorized, executed and delivered by the Fiscal
Agent, the Registrar and the Co-Registrar and by each Paying Agent and Transfer
Agent party thereto, that the Notes conform to the specimen thereof examined by
us and have been duly authenticated by an authorized signatory of the Fiscal
Agent and that the
<PAGE> 182
To the Purchasers, et al. -5-
signatures on all documents examined by us are genuine, assumptions that we
have not independently verified.
This letter is delivered by us as special New York counsel to
the Administrative Agent and is solely for your benefit in connection with the
above referenced matter. This opinion may not be relied upon by you for any
other purposes or relied upon by any other person without our prior written
consent.
Very truly yours,
<PAGE> 183
SCHEDULE I
PURCHASING OFFICES
AND ADDRESSES
FOR NOTICES
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Banque Europeenne pour l'Amdrique Latine PURCHASING OFFICE:
(BEAL) S.A. Rue de l'Association 59
B- 1000 Brussels
BELGIUM
Atm: Frederic Adam/J.C. T'Serclaes
Telephone No.: 011-322-229-2020
Facsimile No.: 011-322-229-2065/35
NOTICES:
Same as above and
Tte. Juan D. Peron, 338
(1038) Buenos Aires
ARGENTINA
Attn: Diego Garcia del Rio
Telephone No.: 011-541-342-8666
Facsimile No.: 011-541-334-9174
Dresdner Bank Luxembourg S.A. PURCHASING OFFICE:
26, rue du Marche-aux-Herbes
L-2097 Luxembourg
LUXEMBOURG
Arm: Risk Management
Telephone No.: 011-352-4760-1
Facsimile No.: 011-352-4760-565
NOTICES:
Attn: Administrative Department
Telephone No.: 011-352-4760-1
Facsimile No.: 011-352-4760-565
</TABLE>
1
<PAGE> 184
<TABLE>
<S> <C>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
CIBC Inc. PURCHASING OFFICE:
Two Paces West
2727 Paces Ferry Road, Suite 1200
Atlanta, GA 30339
UNITED STATES OF AMERICA
Attn: Kathryn McGovern
Telephone No.: (770) 319-4821
Facsimile No.: (770) 319-4950
NOTICES: Same
Banco de la Provincia de Buenos Aires PURCHASING OFFICE:
- - Grand Cayman Branch P.O. Box 6-4592
El Dorado
Panama
REPUBLIC OF PANAMA
NOTICES:
Edificio Banco Exterior, Piso 22
Avenida Balboa
Panama
REPUBLIC OF PANAMA
Attn: Eduardo E. Caro/Marcela de Ng
Telephone No.: 011-507-227-2167/2168
Facsimile No.: 011-507-225=043 1
</TABLE>
2
<PAGE> 185
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Riobank International PURCHASING OFFICE:
Kirk House, 4th Floor
P.O. Box 323 13-SMB
Grand Cayman
CAYMAN ISLANDS
Attn: N/A
Telephone No.: 011-345-945-5507
Facsimile No.: 011-345-945-5509
NOTICES:
Bartolome Mitre 480, 8 Piso
1036 Buenos Aires
ARGENTINA
Attn: Ricardo Rodriguez
Telephone No.: 011-541-340-1173
Facsimile No.: 011-541-340-1164
Bank of America National Trust and Savings
Association PURCHASING OFFICE:
500 Ellinwood Way, Suite 100
Pleasant Hill, CA 94523
UNITED STATES OF AMERICA
Telephone No.: (510) 603-3120
Facsimile No.: (510) 603-3142
NOTICES:
(simultaneously to both of the following):
500 Ellinwood Way, Suite 100
Pleasant Hill, CA 94523
UNITED STATES OF AMERICA
Attn: Swan Oey
Telephone No.: (510) 603-3120
Facsimile No.: (510) 603-3142
and
Attn: Ingrid Marcarian
25 de Mayo 537
1002 Buenos Aires
ARGENTINA
Telephone No.: 011-541-319-2652
Facsimile No.: 011-541-313-0476
</TABLE>
3
<PAGE> 186
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Bank of Montreal PURCHASING OFFICE:
700 Louisiana, Suite 4400
Houston, TX 77002
UNITED STATES OF AMERICA
Attn: Natasha Glossop
Telephone No.: (713) 546-9752
Facsimile No.: (713) 223-4007
NOTICES:
Same as above
and
Attn: Neelam Dass/Farid Ali
Telephone No.: (312) 750-3727
Facsimile No.: (312) 750-6061
Creditanstalt - Bankverein PURCHASING OFFICE:
125 London Wall
London EC2Y 5DD
UNITED KINGDOM
Attn: Gavin Burke
Telephone No.: 011-44-171-417-4879
Facsimile No.: 011-44-171-417-4803/4804
NOTICES:
Same as above
and
Attn: Adrian Beckett/Julie Bentley
Telephone No.: 011-44-171-417-4834/4837
Facsimile No.: 011-44-171-417-4803/4804
</TABLE>
4
<PAGE> 187
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Goldman, Sachs & Co. PURCHASING OFFICE:
c/o Goldman, Sachs & Co.
85 Broad Street, 6th Floor
New York, NY 10004
UNITED STATES OF AMERICA
Attn: Kathy King
Telephone No.: (212) 902-1040
Facsimile No.: (212) 902-4597
NOTICES:
Same as above
Industrial Bank of Japan Trust Company PURCHASING OFFICE:
1251 Avenue of the Americas
New York, New York 10020-1104
UNITED STATES OF AMERICA
Attn: Steven Fineberg
Telephone No.: (212) 282-4060
Facsimile No.: (212) 282-4480
NOTICES:
Attn: Atsushi Kawai
Telephone No.: (212) 309-6521
Facsimile No.: (212) 949-0134
</TABLE>
5
<PAGE> 188
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
ING Bank N.V. PURCHASING OFFICE:
Curacao Branch
Zeelandia Commercial Center
Kaya W.F.G. (Jombi)
Mensing 14
P.O. Box 3895
Willemstad - Curacao
NETHERLANDS ANTILLES
Attn: Harry Kampschoer
Telephone No.: 011-599-9-327-000
Facsimile No.: 011-599-9-327-502
NOTICES:
c/o ING Bank N.V. Buenos Aires
Ing. Butty 220, Piso 22
(1300) Capital Federal
ARGENTINA
Attn: Norma Messina/Alejandra Losada
Telephone No.: 011-541-310-4700/4850
Facsimile No.: 011-541-314-5210
J.P. Morgan Securities Limited PURCHASING OFFICE:
International Banking Facility
New York, NY
UNITED STATES OF AMERICA
Telephone No.: (302) 634-4267
NOTICES:
Corrientes 411
1043 Buenos Aires
ARGENTINA
Attn: Gabriel Micheletti (Business Matters)
Telephone No.: 011-541-348-7345
Facsimile No.: 011-541-348-7228
Eduardo Menutti (Administrative Matters)
Telephone No.: 011-541-348-7309
Facsimile No.: 011-541-348-7228
</TABLE>
6
<PAGE> 189
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
PURCHASING OFFICE:
Toronto Dominion (Texas) Inc. 909 Fannin Street, Suite 1700
Houston, Texas 77010
UNITED STATES OF AMERICA
Atm: Neva Nesbitt
Telephone No.: (713) 653-8261
Facsimile No.: (713) 951-9921
NOTICES: Same as above and
The Toronto-Dominion Bank
31 West 52nd Street
New York, NY
UNITED STATES OF AMERICA
Attn: David Silverstein/Deborah Gravinese
Telephone No.: (212) 468-0774/0777
Facsimile No.: (212) 262-1929
PURCHASING OFFICE:
Bank of Boston Trust Company Charlotte House
(Bahamas) Limited P.O. Box N-3930
Nassau
BAHAMAS
Telephone No.: (809) 322-8531
NOTICES:
For business/credit issues:
Attn: Helena Radzyminzki/Adriana Cimini
Telephone No.: 011-541-346-3255-3140
Facsimile No.: 011-541-346-3245
For administrative issues:
100 Rustcraft Road,
MA-DED-74-02-02D
Dedham, MA 02026
UNITED STATES OF AMERICA
Attn: John Kelly/Dorrane Langent
Telephone No.: (617) 467-2081/2099
Facsimile No.: (617) 467-2094
</TABLE>
7
<PAGE> 190
<TABLE>
<CAPTION>
Name of Initial Purchaser Purchasing Office and Address for Notices
- ------------------------- -----------------------------------------
<S> <C>
Societe Generale, Southwest Agency PURCHASING OFFICE:
2001 Ross Avenue
Suite 4800
Dallas, TX 75201
UNITED STATES OF AMERICA
Attn: Angela Aldridge
Telephone No.: (214) 979-2767
Facsimile No.: (214) 754-0171
NOTICES: Same as above
Royal Bank of Canada Purchasing Office:
Financial Square
New York, New York 10005-3531
UNITED STATES OF AMERICA
Attn: Kenneth Bender
Telephone No.: (212) 428-6503
Facsimile No.: (212) 269-4378
NOTICES:
Attn: Sharon Peters
Telephone No.: (212) 428-6369
Facsimile No.: (212) 269-2372
</TABLE>
8
<PAGE> 191
<TABLE>
<CAPTION>
Name Of Initial Purchaser Purchasing Office and Address for Notices
- -------------------------- -----------------------------------------
<S> <C>
Banca Commerciale Italiana - Purchasing Office:
New York Branch One William Street
New York, New York 10004
UNITED STATES OF AMERICA
Attn: Jack Dickerhof
Telephone No.: (212) 607-3500/3896
Facsimile No.: (212) 809-2124
NOTICES:
Same as above
PURCHASING OFFICE:
Republic National Bank of New York Republic National Bank of New York
(Uruguay) S.A.
Attn: Josef Rebalski
Telephone No.: 011-5982-95-3395
Facsimile No.: 011-5982-96-0125
NOTICES:
For business/credit issues:
Bartolome Mitre 343
(1036) Capital Federal
ARGENTINA
Attn: Marcelo Degrossi
Telephone No.: 011-541-349-1600
Facsimile No.: 011-541-112-259
For administrative issues:
Attn: Josef Rebalski
Telephone No.: 011-5982-95-3395
Facsimile No.: 011-5982-96-0125
</TABLE>
9
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 47,895
<SECURITIES> 0
<RECEIVABLES> 9,734
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 69,981
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 373,004
<CURRENT-LIABILITIES> 18,017
<BONDS> 0
0
0
<COMMON> 268,020
<OTHER-SE> 64,030
<TOTAL-LIABILITY-AND-EQUITY> 373,004
<SALES> 0
<TOTAL-REVENUES> 29,102
<CGS> 0
<TOTAL-COSTS> 3,585
<OTHER-EXPENSES> (4,023)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,343
<INCOME-PRETAX> 28,197
<INCOME-TAX> (2,810)
<INCOME-CONTINUING> 31,007
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,007
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.22
</TABLE>
