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, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
COMMISSION FILE NUMBER: 1-7864
TRITON ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-1151855
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
6688 N. CENTRAL EXPRESSWAY, SUITE 1400, DALLAS, TEXAS 75206
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (214)691-5200
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 stock, as of the latest practicable date.
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Number of Shares
Title of Each Class of Common Stock Outstanding at July 31, 1995
Common Stock, par value $1.00 per share 35,691,371
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TRITON ENERGY CORPORATION AND SUBSIDIARIES
INDEX
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PART I. FINANCIAL INFORMATION PAGE NO.
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Item 1. Financial Statements
Consolidated Condensed Statements of Operations -
Three and six months ended June 30, 1995 and 1994 2
Consolidated Condensed Balance Sheets -
June 30, 1995 and December 31, 1994 3
Consolidated Condensed Statements of Cash Flows -
Three and six months ended June 30, 1995 and 1994 4
Consolidated Condensed Statement of Stockholders' Equity -
Six months ended June 30, 1995 5
Notes to Consolidated Condensed Financial Statements 6
Review of Independent Accountants 10
Review Report of Independent Accountants 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 18
Item 4. Results of Votes of Security Holders 18
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 19
</TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1994 1995 1994
Revenues:
Sales and other operating revenues $ 28,504 $ 8,950 $ 48,255 $ 15,873
Other income 9,643 4,554 12,994 7,074
)
38,147 13,504 61,249 22,947
Costs and expenses:
Operating 9,024 6,205 17,104 11,275
General and administrative 6,767 8,477 12,592 15,396
Depreciation, depletion and amortization 5,810 3,498 10,468 7,442
Writedown of assets --- 7,161 --- 13,732
Interest 5,976 2,810 11,510 5,292
Equity in (earnings) loss of affiliates, net 2,150 (1,478) (777) (1,103)
Foreign exchange loss 497 547 5 220
30,224 27,220 50,902 52,254
Earnings (loss) from continuing operations
before income taxes, minority interest and
discontinued operations 7,923 (13,716) 10,347 (29,307)
Income tax provision:
Current --- (2,238) --- (2,238)
Deferred 2,916 672 5,693 672
5,007 (12,150) 4,654 (27,741)
Minority interest in loss of subsidiaries --- 94 --- 1,920
Earnings (loss) fom continuing operations 5,007 (12,056) 4,654 (25,821)
Discontinued operations:
Loss from operations (656) (1,120) (1,858) (1,413)
Loss on disposal (1,963) (650) (1,963) (650)
Net earnings (loss) 2,388 (13,826) 833 (27,884)
Dividends on preferred stock --- --- 449 ---
Earnings (loss) applicable to common stock $ 2,388 $(13,826) $ 384 $(27,884)
Weighted average number of shares outstanding 35,056 34,899 35,020 34,885
Earnings (loss) per common share:
Continuing operations $ 0.14 $ (0.35) $ 0.12 $ (0.74)
Discontinued operations (0.07) (0.05) (0.11) (0.06)
Net earnings (loss) $ 0.07 $ (0.40) $ 0.01 $ (0.80)
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
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JUNE 30,
ASSETS 1995 DECEMBER 31,
(UNAUDITED) 1994
Current assets:
Cash and equivalents $ 97,070 $ 22,341
Short-term marketable securities 41,397 26,657
Receivables 29,070 20,241
Inventories, prepaid expenses and other 6,652 4,638
Total current assets 174,189 73,877
Long-term marketable securities 12,481 23,264
Long-term receivables 58,566 9,065
Property and equipment, at cost, less accumulated depreciation and
depletion of $502,048 and $493,050, respectively 445,771 399,658
Investments and other assets 124,073 113,337
$ 815,080 $ 619,201
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 1,643 $ 257
Short-term borrowings --- 17,351
Accounts payable and accrued liabilities 30,911 26,608
Total current liabilities 32,554 44,216
Long-term debt, excluding current installments 395,794 315,258
Deferred income taxes 23,089 14,672
Deferred income and other 121,094 7,860
Convertible debentures due to employees --- ---
Stockholders' equity:
Preferred stock, no par value 17,975 17,976
Common stock, par value $1 35,710 35,577
Additional paid-in capital 508,990 505,256
Accumulated deficit (313,181) (314,014)
Foreign currency translation adjustment (6,171) (5,639)
Other (306) (1,384)
243,017 237,772
Less cost of common stock in treasury 468 577
Total stockholders' equity 242,549 237,195
Commitments and contingencies (Note 7)
$ 815,080 $ 619,201
</TABLE>
The Company uses the full cost method to account for its oil and gas producing
activities.
See accompanying notes to consolidated condensed financial statements.
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(IN THOUSANDS)
(UNAUDITED)
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1995 1994
Cash flows from operating activities:
Net earnings (loss) $ 833 $ (27,884)
Adjustments to reconcile net earnings (loss) to net cash
used by operating activities:
Depreciation, depletion and amortization 10,708 7,648
Amortization of debt discount 11,404 5,441
Proceeds from forward oil sale 86,610 ---
Amortization of unearned revenue (700) ---
Equity in (earnings) losses of affiliates (777) (1,103)
Writedown of assets --- 13,732
Deferred income taxes, minority interest and other 9,062 (159)
Changes in working capital pertaining to operating activities (9,710) (2,864)
@
Net cash provided (used) by operating activities 107,430 (5,189)
@
Cash flows from investing activities:
Capital expenditures and investments (68,212) (62,911)
Purchases of investments and marketable securities (25,701) (195,586)
Proceeds from sale of investments and marketable securities 10,050 91,117
Proceeds from sale of discontinued operations 2,100 18,450
Other (684) (7,930)
Net cash provided (used) by investing activities (82,447) (156,860)
Cash flows from financing activities:
Proceeds from short-term borrowings with maturities
greater than three months --- 6,349
Short-term borrowings, net (10,000) (820)
Proceeds from long-term debt 59,726 329
Payments on debt of discontinued operations (2,004) (18,959)
Other 2,915 206
Net cash provided (used) by financing activities 50,637 (12,895)
Effect of exchange rate changes on cash and equivalents (891) 416
Net increase (decrease) in cash and equivalents 74,729 (174,528)
Cash and equivalents at beginning of period 22,341 219,677
Cash and equivalents at end of period $ 97,070 $ 45,149
</TABLE>
See accompanying notes to consolidated condensed financial statements.
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS)
(UNAUDITED)
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ADDITIONAL TOTAL
PREFERRED COMMON PAID-IN ACCUMULATED TREASURY SHAREHOLDERS'
STOCK STOCK CAPITAL DEFICIT OTHER STOCK EQUITY
Balances at
December 31, 1994 $ 17,976 $35,577 $ 505,256 $ (314,014) $(7,023) $ (577) $ 237,195
Net income --- --- --- 833 --- --- 833
Foreign currency translation
adjustment --- --- --- --- (531) --- (531)
Dividends on preferred stock --- --- (449) --- --- --- (449)
Other (1) 133 4,183 --- 1,077 109 5,501
Balances at
June 30, 1995 $ 17,975 $35,710 $ 508,990 $ (313,181) $(6,477) $ (468) $ 242,549
</TABLE>
TRITON ENERGY CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL
In May 1994, the Company changed its fiscal year end from May 31 to December
31 effective January 1, 1995. The consolidated condensed financial statements
reflect the Company's financial position, results of operations and cash flows
for the three and six months ended June 30, 1995 and the restated three and
six months ended June 30, 1994. The Company has also restated the Statements
of Operations for the three and six months ended June 30, 1994 to reflect the
aviation sales and services segment as discontinued operations. See note 4.
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements of Triton Energy Corporation and subsidiaries
(collectively, the "Company") contain all adjustments of a normal recurring
nature necessary to present fairly the Company's financial position as of June
30, 1995, and the results of its operations for the three and six months ended
June 30, 1995 and 1994, its cash flows for the six months ended June 30, 1995
and 1994 and stockholders' equity for the six months ended June 30, 1995. The
results of operations for the three and six months ended June 30, 1995 and
1994, are not necessarily indicative of the final results to be expected for
the full year.
The consolidated condensed financial statements should be read in conjunction
with the Notes to Consolidated Financial Statements, which are included as
part of the Company's Transition Report on Form 10-K for the seven months
ended December 31, 1994.
Certain previously reported financial information has been reclassified to
conform to the current period's presentation.
2. FORWARD SALE OF COLOMBIAN OIL PRODUCTION
On May 26, 1995, the Company sold 10.4 million barrels of oil in a forward oil
sale. Under the terms of the sale, the Company received approximately $87
million of the approximately $124 million net proceeds, and is entitled to
receive substantially all of the remaining proceeds (now held in various
interest-bearing reserve accounts) when the Company's Cusiana and Cupiagua
fields project in Colombia becomes self-financing, which is expected in 1997,
and when certain other conditions are met. The proceeds held in
interest-bearing reserve accounts have been recorded as long-term receivables.
The Company has recorded the net proceeds as deferred income and will
recognize such revenue when the barrels are delivered during a five-year
period beginning in June 1995. The volumes sold in the forward oil sale
represent approximately 15% of the Company's currently projected Cusiana and
Cupiagua production over the five-year period.
The oil was sold to an unrelated entity. Morgan Guaranty Trust Company of New
York ("Morgan Guaranty") has agreed to purchase the oil delivered by the
Company to the unrelated entity at a fixed price.
In order to accommodate efficient marketing of the oil, the Company has agreed
to purchase such oil from Morgan Guaranty at a price per barrel equal to the
then current market price of West Texas Intermediate crude ("WTI") minus
$2.50. The Company intends to market the oil purchased from Morgan Guaranty
together with the Company's other Colombian production.
Morgan Guaranty also agreed to purchase up to $40 million of additional
production on a forward sale basis in the event that the Company is otherwise
unable to meet its cash call obligations in respect of the Cusiana and
Cupiagua fields project. The number of barrels would be determined based on a
formula intended to reflect their fair market value. The Company does not
expect, however, to sell any production under this agreement.
The purchase prices and other terms of the transaction were determined by
arm's-length negotiations among the Company, J.P. Morgan Securities Inc.,
Morgan Guaranty and the unrelated entity. The prices reflect the various
parties' mutual agreement as to present fair market value of the barrels of
oil to be delivered, taking into account such factors as quality relative to
WTI, transportation costs and timing of deliveries.
3. PETROLEUM PRICE RISK MANAGEMENT
In anticipation of entering into the forward oil sale, the Company entered
into five year commodity swap agreements in April and May 1995, to hedge price
risk associated with the portion of the Company's oil production in Colombia
expected to be sold in the forward oil sale. Sales of the Company's Colombian
production are priced with reference to WTI. The swap agreements, which were
entered into with a counterparty with a "AAA" credit rating, fixed a WTI price
benchmark of $18.42 per barrel on approximately 10.4 million barrels.
Simultaneously, the Company purchased from the same institution call options
to retain the ability to benefit from future WTI price increases above $20.42
per barrel. The volumes and expiration dates on the call options coincide
with the volumes and delivery dates under the swap agreements.
Prior to completion of the forward oil sale, the swap and call agreements had
been accounted for as hedging transactions. Upon completion of the forward
oil sale, as a result of which the swap agreements were superseded, the call
options were recorded as a separate investment at their then fair market value
of $9.3 million. As a result of this accounting treatment, fluctuations in
the value of the call options will affect other income as non-cash
adjustments.
In March 1995, the Company entered into a commodity swap agreement with an "A"
rated counterparty to hedge price risk associated with the Company's oil
production in France. The agreement fixes a Brent crude oil price benchmark
at $16.90 per barrel on approximately 275,000 barrels of oil to be produced
during the period from April 1, 1995 to September 30, 1995. The swap
agreement is accounted for as a hedge.
4. DISCONTINUED AVIATION OPERATIONS AND DIVESTITURES
In June 1995, the Company sold the assets of its subsidiary, Jet East, Inc.,
for $2.9 million in cash and a note. The Company realized a loss of $1.4
million on the sale. The Company plans to dispose of its remaining aviation
operations and therefore has reflected the aviation sales and services segment
as discontinued operations. The Company has accrued $.6 million for future
estimated losses associated with final disposal of the segment. Revenues from
the aviation sales and services segment for the three months ended June 30,
1995 and 1994 were $2.2 million and $3 million, respectively, and for the six
months ended June 30, 1995 and 1994 were $4 million and $5.7 million,
respectively.
In March 1995, Crusader Ltd. ("Crusader"), a 49.9% affiliate of the Company,
completed the sale of Saracen Minerals for proceeds of $14.3 million. This
sale resulted in a net gain to the Company of approximately $3.8 million.
5. WRITEDOWN OF ASSETS
During the six months ended June 30, 1994, the carrying amount of the
Company's evaluated oil properties in France and Indonesia were written down
by $11.2 million and $2 million, respectively, principally as a result of
lower oil prices used in the calculation of the ceiling limitation prescribed
by the Securities and Exchange Commission (the "Commission").
6. LONG-TERM DEBT
On March 30, 1995, the Company signed a $65 million bank revolving credit
facility . Borrowings bear interest at various rates either based on prime or
the London Interbank Offered Rate and mature on September 30, 1996. The
facility is secured by the Company's marketable securities portfolio and
Crusader common stock owned by the Company. As of June 30, 1995, the Company
had borrowed $59.7 million and issued a letter of credit for $2.8 million
under the facility.
7. COMMITMENTS AND CONTINGENCIES
COMMITMENTS
The Company is currently involved in the development of significant
discoveries in the Cusiana and Cupiagua fields (the "Fields") in Colombia and
has begun appraisal/exploratory drilling in Block A-18 of the
Malaysia-Thailand Joint Development Area. The Company's capital budget for
the year ending December 31, 1995 is approximately $175 million, excluding
capitalized interest, of which approximately $100 million relates to the
Fields and $29 million relates to Block A-18. Capital requirements for full
field development of the Fields are expected to continue at substantial levels
into 1997. The Company expects to meet the balance of its direct capital
needs in 1995 and later years with increasing cash flow from its Colombian
operations, cash on hand, marketable securities, other asset sales, and
possibly the issuance of equity or other securities.
During the normal course of business, the Company is subject to the terms of
various operating agreements and capital commitments associated with the
exploration and development of its oil and gas properties. Many of these
commitments are discretionary on the part of the Company. It is management's
belief that such commitments, including the capital requirements in Colombia
and Malaysia-Thailand discussed above, will be met without any material
adverse effect on the Company's operations or consolidated financial
condition.
GUARANTEES
At June 30, 1995, the Company has guaranteed loans of approximately $6.9
million for a Colombian pipeline company in which the Company has an ownership
interest and guaranteed performance of $11 million in future exploration
expenditures in various countries. These commitments are backed by letters of
credit and bank guarantees.
REGULATORY MATTERS
The Company continues to cooperate with inquiries by the Commission and the
Department of Justice (the "Department") regarding possible violations of the
Foreign Corrupt Practices Act in connection with the Company's operations in
Indonesia. Based upon the information available to the Company to date, the
Company believes that it will be able to resolve any issues that either the
Commission or the Department ultimately might raise concerning these matters
in a manner that would not have a material adverse effect on the Company's
operations or consolidated financial condition.
LITIGATION
The Company is subject to litigation that is incidental to its business, none
of which is expected to have a material adverse effect on the Company's
operations or consolidated financial condition. (See Part II, Item 1. Legal
Proceedings.)
8. SUBSEQUENT EVENT
On August 4, 1995, the Company signed a definitive agreement to sell its
interest in Triton France S.A. through which it holds its interest in the
Villeperdue Field. The sale, which is subject to customary conditions, is
expected to close in August 1995 and to result in cash to the Company of
approximately $16 million.
REVIEW OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, independent accountants, have reviewed the consolidated
condensed balance sheet as of June 30, 1995, and the related consolidated
condensed statements of operations for the three months and six months ended
June 30, 1995 and 1994, the consolidated condensed statements of cash flows
for the six months ended June 30, 1995 and 1994, and the consolidated
condensed statement of stockholders' equity for the six months ended June 30,
1995, included in this report. Such reviews were made in accordance with
standards established by the American Institute of Certified Public
Accountants. See accompanying Report of Independent Accountants.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To The Board of Directors and Shareholders of
Triton Energy Corporation
We have reviewed the accompanying consolidated condensed balance sheet of
Triton Energy Corporation and subsidiaries as of June 30, 1995, the related
consolidated condensed statements of operations for the three and six months
ended June 30, 1995 and 1994, the consolidated condensed statements of cash
flows for the six months ended June 30, 1995 and 1994 and the consolidated
condensed statement of stockholders' equity for the six months ended June 30,
1995. This financial information is the responsibility of the Company's
management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying interim financial information for it to be
in conformity with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1994, and the
related consolidated statements of operations, of stockholders' equity and of
cash flows for the seven months ended December 31, 1994 (not presented
herein), and in our report dated February 14, 1995, we expressed an
unqualified opinion on those consolidated financial statements. Our report
included a paragraph explaining that the Company changed its method of
accounting for investments in marketable securities at May 31, 1994 and income
taxes in 1993. In our opinion, the information set forth in the accompanying
consolidated condensed balance sheet as of December 31, 1994, is fairly stated
in all material respects in relation to the consolidated balance sheet from
which it has been derived.
PRICE WATERHOUSE LLP
Dallas, Texas
August 1, 1995
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity, Capital Requirements and Funding Alternatives
Cash, cash equivalents and marketable securities totaled $150.9 million
and $72.3 million at June 30, 1995 and December 31, 1994, respectively.
Working capital was $141.6 million at June 30, 1995, an increase of $112
million from December 31, 1994.
On May 26, 1995, the Company sold 10.4 million barrels of oil in a
forward oil sale. Under the terms of the sale, the Company received
approximately $87 million of the approximately $124 million net proceeds, and
is entitled to receive substantially all of the remaining proceeds (now held
in various interest-bearing reserve accounts) when the Company's Cusiana and
Cupiagua project in Colombia becomes self-financing, which is expected in
1997, and when certain other conditions are met. The barrels are to be
delivered during a five-year period that began in June 1995. The forward oil
sale increased working capital by $77.5 million.
As part of the forward oil sale transaction, Morgan Guaranty agreed to
purchase up to $40 million of additional production on a forward sale basis in
the event that the Company is otherwise unable to meet its cash call
obligations in respect of the Cusiana and Cupiagua fields project. The number
of barrels would be determined based on a formula intended to reflect their
fair market value. The Company does not expect, however, to sell any
production under this agreement.
During the six months ended June 30, 1995, the Company repaid $25 million
of short-term debt, and borrowed $59.7 million and issued a letter of credit
for $2.8 million under a long-term revolving credit facility totaling $65
million which matures on September 30, 1996. The facility is secured by the
Company's marketable securities portfolio and Crusader common stock owned by
the Company.
Capital expenditures were approximately $68.2 million and $62.9 million
for the six months ended June 30, 1995 and 1994, respectively. Continued
development of the oil fields in Colombia, including drilling and production
facilities, production sharing and other agreements, will require significant
additional capital. The Company's capital budget for the year ending December
31, 1995 is approximately $175 million, excluding capitalized interest, of
which approximately $100 million relates to the Cusiana and Cupiagua fields
("the Fields") and $29 million relates to Block A-18 of the Malaysia-Thailand
Joint Development Area. Capital requirements for full field development of
the Fields are expected to continue at substantial levels into 1997.
In recognition of the significant investment to be made in transportation
infrastructure in Colombia to evacuate the full production from the Fields,
the Company, along with other investors, formed Oleoducto Central S.A.
("OCENSA") in December 1994 to build, operate and finance the expanded
pipeline from the Fields to the port of Covenas. OCENSA's capitalization plan
contemplates an ultimate capital structure consisting of approximately 30%
equity from the Company and other investors and 70% debt. OCENSA has raised
significant amounts of debt in separate tranches supported by various
agreements with the Company or its partners as the case may be (relating, in
particular, to each partner's tariffs on its throughput). One such tranche is
supported by the Company's tariff commitments for its share of production from
the Fields. This tranche closed on July 7, 1995 and raised $60 million for
OCENSA, which is expected to satisfy all funding obligations related to the
Company's throughput right and equity interest in OCENSA for 1995. OCENSA
will require additional funds in 1996 and has the right to call on the Company
to assist in raising the required funds or making advances to OCENSA.
The Company has received a commitment from the Export-Import Bank of the
United States ("Eximbank") for a guarantee of up to $35 million of borrowings
to purchase United States-sourced exports under a credit facility to be
negotiated. Due to covenants in the indentures relating to the Company's
senior subordinated notes, the Company's ability to borrow additional funds is
limited.
Certain other indenture covenants relating to the Company's senior
subordinated notes would require the Company to offer to purchase a portion of
the notes if the Company's stockholders' equity is less than $225 million at
the end of two consecutive quarters. Stockholders' equity at June 30, 1995
was $242.5 million. Although the Company may experience losses for certain
interim periods, the Company does not anticipate that any such losses would
cause it to violate any indenture covenants.
The Company expects to meet the balance of its direct capital needs in
1995 and later years with increasing cash flow from its Colombian operations,
cash on hand, marketable securities, other asset sales, and possibly the
issuance of equity or other securities. On August 4, 1995, the Company
signed a definitive agreement to sell its interest in Triton France S.A.
through which it holds its interest in the Villeperdue Field. The sale, which
is subject to customary conditions, is expected to close in August 1995 and to
result in cash to the Company of approximately $16 million.
RESULTS OF OPERATIONS
General
The Company reported net earnings of $.8 million (before preferred
dividends) for the six months ended June 30, 1995 compared to a net loss of
$27.9 million in the 1994 period. The improved 1995 results reflected
increased production in Colombia, proceeds from legal settlements and the
absence of writedowns under the Securities and Exchange Commission ("SEC")
ceiling limitation.
QUARTER ENDED JUNE 30, 1995 AND 1994
Revenues
Oil sales increased $19.7 million in 1995, due primarily to an increase
of $20 million in Colombia due to increased production capacity from the
recent installation of three production units. The fourth production unit
commenced production in early July 1995. Also contributing were higher
prices realized in Colombia of $17.13 per barrel in 1995 compared to $12.99
per barrel for 1994, as well as revenues of $5.1 million relating to
reimbursement of pre-commerciality costs from Ecopetrol for the Cusiana Field.
Ecopetrol is obligated to reimburse the Company for approximately $21 million
of remaining Cusiana pre-commerciality costs, most of which will be recorded
as revenue. The reimbursements depend on the timing and amount of Cusiana
production. The Company expects the remaining reimbursements to be paid
during the remainder of 1995 and the first half of 1996.
Other income for the 1995 quarter included the settlement of a lawsuit
for $5.3 million and a $2.9 million gain for cash received as part of the
early redemption of the Crusader Limited ("Crusader") 12% Convertible
Subordinated Unsecured Notes (the "Convertible Notes") to shares of Crusader
common stock. The 1994 quarter included a $1.5 million gain on the sale of
Aero Services Inc. Interest income was $1.6 million and $2.3 million in 1995
and 1994, respectively.
Costs and Expenses
Operating expenses and depreciation, depletion and amortization increased
$2.8 million and $2.3 million, respectively, in 1995 due principally to
increased production in Colombia which increased operating expenses by $3.5
million and depletion by $3.2 million. These increases were offset by lower
production in 1995 and prior period writedowns in France which lowered
operating expenses and depletion by $.5 million and $.9 million, respectively.
The Company's operating costs per equivalent barrel, excluding volumes
related to reimbursement of Cusiana pre-commerciality costs, were $5.98 and
$11.41 in 1995 and 1994, respectively.
General and administrative expenses decreased $1.7 million as
capitalization from exploration and development activities increased $2
million to $5.1 million in 1995.
Equity in earnings of Crusader decreased $3.6 million primarily due to a
$2.7 million loss which represented the Company's equity share of $5.3 million
paid to holders of the Convertible Notes to effect early redemption.
Writedowns in 1994 related to oil properties in France and Indonesia
under application of the SEC full cost ceiling limitation.
Total interest expense in 1995 was $9.9 million, an increase from $8
million in 1994 due to higher debt outstanding. Capitalized interest
decreased from $5.2 million in 1994 to $3.9 million in 1995 primarily as a
result of commercial level production beginning in Colombia during late 1994.
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
Revenues
Oil sales increased $32.4 million in 1995 due primarily to an increase of
$32.8 million in Colombia due to increased production capacity from the recent
installation of three production units in the Cusiana central processing
facilities and higher prices in Colombia ($16.38 per barrel in 1995 compared
to $11.95 per barrel in 1994). The Company's net production in Colombia
increased to 2.2 million barrels in 1995 from .3 million barrels in 1994. The
1995 results also included revenues of $8.7 million relating to the
reimbursement of pre-commerciality costs for the Cusiana Field.
Other income during 1995 included $7.2 million received from legal
settlements and $2.9 million received from the early redemption of the
Convertible Notes. Interest income for the six months ended June 30, 1995 and
1994 was $2.8 million and $4.6 million, respectively.
Costs and Expenses
Operating expenses increased $5.8 million from 1994. The increase was
attributable to higher production in Colombia ($7.0 million). The Company's
operating costs per equivalent barrel, excluding volumes related to
reimbursement of Cusiana pre-commerciality costs, were $7.40 and $11.16 in
1995 and 1994, respectively. The 1994 results included an accrual of $1.1
million for environmental clean-up costs in the United States.
General and administrative ("G&A") expenses decreased from $15.4 million
in 1994 to $12.6 million in 1995 primarily due to increased exploration and
development activities, which increased capitalized G&A. Total G&A costs
increased 4.6% from $21.7 million in 1994 to $22.6 million in 1995.
Higher production in Colombia increased depreciation, depletion and
amortization by $5.4 million compared to 1994 while lower production in France
during 1995 and prior period writedowns of oil properties in France decreased
depletion by $2.3 million in 1995.
Writedown of assets in 1994 was related to oil properties in France and
Indonesia under application of the SEC full cost ceiling limitation.
Interest expense in 1995 of $11.5 million increased from $5.3 million in
1994 due to higher debt outstanding and reduced capitalized interest. As a
result of the commencement of commercial level production in Colombia,
capitalized interest decreased to $7.7 million in 1995 from $10.5 million in
1994.
Equity in earnings of Crusader for 1995 included a net gain of $3.8
million on the sale of Saracen Minerals and a $2.7 million loss related to the
early redemption of the Convertible Notes.
Income Taxes
The Company complies with Statement of Financial Accounting Standards No.
109 ("SFAS 109") which was adopted effective June 1, 1992, with regard to
accounting for income taxes. SFAS 109 requires that the Company make
projections about the timing and scope of certain future business transactions
in order to estimate realizability of deferred tax assets. Changes in the
timing or nature of actual or anticipated business transactions, projections
and income tax laws can give rise to significant adjustments to the Company's
deferred tax expense or benefit that may be reported from time to time. For
these and other reasons, compliance with SFAS 109 may result in significant
differences between tax expense for income statement purposes and taxes
actually paid.
The income tax provision for the 1995 period represented deferred taxes
in Colombia, Argentina, Ecuador, Guatemala and China, and a deferred tax
benefit in the United States related to future utilization of net operating
loss carryforwards ("NOLs"). Subject to the factors described above, the
Company currently expects that its deferred tax provision will substantially
exceed its current tax provision (i.e., actual taxes paid), resulting in an
effective tax rate for income statement purposes that will exceed statutory
tax rates, at least until the Cusiana and Cupiagua fields reach peak
production. The primary reason for the expected difference is the
non-deductibility for Colombian tax purposes of certain capitalized expenses.
Deferred taxes would also be adversely impacted by increased tax rates in
jurisdictions such as Colombia and earlier than anticipated utilization of
U.S. NOLs. Consistent with its business strategy of maximizing stockholder
value by maximizing the Company's after tax cash flow, the Company is
actively considering various alternatives that may improve its after tax cash
flow over the long term, but which would accelerate the previously
anticipated utilization of its U.S. NOLs and, in turn, result in a deferred
tax expense.
No current tax expense is recorded for reimbursements for
pre-commerciality costs paid by Ecopetrol, which are treated as a return of
capital under Colombian tax laws.
Minority Interest in Losses of Subsidiaries
The Company ceased to record minority interest related to Triton Europe
following the purchase of shares held by the minority interest owners on March
31, 1994.
Petroleum Price Risk Management
Oil and natural gas sold by the Company is normally priced with reference
to a defined benchmark, such as light sweet crude oil traded on the New York
Mercantile Exchange (West Texas Intermediate or "WTI"). Actual prices
received vary from the benchmark depending on quality and location
differentials. It is the Company's policy from time to time to use financial
market transactions with credit worthy counterparties to reduce risk
associated with the pricing of a portion of the oil and natural gas which it
sells. The policy is structured to underpin the Company's budgeted revenues
and results of operations.
In anticipation of entering into a forward oil sale, the Company entered
into five year commodity swap agreements in April and May 1995, to hedge price
risk associated with the portion of the Company's oil production in Colombia
expected to be sold in the forward oil sale. Sales of the Company's Colombian
production are priced with reference to WTI. The agreements, which were
entered into with a counterparty with a "AAA" credit rating, fixed a WTI price
benchmark of $18.42 per barrel on approximately 10.4 million barrels. The
volumes sold in the forward oil sale represent approximately 15% of the
Company's currently projected Cusiana and Cupiagua production over the
five-year period.
Simultaneously, the Company purchased from the same institution call
options to retain the ability to benefit from future WTI price increases above
$20.42 per barrel. The volumes and expiration dates on the call options
coincide with the volumes and delivery dates under the swap agreements.
Prior to completion of the forward oil sale, the swap and call agreements
had been accounted for as hedging transactions. Upon completion of the
forward oil sale, as a result of which the swap agreements were superseded,
the call options were recorded as a separate investment at their then fair
market value of $9.3 million. As a result of this accounting treatment,
fluctuations in the value of the call options will affect other income as
non-cash adjustments.
In March 1995, the Company entered into a commodity swap agreement with
an "A" rated counterparty to hedge price risk associated with the Company's
oil production in France. The agreement fixes a Brent crude oil price
benchmark at $16.90 per barrel on approximately 275,000 barrels of oil to be
produced during the period from April 1, 1995 to September 30, 1995. The swap
agreement is accounted for as a hedge.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The United States Environmental Protection Agency and Justice Department have
advised the Company that one of its domestic oil and gas subsidiaries, as a
potentially responsible party for the clean-up of the Monterey Park,
California Superfund site operated by Operating Industries, Inc., may
contribute approximately $2.8 million to settle its alleged liability for the
site's clean-up cost. If the subsidiary does not accept the settlement offer,
it has been advised that it, together with other potentially responsible
parties, may be ordered to perform or pay for various remedial tasks. The
subsidiary is evaluating the settlement offer, the cost to the subsidiary of
possible remedial tasks, possible settlements and joint strategies with other
potentially responsible parties and insurers, and possible legal defenses.
The settlement offer does not address responsibility for any groundwater
remediation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders (the "Meeting") on May 11,
1995 at which the shareholders of the Company voted on and approved the
following proposals by the votes indicated.
1. The first proposal was the election of five directors to serve until
the third annual meeting of shareholders to occur after the Meeting or
until their respective successors shall have been duly elected and
qualified. The directors elected and the votes cast for or withheld were
as follows: Sheldon R. Erikson (31,932,531 votes for and 120,668 votes
withheld), Thomas G. Finck (31,933,926 votes for and 119,273 votes
withheld), Fitzgerald S. Hudson (31,918,612 votes for and 134,587 votes
withheld), John R. Huff (31,933,365 votes for and 119,834 votes withheld)
and William I. Lee (31,853,763 votes for and 199,436 votes withheld). The
following directors continue in office: Herbert L. Brewer, Jesse E.
Hendricks, Michael E. McMahon, J. Otis Winters, Ernest E. Cook, Ray H.
Eubank, John P. Lewis, Wellslake D. Morse, Jr. and Edwin D. Williamson.
2. The second proposal was to effect a change in the state of
incorporation of the Company from Texas to Delaware (the "Reincorporation")
by approving an Agreement and Plan of Merger providing for the Company to
merge into a wholly owned Delaware subsidiary. The Reincorporation was
approved by the following vote: 24,499,789 votes were cast for the
Reincorporation and 1,970,959 votes were cast against the Reincorporation,
and there were 61,967 abstentions and 5,520,484 broker non-votes.
<PAGE>
ITEM 5. OTHER INFORMATION
In June 1995, the Company signed the Guayabo and Las Amelias Association
Contract covering a contiguous area of approximately 1.7 million acres in
Colombia. The area is located approximately 150 kilometers north of Bogota
and 140 kilometers northwest of the Fields, and its northern edge lies
immediately south of the El Pinal block.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The following exhibits are filed as part of this Quarterly
Report on Form 10-Q:
1. Exhibits required to be filed by Item 601 of Regulation S-K. (Where the
amount of securities authorized to be issued under or the amount of any of
Triton Energy Corporation's and any of its subsidiaries' or its affiliate
Crusader's, long-term debt agreements does not exceed 10% of the Company's
assets, pursuant to paragraph (b) (4) of Item 601 of Regulation S-K, in lieu
of filing such an exhibit, the Company hereby agrees to furnish to the
Commission upon request a copy of any agreement with respect to such long-term
debt.)
4.1 Specimen Stock Certificate of Common Stock, $1.00 par value, of
the Company. (14)
4.2 Rights Agreement dated as of May 22, 1995, between Triton andChemical
Bank, as Rights Agent. (15)
4.3 Form of Debt Securities. (11)
4.4 Proposed Form of Senior Indenture. (11)
4.5 Proposed Form of Senior Subordinated Indenture. (11)
4.6 Certificate of Designation Establishing and Designating a Series of
Shares of the Company's 5 % Convertible Preferred Stock, no par
value. (14)
4.7. Certificate of Incorporation, as amended. (14)
4.8 Bylaws. (14)
10.1 Triton Energy Corporation Amended and Restated Retirement Income
Plan. (10)
10.2 Triton Energy Corporation Amended and Restated Supplemental Executive
Retirement Income Plan. (10)
10.3 1981 Employee Non-Qualified Stock Option Plan of Triton Energy
Corporation. (2)
10.4 Amendment No. 1 to the 1981 Employee Non-Qualified Stock Option Plan
of Triton Energy Corporation. (6)
10.5 Amendment No. 2 to the 1981 Employee Non-Qualified Stock Option Plan
of Triton Energy Corporation. (2)
10.6 Amendment No. 3 to the 1981 Employee Non-Qualified Stock Option Plan
of Triton Energy Corporation. (10)
10.7 1985 Stock Option Plan of Triton Energy Corporation. (3)
10.8 Amendment No. 1 to the 1985 Stock Option Plan of Triton Energy
Corporation. (2)
10.9 Amendment No. 2 to the 1985 Stock Option Plan of Triton Energy
Corporation. (10)
10.10 Triton Energy Corporation Amended and Restated 1986 Convertible
Debenture Plan. (10)
10.11 1988 Stock Appreciation Rights Plan of Triton Energy Corporation.
(5)
10.12 Triton Energy Corporation 1989 Stock Option Plan. (7)
10.13 Amendment No. 1 to the Triton Energy Corporation 1989 Stock Option
Plan. (2)
10.14 Amendment No. 2 to the Triton Energy Corporation 1989 Stock Option
Plan. (10)
10.15 Triton Energy Amended and Restated 1992 Stock Option Plan . (10)
10.16 Form of Amended and Restated Employment Agreement by and among
Triton Energy Corporation and certain officers of Triton Energy
Corporation. (10)
10.17 Triton Energy Amended and Restated Restricted Stock Plan. (10)
10.18 Deed of Trust Note dated April 11, 1988, executed by Triton Aviation
Services, Inc. and API Terminal, Inc. and related documents,
including Guaranty of Triton Energy Corporation. (5)
10.19 Triton Energy Corporation Executive Life Insurance Plan. (4)
10.20 Triton Energy Corporation Long Term Disability Income Plan. (4)
10.21 Triton Energy Corporation Amended and Restated Retirement Plan for
Directors. (3)
10.22 Indenture dated as of November 13, 1992 between Triton and Chemical
Bank, with respect to the issuance of Senior Subordinated Discount
Notes due 1997. (8)
10.23 Supplemental Indenture dated as of July 1, 1993 between Triton
Energy Corporation and Chemical Bank. (5)
10.24 Supplemental Indenture dated as of August 16, 1993 between Triton
Energy Corporation and Chemical Bank. (5)
10.25 Third Supplemental Indenture dated as of May 12, 1995 between Triton
Energy Corporation and Chemical Bank. (1)
10.26 Senior Subordinated Indenture by and between the Company and United
States Trust Company of New York, dated as of December 15, 1993. (10)
10.27 First Supplemental Indenture by and between the Company and United
States Trust Company of New York, dated as of December 15, 1993. (10)
10.28 Second Supplemental Indenture dated as of May 12, 1995 between
Triton Energy Corporation and United States Trust Company of New
York. (1)
10.29 Underwriting Agreement dated June 18, 1993 among Triton Canada
Resources Ltd., Triton Energy Corporation and the underwriters named
therein. (10)
10.30 Purchase and Sale Agreement among Triton Oil and Gas Corp., Triton
Energy Corporation and Torch Energy Advisors Incorporated dated
effective as of January 1, 1993. (5)
10.31 Agreement for Purchase and Sale of Assets Among Triton Fuel Group,
Inc. and AVFUEL Corporation dated August 25, 1993. (5)
10.32 Contract for Exploration and Exploitation for Santiago de Atalayas I
with an effective date of July 1, 1982, between Triton Colombia,
Inc., and Empresa Colombiana De Petroleos. (5)
10.33 Contract for Exploration and Exploitation for Tauramena with an
effective date of July 4, 1988, between Triton Colombia, Inc., and
Empresa Colombiana De Petroleos. (5)
10.34 Summary of Assignment legalized by Public Instrument No. 1255 dated
September 15, 1987 (Assignment is in Spanish language). (5)
10.35 Summary of Assignment legalized by Public Instrument No. 1602 dated
June 11, 1990 (Assignment is in Spanish language). (5)
10.36 Summary of Assignment legalized by Public Instrument No. 2586 dated
September 9, 1992 (Assignment is in Spanish language). (5)
10.38 Triton Energy Corporation 401(K) Savings Plan. (10)
10.39 Contract between Malaysia-Thailand and Joint Authority and Petronas
Carigali SDN.BHD. and Triton Oil Company of Thailand relating to
Exploration and Production of Petroleum for Malaysia-Thailand Joint
Development Area Block A-18. (12)
10.40 Credit Agreement between Triton Energy Corporation and Banque
Paribas Houston Agency dated as of March 28, 1995, together with
related form of revolving credit note (14)
10.41 First Amendment to Credit Agreement between Triton Energy
Corporation and Banque Paribas Houston Agency dated May 16, 1995. (1)
10.42 Security Agreement between Triton Energy Corporation and Banque
Paribas Houston Agency. (14)
10.43 Triton Crude Purchase Agreement between Triton Colombia, Inc. and
Oil Co., LTD. dated May 25, 1995. (16)
10.44 Crude Oil Purchase Agreement between Morgan Guaranty Trust Company
of New York and Triton Oil & Gas Corporation dated May 25, 1995. (16)
15.1 Letter of Price Waterhouse LLP, acknowledging awareness of the use of
their reportdated August 4, 1995, relating to the review of interim
financial information. (1)
27.1 FINANCIAL DATA SCHEDULE.(1)
99.1 RIO CHITAMENA ASSOCIATION CONTRACT.(13)
99.2 RIO CHITAMENA PURCHASE AND SALE AGREEMENT.(13)
99.3 INTEGRAL PLAN - CUSIANA OIL STRUCTURE.(13)
99.4 LETTER AGREEMENTS WITH CO-INVESTOR IN COLOMBIA.(13)
99.5 COLOMBIA PIPELINE MEMORANDUM OF UNDERSTANDING.(13)
99.6 AMENDED AND RESTATED OLEODUCTO CENTRAL S.A.AGREEMENT DATED
AS OF MARCH 31, 1995. (1)
____________________
PART II. OTHER INFORMATION
(1) Filed herewith.
(2) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1992 and incorporated herein by
reference.
(3) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1990 and incorporated herein by
reference.
(4) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1991 and incorporated herein by
reference.
(5) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1993 and incorporated by reference
herein.
(6) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended May 31, 1989 and incorporated by reference
herein.
(7) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended November 30, 1988 and incorporated herein
by reference
.
(8) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended November 30, 1992 and incorporated herein
by reference.
(9) Previously filed as an exhibit to the Company's Current Report on Form
8-K dated as of July 14, 1993 and incorporated herein by reference.
(10) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended November 30, 1993 and incorporated by
reference herein.
(11) Previously filed as an exhibit to the Company's Registration
Statement on Form S-3 (No. 33-69230) and incorporated herein by reference.
(12) Previously filed as an exhibit to the Company's current report on
Form 8-K dated April 21, 1994 and incorporated by reference herein.
(13) Previously filed as an exhibit to the Company's current report on
Form 8-K/A dated July 15, 1994 and incorporated by reference herein.
(14) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1995.
(15) Previously filed as an exhibit to the Company's Registration
Statement on Form 8-A dated June 2, 1995 and incorporated by reference
herein.
(16) Previously filed as an exhibit to the Company's current report on
Form 8-K dated May 26, 1995 and incorporated by reference herein.
<PAGE>
(b) Reports on Form 8-K
On June 2, 1995, the Company filed a Current Report on Form 8-K with respect
to Item 5 of said form, relating to the adoption of a Shareholder Rights Plan
and the redemption of the Company's then outstanding preferred share purchase
rights. On June 8, 1995, the Company filed a Current Report on Form 8-K with
respect to Item 5 of said form, relating to the forward sale of oil and
including an unaudited proforma consolidated condensed balance sheet as of
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.
TRITON ENERGY CORPORATION
By: /s Peter Rugg
Peter Rugg
Senior Vice President and Chief Financial Officer
Date: August 4, 1995
EXHIBIT 10.25
THIRD SUPPLEMENTAL INDENTURE
THIRD SUPPLEMENTAL INDENTURE, dated as of May 12, 1995 (this
"Supplemental Indenture"), between TRITON ENERGY CORPORATION, a Delaware
corporation, as issuer (the "Company") and CHEMICAL BANK, a banking
corporation organized and existing under the laws of the State of New York, as
trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, Triton Energy Corporation, a Texas corporation ("Triton Texas"),
and the Trustee are parties to the Indenture dated as of November 13, 1992, as
amended by Supplemental Indenture dated as of July 1, 1993 and Supplemental
Indenture dated as of August 16, 1993 (as has been and may hereafter be
amended, supplemented or otherwise modified from time to time, the
"Indenture") relating to the Senior Subordinated Notes due 1997 (the
"Securities");
WHEREAS, Triton Texas has effected a change in its state of incorporation
from Texas to Delaware through a merger of Triton Texas with and into the
Company (the "Reincorporation") and, as a result of the Reincorporation, the
Company has succeeded to all of the properties, rights, liabilities and
obligations of Triton Texas, including Triton Texas' obligations under the
Indenture and the Securities;
WHEREAS, the Company has requested the Trustee and the Trustee has agreed
to join in the execution of this Supplemental Indenture in accordance with the
terms of Section 9.01 of the Indenture and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the promises and mutual agreements
herein contained, the Company and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the Holders (as defined in the
Indenture) from time to time of the Securities, as follows:
SECTION 1. Definitions. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to such terms in the
Indenture.
SECTION 2. Assumption by the Company. The Company hereby expressly
assumes all of the obligations of Triton Texas as "the Company" under the
Securities and the Indenture.
SECTION 3. Representations and Warranties.
3.1 No Event of Default. Immediately after giving effect to the
Reincorporation, no event which, after notice or lapse of time, would become a
Default or Event of Default occurred or was continuing.
3.2 State of Incorporation. The Company is duly incorporated under
the laws of the State of Delaware.
3.3 Consolidated Net Worth. Immediately after giving effect to the
Reincorporation, the Company had pro forma Consolidated Net Worth at least
equal to the Consolidated Net Worth of Triton Texas prior to the
Reincorporation.
3.4 Additional Indebtedness. Immediately after giving effect to the
Reincorporation, the Company could incur an additional $1.00 of Indebtedness
pursuant to Section 10.07 of the Indenture (other than Permitted
Indebtedness).
SECTION 4. MISCELLANEOUS.
4.1 The Trustee. The recitals contained herein shall be taken as the
statements of the Company and the Trustee shall not assume responsibility for,
or be liable in respect of, the correctness thereof. The Trustee makes no
representation as to, and shall not be liable or responsible for, the validity
or sufficiency of this Supplemental Indenture.
4.2 Limited Effect. Except as expressly amended hereby, all of the
provisions, covenants, terms and conditions of the Indenture are ratified and
confirmed, and shall remain in full force.
4.3 Counterparts. This Supplemental Indenture may be executed by one
or more parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
4.4 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
TRITON ENERGY CORPORATION, as Issuer
Attest: /s/ Tamera D. Gibson By: /s/ Robert B. Holland, III
Title: Assistant Secretary Title: Sr. Vice President
CHEMICAL BANK, as Trustee
Attest: /s/ L. O'Brien /s/ Gregory McFarlane
Title: Senior Trust Officer Title: Vice President
EXHIBIT 10.28
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE, dated as of May 12, 1995 (this
"Supplemental Indenture"), between TRITON ENERGY CORPORATION, a Delaware
corporation, as issuer (the "Issuer") and UNITED STATES TRUST COMPANY OF NEW
YORK, a New York corporation, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, Triton Energy Corporation, a Texas corporation ("Triton Texas"),
and the Trustee are parties to the Indenture dated as of December 15, 1993, as
amended by the First Supplemental Indenture dated as of December 15, 1993 (as
hereafter amended, supplemented or otherwise modified from time to time, the
"Indenture");
WHEREAS, Triton Texas has effected a change in its state of incorporation
from Texas to Delaware through a merger with and into the Issuer (the
"Reincorporation") and, as a result of the Reincorporation, the Issuer has
succeeded to all of the properties, rights, liabilities and obligations of
Triton Texas, including Triton Texas' obligations under the Indenture and the
Notes (as defined in the Indenture);
WHEREAS, the Issuer has requested the Trustee and the Trustee has agreed
to join in the execution of this Supplemental Indenture in accordance with the
terms of Section 8.1 of the Indenture and subject to the conditions set forth
herein;
NOW, THEREFORE, in consideration of the promises and mutual agreements
herein contained, the Issuer and the Trustee mutually covenant and agree,
including for the equal and proportionate benefit of the holders from time to
time of the Notes, as follows:
SECTION 1. Definitions. Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to such terms in the
Indenture.
SECTION 2. Assumption by the Issuer. The Issuer hereby expressly
assumes (a) the due and punctual payment of the principal of and interest, if
any, on all the Securities and the Notes, according to their tenor and (b) the
due and punctual performance and observance of all the covenants and
conditions of the Indenture to be performed by Triton Texas as "Issuer."
SECTION 3. Representations and Warranties.
3.1 No Event of Default. Immediately after giving effect to the
Reincorporation, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, occurred or was
continuing.
3.2 State of Incorporation. The Issuer is duly incorporated under
the laws of the State of Delaware.
3.3 Consolidated Net Worth. Immediately after giving effect to the
Reincorporation, the Issuer had pro forma Consolidated Net Worth at least
equal to the Consolidated Net Worth of Triton Texas prior to the
Reincorporation.
3.4 Additional Indebtedness. Immediately after giving effect to the
Reincorporation, the Issuer could incur an additional $1.00 of Indebtedness
(other than Permitted Indebtedness) pursuant to Section 3.6 of the Indenture.
SECTION 4. MISCELLANEOUS.
4.1 The Trustee. The recitals contained herein shall be taken as the
statements of the Issuer and the Trustee shall not assume responsibility for,
or be liable in respect of, the correctness thereof. The Trustee makes no
representation as to, and shall not be liable or responsible for, the validity
or sufficiency of this Supplemental Indenture.
4.2 Limited Effect. Except as expressly amended hereby, all of the
provisions, covenants, terms and conditions of the Indenture are ratified and
confirmed, and shall remain in full force.
4.3 Counterparts. This Supplemental Indenture may be executed by one
or more parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
4.4 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE SHALL BE DEEMED TO BE
A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.
TRITON ENERGY CORPORATION, as Issuer
Attest: /s/ Tamera D. Gibson By: /s/ Robert B. Holland, III
Title: Assistant Secretary Title:Sr. Vice President
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
Attest: /s/ Colette Newner By: /s/ John Stohlmann
Authorized Signatory Authorized Signatory
EXHIBIT 10.41
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT ("this Amendment") is made
and entered into effective as of May 16, 1995 (the "Effective Date") by and
among TRITON ENERGY CORPORATION, a Texas corporation ("Borrower"), and the
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (individually
referred to herein as a "Lender" and collectively as "Lenders") and BANQUE
PARIBAS HOUSTON AGENCY, as agent for the Lenders (in such capacity, the
"Agent").
W I T N E S S E T H:
WHEREAS, Borrower and Banque Paribas Houston Agency ("Paribas"),
with the Agent as Agent thereunder are parties to a Credit Agreement, dated as
of March 28, 1995 (the "Credit Agreement");
WHEREAS, at present Paribas is the only Lender under the Credit
Agreement, and therefore, pursuant to the terms of the Credit Agreement, at
present the Aggregate Commitments equal $40,000,000;
WHEREAS, in addition to Paribas, other financial institutions listed
on the signature page hereof have expressed a willingness to become Lenders
under the Credit Agreement with Aggregate Commitments of $65,000,000, and
Paribas and Borrower have expressed a desire to amend the Credit Agreement to
accomplish such result;
WHEREAS, in connection with this Amendment, and as memorialized
herein, Union Bank ("Union Bank"), MeesPierson N.V. ("MeesPierson") and
Chemical Bank ("Chemical") respectively desire to purchase from Paribas, and
Paribas desires to sell to Union Bank, MeesPierson and Chemical, respectively
(sometimes individually referred to herein as an "Assignee" and collectively
as "Assignees") a portion of the Revolving Credit Loans held by Paribas
pursuant to, and which are outstanding under the Credit Agreement, and to
participate in a portion of the Letter of Credit Reimbursement Obligations
held by Paribas pursuant to, and which are outstanding under the Credit
Agreement, in each case on the terms and conditions and for the consideration
hereinafter set forth, and thereby the Assignees shall become parties to the
Credit Agreement as Lenders thereunder;
WHEREAS, after giving effect to the foregoing, Borrower and the
Lenders desire to amend the Credit Agreement to reflect that the Aggregate
Commitments shall equal $65,000,000;
WHEREAS, after giving effect to the foregoing, Borrowers, the
Lenders and the Agent desire to further amend the Credit Agreement in the
manner hereinafter set forth; and
WHEREAS, in addition to the foregoing, Borrower has requested that
the Lenders consent to, and to the extent required grant a waiver under the
Credit Agreement in connection with, the Reincorporation, as such term is
defined in Section 4 below;
NOW THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrower, the Lenders and the Agent, each intending to be
legally bound, hereby mutually agree as follows:
1. Capitalized Terms. All capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to such terms in
the Credit Agreement.
2. Outstanding Revolving Credit Loans.
(a) Representations as to the Revolving Credit Loans. Paribas
represents and warrants to each of the Assignees that the amount shown
opposite the name of Paribas in Column A of Schedule 1 hereto as of the
Effective Date is the outstanding principal amount of Revolving Credit Loans
under the Credit Agreement held by Paribas as of the Effective Date. Borrower
represents and warrants to each Assignee that the amount shown in Column A of
Schedule 1 hereto is, on and as of the Effective Date, the outstanding
principal amount of such Revolving Credit Loans free of any rights of set-off
or counterclaim of Borrower. Borrower further represents and warrants that
all interest and fees due and payable through the Effective Date on account of
such Revolving Credit Loans (other than with respect to the Lenders'
Australian counsel) have been paid.
(b) Restructuring of Ownership of the Revolving Credit Loans.Borrower
and each Lender hereby agrees with each of the other that, upon the execution
hereof by all parties, on and as of the Effective Date, Paribas shall sell the
portion of the principal amount of the Revolving Credit Loans set forth in
Column B of Schedule 1 hereto and the Assignees shall purchase from Paribas
the portion of the principal amount of the Revolving Credit Loans held by it
indicated with respect to each of such Assignees in Column C of Schedule 1
hereto, for a purchase price equal to the principal amount of the portion of
the Revolving Credit Loans so purchased from Paribas. The Lenders shall then
hold Revolving Credit Loans outstanding under the Loan Agreement as shown with
respect to each of them in Column C of Schedule 1 hereto and, as a result of
the foregoing transaction, for purposes the Credit Agreement, as amended
hereby, the Lenders' respective Ratable Portions shall be as set forth in
Column D of Schedule 1 hereto.
(c) Replacement Notes. In furtherance of the foregoing transactions,
Borrower shall execute and deliver to each of the Lenders its replacement
promissory notes dated the Effective Date in the form of Annexes "A-1" through
"A-4" hereto attached ("Replacement Notes"). The principal amount of each
Replacement Note delivered to each Lender shall equal such Lender's
Commitment. The Replacement Notes shall, upon acceptance by the Lenders, as
of the Effective Date constitute replacements and substitutions for the
Revolving Credit Note dated March 28, 1995 in the principal amount of
$40,000,000 issued by Borrower to the order of Paribas pursuant to the Credit
Agreement (the "Paribas Note"). All references in the Credit Agreement to the
Revolving Credit Notes shall, from and after the Effective Date, be deemed to
refer to the Replacement Notes, the same as if such Replacement Notes were the
Revolving Credit Notes defined, described and referred to in the Credit
Agreement. Upon acceptance of the Replacement Notes, Paribas agrees to return
to Borrower the Paribas Note marked "Replaced as of May 16, 1995", being the
Effective Date of the First Amendment to Credit Agreement.
(d) Rights and Obligations of the Assignees. Upon consummation of the
foregoing transactions, each Assignee shall become a Lender under the Credit
Agreement with all rights and obligations of a Lender thereunder and under
each other Loan Document. Without limiting the foregoing, but in furtherance
thereof, Paribas hereby assigns and transfers to each Assignee, in accordance
with the respective Ratable Portions of each, a portion of its rights and
obligations under the Equitable Mortgages pursuant to Section 44.2 of each
thereof.
3. Outstanding Letters of Credit. Schedule 2 contains a schedule of
all Letters of Credit issued for the account of Borrower by Paribas prior to
the Effective Date pursuant to the Credit Agreement and which are outstanding
as of the Effective Date. From and after the Effective Date, pursuant to this
Amendment such Letters of Credit shall be deemed to be Letters of Credit
issued pursuant to Section 2.17 of the Credit Agreement, as amended by this
Amendment; and Paribas hereby assigns and grants to each Assignee, and each
such Assignee hereby accepts and assumes, a participation in the Letter of
Credit Reimbursement Obligations with respect thereto to the extent of its
Ratable Portion.
4. Consent and Waiver with respect to the Reincorporation. The Lenders
hereby consent to, and grant any waiver of any provision of the Credit
Agreement, as amended by this Amendment, to the extent required to permit the
change in the state of incorporation of Borrower from Texas to Delaware
pursuant to an Agreement and Plan of Merger providing for Borrower to merge
into a wholly owned Delaware Subsidiary of Borrower (the "Reincorporation"),
all as described more fully Borrower's Proxy Statement for Annual Meeting of
Shareholders held May 11, 1995.
5. Definitions and Accounting Terms. Article I is hereby amended to
amend and restate the following Definitions in their entirety:
"'Aggregate Commitments' shall equal $65,000,000 as the same may be
reduced or terminated pursuant to Section 2.5 hereof.
'Borrowing Base' means, at any time, the sum of (i) 40% of the average
per share closing price for Crusader Shares for the two-week period
immediately preceding, but excluding the date of the current Borrowing Base
determination, based on the Dollar equivalent of the last sale price for
ordinary shares quoted in the Australian Stock Exchange Ltd., as reflected in
Bloomberg Financial Markets Australian Stock Exchange closing price table and
Bloomberg Financial Markets closing market prices for Dollar to Australian
dollar exchange rates, times the number of Crusader Shares that are, at the
date the current Borrowing Base is determined, subject to the Equitable
Mortgages; and (ii) 80% of the Market Value of the aggregate Marketable
Securities that are, at the date the current Borrowing Base is determined, on
deposit for the account of the Borrower in the U.S. Trust Custodial Account;
provided, however, the amount of the Borrowing Base derived from clause (i)
above shall not, at any time, exceed $25,000,000."
Article I is further amended by (i) substituting the words "interest
expense" for the words "Interest Expense" where they appear in the ninth line
of the definition of "EBITDA" and (ii) adding the words "its home office, or"
after the word "through" where it appears in the eighth line of the definition
of "Eligible Assignee".
6. Amendment of Article II of the Credit Agreement. Section 2.17(m) of
the Credit Agreement is hereby amended by substituting the words "the Agent"
for the word "it" where it appears after the word "issued" in the second line
of such Section 2.17(m).
7. Amendment of Article VI of the Credit Agreement.
(a)Preservation of Corporate Existence, Etc. Section 6.5 of the Credit
Agreement is hereby amended by deleting ", except as permitted under Section
7.5" where it appears after the word "franchises" in the last line of such
Section 6.5.
(b) Borrowing Base Matters.
Section 6.16(a) of the Credit Agreement is amended by substituting
the word "third" for the ordinal number "18th" where it appears in the third
line of such Section 6.16(a) and by adding "following the 15th calendar day"
after the word "Day" where it appears in the third line of such Section
6.16(a).
(ii) Section 6.16(c) is amended by adding "; provided, however,
notwithstanding the foregoing, concurrently with the providing of any
instruction to United States Trust Company of New York to effect any
withdrawal or distribution of cash or Marketable Securities from the U.S.
Trust Custodial Account, the Borrower shall provide a copy of such instruction
notice to the Agent" after the work "thereon" where it appears on the last
line of such Section 6.16(c).
(iii) Section 6.16(d) is amended by substituting the work "immediately"
for the word "promptly" after the word "shall" where it appears in the first
line of such Section 6.16(d).
(iv) Section 6.17 is hereby deleted in its entirety from the Credit
Agreement.
8. Amendment of Schedule I to the Credit Agreement. Schedule I to the
Credit Agreement is hereby amended in its entirety by substituting therefor
Schedule I attached hereto.
9. Further Representations and Disclaimers of Paribas. Paribas (i)
represents and warrants to the Assignees that it is the legal and beneficial
owner of 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
to any Assignee and assumes no responsibility to any Assignee with respect to
any statements, warranties or representations made by the Borrower in or in
connection with the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant thereto; (iii) makes no representation or warranty
to any Assignee and assumes no responsibility to any Assignee with respect to
the financial condition of any Loan Party or the performance or observance by
any Loan Party of any of its obligations under the Credit Agreement or any
other Loan Document or any other instrument or document furnished pursuant
thereto; (iv) attaches the Paribas Note referred to above and requests that
the Agent exchange such Paribas Note for the Replacement Notes as contemplated
herein; and (v) represents and warrants to the Assignees that it has neither
sent nor received any notice of any Default or Event of Default.
10. Representations of the Assignees. Each Assignee (i) confirms that
it has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 4.6 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Amendment; (ii) agrees that it will,
independently and without reliance upon the Agent or Paribas 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 the
Credit Agreement; (iii) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement
as are delegated to the Agent by the terms thereof, together with such powers
as are reasonably incidental thereto; (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; (v)
represents and warrants that it is an Eligible Assignee; (vi) specifies as its
Domestic Lending Office (and address for notices) and Eurodollar Lending
Office the offices set forth beneath its name on the signature pages hereof;
and (vii) attaches the forms prescribed by the Internal Revenue Service of the
United States certifying as to such Assignee's status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement and the
Revolving Credit Notes or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty.
11. Further Representations of Borrower.
(a) The execution, delivery and performance by Borrower of this Amendment
and the consummation of the transactions contemplated hereby:
(i) are within Borrower's corporate powers;
(ii)have been duly authorized by all necessary corporate action,
including, without limitation, the consent of stockholders where required;
(iii)do not and will not (A) contravene Borrower's certificate of
incorporation or by-laws or other comparable governing documents, (B) violate
any other applicable Requirement of Law (including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System), or any order or decree of any Governmental Authority or arbitrator,
(C) conflict with or result in the breach of, or constitute a default under,
or result in or permit the termination or acceleration of, any Contractual
Obligation of any Loan Party or any of the Material Subsidiaries, or (D)
result in the creation or imposition of any Lien upon any of the property of
any Loan Party or any of its Material Subsidiaries, other than those in favor
of the Agent pursuant to the Collateral Securities; and
(iv)do not require the consent of, authorization by, approval of, notice
to, or filing or registration with, any Governmental Authority or any other
Person, other than those which have been or will be, prior to the Effective
Date, obtained or made and copies of which in the case of those involving a
Governmental Authority have been or will be delivered to the Agent, and each
of which on the Effective Date will be in full force and effect.
(b) This Amendment has been duly executed and delivered by Borrower.
This Amendment is the legal, valid and binding obligation of Borrower,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar law affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding of law or in equity).
(c) Borrower further represents and warrants that (i) all of the
representations and warranties made by Borrower in Article IV of the Credit
Agreement, and in each other Loan Document, are true and correct on and as of
the date hereof, as though made on the date hereof; (ii) Borrower has complied
with all terms and conditions set forth in the Credit Agreement, and in each
other Loan Document, as of the date hereof; and (iii) there has not occurred,
and currently there exists no, Default or Event of Default.
12. Conditions. The obligations of the Lenders and the Agent under this
Amendment are subject to the condition precedent that this Amendment and the
Replacement Notes shall have been duly executed by Borrower and delivered to
the Lenders, and each Lender and the Agent shall have executed a counterpart
hereof.
13. Ratification of Credit Agreement. All terms and provisions of the
Credit Agreement not expressly amended hereby are hereby ratified and
reaffirmed and shall remain in full force and effect without interruption,
change, or impairment of any kind. By their execution hereof, the Assignees
hereby ratify, accept, adopt and become parties to such Credit Agreement, as
amended hereby, as Lenders thereunder.
14. General.
(a)Applicable Law. This Amendment has been delivered and accepted in,
and shall be a contract made under and governed by the laws of the State of
New York.
(b)Binding Effect. This Amendment shall be binding upon and inure to
the benefit of Borrower and the Lenders and their respective successors and
assigns.
(c)Payment of Expenses. Borrower agrees to reimburse the Lenders for
out-of-pocket expenses and will pay fees of counsel on behalf of the Lenders
reasonably incurred in the preparation, and subsequent enforcement of this
Amendment and the Replacement Notes.
(d)Headings. The Section and subsection headings of this Amendment are
for convenience and shall not affect, limit or expand any term or provision
hereof.
(e)Counterparts. This Amendment may be executed in as many
counterparts as may be deemed necessary or convenient, and each counterpart
shall be deemed an original. No one counterpart need be signed by all parties
hereto, but all such counterparts shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to Credit Agreement to be executed and delivered at Dallas, Texas by
their duly authorized officers, to be deemed effective as of the Effective
Date.
TRITON ENERGY CORPORATION
By: /s/Peter Rugg
Peter Rugg
Senior Vice President and
Chief Financial Officer
6688 North Central Expressway
Suite 1400
Dallas, Texas 75206
Attention: Richard D. Preston
Telephone: (214) 691-5200
Telecopy: (214) 691-0597
BANQUE PARIBAS HOUSTON AGENCY, as the Agent and as a
Lender
By: /s/Mark M. Green
Mark M. Green
Vice President
By: /s/Barton Schouest
Barton Schouest
Group Vice President
Domestic Lending Office and Address for Notice:
Banque Paribas
The Equitable Tower
787 Seventh Avenue
New York, NY 10019
With a copy to:
Banque Paribas Houston Agency
1200 Smith, Suite 3100
Houston, Texas 77002
Attention: Mark M. Green
Telephone: (713) 659-4811
Telecopy: (713) 659-3832
Eurodollar Lending Office:
Banque Paribas
The Equitable Tower
787 Seventh Avenue
New York, NY 10019
With a copy to:
Banque Paribas Houston Agency
1200 Smith, Suite 3100
Houston, Texas 77002
Attention: Mark M. Green
Telephone: (713) 659-4811
Telecopy: (713) 659-3832
UNION BANK
By:
Name:
Title:
By:
Name:
Title:
Domestic Lending Office and Address for Notice:
Union Bank
4200 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
Attention: Carl Stutzman
Telephone: (214) 922-4200
Telecopy: (214) 922-4209
With a copy to:
Union Bank
4200 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
Attention: Marie Reed
Telephone: (214) 922-4200
Telecopy: (214) 922-4209
Eurodollar Lending Office:
Union Bank
4200 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
Attention: Carl Stutzman
Telephone: (214) 922-4200
Telecopy: (214) 922-4209
With a copy to:
Union Bank
4200 Lincoln Plaza
500 North Akard
Dallas, Texas 75201
Attention: Marie Reed
Telephone: (214) 922-4200
Telecopy: (214) 922-4209
MEESPIERSON N.V.
By:
Name:
Title:
Domestic Lending Office and Address for Notice:
MeesPierson N.V.
Coolsingel 93
P.O. Box 749
3000 AS Rotterdam
The Netherlands
Attention: Energy Finance
Group
Telephone: 011-31-10-401-5263
Telecopy: 011-31-10-401-6343
With a copy to:
MeesPierson N.V.
Suite 1660
300 Crescent Court
Dallas, Texas 75201
Attention: Darrell W. Holley
Telephone: (214) 871-6867
Telecopy: (214) 871-6870
Eurodollar Lending Office:
MeesPierson N.V.
Coolsingel 93
P.O. Box 749
3000 AS Rotterdam
The Netherlands
Attention: Energy Finance Group
Telephone: 011-31-10-401-5263
Telecopy: 011-31-10-401-6343
With a copy to:
MeesPierson N.V.
Suite 1660
300 Crescent Court
Dallas, Texas 75201
Attention: Darrell W. Holley
Telephone: (214) 871-6867
Telecopy: (214) 871-6870
CHEMICAL BANK
By:
Name:
Title:
Domestic Lending Office and Address for Notice:
Chemical Bank
270 Park Avenue, 8th Floor
New York, NY 10019
Attention: John Gehebe/De Marin
Telephone: (212) 270-3531
Telecopy: (212) 270-4892
With a copy to:
Chemical Bank
c/o Texas Commerce Bank
2200 Ross Avenue, 3rd Floor
Dallas, Texas 75201
Attention: Donna German
Telephone: (214) 922-2540
Telecopy: (214) 922-2389
Eurodollar Lending Office:
Chemical Bank
270 Park Avenue, 8th Floor
New York, NY 10019
Attention: John Gehebe/De Marin
Telephone: (212) 270-3531
Telecopy: (212) 270-4892
With a copy to:
Chemical Bank
c/o Texas Commerce Bank
2200 Ross Avenue, 3rd Floor
Dallas, Texas 75201
Attention: Donna German
Telephone: (214) 922-2540
Telecopy: (214) 922-2389
<PAGE>
<PAGE>
EXHIBIT "A-1"
FIRST AMENDMENT TO CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
(REPLACEMENT NOTE)
U.S. $20,000,000 Dated: May 16, 1995
FOR VALUE RECEIVED, the undersigned, Triton Energy Corporation, a
Texas corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
Banque Paribas Houston Agency (the "Lender") the principal sum of Twenty
Million United States Dollars ($20,000,000), or, if less, the aggregate unpaid
principal amount of all Revolving Credit Loans (as defined in the Credit
Agreement referred to below) of the Lender to the Borrower, payable at such
times, and in such amounts, as are specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount
of the Revolving Credit Loans from the date made until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America at the office of the Agent, Banque Paribas Houston
Agency, at The Equitable Tower, 787 Seventh Avenue, New York, NY 10019, in
immediately available funds. The Revolving Credit Loans made by the Lender to
the Borrower, and all payments made on account of the principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on this
Note.
This Note is one of the Revolving Credit Notes referred to in, and
is entitled to the benefits of, the Credit Agreement, dated as of March 28,
1995, as amended by the First Amendment to Credit Agreement dated effective
May 16, 1995 (the "First Amendment"; said Agreement, as amended by the First
Amendment, and as it may be amended or otherwise modified thereafter from time
to time, being the "Credit Agreement"), among the Borrower, the Lender, the
other financial institutions referred to therein and Banque Paribas Houston
Agency, as agent for the Lender and such other financial institutions, and the
other Loan Documents referred to therein and entered into pursuant thereto.
The Credit Agreement, among other things, (i) provides for the making of
Revolving Credit Loans by the Lender to the Borrower in an aggregate amount
not to exceed at any time outstanding the United States dollar amount first
above mentioned, the indebtedness of the Borrower resulting from such
Revolving Credit Loans being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity of the unpaid principal amount of
this Note upon the happening of certain stated events and also for prepayments
on account of the principal hereof prior to the maturity hereof upon the terms
and conditions therein specified.
This Note is issued under and pursuant to the First Amendment and
represents a replacement, substitution and change in form for part of the
Indebtedness heretofore evidenced by that certain Revolving Credit Note of
Borrower dated March 28, 1995 in the original principal amount of $40,000,000
made payable to the order of Banque Paribas Houston Agency.
This Note is entitled to the benefits of certain guaranties and is
secured as provided in the Loan Documents (as defined in the Credit
Agreement).
The Indebtedness evidenced by this Note represents "Designated
Senior Indebtedness" as such term is defined in the Chemical Indenture (as
defined in the Credit Agreement).
Demand, presentment, protest and notice of nonpayment and protest
are hereby waived by the Borrower.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
TRITON ENERGY CORPORATION
By:
Name:
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Principal Paid Notation
Date of Loan or Prepaid Made by
EXHIBIT "A-2"
FIRST AMENDMENT TO CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
(REPLACEMENT NOTE)
U.S. $17,500,000 Dated: May 16, 1995
FOR VALUE RECEIVED, the undersigned, Triton Energy Corporation, a
Texas corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
MeesPierson N.V. (the "Lender") the principal sum of Seventeen Million Five
Hundred Thousand United States Dollars ($17,500,000), or, if less, the
aggregate unpaid principal amount of all Revolving Credit Loans (as defined in
the Credit Agreement referred to below) of the Lender to the Borrower, payable
at such times, and in such amounts, as are specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount
of the Revolving Credit Loans from the date made until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America at the office of the Agent, Banque Paribas Houston
Agency, at The Equitable Tower, 787 Seventh Avenue, New York, NY 10019, in
immediately available funds. The Revolving Credit Loans made by the Lender to
the Borrower, and all payments made on account of the principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on this
Note.
This Note is one of the Revolving Credit Notes referred to in, and
is entitled to the benefits of, the Credit Agreement, dated as of March 28,
1995, as amended by the First Amendment to Credit Agreement dated effective
May 16, 1995 (the "FirstAmendment"; said Agreement, as amended by the First
Amendment, and as it may be amended or otherwise modified thereafter from time
to time, being the "Credit Agreement"), among the Borrower, the Lender, the
other financial institutions referred to therein and Banque Paribas Houston
Agency, as agent for the Lender and such other financial institutions, and
the other Loan Documents referred to therein and entered into pursuant thereto.
The Credit Agreement, among other things, (i) provides for the making of
Revolving CreditLoans by the Lender to the Borrower in an aggregate amount
not to exceed atany time outstanding the United States dollar amount first
above mentioned,the indebtedness of the Borrower resulting from such Revolving
Credit Loans being evidenced by this Note, and (ii) contains provisions for
acceleration ofthe maturity of the unpaid principal amount of this Note upon
the happening of certain stated events and also for prepayments on account
of the principalhereof prior to the maturity hereof upon the terms and
conditions therein specified.
This Note is issued under and pursuant to the First Amendment and
represents a replacement, substitution and change in form for part of the
Indebtedness heretofore evidenced by that certain Revolving Credit Note of
Borrower dated March 28, 1995 in the original principal amount of $40,000,000
made payable to the order of Banque Paribas Houston Agency.
This Note is entitled to the benefits of certain guaranties and is
secured as provided in the Loan Documents (as defined in the Credit
Agreement).
The Indebtedness evidenced by this Note represents "Designated
Senior Indebtedness" as such term is defined in the Chemical Indenture (as
defined in the Credit Agreement).
Demand, presentment, protest and notice of nonpayment and protest
are hereby waived by the Borrower.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
TRITON ENERGY CORPORATION
By:
Name:
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Principal Paid Notation
Date of Loan or Prepaid Made by
EXHIBIT "A-3"
FIRST AMENDMENT TO CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
(REPLACEMENT NOTE)
U.S. $17,500,000 Dated: May 16, 1995
FOR VALUE RECEIVED, the undersigned, Triton Energy Corporation, a
Texas corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
Union Bank (the "Lender") the principal sum of Seventeen Million Five Hundred
Thousand United States Dollars ($17,500,000), or, if less, the aggregate
unpaid principal amount of all Revolving Credit Loans (as defined in the
Credit Agreement referred to below) of the Lender to the Borrower, payable at
such times, and in such amounts, as are specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount
of the Revolving Credit Loans from the date made until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America at the office of the Agent, Banque Paribas Houston
Agency, at The Equitable Tower, 787 Seventh Avenue, New York, NY 10019, in
immediately available funds. The Revolving Credit Loans made by the Lender to
the Borrower, and all payments made on account of the principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on this
Note.
This Note is one of the Revolving Credit Notes referred to in, and
is entitled to the benefits of, the Credit Agreement, dated as of March 28,
1995, as amended by the First Amendment to Credit Agreement dated effective
May 16, 1995 (the "First Amendment"; said Agreement, as amended by the First
Amendment, and as it may be amended or otherwise modified thereafter from
time to time, being the "Credit Agreement"), among the Borrower, the Lender,
the other financial institutions referred to therein and Banque Paribas
Houston Agency, as agentfor the Lender and such other financial institutions,
and the other Loan Documents referred to therein and entered into pursuant
thereto. The Credit Agreement, among other things, (i) provides for the
making of Revolving CreditLoans by the Lender to the Borrower in an aggregate
amount not to exceed at any time outstanding the United States dollar amount
first above mentioned, the indebtedness of the Borrower resulting from such
Revolving Credit Loans being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity of the unpaid principal amount
of this Note upon the happening ofcertain stated events and also for
prepayments on account of the principal hereof prior to the maturity hereof
upon the terms and conditions therein specified.
This Note is issued under and pursuant to the First Amendment and
represents a replacement, substitution and change in form for part of the
Indebtedness heretofore evidenced by that certain Revolving Credit Note of
Borrower dated March 28, 1995 in the original principal amount of $40,000,000
made payable to the order of Banque Paribas Houston Agency.
This Note is entitled to the benefits of certain guaranties and is
secured as provided in the Loan Documents (as defined in the Credit
Agreement).
The Indebtedness evidenced by this Note represents "Designated
Senior Indebtedness" as such term is defined in the Chemical Indenture (as
defined in the Credit Agreement).
Demand, presentment, protest and notice of nonpayment and protest
are hereby waived by the Borrower.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
TRITON ENERGY CORPORATION
By:
Name:
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Principal Paid Notation
Date of Loan or Prepaid Made by
"EXHIBIT A-4"
FIRST AMENDMENT TO CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
(REPLACEMENT NOTE)
U.S. $10,000,000 Dated: May 16, 1995
FOR VALUE RECEIVED, the undersigned, Triton Energy Corporation, a
Texas corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
Chemical Bank (the "Lender") the principal sum of Ten Million United States
Dollars ($10,000,000), or, if less, the aggregate unpaid principal amount of
all Revolving Credit Loans (as defined in the Credit Agreement referred to
below) of the Lender to the Borrower, payable at such times, and in such
amounts, as are specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount
of the Revolving Credit Loans from the date made until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America at the office of the Agent, Banque Paribas Houston
Agency, at The Equitable Tower, 787 Seventh Avenue, New York, NY 10019, in
immediately available funds. The Revolving Credit Loans made by the Lender to
the Borrower, and all payments made on account of the principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on this
Note.
This Note is one of the Revolving Credit Notes referred to in, and
is entitled to the benefits of, the Credit Agreement, dated as of March 28,
1995, as amended by the First Amendment to Credit Agreement dated effective
May 16, 1995 (the "First Amendment; and Agreement, as amended
by the First Amendment, and as it may be amended or otherwise modified
thereafter from time to time, being the "Credit Agreement"), among the
Borrower, the Lender, the other financial institutions referred to therein and
Banque Paribas Houston Agency, as agent for the Lender and such other
financial institutions, and the other Loan Documents referred to therein and
entered into pursuant thereto. The Credit Agreement, among other things, (i)
provides for the making of Revolving Credit Loans by the Lender to the
Borrower in an aggregate amount not to exceed at any time outstanding the
United States dollar amount first above mentioned, the indebtedness of the
Borrower resulting from such Revolving Credit Loans being evidenced by this
Note, and (ii) contains provisions for acceleration of the maturity of the
unpaid principal amount of this Note upon the happening of certain stated
events and also for prepayments on account of the principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.
This Note is issued under and pursuant to the First Amendment and
represents a replacement, substitution and change in form for part of the
Indebtedness heretofore evidenced by that certain Revolving Credit Note of
Borrower dated March 28, 1995 in the original principal amount of $40,000,000
made payable to the order of Banque Paribas Houston Agency.
This Note is entitled to the benefits of certain guaranties and is
secured as provided in the Loan Documents (as defined in the Credit
Agreement).
The Indebtedness evidenced by this Note represents "Designated
Senior Indebtedness" as such term is defined in the Chemical Indenture (as
defined in the Credit Agreement).
Demand, presentment, protest and notice of nonpayment and protest
are hereby waived by the Borrower.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
TRITON ENERGY CORPORATION
By:
Name:
Title:
<PAGE>
LOANS AND PAYMENTS OF PRINCIPAL
Amount of
Amount Principal Paid Notation
Date of Loan or Prepaid Made by
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Column A
Revolving Credit Loans Held
Immediately Prior to the Effective Date
Lenders 1 2 3
Banque Paribas Houston Agency 26,000,000.00 2,500,000.00 7,627,907.00
MeesPierson N.V. -0- -0- -0-
Union Bank -0- -0- -0-
Chemical Bank -0- -0- -0-
TOTAL 26,000,000.00 2,500,000.00 7,627,907.00
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Column B
Revolving Credit Loans Sold on
the Effective Date
Lenders 1 2 3
Banque Paribas Houston Agency 17,999,999.94 1,730,769.23 5,280,858.68
MeesPierson N.V. -0- -0- -0-
Union Bank -0- -0- -0-
Chemical Bank -0- -0- -0-
TOTAL 17,999,999.94 1,730,769.23 5,280,858.68
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Column C
Revolving Credit Loans Bought
on the Effective Date
1 2 3
Lenders
Banque Paribas Houston Agency -0- -0- -0-
MeesPierson N.V. 7,000,000.02 673,076.93 2,053,667.28
Union Bank 7,000,000.02 673,076.93 2,053,667.28
Chemical Bank 3,999,999.90 384,615.37 1,173,524.12
TOTAL 17,999,999.94 1,730,769.23 5,280,858.68
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Column D
Revolving Credit Loans
Held Immediately After the Effective Date
Lenders 1 2 3
Banque Paribas Houston Agency 8,000,000.06 769,230.77 2,347,048.32
MeesPierson N.V. 7,000,000.02 673,076.93 2,053,667.28
Union Bank 7,000,000.02 673,076.93 2,053,667.28
Chemical Bank 3,999,999.90 384,615.37 1,173,524.12
TOTAL 26,000,000.00 2,500,000.00 7,627,907.00
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Column E
Lenders' Ratable Portions
Lenders 30.769231%
Banque Paribas Houston Agency 26.923077%
MeesPierson N.V. 26.923077%
Union Bank 15.384615%
Chemical Bank 100.000000%
TOTAL
</TABLE>
1. Eurodollar Tranche funded April 17, 1995
2. Eurodollar Tranche funded May 4, 1995
3. Base Rate Tranche
SCHEDULE 2
The following is a true, correct and complete list of all Letters of
Credit issued for the account of Borrower by Banque Paribas Houston Agency
prior to the Effective Date pursuant to the Credit Agreement and which are
outstanding as of the Effective Date:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
L.C. EXPIRATION
BENEFICIARY NUMBER DATE AMOUNT
---------------------------------- ------ -------------- -------------
Banco de la Produccion S.A., Quito 26750 March 25, 1996 $2,810,000.40
</TABLE>
SCHEDULE I
COMMITMENTS
Lender Commitment Ratable Portion
BANQUE PARIBAS $20,000,000 30.769231%
HOUSTON AGENCY
MEESPIERSON N.V 17,500,000 26.923077%
UNION BANK 17,500,000 26.923077%
CHEMICAL BANK 10,000,000 15.384615%
TOTAL $65,000,000 100.000000%
EXHIBIT 15.1
August 4, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are aware that Triton Energy Corporation has included our report dated May
2, 1995 (issued pursuant to thte provisions of Statement of Auditing Standards
No. 71) in the Registration Statements on Form S-8 (Nos. 2-80978, 33-4042,
33-27203, 33-29498, 33-46968 and 33-51691) and the Registration Statements on
Form S-3 (Nos. 33-11920, 33-15793, 33-17614, 33-21984, 33-23058, 33-25634,
33-31319, 33-45847, 33-69230, 33-55347 and 33-46292). We are also aware of
our responsibilities under the Securities Act of 1933.
Yours very truly,
PRICE WATERHOUSE LLP
Dallas, Texas
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 6/30/95
FINANCIAL STATMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 97,070
<SECURITIES> 41,397
<RECEIVABLES> 29,070
<ALLOWANCES> 0
<INVENTORY> 3,437
<CURRENT-ASSETS> 174,189
<PP&E> 947,819
<DEPRECIATION> 502,048
<TOTAL-ASSETS> 815,080
<CURRENT-LIABILITIES> 32,554
<BONDS> 0
<COMMON> 35,710
0
17,975
<OTHER-SE> 188,864
<TOTAL-LIABILITY-AND-EQUITY> 815,080
<SALES> 48,255
<TOTAL-REVENUES> 61,249
<CGS> 17,104
<TOTAL-COSTS> 17,104
<OTHER-EXPENSES> 10,468
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,510
<INCOME-PRETAX> 10,347
<INCOME-TAX> 5,693
<INCOME-CONTINUING> 4,654
<DISCONTINUED> 3,821
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 833
<EPS-PRIMARY> 0.1
<EPS-DILUTED> 0.1
</TABLE>
EXHIBIT 99.6
AMENDED AND RESTATED OLEODUCTO CENTRAL AGREEMENT
dated as of March 31, 1995
among
OLEODUCTO CENTRAL S.A.
EMPRESA COLOMBIANA DE PETROLEOS - ECOPETROL
BP COLOMBIA PIPELINES LIMITED
TOTAL PIPELINE COLOMBIE S.A.
TRITON PIPELINE COLOMBIA, INC.
IPL ENTERPRISES (COLOMBIA) INC.
and
TCPL INTERNATIONAL INVESTMENTS INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
1.1. Definitions 3
1.2. Interpretation 17
ARTICLE TWO
FORMATION OF OCENSA
2.1. Initial Capitalization of OCENSA 18
2.2. Initial Shareholding Interests 19
2.3. Purpose; Limitation on Activity of OCENSA 19
2.4. By-Laws 19
2.5. Voting Trust Agreement 19
2.6. Dividend Trust Agreement 19
2.7. Relationship of Parties 19
2.8. Dealings by OCENSA with the Parties 20
2.9. Other Business Opportunities 20
2.10. Mutual Collaboration 20
2.11. Changes as Arrangements are Developed 20
ARTICLE THREE
OPERATIONS OF OCENSA
3.1. Operator; Access 21
3.2. Services 21
3.3. Annual Operating Budgets and Plans; Pre- and Post-
Completion Capital Budgets; Reports 21
3.4. Approval of the Annual Operating Budget and Capital Budget 23
3.5. Project Construction Management 23
ARTICLE FOUR
BOARD OF DIRECTORS; OFFICERS; PROCEEDINGS
4.1. Board of Directors 24
4.2. Officers 24
4.3. Language of Proceedings 25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
------- ----
ARTICLE FIVE
FINANCING OF OLEODUCTO CENTRAL
5.1. Financing Plan; Financing Committee 25
5.2. Senior Debt 27
5.3. Several Commitments of Shareholders to Make Equity
Contributions 35
5.4. Returns to Shareholders 38
5.5. Return of Equity Contributions 42
5.6. Other Distributions 44
5.7. Right of Set Off 46
5.8. Senior Debt and Equity Contribution Shortfalls 46
5.9. Liquidity Facilities 46
ARTICLE SIX
CAPITAL INVESTMENT AND SOLE RISK PROPOSALS
6.1. Capital Investment Proposals 48
6.2. Sole Risk Proposals 48
6.3. Participation of Other Shareholders 49
6.4. Implementation and Indemnity 49
6.5. Ownership of Sole Risk Facilities; Financing 50
6.6. Data and Information 50
6.7. Tariffs 50
6.8. Decommissioning; Indemnity 51
6.9. Recommissioning of Oleoducto Central 51
ARTICLE SEVEN
TARIFF REGULATIONS; TRANSPORTION AGREEMENTS;
ADVANCE TARIFF AGREEMENTS
7.1. Tariff Regulations 53
7.2. Transportation Agreements 54
7.3. Advance Tariff Agreements 54
7.4. Third Party Transportation Agreements 54
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
ARTICLE EIGHT
FINANCIAL AND ACCOUNTING MATTERS
8.1. Books and Records; Fiscal Year 55
8.2. Right of Inspection of Books 55
8.3. Accounting Principles 55
8.4. Auditors 55
8.5. Accounting and Contract Award Procedures 56
ARTICLE NINE
PRE-COMPLETION RIGHT TO PURCHASE
9.1. Reorganization Party 56
9.2. Right of Unrelated Shareholder to Purchase 56
9.3. Indemnification by Reorganization Party 57
9.4. Inapplicability After Completion 57
ARTICLE TEN
PERMITTED TRANSFERS
10.1. Permitted Transfers 57
10.2. Transfer in Connection with Assignment of Undivided
Interest in Association Contracts 58
10.3. Transfers to Persons in Petroleum and Natural Gas Industry 58
10.4. Transfers to Affiliates 60
10.5. Transfers to Other Shareholders 60
10.6. Public Offering of Shares 61
10.7. Transfers by Parent Holding Companies 62
10.8. Transfer of Shares by IPL Enterprises and TCPL
International to Ecopetrol 62
10.9. Transfer of Shares by TCPL International to TCPL Bermuda 62
10.10. Political Events Agreement 63
10.11. Transfer to Avoid Dissolution 63
10.12. Novation 63
10.13. Transfers Subject to Voting Trust Agreement and Dividend
Trust Agreement 63
10.14. Successors in Business Combinations 63
10.15. Pledges, etc. 63
10.16. Transfers Other than Permitted Transfers 64
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
------- ----
ARTICLE ELEVEN
CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
11.1. Scope of Obligation of Confidentiality 64
11.2. Return of Confidential Information 66
11.3. Consultation as to Announcements 66
ARTICLE TWELVE
TERM
12.1. Term 67
12.2. Termination Events 67
12.3. Termination 67
12.4. Political Events Agreement 67
12.5. RMOU 67
ARTICLE THIRTEEN
NEGOTIATIONS; ARBITRATION; SUBMISSION TO JURISDICTION
13.1. Negotiations; Arbitration 68
ARTICLE FOURTEEN
GENERAL
14.1. Notices. 69
14.2. Entire Agreement; Amendments; Waivers 71
14.3. Taxes and Expenses 71
14.4. Representations and Warranties 72
14.5. Nature of Obligations 72
14.6. No Third Party Beneficiaries 73
14.7. Severability 73
14.8. No Assignment 73
14.9. Appointment of Valuation Expert 73
14.10. Conduct 73
14.11. Governing Law 73
14.12. Performance Outside Colombia 73
14.13. Commercial Obligations 73
14.14. Waiver of Immunity 73
14.15. Enforcement of Certain Rights 74
14.16. Specific Performance 74
14.17. Audit Rights. 74
14.18. Common Security Trust Agreement 74
14.19. Limitation on Rights 75
14.20. JOA and Association Contracts 75
14.21. Approvals 75
14.22. Headings; Table of Contents 75
14.23. Counterparts 75
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SCHEDULES
A.1. By-Laws
A.2. Certified English Translation of By-Laws
B. Form of Voting Trust Agreement
C. Form of Dividend Trust Agreement
D. Technical Services and Management Agreement
E. Access Principles
F. Preliminary Financing Plan
G. Form of Subscription Agreement
H. Form of Performance Guarantee Agreement
I. Example of ROE Variance with Project Cost Variance
J. Political Events Agreement
K. Transportation Agreement
L. Form of Share Transfer Agreement
M. Advance Tariff Agreement
N. Form of Common Security Trust Agreement
</TABLE>
<PAGE>
-
AMENDED AND RESTATED OLEODUCTO CENTRAL AGREEMENT
AGREEMENT, dated as of March 31, 1995, among:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws of
Colombia;
EMPRESA COLOMBIANA DE PETROLEOS - ECOPETROL, an Empresa Industrial y
Comercial del Estado existing under the laws of Colombia and wholly owned by
Colombia;
BP COLOMBIA PIPELINES LIMITED, a company existing under the laws of
England and Wales;
TOTAL PIPELINE COLOMBIE S.A., a socit anonyme existing under the
laws of France;
TRITON PIPELINE COLOMBIA, INC., a corporation existing under the
laws of the Cayman Islands;
IPL ENTERPRISES (COLOMBIA) INC., a corporation existing under the
laws of the Cayman Islands; and
TCPL INTERNATIONAL INVESTMENTS INC., a corporation existing under
the laws of Alberta, Canada.
This Agreement amends and restates in its entirety the Oleoducto
Central Agreement, dated as of December 14, 1994 (the Original Oleoducto
Central Agreement), among the Parties (as hereinafter defined).
RECITALS
WHEREAS:
A. The Initial Shippers (as hereinafter defined) or their
respective Affiliates (as hereinafter defined) own interests in the
Association Contracts (as hereinafter defined) relating to the Cusiana and
Cupiagua oil fields located within the jurisdiction of the Department of
Casanare, Colombia (the Fields);
B. The Shareholders (as hereinafter defined) intend to invest in
existing and new pipeline transportation systems from the Fields to the Port
of Covenas, Colombia and upgrading the facilities at the Port of Covenas to
create a pipeline system comprised of four Segments (as hereinafter defined)
for the transportation of Petroleum (as hereinafter defined) approximately 800
kilometres in length, including related pumping, storage and loading
facilities (such systems, port facilities, segments and other facilities as
Ocensa may own or operate in whole or in part from time to time, together with
any additional related facilities, referred to herein as the Oleoducto
Central);
C. Pursuant to the terms of a Revised Memorandum of Understanding
dated as of July 15, 1994, as amended to date (the RMOU) and made among the
Initial Shippers and TransCanada PipeLines Colombia Limited and IPL Energy
(Colombia) Limited, the parties thereto agreed to form Oleoducto Central S.A.,
a sociedad anonima existing under the laws of Colombia (Ocensa), to acquire,
develop, construct, own and operate the Oleoducto Central;
D. IPL Enterprises (Colombia) Inc. and TCPL International
Investments Inc. (together with any of their respective successors and assigns
or the successor and assign to both of them or one of them if the other is no
longer a Shareholder, the Canadian Group) are Shareholders and will, or will
cause their Affiliates to, provide or contribute technical and management
services in connection with the development, construction and operation of the
Oleoducto Central;
E. The Shareholders have formed Ocensa by public deed no. 4747 of
December 14, 1994 granted before notary public no. 38 of Santafe de Bogota;
F. The Shareholders wish to specify the terms and conditions of
their respective investments and participation in Ocensa and the financing and
operation of the Oleoducto Central; and
G. Ocensa and the Shareholders entered into the Original Oleoducto
Central Agreement and now wish to amend and restate such agreement as set
forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the Parties agree to
amend and restate the Original Oleoducto Central Agreement as follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires,
the following words and phrases shall have the meanings indicated below:
Access Agreements means the agreements to be entered into by Ocensa and
third parties relating to the grant to Ocensa by such third parties of access
to certain facilities to be used in connection with the Oleoducto Central, in
each case as the same may thereafter be amended from time to time in
accordance with the terms thereof.
Access Principles means the Access Principles attached as Schedule E
hereto.
Accrued Returns has the meaning assigned to it in Section 5.4(i).
Actual Project Cost has the meaning assigned to it in Section 5.4(c)(ii).
Additional Interest Expense in any period means, if a positive amount,
the interest expense on an amount of Overfund Senior Debt outstanding
calculated based on the applicable interest rate less (a) any interest income
(net of taxes) received on the unspent proceeds of such Overfund Senior Debt
and (b) interest on Cash-on-Hand with respect to the Shareholder in the
Related Initial Shipper Group. For this purpose, interest rate shall include
any additional amounts paid in respect of withholding or deduction for any
taxes, duties, assessments or governmental charges of whatever nature imposed
upon or levied upon or as the result of the payment of principal and interest
on such Overfund Senior Debt by Colombia or any political subdivision or
taxing authority thereof or therein as a result of any amendment to, or change
in, the laws (or any regulation or ruling thereunder) of Colombia or any
political subdivision or taxing authority thereof or therein affecting
taxation or any amendment to or change in an official interpretation or
application of such laws or regulations but shall exclude (i) any default or
penalty interest rate to the extent such rate exceeds the otherwise applicable
interest rate and (ii) any interest accruing on any principal amount of such
Overfund Senior Debt due but not yet paid.
Adjusted Paid-In Equity has the meaning assigned to it in Section
5.4(c)(v).
Advance Tariff Agreements means the Advance Tariff Agreements, each dated
as of March 31, 1995, between Ocensa and each Initial Shipper, each
substantially in the form attached as Schedule M hereto, as the same may be
amended from time to time in accordance with the terms thereof.
Advance Tariff Payment has the meaning assigned to it in the Advance
Tariff Agreements.
Affiliate of a Person means a Person (a) which is a Subsidiary of that
Person, (b) of which that Person is a Subsidiary, or (c) which is a Subsidiary
of a Person of which that Person is a Subsidiary.
Agreed Project Cost has the meaning assigned to it in Section
5.4(c)(iii).
Aggregate Subscription Obligation means the product of 30% and the
Project Cost.
Annual Equity Amortization Amount has the meaning assigned to it in
Section 5.5(d).
Annual Operating Budget has the meaning assigned to it in Section 3.3(a).
Annual Revenue Requirement has the meaning assigned to it in the
Transportation Agreements.
Assignment Agreements has the meaning assigned to it in the Common
Security Trust Agreement.
Association Contracts means the two contratos de asociacion between
Ecopetrol and Triton Colombia dated 11th June, 1982 (relating to Santiago de
las Atalayas-1) and 5th May, 1988 (relating to Tauramena) and the contrato de
asociacion between Ecopetrol and TOTAL Exploratie dated December 3, 1990
(relating to Rio Chitamena), in each case as the same have and may be amended
from time to time in accordance with the terms thereof.
Available Cash means, on any date, all cash (including short-term
marketable securities maturing on or before such date or that can be sold on
or before such date without material economic penalty) then held by Ocensa
outside any Related Account of a Shareholder or any common account maintained
by Ocensa funds in which are allocable to any such Related Account, less (a)
funds withdrawn from any such Related Account for the payment of Operating
and Maintenance Costs and pre-Completion Capital Expenditures, but which
have not yet been applied, and (b) any funds held by Ocensa outside any
RelatedAccount of a Shareholder (or such common account) representing
proceeds of Senior Debt and Equity Contributions, Net Proceeds, Insurance
Proceeds and Expropriation Compensation, in each case to the extent dedicated
to fund Capital Expenditures or to prepay Senior Debt.
Bankruptcy of a Person has the meaning assigned to it in the
Transportation Agreements.
Benchmark Interest Expense has the meaning assigned to it in the
Transportation Agreements.
Benchmark Interest Rate has the meaning assigned to it in the
Transportation Agreements.
Board of Directors has the meaning assigned to it in the By-Laws.
BP Pipelines means BP Colombia Pipelines Limited, a company existing
under the laws of England and Wales.
BPEC means BP Exploration Company (Colombia) Limited, a company existing
under the laws of England and Wales.
Business Day means a day in which commercial banks in Santafe de Bogota and
The City of New York, New York are permitted to be open for domestic and
international business.
By-Laws means the by-laws of Ocensa included in public deed no. 4747 of
December 14, 1994 granted before notary public no. 38 of Santafe de Bogota, a
copy of which is attached as Schedule A.1 hereto, as the same may be amended
from time to time in accordance with the terms thereof. A certified English
translation of the By-Laws is attached as Schedule A.2 hereto.
Canadian Group has the meaning assigned to it in Recital D above.
Capital Budget before Completion has the meaning assigned to it in
Section 3.3(b) and following Completion has the meaning assigned to it in
Section 3.3(c).
Capital Expenditures has the meaning assigned to it in the Transportation
Agreements.
Capital Investment Proposal has the meaning assigned to it in Section
6.1(a).
Cash-on-Hand means, with respect to any Shareholder that is a Person in
an Initial Shipper Group, on any date, all cash (including short-term
marketable securities maturing on or before such date or that can be sold on
or before such date without material economic penalty) then held by Ocensa in
the Related Account, plus (a) funds withdrawn from the Related Account for the
payment of Operating and Maintenance Costs and pre-Completion Capital
Expenditures, but which have not yet been applied, (b) funds held in any
common proceeds account maintained by Ocensa which are allocable to the
Related Account, and (c) the Proportionate Share of the Initial Shipper that
is a Person in such Shareholder's Initial Shipper Group of any Available Cash.
Cash Paid-In Equity has the meaning assigned to it in Section 5.4(g).
Collateral with respect to each Senior Lender Group has the meaning
assigned to it in the Common Security Trust Agreement.
Colombia means the Republic of Colombia.
Colombian Taxes means the sum of all taxes, including, without
limitation, all charges, levies, imposts, income taxes, withholding taxes,
remittance taxes, excise taxes or other levies on Distributions by Ocensa in
or from Colombia imposed by any taxation or similar regulatory authority in
Colombia on the recipient of any such Distributions.
Common Security Trust Agreement means the common security trust agreement
to be entered into by Ocensa, the providers of Senior Debt named therein and a
trustee acting on behalf of such providers, setting forth the obligations of
Ocensa to such providers, substantially in the form attached as Schedule N
hereto, with such changes as the parties thereto may agree, in each case as
the same may be amended from time to time in accordance with the terms
thereof.
Completion means the date after all four Segments of the Oleoducto
Central have been commissioned for purposes of transporting shipments of
Petroleum and on which the five millionth barrel of Petroleum is shipped
through the Oleoducto Central from the Cusiana Receipt Point (as defined in
the Transportation Agreements) to the Port of Covenas Delivery Point (as
defined in the Transportation Agreements), all as certified in a resolution
adopted by the Board of Directors.
Confidential Information has the meaning assigned to it in Section 11.1.
Corresponding Portion has the meaning assigned to it in Section 10.2(a).
Debt has the meaning assigned to it in the Common Security Trust
Agreement.
Decommissioning shall occur if Ocensa voluntarily ceases all or
substantially all construction or transportation activities of any Segment of
the Oleoducto Central as evidenced by a resolution of the Board of Directors
or if the Trustee, acting in accordance with the terms and conditions of the
Common Security Trust Agreement, declares that Decommissioning has occurred;
and the term Decommissioned has a correlative meaning.
Distribution shall mean any distribution by Ocensa by means of any
dividend payment, whether in cash, shares, other equity interests or
otherwise, any payment or application of any of its assets to purchase, redeem
or otherwise retire Shares or equity interests held by a Shareholder, any
distribution by way of reduction of capital, split-up (escicion) and
liquidation or otherwise in respect of any of the Shares or equity interests
held by such Shareholder or any interest or other payment in respect of, or
any repayment, repurchase or redemption of, Subordinated Notes held by or on
behalf of a Shareholder.
Dividend Commencement Date has the meaning set forth in Section 5.4(b).
Dividend Trust Agreement means the Dividend Trust Agreement to be entered
into among Ocensa, each of the Shareholders and the trustee named therein,
substantially in the form attached as Schedule C hereto, with such changes as
the parties thereto may agree, as the same may be amended from time to time in
accordance with the terms thereof.
$ or dollars means United States dollars.
Ecopetrol means Empresa Colombiana de Petroleos - Ecopetrol, an Empresa
Industrial y Comercial del Estado existing under the laws of Colombia and
wholly owned by Colombia.
Equity Amortization has the meaning assigned to it in Section 5.5(c).
Equity Amortization Deferral Test has the meaning assigned to it in
Section 5.5(b)(iii).
Equity Contribution by a Shareholder means (a) the acquisition of Shares
or other shares of capital stock of Ocensa in exchange for cash pursuant to
Subscription Agreements, (b) if the Parties unanimously agree, the acquisition
of Subordinated Notes in exchange for cash pursuant to subscription agreements
substantially in the form of the Subscription Agreements and (c) the
contribution of any other funds to Ocensa under or pursuant to Subscription
Agreements.
Equity Percentage has the meaning assigned to it in Section 5.4(c)(iv).
Expropriation Compensation means all value (whether in the form of money,
securities, property or otherwise) paid or payable by Colombia or its agencies
or instrumentalities, in whole or partial settlement of claims, whether or not
resulting from judicial proceedings and whether paid or payable within or
outside Colombia, as compensation for or in respect of Expropriatory Action.
Expropriatory Action means any action or series of actions taken,
authorized, ratified or acquiesced in by Colombia or a governing authority
which is in de facto control of part of Colombia for the appropriation,
confiscation, expropriation or nationalization (by intervention, condemnation
or other form of taking), whether with or without compensation and whether
under color of law or otherwise (including through confiscatory taxation or
imposition of confiscatory charges) of ownership or control of the Oleoducto
Central, or any substantial portion thereof, held by Ocensa.
Fair Market Value of any Shares or any other asset valued pursuant to any
provision of this Agreement means the fair market value of such Shares or
asset as agreed to by the Shareholders or, in the event that the Shareholders
are unable to agree, as determined by a Valuation Expert.
Fields has the meaning assigned to it in Recital A above.
Financing Agreements means the Transportation Agreements, the Advance
Tariff Agreements, the Senior Debt Agreements, the Subscription Agreements,
the Performance Guarantee Agreements, the Common Security Trust Agreement, the
Assignment Agreements, the Dividend Trust Agreement, the Political Events
Agreement and other related agreements to which Ocensa is or shall become a
party or beneficiary and which are entered into in connection with the
Financing Plan, in each case as such agreements and guarantees may be amended
from time to time in accordance with the terms thereof.
Financing Committee has the meaning assigned to it in Section 5.1.
Financing Plan has the meaning assigned to it in Section 5.1.
Funding Resolution means a resolution of the Board of Directors calling
for Shareholders to make Equity Contributions.
Initial Shipper Bridge Loan has the meaning assigned to it in Section
5.2(h).
Initial Shipper Group means an Initial Shipper and its Affiliates that
are (a) a Shareholder, (b) a party to a Transportation Agreement, (c) a party
to the Advance Tariff Agreement, and/or, if applicable, (d) a party to a
Performance Guarantee Agreement and in each case each of their respective
successors and permitted assigns.
Initial Shipper Group's Collateral with respect to any Initial Shipper
Group means the Collateral assigned by Ocensa to a Senior Lender Group that
consists primarily of rights which Ocensa has against members of such Initial
Shipper Group and the Related Account with respect thereto.
Initial Shipper Tariff has the meaning assigned to it in the
Transportation Agreements.
Initial Shippers means Ecopetrol, BPEC, TOTAL Exploratie and Triton
Colombia and each of their respective successors and permitted assigns.
Insurance Proceeds means proceeds from insurance for casualties on
property or assets of Ocensa.
Internationally Recognized Statistical Rating Agency means Standard &
Poor's Ratings Group, Moody's Investors Service, Duff & Phelps and Fitch's
Investor Services and each of the respective successors and assigns to
substantially all of their respective businesses whose business is primarily
the rating of debt and other securities of corporate and other issuers.
IPL Energy means IPL Energy Inc., a corporation existing under the
federal laws of Canada.
IPL Enterprises means IPL Enterprises (Colombia) Inc., a corporation
existing under the laws of the Cayman Islands.
JOA means the Joint Operating Agreement for the Santiago de las
Atalayas-1, Tauramena and Rio Chitamena Association Contract Areas by and
among BPEC, TOTAL Exploratie and Triton Colombia, dated as of March 29, 1994,
as the same may be amended from time to time in accordance with the terms
thereof.
LIBOR has the meaning assigned to it in the Transportation Agreements.
MME means the Colombian Ministry of Mines and Energy and any successor
ministry thereto.
Net Proceeds from any sale or other asset disposition by any Person mean
cash or readily marketable cash equivalents received (including by way of sale
or discounting of a note, instalment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquiree of Debt or other obligations relating to such properties or assets or
received in any other noncash form) therefrom by such Person, net of (i) all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred and all national, regional, foreign and local taxes required
to be accrued as a liability as a consequence of such sale or asset
disposition and (ii) all payments made by such Person on any debt which is
secured by such assets in accordance with the terms of any lien upon or with
respect to such assets or which must by the terms of such lien, or in order to
obtain a necessary consent to such sale or asset disposition or by applicable
law, be repaid out of the proceeds from such sale or asset disposition.
Nominations has the meaning assigned to it in the Transportation
Agreements.
Non-Cash Items has the meaning assigned to it in the Transportation
Agreements.
Notice of Continuance has the meaning assigned to it in Section 12.3(a).
Ocensa has the meaning assigned to it in Recital C above.
Officers' Certificate of a Party means a certificate signed by (a) the
Chairman of the Board, the President, a Vice President, the Chief Operating
Officer or a Director and (b) another Director, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of such Party.
Oleoducto Central has the meaning assigned to it in Recital B above.
Operating and Maintenance Costs has the meaning assigned to it in the
Transportation Agreements.
Operator means CIT Colombiana S.A. acting under the Technical Services
and Management Agreement or any other operator of the Oleoducto Central under
a successor agreement and each of their respective successors and permitted
assigns.
Original Oleoducto Central Agreement has the meaning assigned to it in
the first page hereof.
Overfund Senior Debt has the meaning assigned to it in Section
5.2(c)(iii).
Overfund Shareholder means the Shareholder in an Initial Shipper Group
whose Collateral supports Senior Debt which is raised prior to the time that
such Senior Debt is required by the Uses of Funds table in the then current
Financing Plan as contemplated by Section 5.2(c)(iii) of this Agreement.
Overfunding Proceeds has the meaning assigned to it in Section 5.2(c)(v).
Overutilizer Tariff has the meaning assigned to it in the Transportation
Agreements.
Parent Holding Company has the meaning assigned to it in Section 10.1.
Parties means Ocensa, Ecopetrol, BP Pipelines, TOTAL Pipeline, Triton
Pipeline, IPL Enterprises and TCPL International and their respective
successors and permitted assigns.
PCMT Manager has the meaning assigned to it in Section 3.5(a).
Performance Guarantee Agreements means the Performance Guarantee
Agreements executed and delivered for the benefit of Ocensa by each of BP
International Limited, TOTAL S.A., Triton Energy Corporation, IPL Energy and
TransCanada PipeLines, each substantially in the form attached as Schedule H
hereto, in each case as the same may be amended from time to time in
accordance with the terms thereof.
Person means any individual, corporation, limited liability company,
partnership, joint venture, association, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Petroleum means crude oil and other liquid hydrocarbons, including liquid
hydrocarbons which are recovered or extracted from natural gas.
Political Events Agreement means the Political Events Agreement, dated as
of December 14, 1994, among Ocensa and each of the Shareholders in the form
attached as Schedule J hereto, as the same may be amended from time to time in
accordance with the terms thereof.
Pre-Completion Accrued Returns has the meaning assigned to it in Section
5.4(h).
Preliminary Financing Plan means the Preliminary Financing Plan attached
as Schedule F hereto.
Project Agreements means this Agreement, the Voting Trust Agreement, the
Promesas de Compraventa, the Financing Agreements, the Technical Services and
Management Agreement and the Access Agreements.
Project Cost means the total cost of constructing and developing the
Oleoducto Central, estimated to be $2.03 billion as of the date of this
Agreement, including, without limitation, equipment procurement, construction
and financing costs.
Projections has the meaning assigned to it in the Transportation
Agreements.
Promesas Closing Date means the last closing date for the transactions
contemplated by the four Promesas de Compraventa.
Promesas de Compraventa means the four Promesas de Compraventa each dated
as of December 15, 1994, entered into between (a) Ocensa and Ecopetrol, and
(b) Ocensa and the parties to the Association Contracts, as the same may be
amended from time to time in accordance with the terms thereof.
Proportionate Share means, with respect to the Ecopetrol Initial Shipper
Group and the Shareholder therein, 60%, with respect to each of the BP Initial
Shipper Group and the Shareholder therein and the TOTAL Initial Shipper Group
and the Shareholder therein, 15.2%, and with respect to the Triton Initial
Shipper Group and the Shareholder therein, 9.6%. For purposes of this
Agreement, an Initial Shipper Group's Proportionate Share of Operating and
Maintenance Costs and/or pre-Completion Capital Expenditures shall not include
any amount that was computed and required to be paid as part of Tariffs or an
Advance Tariff Payment by an Initial Shipper or a Throughput Obligor in
another Initial Shipper Group and was not paid by such Person.
Ps or pesos means Colombian pesos.
Purchasing Shareholder has the meaning assigned to it in Section 10.5(a).
Recommissioning Party has the meaning assigned to it in Section 6.9(a).
Recommissioning Proposal has the meaning assigned to it in Section
6.9(a).
Recoverable Costs has the meaning assigned to it in Section 12.3(a)(iii).
Reference Bank means Morgan Guaranty Trust Company of New York and any
successors and assigns to substantially all of its banking business.
Related has the meaning assigned to it in the Common Security Trust
Agreement.
Related Account with respect to any Shareholder means any account or
accounts into which Ocensa or any of its permitted assigns has directed or is
required to direct payments of Tariff Advances and payments for purchases of
Transportation Notes by the Initial Shipper that is a Person in such
Shareholder's Initial Shipper Group and, in the case of the Canadian Group,
Ecopetrol.
Reorganization Party has the meaning assigned to it in Section 9.1.
Revenue Shortfall has the meaning assigned to it in the Advance Tariff
Agreements.
RMOU has the meaning assigned to it in Recital C above.
Segment means any one of the four segments of the Oleoducto Central
consisting of the Cusiana-El Porvenir segment, the El Porvenir-Vasconia
(Central Llanos) segment, the Vasconia-Covenas segment (the ODC Loop) and the
delivery facilities at the Port of Covenas terminal.
Semi-annual Payment Date has the meaning assigned to it in the Common
Security Trust Agreement.
Senior Debt means the loans, bonds, notes and other forms of limited
recourse indebtedness of Ocensa, including, without limitation, any loans
contemplated in Section 5.1(d)(i) and Section 5.2(g), in each case which are
not subordinated to any other liability of Ocensa (except as provided by any
applicable law) and are evidenced by or issued under Senior Debt Agreements.
Senior Debt Agreements has the meaning assigned to it in the Common
Security Trust Agreement.
Senior Debt Obligations has the meaning assigned to it in the Common
Security Trust Agreement.
Senior Debt Shortfall has the meaning assigned to it in Section 5.2(d).
Senior Debt Tranche has the meaning assigned to it in Section 5.2(b)(i).
Senior Lender Group has the meaning assigned to it in Section 5.2(b)(i).
Senior Lenders has the meaning assigned to it in the Common Security
Trust Agreement.
Senior Officers has the meaning assigned to it in Section 13.1.
Share Transfer Agreement means the Share Transfer Agreement entered into
between IPL Enterprises and TCPL International, on the one hand, and
Ecopetrol, on the other, in the form attached as Schedule L hereto, as the
same may be amended from time to time in accordance with the terms thereof.
Shareholder Bridge Loan has the meaning assigned to it in Section 5.2(i).
Shareholders means Ecopetrol, BP Pipelines, TOTAL Pipeline, Triton
Pipeline, IPL Enterprises, TCPL International and their respective successors
and permitted assigns.
Shareholding Interest of any Person means the percentage equal to the
number of Shares held by such Person divided by the total number of Shares
outstanding from time to time.
Shares means the shares of common stock, par value Ps 100,000 each, of
Ocensa, each with no preference among themselves with respect to dividends,
voting rights or rights upon liquidation of Ocensa.
Sole Risk Facilities has the meaning set forth in Section 6.2(a).
Sole Risk Parties has the meaning assigned to it in Section 6.4(b).
Sole Risk Party has the meaning assigned to it in Section 6.2(a).
Sole Risk Proposal has the meaning assigned to it in Section 6.2(a).
Sole Risk Throughput Basis has the meaning set forth in Section
6.7(a)(ii).
Specified Court has the meaning assigned to it in Section 13.1(e).
Subordinated Fee has the meaning assigned to it in the Technical Services
and Management Agreement.
Subordinated Notes means subordinated notes (other than Transportation
Notes) executed and delivered by Ocensa in such form as may be approved by the
Board of Directors in accordance with the By-Laws and applicable law.
Subscription Agreements means the Amended and Restated Subscription
Agreements, each dated as of March 31, 1995, entered into between Ocensa and
each of the Shareholders, each substantially in the form attached as Schedule
G hereto, in each case as the same may be amended from time to time in
accordance with the terms thereof.
Subsidiary of a Person means (i) a corporation more than 50% of the
outstanding Voting Shares of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person
and one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person, or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the
policies, management and affairs thereof.
Target Project Cost has the meaning assigned to it in Section 5.4(c)(i).
Tariff Advances has the meaning assigned to it in the Transportation
Agreements.
Tariff Regulations means the Tariff Regulations attached as Schedule C to
the Transportation Agreements.
Technical Services and Management Agreement means the Technical Services
and Management Agreement, dated as of March 31, 1995, between Ocensa and the
Operator, in the form of Schedule D hereto, as the same may be amended from
time to time in accordance with the terms thereof.
TCPL (Bermuda) means TCPL (Bermuda) Ltd., a corporation existing under
the laws of Bermuda.
TCPL International means TCPL International Investments Inc., a
corporation existing under the laws of Alberta, Canada.
Third Party Tariff has the meaning assigned to it in the Transportation
Agreements.
Third Party Transportation Agreements means the transportation agreements
to be entered into by Ocensa and parties (other than Initial Shippers) for
transportation service on the Oleoducto Central at the Third Party Tariff in
accordance with the Tariff Regulations and the General Terms and Conditions
(as defined in the Transportation Agreements) to the extent applicable to such
parties as indicated therein, as the same may be amended from time to time in
accordance with the terms thereof.
Throughput Capacity has the meaning assigned to it in the Transportation
Agreements.
Throughput Obligor means a party to an Advance Tariff Agreement other
than Ocensa.
TOTAL Exploratie means TOTAL Exploratie en Produktie MIJ B.V., a
corporation existing under the laws of The Netherlands.
TOTAL Pipeline means TOTAL Pipeline Colombie S.A., a societe anonyme
existing under the laws of France.
TransCanada PipeLines means TransCanada PipeLines Limited, a corporation
existing under the federal laws of Canada.
Transportation Agreement Step-Up has the meaning assigned to it in
Section 5.2(f).
Transportation Agreements means the Transportation Agreements, dated as
of March 31, 1995, between Ocensa and each of the Initial Shippers, for
the transportation by such Initial Shippers of Petroleum through the
Oleoducto Central, substantially in the form attached as Schedule K hereto,
as the same may be amended from time to time in accordance with the terms
thereof.
Transportation Note has the meaning assigned to it in the Transportation
Agreements.
Transportation Repayment Obligations has the meaning assigned to it in
the Common Security Trust Agreement.
TRO Holder has the meaning assigned to it in the Common Security Trust
Agreement.
Triton Colombia means Triton Colombia, Inc., a corporation existing under
the laws of the State of Delaware, United States of America.
Triton Pipeline means Triton Pipeline Colombia, Inc., a corporation
existing under the laws of the Cayman Islands.
Trustee means the trustee named in the Common Security Trust Agreement
and its successors and permitted assigns.
Underfund Shareholder has the meaning assigned to it in Section
5.2(c)(v).
UNCITRAL Arbitration Rules means the Arbitration Rules adopted by the
United Nations Commission on International Trade Law and recommended for use
by the General Assembly of the United Nations.
Valuation Expert means an internationally recognized independent
investment banking or other advisory firm with experience in the valuation of
petroleum pipeline operating companies.
Voting Shares means shares which ordinarily have voting power for the
election of directors (or persons performing similar functions), whether at
all times or only so long as no senior class of shares has such voting power
by reason of any contingency.
Voting Trust Agreement means the Voting Trust Agreement to be entered
into among all of the Shareholders (except Ecopetrol), the trustee named
therein and Ocensa, substantially in the form attached as Schedule B hereto,
with such changes as the parties thereto may agree, in each case as the
same may be amended from time to time in accordance with the terms thereof.
Working Capital Tariffs has the meaning assigned to it in the
Transportation Agreements.
Section 1.2. Interpretation. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular and
vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or a Section refers to an Article or
a Section, as the case may be, of this Agreement;
(d) the Schedules hereto (other than Schedules E and F) do not form
part of this Agreement;
(e) all references to this Agreement and the words herein, hereof,
hereto and hereunder and other words of similar import refer to this Agreement
(but not including any Schedules hereto (other than Schedules E and F)) as a
whole and not to any particular Article, Section or other subdivision; and
(f) all references herein to generally accepted accounting principles
shall mean Accounting Principles Generally Accepted in Colombia as in effect
from time to time.
ARTICLE TWO
FORMATION OF OCENSA
Section 2.1. Initial Capitalization of Ocensa. Ocensa's initial
capitalization will consist of 20,000 authorized Shares, of which 10,000
subscribed, partly paid Shares have been issued to the Shareholders. The
partly-paid Shares have been partly paid as to half of their subscribed
capital and the balance will be paid by the respective Shareholders within 12
months of the date hereof in accordance with the By-Laws and applicable law.
Section 2.2. Initial Shareholding Interests. For purposes of this
Agreement, after giving effect to the initial capitalization of Ocensa, the
initial Shareholding Interest of each Shareholder in Ocensa is:
<TABLE>
<CAPTION>
<S> <C>
Shareholder Initial Shareholding Interest
------------------ ------------------------------
Ecopetrol 25.0%
BP Pipelines 15.2%
TOTAL Pipeline 15.2%
Triton Pipeline 9.6%
IPL Enterprises 17.5%
TCPL International 17.5%
</TABLE>
The Shareholding Interest of each Shareholder is subject to adjustment from
time to time in accordance with the terms hereof and the By-Laws.
Section 2.3. Purpose; Limitation on Activity of Ocensa. The
Shareholders have incorporated Ocensa for the sole purpose of acquiring,
developing, constructing, financing, completing, owning and operating the
Oleoducto Central. The activities of Ocensa shall be limited to the activities
set forth in this Agreement, the other Project Agreements and the By-Laws.
Section 2.4. By-Laws. Each Shareholder agrees not to take, and to
prevent the Directors nominated by it from taking, any action contrary to the
By-Laws or to the provisions of this Agreement.
Section 2.5. Voting Trust Agreement. Each of the Shareholders
(except Ecopetrol) agrees to enter into the Voting Trust Agreement on or prior
to the earlier of June 30, 1995 or the date of effectiveness of any assignment
of Shares pursuant to Article Ten, providing for the transfer of the voting
rights attaching to its Shares to the voting trustee named therein, to
transfer to such voting trustee pursuant thereto any voting rights to Shares
it may acquire in the future, and to comply with the terms thereof.
Section 2.6. Dividend Trust Agreement. Each of the Shareholders
agrees to enter into the Dividend Trust Agreement on or prior to the earlier
of June 30, 1995 or the date of any assignment of Shares pursuant to Article
Ten and to comply with the terms thereof.
Section 2.7. Relationship of Parties. Nothing herein shall be
construed to create a general partnership between or among the Shareholders
and Ocensa. Except as expressly authorized by this Agreement, the other
Project Agreements or the By-Laws,nothing herein or therein shall be construed
to authorize any Party to act as the agent of any other Party, nor to permit
any Party to act on behalf of or bind any other Party or to give any Party the
authority to act for or to assume or incur any obligations or liabilities on
behalf of any other Party.
Section 2.8. Dealings by Ocensa with the Parties. Except as
otherwise contemplated herein and in the other Project Agreements, all
transactions between Ocensa and any of the other Parties or their Affiliates
shall be on terms and conditions no less favorable to Ocensa than those that
would be applicable in comparable transactions between independent parties
acting at arm's length.
Section 2.9. Other Business Opportunities. Except as expressly
provided in this Agreement, the other Project Agreements and the By-Laws, each
of the Parties and each of their respective Affiliates shall have the right
independently to engage in and receive full benefits from any business
activities, whether or not in competition with the activities and operations
of Ocensa or the Oleoducto Central, without first consulting any of the other
Parties. No Party shall have any obligation to any of the other Parties or
Ocensa with respect to any investment in or acquisition, construction or
development of any other pipeline transportation facilities or extensions
thereof in Colombia or elsewhere, other than as required or contemplated by
this Agreement, the other Project Agreements or applicable law.
Section 2.10. Mutual Collaboration. The Parties recognize that
circumstances may arise which were not foreseen at the date of this Agreement
and which will have a significant effect upon Ocensa, the Oleoducto Central or
upon a Party in respect of Ocensa or the Oleoducto Central. The Parties agree
to consult in the spirit of mutual collaboration in an attempt to resolve any
problems arising from such unforeseen circumstances. The Parties expressly
acknowledge that this Section only obligates the Parties to consult in good
faith.
Section 2.11. Changes as Arrangements are Developed. The Parties
recognize that development of arrangements for the financing and of other
elements of the Oleoducto Central may make changes in the project structure or
in the Project Agreements or otherwise in respect of the Oleoducto Central
necessary or desirable and that as of the date hereof certain of the Project
Agreements to which they are to be parties have not yet been negotiated,
executed and delivered. The Parties agree to consult in good faith to effect
any such changes which they may agree upon and to negotiate in good faith with
respect to those Project Agreements which have not yet been negotiated,
executed and delivered. The Parties expressly acknowledge that this Section
only obligates the Parties to consult and negotiate in good faith.
ARTICLE THREE
OPERATIONS OF OCENSA
Section 3.1. Operator; Access. Ocensa and the Operator have entered
into the Technical Services and Management Agreement in connection with the
operation of the Oleoducto Central. Ocensa shall enter into Access Agreements
which will, among other matters, give effect to the Access Principles.
Section 3.2. Services. Each of the Shareholders may provide to
Ocensa such services as the Operator or Ocensa may from time to time
reasonably request on such terms as may be mutually agreed. At the reasonable
request of the Operator or Ocensa, each of the Shareholders shall consider
making available its or its Affiliates' employees to provide services to
Ocensa but shall be under no obligation to make available such employees.
Section 3.3. Annual Operating Budgets and Plans; Pre- and
Post-Completion Capital Budgets; Reports.
(a) Ocensa shall instruct the Operator to prepare and provide to Ocensa for
approval by the Board of Directors an operating budget (including the then
required level of maintenance Capital Expenditures) and operating plan (Annual
Operating Budget) for the next fiscal year. The proposed Annual Operating
Budget shall be provided to the Board of Directors not later than 60 days
prior to the beginning of the fiscal year of Ocensa beginning January 1 to
which it relates and shall include, without limitation, the following:
(i) an estimate of proposed maintenance Capital Expenditures, indicating
the item or type of expenditure, the necessity therefor and the time of such
expenditure;
(ii) an estimate of the Annual Revenue Requirement and other cash
receipts to be received and the operating costs to be incurred, and the basis
on which such estimates were prepared, including the Projections of the
Initial Shippers and any third parties; and
(iii) such further detail as the Board of Directors may request.
No line in the Annual Operating Budget shall exceed 10% of the total Annual
Operating Budget, unless otherwise agreed by the Board of Directors.
(b) Prior to the Completion, Ocensa shall instruct the PCMT Manager
to prepare and provide to Ocensa for approval of the Board of Directors an
annual construction budget for the next fiscal year (before Completion, a
Capital Budget).Such proposed budget shall be provided to the Board of
Directors not later than 60 days prior to the beginning of the fiscal year of
Ocensa to which it relates and shall include, without limitation, an estimate
of proposed construction expenditures, indicating the item or type of
expenditures, the purpose thereof and the timing of such expenditures and such
further detail as the Board of Directors may request.
(c) Following the Completion, Ocensa shall instruct the Operator
to prepare and provide to Ocensa for approval of the Board of Directors an
annual budget for Capital Expenditures (following Completion, a Capital
Budget) for the next fiscal year. Such proposed budget shall be provided to
the Board of Directors not later than 60 days prior to the beginning of the
fiscal year of Ocensa to which it relates and shall include, without
limitation, an estimate of proposed non-maintenance Capital Expenditures,
indicating the item or type of expenditures, the purpose thereof and the
timing of such expenditures, plus a budget for the operating costs related to
such Capital Expenditures and such further detail as the Board of Directors
may request.
(d) Ocensa shall instruct the Operator to prepare and provide to
Ocensa for approval of the Board of Directors not later than 60 days prior to
the beginning of the fiscal year of Ocensa to which it relates:
(i) an estimate of the requirements for funds and the estimated timing
of such requirements for such year; and
(ii) an estimate of working capital requirements for such year.
(e) Ocensa shall instruct the Operator to prepare and provide
such other forecasts and estimates covering shorter or longer periods or
particular projects as the Board of Directors may direct. Such other annual
forecasts and estimates shall be provided to the Board of Directors not later
than 30 days prior to the beginning of the fiscal year to which they relate.
(f) Prior to the Completion, Ocensa shall instruct the PCMT Manager
to furnish to the Board of Directors and Shareholders not later than 15 days
after the end of each calendar month (other than a calendar month that is the
final calendar month in a fiscal quarter), a summary of construction
activities relating to each Segment of the Oleoducto Central conducted during
such month, including for each such Segment, prior to its completion, a
comparison of expenditures to budget and actual construction timetable to that
projected for the period in such detail as may be requested from time to time
by the Board of Directors or reasonably by any Shareholder, together with a
summary of routine monthly reports prepared by the PCMT Manager for its own
use.
(g) As soon as practicable but not later than 30 days after the
end of each fiscal quarter, Ocensa shall instruct the PCMT Manager and/or the
Operator to furnish to the Board of Directors and Shareholders (i) a summary
of operations of the Oleoducto Central conducted during such quarter, together
with a profit and loss account, statement of source and application of funds
and balance sheets showing actual expenditure to date against the applicable
Capital Budget and Annual Operating Budget, and latest estimates to the
Completion or fiscal year end, as the case may be, and (ii) prior to the
Completion, construction reports showing physical progress to date against the
Capital Budget and latest estimates to the Completion, as well as such other
pertinent financial or other information as may be requested from time to time
by the Board of Directors or reasonably by any Shareholder.
(h) Ocensa shall make, or shall cause to be made, a prompt report
to the Board of Directors and Shareholders of (i) any unexpected occurrence
which will, or is likely to, materially affect the construction or operation
of the Oleoducto Central or Ocensa; (ii) any actual or anticipated aggregate
expenditures by Ocensa during a period that exceed the aggregate budget
expenditures for such periods by 5% in the aggregate or more than 10% for any
particular item; and (iii) any anticipated deviations from the estimates set
forth in the Annual Operating Budget or Capital Budget of the amounts and
timing of funds that will be required with respect to the agreed expenditures.
Section 3.4. Approval of the Annual Operating Budget and Capital
Budget. (a) In accordance with the By-Laws, the Annual Operating Budget shall
be approved by at least four of the six members of the Board of Directors.
Should the Board of Directors propose to make any amendments, alterations,
deletions or insertions to the proposed Annual Operating Budget, such
amendment, alteration or deletion will require the vote of at least four of
the six members of the Board of Directors.
(b) Even if the Annual Operating Budget has been approved, the
Board of Directors may, by a vote of at least four of the six directors, amend
the Annual Operating Budget.
(c) The Shareholders recognize that rejection or amendment of the
Annual Operating Budget pursuant to subsection (a) or (b) above may require
adjustments in the incentive compensation performance criteria relating to the
Operator incentives reflected in the Technical Services and Management
Agreement to the extent that performance criteria were agreed prior to any
such rejection or amendment.
(d) The Capital Budget, in accordance with the By-Laws, shall
require the unanimous approval of the Board of Directors.
Section 3.5. Project Construction Management. Ocensa shall be
responsible for construction activities. To enable Ocensa to carry out such
activities, it will enter into:
(a) a technical services and management agreement with BPEC pursuant to
which BPEC will provide the services of Ed Truett or another of its employees
acceptable to the Parties (approximately 50% of the individual's time) to act
as manager of the project construction management team (the PCMT Manager) of
Ocensa responsible for construction activities, together with appropriate
technical support; and
(b) such other contracts (including, without limitation, supply,
employment, service and engineering contracts) as are necessary to perform
construction, testing, start-up and other associated operations necessary for
the entering into service of each Segment. These contracts will include the
transportation element of the current contract between BPEC and Brown & Root,
Inc. or an Affiliate thereof, which will be assigned by BPEC to Ocensa, as
well as any contract for the supply of pipe.
ARTICLE FOUR
BOARD OF DIRECTORS; OFFICERS; PROCEEDINGS
Section 4.1. Board of Directors. The Board of Directors shall have
the responsibilities set forth in the By-Laws. The Board of Directors will
consist of six members. Directors will be elected as provided in the By-Laws
and, except for the director to be nominated by Ecopetrol, pursuant to the
provisions of the Voting Trust Agreement. The initial members of the Board of
Directors and their alternates are set forth below:
<TABLE>
<CAPTION>
<S> <C> <C>
Shareholder Director First and Second Alternates
------------------ -------------------- -----------------------------------------
Ecopetrol Ismael Arenas Mauricio Vega, Gabriel Reyes
BP Pipelines Nicholas P. Connolly David de Gruyter, Harry Koppel
TOTAL Pipeline Jacques de Boisseson Yves Cerf-Mayer, Jean Guilbert
Triton Pipeline A.E. Turner Bernard Gros-Dubois, Don M. Drinkard, Jr.
IPL Enterprises Benny J. Phillips Donald M. Wishart, Wayne M. Sartore
TCPL International Michael Durnin Robert M. Jensen, Arthur J. Epp
</TABLE>
Section 4.2. Officers. The Board of Directors shall appoint the
officers of Ocensa in accordance with the By-Laws.
Section 4.3. Language of Proceedings. The proceedings of the Board
of Directors and Shareholders of Ocensa shall be conducted in the Spanish
language. At the request of any member of the Board of Directors or any
Shareholder holding at least 9% of the outstanding Shares, as the case may be,
Ocensa shall provide for a simultaneous translation of such proceedings into
English. The formal minutes of meetings of the Board of Directors and
Shareholders shall be maintained in the Spanish language and an English
version shall be made available to all directors and Shareholders. In the
event of any conflict between the Spanish version of such minutes and the
English version, the Spanish version will control.
ARTICLE FIVE
FINANCING OF OLEODUCTO CENTRAL
Section 5.1. Financing Plan; Financing Committee. (a)(i) Unless
otherwise agreed by the Shareholders, the plan for the sources and amounts of
financing for the acquisition, construction and development of the Oleoducto
Central, including capitalized interest (as the same may be amended from time
to time in accordance with the terms hereof, the Financing Plan), is currently
expected to be based on the following proportions of debt and equity:
<TABLE>
<CAPTION>
<S> <C> <C>
Source Amount Percent
(Nominal U.S.
Dollars in Millions)
Senior Debt
Equity Contributions and Pre-Completion Accrued $ 1,421 70%
Returns 609 30%
--------------------- --------
Total $ 2030 100%
</TABLE>
The current indicative terms of the Financing Plan are set forth in Schedule
F.
(ii) The Shareholders agree that the capitalization of Ocensa
shall consist of approximately 70% Senior Debt and approximately 30% Equity
Contributions and Pre-Completion Accrued Returns when the financing of the
Oleoducto Central is completed. The Shareholders agree that as nearly as
possible such Senior Debt and Equity Contributions should be funded in
accordance with the timetable for the Uses of Funds table set forth in the
Financing Plan as amended from time to time. Prior to completion of such
funding, the Parties shall cooperate in order to maintain Ocensa's
capitalization as close as possible to 70% Senior Debt and 30% Equity
Contributions and Pre-Completion Accrued Returns, but recognize that during
the construction of the Oleoducto Central (i) until the first borrowing of
Senior Debt by Ocensa, the capitalization of Ocensa will be 100% Equity
Contributions and Pre-Completion Accrued Returns and (ii) the timing of
borrowings of Senior Debt by Ocensa will cause the capitalization of Ocensa to
vary. The Shareholders agree that unless Ocensa has been successful in
achieving a percentage of Senior Debt equal to at least 60% of its then
existing capitalization by the later of one year from execution and delivery
of the last Project Agreement and April 1, 1996 (unless construction of the
Oleoducto Central has been delayed in which case such date shall be extended
by a corresponding amount of time), a special committee of Shareholders or of
the Board of Directors shall be established to review and modify the Financing
Plan in a manner acceptable to all of the Shareholders. In this regard
consideration shall be given to requesting Initial Shippers to provide or
arrange to provide loans in order to increase the proportionate share of
Ocensa's capitalization represented by Senior Debt. Such loans shall
constitute Senior Debt.
(b) The Board of Directors has established a financing committee
(the Financing Committee), which is composed of one member representing each
Shareholder or an Affiliate thereof, together with the officer of Ocensa
responsible for finance, and shall report to the Board of Directors. In
addition to reporting to the Board of Directors, the Financing Committee has
the following responsibilities:
(i) to update the Financing Plan at least quarterly based on actual
Project Cost to date and to review and update Project Cost forecasts as
provided by the PCMT Manager;
(ii) to revise the forecast funding requirements of Ocensa for the
subsequent four quarters on a quarterly basis;
(iii) to coordinate the funding of Senior Debt by Ocensa to ensure that
Ocensa obtains Senior Debt and Equity Contributions on a timely basis in
accordance with the Uses of Funds table set forth in the then current
Financing Plan; and
(iv) to provide the Shareholders with a schedule of specific projected
Senior Debt and Equity Contribution funding requirements (including the date
or dates such funding is required and the amounts thereof) at least 105 days
in advance of the date any such funding is expected to be required.
The Committee's decisions shall be in the form of recommendations to the Board
of Directors.
(c) Each Shareholder in an Initial Shipper Group agrees to notify
Ocensa and the Financing Committee of its intention to assist Ocensa in
arranging Senior Debt at least 90 days in advance thereof and to provide them
on a quarterly basis thereafter with a non-binding estimate of funding sources
for the subsequent four quarters. Without the consent of Ecopetrol, each of BP
Pipelines and TOTAL Pipeline severally agrees that neither it nor any
Affiliate will arrange for any Senior Debt of Ocensa with respect to the
Senior Debt Tranche (as defined below) attributable to it to be raised in the
public or private markets for securities transactions.
(d) If, by December 31, 1995, the Shareholders determine that it is
not possible to achieve a capitalization of Ocensa on the basis of the then
current Financing Plan, all of the Shareholders will decide that each
Shareholder or any of its Affiliates will either:
(i) support Ocensa in arranging debt by either arranging loans provided
by such Shareholder or an Affiliate on a several basis, or supporting the
making of such loans by third parties, so that the capitalization of Ocensa
then consists of 70% Senior Debt and 30% Equity Contributions and
Pre-Completion Accrued Returns; or
(ii) increase its Equity Contributions pro rata to its Shareholding
Interest so that the resulting capitalization of Ocensa consists of
approximately 60% Senior Debt and 40% Equity Contributions and Pre-Completion
Accrued Returns. Such Equity Contributions shall consist of the purchase of
Shares for cash or, if all of the Shareholders otherwise agree, the purchase
of either a combination of Shares and Subordinated Notes for cash or
Subordinated Notes for cash, but only if the projected annual return on
such Equity Contributions calculated in accordance with Section 5.4(b) is at
least 13.5% after payment of all Colombian Taxes.
(e) In the event that the Financing Plan as amended from time to
time reflects an estimated Project Cost that exceeds by more than $50 million
the original estimated Project Cost set forth in the Financing Plan in
Schedule F to this Agreement as originally signed then Ocensa shall convene an
emergency meeting of the Board of Directors as soon as practicable after the
release of such amended Financing Plan to discuss methods of funding such
increase in Project Cost.
Section 5.2. Senior Debt. (a) The Shareholders agree that Ocensa
shall borrow Senior Debt from a combination of export credit agencies,
suppliers, commercial banks, public and private capital markets, and
Shareholders and their Affiliates. The Shareholders recognize that the precise
allocation of Ocensa's borrowings of Senior Debt among such sources will
depend upon a number of factors, including, without limitation, capital market
conditions, the availability, terms and conditions of financing provided or
supported by export credit agencies and suppliers, and the availability of
financing provided or arranged by Shareholders and their Affiliates. The
Shareholders agree that the Financing Plan will be designed so as not to
jeopardize the existing and future financing raised and to be raised by the
Initial Shippers with respect to the exploration, development and production
of the Fields. Each Shareholder also agrees to cause its Affiliate that is an
Initial Shipper to design any future financing for such exploration,
development and production in such a manner as to not materially jeopardize
the Financing Plan.
(b)(i) Ocensa shall be the borrower of all Senior Debt included in
the Financing Plan and any other indebtedness from time to time approved by
the Board of Directors in accordance with the By-Laws. The Senior Debt,
including the loans contemplated in Sections 5.1(d)(i), shall be borrowed by
Ocensa in four separate tranches of Senior Debt (each, a Senior Debt Tranche)
provided by four separate groups of Senior Lenders (each, a Senior Lender
Group). Each Senior Debt Tranche shall be separately secured by a single
Initial Shipper Group's Collateral.
(ii) All Senior Debt shall rank pari passu with respect to the
Collateral securing Senior Debt within a particular Senior Debt Tranche. The
Parties agree that each Senior Lender Group will have no recourse to any
assets or rights of Ocensa other than the Collateral separately supporting the
related Senior Debt Tranche and that they will procure that each Senior Lender
Group will waive all rights under Colombian law to initiate Bankruptcy of
Ocensa, except that if Ocensa is otherwise placed in Bankruptcy, Senior
Lenders will not only have recourse to the Collateral assigned to them, but
also as general creditors to the remaining assets of Ocensa, provided that
such Senior Lenders have not initiated the Bankruptcy of Ocensa. Ocensa agrees
not to assign its rights in any agreements or grant any security interests in
any of its assets in favor of any Senior Lender Group other than the
Collateral separately supporting the related Senior Debt Tranche which shall be
used solely to support such Tranche. The Shareholders agree to structure the
Senior Debt so that the rights and remedies of each Senior Lender Group will be
entirely separate and the exercise of rights and remedies by one Senior Lender
Group against the Collateral separately supporting the related Senior Debt
Tranche will not entitle any other Senior Lender Group to exercise any rights
and remedies against its Collateral or the Collateral of any other Senior
Lender Group or against any other assets or rights of Ocensa.
(iii) The Parties agree that the common terms and conditions
applicable to all Senior Debt and Senior Lender Groups and within each Senior
Debt Tranche shall be included in the Common Security Trust Agreement, and
that all provisions specific to an individual borrowing or issuance of Senior
Debt under a particular Senior Debt Tranche shall be included in the Senior
Debt Agreement with respect to such borrowing or issuance.
(c)(i) Ocensa agrees with each Shareholder to use reasonable
commercial efforts to obtain Senior Debt from Senior Lender Groups in such
amounts and at such times as set forth in the then current Financing Plan.
Senior Debt provided by a Senior Lender Group shall have (A) an annual
interest rate or interest rate formula at the time of borrowing of not more
than 600 basis points above the U.S. Treasury note of comparable maturity or,
if a floating rate, above six-month LIBOR, (B) a principal repayment profile
(1) starting not later than the earlier of the first Semi-annual Payment Date
on or immediately after (x) six months following Completion and (y) September
1, 1998 (or such other date as may be mutually agreed by the Parties) and (2)
which each Shareholder other than the Canadian Group shall use its reasonable
commercial efforts to cause to be, for any six month period for each Senior
Debt Tranche of an Initial Shipper Group, at least equal to its Proportionate
Share of Non-Cash Items included in tariffs projected by Ocensa at the time of
issuance of such Senior Debt to be received by Ocensa in such period, (C) such
terms and conditions (insofar as such terms apply to Ocensa) as set forth in
the Common Security Trust Agreement, and (D) such additional terms and
conditions (other than the common terms and conditions) to be set forth in the
Senior Debt Agreement with respect thereto as may be agreed by the person that
has been nominated for election as director by the Shareholder, excluding, in
the case of Ecopetrol, the Canadian Group, whose Subscription Agreement is to
be assigned by Ocensa for the benefit of such Senior Lender Group and to whom
authority to negotiate such Senior Debt Agreement is delegated by the Board of
Directors in accordance with the By-Laws and this Agreement, provided that
such additional terms are not in conflict with this Agreement, the Common
Security Trust Agreement and all other Financing Agreements entered into by
Ocensa, the Shareholders, the Initial Shippers and their Affiliates, and do
not jeopardize in any material respect future financings of Ocensa. If there
is a dispute as to whether the proviso to the preceding sentence has been
breached, the Board of Directors shall determine whether any such conflict
or jeopardy exists. In addition, any such additional term, or change in the
term of any Financing Agreement, which materially adversely affects the 13.5%
annual return to the Canadian Group set forth in Section 5.4(b) shall require
the consent of the Canadian Group. The Shareholder, excluding, in the case of
Ecopetrol, the Canadian Group, whose Subscription Agreement is assigned for
the benefit of any Senior Lender Group from time to time may cause Ocensa to
refinance all or any part of the Senior Debt provided by such Senior Lender
Group provided that the terms of such refinancing meet the requirements of
this paragraph (c).
(ii) Any prospective financial advisor, arranger, underwriter, legal
counsel or other advisor to be employed in connection with obtaining Senior
Debt as contemplated in the then current Financing Plan by the Shareholder
(excluding, in the case of Ecopetrol, the Canadian Group) whose Subscription
Agreement is to be assigned by Ocensa for the benefit of such Senior Lender
Group and to whom authority to negotiate such engagement is delegated by the
Board of Directors in accordance with the By-Laws and this Agreement, proposed
by such Shareholder to be engaged by Ocensa shall be so engaged provided that
the terms of such engagement are customary for such type of engagement and do
not conflict with this Agreement, the Common Security Trust Agreement or the
other Financing Agreements and do not jeopardize in any material respect
future financings of Ocensa. If there is a dispute as to whether the proviso
to the preceding sentence has been breached, the Board of Directors shall
determine whether any such conflict or jeopardy exists. All fees incurred in
connection with obtaining Senior Debt from a Senior Lender Group by Ocensa and
the Related Initial Shipper Group (including, without limitation, commitment
fees, upfront fees, advisory fees, counsel fees and expenses, underwriting
fees, administration fees, insurance premiums, exposure fees, management fees
and facilities fees as contemplated in the then current Financing Plan) shall
be for the account of Ocensa. Such fees, expenses and premiums may be charged
by an Affiliate of an Initial Shipper Group Shareholder and may approximate
the similar fees that may be charged in respect of any other Senior Debt
Tranche provided by third parties.
(iii) Ocensa agrees, and each Shareholder that is a member of an
Initial Shipper Group agrees to cause each of the other members of its Initial
Shipper Group to agree, to use its best efforts to assist Ocensa in incurring
Senior Debt as nearly as possible in accordance with the uses of funds
identified in the Uses of Funds table in the then current Financing Plan so
that borrowings of Senior Debt by Ocensa will be made on a pro rata basis from
each Senior Lender Group. In the event that such pro rata borrowings are not
possible due to capital market conditions or other factors and Ocensa incurs
Senior Debt under the Senior Debt Tranche secured by a particular Initial
Shipper Group's Collateral prior to the time that such Senior Debt is required
in accordance with such table (Overfund Senior Debt and the Shareholder in
such Initial Shipper Group, the Overfund Shareholder), then (A) for the period
of six months following the first date on which Additional Interest Expense in
respect of such Senior Debt is accrued by Ocensa, Ocensa shall bear the cost
ofthe Additional Interest Expense during that six-month period on that amount
of Overfund Senior Debt which is scheduled to be used to meet the requirement
for spending during that six-month period identified in the Use of Funds
table in the Financing Plan as of incurrence of such Overfund Senior Debt,
and the Initial Shipper which is a member of such Initial Shipper Group
shall pay to Ocensa in Tariffs pursuant to Section 5.1 of the Tariff
Regulations during that six-month period the total amount of the Additional
Interest Expense above such amount, and (B) for the period after such
initial six months the relevant Initial Shipper shall pay to Ocensa in
Tariffs pursuant to Section 5.1 of the Tariff Regulations the total amount of
Additional Interest Expense on an amount of such Overfund Senior Debt
appropriately adjusted from time to time to give effect to the application
of the proceeds therefrom and changes in the Financing Plan. Such Initial
Shipper shall also pay in Tariffs pursuant to Section 5.1 of the Tariff
Regulations all default or penalty interest and interest on overdue amounts
of such Overfund Senior Debt. The Parties, other than the Canadian Group,
agree that at Completion, Senior Debt outstanding under each Senior Debt
Tranche shall be equal to the Proportionate Share of the aggregate amount
of Senior Debt then outstanding, in each case excluding accelerated amounts
and with appropriate adjustments for prepayments or repayment of Senior Debt
prior to Completion. In the event there is at Completion an excess amount
of Senior Debt outstanding under any Senior Debt Tranche, Ocensa shall
prepay, repurchase or otherwise retire, in each case without penalties,
such excess amount of Senior Debt (and the Parties, other than the Canadian
Group, agree to procure that it shall have such right under the Senior Debt
Agreement relating to such Senior Debt) with the unused proceeds thereof.
(iv) If Ocensa raises Overfund Senior Debt then each of the
Shareholders (other than the Canadian Group) which is not a member of the
Initial Shipper Group whose Collateral has supported such Senior Debt may
require or cause Ocensa to incur, or arrange on behalf of Ocensa, Senior Debt
supported by the Collateral of the Initial Shipper Group of which it is a
member in order to preserve the pro rata basis for the incurrence of Senior
Debt. In this event the terms of this Section 5.2(c) concerning the liability
of Ocensa and such Shareholder for any Additional Interest Expense and other
interest costs incurred by Ocensa shall apply.
(v) In lieu of requiring Ocensa to incur or arrange Senior Debt on a
pro rata basis as contemplated by sub-paragraph (iv) above, a Shareholder
(Underfund Shareholder) which is a member of an Initial Shipper Group may,
with the consent of the other Shareholders which are members of an Initial
Shipper Group, agree with the Overfund Shareholder that, of the proceeds of
Overfund Senior Debt, all or a portion thereof shall be utilized by Ocensa in
lieu of proceeds of Senior Debt otherwise required that would be supported by
the Collateral of the Underfund Shareholder's Initial Shipper Group
(Overfunding Proceeds). In the next and successive issuances of Senior Debt by
Ocensa, the portion of such Senior Debt which otherwise would have been
supported by Collateral of the Overfund Initial Shipper Group had such Senior
Debt been funded on a pro rata basis will be reduced by up to the amount of
the then outstanding Overfunding Proceeds and the portion of such Senior Debt
which otherwise would have been supported by Collateral of the Underfund
Shareholder's Initial Shipper Group or Groups had such Senior Debt been funded
on a pro rata basis will be increased by such amount (and if there is more
than one Underfund Shareholder shall be allocated pro rata between them) until
the amount of such Overfunding Proceeds has been reduced to zero.
(vi) The terms of the cost sharing arrangements between the Overfund
and any Underfund Shareholder pursuant to clause (v) above, including, without
limitation, cost sharing and credit support (and increases in Tariffs pursuant
to Section 5.1(a)(i) of the Tariff Regulations), will be agreed by them and if
an Overfund Shareholder and a prospective Underfund Shareholder are unable to
agree on such arrangement, such prospective Underfund Shareholder shall not
become an Underfund Shareholder. Such terms will be advised to all
Shareholders prior to the consent referred to in Section 5.2(c)(v).
(vii) With respect to each incurrence of Overfund Senior Debt, each
Underfund Shareholder agrees, solely for the benefit of the Overfund
Shareholder, that, in the event that (A) any Senior Debt in respect of which
there are Overfunding Proceeds which have not been reduced to zero becomes due
prior to its stated maturity date for any reason, or (B) Ocensa (or any
permitted assignee) has made a demand for payment under the Advance Tariff
Agreement in respect of amounts owing under Overfund Senior Debt, then with
respect to clause (A),(1) upon notice thereof from the Overfund Shareholder,
such Underfund Shareholder shall promptly cause Ocensa to incur Senior Debt
supported by the Collateral related to the Underfund Shareholder's Initial
Shipper Group and to pay an amount of the proceeds of such Senior Debt equal
to the then outstanding amount of the Overfunding Proceeds attributable to
such Underfund Shareholder into the Related Account of such Overfund
Shareholder, and in lieu of (1) or if (1) has not occurred within the earlier
of 30 days of such new due date of the Overfund Senior Debt or 30 days of such
demand for payment, then (2) such Underfund Shareholder promptly shall pay to
the Related Account of such Overfund Shareholder an amount equal to the then
outstanding amount of Overfunding Proceeds attributable to such Underfund
Shareholder and, with respect to clause (B), such Underfund Shareholder
promptly shall pay to the Related Account of the Overfund Shareholder an
amount equal to the portion of the Advance Tariff Payment made by the Overfund
Shareholder that bears the same proportion to the aggregate amount of such
payment as the Overfunding Proceeds attributable to such Underfund
Shareholder bear to the aggregate amount of the related Overfund Senior Debt.
(viii) Subject to the Financing Agreements, and subject to
subparagraph (v) above, any drawing of Overfund Senior Debt shall be placed by
Ocensa in United States Treasury bills or, at the option of the relevant
Shareholder, in short-term (less than 90 days) debt securities, commercial
paper or treasury deposits of its ultimate parent company which are rated A or
better by Standard & Poor's Rating Group or the equivalent thereof by another
Internationally Recognized Statistical Rating Agency. Interest and other
earnings thereon shall be deposited by Ocensa into the Related Account of the
relevant Shareholder.
(d) In the event that Ocensa, despite the use of its best efforts,
is unable to obtain commitments (formal or informal) for all or any portion of
the Senior Debt Tranche of an Initial Shipper Group, Ocensa shall first advise
the Shareholder of such Initial Shipper Group and each other Shareholder of
the difficulties it is having and if such difficulties continue, may
thereafter (but not prior to the expiration of 30 days from such first
advice), deliver to such Shareholder and each other Shareholder a notice which
shall specify the amount of such Senior Debt that Ocensa has been unable to
obtain (the Senior Debt Shortfall) and the date on which such Senior Debt is
required to be provided and disbursed to Ocensa in accordance with the then
current Financing Plan. Such notice of Senior Debt Shortfall must be provided
by Ocensa at least 45 days prior to such date. Ocensa and such Shareholder
shall then meet and in good faith discuss alternative bases on which such
Senior Debt may be obtained, including, without limitation, but subject to
Section 5.2(c), changes or additions to the agreements being assigned for the
benefit of the proposed provider of such Senior Debt.
(e) If such Senior Debt is not so disbursed to Ocensa on or prior
to the date specified in the Senior Debt Shortfall notice, then except as
otherwise provided in the Political Events Agreement, (i) or (ii) shall apply:
(i) if (x) the total amount of Senior Debt supported by such Initial
Shipper Group's Collateral that has been disbursed to Ocensa as of such date
is less than 85% of the aggregate Senior Debt Tranche to be supported by such
Initial Shipper Group's Collateral in the then current Financing Plan or (y)
the sum of such Senior Debt disbursed to Ocensa plus Equity Contributions made
by such Initial Shipper Group as of such date is less than 85% of the
aggregate Senior Debt to be supported by such Initial Shipper Group's
Collateral plus Equity Contributions to be made by such Initial Shipper Group
in such Financing Plan, Ocensa shall apply the Transportation Agreement
Step-Up (as defined below) to the Initial Shipper in such Initial Shipper
Group and the applicable percentage shall be 250%; or
(ii) if (x) the total amount of Senior Debt supported by such Initial
Shipper Group's Collateral that has been disbursed to Ocensa as of such date
is greater than 85% of the aggregate Senior Debt Tranche to be supported by
such Initial Shipper Group's Collateral in the then current Financing Plan and
(y) the sum of such Senior Debt supported by such Initial Shipper Group's
Collateral disbursed to Ocensa plus the Equity Contributions made by such
Initial Shipper Group as of such date is greater than 85% of the aggregate
Senior Debt to be supported by such Initial Shipper Group's Collateral plus
Equity Contributions to be made by such Initial Shipper Group in such
Financing Plan, then Ocensa shall apply the Transportation Agreement Step-Up
to the Initial Shipper in such Initial Shipper Group and the applicable
percentage shall be 150%, provided that the 150% tariff increase shall apply
only to such Initial Shipper's pro rata share of all Petroleum in excess of
185,000 barrels per day shipped by such Initial Shipper or on its behalf.
(f) The Transportation Agreement Step-Up shall mean the right of
Ocensa in the Transportation Agreement with an Initial Shipper
(i) to increase the tariff applicable to Petroleum shipped by such
Initial Shipper or on its behalf by a specified percentage of the tariff
originally applicable under such Transportation Agreement for the
transportation of Petroleum (or to exercise any alternative right provided in
the Transportation Agreement or which may otherwise be available to it and
which will achieve substantially the same economic result), for a period
beginning, in the case of Senior Debt, on the date specified in the notice of
Senior Debt Shortfall, and, in the case of an Equity Contribution shortfall,
on the date specified in the call for the Equity Contribution, and ending one
year after the date the Senior Debt Shortfall actually was remedied (whether
by Initial Shipper Bridge Loan or by obtaining Senior Debt from a third party
which may be an existing provider of Senior Debt, in each case solely
supported by Collateral other than any other Initial Shipper Group's
Collateral or any assets of Ocensa), or the Equity Contribution is made, and
(ii) for the remaining term of such Transportation Agreement, to apply
the highest of the Initial Shipper Tariff originally applicable in such
Transportation Agreement, the Overutilizer and the Third Party Tariff to that
proportion of capacity of each Segment for which such Initial Shipper was
entitled to pay the Initial Shipper Tariff originally specified in such
Transportation Agreement represented by the percentage amount that, in the
case of a Senior Debt Shortfall, is equal to the amount of the Senior Debt
Shortfall divided by the sum of the amount of Senior Debt in the Senior Debt
Tranche related to the Initial Shipper under such Transportation Agreement and
the maximum amount of Equity Contributions set forth in the Subscription
Agreement of the related Shareholder, in each case as shown in the then
current Financing Plan, and, in the case of a failure to make an Equity
Contribution, is the amount of such Equity Contribution divided by the same
denominator.
The incremental tariffs payable by such Initial Shipper included in the sum of
(i) plus (ii) above which are above those tariffs otherwise payable, shall
accrue, after Colombian Taxes, to the party that provides funding for such
Senior Debt Shortfall or Equity Contribution shortfall, and otherwise shall
accrue to Ocensa.
(g) In order to fund a Senior Debt Shortfall with respect to Senior
Debt to be supported by a given Initial Shipper Group's Collateral, Ocensa may
request that the relevant Shareholder procure that its related Initial Shipper
provide a commitment to provide an Initial Shipper Bridge Loan (as defined
below) on or prior to the date specified in the notice of Senior Debt
Shortfall. If such commitment is not obtained in 15 days or if the Initial
Shipper Bridge Loan is not provided on the date the Senior Debt Shortfall is
due, then Ocensa may request a Shareholder Bridge Loan (as defined below)
provided that if the Initial Shipper Bridge Loan is provided on or prior to
the date specified in the notice of Senior Debt Shortfall, and meets the full
amount of such Shortfall, Ocensa shall accept the Initial Shipper Bridge Loan
in lieu of any Shareholder Bridge Loan. In any case, Ocensa shall continue to
try to raise the Senior Debt Shortfall.
(h) Initial Shipper Bridge Loan shall mean a bridge loan from an
Initial Shipper or an Affiliate of such Initial Shipper or a financial
institution on its behalf. In such case, the Initial Shipper Bridge Loan shall
accrue interest at the Benchmark Interest Rate, and shall mature not earlier
than the then average life of the outstanding Senior Debt Tranche of such
Initial Shipper. If not replaced after 30 days, such Initial Shipper Bridge
Loan shall convert to a loan at the applicable rate implied by the Benchmark
Interest Expense and such Initial Shipper Bridge Loan shall be part of the
Senior Debt Tranche supported by such Initial Shipper Group's Collateral,
provided that any changes which are necessary to comply with the terms of the
Common Security Trust Agreement are made in accordance with the terms thereof.
(i) Shareholder Bridge Loan shall mean a bridge loan provided by
one or more Shareholders or their Affiliates or one or more financial
institutions on their behalf, at their option, which are not in default for
failing to make an Equity Contribution or are not a member of an Initial
Shipper Group with a Senior Debt Shortfall. Such Shareholder Bridge Loan shall
bear interest at the Benchmark Interest Rate and shall be subject to the same
limitations on recourse and initiation of Bankruptcy proceedings as Senior
Debt. If such loan is not repaid within 90 days with the proceeds of a loan
secured by the Collateral supported by the Initial Shipper Group whose
Shareholder is associated with the Senior Debt Shortfall or, if the
Shareholder Bridge Loan has been provided to meet a failure to make an Equity
Contribution by a member of an Initial Shipper Group, by the making of such
Equity Contribution, then Ocensa shall exercise its rights under the
Transportation Agreement with the Initial Shipper in such Shareholder's
Initial Shipper Group to increase the tariff applicable to Petroleum shipped
by such Initial Shipper or on its behalf by 250% of the tariff otherwise
applicable for shipment of Petroleum in the event subsection 5.2(e)(i) or
5.3(b)(i) is applicable and 150% of such amount if subsection 5.2(e)(ii) or
5.3(b)(ii) is applicable, in each case for a period beginning, in the case of
a Senior Debt Shortfall, on the date specified in the notice of Senior
Debt Shortfall, and, in the case of a call for an Equity Contribution, on the
date specified in the notice of call for such Equity Contribution, and ending
two years following the repayment of such Shareholder Bridge Loan. The
incremental tariffs payable by such Initial Shipper above those otherwise
payable shall accrue, after taxes, to the Shareholder that provides or procures
the provision of the Shareholder Bridge Loan.
(j) If such Senior Debt Shortfall continues for 20 days following
the date of such notice of Senior Debt Shortfall, an emergency meeting of the
Board of Directors shall be convened on a date at least five days prior to the
date specified in the notice of Senior Debt Shortfall to determine a method of
funding such Senior Debt Shortfall. Such meeting need not be held if the
Senior Debt Shortfall is funded.
Section 5.3. Several Commitments of Shareholders to Make Equity
Contributions.
(a) Each Shareholder has entered into a Subscription Agreement with Ocensa
providing for the making of Equity Contributions in proportion to such
Shareholder's respective Shareholding Interest, upon the call of Ocensa either
(i) in conformity with Capital Budgets and Funding Resolutions, as such
funding requirements are updated by the Financing Committee in the Financing
Plan and to comply with the terms hereof or (ii) in the event of Bankruptcy of
Ocensa, Decommissioning of all Segments or a unanimous decision of the Board
of Directors not to continue with the Oleoducto Central if certain conditions
set forth in the Subscription Agreements are met. Ocensa agrees that any call
made by it for the making of Equity Contributions by a Shareholder (A)
pursuant to clause (i) above shall only be made simultaneously with a call to
all Shareholders and that the proceeds therefrom or from any payment under any
Performance Guarantee Agreement in respect thereof shall be used for Capital
Expenditures to be incurred in connection with the construction of the
Oleoducto Central and (B) pursuant to clause (ii) above shall only be made in
accordance with the terms and conditions set forth in the related Subscription
Agreement and that the proceeds therefrom or from any payment under any
Performance Guarantee Agreement in respect thereof shall be deposited in the
Related Account of such Shareholder and, in the case of the Canadian Group,
the Related Account of Ecopetrol.
(b) If a Shareholder fails to make an Equity Contribution on a
timely basis, and such failure continues for 15 Business Days, then, except as
otherwise provided in the Political Events Agreement, (i), (ii) or (iii) shall
apply:
(i) if such defaulting Shareholder is an Initial Shipper or Affiliate of
an Initial Shipper and if (x) the total amount of Senior Debt supported by
such Initial Shipper Group's Collateral and disbursed to Ocensa as of such
date is less than 85% of the aggregate Senior Debt Tranche to be supported by
such Initial Shipper Group's Collateral in the then current Financing Plan or
(y) the sum of Senior Debt supported by such Initial Shipper Group's
Collateral and disbursed to Ocensa plus Equity Contributions made by such
Initial Shipper Group as of such date is less than 85% of the aggregate Senior
Debt to be supported by such Initial Shipper Group's Collateral plus Equity
Contributions to be made by such Initial Shipper Group in such Financing Plan,
Ocensa shall apply the Transportation Agreement Step-Up to the Initial Shipper
in such Initial Shipper Group and the applicable percentage shall be 250%;
(ii) if such defaulting Shareholder is an Initial Shipper or an
Affiliate of an Initial Shipper and if (x) the total amount of Senior Debt
supported by such Initial Shipper Group's Collateral and disbursed to Ocensa
as of such date is greater than 85% of the aggregate Senior Debt Tranche to be
supported by such Initial Shipper Group's Collateral in the then current
Financing Plan and (y) the sum of Senior Debt supported by such Initial
Shipper Group's Collateral and disbursed to Ocensa plus Equity Contributions
by such Initial Shipper Group made as of such date is greater than 85% of the
aggregate Senior Debt to be supported by such Initial Shipper Group's
Collateral plus Equity Contributions to be made by such Initial Shipper Group
in such Financing Plan, Ocensa shall apply the Transportation Agreement
Step-Up to the Initial Shipper in such Initial Shipper Group and the
applicable percentage shall be 150%, provided that the increased tariff shall
only apply to the Initial Shipper's pro rata share of all Petroleum in excess
of 185,000 barrels per day shipped by such Initial Shipper or on its behalf;
or
(iii) if such defaulting Shareholder is IPL Enterprises or TCPL
International or any successor or assign thereto, Ocensa shall exercise its
right to cancel partially or entirely payment of operating, incentive and
other fees payable under the Technical Services and Management Agreement at
the direction of the Initial Shippers for a period of up to five years, and if
such default continues for more than 90 days Ocensa shall have the right to
terminate such Technical Services and Management Agreement without
compensation to (and without prejudice to its accrued rights against) the
Operator (in each case except to the extent provided in the Political Events
Agreement).
(c) In order to avoid a failure by a Shareholder to make any Equity
Contribution, if Ocensa has any reasonable grounds to believe that such
Shareholder may not be able to make such Equity Contribution, Ocensa may, 45
days before an Equity Contribution is due, request a commitment to make a
Shareholder Bridge Loan on the date of the Equity Contribution. If no
Shareholder Bridge Loan commitment is made or if such Shareholder Bridge Loan
is not made, or if such Shareholder Bridge Loan does not cover the shortfall
in Equity Contributions, Ocensa may request that other Shareholders, at their
option, fund such Equity Contributions in return for Shares. If more than one
non-defaulting Shareholder chooses, at its option, to participate in such
Equity Contribution then such Shares shall be sold pro rata to each such
non-defaulting Shareholder choosing to participate or otherwise as they may
mutually agree. In such a case, such default shall not be deemed to be cured.
(d) If Ocensa continues to believe for any reason that a
Shareholder may not be able to make an Equity Contribution on time, an
emergency meeting of the Board of Directors shall be convened on a date at
least five days prior to the date specified in the notice of call for an
Equity Contribution to determine a method of funding such anticipated
shortfall. Such meeting need not be held if the Equity Contribution shortfall
is funded.
(e) In the event there is a Senior Debt Shortfall or a shortfall in
Equity Contributions for purposes of Section 5.2(e) or 5.3(b), as the case may
be, any Accrued Return accumulated for the benefit of the non-funding
Shareholder or any of its successors or assigns after occurrence of such
Senior Debt Shortfall or shortfall in Equity Contributions, as the case may
be, will accumulate for the benefit of and ultimately be paid to the parties
which have provided funding under Section 5.2(g) or 5.3(c) until the failure
is cured, all in accordance with the terms of the Dividend Trust Agreement;
provided that, in case of suspension of the non-funding Shareholder's Purchase
Obligation and application to it of the OCA Remedies under the Political
Events Agreement (as those terms are defined therein), any Accrued Returns
accrued prior to such suspension will accumulate for the benefit of the
non-funding Shareholder and any of its successors or assigns and any dividends
accumulated thereafter will accumulate for the benefit of and ultimately be
paid to, in the first instance, the other Shareholders which have provided
funding pursuant to the Political Events Agreement and thereafter to any other
party which has provided funding under Section 5.2(g) or 5.3(c).
Section 5.4. Returns to Shareholders
(a)(i) Subject to the requirements of any Financing Agreements, any cash
deposited into any Related Account and any other Cash-on-Hand, in each case
generated by Ocensa from operating and investing activities during any period,
shall be applied in the following order of priority (payments listed in the
same clause shall rank pari passu with each other):
(A) to pay Operating and Maintenance Costs payable during such period up
to but not exceeding an amount that is equal to the Related Initial Shipper
Group's Proportionate Share thereof and any such Operating and Maintenance
Costs that were due for a prior period and not paid;
(B) to pay the Related Initial Shipper Group's Proportionate Share of
pre-Completion Capital Expenditures up to the amount of Non-Cash Items and the
annual return on equity referred to in the definition of Annual Revenue
Requirement included in Tariffs payable into the Related Account during
such period and any such pre-Completion Capital Expenditures that were due
for a prior period and not paid;
(C) to pay (x) Senior Debt Obligations due and owing to Senior Lenders
in the Related Senior Lender Group and (y) principal, interest and premium in
respect of its share of unsecured credit facilities (including, without
limitation, any Liquidity Facilities maintained under Section 5.8 hereof), in
each case during such period less, in each case, any amounts in respect
thereof due to a Senior Lender in such Senior Lender Group or to any provider
of such facilities that has commenced, initiated or caused to be initiated
proceedings or has taken any other action that resulted directly or indirectly
in the Bankruptcy of Ocensa notwithstanding its agreement to the contrary;
(D) to pay principal and interest on Shareholder Bridge Loans made by
any Person in any other Initial Shipper Group (excluding, in the case of
Ecopetrol, the Shareholders in the Canadian Group) or the Canadian Group
pursuant to Section 5.3(c) in respect of an Equity Contribution shortfall
relating to the Shareholder in the Related Initial Shipper Group (including,
in the case of Ecopetrol, the Canadian Group) less any amounts due in respect
of such a Shareholder Bridge Loan, the provider of which has commenced,
initiated or caused to be initiated proceedings or has taken any other action
that resulted directly or indirectly in the Bankruptcy of Ocensa;
(E) to pay Transportation Repayment Obligations owing to the Related TRO
Holder less, in each case, any amounts in respect thereof due to a Related TRO
Holder that has commenced, initiated or caused to be initiated any proceedings
or has taken any other action that resulted directly or indirectly in the
Bankruptcy of Ocensa notwithstanding its agreement to the contrary; and
(F) to repay Advance Tariff Payments made by the Initial Shipper in the
Related Initial Shipper Group, but only to the extent that such repayment is
required by Section 3.1(c) Third of the Advance Tariff Agreement with such
Initial Shipper. It is acknowledged that credits of amounts pursuant to
Section 3.1(c) First and Second of such Advance Tariff Agreement do not
constitute payments of cash for purposes of this Section 5.4.
(ii) Subject to the requirements of any Financing Agreements, any
Available Cash generated by Ocensa from operating and investing activities
during any period remaining after application pursuant to clause (i) above
shall be applied in the following order of priority (payments listed in the
same clause shall rank pari passu with each other):
(A) to pay (x) semi-annual cash Distributions in accordance with
paragraph (b) below, (y) the Subordinated Fee to the Operator, and (z)
interest on Subordinated Notes referred to in Section 5.1(d)(ii) issued in
substitution for Shares;
(B) (x) to distribute annual Equity Amortization Amounts in accordance
with Section 5.5 and (y) to pay principal of Subordinated Notes referred to in
Section 5.1(d)(ii) issued in substitution for equity (but not including any
Equity Amortization);
(C) to make other Distributions in accordance with Section 5.6 hereof;
and
(D) to the extent of any remaining Available Cash, to retire or
repurchase any remaining outstanding Shares.
(b) The Parties agree that subject to Section 5.4(a), the
requirements of any Financing Agreements and applicable Colombian law, Ocensa
shall (i) prior to the date which is the earlier of Completion and December
31, 1998 (the Dividend Commencement Date), accumulate, accrue and compound in
each year a 13.5% annual return (net of all Colombian Taxes) on the aggregate
Cash Paid-In Equity and Pre-Completion Accrued Returns (as defined herein and
denominated in dollars) and (ii) subsequent to the Dividend Commencement Date
pay a 13.5% annual return net of all Colombian Taxes on the Adjusted Paid-In
Equity (defined in Section 5.4(c) and adjusted pursuant to Section 5.4(e) and
denominated in dollars). Such return shall be calculated monthly and paid
semi-annually following the Dividend Commencement Date. Such payment shall
accrue any Accrued Return accruing after the Dividend Commencement Date. Such
return shall be paid by Ocensa to or for the account of the Shareholders in
accordance with their Shareholding Interests in the form of Distributions (but
not including any Equity Amortization), in each case in conformity with Annual
Operating Budgets or as the Board of Directors and the Shareholders may
otherwise determine from time to time.
(c) For purposes of subsection (b) above, Adjusted Paid-In Equity
shall mean an amount determined as follows, regardless of the Cash Paid-In
Equity of Ocensa:
(i) As of June 1, 1996 the Target Project Cost shall be unanimously
determined by the Shareholders. Target Project Cost shall include only direct
costs of the Oleoducto Central that are or may be properly capitalized on the
books of Ocensa, including the estimated direct cost to complete the Oleoducto
Central through the expected Completion in the form of a Class I estimate
provided by Brown & Root, Inc. or an Affiliate thereof or, if different, the
principal contractor at the time (including all direct historic and projected
costs, e.g., engineering, material and construction).
(ii) Within 120 days after the end of the month in which the actual
Completion occurs, the Shareholders shall determine the actual direct
completion cost of the Oleoducto Central as of such month end on the same
basis as set forth in clause (i) above (Actual Project Cost).
(iii) Within 30 days after the determination of the Actual Project Cost,
the Shareholders shall compute the Agreed Project Cost. The Agreed Project
Cost shall be the Target Project Cost increased by any amounts arising from
material and equipment defects, construction (workmanship) deficiencies and
capital costs with respect to any facility arising after the facility has been
commissioned, and increased or decreased, as the case may be, by changes in
scope of work, provided that if the Agreed Project Cost as so determined is
within $50 million of the Actual Project Cost, then the Agreed Project Cost
shall be the Actual Project Cost adjusted in any case for such cost variance
up to $50 million.
(iv) Within the time period specified in clause (iii) above, the
Shareholders shall also determine the percentage which the sum of Cash Paid-In
Equity and Pre-Completion Accrued Returns shall represent of the total
capitalization of Ocensa which shall consist of the aggregate of indebtedness,
Cash Paid-In Equity and Pre-Completion Accrued Returns of Ocensa as of the end
of the month in which the Completion occurs (the Equity Percentage). Should
the Parties fail to agree on the Equity Percentage, the Equity Percentage
shall be the actual percentage on such date as determined by Ocensa's
independent auditors.
(v) Adjusted Paid-In Equity shall be a dollar amount equal to the sum of
(x) Cash Paid-In Equity and Pre-Completion Accrued Returns and (y) the product
of (a) the Equity Percentage and (b) the difference between the Agreed Project
Cost and the Actual Project Cost less (z) the amounts of any Distributions of
funds in respect of (A) Net Proceeds from the sale or other disposition of
property or assets of Ocensa, (B) Insurance Proceeds, and (C) Expropriation
Compensation received by Ocensa.
Adjusted Paid-In Equity = Cash Paid-In Equity + Pre-Completion Accrued Returns
+ (Equity Percentage X (Agreed Project Cost - Actual Project Cost)) -
Distributions of Net Proceeds - Insurance Proceeds - Expropriation
Compensation.
(d) An example of the calculation of the Agreed Project Cost is
attached to this Agreement as Schedule I.
(e) Following the determination of the Adjusted Paid-In Equity,
such annual return to Shareholders shall be calculated and paid on the basis
of Adjusted Paid-In Equity as calculated above or, if applicable, Adjusted
Paid-In Equity decreased to reflect amortization of the Cash Paid-In Equity
and Pre-Completion Accrued Returns in accordance with Section 5.5.
(f) The Tariff Regulations included in the Transportation
Agreements reflect, and the tariffs payable by Initial Shippers shall be
calculated to provide, the annual return on equity set forth in paragraph (b)
above based on Adjusted Paid-In Equity determined as set forth in clause (v)
of paragraph (c) above, subject to paragraph (e).
(g) Cash Paid-In Equity shall mean a dollar amount equal to the
aggregate of all cash payments made in exchange for (i) Shares or other
capital stock of Ocensa pursuant to the Subscription Agreements and (ii)
Subordinated Notes pursuant to subscription agreements substantially in the
form of the Subscription Agreements.
(h) Pre-Completion Accrued Returns shall mean a dollar amount equal
to a 13.5% annual return (net of all Colombian Taxes) accumulated, accrued and
compounded by Ocensa in each year prior to the Completion. Such returns shall
be calculated on the aggregate of prior balances of Cash Paid-In Equity and
Accrued Returns.
(i) Accrued Returns shall mean that amount of the annual return
referred to in paragraph (b) above which has not been paid and is accrued and
compounded.
(j) The right of a Shareholder to receive Distributions from Ocensa
shall not constitute Collateral supporting any Senior Debt Tranche. Any
reduction in amounts available for Distributions due to a failure to make a
payment or a material default of a member of an Initial Shipper Group or its
successor or assign under any of the Financing Agreements or the related
Transportation Agreement shall, notwithstanding such reduction, not affect the
entitlement of Shareholders which are not members of a defaulting Initial
Shipper Group to receive, through the operation of the Dividend Trust
Agreement, their respective Shareholding Interest of the amount which, but for
the default, would have been available for Distributions. The Dividend Trust
Agreement shall provide that any Shareholder which is a member of an Initial
Shipper Group which, through the default of any of its members, has caused a
reduction in the amount available for Distributions, shall only be entitled to
retain the balance remaining of any Distributions after each of the other
Shareholders has received its respective Shareholding Interest of the amount
which, but for such default, would have been available as Distributions. The
Dividend Trust Agreement shall further provide that Distributions receivable
by the Shareholders which are part of the defaulting Initial Shipper Group in
subsequent periods shall be redistributed pro rata to Shareholders which are
not part of the defaulting Initial Shipper Group so as to make up any
remaining shortfall in the Distributions which such Shareholders would, but
for such default, have been entitled to receive in the previous periods. The
Dividend Trust Agreement shall give effect to the principles set forth in this
paragraph (j).
Section 5.5. Return of Equity Contributions. (a) Ocensa agrees to
use all reasonable measures available to it under Colombian law to effect the
Equity Amortization under arrangements satisfactory to the Shareholders
associated with the Initial Shipper Groups, provided that there is no
obligation on the part of any Initial Shipper to produce Petroleum and ship it
if such Initial Shipper believes it would be uneconomic for it to do so.
(b) Subject to paragraph (a) and applicable Colombian law, the
equity capital of Ocensa will be repaid pro rata to Ocensa's shareholders by
making Distributions as follows:
(i) Subject to clause (ii) below and to the requirements of Colombian
law, no later than the last dividend date in respect of 2003 and no later than
such date in respect of each of the following nine years, Ocensa shall make a
Distribution equal to the Annual Equity Amortization Amount.
(ii) The obligation to distribute an Annual Equity Amortization Amount
in any year shall be suspended if the Equity Amortization Deferral Test for
that year is satisfied, provided such distributions may not be suspended in
respect of 2012 or any year thereafter, and provided further that such
distributions shall not be suspended in any year in or after which the
Technical Services and Management Agreement is not extended by its terms.
(iii) The Equity Amortization Deferral Test shall be satisfied as to any
Equity Amortization Period if cumulative BITCF (as defined below) is positive
for a period commencing at the beginning of such Equity Amortization Period
and ending with the third calendar year after such Equity Amortization Period
and during which annual BITCF may be negative for no more than two calendar
years, provided that the second such year of negative annual BITCF is followed
by at least one year in which annual BITCF is positive. The determination of
whether BITCF meets the above standard is satisfied shall be made as follows:
Such determination for any year shall incorporate both physical and economic
performance factors relating to Cusiana/Cupiagua reservoirs and any other
reservoirs dedicated to the Oleoducto Central. The physical performance of the
reservoirs shall be based on an annual estimate of remaining economically
recoverable reserves dedicated to the Oleoducto Central. This estimate shall
be proposed by Ocensa to the Board of Directors utilizing internationally
recognized reservoir techniques. If the Board of Directors fails to agree to
the estimate unanimously, the Board of Directors will engage an
internationally recognized reservoir consulting firm to make a recommendation
on physical performance of the reservoirs to Ocensa. The information to be
presented to the Board of Directors shall include all currently available
reservoir information such as geophysical, geological, production, pressures,
fluid properties and historical performance trends. The information shall also
include estimates of proved, probable and possible production forecasts, risk
weighted as appropriate. The Equity Amortization Deferral Test for any year
shall include all fields from which liquid hydrocarbons are reasonably
forecast, as determined by the Board of Directors, to be transported via the
Oleoducto Central.
Based on this projection of future field(s) deliverability, an economic
model shall be developed using United States Securities and Exchange
Commission guidelines and operating expense and oil price scenarios approved
by the Board of Directors. From the foregoing, an estimate of future annual
before income tax cash flow (BITCF) is to be derived for Cusiana/Cupiagua and
any additional reservoirs. Such annual BITCF shall be the total revenue to be
derived from the field's sale of all liquid hydrocarbons transported via the
Oleoducto Central minus all actual or forecast expenses required to deliver
these liquids to Covenas and related taxes, including but not limited to the
following:
- the tariff charged by Ocensa,
- all related field operating expenses, including but not limited to crude
oil lifting and processing costs, water/gas reinjection costs, overhead
charges, and any other expenses related to the operation of the field,
- any special levies such as war tax,
- any contractual uses of cash such as interest on and principal repayment
of outstanding (field) debt, and
- any presumptive/social taxes or other corporate burdens.
(iv) Payments of Annual Amortization Amounts shall be made annually.
(c) The term Equity Amortization refers to the process of repaying
equity described in paragraph (b) above.
(d) Annual Equity Amortization Amount means the difference between
(x) 10% of the sum of Cash Paid-In Equity and Pre-Completion Accrued Returns
at the end of the year preceding the first year in which Equity Amortization
occurs less (y) the sum of the quotients of (i) the amount of each
Distribution to the date of payment of such Annual Equity Amortization Amount
of funds in respect of (A) Net Proceeds from the sale or other disposition of
property or assets of Ocensa, (B) Insurance Proceeds, and (C) Expropriation
Compensation received by Ocensa divided by (ii) the number of years remaining
in the Equity Amortization Period as of the date of each such Distribution,
provided that in the tenth and last year of Equity Amortization, the
equivalent of 20,000 shares of Ocensa's original capitalization shall be left
outstanding. The Annual Equity Amoritization Amount shall therefore be
calculated by application of the following formula:
<TABLE>
<CAPTION>
<S> <C> <C>
D + D1 + Du ...
-----------------------
AEAA = (10% x (CPE + PCAR)) -- t t1 tu
</TABLE>
where (i) AEAA is Annual Equity Amortization Amount, (ii) CPE is Cash
Paid-in-Equity, (iii) PCAR is Pre-Completion Accrued Returns, (iv) D, D1,
Du... are Distributions in respect of Net Proceeds from asset sales, Insurance
Proceeds and Expropriation Compensation, and (v) t, t1, tu... are the number
of years remaining in the Equity Amortization Period at the time of each such
Distribution.
(e) Equity Amortization Period shall mean a period of 10 years less
the number of years as to which Equity Amortization Payments have been made.
Section 5.6. Other Distributions. (a) As of the last day of each
calendar quarter, and for each succeeding calendar quarter, after all the
payments required by clauses (i) and (ii)(A) and (B) of Section 5.4(a) have
been made in respect of such quarter, Ocensa shall determine the amount, if
any, of Available Cash which it is unable for legal reasons to pay as a
dividend (the Cash Trap Amount). During the subsequent quarter, Ocensa shall
determine the interest earned on the Cash Trap Amount and record such interest
in a separate account. Such interest and any interest earned thereon is the
Cash Trap Interest.
(b) Any Shareholder which is a member of an Initial Shipper Group
may direct Ocensa to invest that portion of the Cash Trap Amount equal to such
Initial Shipper Group's Proportionate Share in commercial paper, short term
notes (not exceeding 90 days maturity) or treasury deposits of its ultimate
parent company so long as such securities are rated A or better by Standard &
Poor's Rating Group or the equivalent thereof by another Internationally
Recognized Statistical Rating Agency.
(c) After the repayment in full by Ocensa of Senior Debt, Tariff
Advances, Transportation Notes and Advance Tariff Payments, and upon the
determination by the Board of Directors that Ocensa has Available Cash, but is
unable for legal reasons to pay dividends, Ocensa may, based on the financial
statements of Ocensa at the end of the prior semi-annual period, to the extent
that it has Available Cash after making the payments required by clauses (i)
and (ii)(A) and (B) of Section 5.4(a), pay out of such Available Cash to each
Shareholder which is a member of an Initial Shipper Group, (i) up to the
Proportionate Share of the Initial Shipper that is a Person in the same
Initial Shipper Group as such Shareholder of the sum in dollars of the Cash
Paid-In Equity, the Pre-Completion Accrued Returns and Non-Cash Items paid in
Tariffs to the extent used to fund pre-Completion Capital Expenditures less
any Annual Equity Amortization Amount previously paid plus the legal reserve
required by the Colombian Commercial Code (Reserva Legal)expressed in pesos,
(ii) the Proportionate Share of the Initial Shipper that is a Person in such
Shareholder's Initial Shipper Group of an amount equal to the Cash Trap
Interest to the extent not applied to cash rebates against Tariffs payable by
such Initial Shipper under its Transportation Agreement or applied to any
payment as part of its Cash-on-Hand, taking into account the investment
instructions given by such Shareholder in accordance with subsection (b)
above, and (iii) to the extent of the balance of such excess Available Cash,
the amount of such excess multiplied by the fraction obtained by dividing the
sum of (A) the cumulative barrels of Petroleum shipped through the Oleoducto
Central by the Initial Shipper (including its successors and permitted
assigns) in the Initial Shipper Group of such Shareholder and any shipper
shipping Petroleum pursuant to a release of capacity by such Initial Shipper,
in each case under the Transportation Agreement with such Initial Shipper,
since January 1, 1996 and (B) such Initial Shipper's Proportionate Share of
third party barrels shipped during the same period, by total cumulative
barrels shipped through the Oleoducto Central during such period. Such payment
shall be by means of any Distributions legally permissible under Colombian
law, including the capitalization of inflation adjustment reserves followed by
Distributions to Shareholders entitled thereto hereunder.
Section 5.7. Right of Set Off. The Parties agree that Ocensa shall
have the right, in its sole discretion, to set off the unpaid amount of any
Equity Contribution with respect to which a Shareholder is in default against
sums due by it under any payment obligation, loan, note or credit for Advance
Tariff Payments, Tariff Advances or Transportation Notes held by the Initial
Shipper in such Shareholder's Initial Shipper Group or its assignee or, if
such Shareholder is a Person in the Canadian Group, against sums in respect of
the Subordinated Fee owing to CITCOL.
Section 5.8. Senior Debt and Equity Contribution Shortfalls. In
recognition of the serious consequences of any Senior Debt Shortfalls or
failures by a Shareholder to make Equity Contributions to the ability of
Ocensa to construct and develop the Oleoducto Central and the difficulty of
ascertaining the damages that would result from such consequences, the
Shareholders recognize and acknowledge that the rights of Ocensa under
Sections 5.2(e) and 5.3(b) are reasonable. Furthermore, each Shareholder that
is a member of an Initial Shipper Group agrees to cause its associated Initial
Shipper to comply with its obligations under its Transportation Agreement,
including, without limitation, the obligations referred to in Section 5.2(e)
and Section 5.3(b).
Section 5.9. Liquidity Facilities. (a) In order to meet any
temporary liquidity shortfalls arising after the full several application of
all Cash-on-Hand with respect to each Related Account of an Initial Shipper
Group pursuant to Section 5.4(a)(i), the Shareholders, severally and not
jointly, in proportion to their respective Shareholding Interests, agree to
provide or procure the provision of up to $5 million (or, to the extent
required to meet Peso-denominated expenses, at the election of each
Shareholder, the equivalent amount in Pesos) in loan or other credit
facilities (the Liquidity Facilities), callable on two Business Days notice
by the Board of Directors or its delegate. The Liquidity Facilities shall be
available solely to fund liquidity shortfalls arising directly out of
operations including, without limitation, to repair breaches of the Oleoducto
Central and damage to any of its facilities from whatever cause including
consequences such as environmental damage resulting from such breaches and
related Capital Expenditures and excluding any payments in respect of
Senior Debt or other payments ranking junior thereto under Section 5.4(a).
The Liquidity Facilities shall not be available to be drawn upon for any
other reason, and shall not be available if an event of Bankruptcy has
occurred with respect to Ocensa. The Parties agree, and shall procure, that
the Liquidity Facilities shall be subject to the same limitations on recourse
and initiation of Bankruptcy proceedings as Senior Debt.
(b) A Shareholder shall be deemed to have discharged its
responsibility under this Section 5.9 to the extent and for the period that it
causes to be made available to Ocensa a facility meeting the requirements of
this Section 5.9 from a third party (without any conditions to drawdown other
than customary conditions and as set forth herein), such facility being
provided by a Person at least as creditworthy as the Shareholder.
(c) Subject to paragraph (d) below, the Liquidity Facilities may be
drawn upon by Ocensa at any time and from time to time up to the amount then
not drawn taking into account any repayments previously made by Ocensa. More
than one advance may be outstanding at one time subject to the provisions of
this Section 5.9. The aggregate amount of the Liquidity Facilities may not be
increased without the consent of all the Shareholders.
(d) If at any time the Liquidity Facilities are used to cover a
liquidity shortfall arising from the default of a Related Initial Shipper in
meeting a call under its Advance Tariff Agreement for its share pursuant
thereto of amounts calculated pursuant to clause (i) of the definition of Base
Revenue Requirement in its Transportation Agreement or a shipper in paying the
applicable Tariff under its transportation agreement to the extent of its
share pursuant thereto of such amounts or from the default of a Shareholder in
meeting its responsibilities hereunder, no further call under the Liquidity
Facilities may be made by Ocensa in respect of the shortfall arising out of
such default or defaults until such defaults have been fully cured, including
payment of any fees, charges, penalties, interest and liquidated damages.
(e) As soon as practicable after making a call under the Liquidity
Facilities, subject to the terms and conditions of the Transportation
Agreements, Ocensa shall adjust its Tariffs in order to generate funds to
repay advances under such Liquidity Facilities, provided that no such
adjustment shall be made on account of a default or defaults referred to in
subparagraph (d) above. Such repayments shall be made as rapidly as possible,
taking into account Ocensa's cash needs and operating requirements and the
level of its Tariffs. It shall be Ocensa's policy to repay amounts advanced
under the Liquidity Facilities within 90 days of the advances, and in any
event such repayments shall be made within 365 days after the advance. All
repayments shall be made pro rata to the amounts advanced under each Liquidity
Facility. If more than one advance is outstanding at a time under the
Liquidity Facilities, repayments shall be applied in chronological order of
the advances under the Liquidity Facilities.
(f) Advances under the Liquidity Facilities shall bear interest,
payable semi-annually in arrears, at the Benchmark Interest Rate. To the
extent a Shareholder has procured a Liquidity Facility (including a letter of
credit facility) from a third party at an interest rate less than such
Benchmark Interest Rate, Ocensa shall pay the amounts representing the
difference between the actual rate and such Benchmark Interest Rate to such
Shareholder at the same time interest payments are made as an arrangement or
other fee for such facility.
ARTICLE SIX
CAPITAL INVESTMENT AND SOLE RISK PROPOSALS
Section 6.1. Capital Investment Proposals. (a) Any Shareholder or
Shareholders may require Ocensa to submit, at the expense of the proposing
Shareholder or Shareholders, a proposal (a Capital Investment Proposal) to the
Board of Directors to add facilities or recommission any Segment that was
previously Decommissioned or modify any existing facilities of the Oleoducto
Central for the purpose of expanding capacity or otherwise improving service.
A Capital Investment Proposal shall be submitted to the Board of Directors
only if Ocensa, acting through the Operator, certifies that such Capital
Investment Proposal complies with all safety, environmental and engineering
standards of Ocensa then in effect. The Capital Investment Proposal shall be
submitted together with all relevant details of the proposed additional
facilities or modifications to or in the existing facilities, the estimated
cost thereof, the schedule for their construction and entry into service and
an estimate of the associated operational and maintenance costs expected to be
incurred during the lifetime of such facilities.
(b) The Board of Directors shall consider the Capital Investment
Proposal and may cause Ocensa to adopt such Capital Investment Proposal by a
unanimous vote of the Board of Directors in accordance with the By-Laws as an
amendment to the then current Capital Budget and by a vote of four of the six
members of the Board of Directors in accordance with the By-Laws as an
amendment to the then current Annual Operating Budget. Ocensa shall notify the
proposing Shareholder or Shareholders of the Board of Directors' decision
promptly after it is considered and in any case within 60 days of the date on
which the Capital Investment Proposal was submitted.
Section 6.2. Sole Risk Proposals. (a) If the Board of Directors
does not approve a Capital Investment Proposal submitted for its consideration
by a Shareholder pursuant to Section 6.1, such Shareholder (the Sole Risk
Party, which term shall include any Shareholders electing to participate in
the Sole Risk Proposal pursuant to Section 6.3) may require Ocensa to resubmit
such Capital Investment Proposal, as it may be amended by the Shareholder, as
a sole risk proposal (a Sole Risk Proposal). The Sole Risk Proposal shall be
submitted together with all relevant details of the proposed additional
facilities or those related to the recommissioning of any Segment that was
previously Decommissioned or modifications to or in the existing facilities,
the estimated cost thereof, the schedule for their construction and entry into
service and an estimate of the associated operational and maintenance costs
expected to be incurred during the lifetime of the proposed facilities or
modifications to existing facilities (including those related to the
recommissioning of any Segment that was previously Decommissioned) (the Sole
Risk Facilities). A Sole Risk Proposal shall be submitted to the Board of
Directors only if Ocensa, acting through the Operator, certifies that such
Sole Risk Proposal complies with all safety, environmental and engineering
standards of Ocensa then in effect. The Board of Directors shall consider the
Sole Risk Proposal and may, subject to its compliance with the criteria
established in Sections 6.4 through 6.8, approve the implementation of the
Sole Risk Proposal by a vote of four of the six members of the Board of
Directors in accordance with the By-Laws. The members of the Board of
Directors shall (and, if the matter is subsequently referred to a General
Meeting of Shareholders, the Shareholders shall) vote to approve the
implementation of the Sole Risk Proposal (subject to compliance with the
criteria referred to above) unless such implementation would prejudice the
rights of any Shareholder or its Affiliate under the Project Agreements.
Ocensa shall notify the Sole Risk Party in writing of the Board of Directors'
decision within 60 days of the date on which the Sole Risk Proposal was
submitted.
(b) If the Board of Directors does not approve a Sole Risk
Proposal, Ocensa shall state in writing in reasonable detail the reasons why
Ocensa did not approve such Sole Risk Proposal.
(c) If the Board of Directors does not approve a Sole Risk
Proposal, the Sole Risk Party may require Ocensa to submit an amended Sole
Risk Proposal provided that such Sole Risk Party follows the procedures
applicable to Sole Risk Proposals set forth in paragraph (a) above.
Section 6.3. Participation of Other Shareholders. If a Sole Risk
Proposal is approved in accordance with Section 6.2, then the Sole Risk Party
shall, if it wishes to implement the Sole Risk Proposal, issue a written
notice to the other Shareholders and Ocensa of its intention to proceed.
Such notice shall contain the Sole Risk Proposal together with all the
relevant details referred to in Section 6.2. Any Shareholder may within 45
days of its receipt of such notice give written notice to the Sole Risk
Party and Ocensa of its decision whether or not to participate in the Sole
Risk Proposal and if it decides to so participate it shall have the right to
do so in such proportion as it and the Sole Risk Party may agree.
Section 6.4. Implementation and Indemnity. (a) The Operator shall
carry out the construction operations in connection with any Sole Risk
Proposal which has been accepted unless the Board of Directors unanimously
agrees to permit the Sole Risk Party to carry out such construction
operations.
(b) The Shareholder or Shareholders participating in the Sole Risk
Proposal with the Sole Risk Party (together, the Sole Risk Parties), pro rata
to their interests in the Sole Risk Facilities, shall jointly and severally
indemnify Ocensa, the Operator and the Initial Shippers that are not
Affiliates of Sole Risk Parties and hold them harmless against all losses,
claims, damages and liabilities in respect thereof arising prior to the end of
commissioning of the Sole Risk Facilities (but not consequential losses, other
than loss of or delay in receipt of revenue due to interruption in the
operation of the Oleoducto Central or any part thereof) after Ocensa, the Sole
Risk Party and the Initial Shippers that are not Affiliates of the Sole Risk
Parties have made all reasonable efforts to avoid or mitigate such losses or
delays during the implementation of a Sole Risk Proposal.
(c) Ocensa, in consultation with the Sole Risk Parties, shall
arrange for insurance coverage during the period of construction and entry
into service for the Sole Risk Facilities on terms reasonably satisfactory to
the Board of Directors.
(d) All costs and expenses attributed by Ocensa and the Operator as
having been incurred by it in the implementation of a Sole Risk Proposal shall
be agreed with and for the account of the Sole Risk Parties.
Section 6.5. Ownership of Sole Risk Facilities; Financing.
(a) All additional materials and facilities used or constructed for the
implementation of a Sole Risk Proposal shall be the property of the Sole Risk
Parties. The Sole Risk Parties shall arrange the financing necessary for the
implementation of the Sole Risk Proposal and shall be liable for all payments
or repayments due in respect thereof.
(b) Ocensa shall make available to the Sole Risk Parties (or their
Affiliates) the Sole Risk Facilities and/or the additional throughput capacity
arising therefrom. The Sole Risk Parties (or their Affiliates) shall ensure
that the Throughput Capacity in the affected Segment or part thereof (other
than that created by other Sole Risk Facilities) and all relevant
unutilized facilities shall be used before any Sole Risk Facilities or
throughput capacity created by the Sole Risk Facilities are used.
Section 6.6. Data and Information. All data and information
obtained or arising in respect of a Sole Risk Proposal or amended Sole Risk
Proposal shall be made available to Ocensa, provided that Ocensa shall not be
the owner thereof.
Section 6.7. Tariffs. (a) The tariffs charged by Ocensa on each
barrel of Petroleum using, or deemed to use, the Sole Risk Facilities shall be
calculated so as to be sufficient to cover:
(i) all fixed Operating and Maintenance Costs other than those included
in (ii) below attributed by Ocensa to the Sole Risk Capacity;
(ii) the proportion of the total overhead and fixed Operating and
Maintenance Costs of Ocensa other than those in (i) above, Operator incentives
and applicable Colombian Taxes (other than taxes attributable to the profits
earned by Ocensa in order to pay Distributions and the Subordinated Fee) equal
to the amount calculated by dividing the total number of barrels of Petroleum
using the Sole Risk Facilities by the aggregate of all barrels of Petroleum
using (or deemed to use) the Oleoducto Central and the Sole Risk Facilities
(the Sole Risk Throughput Basis); and
(iii) the variable Operating and Maintenance Costs other than those
included in (ii) above which Ocensa and the Sole Risk Parties agree, or,
failing agreement, Ocensa determines, to charge either (A) on the Sole Risk
Throughput Basis, or (B) on the basis of the cost increment to Ocensa
associated with the Sole Risk Facilities and the additional throughput
capacity created by them.
The tariff shall include a fixed component based on barrels nominated for
shipment arising from the items referred to in clause (i) above and that part
of clause (ii) above that may be agreed upon by Ocensa and the Sole Risk
Parties which shall be payable by the Sole Risk Parties regardless of volumes
of Petroleum actually shipped.
(b) Ocensa shall be entitled to review (on one occasion only) the
basis of charging tariffs under clause (iii) of paragraph (a) above five years
after the coming into service of the Sole Risk Facilities and may either
confirm such basis or change it to the other basis referred to therein.
Section 6.8. Decommissioning; Indemnity (a)The Sole Risk Parties
may on reasonable notice in writing require Ocensa to decommission and/or
remove any Sole Risk Facilities owned by the Sole Risk Parties. Ocensa shall
consent to the request for the decommissioning and/or removal of the Sole
Risk Facilities (or part thereof) provided that Ocensa, acting through the
Operator, certifies that such decommissioning and/or removal will not
prejudice the safety or integrity of the Oleoducto Central.
(b) Any cost incurred in such decommissioning and removal shall be for the
account of and be borne by the Sole Risk Parties, and the Sole Risk Parties,
pro rata to their interest in the Sole Risk Facilities, shall jointly and
severally indemnify Ocensa, the Operator and the Initial Shippers which are
not Affiliates of the Sole Risk Parties on demand and hold them harmless
against all losses, claims, damages and liabilities in respect thereof arising
during the period of decommissioning and/or removal (but not consequential
losses, other than loss of or delay in receipt of revenue due to interruption
in the operations of the Oleoducto Central or any part thereof) after Ocensa,
the Sole Risk Parties and the Initial Shippers that are not Affiliates of the
Sole Risk Parties have made all reasonable efforts to avoid or mitigate such
losses or delays during the decommissioning and/or removal of the Sole Risk
Facilities.
Section 6.9 Recommissioning of Oleoducto Central. (a) Following
the earlier of (i) twelve consecutive months during which no Petroleum has
been shipped through any Segment of the Oleoducto Central and (ii) one month
after Decommissioning of all four segments of the Oleoducto Central, any
Shareholder (the Recommissioning Party which term shall include any
Shareholder that elects to participate in a Recommissioning Proposal pursuant
to paragraph (c) below) may submit to the Board of Directors, at the expense
of the proposing Shareholder, a proposal (a Recommissioning Proposal) to
rebuild or recommission all four segments of the Oleoducto Central. The
Recommissioning Proposal shall be submitted together with all relevant details
of the proposed rebuilding or recommissioning and any proposed additional
facilities or modifications to or in the existing facilities, the estimated
cost thereof and the schedule for proposed recommissioning and any
construction and entry into service.
(b) The Board of Directors shall consider the Recommissioning
Proposal and may cause Ocensa to adopt such Recommissioning Proposal by a
unanimous vote of the Board of Directors in accordance with the By-Laws.
Ocensa shall notify the Recommissioning Party of the Board of Directors'
decision promptly after it is considered and in any case within 30 days of the
date on which the Recommissioning Proposal was submitted.
(c) If the Recommissioning Proposal is not adopted within such
30-day period, the party making such Recommissioning Proposal may decide, by
written notice to Ocensa and each of the other Shareholders, to proceed with
its Recommissioning Proposal (and cause Ocensa to so proceed), provided that,
except for dilution of Shareholding Interest and the concomitant consequences
thereof hereunder and under the Project Agreements, there shall be no adverse
effect on the rights set forth in Sections 5.4 and 5.5 and no material adverse
effect on any other rights of Shareholders in their capacity as such hereunder
and thereunder, provided further that such party shall not be permitted to
proceed with such Recommissioning Proposal if the sole or primary purpose
thereof is to avoid obligations due to any Party hereunder. Each of the other
Shareholders may, within 15 days of its receipt of such notice, give written
notice to Ocensa and the Recommissioning Party of its decision whether or not
to participate in the Recommissioning Proposal and, if it decides to so
participate, it shall have the right to do so in such proportion as it and the
party making such Recommissioning Proposal may agree (which proportion shall
be at least equal to such other Shareholder's Shareholding Interest, if such
other Shareholder so requires).
(d) Each of the Shareholders agrees that the Recommissioning
Proposal shall be implemented by the Recommissioning Party or Parties through
Ocensa and that the cost thereof shall be borne by Ocensa by issuance of
additional debt and/or equity of Ocensa, even if the result thereof is to
substantially dilute such Shareholders' equity interest in Ocensa or rights in
Ocensa. If the cost of the Recommissioning Proposal is funded through the
issuance of additional debt, such debt shall be Senior Debt under the Senior
Debt Tranche or Tranches of the Recommissioning Party or Parties and the
provisions of Section 5.2 shall apply mutatis mutandis with respect to the
raising of such debt. If and to the extent that the cost of the
Recommissioning Proposal is funded through the issuance to the Recommissioning
Party or Parties of additional Shares, the issuance price of each Share shall
be an amount in dollars equal to the per Share (based on the number of Shares
outstanding at the time such Recommissioning Proposal is made) Fair Market
Value of the net assets of Ocensa at the time such Recommissioning Proposal is
made. Notwithstanding anything herein (but without prejudice to the provisos
in the first sentence of paragraph (c) above) or under the By-Laws and the
Project Agreements to the contrary, each of the Shareholders agrees to take
such actions as may be required or that may be reasonably appropriate,
including, without limitation, to amend the By-Laws and each of the Project
Agreements, to give effect to the Recommissioning Proposal, the proposed
financing thereof and the terms of this Section 6.9(d) and shall not take any
action to hinder or otherwise impede the implementation or financing of such
Proposal or the purposes of such Section.
(e) Ocensa shall indemnify the Operator and the Initial Shippers
that are not Affiliates of the Recommissioning Party or Parties and hold them
harmless against all losses, claims, damages and liabilities in respect
thereof arising after the beginning and prior to the end of the implementation
of the Recommissioning Proposal as a result thereof (but not consequential
losses) after Ocensa, the Recommissioning Party or Parties and the Initial
Shippers that are not Affiliates of the Recommissioning Party or Parties have
made all reasonable efforts to avoid or mitigate such losses or delays during
the implementation of the Recommissioning Proposal. Ocensa, in consultation
with the Recommissioning Party or Parties, shall arrange for insurance
coverage during the period of construction and entry into service for the
additional facilities and the modifications to existing facilities related to
the implementation of the Recommissioning Proposal on terms reasonably
satisfactory to the Board of Directors.
ARTICLE SEVEN
TARIFF REGULATIONS; TRANSPORTATION AGREEMENTS;
ADVANCE TARIFF AGREEMENTS
Section 7.1. Tariff Regulations. (a) The Parties agree that the
tariffs for transportation of Petroleum on the Oleoducto Central shall conform
to the Tariff Regulations, recognizing that the Third Party Tariff must be
approved by the MME.
(b) The Parties agree that the Tariff Regulations may only be
amended with the unanimous approval of the Parties and each Initial Shipper in
accordance with the terms of the Transportation Agreements.
(c) (i) From January 1, 1995 until the Promesas Closing Date, all
shippers transporting Petroleum using the Central Llanos Segment assets shall
pay the tariff established by the MME to Ecopetrol as operator of such assets.
Ecopetrol shall in turn pay to Ocensa a monthly fraction of such tariff, net
of operating and maintenance costs, equal to (x) the aggregate of the monies
paid to Ecopetrol by Ocensa under the Promesas de Compraventa divided by (y)
the total value of the assets on which such tariffs are being levied and such
monthly fraction of such tariff shall not be less than the result of applying
the approved MME rate of return on investment on such aggregate monies.
Following the Promesas Closing Date, Ocensa shall charge and collect tariffs
on the assets sold to it (including, without limitation, the Central Llanos
30" pipeline) calculated in accordance with the Tariff Regulations, such that
by December 31, 1995, Tariffs charged shall have included all Pre-Completion
Accrued Returns referred to in Section 5.4(h) for the period from January 1,
1995 to such date.
(ii) After the Promesas Closing Date, Ocensa shall pay lease
rentals or tariffs on assets owned by Ecopetrol and other Initial Shippers
which will be used by Ocensa temporarily during construction, including, but
not limited to, the Central Llanos 20" pipeline and the Cusiana El Porvenir
20" pipeline. Tariff or lease or rental costs shall be agreed between Ocensa
and the owners of the assets prior to the Promesas Closing Date. Tariffs
charged to Ocensa by the owners of the Central Llanos 20" pipeline shall be
the tariff approved by the MME multiplied by a fraction equal to the value of
such assets divided by the value of the assets on which such tariff is levied.
The tariff for the Cusiana-El Porvenir 20" pipeline shall be agreed between
the owners thereof and Ocensa. These costs will be included in the Annual
Revenue Requirement for the corresponding Segments.
(iii) There will also be a tariff applicable to the assets to
be sold to Ocensa covered by the Association Contracts, i.e. Cusiana pumps and
drivers, but only after the date ownership of such assets has been transferred
to Ocensa. The tariff applicable will be calculated in accordance with the
Tariff Regulations and the General Terms and Conditions substantially in the
form included in the Transportation Agreements. Prior to that date, any costs
related to such assets shall be for the account of the parties to the
Association Contracts.
Section 7.2. Transportation Agreements. Ocensa and each Initial
Shipper have entered into a Transportation Agreement.
Section 7.3. Advance Tariff Agreements. Ocensa and each Initial
Shipper have entered into an Advance Tariff Agreement.
Section 7.4. Third Party Transportation Agreements. Ocensa agrees
to enter into Third Party Transportation Agreements that will, among other
matters, give effect to the Tariff Regulations and the General Terms and
Conditions substantially in the form included in the Transportation
Agreements. Except as otherwise contemplated in the Transportation Agreements,
Ocensa agrees that such Third Party Transportation Agreements shall not
materially alter the rights or obligations of the parties to the
Transportation Agreements.
ARTICLE EIGHT
FINANCIAL AND ACCOUNTING MATTERS
Section 8.1. Books and Records; Fiscal Year. Ocensa shall, to the
extent permitted by law, keep its accounts and financial and cost records in
such currency, if any, as may be required by the provisions of this Agreement
and in dollars. Ocensa shall provide each Shareholder with a copy of any tax
return reasonably in advance of the filing thereof. Ocensa shall provide each
Shareholder with copies of its audited financial statements within three
months following the end of its fiscal year ended December 31 and the six
month period ended June 30.
Section 8.2. Right of Inspection of Books. Ocensa shall keep full,
complete and accurate books of account, records and information with respect
to its affairs and the same shall be maintained at the principal office of
Ocensa. Entries shall be made in such books of account and records of all such
matters, transactions and things as are usually written and entered in books
of account and records kept by persons engaged in businesses similar to the
business of Ocensa or required by applicable law. Each Shareholder shall have
the right, acting reasonably and in coordination with Ocensa's auditors and
accounting personnel and, to the extent practicable, other Shareholders, to
audit, examine, and make copies of or extracts from the books of account and
records of Ocensa at all reasonable times during usual business hours. Such
right may be exercised through any agent or employee of such Shareholder
designated in writing by it or by an independent certified accountant
designated in writing by such Shareholder. Each Shareholder shall bear all
expenses incurred in any examination made for such Shareholder's account.
Section 8.3. Accounting Principles. Unless otherwise agreed by the
Shareholders, the accounts and records of Ocensa shall be maintained in
accordance with generally accepted accounting principles in Colombia (and, to
the extent not inconsistent therewith, in accordance with generally accepted
accounting principles in the United States), shall be on an accrual basis with
working capital separately identified and shall otherwise be adequate to
provide the information necessary for the filing of tax returns by Ocensa and
each Shareholder.
Section 8.4. Auditors. The auditors of Ocensa shall be an
internationally recognized auditing firm nominated by the Board of Directors
and approved by the Shareholders from time to time in accordance with the
By-Laws and applicable law. Initially such firm shall be Ernst & Young for an
interim period and thereafter shall be such a firm appointed by the
Shareholders in accordance with a competitive bidding process to be agreed
upon among the Shareholders. All audit reports and reports to management on
internal controls and procedures prepared by such auditing firm shall be made
available to the Board of Directors and each Shareholder.
Section 8.5. Accounting and Contract Award Procedures. The Parties
agree that the President of Ocensa shall be responsible for presenting to the
Board of Directors for its approval a set of accounting and contract award
procedures and delegation of authorities for the construction and operation
activities of Ocensa in the form previously approved by the Initial Shippers
and Canadian Group. Such procedures shall be substantially consistent with the
procedures set forth in Annex G of the RMOU. Prior to the date the Board of
Directors adopts the procedures, the President shall be responsible for
ensuring that accounting and contract award procedures followed by Ocensa are
substantially consistent with the procedures contained in Annex G of the RMOU
and consistent with generally accepted accounting principles.
ARTICLE NINE
PRE-COMPLETION RIGHT TO PURCHASE
Section 9.1. Reorganization Party. Prior to the Completion, unless
the Parties otherwise agree, a Shareholder (and any related guarantor under a
Performance Guarantee Agreement) shall be a Reorganization Party in the event
that any of the following events occurs:
(a) an order is made by a court of competent jurisdiction, or a
resolution is passed, for the dissolution or judicial administration of the
Shareholder or any related guarantor under a Performance Guarantee Agreement;
or
(b) a manager, receiver, administrator, trustee or other similar
officer is appointed in respect of any assets which include either (i) the
Shares held by the Shareholder or (ii) shares of the Shareholder or of any
related guarantor under its Performance Guarantee Agreement; or
(c) such Shareholder or any related guarantor of such Shareholder's
obligations under its Performance Guarantee Agreement convenes a meeting of
its creditors generally and makes or proposes any arrangement or composition
with, or any assignment for the benefit of, its creditors generally.
Section 9.2. Right of Unrelated Shareholder to Purchase.
(a) If a Reorganization Party does not cease to be a Reorganization Party
within 180 days after becoming a Reorganization Party, the other Shareholders
shall, unless Ecopetrol is the Reorganization Party, subject to applicable
law, have the right, but not the obligation, to purchase or procure the
purchase of all, but not less than all, of the Shares held by the
Reorganization Party or its related Shareholder. If Ecopetrol is the
Reorganization Party the other Parties shall only have the right, but not the
obligation, to purchase all, but not less than all, of Ecopetrol's Shares if
prior thereto Ecopetrol has complied with all laws applicable to it with
respect to the sale by it of such Shares.
(b) Such purchase right shall be exercised by one or more of
the other Shareholders by delivering a notice to the Reorganization
Shareholder at any time within a period of 60 days after the expiry of the
180-day period referred to in paragraph (a) above. The Shareholder or
Shareholders exercising such right shall purchase such Shares pro rata based
on the proportion that their respective Shareholding Interests bear to the
Shareholding Interest of the Reorganization Party unless the Reorganization
Party is otherwise advised by all of such other Shareholders. The price
payable by such Shareholder or Shareholders to the Reorganization Party (or
its related Shareholder) shall be the Fair Market Value of the Reorganization
Party's (or its related Shareholder's)Shares. The sale of the Reorganization
Party's Shares shall be completed within 14 days of the date on which the Fair
Market Value is determined or, if later, when governmental and other required
third party approvals or consents are obtained.
Section 9.3. Indemnification by Reorganization Party. The
Reorganization Party shall indemnify and hold harmless the other
non-defaulting Parties against any loss, liability, damage or claim (or action
in respect thereof) (including, but not limited to, legal fees and expenses)
suffered or incurred:
(a) as a result of the occurrence of the events listed in Section
9.1; or
(b) in connection with the enforcement, preservation or protection of
any rights against the Reorganization Party under this Agreement;
provided, however, that in no event shall the Reorganization Party be
obligated to indemnify the other Parties for loss of anticipated profits or
other consequential damages.
Section 9.4. Inapplicability After Completion. This Article Nine
shall terminate and have no effect after the Completion.
ARTICLE TEN
PERMITTED TRANSFERS
Section 10.1. Permitted Transfers. Except to the extent otherwise
provided in this Article Ten, no Shareholder shall transfer any Shares to any
other Person without the unanimous written approval of each other Shareholder.
For purposes of this Article Ten, a transfer of all or any Voting Shares of a
Shareholder or of any Parent Holding Company of a Shareholder shall be subject
to the same restrictions on transfer as apply to the transfer of Shares
hereunder. Parent Holding Company means, with respect to any Shareholder, any
Person that, directly or indirectly through any Subsidiary, owns, as its sole
material asset, Voting Shares that enable it, in the absence of contingencies,
to elect a majority of the board of directors (or persons performing similar
functions) of such Shareholder.
Section 10.2. Transfer in Connection with Assignment of Undivided
Interest in Association Contracts. Notwithstanding Section 10.1, subsequent to
the date on which the aggregate amount of Senior Debt expected to be provided
by the Senior Lender Group for whose benefit the Collateral related to such
Shareholder's Initial Shipper Group has been assigned by Ocensa and Equity
Contributions have been funded, any Shareholder (other than Ecopetrol) which
is a member of an Initial Shipper Group shall have the right to transfer all
or any portion of its Shares if such transfer is made in connection with the
simultaneous assignment of all or a Corresponding Portion of the undivided
interest held by such Shareholder or its affiliated Initial Shipper in the
Association Contracts to a party that agrees in writing to be bound by all of
the provisions of this Agreement and of the Project Agreements to which the
transferor Shareholder or its Affiliate is a party (in which case such
transferee shall be considered to be a Shareholder under this Agreement). For
purposes of this Section 10.2, Corresponding Portion of the undivided interest
in the Association Contracts means the portion, expressed as a percentage,
equal to the number of Shares being transferred divided by the aggregate
number of Shares held by such Shareholder immediately prior to such transfer.
Section 10.3. Transfers to Persons in Petroleum and Natural Gas
Industry. (a) Notwithstanding Section 10.1, and subject to paragraph (b)
below, any Shareholder (subject, in the case of transfers by IPL Enterprises
or TCPL International, to Section 10.8 and receipt of the written consent of
Ecopetrol), shall have the right to transfer Shares if the transfer is made:
(i) prior to the date on which the aggregate amount of Senior Debt to be
provided by the Senior Lender Group for whose benefit the Collateral related
to such Shareholder's Initial Shipper Group has been assigned by Ocensa, and
Equity Contributions have been funded, to a Person (other than an individual)
(A) whose primary purpose or business is the exploration for, and the
development and operation of, Petroleum or natural gas fields and the lifting
and sale of Petroleum or natural gas or the development and operation of
pipelines for the transportation of Petroleum or natural gas,
(B) that agrees in writing to be bound by all of the provisions of this
Agreement and the Subscription Agreement with respect to such Shares, and
(C) who has, or causes a Performance Guarantee Agreement to be entered
into by a Person that has, a minimum net tangible book value of $500 million
(or the equivalent thereof) and a long-term senior unsecured debt rating
assigned to it of not less than (x) A by Standard & Poor's Corporation or its
equivalent by another Internationally Recognized Statistical Rating Agency or
(y) BBB by Standard & Poor's Corporation or its equivalent by another
Internationally Recognized Statistical Rating Agency if 85% or more of the
aggregate amount of Senior Debt expected to be provided by the Senior Lender
Group for whose benefit the Collateral related to such Shareholder's Initial
Shipper Group has been assigned by Ocensa and of Equity Contributions
(including at least 85% of the amount of the Senior Debt) have been funded; or
(ii) subsequent to the date on which the aggregate amount of Senior Debt
expected to be provided by the Senior Lender Group for whose benefit the
Collateral related to such Shareholder's Initial Shipper Group has been
assigned by Ocensa and Equity Contributions have been funded, to a Person
(other than an individual)
(A) that agrees in writing to be bound by all of the provisions of this
Agreement and the Subscription Agreement with respect to such Shares, and
(B) has, or causes a Performance Guarantee Agreement to be entered into
by a Person that has, a long-term senior unsecured debt rating assigned to it
not lower than BBB - by Standard & Poor's Corporation or its equivalent by
another Internationally Recognized Statistical Rating Agency.
(b) A Shareholder making a transfer under Section 10.3 shall sell
Shares representing a Shareholding Interest of not less than 5% in any single
transaction to any single transferee, provided that (i) if such Shareholder
then has a Shareholding Interest of less than 5% immediately prior to such
sale, such Shareholder shall be permitted hereunder to sell all, but not less
than all, of its Shares and (ii) the transferring Shareholder shall receive
the written approval of a majority of the Shareholders (other than such
Shareholder), which approval shall be granted unless in the reasonable view of
such Shareholders the criteria set forth in Section 10.3(a)(i) and (ii) have
not been met.
(c) A Shareholder proposing to transfer Shares pursuant to Section
10.3(a)(i) or (ii) shall deliver to each other Shareholder written notice of
the proposed transfer, including the identity of the proposed transferee and
the date upon which such transfer is proposed to be made, which shall be not
earlier than 30 days from the date of such notice. Upon receipt of such notice
the Shareholders shall consult in good faith in order to approve or disapprove
such transfer pursuant to paragraph (b).
Section 10.4. Transfers to Affiliates. Notwithstanding Section
10.1, any Shareholder shall have the right to transfer Shares if the proposed
transferee is an Affiliate of such Shareholder, provided that any guarantee of
such Shareholder's obligations under its Subscription Agreement shall remain
in effect and, only if all of such Shares are transferred to such transferee,
such transferee agrees in writing to be bound by all provisions of this
Agreement and to enter into a Subscription Agreement (in which case such
transferee shall be considered to be the Shareholder under this Agreement). If
the transferring Shareholder's obligations hereunder and under its
Subscription Agreement are guaranteed, such guarantee shall be extended to
cover such transferee's obligations under its Subscription Agreement,
otherwise the transferring Shareholder shall guarantee unconditionally the
performance of such transferee's obligations under this Agreement, the
Subscription Agreement, the Voting Trust Agreement and the Dividend Trust
Agreement.
Section 10.5. Transfers to Other Shareholders. Notwithstanding
Section 10.1, any Shareholder (subject, in the case of transfers by IPL
Enterprises or TCPL International, to Section 10.8 and receipt of the written
consent of Ecopetrol) may transfer Shares to one or more other Shareholders
subject to applicable law and subject to the following conditions:
(a) If a Shareholder proposes to transfer, assign or otherwise
dispose of any portion of its Shares to another Shareholder or an Affiliate
thereof which is not an Affiliate of such Shareholder, and has received a bona
fide offer that it is willing to accept, then the transferring Shareholder
shall cause the Shareholder transferee or its Affiliate to agree (and each
Shareholder hereby agrees) to give notice to the other Shareholders of the
proposed transfer and of the terms and conditions of such offer, including the
consideration offered and the date upon which the sale is proposed to be made,
which shall not be earlier than 75 days nor later than 120 days from the date
of such notice, and offering such Shares to such other Shareholders on the
terms and conditions of the offer of such proposed Shareholder transferee.
Thereafter, the other Shareholders, or any of them, including the Shareholder
transferee (together, the Purchasing Shareholders), shall have the right, by
notice to the transferring Shareholder and the Shareholder transferee within
90 days after receipt of such notice of the proposed transfer, to elect to
acquire all (but not a portion) of such Shares for the consideration offered
(or, if the Purchasing Shareholders so elect, the cash equivalent thereof) and
in accordance with the other terms and conditions of such offer. Shares so
offered shall be purchased by the Purchasing Shareholders pro rata in the
proportion that their respective Shareholding Interests bear to the total
number of Shares being offered unless the transferring Shareholder is
otherwise advised by all of the Purchasing Shareholders prior to the effective
date of the transfer of the Shares, in which case the Shares shall be acquired
by the Purchasing Shareholders as so advised by them, and shall be transferred
and delivered by the transferring Shareholder directly to such Purchasing
Shareholders pursuant to the terms and conditions of the original offer. If no
Shareholder other than the Shareholder transferee elects to acquire the
Shares, the transferring Shareholder and the Shareholder transferee may
proceed to complete the transfer between them in accordance with the original
offer not later than 120 days after the notice of the proposed sale given to
the other Shareholders. If the transfer is not completed by that date, the
provisions of this Section 10.5 shall again apply and no sale or transfer may
be made in reliance upon this Section 10.5 without again complying
with its provisions. Notwithstanding the foregoing, no Shareholder may acquire
any Shares under this Section 10.5 unless it has caused its Subscription
Agreement and any Performance Guarantee Agreement of its obligations
thereunder to be amended to increase the dollar amount limitations thereof by
an amount in the same proportion to the previous amount as the aggregate number
of Shares purchased pursuant to this Section 10.5 bears to the aggregate number
of Shares previously held by such Shareholder. For purposes of this Section
10.5, unless the Shareholders otherwise agree, the price payable by any
Shareholder shall be payable in dollars.
(b) If any governmental approval or authorization is required to
permit the purchase of Shares by any Purchasing Shareholder under paragraph
(a), the 120-day period shall be extended for such period as is necessary to
secure such approval, provided that the transferring Shareholder and any
Purchasing Shareholder diligently pursue such approvals.
Section 10.6. Public Offering of Shares. (a) Prior to the funding
of the aggregate amount of Senior Debt and Equity Contributions, no
Shareholder shall offer any of its Shares by means of a public offering or
otherwise obligate Ocensa (nor shall Ocensa take any action that would cause
it) to become a public reporting issuer within the meaning of any securities
law without the prior approval of the Shareholders, which approval may, in the
sole discretion of such Shareholders, be conditioned upon, among other
matters, amendments to this Agreement and the By-Laws reasonably satisfactory
to each of such Shareholders.
(b) Notwithstanding clause (a) above, if requested by the
Government of Colombia to allow the public offering of Shares held by
Ecopetrol, each Shareholder agrees to grant its approval under paragraph (a)
of this Section 10.6 and to use its reasonable efforts to cause Ocensa to
take, and Ocensa agrees to take, all reasonable action necessary to effect the
public offering of such Shares, provided that (i) Ecopetrol shall cooperate
with Ocensa in order to make amendments to this Agreement and the By-Laws
reasonably satisfactory to each of the Shareholders and (ii) notwithstanding
anything to the contrary herein, Ecopetrol shall continue to have all the
duties, obligations and liabilities of a Shareholder hereunder and under its
Subscription Agreement in respect of such Shares and that for purposes of
calculating its Proportionate Share or its Shareholding Interest for the
determination of its duties, obligations and liabilities hereunder and under
its Subscription Agreement and Advance Tariff Agreement, such Shares shall be
deemed to be held by Ecopetrol.
Section 10.7. Transfers by Parent Holding Companies. (a) If any
Parent Holding Company of a Shareholder shall attempt to circumvent the
restrictions on transfer set forth in this Article Ten through any transfer of
Shares held by such Shareholder or otherwise, each other Shareholder shall
have the right, at its option, to purchase the Shares of each such Shareholder,
pro rata to its Shareholding Interest, for a cash purchase price equal to the
Fair Market Value of such Shares, payable in dollars within 30 days of written
notice of such election.
(b) Each Shareholder shall give written notice to the Board of
Directors of any transaction that involves a change of control of any parent
company of the Shareholder, including the ultimate parent company of the
Shareholder, substantially contemporaneously with any public announcement of
any such transaction.
Section 10.8. Transfer of Shares by IPL Enterprises and TCPL
International to Ecopetrol. The Parties acknowledge that IPL Enterprises and
TCPL International have agreed to sell their shares to Ecopetrol in accordance
with the terms of, and subject to the conditions contained in, the Share
Transfer Agreement. Section 10.1 shall not apply to any transfers referred to
in this Section 10.8.
Section 10.9. Transfer of Shares by TCPL International to TCPL
Bermuda. Notwithstanding Section 10.1, TCPL International shall have the right
to transfer all, but not less than all, of its Shares to TCPL Bermuda,
provided that TCPL Bermuda signs a counterpart of this Agreement, a
counterpart of TCPL International's Subscription Agreement and a counterpart
of the Political Events Agreement whereupon TCPL Bermuda shall assume all
rights and obligations of TCPL International as a Shareholder hereunder and
under such Subscription Agreement and Political Events Agreement. Upon
execution and delivery of such counterpart by TCPL Bermuda,
(a) TCPL International shall be released of all obligations hereunder
other than its obligations under Section 11.1 and Section 11.2 and shall be
released from all obligations under its Subscription Agreement in accordance
with the terms thereof; and
(b) TCPL Bermuda shall thereafter be considered a Shareholder and a
Party for all purposes hereunder.
Section 10.10. Political Events Agreement. Notwithstanding Section
10.1, transfers of Shares may be made between Shareholders in accordance with
the terms of the Political Events Agreement.
Section 10.11 Transfers to Avoid Dissolution. Notwithstanding
Section 10.1, each Shareholder may transfer one, but not more than one, of its
Shares to any third party in order to create a sufficient number of
shareholders of Ocensa to avoid any Colombian legal requirement that Ocensa be
dissolved, provided that (i) such transferee shall enter into an agreement
with Ocensa and all of the Shareholders agreeing to comply with all
provisions of this Agreement and the other Project Agreements (to the extent
applicable to the transferring Shareholder) and (ii) such transfer shall not
release the transferring Shareholder from any of its obligations hereunder.
Section 10.12 Novation. Subject to Section 10.4, if a transfer is
effected by a Shareholder of all or a portion of its Shares in conformity with
the preceding provisions of this Article, the transferring Shareholder shall
be relieved of all or such portion of its obligations under this Agreement and
its Subscription Agreement transferred to and assumed by the transferee.
Section 10.13. Transfers Subject to Voting Trust Agreement and
Dividend Trust Agreement. Except as otherwise provided in the Voting Trust
Agreement and the Dividend Trust Agreement, any transferee of Shares (and
unless otherwise agreed by the Parties, other than pursuant to Section 10.6)
shall hold such Shares subject to the provisions contained in the Voting Trust
Agreement and the Dividend Trust Agreement, in each case, subject to the terms
thereof, as if it were a member of the Initial Shipper Group or the Canadian
Group from which it acquired such Shares, respectively, and each Shareholder
shall, as a condition to any transfer of its Shares, require that such
transferee agree in writing for the benefit of the other Shareholders party
thereto to comply with the terms of such agreements as if it were a party
thereto.
Section 10.14. Successors in Business Combinations. If a
Shareholder shall assign to any Person all or substantially all the assets of
such Shareholder by acquisition, amalgamation, merger or other business
combination, such Shareholder shall require such Person to agree in writing to
be bound by all of the provisions of this Agreement, the Voting Trust
Agreement and the Dividend Trust Agreement as a successor to such Shareholder.
Section 10.15. Pledges, etc. If a Shareholder shall pledge, encumber
or otherwise hypothecate any of its Shares, prior to making any such pledge,
encumbrance or hypothecation it shall procure the agreement of the pledgee for
the benefit of Ocensa and the Shareholders (a) that any transfer or other
disposition of such Shares resulting from such pledge, encumbrance or
hypothecation shall be made only in accordance with the terms and conditions
of this Article Ten to a permitted transferee, (b) that no other transfer is
permitted, and (c) that such pledgee will require any transferee as a result
of such pledge, encumbrance or hypothecation to agree in writing with Ocensa
to be bound by the provisions of this Agreement as to any Shares so acquired.
Such Shareholder agrees that if it or such a pledgee or transferee violates
the terms of this Section 10.15, the provisions of Sections 4.1(d) and 4.2(b)
of the Tariff Regulations of the Transportation Agreement with the Initial
Shipper which is an Affiliate of the original Shareholder shall apply and, in
the case of the Canadian Group, Section 5.2 of the Technical Services and
Management Agreement shall apply.
Section 10.16. Transfers Other than Permitted Transfers. In the
event of a transfer, pledge, encumbrance or hypothecation of Shares by a
Shareholder in violation of the provisions of this Article Ten, the
Transportation Agreement Step-up shall apply with respect to such Shareholder,
if a member of an Initial Shipper Group, and the applicable percentage shall
be 250% (except that the period set forth in Section 5.2(f)(i) shall be one
year after the effectiveness of such transfer, pledge, encumbrance or
hypothecation and the percentage amount set forth in Section 5.2(f)(ii) shall
be the quotient of its Shareholding Interest so transferred, pledged,
encumbered or hypothecated divided by its Shareholding Interest immediately
prior to such transfer, pledge, encumbrance or hypothecation expressed as a
percentage) and, if such Shareholder is a member of the Canadian Group,
Section 5.3(b)(iii) shall apply. In recognition of the serious consequences of
any such transfer, pledge, encumbrance or hypothecation by a Shareholder to
the management and operation of Ocensa and its ability to construct and
develop the Oleoducto Central and the difficulty of ascertaining the damages
that would result from such consequences, the Shareholders recognize and
acknowledge that the rights of Ocensa under this Section 10.16 are reasonable.
Furthermore, each Shareholder that is a member of an Initial Shipper Group
agrees to cause its associated Initial Shipper to comply with its obligations
under its Transportation Agreement and each Shareholder in the Canadian Group
agrees to cause CITCOL to comply with its obligations under the Technical
Services and Management Agreement, in each case including, without limitation,
the obligations referred to in this Section 10.16.
ARTICLE ELEVEN
CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
Section 11.1. Scope of Obligation of Confidentiality. Each Party
shall use its best efforts to ensure that all information disclosed to it
concerning the Oleoducto Central, the assets and business of Ocensa and the
assets and business of each of the other Parties and not otherwise generally
available (Confidential Information) shall be kept confidential and shall,
unless otherwise required by law or official request issued by a court of
competent jurisdiction or by a judicial, administrative, legislative,
regulatory or self-regulatory authority, including any stock exchange or
similar regulatory authority, or, unless required by the reasonable good faith
judgment of the disclosing Party as a response to any environmental or other
emergency that may have a significant adverse effect upon Ocensa, not be
revealed without the consent of all Parties other than to:
(a) the directors, officers, employees and representatives of Ocensa,
the Parties and Affiliates of the Parties;
(b) a financial advisor, prospective managers of an underwriting
syndicate, legal counsel, consultant, contractor or subcontractor that has a
legitimate business need to be informed and has signed an agreement to protect
the Confidential Information from further disclosure to the same extent as the
Parties are obligated under this Section 11.1 and naming Ocensa as a third
party beneficiary thereof;
(c) any third party to whom the disclosing Party or its Affiliate
contemplates a transfer of all or any part of its Shareholding Interest in
accordance with the terms hereof who has signed a confidentiality agreement
satisfactory to Ocensa; or
(d) a governmental agency or to the public which the disclosing Party
or its Affiliate believes in good faith is required by applicable laws or
regulations or the rules of any stock exchange or similar regulatory
authority.
Information shall not be deemed Confidential Information, and the
provisions of this Section 11.1 shall not apply, if the information (i) is
already in the possession of any Party, provided that such information is not
known by such Party to be subject to another obligation of secrecy, (ii) is or
becomes available in the public domain other than as a result of disclosure by
any of the Parties, their associates or employees in contravention of this
Section 11.1, or (iii) is not acquired by any of the Parties from Ocensa or
any of the other Parties or persons known by any of the Parties to be in
breach of a confidentiality agreement with or other obligation of secrecy to
Ocensa or any of the other Parties.
The disclosing Party shall give notice to each of the other Parties
as soon as practicable after the making of any disclosure made as a response
to any environmental or other emergency or as permitted by Section 11.1(d). As
to any disclosure pursuant to Section 11.1(a) or (b), only such Confidential
Information as such third party shall have a legitimate business need to know
shall be disclosed and, in the case of disclosure to a third party permitted
by Section 11.1(a), the Party disclosing such information shall cause such
party to protect the Confidential Information from further disclosure to the
same extent as the Parties are obligated under this Section 11.1 and, in the
case of disclosure to a third party permitted by Section 11.1(b) or 11.1(c),
the Party disclosing such information shall cause such third party to first
agree in writing to so protect the Confidential Information.
Section 11.2. Return of Confidential Information. Upon any Party
demanding the return of Confidential Information relating to it by notice in
writing to another Party, the other Party shall, and shall cause its
representatives to,
(a) return all documents containing Confidential Information that
have been provided by the Shareholder demanding the return of Confidential
Information (or on its behalf); and
(b) destroy any copies of such documents and any document or other
record reproducing, containing or made from or with reference to the
Confidential Information,
except, in each case, for any submissions to or filings with judicial,
administrative, legislative or regulatory authorities. Such return or
destruction shall take place as soon as practicable after the receipt of such
notice, provided, however, that this Section shall not apply to Ocensa to the
extent it reasonably believes it has such Confidential Information for
purposes of the Oleoducto Central.
Section 11.3. Consultation as to Announcements. No public
announcement or press release concerning the business of Ocensa, including the
Oleoducto Central, shall be made by any Party or Ocensa without prior
consultation with Ocensa and each of the other Parties. This provision shall
not prohibit any public announcement or press release required to be made by
the laws, regulations or policies of any federal, provincial or state
governmental agency or similar agency or any stock exchange or similar
regulatory authority or if required by the reasonable good faith judgment of
the disclosing Party as a response to any environmental or other emergency
that may have a significant adverse effect upon Ocensa, provided that the
Party making such announcement shall, to the extent practicable, consult with
the other Parties concerning the timing and content of such announcement
before such announcement is made and shall give a copy thereof to each of the
other Shareholders at the same time, or as soon as reasonably practicable
after, the making of such announcement.
ARTICLE TWELVE
TERM
Section 12.1. Term. This Agreement shall become effective when
executed and delivered by all the Parties and, subject to Section 12.2, shall
continue to be in effect so long as Ocensa continues to be in existence in
accordance with the By-Laws.
Section 12.2. Termination Events. This Agreement shall terminate
(a) at such time as no Shareholder which is also an Initial Shipper
or an Affiliate thereof has a Shareholding Interest greater than 5%; or
(b) at such time as the Shareholders may otherwise unanimously
agree.
Section 12.3. Termination. In the event of termination of this
Agreement in accordance with Section 12.2 or 12.4:
(a) this Agreement shall thereafter have no effect, and no Party
shall have any liability to the other Parties in respect hereof, except that
(i) the obligations of the Parties in Sections 11.1 and 11.2 shall survive for
a period of three years from the date of termination with respect to any Party
and/or its Affiliates which sells or otherwise disposes of all or any part of
its Shareholding Interest, (ii) the rights of the Shareholders under Section
8.2 shall survive for a period of six years from the date of termination and
(iii) nothing herein contained shall relieve any Party from liability for any
breach of any representation, warranty or agreement hereunder occurring prior
to such termination; and
(b) no Party shall under any circumstances be liable to the other
Parties for loss of anticipated profits from the transactions contemplated by
this Agreement or for other consequential damages (including, without
limitation, loss or deferment of production from the Fields or throughput
rights in the Oleoducto Central) arising out of the termination of this
Agreement.
Section 12.4. Political Events Agreement. This Agreement shall
terminate as to any Shareholder as specified in the Political Events
Agreement.
Section 12.5. RMOU. The Parties acknowledge that the parties to the
RMOU have, pursuant to a letter agreement dated as of December 14, 1994,
terminated the RMOU in accordance with the terms thereof.
ARTICLE THIRTEEN
NEGOTIATIONS; ARBITRATION; SUBMISSION TO JURISDICTION
Section 13.1. Negotiations; Arbitration (a) In the event of any
dispute, controversy or claim arising out of or relating to this Agreement, or
the performance, breach, termination, or invalidity hereof, such dispute,
controversy or claim shall be the subject of an attempt at an amicable
solution, for which purpose any Party shall give notice to the other Parties,
giving a concise description of the matter in question and the position of
such Party in respect thereof and proposing a meeting among the chief
executive officers, executive managing directors or their designees (the
Senior Officers) of the ultimate parent companies of the Shareholders in The
City of New York (or such other place as they may agree) with the purpose of
resolving the dispute, controversy or claim.
(b) In the event such a meeting is called, the meeting shall
take place within 10 days of its being requested. Unless the Parties otherwise
agree, if such meeting does not take place within such 10 days or if within 10
days after such meeting the Senior Officers have not resolved such matter,
then the matter shall be settled by arbitration in accordance with the
UNCITRAL Arbitration Rules in effect on the date hereof. The arbitration shall
be the sole and exclusive forum for resolution of the dispute, controversy or
claim, and the award shall be final and binding. Judgment thereon may be
entered by any court having jurisdiction. The number of arbitrators shall be
three, each of whom shall be disinterested in the dispute, controversy or
claim and shall have no connection with any Party. Should the services of an
appointing authority be necessary, the appointing authority shall be the
American Arbitration Association. In the event that more than two Parties are
involved in the dispute, controversy or claim, all such Parties shall have 30
days to agree among themselves as to the appointment of the three arbitrators.
If, after such 30-day period, the Parties have not agreed on such appointment,
the appointing authority shall select all three arbitrators. The Parties and
the appointing authority may appoint from among the nationals of any country,
whether or not a Party is a national of that country. The place of arbitration
shall be The City of New York, New York. The arbitration shall be conducted in
the English language and any foreign-language documents presented at such
arbitration shall be accompanied by an English translation thereof. The
arbitrators shall apply the laws of the State of New York without regard to
the principles of conflicts of laws.
(c) In the event that there is an existing arbitration pursuant to
paragraph (b), and that the same or a similar dispute, controversy or claim
should arise between Parties other than the Parties to the existing
arbitration, the American Arbitration Association shall have the power to
allow the other Parties to be joined in the existing arbitration with their
express consent, and to make a single final award determining all disputes,
controversies or claims among them.
(d) Any matter expressed in this Agreement to be a matter for
review, collaboration, consultation, consent, decision or agreement by the
Parties or any of them shall not, in the event of failure of decision or
agreement, constitute a dispute or difference to be referred to or settled by
arbitration proceedings.
(e) Each of the Parties hereby submits to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York (the Specified Court) in any action, suit or proceeding with respect
to the enforcement of the arbitration provisions of this Agreement and the
non-exclusive jurisdiction of such court with respect to the enforcement of
any award thereunder. Each Party irrevocably appoints the agent for service
specified opposite its name in Section 14.1 as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served
in any related proceeding, and agrees that service of process upon such agent,
and written notice of said service to such Party, by the person serving
the same to the address provided in Section 14.1, shall be deemed in every
respect effective service of process upon such Party in any such action, suit
or proceeding. Each Party further agrees to take any and all action as may
be necessary to maintain such designation and appointment of such agent in
full force and effect for the duration of this Agreement.
ARTICLE FOURTEEN
GENERAL
Section 14.1 Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<PAGE>
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Party Copy To Agent for
--------------------------------- ---------------------------------
Service
----------------------------
OLEODUCTO CENTRAL S.A. N/A CT CORPORATION
---------------------------------
World Trade Center Bogota SYSTEM
Torre C, Piso 10
Calle 100 N. 8A-55 1633 Broadway
Santafe de Bogota, D.C. -Colombia New York, New York 10019
Telefax: 571-218-3933 Telefax: (212) 247-2882
Attention: President
EMPRESA COLOMBIANA DE N/A CONSULATE GENERAL OF
PETROLEOS-ECOPETROL COLOMBIA
Carrera 13 No. 36-24 10 East 46th Street
Santafe de Bogota, D.C. -Colombia New York, New York 10017
Telefax: (571) 287-0041 Telefax: (212) 972-1725
Attention: Juan Maria Rendon
BP COLOMBIA PIPELINES BP EXPLORATION CT CORPORATION
LIMITED COMPANY SYSTEM
c/o BP EXPLORATION (COLOMBIA) LIMITED 1633 Broadway
(COLOMBIA) LIMITED Carrera 9A No. 99-02 New York, New York 10019
Carrera 9A No. 99-02 Post Office Box 59824 Telefax: (212) 247-2882
Post Office Box 59824 Santafe de Bogota, D.C. Colombia
Santafe de Bogota, D.C.-Colombia Telefax: (571) 222-8619/618-2895
Telefax: (571) 618-2895 Attention: Legal Manager
Attention: Nicholas P. Connolly
TOTAL PIPELINE TOTAL EXPLORATIE EN PROSKAUER, ROSE,
COLOMBIE S.A. PRODUKTIE MIJ B.V. GOETZ & MENDELSOHN
Tour TOTAL Calle 72 No. 10-03 1585 Broadway
TEP/AME Piso 8 New York, New York 10036
24, Cours Michelet Apartado aereo 251375 Telefax: (212) 969-2900
Cedex 47,92069 Paris, France Santafe de Bogota, D.C. -Colombia Attention: Ronald Papa, Esq.
Telefax: (33 1) 4135 6530 Telefax: (571) 235-8453
Attention: Jean-Claude Soligny Attention: Jacques de Boisseson
TRITON PIPELINE TRITON COLOMBIA, INC. CT CORPORATION
COLOMBIA, INC. Carrera 9A No. 99-02 SYSTEM
c/o TRITON ENERGY Oficina 407 1633 Broadway
CORPORATION Santafe de Bogota, D.C.- Colombia New York, New York 10019
6688 North Central Expressway Telefas: (571) 618-2553 Telefax: (212) 247-2882
Suite 1400 Attention: Ivan Fajardo
Dallas, Texas 75206
Telefax: (214) 692-7487
Attention: Thomas G. Finck and
A.E. Turner
Service
----------------------------
IPL ENTERPRISES IPL INTERNATIONAL INC. CT CORPORATION
(COLOMBIA) INC. Suite 1100 SYSTEM
c/o IPL ENERGY INC. 363 North 1633 Broadway
31st Floor Bow Valley Square 2 Sam Houston Parkway East New York, New York 10019
205 - 5th Avenue S.W. Houston, Texas 77060 Telefax: (212) 247-2882
Calgary, Alberta, Canada T29 2V7 Telefax: (713) 820-9310
Telefax: (403) 231-3920 Attention: Benny J. Phillips
Attention: Donald M. Wishart
PARTY COPY TO AGENT FOR SERVICE
--------------------------------- --------------------------------- ----------------------------
TCPL INTERNATIONAL TRANSCANADA PIPELINES FRIED, FRANK, HARRIS,
INVESTMENTS INC. LIMITED SHRIVER & JACOBSON
c/o FRIED, FRANK, HARRIS, TransCanada PipeLines Tower 1 New York Plaza
SHRIVER & JACOBSON 111 Fifth Avenue S.W. New York, New York 10004
1 New York Plaza P.O. Box 1000, Station M Telefax: (212) 747-1526
New York, New York 10004 Calgary, Alberta, Canada T2P WP Attention: Ken Blackman
Telefax: (212) 747-1526 Telefax: (403) 267-2668
Attention: Ken Blackman Attention: Michael Durnin and
Robert M. Jensen
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any Party to the others. Any notice, demand,
request, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The Party giving any notice, demand, request, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 14.2. Entire Agreement; Amendments; Waivers. This
Agreement, together with the By-Laws and Project Agreements, constitutes the
entire agreement among the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties, and there are no warranties,
representations or other agreements between the Parties in connection with the
subject matter hereof except as specifically set forth herein and therein. No
amendment, supplement, waiver or termination of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions (whether or not similar) nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
Section 14.3. Taxes and Expenses (a)Each Party shall be solely
responsible for the payment of all taxes imposed on it, whether by taxing
authorities within Colombia or elsewhere, in connection with the holding of
its Shares.
(b) Common expenses of the Parties in connection with the
execution of this Agreement and the incorporation of Ocensa, including fees
and disbursements of financial advisors to Ocensa, shall be borne by the
Parties hereto (other than Ocensa) in proportion to their respective
Shareholding Interest. Each Party shall bear the costs and expenses incurred
by it in connection with the execution and performance of this Agreement and
the incorporation of Ocensa.
Section 14.4. Representations and Warranties. Each Party represents
and warrants to the others that:
(a) it is a corporation duly incorporated and organized under the
laws of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and
perform its obligations under this Agreement and this Agreement and the
Project Agreements to which it is a party, when executed and delivered by such
Party, constitute valid and legally binding agreements of such Party;
(c) the execution and delivery of, and the performance by it of its
obligations under, this Agreement and the Project Agreements to which it is a
party will not result in a breach of or constitute a default under:
(i) any provision of its corporate charter or articles of
incorporation or its by-laws;
(ii)any agreement or instrument to which it is a party and which is
material to the performance by it of its obligations hereunder and under the
Project Agreements to which it is a party; or
(iii) any order, judgment or decree of any court or governmental
agency to which it is a party or by which it is bound.
Section 14.5. Nature of Obligations (a) The obligations of each
Party created by this Agreement, and in particular the obligations of the
Shareholders to make Equity Contributions under the Subscription Agreements,
shall be the several obligations of that Party. Nothing herein shall be deemed
or construed to make any Party a surety or a guarantor of Ocensa or of another
Party or liable to meet any obligation of Ocensa or of another Party.
(b) The obligations of each Party hereunder shall run to the benefit
of each other Party, and each Party shall have the right to enforce the
obligations of any Party hereunder.
(c) This Agreement is intended solely to govern the rights and
obligations of the Shareholders as shareholders of Ocensa.
Section 14.6. No Third Party Beneficiaries. Except as herein
otherwise expressly provided to the contrary, this Agreement shall inure to
the benefit of and be binding upon the Parties and their respective successors
and assigns, and no other Person shall have any right hereunder.
Section 14.7. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect. Any provision of this Agreement that is
unenforceable in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
Section 14.8. No Assignment. Except as expressly provided herein,
no Party may assign all or any portion of its rights or obligations hereunder.
Section 14.9. Appointment of Valuation Expert. Except as otherwise
specifically provided herein, any Valuation Expert required hereunder shall be
appointed by a majority of the Shareholders or, in case the Shareholders are
unable to agree, such a firm appointed by a majority of other such firms, each
appointed by one of the Shareholders.
Section 14.10. Conduct. Each of the Parties acknowledges that it is
aware of the provisions of the United States Foreign Corrupt Practices Act of
1977, as amended, and will take no action nor make any payment in violation
of, nor cause any Party or its subsidiaries or Affiliates to be charged with
any violation of, such Act.
Section 14.11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 14.12. Performance Outside Colombia. The Parties
acknowledge and agree that their activities hereunder will be performed
substantially outside Colombia.
Section 14.13. Commercial Obligations. Each Party acknowledges and
agrees that its rights and obligations hereunder are of a commercial and not
governmental nature.
Section 14.14. Waiver of Immunity. (a) Each Party irrevocably
consents to and waives any objection which it may now or hereafter have to the
laying of venue of any proceeding relating to enforcement of the arbitration
provisions of this Agreement or any award thereunder brought in the Specified
Court and further irrevocably waives, to the fullest extent it may effectively
do so, the defense of an inconvenient forum to the maintenance of any such
proceeding in the Specified Court.
(b) To the extent that a Party or any of its revenues, assets or
properties shall be entitled, with respect to any proceeding relating to
enforcement of the arbitration provisions of this Agreement or any award
thereunder at any time brought against such Party or any of its revenues,
assets or properties, to any sovereign or other immunity from suit, from
jurisdiction, from attachment prior to judgment, from attachment in aid of
execution of judgment, from execution of a judgment or from any other legal or
judicial process or remedy, and to the extent that in any jurisdiction there
shall be attributed such an immunity, such Party irrevocably agrees not to
claim and irrevocably waives such immunity to the fullest extent permitted by
the laws of such jurisdiction (including, without limitation, the Foreign
Sovereign Immunities Act 1976 of the United States), except, in the case of
Ecopetrol, as provided under Article 177 of the Codigo Contencioso
Administrativo and Article 684 of the Codigo de Procedimiento Civil of
Colombia.
Section 14.15. Enforcement of Certain Rights. Ocensa agrees to
diligently enforce its rights against the parties to the Promesas de
Compraventa, the Transportation Agreements, the Advance Tariff Agreements, the
Subscription Agreements, and, in each case, any guarantees of obligations
thereunder (including, without limitation, the Performance Guarantee
Agreements), and not to waive or terminate any rights against any party
thereto except with the approval of the Parties.
Section 14.16. Specific Performance. The Parties recognize and
agree that if any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not
be an adequate remedy. Accordingly, each Party agrees that, in addition to
other remedies, the Parties shall be entitled to an injunction restraining any
violation or threatened violation of the provisions of this Agreement or to
specific performance or other equitable relief to enforce the provisions of
this Agreement. In the event that any action should be brought in equity to
enforce the provisions of this Agreement, no Party will allege, and each Party
hereby waives the defense, that there is adequate remedy at law.
Section 14.17. Audit Rights. Each of the Shareholders agrees that
Ocensa has the right to conduct a limited audit of each Shareholder in order
to verify that any amounts paid to such Shareholder in respect of Colombian
Taxes were in respect of Colombian Taxes actually incurred by such
Shareholder. Such audits shall be conducted on at least 15 Business Days
notice during normal business hours by an independent accounting firm selected
by Ocensa (who may be Ocensa's auditor). Ocensa may undertake any such audit
on any one Shareholder no more than annually.
Section 14.18. Common Security Trust Agreement. Following the
satisfaction and discharge of the trusts created by the Common Security Trust
Agreement, Ocensa shall enter into a trust agreement substantially in the form
of the Common Security Trust Agreement and shall cause the trustee thereunder
to maintain four segregated Proceeds Accounts (as defined in the Common
Security Trust Agreement) for the benefit of each Shareholder into which
payments shall be made as specified in the Common Security Trust Agreement and
from which withdrawals shall be made as specified in Section 5.4(a) hereof, in
each case with such changes thereto as the Shareholders may agree. The trusts
under such agreement shall be established in the State of New York unless
establishment thereof in such jurisdiction shall have adverse tax consequences
for Ocensa or its Shareholders.
Section 14.19. Limitation on Rights. No assignee or transferee of
any Shareholder shall have any rights hereunder if such assignee or transferee
holds less than 5% of the outstanding Shares.
Section 14.20. JOA and Association Contracts. Nothing contained in
this Agreement shall constitute a derogation or waiver of any rights or
obligations of the parties to the JOA or the Association Contracts.
Section 14.21. Approvals. Each of the Parties agrees to use its
reasonable commercial efforts to secure all governmental and related approvals
necessary in order to give full effect to this Agreement and the transactions
contemplated herein and in the Schedules hereto.
Section 14.22. Headings; Table of Contents. The headings and table
of contents contained herein are for convenience of reference only and do not
constitute a part of this Agreement.
Section 14.23. Counterparts. This Agreement may be executed in
seven or more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement
to be executed and delivered by their respective proper officers thereunto
duly authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
/s/
By:
Title:
EMPRESA COLOMBIANA DE
PETROLEOS - ECOPETROL
/s/Alberto Merlano Alcocer
By: Alberto Merlano Alcocer
Title: (A) President
By:
Title:
BP COLOMBIA PIPELINES LIMITED
/s/Nicholas P. Connolly
By: Nicholas P. Connolly
Title:
TOTAL PIPELINE COLOMBIE S.A.
/s/J. de Boisseson
By: J. de Boisseson
Title:
TRITON PIPELINE COLOMBIA, INC.
/s/ Bernard Gros-Dubois
By: Bernard Gros-Dubois
Title: Vice-President
IPL ENTERPRISES (COLOMBIA) INC.
/s/ Wayne M. Sartore
By: Wayne M. Sartore
Title: Vice President
/s/ Brian M. Brown
By: Brian M. Brown
Title: Officer
TCPL INTERNATIONAL INVESTMENTS INC.
/s/
By:
Title:
<PAGE>
TCPL (BERMUDA) LTD., a corporation existing under the laws of Bermuda, hereby
acknowledges the assignment, delegation and transfer to it and assumption by
it of all of the rights and obligations of TCPL International Investments Inc.
pursuant to Section 10.9 as a Shareholder hereunder as if it were a Party
hereto as of the date first above written and has caused this Agreement to be
executed and delivered by its duly authorized officer as of ,
1995.
TCPL (BERMUDA) LTD.
By:
Title:
SCHEDULE A.1
TO OLEODUCTO CENTRAL AGREEMENT
BY-LAWS
Spanish version not submitted here.
SCHEDULE A.2
TO OLEODUCTO CENTRAL AGREEMENT
CERTIFIED ENGLISH TRANSLATION OF BY-LAWS
BY-LAWS OF
OLEODUCTO CENTRAL S.A.
December 14, 1994
<PAGE>
-
TABLE OF CONTENTS
[For convenience of reference only --
not included in Spanish original]
Page
<TABLE>
<CAPTION>
<S> <C> <C>
Page
----
CHAPTER ONE
NAME, NATURE, NATIONALITY, DOMICILE, PURPOSE AND
DURATION OF THE COMPANY
ARTICLE 1. Name and Nature
ARTICLE 2. Domicile
ARTICLE 3. Corporate Purpose
ARTICLE 4. Duration
CHAPTER TWO
CORPORATE CAPITAL
ARTICLE 5. Authorized Capital
ARTICLE 6. Subscribed and Paid-in Capital
ARTICLE 7. Authorized but Unissued Shares
CHAPTER THREE
SHARES AND SHAREHOLDERS
ARTICLE 8. Registered Form
ARTICLE 9. Share Certificates
ARTICLE 10. Negociations of the Shares
ARTICLE 11. Stolen, Lost and Damaged Share Certificates
ARTICLE 12. Issuance and Transfer Costs
ARTICLE 13. Notices
ARTICLE 14. Pledges of Shares
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Page
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ARTICLE 15. Judicial Proceedings
ARTICLE 16. Creation of a Certain Class of Shares
ARTICLE 17. Rights of the Shareholders
ARTICLE 18. Share Register
CHAPTER FOUR
DIRECTION, ADMINISTRATION AND REPRESENTATION
ARTICLE 19. General Meetings of Shareholders, Board of Directors and
President
CHAPTER FIVE
GENERAL MEETINGS OF SHAREHOLDERS
ARTICLE 20. Composition
ARTICLE 21. Powers of Attorney
ARTICLE 22. Representation of Shareholders
ARTICLE 23. Prohibited Representatives
ARTICLE 24. Regular Meetings
ARTICLE 25. Extraordinary Meetings
ARTICLE 26. Place of Meetings
ARTICLE 27. Notice
ARTICLE 28. Quorum; Majority Voting
ARTICLE 29. Reconstitution After Loss of Quorum
ARTICLE 30. Chairman and Secretary of Meeting
ARTICLE 31. Minutes
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Page
----
ARTICLE 32. Voting Rules
ARTICLE 33. Supermajority Votes
ARTICLE 34. Responsibilities of the General Meeting of Shareholders
ARTICLE 35. Other Responsibilities of the General Meeting of Shareholders
CHAPTER SIX
BOARD OF DIRECTORS
ARTICLE 36. Composition
ARTICLE 37. President
ARTICLE 38. Meetings
ARTICLE 39. Operations
ARTICLE 40. Permanent Vacancies
ARTICLE 41. Responsibilities
ARTICLE 42. Unanimous Decisions
ARTICLE 43. Other Decisions
CHAPTER SEVEN
PRESIDENT
ARTICLE 44. Appointment
ARTICLE 45. Responsibilities
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Page
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CHAPTER EIGHT
SECRETARY
ARTICLE 46. Appointment
ARTICLE 47. Responsibilities
CHAPTER NINE
FISCAL SUPERVISOR
ARTICLE 48. Appointment
ARTICLE 49. Qualifications
ARTICLE 50. Responsibilities
ARTICLE 51. Opinions and Reports
ARTICLE 52. Liability
ARTICLE 53. Participation at Meetings
CHAPTER TEN
BALANCE SHEETS, RESERVES AND DIVIDENDS
ARTICLE 54. Fiscal Year
ARTICLE 55. Other Statements
ARTICLE 56. Prior Requirements for the Distribution of Profits
ARTICLE 57. Distribution of Profits
ARTICLE 58. Timing for the Payment of Dividends
ARTICLE 59. Non-Payment of Interest on Dividends Not Promptly Claimed
CHAPTER ELEVEN
AMENDMENTS TO BY-LAWS
ARTICLE 60. Amendment to By-Laws
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
CHAPTER TWELVE
DISSOLUTION AND LIQUIDATION OF THE COMPANY
ARTICLE 61. Dissolution
ARTICLE 62. Manadatory Dissolution
ARTICLE 63. Notice
ARTICLE 64. Appointment to Liquidate
ARTICLE 65. Rules for the Liquidation and Division of the Corporate Capital
ARTICLE 66. Powers of Liquidator
CHAPTER THIRTEEN
ARBITRATION
ARTICLE 67. Arbitration
CHAPTER FOURTEEN
MISCELLANEOUS
ARTICLE 68. Duties of Officers
First amendment to the By-Laws, December 21, 1994
ARTICLE 5. Authorized Capital
</TABLE>
<PAGE>
CHAPTER ONE
NAME, NATURE, NATIONALITY, DOMICILE, PURPOSE AND DURATION
OF THE COMPANY
ARTICLE 1. Name and Nature. The name of the sociedad anonima is OLEODUCTO
CENTRAL S.A. and it is a sociedad anonima incorporated under the laws of
Colombia (the Company). It is a second class, mixed-economy company of the
national level, assigned to the Ministry of Mines and Energy and governed by
the rules for commercial sociedades annimas.
ARTICLE 2. Domicile. The domicile of the Company is the City of Santafe de
Bogota. The Company may establish branches or agencies elsewhere in Colombia or
abroad, as provided for by the Board of Directors of the Company in accordance
with applicable law.
ARTICLE 3. Corporate Purpose. The purpose of the Company is to design,
construct, develop, operate and own a public use pipeline system and related
facilities including, without limitation, port facilities, running from the
Municipality of Tauramena, Department of Casanare, to the Port of Covenas,
located in the jurisdiction of the Municipality of Tolu, Department of Sucre.
In furtherance of its corporate purpose, the Company shall conduct
technical-economic feasibility studies, prepare such studies and designs, and
determine such technical specifications for the pipeline, its terminal and the
pumping and storage stations to carry out its construction and operation. The
foregoing actions may be performed directly by the Company or by contracting
with third parties.
In addition, the Company may purchase or sell real estate or personal
property, shares and all other kinds of securities; borrow money; issue bonds,
notes, commercial paper and other evidences of indebtedness; mortgage and
pledge its real estate and personal property and carry out all credit
operations enabling it to obtain the financing or other assets necessary for
the development of the Company; establish branches and incorporate
subsidiaries and affiliated companies for the establishment and operation of
enterprises for the performance of any activity comprised within the Company's
corporate purpose and hold interests as a participant, associate or
shareholder, founder or otherwise, in other companies of a similar or
complementary corporate purpose; make contributions in cash, in kind or in
services to affiliated companies, dispose of its interests, rights or shares
therein, merge therewith or acquire them; register patents, trade names,
trademarks and other industrial property rights and acquire or grant
concessions for the exploitation thereof; enter into all types of banking
transactions; draw, accept and discount bills of exchange, checks, promissory
notes, drafts and allkinds of negotiable securities and other documents; enter
into and perform consulting and research contracts; execute, deliver and
perform operating agreements, construction contracts, leases, mandates,
commissions and sales agency, petroleum transportation, supply and insurance
contracts; execute, deliver and perform cuentas en participacion contracts;
and, in general, execute, deliver and perform all acts and contracts related
to the purpose of the Company and all those whose object is to exercise the
rights and fulfill the obligations legally or contractually arising from the
existence and activities carried out by the Company.
ARTICLE 4. Duration. The Company shall have a duration of 99 years from the
date hereof. Nevertheless, by decision at a General Meeting of Shareholders of
the Company, the duration of the Company may be extended before its
expiration, or its dissolution may be ordered before its expiration, in each
case in accordance with these By-Laws and applicable law.
CHAPTER TWO
CORPORATE CAPITAL
ARTICLE 5. Authorized Capital. The authorized capital of the Company shall be
Colombian Ps.2,000,000,000 consisting of 20,000 ordinary shares, par value
Ps.100,000 each, having the characteristics set forth in these By-Laws
(shares).
The authorized capital of the Company may be increased or decreased from time
to time by amending these By-Laws in accordance with these By-Laws and
applicable law and with the pertinent authorizations required at the time of
increasing or decreasing the capital, provided, however, that in no event
shall the number of outstanding shares be evenly divisible by six.
Any shares of the Company's capital owned by public entities shall be
represented by shares designated Class A, and the private capital of the
Company's capital shall be designated Class B.
ARTICLE 6. Subscribed and Paid-in Capital. The initial subscribed capital as
at the date of incorporation of the Company is Colombian Ps.1,000,000,000
consisting of 10,000 shares, as set forth below:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INITIAL
NUMBER OF AGGREGATE SHAREHOLDING
SHAREHOLDER SHARES PAR VALUE INTEREST
Empresa Colombiana de
Petroleos-Ecopetrol
(Ecopetrol) 2,500 Ps.250,000,000 25%
BP Colombia Pipelines
Limited 1,520 Ps.152,000,000 15.2%
TOTAL Pipeline
Colombie S.A. 1,520 Ps.152,000,000 15.2%
Triton Pipeline Colombia,Inc. 960 Ps.96,000,000 9.6%
.
IPL Enterprises (Colombia)
Inc. 1,750 Ps.175,000,000 17.5%
TCPL International
Investments Inc. 1,750 Ps.175,000,000 17.5%
--------- ---------------- -------------
Total 10,000 Ps.1,000,000,000 100%
========= ================ =============
</TABLE>
The paid-in capital as of the date of incorporation of the Company is
Colombian Ps.500,000,000 represented by shares held as follows:
<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER AMOUNT PAID IN
Ecopetrol Ps.125,000,000
BP Colombia Pipelines Limited Ps.76,000,000
TOTAL Pipeline Colombie S.A. Ps.76,000,000
Triton Pipeline Colombia, Inc. Ps.48,000,000
IPL Enterprises (Colombia) Inc. Ps.87,500,000
TCPL International Investments Inc. Ps.87,500,000
---------------
Total Ps.500,000,000
===============
</TABLE>
The balance shall be paid by the shareholders on the date determined by the
Board of Directors within one year of the date of incorporation of the
Company.
In the case of default in the payment of any subscribed shares, Article 397
and related provisions of the Commercial Code shall apply. So long as the
value of any shares has not been fully paid, only provisional share
certificates shall be issued to the subscribers therefor.
ARTICLE 7. Authorized but Unissued Shares. Authorized but unissued shares and
shares subsequently issued by the Company due to an increase in the Company's
authorized capital shall be placed as determined by the Board of Directors,
which shall be responsible for approving the pertinent share subscription
resolutions in accordance with these By-Laws and applicable law.
The shareholders shall have a preferential right to subscribe for any new
share issue in the amount of shares proportional to that held by them at the
date of approval of the share issue by the Board of Directors.
CHAPTER THREE
SHARES AND SHAREHOLDERS
ARTICLE 8. Registered Form. The shares of the Company shall be ordinary
shares in nominative (registered) form.
ARTICLE 9. Share Certificates. The shares shall be evidenced by certificates
which shall be numbered sequentially in different series for public entities
(Class A) and private shareholders (Class B), shall bear the signatures of the
President and the Secretary of the Company, and shall indicate:
A. The name of the Company, its principal domicile, the Notarial Office,
and the number and date of the deed of incorporation.
B. The number of shares represented by each certificate, their class and
whether their transferability is limited by any preferential rights and the
conditions to exercise such rights.
C. The full legal name of the person to whom they are issued.
In no event will certificates be issued for a fraction of a share.
By virtue of the shares' fully registered form, the Company shall recognize as
a shareholder of the Company only the person who is registered as such in the
share register book maintained by the Company for that purpose (the Share
Register). No alienation or transfer of shares, liens or restrictions,
attachment or adjudication shall be effective with respect to the Company or
any third party, except by virtue of its registration in the Share Register,
which the Company may not refuse, except by order of a competent authority or
in compliance with any restrictions applicable to the transfer of such shares.
ARTICLE 10. Transfer of the Shares. The shares are negotiable in accordance
with applicable law. For the transfer of the shares to be effective with
respect to the Company and third parties, such transfer must be registered in
the Share Register pursuant to written transfer instructions from the
transferor or under the formality of endorsement of the respective share
certificate. In sales pursuant to court order or other judicial adjudication,
the registration of transfer shall be made upon presentment of the original or
certified copy of the pertinent legal documents containing the order of
whomever is legally responsible therefor. As established in Decree _____ of
December __, 1994, Ecopetrol will not exercise the preferential rights
contemplated in Article 10 of Decree 130 of 1976.
In connection with any transfer of shares, the prior cancellation of the
certificates issued to the transferor will be required.
ARTICLE 11. Stolen, Lost and Damaged Share Certificates. In the event a share
certificate is stolen, the Company shall replace it, issuing a duplicate to
the holder of the shares evidenced thereby as registered in the Share
Register, upon presenting evidence of such theft satisfactory to the
Secretary, presenting a copy of the notice of loss provided to the relevant
legal authorities. When a Shareholder requests a duplicate share certificate
to replace a lost one, the Shareholder shall present such bond as may be
requested by the President. A shareholder who has lost its certificate for any
reason shall be responsible to the Company for any damage or liability
suffered by the Company in connection with the loss of the original share
certificate or the issuance of the replacement therefor. Should the lost share
certificate be found, the holder of the shares previously evidenced thereby
shall return the replacement therefor to the Company, which shall then be
destroyed by the Secretary by providing evidence thereof. In the event of
damage to a share certificate, the Company will issue a replacement therefor,
provided that the shareholder delivers the original certificates to the
Company.
ARTICLE 12. Issuance and Transfer Costs. The respective shareholder shall
bear the costs and taxes incident to the transfer of shares and the issuance
of certificates, whichexpenses shall be born in equal part by the transferor
and transferee, absent agreement otherwise.
ARTICLE 13. Notices. Each shareholder must provide its registered address to
the Secretary of the Company.
ARTICLE 14. Pledges of Shares. In the case of shares pledged to a third
party, such pledge shall not confer on the third party any rights pertaining
to shareholders, except as otherwise expressly provided by the terms of a
written agreement registered in the Share Register.
ARTICLE 15. Judicial Proceedings. The transfer of shares, the ownership of
which is in litigation, shall require authorization from the competent
judicial authority in the forum in which such litigation is pending. In the
case of shares to which a judicial lien has attached, the authorization of the
secured party will also be required. In the event of litigation or judicial
lien regarding the ownership of any shares issued by the Company, the Company
shall abstain from registering any transfer thereof beginning the date on
which it has been notified by the competent authority in which such litigation
or judicial lien is pending.
ARTICLE 16. Creation of a Certain Class of Shares. Subject to compliance with
applicable law and these By-Laws, General Meeting of Shareholders may, at any
time, create new classes of shares (including preference shares, industry
shares or other shares with economic rights preferential to those of the
shares). For an issuance of preference shares, the determination of the
respective preferences and the pertinent subscription resolutions must be
approved by a General Meeting of Shareholders upon the favorable vote of a
plural number of shareholders representing not less than 90.41% of the
subscribed shares and under the condition that the subscription resolutions
stipulate the preferential right in favor of all shareholders, in order that
the latter may subscribe them proportionately to the number of shares held by
each of them on the date of the offer.
ARTICLE 17. Rights of the Shareholders. The shares confer on each holder
thereof the following rights:
A. To participate in deliberations at General Meetings of Shareholders and to
vote thereat, with one vote per share, with as many votes as the number of
shares held. The restrictions on voting contained in Article 428 of the
Commercial Code do not apply to the shares.
B. To receive dividends in proportion to its ownership of shares of the
Company in accordance with the end of the accounting period balance sheets,
the By-Laws and applicable law.
C. To inspect freely, either personally or through representatives, the books
and records of the Company at any time, and, in any case, during the 15
business day period preceding the General Meeting of Shareholders whereat the
end of the accounting period balance sheets are examined.
D. To receive a share of the corporate assets at the time of liquidation of
the Company pro rata to its holding of shares of the Company and after the
Company's external liabilities have been paid or provided for in accordance
with the decision of the General Meeting of Shareholders.
ARTICLE 18. Share Register. The Company shall keep a Share Register
registered at the Chamber of Commerce in Santafe de Bogota, indicating the names
of its shareholders, the provisional certificates, the final certificates, the
number of shares and their series corresponding to each shareholder, the
certificate with its respective registration number and date, any transfers,
pledges, usufructs and other liens or ownership limitations, attachments or
judicial claims, in each case applicable to the shares, as well as any other
act subject to inscription pursuant to applicable law.
CHAPTER FOUR
DIRECTION, ADMINISTRATION AND REPRESENTATION
ARTICLE 19. General Meetings of Shareholders, Board of Directors and
President. For its direction, administration and legal representation, the
Company consists of the following bodies:
A. General Meetings of Shareholders; B. Board of Directors; and C. President.
The direction and administration of the Company is the responsibility, first,
of the shareholders acting at a General Meeting thereof and, second, of the
Board of Directors as delegate of the General Meeting of Shareholders. The
legal representation of the Company shall be the responsibility of the
President subject to such policies as may be established by the Board of
Directors and subject to the provisions of these By-Laws and applicable law.
The Board of Directors shall be responsible for any matters not specifically
assigned to the General Meeting of Shareholders or the President by these
By-Laws or applicable law.
Each of the aforementioned bodies has the power and authority conferred on it
by these By-Laws, which it shall exercise in accordance with the provisions
herein set forth and in compliance with applicable law.
CHAPTER FIVE
GENERAL MEETINGS OF SHAREHOLDERS
ARTICLE 20. Composition. General Meetings of Shareholders consist of a
meeting of the shareholders registered in the Share Register, either in person
or represented by their proxies or legal representatives and convening the
quorum under the circumstances provided for in these By-Laws and in compliance
with applicable law.
ARTICLE 21. Powers of Attorney. Powers of attorney to represent a shareholder
at any General Meeting of Shareholders shall be granted in writing, indicating
the name of the attorney-in-fact, any person to whom the latter may substitute
such powers, and the date of the meeting for which they are granted. Powers of
attorney may be granted by facsimile transmission.
Except as required by laws applicable to public entities, representation may
only be granted to a natural person unless it is granted pursuant to a negocio
fiduciario. Except upon express stipulation to the contrary by the grantor of
the power of attorney, the power granted for a specific General Meeting of
Shareholders shall authorize the attorney-in-fact to represent the principal
at any successive meetings which are a consequence or continuation thereof,
either due to the initial lack of a quorum or to an adjournment of
deliberations.
Any power of attorney granted under a Public Deed or other legally accepted
document may by its terms be made applicable for two or more General Meetings
of Shareholders.
ARTICLE 22. Representation of Shareholders. Each shareholder, whether a
natural person or legal entity, individual or group of any kind, may only
appoint one individual to represent it at any General Meeting of Shareholders,
regardless of the number of shares it holds. The representative or
attorney-in-fact of more than one natural person or legal entity may vote in
each case according to the separate instructions of each natural person or
legal entity represented.
ARTICLE 23. Prohibited Representatives. Except as required by mandatory
provisions of applicable law, officers and employees of the Company may
neither represent any shares other than their own shares at meetings of
shareholders, norsubstitute the powers conferred on them, nor vote their
shares in connection with the approval of the year-end balance sheet or the
liquidation accounts.
ARTICLE 24. General Meetings of Shareholders. The General Meetings of
Shareholders shall be held semiannually, no later than March 31 and September
30, for the purpose of examining the position of the Company, studying the
accounts and balance sheets of the Company for the latest accounting period,
deciding on any declaration of dividends and adopting any other resolutions it
may see fit to fulfill the corporate purpose of the Company.
The date of the meeting shall be fixed by the Board of Directors and shall be
called by the President. If the meeting is not called, the shareholders shall
meet on their own right on the first working day of April or October at ten
o'clock in the morning (10:00 a.m.) at the principal office of the Company in
Santafe de Bogota. The quorum at such meeting shall consist of a plurality of
shareholders, regardless of the number of shares represented thereby.
Decisions at any such meeting must be adopted by the majorities required by
these By-Laws and applicable law.
ARTICLE 25. Extraordinary Meetings. Extraordinary Meetings of Shareholders
may be called upon the occurrence of an unforeseen or urgent event by the
Board of Directors, the President, the Fiscal Supervisor or the
Superintendency of Corporations, either on their own initiative or upon
request of one or more shareholders holding at least 9% of the outstanding
shares.
At any extraordinary meeting, the shareholders may address only those subjects
specified in the agenda included in the notice thereof, unless otherwise
decided by holders of all of the shares represented at the meeting and
representing at least 90.41% of the shares outstanding and after having
completed the business set forth in the agenda.
ARTICLE 26. Place of Meetings. All meetings of shareholders shall take place
at the principal office of the Company in Santafe de Bogota, on the date and at
the time set forth in the notice. Notwithstanding the foregoing, shareholders
may meet without prior notice and elsewhere when all of the outstanding shares
are represented at such meeting.
ARTICLE 27. Notice. Notice shall be sent by means of a written communication
to each one of the shareholders at its registered address as recorded by the
Secretary. For the meetings in which end of accounting period balance sheets
are to be examined, notice shall be given at least 15 business days in
advance. In other cases, 10 days' advance notice shall suffice. The day of the
notice and the day of the meeting shall notbe counted. Any notice calling an
extraordinary meeting shall necessarily indicate the subjects to be addressed
at such meeting.
ARTICLE 28. Quorum; Majority Voting. Unless otherwise specified herein,
meetings of shareholders shall deliberate with a plurality of persons
representing shareholders holding at least 55% of the outstanding shares.
Decisions shall be made with a favorable vote by shareholders holding at least
55% of the outstanding shares, unless otherwise required by these By-Laws or
applicable law.
ARTICLE 29. Reconstitution After Loss of Quorum. If the meeting is called but
not held due to lack of a quorum, a new meeting shall be summoned at which a
quorum shall consist of a plurality of shareholders, regardless of the number
of shares represented thereby. Notwithstanding anything to the contrary
contained herein, decisions at such meeting may, subject to applicable law, be
taken by holders of a majority of the shares represented at such meeting. The
new meeting shall be held no less than 10 no more than 30 days from the date
fixed for the original meeting.
30.ARTICLE Chairman and Secretary of Meeting. The meeting of shareholders
must be chaired by the President and, in his absence, by one of the principal
members of the Board of Directors, in order of designation and, in the absence
of the latter, by the person appointed at the meeting by a majority of the
votes corresponding to the shares represented thereat. The Secretary of the
meeting shall be the Secretary of the Company and, in his absence, the person
appointed secretary of the meeting by the Chairman.
ARTICLE 31. Minutes. The proceedings of meetings of shareholders shall be
recorded in a Minute Book registered in the Chamber of Commerce in the City of
Santafe de Bogota. The minutes shall be signed by the Chairman and by the
Secretary who have acted therein, or, in their place, by the Fiscal Supervisor
and by the plural committee appointed at the meeting to give its approval,
after studying the minutes of such meeting, within 10 business days after the
date of such meeting, if not approved at such meeting.
The committee members shall record their approval or their objections at the
end of the minutes of each meeting.
ARTICLE 32. Voting Rules. The following voting rules shall apply to elections
of directors and the passing of resolutions by shareholders:
A.Unless otherwise decided at the meeting or when the electoral quotient legal
system is to be applied, votes shall be taken by voice or by a show of
hands.Unless otherwise determined at the meeting, written votes shall be
secret and the Secretary shall deliver to each shareholder or representative
thereof a ballot authorized with his signature indicating the number of shares
represented by such shareholder or representative thereof at the meeting.
B.For the election of the Board of Directors, and of committees or bodies
thereof, the electoral quotient system shall be applied, unless the election
is by unanimous vote of the shares represented at the meeting. For purposes of
determining the quotient, the quotient shall be rounded down to one decimal
place.
C.The election of alternate directors shall be made simultaneously with that
of directors, unless the meeting provides that it be made separately. At no
election, whether single or plural, shall persons who have been elected as
directors be elected as alternate directors.
D.In the event of a tie in voting for any election of directors, the election
shall be decided by the toss of a coin.
E.The Company may not vote its own shares.
ARTICLE 33. Supermajority Votes. The following decisions require the
favorable vote of shareholders holding at least 90.41% of the outstanding
Shares:
A.Any amendment to the By-Laws, other than an amendment to increase the
authorized capital or decrease the subscribed capital of the Company or any
amendment undertaken to give effect to decisions taken pursuant to Article 35
hereof.
B.The dissolution, winding-up or liquidation or other distribution of assets
of the Company other than by a purchase or sale.
C.The declaration by the Company of any dividends in shares or stock.
D.The appointment of the Company's Fiscal Supervisor and his alternate (the
Shareholders may delegate to a firm of auditors the decision to choose the
individual Fiscal Supervisor and his or her alternate).
E.The issuance of shares other than ordinary shares.
F.Any decision to list any class of the Company's shares on any stock exchange
or to register any such class with the Registro Nacional de Valores in
Colombia or any other securities regulatory authority, national or foreign.
G.The acquisition of interests in existing companies or the incorporation of
companies, affiliates, or subsidiaries for the development of activities or
businesses for any purpose, and contributions in cash, in kind or in services
thereto, the liquidation of such companies, and the transfer of any ownership
interests, rights or shares thereof.
H.The valuation of contributions in kind for equity.
I.To decide what, if any, reserves the Company should establish in addition to
the legal reserve or any increase in the legal reserve above the legal
minimum.
J.Any decision relating to any of the matters referred to in, or to override a
decision of the Board of Directors, except with respect to matters previously
engaged in with third parties, or by a delegate thereof taken pursuant to,
Article 42 of the By-Laws or to revoke any delegation of authority given to
the Board of Directors.
ARTICLE 34. Responsibilities of the General Meeting of Shareholders. In
addition to the responsibilities set forth in Article 33 above, the following
shall be responsibilities of the General Meeting of Shareholders, which shall
be adopted by the favorable vote of holders of at least 55% of the outstanding
shares:
A.To order actions against the Board of Directors, President, officers, or
Fiscal Supervisor.
B.To remove the Fiscal Supervisor and his or her alternate at any time.
C.To fix the remuneration of the members of the Board of Directors and the
Fiscal Supervisor.
D.To examine, approve or disapprove the end of the accounting period balance
sheets and the accounts which must be submitted by the Board of Directors
every six months or when required by the General Meeting of Shareholders. If
the balance sheets or accounts are not approved, the General Meeting of
Shareholders shall designate a committee of three members, which shall examine
the balance sheets and accounts and shall submit a detailed report in writing
at a special meeting called for such purpose by the General Meeting of
Shareholders, the date and time of which shall be fixed at such General
Meeting of Shareholders.
E.To declare cash dividends in accordance with the balance sheets approved in
accordance with these By-Laws and applicable law.
F.In the event of the dissolution of the Company, to designate one or more
liquidators and their alternates, to remove them, to fix their remuneration,
to give them orders and instructions for liquidation and to approve their
accounts.
G.To delegate to the Board of Directors such functions as it deems appropriate
and which are not assigned by law exclusively to the General Meeting of
Shareholders and to provide the Board of Directors with the necessary
authorizations.
H.To adopt, in general, all measures necessary for compliance with these
By-Laws or in the interests of the Company.
I.All other decisions stipulated by these By-Laws or applicable law to be
adopted by the majorities contained herein or by law.
J.Any decision relating to any of the matters referred to in, or to override a
decision of the Board of Directors, except with respect to matters previously
engaged in with third parties, or by a delegate thereof taken pursuant to,
Article 43 of the By-Laws.
ARTICLE 35. Other Responsibilities of the General Meeting of Shareholders.
The following matters shall require the minimum favorable vote of shareholders
required by applicable law, unless the following matters are undertaken for
any purpose other than to distribute an amount of cash to shareholders at a
time when the Company would not be permitted under applicable law to declare a
dividend in such amount, in which case the following matters shall require the
favorable vote of holders of at least 90.41% of the outstanding shares:
A.Any consolidation, merger or sale of all or substantially all of the assets
of the Company, any transformation of the Company into another entity or the
split-up (escicion) of the Company.
B.Any increase in authorized capital or reduction in subscribed capital of the
Company or any repurchase by the Company of its shares.
CHAPTER SIX
BOARD OF DIRECTORS
ARTICLE 36. Composition. The Board of Directors shall be composed of six
principal members, each one with two personal alternates, first and second,
elected by the General Meeting of Shareholders. The alternates shall, in
numerical order, replace the principal member during his or her absolute or
temporary absence.
The term of the members elected as principals and alternate members of the
Board of Directors shall be two years without prejudice to their re-election
or free removal by any General Meeting of Shareholders.
The Board of Directors shall designate from among its principal members a
Chairman. The Chairman shall chair the meetings of the Board of Directors and
authorize with his signature the minutes thereof.
37.ARTICLE President. The President shall attend the meetings of the Board
of Directors and shall have the right to speak but not to vote thereat unless
he is a member of the Board of Directors
ARTICLE 38. Meetings. The Board of Directors shall meet ordinarily at least
once a month until December 31, 1997 and quarterly thereafter and
extraordinarily when called by the President, by one of its members acting as
principals or by the Fiscal Supervisor. Meetings of the Board of Directors
shall be held at the offices of the Company in the City of Santafe de Bogota,
but upon a decision of the Board of Directors itself, meetings may be held at
any other place inside or outside Colombia.
ARTICLE 39. Internal Rules. The operation of the Board of Directors shall be
governed by the following rules:
A.It shall deliberate and decide validly with the presence and the votes of
four of its members, except as otherwise required by these By-Laws or
applicable law.
B.Notice of meetings shall be given at least 10 days in advance, but with the
consent of all members, with principals or acting alternates, the Board of
Directors may deliberate validly and adopt decisions without sending out prior
notice. The notice must set forth the subjects that will be addressed at the
respective meeting and each director may add additional or change items to be
discussed at such meeting in an additional notice provided to each director at
least five days prior to the meeting. No changes may be made to the agenda for
such meetings without the unanimous consent of the directors.
C.Minutes of each meeting shall be prepared and shall be recorded in a Minute
Book registered in the Chamber of Commerce in the City of Santafe de Bogota and
these shall contain evidence of the date, time and place of the meeting, the
names of the persons in attendance, indicating whether they are principals or
alternates, the matters dealt with, the resolutions adopted and the number of
votes issued in favor, against or abstained in connection with such
resolutions, the appointments made and the date and time of adjournment.
D.The minutes shall be signed by the Chairman of the respective meeting and by
the Secretary.
ARTICLE 40. Permanent Vacancies. When a quorum is impossible to achieve due
to the absolute absence of members of the Board of Directors and it is more
than one month before the next Annual General Meeting of Shareholders, the
President shall call an Extraordinary Meeting of Shareholders to elect
directors to fill the existing vacancies for a new two year term.
ARTICLE 41. Responsibilities. The Board of Directors shall have the following
responsibilities:
A.To comply with these By-Laws and decisions of the General Meeting of
Shareholders and to ensure that these By-Laws and such decisions are complied
with.
B.To examine, when it so deems appropriate, the books, documents,
installations, camps, deposits, warehouses and funds of the Company.
C.To serve as a consulting and advisory body to the President.
D.To request from the President, the Fiscal Supervisor and other employees of
the Company the reports required for the knowledge and good progress of the
corporate business, and to examine, either personally or through committees
appointed from among its members, the books, accounts, correspondence and
other documents of the Company.
ARTICLE 42. Unanimous Decisions. The following decisions require the
unanimous approval of the Board of Directors:
A.To designate the President and two alternates and the Secretary, for periods
of two years, and to determine their remuneration.
B.To establish any program of capital expenditures (other than capital
expenditures required to maintain the then current objectives of the Company's
operations approved in an annual operating budget).
C.To authorize the President to execute all acts, contracts and agreements in
amounts exceeding the equivalent in pesos of U.S.$10 million at the Market
Representative Rate or the rate that replaces it, other than those for which
expenditure has been included in the Company's annual operating budget
approved by the Board of Directors.
D.To authorize the President to enter into agreements for the benefit of the
Company's creditors (concordat).
E.To determine the tariff and transportation principles applicable to the
pipeline.
F.To approve any contract that may be made between the Company and its
shareholders or affiliates of the shareholders in an amount that exceeds the
equivalent in pesos of U.S.$100,000 at the Market Representative Rate or the
rate that replaces it.
G.To decide to increase or decrease the design capacity of (i) the Cusiana to
El Porvenir segment of the pipeline from 500,000 barrels per day, (ii) the El
Porvenir to Vasconia segment of the pipeline from 556,000 barrels per day,
(iii) the Vasconia to Covenas segment of the pipeline from 290,000 barrels per
day, and (iv) the Covenas terminal segment of the pipeline from 500,000 barrels
per day.
H.To enter into any acquisition or sale or other disposition of assets or
properties by the Company or any series of such transactions involving an
amount greater than the equivalent in pesos of U.S.$10 million at the Market
Representative Rate or the rate that replaces it, other than any acquisition
for which expenditure has been included in the Company's annual operating
budget approved by the Board of Directors.
I.To enter into any pledge, lease or other encumbrance of assets or properties
of the Company in each case involving an amount greater than the equivalent in
pesos of U.S.$1 million at the Market Representative Rate or the rate that
replaces it.
J.To enter into any transaction for the borrowing of money being either
indebtedness with a maturity greater than one year or indebtedness in a
principal amount at the Market Representative Rate or the rate that replaces
it in excess of the equivalent in pesos of U.S.$10 million.
K.To delegate to a committee of the Board of Directors, to one director, to
the President or any other officer of the Company or to any third party, when
it deems appropriate, for specific cases or for a limited period of time, one
or several of its functions, provided that, by their nature, these may be
delegated and their delegation is not otherwise prohibited by these By-Laws or
applicable law.
ARTICLE 43. Other Decisions. The following decisions shall require the
favorable vote of four members of the Board of Directors:
A.To approve the annual operating budgets of the Company, including any
capital expenditures required to maintain the then current objectives of the
Company's operations.
B.To authorize the President to execute all acts, contracts and agreements in
amounts exceeding the equivalent in pesos of U.S.$10 million at the Market
Representative Rate or the rate that replaces it for which expenditure has
been included in an annual operating budget of the Company in each case
approved by the Board of Directors.
C.To create such positions as it deems appropriate for the operation of the
Company, and to fix the remuneration and duties associated therewith, except
for those whose designation or removal is the responsibility of the General
Meeting of Shareholders.
D.To submit, jointly with the President, to the General Meeting of
Shareholders the reports, accounts, balance sheets, inventories, proposed
distributions of profits and other documents referred to in Article 446 of the
Commercial Code.
E.Upon the occurrence of an unforeseen or urgent event to summon a General
Meeting of Shareholders or Extraordinary Meetings of Shareholders, whenever
required or requested by a number of shareholders representing not less than
9% of the outstanding shares.
F.To decide on the establishment or closing of branches or agencies within or
outside the corporate domicile.
G.To regulate the handling of Company funds to determine the proper allocation
of available funds and to decide on changes in their investment, as well as to
determine the timing of disbursements for the execution of approved budgets.
H.To issue the internal regulations of the Company.
I.To propose to the General Meeting of Shareholders increases of capital, to
authorize the issuance of subordinated notes to shareholders and to approve
the placement regulation of shares and subordinated notes.
J.To authorize the officers or representatives of the Company, giving them
relevant instructions, to enter into or reject collective labor agreements or
contracts and to constitute courts of arbitration and to designate
conciliators and arbitrators in cases of collective labor conflicts. To
authorize bonuses, benefits or other compensation for Company personnel.
K.To authorize any delegation of functions which the President might wish to
make.
L.To name and to remove the operator of the pipeline.
M.To approve the policies pertaining to relations with government and public
entities.
N.To appoint and remove the senior officers of the Company (other than the
President).
CHAPTER SEVEN
PRESIDENT
ARTICLE 44. Appointment. Subject to the requirements of these By-Laws and
applicable law, the administration of the Company and its legal and other
representation shall be the responsibility of the President appointed by the
Board of Directors for a period of two years or until his or her replacement
is appointed. The President may be indefinitely re-elected or freely removed
by the Board of Directors at any time.
The President shall have two alternates who shall replace him or her during
his or her absolute or temporary absences.
ARTICLE 45. Responsibilities. Subject to such policies as may from time to
time be established by the Board of Directors, the following are the
responsibilities of the President:
A.To represent the Company as a juridical person.
B.To carry out the decisions or orders of the General Meeting of Shareholders
and Extraordinary Meetings of Shareholders and the Board of Directors.
C.To designate and remove the employees of the Company, except those whose
designation is a function of the General Meeting of Shareholders or the Board
of Directors.
D.To ensure that the employees of the Company perform their duties in a
satisfactory manner.
E.To constitute the attorneys of the Company to act in accordance with his
instructions and to represent the Company before any authorities, officers or
entities.
F.To supervise the collection and investment of Company funds and to see that
all assets pertaining to it and those received in custody or on deposit are
maintained with appropriate safeguards.
G.To execute the acts and enter into the contracts intended to carry out the
corporate purposes of the Company, previously submitting to the Board of
Directors those matters in which it must participate as stipulated in these
By-Laws or applicable law, and those the amount of which exceeds the
equivalent in pesos of U.S.$10 million at the Market Representative Rate or
the rate that replaces it provided that any such act or contract the amount of
which exceeds the equivalent in pesos of U.S.$5 million at the Market
Representative Rate or the rate that replaces it but is less than the
equivalent in pesos of U.S.$10 million at the Market Representative Rate or
the rate that replaces it are executed by both the President and another
officer of the Company designated by the Board of Directors whose name is
registered for such purpose at the Chamber of Commerce in Bogota.
H.To summon and to chair General Meetings of Shareholders and Extraordinary
Meetings of Shareholders or the Board of Directors in the manner provided for
in these By-Laws or the law and seek their advice and opinion on important
matters.
I.To prepare and submit to the approval of the Board of Directors the health,
safety and working condition regulations of the Company.
J.To present, in conjunction with the Board of Directors, to the General
Meeting of Shareholders, for its approval or disapproval, the documents
referred to in Article 446 of the Commercial Code.
K.To carry out duties expressly delegated by the General Meeting of
Shareholders or the Board of Directors in the terms of the delegation given.
L.To organize properly the computation, accounting and payment of salaries and
legal and other benefits.
M.To ensure proper and prompt payment of all tax obligations of the Company.
N.To ensure that the Company properly carries on its purpose and objectives.
O.To ensure that the books of minutes of the General Meeting of Shareholders
and the Board of Directors, the Share Register and all others stipulated by
law and the Board of Directors, are kept under his or her care and
responsibility.
P.To report to the Board of Directors regarding all matters for which he or
she is responsible.
Q.To submit such financial information to the Board of Directors as may be
requested from time to time by the Board of Directors.
R.To delegate with the prior approval of the Board of Directors certain
functions pertaining to his or her office and within the limits established in
these By-Laws.
S.To take all necessary and reasonable action to promptly respond to all
nonroutine occurrences that may have a significant adverse effect upon Ocensa
and to report as soon as possible all such occurrences and all action taken in
response thereto to the Board of Directors and to make follow-up reports from
time to time on such occurrences and actions.
T.To carry out such other duties as may be assigned to him or her by the
General Meeting of Shareholders or any Extraordinary Meeting of Shareholders
or the Board of Directors, as well as those corresponding to him or her in
accordance with applicable law or the nature of his or her office.
CHAPTER EIGHT
SECRETARY
ARTICLE 46. Appointment. The Company shall have a Secretary for a term of two
years, who shall be freely designated and removed by the Board of Directors,
and who shall in turn be the Secretary to the General Meeting of Shareholders,
the Board of Directors and the Company.
ARTICLE 47. Responsibilities. The following are the responsibilities of the
Secretary:
A.To keep, in accordance with applicable law, the minutes of the General
Meeting of Shareholders and the Board of Directors, and to authorize with his
or her signature copies thereof.
B.To be in charge of all matters related to the issuance of share
certificates, notation of acts or documents in the Share Register and to
countersign the share certificates.
C.To send out notices for meetings of the Board of Directors and any General
Meeting of Shareholders.
D.To organize the files of the Company and to ensure the custody and
preservation of the books, documents, vouchers and other items entrusted to
him or her.
E.To maintain in order and up-to-date, fulfilling all applicable legal
requirements, the registration of trademarks, patents, insurance policies,
public deeds and other documents related to the ownership or possession of
assets or rights of the Company.
F.Any other duties of a special nature which are conferred on him or her by
the General Meeting of Shareholders, the Board of Directors or the President.
CHAPTER NINE
FISCAL SUPERVISOR
ARTICLE 48. Appointment. The Company shall have a Fiscal Supervisor and an
alternate, who shall be appointed by the General Meeting of Shareholders in
accordance with these By-Laws and applicable law for two-year periods but may
be indefinitely re-elected or removed by the General Meeting of Shareholders
at any time. The alternate shall replace the principal in all cases of
absolute or temporary absence.
ARTICLE 49. Qualifications. The Fiscal Supervisor and his or her alternate
shall be Public Accountants and shall be subject to the disqualifications,
prohibitions, incompatibilities and liabilities established by applicable law.
Therefore, they may not be shareholders or be employed in any other position
within the Company or be related within the fourth degree of consanguinity or
second of affinity or first of civil kinship to the President or to any member
of the Board of Directors. The Fiscal Supervisor is prohibited from entering,
either directly or through a third party, into contracts of any nature with
the Company.
ARTICLE 50. Responsibilities. The following are the responsibilities of the
Fiscal Supervisor:
A.To see that the operations entered into or carried out on behalf of the
Company are in accordance with the provisions of these By-Laws, the decisions
of the General Meeting of Shareholders and of the Board of Directors.
B.To render prompt written account to the General Meeting of Shareholders, the
Board of Directors or the President, as the case may be, of any irregularities
which occur in the operations of the Company or in the development of its
business.
C.To cooperate with government agencies which inspect and supervise the
Company and to provide them with relevant reports.
D.To ensure that the accounts of the Company and the minutes of the General
Meeting of Shareholders and of the Board of Directors are regularly kept, and
that correspondence of the Company and vouchers of the accounts are preserved,
rendering instructions necessary to achieve such ends.
E.To inspect regularly the assets of the Company and to see that measures for
the preservation and security of such assets and of those held by the Company
in custody or on deposit for any reason are taken promptly.
F.To give the instructions, perform the inspections and request the reports
which may be necessary to establish control of the corporate assets.
G.To authorize with his or her signature any balance sheet prepared with his
or her corresponding certificate or report.
H.To summon the shareholders to Extraordinary Meetings of Shareholders when he
or she so deems it appropriate.
I.To carry out the remaining duties required by applicable law or these
By-Laws and those which, being compatible with the above, are entrusted to him
or her by the General Meeting of Shareholders.
ARTICLE 51. Opinions and Reports. The opinion or report of the Fiscal
Supervisor in connection with the issuance of the balance sheets of the
Company shall contain at least what is required by Article 208 of the
Commercial Code and the report of the Fiscal Supervisor to the General Meeting
of Shareholders shall contain the items required by Article 209 of the
Commercial Code.
ARTICLE 52. Liability. The Fiscal Supervisor shall be responsible for any
damages he or she may cause the Company, its associates or third parties due
to his or her negligence or willful misconduct in the performance of his or
her duties.
ARTICLE 53. Participation at Meetings. When called, the Fiscal Supervisor
shall be entitled to participate in deliberations of the General Meeting of
Shareholders and meetings of the Board of Directors, although without the
right to vote. He or she shall, likewise, have the right to inspect at any
time the accounting books, the books of minutes, the correspondence, the
account vouchers and all other assets of the Company.
CHAPTER TEN
BALANCE SHEETS, RESERVES AND DIVIDENDS
ARTICLE 54. Fiscal Year. On December 31 and June 30 of each year, the Company
shall close its accounts in order to produce the balance sheet, the profit and
loss statement corresponding to the annual and six month period, respectively,
ended as of that date and the itemized inventory of all assets and liabilities
of the Company in conformity with applicable law and accounting standards. The
balance sheet, the profit and loss statement and the itemized inventory shall
be submitted to the consideration of each General Meeting of Shareholders in
its ordinary session, together with reports, projects and other documents
required by these By-Laws and in accordance with applicable law.
ARTICLE 55. Other Statements. At the times determined by the Board of
Directors, trial or special balance sheets shall be prepared as well as other
financial statements ordered by the Board of Directors to meet its needs.
ARTICLE 56. Prior Requirements for the Distribution of Profits. There shall
be no distribution of profits except on the basis of the December 31 balance
sheet approved by the General Meeting of Shareholders at its meeting to
approve the annual financial statements for the fiscal year then ended and on
the basis of the June 30 balance sheet at its meeting to approve the financial
statements for the six month period then ended.
Profits not be distributed unless and until losses from previous accounting
periods affecting capital have been paid, it being understood that losses
affect the capital when as a result thereof the net worth of the Company is
reduced to less than the subscribed capital.
ARTICLE 57. Distribution of Profits. The profits of each accounting period,
established in accordance with the balance sheet approved by each General
Meeting of Shareholders, after deducting applicable taxes, shall be
distributed by it in accordance with the following regulations and legal
provisions:
A.10% of net profits after taxes shall be attributed to the legal reserve
until it reaches at least 50% of the subscribed capital. After this reserve
limit has been reached, each General Meeting of Shareholders may, at its
discretion, continue to increase the legal reserve, but should such reserve
decrease below 50% of the subscribed capital, it shall be necessary to
appropriate up to 10% of the net profits until the reserve again reaches the
limit prescribed by law.
B.Once the appropriation for the legal reserve has been made, the
appropriations for any other reserves which, upon fulfillment of the legal
requirements, are agreed on by the General Meeting of Shareholders in
accordance with Section 33 on its own initiative or upon the recommendation of
the Board of Directors shall be made. These reserves shall have a clear and
specific allocation, shall be mandatory for the accounting period in which
they are established and their change or subsequent distribution may only be
authorized by a General Meeting of Shareholders.
C.Should there be any losses which have not been set off and which affect the
capital of the Company, net profits shall be applied first to setting off such
losses before any appropriation for legal, voluntary or occasional reserves.
D.Any remaining net profits, after making appropriations for the legal reserve
and for other reserves, shall be paid as dividends to the shareholders, pro
rata to the portion of the par value of their shares.
E.The General Meeting of Shareholders may decide, with the vote of at least
90.41% of the outstanding shares, that there be no distribution of profits by
way of dividends in the respective accounting period, even if the sum of all
the reserves exceeds all of the subscribed capital, or decide that less than
50% or 70% of the net profits be distributed, for those cases contemplated in
Articles 155 and 454 of the Commercial Code.
ARTICLE 58. Timing for the Payment of Dividends. Except as otherwise decided
by a General Meeting of Shareholders pursuant to Article 34, the payment of
dividends to the shareholders shall be made within one month of the date on
which they are declared and they shall be set off against any amounts owed by
such shareholders to the Company. It shall be the responsibility of each
General Meeting of Shareholders to fix the time of payment of dividends and to
regulate them, particularly as regards themethod and place of payment to
facilitate the timely receipt of dividends by shareholders.
ARTICLE 59. Non-Payment of Interest on Dividends Not Promptly Claimed. The
Company shall not pay interest on any dividends not promptly claimed which
shall remain with the cashier of the Company, in deposit and available to the
order of their owners.
CHAPTER ELEVEN
AMENDMENTS TO BY-LAWS
ARTICLE 60. Decisions regarding amendments to the By-Laws shall be approved
in a single debate, which shall take place during a General Meeting of
Shareholders or an Extraordinary Meeting of Shareholders. Any amendments, once
approved by the meeting through the favorable vote of a plurality of
shareholders representing at least 90.41% of the outstanding shares (other
than those related to increases or decreases in authorized capital or the
matters referred to in Article 35 to the extent provided therein), shall be
made in a Public Deed by the President of the Company and shall be registered
with the Chamber of Commerce. Unless otherwise provided, the approval of an
amendment by a meeting of shareholders imposes on the President the obligation
to carry out the legal formalities for its solemnization without requiring any
other authorizations.
CHAPTER TWELVE
DISSOLUTION AND LIQUIDATION OF THE COMPANY
ARTICLE 61. Dissolution. The Company shall be dissolved upon the grounds
determined by the law generally for commercial corporations, upon the special
grounds established by commercial law for stock companies, extraordinarily, at
any time by decision of the General Meeting of Shareholders, approved and
formalized as provided for in these By-Laws for amendment thereto or, without
any action of the Board of Directors or the General Meeting of Shareholders,
April 3, 1995 if the Company shall have received from any shareholder on or
prior to March 15, 1995 a certified copy of a resolution adopted by the board
of directors or equivalent decision making body, or an authorized committee
thereof, of any of Empresa Colombiana de Petrleos-Ecopetrol, The British
Petroleum Company p.l.c., TOTAL S.A., Triton Energy Corporation, IPL Energy
Inc. or TransCanada PipeLines Limited to the effect that such board or body or
committee has resolved to end such shareholder's (or, in the case of
Ecopetrol, Ecopetrol's) participation in the Oleoducto Central S.A. and has
not received prior to5:00 p.m., local time, Santafe de Bogota, Colombia on March
31, 1995 either (A) a notice of withdrawal of such resolution or (B) a
certificate from one or more of the other shareholders of their intention to
continue with the Oleoducto Central S.A.
ARTICLE 62. Mandatory Dissolution. When losses occur which reduce the net
worth of the Company to less than 50% of the subscribed capital, the Company
shall not be dissolved ipso facto, since the General Meeting of Shareholders
may take or order the steps required for the re-establishment of net worth
above 50% of the subscribed capital within six months following the date of
the balance sheet wherein the mentioned losses appear as incurred. Should
these steps not be taken within the indicated period, the General Meeting of
Shareholders shall declare the dissolution of the Company in order to proceed
to its liquidation.
ARTICLE 63. Notice. In the event of dissolution of the Company, for whatever
reason, its state of liquidation, once dissolved, shall be communicated by
means of a notice to be published in one or several newspapers regularly
circulating in the corporate domicile of the Company for three or more
consecutive business days, and to be posted in visible places of the offices
where the Company has established branches.
ARTICLE 64. Appointment to Liquidate. Once the Company has been dissolved for
any reason, the calculation and division of the corporate capital shall be
made in accordance with the legal provisions, by a special liquidator, who
shall be appointed by the General Meeting of Shareholders, without prejudice
to its right to designate liquidators and determine, in such case, whether
they are to act jointly or severally. The General Meeting of Shareholders
shall appoint an alternate for each liquidator. Unless and until the
designation of the liquidator and alternate is made, whoever holds the office
of President of the Company at the time it goes into liquidation, shall act as
such, and his or her alternates shall be the alternates to the President,
first and second, in their order.
ARTICLE 65. Rules for the Liquidation and Division of the Corporate Capital.
The liquidation of the Company and the division of its corporate capital shall
be carried out in accordance with the commercial laws and the applicable
provision of the Civil Code, observing the following rules:
A.The General Meeting of Shareholders shall be summoned and shall meet at the
times, in the manner and upon the terms provided for the ordinary meetings,
and extraordinarily whenever called by the liquidator, the Fiscal Supervisor,
the Superintendency of Companies, or when requested by a plural number of
shareholders representing not less than 9% of the subscribed shares. At such
meetings, it shall perform all functions compatible with the process of
liquidation,and in particular, those of appointing, changing and freely
removing the liquidator or liquidators and their alternates, requesting them
to render accounts, determining the assets which are to be distributed in
kind, and establishing priorities for the realization of assets, manner and
terms of realization, agreeing with the liquidators upon the price of their
services and adopting other determinations which may be in order pursuant to
applicable law or these By-Laws.
B.The General Meeting of Shareholders may determine which assets are to be
distributed in kind, fix the values of such assets or the manner of
determining them, establish the form of adjudication and authorize the
liquidator to make the required distributions, observing applicable legal
requirements. The General Meeting of Shareholders shall be empowered to
authorize the adjudication of assets pro indiviso by groups of shareholders,
order sales of assets through auctions among the shareholders themselves, or
admit outside bidders, and decide on the use of other forms considered
appropriate.
C.For the approval of periodic accounts rendered by the liquidator or of the
occasional accounts required from him, as well as to authorize the
adjudication of the assets in kind, authorize payments in kind, grant special
facilities to debtors of the Company and carry out other transactions which
may be necessary or appropriate to facilitate or conclude the liquidation, the
favorable vote of 55% of the outstanding shares shall be required.
D.For the approval of the final liquidation accounts and of the memorandum of
distribution, the favorable vote of 55% of the outstanding shares shall be
required.
E.Upon completion of the Company's liquidation, the liquidators shall request
the appropriate approval from the Superintendency of Corporations.
ARTICLE 66. Powers of Liquidator. The liquidator shall have the powers
conferred on him or her by applicable law, which may be extended by the
General Meeting of Shareholders, and his or her actions shall conform at all
times to the applicable law and to the instructions he receives from the
General Meeting of Shareholders.
CHAPTER THIRTEEN
ARBITRATION
ARTICLE 67. Arbitration. Any controversy or dispute among the shareholders or
between the shareholders and the Company in connection with corporate
activities, rights of the shareholders, profit participation, liquidation of
the Company or othermatters arising from the existence of the Company that
cannot be resolved directly by the parties, unless applicable law requires
such controversy or dispute to be resolved by judicial proceedings, they shall
be settled by a Court of Arbitration designated by the Board of Directors of
the Chamber of Commerce of Santafe de Bogota by drawing lots among the
arbitrators appearing in the list kept by the Center of Mercantile Arbitration
and Conciliation of said Chamber. The Court thus designated shall abide by the
provisions of the Code of Civil Procedure and the Commercial Code in
accordance with the following rules: (A) the Court shall consist of three
arbitrators, who must be Colombian citizens and lawyers; (B) the internal
organization of the Court shall be subject to the rules established to such
end by the Center of Mercantile Arbitration and Conciliation of the Chamber of
Commerce of Santafe de Bogota; (C) the decision of the Court shall be in law;
and (D) the Court shall meet in Santafe de Bogota, at the Center of Mercantile
Arbitration and Conciliation of the Chamber of Commerce of such city.
CHAPTER FOURTEEN
MISCELLANEOUS
ARTICLE 68. Duties of Officers. It is the duty of every officer of the
Company to perform the duties of his or her job, even if his or her term has
expired, until his or her replacement takes office.
Note to English version: As used in these By-Laws, business day means a day
in which commercial banks in Santafe de Bogota are permitted by law to be open
for domestic and international business.
Transitory Provisions. Until the first General Meeting of Shareholders is
held, the following will be members of the Board of Directors:
<TABLE>
<CAPTION>
<S> <C> <C>
Principal 1st Alternate 2nd Alternate
1.Ismael E. Arenas Mauricio Vega Gabriel Reyes
2.Nick Connolly David de Gruyter Harry Koppel
3.A.E. Turner Bernard Gros Dubois Don M. Drinkard
4.Benny Philips Wayne M. Sartore Donald Wishart
5.Jacques de Boisseson Ives Cerf Mayer Jean A.P. Guilbert
6.Michael Durnin Robert M. Jensen Arthur J. Epp
</TABLE>
Until the first General Meeting of Shareholders is held, Gustavo Suarez
Camacho will act as President of the Company, Wayne Sartore as first alternate
and Fernando Gutierrez as second alternate.
Until the first General Meeting of Shareholders is held, Ernst & Young Ltd.
will exercise the role of the Company's accountants, which firmhas in turn
designated Virgilio Baquero B. as principal fiscal supervisor and Alfonso
Coronado R. as alternate fiscal supervisor.
<PAGE>
OFFICIAL TRANSLATION
Certification of true translation from its original is not included here.
<PAGE>
-
SCHEDULE B TO
OLEODUCTO CENTRAL AGREEMENT
FORM OF VOTING TRUST AGREEMENT
dated as of the day of , 1995
among
OLEODUCTO CENTRAL S.A.
BP COLOMBIA PIPELINES LIMITED
TOTAL PIPELINE COLOMBIE S.A.
TRITON PIPELINE COLOMBIA, INC.
IPL ENTERPRISES (COLOMBIA) INC.
TCPL (BERMUDA) LTD.
and
[INSERT NAME OF VOTING TRUSTEE]
as Voting Trustee
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
------- ----
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
1.1. Definitions
1.2. Interpretation
ARTICLE TWO
VOTING TRUST (ENCARGO FIDUCIARIO)
2.1. Transfer of Voting Rights to the Voting Trustee
2.2. Party Instructions Irrevocable
2.3. with By-Laws
ARTICLE THREE
VOTING OF THE SHARES
3.1. Exercise of Voting Rights
3.2. Effect of Voting Default
3.3. Voting Default
ARTICLE FOUR
THE VOTING TRUSTEE
4.1. Appointment of Voting Trustee
4.2. Delivery of Documentation
4.3. Attorney-in-Fact
4.4. Reliance
4.5. Books and Records
4.6. Liability
4.7. Counsultaion With Counsel, etc.
4.8. Duties
4.9. Resignation,Replacement and Successor Voting Trustee
4.10. Indemnity
4.11. Compensation
4.12. Certificates
4.13. Stamp and Other Similar Taxes
4.14. Exculpatory Provisions
4.15. Merger of the Trustee
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
------- ----
4.16. Treatment of Shareholder Parties by Voting Trustee
4.17. Confidentiality
4.18. Miscellaneous
ARTICLE FIVE
TERM
5.1. Term
5.2. Effectiveness
ARTICLE SIX
GENERAL
6.1. Notices
6.2. Entire Agreement
6.3. Representations and Warranties
6.4. Assignments
6.5. Amendments
6.6. No Third Party Beneficiaries
6.7. Severability
6.8. Governing Law
6.9. Arbitration
6.10. Waiver of Immunity
6.11. Headings; Table of Contents
6.12. Counterparts
</TABLE>
ANNEX A - Form of Power of Attorney
<PAGE>
VOTING TRUST AGREEMENT
AGREEMENT, dated as of the day of , 1995, among:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws of
Colombia (the JSC);
BP COLOMBIA PIPELINES LIMITED, a corporation existing under the laws
of England and Wales;
TOTAL PIPELINE COLOMBIE S.A., a corporation existing under the laws
of France;
TRITON PIPELINE COLOMBIA, INC., a corporation existing under the
laws of the Cayman Islands;
IPL ENTERPRISES (COLOMBIA) INC., a corporation existing under the
laws of the Cayman Islands; and
TCPL (BERMUDA) LTD., a corporation existing under the laws of
Bermuda; and
[INSERT NAME OF VOTING TRUSTEE], a trust company existing under the
laws of Colombia, as voting trustee (the Voting Trustee).
RECITALS
WHEREAS:
A. The Shareholders have formed Ocensa by public deed no. 4747
of December 14, 1994 granted before notary public no. 38 of Santafe de Bogota;
B. The Shareholders have entered into the Oleoducto Central
Agreement (the Oleoducto Central Agreement), dated as of December 14, 1994,
among Ocensa and the Shareholders, specifying certain terms and conditions of
their respective investments and participation in Ocensa, the Oleoducto
Central and the financing and operation thereof;
C. Ocensa, the Shareholder Parties and Ecopetrol are entering
into a Dividend Trust Agreement in order to specify certain additional terms
and conditions of their respective investments in Ocensa;
D. The Shareholder Parties wish to specify certain terms and
conditions of exercise of their respective voting rights as shareholders of
Ocensa; and
E. The Shareholder Parties deem it to be in each of their best
interests and in the best interest of Ocensa that this Agreement be made.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the Parties agree as
follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires,
the following words and phrases shall have the meanings indicated below:
Confidential Information shall have the meaning assigned to it in
Section 4.17.
Nominating Shareholder Party shall mean each of BP Colombia
Pipelines Limited, TOTAL Pipeline Colombie, S.A., Triton Pipeline Colombia,
Inc., IPL Enterprises (Colombia) Inc., TCPL (Bermuda) Ltd. and its successors
to and permitted assigns of (a) of all its respective Shares or (b) of a
portion of its respective Shares, if such successor and assign has been
designated the Nominating Shareholder Party in replacement of its respective
predecessor and assignor by joint notice of the former and the latter to
Ocensa and each other Nominating Shareholder Party.
Parties shall mean BP Colombia Pipelines Limited, TOTAL Pipeline
Colombie S.A., Triton Pipeline Colombia, Inc., IPL Enterprises (Colombia)
Inc., TCPL (Bermuda) Ltd. and the Voting Trustee and their respective
successors and permitted assigns.
Shareholder Party shall mean any Party to this Agreement that is (a)
a Shareholder or (b) a holder of Shares of Ocensa who has delivered the notice
(or deemed notice) described in Section 6.4(c).
Voting Default shall have the meaning assigned to it in Section 3.3.
Voting List shall have the meaning assigned to it in Section 3.1.
Voting Rights shall mean all rights and powers of every nature
related to the voting of the Shares and/or the execution of consents in
respect thereof in person or by proxy, including, without limitation, the
right to vote for election of directors and in favor of or in opposition to
any resolution or proposed action of any character whatsoever which may be
presented in any and all meetings of the general meeting of shareholders and
any other meetings of shareholders of Ocensa called or held for any purpose
and in any and all proceedings, whether at a meeting of shareholders or
otherwise, requiring the consents of shareholders of Ocensa or when such
consents are given in lieu of such meetings.
All defined terms used and not defined herein shall have the meanings assigned
to them in the Oleoducto Central Agreement.
Section 1.2. Interpretation. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular and
vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or a Section refers to an Article or
a Section, as the case may be, of this Agreement;
(d) all references to this Agreement and the words herein, hereof,
hereto and hereunder and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section or other subdivision;
and
(e) all references herein to accounting principles shall mean
accounting principles generally accepted in Colombia as in effect from time to
time.
ARTICLE TWO
VOTING TRUST (ENCARGO FIDUCIARIO)
Section 2.1. Transfer of Voting Rights to the Voting Trustee. Each
Shareholder Party hereby transfers and assigns all Voting Rights attaching to
all (but not a portion of) the Shares held by it from time to time to the
Voting Trustee to be held in trust (encargo fiduciario) and be voted by the
Voting Trustee according to the terms of this Agreement. Until the termination
of this Agreement, and subject to the terms hereof, the Voting Trustee or its
successor in the trust (encargo fiduciario) shall possess and shall be
entitled to exercise all Voting Rights in respect of such Shares, it being
expressly stipulated that, except as otherwise provided in this Agreement, no
Shareholder Party shall have any right to exercise the Voting Rights or take
part in or consent to or in any way control or limit any corporate or
shareholders' action of Ocensa in respect of any Shares held by it, provided
that it may attend such meetings.
Section 2.2. Shareholder Party Instructions Irrevocable. Each
Shareholder Party hereby irrevocably instructs and authorizes the Voting
Trustee to hold the Voting Rights with respect to such Shareholder Party's
Shares in trust (encargo fiduciario) and to exercise such Voting Rights only
as provided in this Agreement and all instructions given and all authority
conferred under this Agreement is given and conferred subject to the interests
of the Voting Trustee and the other Shareholder Parties as beneficiaries
hereof; and, in consideration of those interests and for the purpose of
completing the transactions contemplated by this Agreement, all instructions
given and all authority conferred by this Section 2.2 shall be deemed coupled
with an interest and be irrevocable and not subject to termination by such
Shareholder Party or by operation of law, whether by the death or incapacity
of such Shareholder Party (if such Shareholder Party is an individual) or by
the death or incapacity of any executor or trustee (if such Shareholder Party
is an estate or trust) or the termination of such estate or trust or by the
dissolution of such Shareholder Party (if such Shareholder Party is a
partnership or corporation), or by the occurrence of any other event.
Section 2.3. Relationship with By-Laws. This Agreement does not in
any way change or amend the approval requirements required for certain
corporate or shareholder actions of Ocensa as set forth in By-Laws and under
applicable law.
ARTICLE THREE
VOTING OF THE SHARES
Section 3.1. Exercise of Voting Rights. Subject to Section 3.2, the
Voting Trustee shall exercise the Voting Rights attaching to the Shares of
each Shareholder Party in accordance with the direction of such Shareholder
Party in all instances; provided, however, that the Voting Trustee, unless
otherwise unanimously instructed by all Shareholder Parties, shall exercise
the Voting Rights attaching to all Shares held by it in trust (encargo
fiduciario):
(a) So that one nominee of each Nominating Shareholder Party will at all
times be a member of the Board of Directors provided that such Nominating
Shareholder Party continues to be a Shareholder Party at the time of such
election. Five Business Days prior to any election of directors, each
Nominating Shareholder Party shall deliver to the Voting Trustee the name of
its nominee (and two alternates thereof):
(i) For each election of directors of Ocensa, the Voting Trustee on
behalf of all of the Nominating Shareholder Parties shall submit to Ocensa a
single list (the Voting List) for purposes of that election containing (A) in
the event of an election of the whole Board of Directors, the name of one
nominee (and two alternates thereof) of each Nominating Shareholder Party or
(B) in the event of an election of less than the whole Board of Directors, the
name of one nominee (and two alternates thereof) of each Nominating
Shareholder Party whose nominee does not continue to be a Director of Ocensa.
(ii) In each case of (A) and (B) of clause (i) above, if all Nominating
Shareholder Parties have designated their respective nominees (and
alternates), or one or more Nominating Shareholder Parties have failed to
designate their respective nominees (and alternates), and as of the fourth
Business Day prior to an election, the number of nominees in the Voting List
is less than the number of directors to be elected at such election, the
Voting Trustee shall notify the Nominating Shareholder Parties who shall
consult in good faith to issue joint instructions to the Voting Trustee for
the designation of mutually agreeable nominees (and alternates) to fill the
vacancies in the Voting List. If no agreement is reached prior to the second
Business Day prior to such election, the nominees (and alternates) to fill the
vacancies in the Voting List shall be designated by joint instructions of
Nominating Shareholder Parties holding a majority of the Shares held by all
Shareholder Parties. If no instructions have been received by the Trusteeby
the end of the last Business Day prior to the election, nominees (and
alternates) to fill the vacancies on the Voting List shall be designated upon
instructions of any Nominating Shareholder Party and, if more than one, the
Nominating Shareholder Party holding the larger number of Shares and, in case
of a tie, the Nominating Shareholder Party that delivered its instructions
first.
(iii) The priority order of nominees in the Voting List shall be set in
the declining order of the Shareholding Interest of the Nominating Shareholder
Party designating each nominee, provided that the nominee of a Nominating
Shareholder Party with respect to which a Voting Default is continuing will be
placed in order of priority after the nominees of all other non-defaulting
Nominating Shareholder Parties and, in the case of a continuing Voting Default
with respect to more than one Nominating Shareholder Parties, their respective
nominees will be placed in the order of priority among them that is the
declining order of the Shareholding Interest of such Nominating Shareholder
Parties provided, further, that a nominee nominated pursuant to clause (ii) of
this paragraph (a) shall in all instances occupy the last place in the order
of priority in the Voting List and, if more than one, in the declining order
of majority by which they were designated and, in case of a tie, the higher in
priority among them shall be the one designated first.
(b) In favor of all Funding Resolutions in accordance with the Financing
Plan and all authorized capital increases pursuant to the Capital Budget and a
Funding Resolution, in each case, approved by the Board of Directors, as
certified thereby;
(c) In favor of all Distributions pursuant to Section 5.4(b) of the
Oleoducto Central Agreement;
(d) In favor of all capital reductions, liquidations or split-ups
(esciciones) or other corporate action of Ocensa required to achieve Equity
Amortization pursuant to Section 5.5 of the Oleoducto Central Agreement and
all capital increases followed by capital reductions, liquidations or
split-ups escicines (but not to a level lower than Cash Paid-In Equity) for
purposes of making any Distributions pursuant to Section 5.6 thereof, in each
case, as certified by three Shareholder Parties hereto;
(e) In favor of the incurrence of Senior Debt by Ocensa in accordance
with the Financing Plan and Section 5.2(c) of the Oleoducto Central Agreement
as certified by the President and one member of the Board of Directors;
(f) Against the making of any Distribution by Ocensa in respect of the
three-year period ending December 31, 1997; and
(g) So as to ensure that no resolution of the Shareholders which does
not fall within the category of resolutions for which a 90.41% affirmative
vote is required pursuant to Article 33 of the By-laws shall be blocked by any
single Shareholder Party.
The Voting Trustee shall in all matters act at a meeting. The Voting Trustee
may exercise Voting Rights of Shares of Ocensa in person or by such person as
it shall select as its proxy.
Section 3.2. Effect of Voting Default. Upon occurrence of a Voting
Default, Ocensa shall immediately notify the Voting Trustee and until such
time that Ocensa shall have notified the Voting Trustee that such Voting
Default has been cured or otherwise remedied, the Shares of the defaulting
Shareholder Party will be represented by the Voting Trustee, and included for
purposes of determining whether or not a quorum is present, at any meeting of
shareholders of Ocensa or any other proceeding and, subject to Section 3.1,
the Voting Trustee will exercise the Voting Rights attaching to such Shares in
proportion to instructions given for votes to be cast by non-defaulting
Shareholder Parties without regard to any direction of the defaulting
Shareholder Party.
Section 3.3. Voting Default. Voting Default shall exist with
respect to a Shareholder Party if:
(a) There is continuing an event of default or default under the Common
Security Trust Agreement with respect to the Senior Debt Tranche secured by
Collateral provided by such Shareholder Party or members of its Initial
Shipper Group after receipt by Ocensa of a notice of default in the form
provided under the Common Security Trust Agreement;
(b) Such Shareholder Party has failed to meet any of its payment
obligations under its Subscription Agreement or any of its duties and
obligations under this Agreement or the Dividend Trust Agreement or has
transferred Shares in violation of Article Ten of the Oleoducto Central
Agreement;
(c) Such Shareholder Party or any Affiliate of such Shareholder Party
has failed to meet any of its payment or material shipping obligations under
its Transportation Agreement, Transportation Notes Agreement, Advance Tariff
Agreement or any guarantee of obligations thereunder or under the Subscription
Agreement of such Shareholder Party; or
(d) Ocensa has failed to obtain all or any portion of the Senior Debt
Tranche related to such Shareholder Party's Initial Shipper Group, has
provided such Shareholder Party with a notice of Senior Debt Shortfall
pursuant to Section 5.2(d) of the Oleoducto Central Agreement and Senior Debt
to cover such Senior Debt Shortfall has not been provided by the date
determined in such notice.
ARTICLE FOUR
THE VOTING TRUSTEE
Section 4.1. Appointment of Voting Trustee . _________________,
acting through its corporate trust office, [insert address], is hereby
appointed by the Shareholder Parties as Voting Trustee hereunder and the
Voting Trustee hereby accepts the trust created by this Agreement upon the
terms and conditions hereof. Except as otherwise provided herein, the Voting
Trustee shall have no authority to act hereunder on behalf of a Shareholder
Party or Ocensa without specific instructions of such Shareholder Party or
Ocensa, as the case may be.
Section 4.2. Delivery of Documentation. Executed counterparts of the
Oleoducto Central Agreement referred to herein have been delivered to the
Voting Trustee and the Voting Trustee acknowledges receipt thereof. Ocensa and
each Shareholder Party agree to deliver to the Voting Trustee any instrument
amending or modifying any agreement previously delivered to the Voting
Trustee. Amendments or modifications of the aforementioned agreements shall
not affect the duties and obligations of the Voting Trustee hereunder unless
(a) the Voting Trustee has knowledge of such amendment or modification, and
(b) with respect to any amendment or modification which, in the opinion of the
Voting Trustee, enlarges the Voting Trustee's duties, obligations, or
responsibilities, the Voting Trustee has not objected in writing thereto
within 10 Business Days of receiving notice thereof.
Section 4.3. Attorney-in-Fact. (a) The Voting Trustee or any officer
or agent thereof, with full power of substitution, is hereby appointed the
attorney-in-fact of each Shareholder Party for the purpose of carrying out the
provisions of this Agreement and taking any action and executing any
instruments which the Voting Trustee may deem necessary or advisable to
accomplish the purposes hereof without notice to or assent by any of the
foregoing, to the extent permitted by applicable law, which appointment as
attorney-in-fact is coupled with an interest and irrevocable.
(b) Each Shareholder Party agrees to execute and deliver to the
Voting Trustee, and register in every public registry in Colombia in which
such registration is necessary, a notarized Colombian public deed appointing
the Voting Trustee and anyofficer or agent thereof, with full power of
substitution, its attorney-in-fact for purposes of exercising the rights and
remedies of such Shareholder Party hereunder and taking all action in Colombia
on behalf of such Shareholder Party that the Voting Trustee is authorized to
take pursuant to this Agreement and Colombia law in furtherance thereof.
Section 4.4. Reliance. The Voting Trustee shall be entitled to act
upon any notice, certificate, instrument, demand, request, direction,
instruction, waiver, receipt, consent or other document or communication
furnished hereunder which it in good faith believes to be genuine, and it
shall be entitled to rely upon the due execution, validity and effectiveness
and the truth and acceptability of any provisions contained therein. The
Voting Trustee shall not have any responsibility to make any investigation
into the facts or matters stated in any notice, certificate, instrument,
demand, request, direction, instruction, waiver, receipt, consent or other
document or communication furnished to it hereunder. Ocensa and each
Shareholder Party shall deliver to the Voting Trustee a list duly executed by
an officer thereof duly authorized thereunto of authorized signatories of any
notice, certificate, instrument, demand, request, direction, instruction,
waiver, receipt, consent or other document or communication furnished to the
Voting Trustee hereunder, and the Voting Trustee shall be entitled to rely on
such list until a new list is furnished by Ocensa or such Shareholder Party,
as the case may be, to the Voting Trustee.
Section 4.5. Books and Records. The Voting Trustee shall maintain
all such books and records as may be necessary properly to record all
transactions carried out by it under this Agreement and as required by
Colombian law. The Voting Trustee shall permit the Shareholder Parties and
Ocensa and their authorized representatives to examine such books and records;
provided that any such examination shall occur upon reasonable notice and
during normal business hours. Upon request by Ocensa or any Shareholder Party,
the Voting Trustee shall at any time provide such parties with any other
information such parties may reasonably request regarding the transactions
contemplated in this Agreement. Upon removal or resignation of the Voting
Trustee, the Voting Trustee shall deliver all such books and records to the
successor voting trustee, or, in the event of termination of this Agreement,
to Ocensa.
Section 4.6. Liability. The Voting Trustee shall not be liable for
any error of judgment or for any act done or omitted to be done by it in good
faith or for any mistake of fact or law, or for anything which it may do or
refrain from doing, except for its own negligence or willful misconduct. A
Shareholder Party or Ocensa shall in no event be liable for any act done or
omitted to be done by the Voting Trustee or by any of its officers or
employees.
Section 4.7. Consultation With Counsel, etc. The Voting Trustee may
consult with, and obtain advice from, legal counsel, accountants and other
experts, in connection with the performance of its duties hereunder and it
shall incur no liability andshall be fully protected in acting in good faith
in accordance with the written opinion and advice of such counsel, accountants
and other experts. The Voting Trustee shall not be responsible for the
negligence or misconduct of any counsel, accountants and other experts
selected by it without negligence or willful misconduct on its part.
Section 4.8. Duties. The Voting Trustee shall have no duties other
than those specifically set forth or provided for in this Agreement and no
implied covenants or obligations of the Voting Trustee shall be read into this
Agreement or any related agreement to which the Voting Trustee is a party. The
Voting Trustee shall have no obligation to familiarize itself with and shall
have no responsibility with respect to any other agreement or document
relating to the transactions contemplated by this Agreement nor any obligation
to inquire whether any notice, certificate, instrument, demand, request,
direction, instruction, waiver, receipt, consent, document, communication,
statement or calculation is in conformity with the terms of any such other
agreement, except those irregularities or errors manifestly apparent on the
face of such document or to the actual knowledge of the Voting Trustee. If,
however, any communication received by the Voting Trustee appears manifestly
erroneous or irregular the Voting Trustee shall be under a duty to make prompt
inquiry to the Person originating such communication in order to determine
whether a clerical error or inadvertent mistake has occurred.
Section 4.9. Resignation, Replacement and Successor Voting Trustee.
The Voting Trustee at any time may resign as Voting Trustee hereunder upon
giving not less than six months' notice in writing to Ocensa and each
Shareholder Party. The Voting Trustee may be removed as Voting Trustee
hereunder by an instrument in writing by Ocensa and each Shareholder Party
with respect to which there is continuing no Voting Default. Upon resignation
of the Voting Trustee, a successor voting trustee shall be designated by
Ocensa and each Shareholder Party with respect to which there is continuing no
Voting Default. No resignation or removal of the Voting Trustee and no
designation of a successor voting trustee shall be effective until (a) the
successor voting trustee has accepted its designation, (b) all indemnities,
compensation and expenses required by Sections 4.10, 4.11 and 4.13 shall have
been paid or provided for and (c) the Voting Trustee shall have executed and
delivered to the successor trustee a notarized Colombian public deed
delegating its rights and responsibilities hereunder to the successor trustee.
If no designation of a successor voting trustee shall have been made and
accepted within 60 days after the date fixed for such resignation or removal a
successor voting trustee shall be designated by Ocensa and Shareholder Parties
holding a majority of the Shares subject to this trust (encargo fiduciario).
Any successor voting trustee designated pursuant to this Section 4.9 shall be
a Person eligible to act as Voting Trustee hereunder in accordance with
applicable law. Any successor voting trustee shall evidence its acceptance of
the trust (encargo fiduciario) hereunder by executing and delivering to
Ocensa, each Shareholder Party and the Voting Trustee an instrument accepting
this trust (encargo fiduciario) and its designation as Voting Trustee
hereunder, and thereupon such successor voting trustee,without any further
act, deed or conveyance, shall become vested with all the rights, powers,
duties and obligations of its predecessor hereunder with like effect as if
originally named as Voting Trustee herein, and such predecessor shall have no
further obligation or liability thereunder except for liability with respect
to its acts or omissions prior to such succession pursuant to Section 4.6;
nevertheless, on the request of any party hereto or such successor voting
trustee, the Voting Trustee ceasing to act shall execute and deliver
instruments transferring to such successor voting trustee all rights and
powers of the Voting Trustee so ceasing to act.
Section 4.10. Indemnity. (a) Each Shareholder Party agrees to
indemnify the Voting Trustee for, and to hold it harmless against, any loss,
liability, claim, judgment, settlement, compromise, obligation, damage,
penalty, cost, expense or disbursement of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and
administration of this Agreement, unless arising from the negligence or
willful misconduct of the Voting Trustee or any agents that are seeking
indemnification, including the costs and expenses of defending itself against
any claim of liability in the premises.
(b) In any suit, proceeding or action brought by the Voting Trustee
with respect to, or to enforce any provisions of this Agreement, each
Shareholder Party severally, in proportion to the number of Shares held by
such Shareholder Party to the number of Shares held by all Shareholder
Parties, will save, indemnify and keep the Voting Trustee harmless from and
against all expense, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligee
thereunder, arising out of a breach by Ocensa or any Shareholder Party of any
of its obligations hereunder or thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
obligee or its successors from Ocensa or such Shareholder Party, and all such
obligations of Ocensa shall be and remain enforceable against and only against
Ocensa or such Shareholder Party and shall not be enforceable against the
Voting Trustee or any Shareholder.
(c) The agreements in this Section 4.10 shall survive the
termination of the other provisions of this Agreement.
Section 4.11. Compensation. The Voting Trustee shall be entitled to
reasonable compensation (which shall not be limited by any provision of law in
regard to compensation of a trustee of an express trust) as may be agreed from
time to time between Ocensa and the Voting Trustee for all services rendered
under this Agreement, and such compensation, together with reimbursement of
the Voting Trustee for its advances, disbursements and expenses in connection
with the performance of the trust provided for herein (including the
reasonable fees and expenses of its agents and of counsel, accountants and
other experts referred to in Section 4.7), shall be paid by Ocensa promptly
upondemand from the Voting Trustee from time to time as services are rendered
and expenses are incurred. The Shareholder Parties shall have no liability for
any fees, expenses or disbursements of the Voting Trustee.
Section 4.12. Certificates. Whenever in the administration of the
trust created by this Agreement the Voting Trustee shall deem it necessary or
desirable that a matter be proved or established in connection with taking or
omitting any action by the Voting Trustee hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or willful misconduct on the part of the Voting Trustee,
be deemed to be conclusively proved or established by a certificate of Ocensa
delivered to the Voting Trustee.
Section 4.13. Stamp and Other Similar Taxes. Ocensa agrees to
indemnify and hold harmless the Voting Trustee from, and shall reimburse the
Voting Trustee for, any present or future claim for liability for any stamp or
other similar tax and any penalties or interest with respect thereto, which
may be assessed, levied or collected by any jurisdiction in connection with
this Agreement or the trust created hereunder. The obligations of Ocensa under
this Section 4.13 shall survive the termination of the other provisions of
this Agreement.
Section 4.14. Exculpatory Provisions. The Voting Trustee makes no
representations as to the value or condition of the trust created hereunder or
any part thereof or as to the validity, execution (except by itself),
enforceability, legality or sufficiency of this Agreement, and the Voting
Trustee shall incur no liability or responsibility in respect of any such
matters.
Section 4.15. Merger of the Trustee. Any corporation into which the
Voting Trustee shall be merged, or with which it shall be consolidated, or any
corporation resulting from any merger or consolidation to which the Voting
Trustee shall be a party, shall be the Voting Trustee under this Agreement
without the execution or filing of any paper or any further act on the part of
the parties hereto .
Section 4.16. Treatment of Shareholder Parties by Voting Trustee.
(a) The Trustee may treat the Shareholder Parties as the holders of the
Shares and as the absolute owners thereof for all purposes hereunder unless
the Voting Trustee shall receive notice to the contrary.
(b) Any Person which shall be designated as the duly authorized
representative of one or more of Shareholder Parties to act as such in
connection with any matters pertaining to this Agreement shall present to the
Voting Trustee such documents, including, without limitation, opinions of
counsel, as the Voting Trustee may reasonablyrequest, in order to demonstrate
to the Voting Trustee the authority of such Person to act as the
representative of such Shareholder Party.
(c) Ocensa shall treat the Voting Trustee as the holder of all
Voting Rights attaching to the Shares held by the Shareholder Parties for all
purposes hereunder.
Section 4.17. Confidentiality. The Voting Trustee shall assure that
all information disclosed to it concerning the Oleoducto Central, the assets
and business of Ocensa and the assets and business of each of the Shareholder
Parties and not otherwise generally available (Confidential Information) shall
be kept confidential and shall, unless otherwise required by law or official
request issued by a court of competent jurisdiction or by a judicial,
administrative, legislative, regulatory or self-regulatory authority with
legal authority to make such request not be revealed without the consent of
Ocensa and all Shareholder Parties other than to the directors, officers and
representatives of Ocensa, the Shareholder Parties and Affiliates of the
Shareholder Parties. Upon Ocensa or any Shareholder Party demanding the return
of Confidential Information relating to it by notice in writing to the Voting
Trustee shall, and shall cause its representatives to, return all documents
containing Confidential Information that have been provided by the Shareholder
Party demanding the return of Confidential Information (or on its behalf) and
destroy any copies of such documents and any document or other record
reproducing, containing or made from or with reference to the Confidential
Information, except, in each case, for any submissions to or filings with
judicial, administrative, legislative or regulatory authorities. Such return
or destruction shall take place as soon as practicable after the receipt of
such notice. The agreements in this Section 4.17 shall survive the termination
of the other provisions of this Agreement.
Section 4.18. Miscellaneous. (a) The Voting Trustee shall have the
right at any time to seek instructions concerning the administration of this
trust from any court of competent jurisdiction. In the event of any
disagreement between the other parties to this Agreement resulting in adverse
claims being made in connection with the execution of the trust held by the
Voting Trustee and the terms of this Agreement do not unambiguously mandate
the action the Voting Trustee is to take in connection with the Voting Rights
under the circumstances then existing, or the Voting Trustee is in doubt as to
what action it is required to take, the Voting Trustee shall be entitled to
refrain from taking any action until directed otherwise in writing by the
Parties hereto entitled to give such direction or by a court of competent
jurisdiction.
(b) The Voting Trustee makes no representations as to, and shall
have no responsibility for, the correctness of any statement contained in, or
the validity or sufficiency of, this Agreement or any documents or instruments
referred to herein.
(c) The Voting Trustee shall not be disqualified by his office from
dealing or contracting with Ocensa or any Shareholder Party either as vendor,
purchaser, depositary, lender, borrower, correspondent bank or otherwise.
ARTICLE FIVE
TERM
Section 5.1. Term. This Agreement shall continue in full force and
effect so long as Ocensa continues to be in existence in accordance with the
By-laws and shall terminate upon termination of the Oleoducto Central
Agreement unless earlier terminated by written agreement of the Parties or as
required by law. Each Party's obligations incurred or accrued hereunder prior
to termination shall survive any termination of this Agreement.
Section 5.2. Effectiveness. This Agreement shall have no effect or
validity unless and until the Oleoducto Central Agreement shall have become
effective.
ARTICLE SIX
GENERAL
Section 6.1. Notices. All notices, requests, demands, directions and
other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Party Copy To
--------------------------------- ---------------------------------
OLEODUCTO CENTRAL S.A. N/A
---------------------------------
World Trade Center Bogota
Calle 100 N. 8A-55
Santafe de Bogota, D.C. -Colombia
Telefax: 571-218-3933
Attention: President
BP COLOMBIA PIPELINES BP EXPLORATION COMPANY
LIMITED c/o (COLOMBIA) LIMITED
BP EXPLORATION COMPANY Carrera 9A No. 99-02
(COLOMBIA) LIMITED Post Office Box 59824
Carrera 9A No. 99-02 Santafe de Bogota, D.C. Colombia
Post Office Box 59824 Telefax: (571) 618-2895
Santafe de Bogota, D.C. -Colombia
Telefax: (571) 618-2895 Attention: Legal Manager
Attention: Nicholas P. Connolly
TOTAL PIPELINE TOTAL EXPLORATIE EN PROSKAUER, ROSE
COLOMBIE S.A. PRODUKTIE MIJ B.V. GOETZ & MENDELSOHN
Tour TOTAL Calle 72 No. 10-03 1585 Broadway
TEP/AME Piso 8 New York, New York 10036
24, Cour Michelet Apartado aereo 251375 Telefax: (212) 969-2900
Cedex 47,92069 Paris, France Santafe de Bogota, D.C. -Colombia Attention: Ronald Papa, Esq.
Telefax: (33 1) 4135 6530 Telefax: (571) 235-8453
Attention: Jean-Claude Soligny Attention: Jacques de Boisseson
TRITON PIPELINE TRITON COLOMBIA, INC.
COLOMBIA, INC. Carrera 9A No. 99-02
c/o TRITON ENERGY Oficina 407
CORPORATION Santafe de Bogota, D.C.- Colombia
6688 North Central Expressway Telefas: (571) 618-2553
Suite 1400 Attention: Ivan Fajardo
Dallas, Texas 75206
Telefax: (214) 692-7487
Attention: Thomas G. Finck and
A.E. Turner
IPL ENTERPRISES IPL INTERNATIONAL INC.
(COLOMBIA) INC. Suite 1100
c/o IPL ENERGY INC. 363 North
205-5thAvenue S.W. Sam Houston Parkway East
Calgary, Albera, Canada T29 2V7 Houston, Texas 77060
Telefas: (403)231-3920 Telefax: (713) 820-9310
Attention: Mr. Donald M. Wishart Attention: Benny J. Phillips
TRANSCANADA PIPELINES FRIED, FRANK, HARRIS,
LIMITED SHRIVER & JACOBSON
TransCanada PipeLines Tower 1 New York Plaz
111 Fifth Avenue S.W. New York, New York 10004
P.O. Box 1000, Station M Telefax: (212) 747-1526
Calgary, Alberta, Canada T2P 4K5 Attention: Ken Blackman
Telefax: (403)267-2668
Attention: Mike Durnin
</TABLE>
If to the Voting Trustee: [Insert name and address]
to such other address, individual or facsimile telephone number as may be
designated by notice given by any Party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The Party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 6.2. Entire Agreement. This Agreement constitutes the entire
Agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties, and there are no warranties,
representations or other agreements between the Parties in connection with the
subject matter hereof except as specifically set forth herein and therein. No
amendment, supplement, waiver or termination of this Agreement shall be
binding unless executed in writing by the Party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute
a waiver of any other provisions (whether or not similar) nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
Section 6.3. Representations and Warranties. Each Party represents
and warrants to the other that:
(a) it is a corporation duly incorporated and organized under the laws
of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and perform
its obligations under this Agreement, and this Agreement, when executed and
delivered by such Party, constitutes a valid and legally binding agreement of
such Party;
(c) the execution and delivery of, and the performance by it of its
obligations under this Agreement will not result in a breach of or constitute
a default under:
(i) any provision of its charter or articles of incorporation
or its by-laws;
(ii) any agreement or instrument to which it is a party and
which is material to the performance by it of its obligations hereunder;
(iii) any statute, rule, regulation or order, judgment or decree
of any governmental agency or court having jurisdiction over it or by which it
is bound; and
(d) neither it nor any of its property has any immunity from
jurisdiction of any court or from set-off or any legal process.
Section 6.4. Assignments. (a) Ocensa may not assign this Agreement
or any of its rights hereunder to or in any person not a party hereto except
with the prior written consent of each Shareholder Party.
(b) A Shareholder Party may not assign this Agreement or any of its
Voting Rights or its rights hereunder to or in any person not a party hereto
except in connection with a transfer of its Shares permitted pursuant to
Article Ten of the Oleoducto Central Agreement.
(c) A Shareholder Party which has transferred any of its Shares to
another Person or assigned to another Person any right to acquire Shares shall
procure that such Person shall become a Shareholder Party hereto with respect
to such Shares by providing written notice to the Voting Trustee, which shall
then notify all other Parties hereto. Upon receipt of such notice by the
Voting Trustee, such holder shall have all the rights, benefits, obligations
and duties hereunder of a Shareholder Party hereto. A notice or application by
a holder of Shares to be registered as a shareholder of Ocensa in the Share
Register maintained by Ocensa shall be deemed to also be a notice to Ocensa
pursuant to this paragraph (c) of Section 6.4.
Section 6.5. Amendments. This Agreement may not be amended or
modified except with the written consent of the Parties and any permitted
assignees.
Section 6.6. No Third Party Beneficiaries. Except as herein
otherwise expressly provided to the contrary, this Agreement shall inure to
the benefit of and be binding upon the Parties and their respective successors
and permitted assignees, and no other Person shall have any rights hereunder.
Section
6.7. Severability
. If, for any reason, any provision of this Agreement is unenforceable, the
remaining provisions hereof shall nevertheless be carried into effect.
Section
6.8. Governing Law
. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE REPUBLIC OF COLOMBIA WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS
OF LAWS.
Section 6.9. Arbitration. Any controversy, claim or dispute among
the Parties in connection with corporate activities, rights of the
shareholders, profit participation, liquidation of the Company or other
matters arising out of or relating to this Agreement or the performance,
breach, termination or invalidity hereof, unless not in the disposal of the
Parties, shall be settled by a Court of Arbitration designated by the Board of
Directors of the Chamber of Commerce of Santafe de Bogota by drawing lots among
the arbitrators appearing in the list kept by the Center of Mercantile
Arbitration and Conciliation of said Chamber. The Court thus designated shall
abide by the provisions of the Code of Civil Procedure and the Commercial Code
in accordance with the following rules: (A) the Court shall consist of three
arbitrators; (B) the internal organization of the Court shall be subject to
the rules established to such end by the Center of Mercantile Arbitration and
Conciliation of the Chamber of Commerce of Santafe de Bogota; (C) the decision
of the Court shall be in law; and (D) the Court shall meet in Santafe de Bogota,
at the Center of Mercantile Arbitration and Conciliation of the Chamber of
Commerce of such city.
Section 6.10. Waiver of Immunity. (a) Each Party irrevocably
consents to and waives any objection which it may now or hereafter have to the
laying of venue of any proceeding relating to enforcement of the arbitration
provisions of this Agreement brought in the Specified Court and further
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of any such proceeding in
the Specified Court.
(b) To the extent that a Party or any of its revenues, assets or
properties shall be entitled, with respect to any proceeding relating to
enforcement of the arbitration provisions of this Agreement at any time
brought against such Party or any of its revenues, assets or properties, to
any sovereign or other immunity from suit, from jurisdiction, from attachment
prior to judgment, from attachment in aid of execution of judgment, from
execution of a judgment or from any other legal or judicial process or remedy,
and to the extent that in any jurisdiction there shall be attributed such an
immunity, such Party irrevocably agrees not to claim and irrevocably waives
such immunity to the fullest extent permitted by the laws of such jurisdiction
(including, without limitation, the Foreign Sovereign Immunities Act 1976 of
the United States).
Section 6.11. Headings; Table of Contents. The headings and table of
contents contained herein are for convenience of reference only and do not
constitute a part of this Agreement.
Section 6.12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have hereunto caused this agreement
to be executed and delivered by their proper officers thereunto duly
authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
By:
Title:
BP COLOMBIA PIPELINES LIMITED
By:
Title:
TOTAL PIPELINE COLOMBIE S.A.
By:
Title:
TRITON PIPELINE COLOMBIA, INC.
By:
Title:
IPL ENTERPRISES (COLOMBIA) INC.
By:
Title:
By:
Title:
TCPL (BERMUDA) LTD.
By:
Title:
By:
Title:
[NAME OF VOTING TRUSTEE]
As Voting Trustee
By:
Title:
SCHEDULE C
TO OLEODUCTO CENTRAL AGREEMENT
FORM OF DIVIDEND TRUST AGREEMENT
dated as of the day of , 1995
among
OLEODUCTO CENTRAL S.A.
[EMPRESA COLOMBIANA DE PETROLEOS - ECOPETROL]
BP COLOMBIA PIPELINES LIMITED
TOTAL PIPELINE COLOMBIE S.A.
TRITON PIPELINE COLOMBIA, INC.
IPL ENTERPRISES (COLOMBIA) INC.
TCPL (BERMUDA) LTD.
and
[INSERT NAME OF DIVIDEND TRUSTEE]
as Dividend Trustee
<PAGE>
TABLE OF CONTENTS
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<S> <C> <C>
Section Page
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ARTICLE ONE
DEFINITIONS AND INTERPRETATION
1.1. Definitions 2
1.2. Interpretation 4
ARTICLE TWO
MASTER DIVIDEND ACCOUNTS AND DIVIDENT ACCOUNTS
2.1. Creation of Master Dividend Accounts 5
2.2. Creation of Dividend Subaccounts 5
2.3. Investment of Funds in the Dividend Accounts 6
ARTICLE THREE
PAYMENTS AND WITHDRAWALS
3.1. Payment into Master Dividend Accounts and Dividend Accounts 6
3.2. Effect of Payment into Master Dividend Account 6
3.3. Shareholder Instructions for Payments in Dividend Account 6
3.4. Withdrawals from Dividend Account 7
3.5. Restriction Notice 8
3.6. Restricted Period 9
ARTICLLE FOUR
THE DIVIDEND TRUSTEE
4.1. Appointment of Dividend Trustee 9
4.2. Delivery of Documentation 10
4.2. Attorney-in-Fact 10
4.4. Reliance 10
4.5. Books and Accounts 11
4.6. Liability 11
4.7. Consultation With Counsel, etc. 11
4.8. Duties 12
4.9. Resignation, Replacement and Successor Dividend Trustee 12
4.10. Indemnity 13
4.11. Compensation 14
4.12. Certificates 14
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
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4.13. Stamp and Other Similar Taxes 14
4.14. Exculpatory Provisions 14
4.15. Merger of the Trustee 14
4.16. Treatment of Shareholders by Dividend Trustee 15
4.17. Confidentiality 15
4.18. Miscellaneous 15
ARTICLE FIVE
TERM
5.1. Term 16
5.2. Effectiveness 17
ARTICLE SIX
GENERAL
6.1. Notices 17
6.2. Entire Agreement 19
6.3. Representations and Warranties 19
6.4. Assignments 20
6.5. Nature of Obligations 20
6.6. Amendments 21
6.7. No Third Party Beneficiaries 21
6.8. Severability 21
6.9. Governing Law 21
6.10. Commercial Obligations 21
6.11. Arbitration 21
6.12. Submission to Jurisdiction; Consent to Service 22
6.13. Waiver of Immunity 22
6.14. Headings; Table of Contents 23
6.15. Counterparts 23
ANNEX A Form of Dividend Subaccount Bank Agreement
</TABLE>
DIVIDEND TRUST AGREEMENT
AGREEMENT, dated as of the day of _____________, 1995, among:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws of
Colombia (JSC);
[EMPRESA COLOMBIANA DE PETROLEOS - ECOPETROL, an Empresa Industrial
y Comercial del Estado existing under the laws of Colombia and wholly owned by
Colombia;]
BP COLOMBIA PIPELINES LIMITED, a corporation existing under the laws
of England and Wales;
TOTAL PIPELINE COLOMBIE S.A., a corporation existing under the laws
of France;
TRITON PIPELINE COLOMBIA, INC., a corporation existing under the
laws of the Cayman Islands;
IPL ENTERPRISES (COLOMBIA) INC., a corporation existing under the
laws of the Cayman Islands; and
TCPL (BERMUDA) LTD., a corporation existing under the laws of
Bermuda;
[INSERT NAME OF DIVIDEND TRUSTEE], a bank and trust company existing
under the laws of ________________, as dividend trustee (the Dividend
Trustee).
RECITALS
WHEREAS:
A. Shareholders have formed Ocensa by public deed no. 4747 of
December 14, 1994 granted before notary public no. 38 of Santafe de Bogota;
B. The Shareholders have entered into the Oleoducto Central
Agreement (as amended from time to time, the Oleoducto Central Agreement),
dated as of December 14, 1994, among Ocensa and the Shareholders (as defined
therein)specifying certain terms and conditions of their respective
investments and participation in Ocensa, the Oleoducto Central and the
financing thereof and the operation of the Oleoducto Central;
C. Ocensa and the Shareholder Parties (other than Ecopetrol) are
concurrently entering into the Voting Trust Agreement specifying certain terms
and conditions of exercise of their respective voting rights as shareholders
of Ocensa;
D. The Shareholder Parties wish to specify certain additional
terms and conditions of their respective investments and participation in
Ocensa; and
E. Ocensa and the Shareholder Parties acknowledge that Ocensa
proposes to incur and secure Senior Debt on a limited recourse basis under
separate Senior Debt Tranches to finance in part the Oleoducto Central and
that it may enter into Common Security Trust Agreement(s) (the Common Security
Trust Agreement) with Senior Lenders or agents therefor and a trustee therefor
to secure each Senior Debt Tranche separately with certain of its rights under
each of its Transportation Agreements, Transportation Notes Agreements,
Advance Tariff Agreements and Subscription Agreements with the Shareholders
(or their respective Affiliates), as the case may be.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the Parties agree as
follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires,
the following words and phrases shall have the meanings indicated below:
Authorized Investments shall mean one or more of the following:
(a) obligations maturing or capable of redemption by the holder not more
than 12 months after the date of acquisition and issued or guaranteed by (i)
any government, governmental agency or multilateral intergovernmental
organization similar obligations of which have a rating of not less than AA-
from Standard & Poor's Corporation or equivalent from an Internationally
Recognized Statistical Rating Agency and (ii) in an amount not to exceed the
equivalent of $500,000 at any one time;
(b) demand deposits, time deposits, certificates of deposit or other
obligations (including acceptances) maturing or capable of redemption by the
holder not more than 12 months after the date of investment or acquisition
which are issued, accepted or guaranteed by (i) the bank that is then serving
as Dividend Trustee, or (ii) a bank having a rating of not less than A- from
Standard & Poor's Corporation or equivalent from an Internationally Recognized
Statistical Ratings Agency provided that, except for the bank that is then
serving as Dividend Trustee, deposits in or investments with any one such bank
shall not at one time exceed $500,000 or the equivalent in other currencies;
(c) commercial paper, corporate promissory notes or other obligations
maturing or capable of redemption by the holder not more than 12 months after
the date of acquisition which (i) have, or are supported by an unconditional
guarantee from a corporation similar obligations of which have, a rating of at
least AA- from Standard & Poor's Corporation or equivalent from an
Internationally Recognized Statistical Rating Agency, or (ii) are obligations
which are supported by an unconditional guarantee or letter of credit from any
bank referred to in clause (b); or
(d) authorized investments as permitted under the Common Security Trust
Agreement.
All amounts contained in this definition are subject to adjustment based on
the Consumer Price Index for All Urban Consumers (not seasonally adjusted) or
any other successor index or comparable measure which may be substituted
therefor, published by the United States Department of Commerce, Bureau of
Labor Statistics.
Collateral shall have the meaning assigned to it in the Common
Security Trust Agreement.
Common Security Trust Agreement shall have the meaning assigned to
it in the Recitals hereto.
Confidential Information shall have the meaning assigned to it in
Section 4.17.
Dividend Account shall have the meaning assigned to it in Section
2.1.
Dividend Subaccount shall have the meaning assigned to it in Section
2.2.
Dividend Subaccount Bank shall have the meaning assigned to it in
Section 2.2.
Excess Payment shall mean any Distribution pursuant to Section 5.6
of the Oleoducto Central Agreement.
Onshore Dividend Subaccount shall have the meaning assigned to it in
Section 2.2.
Parties shall mean Ocensa, [Ecopetrol], BP Pipelines, TOTAL
Pipeline, Triton Pipeline, IPL Enterprises, TCPL (Bermuda) Ltd., the Dividend
Trustee and their respective successors and permitted assigns.
Restricted Account shall have the meaning assigned to it in Section
3.4.
Restricted Payment shall have the meaning assigned to it in Section
3.5.
Restricted Period shall have the meaning assigned to it in Section
3.6.
Restriction Notice shall have the meaning assigned to it in Section
3.5.
Shareholder Party shall mean any Party to this Agreement that is a
Shareholder.
All defined terms used and not defined herein shall have the meanings assigned
to them in the Oleoducto Central Agreement.
Section 1.2. Interpretation. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular and
vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or a Section refers to an Article or
a Section, as the case may be, of this Agreement; and
(d) all references to this Agreement and the words herein, hereof,
hereto and hereunder and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section or other subdivision.
ARTICLE TWO
DIVIDEND ACCOUNTS
Section 2.1. Creation of Dividend Accounts. Subject to Section
6.4(c), the Dividend Trustee shall establish and maintain segregated accounts
in Dollars or other non-Colombian currency in the name of the Dividend Trustee
at [offshore], one for the benefit of each Shareholder Party (each, a Dividend
Account). For each Dividend Account the Dividend Trustee shall establish and
maintain Dividend Subaccounts pursuant to Section 2.2. Unless otherwise
specified in this Agreement, all references to any Dividend Account shall
include references to all related Dividend Subaccounts thereof and such
Dividend Subaccounts shall be subject to the same restrictions and limitations
and entitled to the same rights as the Dividend Account to which they relate.
All moneys held in a Dividend Account shall be trust funds held by the
Dividend Trustee for the purpose of making payments therefrom in accordance
with this Agreement. The Dividend Trustee and Ocensa shall comply with all
applicable law in connection with any payments and transfers of funds
hereunder.
Section 2.2. Creation of Dividend Subaccounts. (a) Each Dividend
Account may include accounts maintained outside of Colombia and, in the case
of Ecopetrol, shall include an account maintained in Colombia in the name of
the Dividend Trustee (each, a Dividend Subaccount and the Dividend Subaccount
maintained in Colombia for Ecopetrol, the Onshore Dividend Subaccount) at
commercial, merchant or investment banks of international standing designated
from time to time by the related Shareholder Party as provided in this Section
(which may include the bank which at the time is acting as Dividend Trustee)
(Dividend Subaccount Banks). Each Dividend Subaccount shall be designated as
such, and shall be segregated from any other Dividend Subaccount at the same
Dividend Subaccount Bank.
(b) The related Shareholder Party shall give each Shareholder
Party, Ocensa and the Dividend Trustee at least 15 days' prior notice of its
intention to designate a Dividend Subaccount Bank. No bank (other than the
bank which at the time is acting as Dividend Trustee) shall become or continue
to be a Dividend Subaccount Bank if Ocensa shall have notified the related
Shareholder Party and other Shareholder Parties that in its reasonable
judgment it has concluded that such bank is not appropriate to serve as a
Dividend Subaccount Bank.
Each bank designated by the related Shareholder Party as a
Dividend Subaccount Bank shall, as a condition to being a Dividend Subaccount
Bank for purposes of this Agreement, enter into an agreement with the Dividend
Trustee substantially to the effect set forth in Annex A, with such changes
thereto of form, but not of substance, asthe Dividend Trustee shall approve.
Each Dividend Subaccount Bank shall deliver a signed copy of such agreement to
Ocensa and each Shareholder Party.
Section Investment of Funds in the Dividend Accounts. Pending
application thereof pursuant to Section 3.4, funds in the Dividend Account
maintained by the Dividend Trustee for the benefit of a Shareholder Party
shall be invested into Authorized Investments as directed by Ocensa.
ARTICLE THREE
PAYMENTS AND WITHDRAWALS
Section 3.1.Payment into Dividend Accounts. Ocensa may from time to
time make Distributions to the Dividend Trustee, which Distributions shall be
deposited in dollars by or on behalf of Ocensa simultaneously into the
respective Dividend Accounts established by the Dividend Trustee for the
benefit of each Shareholder Party, except that in the case of Ecopetrol such
Distributions shall be deposited in pesos into the Onshore Dividend
Subaccount. Each Distribution shall be identified by Ocensa as to the party
entitled to the payment, the amount thereof, and if applicable, as an Excess
Payment.
Section 3.2. Effect of Payment into Dividend Account. Any
Distribution made by Ocensa to such Dividend Account shall discharge Ocensa's
obligation to such Shareholder Party in respect of such Distribution as fully
as if such payment were made directly to such Shareholder Party otherwise
entitled to receive it.
Section 3.3. Shareholder Instructions for Payments in Dividend
Account. Each Shareholder Party hereby irrevocably instructs and authorizes
Ocensa to make Distributions only as provided in this Agreement and all
instructions given and all authority conferred under this Agreement is given
and conferred subject to the interests of the Dividend Trustee, Ocensa and the
other Shareholder Parties as beneficiaries hereof; and, in consideration of
those interests and for the purpose of completing the transactions
contemplated by this Agreement all instructions given and all authority
conferred by this Section 3.3 shall be deemed coupled with an interest and be
irrevocable and not subject to termination by such Shareholder Party or by
operation of law, whether by the death or incapacity of such Shareholder Party
(if such Shareholder Party is an individual) or by the death or incapacity of
any executor or trustee (if such Shareholder Party is an estate or trust) or
the termination of such estate or trust or by the dissolution of such
Shareholder Party (if such Shareholder Party is a partnership or corporation),
or by the occurrence of any other event.
Section 3.4. Withdrawals from Dividend Account. Upon receipt,
funds in the Dividend Account of a Shareholder Party shall be automatically
withdrawn by the Dividend Trustee and transferred to such Shareholder Party
unless the Dividend Trustee shall have received, prior to the receipt of such
Distribution, a Restriction Notice (as defined below) in respect of such
Shareholder Party's Dividend Account (the Restricted Account) pursuant:
(a) to paragraph (a), (b), (c) or, subject to paragraph (b) of this
Section 3.4., (d) of Section 3.5 in which case such funds, to the extent
described in Section 3.6(c), shall be withdrawn by the Dividend Trustee and
deposited into the Dividend Accounts maintained for the benefit of the other
Shareholder Parties in proportion to their respective Shareholding Interests,
provided that no such deposit shall be made into a Restricted Account of any
such Shareholder Party;
(b) to clause (d) of Section 3.5, in which case such funds shall be
withdrawn and deposited by the Dividend Trustee into the Dividend Accounts
maintained for the benefit of the Shareholder Parties, if any, who have
provided Shareholder Bridge Loans pursuant to Section 5.2(j), or 5.3(c), as
the case may be, of the Oleoducto Central Agreement, in each case as certified
by Ocensa, in the same proportion as such Shareholder Bridge Loans provided by
them; or
(c) to clause (e) of Section 3.5 in which case such Excess Payments will
automatically be withdrawn by the Dividend Trustee from the Dividend Account
maintained for the benefit of IPL Enterprises and TCPL (Bermuda) and deposited
into the Dividend Accounts maintained for the benefit of the Shareholder
Parties that are members of Initial Shipper Groups in the proportion set forth
in clause (b) of Section 5.6 of the Oleoducto Central Agreement provided that
no such deposit shall be made into a Restricted Account of any such
Shareholder Party.
All Distributions not automatically transferred to a Shareholder Party as
provided in the preceding clauses shall be converted immediately into dollars
by the Dividend Trustee if not so converted by Ocensa at the best rate then
offered by the Dividend Trustee for such conversion [and, in the case of
Ecopetrol, pending application pursuant to this Section 3.4, shall be
transferred by the Dividend Trustee into an offshore Dividend Subaccount of
the Dividend Account maintained for the benefit of Ecopetrol].
Section 3.5. Restricted Payments. A payment into the Dividend
Account maintained for the benefit of a Shareholder Party shall be a
Restricted Payment only if Ocensa shall have delivered a notice (a Restriction
Notice) to the Dividend Trustee to the effect that:
(a) there is at or prior to the time of such payment, and
immediately following the making of such payment would be, continuing an event
of default or default under the Common Security Trust Agreement with respect
to the Senior Debt Tranche secured by Collateral provided by such Shareholder
Party's Initial Shipper Group;
(b) there has occurred at or prior to the time of such payment,
and immediately following the making of such payment would be, continuing a
failure of any Affiliate of such Shareholder Party to meet any payment
obligations or material shipping obligations under its Transportation
Agreement, Transportation Notes Agreement or Advance Tariff Agreement or any
guarantee of obligations thereunder;
(c) there has occurred at or prior to the time of such payment a
violation by such Shareholder Party of Article Two of the Voting Trust
Agreement or a transfer of Shares by such Shareholder Party in violation of
the provisions of Article Ten thereof;
(d) there is at or prior to the time of such payment, and
immediately following the making of such payment would be, continuing a
failure by such Shareholder Party to meet any of its payment obligations under
its Subscription Agreement or by any Affiliate of such Shareholder Party to
meet any payment obligations under a guarantee of obligations under such
Subscription Agreement, or such Shareholder Party is at or prior to the time
of such payment, and immediately following the making of such payment would
be, subject to the remedies under Section 5.2(e) or 5.3(b) of the Oleoducto
Central Agreement; or
(e) with respect to IPL Enterprises or TCPL (Bermuda) only, such payment
constitutes an Excess Payment.
[COORDINATE WITH TREATMENT OF DISTRIBUTIONS
UNDER THE POLITICAL EVENTS AGREEMENT]
[CONSIDER DISTRIBUTIONS IN RESPECT OF TARIFF
CREDITS PURSUANT TO TARIFF PRINCIPLES]
Section 3.6. Restricted Period. Upon the occurrence of any of the
events set forth in paragraphs (a) through (e) above with respect to a
Shareholder Party, Ocensa shall deliver to the Dividend Trustee a Restriction
Notice with respect to such Shareholder Party's Dividend Account, which shall
remain in effect until its withdrawal by Ocensa (the Restricted Period).
Ocensa shall only withdraw a Restriction Notice:
(a) in the case of an event described in Section 3.5(a) which is
not an event described in Section 3.5(b) or (d) (in which case paragraphs (b)
and (c) below shall apply), upon the termination of such event;
(b) in the case of an event described in Section 3.5(d) and only if
other Shareholder Parties have provided Shareholder Bridge Loans pursuant to
Section 5.2(j) or 5.3(c) of the Oleoducto Central Agreement, as the case may
be, after a year and such additional period as is necessary for the aggregate
Distributions paid into the Restricted Account and applied as set forth in
Section 3.4(b) during such additional period to equal the Shareholding
Interest of the Shareholder Party for the benefit of which such Restricted
Account is maintained, of any increase in Pre-Completion Retained Returns or
Accrued Returns accumulated during the continuance of such event has passed
following the termination of such event; or
(c) in the case of an event described in Section 3.5(b) or 3.5(d)
(other than as set forth in paragraph (b) of this Section 3.6), for such
period of time and to the extent that is necessary for the aggregate
Distributions paid into the Restricted Account and applied as set forth in
Section 3.4(a) to equal the amount of Distributions that the Shareholder
Parties for the benefit of which are maintained Dividend Accounts that are not
Restricted Accounts failed to receive during the continuation of such event as
a result thereof.
[CONSIDER EFFECT ON PRE-COMPLETION RETAINED
RETURNS AND ACCRUED RETURNS]
ARTICLE FOUR
THE DIVIDEND TRUSTEE
Section 4.1. Appointment of Dividend Trustee. _________________,
acting through its corporate trust office, [insert location of office], is
hereby appointed by eachof the Shareholder Parties as Dividend Trustee
hereunder and the Dividend Trustee hereby accepts the trust created by this
Agreement upon the terms and conditions hereof.
Section 4.2. Delivery of Documentation. Executed counterparts of the
Oleoducto Central Agreement referred to herein have been delivered to the
Dividend Trustee and the Dividend Trustee acknowledges receipt thereof. Ocensa
and each Shareholder Party agree to deliver to the Dividend Trustee any
instrument amending or modifying any agreement previously delivered to the
Dividend Trustee. Amendments or modifications of the aforementioned agreements
shall not affect the duties and obligations of the Dividend Trustee hereunder
unless (a) the Dividend Trustee has knowledge of such amendment or
modification, and (b) with respect to any amendment or modification which, in
the opinion of the Dividend Trustee, enlarge the Dividend Trustee's duties,
obligations, or responsibility, the Dividend Trustee has not objected in
writing thereto within ten Business Days of receiving notice thereof.
Section 4.3. Attorney-in-Fact. (a) The Dividend Trustee or any
officer or agent thereof, with full power of substitution, is hereby appointed
the attorney-in-fact of Ocensa and each Shareholder Party for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing any instruments which the Dividend Trustee may deem necessary or
advisable to accomplish the purposes hereof without notice to or assent by any
of the foregoing, to the extent permitted by applicable law, which appointment
as attorney-in-fact is coupled with an interest and irrevocable.
(b) Ocensa and each Shareholder Party agrees to execute and deliver
to the Dividend Trustee, and register in every public registry in Colombia in
which such registration is necessary, a notarized Colombian public deed
appointing the Dividend Trustee and any officer or agent thereof, with full
power of substitution, its attorney-in-fact for purposes of exercising the
rights and remedies of Ocensa or such Shareholder Party, as the case may be,
hereunder and taking all action in Colombia on behalf of such Shareholder
Party that the Dividend Trustee is authorized to take pursuant to this
Agreement.
Section 4.4. Reliance. The Dividend Trustee shall be entitled to act
upon any notice, certificate, instrument, demand, request, direction,
instruction, waiver, receipt, consent or other document or communication
furnished hereunder which it in good faith believes to be genuine, and it
shall be entitled to rely upon the due execution, validity and effectiveness,
and the truth and acceptability of any provisions contained therein. The
Dividend Trustee shall not have any responsibility to make any investigation
into the facts or matters stated in any notice, certificate, instrument,
demand, request, direction, instruction, waiver, receipt, consent or other
document or communication furnished to it hereunder. Ocensa and each
Shareholder Party shall deliver to the Dividend Trustee a list duly executed
by an officer thereof duly authorized thereunto of authorized signatories
ofany notice, certificate, instrument, demand, request, direction,
instruction, waiver, receipt, consent or other document or communication
furnished to the Dividend Trustee hereunder, and the Dividend Trustee shall be
entitled to rely on such list until a new list is furnished by Ocensa or such
Shareholder Party, as the case may be, to the Dividend Trustee.
Section 4.5. Books and Accounts. (a) The Dividend Trustee shall
maintain all such accounts, books and records as may be necessary properly to
record all transactions carried out by us under this Agreement. The Dividend
Trustee shall permit the Shareholder Parties and Ocensa and their authorized
representatives to examine such accounts, books and records; provided that any
such examination shall occur upon reasonable notice and during normal business
hours. Upon request by Ocensa or any Shareholder Party, the Dividend Trustee
shall at any time provide such parties with any other information such Parties
may reasonably request regarding the transactions contemplated in this
Agreement. Upon removal or resignation of the Dividend Trustee, the Dividend
Trustee shall deliver all such books and records to the successor dividend
trustee, or, in the event of termination of this Agreement, to Ocensa.
(b) On or before the fifth Business Day in New York of each
calendar month for so long as such Dividend Account are open, the Dividend
Trustee shall deliver to Ocensa and the related Shareholder Party a statement
indicating the amount of funds and other assets on deposit in the Dividend
Account and the nature of any investments thereof as of the end of the
preceding calendar month and identifying all deposits to and payments from the
Dividend Account during such calendar month, including the date on which made.
Upon request by Ocensa or the Shareholder Party for the benefit of which a
Dividend Account is maintained, the Dividend Trustee shall at any other time
inform such parties of deposits, investments, payments, balances and any other
information such parties may reasonably request regarding the Dividend
Account.
Section 4.6. Liability. The Dividend Trustee shall not be liable for
any error of judgment or for any act done or omitted to be done by it in good
faith or for any mistake of fact or law, or for anything which it may do or
refrain from doing, except for its own gross negligence or willful misconduct.
A Shareholder Party or Ocensa shall in no event be liable for any act done or
omitted to be done by the Dividend Trustee or by any of its officers or
employees.
Section 4.7. Consultation With Counsel, etc. The Dividend Trustee
may consult with, and obtain advice from, legal counsel, accountants and other
experts, in connection with the performance of its duties hereunder and it
shall incur no liability and shall be fully protected in acting in good faith
in accordance with the opinion and advice of such counsel, accountants and
other experts. The Dividend Trustee shall not be responsible for the
negligence or misconduct of any counsel, accountants and other experts
selected by it without negligence or willful misconduct on its part.
Section 4.8. Duties. The Dividend Trustee shall have no duties other
than those specifically set forth or provided for in this Agreement and no
implied covenants or obligations of the Dividend Trustee shall be read into
this Agreement or any related agreement to which the Dividend Trustee is a
party. The Dividend Trustee shall have no obligation to familiarize itself
with and shall have no responsibility with respect to any other agreement or
document relating to the transactions contemplated by this Agreement nor any
obligation to inquire whether any notice, certificate, instrument, demand,
request, direction, instruction, waiver, receipt, consent, document,
communication, statement or calculation is in conformity with the terms of any
such other agreement, except those irregularities or errors manifestly
apparent on the face of such document or to the actual knowledge of the
Dividend Trustee. If, however, any remittance or communication received by the
Dividend Trustee appears manifestly erroneous or irregular the Dividend
Trustee shall be under a duty to make prompt inquiry to the Person originating
such remittance or communication in order to determine whether a clerical
error or inadvertent mistake has occurred. The Dividend Trustee shall at all
times take such care in dealing with the Dividend Accounts as would a prudent
man in dealing with his own property. The Dividend Trustee shall, upon receipt
of a Restriction Notice, exercise the rights and powers vested in it by this
Agreement which it is directed by Ocensa to exercise and the Dividend Trustee
shall not be liable with respect to any action taken or omitted to be taken by
it in accordance with the direction of Ocensa absent gross negligence or
willful misconduct.
Section 4.9. Resignation, Replacement and Successor Dividend
Trustee. The Dividend Trustee at any time may resign as Dividend Trustee
hereunder upon giving not less than three months' notice in writing to Ocensa
and each Shareholder Party. The Dividend Trustee may be removed as Dividend
Trustee hereunder by an instrument in writing by Ocensa and each Shareholder
Party with respect to the Dividend Account of which there is no outstanding
Restriction Notice. Upon resignation of the Dividend Trustee, a successor
dividend trustee shall be designated by Ocensa and each Shareholder Party with
respect to which there is no outstanding Restriction Notice. No resignation or
removal of the Dividend Trustee and no appointment of a successor dividend
trustee shall be effective until (a) the successor dividend trustee has
accepted its designation, (b) all indemnities, compensation and expenses
required by Sections 4.10, 4.11 and 4.13 shall have been paid or provided for
and (c) the Dividend Trustee shall have executed and delivered to the
successor trustee a notarized Colombian public deed delegating its rights and
responsibilities hereunder and under the Security Documents to the successor
trustee. If no designation of a successor dividend trustee shall have been
made and accepted within 60 days after the date fixed for such resignation or
removal a successor dividend trustee shall be designated by Ocensa and
Shareholder Parties holding a majority of the Shares subject to this Agreement
and if no successor dividend trustee shall have been so designated and shall
have accepted such designation within an additional 30 days after the date
fixed for such resignation or such removal, the Dividend Trustee may petition
anycourt of competent jurisdiction for the designation of a successor dividend
trustee. Such court may thereupon, after such notice, if any, as it may
prescribe, designate a successor dividend trustee. Any successor dividend
trustee appointed pursuant to this Section 4.9 shall be a bank or trust
company organized under the laws of [________] having its principal corporate
trust office in [insert office location] and a combined capital surplus of at
least $200,000,000. Any successor dividend trustee shall evidence its
acceptance of the trust hereunder by executing and delivering to Ocensa, each
Shareholder Party and the Dividend Trustee an instrument accepting this trust
and its designation as Dividend Trustee hereunder, and thereupon such
successor dividend trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder with like effect as if originally named as Dividend
Trustee herein, and such predecessor shall have no further obligation or
liability thereunder except for liability with respect to its acts or
omissions prior to such succession pursuant to Section 4.6; nevertheless, on
the request of any party hereto or such successor dividend trustee, the
Dividend Trustee ceasing to act shall execute and deliver instruments
transferring to such successor dividend trustee all rights and powers of the
Dividend Trustee so ceasing to act, including any such instruments necessary
to transfer the Dividend Account maintained for the benefit of each
Shareholder Party to such successor dividend trustee, and shall deliver to
such successor dividend trustee all property held by it in trust hereunder.
Section 4.10. Indemnity. (a) Ocensa agrees to indemnify the
Dividend Trustee for, and to hold it harmless against, any loss, liability,
claim, judgment, settlement, compromise, obligation, damage, penalty, cost,
expense or disbursement of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, unless forming part of the compensation agreed pursuant to Section
4.11 or arising from the gross negligence or willful misconduct of such of
the Dividend Trustee or the agents that are seeking indemnification, including
the costs and expenses of defending itself against any claim of liability in
the premises.
(b) In any suit, proceeding or action brought by the Dividend
Trustee with respect to, or to enforce any provisions of this Agreement,
Ocensa will save, indemnify and keep the Dividend Trustee harmless from and
against all expense, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment or reduction of liability whatsoever of the obligee
thereunder, arising out of a breach by Ocensa of any of its obligations
hereunder or thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such obligee or its successors
from Ocensa, and all such obligations of Ocensa shall be and remain
enforceable against and only against Ocensa and shall not be enforceable
against the Dividend Trustee or any Shareholder.
(c) The agreements in this Section 4.10 shall survive the
termination of the other provisions of this Agreement.
Section 4.11. Compensation. The Dividend Trustee shall be entitled
to reasonable compensation (which shall not be limited by any provision of law
in regard to compensation of a trustee of an express trust) as may be agreed
from time to time between Ocensa and the Dividend Trustee for all services
rendered under this Agreement, and such compensation, together with
reimbursement of the Dividend Trustee for its advances, disbursements and
expenses in connection with the performance of the trust provided for herein
(including the reasonable fees and expenses of its agents and of counsel,
accountants and other experts referred to in Section 4.7), shall be paid by
Ocensa promptly upon demand from the Dividend Trustee from time to time as
services are rendered and expenses are incurred. The Shareholders shall have
no liability for any fees, expenses or disbursements of the Dividend Trustee.
Section 4.12. Certificates. Whenever in the administration of the
trusts of this Agreement the Dividend Trustee shall deem it necessary or
desirable that a matter be proved or established in connection with taking or
omitting any action by the Dividend Trustee hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence or willful misconduct on the part of the Dividend
Trustee, be deemed to be conclusively proved or established by a certificate
of Ocensa delivered to the Dividend Trustee.
Section 4.13. Stamp and Other Similar Taxes. Ocensa agrees to
indemnify and hold harmless the Dividend Trustee from, and shall reimburse the
Dividend Trustee for, any present or future claim for liability for any stamp
or other similar tax and any penalties or interest with respect thereto, which
may be assessed, levied or collected by any jurisdiction in connection with
this Agreement or the trusts created hereunder. The obligations of Ocensa
under this Section 4.13 shall survive the termination of the other provisions
of this Agreement.
Section 4.14. Exculpatory Provisions. The Dividend Trustee makes no
representations as to the value or condition of the trusts created hereunder
or any part thereof, or as to the title of Ocensa or any Shareholder Parties
thereto or as to the validity, execution (except by itself), enforceability,
legality or sufficiency of this Agreement, and the Dividend Trustee shall
incur no liability or responsibility in respect of any such matters.
Section 4.15. Merger of the Trustee. Any corporation into which the
Dividend Trustee shall be merged, or with which it shall be consolidated, or
any corporation resulting from any merger or consolidation to which the
Dividend Trusteeshall be a party, shall be the Dividend Trustee under this
Agreement without the execution or filing of any paper or any further act on
the part of the parties hereto.
Section 4.16. Treatment of Shareholders by Dividend Trustee. (a)
The Trustee may treat the Shareholder Parties as the holders of the Shares and
as the absolute owners thereof for all purposes hereunder unless the Dividend
Trustee shall receive notice to the contrary.
(b) Any Person which shall be designated as the duly authorized
representative of one or more of a Shareholder Party to act as such in
connection with any matters pertaining to this Agreement shall present to the
Dividend Trustee such documents, including, without limitation, opinions of
counsel, as the Dividend Trustee may reasonably request, in order to
demonstrate to the Dividend Trustee the authority of such Person to act as the
representative of such Shareholder Party.
Section 4.17. Confidentiality. The Dividend Trustee shall assure
that all information disclosed to it concerning the Oleoducto Central, the
assets and business of Ocensa and the assets and business of each of the other
Shareholder Parties and not otherwise generally available (Confidential
Information) shall be kept confidential and shall, unless otherwise required
by law or official request issued by a court of competent jurisdiction or by a
judicial, administrative, legislative, regulatory or self-regulatory authority
not be revealed without the consent of Ocensa and all Shareholder Parties
other than to the directors, officers and representatives of Ocensa, the
Shareholder Parties and Affiliates of the Shareholder Parties. Upon Ocensa or
any Shareholder Party demanding the return of Confidential Information
relating to it by notice in writing the Dividend Trustee shall, and shall
cause its representatives to, return all documents containing Confidential
Information that have been provided by Ocensa or Shareholder Party demanding
the return of Confidential Information (or on its behalf) and destroy any
copies of such documents and any document or other record reproducing,
containing or made from or with reference to the Confidential Information,
except, in each case, for any submissions to or filings with judicial,
administrative, legislative or regulatory authorities. Such return or
destruction shall take place as soon as practicable after the receipt of such
notice. The agreements in this Section 4.17 shall survive the termination of
the other provisions of this Agreement.
Section 4.18. Miscellaneous. (a) The Dividend Trustee shall have
the right at any time to seek instructions concerning the administration of
this trust from any court of competent jurisdiction. In the event of any
disagreement between the other parties to this Agreement resulting in adverse
claims being made in connection with property held by the Dividend Trustee and
the terms of this Agreement do not unambiguously mandate the action the
Dividend Trustee is to take in connection with such property under the
circumstance then existing, or the Dividend Trustee is in doubt as to what
action it isrequired to take, the Dividend Trustee shall be entitled to
refrain from taking any action until directed otherwise in writing by the
Parties hereto entitled to give such direction or by a court of competent
jurisdiction.
(b) None of the provisions of this Agreement shall be construed to
require the Dividend Trustee to expend or risk its own funds or otherwise to
incur any personal financial liability in the performance of any of its duties
hereunder or thereunder if it shall have reasonable grounds for belief that
repayment of such funds or indemnity against such risk or liability is not
reasonably assured to it.
(c) The Dividend Trustee makes no representations as to, and shall
have no responsibility for, the correctness of any statement contained in, or
the validity or sufficiency of, this Agreement or any documents or instruments
referred to herein, or as to or for the validity or collectibility of any
obligation contemplated hereby or thereby. The Dividend Trustee shall not be
accountable for the use or application by any Person of disbursements properly
made by the Dividend Trustee in conformity with the provisions of this
Agreement.
(d) The Dividend Trustee (or any parent, subsidiary or associated
person) may accept deposits from, lend money to, and generally engage in any
business with, Ocensa, any Shareholder Party, the Subaccount Banks or any of
their Affiliates, without affecting the validity of the trusts created hereby
or the right to enforce any right to payment hereunder as freely as if it were
not the Dividend Trustee hereunder. The Dividend Trustee shall notify Ocensa
and each Shareholder Party at any time it believes it has any interest
conflicting with its obligations hereunder. The Trustee hereby waives any
right of banker's lien, set-off or counterclaim in respect of any assets
contained in the Dividend Accounts maintained for the benefit of a Shareholder
Party or otherwise that are held by the Dividend Trustee as dividend trustee
hereunder.
(e) The Trustee shall not be personally liable for debts contracted
or liabilities or damages incurred in the management or operations of the
trust hereunder, except for those contracted or incurred as a result of its
gross negligence or willful misconduct.
ARTICLE FIVE
TERM
Section 5.1. Term. This Agreement shall continue in full force and
effect so long as Ocensa continues to be in existence in accordance with the
By-laws and shall terminate upon termination of the Oleoducto Central
Agreement unless earlier terminatedby written agreement of the Parties. Each
Party's obligations incurred or accrued hereunder prior to termination shall
survive any termination of this Agreement.
Section 5.2. Effectiveness. This Agreement shall have no effect or
validity unless and until the Oleoducto Central Agreement shall have become
effective.
ARTICLE SIX
GENERAL
Section 6.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Party Copy To Agent for
--------------------------------- ---------------------------------
Service
----------------------------
OLEODUCTO CENTRAL S.A. N/A CT CORPORATION
---------------------------------
World Trade Center Bogota SYSTEM
Calle 100 N. 8A-55 1633 Broadway
Santafe de Bogota, D.C. -Colombia New York, New York 10019
Telefax: 571-218-3933 Telefax: (212) 247-2882
Attention: President
EMPRESA COLOMBIANA DE N/A CONSULATE GENERAL OF
PETROLEOS ECOPETROL COLOMBIA
Carrera 13 No. 36-24 10 East 46th Street
Santafe de Bogota, D.C. -Colombia New York, New York 10017
Telefax: (571) 287-0041 Telefax: (212) 972-1725
Attention: Juan Maria Rendon
BP COLOMBIA PIPELINES CT CORPORATION
LIMITED BP EXPLORATION SYSTEM
c/o BP EXPLORATION (COLOMBIA) LIMITED 1633 Broadway
(COLOMBIA) LIMITED Carrera 9A No. 99-02 New York, New York 10019
Carrera 9A No. 99-02 Post Office Box 59824 Telefax: (212) 247-2882
Post Office Box 59824 Santafe de Bogota, D.C. Colombia
Santafe de Bogota, D.C. -Colombia Telefax: (571) 618-2895
Telefax: (571) 618-2895 Attention: Legal Manager
Attention: Nicholas P. Connolly
TOTAL PIPELINE TOTAL EXPLORATIE EN PROSKAUER, ROSE,
COLOMBIE S.A. PRODUKTIE MIJ B.V. GOETZ & MENDELSOHN
Tour TOTAL Calle 72 No. 10-03 1585 Broadway
TEP/AME Piso 8 New York, New York 10036
24, Cours Michelet Apartado aereo 251375 Telefax: (212) 969-2900
Cedex 47,92069 Paris, France Santafe de Bogota, D.C. -Colombia Attention: Ronald Papa, Esq.
Telefax: (33 1) 4135 6530 Telefax: (571) 235-8453
Attention: Jean-Claude Soligny Attention: Jacques de Boisseson
TRITON PIPELINE TRITON COLOMBIA, INC. CT CORPORATION
COLOMBIA, INC. Carrera 9A No. 99-02 SYSTEM
6688 North Central Expressway Oficina 407 1633 Broadway
Suite 1400 Santafe de Bogota, D.C.- Colombia New York, New York 10019
Dallas, Texas 75206 Telefax: (571) 618-2553 Telefax: (212) 247-2882
Telefax: (214) 692-0355 Attention: Ivan Fajardo
Attention: Thomas G. Finck and
A.E. Turner
IPL ENTERPRISES IPL INTERNATIONAL INC. CT CORPORATION
(COLOMBIA) INC. Suite 1100 SYSTEM
c/o IPL ENERGY INC. 363 North 1633 Broadway
31st Floor Bow Valley Square 2 Sam Houston Parkway East New York, New York 10019
205 - 5th Avenue S.W. Houston, Texas 77060 Telefax: (212) 247-2882
Calgary, Alberta, Canada T29 2V7 Telefax: (713) 820-9310
Telefax: (403) 231-3920 Attention: Benny J. Phillips
Attention: Donald M. Wishart
TCPL (BERMUDA) LTD. N/A FRIED, FRANK, HARRIS,
c/o TransCanada PipeLines SHRIVER & JACOBSON
Limited 1 New York Plaza
TransCanada PipeLines Tower New York, New York 10004
111 Fifth Avenue S.W. Telefax: (212) 747-1526
P.O. Box 1000, Station M Attention: Ken Blackman
Calgary, Alberta, Canada T2P 4K5
Telefax: (403) 267-2668
Attention: Dave Russell
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any Party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The Party giving any notice, request,demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 6.2. Entire Agreement. This Agreement, together with the
Oleoducto Central Agreement, constitutes the entire Agreement between the
Parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties, and there are no warranties, representations or other
agreements between the Parties in connection with the subject matter hereof
except as specifically set forth herein and therein. No amendment, supplement,
waiver or termination of this Agreement shall be binding unless executed in
writing by the Party to be bound thereby. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provisions (whether or not similar) nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
Section 6.3. Representations and Warranties. Each Party represents
and warrants to the other that:
(a) it is a corporation duly incorporated and organized under the laws
of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and perform
its obligations under this Agreement, and this Agreement, when executed and
delivered by such Party, constitutes a valid and legally binding agreement of
such Party;
(c) the execution and delivery of, and the performance by it of its
obligations under this Agreement will not result in a breach of or constitute
a default under:
(i)any provision of its charter or articles of incorporation or
its by-laws;
(ii)any agreement or instrument to which it is a party and
which is material to the performance by it of its obligations hereunder;
(iii) any statute, rule, regulation or order, judgment or
decree of any governmental agency or court having jurisdiction over it or by
which it is bound; and
(d) neither it nor any of its property has any immunity from
jurisdiction of any court or from set-off or any legal process.
Section 6.4. Assignments. (a) Ocensa may not assign this Agreement
or any of its rights or proceeds hereunder, or create enforceable third party
rights herein, to or in any person not a party hereto except with the prior
written consent of each Shareholder Party. If each Shareholder Party consents,
it agrees to execute and deliver all consents and documents reasonably
necessary to effect such assignment and to create a valid and perfected
interest herein. The claims and rights of each such Permitted Assignee shall
rank pari passu with the claims and rights of all permitted assignees
irrespective of the time or times at which prior, concurrent or subsequent
assignments under this Section 6.4 are made or perfected. Subject to
compliance with the terms of any such assignment, any such Permitted Assignee
shall have the rights of Ocensa and may enforce such rights hereunder as if
such Permitted Assignee were a party hereto.
(b) A Shareholder Party may not assign this Agreement or any of its
rights or proceeds hereunder or its interest in the Dividend Account
maintained for its benefit by the Dividend Trustee, or create enforceable
third party rights herein or therein, to or in any person not a party hereto
except in connection with a transfer of Shares permitted pursuant to Article
Ten of the Oleoducto Central Agreement. A Shareholder Party which has
transferred any of its Shares to another Person or assigned to another Person
any right to acquire Shares shall procure that such Person shall become a
Shareholder Party hereto with respect to such Shares by providing written
notice to the Dividend Trustee, which shall then notify all other Parties
hereto. Upon receipt of such notice by the Dividend Trustee, such holder shall
have all the rights, benefits, obligations and duties hereunder of a
Shareholder Party hereto. A notice or application by a holder of Shares to be
registered as a shareholder of Ocensa in the Share Register maintained by
Ocensa shall be deemed to also be a notice to Ocensa pursuant to this
paragraph (c) of Section 6.4.
(c) In the event of a transfer or assignment pursuant to paragraph
(b) above by a Shareholder Party during the Restricted Period with respect to
the Restricted Account, the Restricted Period shall continue with respect to
such account and funds therein shall be applied accordingly. Notwithstanding
Section 2.1, no Dividend Account shall be established by the Dividend Trustee
for the benefit of any such transferee or assignee of such Shareholder Party
prior to the termination of the Restricted Period and the Restricted Account
shall be deemed to be maintained by the Dividend Trustee also for the benefit
of any such transferee or assignee.
Section 6.5. Nature of Obligations. Subject to the terms of this
Agreement, the obligations under this Agreement shall be unconditional and
absolute and shall not be deferred, excused, released, discharged, or in any
way affected by: (i) any right of set off, counterclaim, or defense by reason
of any claims against Ocensa arising under this Agreement or on any other
account whatsoever, (ii) any insolvency, bankruptcy, receivership,
reorganization, dissolution, or liquidation of Ocensa or any Shareholder
Party, (iii) any sale or other transfer by any of the Shareholders (among
themselves orotherwise) of any of Ocensa's capital stock, or (iv) any change,
waiver, extension, indulgence, or other action or omission in respect of any
of Ocensa's obligations in each case, whether or not the Parties shall have
had any notice or knowledge of any of the foregoing.
Section 6.6. Amendments. This Agreement may not be amended or
modified except with the written consent of the Parties and any permitted
assignees.
Section 6.7. No Third Party Beneficiaries. Except as herein
otherwise expressly provided to the contrary, this Agreement shall inure to
the benefit of and be binding upon the Parties and their respective successors
and permitted assignees, and no other Person shall have any rights hereunder.
Section 6.8. Severability. If, for any reason, any provision of this
Agreement is unenforceable, the remaining provisions hereof shall nevertheless
be carried into effect.
Section 6.9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 6.10. Commercial Obligations. The Parties acknowledge and
agree that their rights and obligations hereunder are commercial and not
governmental in nature.
Section 6.11. Arbitration. Any dispute, controversy or claim arising
out of or relating to this Agreement, or the performance, breach, termination,
or invalidity hereof, shall be settled by arbitration in accordance with the
UNCITRAL Arbitration Rules in effect on the date hereof. The arbitration shall
be the sole and exclusive forum for resolution of the dispute, controversy or
claim, and the award shall be final and binding. Judgment thereon may be
entered by any court having jurisdiction. The number of arbitrators shall be
three, each of whom shall be disinterested in the dispute, controversy or
claim, and shall have no connection with any party. Should the services of an
appointing authority be necessary, the appointing authority shall be the
American Arbitration Association. The Parties and the appointing authority may
appoint from among the nationals of any country, whether or not a party is a
national of that country. The place of arbitration shall be The City of New
York, New York. The arbitration shall be conducted in the English language and
any foreign-language documents presented at such arbitration shall be
accompanied by an English translation thereof. The arbitrators shall apply the
law of New York without regard to the principles of conflicts of laws.
Section 6.12. Submission to Jurisdiction; Consent to Service. Each
of the Parties hereto hereby submits to the exclusive jurisdiction of the
United States District Court for the Southern District of New York (the
Specified Court) with respect to the enforcement of the arbitration provisions
of this Agreement and the non-exclusive jurisdiction of such courts with
respect to the enforcement of any award thereunder. Each of the parties hereto
irrevocably appoints the person opposite its name in Section 6.1 as its
authorized agent in the Borough of Manhattan in The City of New York upon
which process may be served in any related suit or proceeding, and agrees that
service of process upon such agent, and written notice of said service to such
party, by the person serving the same to the address provided in Section 6.1,
shall be deemed in every respect effective service of process upon such party
in any such suit or proceeding. Each of the Parties hereto further agrees to
take any and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect for the duration of this
Agreement.
The obligation of a Party in respect of any sum due from it to the
other party hereunder expressed in United States dollars, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first Business Day following receipt by such Party of any
sum adjudged to be so due in such other currency on which (and only to the
extent that) such Party may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to such Party
hereunder, the other party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Party against such dollar
shortfall. If the United States dollars so purchased are greater than the sum
originally due to such party hereunder, such Party agrees to pay to the other
Party an amount equal to the excess of the dollars so purchased over the sum
originally due to such Party hereunder.
Section 6.13. Waiver of Immunity. (a) The Purchaser irrevocably
consents to and waives any objection which it may now or hereafter have to the
laying of venue of any proceeding relating to enforcement of the arbitration
provisions of this Agreement brought in the Specified Court and further
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of any such proceeding in
the Specified Court.
(b) To the extent that the Purchaser or any of its revenues, assets
or properties shall be entitled, with respect to any proceeding relating to
enforcement of the arbitration provisions of this Agreement at any time
brought against the Purchaser or any of its revenues, assets or properties, to
any sovereign or other immunity from suit, from jurisdiction, from attachment
prior to judgment, from attachment in aid of execution of judgment, from
execution of a judgment or from any other legal or judicial process or remedy,
and to the extent that in any jurisdiction there shall be attributed such
animmunity, the Purchaser irrevocably agrees not to claim and irrevocably
waives such immunity to the fullest extent permitted by the laws of such
jurisdiction (including, without limitation, the Foreign Sovereign Immunities
Act 1976 of the United States), except, in the case of Ecopetrol, as provided
under Article 684 of the Codigo de Procedimiento Civil of Colombia.
Section 6.14. Headings; Table of Contents. The headings and table of
contents contained herein are for convenience of reference only and do not
constitute a part of this Agreement.
Section 6.15. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have hereunto caused this agreement
to be executed and delivered by their proper officers thereunto duly
authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
By:
Title:
[EMPRESA COLOMBIANA DE PETROLEOS -
ECOPETROL
By:
Title:
BP COLOMBIA PIPELINES LIMITED
By:
Title:
TOTAL PIPELINE COLOMBIE S.A.
By:
Title:
TRITON PIPELINE COLOMBIA, INC.
By:
Title:
IPL ENTERPRISES (COLOMBIA) INC.
By:
Title:
By:
Title:
TCPL (BERMUDA) LTD.
By:
Title:
[NAME OF DIVIDEND TRUSTEE]
AS DIVIDEND TRUSTEE
By:
Title:
ANNEX A
to Dividend Trust Agreement
FORM OF DIVIDEND SUBACCOUNT BANK AGREEMENT
[date]
[Dividend Trustee]
[Address]
Attention:
Gentlemen:
This is to confirm our agreement with you as follows:
1. The Dividend Subaccount; No Set-Offs. We have today opened a
segregated account in your name, no. _______ (the Dividend Subaccount). We
acknowledge that all funds or other assets in such account are trust funds
held by you under the Dividend Trust Agreement, dated as of _____________,
1994, among Oleoducto Central S.A. (the JSC) and the other parties thereto,
which trust funds we will hold as your custodian. Accordingly, we will not
have, and hereby waive, any right of banker's lien, set-off or counterclaim in
respect of any funds or other assets in the Dividend Subaccount or any Special
Account (as defined below).
[2. Consent to Assignment. We acknowledge and consent to the
assignment of such interest or rights (if any) as Ocensa may have in or with
respect to the Dividend Trust Subaccount or any Special Account.]
3. Investments. (a) We agree to remit all funds and other assets
held in or for the Dividend Subaccount or any Special Account to you or any
person designated by you upon receipt of your instructions following receipt
of any funds or assets for deposit to the Dividend Subaccount or any Special
Account.
(b) We shall have no liability with respect to investments
(including purchases or conversions of foreign exchange) of moneys held in or
for the Dividend Subaccount or any Special Account (or any losses resulting
therefrom) made at your direction. Investments which we make with Dividend
Subaccount or Special Account balances will be held by us in your name.
(c) If, in addition to the Dividend Subaccount, we have opened
other accounts in your name and we receive funds from you or Ocensa or for
your, Ocensa'sor a Shareholder Party's account that are not identified as
funds for deposit in the Dividend Subaccount or any such other account, and as
to which we have received no instructions from you, we shall deposit such
funds to a segregated account established by us in your name at such time and
for such purpose (Special Account) and promptly thereafter we shall request
that you instruct us as to the deposit or other disposition of such funds.
4. Books and Accounts. (a) We shall maintain all such accounts,
books and records as may be necessary properly to record all transactions
carried out by us under this Agreement. We shall permit you, the Shareholder
Parties and Ocensa and their authorized representatives to examine such
accounts, books and records; provided that any such examination shall occur
upon reasonable notice and during normal business hours.
(b) On or before the fifth banking day in [New York] of each
calendar month for so long as such Dividend Subaccount and any Special Account
are open, we shall deliver to you a statement indicating the amount of funds
and other assets on deposit in the Dividend Subaccount and such Special
Account and the nature of any investments thereof as of the end of the
preceding calendar month and identifying all deposits to and payments from the
Dividend Subaccount and such Special Account during such calendar month,
including the date on which made. Upon your request, we will at any other time
inform you of deposits, investments, payments, balances and any other
information you may request (and that is reasonably available to us) regarding
the Dividend Subaccount and any Special Account.
5. Communications. Any instruction to be given hereunder to us for
the withdrawal and transfer of moneys in the Dividend Subaccount or any
Special Account may be given by you in writing, by telephone, by tested telex,
facsimile or other form of electronic transmission, and in any manner that we
may reasonably accept (subject to normal and customary verification
requirements), in each case from persons designated for such purpose by you,
and under procedures established from time to time by you and us. Any
initiation of a wire transfer of funds in the Dividend Subaccount or any
Special Account effected through computerized facilities offered to you by us
shall be deemed to be the giving to us of a direction or instruction to make
such transfer. All directions, notices and instructions given to us that are
not in writing or by electronic funds transfer shall be confirmed in writing.
6. Duties of Subaccount Bank. (a) We shall be entitled to act upon
any notice, request, direction, waiver, receipt or other document which in
good faith we believe to be genuine, and we shall be entitled to rely upon the
due execution, validity and effectiveness, and the truth and acceptability of
any provisions contained therein. We shall not have any responsibility to make
any investigation into the facts or matters stated in any notice, certificate,
instrument, demand, request or other communications furnished to us hereunder.
(b) We shall not be liable for any error of judgment or for any act
done or omitted by us in good faith or for any mistake of fact or law, or for
anything which we may do or refrain from doing, except for our own negligence
or willful misconduct.
(c) We may consult with, and obtain advice from, legal counsel,
accountants and other experts, in connection with the performance of our
duties hereunder and we shall incur no liability and shall be fully protected
in acting in good faith in accordance with the written opinion and written
advice of such counsel, accountants and other experts. We shall not be
responsible for the negligence or misconduct of any counsel, accountants and
other experts selected by us without negligence or willful misconduct.
(d) We shall have no duties other than those specifically set forth
or provided for in this Agreement and no implied covenants or obligations on
our part shall be read into this Agreement. We shall have no obligation to
familiarize ourselves with and shall have no responsibility with respect to
any other agreement relating to the transactions contemplated by this
Agreement nor any obligation to inquire whether any notice, instruction,
statement or calculation is in conformity with the terms of any such other
agreement, except those irregularities or errors manifestly apparent on the
face of such document or to our actual knowledge. If, however, any remittance
or communication received by us appears manifestly erroneous or irregular we
shall be under a duty to make prompt inquiry to the person originating such
remittance or communication in order to determine whether a clerical error or
inadvertent mistake has occurred. We shall at all times take such care in
dealing with the Subaccount and any Special Account as would a prudent man in
dealing with his own property.
7. Expenses. We acknowledge that you shall have no responsibility
for any fees or expenses incurred by us in connection with this Agreement. Any
arrangements for the payment of such fees and expenses shall be made directly
between us and Ocensa.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
9. Definitions. Terms used but not defined herein have the meaning
assigned to them in the Dividend Trust Agreement.
[NAME OF DIVIDEND SUBACCOUNT BANK]
By
SCHEDULE D TO
OLEODUCTO CENTRAL AGREEMENT
TECHNICAL SERVICES AND MANAGEMENT AGREEMENT
dated as of March 31, 1995
between
OLEODUCTO CENTRAL S.A.
and
CIT COLOMBIANA S.A.
<PAGE>
TABLE OF CONTENTS
Section Page
RECITALS 1
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
1.1. Definitions 1
1.2. Interpretation 5
ARTICLE TWO
THE SERVICES
2.1. The Services 5
2.2. Standard of Performance 5
ARTICLE THREE
RESPONSIBILITIES AND DUTIES OF CITCOL,
THE CHIEF OPERATING OFFICER AND THE OPERATING DIVISION
3.1. CITCOL 6
3.2. Chief Operating Officer 6
3.3. Operating Division 6
3.4. CITCOL's Employees 8
ARTICLE FOUR
INTELLECTUAL PROPERTY AND KNOW HOW
4.1. Intellectual Property and Know How 9
ARTICLE FIVE
COMPENSATION AND FINANCIAL
5.1. Compensation 9
5.2. Suspension of Compensation 9
5.3. Audit and Examination 10
5.4. CITCOL Operating Expenses 10
5.5. Right of Set Off 10
ARTICLE SIX
CONFIDENTIAL INFORMATION
6.1. Confidentiality 10
6.2. No Announcements 10
6.3. Developed Information and Inventions 10
ARTICLE SEVEN
RELEASE; INDEMNIFICATION AND INSURANCE
7.1. Owner's Release 11
7.2. Owner's Indemnity 11
7.3. CITCOL's Indemnity 12
7.4. Acknowledgment 12
7.5. Insurance 12
ARTICLE EIGHT
TERM AND TERMINATION
8.1. Term 12
8.2. Termination by Owner 12
8.3. Termination by CITCOL 13
8.4. Consequences of Termination 13
8.5. Transfer of Responsibilities 13
ARTICLE NINE
GENERAL
9.1. Exclusive Dedication 14
9.2. Notices 14
9.3. Entire Agreement 15
9.4. Waiver 15
9.5. No Third Party Beneficiaries 15
9.6. Assignments 15
9.7. Taxes 15
9.8. Severability 16
9.9. Survival of Obligations 16
9.10. Remedies Exclusive 16
9.11. Governing Law 16
9.12. Dispute Resolution 16
9.13. Counterparts 17
9.14. Headings, Table of Contents 17
9.15. Language of Agreement 17
EXHIBITS
A. Description of Pipeline
B. Operator Incentives
C. Subordinated Fee
D. Operating Division Organization
E. Form of Guarantee Agreement and Comfort Letters
<PAGE>
TECHNICAL SERVICES AND MANAGEMENT AGREEMENT
TECHNICAL SERVICES AND MANAGEMENT AGREEMENT (including all
Exhibits) (the Agreement), dated as of March 31, 1995, between OLEODUCTO
CENTRAL S.A. (Owner), and CIT COLOMBIANA S.A. (CITCOL), each a sociedad anonima
organized under the laws of Colombia.
RECITALS
WHEREAS:
A. Owner was formed on December 14, 1994 to construct, acquire, own
and operate the Pipeline transport system and Port facilities.
B. Owner desires that CITCOL provide the necessary expertise,
management skills and manpower to perform the technical and management
services for the operations of the Pipeline.
C. CITCOL is willing and qualified to provide the Services to Owner
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), Owner and CITCOL
agree as follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Defined terms in this Agreement, which
are identified by the capitalization of the first letter of each principal
word thereof, have the meanings indicated below:
Access Agreements means the agreements to be entered into by Owner
and third parties relating to the grant to Owner by such third parties of
access to certain facilities to be used in connection with the Pipeline, in
each case as the same may be thereafter amended from time to time in
accordance with the terms thereof.
Accounting Procedure means the Accounting Procedure referenced in
the Oleoducto Central Agreement as approved and as may be amended by Owner
from time to time.
Annual Operating Budget Format means the form in which the Annual
Operating Budget is presented to the Board of Directors as approved and as may
be amended by Owner from time to time.
Annual Revenue Requirement has the meaning assigned to it in the
Definitions attached as Schedule A to the Transportation Agreements as the
same may be amended from time to time.
Board of Directors means the Board of Directors of Owner.
Budgets means the Annual Operating Budget and the Capital Budget.
Chief Operating Officer means the most senior position of the
Operating Division.
CITCOL means the sociedad anonima specified as such in the first
paragraph of this Agreement and its successors and permitted assigns.
CITCOL Parties has the meaning assigned to it in Section 7.1 of the
Agreement.
Claims has the meaning assigned to it in Section 7.1 of the
Agreement.
Colombia means the Republic of Colombia.
Colombian Authority means any authority of the executive, judicial
or legislative branches and any other body or individual with public authority
given by law.
Day means a period of twenty - four (24) consecutive hours
commencing at 12:01 a.m. in Santafe de Bogota, Colombia.
Demobilization Costs means the following categories of costs,
including costs fairly incidental thereto:
(a) relocation costs for Secondees and their families to their
locations of origin in accordance with the Parent company practices, provided
that in all cases the locations of origin of such Secondees shall be deemed to
be within Canada;
(b) legal and audit costs of dissolving and liquidating CITCOL as a
business entity using all reasonable efforts to do so, provided that CITCOL is
notengaged in other activities in accordance with Section 9.1 of this
Agreement and, provided further, that CITCOL initiates such dissolution and
liquidation proceedings within 30 days of the date of termination or
expiration of the term of this Agreement;
(c) reasonable severance and legal costs of terminating Secondees
whose location of origin is Colombia.
$ or dollars means United States dollars.
Ecopetrol means Empresa Colombiana de Petroleos - Ecopetrol, an
Empresa Industrial y Comercial del Estado existing under the laws of Colombia
and wholly-owned by Colombia, and its successors and permitted assigns..
Environment means the air, land, water and all organic matter as
affected by the operation and maintenance activities of the Pipeline.
Environmental has a corresponding meaning.
Environmental Regulations means all laws, rules, regulations and
orders pertaining to the conservation and preservation of the Environment as
enacted by any Colombian Authority.
Environmental, Health and Safety Standards and Procedures means the
corporate environmental, health and safety standards, policies and procedures
approved and adopted by Owner from time to time.
Environmental Studies means all technical studies applicable to the
Environment, including socio-economic impact assessments, spill contingency
plans, Environmental assessments and audits, studies regarding routing,
permits and rights-of-way, and studies concerning incidents, emergencies,
Environmental restoration and reclamation, and Environmental risk and
liabilities, all as accepted and/or approved by Owner.
Fees means, for any Year, the sum of the Operating Fee, the
Subordinated Fee and the Incentive Fees.
Guarantee Agreement means the Guarantee Agreement, dated as of the
date hereof, among Owner, IPL Enterprises (Colombia) Inc. and TCPL
International Investments Inc., substantially in the form attached as Exhibit
E hereto.
Incentive Fees has the meaning assigned in Section 5.1(b).
Oleoducto Central Agreement means the Amended and Restated Oleoducto
Central Agreement dated as of March 31, 1995 among Owner, Ecopetrol,
BPColombia Pipelines Limited, TOTAL Pipeline Colombie S.A., Triton Pipeline
Colombia, Inc., IPL Enterprises (Colombia) Inc. and TCPL International
Investments Inc., as the same may be amended and restated from time to time.
Operating and Maintenance Costs has the meaning assigned to it in
the Definitions attached as Schedule A to the Transportation Agreements.
Operating Division means the operating division of Owner as
diagrammed on Exhibit D hereto as amended by the Board of Directors from time
to time consisting of the Chief Operating Officer, the other Secondees and all
employees of Owner who report directly or indirectly to the Chief Operating
Officer.
Operating Fee has the meaning assigned to it in Section 5.1(a)
hereof.
Owner means the sociedad anonima specified as such in the first
paragraph of this Agreement and its successors and permitted assigns.
Owner Parties has the meaning assigned to it in Section 7.2 of the
Agreement.
Parents means IPL Energy Inc. and TransCanada PipeLines Limited,
each a corporation organized under the laws of Canada, and their respective
successors and permitted assigns.
Party means Owner or CITCOL as the case may be.
Peso Equivalent Amount means an amount in Pesos that is the
equivalent of a dollar amount payment hereunder calculated based on the
exchange rate quoted by Citibank N.A. for Citibank N.A. selling dollars for
Pesos for wire transfers on the date the payment is actually made.
Pesos or Ps means the lawful currency of Colombia.
Pipeline means the facilities described in Exhibit A hereof and the
Sole Risk Facilities.
Port means Owner's port facilities at Coveas.
President means the President of Owner.
Secondees has the meaning assigned to it in Section 3.1.
Services means the provision by CITCOL of its expertise, management
skills and manpower, to the Operating Division pursuant to Article Two and
Article Threeand the contribution of intellectual property and know-how
pursuant to Article Four hereof.
Special Damages has the meaning assigned to it in Section 7.2 of the
Agreement.
Subordinated Fee has the meaning assigned to it in Section 5.1(c).
SCADA means Supervisory Control and Data Acquisition.
Transportation Agreements means those certain Transportation
Agreements, each dated as of March 31, 1995, between Owner and each of
Ecopetrol, BP Exploration Company (Colombia) Limited, TOTAL Exploratie en
Produktie MIJ B.V., and Triton Colombia Inc.
Year means a calendar year.
All defined terms used and not defined herein shall have the meanings assigned
to them in the Oleoducto Central Agreement.
Section 1.2. Interpretation. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular and vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or a Section refers to an Article
or a Section, as the case may be, of this Agreement; and
(d) all references to this Agreement and the words herein, hereof,
hereto and hereunder and others words of similar import refer to this
Agreement as a whole and not to any particular Article, Section, other
subdivision or Exhibit.
ARTICLE TWO
THE SERVICES
Section 2.1. The Services. Subject to the terms and conditions of
this Agreement, CITCOL hereby covenants and agrees to provide to Owner the
Services and hereby agrees to act as an independent contractor pursuant to,
and to be bound by, the terms of this Agreement.
Section 2.2. Standard of Performance. CITCOL shall ensure that
activities of the Operating Division hereunder are in compliance with all
applicable laws, statutes, ordinances, statutory codes, orders and
Environmental Regulations of the Colombian Authority and the standards and
procedures approved by Owner from time to time including the Accounting
Procedure and Environmental, Health and Safety Standards and Procedures. The
Parties agree that the standard of performance provided by the Operating
Division shall be that generally applied by an experienced and prudent
operator for pipeline operations in Canada and the United States as modified
to appropriately reflect the context of operations in Colombia and the
policies and Budgets approved by the Board of Directors.
ARTICLE THREE
RESPONSIBILITIES AND DUTIES OF CITCOL, THE CHIEF OPERATING OFFICER
AND THE OPERATING DIVISION
Section 3.1. CITCOL. CITCOL shall assign to Owner certain of
CITCOL's employees of appropriate skill and experience (the Secondees) to fill
the position of Chief Operating Officer and the other positions to be filled
by Secondees specified on Exhibit D, as the same may be amended by the Board
of Directors from time to time. The appointment of the Chief Operating Officer
and each person reporting directly to the Chief Operating Officer shall be
subject to the approval of the Board of Directors before assignment and the
Board of Directors may at any time direct the replacement of such employees.
The Secondees shall remain employees of CITCOL, but shall function within the
Operating Division as if they were employees of Owner. CITCOL shall be
responsible for the actions and omissions of the Chief Operating Officer and
the other employees of the Operating Division.
Section 3.2. Chief Operating Officer. The Chief Operating Officer
shall have the duties and responsibilities delegated by decisions of the Board
of Directors from time to time including, as so delegated, the following:
(i) to act as a legal representative of Owner;
(ii) to appoint those Operating Division employees not appointed under
Section 3.1;
(iii) to ensure that the Operating Division performs to the
standard of performance contemplated in this Agreement;
(iv) to execute on behalf of Owner, within the limits delegated by
the Board of Directors, agreements relating to the activities of the Operating
Division, including agreements with Owner's Shareholders and their Affiliates,
provided that such agreements shall be on terms and conditions no less
favorable to Owner than those of comparable agreements between independent
parties acting at arm's length; and
(v) to report to the President regarding all matters for which the
Chief Operating Officer has responsibility.
Section 3.3 Operating Division. The Operating Division shall have
the authority and duties set forth in the guidelines and general statements of
policy and procedure submitted by the Chief Operating Officer and approved by
the Board of Directors from time to time, including the authority and duties
described below and the authority to conduct activities similar to the ones so
described:
(i) Human Resources including recruiting, terminating and career
development activities relating to the Operating Division and the
administration of benefits, salaries, wages and other compensation matters for
the Operating Division;
(ii) Operational Accounting including institution and maintenance
of proper operational accounting controls and procedures for all of Owner's
activities, the supply of information required for the compilation of periodic
operating and other reports as requested by the Board of Directors, all in
accordance with the Accounting Procedure, but excluding all taxation matters
and treasury and financial reporting functions;
(iii) Contract Administration including the implementation and
administration of the Transportation Agreements, the Access Agreements and the
other agreements entered into by Owner related to the activities of the
Operating Division;
(iv) External Relations relating to community affairs and relations
with any municipal Colombian Authority;
(v) Security including responsibility for local security measures
with respect to guerrilla activities, theft and vandalism and liaison with
local military representatives in the vicinity of the Pipeline;
(vi) Environmental, Health and Safety including the preparation and
submission to the Board of Directors of the Environmental, Health and Safety
Standards and Procedures and compliance therewith and, following Completion,
developing safe work procedures and safety training programs, managing safety
hazards and risks, preparing Environment protection and emergency response
plans, planning and training of staff in all Environmental procedures and
inspection of facilities to ensure proper and safe work practices;
(vii) Oil Accounting including administration and implementation of
the tariffs, quality bank management, oil measurement and invoicing, all in
accordance with the Transportation Agreements and the Accounting Procedure;
(viii) Engineering including the preparation, as required by the
Board of Directors, of operational and maintenance manuals and, following
Completion, design services for all Pipeline facilities, ongoing technical
support and maintenance of system integrity programs, quality control for
field operations, maintenance of design and material records and engineering
of capital upgrades including Sole Risk Proposals;
(ix) Purchasing including administration of procurement procedures
and purchasing of materials and supplies for Pipeline operations in accordance
with approved Budgets and the Accounting Procedure;
(x) Oil Movements including forecasting, batching, allocation of
capacity in accordance with nomination procedures in the Transportation
Agreements, scheduling of Pipeline and Port oil movements and control center
operations;
(xi) Operations including proper inspection, maintenance and
operation of all Pipeline facilities; performance of Pipeline emergency
response function; prompt emergency notification; and the provision of
operational reports as requested by the Board of Directors;
(xii) Information Systems including support for all information
systems including SCADA, communication systems, management information
services, equipment and software; and
(xiii) Budgeting including the preparation of and submission for
approval by the Board of Directors the Annual Operating and, following
Completion, the Capital Budgets, all in accordance with the Annual
OperatingBudget Format and Article Three of the Oleoducto Central Agreement,
and to provide such financial information to the Board of Directors as
required.
Section 3.4. CITCOL's Employees. CITCOL shall be responsible for
salaries, wages, fees, other compensation, health, life and disability
insurance, pension benefits and employee stock options (in the case of
expatriate employees such pension benefits and employee stock options shall be
provided in accordance with Parent company practices for employees in Canada
or Affiliate company practices for employees in the United States), expatriate
benefits and perquisites, overhead and administrative expenses, and, if
applicable, social security taxes, workers' compensation insurance as required
by law and other employee-related expenses relating to the Secondees. All such
employee-related expenses properly incurred pursuant to this Section 3.4 and
the Accounting Procedure and included in the approved Annual Operating Budget
shall be reimbursed to CITCOL by Owner. It is acknowledged by Owner and CITCOL
that all of the reasonable direct and indirect costs and expenses of CITCOL in
providing the Secondees to the Operating Division shall be reimbursed to
CITCOL by Owner, inclusive of any applicable withholding, IVA or other taxes
(other than any income taxes levied in any jurisdiction), within 30 days of
delivery of a monthly invoice to Owner by CITCOL setting forth such amounts.
Except as provided in Section 5.1, these reimbursements shall be made at cost,
it being the intent that neither CITCOL nor the Parent companies thereof shall
profit from or incur loss as a result of providing Secondees to the Operating
Division.
ARTICLE FOUR
INTELLECTUAL PROPERTY AND KNOW HOW
Section 4.1. Intellectual Property and Know How. CITCOL shall,
subject to any legal or regulatory restrictions, obtain for use in the
performance of the Services to the standard herein contemplated, and make
available to the Operating Division, such processes, inventions, proprietary
rights, intellectual property, and know how relating to pipeline operations in
the possession of any Affiliate of CITCOL. Owner shall, to the extent such
intellectual property and know how is not in the public domain or otherwise
known to Owner, keep such intellectual property and know how confidential, and
shall not make any claim of ownership to, or interest in, such intellectual
property and know how. Owner shall pay no licensing fee or royalties with
respect to such intellectual property and know how.
ARTICLE FIVE
COMPENSATION AND FINANCIAL
Section 5.1. Compensation. Subject to Section 5.3(b)(iii) of the
Oleoducto Central Agreement, Owner shall pay CITCOL the expenses which are
reimbursable hereunder and the following fees in respect of Services provided
hereunder:
(a) a non-inflation adjusted, pre-tax fee (the Operating Fee) of
$2,500,000 annually on December 31 for the years 1996 and following (or the
Peso Equivalent Amount);
(b) the fees and payments (the Incentive Fees) to be made pursuant to
Section 6 of Exhibit B hereto; and
(c) the fee (the Subordinated Fee) to be determined in the manner
described in Exhibit C hereto.
In order to allow the payment of Fees in dollars, CITCOL shall, at the request
of Owner, seek to be certified as an oil-related service company by the
Colombian Ministry of Mines. If an increase in the Operating Division's
personnel is necessitated by a substantial increase in the Operating
Division's scope of operations, CITCOL may request an increase in the
Operating Fee in order to achieve fair compensation for its increase in
activity, and Owner agrees to consider such request in good faith.
Section 5.2. Suspension of Compensation. If IPL Enterprises or
TCPL International fails to make an Equity Contribution on a timely basis as
required under the Oleoducto Central Agreement or fails to comply with Article
Ten of the Oleoducto Central Agreement in connection with a transfer, pledge,
encumbrance or hypothecation of Shares, and such failure continues for 15
Business Days, Owner shall, at the direction of the Initial Shippers, cancel
partially or entirely the payment of Fees payable hereunder for a period of up
to five years.
Section 5.3. Audit and Examination. Owner or its designated
representatives, after reasonable notice in writing to CITCOL, shall have the
right during normal business hours to audit or examine, at the expense of
Owner, all books and records of CITCOL relating to the performance of this
Agreement. Such right shall include the right to meet with CITCOL's auditor
(revisor fiscal) to discuss matters relevant to the audit or examination.
Owner shall have two Years after the close of a Year to initiate audits for
such Year. Any reasonable cost to CITCOL arising hereunder in assisting Owner
during any audit shall be a reimbursable expense. This Section 5.3 shall
survive the termination of this Agreement for a period of three Years.
Section 5.4. CITCOL Operating Expenses. Owner shall reimburse
CITCOL for all expenses incurred by CITCOL in carrying out its operations
prior to the effective date of this Agreement to the extent provided for in a
budget previously approved by the Board of Directors.
Section 5.5. Right of Set Off. The Parties agree that Ocensa shall
have the right, in its sole discretion, to set off against sums due by it to
CITCOL under any payment obligation hereunder or under any loan, note or
credit the unpaid amount of any Equity Contribution with respect to which any
Shareholder in the Canadian Group is in default.
ARTICLE SIX
CONFIDENTIAL INFORMATION
Section 6.1. Confidentiality. Except as hereinafter provided, all
information concerning Owner's business in the possession of the Secondees
shall be treated by them and by CITCOL as confidential. Such confidential
information shall not be divulged to any third party without obtaining prior
written approval by Owner. The Secondees and CITCOL shall limit the disclosure
of the confidential information to only those officers, employees and agents
of CITCOL (including legal counsel, accountants and consultants) necessary for
the performance of CITCOL's obligations hereunder. No information shall be
subject to such restrictions if (a) it is received from a third party whose
possession was not subject to restriction at the time of receipt or (b) it was
in the public domain at the time of disclosure, or subsequently became part of
the public domain through no fault of the receiving Party. In addition, the
Secondees and CITCOL may disclose information if legally required to do so.
The obligation set forth in this Section 6.1 shall be a continuing one and
shall survive the termination of this Agreement.
Section 6.2. No Announcements. No public announcement or press
release concerning the business of Owner, including the Pipeline, shall be
made by CITCOL without Owner's prior written consent.
Section 6.3. Developed Information and Inventions. All know how,
processes, proprietary rights, trade-secrets, inventions or other similar
intangible property rights developed or derived by CITCOL or the Secondees in
the course of performing Services, or developed or derived by CITCOL or the
Secondees from confidential information provided by Owner, shall be and remain
the exclusive property of Owner. CITCOL shall have a right to use such
information and inventions solely in connection with and during the
performance of Services hereunder.
ARTICLE SEVEN
RELEASE; INDEMNIFICATION AND INSURANCE
Section 7.1. Owner's Release. Notwithstanding any provision
contained in this Agreement to the contrary, Owner hereby releases CITCOL and
its Affiliates and their respective shareholders, directors, officers,
employees (including the Secondees) and agents (collectively, the CITCOL
Parties) from and against any and all claims, demands, suits, actions,
damages, costs, losses and expenses of whatever nature, including reasonable
attorneys' fees and legal costs (collectively Claims) that may be brought
against any of the Owner Parties or that any of the Owner Parties may suffer,
sustain, pay or incur arising out of the acts, or failure to act, of any of
the CITCOL Parties (including any responsibility for the supervision of the
Operating Division and any other responsibility for the acts or failure to act
of the Operating Division) in the performance of, or related to, this
Agreement; provided that the CITCOL Parties shall not be released, and this
Section 7.1 shall not apply, in respect of any Claims arising out of the gross
negligence (culpa grave) or willful misconduct (dolo) of any of the CITCOL
Parties.
Section 7.2. Owner's Indemnity. Owner shall:
(a) be liable to CITCOL for any Claims that may be brought by Owner and
its officers, agents and employees (but excluding the Secondees)
(collectively, the Owner Parties) or any third party against any of the CITCOL
Parties or that any of the CITCOL Parties may suffer, sustain, pay or incur in
connection with Claims by Owner Parties or third parties arising out of the
performance of, or related to, this Agreement, and
(b) indemnify the CITCOL Parties from and against any and all such
Claims by such Owner Parties or third parties;
provided that in no event shall Owner be liable to the CITCOL Parties for (i)
any Claims arising out of the gross negligence (culpa grave) or willful
misconduct (dolo) of any of the CITCOL Parties, or (ii) any consequential,
incidental, special, exemplary or punitive damages or claims, including
business interruption, loss of profit or revenue or cost of capital
(collectively, Special Damages).
Section 7.3. CITCOL's Indemnity. CITCOL shall:
(a) be liable to the Owner Parties for any Claims that may be brought by
any of the officers, employees or agents of CITCOL against any of the Owner
Parties or that any of the Owner Parties may suffer, sustain, pay or incur in
connection with Claims by the officers, employees or agents of CITCOL arising
out of the performance of, or related to, this Agreement, and
(b) be liable to the Owner Parties for any Claims that may be brought
against any of the Owner Parties or that any of the Owner Parties may suffer,
sustain, pay or incur arising out of the gross negligence (culpa grave) or
willful misconduct (dolo) of any of the CITCOL Parties, and
(c) indemnify the Owner Parties from and against all such Claims by such
CITCOL Parties;
provided that in no event shall CITCOL be liable to the Owner Parties for any
Special Damages.
Section 7.4. Acknowledgment. Notwithstanding any provision
contained in this Agreement to the contrary, Owner acknowledges that, except
as provided in Section 7.3, Owner's sole remedy relating to the performance
(or the failure to perform) of CITCOL Parties or the Operating Division shall
be the right of termination provided in Section 8.2 of this Agreement.
Section 7.5. Insurance. All insurance policies placed on behalf
of, or by, Owner shall name CITCOL as an additional insured under such policy
and shall contain a waiver of subrogation in favor of CITCOL and the Secondees
and any other person for whom CITCOL is responsible at law as a result of
providing Services hereunder.
ARTICLE EIGHT
TERM AND TERMINATION
Section 8.1. Term. This Agreement shall become effective as of the
date first above written and shall continue for a period of fifteen years and
shall be extended for two additional terms of not more than five years each
without further action by either party unless Owner notifies CITCOL, at least
365 Days prior to the expiration of the then current term of the Agreement,
that Owner will not extend the Agreement.
Section 8.2. Termination by Owner. This Agreement may be
terminated by Owner in its sole discretion at any time by delivery to CITCOL
of a written notice. In the event of termination by Owner, Owner shall only be
liable to pay CITCOL those sums set out in Section 8.4(a) below. CITCOL
expressly waives, and shall repeat such waiver at termination, any rights to
claim any other sums of whatever nature or any other forms of compensation
whatsoever as a result of Owner's right to terminate this Agreement. After
receiving notice of termination, CITCOL covenants and agrees to continue to
provide the Services in accordance with this Agreement until the effective
date of the termination, which shall not be more than 120 days from the date
of the receipt of notice.
Section 8.3. Termination by CITCOL. (a) By Notice. This
Agreement may be terminated by CITCOL at any time by delivery to Owner of
written notice specifying a date for termination not earlier than one year
after the date such notice is provided to Owner.
(b) For Payment Default. This Agreement may be terminated by
CITCOL upon a default in the payment by Owner to CITCOL in excess of $2
million, that is due and payable hereunder and which has remained unpaid for a
period of sixty Days after written notice thereof by CITCOL to Owner, provided
that such unpaid amount is not subject to dispute pursuant to Section 9.12.
Section 8.4. Consequences of Termination. (a) Following termination
of this Agreement under Section 8.1, 8.2 or 8.3(b) above, Owner shall continue
to pay the Subordinated Fee as calculated in accordance with Exhibit C hereto
until completion of Equity Amortization and Owner shall pay to CITCOL
thereafter within 30 days of receipt of an invoice setting forth any such
amounts (i) Demobilization Costs, (ii) the Operating Fee or a pro rated part
thereof corresponding to the portion of the Year prior to the date of
termination, (iii) the Incentive Fees as adjusted in good faith by the
Parties, taking into account the basis on which the Agreement was terminated
by Owner, to reflect the extent to which the Incentive Fees may be payable,
less the offset of such amounts against any financial loss to Owner caused by
the Operating Division and (iv) all other amounts due under the Agreement,
provided that Owner may offset such amounts against amounts due to Owner
including any amounts under the Guarantee Agreement; provided that Owner shall
not pay to CITCOL the Subordinated Fee and items (i) through (iv) inclusive if
Owner terminates CITCOL (A) for failure to comply with Law 40 or Law 104 of
1993 and, as a result of CITCOL's failure to comply therewith, Owner is
subject to penalties thereunder or (B) following the failure of either IPL
Enterprises or TCPL International to make an Equity Contribution on a timely
basis as required under the Oleoducto Central Agreement or to comply with
Article Ten of the Oleducto Central Agreement in connection with a transfer,
pledge, encumbrance or hypothecation of Shares and the continuation of such
default for more than 90 days; and
(b) If this Agreement is terminated by CITCOL under Section 8.3(a),
Owner shall pay to CITCOL (i) the Subordinated Fee pro rated through the date
of termination, and (ii) amounts included in clauses (a)(iii) and (a)(iv)
above.
Section 8.5. Transfer of Responsibilities. Prior to the effective
date of the termination of this Agreement, CITCOL will cooperate with Owner to
facilitate the timely and orderly transfer of CITCOL's responsibilities to its
successor, and shall not remove any Secondees in place until such effective
date of termination. Failure by CITCOL to so cooperate shall constitute an act
of willful misconduct (dolo) by CITCOL.
ARTICLE NINE
GENERAL
Section 9.1. Exclusive Dedication. CITCOL covenants and agrees
that during the term of this Agreement it shall not engage in any other
activities for Owner or a third party other than those provided for hereunder
without the prior consent of Owner.
Section 9.2. Notices. All notices, requests, demands and other
communication provided for in this Agreement shall be in writing and shall be
given by personal delivery, by certified or registered mail or by electronic
means of communication and addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
(a)If to Owner
---------------------------------
OLEODUCTO CENTRAL S.A.
---------------------------------
World Trade Center-Bogota
Calle 100 No. 8A-55
Torre C, Piso 10
Santafe de Bogota, D.C. -Colombia
Republic of Colombia
Telefax: 571-218-3933
Attention: President
(b)If to CITCOL: Copy To
--------------------------------
CIT COLOMBIANA S.A. IPL INTERNATIONAL INC.
c/o Baker & McKenzie Suite 1100
Calle 35 No 7-25, Piso 4 363 North
Santafe de Bogota Sam Houston Parkway East
D.C. - Colombia Houston, Texas 77060
Telefax: (571) 285-6908 Telefax: (713) 820-9310
Attention: Mr. Eduardo Zuleta Attention: Benny J. Phillips
TRANSCANADA
PIPELINES LIMITED
TransCanada PipeLines Tower
111 Fifth Avenue S.W.
P.O. Box 1000, Station M
Calgary, Alberta, Canada T2P 4K5
Telefax: (403) 267-2668
Attention:Michael Durnin and
Robert M. Jensen
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by either Party to the other. Any demand, notice or
other communication given by personal delivery shall be conclusively deemed to
have been given on the Day of actual delivery thereof and, if given by
registered mail, on the fifth Business Day following the deposit thereof in
the mail and, if given by electronic communication, on the Day of transmittal
thereof if given during the normal business hours of the recipient and on the
Business Day during which such normal business hours next occur if not given
during such hours on any Day. The Party giving any demand, notice or other
communication by personal delivery or by electronic communication shall send
the original thereof by first class mail.
Section 9.3. Entire Agreement. This Agreement constitutes the
entire Agreement between the Parties pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussion, whether oral or written (including, for the avoidance of doubt,
the Operating Principles attached as Schedule D to the Oleoducto Central
Agreement), of the Parties, and there are no warranties, representations or
other agreements between the Parties in connection with the subject matter
hereof except as specifically set forth herein and therein. No amendment,
supplement, waiver or termination of this Agreement shall be binding unless
executed in writing by the Party to be bound thereby.
Section 9.4. Waiver. A failure by a Party to assert its rights
under this Agreement shall not be deemed a waiver of such rights, nor shall
any waiver be impliedfrom any act or omission. No waiver by a Party with
respect to any right shall extend its effect to any subsequent breach of the
terms hereof of like or different kind unless the waiver explicitly provides
otherwise.
Section 9.5. No Third Party Beneficiaries. Except as herein
otherwise expressly provided to the contrary, this Agreement shall enure to
the benefit of and be binding upon the Parties and their respective successors
and no other Person shall have any rights hereunder except the Initial
Shippers to the extent that the Initial Shippers are entitled to direct Owner
to suspend payment of Fees to CITCOL under Section 5.2 hereunder and are
entitled to appoint an Owner Representative in connection with the operating
incentives described in Exhibit B hereto.
Section 9.6. Assignments. This Agreement shall not be assigned by
CITCOL without the prior written consent of Owner.
Section 9.7. Taxes. Except as otherwise provided herein, each
Party shall be solely responsible for the payment of all taxes imposed on it,
whether by taxing authorities within Colombia or elsewhere, provided that
Owner shall be solely responsible for the payment of any stamp tax incurred in
connection with this Agreement (except any stamp tax incurred as a result of
payments to CITCOL hereunder with respect to profit-sharing and the Operating
Fee for which CITCOL shall be solely responsible) and shall reimburse CITCOL
for all Industry and Commerce taxes payable by CITCOL in respect of revenues
received by CITCOL from Owner within 30 days of receipt of an invoice from
CITCOL setting forth any such amounts.
Section 9.8. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect. Any provision of this Agreement that is
unenforceable in any jurisdiction shall not invalidate or render unenforceable
this Agreement in any other jurisdiction.
Section 9.9. Survival of Obligations. The termination of this
Agreement shall not discharge any Party from any obligation which it owes to
another Party under this Agreement, or any loss, cost, damage, expense or
liability which shall occur or arise (or the circumstances, events or basis of
which occurred or arose) under this Agreement prior to or as a result of such
termination. It is the intent of the Parties that any obligation owed by a
Party to another Party under this Agreement (whether the same shall be known
or unknown at the termination hereof, or whether the circumstances, events or
basis of the same shall be known or unknown at the termination hereof) shall
survive the termination of this Agreement. In addition, Articles Six and
Seven, Section 8.4 and Exhibit C to the extent provided in Section 8.4 shall
survive the termination of this Agreement.
Section 9.10. Remedies Exclusive. Remedies provided under the
provisions of this Agreement shall be the exclusive remedies available to the
Parties hereto.
Section 9.11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF COLOMBIA WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
Section 9.12. Dispute Resolution. (a) Controversies. If:
(i) any controversy, claim, or dispute arises between Owner and
CITCOL that relates to this Agreement including the termination or invalidity
hereof (hereinafter called a Controversy); and
(ii) the Parties have not resolved such Controversy within sixty
(60) Days (or such other period of time as the Parties may at the time agree
upon) after either party gives notice of such Controversy to the other,then
the Controversy in question shall, at the request of any party, be resolved by
binding arbitration in accordance with the succeeding provisions of this
Section, which shall be the sole and exclusive remedy for resolution of such
Controversy. Any claimed default based upon such Controversy shall be deemed
suspended until the Controversy is settled, provided that the party claimed to
be in default is proceeding diligently with the arbitration. For greater
clarity and certainty, arbitration shall not be available to anyone who is not
a Party, and the aforesaid requirement to arbitrate shall not preclude a Party
from seeking contribution, indemnification, or damages from the other Party in
proceedings instituted by third parties in courts of competent jurisdiction.
Judgment on an arbitration decision may be entered by any court having
jurisdiction.
(b) Procedures. Any Controversy shall be settled by a Court of
Arbitration designated by the Board of Directors of the Chamber of Commerce of
Santafe de Bogota by drawing lots among the arbitrators appearing in the list of
arbitrators with a specialization which relates to the matter under dispute
kept by the Center of Mercantile Arbitration and Conciliation of said Chamber.
The Court thus designated shall abide by the provisions of the Code of Civil
Procedure and the Commercial Code in accordance with the following rules: (A)
the Court shall consist of three arbitrators; (B) the internal organization of
the Court shall be subject to the rules established to such end by the Center
of Mercantile Arbitration and Conciliation of the Chamber of Commerce of
Santafe de Bogota; (C) the decision of the Court shall be in law; and (D) the
Court shall meet in Santafe de Bogota, at the Center or Mercantile Arbitration
and Conciliation of the Chamber of Commerce of such city.
Section 9.13. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 9.14. Headings, Table of Contents. Headings contained
herein are for convenience of reference only and do not constitute a part of
this Agreement.
Section 9.15. Language of Agreement. This Agreement may be
executed in both the English language and the Spanish language. In the event
of any dispute between the meaning of the Spanish language and English
language versions, the Spanish language version shall prevail.
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first set out
above.
OLEODUCTO CENTRAL S.A.
By: ______________________________
CIT COLOMBIANA S.A.
By:______________________________
By: _____________________________
<PAGE>
EXHIBIT A
To Technical Services and Management Agreement
PIPELINE DESCRIPTION
This description of Owner's oil transportation and storage facilities is
separated into two categories: (i) existing assets which will be transferred
to Owner as provided in the Oleoducto Central Agreement and (ii) assets that
will be built during the construction phase currently estimated during the
year 1997. The existing assets are interconnected by a variety of facilities
which will not become part of the Pipeline, but which will be used. Once
completed, Owner will own a complete transportation system, capable of
transporting Petroleum from the Fields to the export terminal in the Port of
Covenas on the Caribbean coast. At any time, the Pipeline shall, for the
purposes of the Agreement, be comprised of any pipeline assets that are owned
by Owner and shall, unless otherwise determined by Owner by a decision of its
Board of Directors in accordance with the By-laws of Owner, consist of the
assets described or referred to in this Exhibit which are at some time owned
by Owner.
I. Existing Facilities
The current assets which will be transferred to Owner during 1995
consist of the following facilities (see Figure):
A. Cusiana Pump Station
The Cusiana Pump Station is located in the central processing
facilities of the Santiago de las Atalayas, Tauramena, and Rio Chitamena
Association Contracts and includes the following main equipment:
1. Two production storage tanks, with a nominal capacity of 50,000
barrels each.
2. Two production storage tanks (one under construction) with a
nominal capacity of 100,000 barrels.
3. One off-spec tank with a nominal capacity of 10,000 barrels.
4. BS&W analyzer.
5. Two metering skids.
6. High alarm.
7. Two vertical canned off-spec oil recycle pumps.
8. Four crude dehydrators.
9. Four crude oil transfer pumps.
10. Four crude oil booster pumps with 1,200 GPM capacity and
differential pressure of 100 psi.
11. Four crude oil shipping pumps, with 1,200 GPM capacity and
differential pressure of 1,450 psi.
B. El Porvenir-Vasconia (Central Llanos) Pipeline Upgrade
1. El Porvenir Station
The following equipment is completed or under completion:
(a) Five main crude oil shipping pumps, of 4,000 HP and with 110
MBPD capacity (3208 GPM), 1,615 psi each.
(b) Five crude oil booster pumps with 350 HP and 73.3 MBPD
capacity (2138) each, at a differential pressure of 150 psi.
(c) Fire Protection System, including a 25 MB water tank.
(d) Three 150,000 barrel metering runs for receiving crude oil
from Cusiana.
(e) 2 KVA, Electric Substation.
(f) Three 1,000 KV Generator Sets.
(g) Pressure relief valves at receiving and dispatching points.
(h) One scraper trap for receiving crude.
(i) Four 112.8 MBPD meter runs for shipping crude oil.
(j) Distributed control system.
2. Miraflores Station:
(a) Five main crude oil shipping pumps, with 4,500 HP and 73.3
MBPD, 2,315 psig capacity each.
(b) Distributed Control System.
(c) Fire Protection System, including a 5,000 barrel water tank.
(d) Pressure relief valves available at receiving and
dispatching points.
(e) Scraper traps at dispatching points.
3. Vasconia Station:
(a) High pressure metering skid (260 MBPD) composed of 8 meter
runs, with BS&W Analyzer
(b) One low pressure flow meter, 150 MBPD.
(c) Upgraded DCS.
(d) Scraper traps installed at receiving points.
4. 30" Pipeline (96 kilometers of 30" outside diameter pipe with
5/8" and 3/4" wall thickness).
C. Covenas Terminal
The Covenas Terminal is located in the Port of Covenas and the
following equipment is contained within the existing Oleoducto de Colombia.
1. Four crude oil storage tanks with a nominal capacity of 350,000
barrels.
II. Post-Construction Facilities
The completed Pipeline, as envisaged under current development
plans, will comprise an 800 km transportation system linking the production
centers in the Fields to the terminal facilities in the Port of Covenas (see
Figure). The proposed pipeline divides naturally into four segments:
1. Cusiana Segment: a 35 km section of 30" pipe which connects
the Cusiana Pump Station within field facilities to the El Porvenir Pump
Station;
2. El Porvenir-Vasconia (Central Llanos) Segment: a 280 km
section of 30" and 36" pipe linking El Porvenir to La Belleza, along with
additional pumping capacity added to El Porvenir and Miraflores:
3. ODC Loop: a 480 km section of 30" pipe which leads from
Vasconia to Covenas; and
4. Covenas Terminal: export terminal facilities at the Port of
Covenas.
A. Cusiana to El Porvenir Segment
A new 30" pipeline is proposed between Cusiana and El Porvenir
to transport an annual average of 500 MBD. The existing 20" pipeline will be
converted for the transportation of gas. New pumps and equipment will be
installed for the new 30" pipeline. Incremental tankage will be installed as
part of the field facilities to provide for a total volume equivalent to three
days of production.
B. El Porvenir to La Belleza - El Porvenir - Vasconia (Central
Llanos) Segment
A new 36" pipeline will be constructed between El Porvenir and
Miraflores and a new 30" pipeline will be constructed between Miraflores and
La Belleza. Additional pumps and drivers will be added to the El Porvenir and
Miraflores Pump Stations, allowing this new system to transport an annual
average of 556 MBD.
The existing 20" Central Llanos Line will be leased by Owner from
1995 until completion of the El Porvenir to La Belleza loop and then it will
be removed from the crude oil transport system and converted to a gas
transmission line. At La Belleza, the new line will be connected to the
existing 30" line described above. At Vasconia, about 230 MBD will be
off-loaded from the Pipeline for transport through ODC to Covenas. The
remainder of the oil, 290 MBD, will flow directed into a new Vasconia to
Covenas pipeline for transport to Covenas.
C. Vasconia to Covenas Segment (ODC Loop)
A 30" pipeline will be constructed from Vasconia to Covenas. This
pipeline will carry an annual average of 290 MBD. The existing ODC will be
used to transport oil from Vasconia that is not sent to the refinery in
Barrancabermeja.
D. Covenas Terminal
One Tanker Loading Unit will be added to the Covenas terminal and
the tank farm will be expanded to a total storage capacity of 2,000 to 3,000
MB.
<PAGE>
Map of production values corresponding to annual rates for a case
with 500 MBD from Cusiana and Cupiagua and existing production
for 1996 not filed here within.
<PAGE>
125_LAN04
EXHIBIT B
TO TECHNICAL SERVICES AND MANAGEMENT AGREEMENT
OPERATOR INCENTIVES
1. DEFINITIONS. The following terms are used in this Exhibit B and have the
meanings indicated. Capitalized terms not otherwise defined herein shall have
the meanings assigned in the Oleoducto Central Agreement or in the Agreement
to which this Exhibit B is attached.
Adjusted Equity means the Adjusted Paid-in Equity for the Canadian Group,
decreased to reflect amortization in accordance with Section 5.5 of the
Oleoducto Central Agreement but without regard to any additional equity of
Owner acquired from others by the Canadian Group or any capital contributions
to Owner made by the Canadian Group in excess of the contributions
attributable to its original Shareholder Interest as set out in the Oleoducto
Central Agreement on the date of its execution.
Base Performance Incentive Factor has the meaning assigned to it in
Section 4(c) hereof.
Base Performance Percentage means X in the following formula:
13.5% + 0.5% + ( 2,500,000 x (1-T)Adjusted Paid-In Equity x 100 )% + X% = 16%
where T equals the effective Colombian tax rate applicable to CITCOL
(including remittance or other taxes withheld on dividends paid by CITCOL) in
effect at the time of calculation, provided that X shall never be less than
zero.
Base Performance Standard means a quantifiable and measurable level of
performance for an Objective which is the broad equivalent of such performance
by an experienced and prudent operator for pipeline operations in Canada and
the United States as modified to appropriately reflect the context of
operations in Colombia and the policies and Budgets approved by the Board of
Directors.
Colombian Income Taxes means the sum of all taxes, including all charges,
levies, income taxes, remittance taxes, withholding tax, excise taxes, or
other levies, on fees earned in Colombia imposed by any taxation or similar
regulatory authority in Colombia on CITCOL as recipient of such fees and on
dividends paid by CITCOL outside of Colombia derived from such fees.
Cost Savings Initiative means any plan, program or modification to a plan
or program identified by CITCOL that will result in measurable cost savings or
cost avoidance for the benefit of the Owner.
GAAP means the generally accepted accounting practices consistently
applied and used by professionally accredited independent auditors employed by
leading accounting firms when performing financial audits of Colombian
corporations. In any event, such accounting practices shall be consistent with
the accounting practices used to calculate annual returns under Section 5.4(b)
of the Oleoducto Central Agreement.
Incentive Fees means for any Year an amount computed by (i) reducing the
Stretch Performance Incentive Factor by the amount of the Negative Performance
Incentive Factor, provided that the Stretch Performance Incentive Factor shall
not be less than zero nor more than one, (ii) combining the Stretch
Performance Incentive Factor as so modified with the Base Performance
Incentive Factor provided that for the Years 1998 and 1999 such combined
Factors shall not exceed the Base Performance Percentage, and (iii)
multiplying the combined Factors times the Adjusted Equity determined from the
audited financial statements of Owner for such Year.
Incentive Index means a number (including zero) (which may be negative)
expressed as a percentage to two decimal place values (or as a range of such
percentages).
Incentives Schedule has the meaning assigned to it in Section 2(a) of
this Exhibit B.
Measurement Statement has the meaning assigned to it in Section 4(b) of
this Exhibit B.
Method of Performance Measurement means a detailed, objective,
quantifiable method of measuring actual performance of an Objective against
such Objective's Base, Negative and Stretch Performance Standards.
Negative Performance Incentive Factor has the meaning assigned to it in
Section 4(d) hereof.
Negative Performance Standard means a quantifiable and measurable level
of performance associated with an Objective which performance level is
substantially lower than the Base Performance Standard for such Objective, or,
if there is no Base Performance Standard for such Objective, then a
quantifiable and measurable level of performance for an Objective which is
substantially lower than the broad equivalent of that referred to in the
definition of the Base Performance Standard.
Objective means any purpose or goal, specified at the sole discretion of
the Owner Representatives, for the Operating Division's performance in
operating the Pipeline which is objective, quantifiable and measurable, which
may relate to, among other things: technical integrity, safety, Environment,
security, emergency response, operations, maintenance, overhead, capital
improvement, cost efficiency, reliability of service, administrative and
reporting responsiveness, management of line fuel and line loss, technical
improvements, and which may, but need not, result in cost savings.
Operating Costs mean those costs attributable to the Operating Division
which are of the nature included in operating costs and expenses under GAAP on
the audited earnings statements of Owner.
Operating Cost Reductions has the meaning assigned to it in Section 3(b)
of this Exhibit B.
Owner Representatives means the individuals appointed as such by the
Initial Shippers for purposes of this Agreement, of which each Initial Shipper
shall be entitled to appoint one and an alternate.
Performance Standard means a Base Performance Standard or a Stretch
Performance Standard.
Stretch Performance Incentive Factor has the meaning assigned to it in
Section 4(e) hereof.
Stretch Performance Standard means a quantifiable and measurable level of
performance which is substantially higher in degree of difficulty for CITCOL
to achieve than the Base Performance Standard, or, if there is no Base
Performance Standard for such Objective, then a quantifiable level of
performance with a high degree of difficulty to achieve, and represents, if
achieved, a substantial benefit to the Owner or the Initial Shippers.
2. INCENTIVES SCHEDULE.
(a) Contents of the Incentives Schedule.
(i) The Incentives Schedule for any Year shall state the
Objectives of the Owner Representatives to which the incentives under this
Exhibit B to the Agreement apply. There may be any number of Objectives up to
a maximum of 10 and there shall always be at least one Objective. The
Objectives shall be ranked in numerical order with the most important
Objective of the Owner Representatives ranked number one.
(ii) Each Incentives Schedule shall contain at least the
following:
(A) a description of each Objective in reasonable detail,
and
(B) the Method of Performance Measurement applicable to
such Objective,
and as to each Objective the Incentive Schedule shall be required to contain
at least one of the following:
(C) the Base Performance Standard for such Objective and
the Incentive Index applicable thereto,
(D) a Stretch Performance Standard for such Objective and
the Incentive Index applicable thereto, and
(E) a Negative Performance Standard for such Objective
and the Incentive Index applicable thereto.
In addition, each Incentives Schedule may contain one Stretch Performance
Standard with an Incentive Index of up to 0.10 based on satisfaction of the
Initial Shippers.
(iii) The Incentive Indices applicable to Base, Negative
and Stretch Performance Standards on the Incentives Schedule shall rank
numerically in the same order as the Objectives, with the largest Incentive
Index for each such Standard applicable to the highest ranked Objective. In
the case of a range, the higher number in the range shall determine the
ranking. The Negative and Stretch Incentive Indices shall be so ranked by
omitting any Objectives as to which an Incentive Index is not stated.
(iv) On each Incentive Schedule the Incentive Indices
applicable to the Base Performance Standards shall aggregate a percentage
equal to the applicable Base Performance Percentage; the Incentive Indices
applicable to the Negative Performance Standard shall aggregate not more than
minus 0.50%; and the Incentive Indices applied to the Stretch Performance
Standard shall aggregate 1.50%.
(v) An example of an Incentives Schedule is attached to
this Exhibit B as Attachment I.
(b) Incentives Schedule Procedure.
(i) For each Year commencing with 1998 the Owner
Representatives will prepare a draft Incentives Schedule and deliver it to
CITCOL at least 45 and no more than 60 Days prior to the date the Annual
Operating Budget for that Year is required to be provided to the Board of
Directors pursuant to the Oleoducto Central Agreement.
(ii) CITCOL shall review the draft Incentives Schedule and,
within 15 Days of the receipt thereof, shall suggest any additional Objectives
that may be beneficial to Initial Shippers, and, in addition, shall provide to
the Owner Representatives in respect of each Objective on the Incentives
Schedule a preliminary estimate of the costs to achieve the Base and Stretch
Performance Standards for such Objective.
(iii) Owner Representatives and CITCOL shall meet in good
faith to resolve any questions or discrepancies in the draft Incentives
Schedule and the related estimated costs, it being agreed that if such
resolution cannot be achieved by mutual consent, then the Owner
Representatives may determine the Objectives and the Incentive Indices and the
related costs so long as they are within the terms of this Exhibit B.
(iv) If CITCOL disagrees with any Method of Performance
Measurement, Base, Negative or Stretch Performance Standard (but not any
ranking of Objectives or Incentive Indices), it may so inform the Owner
Representatives in writing. Such notice shall describe an alternative proposal
to that which CITCOL disagrees with reasons supporting the proposed
modification. CITCOL and the Owner Representatives shall then meet as promptly
as practicable to negotiate a mutually acceptable solution. In the event such
solution is not agreed within 10 Days, then the matter shall be settled in
accordance with the dispute resolution procedure in Section 5 below.
(v) The Incentives Schedule may be amended from time to
time by mutual agreement of CITCOL and the Owner Representatives in light of
changes in the responsibilities of the Operating Division, changes in the
Annual Operating Budget, any decision of the Board of Directors, the President
or the Owner Representatives that would affect the operations of the Operating
Division and that either Party reasonably considers to impact the
achievability of any Performance Standard.
(vi) The Chief Operating Officer and the Owner
Representatives shall meet within 30 Days after the end of each calendar
quarter to review the progress of CITCOL in achieving the Performance
Standards.
(vii) Costs to achieve agreed upon Base and Stretch
Performance Standards shall be reflected in the Annual Operating Budget when
it is adopted.
3. COST SAVING INCENTIVES.
(a) Cost Saving Initiatives.
(i) Each time that CITCOL identifies a Cost Saving
Initiative, it shall submit a written description thereof to the Owner
Representatives in a form and manner that clearly identifies the Cost Saving
Initiative, the method of implementingthe Cost Saving Initiative, the
potential cost savings to be realized if approved and implemented and a
quantifiable means of measuring these cost savings.
(ii) Within 30 Days of receipt of the description of a Cost
Saving Initiative, the Owner Representatives shall inform CITCOL that Owner
has approved or rejected the Cost Saving Initiative. Alternatively, the Owner
Representatives and CITCOL may agree on a modified Cost Saving Initiative.
(iii) CITCOL must implement, as soon as reasonably
practicable, all Cost Saving Initiatives approved by the Owner Representatives
or otherwise agreed by the Owner Representatives and CITCOL.
(iv) Prior to the beginning of each Year, Owner
Representative shall consult with CITCOL and at Owner Representative's sole
discretion shall establish a schedule for sharing cost savings for such Years.
(v) For each Year in which the Cost Saving Initiative is
implemented, Owner shall make a payment in respect of actual cost savings
realized by each Cost Saving Initiative in accordance with the provisions of
Sections 4 and 6 of this Exhibit B and on the basis of the final and binding
Measurement Statement setting forth the cost savings.
(b) Operating Cost Reductions.
(i) For each Year commencing with 1997 promptly after the
preparation of the audited financial statements of Owner for that Year, a
schedule shall be prepared by a party nominated by the Owner Representatives
and reasonably acceptable to CITCOL on which Operating Costs for that Year
shall be compared to the average of the actual Operating Costs for the
previous three Years (except for 1997 where the comparison shall be with the
1996 actual Operating Costs and for 1998 when the comparison shall be with the
average of the 1996 and 1997 actual Operating Costs).
(ii) The annual Operating Costs for the Year covered by
such schedule and each of the previous comparative Years shall be normalized
to allow accurate comparisons and specifically each of the annual Operating
Costs amounts shall be adjusted to reflect:
A. cost differentials due to differences in volumes,
schedules and characteristics of Petroleum transported,
B. actual Colombian inflation,
C. any exceptional one-time operating cost or cost savings,
D. deletion of all Cost Saving Initiatives identified
pursuant to Section 3(a) of this Exhibit B, and
E. significant additions and deletions to the facilities
comprising the Oleoducto Central.
As to any segment of the Pipeline which was in service for only part of one of
the periods referred to above (whether the subject Year or a comparative
Year), Operating Costs shall be annualized after eliminating the effect of any
start up or shut down costs.
(iii) Prior to the beginning of each Year, Owner
Representative shall consult with CITCOL and at Owner Representative's sole
discretion establish a schedule for sharing Operating Cost Reductions for such
Year.
(iv) For such Year, a payment shall be made by Owner to
CITCOL with respect to any reductions in normalized Operating Costs (Operating
Cost Reductions) in such Year in comparison to the preceding Years (pursuant
to Section 3(b)(i) and (ii), above) in accordance with the provisions of
Sections 4 and 6 of this Exhibit B and on the basis of the final and binding
Measurement Statement setting forth the Operating Cost Reductions.
(c) Disputes. If CITCOL disagrees with the determination or
payment of any Cost Saving Incentives or Operating Cost Reductions, CITCOL may
so notify Owner Representatives in writing. Such notice shall describe an
alternate proposal to that with which CITCOL disagrees with reasons justifying
the proposed modifications. CITCOL and Owner Representatives shall then meet
as promptly as practicable to negotiate a mutually acceptable agreement. In
the event the subject matter of the negotiation remains outstanding 10 Days
after negotiations between CITCOL and Owner Representatives commence, then the
matter shall be settled in accordance with the procedures in Section 5 hereof.
4. MEASUREMENT STATEMENTS
(a) Measurement Statements. For each Year commencing with 1996,
CITCOL shall deliver to the Owner Representatives and the President within 45
Days after the completion of the fiscal year-end audit of Owner's accounts a
Measurement Statement.
(b) Contents. The Measurement Statement for each Year shall
provide:
(i) for 1996 and each subsequent Year a calculation of
actual cost savings as determined in accordance with Section 3(a) hereof.
(ii) for 1997 and for each subsequent Year, a calculation
of Operating Cost Reductions as determined in accordance with Section 3(b)
hereof.
(iii) for 1998 and for each subsequent Year, a calculation
of the actual performance of the Operating Division in respect of each
Objective set forth on the Incentives Statement for that Year, and an
assessment using the associated Method of Performance Measure of the
achievement of each Objective's Base, Negative and Stretch Performance
Standard;
(iv) for 1998 and for each subsequent Year, a calculation
of the Base Performance Incentive Factor pursuant to Section 4(c) below;
(v) for 1998 and for each subsequent Year, a calculation of
the Negative Performance Incentive Factor pursuant to Section 4(d) below; and
(vi) for 1998 and for each subsequent Year, the Stretch
Performance Incentive Factor pursuant to Section 4(e) below.
(c) If the Operating Division's actual performance as set forth in
the final and binding Measurement Statement equals or exceeds the Base
Performance Standard for an Objective on the Incentives Schedule for that
Year, then the Incentive Index value corresponding to the Base Performance
Standard of that Objective and all other Objectives on such Incentives
Schedule which also equal or exceed the applicable Base Performance Standard
shall be added together and the total, expressed as a percentage shall
comprise the Base Performance Incentive Factor.
(d) If the Operating Division's actual performance as set forth in
the final and binding Measurement Statement falls below the Negative
Performance Standard for an Objective on the Incentives Schedule for that
Year, then the Incentive Index value corresponding to the Negative Performance
Standard of that Objective and all other Objectives on such Incentives
Schedule with Negative Performance Standards which also fall below the
applicable Negative Performance Standard shall be added together and the
total, expressed as a negative percentage, shall comprise the Negative
Performance Incentive Factor.
(e) If the Operating Division's actual performance as set forth in
the final and binding Measurement Statement equals or exceeds the Stretch
Performance Standard for an Objective on the Incentives Schedule for that
Year, then the Incentive Index values corresponding to the Stretch Performance
Standard applicable to that Objective and all other Objectives on such
Incentives Schedule with Stretch Performance Standards which also equal or
exceed the applicable Stretch Performance Standards shall be added together
and the total, expressed as a percentage shall comprise the Stretch
Performance Incentive Factor.
(f) Within 30 Days of receiving the Measurement Statement, Owner
Representatives may in writing, request that CITCOL provide additional data
and other information reasonably available that concerns the contents of the
Measurement Statement. CITCOL shall supply such data and information within 30
Days of receipt of such notice. If the CITCOL responses do not satisfy
concerns raised by Owner Representatives then CITCOL and Owner Representative
shall be notified in writing by Owner Representatives and requested to meet as
soon as is practicable to negotiate a mutually acceptable, final and binding
Measurement Statement. Pending such negotiation, Owner shall pay to CITCOL
pursuant to Section 6 hereof all amounts derived from such Measurement
Statement which are undisputed.
(g) In the event the subject matter of the negotiation remains
outstanding 10 Days after negotiations between CITCOL and Owner
Representatives commenced, then the matter shall be deemed as a Controversy
for purposes of Section 9.12 of the Agreement and shall be settled by means of
the procedures set forth therein.
5. EXHIBIT B DISPUTE RESOLUTION.
Any dispute which is to be settled under this Section shall be settled by
means of the following procedures:
(a) An expert (amigable componedor) (Expert) with experience in the area
of crude oil pipeline operations shall be selected by CITCOL and the Owner
Representatives. If CITCOL and the Owner Representatives have not selected the
Expert within 10 days of the commencement of the Controversy, then the Expert
shall be selected by the President of the American Petroleum Institute. Within
30 Days after the Expert has been appointed and has accepted such appointment,
the Owner Representatives and CITCOL shall each submit a proposal to the
Expert setting forth a position acceptable to it to resolve the Controversy,
(b) Within 15 Days after the second proposal has been submitted, the
Expert shall select one of the two proposals as the final and binding
determination of the Controversy. The Expert shall not attempt to negotiate
any compromise between the two proposals,
(c) No later than the second Business Day following such selection, the
Expert shall notify the Parties of the proposal which has been selected,
(d) The selected proposal shall be final and binding upon CITCOL and
Owner for the applicable Year,
(e) The Expert shall not provide reasons for his decision, unless
requested to do so by a Party in which case such Party will bear the
additional costs associated with such request,
(f) Costs of this proceeding which arise under this Section 5 shall be
divided equally, and
(g) The Parties acknowledge and agree that the purpose of the dispute
resolution provisions of this Exhibit B are for the purpose of resolving
disputes by making and binding the Parties to agreements that they heretofore
have been unable to reach on their own accord.
6. PAYMENT OF OPERATOR INCENTIVES.
(a) Payment. Within 30 Days after determination of the final and
binding Measurement Statement (subject to the last sentence of Section 4(f) of
this Exhibit B), Owner shall pay to CITCOL, in immediately available funds, a
cash sum in U.S. dollars, or the Peso Equivalent Amount, equal to
(1) the Incentive Fees; and
(2) a portion of the actual aggregate cost savings realized from Cost
Saving Initiatives and Operating Cost Reductions amounts determined in
accordance with the schedules established in accordance with Sections 3(a)(iv)
and 3(b)(iii).
(b) Taxes and Interest. Payments of the Performance Incentives
shall be made free and clear of all Colombian Income Taxes and payments shall
be grossed up to the extent necessary to achieve that result. All amounts paid
in respect of Cost Saving Initiatives and Operating Cost Reductions shall be
paid to CITCOL on a pre-tax basis and CITCOL shall be responsible for payment
of all Colombian taxes associated with the payment of such amount. If Owner
does not make any of the payments to CITCOL described in this Section 6 within
30 Days after determination of the final and binding Measurement Statement
then such overdue amounts shall accrue interest at the rate equivalent to the
London Inter-Bank Offered Rate plus 6% until such time as they are paid.
7. CERTIFICATION. Each written description of a Cost Saving Initiative,
schedule of Operating Costs comparisons and Measurement Statement delivered by
CITCOL to Owner shall be accompanied by an Officer's Certificate stating that
to the best knowledge of the person(s) signing such certificate after due
investigation the information contained therein is true and correct.
ATTACHMENT 1
TO EXHIBIT B
TO TECHNICAL SERVICES AND MANAGEMENT AGREEMENT
INCENTIVE SCHEDULE EXAMPLE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Method of Base
Performance Incentive Base
Objective Measurement Index Performance
---------------------------------------- ------------------------------------------- --------- -------------
Petroleum Quality (batching) Interface volume 0 to 0.5 8% to 5%
(% of Cusiana)
Tanker Demurrage Hours demurrage 0.4 < 50 hrs.
paid for year
Service factor (non-guerrilla) Percentage time operable 0 to 0.3 85% - 88%
Planned Outage Hours Hours of planned outage for year 0.15 < 75 hrs.
Accuracy of Available Capacity Projects Ratio of total barrels transported vs. - -
Projections
Long Term Integrity Ratio of repair costs to preventative cost - -
Initial Shipper Satisfaction -- - -
TOTAL 1.35
</TABLE>
Stretch Incentive
Objective Negative Negative
Incentive Index Performance
Petroleum Quality --- ---
(batching)
Tanker Demurrage -0.20 to 0 70 to 60 hrs
Service factor
(non-guerrilla) -0.1 <85%
Planned Outage --- ---
Hours
Accuracy of Available -0.10 to 0 >10% to 8%
Capacity Projects
Long Term Integrity -0.1 to 0 > z to x
Initial Shipper
Satisfaction --- ---
Total -0.5 to 0 ---
Stretch Stretch
Objective Incentive Index Performance
Petroleum Quality 0 to 0.5 5% to 3%
(batching)
Tanker Demurrage 0 to 0.3 45 to 25 hrs
Service factor
(non-guerrilla) 0 to 0.3 88% to 92%
Planned Outage
Hours 0 to 0.15 < 48 hrs
Accuracy of Available
Capacity Projects 0 to 0.10 8% to 5%
Long Term Integrity 0 to 0.05 x to <y
Initial Shipper
Satisfaction 0 to 0.1 ---
Total 1.50
EXHIBIT C
TO TECHNICAL SERVICES AND MANAGEMENT AGREEMENT
SUBORDINATED FEE
1. DEFINITIONS. The following terms are used in this Exhibit C and
have the meanings indicated. Capitalized terms not otherwise defined herein
shall have the meanings assigned in the Oleoducto Central Agreement or in the
Agreement (including Exhibits) to which this Exhibit C is attached.
The following additional terms have the meanings indicated:
Actual Volume means the actual average daily volume of crude oil
shipped through the Central Llanos Segment during a Year.
Central Llanos Segment means the El Porvenir - Vasconia (Central
Llanos) segment.
Excusable Event has the meaning assigned to it in the Transportation
Agreements.
Forecast Volume means the average daily volume of crude oil
anticipated to be shipped through the Central Llanos Segment during a Year as
described in the Forecast, and shall mean actual volumes for any period during
which an Excusable Event is in effect.
Subordinated Amount means an amount equal to the applicable
percentage specified in (i), (ii) or (iii) below multiplied by (a) prior to
the Dividend Commencement Date, the Canadian Group's Shareholding Interest in
the sum of the Cash Paid-In Equity and Pre-Completion Accrued Returns, or (b)
following the Dividend Commencement Date, the Adjusted Equity. The applicable
percentage is:
(i) 0.50%, if the Actual Volume is between 90% and 120% of the
Forecast Volume;
(ii) 0.40%, if the Actual Volume is less than 90% of the
Forecast Volume;
(iii) 0.60%, if the Actual Volume is greater than 120% of the
Forecast Volume.
Subordinated Fee means the sum of the Subordinated Amount plus such
additional amounts, including Colombian Income Taxes, such that the amount
received off-shore by the shareholders of CITCOL equals the Subordinated
Amount.
2. CALCULATION AND PAYMENT. Within 30 Days after the audited financial
statements of Ocensa become available for each Year, CITCOL (or a successor
operator which may be Owner) shall provide Owner with a statement showing
acomparison of the Actual Volume and the Forecast Volume during the preceding
Year and a calculation of the Subordinated Fee for that Year. Owner will pay
the Subordinated Fee to CITCOL semi-annually and in arrears on the Semi-Annual
Payment Dates (as defined in the Common Security Trust Agreement) in respect
of such Year. The first semi-annual payment of the Subordinated Fee in each
Year shall be paid at the same time as, if and when Owner pays its first cash
dividends for such Year in an amount determined as set forth in the definition
of Subordinated Amount but utilizing an applicable percentage of 0.25%. The
second semi-annual payment shall be payable as, if and when Owner pays its
second cash dividend for such Year in an amount equal to the Subordinated Fee
calculated for that Year less the amount of the first semi-annual payment.
3. LIMITATION. Notwithstanding the foregoing, the applicable
percentage used in the calculation of the Subordinated Amount for each Year
(after the first Year in which a Subordinated Fee is paid) shall, when added
to the applicable percentages for each of the previous Years in which a
Subordinated Fee was paid and divided by the number of such Years, not exceed
0.50%.
4. ACCRUAL. Prior to the Dividend Commencement Date, Owner shall not
pay a Subordinated Fee, however, such Subordinated Fee shall be accumulated
and compounded at 14% per annum until paid by Owner, which payment or payments
shall occur not later than the second anniversary of the Dividend Commencement
Date. Otherwise, after the Dividend Commencement Date any unpaid Subordinated
Fees shall be accumulated, compounded at 14% per annum and paid by Owner at
such time as dividends are paid by Owner in the same manner as described in
Section 5.4(b)(ii) of the Oleoducto Central Agreement.
5. DISAGREEMENTS. Any disagreements between CITCOL and Owner concerning
any calculations made in connection with the Subordinated Fee shall be
referred to Owner's auditor (revisor fiscal) who shall serve as the expert
(amigable componedor), whose decision with respect to the manner and result of
such calculation, in their judgment after giving effect to the provisions of
this Exhibit C interpreted by them in good faith (with the assistance of any
independent legal counsel they may choose to consult), shall be final and
binding on the parties. The expert shall have up to 30 days to make its
decision. Costs of this procedure shall be divided equally between the
Parties. All other disagreements arising under this Exhibit C shall be
resolved as provided for in Section 9.12 of the Agreement.
6. SURVIVAL. This Exhibit C will survive the termination of the
Agreement to the extent set forth therein until completion of Equity
Amortization.
<PAGE>
EXHIBIT D
To Technical Services and Management Agreement
OPERATING DIVISION (CONCEPTUAL)**
(Originally displayed in Organizational Chart Form)
I. General Manager*
A. Facility Operations* and Maintenance
1. Field Facility Operations
2. Field Facility Maintenance
3. ROW Maintenance
B. Logistics & * Customer Relations
1. Customer Liaison
2. Scheduling Oil Movements
3. Batch Optimization
4. Quality Standards
5. Control Centre
C. Engineering* & Technology
1. Operations Engineering
2. Information Systems
3. SCADA Technology
4. Long Term Planning
5. Facilities Development
D. Human Resources* & Administration
1. Labour Relations
2. Compensation & Benefits
3. Personnel Security
4. Training and Development
5. HR Policy Development and Adminstration
E. Accounting*
1. General Accounting
2. Oil Accounting
3. Purchasing
F. Security & Local Government Relations
1. Government Liaison
2. Facilities Security
3. Public Affairs
4. Safety & Environment
5. Community Relations
* Secondees appointed and approved by the Board of Directors as of March
15, 1995
** This Exhibit D is for illustrative purposes only and the structure,
functions and positions may be amended by the Board at any time. Other
positions may be filed by Secondees.
<PAGE>
EXHIBIT E
TO TECHNICAL SERVICES AND MANAGEMENT AGREEMENT
FORM OF GUARANTEE AGREEMENT
THIS AGREEMENT, dated as of March 31, 1995, is made among IPL
Enterprises (Colombia) Inc. (IPL), a corporation existing under the laws of
the Cayman Islands, and TCPL International Investments Inc., a corporation
existing under the laws of Alberta, Canada (TCPL) (collectively, the
Guarantors), and OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the
laws of Colombia (Ocensa).
RECITALS
WHEREAS:
A. Each of the Guarantors is a party to an Amended and Restated
Subscription Agreement with Ocensa, each dated as of March 31, 1994 (as
amended from time to time, the Subscription Agreement), entered into pursuant
to the Amended and Restated Oleoducto Central Agreement, dated as of the same
date (as amended from time to time, the Oleoducto Central Agreement);
B. IPL is an indirect wholly-owned subsidiary of IPL Energy Inc.
(IPL Energy). IPL Energy in turn is an indirect owner of a 50% beneficial
interest in CIT Colombiana S.A. (CITCOL);
C. TCPL is a direct wholly-owned subsidiary of TransCanada
PipeLines Limited (TransCanada PipeLines). TransCanada PipeLines in turn is an
indirect owner of a 50% beneficial interest in CITCOL;
D. CITCOL is a party to the Technical Services and Management
Agreement (the TSMA) with Ocensa; and
E. As an inducement to Ocensa to enter into the TSMA, each of the
Guarantors has agreed to enter into this Guarantee Agreement (the Agreement)
with Ocensa.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the Guarantors and
Ocensa agree as follows:
Section 1. Definitions. All capitalized terms used and not defined
herein have the meanings assigned to them in the TSMA.
Section 2. Representations and Warranties. (a) Each of IPL and
TCPL severally represents and warrants to Ocensa that:
(i) it is a corporation duly incorporated and organized under the
laws of its jurisdiction of incorporation;
(ii) it has the requisite power and authority to enter into and
perform its obligations under this Agreement, and this Agreement constitutes
the valid and legally binding agreement of the Guarantor; and
(iii) the execution and delivery of, and the performance by the
Guarantor of its obligations under, this Agreement will not result in a breach
of or constitute a default under:
(A) any provision of its corporate charter or articles of incorporation
or its by-laws;
(B) any agreement or instrument to which it is a party and which is
material to the performance of its obligations hereunder; or
(C) any order, judgment or decree of any court or governmental agency to
which it is a party or by which it is bound.
(b) IPL represents and warrants to Ocensa that 50% of the
outstanding capital stock of CITCOL (except for any directors' qualifying
shares) is directly or indirectly beneficially owned by IPL Energy, free and
clear of all liens, encumbrances, equities and claims.
(c) TCPL represents and warrants to Ocensa that 50% of the
outstanding capital stock of CITCOL (except for any directors' qualifying
shares) is directly or indirectly beneficially owned by TransCanada PipeLines,
free and clear of all liens, encumbrances, equities and claims.
Section 3. Guarantee. Subject to the provisions contained herein,
each of the Guarantors hereby irrevocably and unconditionally guarantees to
Ocensa that in the event that CITCOL, as a party to the TSMA, has committed an
act of gross negligence (culpa grave) or willful misconduct (dolo) as
determined by the Court of Arbitration referenced in Section 9.12(b) of the
TSMA, each of the Guarantors shall guarantee (the Guaranteed Obligations) to
Ocensa the full and punctual payment of CITCOL's liability to Ocensa to a
cumulative maximum amount of U.S. $10 million for each Guarantor.
Section 4. Unconditional Obligations of Guarantors. Each of the
Guarantors hereby agrees that its obligations hereunder are in the nature of a
continuing guarantee and shall remain valid and in full force irrespective of
any circumstances which might otherwise constitute a legal or equitable
discharge of a guarantor, provided that it is hereby acknowledged and agreed
that(a) the benefit of any waiver or indulgence granted to, or any compromise
with, CITCOL shall extend to each of the Guarantors and (b) in no event shall
either of the Guarantors be obligated to make payments hereunder exceeding in
the aggregate U.S. $10 million less in each case all amounts (similarly
determined) paid by each of the Guarantors or CITCOL pursuant to the
Guaranteed Obligations.
Section 5. No Waiver. No failure on the part of Ocensa to
exercise, and no delay in exercising, any right, remedy or power hereunder
shall operate as a waiver thereof, nor shall any single or particular exercise
by Ocensa of any right, remedy or power hereunder preclude any other or
future exercise of any other right, remedy or power.
Section 6. Subrogation. Each of the Guarantors shall be subrogated
to all rights of Ocensa against CITCOL in respect of any amounts paid by each
of the Guarantors pursuant to the provisions of this Agreement.
Section 7. Effectiveness. This Agreement shall have no effect or
validity unless and until the TSMA shall have become effective.
Section 8. Termination. This Agreement shall terminate on the
termination of the TSMA in accordance with Article Eight thereof.
Section 9. Successors. This Agreement shall not be assigned by any
party without the prior written consent of each of the other parties; provided
that this Section 9 shall not apply to any assignment of this Agreement by
TCPL to TCPL (Bermuda) Ltd. in connection with an assignment under Section
10.9 of the Oleoducto Central Agreement.
Section 10. Release. (a) Neither of the Guarantors shall be
released and discharged from any of its obligations hereunder except once this
Agreement is terminated in accordance with Section 8 above.
(b) Notwithstanding the foregoing, neither of the Guarantors shall
be released or discharged from obligations which shall have been incurred
prior to the release and discharge referred to in paragraph (a) of this
Section 10.
Section 11. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Copy To Agent for
---------------------------------
If to Ocensa: Service
------------------------
OLEODUCTO CENTRAL S.A. N/A CT CORPORATION
World Trade Center Bogota SYSTEM
Calle 100 N. 8A-55 1633 Broadway
Santafe de Bogota, D.C. -Colombia New York, New York 10019
Telefax: 571-218-3933 Telefax: (212) 247-2882
Attention: President
If to the Guarantors:
IPL ENTERPRISES CIT COLOMBIANA, S.A. CT CORPORATION
(COLOMBIA) INC. Calle 100 N. 8A-55 SYSTEM
c/o ROYAL TRUST BANK Torre C Piso 10 1633 Broadway
(CAYMAN) LTD. World Trade Center New York, New York 10019
P.O. Box 1586 Santafe de Bogota, D.C. -Colombia Telefax: (212) 247-2882
Colombia
Grand Cayman, Cayman Island Telefax: 571-610-7906
British West Indies Attention: Mr. Wayne Sartore
Telefax: (809) 949-5777
Attention: Mr. Brian Balleine
TCPL INTERNATIONAL TRANSCANADA PIPELINES FRIED, FRANK, HARRIS,
INVESTMENTS INC. LIMITED SHRIVER & JACOBSON
C/O FRIED, FRANK, HARRIS, TransCanada PipeLines Tower 1 New York Plaza
SHRIVER & JACOBSON 111 Fifth Avenue S.W. New York, New York 10004
1 New York Plaza P.O. Box 1000 Telefax: (212) 747-1526
New York, New York 10004 Calgary, Albera, Canada Attention: Ken Blackman
Telefax: (212) 747-1526 T2P 4K5
Attention: Ken Blackman Telefax: (403)267-2668
Attention: Michael Durnin and
Robert M. Jensen
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 12. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect.
Section 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 14. Submission to Jurisdiction; Consent to Service. Each
of the Guarantors hereby submits to the non-exclusive jurisdiction of the
Federal and State courts in the Borough of Manhattan in The City of New York
in any action, suit or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby (a Related Proceeding). Each of the
Guarantors irrevocably appoints the agent for service designated opposite its
name in Section 11 hereof as its authorized agent in the Borough of Manhattan
in The City of New York upon which process may be served in any such action,
suit or proceeding, and agrees that service of process upon such agent, and
written notice of said service to each of the Guarantors, by the person
serving the same to the address provided in Section 11, shall be deemed in
every respect effective service of process upon such party in any such suit or
proceeding. Each of the Guarantors further agrees to take any and all action
as may be necessary to maintain such designation and appointment of such agent
in full force and effect for the duration of this Agreement.
The obligation of each of the Guarantors in respect of any sum due
from it to Ocensa expressed in United States dollars, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first Business Day following receipt by Ocensa of any sum
adjudged to be so due in such other currency on which (and only to the extent
that) Ocensa may in accordance with normal banking procedures purchase United
States dollars with such other currency. If the United States dollars so
purchased are less than the sum originally due to Ocensa hereunder, each of
the Guarantors agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify Ocensa against such dollar shortfall. If the United
States dollars so purchased are greater than the sum originally due to Ocensa
hereunder, Ocensa agrees to pay equally to each of the Guarantors an amount
equal to the excess of the dollars so purchased over the sum originally due to
Ocensa hereunder.
Section 15. Nature of Obligations. The obligations of IPL and TCPL
to Ocensa created by this Agreement are several, and not joint and several
between the Guarantors or with any other party.
Section 16. Headings. The headings contained herein are for convenience
of reference only and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its proper officer or officers
thereunto duly authorized as of the date first above written.
IPL ENTERPRISES (COLOMBIA) INC.
By:
Title:
TCPL INTERNATIONAL INVESTMENTS INC.
By:
Title:
OLEODUCTO CENTRAL S.A.
By:
Title:
<PAGE>
SCHEDULE E TO
OLEODUCTO CENTRAL AGREEMENT
ACCESS PRINCIPLES
Ocensa will enter into access agreements with the following entities for the
assets which do not belong to Ocensa, but which must be used in whole or
inpart by Ocensa to transport Petroleum through the Oleoducto Central by on or
before December 31, 1995.
<TABLE>
<CAPTION>
<S> <C>
ENTITY ASSET(S)
------------------------ -----------------------------------------------
SDLA, Tauramena, and Rio Central Processing Facility land and
Chitamena Associations infrastructure which support the
Cusiana #1 Pump Station and tank farm
Ecopetrol El Porvenir Pump Station and tank farm
Ecopetrol Miraflores Pump Station
ODC Vasconia Pump Station and tank farm
ODC Caucasia Pump Station
ODC Pipeline from Vasconia to Caucasia
ODC Covenas Terminal Facilities and tank farm
Cravo Norte Association Covenas Terminal and Offshore (TLU) facilities
</TABLE>
Each of the Parties agree to provide active support in negotiating such access
agreements with ODC and Cravo Norte.
<PAGE>
SCHEDULE F
TO OLEODUCTO CENTRAL AGREEMENT
CURRENT INDICATIVE TERMS OF FINANCING PLAN
FOLLOWS ON NEXT TWO PAGES
Fund by Part
Senior Debt 70.0% ASSUMPTIONS:(1)Interest on Bonds 13.5%
Equity 30.0% (2)Interest on ECA Debt 13.5%
(3)All Interest capitalised
Sources & Uses of Funds During Construction (Nominal US $ millions)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Project Quarter 1 2 3 4 5 6 7
Description
1994
Uses of Funds
Cash Capital Expenditures 1,375 0 0 0 0 117 118 119
Less Excess Proceeds from Previous Bond Is 0 0 0 0 0 0 0 0
Purchase of Phase I Assets 320 0 0 0 80 0 0 240
Coupons Payable on Series 1 Bonds 65 0 0 0 0 0 0 0
Coupons Payable on Series 2 Bonds 49 0 0 0 0 0 0 0
Coupons Payable on Series 3 Bonds 29 0 0 0 0 0 0 0
Coupons Payable on Series 4 Bonds 0 0 0 0 0 0 0 0
"Coupons" Payable on Shareholder Loan I 48 0 0 0 0 0 0 0
Interest During Construction+Upfront Fee-E 98 0 0 0 0 0 0 0
Interest Payable on Shareholder Loan II 20 0 0 0 0 0 0 0
Coupon During Construction-Bid Debt 0 0 0 0 0 0 0 0
Subtotal Uses of Funds 2,004 0 0 0 80 117 118 359
Accrued Return on Equity during
Contruction 131 0 0 0 0 0 0 0
Total Uses of Funds 2,135 0 0 0 80 117 118 359
Cumulative Subtotal Uses of Funds
Sources of Funds
Cash for Tariffs 210 0 0 0 0 0 0 0
Capital Markets
Bond Series 1 200 0 0 0 0 0 200 0
Bond Series 1 150 0 0 0 0 0 150 0
Bond Series 3 220 0 0 0 0 0 0 0
Bond Series 4 0 0 0 0 0 0 0 0
Shareholders' Loan I 213 0 0 0 0 0 101 0
Commercial Banks
ECA-Guaranteed Debt 470 0 0 0 0 0 0 0
Shareholder Loan II 95 0 0 0 0 0 0 0
Sponsors' Funds:
Subordinated Debt 0 0 0 0 0 0 0 0
Equity Inc. Retained Earnings 578 0 0 0 80 117 0 144
Total Sources of Funds 2,136 0 0 0 80 117 451 144
Cumulative Subtotal sources of Funds 0 0 0 80 197 649 793
Check: (Overfunding) Underfunding (0) 0 0 0 0 333 -215
cum (0) (0) 0 0 0 333 118
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Project Quarter 8 9 10 11 12 13 14 15 16
Description
(CURRENT INDICATIVE TERMS OF
FINANCING PLAN) 1995 1996 1997
Uses of Funds
Cash Capital Expenditures 120 181 182 183 185 42 42 42 43
Less Excess Proceeds from Previous Bond Is 0 0 0 0 0 0 0 0 0
Purchase of Phase I Assets 0 0 0 0 0 0 0 0 0
Coupons Payable on Series 1 Bonds 13 0 13 0 13 0 13 0 13
Coupons Payable on Series 2 Bonds 10 0 10 0 10 0 10 0 10
Coupons Payable on Series 3 Bonds 0 0 0 0 0 14 0 14 0
Coupons Payable on Series 4 Bonds 0 0 0 0 0 0 0 0 0
"Coupons" Payable on Shareholder Loan I 7 0 7 0 7 7 7 7 7
Interest During Construction+Upfront Fee-E 16 3 6 11 11 12 12 13 13
Interest Payable on Shareholder Loan II 3 1 1 2 2 2 2 3 3
Coupon During Construction-Bid Debt 0 0 0 0 0 0 0 0 0
Subtotal Uses of Funds 170 185 219 196 228 78 86 79 89
Accrued Return on Equity during
Contruction 25 0 0 0 42 0 0 0 65
Total Uses of Funds 194 185 219 196 270 78 86 79 154
Cumulative Subtotal Uses of Funds
Sources of Funds
Cash for Tariffs 0 36 0 0 0 174 0 0 0
Capital Markets
Bond Series 1 0 0 0 0 0 0 0 0 0
Bond Series 1 0 0 0 0 0 0 0 0 0
Bond Series 3 0 0 0 220 0 0 0 0 0
Bond Series 4 0 0 0 0 0 0 0 0 0
Shareholders' Loan I 0 0 0 111 0 0 0 0 0
Commercial Banks
ECA-Guaranteed Debt 105 93 133 11 26 12 12 26 53
Shareholder Loan II 21 19 27 2 5 2 2 5 11
Sponsors' Funds:
Subordinated Debt 0 0 0 0 0 0 0 0 0
Equity Inc. Retained Earnings 50 25 36 0 46 0 0 4 76
Total Sources of Funds 176 173 196 344 77 188 14 36 140
Cumulative Subtotal sources of Funds 968 1,142 1,337 1,681 1,758 1,946 1,961 1996 2,136
Check: (Overfunding) Underfunding -19 -11 -24 148 -193 111 -72 -44 -13
cum 99 88 64 212 19 130 58 14 1
</TABLE>
<PAGE>
Project Capitalization Amounts (US $,m) % Capitalization
Senior Debt 1348 70.0%
Cash Paid-In Equity 447 23.2%
Pre-Completion Accrued Returns 131 6.8%
Total Project Capitalization 1926 100.0%
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
OLEODUCTO CENTRAL
Dec 12 1995
EOUITY SUBSCRIPTION & PERFORMANCE GUARANTEE
CAPEX - DEC'94 US $ 1270
INFLATION 105
ASSETS 320
INTEREST 195
1,890
COST OVERRUN @ 10%. 140
NOMINAL CAPEX $1375M
TOTAL 2,030
TOTAL PROJECT COST 2,030
SENIOR DEBT @ 70% 1,421
EQUITY @ 30% 609
SHARE TOTAL
EOP 507.5 0.25
TOTAL 308.56 0.152
BP 308.56 0.152
TRITON 194.88 0.096
TCPL 355.25 0.175
IPL 355.25 0.175
2,030
PREFORMANCE GUARANTEE NUMBERS
30% 30% ROUNDED
EOP 152.25 152.3
TOTAL 92.57 92.6
BP 92.57 92.6
TRITON 58.46 58.5
TCPL 106.58 106.5
IPL 106.58 106.5
TOTAL 609 609
Note A: THE SHAREHOLDERS AGREEMENT REQUIRES SHAREHOLDERS TO EITHER:
1. SUPPORT THE JSC BY PROVIDING DEBT AND EQUITY TO ACHIEVE 70% DEBT AND 30%
EQUITY OR, 2. INCREASE EQUITY PRORATA TO 40% EQUITY, 60% DEBT.
B. Finance Plan shows capitalised interest at $263mm. Reduced here as partners expect to expense
interest on productive assets.
C. rounded figures used in the performance guarantees
D. The Finance Plan of the Shareholders agreement indicates total capitalization of $1926mm
including accrued returns but excluding cash from tariffs.
</TABLE>
-
SCHEDULE G TO
OLEODUCTO CENTRAL AGREEMENT
AMENDED AND RESTATED SUBSCRIPTION AGREEMENT
AGREEMENT, dated as of March 31, 1995, between OLEODUCTO CENTRAL
S.A., a sociedad anonima organized under the laws of Colombia (Ocensa), and
___________________________, a corporation existing under the laws of _____
(the Purchaser). This Agreement amends and restates in its entirety the
subscription agreement, dated as of December [13][14], 1994, between Ocensa
and the Purchaser (the Original Subscription Agreement).
RECITALS
WHEREAS:
A. The Purchaser is a Shareholder of Ocensa, and Ocensa and the
Purchaser are parties to the Amended and Restated Oleoducto Central Agreement
(the Oleoducto Central Agreement), dated as of March 31, 1995, among Ocensa,
the Purchaser and the other Shareholders parties thereto;
B. The Purchaser has entered into the Original Subscription
Agreement to acquire from time to time upon the call of Ocensa and subject to
certain other conditions set forth herein, Shares (as hereinafter defined) in
exchange for cash and in proportion to the Purchaser's Shareholding Interest
(as hereinafter defined); and
C. The Purchaser and Ocensa desire to amend and restate the
Original Subscription Agreement to alter the conditions of a call by Ocensa to
the Purchaser to purchase Shares.
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree
that the Original Subscription Agreement is amended and restated as follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires, the
following words and phrases shall have the meanings indicated below:
Bankruptcy of Ocensa means (a) entry by any competent governmental
authority of any jurisdiction or a court having jurisdiction in the premises
of (i) a decree or order
for relief in respect of Ocensa in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or (ii)
an involuntary or contested decree or order adjudging Ocensa a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Ocensa under any
applicable law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of Ocensa or of any
substantial part of the property of Ocensa, or ordering the winding up or
liquidation of the affairs of Ocensa and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive days; or
(b) commencement by Ocensa of a voluntary case or proceeding under
any applicable bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by Ocensa to the entry of a decree or order for relief in respect
of Ocensa in an involuntary case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
Ocensa, or the filing by Ocensa of a petition or answer or consent seeking
reorganization or relief under any applicable law; or consent by Ocensa to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of Ocensa or of any substantial part of the property of Ocensa, or
the making by Ocensa of an assignment for the benefit of creditors, or the
admission by Ocensa in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by Ocensa in furtherance of
any such action.
Business Day means a day in which commercial banks in Santafe de Bogota and
The City of New York, New York are permitted to be open for domestic and
international business.
Call has the meaning assigned to it in Section 2.1.
Capital Budget means the budget for Capital Expenditures not included in
the Annual Operating Budget for a fiscal year identified as such and approved
by the Board of Directors.
Capital Expenditures means, with respect to Ocensa for any period, the
aggregate of all direct and indirect expenditures (including capitalized
interest) of Ocensa during such period which are required to be included in
property, plant or equipment, good will, rights of way and other long-term
intangible assets or a similar tangible or intangible property account,
including, without limitation, additions to equipment and leasehold
improvements, on aconsolidated balance sheet of Ocensa prepared in accordance
with generally accepted accounting principles in Colombia.
Completion means the date after all four Segments of the Oleoducto
Central have been commissioned for purposes of transporting shipments of
Petroleum and on which the five millionth barrel of Petroleum is shipped
through the Oleoducto Central from the Cusiana Receipt Point to the Coveas
Delivery Point (as such terms are defined in the Transportation Agreements),
all as certified in a resolution adopted by the Board of Directors.
Corresponding Portion of Shares means the portion, expressed as a
percentage, equal to the payment obligations hereunder being transferred
divided by the payment obligations hereunder held by the Purchaser immediately
prior to such transfer.
Current Shareholding Interest of the Purchaser means for purposes of this
definition the percentage equal to the number of Shares held by the Purchaser
divided by the total number of Shares outstanding, in each case as of the date
of determination.
Decommissioning has the meaning assigned to it in the Common Security
Trust Agreement.
Notice of Exercise of Call has the meaning assigned to it in Section 2.1.
Oleoducto Central Agreement has the meaning assigned to it in the
Recitals.
Permitted Assignee means a person to whom Ocensa or the Purchaser, as the
case may be, has assigned or transferred rights or obligations under this
Agreement in accordance with Section 5.3.
Political Events Agreement means the Political Events Agreement, dated as
of December 14, 1994, among the parties to the Oleoducto Central Agreement
providing definitions and procedures relating to certain political events, as
the same may be amended from time to time in accordance with the terms
thereof.
Related Account means any account or accounts into which Ocensa or its
permitted assign under the Transportation Agreement with [a Person in the
Purchaser's Initial Shipper Group] [in the Canadian Group
Agreements-Ecopetrol] has directed or is required to direct payments of Tariff
Advances and payments for purchases of Transportation Notes under such
agreement.
Senior Debt to Equity Ratio means the ratio for the Senior Debt Tranche
for the benefit of which this Subscription Agreement has been assigned of (a)
the principal amount of Senior Debt outstanding under such Senior Debt Tranche
secured by an interest in the RelatedAccount (excluding the notional amount of
any liability under interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements, interest rate insurance, currency
swap agreements, currency options, futures or purchase or sale agreements or
other agreements and arrangements designed to protect against fluctuations in
interest rates and currency exchange rates in each case constituting Senior
Debt under such Senior Debt Tranche to the extent the aggregate of such
notional amount is not in excess of the aggregate principal amount outstanding
of all other Senior Debt under such Senior Debt Tranche) less any proceeds of
Senior Debt under such Senior Debt Tranche held in an escrow account or other
similar account or fund pursuant to the related Senior Debt Agreement to (b)
the sum of (without duplication) (i) the greater of (A) the sum of (x) Equity
Contributions made by Persons in [the Purchaser's Initial Shipper Group [in
the Ecopetrol Agreement - and the Canadian Group]] [in the Canadian Group
Agreements - the Canadian Group and Ecopetrol], and (y) the [Purchaser's]
Current Shareholding Interest [in the Canadian Group Agreements - of the
Canadian Group and Ecopetrol] in Pre-Completion Accrued Returns [in the case
of Ecopetrol - and the Canadian Group's Current Shareholding Interest in
such Pre-Completion Accrued Returns], and (B) the [Purchaser's] Current
Shareholding Interest [in the Canadian Group Agreements - of the Canadian
Group and Ecopetrol] of Ocensa's shareholders' equity [in the case of
Ecopetrol - and the Canadian Group's Current Shareholding Interest in such
equity] determined on a consolidated basis in accordance with generally
accepted accounting principles in the United States (but excluding Ocensa's
equity interest in any Unrestricted Subsidiaries), (ii) any Transportation
Repayment Obligations owing to the Related TRO Holders, (iii) any other
outstanding debt subordinated to Senior Debt (other than Shareholder Bridge
Loans incurred to fund failures by Shareholders in other Initial Shipper
Groups or the Canadian Group to make Equity Contributions as required)
provided by Persons in the [Purchaser's Initial Shipper Group [in the
Ecopetrol Agreement - and the Canadian Group]] [in the Canadian Group
Agreements - the Canadian Group and Ecopetrol], or in each case financial
institutions designated by any such Person and Shareholder Bridge Loans
incurred to fund a failure of Purchaser or another Shareholder in its Initial
Shipper Group [in the case of Ecopetrol - or a Shareholder in the Canadian
Group] [in the case of the Canadian Group - , any Shareholder in the Canadian
Group or Ecopetrol] to make Equity Contributions as required, (iv) [the
Purchaser's Initial Shipper Group's] [in the Canadian Group Agreements -
Ecopetrol's] Proportionate Share of any outstanding debt subordinated to
Senior Debt that has not been provided by a Person in an Initial Shipper Group
or the Canadian Group or a financial institution designated by any such Person
and (v) any Advance Tariff Payments under the Advance Tariff Agreement with [a
Person in the Purchaser's Initial Shipper Group] [in the Canadian Group
Agreements - Ecopetrol] [in the Ecopetrol Agreement - the Purchaser] to
the extent not included as an expense item in the income statement of Ocensa
for the relevant period [for Ecopetrol and the Canadian Group only - ,
provided that such ratio shall be calculated on the assumption that any
amounts for which a Call has been issued under the [Ecopetrol] [each
Shareholder in the Canadian Group] Subscription Agreement have been paid].
Shareholding Interest of the Purchaser means the percentage equal to the
number of Shares held by the Purchaser divided by the total number of Shares
outstanding, in each case as of December 14, 1994.
Shares means the shares of capital stock of Ocensa, par value Ps. 100,000
each, each with no preference among themselves with respect to dividends,
voting rights or rights upon liquidation of Ocensa.
Specified Court has the meaning assigned to it in Section 5.11. [Not to
be included in Ecopetrol Agreement]
Time of Delivery has the meaning assigned to it in Section 2.1.
Unrestricted Subsidiary has the meaning assigned to it in the Common
Security Trust Agreement.
Section 1.2. Interpretation. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular and vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or Section refers to an Article or a
Section, as the case may be, of this Agreement; and
(d) all references to this Agreement and the words herein, hereof,
hereto and hereunder and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section or other subdivision.
All defined terms used and not defined herein have the meanings assigned to
them in the Oleoducto Central Agreement.
ARTICLE TWO
COMMITMENT
Section 2.1. Commitment to Purchase Shares. On the terms and subject to
the conditions hereinafter set forth, the Purchaser agrees from time to time
to acquire Shares uponthe call (each, a Call) of Ocensa to be exercised by a
notice of exercise (each, a Notice of Exercise of Call), in each case in
exchange for cash, in the number, at the purchase price per Share and on the
date and at the time (each, a Time of Delivery) set forth in the Notice of
Exercise of Call; provided, however, that, in each case,
(a) the Call shall be made (i) in accordance with the procedures
established for such purpose in the By-Laws of Ocensa and applicable laws,
(ii) prior to (x) Bankruptcy of Ocensa, (y) Decommissioning or (z) a unanimous
decision of the Board of Directors not to continue with the Oleoducto Central,
in conformity with a Capital Budget and a Funding Resolution of Ocensa, and
(iii) simultaneously with Calls to all other purchasers under other
Subscription Agreements, as soon as practicable after all necessary
governmental and shareholder approvals for the issuance of such equity have
been obtained,
(b) the Notice of Exercise of Call shall be substantially in the form of
the Notice of Exercise of Call attached as Annex I hereto and shall be
transmitted simultaneously to all purchasers under other Subscription
Agreements,
(c) the number of Shares to be purchased by the Purchaser at such Time
of Delivery and the aggregate purchase price therefor shall be in the same
proportion to the aggregate amount of Shares being sold by Ocensa pursuant to
such Call and the aggregate price therefor as the Purchaser's Shareholding
Interest,
(d) the purchase price per Share to be sold at each Time of Delivery,
the Time of Delivery and all other terms of purchase shall be identical for
all Shareholders, and
(e) the Time of Delivery shall be not less than 15 Business Days after
the date of delivery of the Notice of Exercise of Call.
In addition, one special Call (which shall be for a contribution of funds
but not for additional Shares) may be made without reference to a Capital
Budget or Funding Resolution in the event of (x) Bankruptcy of Ocensa, (y)
Decommissioning or (z) a unanimous decision of the Board of Directors not to
continue with the Oleoducto Central, if at the time of such event the Senior
Debt to Equity Ratio is higher than 70/30, for an amount sufficient so that,
after giving effect to such Call and the actual or pro forma application of
the proceeds thereof to repay Senior Debt, such ratio shall be 70/30.
Ocensa agrees to make Calls to the Purchaser to acquire Shares in
exchange for cash only in compliance with this Section 2.1.
Section 2.2. Sale of the Shares. At each Time of Delivery, Ocensa shall
issue, sell, transfer, convey, assign and deliver to the Purchaser, and the
Purchaser will acquire from Ocensa, all right, title and interest in and to
the Shares being purchased by the Purchaser atTime of Delivery at such
purchase price per Share set forth in the Notice of Exercise of Call. Upon
payment of the aggregate purchase price therefor as provided herein and in
such Notice of Exercise of Call, the Purchaser shall have no further
obligations thereunder.
Section 2.3. Payment and Delivery. The certificate(s) representing the
Shares purchased by the Purchaser hereunder at each Time of Delivery shall be
delivered by or on behalf of Ocensa to the Purchaser's designated
representative in the place set forth in the Notice of Exercise of Call
against payment in full by the Purchaser of the purchase price as set forth in
the Notice of Exercise of Call.
Section 2.4. Conditions to Purchase. The obligations of the Purchaser
hereunder to purchase the Shares to be delivered at each Time of Delivery
shall be subject to the conditions that (a) the representations and warranties
of Ocensa in Section 2.6 are, at and as of such Time of Delivery, true and
correct, and (b) that the aggregate purchase price of all Shares purchased and
contributions of funds by the Purchaser pursuant to Calls of Ocensa hereunder
shall not exceed the lower of (i) $_____ million and (ii) the Purchaser's
Shareholding Interest of the Aggregate Subscription Obligation (or, in each
case, the equivalent thereof in Colombian Pesos determined by reference to
exchange rates between U.S. dollars and Pesos in effect on each Time of
Delivery hereunder based on such rates available to Ocensa as reasonably
determined by Ocensa), less, in each case, all amounts (similarly determined)
paid by the Purchaser [or any guarantor thereof pursuant to a Performance
Guarantee Agreement] pursuant hereto [or thereto]. It is acknowledged that
such Shares are subject to the terms of the Oleoducto Central Agreement, [not
to be included in Ecopetrol Agreement - the Voting Trust Agreement] and the
Dividend Trust Agreement.
Section 2.5. Mutual Representations and Warranties. Each party
represents and warrants to the other for its benefit that:
(a) it is a corporation duly incorporated and organized under the laws
of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and perform
its obligations under this Agreement and this Agreement, when executed and
delivered by such party, constitutes the valid and legally binding agreement
of such party; and
(c) the execution and delivery of, and the performance by it of its
obligations under, this Agreement will not result in a breach of or constitute
a default under:
(i) any provision of its charter or articles of incorporation or its
By-laws;
(ii) any agreement or instrument to which it is a party and which is
material to the performance by it of its obligations hereunder; and
(iii) any order, judgment or decree of any court or governmental
agency to which it is a party or by which it is bound.
Section 2.6. Additional Representations and Warranties of Ocensa.
Ocensa represents and warrants to the Purchaser for its benefit and for the
benefit of its Permitted Assignees that the Shares to be issued and sold by
Ocensa hereunder and under the related Notice of Exercise of Call at each Time
of Delivery will have been duly and validly authorized and, when issued and
delivered against payment in full therefor as provided herein and in such
Notice of Exercise of Call, will be fully paid and non-assessable.
Section 2.7. Use of Proceeds. All proceeds from the purchase of Shares
hereunder (except pursuant to a special Call pursuant to the penultimate
paragraph of Section 2.1 which shall be deposited into the Related Account)
shall be used solely to pay the Purchaser's Shareholding Interest of the
Capital Expenditures of Ocensa or to refinance indebtedness of Ocensa incurred
in order to finance its Shareholding Interest of such Capital Expenditures.
Section 2.7. Use of Proceeds. All proceeds from the purchase of
Shares hereunder (except pursuant to a special Call pursuant to the
penultimate paragraph of Section 2.1 which shall be deposited into the
Related Account) shall be used solely to pay the Purchases's Shareholding
Interest of the Capital Expenditures of Ocensa or to refinance
indebtedness of Ocensa incurred in order to finance its Shareholding
Iterest of such Capital Expenditures.
Section 2.8. Fees and Expenses. All fees and expenses incurred by or on
behalf of each party hereto in connection with the negotiation and execution
of this Agreement and the transfer of the Shares to be sold hereunder at each
Time of Delivery shall be borne by such party.
Section 2.9. Taxes. Ocensa shall be solely responsible for the payment
of all taxes imposed on it, whether by taxing authorities within Colombia or
elsewhere, arising from or in connection with the transactions contemplated
hereby.
ARTICLE THREE
POLITICAL EVENTS
Section 3.1. Political Events. The obligations of the Purchaser under
this Agreement to purchase Shares are subject to the terms of the Political
Events Agreement. For purposes of the Political Events Agreement the special
Call referred to in the penultimate paragraph of Section 2.1 and the similar
special Calls under the Amended and Restated Subscription Agreements entered
into as of the date hereof by the other Shareholders shall be a Purchase
Obligation as defined in the Political Events Agreement.
ARTICLE FOUR
TERM; EFFECTIVENESS
Section 4.1. Term. This Agreement shall be effective as of the date of
the Original Subscription Agreement and shall continue in force and effect
until the earliest of (i) the termination of the Oleoducto Central Agreement,
(ii) December 31, 2001, (iii) as provided in the Political Events Agreement,
(iv) Completion and (v) following a unanimous decision of the Board of
Directors of Ocensa not to continue with the Oleoducto Central, Bankruptcy of
Ocensa or Decommissioning, at the earlier, in the case of this clause (v), of
(A) full satisfaction of a special Call pursuant to the penultimate paragraph
of Section 2.1 and (B) when a Senior Debt to Equity Ratio of 70/30 has
otherwise been achieved, provided, that, in each case (i) through (v), any
rights and obligations existing prior to termination shall survive termination
of this Agreement.
Section 4.2. Effectiveness. Notwithstanding Section 4.1, this Agreement
shall have no effect or validity unless and until Ocensa has entered into
amended and restated Subscription Agreements in substantially identical form
to this Agreement with the other Shareholders, supported, in each case (other
than with respect to Ecopetrol) by performance guarantee agreements
substantially in the form attached as Schedule H to the Oleoducto Central
Agreement.
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
Agent for
If to Ocensa: Service
------------------------
OLEODUCTO CENTRAL S.A. CT CORPORATION
---------------------------------
World Trade Center Bogota SYSTEM
Torre C, Piso 10 1633 Broadway
Calle 100 N. 8A-55 New York, New York 10019
Santafe de Bogota, D.C. -Colombia Telefax: (212) 247-2882
Telefax: 571-218-3933
Attention: President
If to the Purchaser:
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 5.2. Amendments and Waivers. Ocensa will enter into other
Subscription Agreements on substantially identical terms with the other
Shareholders, and the Purchaser shall have no obligations with respect to any
other such Subscription Agreement. No amendment, supplement, waiver or
termination of this Agreement shall be binding unless executed in writing by
the party to be bound thereby. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
Section 5.3. Assignments. (a) Ocensa may not assign this Agreement or
any of its rights hereunder, or create enforceable third party rights herein,
to or in any person not a party hereto (or an Affiliate of a party hereto)
except that Ocensa may assign to any person, in each case with the prior
written consent of the Purchaser, all or any part of Ocensa's rights hereunder
to the trustee under the Common Security Trust Agreement. If the Purchaser
consents, it agrees to execute and deliver all consents and documents
reasonably necessary to effect such assignment and to create a valid and
perfected security interest herein. The claims and rights of each such
Permitted Assignee shall rank pari passu with the claims and rights of all
Permitted Assignees irrespective of the time or times at which prior,
concurrent or subsequent assignments under this Section 5.3 are made or
perfected. Subject to compliance with the terms of any such assignment, any
such Permitted Assignee shall have the benefit of the representations and
warranties of the Purchaser and may enforce the obligations of the Purchaser
hereunder as if such Permitted Assignee were a party hereto.
(b) The Purchaser shall assign all or part of its rights and obligations
hereunder in connection with a transfer of the Corresponding Portion of its
Shares to a Person that is a permitted transferee thereof pursuant to Article
Ten of the Oleoducto Central Agreement.Upon the unconditional assumption of
the Purchaser's rights and obligations being assigned to such permitted
transferee of the Purchaser pursuant to this Section 5.3(b) by such permitted
transferee, and subject to any limitations in any assignment agreement, the
Purchaser shall be released and discharged from all of its obligations
hereunder, except obligations which shall have been incurred prior to such
assignment and assumption.
Section 5.4. Nature of Obligations (a) Subject to the terms of
this Agreement, the obligations of the Purchaser under this Agreement to
purchase Shares shall be unconditional and absolute and, shall not be
deferred, excused, released, discharged, or in any way affected by (i) any
right of set off, counterclaim, or defense by reason of any claims against
Ocensa arising under this Agreement or on any other account whatsoever, (ii)
any sale or other transfer by any of the Shareholders (among themselves or
otherwise) of any of the Shares, or the failure by any other Shareholder to
perform its obligations under its Subscription Agreement, (iii) Bankruptcy of
Ocensa or any bankruptcy, reorganization or dissolution (on whatever grounds)
of the Purchaser, or (iv) any change, waiver, extension, indulgence, or other
action or omission in respect of any of Ocensa's obligations, in each case
whether or not the parties hereto shall have had any notice or knowledge of
any of the foregoing.
(b) The obligations of the Purchaser created by this Agreement,
and in particular the obligation to acquire Shares in exchange for cash
pursuant to Calls, are several, not joint and several with any other party.
Nothing herein shall be deemed or construed to make the Purchaser a surety or
a guarantor of Ocensa or of any other Shareholder or liable to meet any
obligation of Ocensa or of any other Shareholder.
Section 5.5. No Third Party Beneficiaries. Except with respect to the
second sentence of Section 3.1, which shall also inure to the benefit of
Shareholders referred to therein, and as otherwise expressly provided herein
to the contrary, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and Permitted
Assignees, and no other Person shall have any rights hereunder.
Section 5.6. Severability. If, for any reason, any provision of this
Agreement is unenforceable, the remaining provisions hereof shall nevertheless
be carried into effect.
Section 5.7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK [FOR
ECOPETROL-COLOMBIA] WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.8. Performance Outside Colombia. The parties hereto
acknowledge and agree that their activities hereunder will be performed
substantially outside Colombia. [Not to be inserted in Ecopetrol Agreement]
[Only in Ecopetrol Agreement -- Section 5.8 Language of Agreement. This
Agreement may be executed in both the English language and the Spanish
language. In the event of any dispute between the meaning of the Spanish
language and English language versions, the Spanish language version shall
prevail.]
Section 5.9. Commercial Obligations. Each Party acknowledges and agrees
that its rights and obligations hereunder are commercial and not governmental
in nature.
Section 5.10. Arbitration. Any dispute, controversy or claim arising
out of or relating to this Agreement, or the performance, breach, termination,
or invalidity hereof, shall be settled by arbitration in accordance with the
UNCITRAL Arbitration Rules in effect as of the date hereof. The arbitration
shall be the sole and exclusive forum for resolution of the dispute,
controversy or claim, and the award shall be final and binding. Judgment
thereon may be entered by any court having jurisdiction. The number of
arbitrators shall be three, each of whom shall be disinterested in the
dispute, controversy or claim, and shall have no connection with any party.
Should the services of an appointing authority be necessary, the appointing
authority shall be the American Arbitration Association. The parties and the
appointing authority may appoint from among the nationals of any country,
whether or not a party is a national of that country. The place of arbitration
shall be The City of New York, New York. The arbitration shall be conducted in
the English language and any foreign-language documents presented at such
arbitration shall be accompanied by an English translation thereof. The
arbitrators shall apply the law of the State of New York without regard to the
principles of conflicts of laws. [Not to be inserted in Ecopetrol Agreement.]
Section 5.11. Submission to Jurisdiction; Consent to Service. Each of
the parties hereto hereby submits to the exclusive jurisdiction of the United
States District Court for the Southern District of New York (the Specified
Court) with respect to the enforcement of the arbitration provisions of this
Agreement and the non-exclusive jurisdiction of such court with respect to the
enforcement of any award thereunder. Each of the parties hereto irrevocably
appoints the agent for service specified opposite its name in Section 5.1 as
its authorized agent in the Borough of Manhattan in The City of New York upon
which process may be served in any related suit or proceeding, and agrees that
service of process upon such agent, and written notice of said service to such
party, by the person serving the same to the address provided in Section 5.1,
shall be deemed in every respect effective service of process upon such party
in any such suit or proceeding. Each of the parties hereto further agrees to
take any and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect for the duration of this
Agreement.
The obligation of a party in respect of any sum due from it to the other
party hereunder expressed in United States dollars, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first Business Day following receipt by such party of any
sum adjudged to be so due in such other currency on which (and only to
theextent that) such party may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to such party
hereunder, the other party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such party against such dollar
shortfall. If the United States dollars so purchased are greater than the sum
originally due to such party hereunder, such party agrees to pay to the other
party an amount equal to the excess of the dollars so purchased over the sum
originally due to such party hereunder. [Not to be inserted in Ecopetrol
Agreement.]
Section 5.12. Waiver of Immunity. (a) The Purchaser irrevocably
consents to and waives any objection which it may now or hereafter have to the
laying of venue of any proceeding relating to enforcement of the arbitration
provisions of this Agreement brought in the Specified Court and further
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of any such proceeding in
the Specified Court. [Not to be included in Ecopetrol Agreement]
(b) To the extent that the Purchaser or any of its revenues, assets or
properties shall be entitled, with respect to any proceeding relating to
enforcement of the arbitration provisions of this Agreement at any time
brought against the Purchaser or any of its revenues, assets or properties, to
any sovereign or other immunity from suit, from jurisdiction, from attachment
prior to judgment, from attachment in aid of execution of judgment, from
execution of a judgment or from any other legal or judicial process or remedy,
and to the extent that in any jurisdiction there shall be attributed such an
immunity, the Purchaser irrevocably agrees not to claim and irrevocably waives
such immunity to the fullest extent permitted by the laws of such jurisdiction
(including, without limitation, the Foreign Sovereign Immunities Act 1976 of
the United States) [if Ecopetrol, insert - , except as provided under Article
177 of the Codigo Contencioso Administrativo and Article 684 of the Codigo de
Procedimento Civil of Colombia].
Section 5.13. Headings
. The headings contained herein are for convenience of reference only and do
not constitute a part of this Agreement.
Section 5.14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have hereunto caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
OLEODUCTO CENTRAL S.A.
By:
Title:
[PURCHASER]
By:
Title:
ANNEX I
TO SUBSCRIPTION AGREEMENT
[Date, not less than 15
Business Days prior to
requested purchase date]
NOTICE OF EXERCISE OF CALL
TO: Empresa Colombiana de Petroleos - Ecopetrol
BP Colombia Pipelines Limited
TOTAL Pipeline Colombie S.A.
Triton Pipeline Colombia, Inc.
IPL Enterprises (Colombia) Inc.
TCPL International Investments Inc.
[Permitted Assignees]
FROM: Oleoducto Central S.A. (Ocensa)
RE: Notice of Exercise of Call Pursuant to Section 2.1 of the
Subscription Agreement with each of the addressees (Purchasers), each dated as
of March 31, 1995 (each, a Subscription Agreement)
Ocensa hereby requires [the purchase on __________, ____ of the
number of Shares of Ocensa] [the contribution of funds in the amount] set
forth opposite your name in the table below by each of you severally [against
payment of the aggregate purchase price indicated in such table]. Payment
should be made in [same] [next] day funds by [official or certified bank check
or checks] [wire transfer to the account indicated opposite your name in the
table below] [and in the case of a special Call pursuant to the penultimate
paragraph of Section 2.1 such funds shall be exclusively payable to the
account specified in the Common Security Trust Agreement].
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
[NAME OF BANK
PURCHASER NUMBER OF PRICE PER AGGREGATE OR AND ACCOUNT
SHARES SHARE CONTRIBUTION PRICE NUMBER]
Empresa Colombiana de
Petroleos-Ecopetrol
BP Colombia Pipelines Limited
TOTAL Pipeline Colombie S.A.
Triton Pipeline Colombia, Inc.
IPL Enterprises (Colombia) Inc.
TCPL International Investments Inc.
[Any Permitted Assignees]
Total
</TABLE>
Ocensa hereby represents and warrants to each Purchaser that, as of the date
hereof:
1. The requested payment date is a Business Day;
2. The Call exercised hereby is [in conformity with a Capital
Budget and Funding Resolution of Ocensa][made at or following [the Bankruptcy
of Ocensa][Decommissioning][a unanimous decision of the Board of Directors not
to continue with the Oleoducto Central] and after giving effect to this Call,
the Senior Debt to Equity Ratio shall be 70/30];
[3. The number of Shares to be purchased by each Purchaser at the
Time of Delivery pursuant hereto and the Subscription Agreement to which such
Purchaser is a party and the aggregate purchase price therefor is in
proportion to such Purchaser's Shareholding Interest;
4. The terms of purchase hereunder and under such Purchaser's
Subscription Agreement are identical for all Purchasers; and
5. The representations and warranties of Ocensa in such Purchaser's
Subscription Agreement are true and correct.]
All defined terms used herein and not defined herein shall have the
meanings assigned to them in the Subscription Agreement with each Purchaser.
OLEODUCTO CENTRAL S.A.
By:
Title:
SCHEDULE H TO
OLEODUCTO CENTRAL AGREEMENT
FORM OF PERFORMANCE GUARANTEE AGREEMENT
AGREEMENT, dated as of December 14, 1994, made by [name of
Guarantor] (the "Guarantor") in favor of OLEODUCTO CENTRAL S.A., a sociedad
anonima existing under the laws of Colombia (the "JSC").
RECITALS
WHEREAS:
A. [Name of party whose obligations are being guaranteed] (the
"Company") and the JSC are parties to a Subscription Agreement, dated as of
December 14, 1994 (as amended from time to time, the "Subscription
Agreement"), entered into pursuant to the Oleoducto Central Agreement, dated
as of the same date (as amended from time to time, the "Oleoducto Central
Agreement");
B. The Company is an Affiliate of the Guarantor; and
C. As an inducement to the JSC to enter into the Subscription
Agreement, the Guarantor has agreed to enter into this Performance Guarantee
Agreement (the "Agreement").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the Guarantor and
the JSC agree as follows:
Section 1. Definitions. All capitalized terms used and not defined
herein have the meanings assigned to them in the Subscription Agreement.
Section 2. Representations and Warranties. The Guarantor
represents and warrants to the JSC that:
(a) it is a corporation duly incorporated and organized under
the laws of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and
perform its obligations under this Agreement, and this Agreement constitutes
the valid and legally binding agreement of the Guarantor;
(c) the execution and delivery of, and the performance by the
Guarantor of its obligations under, this Agreement will not result in a breach
of or constitute a default under:
(i) any provision of its corporate charter or articles of incorporation
or its by-laws;
(ii) any agreement or instrument to which it is a party and which is
material to the performance of its obligations hereunder; or
(iii) any order, judgment or decree of any court or governmental agency
to which it is a party or by which it is bound; and
(d) all of the outstanding capital stock of the Company (except for any
directors' qualifying shares) is directly or indirectly beneficially owned by
the Guarantor [not applicable to Triton and TOTAL -- or by the same ultimate
parent entity of the Company and the Guarantor], free and clear of all liens,
encumbrances, equities and claims.
Section 3. Performance Guarantee. Subject to the provisions
contained herein, the Guarantor hereby irrevocably and unconditionally
guarantees to the JSC the full and punctual performance of all of the
Company's obligations (the "Guaranteed Obligations") under the Subscription
Agreement. In the event that the Company shall default in the full and timely
performance of any of the Guaranteed Obligations for any reason, the Guarantor
hereby agrees to perform, or to cause to be performed, any such Guaranteed
Obligations fully and timely in accordance with the terms of the Subscription
Agreement.
Section 4. Unconditional Obligations of Guarantor. The Guarantor
hereby agrees that its obligations hereunder are in the nature of a continuing
performance guarantee and shall remain valid and in full force irrespective of
any circumstances which might otherwise constitute a legal or equitable
discharge of a guarantor, including the absence of any action to enforce the
Subscription Agreement or any judgment against the Company; provided that it
is hereby acknowledged and agreed that (a) the Guarantor shall not be
obligated under this Agreement to make any payment in respect of any amounts
that would not be due under the Subscription Agreement were it to be a party
to the Subscription Agreement in the place and stead of the Company, (b) the
benefit of any waiver or indulgence granted to, or any compromise with, the
Company shall extend to the Guarantor and (c) in no event shall the Guarantor
be obligated to make payments hereunder exceeding in the aggregate the lower
of (i) U.S.$____ million and (ii) theCompany's Shareholding Interest of the
Aggregate Subscription Obligation (or, in each case, the equivalent thereof in
Colombian pesos determined with respect to each payment hereunder by reference
to exchange rates between dollars and pesos in effect at the time of such
payment based on such rates available to the JSC as reasonably determined by
the JSC), less in each case all amounts (similarly determined) paid by the
Company pursuant to the Guaranteed Obligations.
Section 5. No Waiver. No failure on the part of the JSC to
exercise, and no delay in exercising, any right, remedy or power hereunder
shall operate as a waiver thereof, nor shall any single or particular exercise
by the JSC of any right, remedy or power hereunder preclude any other or
future exercise of any other right, remedy or power.
Section 6. Subrogation. The Guarantor shall be subrogated to all
rights of the JSC against the Company in respect of any amounts paid by the
Guarantor pursuant to the provisions of this Agreement; provided, however,
that the Guarantor shall not be entitled to enforce, or to receive any
payments arising out of or based upon, such right of subrogation until all of
the Guaranteed Obligations under the Subscription Agreement shall have been
performed in full, all the Senior Debt referred to in the Oleoducto Central
Agreement provided by the Senior Lender Group for whose benefit the
Subscription Agreement may be assigned by the JSC has been repaid and all
other obligations of the Company owed to the JSC have been discharged in full.
Section 7. Effectiveness. This Agreement shall have no effect or
validity unless and until the Subscription Agreement shall have become
effective and performance guarantee agreements in substantially identical form
to this Agreement with Affiliates of the other Shareholders (except Ecopetrol)
shall have become effective.
Section 8. Termination. This Agreement shall terminate on the
earlier of (a) the complete performance or termination of all Guaranteed
Obligations of the Company under the Subscription Agreement and (b) July 1,
2002.
Section 9. Successors. This Agreement may only be assigned by the
JSC in connection with an assignment of the Subscription Agreement to a
permitted assignee under Section 5.3 thereof. The obligations of the
Guarantor hereunder shall be binding upon the Guarantor and its successors and
assigns and shall inure to the benefit of and be enforceable by the JSC and
any of its successors and assigns.
Section 10. Release. (a) The Guarantor shall not be released and
discharged from any of its obligations hereunder except to the extent that, in
connection with the simultaneous transfer of all or any part of the Shares
held by the Company to a Person that is a permitted transferee thereof
pursuant to Article Ten of the OleoductoCentral Agreement, such permitted
transferee assumes or undertakes the related obligations under the
Subscription Agreement or such obligations are guaranteed under a performance
guarantee agreement in substantially identical form to this Agreement as
provided therein.
(b) Notwithstanding the foregoing, the Guarantor shall not be
released or discharged from obligations which shall have been incurred prior
to the release and discharge referred to in paragraph (a) of this Section 10.
Section 11. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
If to Ocensa: Agent for
Service
OLEODUCTO CENTRAL S.A. CT CORPORATION
World Trade Center Bogota SYSTEM
Calle 100 N. 8A-55 1633 Broadway
Santafe de Bogota, D.C.-Colombia New York, New York 10019
Telefax: 571-218-3933 Telefax: (212) 247-2882
Attention: President
</TABLE>
If to the Guarantor: [INSERT NAME AND ADDRESS]
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 12. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect.
Section 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 14. Submission to Jurisdiction; Consent to Service. The
Guarantor hereby submits to the non-exclusive jurisdiction of the Federal and
State courts in the Borough of Manhattan in The City of New York in any
action, suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby (a Related Proceeding). The Guarantor
irrevocably appoints the agent for service designated opposite its name in
Section 11 hereof as its authorized agent in the Borough of Manhattan in The
City of New York upon which process may be served in any such action, suit or
proceeding, and agrees that service of process upon such agent, and written
notice of said service to the Guarantor, by the person serving the same to the
address provided in Section 11, shall be deemed in every respect effective
service of process upon such party in any such suit or proceeding. The
Guarantor further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and
effect for the duration of this Agreement.
The obligation of the Guarantor in respect of any sum due from it to
the JSC expressed in United States dollars, notwithstanding any judgment in a
currency other than United States dollars, shall not be discharged until the
first Business Day following receipt by the JSC of any sum adjudged to be so
due in such other currency on which (and only to the extent that) the JSC may
in accordance with normal banking procedures purchase United States dollars
with such other currency. If the United States dollars so purchased are less
than the sum originally due to the JSC hereunder, the Guarantor agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
JSC against such dollar shortfall. If the United States dollars so purchased
are greater than the sum originally due to the JSC hereunder, the JSC agrees
to pay to the Guarantor an amount equal to the excess of the dollars so
purchased over the sum originally due to the JSC hereunder.
Section 15. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, the Guarantor has caused this Agreement to be
executed and delivered by its proper officer or officers thereunto duly
authorized as of the date first above written.
[INSERT NAME OF GUARANTOR]
By:
Title:
OLEODUCTO CENTRAL, S.A., a corporation existing under the laws of Colombia
hereby acknowledges and accepts this Agreement and has caused this Agreement
to be executed and delivered by its proper officer or officers thereunto duly
authorized as of December 14, 1994.
OLEODUCTO CENTRAL S.A.
By:
Title:
<PAGE>
SCHEDULE I
TO OLEODUCTO CENTRAL AGREEMENT
EXAMPLE OF ROE VARIANCE WITH PROJECT COST VARIANCE
(Section 5.4(c))
Example of Calculation
(millions of $)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Estimate as of Agreed
Estimate Target Project Capitalization for
Dec. 31, Cost Date As of Project Equity Return
Capitalization & Returns 1994 June 1, 1996* Completion Purposes
Equity Contributions (30%) $ 609 $ 579 $ 669 ++ $ 609 **
Senior Debt (70%) 1,421 1,351 1,561 1,421
Total Cost 2,030 1,930 2,230 2,030
ROE 13.5% 13.5% --- 13.5%
$ 82 $ 78 --- $ 82 m
Effective ROE 13.5% 13.5% --- 12.3%
Actual Project
Project Costs Estimate Target Cost As of
(Phase 2 Capex) Dec. 31, Project Cost* Project Agreed Project
($1995, constant) 1994 June 1, 1996 Completion Cost
$ 1,375 $ 1,275 + $ 1,575 $ 1,375
</TABLE>
Project Cost Variance
$300
Permitted Adjustments:
Adjustments for Non-Controllable Factors $ 50
Allowed Variance within Target +
Completion Cost $ 50
Total $100
Non-Permitted Adjustments $200
* (Post Class I Estimate)
** Adjusted Paid-In Equity = (Cash Paid-In-Equity + Pre-Completion Accrued
Returns) + Equity
Percentage* (Agreed Project Cost - Actual Project Cost) = 669 + [30%*
(1375-1575)]
+ $50M allowance (plus and minus) in target completion range.
++ Cash Paid In Equity and Pre-Completion Accrued Returns.
SCHEDULE J TO
OLEODUCTO CENTRAL AGREEMENT
POLITICAL EVENTS AGREEMENT
dated as of the 14th day of December, 1994
among
OLEODUCTO CENTRAL S.A.
EMPRESA COLOMBIANA DE PETROLEOS-ECOPETROL
BP COLOMBIA PIPELINES LIMITED
TOTAL PIPELINE COLOMBIE S.A.
TRITON PIPELINE COLOMBIA, INC.
IPL ENTERPRISES (COLOMBIA) INC.
and
TCPL INTERNATIONAL INVESTMENTS INC.
<PAGE>
POLITICAL EVENTS AGREEMENT
AGREEMENT, dated as of the 14th day of December, 1994, among:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws of
Colombia;
EMPRESA COLOMBIANA DE PETROLEOS - ECOPETROL, an Empresa Industrial y
Comercial del Estado existing under the laws of Colombia and wholly owned by
Colombia;
BP COLOMBIA PIPELINES LIMITED, a corporation existing under the laws
of England and Wales;
TOTAL PIPELINE COLOMBIE S.A., a corporation existing under the laws
of France;
TRITON PIPELINE COLOMBIA, INC., a corporation existing under the
laws of the Cayman Islands;
IPL ENTERPRISES (COLOMBIA) INC., a corporation existing under the
laws of the Cayman Islands; and
TCPL INTERNATIONAL INVESTMENTS INC., a corporation existing under
the laws of Alberta, Canada.
RECITALS
WHEREAS:
A. The Shareholders have formed Ocensa by public deed no. of
December 14, 1994 granted before notary public no. 38 of Santafe de Bogota;
B. The Shareholders have entered into the Oleoducto Central
Agreement (as amended from time to time, the Oleoducto Central Agreement),
dated as of December 14, 1994, among Ocensa and the Shareholders (as defined
therein) specifying certain terms and conditions of their respective
investments and participation in Ocensa, the Oleoducto Central and the
financing and operation thereof.
C. The Oleoducto Central Agreement contemplates that the financing
of the Oleoducto Central will be comprised of approximately 30% Equity
Contributions andapproximately 70% Senior Debt raised by Ocensa and provided
by four separate Senior Lender Groups. Under Sections 5.2(e) and 5.3(b)(i) and
(ii) of the Oleoducto Central Agreement, except to the extent otherwise
provided in this Agreement, a failure by a Shareholder to make timely Equity
Contributions or the existence of a Senior Debt Shortfall with respect to the
Initial Shipper Group of which a Shareholder is a member could result in
certain adverse consequences, including an increase in the tariff payable by
the Initial Shipper in such Initial Shipper Group for Petroleum shipped by or
on its behalf under its Transportation Agreement (Sections 5.2(e) and
5.3(b)(i) and (ii) being referred to herein as the OCA Remedies).
D. The parties wish to provide in this Agreement the terms and
conditions under which, upon the occurrence of certain Political Events, one
or more Shareholders may suspend (subject to reinstatement) or terminate its
obligations to make Equity Contributions on a timely basis, including to
purchase Shares under its Subscription Agreement (the Purchase Obligations)
and the application to it and its Affiliates of the OCA Remedies.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the parties agree as
follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires,
the following words and phrases shall have the meanings indicated below:
Colombia means the Republic of Colombia.
Convertibility or Transfer Restrictions means that for a period of
at least 120 continuous days with respect to any Distribution of Ocensa,
Ocensa is unable legally to convert Colombian currency held by it to make any
such payment denominated in currencies other than Colombian currency, or to
transfer outside of Colombia amounts it holds in currencies other than
Colombian currency to make when due any such payment denominated in currencies
other than Colombian currency for the purpose of making any such payment.
Escrow Account has the meaning assigned to it in Section 3.3(a).
Escrow Agent has the meaning assigned to it in Section 3.3(a).
Escrow Agreement has the meaning assigned to it in Section 3.3(a).
Expropriatory Action means any action or series of actions taken,
authorized, ratified or acquiesced in by Colombia or a governing authority
which is in de facto control of part of Colombia for the appropriation,
confiscation, expropriation or nationalization (by intervention, condemnation
or other form of taking), whether with or without compensation and whether
under color of law or otherwise (including through confiscatory taxation or
imposition of confiscatory charges) of any of the following:
(a) an equity interest in Ocensa, and/or loans to or debt securities
issued by Ocensa, in each case held by a Shareholder (other than Ecopetrol) or
any of its Affiliates or another Person on its behalf, as the case may be, if
such action or series of actions, together with similar prior actions or
series of actions, if any, result in the appropriation, confiscation,
expropriation or nationalization of such interests, loans or securities in
excess of 50% of the equity interest in Ocensa, or loans to and debt
securities issued by Ocensa, taken as a whole, held by such party and its
Affiliates and other Persons on its behalf before the taking of such action or
series of actions;
(b) the rights of the Initial Shipper affiliated with a Shareholder
(other than Ecopetrol) or any of its Affiliates, as the case may be, under the
Association Contract(s) through which it participates in the Fields and its
direct or indirect interest in the Fields or the Petroleum produced therefrom
if such action or series of actions, together with similar prior actions or
series of actions, if any, result in the appropriation, confiscation,
expropriation or nationalization of the rights under such Association
Contract(s) and the interest in the Fields or the Petroleum produced therefrom
of such party (or any of its Affiliates, as the case may be) in excess of 50%
of the aggregate rights under such Association Contract(s) and interests in
the Fields or such Petroleum held by it and its Affiliates before the taking
of such action or series of actions; or
(c) ownership or control of the Oleoducto Central, or any substantial
portion thereof, held by Ocensa, the effect of which is to deprive Ocensa of
the ability to ship for export (or to receive tariffs in respect thereof)
through the Oleoducto Central a volume of Petroleum equal to not less than 50%
of the Throughput Capacity of any Segment.
OCA Remedies has the meaning assigned to it in Recital C.
Political Event means (a) Expropriatory Action, (b) Political
Violence or (c) Convertibility or Transfer Restrictions.
Political Event Performance Guarantee Agreement has the meaning
assigned to it in Section 3.3(b).
Political Violence means war (declared or undeclared), civil war,
revolution,insurrection, civil strife, terrorism or sabotage or any other
violent act undertaken with the intent of achieving a political objective
(other than acts undertaken primarily to achieve labor or student objectives)
in Colombia which (in any such case) directly and proximately causes:
(a) cessation of substantially all construction or operation of the
Oleoducto Central or any part thereof necessary for the transport, storage or
export of Petroleum for a period of at least 70 continuous days and renders it
patently unreasonable (considering all relevant circumstances, including
without limitation the risk that such events will continue or that other
Political Events will occur), or impossible without unreasonable risk of
physical harm to JSC or Operator workers, to resume significant construction
or operation activities at the Oleoducto Central or any part thereof necessary
for the transport, storage or export of Petroleum;
(b) cessation of substantially all development or operation of the
Fields for a period of at least 70 continuous days and renders it patently
unreasonable (considering all relevant circumstances, including without
limitation the risk that such events will continue or that other Political
Events will occur), or impossible without unreasonable risk of physical harm
to workers at the Fields, to resume significant development or operation
activities at the Fields;
(c) damage to or the destruction of the Oleoducto Central to such
extent that it would be unreasonable or uneconomical (considering all relevant
circumstances, including without limitation the extent to which there is
insurance coverage and the risk that such events will continue or that other
Political Events will occur) for Ocensa to proceed to construct or repair or
to continue to operate the Oleoducto Central; or
(d) damage to or the destruction of the Fields or other property
necessary for the production or transport of petroleum in and from the Fields
to such extent that it would be unreasonable or uneconomical (considering all
relevant circumstances, including the extent to which there is insurance
coverage and the risk that such events will continue or that other Political
Events will occur) to proceed to develop or repair or to continue to operate
the Fields.
Purchase Obligations has the meaning assigned to it in Recital D.
Specified Court has the meaning assigned to it in Section 6.2.
All defined terms used and not defined herein shall have the meanings assigned
to them in the Oleoducto Central Agreement.
Section 1.2. Interpretation. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular and
vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or a Section refers to an Article or
a Section, as the case may be, of this Agreement; and
(d) all references to this Agreement and the words herein, hereof,
hereto and hereunder and other words of similar import refer to this Agreement
(but not including any Schedules hereto) as a whole and not to any particular
Article, Section or other subdivision.
ARTICLE TWO
JOINT DECLARATION OF POLITICAL EVENT
Section 2.1. Joint Declaration. A declaration of a Political Event
shall be effective only upon the receipt by Ocensa of a certificate signed by
each Shareholder that is a member of an Initial Shipper Group (other than
Ecopetrol and any Shareholder that is precluded under Section 5.1 from
declaring a Political Event) to the effect that such Political Event has
occurred and is continuing as of the date of such certificate; provided that,
in case of clauses (b) and (d) of the definition of Political Violence,
execution by a Shareholder that is not also an Affiliate of an Initial Shipper
shall not be required. Such certificate shall set forth in reasonable detail
(a) the events, conditions, circumstances or occurrences that constitute the
Political Event, (b) the type of Political Event that has occurred and is
continuing, (c) the date as of which such Political Event has occurred and (d)
a statement to the effect that the restrictions under Section 5.1 on the right
to declare a Political Event do not apply. Any one of the Shareholders not
executing such certificate shall have the right to object to the declaration
of a Political Event under this Section by calling for arbitration under
Section 6.1 within 60 days of the effectiveness of the Political Event
declaration. The declaration of the Political Event shall remain effective
pending resolution of the arbitration proceeding. This Article Two shall not
apply to declarations of Political Events under Section 3.1 or Section 4.1.
Section 2.2. Suspension of Purchase Obligations and of OCA
Remedies. Upon a joint declaration in accordance with Section 2.1, the
Purchase Obligations of all Shareholders and the application to such
Shareholders of the OCA Remedies shall be suspended.
Section 2.3. Termination of Purchase Obligations and of OCA
Remedies. (a) The Purchase Obligation of a Shareholder and the application to
it of the OCA Remedies shall terminate if a suspension under Section 2.2
continues for 365 days without reinstatement;provided that, if an arbitration
proceeding is commenced, and the arbitrators rule against the Shareholders
which executed the certificate under Section 2.1, such 365-day period shall be
extended by the number of days that expire between the date on which the
corresponding notice demanding arbitration is delivered by a Shareholder not
delivering a notice under Section 2.1 and the arbitrators issue their ruling.
(b) In case of termination under clause (a), the Subscription
Agreement of the terminated Shareholder shall terminate (subject to survival
of certain provisions as provided therein) and the Performance Guarantee
Agreement of any Affiliate shall terminate (other than to the extent of
survival of certain provisions of the corresponding Subscription Agreement)
and (b) the terminated Shareholder shall cease to be a party to the Oleoducto
Central Agreement (subject to survival of certain provisions as provided
therein).
Section 2.4. Reinstatement. Reinstatement for purposes of this
Article Two shall occur upon the occurrence, prior to termination, of any of
the following events:
(a) Any Shareholder objects to the joint declaration of Political Event,
commences arbitration proceedings within 60 days of the effectiveness of the
Political Event declaration and the arbitrators rule that the Political Event
claimed in the certificate delivered under Section 2.1 did not occur or was
not continuing as of the date of the certificate, or that the restrictions in
Section 5.1 applied;
(b) One or more of the Shareholders which executed the certificate under
Section 2.1 delivers a certificate to Ocensa, with copies to the other
Shareholders, to the effect that the Political Event that gave rise to the
suspension has ceased (provided that the other Shareholders which executed the
certificate under Section 2.1 can object to, and within 60 days of the
delivery of the cessation certificate commence arbitration on, the claim that
the Political Event has ceased, in which case the reinstatement certificate
will be effective as to the objecting Shareholders only if arbitrators rule
that the Political Event had ceased as of the date of the reinstatement
certificate); or
(c) Any Shareholder which executed the certificate pursuant to Section
2.1 fails to deliver a reinstatement certificate under clause (b) upon demand
of another Shareholder, the other Shareholders commence arbitration within 60
days of demanding that the suspending Shareholders deliver a reinstatement
certificate on the ground that the Political Event has ceased, and the
arbitrators rule that the Political Event that gave rise to the suspension had
ceased as of the time of the demand for a reinstatement certificate.
The Purchase Obligations of reinstated Shareholders will apply immediately
upon reinstatement as if no suspension had occurred. The OCA Remedies will
apply retroactively to failures to make Equity Contributions or to Senior Debt
Shortfalls during the suspension period if and to the extent that prior to
reinstatement other Shareholders have not purchasedShares in lieu of the
reinstated Shareholder and Ocensa otherwise has not covered the Senior Debt
Shortfall created during the suspension and within 15 days following
reinstatement the shortfall in Equity Contributions or the Senior Debt
Shortfall, as the case may be, continue; provided that in case of retroactive
application the Transportation Agreement Step-Up shall continue to apply only
until the date the Equity Contribution shortfall or Senior Debt Shortfall, as
the case may be, is made up, rather than (as is contemplated in the definition
of the Transportation Agreement Step-up set forth in the Oleoducto Central
Agreement) for one year after such date.
Section 2.5. Canadian Group. In the event of suspension under this
Article of the Purchase Obligations of the members of the Canadian Group, the
application to them of the remedies under Section 5.3(b)(iii) of the Oleoducto
Central Agreement shall continue, although during the suspending period Ocensa
shall not exercise its right to terminate the Oleoducto Central Operations
Agreement. Following the earlier of termination or reinstatement, there will
be no restriction on Ocensa's right to exercise all remedies under such
Section 5.3(b)(iii) during and for the periods indicated therein; provided
that, in the case of reinstatement, Ocensa shall be obliged to (a) cease to
exercise the right to cancel partially or entirely payment of operating,
incentive and other fees payable under the Oleoducto Central Operations
Agreement and (b) not exercise its right to terminate the Oleoducto Central
Operations Agreement, in each case as a result of Equity Contributions not
made by the reinstated Shareholder during the suspension period, if (but only
if) within 15 days of reinstatement the reinstated Shareholder makes up in
full any Equity Contributions it failed to make during the suspending period
which were not otherwise made up by other Shareholders during such period.
ARTICLE THREE
UNILATERAL DECLARATION OF POLITICAL EVENT
Section 3.1. Unilateral Declaration. If an event of the type
identified in clause (a) or (b) of the definition of Expropriatory Action
occurs and is continuing (other than as a result of the imposition of
confiscatory taxation or imposition of confiscatory charges), any Shareholder
as to which such Expropriatory Action relates that is a member of an Initial
Shipper Group (other than Ecopetrol and any Shareholder that is precluded
under Section 5.1 from declaring a Political Event) shall have the right to
declare a Political Event by delivering a certificate to Ocensa, with a copy
to each other Shareholder, to the effect that such Expropriatory Action has
occurred and is continuing as of the date of such certificate. Such
certificate shall set forth in reasonable detail (a) the events, conditions,
circumstances or occurrences that constitute the Expropriatory Action, (b) the
date as of which such Expropriatory Action has occurred and (c) a statement to
the effect that the restrictions under Section 5.1 on the right to declare a
Political Event do not apply to it. Ocensa and any one of the Shareholders not
delivering certificates shall have the right to object to the declaration of
aPolitical Event under this Section by calling for arbitration pursuant to
Section 6.1 within 60 days of receipt of the certificate declaring the
Political Event. The declaration of the Political Event shall remain effective
pending resolution of the arbitration proceeding. Although joint action is not
required under this Section, more than one Shareholder can declare a Political
Event hereunder at the same time.
Section 3.2. Suspension of Purchase Obligation and of Application
of OCA Remedies. Upon a declaration in accordance with Section 3.1, the
Purchase Obligation of the suspending Shareholder and the application to it of
the OCA Remedies shall be suspended.
Section 3.3. Other Consequences of Unilateral Declaration of
Political Event. (a) Escrow Account. Upon a declaration in accordance with
Section 3.1, the suspending Shareholder shall execute an escrow agreement
substantially in the form set forth in Schedule A (the Escrow Agreement), with
the New York office of a commercial bank selected by the declaring Shareholder
organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least U.S.$500,000,000
(the Escrow Agent) providing for the establishment of a segregated bank
account in New York (the Escrow Account). So long as such Shareholder's
Purchase Obligation remains suspended, it shall deposit in the Escrow Account
an amount equal to not less than 50% of the Equity Contributions that it would
have been obliged to make to Ocensa but for the suspension of its Purchase
Obligation under Section 3.1. Such deposits shall be made within the time
periods during which the Equity Contributions would have to be made but for
the suspension. The failure to enter into the Escrow Agreement or to make a
timely deposit under this clause shall result in reinstatement under Section
3.5. Funds held in the Escrow Account shall be invested and distributed as
provided in the Escrow Agreement. Instructions on distributions shall be
delivered to the Escrow Agent by Ocensa in accordance with Section 3.5(d) or
by the terminated Shareholder in accordance with Section 3.4(b)(iv), and shall
not be delivered by any other party hereto. This clause shall not apply at any
time during which the suspending Shareholder's Purchase Obligation also is
suspended by application of Section 2.2.
(b) Performance Guarantee. Upon a declaration in accordance with
Section 3.1, the suspending Shareholder shall deliver to Ocensa and each other
Shareholder a performance guarantee agreement substantially in the form set
forth in Schedule B (the Political Event Performance Guarantee Agreement),
executed by the party which is then guarantor under the Performance Guarantee
Agreement that relates to its Subscription Agreement, pursuant to which such
guarantor will guarantee the obligations of the suspending Shareholder under
this Agreement. The parties acknowledge that the Political Event Performance
Guarantee Agreement will contain an expiration date and maximum coverage
limitations. The suspending Shareholder shall deliver to Ocensa a substitute
Political Event Performance Guarantee Agreement prior to the earlier of (i)
six months prior to the expiration date of the Political Event Performance
Guarantee Agreement then in effect and (ii) the date on which the sum of
aggregate accrued contingent liabilities and actual payments under the
Political Event Performance Guarantee Agreement then in effect equal 85% of
the maximumcoverage limitation therein. The failure to deliver the executed
Political Event Performance Guarantee Agreement or a substitute therefor as
provided in the preceding sentence shall result in reinstatement under Section
3.5.
(c) Other Shareholders' Option to Fund. So long as a Shareholder's
Purchase Obligation is suspended under Section 3.2, each of the other
Shareholders (other than a Shareholder the Purchase Obligations of which shall
then be suspended or terminated under this Agreement) shall have the right,
but not the obligation, on its own behalf or, if more than one Shareholder so
elects, jointly with such other Shareholder(s), pro rata to their Shareholding
Interests, to make Equity Contributions not made by the suspended Shareholder.
To the extent one or more Shareholders exercise this option, the suspended
Shareholder shall pay to each such Shareholder a percentage of the amount of
the Equity Contributions made by such Shareholder in lieu of the suspended
Shareholder, which percentage shall be calculated (based on the actual number
of days elapsed between the date an Equity Contribution is made in lieu of the
suspending Shareholder and the date the obligation to pay this amount
terminates) at a rate per annum equal to the Benchmark Interest Expense, such
amount being payable in arrears on the first Business Day of each calendar
month until the first calendar month that follows termination pursuant to
Section 3.5 or reinstatement pursuant to Section 3.5 (for purposes of this
clause, the payment amounts and the payment period); provided that, in case
the funding Shareholder shall receive any Distribution as a result of the
application of the proviso in Section 5.3(e) of the Oleoducto Central
Agreement at any time during the payment period, the amount of the
Distribution received shall be credited against future payment amounts payable
by the non-funding Shareholder; and provided further that after termination of
the payment period, the funding Shareholder shall reimburse the non-funding
Shareholder (subject, if applicable, to set-off against the put purchase price
payable to the funding Shareholder under Section 3.5(e) hereof) for any
payment amounts received and not previously credited against Distributions
that have not been previously credited against payment amounts. This clause
shall not apply at any time during which the suspending Shareholder's Purchase
Obligation also is suspended by application of Section 2.2.
Section 3.4. Termination of Purchase Obligations and of Application
of OCA Remedies. (a) The Purchase Obligation of a declaring Shareholder and
the application to it of OCA Remedies shall terminate if a suspension under
Section 3.2 continues for 365 days without reinstatement; provided that, if an
arbitration proceeding is commenced, and the arbitrators rule against the
suspending Shareholder, such 365-day period shall be extended by the number of
days that expire between the date on which the corresponding notice of
arbitration is delivered and the arbitrators issue their ruling.
(b) In case of a termination under clause (a):
(i) the Subscription Agreement of the terminated Shareholder shall
terminate (subject to survival of certain provisions in the Subscription
Agreement as provided therein);
(ii) the Performance Guarantee Agreement of any Affiliate of the
terminated Shareholder shall terminate (other than to the extent of survival
of certain provisions of the corresponding Subscription Agreement);
(iii) the terminated Shareholder shall cease to be a party to the
Oleoducto Central Agreement (subject to survival of certain provisions as
provided therein);
(iv) the terminated Shareholder shall have the right to deliver an
instruction under Section 4 of the Escrow Agreement to the Escrow Agent, with
a copy to Ocensa and the other Shareholders, instructing the Escrow Agent to
deliver to the terminated Shareholder all funds on deposit in the Escrow
Account;
(v) Ocensa shall exercise the right it has in the Transportation
Agreement of the Initial Shipper that is a member of such terminated
Shareholder's Initial Shipper Group to apply as to future shipments of
Petroleum by such Initial Shipper or on its behalf a tariff that is the higher
of the Initial Shipper Tariff and the Third Party Shipper Tariff applicable
from time to time; provided that Ocensa shall not exercise such right to the
proportion of the Petroleum shipped by or on behalf of such Initial Shipper
that is equal to the proportion that the Equity Contributions made by the
terminated Shareholder prior to the suspension and termination of its
obligations under this Article bears to the total Equity Contributions that
would have been required from the terminated Shareholder prior to Completion
(but for suspension and termination under this Agreement) in the most recent
Financing Plan adopted by the Board of Directors of Ocensa. This clause shall
cease to apply if and when the obligations of the Shareholders to make Equity
Contributions are terminated pursuant to Section 2.4.
Section 3.5. Reinstatement. (a) Reinstatement Events.
Reinstatement for purposes of this Article Three shall occur upon the
occurrence, prior to termination, of any of the following events:
(i) Ocensa or any other Shareholder objects to the unilateral
declaration of Political Event, commences arbitration proceedings within 60
days of receipt of the certificate declaring the Political Event, and the
arbitrators rule that the Political Event claimed in the certificate delivered
under Section 3.1 did not occur or was not continuing as of the date of the
certificate, or that the restrictions in Section 5.1 applied;
(ii) the suspended Shareholder delivers a reinstatement certificate to
Ocensa to the effect that the Political Event that gave rise to the suspension
has ceased;
(iii) the suspended Shareholder fails to deliver a reinstatement
certificate under (ii) above upon demand of Ocensa or any other Shareholder on
the grounds that the Political Event has ceased, the objecting party commences
arbitration within 60 days ofdemanding that the suspended Shareholder deliver
a reinstatement certificate, and the arbitrators rule that the Political Event
that gave rise to the suspension had ceased as of the time of the demand for a
reinstatement certificate;
(iv) the suspended Shareholder fails to enter into or maintain in effect
the Escrow Agreement or fails to make on a timely basis the deposits into the
Escrow Account contemplated by Section 3.3(a); or
(v) the suspended Shareholder fails to deliver to Ocensa and each other
Shareholder or to maintain in effect the executed Political Event Performance
Guarantee Agreement (whether because of expiration, limitations on coverage
resulting from accrued contingent obligations or actual payments, or
otherwise).
(b) Purchase Obligation. Upon reinstatement the Purchase Obligation
of the reinstated Shareholder will apply immediately as if no suspension had
occurred.
(c) OCA Remedies. Upon reinstatement, the OCA Remedies will apply
retroactively to the reinstated Shareholder as if such suspension had never
occurred to failures to meet Purchase Obligations or Senior Debt Shortfalls
during the suspension period if and to the extent that prior to reinstatement
other Shareholders have not made Equity Contributions in lieu of the
reinstated Shareholder and Ocensa otherwise has not covered the Senior Debt
Shortfall created during the suspension and within 15 days following
reinstatement the shortfall in Equity Contributions or the Senior Debt
Shortfall, as the case may be, continues; provided that in case of retroactive
application the Transportation Agreement Step-Up shall continue to apply only
until the date the Equity Contribution or Senior Debt Shortfall, as the case
may be, is made up, rather than (as is contemplated in the definition of the
Transportation Agreement Step-up) for one year after such date.
(d) Escrow Account. Within ten Business Days after the earlier of
the date on which each Shareholder having a put right under clause (e) shall
have exercised and the expiration of the 30-day period referred to in such
clause, Ocensa shall deliver an instruction under Section 4 of the Escrow
Agreement, with a copy to each Shareholder, instructing the Escrow Agent to
deliver promptly, but in any case within two Business Days of delivery of the
instruction, all funds on deposit in the Escrow Account to the following
Persons in the following order of priority:
(i) to the extent put rights are exercised, to the sellers (as defined
in clause (e)) in or towards satisfaction of the purchase price payable by the
purchaser under such clause pro rata among the sellers based on the number of
Shares being sold;
(ii) to Ocensa in satisfaction of any outstanding Purchase Obligation of
the reinstated Shareholder not met by other Shareholders during the suspension
period; and
(iii) the balance, if any, to the reinstated Shareholder.
(e) Put Right. Upon reinstatement under clause (a), each
Shareholder (for purposes of this clause, the seller) which shall have
exercised the option pursuant to Section 3.3(c) to make Equity Contributions
in lieu of the suspending Shareholder shall have the right to require the
reinstated Shareholder (for purposes of this clause, the purchaser) to
purchase all or a portion of the Shares and other securities or instruments
(together, for purposes of this clause, the Put Securities) issued to the
seller or on its behalf by Ocensa in connection with such Equity Contributions
by giving the purchaser notice no later than 30 days following the date on
which reinstatement occurs, specifying the number of Put Securities to be
purchased. The purchase price per Put Security shall equal the sum of (i) the
amount of the Equity Contributions made for such Put Security and (ii) an
amount calculated (based on the actual number of days elapsed between the date
such Put Security was purchased in lieu of the purchaser and the last day of
the calendar month preceding the date on which the seller notifies the
purchase that it is exercising the put right) at a rate of 13.5% per annum of
the amount in (i), less any Distribution received in respect of such Put
Security as of such calculation date. The closing on the purchase shall occur
on the later of (A) ten Business Days after the date the seller notifies the
purchaser that it is exercising its put right and (B) the first Business Day
following the receipt of any necessary governmental approvals. Clause (d)
contemplates that funds in the Escrow Account will be applied in the first
instance to pay to each seller, pro rata based on the aggregate purchase price
payable to such seller, such purchase price.
ARTICLE FOUR
DECLARATION OF POLITICAL EVENT BY CANADIAN GROUP
Section 4.1. Declaration by Canadian Group. If an event of the type
identified in clause (a) of the definition of Expropriatory Action occurs and
is continuing (other than as a result of the imposition of confiscatory
taxation or imposition of confiscatory charges), the members of the Canadian
Group, acting jointly, shall have the right (unless precluded under Section
5.1) to declare a Political Event by delivering to Ocensa a certificate
executed by both of them, with a copy to each other Shareholder, to the effect
that such Expropriatory Action has occurred and is continuing as of the date
of such certificate. Such certificate shall set forth in reasonable detail (a)
the events, conditions, circumstances or occurrences that constitute the
Expropriatory Action, (b) the date as of which such Expropriatory Action has
occurred and (c) a statement to the effect that the restrictions under Section
5.1 on the right to declare a Political Event do not apply to it. Ocensa or
any of the Shareholders not delivering certificates shall have the right to
object to the declaration of a Political Event by calling for arbitration
within 60 days of receipt of the certificate declaring the Political Event.
The declaration of the Political Event shall remain effective pending
resolution of the arbitration proceeding.
Section 4.2. Suspension of Purchase Obligations. Upon a declaration
in accordance with Section 4.1, the Purchase Obligations of the members of the
Canadian Group shall be suspended. In the event of suspension of the Purchase
Obligations, the application to them of the remedies under Section 5.3(b)(iii)
of the Oleoducto Central Agreement shall continue, although during the
suspension period Ocensa shall not exercise its right to terminate the
Oleoducto Central Operations Agreement.
Section 4.3. Other Consequences of Declaration of Political Event
by Canadian Group. (a) Escrow Account. Upon a declaration in accordance with
Section 4.1, each member of the Canadian Group shall execute an Escrow
Agreement with an Escrow Agent selected by it providing for the establishment
of an Escrow Account. So long as such Shareholders' Purchase Obligation
remains suspended, it shall deposit in the Escrow Account an amount equal to
not less than 50% of the Equity Contributions that it would have been obliged
to make to Ocensa but for the suspension of its Purchase Obligations. Such
deposits shall be made within the time periods during which the Equity
Contributions would have to be made but for the suspension. The failure to
enter into the Escrow Agreement or to make a timely deposit under this clause
shall result in reinstatement under Section 4.5. Funds held in the Escrow
Account shall be invested and withdrawn as provided in the Escrow Agreement.
Instructions on distributions shall be delivered to the Escrow Agent only by
Ocensa in accordance with Section 3.5(d) or by the terminated Shareholder in
accordance with Section 4.4(b)(iv) and shall not be delivered by any other
party hereto. This clause (c) shall not apply at any time during which the
Purchase Obligations of such Shareholders also are suspended by application of
Section 2.2.
(b) Performance Guarantee. Upon a declaration in accordance with
Section 4.1, each of the members of the Canadian Group shall deliver to Ocensa
and each other Shareholder a Political Event Performance Guarantee Agreement
executed by the party which is then guarantor under the Performance Guarantee
Agreement that relates to its Subscription Agreements, pursuant to which such
guarantor will guarantee the obligations of such Shareholder under this
Agreement. The parties acknowledge that the Political Event Performance
Guarantee Agreement will contain an expiration date and maximum coverage
limitations. The suspending Shareholder shall deliver to Ocensa a substitute
Political Event Performance Guarantee Agreement prior to the earlier of (i)
six months prior to the expiration date of the Political Event Performance
Guarantee Agreement then in effect and (ii) the date on which the sum of
aggregate accrued contingent liabilities and actual payments under the
Political Event Performance Guarantee Agreement then in effect equal 85% of
the maximum coverage limitation therein. The failure to deliver executed a
Political Event Performance Guarantee Agreement or a substitute therefor as
provided in the preceding sentence shall result in reinstatement under Section
4.5.
(c) Other Shareholders' Option to Fund. So long as the Purchase
Obligations of the members of the Canadian Group is suspended under Section
4.2, each of the other Shareholders (other than a Shareholder the Purchase
Obligations of which shall then be suspended or terminated under this
Agreement) shall have the right, but not the obligation, onits own behalf or,
if more than one Shareholder so elects, jointly with such other
Shareholder(s), pro rata to their Shareholding Interests, to make Equity
Contributions not made by the suspended Shareholder. To the extent one or more
Shareholders exercise this option, the suspended Shareholder shall pay to each
such Shareholder, a percentage of the amount of the Equity Contributions made
by such Shareholder in lieu of the suspended Shareholders, which percentage
shall be calculated (based on the actual number of days elapsed between the
date an Equity Contribution is made in lieu of the suspended Shareholders and
the date the obligation to pay this amount terminates) at a rate per annum
equal to the Benchmark Interest Expense such amounts being payable in arrears
on the first Business Day of each calendar month until such amounts shall
cease to be paid commencing on the first calendar month that follows
termination pursuant to Section 4.4 or reinstatement pursuant to Section 4.5
(for purposes of this clause, the payment amounts and the payment period);
provided that, in case the funding Shareholder shall receive any Distribution
as a result of the application of the proviso in Section 5.3(e) of the
Oleoducto Central Agreement at any time during the payment period, the amount
of the Distribution received shall be credited against future payment amounts
payable by the non-funding Shareholder; and provided further that after
termination of the payment period, the funding Shareholder shall reimburse the
non-funding Shareholder (subject, if applicable, to set-off against the put
purchase price payable to the funding Shareholder under Section 3.5(e) hereof)
for any payment amounts received and not previously credited against
Distributions that have not been previously credited against payment amounts.
This clause shall not apply at any time during which the Purchase Obligations
of the members of the Canadian Group also are suspended by application of
Section 2.2.
Section 4.4. Termination of Purchase Obligations. (a) The Purchase
Obligation of a member of the Canadian Group shall terminate if a suspension
under Section 4.2 continues for 365 days without reinstatement pursuant to
Section 4.5; provided that, if an arbitration proceeding is commenced, and the
arbitrators rule against the members of the Canadian Group, such 365-day
period shall be extended by the number of days that expire between the date on
which the corresponding notice of arbitration is delivered and the arbitrators
issue their ruling.
(b) In case of a termination under clause (a):
(i) the Subscription Agreements of the terminated Shareholder shall
terminate (subject to survival of certain provisions in the Subscription
Agreement as provided therein) and there shall be no restriction on Ocensa's
right to exercise all remedies under Section 5.3(b)(iii) of the Oleoducto
Central Agreement during and for the periods indicated therein.
(ii) the Performance Guarantee Agreement of any Affiliate of the
terminated Shareholder shall terminate (other than to the extent survival of
certain provisions of the corresponding Subscription Agreement);
(iii) the terminated Shareholder shall cease to be a party to the
Oleoducto Central Agreement (subject to survival of certain provisions as
provided therein); and
(iv) the terminated Shareholder shall have the right to deliver an
instruction under Section 4 of the Escrow Agreement to the Escrow Agent, with
a copy to Ocensa and the other Shareholders, instructing the Escrow Agent to
deliver to the terminated Shareholder all funds on deposit in the Escrow
Account.
Section 4.5. Reinstatement. (a) Reinstatement Events.
Reinstatement for purposes of this Article Four shall occur upon the
occurrence, prior to termination under Section 4.4, of any of the following
events:
(i) Ocensa or any other Shareholder objects to the declaration of
Political Event by the members of the Canadian Group, commences arbitration
proceedings within 60 days of receipt of the certificate declaring the Event
of Default, and the arbitrators rule that the Political Event claimed in the
Section 4.1 certificates did not occur or was not continuing as of the date of
the certificate delivered under Section 4.1, or that the restrictions in
Section 5.1 applied;
(ii) either member of the Canadian Group delivers to Ocensa a
certificate executed by it to the effect that the Political Event that gave
rise to the suspension has ceased (provided that the other member of the
Canadian Group can object to, and within 60 days of the delivery of the
cessation certificate commence arbitration on, the claim that the Political
Event has ceased, in which case the reinstatement certificate will be
effective as to the objecting Shareholder only if arbitrators rule that the
Political Event had ceased as of the date of the reinstatement certificate);
(iii) the members of the Canadian Group fail to deliver a reinstatement
certificate under (ii) above upon demand of Ocensa or any other Shareholder on
the grounds that the Political Event has ceased, the objecting party commences
within 60 days of demanding that the members of the Canadian Group deliver a
reinstatement certificate, and the arbitrators rule that the Political Event
that gave rise to the suspension had ceased as of the time of the demand for a
reinstatement certificate;
(iv) as to either member of the Canadian Group, such Shareholder fails
to enter into or maintain in effect the Escrow Agreement or fails to make on a
timely basis the deposits into the Escrow Account contemplated by Section
4.3(a); or
(v) as to either member of the Canadian Group, such Shareholder fails to
deliver to Ocensa and each other Shareholder or to maintain in effect the
executed Political Event Performance Guarantee (whether because of expiration,
limitations on coverage resulting from accrued contingent obligations or
actual payments, or otherwise).
(b) Purchase Obligations; Application of Section 5.3(b)(iii). Upon
reinstatement under clause (a), the Purchase Obligations of the members of the
Canadian Group will apply immediately as if no suspension had occurred.
Following reinstatement, there will be no restriction on Ocensa's right to
exercise all remedies under Section 5.3(b)(iii) during and for the periods
indicated therein; provided that Ocensa shall be obliged to (i) cease to
exercise the right to cancel partially or entirely payment of operating,
incentive and other fees payable under the Oleoducto Central Operations
Agreement and (ii) not exercise its right to terminate the Oleoducto Central
Operations Agreement, in each case as a result of Equity Contributions not
made by the reinstated Shareholder during the suspension period, if (but only
if) within 15 days of reinstatement the reinstated Shareholder makes up in
full any Equity Contributions it failed to make during the suspension period
which were not otherwise made up by other Shareholders during such period.
(c) Escrow Account. Within ten Business Days after the earlier of
the date on which each Shareholder having a put right under clause (d) shall
have exercised it and the expiration of the 30-day period referred to in such
clause, Ocensa shall deliver an instruction under Section 4 of the Escrow
Agreement, with a copy to each Shareholder, instructing the Escrow Agent to
deliver promptly, but in any case within two Business Days of delivery of the
instruction, all funds on deposit in the Escrow Account to the following
Persons in the following order of priority:
(i) to the extent put rights are exercised, to the sellers in or towards
satisfaction of the purchase price payable by the purchaser under such clause
pro rata among the sellers based on the number of Shares being sold;
(ii) to Ocensa in satisfaction of any outstanding Purchase Obligation of
the reinstated Shareholder to purchase Shares not purchased by other
Shareholders during the suspension period; and
(iii) the balance, if any, to the reinstated Shareholder.
(d) Put Right. Upon reinstatement under clause (a), each
Shareholder (for purposes of this clause, the seller) which shall have
exercised the option pursuant to Section 4.3(c) to make Equity Contributions
in lieu of a Shareholder which is a member of the Canadian Group shall have
the right to require the reinstated Shareholder (for purposes of this clause,
the purchaser) to purchase all or a portion of the Shares and other securities
or instruments (together, for purposes of this clause, the Put Securities)
issued to the seller or on its behalf by Ocensa in connection with such Equity
Contributions by giving the purchaser notice no later than 30 days following
the date on which reinstatement occurs, specifying the number of Put
Securities to be purchased. The purchase price per Put Security shall equal
the sum of (i) the amount of the Equity Contribution made for such Put
Security and (ii) an amount calculated (based on the actual number of days
elapsed between the date such Put Security was purchased in lieu of the
purchaser and the last day of the calendar month preceding the date on which
the seller notifies the purchaser that it is exercising the put right) at a
rate of 13.5% per annum of the amount in (i), less any Distribution received
in respect of such Put Security as of such calculation date. The closing on
the purchase shall occur on the later of (A) ten Business Days after the date
the seller notifies the purchaser that it is exercising its put right under
this clause and (B) the first Business Day following the receipt of any
necessary governmental approvals. Clause (c) contemplates that funds in the
Escrow Account will be applied in the first instance to pay to each seller,
pro rata based on the aggregate purchase price payable to such seller, such
purchase price.
ARTICLE FIVE
RESTRICTIONS ON RIGHTS TO DECLARE POLITICAL EVENTS
Section 5.1. Restrictions on Rights to Declare Political Events.
Notwithstanding any other provision of this Agreement, no Shareholder shall
have a right to declare a Political Event pursuant to Section 2.1, 3.1 or 4.1
if:
(a) the failure of such party (or any of its Affiliates, as the case may
be) or, in the case of Section 2.1, Ocensa to comply in any material respects
with its respective obligations under (i) any binding agreement freely made
between any of them and Colombia or a governing authority which is in de facto
control of part of Colombia or (ii) any law, statute, decree, writ or order of
Colombia or any governmental authority thereof binding on it (other than such
law, statute, decree, writ or order, the adoption or application of which to
the Oleoducto Central would constitute Expropriatory Action) is the principal,
direct and proximate cause of such Political Event;
(b) the events, conditions or occurrences which constitute such
Political Event have been voluntarily agreed to (which for this purpose shall
not include coerced agreement), or have been voluntarily arranged or
deliberately instigated, by such party (or any of its Affiliates, as the case
may be) or, in the case of Section 2.1, Ocensa;
(c) such party (or any of its Affiliates, as the case may be) or, in the
case of Section 2.1, Ocensa has failed to take reasonable precautions or
pursue reasonable alternative measures available to it to prevent, or to
mitigate the effects of, the occurrence or continuation of such Political
Event; provided, however, that neither such party (nor any of its Affiliates)
nor, in the case of Section 2.1, Ocensa shall be required by this clause (c)
to accept, acquiesce in or agree to any modification of any right, make any
payment or concession it is not legally obligated to make or enter into any
settlement, compromise or agreement with any governmental authority, labor
union or other person that it is not legally obligated to enter into; or
(d) in the case of Expropriatory Action, such party (or any of its
Affiliates, asthe case may be) or, in the case of Section 2.1, Ocensa has
failed to commence judicial, administrative or other proceedings reasonably
available under Colombian law against the expropriating authority for the
purpose of reversing or mitigating the effects of the Expropriatory Action.
ARTICLE SIX
ARBITRATION; SUBMISSION TO JURISDICTION
Section 6.1. Arbitration. Any dispute under this Agreement shall be
settled by arbitration in accordance with the UNCITRAL Arbitration Rules in
effect on the date hereof. The arbitration shall be the sole and exclusive
forum for resolution of the dispute, controversy or claim, and the award shall
be final and binding. Judgment thereon may be entered by any court having
jurisdiction. The number of arbitrators shall be three, each of whom shall be
disinterested in the dispute, controversy or claim and shall have no
connection with any party. Should the services of an appointing authority be
necessary, the appointing authority shall be the American Arbitration
Association. In the event that more than two parties are involved in the
dispute, controversy or claim, all such parties shall have 30 days to agree
among themselves as to the appointment of the three arbitrators. If, after
such 30-day period, the parties have not agreed on such appointment, the
appointing authority shall select all three arbitrators. The parties and the
appointing authority may appoint from among the nationals of any country,
whether or not a party is a national of that country. The place of arbitration
shall be The City of New York, New York. The arbitration shall be conducted in
the English language and any foreign-language documents presented at such
arbitration shall be accompanied by an English translation thereof. The
arbitrators shall apply the law (except for conflicts of law rules) of the
State of New York.
(a) In the event that there is an existing arbitration pursuant
to paragraph (b), and that the same or a similar disagreement, dispute,
controversy or claim should arise between parties other than the parties to
the existing arbitration, the American Arbitration Association shall have the
power to allow the other parties to be joined in the existing arbitration with
their express consent, which is hereby granted, and to make a single final
award determining all disputes, controversies or claims among them.
(b) Any matter expressed in this Agreement to be a matter for
review, collaboration, consultation, consent, decision or agreement by the
parties or any of them shall not, in the event of failure of decision or
agreement, constitute a dispute or difference to be referred to or settled by
arbitration proceedings.
Section 6.2. Submission to Jurisdiction. Each of the parties hereby
submits to the exclusive jurisdiction of the United States District Court for
the Southern District of New York (the Specified Court) in any suit or
proceeding with respect to the enforcement of thearbitration provisions of
this Agreement and the non-exclusive jurisdiction of such court with respect
to the enforcement of any award thereunder. Each party irrevocably appoints
the agent for service specified opposite its name in Section 8.1 as its
authorized agent in the Borough of Manhattan in The City of New York upon
which process may be served in any related proceeding, and agrees that service
of process upon such agent, and written notice of said service to such party,
by the person serving the same to the address provided in Section 8.1, shall
be deemed in every respect effective service of process upon such party in any
such suit or proceeding. Each party further agrees to take any and all action
as may be necessary to maintain such designation and appointment of such agent
in full force and effect for the duration of this Agreement.
ARTICLE SEVEN
TERM
Section 7.1. Effectiveness; Termination. As to any party hereto,
this Agreement shall become effective on the earlier of the date the Oleoducto
Central Agreement becomes effective and the date on which a Subscription
Agreement to which it is a party becomes effective and shall terminate upon
the later of the date the Oleoducto Central Agreement terminates and the date
on which a Subscription Agreement to which it is a party terminates; provided
that Sections 3.4(b)(iv) and (v) and Section 4.4(b)(iv) shall survive
termination.
ARTICLE EIGHT
GENERAL
Section 8.1 Notices. All notices, requests, demands, directions and
other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Party Copy To Agent for
-------------------------------------------- ----------------------------------
Service
-----------------------------
OLEODUCTO CENTRAL S.A. N/A CT CORPORATION
--------------------------------------------
World Trade Center Bogota SYSTEM
Calle 100 N. 8A-55 1633 Broadway
Santafe de Bogota, D.C. -Colombia New York, New York 10019
Telefax: 571-218-3933 Telefax: (212) 247-2882
Attention: President
EMPRESA COLOMBIANA DE N/A CONSULATE GENERAL OF
PETROLEOS-ECOPETROL COLOMBIA
Carrera 13 No. 36-24 10 East 46th Street
Santafe de Bogota, D.C. -Colombia New York, New York 10017
Telefax: (571) 287-0041 Telefax: (212) 972-1725
Attention: Juan Maria Rendon
BP COLOMBIA PIPELINES BP EXPLORATION CT CORPORATION
LIMITED COMPANY SYSTEM
c/o BP EXPLORATION (COLOMBIA) LIMITED 1633 Broadway
(COLOMBIA) LIMITED Carrera 9A No. 99-02 New York, New York 10019
Carrera 9A No. 99-02 Post Office Box 59824 Telefax: (212) 247-2882
Post Office Box 59824 Santafe de Bogota, D.C. Colombia
Santafe de Bogota, D.C. -Colombia Telefax: (571) 222-8619
Telefax: (571) 618-2895 Attention: Legal Manager
Attention: Nicholas P. Connolly
TOTAL PIPELINE TOTAL EXPLORATIE EN PROSKAUER, ROSE,
COLOMBIE S.A. PRODUKTIE MIJ B.V. GOETZ & MENDELSOHN
Tour TOTAL Calle 72 No. 10-03 1585 Broadway
TEP/AME Piso 8 New York, New York 10036
24, Cours Michelet Apartado aereo 251375 Telefax: (212) 969-2900
Cedex 47,92069 Paris, France Santafe de Bogota, D.C. -Colombia Attention: Ronald Papa, Esq.
Telefax: (33 1) 4135 6530 Telefax: (571) 235-8453
Attention: Jean-Claude Soligny Attention: Jacques de Boisseson
TRITON PIPELINE TRITON COLOMBIA, INC. CT CORPORATION
COLOMBIA, INC. Carrera 9A No. 99-02 SYSTEM
c/o TRITON ENERGY Oficina 407 1633 Broadway
CORPORATION Santafe de Bogota, D.C.- Colombia New York, New York 10019
6688 North Central Expressway Telefas: (571) 618-2553 Telefax: (212) 247-2882
Suite 1400 Attention: Ivan Fajardo
Dallas, Texas 75206
Telefax: (214) 692-7487
Attention: Thomas G. Finck
A.E. Turner
IPL ENTERPRISES IPL INTERNATIONAL INC. CT CORPORATION
(COLOMBIA) INC. Suite 1100 SYSTEM
c/o IPL ENERGY INC. 363 North 1633 Broadway
31st Floor Bow Valley Square 2 Sam Houston Parkway East New York, New York 10019
205 - 5th Avenue S.W. Houston, Texas 77060 Telefax: (212) 247-2882
Calgary, Alberta, Canada T29 2V7 Telefax: (713) 820-9310
Telefax: (403) 231-3920 Attention: Benny J. Phillips
Attention: Donald M. Wishart
TCPL INTERNATIONAL TRANSCANADA PIPELINES FRIED, FRANK, HARRIS,
INVESTMENTS INC. LIMITED SHRIVER & JACOBSON
c/o FRIED, FRANK, HARRIS, TransCanada PipeLines Tower 1 New York Plaza
SHRIVER & JACOBSON 111 Fifth Avenue S.W. New York, New York 10004
1 New York Plaza P.O. Box 1000, Station M Telefax: (212) 747-1526
New York, New York 10004 Calgary, Alberta, Canada T2P 4K5 Attention: Ken Blackman
Telefax: (212) 747-1526 Telefax: (403) 267-2668
Attention: Ken Blackman Attention: Michael Durnin and
Robert M. Jensen
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the others. Any notice, demand,
request, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, demand, request, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 8.2. Representations and Warranties. Each party represents
and warrants to the others that:
(a) it is a corporation duly incorporated and organized under
the laws of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and
perform its obligations under this Agreement and this Agreement to which it is
a party, when executed and delivered by such party, constitute valid and
legally binding agreements of such party;
(c) the execution and delivery of, and the performance by it of
its obligations under, this Agreement to which it is a party will not result
in a breach of or constitute a default under:
(i) any provision of its corporate charter or articles of
incorporation or its by-laws;
(ii) any agreement or instrument to which it is a party and
which is material to the performance by it of its obligations hereunder to
which it is a party; or
(iii) any order, judgment or decree of any court or
governmental agency to which it is a party or by which it is bound.
Section 8.3. Nature of Obligations (a) The obligations of each
party created by this Agreement shall be the several obligations of that
party. Nothing herein shall be deemed or construed to make any party a surety
or a guarantor of Ocensa or of another party or liable to meet any obligation
of Ocensa or of another party.
(b) The obligations of each party hereunder shall run to the
benefit of each other party, and each party shall have the right to enforce
the obligations of any party hereunder.
Section 8.4. Amendments. This Agreement may not be amended or
modified except with the written consent of each of the parties. The parties
acknowledge that they may from time to time (a) consider amending this
Agreement to meet the needs of Ocensa and (b) enter into one or more separate
agreements to provide for the suspension or termination of obligations under
certain other Project Agreements to which they or their Affiliates may be
party, including the Transportation Agreements, the Transportation Notes
Agreements and the Advance Tariff Agreements.
Section 8.5. No Third Party Beneficiaries. Except as herein
otherwise expressly provided to the contrary, this Agreement shall inure to
the benefit of and be binding upon the parties and their respective successors
and assigns, and no other Person shall have any right hereunder.
Section 8.6. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect. Any provision of this Agreement that is
unenforceable in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
Section 8.7. No Assignment. Except as expressly provided herein and
except for anassignment by TCPL International to TCPL Bermuda in accordance
with Section 10.9 of the Oleoducto Central Agreement, no party may assign all
or any portion of its rights or obligations hereunder.
Section 8.8. Conduct. Each of the parties acknowledge that it is
aware of the provisions of the United States Foreign Corrupt Practices Act of
1977, as amended, and will take no action nor make any payment in violation
of, nor cause any party or its subsidiaries or affiliates, to be charged with
violation of, such Act.
Section 8.9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 8.10. Commercial Obligations. Each party acknowledges and
agrees that its rights and obligations hereunder are of a commercial and not
governmental in nature.
Section 8.11. Waiver of Immunity. (a) Each party irrevocably
consents to and waives any objection which it may now or hereafter have to the
laying of venue of any proceeding relating to enforcement of the arbitration
provisions of this Agreement or any award thereunder brought in the Specified
Court and further irrevocably waives, to the fullest extent it may effectively
do so, the defense of an inconvenient forum to the maintenance of any such
proceeding in the Specified Court.
(b) To the extent that a party or any of its revenues, assets or
properties shall be entitled, with respect to any proceeding relating to
enforcement of the arbitration provisions of this Agreement or any award
thereunder at any time brought against such party or any of its revenues,
assets or properties, to any sovereign or other immunity from suit, from
jurisdiction, from attachment prior to judgment, from attachment in aid of
execution of judgment, from execution of a judgment or from any other legal or
judicial process or remedy, and to the extent that in any jurisdiction there
shall be attributed such an immunity, such party irrevocably agrees not to
claim and irrevocably waives such immunity to the fullest extent permitted by
the laws of such jurisdiction (including, without limitation, the Foreign
Sovereign Immunities Act 1976 of the United States), except, in the case of
Ecopetrol, as provided under Article 684 of the Codigo de Procedimiento Civil
of Colombia.
Section 8.12. Headings; Table of Contents. The headings and table
of contents contained herein are for convenience of reference only and do not
constitute a part of this Agreement.
Section 8.13. Counterparts. This Agreement may be executed in
sevenor more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement
to be executed and delivered by their respective proper officers thereunto
duly authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
By:
Title:
EMPRESA COLOMBIANA DE
PETROLEOS-ECOPETROL
By:
Title:
BP COLOMBIA PIPELINES LIMITED
By:
Title:
TOTAL PIPELINE COLOMBIE S.A.
By:
Title:
TRITON PIPELINE COLOMBIA, INC.
By:
Title:
IPL ENTERPRISES (COLOMBIA) INC.
By:
Title:
TCPL INTERNATIONAL INVESTMENTS INC.
By:
Title:SCHEDULE A TO
POLITICAL EVENTS AGREEMENT
ESCROW AGREEMENT
AGREEMENT, dated as of _________, among OLEODUCTO CENTRAL S.A., a
sociedad anonima organized under the laws of Colombia (the JSC), ________, a
_________ (the Escrowing Party and, together with Ocensa, the Parties) and
_______________, a ____________________________, as Escrow Agent (and together
with the Parties, the Signatories).
(a) Appointment of Escrow Agent. __________, acting through its
corporate trust office, ________________, New York, New York, United States of
America, is hereby appointed as escrow agent hereunder (the Escrow Agent) upon
the terms and conditions hereof.
(b) Escrow Account. The Escrow Agent today has opened in its
name at _________ in New York, New York a segregated escrow account, account
no. _______ (the Escrow Account). Escrowing Party or its affiliates may from
time to time deposit funds into the Escrow Account. All moneys held in the
Escrow Account shall be escrow funds held by the Escrow Agent under this
Agreement. The Escrow Agent shall have no duty to solicit funds.
(c) Unless Ocensa and the Escrowing Party otherwise jointly
notify the Escrow Agent, funds held in the Escrow Account shall be invested by
the Escrow Agent in interest-bearing securities of, or guaranteed by, the
United States Government with maturities of 90 days or less, with amounts too
small to be feasibly so invested to be invested as directed by the Escrowing
Party. All interest and other income earned on the principal amount of the
deposits in the Escrow Account shall be reinvested in accordance with this
clause promptly (and in any case within one banking day in New York) upon
receipt thereof. For purposes of this Agreement, Banking Day shall mean a day
on which commercial banks in The City of New York are authorized by law to be
open for the transaction of business.
(d) Distribution from the Escrow Account. Except as otherwise
expressly provided in this Section 4, the Escrow Agent shall not distribute
any funds on deposit in the Escrow Account. The Escrow Agent shall make
distributions of all funds in the Escrow Account only as follows:
(a) at the time and to the persons indicated in an instruction
received from Ocensa, provided that the instruction certifies that Ocensa is
delivering the instruction in accordance with Section 3.5(d) or 4.5(c) of the
Political Events Agreement; or
(b) at the time and to the person indicated in an instruction received
from the Escrowing Party (accompanied by a certification from the Escrowing
Party to the effect that it is delivering the instruction in accordance with
[INSERT IF ESCROWING PARTY IS ENTERING INTO ESCROW AGREEMENT UNDER SECTION
3.3(a) OF POLITICAL EVENTS AGREEMENT -- Section 3.4(b)(iv)][INSERT IF
ESCROWING PARTY IS ENTERING INTO ESCROW AGREEMENT UNDER SECTION 4.3(a) OF
POLITICAL EVENTS AGREEMENT -- Section 4.4(b)(iv)]), provided that no
distribution shall be made unless and until one of the following two
conditions is satisfied: (A) 30 Business Days after the Escrow Agent delivers
a copy of the instruction to Ocensa expire without Ocensa notifying the Escrow
Agent that it objects to the instruction delivered by the Escrowing Party or
(B) Ocensa notifies the Escrow Agent within such 30-day period that it objects
to the instruction notice but thereafter notifies the Escrow Agent that it is
withdrawing the objection. In no event shall the Escrow Agent be obligated to
distribute any amount in excess of the funds in the Escrow Account at the time
the distribution is made.
(e) Books and Accounts. (i) The Escrow Agent shall maintain
all such accounts, books and records as may be necessary properly to record
all transactions carried out by it under this Agreement. The Escrow Agent
shall permit the Parties and their authorized representatives to examine such
accounts, books and records; provided that any such examination shall occur
upon reasonable notice and during normal business hours.
(ii) On or before the tenth Banking Day of each calendar month,
the Escrow Agent shall send to the Parties a statement indicating the amount
of funds on deposit in the Escrow Account and the nature of any investments
thereof as of the end of the preceding calendar month and identifying all
deposits to and payments from the Escrow Account during such calendar month,
including the date on which made. Upon the request and at the expense of the
Escrowing Party or Ocensa, the Escrow Agent shall inform the Escrowing Party
and Ocensa of deposits, investments, payments, balances and any other
information they may request (and that is reasonably available to the Escrow
Agent) regarding the Escrow Account,
(f) Communications. Any instruction to be given hereunder to
the Escrow Agent for the investment or withdrawal of funds or investment in
the Escrow Account or any other communication required or permitted to be
given hereunder to the Escrow Agent may be given by Escrowing Party or Ocensa,
as the case may be, in writing, by facsimile or other form of electronic
transmission, and in any manner that the Escrow Agent may reasonably accept,
to or at the address for the Escrow Agent set out in Appendix A hereto or to
such other address as may be furnished for the purposeby the Escrow Agent. Any
notice or other communication required or permitted to be given to the
Escrowing Party or Ocensa hereunder may be given, in writing, by facsimile or
other form of electronic transmission, and in any manner that the Escrowing
Party or Ocensa may reasonably accept, to or at the address set out for each
of the Escrowing Party and Ocensa in Appendix A hereto or to such other
address as may be furnished by the Escrowing Party or Ocensa, as the case may
be.
(g) Duties of Escrow Agent. The Escrow Agent shall not be
liable for any error of judgment or for any act done or omitted by it in good
faith or for any mistake of fact or law, or for anything which it may do or
refrain from doing, except for the Escrow Agent's own gross negligence or
willful misconduct
(ii) The Escrow Agent may consult with, and obtain advice from,
legal counsel, accountants and other experts, in connection with the
performance of its good faith in accordance with the written opinion and
written advice of such counsel, negligence or misconduct of any counsel,
accountants and other experts selected by it without gross negligence or
willful misconduct.
(iii) The Escrow Agent shall have no duties other than those
specifically set forth or provided for in this Agreement and no implied
covenants or obligations of the Escrow Agent shall be read into this
Agreement. The Escrow Agent shall have no obligation to familiarize itself
with and shall have no responsibility with respect to any obligation to
inquire whether any notice, instruction, statement or calculation is in
conformity with the terms of any such other agreement, except those
irregularities or errors manifestly apparent on the face of such document or
to its actual knowledge. The Escrow Agent shall at all times take such care in
dealing with the Escrow Account as would a prudent man in dealing with his own
property.
(h) No Set-offs. The Escrow Agent shall not have, and hereby
waives, any right to banker's lien, set-off or counterclaim in respect of
funds or investments in the Escrow Account.
(i) Expenses; Indemnification. The Escrowing Party shall pay
directly and not out of the Escrow Account the fees of the Escrow Agent for
the services rendered pursuant or relating to this Escrow Agreement chargeable
in accordance with the Escrow Agent's usual rate of compensation. Ocensa shall
have no obligation to pay the Escrow Agent any fees.
(ii) The Escrowing Party agrees to indemnify the Escrow Agent
and hold it harmless against any and all losses, liabilities and expenses
(including reasonable attorney's fees and expenses) incurred by it arising out
of or in connection with the performance of its duties hereunder except those
resulting from its own willful misconduct or gross negligence. The foregoing
indemnities shall also extent to each andevery employee and agent of the
Escrow Agent and shall remain in full force and effect regardless of any
investigation made by or on behalf of the Escrow Agent or its employees and
agents, and survive the resignation of the Escrow Agent and the termination of
this Agreement. Ocensa shall have no indemnification obligation to the Escrow
Agent.
(j) Resignation; Removal. The Escrow Agent at any time may
resign as escrow agent under this Agreement upon given not less than 60 days'
notice in writing to the Parties, provided that such resignation shall not be
effective until a replacement Escrow Agent reasonably satisfactory to the
Parties shall have been appointed. The Parties may remove the Escrow Agent as
escrow agent under this Agreement for any reason, with or without cause, upon
given the Escrow Agent and the other party hereto 60 days' notice thereof;
provided that such removal shall not be effective until a replacement Escrow
Agent satisfactory to the Parties shall have been appointed.
(ii) If no successor Escrow Agent shall have been appointed and
shall have accepted such appointment within such 60-day period, then the
retiring Escrow Agent may on behalf of the Parties, appoint a successor Escrow
Agent which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least U.S.$500,000,000. If a successor escrow agent shall not
have been appointed and accepted such appointment within such 60-day period,
the retiring Escrow Agent may petition any court of competent jurisdiction for
the appointment of a successor Escrow Agent.
(k) Miscellaneous. The Escrow Agent shall have the right at any
time to seek instructions concerning the administration of the Escrow Account
from any court of competent jurisdiction. In the event of any disagreement
between the Parties resulting in adverse claims being made against or with
respect to any cash, monies, funds or investments held by the Escrow Agent
hereunder and the terms of this Agreement do not unambiguously mandate the
action that the Escrow Agent is to take or not take in connection therewith
under the circumstances then existing, or the Escrow Agent is in doubt as to
what action it is required to take or not take, the Escrow Agent shall not be
entitled to refrain from taking any action until directed otherwise in writing
by a request signed jointly by the Parties or by order of a court of competent
jurisdiction.
(ii) None of the provisions of this Agreement shall be
construed to require the Escrow Agent to expend or risk its own funds or
otherwise to incur any personal financial liability in the performance of any
of its duties hereunder if it shall have reasonable grounds for belief that
repayment of such funds or indemnity against such risk or liability is not
reasonably assured to it. The Escrow Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement atthe
request or direction of the Escrowing Party or Ocensa, unless the Escrow Agent
shall have been offered security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction (including interest thereon from the
time incurred until reimbursed).
(iii) The Escrow Agent makes no representations as to, and shall
have no responsibility for, the correctness of any statement contained in, or
the validity or sufficiency of, this Agreement, or the sufficiency or
effectiveness of any security afforded hereby or thereby or as to or for the
validity or collectibility of any obligation contemplated hereby or thereby.
The Escrow Agent shall not be accountable for the use or application by any
person of distributions properly made by the Escrow Agent in conformity with
the provisions of this Agreement.
(iv) The Escrow Agent shall not be personally liable for debts
contracted or liabilities or damages incurred in the management or operations
of the Escrow Account hereunder, except for those contracted or incurred as a
result of its gross negligence or willful misconduct.
(v) Escrowing Party shall provide the Escrow Agent with its Tax
Identification Number (TIN) as assigned by the Internal Revenue Service. All
interest or other income earned under the Escrow Agreement shall be allocated
and paid to Escrowing Party as provided herein and reported by Escrowing Party
to the Internal Revenue Service as having been so allocated and paid.
(l) Termination. When all funds in the Escrow Account have been
distributed pursuant to Section 4, the Escrow Agent shall promptly deliver
written notice of that fact to the Parties. On the 10th Business Day following
delivery of such notice, this Agreement shall terminate.
In the event of the termination of this Agreement pursuant to this
Section 12, this Agreement shall thereafter become void and have no effect,
and no Signatory hereto shall have any liability to any other Signatory hereto
in respect thereof, except that nothing in this Section shall relieve any
Signatory from liability for any breach of this Agreement prior to
termination. No Signatory shall in any event be liable to any other Signatory
for loss of anticipated profits from the transactions contemplated by this
Agreement or for any other consequential damages arising out of the
termination of this Agreement.
(m) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
By:
By:
By:
APPENDIX A
TO THE
ESCROW AGREEMENT
Addresses
<PAGE>
SCHEDULE B TO
POLITICAL EVENTS AGREEMENT
POLITICAL EVENT PERFORMANCE GUARANTEE AGREEMENT
AGREEMENT, dated as of ___________, made by __________________, a
corporation existing under the laws of ___________ (the Guarantor) in favor of
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws of Colombia
(the JSC) and [names of other shareholders] to the extent such other parties
are Shareholders (the Funding Shareholders) which are exercising the option to
fund under Section [3.3(c)][4.3(c)] of the Political Events Agreement referred
to below.
RECITALS
WHEREAS:
A. _______________, a ___________ corporation organized under the
laws of ___________ (the Company), Ocensa and the Funding Shareholders are
parties to a Political Events Agreement, dated as of December 14, 1994 (as
amended from time to time, the Political Events Agreement), entered into
pursuant to the Oleoducto Central Agreement, dated as of the same date (as
amended from time to time, the Oleoducto Central Agreement);
B. The Company is an Affiliate of the Guarantor; and
C. As an inducement to Ocensa and the Funding Shareholders to enter
into the Political Events Agreement, the Guarantor has agreed to enter into
this Political Events Performance Guarantee Agreement (the Agreement).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the Guarantor,
Ocensa and the Funding Shareholders agree as follows:
Section 1. Definitions. All capitalized terms used and not defined
herein have the meanings assigned to them in the Political Events Agreement.
Section 2. Representations and Warranties. The Guarantor represents
and warrants to Ocensa and the Funding Shareholders that:
(a) it is a corporation duly incorporated and organized under the
laws of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and
perform its obligations under this Agreement, and this Agreement constitutes
the valid and legally binding agreement of the Guarantor;
(c) the execution and delivery of, and the performance by the Guarantor
of its obligations under, this Agreement will not result in a breach of or
constitute a default under:
(i) any provision of its corporate charter or articles of
incorporation or its by-laws;
(ii) any agreement or instrument to which it is a party and which is
material to the performance of its obligations hereunder; or
(iii) any order, judgment or decree of any court or governmental agency
to which it is a party or by which it is bound; and
(d) all of the outstanding capital stock of the Company (except for any
directors' qualifying shares) is directly or indirectly beneficially owned by
the Guarantor, free and clear of all liens, encumbrances, equities and claims.
Section 3. Performance Guarantee. Subject to the provisions
contained herein, the Guarantor hereby irrevocably and unconditionally
guarantees to Ocensa and the Funding Shareholders the full and punctual
performance of all of the Company's obligations (the Guaranteed Obligations)
under the Political Events Agreement. In the event that the Company shall
default in the full and timely performance of any of the Guaranteed
Obligations for any reason, the Guarantor hereby agrees to perform, or to
cause to be performed, any such Guaranteed Obligations fully and timely in
accordance with the terms of the Political Events Agreement.
Section 4. Unconditional Obligations of Guarantor. The Guarantor
hereby agrees that its obligations hereunder are in the nature of a continuing
performance guarantee and shall remain valid and in full force irrespective of
any circumstances which might otherwise constitute a legal or equitable
discharge of a guarantor, including the absence of any action to enforce the
Political Events Agreement or any judgment against the Company; provided that
it is hereby acknowledged and agreed that (a) the Guarantor shall not be
obligated under this Agreement to make any payment in respect of any amounts
that would not be dueunder the Political Events Agreement were it to be a
party to the Political Events Agreement in the place and stead of the Company,
(b) the benefit of any waiver or indulgence granted to, or any compromise
with, the Company shall extend to the Guarantor and (c) in no event shall the
Guarantor be obligated to make payments hereunder exceeding in the aggregate
[INSERT 200% OF REMAINING EQUITY CONTRIBUTION OF SUSPENDED PARTY UNDER LATEST
FINANCING PLAN AT THE TIME THIS AGREEMENT IS EXECUTED AND DELIVERED.]
Section 5. No Waiver. No failure on the part of Ocensa or any
Funding Shareholder to exercise, and no delay in exercising, any right, remedy
or power hereunder shall operate as a waiver thereof, nor shall any single or
particular exercise by Ocensa or any Funding Shareholder of any right, remedy
or power hereunder preclude any other or future exercise of any other right,
remedy or power.
Section 6. Subrogation. The Guarantor shall be subrogated to all
rights of Ocensa and the Funding Shareholders against the Company in respect
of any amounts paid by the Guarantor pursuant to the provisions of this
Agreement; provided, however, that the Guarantor shall not be entitled to
enforce, or to receive any payments arising out of or based upon, such right
of subrogation until all of the Guaranteed Obligations under the Political
Events Agreement shall have been performed in full, all the Senior Debt
referred to in the Oleoducto Central Agreement provided by the Senior Lender
Group for whose benefit the Political Events Agreement to which the Company is
party may be assigned by Ocensa has been repaid and all other obligations of
the Company owed to Ocensa and the Funding Shareholders have been discharged
in full.
Section 7. Effectiveness. This Agreement shall become effective upon
the execution hereof by all the Parties hereto.
Section 8. Termination. This Agreement shall terminate on the
earlier of (a) the complete performance or termination of all Guaranteed
Obligations of the Company under the Political Events Agreement and (b)
[INSERT DATE FIVE YEARS AFTER DATE OF EXECUTION].
Section 9. Successors. The obligations of the Guarantor hereunder
shall be binding upon the Guarantor and its successors and assigns and shall
inure to the benefit of and be enforceable by Ocensa and the Funding
Shareholders and their respective successors and assigns.
Section 10. Release. (a) The Guarantor shall not be released and
discharged from any of its obligations hereunder except to the extent that, in
connection with the simultaneous direct or indirect transfer of all or any
part of the Shares held by the Company to a Person that is a permitted
transferee thereof pursuant to Article Ten of the Oleoducto Central Agreement,
such permitted transferee assumes or undertakes the related obligations under
the Political Events Agreement or such obligations are guaranteed under a
performance guarantee agreement in substantially identical form to this
Agreement.
(b) Notwithstanding the foregoing, the Guarantor shall not be
released or discharged from obligations which shall have been incurred prior
to the release and discharge referred to in paragraph (a) of this Section 10.
Section 11. Notices. All notices, requests, demands, directions and
other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
If to Ocensa: Copy To Agent for Service
OLEODUCTO CENTRAL S.A. N/A CT CORPORATION
World Trade Center Bogota SYSTEM
Calle 100 N. 8A-55 1633 Broadway
Santafe de Bogota, D.C.-Colombia New York, New York 10019
Telefax: 571-218-3933 Telefax: (212) 247-2882
Attention: President
</TABLE>
If to the Guarantor:
If to the Funding Shareholders:
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof inthe mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 12. Severability. If, for any reason, any provision of this
Agreement is unenforceable, the remaining provisions hereof shall nevertheless
be carried into effect.
Section 13. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 14. Submission to Jurisdiction; Consent to Service. The
Guarantor hereby submits to the non-exclusive jurisdiction of the Federal and
State courts in the Borough of Manhattan in The City of New York (the
Specified Court) in any action, suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby (a Related
Proceeding). The Guarantor irrevocably appoints the agent for service
designated opposite its name in Section 11 hereof as its authorized agent in
the Borough of Manhattan in The City of New York upon which process may be
served in any such action, suit or proceeding, and agrees that service of
process upon such agent, and written notice of said service to the Guarantor,
by the person serving the same to the address provided in Section 11, shall be
deemed in every respect effective service of process upon such party in any
such suit or proceeding. The Guarantor further agrees to take any and all
action as may be necessary to maintain such designation and appointment of
such agent in full force and effect for the duration of this Agreement.
The obligation of the Guarantor in respect of any sum due from it to
Ocensa expressed in United States dollars, notwithstanding any judgment in a
currency other than United States dollars, shall not be discharged until the
first Business Day following receipt by Ocensa of any sum adjudged to be so
due in such other currency on which (and only to the extent that) Ocensa may
in accordance with normal banking procedures purchase United States dollars
with such other currency. If the United States dollars so purchased are less
than the sum originally due to Ocensa or the Funding Shareholders hereunder,
the Guarantor agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify Ocensa against such dollar shortfall. If the United
States dollars so purchased are greater than the sum originally due to Ocensa
or the Funding Shareholders hereunder, Ocensa or the Funding Shareholders, as
the case may be, agree to pay to the Guarantor an amount equal to the excess
of thedollars so purchased over the sum originally due hereunder to Ocensa or
the Funding Shareholders, as the case may be.
Section 15. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
IN WITNESS WHEREOF, the Guarantor has caused this Agreement to be
executed and delivered by its proper officer or officers thereunto duly
authorized as of the date first above written.
[NAME OF GUARANTOR]
By:
Title:
<PAGE>
SCHEDULE K TO
OLEODUCTO CENTRAL AGREEMENT
TRANSPORTATION AGREEMENT
dated as of March 31, 1995
between
OLEODUCTO CENTRAL S.A.
and
[NAME OF INITIAL SHIPPER]
Not filed here as executed one is at back of exhibit.
<PAGE>
SCHEDULE L TO
OLEODUCTO CENTRAL AGREEMENT
FORM OF SHARE TRANSFER AGREEMENT
AGREEMENT, dated as of December 14, 1994 between IPL ENTERPRISES
(COLOMBIA) INC., a corporation existing under the laws of the Cayman Islands,
and TCPL INTERNATIONAL INVESTMENTS INC., a corporation existing under the laws
of Alberta, Canada (each, a Seller), on the one hand, and EMPRESA COLOMBIANA
DE PETROLEOS - ECOPETROL, an Empresa Industrial y Comercial del Estado
existing under the laws of Colombia (the Purchaser), on the other.
RECITALS
WHEREAS:
A. The Purchaser and each Seller is a Shareholder of Oleoducto
Central S.A., a corporation existing under the laws of Colombia (the JSC), and
the Purchaser and each Seller are parties to the Oleoducto Central Agreement
(the Oleoducto Central Agreement), dated as of December 14, 1994, among
Ocensa, the Purchaser, the Sellers, BP Pipelines (Colombia) Limited, TOTAL
Pipeline Colombia S.A. and Triton Pipeline Colombia, Inc.;
B. The Purchaser desires to enter into an agreement with each Seller
to acquire at such Purchaser's election, and subject to certain other
conditions set forth herein, Shares (as hereinafter defined) in exchange for
cash and in proportion to such Seller's Shareholding Interest (as hereinafter
defined); and
C. Each Seller desires to sell such Shares to the Purchaser at such
Purchaser's election.
NOW THEREFORE, for good and valuable consideration the sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires, the
following words and phrases shall have the meanings indicated below:
Bankruptcy Call shall mean a Call permitted by clause (d) of the
definition of Determination Date.
Bankruptcy Event shall mean the event set forth in clause (d) of the
definition of Determination Date.
Determination Date shall mean, at the election of the Purchaser (a) July
1 of the year immediately following the last day of the Equity Amortization
Period, (b) if the Equity Amortization Period has not ended by December 31,
2021, then July 1, 2022, (c) if the Equity Amortization Period has not
commenced prior to December 31, 2011 and Annual Equity Amortization Amounts
have not been paid in respect of all years in the 5-year period ending
December 31, 2016, then July 1, 2017, or (d) as to either Seller any day after
the filing of a voluntary proceeding, and after the 30th day after the filing
of an involuntary (not withdrawn) proceeding, in insolvency, bankruptcy,
receivership, reorganization, dissolution or liquidation of such Seller.
JSC has the meaning assigned to it in the recitals above.
Notice of Exercise has the meaning assigned to it in Section 2.1.
Original Shares means Shares held by a Seller that have been purchased by
such Seller directly from Ocensa.
Permitted Assignee means a permitted assignee of a Seller pursuant to
Section 4.3 or the Purchaser, as the case may be.
Purchase Price means, with respect to the Shares to be sold by each
Seller at the Time of Delivery, an amount (net of Colombian taxes applicable
to the sale of the Shares under this Agreement, including capital gains taxes,
if any) denominated in dollars equal to such Seller's Shareholding Interest of
the difference of (a) the sum of the Cash Paid-In Equity, Pre-Completion
Accrued Returns and Accrued Returns arising from periods when Oleoducto
Central operations were interrupted after which full operations were resumed
and during periods when cash dividends were restricted by virtue of legal
and/or accounting constraints of Ocensa, less (b) such Seller's Shareholding
Interest of the cumulative Annual Equity Amortization Amounts paid prior to
the Determination Date. All amounts used for purposes of the calculation of
the Purchase Price shall be determined pursuant to the financial statements of
Ocensa maintained in dollars and in accordance with Section 8.3 of the
Oleoducto Central Agreement of the six-month accounting period immediately
preceding the Determination Date.
Shares means Shares as defined in the Oleoducto Central Agreement or
other shares or instruments representing capital stock of Ocensa.
Time of Delivery has the meaning assigned to it in Section 2.1 hereof.
All defined terms used and not defined herein have the meanings assigned to
them in the Oleoducto Central Agreement.
Section 1.2. Interpretation
. For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular and
vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or Section refers to an Article or a
Section, as the case may be, of this Agreement; and
(d) all references to this Agreement and the words herein, hereof,
hereto and hereunder and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section or other subdivision.
ARTICLE TWO
OPTION TO ACQUIRE SHARES
Section 2.1. Option to Acquire Shares. On the terms and subject to the
conditions hereinafter set forth the Purchaser shall have the right, but not
the obligation, to acquire in exchange for cash all (but not a portion of) the
Shares held by each Seller upon the Purchaser's call (Call) to be exercised on
or within 60 days immediately following the Determination Date by a notice of
exercise (Notice of Exercise) at the Purchase Price and on the Time of
Delivery set forth in the Notice of Exercise; provided, however, that a Notice
of Exercise to one Seller shall not be effective unless and until a Notice of
Exercise to the other Seller shall have been delivered within the 60-day
period referred to above (except a Bankruptcy Call which shall be made only as
to the Seller affected by the Bankruptcy Event), and that (except for a
Bankruptcy Call) all other terms of purchase shall be identical for each
Seller. The Time of Delivery shall be not less than 10 Business Days and not
more than the later of (a) 30 Business Days and (b) the first Business Day
following the attaining of any governmental approvals, in each case from the
date of the effectiveness of the Notice of Exercise.
Section 2.2. Sale of the Shares. At the Time of Delivery, each Seller
shall sell, transfer, convey, assign and deliver to the Purchaser, and the
Purchaser shall acquire from each Seller, all right, title and interest in and
to the Shares being purchased by the Purchaser at the Time of Delivery and any
Distributions (including Annual Equity Amortization Amounts) paid or payable
on or after the Determination Date at the Purchase Price set forth in the
Notice of Exercise. Upon payment of the Purchase Price in respect of the
Shares being sold by such Seller as provided herein and in such Notice of
Exercise, the Purchaser shall have no further obligations hereunder.
Section 2.3. Payment and Delivery. The certificate(s) representing the
Shares purchased by the Purchaser hereunder at the Time of Delivery shall be
delivered by or on behalf of each Seller to the Purchaser's designated
representative in the place set forth in the Notice of Exercise against
payment in full by the Purchaser of the purchase price as set forth in the
Notice of Exercise to the account specified by Seller.
Section 2.4. Condition to Purchase. The purchase hereunder at the Time of
Delivery shall be subject, in the Purchaser's sole discretion, to the
condition that the representations and warranties of the Sellers in Section
2.6 are, at and as of such Time of Delivery, true and correct.
Section 2.5. Mutual Representations and Warranties. Each party represents
and warrants to the other for its benefit that:
(a) it is a corporation duly incorporated and organized under the laws
of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and perform
its obligations under this Agreement and this Agreement, when executed and
delivered by such party, constitutes the valid and legally binding agreement
of such party; and
(c) the execution and delivery of, and the performance by it of its
obligations under, this Agreement will not result in a breach of or constitute
a default under:
(i) any provision of its charter or articles of incorporation
or its by-laws;
(ii) any agreement or instrument to which it is a party and
which is material to the performance by it of its obligations hereunder; and
(iii) any order, judgment or decree of any court or governmental
agency to which it is a party or by which it is bound.
Section 2.6. Additional Representation and Warranty of Sellers. At the
Time of Delivery, each Seller shall represent and warrant to the Purchaser for
its benefit and for the benefit of its Permitted Assignees that the Shares to
be sold by such Seller hereunder and under the related Notice of Exercise at
the Time of Delivery shall be owned by such Seller free and clear of all
liens, equities or claims.
Section 2.7. Fees and Expenses. All fees and expenses incurred by or on
behalf of each party hereto in connection with the negotiation and execution
of this Agreement and the transfer of the Shares to be sold hereunder at the
Time of Delivery shall be borne by such party.
Section 2.8. Taxes. Each party shall be solely responsible for the
payment of all taxes imposed on it, whether by taxing authorities within
Colombia or elsewhere, arising from or in connection with the transactions
contemplated hereby.
Section 2.9. Covenant to Hold Shares. Each Seller covenants that it will
hold its Shares at all times free and clear of all liens, pledges, charges and
encumbrances and it will not sell, transfer or otherwise dispose of any Shares
owned by it, except that this Section 2.9 shall not prevent transfers of
Shares in accordance with Article Ten of the Oleoducto Central Agreement so
long as any transferee shall assume (without releasing such Seller of its
obligations hereunder, unless the transferee is TCPL (Bermuda) Ltd.), all of
the rights and obligations of a Seller hereunder, which assumption shall be
evidenced by its execution of a counterpart hereof.
ARTICLE THREE
COMMENCEMENT; EFFECTIVENESS
Section 3.1 Commencement. This Agreement shall become effective at the
time the Oleoducto Central Agreement becomes effective.
ARTICLE FOUR
GENERAL
Section 4.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Copy To Agent for
If to the Sellers: Service
------------------------
IPL ENTERPRISES CT CORPORATION
(COLOMBIA) INC. SYSTEM
c/o IPL ENERGY INC. 1633 Broadway
31st Floor Bow Valley Square 2 New York, New York 10019
205 - 5th Avenue S.W. Telefax: (212) 247-2882
Calgary, Alberta, Canada T29 2V7
Telefax: (403) 231-3920
Attention: Benny J. Phillips
TCPL INTERNATIONAL TRANSCANADA PIPELINES FRIED, FRANK, HARRIS,
INVESTMENTS INC. LIMITED SHRIVER & JACOBSON
c/o TRANSCANADA TransCanada PipeLines Tower 1 New York Plaza
PIPELINES LIMITED 111 Fifth Avenue S.W. New York, New York 10004
TransCanada PipeLines Tower P.O. Box 1000, Station M Telefax: (212) 747-1526
111 Fifth Avenue S.W. Calgary, Alberta, Canada T2P 4K5 Attention: Ken Blackman
P.O. Box 1000, Station M Telefax: (403) 267-2668
Calgary, Alberta, Canada T2P 4K5 Attention: Michael Durnin
Telefax: (403) 267-2668
Attention: Michael Durnin
TCPL (BERMUDA) LTD. TRANSCANADA PIPELINES FRIED, FRANK, HARRIS,
c/o FRIED, FRANK, HARRIS, LIMITED SHRIVER & JACOBSON
SHRIVER & JACOBSON TransCanada PipeLines Tower 1 New York Plaza
1 New York Plaza 111 Fifth Avenue S.W. New York, New York 10004
New York, New York 10004 P.O. Box 1000, Station M Telefax: (212) 747-1526
Telefax: (212) 747-1526 Calgary, Alberta, Canada T2P 4K5 Attention: Ken Blackman
Attention: Ken Blackman Telefax: (403) 267-2668
Attention: Michael Durnin
If to the Purchaser:
EMPRESA COLOMBIANA DE CONSULATE GENERAL OF
PETROLEOS - ECOPETROL COLOMBIA
Carrera 13 No. 36-24 10 East 46th Street
Santafe de Bogota, D.C. - Colombia New York, New York 10017
Telefax: (571) 287-0041 Telefax: (212) 972-1725
AttentionL Juan Maria Rendon
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 4.2. Entire Agreement. This Agreement constitutes the entire
Agreement between the parties hereto pertaining to the sale of Shares by each
Seller to the Purchaser and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties hereto,
and there are no warranties, representations or other agreements between the
parties hereto in connection with the purchase and sale of Shares except as
specifically set forth herein. No amendment, supplement, waiver or termination
of this Agreement shall be binding unless executed in writing by the party to
be bound thereby. No waiver of any of the provisions of this Agreement shall
be deemed or shall constitute a waiver of any other provisions (whether or not
similar) nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
Section 4.3. Assignments. Neither of the Sellers may assign this
Agreement nor any of its rights, proceeds or obligations hereunder, or create
enforceable third party rights herein, to or in any person not a party hereto
other than to a transferee of Shares to the extent such transferee is
permitted under Section 2.9 or to any other person as to which Purchaser
consents in writing (provided that such other person shall assume, without
releasing such Seller of its obligations hereunder) all of the obligations of
such Seller hereunder, which assumption shall be evidenced by its execution of
a counterpart hereof.
Section 4.4. Nature of Obligations The obligations of each Seller under
this Agreement to sell Shares shall be unconditional and absolute and shall
not be deferred, excused, released, discharged, or in any way affected by (i)
any right of set off, counterclaim, or defense by reason of any claims against
the Purchaser arising under this Agreement or on any other account whatsoever,
(ii) any sale or other transfer by the Purchaser of any Shares, or (iii) any
change, waiver, extension, indulgence, or other action or omission in respect
of any of the Purchaser's obligations, in each case whether or not the parties
hereto shall have had any notice or knowledge of any of the foregoing.
The obligations of each Seller created by this Agreement, and in
particular the obligation to sell Shares in exchange for cash upon exercise of
the Call, are several, not joint and several with any other party.
Section 4.5. Amendments. This Agreement may not be amended or modified
except with the written consent of the parties hereto and any Permitted
Assignees.
Section 4.6. No Third Party Beneficiaries. Except as otherwise expressly
provided herein to the contrary, this Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
Permitted Assignees, and no other Person shall have any rights hereunder.
Section 4.7. Severability. If, for any reason, any provision of this
Agreement is unenforceable, the remaining provisions hereof shall nevertheless
be carried into effect.
Section 4.8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 4.9. Performance Outside Colombia. The parties acknowledge and
agree that their activities hereunder shall be performed substantially outside
Colombia.
Section 4.10. Commercial Obligations. Each party acknowledges and agrees
that its rights and obligations hereunder are of a commercial and not a
governmental nature.
Section 4.11. Arbitration. Any dispute, controversy or claim arising out
of or relating to this Agreement, or the performance, breach, termination, or
invalidity hereof, shall be settled by arbitration in accordance with the
UNCITRAL Arbitration Rules in effect as of the date hereof. The arbitration
shall be the sole and exclusive forum for resolution of the dispute,
controversy or claim, and the award shall be final and binding. Judgment
thereon may be entered by any court having jurisdiction. The number of
arbitrators shall be three, each of whom shall be disinterested in the
dispute, controversy or claim, and shall have no connection with any party.
Should the services of an appointing authority be necessary, the appointing
authority shall be the American Arbitration Association. The parties and the
appointing authority may appoint from among the nationals of any country,
whether or not a party is a national of that country. The place of arbitration
shall be The City of New York, New York. The arbitration shall be conducted in
the English language and any foreign-language documents presented at such
arbitration shall be accompanied by an English translation thereof. The
arbitrators shall apply the law (except for conflicts of law rules) of the
State of New York without regard to the principles of conflicts of laws.
Section 4.12. Submission to Jurisdiction; Consent to Service. Each of
the parties hereto hereby submits to the exclusive jurisdiction of the United
States District Court for the Southern District of New York (the Specified
Court) with respect to the enforcement of the arbitration provisions of this
Agreement and the non-exclusive jurisdiction of such court with respect to the
enforcement of any award thereunder. Each of the parties hereto irrevocably
appoints the agent for service specified opposite its name in Section 4.1 as
its authorized agent in the Borough of Manhattan in The City of New York upon
which process may be served in any related action, suit or proceeding, and
agrees that service of process upon such agent, and written notice of said
service to such party, by the person serving the same to the address provided
in Section 4.1, shall be deemed in every respect effective service of process
upon such party in any such action, suit or proceeding. Each of the parties
hereto further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and
effect for the duration of this Agreement.
The obligation of a party in respect of any sum due from it to the other
party hereunder expressed in United States dollars, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first Business Day following receipt by such party of any
sum adjudged to be so due in such other currency on which (and only to the
extent that) such party may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to such party
hereunder, the other party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such party against such dollar
shortfall.If the United States dollars so purchased are greater than the sum
originally due to such party hereunder, such party agrees to pay to the other
party an amount equal to the excess of the dollars so purchased over the sum
originally due to such party hereunder.
Section 4.13. Waiver of Immunity. (a) Each party hereto irrevocably
consents to and waives any objection which it may now or hereafter have to the
laying of venue of any proceeding relating to enforcement of the arbitration
provisions of this Agreement brought in the Specified Court and further
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of any such proceeding in
the Specified Court.
(b) To the extent that a party hereto or any of its revenues, assets or
properties shall be entitled, with respect to any proceeding relating to
enforcement of the arbitration provisions of this Agreement at any time
brought against such party or any of its revenues, assets or properties, to
any sovereign or other immunity from suit, from jurisdiction, from attachment
prior to judgment, from attachment in aid of execution of judgment, from
execution of a judgment or from any other legal or judicial process or remedy,
and to the extent that in any jurisdiction there shall be attributed such an
immunity, such party irrevocably agrees not to claim and irrevocably waives
such immunity to the fullest extent permitted by the laws of such jurisdiction
(including, without limitation, the Foreign Sovereign Immunities Act 1976 of
the United States) except, with respect to the Purchaser, as provided under
Article 684 of the Codigo de Procedimiento Civil of Colombia.
Section 4.14. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
Section 4.15. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have hereunto caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
IPL ENTERPRISES (COLOMBIA) INC.
By:
Title:
TCPL INTERNATIONAL INVESTMENTS INC.
By:
Title:
EMPRESA COLOMBIANA DE PETROLEOS -
ECOPETROL
By:
Title:
TCPL (BERMUDA) LTD., a corporation existing under the laws of Bermuda, hereby
acknowledges the assignment, delegation and transfer to it and assumption by
it of all of the rights and obligations of TCPL International Investments Inc.
as a Seller hereunder as if it were a party hereto as of the date first above
written and has caused this Agreement to be executed and delivered by its duly
authorized officers as of , 1994.
TCPL (BERMUDA) LTD.
By:
Title:
<PAGE>
SCHEDULE M
TO OLEODUCTO CENTRAL AGREEMENT
FORM OF ADVANCE TARIFF AGREEMENT
dated as of March 31, 1995
between
OLEODUCTO CENTRAL S.A.
and
[NAME OF THROUGHPUT OBLIGOR]
Not filed here. Executed one is filed at end of exhibit.
SCHEDULE N
to Oleoducto Central Agreement
COMMON SECURITY TRUST AGREEMENT
dated as of June 1, 1995
among
OLEODUCTO CENTRAL S.A.
BANKERS TRUST COMPANY,
as Trustee
and
HOLDERS FROM TIME TO
TIME OF SENIOR DEBT
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
Section Page
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
1.1. Definitions 1
1.2. Interpretation 25
ARTICLE TWO
SENIOR DEBT
2.1. Designation of Senior Debt 26
2.2. Senior Debt Pari Passu; No Recourse to Borrower 27
ARTICLE THREE
ASSIGNED RIGHTS
3.1. Assignment of Rights under Transportation Agreements 29
3.2. Assignment of Rights under Advance Tariff Agreements 29
3.3. Assignment of Rights under Subscription Agreement and Performance Guarantee Agreement 29
3.4. Assigned Rights Held in Trust 29
3.5. Pledge and Assignment of Interests in Accounts 30
3.6. Perfection and Maintenance of Assignments and Security Interests 31
3.7. Rights in Assigned Rights Prior to Enforcement Dicection 31
ARTICLE FOUR
ACCOUNTS
4.1. Common Account 33
4.2. Proceeds Accounts 35
4.3. Subaccounts 35
4.4. Deposits to Proceeds Accounts 36
4.5. Withdrawals from Proceeds Accounts 38
4.6. Investment of Funds in Proceeds Accounts 46
4.7. Reports to Borrower and Senior Lenders 47
ARTICLE FIVE
COMMON REPRESENTATIONS AND WARRANTIES OF BORROWER
5.1. Common Representations and Warranties of Borrower 47
ARTICLE SIX
COMMON COVENANTS
6.1. Common Affirmative Covenants 47
6.2. Common Negative Covenants 59
6.3. Waiver of Covenants 61
ARTICLE SEVEN
COMMON CONDITIONS TO DISBURSEMENTS
7.1. Common Conditions Precedent to Initial Disbursements of Senior Loans 61
ARTICLE EIGHT
PAYMENTS AND PREPAYMENTS
8.1. Prepayment under Single Senior Debt Agreement 62
8.2. Mandatory Prepayments 62
8.3. Partial Payments 62
ARTICLE NINE
EVENTS OF DEFAULT AND REMEDIES
9.1. Common Events of Default 63
9.2. Declaration of Default 65
9.3. Cessation of Default 65
9.4. Timing of Remedies 65
9.5. Common Remedies 66
9.6. Trustee May Enforce Claims 68
9.7. Control of Enforcement Action 68
9.8. Nature of Remedies 68
9.9. Limitation on Suits 69
ARTICLE TEN
INTERCREDITOR ARRANGEMENTS
10.1. Meetings of Senior Lenders in a Senior Lender Group 70
ARTICLE ELEVEN
CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
11.1. Scope of Obligation of Confidentiality 70
11.2. Return of Confidential Information 72
11.3. Announcements 72
11.4. Survival 72
ARTICLE TWELVE
THE TRUSTEE
12.1. Appointment of Trustee 73
12.2. Delivery of Documentation 73
12.3. Attorney-in-Fact 73
12.4. Reliance 74
12.5. Liability 75
12.6. Consultation with Counsel, etc. 75
12.7. Duties 75
12.8. Resignation, Replacement and Successor Trustee 75
12.9. Indemnity 76
12.10. Compensation 77
12.11. Certificates 77
12.12. Stamp and Other Similar Taxes 78
12.13. Information 78
12.14. Limitation on Trustee's Duties in Respect of Assigned Rights 78
12.15. Right to Initiate Judicial Proceedings, etc. 79
12.16. Exculpatory Provisions 79
12.17. Merger of the Trustee 80
12.18. Treatment of Senior lenders in a Senior Lender Group and of TRO Holders by Trustee 80
12.19. Additional Security Arrangements 80
12.20. Miscellaneous 81
ARTICLE THIRTEEN
TERM
13.1. Effectiveness 82
13.2. Termination 82
ARTICLE FOURTEEN
GENERAL
14.1. Notices 83
14.2. Entire Agreement 83
14.3. Amendments 84
14.4. No Third Party Beneficiaries 84
14.5. Conflicts 86
14.6. Language; Spanish Translation 86
14.7. Specific Performance 86
14.8. Governing Law 87
14.9. Performance Outside Colombia 87
14.10. Waiver of Immunity 87
14.11. Submission to Jurisdiction; Consent to Service 87
14.12. Currency Equivalents 88
14.13. Headings; Table of Contents 88
14.14. Counterparts 88
14.15. Waiver of Jury Trial 88
</TABLE>
APPENDICES
A. Senior Debt Schedule
B. Form of Assumption Agreement
C. Form of Assignment and Acknowledgment Agreement for Rights under the
Transportation Agreement
D. Form of Assignment and Acknowledgment Agreement for Rights under the
Advance Tariff Agreement
E. Form of Assignment and Acknowledgment Agreement for Rights under the
Subscription Agreement and the Performance Guarantee Agreement
F. Form of Off-Shore Subaccount Bank Agreement
G. Common Representations and Warranties
H. Colombian Consents and Approvals
I. Common Conditions to Disbursements
J. Subordination Terms
K. Form of Transportation Agreement
L. Form of Advance Tariff Agreement
M. Forms of Legal Opinions
COMMON SECURITY TRUST AGREEMENT
This Agreement, dated as of June 1, 1995, is made among OLEODUCTO CENTRAL
S.A., a sociedad anonima existing under the laws of Colombia (the Borrower),
BANKERS TRUST COMPANY, a New York banking corporation, as trustee (the
Trustee), and the holders from time to time of Senior Debt.
WHEREAS:
A. The Borrower proposes to Incur and secure Senior Debt in separate
Senior Debt Tranches on a limited recourse basis;
B. The Borrower has authorized the execution and delivery of this
Agreement; and
C. All things have been done which are necessary to constitute this
Agreement a valid deed of trust and security agreement for Senior Debt.
NOW, THEREFORE, the Borrower hereby agrees with the Trustee and Senior
Lenders as follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Defined terms in this Agreement and the
Appendices to this Agreement, which are identified by the capitalization of
the first letter of each principal word thereof, have the meanings indicated
below:
Access Agreements means the agreements to be entered into by the
Borrower and third parties relating to the grant to the Borrower by such third
parties of access to certain facilities to be used in connection with the
Oleoducto Central, in each case as the same may thereafter be amended from
time to time in accordance with the terms thereof.
Additional Cusiana Petroleum means the volume of Petroleum from the
Cusiana Area nominated for shipment through a Segment of the Oleoducto Central
by an Initial Shipper that is in excess of the product of (a) the aggregate
volume of Petroleum produced from the Cusiana Area during the relevant period
multiplied by (b) such Initial Shipper's undivided interest in the Cusiana
Area under the JOA and the Association Contracts as of the date hereof
expressed as a percentage, but only to the extent that such excess has
resulted from the direct or indirect acquisition of an additional undivided
interest therein by such Initial Shipper from another Initial Shipper (other
than in connection with a corresponding assignment to such Initial Shipper
from such other Initial Shipper of entitlement to transportation capacity or
Release Capacity for the duration of such interest under the Transportation
Agreement with such other Initial Shipper).
Advance Tariff Agreements means the Advance Tariff Agreements
substantially in the form attached hereto as Appendix L, each dated as of
March 31, 1995, between the Borrower and each Initial Shipper as Throughput
Obligor thereunder, as the same may be amended from time to time in accordance
with the terms thereof.
Advance Tariff Payment means any payment by the Throughput Obligor
made under an Advance Tariff Agreement.
Affiliate of a Person means another Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
such Person. For purposes of Section 6.1(i) and paragraph (n) of Appendix G,
each Person in an Initial Shipper Group is deemed to be an Affiliate of
Ocensa.
Annual Operating Budget means the operating budget (including the
then required level of maintenance capital expenditures) and operating plan
for a fiscal year identified as such and approved by the Borrower's Board of
Directors.
Assigned Rights means with respect to each Senior Lender Group and
subject to the terms of this Agreement:
(a) the following rights against Persons in the Related Initial
Shipper Group including, in the case of Ecopetrol, the Canadian Group, which
have been assigned by the Borrower to the Trustee to be held in trust for the
benefit of such Senior Lender Group and to be exercised in accordance with
this Agreement:
(i) to request and receive Tariffs, Tariff Advances and proceeds
from Transportation Notes and to exercise remedies and other rights, and to
receive proceeds therefrom, under the Transportation Agreement with the
Initial Shipper in the Related Initial Shipper Group, assigned pursuant to
Section 3.1 and the Assignment Agreement with respect thereto substantially in
the form attached hereto as Appendix C,
(ii) to request and receive Advance Tariff Payments (other than
Excess Advance Tariff Payments and voluntary Advance Tariff Payments) and to
exercise remedies and other rights, and to receive proceeds therefrom, under
the Advance Tariff Agreement with the Throughput Obligor in the Related
Initial Shipper Group, assigned pursuant to Section 3.2 and the Assignment
Agreement with respect thereto substantially in the form attached hereto as
Appendix D, and
(iii) (A) to cause payments to be made to the Borrower for
Equity Contributions after delivery of a Notice of Call therefor (as defined
in the Subscription Agreement) and, in certain circumstances in the event of
Bankruptcy of the Borrower, Decommissioning or a unanimous decision of the
Board of Directors not to continue with the Oleoducto Central, to receive
Equity Contributions, in each case, under the Subscription Agreement with the
Shareholder in the Related Initial Shipper Group and, in the case of
Ecopetrol, the Canadian Group, and to cause payments to be made to the
Borrower for Subordinated Notes under a subscription agreement with such
Shareholder(s) substantially in the form of the Subscription Agreements and to
exercise remedies thereunder, and (B) to cause to be made to the Borrower, or
to receive as the case may be, payments under the Performance Guarantee
Agreement with a Person in the Related Initial Shipper Group and, in the case
of Ecopetrol, the Canadian Group, and to exercise remedies thereunder
pursuant, in each of clauses (A) and (B) above, to Section 3.3 and the
Assignment Agreement with respect thereto substantially in the form attached
hereto as Appendix E,
in each case (i) and (ii) to the extent the proceeds from such rights are or
are to be deposited directly or indirectly (from the Common Account) into the
Proceeds Account assigned to the Trustee to be held in trust for the benefit
of such Senior Lender Group;
(b) an undivided interest in the following rights against Persons in
the Initial Shipper Groups which have been assigned by the Borrower to the
Trustee to be held in trust for the benefit of all Senior Lender Groups, as
their interests therein may appear, and to be exercised in accordance with
this Agreement:
(i) to request and receive Tariffs to the extent such Tariffs
are or are to be deposited into the Common Account pursuant hereto and to
exercise remedies and other rights, and to receive proceeds therefrom, under
the other Transportation Agreements, and
(ii) to request and receive Excess Advance Tariff Payments and
to exercise remedies and other rights, and to receive proceeds therefrom,
under the other Advance Tariff Agreements,
in each case (i) and (ii) in the proportion that such payments into the
Common Account are allocable to the Initial Shipper or Throughput Obligor in
the Related Initial Shipper Group and are to be withdrawn therefrom and
deposited into the Proceeds Account maintained by the Trustee to be held in
trust for the benefit of such Senior Lender Group; and
(c) a security interest of the Trustee in the Proceeds Account
maintained for the benefit of such Senior Lender Group and in the Common
Account to the extent maintained for the benefit of such Senior Lender Group
pursuant to Section 3.5.
Assignment Agreements means, with respect to a Senior Lender Group,
the assignment and acknowledgement agreements, substantially in the forms
attached hereto as Appendices C, D and E, with respect to Financing Agreements
entered into with Persons in the Related Initial Shipper Group.
Association Contracts means the two contratos de asociacion between
Ecopetrol and Triton Colombia, dated 11th June, 1982 (relating to Santiago de
las Atalayas-1) and 5th May, 1988 (relating to Tauramena), and the contrato de
asociacion between Ecopetrol and TOTAL Exploratie, dated December 3, 1990
(relating to Rio Chitamena), in each case as the same have been, and may be
amended from time to time in accordance with the terms hereof.
Authorized Investments means one or more of the following:
(a) obligations maturing or capable of redemption by the holder
not more than 12 months after the date of acquisition thereof and issued or
guaranteed by any government, governmental agency or multilateral
intergovernmental organization similar obligations of which have a rating at
the time of such acquisition of not less than AA- from Standard & Poor's
Ratings Group or equivalent from another Internationally Recognized
Statistical Rating Agency;
(b) demand deposits, time deposits, certificates of deposit or
other obligations (including acceptances) maturing or capable of redemption by
the holder not more than 12 months after the date of investment or acquisition
which are issued, accepted or guaranteed by a bank having a rating at the time
of such investment or acquisition of not less than A from Standard & Poor's
Ratings Group or equivalent from another Internationally Recognized
Statistical Rating Agency and having a capital and surplus of at least $500
million;
(c) commercial paper having a rating at the time of acquisition
of at least A-1 from Standard & Poor's Ratings Group and P-1 from Moody's
Investors Service, Inc., corporate promissory notes or other obligations
maturing or capable of redemption by the holder not more than three months
after the date of acquisition which (i) have, or are supported by an
unconditional guarantee from a corporation similar obligations of which have,
a rating at the time of such acquisition of at least AA- from Standard &
Poor's Ratings Group or equivalent from another Internationally Recognized
Statistical Rating Agency, or (ii) are obligations which are supported by an
unconditional guarantee or letter of credit from any bank referred to in
clause (b);
(d) short-term (maturity of 90 days or less) debt securities,
commercial paper or treasury deposits of the ultimate parent entity of the
Persons in the related Initial Shipper Group which have a rating at the time
of acquisition of at least A-1 or AA- by Standard & Poor's Ratings Group or
equivalent from another Internationally Recognized Statistical Rating Agency;
and
(e) money market funds having a rating from Standard & Poor's
Ratings Group or Moody's Investors Service, Inc. in the highest investment
category granted thereby at the time of acquisition (including funds for which
the Trustee or any of its Affiliates is investment manager or advisor);
that are, in each case, Dollar-denominated and in which a security interest
may be created hereunder and perfected pursuant to Section 3.6.
Available Capacity has the meaning assigned to it in the
Transportation Agreement.
Available Cash means, on any date, all cash (including short-term
marketable securities maturing on or before such date or that can be sold on
or before such date without material economic penalty) then held by the
Borrower outside the Proceeds Accounts and the Common Account maintained by
the Trustee, less (a) funds withdrawn from any Proceeds Account for the
payment of Operating and Maintenance Costs and pre-Completion Capital
Expenditures, but which have not yet been applied, and (b) any funds held by
the Borrower outside any Proceeds Account or the Common Account representing
proceeds of Senior Debt or Equity Contributions, Net Proceeds, Insurance
Proceeds and Expropriation Compensation, in each case to the extent dedicated
to fund Capital Expenditures or to prepay Senior Debt.
Average Life means, as of the date of determination, with respect to
any Debt, the quotient obtained by dividing (a) the sum of the products of the
numbers of years from the date of determination to the dates of each
successive scheduled principal payment of such Debt and the amount of such
principal payments, by (b) the sum of all such principal payments.
Bankruptcy of a Person means (a) entry by any competent governmental
authority of any jurisdiction or a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of such Person in an
involuntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or (ii) an involuntary or contested decree
or order adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, concordato, arrangement,
adjustment or composition of or in respect of such Person under any applicable
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such Person or of any substantial
part of the property of such Person, or ordering the winding up or liquidation
of the affairs of such Person; or
(b) commencement by a Person of a voluntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization, concordato or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by such Person to the entry of a decree
or order for relief in respect of such Person in an involuntary case or
proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against such Person, or the filing by such Person of a petition
or answer or consent seeking reorganization or relief under any applicable
law; or consent by such Person to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of such Person or of any
substantial part of the property of such Person, or the making by such Person
of an assignment for the benefit of creditors, or the admission by such Person
in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by such Person in furtherance of any such
action.
Base Revenue Requirement has the meaning assigned to it in the
Transportation Agreements.
Board of Directors has the meaning assigned to it in the By-Laws of
the Borrower.
Board Resolution means a resolution duly adopted by the Board of
Directors in accordance with the By-Laws.
Borrower has the meaning assigned to it in the first page of this
Agreement and its successors and permitted assigns.
BP Pipelines means BP Colombia Pipelines Limited, a company existing
under the laws of England and Wales.
BPEC means BP Exploration Company (Colombia) Limited, a company
existing under the laws of England and Wales.
Business Day means a day in which commercial banks in Santafe de
Bogota, Colombia, London, England, Tokyo, Japan, and The City of New York, New
York are permitted to be open for domestic and international business. The
Borrower shall provide an Officers' Certificate to the Trustee annually on or
before June 1 of each year, setting forth which days in the calendar year are
not Business Days.
By-Laws means the by-laws of the Borrower included in public deed
no. 4747 of December 14, 1994 granted before notary public no. 38 of Santafe de
Bogota, as the same may be amended from time to time in accordance with the
terms thereof.
Canadian Group means TCPL International Investments Inc. and IPL
Enterprises, their respective successors and permitted assigns as Shareholders
and their respective Affiliates that are parties to Performance Guarantee
Agreements and their respective successors and permitted assigns.
Capital Budget means the budget for Capital Expenditures not
included in the Annual Operating Budget for a fiscal year identified as such
and approved by the Borrower's Board of Directors.
Capital Expenditures means, with respect to any Person for any
period, the aggregate of all direct and indirect expenditures (including
capitalized interest) of such Person during such period which are required to
be included in property, plant or equipment, good will, rights of way and
other long-term intangible assets or a similar tangible or intangible property
account, including, without limitation, additions to equipment and leasehold
improvements, on a consolidated balance sheet of such Person prepared in
accordance with generally accepted accounting principles in Colombia.
Capital Stock of any Person means any and all shares, interests,
participations or other equivalents (however designated and whether or not
such shares have any voting rights) of corporate stock of such Person.
Cash-on-Hand means, with respect to any Initial Shipper Group, on
any date, all cash (including short-term marketable securities maturing on or
before such date or that can be sold on or before such date without material
economic penalty) then held in the Proceeds Account maintained by the Trustee
for the benefit of the Related Senior Lender Group, plus (a) funds withdrawn
from such Proceeds Account for the payment of Operating and Maintenance Costs
and pre-Completion Capital Expenditures, but which have not yet been applied,
(b) funds held in the Common Account which are allocable to such Proceeds
Account, and (c) such Initial Shipper Group's Proportionate Share of any
Available Cash.
Certificated Security means an Authorized Investment evidenced by a
certificate.
Cessation Notice has the meaning assigned to it in Section 9.3.
CITCOL means CIT Colombiana S.A., a sociedad anonima existing under
the laws of Colombia.
Collateral means Assigned Rights.
Colombia means the Republic of Colombia.
Colombian Subaccount has the meaning assigned to it in Section
4.3(a).
Colombian Subaccount Bank has the meaning assigned to it in Section
4.3(a).
Common Account has the meaning assigned to it in Section 4.1.
Completion means the date after all four Segments of the Oleoducto
Central have been commissioned for purposes of transporting shipments of
Petroleum and on which the five millionth barrel of Petroleum is shipped
through the Oleoducto Central from the Cusiana receipt point to the Port of
Covenas delivery point, all as certified in a resolution adopted by the Board
of Directors.
Confidential Information has the meaning assigned to it in Section
11.1.
Cusiana Area means the Cusiana and Cupiagua oil fields located
within the jurisdiction of the Department of Casanare, Colombia to which the
Association Contracts relate.
Debt means (without duplication), with respect to any Person,
whether recourse is to all or a portion or none of the assets of such Person
and whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations Incurred in
connection with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) any liability under interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements, interest rate insurance,
currency swap agreements, currency options, futures or purchase or sale
agreements or other agreements and arrangements designed to protect against
fluctuations in interest rates and currency exchange rates, (v) every
obligation of such Person issued or assumed as the deferred purchase price of
property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business), and (vi) every
obligation of the type referred to in clauses (i) through (v) of another
Person and all dividends declared or to be declared by another Person the
payment of which, in either case, such Person has guaranteed or for which such
Person is responsible or liable, directly or indirectly, as obligor, guarantor
or otherwise.
Decommissioning shall occur if the Borrower voluntarily ceases all
or substantially all construction and transportation activities of all four
Segments of the Oleoducto Central as evidenced by a Board Resolution. If the
Borrower voluntarily ceases all or substantially all such construction or
transportation activities and such cessation continues without interruption
for 180 days, the Trustee, if requested by Majority Senior Lenders in a Senior
Lender Group, shall have the right to deliver to the Borrower a notice
requesting a certificate to the effect that the Borrower intends to cause all
or substantially all such construction or transportation activities to resume
as soon as is commercially practicable. If (a) within 90 days following
delivery of such notice the certificate is not delivered or the Borrower does
not resume all or substantially all such activities, (b) the Borrower timely
delivers such certificate but does not resume all or substantially all such
activities within 90 days following such delivery, or (c) the Borrower timely
delivers such certificate and resumes such activities but does not maintain
such activities as evidenced by a cessation which continues without
interruption for an additional 90 days after such resumption of activities,
then the Trustee, if requested by Supermajority Senior Lenders in such Senior
Lender Group or Groups, as the case may be, shall have the right to declare
that Decommissioning has occurred; provided, however, that such declaration of
Decommissioning shall only be effective (i) for the purposes of Section 6.1(s)
with respect to such Senior Lender Group or Groups which are identified
therein, and not with respect to any other Senior Lender Group, and (ii) for
purposes of Sections 4.4(a)(iii) and 6.1(m) with respect to all Senior Lender
Groups. For purposes of this definition, the Borrower shall not be deemed to
have voluntarily ceased construction or transportation activities of the
Oleoducto Central if the cessation of construction or transportation
activities is caused by Force Majeure.
Default has the meaning assigned to it in Section 9.2.
Default Interest Rate applicable to any Senior Loan means the
(non-default) annual interest rate set forth in the related Senior Debt
Agreement plus no more than 2%.
Distribution shall mean any distribution by the Borrower by means of
any dividend payment, whether in cash, shares, other equity interests or
otherwise, any payment or application of any of its assets to purchase, redeem
or otherwise retire Shares or equity interests held by a Shareholder, any
distribution by way of reduction of capital, split-up (escision) and
liquidation or otherwise in respect of any of the Shares or equity interests
held by such Shareholder or any interest or other payment in respect of, or
any repayment, repurchase or redemption of, Subordinated Notes held by or on
behalf of a Shareholder.
Dividend Trust Agreement means the Dividend Trust Agreement, to be
entered into among the Borrower, each of the Shareholders and the trustee
named therein, as the same may be amended from time to time in accordance with
the terms thereof.
$ or Dollars means United States dollars.
Ecopetrol means Empresa Colombiana de Petroleos - Ecopetrol, an
Empresa Industrial y Comercial del Estado existing under the laws of Colombia
and wholly owned by Colombia.
Enforcement Direction has the meaning assigned to it in Section
9.5(e).
Equity Contribution means (a) the acquisition of Shares or other
shares of capital stock of the Borrower in exchange for cash pursuant to
Subscription Agreements, (b) the acquisition of Subordinated Notes in exchange
for cash pursuant to subscription agreements substantially in the form of the
Subscription Agreements, and (c) the contribution of any other funds to the
Borrower under or pursuant to Subscription Agreements.
Established Third Party Premium has the meaning assigned to it in
the Transportation Agreements.
Estimated Operating Costs means, as of a Payment Date, the amount of
Operating and Maintenance Costs then payable but unpaid plus the Borrower's
estimate of the amount of Operating and Maintenance Costs that will become
payable during the period commencing on such Payment Date and terminating on
the day immediately prior to the next succeeding Payment Date which in each
case have not been included in any Officers' Certificate previously delivered
pursuant to Section 4.5(d)(ii) or (iii).
Event of Default has the meaning assigned to it in Section 9.1.
Excess Advance Tariff Payment means an Advance Tariff Payment by a
Throughput Obligor in an Initial Shipper Group resulting from a Revenue
Shortfall calculated by reference to the amounts in clause (i) of the
definition of Base Revenue Requirement to the extent that such Advance Tariff
Payment is in excess of the amount that would be payable by it had such
payment been calculated on the basis of such Throughput Obligor's
Proportionate Share of such amounts instead of its Weighted Average Throughput
Share of such amounts.
Excess Cusiana Petroleum means the volume of Petroleum from the
Cusiana Area nominated for shipment through a Segment of the Oleoducto Central
by an Initial Shipper that is in excess of the product of the aggregate volume
of Petroleum produced from the Cusiana Area during the relevant period
multiplied by such Initial Shipper's undivided interest in the Cusiana Area
under the JOA and the Association Contracts expressed as a percentage, other
than Additional Cusiana Petroleum.
Expropriation Compensation means all value (whether in the form of
money, securities, property or otherwise) paid or payable by Colombia or its
agencies or instrumentalities, in whole or partial settlement of claims,
whether or not resulting from judicial proceedings and whether paid or payable
within or outside Colombia, as compensation for or in respect of Expropriatory
Action.
Expropriatory Action means any action or series of actions taken,
authorized, ratified or acquiesced in by Colombia or a governing authority
which is in de facto control of part of Colombia for the appropriation,
confiscation, expropriation or nationalization (by intervention, condemnation
or other form of taking), whether with or without compensation and whether
under color of law or otherwise (including through confiscatory taxation or
imposition of confiscatory charges) of ownership or control of the Oleoducto
Central, or any substantial portion thereof, held by the Borrower.
Extraordinary Operating Costs means as of any date the amount of
Operating and Maintenance Costs then payable but unpaid plus the amount of
Operating and Maintenance Costs that the Borrower estimates will become
payable prior to the next Monthly Payment Date which in each case have not
been included in any Officers' Certificate previously delivered pursuant to
Section 4.5(d)(ii) or (iii).
Financing Agreements means, with respect to a Senior Lender Group,
the Transportation Agreement, the Advance Tariff Agreement, the Subscription
Agreement and, if applicable, the Performance Guarantee Agreement between the
Borrower and Persons in the Related Initial Shipper Group and, in the case of
Ecopetrol, the Canadian Group, rights under which have been assigned to the
Trustee for purposes of the exercise of such rights and the application of any
proceeds thereof in accordance with the terms of this Agreement, in each case
as such agreements may be amended from time to time in accordance with the
terms thereof.
Force Majeure means an act of God, labor dispute and industrial
action of any kind (including, without limitation, a strike, interruption,
slowdown and other similar action on the part of organized labor), a lockout,
act of the public enemy, war (declared or undeclared), civil war, sabotage,
blockade, revolution, riot, insurrection, civil disturbance, terrorism,
epidemic, cyclone, tidal wave, landslide, lightning, earthquake, flood, storm,
fire, adverse weather conditions, expropriation, nationalization, act of
eminent domain, laws, rules, regulations or orders of governmental authority,
explosion, breakage or accident to machinery or equipment or pipe or
transmission line or other facility, embargo, inability to obtain or delay in
obtaining equipment, materials, transport, or any other event whether similar
to the foregoing or not which is not within the reasonable control of the
Borrower and which has a material adverse effect on the ability of the
Borrower to perform its obligations or continue its construction or
transportation activities, including, without limitation, any such event which
has a material adverse effect on the ability of the Borrower to transport
Petroleum as contemplated by the Transportation Agreements.
Incur means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Debt or other
obligation or the recording, as required pursuant to generally accepted
accounting principles in Colombia or otherwise, of any such Debt or other
obligation on the balance sheet of such Person (and Incurrence, Incurred,
Incurrable and Incurring shall have meanings correlative to the foregoing);
provided, however, that a change in such generally accepted accounting
principles that results in an obligation of such Person that exists at such
time becoming Debt shall not be deemed an Incurrence of such Debt.
Initial Shipper Bridge Loan means a bridge loan to the Borrower from
an Initial Shipper or an Affiliate of such Initial Shipper or a financial
institution on its behalf to fund the amount of Senior Debt under the Senior
Debt Tranche Related to its Initial Shipper Group which the Borrower, despite
its best efforts, has been unable to obtain in accordance with its then
current financing plan.
Initial Shipper Group means an Initial Shipper and its Affiliates
that are (a) a Shareholder, (b) a party to a Transportation Agreement, (c) a
party to the Advance Tariff Agreement, and, (d) if applicable, a party to a
Performance Guarantee Agreement as set forth in Appendix A and in each case
each of their respective successors and permitted assigns; provided, however,
that a Person in an Initial Shipper Group that acquires by a permitted
assignment from a Person in another Initial Shipper Group an interest in a
Subscription Agreement, Transportation Agreement, Advance Tariff Agreement or
Performance Guarantee Agreement, as the case may be, pursuant hereto and
thereto shall, to the extent of such interest, be considered only a Person in
such other Initial Shipper Group.
Initial Shippers means Ecopetrol, BPEC, TOTAL Exploratie and Triton
Colombia and each of their respective successors and permitted assigns.
Insurance Proceeds means proceeds from insurance for casualties on
property or assets of the Borrower.
Internationally Recognized Statistical Rating Agency means Standard
& Poor's Ratings Group, Moody's Investors Service, Inc., Duff & Phelps and
Fitch's Investor Services and each of the respective successors and assigns to
substantially all of their respective businesses whose business is primarily
the rating of debt and other securities of corporate and other issuers.
IPL Energy means IPL Energy Inc., a corporation existing under the
federal laws of Canada.
IPL Enterprises means IPL Enterprises (Colombia) Inc., a corporation
existing under the laws of the Cayman Islands.
JOA means the Joint Operating Agreement for the Santiago de las
Atalayas-1, Tauramena and Rio Chitamena Association Contract Areas among BP
Exploration Company (Colombia) Limited, TOTAL Exploratie en Produktie MIJ B.V.
and Triton Colombia, Inc., dated as of March 29, 1994, as the same may be
amended from time to time in accordance with the terms thereof.
Lien means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
Liquidity Facilities means unsecured lines of credit or loan
facilities entered into by the Borrower and (a) a bank or other financial
institution, (b) one or more Initial Shippers or their Affiliates or (c) one
or more Shareholders or their Affiliates, limited in aggregate principal
amount to $5 million, from time to time to fund the Borrower's working capital
and other short-term liquidity needs.
Majority Senior Lenders means, with respect to a Senior Lender
Group, Senior Lenders in such Senior Lender Group holding (or representing in
the case of Senior Loans issued under a trust indenture or trust deed) in the
aggregate more than 50% of the principal amount of Senior Debt outstanding
under the Related Senior Debt Tranche.
Mandatory Prepayment has the meaning assigned to it in Section 8.2.
Minimum Tariffs has the meaning assigned to it in the Transportation
Agreements.
MME means the Colombian Ministry of Mines and Energy and any
successor ministry thereto.
Monthly Payment Date means the first Business Day of each month.
Net Proceeds from any sale or other asset disposition by any Person
means cash or readily marketable cash equivalents received (including by way
of sale or discounting of a note, installment receivable or other receivable,
but excluding any other consideration received in the form of assumption by
the acquiree of Debt or other obligations relating to such properties or
assets or received in any other non-cash form) therefrom by such Person, net
of (i) all legal, title and recording tax expenses, commissions and other fees
and expenses Incurred and all national, regional, foreign and local taxes
required to be accrued as a liability as a consequence of such sale or asset
disposition and (ii) all payments made by such Person on any Debt which is
secured by such assets in accordance with the terms of any Lien upon or with
respect to such assets or which must by the terms of such Lien, or in order to
obtain a necessary consent to such sale or asset disposition or by applicable
law, be repaid out of the proceeds from such sale or asset disposition.
Non-Cash Items has the meaning assigned to it in the Transportation
Agreements.
Ocensa means the Borrower.
Officers' Certificate of a Party means a certificate signed by (a)
the Chairman of the Board, the President, a Vice President, the Chief
Operating Officer or a Director and (b) another Director, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of such party.
Oleoducto Central means the existing and to be constructed pipeline
transportation systems from the Cusiana Area to the Port of Covenas, Colombia
owned and to be owned by the Borrower, including upgraded facilities at the
Port of Covenas, comprising a pipeline system comprised of four Segments for
the transportation of Petroleum (as hereinafter defined) approximately 800
kilometers in length, including related pumping, storage and loading
facilities and such systems, port facilities, segments and other facilities as
the Borrower may own or operate in whole or in part from time to time,
together with any additional related facilities other than any Sole Risk
Facilities.
Oleoducto Central Agreement means the Oleoducto Central Agreement,
dated as of December 14, 1994, among the Borrower and the Shareholders, as the
same has been and may be amended and restated from time to time in accordance
with the terms thereof.
Operating and Maintenance Costs has the meaning assigned to it in
the Transportation Agreements.
Operating Segment has the meaning assigned to it in the
Transportation Agreements.
Operator means CITCOL acting under the Technical Services and
Management Agreement or any operator of the Oleoducto Central under a
successor agreement and their respective successors and permitted assigns.
Opinion of Counsel means a written opinion of counsel, who may be
counsel to the Borrower, and who shall be acceptable to the Trustee. Any such
opinion of counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Borrower stating that the information with respect to such
factual matters is in the possession of the Borrower, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Overfund Certificate means a joint Officers' Certificate of two or
more Shareholders which are Persons in different Initial Shipper Groups
delivered to the Borrower and the Trustee designating a certain amount of
Senior Debt under one or more Senior Debt Agreements as Overfund Senior Debt
pursuant to Section 5.2(c) of the Oleoducto Central Agreement, the Overfund
Initial Shipper Group and the Underfund Initial Shipper Group(s) with respect
to such Overfund Senior Debt and the extent of deposits required to be made as
a result thereof pursuant to clauses (i) and (iv) of Section 4.4(a).
Overfund Initial Shipper Group means an Initial Shipper Group
certain obligations of which under its Financing Agreements constitute
Assigned Rights supporting Overfund Senior Debt as set forth in an Overfund
Certificate.
Overfund Senior Debt means Senior Debt under a Senior Debt Tranche
designated as such in an Overfund Certificate, the proceeds of which have been
used by the Borrower prior to the time such proceeds were required to be used
in accordance with the Borrower's projected use of funds from time to time.
Overlifting Initial Shipper means an Initial Shipper nominating for
shipment through a Segment of the Oleoducto Central Excess Cusiana Petroleum.
Overutilizer Premiums has the meaning assigned to it in the
Transportation Agreements.
Overutilizer Tariff has the meaning assigned to it in the
Transportation Agreements.
The term pari passu, when used with respect to the ranking of any
Debt of any Person in relation to other Debt of such Person, means that each
such Debt (a) either (i) is not subordinated in right of payment to any other
Debt of such Person or (ii) is subordinate in right of payment to the same
Debt of such Person as is the other and is so subordinate to the same extent
and (b) is not subordinate in right of payment to the other Debt or to any
Debt of such Person as to which the other is not so subordinate.
Parties means the Borrower, the Trustee and the Senior Lenders
identified in Appendix A as in effect from time to time or, with respect to
Senior Debt pursuant to Section 2.1(b), as set forth in the definition of TRO
Holders herein.
Past Operating Costs means, with respect to a Proceeds Account, any
amount in respect of Operating and Maintenance Costs that has been included in
an Officers' Certificate pursuant to Section 4.5(d)(ii) or (iii) and called
for from such Proceeds Account as part of the Related Initial Shipper Group's
Proportionate Share of Estimated Operating Costs or of Extraordinary Operating
Costs pursuant to Section 4.5(a)(i) or (c)(i) but was not withdrawn due to
lack of funds therein.
Past pre-Completion Capital Expenditures means, with respect to a
Proceeds Account, any amount in respect of pre-Completion Capital Expenditures
that has been included in an Officers' Certificate pursuant to Section
4.5(d)(ii) and called for from such Proceeds Account as part of the Related
Initial Shipper Group's Proportionate Share of pre-Completion Capital
Expenditures pursuant to Section 4.5(a)(ii) or (c)(ii) but was not withdrawn
due to lack of funds therein.
Payment Date means a Monthly Payment Date or a Semi-annual Payment
Date, as the case may be.
Performance Guarantee Agreements means the Performance Guarantee
Agreements executed and delivered for the benefit of the Borrower by each of
BP International Limited, TOTAL S.A., Triton Energy Corporation, IPL Energy
and TransCanada PipeLines, in respect of Subscription Agreements between the
Borrower and their respective Affiliates, in each case as the same may be
amended from time to time in accordance with the terms thereof.
Permitted Encumbrances means (a) Liens for taxes not delinquent or
being contested in good faith, by appropriate proceedings and for which
adequate reserves are maintained by the Borrower in accordance with generally
accepted accounting principles, (b) Liens for customs duties that have been
deferred in accordance with Colombian law, (c) deposits or pledges made in the
ordinary course of business to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance, (d) deposits or pledges made to secure bids, tenders, contracts
(other than contracts for the payment of money), operating leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business, (e) statutory mechanics',
workmen's, materialmen's, carrier's, supplier's, vendor's, warehousemen's or
other like Liens arising in the ordinary course of business with respect to
obligations which are not due or which are being contested in good faith, (f)
easements, rights of way, reservations, restrictions, covenants, party-wall
agreements, agreements for joint or common use, landlord's rights of distraint
and other similar imperfections of title on real estate, provided that such
easements and imperfections do not materially interfere with the operation of
the Oleoducto Central, (g) attachment, judgment and other similar Liens
arising in connection with court proceedings that are being contested in good
faith, (h) Liens on property of a Person existing at the time such Person is
merged into or consolidated with any Subsidiary of the Borrower, and (i) the
assignments and security interests created by or pursuant to this Agreement.
Person means any individual, corporation, limited liability company,
partnership, joint venture, association, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pesos or Ps means the lawful currency of Colombia.
Petroleum means crude oil and other liquid hydrocarbons, including
liquid hydrocarbons which are recovered or extracted from natural gas.
Political Events Agreement means the Political Events Agreement,
dated as of December 14, 1994, among the Borrower and the Shareholders, as the
same may be amended from time to time in accordance with the terms thereof.
Pre-Completion Accrued Returns has the meaning assigned to it in the
Oleoducto Central Agreement.
Proceeds Account has the meaning assigned to it in Section 4.2.
Project Agreements means the Oleoducto Central Agreement, the Voting
Trust Agreement, the Dividend Trust Agreement, the Political Events Agreement,
the Promesas de Compraventa, the Technical Services and Management Agreement
and the Access Agreements.
Promesas de Compraventa means the Promesas de Compraventa, dated as
of December 15, 1994, entered into between (a) the Borrower and Ecopetrol, and
(b) the Borrower and the parties to the Association Contracts, as the same may
be amended from time to time in accordance with the terms thereof.
Proportionate Share means, with respect to the Ecopetrol Initial
Shipper Group, 60%, with respect to each of the BP Initial Shipper Group and
the TOTAL Initial Shipper Group, 15.2%, and with respect to the Triton Initial
Shipper Group, 9.6%. For purposes of this Agreement, an Initial Shipper
Group's Proportionate Share of Operating and Maintenance Costs, Estimated
Operating Costs, Extraordinary Operating Costs and/or Pre-Completion Capital
Expenditures shall not include any amount that was computed and required to be
paid as part of Tariffs or an Advance Tariff Payment by an Initial Shipper or
a Throughput Obligor in another Initial Shipper Group and was not paid by such
Person.
Pro Rata Payment means a payment to a Senior Lender in a Senior
Lender Group on any date on which (a) interest paid to such Senior Lender in
such Senior Lender Group on such date bears the same proportion to the total
interest payments made to all Senior Lenders in such Senior Lender Group on
such date as (i) the total Senior Debt Obligations for interest due to such
Senior Lender in such Senior Lender Group on such date bears to (ii) the total
Senior Debt Obligations for interest due to all Senior Lenders in such Senior
Lender Group on such date, (b) principal paid or prepaid to such Senior Lender
in such Senior Lender Group on such date bears the same proportion to the
total principal payments or prepayments made to all Senior Lenders in such
Senior Lender Group on such date as (i) the total Senior Debt Obligations for
principal due to such Senior Lender in such Senior Lender Group on such date
bears to (ii) the total Senior Debt Obligations for principal due to all
Senior Lenders in such Senior Lender Group on such date, in each case not
including any principal payable by way of an acceleration of principal unless
each Senior Loan has been accelerated (unless an Enforcement Direction has
been given with respect to a Senior Lender Group, in which case all Senior
Loans owing to Senior Lenders in such Senior Lender Group will be deemed for
purposes of this definition to have been accelerated) and (c) premiums, fees,
commissions, indemnities and all amounts other than interest and principal
paid to such Senior Lender in such Senior Lender Group on such date bears the
same proportion to the total premiums, fees, commissions, indemnities and such
other amounts paid to all Senior Lenders in such Senior Lender Group on such
date as (i) the total Senior Debt Obligations for premiums, fees, commissions,
indemnities and such other amounts due to such Senior Lender in such Senior
Lender Group on such date bears to (ii) the total Senior Debt Obligations for
premiums, fees, commissions, indemnities and such other amounts due to all
Senior Lenders in such Senior Lender Group on such date.
Related means
(a) when qualifying an Initial Shipper Group, a Senior Lender Group
or a Senior Debt Tranche with respect to each other, the Initial Shipper Group
identified as related to such Senior Debt Tranche in Appendix A, such Senior
Debt Tranche and the Senior Lender Group providing Senior Debt under such
Senior Debt Tranche, as the case may be; and
(b) when qualifying TRO Holders with respect to an Initial Shipper
Group, Senior Lender Group or Senior Debt Tranche, the TRO Holders under or
pursuant to the Transportation Agreement with a Person in such Initial Shipper
Group or the Senior Lender Group or the Senior Debt Tranche Related to such
Initial Shipper Group, as the case may be.
Related Proceeding has the meaning assigned to it in Section 14.12.
Revenue Shortfall has the meaning assigned to it in the Advance
Tariff Agreements.
Segment has the meaning assigned to it in the Transportation
Agreement.
Semi-annual Payment Date means the Monthly Payment Date in March and
September.
Senior Debt has the meaning assigned to it in Section 2.1(a).
Senior Debt Agreements means the individual loan agreements,
indentures, fiscal agency agreements and interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements entered
or to be entered into between the Borrower and the respective Senior Lender
named therein, as the case may be, with respect to the loans, bonds, notes and
other forms of limited recourse indebtedness of the Borrower which are not
subordinated to any other liability of the Borrower (except as required by
applicable law) to be provided from time to time to the Borrower by such
Senior Lender and identified in Appendix A, as such agreements and indentures
may be amended and supplemented in accordance with the terms thereof or
replaced from time to time. With respect to any Senior Lender pursuant to
Section 2.1(b), references to Senior Debt Agreements are to its Transportation
Note and/or the Transportation Agreement under or pursuant to which its
Transportation Repayment Obligations are owed to it.
Senior Debt Commitment means the aggregate principal amount of
Senior Debt any Senior Lender in a Senior Lender Group is committed to
disburse to Borrower under any Senior Debt Agreement.
Senior Debt Obligations means the obligations to pay principal and
interest on the Senior Debt (including any interest accruing after the filing
of a petition with respect to, or the commencement of, any proceeding, whether
or not a claim for post-petition interest is allowed in such proceeding) and
any and all payment obligations of the Borrower under interest rate swaps or
similar agreements or foreign currency hedge, exchange or similar agreements
entered into when required by a Senior Debt Agreement as well as any and all
commissions, fees, indemnities, prepayment premiums and other amounts payable
to Senior Lenders under the Senior Debt Agreements including all renewals,
extensions or refundings thereof or amendments, modifications or supplements
thereto. For the avoidance of any doubt, Senior Debt Obligations under a
Senior Debt Agreement shall, for purposes of withdrawals from a Proceeds
Account and of payments hereunder, include any obligation of the Borrower to
make a deposit of funds with the Banco de la Republica for purposes of making
any payment of Senior Debt Obligations in respect of principal due under such
Senior Debt Agreement and payable prior to the stated maturity thereof through
withdrawals from such account.
Senior Debt to Equity Ratio means, with respect to a Senior Debt
Tranche, the ratio of (a) the principal amount of Senior Debt outstanding
under such Senior Debt Tranche (excluding the notional amount of any Senior
Debt under such Senior Debt Tranche that is Debt under clause (iv) of the
definition thereof herein to the extent the aggregate of such notional amount
is not in excess of the aggregate principal amount outstanding of all other
Senior Debt under such Senior Debt Tranche) to (b) the sum of (without
duplication) (i) the greater of (A) the sum of (x) Equity Contributions made
by Persons in the Related Initial Shipper Group and, in the case of Ecopetrol,
the Canadian Group and (y) the Related Initial Shipper Group's Shareholding
Interest in Pre-Completion Accrued Returns and, in the case of Ecopetrol, the
Canadian Group's Shareholding Interest in Pre-Completion Accrued Returns, and
(B) the Related Initial Shipper Group's Shareholding Interest in the
Borrower's shareholders' equity determined on a consolidated basis in
accordance with generally accepted accounting principles (but excluding the
Borrower's equity interest in any Unrestricted Subsidiaries) and, in the case
of Ecopetrol, the Canadian Group's Shareholding Interest in such equity, (ii)
any Transportation Repayment Obligations owing to the Related TRO Holders,
(iii) any other Subordinated Debt (other than Shareholder Bridge Loans
Incurred to fund an Equity Contributions shortfall) provided by Persons in the
Related Initial Shipper Group and, in the case of Ecopetrol, the Canadian
Group or financial institutions designated by such Persons and Shareholder
Bridge Loans Incurred to fund a failure by the Shareholder in the Related
Initial Shipper Group to make Equity Contributions as required, (iv) the
Related Initial Shipper Group's Proportionate Share of any Subordinated Debt
outstanding that has not been provided by a Person in any Initial Shipper
Group or the Canadian Group or financial institutions designated by any such
Persons and (v) any Advance Tariff Payments made by the Throughput Obligor in
the Related Initial Shipper Group to the extent not included as an expense
item in the Borrower's income statement for the period during which such ratio
is being calculated.
Senior Debt Tranche means the aggregate Senior Debt provided by a
Senior Lender Group supported by Assigned Rights consisting primarily of
obligations of a Related Initial Shipper Group. Senior Debt Tranches are
designated Senior Debt Tranche A, Senior Debt Tranche B, Senior Debt Tranche C
or Senior Debt Tranche D, as the case may be, each as identified in Appendix
A. Following application of Section 2.1(b) with respect to a Senior Debt
Tranche, such Senior Debt Tranche shall consist of the Transportation
Repayment Obligations existing under or pursuant to the Transportation
Agreement with the Initial Shipper in the Related Initial Shipper Group that
shall have become Senior Debt under such Senior Debt Tranche pursuant to such
Section.
Senior Lender Group means the Persons providing export credit agency
financing, bank financing and other financing or interest or foreign exchange
swaps or similar arrangements, Initial Shipper Bridge Loans and Shareholder
Bridge Loans made by a Person in an Initial Shipper Group or the Canadian
Group (or a financial institution designated by them) to cover a failure to
fund Senior Debt under a Senior Debt Tranche other than its Related Senior
Debt Tranche and, in the case of the Canadian Group, the Ecopetrol Senior Debt
Tranche and any indenture trustee or fiscal agent for holders of Borrower's
debt securities identified in Appendix A as holding collectively Senior Debt
constituting a single Senior Debt Tranche. Following application of Section
2.1(b) with respect to a Senior Debt Tranche, the Related Senior Lender Group
shall consist of the TRO Holders under or pursuant to the Transportation
Agreement with the Initial Shipper in the Related Initial Shipper Group.
Senior Lenders means the Persons providing export credit agency
financing, bank financing, other financing or interest or foreign exchange
swaps or similar arrangements, Initial Shipper Bridge Loans and Shareholder
Bridge Loans made by a Person in an Initial Shipper Group or the Canadian
Group (or a financial institution designated by them) to cover a failure to
fund Senior Debt under a Senior Debt Tranche other than its Related Senior
Debt Tranche and, in the case of the Canadian Group, the Ecopetrol Senior Debt
Tranche and any indenture trustee or fiscal agent for holders of the
Borrower's Debt securities, in each case identified in Appendix A, provided,
however, that:
(a) the holder of Senior Debt designated in Appendix A as the Senior
Lender under such Senior Debt Agreement shall be deemed to be the sole holder
of all Senior Debt under such Senior Debt Agreement and to represent all other
holders of Senior Debt thereunder in connection with the determination and
exercise of any voting or other rights or the taking of any other action under
this Agreement and/or such Senior Debt Agreement and for all other purposes
hereunder and thereunder; and
(b) if a Senior Lender in a Senior Lender Group referred to in paragraph
(a) above ceases to hold any Senior Debt under its related Senior Debt
Agreement it shall (by notice to the Trustee, the other Senior Lenders in such
Senior Lender Group and the Borrower attaching an amended Appendix A giving
effect to such designation) designate the holder of such Senior Debt under
such Senior Debt Agreement or, if there is more than one such holder, one of
the other holders of the Senior Debt under such Senior Debt Agreement of which
it is deemed hereunder to be the sole holder as its successor as the deemed
sole holder thereof for purposes of this Agreement and such Senior Debt
Agreement.
Senior Lenders shall also include any TRO Holders whose Transportation
Repayment Obligations have become Senior Debt pursuant to Section 2.1(b).
Senior Loan means the Senior Debt Incurred by the Borrower under an
individual Senior Debt Agreement.
Shareholder Bridge Loan means a bridge loan to the Borrower provided
by one or more Shareholders or their Affiliates or one or more financial
institutions on their behalf to fund (a) an amount of Senior Debt under a
Senior Debt Tranche Related to another Initial Shipper Group which the
Borrower, despite its best efforts, has been unable to obtain in accordance
with its then current financing plan or (b) a failure of another Shareholder
to make Equity Contributions as required.
Shareholders means Ecopetrol, BP Pipelines, TOTAL Pipeline, Triton
Pipeline, IPL Enterprises, TCPL International Investments Inc., in each case
so long as it continues to hold any direct or indirect beneficial Shareholding
Interest, and their respective successors and permitted assigns.
Shareholding Interest of any Person means the percentage equal to
the number of Shares held by such Person divided by the total number of Shares
outstanding from time to time.
Shares means the shares of common stock, par value Ps 100,000 each,
of the Borrower, each with no preference among themselves with respect to
dividends, voting rights or rights upon liquidation of the Borrower.
Sole Risk Facilities has the meaning assigned to it in the
Transportation Agreements.
Specified Court has the meaning assigned to it in Section 14.12.
Standard Barrel has the meaning assigned to it in the Transportation
Agreements.
Subaccount has the meaning assigned to it in Section 4.3(a).
Subaccount Bank has the meaning assigned to it in Section 4.3(a).
Subordinated Debt means the unsecured Debt of the Borrower, whether
presently outstanding or hereafter created, ranking in payment and upon
liquidation junior to the Senior Debt in accordance with the subordination
terms attached hereto as Appendix J other than Transportation Repayment
Obligations or Shareholder Bridge Loans pursuant to clause (b) of the
definition thereof herein.
Subordinated Fee has the meaning assigned to it in the Technical
Services and Management Agreement.
Subordinated Lender means a lender or provider of Subordinated Debt.
Subordinated Notes means notes or other instruments of the Borrower
evidencing Subordinated Debt.
Subscription Agreements means the Amended and Restated Subscription
Agreements, each dated as of March 31, 1995, between the Borrower and each of
the Shareholders, in each case as the same have been and may be amended and
restated from time to time in accordance with the terms thereof.
Subsidiary of a Person means (i) a corporation more than 50% of the
outstanding voting shares of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person
and one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person, or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the
policies, management and affairs thereof, provided that (except for purposes
of the definition herein of Unrestricted Subsidiary) the term Subsidiary shall
not include any Unrestricted Subsidiary.
Successor Borrower has the meaning assigned to it in Section
6.1(b)(iii)(B).
Supermajority Senior Lenders means, with respect to a Senior Lender
Group, Senior Lenders in such Senior Lender Group holding (or representing in
the case of Senior Loans issued pursuant to a trust indenture or trust deed)
in the aggregate at least 66-2/3% of the principal amount of Senior Debt
outstanding under the related Senior Debt Tranche.
Surcharges has the meaning assigned to it in the Transportation
Agreements.
Tariff Advances has the meaning assigned to it in the Transportation
Agreements.
Tariff Regulations means Schedule C to the Transportation
Agreements.
Tariffs has the meaning assigned to it in the Transportation
Agreements.
TCPL International means TCPL International Investments Inc., a
corporation existing under the laws of Alberta, Canada.
Technical Services and Management Agreement means the Technical
Services and Management Agreement, dated as of March 31, 1995, between the
Borrower and CITCOL, as the same may be amended from time to time in
accordance with the terms thereof.
Third Party Tariff has the meaning assigned to it in the
Transportation Agreements.
Throughput Capacity has the meaning assigned to it in the
Transportation Agreements.
Throughput Obligor means the Person in an Initial Shipper Group that
is party to an Advance Tariff Agreement.
Throughput Share has the meaning assigned to it in each
Transportation Agreement, provided that for purposes of this Agreement the
Throughput Share of an Initial Shipper or Throughput Obligor in an Initial
Shipper Group shall be calculated based on the aggregate number of Standard
Barrels of Petroleum nominated to be transported through the relevant Segment
by, and the Net Deliveries of, the original Initial Shipper which was a party
to such Transportation Agreement (to the extent still a party thereto) and its
successors and permitted assigns with respect to such Transportation Agreement
other than any such successors and permitted assigns that were, prior to such
succession or assignment, and continue to be, Initial Shippers in another
Initial Shipper Group.
TOTAL Exploratie means TOTAL Exploratie en Produktie Maatschappij
B.V., a corporation existing under the laws of The Netherlands.
TOTAL Pipeline means TOTAL Pipeline Colombie S.A., a societe anonyme
existing under the laws of France.
TransCanada PipeLines means TransCanada PipeLines Limited, a
corporation existing under the federal laws of Canada.
Transportation Agreements means the Transportation Agreements
substantially in the form attached hereto as Appendix K, each dated as of
March 31, 1995, between the Borrower and each of the Initial Shippers for the
transportation by such Initial Shippers of Petroleum through the Oleoducto
Central, as the same may be amended from time to time in accordance with the
terms thereof.
Transportation Note has the meaning assigned to it in the
Transportation Agreement.
Transportation Repayment Obligations means the Borrower's
obligations to pay interest on and to repay Tariff Advances and to repay
principal of and interest on Transportation Notes as well as any and all other
amounts payable in respect thereof.
Triton Colombia means Triton Colombia, Inc., a corporation existing
under the laws of the State of Delaware, United States of America.
Triton Pipeline means Triton Pipeline Colombia, Inc., a corporation
existing under the laws of the Cayman Islands.
TRO Holder means a Person to whom Transportation Repayment
Obligations are owing.
Trustee means Bankers Trust Company, a New York banking corporation,
and its successors and permitted assigns.
Underfund Initial Shipper Group means an Initial Shipper Group
designated as an Underfund Initial Shipper Group with respect to certain
Overfund Senior Debt in an Overfund Certificate.
Underlifting Initial Shipper means an Initial Shipper to whose
failure to nominate for shipment through a Segment of the Oleoducto Central an
amount at least equal to the product of such Initial Shipper's undivided
interest in the JOA and the Association Contracts expressed as a percentage
multiplied by the aggregate amount of Petroleum produced from the Cusiana Area
during the relevant period is attributable in whole or in part to Excess
Cusiana Petroleum nominated for shipment through such Segment by an
Overlifting Initial Shipper.
Underutilizer Tariff has the meaning assigned to it in the
Transportation Agreements.
Unrestricted Subsidiary means any Subsidiary designated as such by
the Board of Directors as set forth below where (a) neither the Borrower nor
any of its other Subsidiaries (other than another Unrestricted Subsidiary) (i)
provides credit support for, or a Guarantee (as defined in Section 6.2(c)) of,
any Debt of such Subsidiary (including any undertaking, agreement or
instrument evidencing such Debt) or (ii) is directly or indirectly liable for
any Debt of such Subsidiary, and (b) no default with respect to any Debt of
such Subsidiary (including any right which the holders thereof may have to
take enforcement action against such Subsidiary) would permit (upon notice,
lapse of time or both) any holder of any other Debt of the Borrower and its
other Subsidiaries (other than another Unrestricted Subsidiary) to declare a
default on such other Debt or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity. The Board of Directors may
designate any Subsidiary to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any
property of, any other Subsidiary of the Borrower which is not itself an
Unrestricted Subsidiary, provided that either (x) the Subsidiary to be so
designated has total assets of $1,000 or less or (y) immediately after giving
effect to such designation, the Borrower could Incur at least $1.00 of
additional Debt pursuant to Section 6.2 (a) or 6.2(b). The Board of Directors
may designate any Unrestricted Subsidiary to be a Subsidiary, provided that,
immediately after giving effect to such designation, the Borrower could Incur
at least $1.00 of additional Debt pursuant to Section 6.2 (a) or 6.2(b). Any
such designation by the Board of Directors shall be evidenced to the Trustee
by filing with the Trustee of a certified copy of the resolution of the Board
of Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions.
Voting Trust Agreement means the Voting Trust Agreement to be
entered into among all of the Shareholders (except Ecopetrol), the trustee
named therein and the Borrower, with such changes as the parties thereto may
agree, in each case as the same may be amended from time to time in accordance
with the terms thereof.
Weighted Average Throughput Share with respect to an Initial Shipper
or a Throughput Obligor means the quotient obtained by dividing (a) the sum of
the products obtained by multiplying the Throughput Share of such Initial
Shipper or Throughput Obligor, as the case may be, for each Operating Segment
by the Capital Cost for such Operating Segment, by (b) the Capital Cost for
all Operating Segments. For purposes of this definition, Capital Cost has the
meaning assigned to it in and is calculated pursuant to the Tariff
Regulations.
Wholly Owned Subsidiary of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
Working Capital Tariffs has the meaning assigned to it in the
Transportation Agreement.
Section 1.2. Interpretation. In this Agreement and in the
Appendices hereto, except to the extent that the context otherwise requires:
(a) words importing gender include all genders;
(b) any reference to an Article or Section refers to an Article
or Section, as the case may be, of this Agreement;
(c) the Appendices hereto do not form part of this Agreement
except as specifically referred to herein;
(d) all references to this Agreement and the words herein,
hereof, hereto, hereunder and other words of similar import refer to this
Agreement (but not including Appendices hereto) as a whole and not to any
particular Article, Section or other subdivision; and
(e) all references herein to generally accepted accounting
principles shall mean generally accepted accounting principles in the United
States, as in effect from time to time.
ARTICLE TWO
SENIOR DEBT
Section 2.1.1 Designation of Senior Debt. (a) Senior Debt shall
consist of Debt of the Borrower under separate Senior Debt Tranches provided
by separate Senior Lender Groups which are identified in the Senior Debt
Schedule attached as Appendix A (as the same is revised from time to time to
reflect the designation of additional Senior Debt, as set forth below, or to
reflect modifications of existing Senior Debt Agreements as set forth in an
Officers' Certificate delivered by the Borrower to the Trustee) and shall be
secured by and entitled to the benefits of this Agreement. At any time and
from time to time the Borrower may, subject to Section 6.2(a) and (b),
designate additional Debt Incurred and to be Incurred by the Borrower as
Senior Debt under a Senior Debt Tranche. Upon satisfaction of each of the
following conditions precedent such designated Debt (once Incurred), for all
purposes of this Agreement, shall be Senior Debt under a Senior Debt Tranche
secured by and entitled to the benefits of this Agreement as Senior Debt under
such Senior Debt Tranche:
(i) The Trustee, each Senior Lender in the Senior Lender
Group under such Senior Debt Tranche and the Shareholder in the Related
Initial Shipper Group shall have received an Officers' Certificate of the
Borrower (A) identifying the lender(s) (or agents or trustees therefor) or,
where applicable, the counterparties to the related agreements and the maximum
principal or notional amount thereof, Average Life and final maturity date of
the Debt so designated; (B) stating that such Debt is permitted to be Incurred
under Section 6.2(a) or (b); (C) enclosing a copy of the proposed Senior Debt
Agreement(s) relating to such Debt and a copy of the agreement referred to in
clause (ii); and (D) enclosing a revised version of Appendix A (revised to
identify such Debt Incurred and to be Incurred, the related Senior Debt
Agreements and the lenders thereof);
(ii) The lender(s) (or agents or trustees therefor) of such
Debt shall have executed and delivered to the Trustee an agreement in
substantially the form of assumption agreement attached as Appendix B hereto
in which such lender agrees to become a Party to this Agreement bound by all
of the terms and conditions hereof; and
(iii) The consent of the Initial Shipper or, if different, the
Throughput Obligor in the Related Initial Shipper Group as to the terms and
conditions of the proposed Senior Debt Agreement shall have been received by
the Trustee; and
(iv) Delivery to the Trustee of an Opinion of Counsel that the
Senior Debt Agreement is the valid and legally binding obligation of the
Borrower enforceable in accordance with its terms.
Any Incurrence of Senior Debt under a Senior Debt Tranche by the Borrower
other than as provided for in this Section shall be made only at such times,
in such amounts, for such purposes and on such terms and conditions as shall
be acceptable to, and with the prior consent of, Majority Senior Lenders in
the Related Senior Lender Group and the Initial Shipper or, if different, the
Throughput Obligor in the Related Initial Shipper Group, and at each such
Incurrence of Senior Debt the Borrower shall deliver to the Trustee, each
Senior Lender in the Related Senior Lender Group and the Initial Shipper or,
if different, the Throughput Obligor in the Related Initial Shipper Group a
certificate covering the items set forth in paragraph (a) above with respect
to the Senior Debt so Incurred.
(b) As to any Senior Debt Tranche, without any action on the part
of the Borrower or the Trustee and without any consent of Senior Lenders, upon
the payment in full of the Senior Debt of such Senior Debt Tranche, all the
then outstanding and future Transportation Repayment Obligations under or
pursuant to the Transportation Agreement with the Initial Shipper in the
Initial Shipper Group Related to such Senior Debt Tranche shall become Senior
Debt for all purposes of this Agreement and thereupon, but not before, shall
be secured by and be entitled to the benefits of this Agreement as Senior
Debt. The Borrower and the Trustee upon advice of counsel shall execute all
documents and do all things necessary to give effect to the provisions in this
paragraph or to evidence such Senior Debt.
Section 2.2. Senior Debt Pari Passu; No Recourse to Borrower.
(a) All Senior Debt within a Senior Debt Tranche shall rank pari passu with
respect to the Assigned Rights securing such Senior Debt Tranche without any
preference among such Senior Debt by reason of date of Incurrence, currency of
repayment or otherwise.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Senior Debt Agreements or any Assignment Agreement, (i) the
recourse of the Trustee (on behalf of itself and any Senior Lender) or any
Senior Lender for payment and performance of Senior Debt Obligations shall be
limited solely to the Assigned Rights assigned for the benefit of the related
Senior Debt Tranche to the extent of their respective interests therein
pursuant hereto, and none of (A) the Borrower, (B) any Person in the Related
Initial Shipper Group or in any other Initial Shipper Group or the Canadian
Group, (C) any Person owning, directly or indirectly, any legal or beneficial
interest in the Borrower or in any Person in the Related Initial Shipper Group
or in any other Initial Shipper Group or the Canadian Group, (D) the Trustee,
or (E) any partner, principal, officer, controlling person, beneficiary,
trustee, shareholder, employee, agent, affiliate or director of any Person
described in clauses (A) through (D) above shall be personally liable for the
payment or performance of any Senior Debt Obligations and (ii) for the benefit
of the Borrower and each other Senior Lender, each Senior Lender and the
Trustee acting on behalf of any Senior Lender or itself expressly waive, as
authorized by Article 15 of the Colombian Civil Code and Article 822 of the
Colombian Code of Commerce or any successor provision, any and all personal
actions or rights they may have under Colombian law and any other applicable
law as provided by Article 2488 of the Colombian Civil Code or any successor
provision to demand payment and performance of Senior Debt Obligations owing
to such Senior Lender from the real estate and any other tangible or
intangible assets of any Person described in clauses (A) through (D) and any
right to commence, initiate or cause to be initiated any related proceeding,
judicial or otherwise, against the Borrower under any bankruptcy law or other
reorganization, arrangement, readjustment of debt, relief of debtors,
dissolution, insolvency, liquidation or similar law or for the appointment of
a receiver, trustee or other officer or representative of a court or of
creditors or to take any other action that may result in the Bankruptcy of the
Borrower; provided, however, that in each of cases (i) and (ii), the foregoing
shall not impair the validity of any security interest granted to a Senior
Lender under its Senior Debt Agreement in and to an escrow or trust account
into which the proceeds of Senior Debt under its Senior Debt Agreement, the
proceeds therefrom and from investments thereon and no other funds shall be
deposited, any assignments made or any security interests granted by or
pursuant to the Assignment Agreements or this Agreement or the right of the
Trustee (or any Senior Lender in a Senior Lender Group to the extent provided
in this Agreement) to foreclose and/or to exercise or enforce any rights or
remedies in and to the Assigned Rights assigned for the benefit of the Related
Senior Debt Tranche as provided in this Agreement and the Assignment
Agreements (including, as provided in Section 9.9(a), the right to institute
suit against the Borrower for the payment of money due); and provided,
further, however, that, as to the Borrower but not as to any Person listed in
(B) through (E) above, in the event of the Bankruptcy of the Borrower, such
recourse shall not be so limited and such waiver shall not so apply as of or
subsequent to such Bankruptcy, except that such recourse shall continue to be
so limited and such waiver shall continue to apply with respect to a Senior
Lender in a Senior Lender Group, or the Trustee acting on behalf or for the
benefit of such Senior Lender in such Senior Lender Group if such Bankruptcy
of the Borrower was commenced, initiated or caused to be initiated or
otherwise resulted from any action of such Senior Lender in such Senior Lender
Group or the Trustee on its behalf or for its benefit notwithstanding their
respective agreements herein to the contrary. This paragraph (b) shall also
apply to the Trustee acting on its own account hereunder.
ARTICLE THREE
ASSIGNED RIGHTS
Section 3.1. Assignment of Rights under Transportation
Agreements. The Borrower agrees with the Trustee to deliver to the Trustee for
the benefit of Senior Lenders in each Senior Lender Group an Assignment
Agreement, substantially in the form attached as Appendix C, executed by the
Borrower and each Initial Shipper, with respect to certain of the Borrower's
rights under the Transportation Agreement between them. Such rights under the
Transportation Agreement with the Initial Shipper in each Initial Shipper
Group shall be assigned to the Trustee for the benefit of Senior Lenders in
the Related Senior Lender Group and, only to the extent the proceeds therefrom
are payable hereunder into the Common Account, for the benefit of Senior
Lenders in all Senior Lender Groups as their interests therein may appear.
Section 3.2. Assignment of Rights under Advance Tariff
Agreements. The Borrower agrees with the Trustee to deliver to the Trustee for
the benefit of Senior Lenders in each Senior Lender Group an Assignment
Agreement, substantially in the form attached as Appendix D, executed by the
Borrower and each Throughput Obligor, with respect to certain of the
Borrower's rights under the Advance Tariff Agreement between them. Such rights
under the Advance Tariff Agreement with the Throughput Obligor in each Initial
Shipper Group shall be assigned to the Trustee for the benefit of Senior
Lenders in the Related Senior Lender Group and, only to the extent the
proceeds therefrom are payable hereunder into the Common Account, for the
benefit of Senior Lenders in all Senior Lender Groups as their interests
therein may appear.
Section 3.3. Assignment of Rights under Subscription Agreement and
Performance Guarantee Agreement. The Borrower agrees with the Trustee to
deliver to the Trustee for the benefit of Senior Lenders in each Senior Lender
Group an Assignment Agreement, substantially in the form attached as Appendix
E, executed by the Borrower, the Shareholder in the Related Initial Shipper
Group and, in the case of Ecopetrol, the Shareholders in the Canadian Group,
and, if applicable, the guarantor of any such Shareholder, with respect to
certain of the Borrower's rights under the Subscription Agreement with such
Shareholder and, if applicable, the Performance Guarantee Agreement with
respect thereto.
Section 3.4. Assigned Rights Held in Trust. All rights assigned to
the Trustee pursuant to the Assignment Agreements shall be held in trust by
the Trustee subject to the agreements herein contained and the Trustee shall
exercise such rights and shall apply the proceeds therefrom strictly in
accordance with the terms hereof and whether or not an Event of Default or a
Default shall have occurred, none of the Borrower, any Person in the related
Initial Shipper Group, nor any Senior Lender shall have the right to attach or
garnish any such rights or any proceeds therefrom, and the Borrower, the
Persons in the related Initial Shipper Group and Senior Lenders shall have
only those rights to direct the Trustee as to the application of funds and
investments as provided herein. The Trustee shall reassign such rights to the
Borrower or the Throughput Obligor, as the case may be, pursuant to Section
13.2.
Section 3.5. Pledge and Assignment of Interests in Accounts. (a)
As security for the Senior Debt Obligations due to Senior Lenders in a Senior
Lender Group under this Agreement and the Related Senior Debt Agreements, the
Borrower hereby transfers and assigns to the Trustee to be held in trust for
the benefit of each Senior Lender in such Senior Lender Group and creates in
favor of the Trustee a security interest in, all of its right and interest, if
any, in and to the Proceeds Account maintained by the Trustee for the benefit
of such Senior Lender Group pursuant to Section 4.2 and, to the full extent
possible under applicable law, the monies, certificated and uncertificated
securities, instruments and proceeds therein from time to time.
(b) As security for the Senior Debt Obligations due to Senior
Lenders in a Senior Lender Group under this Agreement and the related Senior
Debt Agreements, the Borrower hereby transfers and assigns to the Trustee to
be held in trust for the benefit of each Senior Lender in such Senior Lender
Group and creates in favor of the Trustee a security interest in, all of its
right and interest, if any, in and to the Common Account maintained by the
Trustee pursuant to Section 4.1 and, to the full extent possible under
applicable law, the monies, certificated and uncertificated securities,
instruments and proceeds therein from time to time, in each case, in the
proportion in which the funds and investments in such account are allocable
pursuant to Section 4.1 to the Proceeds Account maintained by the Trustee for
the benefit of such Senior Lender Group.
(c) Funds and investments from time to time in each Proceeds
Account and the Common Account shall be trust funds held by the Trustee for
the benefit of Senior Lenders in each Senior Lender Group, as their respective
interests therein may appear, for application as provided herein. Accordingly,
notwithstanding the foregoing grant, transfer and assignment, the Trustee
shall apply such funds and investments strictly in accordance with the terms
hereof and whether or not an Event of Default or a Default shall have
occurred, none of the Borrower, any Person in the related Initial Shipper
Group, any Senior Lender in the Related Senior Lender Group, nor any other
Senior Lender shall have the rightto attach or garnish the monies,
certificated and uncertificated securities, instruments or proceeds in any
such account, and the Borrower, the Persons in the related Initial Shipper
Group and Senior Lenders shall have only those rights to direct the Trustee as
to the application of funds and investments as provided herein.
(d) Funds and investments in the Colombian Subaccount shall be held
by the Colombian Subaccount Bank in its name as trustee for the Trustee
hereunder for the benefit of Senior Lenders in each Senior Lender Group, as
their respective interests therein may appear, for application as provided
herein under a fiducia mercantil governed by Colombian law. Accordingly,
notwithstanding the foregoing grant, transfer and assignment, the Trustee
shall apply such funds and investments strictly in accordance with the terms
hereof and whether or not an Event of Default or a Default shall have
occurred, none of the Borrower, any Person in the related Initial Shipper
Group, any Senior Lender in the Related Senior Lender Group, nor any other
Senior Lender shall have the right to attach or garnish the monies,
certificated and uncertificated securities, instruments or proceeds in any
such account, and the Borrower, the Persons in the related Initial Shipper
Group and Senior Lenders shall have only those rights to direct the Trustee as
to the application of funds and investments as provided herein.
Section 3.6. Perfection and Maintenance of Assignments and Security
Interests. At any time and from time to time, upon demand of the Trustee, the
Borrower, at its expense, shall give, execute, file and/or record any notice,
financing statement, continuation statement, public deed, instrument, document
or agreement and shall otherwise take such actions that the Trustee upon
advice of counsel may consider reasonably necessary to create, preserve,
continue, perfect or validate any assignment made or security interest granted
hereunder or pursuant hereto or to enable the Trustee to exercise or enforce
its rights hereunder with respect to such assignment or security interest.
Without limiting the generality of the foregoing, the Trustee shall be
authorized upon advice of counsel (a) to file under the Uniform Commercial
Code of any state of the United States of America or other applicable law
financing statements, continuation statements or other documents in connection
with such assignment or security interest, and (b) to execute and file public
deeds or other documents under the laws of Colombia necessary to preserve such
assignment or security interest, in each case without the signature of the
Borrower (to the extent permitted by law), in each case at the Borrower's
expense. The Trustee shall maintain all Authorized Investments in its name as
Trustee hereunder and shall hold such investments, and shall take such steps
as are required to perfect the security interests granted hereunder in
Authorized Investments, as specified or required by the Uniform Commercial
Code of the State of New York as specified in the form of opinion of Sullivan
& Cromwell set forth in Appendix M-3 hereto or, if an opinion of Sullivan &
Cromwell or other counsel referred to in the next sentence shall have been
delivered, in the most recently delivered of such opinions. The Borrower shall
cause to be delivered to the Trustee annually on June 1 of each year,
beginning June 1, 1996, an opinion of Sullivan & Cromwell or other counsel
reasonably satisfactory to the Trustee confirming such opinion or providing a
new opinion with respect to the perfection of such security interests, as the
case may be, provided that no such opinionneed be delivered in any
twelve-month period ending June 1 if, in connection with the execution and
delivery of a Senior Debt Agreement, such an opinion has been delivered to the
Trustee on or after the March 1 in such twelve month period. The Trustee shall
have no duty to monitor any changes in law subsequent to the date of any such
opinion.
Section 3.7. Rights in Assigned Rights Prior to Enforcement
Direction. (a) Notwithstanding the interests assigned or created hereunder
and to be assigned or created pursuant hereto, subject to paragraph (c) below,
and unless otherwise provided herein or unless a Default shall have occurred
and be continuing hereunder with respect to a Senior Lender and the Trustee
shall have received from such Senior Lender's Senior Lender Group an
Enforcement Direction with respect to the Assigned Rights assigned for the
benefit of and to the extent of the interest therein of such Senior Lender
Group, the Borrower and any Person in the Related Initial Shipper Group, as
the case may be, shall retain and be entitled to exercise all their respective
rights, if any, relating to such Assigned Rights, including, without
limitation, all rights to request the Trustee to make withdrawals from the
related Proceeds Account and the Common Account in accordance herewith, and
all their rights relating to the related Transportation Agreements, Advance
Tariff Agreements, Subscription Agreements and Performance Guarantee
Agreements, subject, in each such case, to the other obligations of such
parties expressly set forth herein and in the related Assignment Agreements.
(b) Unless a Default shall have occurred and be continuing
hereunder with respect to a Senior Lender and the Trustee shall have received
an Enforcement Direction from such Senior Lender's Senior Lender Group with
respect to the Assigned Rights assigned for the benefit of and to the extent
of the interest therein of such Senior Lender Group pursuant to Section
9.5(f), the Trustee and each Senior Lender shall, at the request and cost of
the Borrower or any Person in the Related Initial Shipper Group, as the case
may be, execute such documents and take such action and do such things as may
be necessary or convenient to enable the Borrower or such other Person, as the
case may be, to exercise their respective rights retained in such Assigned
Rights, and neither the Trustee nor any Senior Lender shall take any action
prior to taking by the Trustee of such enforcement action (other than any
actions expressly permitted hereby to be taken prior to the taking of such
enforcement action) that would unreasonably interfere with actions in respect
of such Assigned Rights by the Borrower or any such Person.
(c) Subject to the terms and conditions set forth in the Advance
Tariff Agreement with a Throughput Obligor in an Initial Shipper Group and the
Assignment Agreement with respect thereto, the Trustee, upon direction of a
Senior Lender in the Related Senior Lender Group and, in the case of Excess
Advance Tariff Payments only, in another Senior Lender Group having an
interest therein pursuant hereto shall, at any time after an event shall have
occurred and be continuing that after the lapse of time would cause the
outstanding Senior Debt Obligations owing to such Senior Lender to become due
and payable prior to the stated maturity thereof hereunder or under its Senior
Debt Agreement, as certified to the Trustee by such Senior Lender, have the
right to make, and shall make, a call for Advance Tariff Payments under such
Advance Tariff Agreement to the extent of any Revenue Shortfall (as defined
therein) if the Borrower has failed to make such call at least two Business
Days prior to the required notice period for calls set forth therein.
(d) Nothing in this Section 3.7 constitutes an authorization of
the Trustee to take any enforcement action with respect to any Assigned Rights
for the benefit of a Senior Lender Group that extends beyond the Assigned
Rights relating to such Senior Lender Group.
ARTICLE FOUR
ACCOUNTS
Section 4.1. Common Account. (a) The Trustee shall establish and
maintain with and in the name of the Trustee in New York, New York a
segregated account for the benefit of all Senior Lenders (such account,
including any Subaccount thereof established at the request of the Borrower
pursuant to Section 4.3, the Common Account) into which shall be deposited all
funds received by the Borrower or the Trustee in respect of
(i) Third Party Tariffs and any other payments made under any
transportation agreement with parties other than Initial Shippers,
(ii) Overutilizer Tariffs except with respect to Petroleum from the
Cusiana Area, if any, in which case (other than in the case of Additional
Cusiana Petroleum) only the Overutilizer Premiums in respect of such
Overutilizer Tariffs shall be deposited in the Common Account pursuant to this
clause,
(iii) (A) Tariffs in respect of Additional Cusiana Petroleum and
(B) other Tariffs payable by a shipper or an Initial Shipper under a
transportation agreement with the Borrower or a Transportation Agreement, in
the case of (B) for fields other than the Cusiana Area,
(iv) Excess Advance Tariff Payments,
(v) Working Capital Tariffs,
(vi) Tariffs payable by an Overlifting Initial Shipper with respect
to the transportation of Excess Cusiana Petroleum in an amount calculated
pursuant to such Initial Shippers Transportation Agreement,
(vii) Surcharges, and
(viii) any other amounts (except any amounts set forth in Section
4.4(a)) payable under a Transportation Agreement, Advance Tariff Agreement or
transportation agreement with a shipper other than an Initial Shipper.
(b) Upon receipt of any funds pursuant to paragraph (a) above,
(i) such funds (other than all Established Third Party Premiums,
Overutilizer Premiums, Surcharges, Excess Advance Tariff Payments, Tariffs
with respect to Additional Cusiana Petroleum and Tariffs payable by an
Overlifting Initial Shipper with respect to the transportation of Excess
Cusiana Petroleum) shall be allocated to the Initial Shipper in each Initial
Shipper Group in proportion to its Proportionate Share; provided, however,
that no Initial Shipper that is in default under its Transportation Agreement
(as set forth in an Officers' Certificate of the Borrower delivered to the
Trustee at least one Business Day prior to the Trustee's receipt of such
funds) shall be allocated any Working Capital Tariffs. Any Working Capital
Tariffs that would be allocable to a defaulting Initial Shipper but for such
default shall be allocated to the non-defaulting Initial Shippers in
proportion to their Proportionate Shares set forth in their respective
Transportation Agreements,
(ii) funds in respect of Established Third Party Premiums,
Overutilizer Premiums, deemed Established Third Party Premiums, deemed
Overutilizer Premiums and Surcharges shall be allocated to the Initial Shipper
in each Initial Shipper Group pursuant to its Transportation Agreement,
(iii) funds in respect of Excess Advance Tariff Payments shall be
allocated to the Throughput Obligor in each Initial Shipper Group whose
Weighted Average Throughput Share is less than its Proportionate Share in
proportion to the difference between such percentages,
(iv) funds in respect of Tariffs payable by an Overlifting Initial
Shipper with respect to the transportation of Excess Cusiana Petroleum shall
be allocated to each Initial Shipper that is an Underlifting Initial Shipper
with respect thereto as agreed either between each such Initial Shipper and
the Borrower or among such Initial Shippers, and
(v) funds in respect of Tariffs in respect of Additional Cusiana
Petroleum (net of Overutilizer Premiums, if any) shall be allocated (A) to the
extent required to fund items (i), (ii) and (iii) of the definition of Annual
Revenue Requirement in the Transportation Agreements, to the Initial Shipper
that would have shipped such Petroleum but for the occurrence of the event
that caused such Petroleum to become Additional Cusiana Petroleum and (B) to
the extent of any balance thereof, to the Initial Shipper that shipped such
Petroleum, provided that all such funds shall be allocated to the Initial
Shipper that would have shipped such Petroleum if the event that caused such
Petroleum to become Additional Cusiana Petroleum was the full or partial
reversion of such Initial Shipper's undivided interest in the Fields in
accordance with the terms of the Association Contracts.
Funds so allocated to an Initial Shipper or a Throughput Obligor in an Initial
Shipper Group shall be automatically withdrawn by the Trustee and deposited
into the Proceeds Account maintained by the Trustee for the benefit of the
Related Senior Lender Group pursuant to Section 4.2. Any interest or other
earnings accrued in respect of funds so allocated and withdrawn shall be
withdrawn and deposited into each Proceeds Accounts in the proportion of the
amounts so withdrawn and deposited in each such account.
(c) No amounts other than the amounts set forth in paragraph (a)
above shall be deposited in the Common Account. All monies and proceeds held
in the Common Account shall be trust funds held by the Trustee for the benefit
of Senior Lenders in each Senior Lender Group as their respective interests
therein may appear from time to time for the purpose of making payments
therefrom in accordance herewith.
(d) As soon as practicable but in no event less than two Business
Days prior to each deposit of funds into the Common Account the Borrower shall
provide to the Trustee a certificate setting forth in reasonable detail
sufficient to comply with the requirements of this Agreement the source and
amount of such funds and the reallocation thereof pursuant to this Section.
Section 4.2. Proceeds Accounts. The Trustee shall establish and
maintain with and in the name of the Trustee in New York, New York four
segregated accounts, one for the benefit of each Senior Lender Group into
which deposits shall be made in accordance with Section 4.4. Each such
account, including any Subaccount thereof established at the request of the
Borrower in accordance with Section 4.3, shall be designated as a Proceeds
Account. All monies, certificated and uncertificated securities, instruments
and proceeds held in a Proceeds Account shall be trust funds held by or for
the Trustee for the benefit of Senior Lenders in the Related Senior Lender
Group for the purpose of making payments therefrom in accordance herewith.
Section 4.3. Subaccounts. (a) The Common Account and each Proceeds
Account may include one or more accounts (each, a Subaccount) established by
the Trustee and maintained in its name as Trustee hereunder in New York, New
York at commercial, merchant or investment banks of international standing or,
in the case of a Subaccount of a Proceeds Account only, in Colombia at a trust
company organized under Colombian law of international standing, in each case
designated from time to time by the Borrower and reasonably acceptable to the
Trustee as provided in this Section 4.3 (each, a "Subaccount Bank). Any
Subaccount established and maintained in Colombia shall constitute a Colombian
Subaccount and a Subaccount Bank in Colombia shall constitute a Colombian
Subaccount Bank. Each Subaccount shall be segregated from any other Subaccount
at the same Subaccount Bank. Each Colombian Subaccount shall be maintained in
the name of the Colombian Subaccount Bank as trustee for the Trustee hereunder
under a fiducia mercantil governed by Colombian law.
(b) The Borrower shall give the Trustee at least 15 days' prior
notice of its intention to designate a Subaccount Bank. No bank shall become
or continue to be a Subaccount Bank if it has a combined capital and surplus
of less than $500 million or, in the case of a Colombian Subaccount Bank, the
branch in Santafe de Bogota of a trust company organized under Colombian law of
international standing.
(c) Each bank designated by the Borrower as a Subaccount Bank
shall, as a condition to being a Subaccount Bank for purposes of this
Agreement, enter into an agreement with the Trustee substantially in the form
attached as Appendix F. Each Subaccount Bank shall deliver a signed copy of
such agreement to the Trustee.
(d) Unless otherwise specified in this Agreement, Subaccounts
shall be subject to the same restrictions and limitations as the Common
Account or the Proceeds Account to which they relate, as the case may be.
Section 4.4. Deposits to Proceeds Accounts. (a) The Borrower and
the Trustee (subject to receipt by it) shall deposit or cause to be deposited
all of the following funds, subject to paragraph (b) below, in Dollars into
the Proceeds Account maintained by the Trustee for the benefit of a Senior
Lender Group pursuant to Section 4.2:
(i) all funds received by the Borrower or the Trustee in respect of
(A) Tariffs, Tariff Advances and Transportation Notes paid under the
Transportation Agreement with the Initial Shipper in the Related Initial
Shipper Group, in each case paid in cash or with the proceeds from the sale of
Petroleum (other than the amounts deposited in the Common Account pursuant to
Section 4.1(a)(ii), (iii) and (v) through (vii)), and (B) Advance Tariff
Payments under the Advance Tariff Agreement with the Throughput Obligor in the
Related Initial Shipper Group (other than Excess Advance Tariff Payments and
Advance Tariff Payments pursuant to (x) item (b)(C) of the definition of
Revenue Shortfall in such Advance Tariff Agreement and (y) Section 3.2(a) of
such Advance Tariff Agreement to the extent due in respect of defaulted
amounts not allocable directly or indirectly into such Proceeds Account) less,
in case (A), charges included in Tariffs pursuant to Section 5.1(a)(ii) of the
Tariff Regulations and, in the event that the Related Initial Shipper Group is
an Underfund Initial Shipper Group with respect to any Overfund Senior Debt,
the portion of any such funds representing a payment agreed to be made to the
Overfund Initial Shipper Group with respect to such Overfund Senior Debt
pursuant to Section 5.2(c)(vi) of the Oleoducto Central Agreement as certified
to the Trustee and the Borrower in the Overfund Certificate with respect to
such Overfund Senior Debt;
(ii) all funds allocated to the Initial Shipper and the Throughput
Obligor in the Related Initial Shipper Group and withdrawn from the Common
Account pursuant to Section 4.1;
(iii) all funds received by the Borrower or the Trustee under the
Subscription Agreement and, if applicable, the Performance Guarantee Agreement
with respect thereto, with Persons in the Related Initial Shipper Group and,
in the case of Ecopetrol, the Canadian Group pursuant to a special call under
the Subscription Agreement made following the Bankruptcy of the Borrower,
Decommissioning or a unanimous decision of the Board of Directors not to
continue with the Oleoducto Central;
(iv) (A) charges included in Tariffs under the Transportation
Agreements pursuant to Section 5.1(a)(ii) of the Tariff Regulations in the
proportion that (1) the portion of Senior Debt outstanding under the Related
Senior Debt Tranche that is the excess of (x) the sum of the principal amount
of Senior Debt outstanding under such Senior Debt Tranche and Related
Transportation Repayment Obligations over (y) the Related Initial Shipper
Group's Proportionate Share of the sum of the principal amount of Senior Debt
and Transportation Repayment Obligations outstanding in the aggregate that, in
each of cases (x) and (y), was incurred prior to the time when the proceeds
thereof were to be applied in accordance with the Borrower's projected use of
funds from time to time and was projected to be used by the Borrower within
the six-month period following its Incurrence thereof bears to (2) the portion
of the aggregate amount of Senior Debt outstanding that was so incurred and
that is so projected to be used, in each of cases (1) and (2) to the extent
that no Overfund Certificate was delivered with respect to such Senior Debt,
and (B) if the Related Initial Shipper Group is an Overfund Initial Shipper
Group with respect to any Overfund Senior Debt, any payment agreed to be made
to such Overfund Initial Shipper Group by a Person in an Underfund Initial
Shipper Group with respect to such Overfund Senior Debt pursuant to Section
5.2(c) (vi) or (vii) of the Oleoducto Central Agreement as certified to the
Trustee and the Borrower in the Overfund Certificate with respect to such
Overfund Senior Debt;
(v) Advance Tariff Payments under an Advance Tariff Agreement with
a Throughput Obligor in another Initial Shipper Group pursuant to (x) item (C)
of the definition of Revenue Shortfall therein and (y) Section 3.2(a) thereof
to the extent due in respect of defaulted amounts allocable directly or
indirectly into such Proceeds Account; and
(vi) interest or other earnings received by the Borrower on the
unspent proceeds of Senior Debt Incurred under the Related Senior Debt Tranche
and on Cash-on-Hand with respect to the Related Initial Shipper Group.
(b) The Borrower shall make or cause to be made all deposits
into the Proceeds Account pursuant to paragraph (a) above in Dollars outside
Colombia except that the Borrower may make or cause to be made deposits in
Pesos into a Colombian Subaccount of the Proceeds Account only (i) pursuant to
Section 4.5(a)(i) and (c)(i) from funds otherwise available to it in Colombia
or (ii) directly from the Initial Shippers, Throughput Obligors and, if
applicable, the Shareholders or their guarantors, limited in the aggregate for
clauses (i) and (ii) above to the extent that funds are required to pay the
Related Initial Shipper Group's Proportionate Share of Estimated Operating
Costs, of any Extraordinary Operating Costs and of pre-Completion Capital
Expenditures that are, in each case, Peso-denominated and payable in Colombia
as certified by the Borrower pursuant to Section 4.5(d), provided that this
limitation shall not apply with respect to deposits made pursuant to Section
4.4(a)(iii).
(c) Any interest or other earnings accrued on any balances in a
Proceeds Account, or on any investment thereof, shall be credited to and
accumulated in such account and thereafter be applied without differentiation
from other funds in such account.
(d) No funds other than those representing receipts of the type
described in paragraphs (a), (b) and (c) above that are received by the
Trustee shall be deposited into the Proceeds Account; any such other funds
shall be trust funds held by the Trustee for the benefit of the Borrower and
shall be promptly remitted by the Trustee to the Borrower upon the Borrower's
request.
As soon as practicable but in no event less than two Business Days
prior to each deposit of funds in the Proceeds Accounts pursuant to paragraph
(a) or (b) above the Borrower shall provide to the Trustee a certificate
setting forth in reasonable detail sufficient to comply with the requirements
of this Agreement the source and amount of such funds and the allocation
thereof among such Proceeds Accounts pursuant to this Section.
Section 4.5. Withdrawals from Proceeds Accounts. Funds in a
Proceeds Account maintained by the Trustee for the benefit of a Senior Lender
Group pursuant to Section 4.2 shall be applied as follows:
(a) Withdrawals Prior to Default. Unless a Default shall be
continuing with respect to the Senior Debt Tranche of such Senior Lender Group
and the Trustee shall have received notice of the occurrence and continuance
of such Default, the Borrower may by an Officers' Certificate delivered
pursuant to Section 4.5(d)(ii) hereof at least 10 Business Days prior to any
Monthly Payment Date request the Trustee, and the Trustee shall, at the
request of the Borrower, withdraw in accordance with such Officers'
Certificate monies from such Proceeds Account for any of the following
purposes at the times and in the order of priority in which they are listed
below (payments listed in the same subclause shall rank pari passu with each
other):
(i) to pay on a Monthly Payment Date Operating and Maintenance
Costs payable within such calendar month up to but not exceeding an amount
that is equal to the Related Initial Shipper Group's Proportionate Share of
the Estimated Operating Costs, to pay at any time the Related Initial Shipper
Group's Proportionate Share of any Extraordinary Operating Costs and to pay at
any time any Past Operating Costs with respect to such Proceeds Account, in
each case until the 180th day following the declaration by the Initial Shipper
in the Related Initial Shipper Group of an Excusable Event (as defined in the
Transportation Agreements). Funds to pay Operating and Maintenance Costs
(including Past Operating Costs with respect to such Proceeds Account) payable
in Pesos in Colombia shall, subject to the proviso below, be first withdrawn
from balances available in the related Colombian Subaccount before any such
funds are withdrawn from the related off-shore Proceeds Account, provided
that, if there are insufficient funds in the related Colombian Subaccount to
pay the Related Initial Shipper Group's Proportionate Share of Estimated
Operating Costs or of Extraordinary Operating Costs and to pay any Past
Operating Costs with respect to such Proceeds Account in each case payable in
Pesos in Colombia, the Borrower shall have the right, at its election, to
deposit in such Colombian Subaccount in Pesos the amount of such shortfall
from funds otherwise available to it in Colombia against a simultaneous
withdrawal and remittance to the Borrower in Dollars off-shore of an
equivalent amount from such Proceeds Account, such withdrawal and remittance
to be deemed for all purposes of this Agreement to constitute the payment of
Operating and Maintenance Costs;
(ii) to pay on a Monthly Payment Date (A) the Related Initial
Shipper Group's Proportionate Share of pre-Completion Capital Expenditures
and/or (B) any Past pre-Completion Capital Expenditures with respect to such
Proceeds Account in each case up to the amount of Non-Cash Items and the
annual return on equity referred to in the definition of Annual Revenue
Requirement in the Transportation Agreements included in the Tariffs payable
into such Proceeds Account;
(iii) to repay on a Semi-annual Payment Date Senior Debt
Obligations due and owing to Senior Lenders in such Senior Lender Group other
than in respect of principal and premium, if any, less, in each case, any
amounts in respect thereof due to a Senior Lender in such Senior Lender Group
that has commenced, initiated or caused to be initiated proceedings or has
taken any other action that resulted in Bankruptcy of the Borrower
notwithstanding its agreement herein to the contrary;
(iv) to repay on a Semi-annual Payment Date Senior Debt Obligations
due and owing to Senior Lenders in such Senior Lender Group in respect of
principal (whether at maturity or upon redemption, prepayment or acceleration)
and premium, if any, less, in each case, any amounts in respect thereof due to
a Senior Lender in such Senior Lender Group that has commenced, initiated or
caused to be initiated proceedings or has taken any other action that resulted
in Bankruptcy of the Borrower notwithstanding its agreement herein to the
contrary;
(v) to repay on a Monthly Payment Date that is not a Semi-annual
Payment Date (A) any Senior Debt Obligations due and owing to Senior Lenders
in such Senior Lender Group that have become due and payable on such date
prior to their stated maturity or upon redemption at any time other than on a
Semi-annual Payment Date or that have become due at their stated maturity on a
Semi-annual Payment Date or upon redemption, prepayment or acceleration on a
Monthly Payment Date and remain unpaid (and to such extent), less, in each
case, any amounts in respect thereof due to a Senior Lender in such Senior
Lender Group that has commenced, initiated or caused to be initiated
proceedings or has taken any other action that resulted in Bankruptcy of the
Borrower notwithstanding its agreement herein to the contrary, provided,
however, that no withdrawal for payment of any amounts shall be made on a
Monthly Payment Date that is not a Semi-annual Payment Date pursuant to this
clause in respect of any Senior Loan unless, and to the extent that, after
giving effect to such withdrawal and all withdrawals ranking senior thereto,
funds remaining in such Proceeds Account (including funds invested in
Authorized Investments), shall be not less than an amount equal to the sum of
Senior Debt Obligations in respect of Senior Loans that have not so become due
and payable or remain unpaid and that are payable pursuant to clauses (iii)
and (iv) above on the next Semi-annual Payment Date multiplied by a fraction
equal to the number of full calendar months that have elapsed since the
immediately preceding Semi-annual Payment Date divided by six and (B) Senior
Debt Obligations with respect to Senior Debt pursuant to Section 2.1(b);
(vi) to repay on a Semi-annual Payment Date principal and interest
on Shareholder Bridge Loans made by any Person in any other Initial Shipper
Group (including, in the case of Ecopetrol, the Shareholders in the Canadian
Group) pursuant to Section 5.3(c) of the Oleoducto Central Agreement in
respect of an Equity Contribution shortfall relating to the Shareholder in the
Related Initial Shipper Group (including, in the case of Ecopetrol, the
Canadian Group) less any amounts due in respect of any such Shareholder Bridge
Loan, the provider of which has commenced, initiated or caused to be initiated
proceedings or has taken any other action that resulted in Bankruptcy of the
Borrower;
(vii) to pay on a Semi-annual Payment Date Transportation Repayment
Obligations owing to the Related TRO Holders in respect of interest and to
repay on a Monthly Payment Date such Transportation Repayment Obligations in
respect of principal less, in each case, any amounts in respect thereof due to
a Related TRO Holder that has commenced, initiated or caused to be initiated
any proceedings or has taken any other action that resulted in Bankruptcy of
the Borrower notwithstanding its agreement to the contrary; and
(viii) for all other purposes (except to make Distributions) on a
Monthly Payment Date and to make Distributions on a Semi-annual Payment Date.
(b) Trustee to Control Proceeds Account During the Continuance
of a Default. Upon the occurrence and during the continuance of a Default
under the Senior Debt Tranche of such Senior Lender Group:
(i) Each Subaccount Bank of the Proceeds Account assigned to the
Trustee for the benefit of the Senior Lender Group pursuant to Section 3.5(a)
shall cease accepting the directions of the Borrower and accept only the
directions of the Trustee upon its receipt of notice of the occurrence and
continuance of a Default;
(ii) The Borrower shall have no right to request the Trustee or any
Subaccount Bank regarding the investment, withdrawal or transfer of funds on
deposit in such Proceeds Account;
(iii) The Trustee shall withdraw funds from such Proceeds Account
in accordance with paragraph (c) below; and
(iv) Upon the receipt by the Trustee of a Cessation Notice with
respect to a continuing Default under such Senior Debt Tranche, the Borrower
shall again have the right to request the Trustee to apply the funds in the
Proceeds Account maintained for the benefit of such Senior Lender Group
pursuant to Section 4.5(a) and the investment of funds therefrom pursuant to
Section 4.6(a) and the Trustee shall direct the related Subaccount Banks to
resume accepting the requests of the Borrower.
(c) Withdrawal Procedures During the Continuance of a Default.
During the continuance of a Default with respect to a Senior Debt Tranche with
respect to which the Trustee shall have received notice of its occurrence and
continuance, the Trustee shall withdraw monies in accordance with the
Officers' Certificate delivered pursuant to Section 4.5(d)(ii) from the
Proceeds Account maintained for the benefit of the Related Senior Lender Group
for any of the following purposes at the times and in the order of priority in
which they are listed below (payments listed in the same clause shall rank
pari passu with each other):
(i) to pay at any time the Related Initial Shipper Group's
Proportionate Share of Extraordinary Operating Costs and/or to pay any Past
Operating Costs with respect to such Proceeds Account, and to pay on a Monthly
Payment Date the Related Initial Shipper Group's Proportionate Share of
Estimated Operating Costs, in each case until the 180th day following the
declaration by the Initial Shipper in the Related Initial Shipper Group of an
Excusable Event (as defined in the Transportation Agreements). Funds to pay
Operating and Maintenance Costs (including Past Operating Costs with respect
to such Proceeds Account) payable in Pesos in Colombia shall, subject to the
proviso below, be first withdrawn from balances available in the related
Colombian Subaccount before any such funds are withdrawn from the related
off-shore Proceeds Account, provided that, if there are insufficient funds in
the related Colombian Subaccount to pay the Related Initial Shipper Group's
Proportionate Share of Estimated Operating Costs or of Extraordinary Operating
Costs and to pay any Past Operating Costs with respect to such Proceeds
Account in each case payable in Pesos in Colombia, the Borrower shall have the
right, at its election, to deposit in such Colombian Subaccount in Pesos the
amount of such shortfall from funds otherwise available to it in Colombia
against a simultaneous withdrawal and remittance to the Borrower in Dollars
off-shore of an equivalent amount from such Proceeds Account, such withdrawal
and remittance to be deemed for all purposes of this Agreement to constitute
the payment of Operating and Maintenance Costs;
(ii) to pay on a Monthly Payment Date (A) the Related Initial
Shipper Group's Proportionate Share of pre-Completion Capital Expenditures
and/or (B) any Past pre-Completion Capital Expenditures with respect to such
Proceeds Account in each case up to the amount of Non-Cash Items and the
annual return on equity referred to in the definition of Annual Revenue
Requirement in the Transportation Agreement included in the Tariffs payable
into such Proceeds Account;
(iii) to repay on a Semi-annual Payment Date Senior Debt
Obligations due and owing to Senior Lenders in such Senior Lender Group other
than in respect of principal and premium, if any, less, in each case, any
amounts in respect thereof due to a Senior Lender in such Senior Lender Group
that has commenced, initiated or caused to be initiated proceedings or has
taken any other action that resulted in Bankruptcy of the Borrower
notwithstanding its agreement herein to the contrary;
(iv) to repay on a Semi-annual Payment Date Senior Debt Obligations
due and owing to Senior Lenders in such Senior Lender Group in respect of
principal (whether at maturity or upon redemption, prepayment or acceleration)
and premium, if any, less, in each case, any amounts in respect thereof due to
a Senior Lender in such Senior Lender Group that has commenced, initiated or
caused to be initiated proceedings or has taken any other action that resulted
in Bankruptcy of the Borrower notwithstanding its agreement herein to the
contrary;
(v) to repay on a Monthly Payment Date that is not a Semi-annual
Payment Date (A) any Senior Debt Obligations due and owing to Senior Lenders
in such Senior Lender Group that have become due and payable on such date
prior to their stated maturity or upon redemption at any time other than on a
Semi-annual Payment Date or that have become due at their stated maturity or
upon redemption, prepayment or acceleration and remain unpaid (and to such
extent), less, in each case, any amounts in respect thereof due to a Senior
Lender in such Senior Lender Group that has commenced, initiated or caused to
be initiated proceedings or has taken any other action that directly resulted
in Bankruptcy of the Borrower notwithstanding its agreement herein to the
contrary, provided, however, that no withdrawal for payment of any amounts
shall be made on a Monthly Payment Date that is not a Semi-annual Payment Date
pursuant to this clause in respect of any Senior Loan unless, and to the
extent that, after giving effect to such withdrawal and all withdrawals
ranking senior thereto, funds remaining in such Proceeds Account (including
funds invested in Authorized Investments), shall be not less than an amount
equal to the sum of Senior Debt Obligations in respect of Senior Loans that
have not so become due and payable or remain unpaid and that are payable
pursuant to clauses (iii) and (iv) above on the next Semi-annual Payment Date
multiplied by a fraction equal to the number of full calendar months that have
elapsed since the immediately preceding Semi-annual Payment Date divided by
six and (B) Senior Debt Obligations with respect to Senior Debt pursuant to
Section 2.1(b);
(vi) to repay on a Semi-annual Payment Date principal and interest
on Shareholder Bridge Loans made by any Person in any other Initial Shipper
Group (including, in the case of Ecopetrol, the Shareholders in the Canadian
Group) pursuant to Section 5.3(c) of the Oleoducto Central Agreement in
respect of an Equity Contribution shortfall relating to the Shareholder in the
Related Initial Shipper Group (including, in the case of Ecopetrol, the
Canadian Group) less any amounts due in respect of any such Shareholder Bridge
Loan, the provider of which has commenced, initiated or caused to be initiated
proceedings or has taken any other action that resulted in Bankruptcy of the
Borrower; and
(vii) except during the continuance of a Default pursuant to
Section 9.1(g), to pay on a Semi-annual Payment Date Transportation Repayment
Obligations owing to the Related TRO Holders in respect of interest and to
repay on a Monthly Payment Date such Transportation Repayment Obligations in
respect of principal less, in each case, any amounts in respect thereof due to
a Related TRO Holder that has commenced, initiated or caused to be initiated
any proceedings or has taken any other action that resulted in Bankruptcy of
the Borrower notwithstanding its agreement to the contrary.
(d) Withdrawal Procedures Generally. (i) No withdrawal shall be
made from a Proceeds Account on a Monthly Payment Date or a Semi-annual
Payment Date, as the case may be, without first giving effect to any
withdrawal to be made on such Monthly Payment Date that is not a Semi-annual
Payment Date or Semi-annual Payment Date, as the case may be, ranking senior
thereto or pari passu therewith, provided that no withdrawal shall be made on
a Monthly Payment Date pursuant to clause (a)(vii) or (viii) unless, and to
the extent that, after giving effect to such withdrawal and all withdrawals
ranking senior thereto, funds remaining in such Proceeds Account (including
funds invested in Authorized Investments) shall be not less than an amount
equal to the sum of Senior Debt Obligations payable pursuant to clause
(a)(iii) and (a)(iv) on the next Semi-annual Payment Date multiplied by a
fraction equal to the number of full calendar months that have elapsed since
the immediately preceding Semi-annual Payment Date divided by six, and
provided, further, that for purposes of withdrawals pursuant to clause
(a)(vii) or (a)(viii), the Borrower shall certify that at the time of any such
withdrawal there is, and immediately following such withdrawal there will be,
continuing no Default or Event of Default with respect to the Related Senior
Debt Tranche.
(ii) Ten Business Days prior to each Payment Date, the Borrower
shall deliver to the Trustee an Officers' Certificate, upon which the Trustee
may conclusively rely, setting forth (A) in reasonable detail sufficient to
comply with this Agreement the calculation of the amount to be disbursed for
payments of Estimated Operating Costs pursuant to paragraph (a)(i) or (c)(i),
in each case specifying the amount thereof payable in Colombia and outside of
Colombia, (B) the Borrower's estimate of the amount, if any, to be disbursed
for pre-Completion Capital Expenditures pursuant to paragraph (a)(ii) or
(c)(ii) during the period commencing on such Payment Date and terminating on
the day immediately prior to the next succeeding Payment Date showing
separately any Past pre-Completion Capital Expenditures with respect to the
related Proceeds Account, and (C) the amounts to be withdrawn pursuant to
paragraphs (a)(vi), (vii) and (viii) and (c)(vi) and (vii). Each such
Officers' Certificate shall contain a warranty that the funds to be disbursed
by the Trustee or Subaccount Banks, as the case may be, to the Borrower set
forth in clauses (A) and (B) above shall be used solely to pay the Related
Initial Shipper Group's Proportionate Share of Estimated Operating Costs and
its Proportionate Share of pre-Completion Capital Expenditures and to pay any
Past pre-Completion Capital Expenditures with respect to such Proceeds
Account, respectively. Each such Officers' Certificate shall state that the
amount of Estimated Operating Costs and pre-Completion Capital Expenditures
contained therein has been based on an Annual Operating Budget of the Borrower
for the month to which it relates and the Capital Budget of the Borrower,
respectively.
(iii) As soon as practicable prior to, or on the Business Day
immediately preceding, a withdrawal for payment of Extraordinary Operating
Costs and/or payment of Past Operating Costs with respect to the related
Proceeds Account pursuant to paragraph (a)(i) and (c)(i), the Borrower shall
deliver to the Trustee an Officers' Certificate, upon which the Trustee may
conclusively rely, setting forth in reasonable detail the amount of
Extraordinary Operating Costs for such period specifying the amount thereof
payable in Colombia and outside of Colombia and showing separately any Past
Operating Costs with respect to such Proceeds Account. Such Officers'
Certificate shall contain a warranty that the funds to be so disbursed by the
Trustee or Subaccount Banks, as the case may be, to the Borrower shall be used
solely to pay the Related Initial Shipper Group's Proportionate Share of
Extraordinary Operating Costs and to pay any Past Operating Costs with respect
to such Proceeds Account and a representation that the funds disbursed by the
Trustee or Subaccount Banks on the immediately preceding Monthly Payment Date
or Semi-annual Payment Date, as the case may be, to the Borrower in respect of
Estimated Operating Costs were used solely to pay the Related Initial Shipper
Group's Proportionate Share of such costs and have been or, by the next
Payment Date, will be exhausted.
(iv) Notwithstanding anything in this Agreement to the contrary:
(A) no withdrawals shall be made from a Proceeds Account (x) to
meet payments that should have been but were not met by withdrawals from
another Proceeds Account due to lack of funds therein or to the application of
this clause (A) or (y) in replacement for any amounts from a Proceeds Account
that should have been but were not deposited therein by allocation from the
Common Account due to a failure of an Initial Shipper or a Throughput Obligor
in an Initial Shipper Group other than that Related to the Senior Lender Group
for the benefit of which such Proceeds Account is maintained to make payments
due under its Transportation Agreement or Advance Tariff Agreement; and
(B) the Senior Lenders in a Senior Lender Group and the Trustee on
their behalf shall be entitled to receive funds from a Proceeds Account only
in respect of the amounts deposited therein in accordance with Section 4.4(a).
Any excess amounts received by any such Person shall be trust funds held by
such Person (without, if possible, intermingling them with other funds held by
it) in trust for the benefit of the Trustee and the Persons entitled thereto
pursuant to this Agreement. Promptly following receipt thereof, any such
excess amounts held by any such Person shall be remitted to the Trustee for
further remittance to the Persons entitled thereto pursuant hereto.
(v) The Trustee and Subaccount Banks shall not hinder any such
transfer or withdrawal requested by the Borrower in accordance with this
Agreement.
Section 4.6. Investment of Funds in Proceeds Accounts. (a)
Prior to Default. Unless a Default shall be continuing with respect to a
Senior Debt Tranche, the Trustee shall invest funds (and vary and redeem such
investments) in the related Proceeds Account in the name of the Trustee, as
requested by the Borrower or, to the extent necessary to comply with paragraph
(c) below, in its discretion, provided, in each case, that the designated
investment is an Authorized Investment.
(b) During the Continuance of a Default. During the continuance
of a Default with respect to a Senior Debt Tranche the Trustee shall invest
funds (and vary and redeem such investments) in the related Proceeds Account
in its discretion or as directed by Majority Senior Lenders in such Senior
Lender Group, provided, in each case, that the designated investment is an
Authorized Investment.
(c) Investment of Funds in Authorized Investments. The Borrower
and the Trustee agree for the benefit of each Senior Lender in a Senior Lender
Group that funds deposited into the Proceeds Account (other than a Colombian
Subaccount) maintained for its benefit, shall, within 10 days of receipt
thereof, be invested in such Authorized Investments as may be requested by the
Borrower (which request the Borrower shall give to the Trustee prior to its
receipt of any such funds) (upon direction of the Throughput Obligor in the
Related Initial Shipper Group) and that any proceeds therefrom shall be
reinvested in Authorized Investments within 10 days of the receipt of such
proceeds in each case to the extent not otherwise withdrawn from such Proceeds
Account in accordance with Section 4.5. In the absence of any such requests,
such funds shall be invested and reinvested in the Authorized Investments
described in paragraph (e) of the definition thereof as may be determined by
the Trustee. The Borrower and the Trustee agree that any funds in a Colombian
Subaccount may be invested only in Colombian government issued
peso-denominated titulos de tesoreria maturing or capable of redemption by the
holder not more than 12 months after the date of investment or acquisition
which are not issued, accepted or guaranteed by the Colombian Subaccount Bank
as requested by the Borrower held in the name of the Colombian Subaccount Bank
as trustee under a fiducia mercantil for the Trustee hereunder and that any
proceeds therefrom shall be reinvested in such investments in each case to the
extent not withdrawn from such Colombian Subaccount in accordance with Section
4.5. In the absence of any such requests, such funds shall be so invested and
reinvested in such titulos de tesoreria or demand deposits, time deposits or
certificates of deposit as may be determined by the Trustee.
(d) Liability of the Trustee. The Trustee shall not be liable
for any loss or penalty arising from or in connection with any investment or
redemption or sale of such investment made in accordance with instructions of
the Borrower pursuant to this Section or by the Trustee pursuant to paragraph
(c) above and shall be fully protected and indemnified in connection therewith
as set forth in Section 12.5.
Section 4.7. Reports to Borrower and Senior Lenders.(a)The Trustee
shall deliver to the Borrower and each Senior Lender in a Senior Lender Group
within 20 Business Days after the end of each calendar month commencing with
the calendar month in which the first deposit is made to the related Proceeds
Account or the Common Account a report in reasonable detail setting forth with
respect to each such account the identity of all Subaccount Banks, all
deposits to and disbursements from such account during such month, including
the date on which made, and the balances of and any investments in such
account at the end of such month. The Trustee shall provide any additional
information or reports relating to any such account and the transactions
therein requested from time to time by the Borrower and any such Senior
Lender.
(b) For reporting purposes only, the Trustee agrees to provide
to the Borrower such information regarding the Proceeds Accounts and the
Common Account as if such accounts were registered in the name of the Borrower
and it were the sole legal and beneficial owner thereof.
ARTICLE FIVE
COMMON REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 5.1. Common Representations and Warranties of Borrower. The
representations and warranties set forth in Appendix G are made by the
Borrower to each Senior Lender in a Senior Lender Group to the extent
expressly provided in the Senior Debt Agreement to which such Senior Lender is
a party and (except as expressly contemplated in Appendix G or such Senior
Debt Agreement) as of the date thereof and as of the date of the initial
disbursement in respect of the Senior Loan thereunder. Except to the extent
contemplated in the preceding sentence, the Borrower does not make any
representations and warranties to any Senior Lender.
ARTICLE SIX
COMMON COVENANTS
Section 6.1. Common Affirmative Covenants. The Borrower agrees
for the benefit of each Senior Lender in a Senior Lender Group that:
(a) Maintenance of Existence. Subject to mandatory requirements
of Colombian law and its By-Laws, the Borrower shall do or cause to be done
all things necessary to maintain itself in existence as a sociedad anonima
under the laws of Colombia.
(b) Merger, Consolidation, Sale of All or Substantially All
Assets. The Borrower:
(i) shall not consolidate, directly or indirectly, with or merge
into any other Person;
(ii) shall not permit any other Person to consolidate, directly or
indirectly, with or merge into the Borrower; and
(iii) shall not, directly or indirectly, transfer, convey, sell,
lease or otherwise dispose of all or substantially all of its properties and
assets as an entirety (whether in one transaction or in a series of related
transactions);
unless, in any such transaction contemplated in clauses (i), (ii) and (iii),
(A) immediately before and after giving effect to such transaction
and treating any Debt Incurred by the Borrower as a result of such transaction
as having been Incurred by the Borrower 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;
(B) the Borrower consolidates with or merges into another Person or
directly or indirectly transfers, conveys, sells, leases or otherwise disposes
of all or substantially all of its properties and assets as an entirety, and
the Person formed by such consolidation or into which the Borrower is merged
or the Person which acquires by transfer, conveyance, sale, lease or other
disposition all or substantially all of the properties and assets of the
Borrower as an entirety (a Successor Borrower) shall be a corporation,
partnership or trust, shall be organized and validly existing under the laws
of Colombia and shall expressly assume by an agreement supplemental hereto
executed and delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the Senior Debt Obligations and the
performance of every covenant contained in this Agreement and the Senior Debt
Agreements with Senior Lenders in such Senior Lender Group on the part of the
Borrower to be performed or observed;
(C) immediately after giving effect to such transaction, and
treating any Debt Incurred by the Borrower as a result of such transaction as
having been Incurred at the time of such transaction, the Borrower or the
Person which acquires by transfer, conveyance, sale, lease or other
disposition all or substantially all of the properties and assets of the
Borrower as an entirety could Incur at least $1.00 of additional Debt pursuant
to Section 6.2(a) or (b), as the case may be; provided, however, that this
sub-clause (C) shall be deemed not to be satisfied if after giving effect to
such transaction the Borrower shall have Incurred any Debt other than Debt
containing limitations on recourse and waivers at least equal to those set
forth in Section 2.2(b); and
(D) the Borrower has delivered to the Trustee an Officers'
Certificate stating that such consolidation, merger, conveyance, transfer,
lease or acquisition complies with this paragraph (b).
provided, however, that in no event shall the Borrower enter into any such
transaction if, as a result of any such transaction, property and assets of
the Borrower would become subject to a Lien which would not be a Permitted
Encumbrance.
Upon any consolidation of the Borrower with, or merger of the Borrower into,
any other Person or any transfer, conveyance, sale, lease or other disposition
of all or substantially all of the properties and assets of the Borrower as an
entirety in accordance with this paragraph (b), the Successor Borrower shall
succeed to, and be substituted for, and may exercise every right and power of,
the Borrower under this Agreement with the same effect as if such successor
Person had been named as the Borrower herein, and thereafter, except in the
case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Agreement.
(c) Business. The Borrower shall not change the purpose of its
business from that set forth in Article 3 of its By-Laws.
(d) Principal Place of Business. The Borrower shall have its
principal place of business and executive office in Santafe de Bogota,
Colombia and shall maintain in such place and/or at the Borrower site
originals or copies of the principal books and records relating to its
business. Other books and records relating to the Borrower may be maintained
at the offices of the Operator either in Colombia or elsewhere. The Borrower
shall give the Trustee and each Senior Lender 30 days' notice before
establishing any place of business in Canada or the United States.
(e) Access. The Borrower shall permit representatives of any
Senior Lender Group or the Trustee not reasonably objected to by the Borrower,
upon reasonable written notice to the Borrower, at the expense (unless
otherwise agreed between such Senior Lender Group or the Trustee, as the case
may be, and the Borrower) and risk of the Senior Lenders naming such
representatives or which shall agree to bear such risk and expenses in respect
of such representatives of the Trustee to visit and inspect the Oleoducto
Central to examine the principal books and records of the Borrower including
without limitation its minute books, books of account and other records, and
make copies thereof or extracts therefrom, and to discuss the business and
finances of the Borrower with senior officers of the Borrower, the Operator
and the Borrower's independent accountants, in each case during normal
business hours and in a manner that does not disrupt the Oleoducto Central,
and as often as such Senior Lender Group or the Trustee may reasonably
request.
(f) Preservation and Sale of Assets; Insurance Proceeds;
Expropriation Compensation. (i) The Borrower shall maintain the Oleoducto
Central facilities in good repair and from time to time make all repairs and
replacements thereto for the transportation of Petroleum from the Cusiana Area
as required by normal industry practice. The Borrower shall, and shall cause
each of its Subsidiaries to, not sell or otherwise dispose of any real or
tangible personal property or assets unless:
(A) such property or assets are or have become obsolete or
redundant in the business of the Borrower or such Subsidiary;
(B) the Borrower or such Subsidiary sells or disposes of such
property or assets in the ordinary course of business; or
(C) subject to clause (iv) below, within 180 days after such
disposition the Borrower declares its intention, evidenced by a Board
Resolution, to replace such property or assets with similar productive
property or assets, in which case, if the Net Proceeds of such disposition
exceed the cost of making such replacement, such excess shall accrue to the
Borrower or such Subsidiary, or, if no such Board Resolution is adopted within
such period, the Borrower shall prepay Senior Debt Obligations in respect of
principal owing to such Senior Lender Group pursuant to Section 8.2 in an
amount equal to the Related Initial Shipper Group's Proportionate Share of the
Net Proceeds of such disposition.
(ii) Subject to clause (iv) below, the Borrower shall, and
shall cause each of its Subsidiaries to, apply any Insurance Proceeds received
by it as follows:
(A) if within 180 days after the casualty giving rise to such
Insurance Proceeds the Borrower declares its intention evidenced by a Board
Resolution to replace the property or assets affected by such casualty with
similar property or assets, to so replace such assets and, if such Insurance
Proceeds exceed the cost of making any such replacement, such excess shall
accrue to the Borrower or such Subsidiary; or
(B) if no such Board Resolution is adopted within such period,
to prepay Senior Debt Obligations in respect of principal owing to such Senior
Lender Group pursuant to Section 8.2 in an amount equal to the Related Initial
Shipper Group's Proportionate Share of such Insurance Proceeds.
(iii) Subject to clause (iv) below, the Borrower shall, and
shall cause each of its Subsidiaries to, apply any Expropriation Compensation
received by it as follows:
(A) if within 180 days after the Expropriatory Action giving
rise to the Expropriatory Compensation the Borrower declares its intention
evidenced by a Board Resolution to replace the property or assets that were
the subject of such Expropriatory Action with similar property or assets, to
so replace such property and assets, and, if such Expropriation Compensation
exceeds the cost of making such replacement, such excess shall accrue to the
Borrower or such Subsidiary; or
(B) if no such Board Resolution is adopted within such period,
to prepay Senior Debt Obligations in respect of principal owing to such Senior
Lender Group pursuant to Section 8.2 in an amount equal to the Related Initial
Shipper Group's Proportionate Share of such Expropriation Compensation.
(iv) This clause (f) shall not apply to the application of Net
Proceeds from any sale or disposition of property or assets by the Borrower or
any of its Subsidiaries, the application of any Insurance Proceeds or the
application of any Expropriation Compensation to the extent that the amounts
received by the Borrower and any of its Subsidiaries during any twelve-month
period in respect of such Net Proceeds, Insurance Proceeds or Expropriation
Compensation, as the case may be, is, in each such case, equal to or less than
$50 million and provided further that payments to Senior Lenders in a Senior
Lender Group pursuant to sub-clauses (i)(C), (ii)(B) and (iii)(B) of this
paragraph (f) shall only be made on a Semi-annual Payment Date and only if the
amount of the Net Proceeds, Insurance Proceeds or Expropriation Compensation,
as the case may be, received by the Borrower and any of its Subsidiaries
during the twelve-month period immediately preceding such Semi-annual Payment
Date and required to be applied to such payments to such Senior Lender Group
and not so applied during such twelve-month period, exceed, in each such case,
the Related Initial Shipper Group's Proportionate Share of $50 million.
(g) Taxes. The Borrower shall, and shall cause each of its
Subsidiaries to, pay and discharge, before the same shall become delinquent,
all taxes, assessments and governmental charges or levies lawfully imposed on
it or its property (including interest and penalties) pursuant to a formal
demand for payment from appropriate governmental officials unless such taxes,
assessments, charges or levies shall be contested in good faith and by
appropriate proceedings and adequate reserves are maintained by the Borrower
with respect thereto. The Borrower shall notify the Trustee, promptly
following the occurrence thereof, of any disputes pending or to its knowledge
threatened between the Borrower or any of its Subsidiaries and any
governmental authority in Colombia relating to claims for taxes due in an
amount exceeding $5 million.
(h) Seek and Maintain Approvals. Borrower shall seek and
maintain in good legal standing and validity all Colombian consents and
approvals set forth in Appendix H hereto and all licenses, permits, contracts
and rights necessary to ensure the construction and the operation of the
Oleoducto Central as set forth in paragraph (k) below, except, in each case,
such as the Borrower shall determine are not necessary or desirable in the
conduct of its business and the loss thereof would not materially adversely
affect the Borrower's ability to repay Senior Debt Obligations owing to such
Senior Lender Group on a timely basis or such Senior Lender Group's ability to
realize on the Assigned Rights assigned hereby or pursuant hereto for its
benefit, such determination to be evidenced by an Officers' Certificate.
(i) Transactions with Affiliates. Each transaction or agreement
between the Borrower or any of its Subsidiaries, on the one hand, and any
Affiliate of any of them, on the other hand, shall be on terms and conditions
no less favorable to the Borrower than those that would be applicable in
comparable transactions with independent parties acting at arm's length.
Senior Lenders in such Senior Lender Group acknowledge that all transactions
contemplated by the Project Agreements (as in effect on the date hereof) and
all Financing Agreements satisfy the requirements of this Section.
(j) Compliance with Law. The Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders unless the necessity of
compliance therewith is contested in good faith by appropriate proceedings.
The Borrower shall notify the Trustee, promptly following the occurrence
thereof, of any disputes pending or to its knowledge threatened between the
Borrower or any of its Subsidiaries and any governmental authority in Colombia
that, if resolved adversely to the Borrower, would materially adversely affect
the Borrower's ability to repay Senior Debt Obligations owing to such Senior
Lender Group on a timely basis or such Senior Lender Groups ability to realize
on the Assigned Rights assigned hereby or pursuant hereto for its benefit.
(k) Operation. The Borrower shall operate the Oleoducto Central
in all respects in accordance with standards from time to time at least as
high as those set forth as of the date hereof in the Technical Services and
Management Agreement with such deviations as would not materially adversely
affect the Borrower's ability to repay Senior Debt Obligations owing to such
Senior Lender Group on a timely basis or the ability of such Senior Lender
Group to realize on the Assigned Rights assigned hereby or pursuant hereto for
its benefit and shall at all times employ an Operator reasonably capable, as
determined by the Borrower, of implementing such standards in said manner.
(l) Amendments, Waivers and Enforcement of Certain Agreements.
(i) The Borrower and the Trustee shall not consent to any amendment or waiver
(A) to the Transportation Agreement with the Initial Shipper
in the Related Initial Shipper Group with respect to the tariff payment or
reserve dedication and shipment obligations of such Initial Shipper
thereunder, unless the Trustee shall have received an Officers' Certificate
from the Borrower to the effect that, after giving effect to such amendment,
the then projected aggregate amounts payable directly or indirectly to the
Proceeds Account maintained for the benefit of such Senior Lender Group in
each fiscal year in the remaining term of such Senior Debt Obligations would
be not less than 130% of the sum of (x) such Initial Shipper's Proportionate
Share of Operating and Maintenance Costs excluding all taxes, assessments,
charges, imposts, income taxes, remittance taxes, excise taxes or other levies
imposed on the Borrower payable during such fiscal year and (y) the Senior
Debt Obligations due to such Senior Lender Group during such fiscal year
provided, however, that in making such computation, the Senior Debt
Obligations calculated based on a floating interest rate shall be computed on
a pro forma basis as if the rate in effect on the date of computation had been
the applicable rate for the entire period,
(B) to the Advance Tariff Agreement with the Throughput Obligor in
the Related Initial Shipper Group with respect to the payment obligations of
the Throughput Obligors, unless the Trustee shall have received an Officers'
Certificate from the Borrower to the effect that such payment obligations
shall not decrease as a result thereof,
(C) to the Subscription Agreement with the Shareholder in the
Related Initial Shipper Group and, in the case of Ecopetrol, each Shareholder
in the Canadian Group, with respect to its payment obligations thereunder,
unless the Trustee shall have received an Officers' Certificate from the
Borrower to the effect that such payment obligations shall not decrease as a
result thereof, or
(D) to the Performance Guarantee Agreement with a Person in the
Related Initial Shipper Group, or, in the case of Ecopetrol, the Canadian
Group with respect to its payment obligations thereunder, unless the Trustee
shall have received an Officers' Certificate from the Borrower to the effect
that such payment obligations shall not decrease as a result thereof,
or, in each case (A) through (D), unless (1) if any Senior Lender in
such Senior Lender Group is a trustee or agent for holders of Senior Debt
issued in the public or private capital markets, the Trustee has received the
prior written advice from any two Internationally Recognized Statistical
Rating Agencies that their then current ratings of any Senior Loans of the
Borrower would not be negatively impacted by any such amendment or (2)
Supermajority Senior Lenders in such Senior Lender Group have consented to
such amendment or waiver in writing after notice of any such amendment or
waiver was provided to the Trustee by the Borrower and, in each case, the
Trustee shall have received (x) an Opinion of Counsel that such amendment has
been duly authorized, executed and delivered by the Borrower and constitutes a
valid and legally binding obligation enforceable in accordance with its terms,
and (y) an Officers' Certificate stating that as a result of such amendment 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.
(ii) The Borrower and the Trustee shall not consent to any other
amendments or waivers not specified in clause (i) above with respect to the
Financing Agreements with Persons in the Related Initial Shipper Group unless
(A) the Trustee has received an Officers' Certificate from the Borrower that
the proposed amendment would not materially adversely affect the Borrower's
ability to repay Senior Debt Obligations owing to such Senior Lender Group on
a timely basis or the ability of such Senior Lender Group to realize on the
Assigned Rights assigned hereby or pursuant hereto for its benefit, (B) if any
Senior Lender in such Senior Lender Group is a trustee or agent for holders of
Senior Debt issued in the public or private capital markets, the Trustee has
received the prior written advice from any two Internationally Recognized
Statistical Rating Agencies that their then current ratings of any Senior
Loans of the Borrower would not be negatively impacted by such amendment, or
(C) Majority Senior Lenders in such Senior Lender Group have consented to such
amendment or waiver in writing after notice of any such amendment or waiver
was provided to the Trustee by the Borrower and, in the case of an amendment,
the Trustee shall have received (x) an Opinion of Counsel that such amendment
has been duly authorized, executed and delivered by the Borrower and
constitutes a valid and legally binding obligation enforceable in accordance
with its terms, and (y) an Officers' Certificate stating that as a result of
such amendment 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.
(iii) Subject to paragraph (t) below, in the event that a waiver
under the Advance Tariff Agreement with the Throughput Obligor in the Related
Initial Shipper Group, including a waiver of any past default (other than with
respect to the obligation to make Advance Tariff Payments calculated based on
clauses (a) and (b)(C) of the definition of Revenue Shortfall to the extent it
relates to another Initial Shipper Group), is requested by such Throughput
Obligor and Majority or Supermajority Senior Lenders, as the case may be, in
the Related Initial Shipper Group have consented to such waiver, the Borrower
and the Trustee shall be obligated to grant such waiver.
(m) Use of Proceeds. The Borrower shall use the proceeds from
the Senior Loans under the Related Senior Debt Tranche and the Equity
Contributions (including payments under any Performance Guarantee Agreement
with respect thereto) of any Person in the Related Initial Shipper Group and,
in the case of Ecopetrol, the Canadian Group in all circumstances (except in
the case of Equity Contributions pursuant to a special call made following the
Bankruptcy of the Borrower, Decommissioning or a unanimous decision of the
Board of Directors not to continue with the Oleoducto Central, in which case
such funds shall be deposited into the Proceeds Account maintained for the
benefit of such Senior Lender Group pursuant to Section 4.4(a)(iii)) to
finance Capital Expenditures, to refinance Debt Incurred to finance Capital
Expenditures and to purchase Petroleum from Initial Shippers and others for
the purpose of line fill and, in the case of proceeds from such Senior Loans
only, to finance working capital needs, and for no other purpose. Pending such
application, the Borrower may invest such proceeds in Authorized Investments.
(n) Payments into Proceeds Account and the Common Account. The
Borrower agrees that it will deposit or cause to be deposited in the Proceeds
Account established with the Trustee for the benefit of such Senior Lender
Group all funds to be deposited therein pursuant to Section 4.4(a) and to
deposit or cause to be deposited in the Common Account all funds to be
deposited therein pursuant to Section 4.1. If the Borrower receives any such
funds, it shall hold such funds (without, if possible, intermingling them with
other funds held by it) in trust for the benefit of the Trustee and promptly
following receipt remit such funds to the Trustee for deposit to the Proceeds
Account maintained for the benefit of such Senior Lender Group or the Common
Account, as the case may be.
(o) Insurance.
(i) Insurance Coverage. The Borrower shall, and shall cause
each of its Subsidiaries to, maintain insurance with insurers of good repute,
with such coverage (including deductibles and exclusions) and in such forms
and amounts as are customarily provided for pipeline transportation systems of
the type, scale and geographic location of the Oleoducto Central, as
determined in the good faith judgment of the Board of Directors of the
Borrower after taking into account availability, cost, condition and policy of
the Borrower and amount of Senior Debt outstanding.
(ii) Information. The Borrower shall promptly inform the
Trustee in writing of material disputes with insurers, failure to pay any
premium or material reduction in coverage maintained and shall deliver to the
Trustee upon its request copies of certificates of insurance and binders or
brokers' undertaking letters.
(p) Reporting Obligations. The Borrower shall furnish in English
to the Trustee for delivery to each Senior Lender in such Senior Lender Group:
(i) Construction and Operations Reports. Not later than 45 days
after the end of each fiscal quarter, the Borrower shall furnish to the
Trustee for delivery to each Senior Lender in such Senior Lender Group (i) a
summary of construction or operations, as the case may be, of the Oleoducto
Central conducted during such quarter, together with a profit and loss
account, statement of source and application of funds and balance sheets
showing actual expenditures to date against the applicable Capital Budget and
Annual Operating Budget, and latest estimates to Completion or fiscal year
end, as the case may be, and (ii) prior to Completion, a construction report
showing physical progress to date against the Capital Budget and latest
estimates to Completion.
(ii) Annual Operating Budget and Capital Budget. Promptly
following adoption thereof by the Borrower's Board of Directors, but in no
event later than 45 days prior to the beginning of each fiscal year of the
Borrower, the Annual Operating Budget and Capital Budget approved by the
Borrower's Board of Directors in the form in which it then exists for such
fiscal year. Any material changes to such Annual Budget or Capital Budget
approved by the Borrower's Board of Directors shall promptly be provided to
the Trustee.
(iii) Unaudited Quarterly Financial Statements. As soon as
available but in no event more than 45 days after the end of the first, second
and third fiscal quarters of the Borrower, unaudited financial statements of
the Borrower consisting of balance sheets as of the end of such fiscal quarter
and statements of profit and loss for such fiscal quarter, prepared in
accordance with generally accepted accounting principles in Colombia (together
with a reconciliation to generally accepted accounting principles in the
United States) and expressed in Colombian currency.
(iv) Semi-annual and Annual Audited Financial Statements. As
soon as available but in no event more than 75 days after the end of the first
six-month fiscal period of each fiscal year of the Borrower and the end of
each such fiscal year, audited financial statements of the Borrower consisting
of balance sheets as of the end of such six-month fiscal period or fiscal
year, as the case may be, and statements of profit and loss and changes in
financial position for such six-month fiscal period or fiscal year, as the
case may be, prepared in accordance with generally accepted accounting
principles in Colombia (together with a reconciliation to generally accepted
accounting principles in the United States) and expressed in Colombian
currency certified by independent public accountants of international standing
appointed from time to time by the Borrower.
(v) Security Holder Documents. Promptly after the sending or
filing thereof, copies of all reports which the Borrower sends to any of its
public security holders or files with regulatory authorities with respect to
its outstanding securities that have been requested by the Trustee.
(vi) Agreement Amendments. Promptly after the execution and
delivery thereof, copies of all amendments to Project Agreements and Financing
Agreements with Persons in the Related Initial Shipper Group and Assignment
Agreements with respect thereto.
(vii) Other Information. As promptly as possible following a
request, such additional information relating to the Oleoducto Central and
relevant to the ability of the Borrower to perform its obligations hereunder
as the Trustee or Majority Senior Lenders in such Senior Lender Group from
time to time may reasonably request.
(q) Notice of Extraordinary Events. The Borrower shall notify
the Trustee for delivery to each Senior Lender in such Senior Lender Group
upon its discovery of the occurrence of:
(i) any Default or Event of Default as soon as possible and in any
event within five Business Days after such discovery;
(ii) any default by any party under any Financing Agreement with a
Person in the Related Initial Shipper Group and, in the case of Ecopetrol, the
Canadian Group that would materially adversely affect the ability of the
Borrower to repay the Senior Debt Obligations owing to such Senior Lender
Group on a timely basis or on the ability of such Senior Lender Group to
realize on the Assigned Rights assigned hereby or pursuant hereto for its
benefit promptly after such discovery;
(iii) any litigation, arbitration or governmental proceeding that
is instituted or threatened against the Borrower or any of its Subsidiaries
that, if decided against the Borrower or any such Subsidiary, would have a
material adverse effect on the ability of the Borrower to repay the Senior
Debt Obligations owing to such Senior Lender Group on a timely basis or on the
ability of such Senior Lender Group to realize on the Assigned Rights assigned
hereby or pursuant hereto for its benefit promptly after such discovery; and
(iv) any other unexpected event or occurrence known to the Borrower
if such occurrence is reasonably expected to have a material adverse effect on
the ability of the Borrower to repay the Senior Debt Obligations owing to such
Senior Lender Group on a timely basis or on the ability of such Senior Lender
Group to realize on the Assigned Rights assigned hereby or pursuant hereto for
its benefit promptly after such discovery;
in each case describing the nature thereof and the action the Borrower
proposes to take with respect thereto.
(r) Books and Records. The Borrower shall keep proper books of
record and accounts in which entries will be made of transactions of or in
relation to its business and shall keep accounts and financial and cost
records in Colombian currency in accordance with generally accepted accounting
principles in Colombia.
(s) Decommissioning; Unanimous Decision Not to Continue with the
Oleoducto Central. In the event of Decommissioning or a unanimous decision of
the Board of Directors not to continue with the Oleoducto Central the Borrower
shall, if and to the extent so required under any Senior Debt Agreement with
Senior Lenders in such Senior Lender Group, prepay Senior Debt Obligations
owing to such Senior Lenders in accordance with Section 8.2.
(t) Enforcement of Certain Agreements. The Borrower and the
Trustee agree for the benefit of all Senior Lender Groups to diligently
enforce their respective rights, if any, (i) under the Financing Agreements
with Persons in all Initial Shipper Groups to the extent that payments
thereunder that are required to be deposited in the Common Account and
allocated to the Initial Shipper or the Throughput Obligor in an Initial
Shipper Group pursuant to Section 4.1 are not being so deposited unless their
respective obligations under this clause have been waived by Majority Senior
Lenders in every Senior Lender Group other than the Senior Lender Group
Related to the Initial Shipper Group payments of which have not been so
deposited in the Common Account, and (ii) under the Technical Services and
Management Agreement.
Section 6.2. Common Negative Covenants. The Borrower agrees for the
benefit of each Senior Lender Group that:
(a) Limitation on Senior Debt Pre-Completion. Prior to
Completion,
(i) the Borrower shall not at any time permit to be outstanding
Senior Debt in an aggregate principal amount under all Senior Debt Tranches
(excluding the notional amount of any Senior Debt that is Debt under clause
(iv) of the definition thereof herein to the extent such notional amount is
not in excess of the aggregate principal amount outstanding of all other
Senior Debt) exceeding $1,600 million; and
(ii) the Borrower shall not at any time Incur Senior Debt under the
Related Senior Debt Tranche if, immediately after giving effect to such
Incurrence, the Senior Debt to Equity Ratio with respect to such Senior Debt
Tranche would exceed 85/15;
provided in each case that the Borrower may Incur Senior Debt under the
Related Senior Debt Tranche to renew, extend, substitute, refund, refinance or
replace all or any portion of any outstanding Senior Debt under such Senior
Debt Tranche (plus any redemption premiums payable thereon), provided further
that the principal amount thereof is not otherwise thereby increased.
(b) Limitation on Senior Debt Post-Completion. On and after
Completion, the Borrower shall not Incur at any time Senior Debt unless (i)
immediately after giving effect to any such Incurrence of Senior Debt under
the Related Senior Debt Tranche, the Senior Debt to Equity Ratio with respect
to such Senior Debt Tranche would not exceed 70/30, (ii) such Senior Debt
under such Senior Debt Tranche is Incurred to renew, extend, substitute,
refund, refinance or replace all or any portion of outstanding Senior Debt
under such Senior Debt Tranche (plus any redemption premiums payable thereon),
provided that the principal amount thereof is not otherwise thereby increased,
(iii) such Senior Debt under such Senior Debt Tranche is Incurred by the
Borrower to any Wholly Owned Subsidiary of the Borrower (provided that such
Senior Debt is at all times held by a Person which is a Wholly Owned
Subsidiary of the Borrower), provided, however, that for purposes of this
Section 6.2(b), upon either (A) the transfer or other disposition by such
Wholly Owned Subsidiary of any Senior Debt so permitted to a Person other than
the Borrower or another Wholly Owned Subsidiary of the Borrower or (B) the
issuance (other than directors' qualifying shares), sale, lease, transfer or
other disposition of shares of Capital Stock (including by consolidation or
merger) of such Wholly Owned Subsidiary to a Person other than the Borrower or
another such Wholly Owned Subsidiary, the provisions of this clause (iii)
shall no longer be applicable to such Senior Debt and such Senior Debt shall
be deemed to have been Incurred at the time of such issuance, sale, lease,
transfer or other disposition.
(c) Limitation on Guarantees. The Borrower shall not, and shall
not permit any of its Subsidiaries to, provide Guarantees of obligations of
others except for (i) indemnities with respect to unfiled materialmen's,
mechanics, workmen's, repairmen's, employee's or other like Liens arising in
the course of construction or in the ordinary course of operations or
maintenance of the Oleoducto Central, (ii) indemnities to governmental
agencies or authorities relating to any expenses incurred that are incidental
to obtaining easements for the benefit of the Oleoducto Central, (iii)
indemnities hereunder to the Trustee or under the Financing Agreements or the
Project Agreements, or (iv) guarantees of obligations of suppliers in the
ordinary course of business not exceeding $5 million in the aggregate.
Guarantee means, for purposes of this paragraph (c), any obligation,
contingent or otherwise, of the Borrower or any of its Subsidiaries
guaranteeing any Debt of any other Person (the primary obligor) in any manner,
whether directly or indirectly, and including, without limitation, any
obligation of the Borrower or any of its Subsidiaries (A) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Debt, (B) to purchase property, securities or services for
the purpose of assuring the holder of such Debt of the payment of such Debt,
or (C) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Debt; provided, however, that guarantee for
purposes of this paragraph (c) shall not include endorsements by the Borrower
or any of its Subsidiaries for collection or deposit, in either case, in the
ordinary course of business.
(d) Negative Pledge. Other than with respect to Liens securing
Senior Debt to the extent contemplated by this Agreement, the Borrower shall
not, and shall not permit any of its Subsidiaries to, create, Incur, assume or
suffer to exist any Liens upon any of its assets or properties (whether now
owned or hereinafter acquired) or the Assigned Rights securing the Related
Senior Debt Tranche, other than Permitted Encumbrances, or assign any right to
receive income, in each case to secure or provide for the payment of any
Indebtedness of any Person, provided that the Borrower and any of its
Subsidiaries may so create, Incur, assume or suffer to exist any such Liens or
assign rights to receive income with the prior written consent of the Initial
Shipper in each Initial Shipper Group, if it equally and ratably secures such
Senior Debt Tranche or, in the event the obligations secured by such Lien are
subordinate in right of payment to the Senior Debt, prior to such obligations
for so long as such obligations shall be so secured, and provided, further,
that the Borrower may create under or pursuant to a Senior Debt Agreement
escrow or trust accounts into which the proceeds of Senior Debt under such
Senior Debt Agreement, the proceeds therefrom and no other funds shall be
deposited and may create, Incur or suffer to exist any Lien on such accounts
for the sole benefit of the Senior Lender under such Senior Debt Agreement.
(e) Limitation on Loans. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make any loans or advances other than (i)
Authorized Investments, (ii) loans in an aggregate principal amount
outstanding at any one time not exceeding $5 million on a consolidated basis
and (iii) loans from a Wholly Owned Subsidiary to the Borrower.
(f) Limitation on Distributions. The Borrower shall not make,
and shall not permit any of its Subsidiaries other than a Wholly Owned
Subsidiary to make, any Distributions prior to the earlier of Completion and
December 31, 1998.
(g) Transfers of Shareholding Interest. Subject to applicable
law, the Borrower shall not consent to any transfer, pledge, encumbrance or
hypothecation of a Shareholding Interest unless such transfer, pledge,
encumbrance or hypothecation is permitted under the terms of the Oleoducto
Central Agreement.
(h) Limitation on Certain Debt. The Borrower shall not Incur any
Debt (other than under Liquidity Facilities) that does not constitute Senior
Debt or Transportation Repayment Obligations or does not contain subordination
terms at least as favorable to Senior Debt as Subordinated Debt. The Borrower
shall not permit any of its Subsidiaries to Incur any Debt other than to
renew, extend, substitute, refund, refinance or replace all or any portion of
any such Subsidiary's outstanding Debt (plus any redemption premiums payable
thereon) provided that the principal amount thereof is not otherwise thereby
increased.
Section 6.3. Waiver of Covenants. The Borrower or the Trustee,
as the case may be, may omit in any particular instance to comply with any
covenant or condition set forth in Section 6.1 or 6.2 if, before the time for
such compliance, Supermajority Senior Lenders in a Senior Lender Group, if
such consent is required under Section 6.1, or, otherwise, Majority Senior
Lenders in a Senior Lender Group shall either consent in writing to waive such
compliance in such instance or to generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Borrower and the
duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.
ARTICLE SEVEN
COMMON CONDITIONS TO DISBURSEMENTS
Section 7.1. Common Conditions Precedent to Initial Disbursements
of Senior Loans. The obligations of each Senior Lender in a Senior Lender
Group to make initial and subsequent disbursements of Senior Debt shall be
subject, to the extent expressly provided in the Senior Debt Agreement to
which such Senior Lender is a party, to the satisfaction (or waiver by such
Senior Lender) of the common conditions precedent set forth in Appendix I.
Unless so provided in the Senior Debt Agreement, the conditions precedent set
forth in Appendix I shall not apply to the obligation of any Senior Lender to
make disbursements of Senior Debt.
ARTICLE EIGHT
PAYMENTS AND PREPAYMENTS
Section 8.1. Prepayment under Single Senior Debt Agreement. The
Borrower may at any time pay or prepay in whole or in part the Senior Debt
Obligations owing to the Senior Lender in a Senior Lender Group under a single
Senior Debt Agreement on the terms and conditions set forth in such agreement.
If any Senior Debt commitments then remain available and undrawn, the
obligations of other Senior Lenders in such Senior Lender Group to make
additional Senior Loans under the Related Senior Debt Tranche shall, subject
to the terms and conditions set forth in their respective Senior Debt
Agreements and to the extent no other event has then suspended such
obligations, not be affected by such payment or prepayment. The Borrower shall
notify the Trustee of payments of the type referred to in this Section 8.1.
Section 8.2. Mandatory Prepayments. Payments to Senior Lenders in a
Senior Lender Group pursuant to Section 6.1(f) and (s) (Mandatory Prepayments)
shall be made on a Semi-annual Payment Date.
Section 8.3. Partial Payments. If at any time when Senior Debt
Obligations are payable to Senior Lenders in a Senior Lender Group there are
insufficient funds to satisfy all such Senior Debt Obligations, such funds
shall be paid to such Senior Lenders through Pro Rata Payments. If any time at
which any Senior Debt Obligations are payable to a Senior Lender in a Senior
Lender Group such Senior Lender in such Senior Lender Group receives
insufficient funds pursuant to its Senior Debt Agreement or this Agreement to
pay in full all Senior Debt Obligations under the Related Senior Debt Tranche
payable to such Senior Lender at such time, for purposes of computations
hereunder, and under its Senior Debt Agreement, the funds so received by such
Senior Lender at such time shall be deemed to be applied as follows:
FIRST, to fees, commissions, indemnities, expenses and all amounts
(other than principal of and interest on the Senior Debt) payable to such
Senior Lender in such Senior Lender Group;
SECOND, to interest (including post-default interest) on the Senior
Debt held by such Senior Lender in such Senior Lender Group; and
THIRD, to principal of the Senior Debt held by such Senior Lender in
such Senior Lender Group;
provided that such Senior Lender in such Senior Lender Group may apply such
funds in a different order, but any such application shall not affect the
obligations of the Borrower hereunder or under any Senior Debt Agreement.
ARTICLE NINE
EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Common Events of Default. An Event of Default shall
occur separately with respect to a Senior Debt Tranche if:
(a) Breach of Covenant. The Borrower shall breach any of its
obligations to any Senior Lender in the Related Senior Lender Group hereunder
or pursuant hereto which shall continue unremedied for 30 days after notice
thereof (specifying such default and requiring that it be remedied) is given
to the Borrower by the Trustee upon instruction by or with the written consent
of the Supermajority Senior Lenders in such Senior Lender Group;
(b) Bankruptcy. Bankruptcy of the Borrower or any Person in the
Related Initial Shipper Group that is party to a Financing Agreement shall
have occurred and, in the case of Bankruptcy pursuant to clause (a) of the
definition of Bankruptcy herein, such Bankruptcy shall remain unstayed and in
effect for a period of 90 consecutive days from the date of such occurrence;
(c) Assignments and Security Interests Invalid. Any assignment
of rights under a Financing Agreement with a Person in the Related Initial
Shipper Group and, in the case of Ecopetrol, the Canadian Group, or any
Assigned Rights assigned hereby or pursuant hereto for the benefit of such
Senior Lender Group is, in the reasonable opinion of common counsel to Senior
Lenders, not valid or perfected (other than to the extent noted in legal
opinions delivered at the first drawdown date) and such invalidation is not
cured within 30 days of notice of the same by the Trustee delivered to the
Borrower upon instruction by or with the written consent of Majority Senior
Lenders in such Senior Lender Group provided that such 30 day period shall
apply only so long as the Borrower is attempting in good faith to cure such
invalidation;
(d) Unsatisfied Judgments. A final judgment or final judgments
for the payment of money shall have been entered against the Borrower (other
than, with respect to such Senior Debt Tranche, by any Senior Lender in a
Senior Lender Group other than the Senior Lender Group under such Senior Debt
Tranche or by the Trustee on behalf of any Senior Lender in such other Senior
Lender Group) in an aggregate amount in excess of $35 million by a court or
courts of competent jurisdiction, which judgments remain undischarged or
unbonded for a period (during which execution shall not be effectively stayed)
of 90 days after the right to appeal all such judgments has expired;
(e) Unenforceability of Certain Agreements. Any of this
Agreement or any Financing Agreement with a Person in the Related Initial
Shipper Group and, in the case of Ecopetrol, the Canadian Group, or any
Assignment Agreement relating thereto is, in the reasonable opinion of common
counsel to Senior Lender, unenforceable (other than to the extent noted in
legal opinions delivered at the first drawdown date) or is expressly
repudiated by any party thereto (which party has also ceased to perform its
obligations thereunder) and such unenforceability is not cured within 30 days
of notice of the same by the Trustee delivered to the Borrower upon
instruction by or with the written consent of Majority Senior Lenders in such
Senior Lender Group provided that such 30 day period shall apply only so long
as the Borrower is attempting in good faith to cure such unenforceability;
(f) Default under and Termination of Certain Agreements. A
default under any Financing Agreement with a Person in the Related Initial
Shipper Group and, in the case of Ecopetrol, the Canadian Group or any
Assignment Agreement with respect thereto (which default is not cured within
any applicable grace periods set forth therein and which is further not cured
within 30 days of notice of same by the Trustee delivered to the Borrower upon
instruction by or with the written consent of Majority Senior Lenders in such
Senior Lender Group), or premature termination of any of said agreements
which, in each case, would materially adversely affect the Borrower's ability
to repay Senior Debt Obligations owing to such Senior Lender Group on a timely
basis or the ability of such Senior Lender Group to realize on the Assigned
Rights assigned hereby or pursuant hereto for its benefit;
(g) Payment Defaults. Failure by the Borrower to pay any Senior
Debt Obligation owing to any Senior Lender in the Related Senior Lender Group
in respect of (i) any amount (other than in respect of principal of or any
premium on any Senior Loan) when it becomes due and payable, and continuance
of such default for the number of days in each case set forth in the Senior
Debt Agreement with respect to such Senior Loan, or (ii) the principal of or
any premium on any Senior Loan when due under the Senior Debt Agreement with
respect thereto; or
(h) Cross-Acceleration within Senior Debt Tranche. There shall
have occurred a default with respect to any Senior Loan under such Senior Debt
Tranche with the minimum principal amount outstanding specified in any Senior
Debt Agreement with Senior Lenders in such Senior Lender Group which shall
have resulted in such Senior Loan becoming or being declared due and payable
prior to the stated maturity thereof (all applicable grace periods having
expired).
Section 9.2. Declaration of Default. Upon the receipt by the
Trustee of one or more of the following:
(i) a certificate from Majority Senior Lenders in a Senior Lender
Group stating that an Event of Default described in Section 9.1 (other than
Section 9.1(a) or (b)) has occurred and is continuing with respect to its
Senior Debt Tranche; or
(ii) a certificate from Supermajority Senior Lenders in a Senior
Lender Group stating that an Event of Default described in Section 9.1(a) has
occurred with respect to its Senior Debt Tranche;
the Trustee shall, by notice to the Borrower and to each Person in the Related
Initial Shipper Group and, in the case of Ecopetrol, the Canadian Group that
is party to a Financing Agreement, and to each other Senior Lender in such
Senior Lender Group, declare that a Default has occurred with respect to such
Senior Debt Tranche.
(b) If an Event of Default described in Section 9.1(b) shall
occur and be continuing, a Default shall automatically occur without any
declaration or act by the Trustee or any Senior Lender.
Section 9.3. Cessation of Default. Without prejudice to any of its
rights hereunder, any Senior Lender in a Senior Lender Group that has
instructed the Trustee to notify the Borrower of an Event of Default or to
declare a Default with respect to its Senior Debt Tranche agrees promptly to
notify the Trustee upon the cessation of an Event of Default and, in the case
of an Event of Default pursuant to Section 9.1(a), (c), (e) and (f) or a
Default declared pursuant to Section 9.2, such notice shall be effective upon
its receipt by the Trustee from Majority Senior Lenders in such Senior Lender
Group. Any notice given pursuant to this Section 9.3 shall be a Cessation
Notice. Promptly upon receipt of a Cessation Notice, the Trustee shall deliver
a copy thereof to the Borrower.
Section 9.4. Timing of Remedies. (a) Immediately upon the
declaration or occurrence of a Default with respect to a Senior Debt Tranche
pursuant to an Event of Default under Section 9.1 (other than an Event of
Default under Section 9.1(a)), all remedies under Section 9.5 (other than
default interest as provided in Section 9.5(d), which shall apply only in case
of a payment default under Section 9.1(g)) shall be available to the Senior
Lender Group under such Senior Debt Tranche;
(b) Immediately upon the declaration of a Default with respect to a
Senior Debt Tranche pursuant to an Event of Default under Section 9.1(a), the
remedies set forth under Section 9.5(a), Section 9.5(b) and Section 9.5(c)
shall be available to the Senior Lender Group under such Senior Debt Tranche;
and
(c) After 90 days following the declaration of any Default with
respect to a Senior Debt Tranche pursuant to an Event of Default under Section
9.1(a), all remedies under Section 9.5 (other than under clause (e) thereof)
shall be available to the Senior Lender Group under such Senior Debt Tranche.
Section 9.5. Common Remedies. Subject to Section 9.4, the following
remedies shall be available to a Senior Lender Group in case a Default is
declared or has occurred and is continuing under Section 9.2 with respect to
such Senior Lender Group's Senior Debt Tranche:
(a) Suspension of Senior Debt Tranche Commitments. To the extent
provided in the Senior Debt Agreement with a Senior Lender in such Senior
Lender Group, the suspension of the obligation of such Senior Lender to lend
further funds to Borrower.
(b) Termination of Senior Debt Tranche Commitments. To the
extent provided in the Senior Debt Agreement with a Senior Lender in such
Senior Lender Group, the termination of the obligation of such Senior Lender
to lend further funds to Borrower.
(c) Management of the Accounts. The Trustee shall take control
of the management of the Proceeds Account maintained by it for the benefit of
such Senior Lender Group pursuant to Section 4.5(b) and (c) and, to the extent
of the security interest granted therein for the benefit of such Senior Lender
Group, the Common Account.
(d) Default Interest. The Default Interest Rate shall apply to
any defaulted payment.
(e) Acceleration. The Trustee may, and shall if so directed in
writing by Supermajority Senior Lenders in the Related Senior Lender Group
(such direction, or any direction pursuant to clause (f) below, an Enforcement
Direction), accelerate and declare forthwith due and payable all outstanding
Senior Loans owing to such Senior Lender Group, provided that upon the
occurrence of an Event of Default described in Section 9.1(b) all outstanding
Senior Loans owing to such Senior Lender Group shall automatically be
accelerated and shall forthwith become due and payable without any declaration
or act by the Trustee or any Senior Lender.
(f) Enforcement. The Trustee may, and shall if so directed in
writing by Supermajority Senior Lenders in the Related Senior Lender Group,
exercise and enforce any and all of its rights under the Financing Agreements
with Persons in the Related Initial Shipper Group pursuant to the Assignment
Agreements to the extent of the interest therein of such Senior Lender Group
and to enforce any and all security interests granted for the benefit of such
Senior Lender Group hereunder or pursuant hereto, including:
(i) To exercise any and all rights and remedies assigned for
the benefit of such Related Senior Lender Group under the Assignment
Agreements with respect to the Financing Agreements with Persons in the
Related Initial Shipper Group; and
(ii) To exercise the right of seizure of all funds in the Proceeds
Account maintained for the benefit of such Senior Lender Group and the Common
Account to the extent of the interest therein of such Senior Lender Group in
accordance with the terms hereof and to apply such funds pursuant to Sections
4.5(b) and (c) and Section 4.1, respectively.
Nothing herein shall require, authorize or permit the Trustee to exercise any
right under any Financing Agreement assigned to it pursuant to an Enforcement
Direction by a Senior Lender Group to the extent that the proceeds from such
exercise would not be allocable (directly or indirectly through the Common
Account) pursuant hereto into the Proceeds Account maintained for the benefit
of such Senior Lender Group.
(g) Call under the Advance Tariff Agreement. Any Senior Lender
in such Senior Lender Group shall have the right to direct the Trustee to make
a call for an Advance Tariff Payment under the Advance Tariff Agreement with
the Throughput Obligor in the Related Initial Shipper Group in accordance with
Section 3.7.
Section 9.6. Trustee May Enforce Claims. All remedies, rights of
action and claims under this Agreement may be prosecuted and enforced by the
Trustee in its own name as trustee of an express trust; provided, however,
that the Trustee is also hereby appointed as agent for Senior Lenders in each
Senior Lender Group for this and the other purposes of this Agreement, and the
Trustee may, if necessary under applicable law, take such action solely as
agent for such Senior Lender in such Senior Lender Group. This
power-of-attorney shall include the right to commence or initiate judicial or
other proceedings and to revoke, cancel, annul, move to dismiss or otherwise
undo any such commencement or initiation of proceedings or any other action
leading to Bankruptcy of the Borrower and to reinstate the Borrower and
otherwise eliminate all consequences of, and restore all damages caused by,
such Bankruptcy. Any recovery of judgment by the Trustee shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
benefit of Senior Lenders in the related Senior Lender Group and deposited to
the Proceeds Account maintained for the benefit of such Senior Lender Group
for application as provided in Section 4.5(c). This power-of-attorney is
coupled with an interest of each other Senior Lender and the Trustee and shall
be irrevocable.
Section 9.7. Control of Enforcement Action. Subject to Section
2.2(b) and receipt by the Trustee of indemnity satisfactory to it, the
Majority Senior Lenders in a Senior Lender Group shall have the right, after
the giving of an Enforcement Direction:
(i) to require the Trustee to enforce this Agreement, either
by judicial proceedings for the enforcement of the payment of Senior Debt
Obligations owing to such Senior Lender Group and the enforcement of the
rights assigned and the security interests created for its benefit under or
pursuant to this Agreement and any of the Assignment Agreements; and
(ii) to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee hereunder; provided that (A) such direction
shall not be in conflict with applicable law, this Agreement or any of the
Assignment Agreements and (B) the Trustee may take any other action incidental
to carrying out any direction of Majority Senior Lenders in such Senior Lender
Group.
Section 9.8. Nature of Remedies. (a) No remedy conferred upon the
Trustee or any Senior Lender in a Senior Lender Group herein or under any
Senior Debt Agreement or Assignment Agreement is intended to be exclusive of
any other remedy so conferred and each and every such remedy shall be
cumulative. The remedies conferred herein, under any Senior Debt Agreement or
under any Assignment Agreement shall be the exclusive remedies of the Senior
Lenders against the Borrower or any Assigned Rights in connection with the
transactions contemplated hereby and thereby and neither the Trustee nor any
Senior Lender shall have any other remedy now or hereafter existing
contractually, at law or in equity or by statute or otherwise against the
Borrower or any Assigned Rights. All remedies granted hereunder or pursuant
hereto or under any Senior Debt Agreement or Assignment Agreement are subject
to Section 2.2(b) and to this Article Nine.
(b) The amounts payable by the Borrower at any time under each
Senior Debt Agreement shall be a separate and independent Debt and each Senior
Lender in a Senior Lender Group, except as otherwise specifically provided in
this Agreement (including Section 2.2(b)), shall be entitled to protect and
enforce its rights arising out of this Agreement and its Senior Debt Agreement
and its right, pursuant to such Senior Debt Agreement, to cancel or suspend
its commitment to make disbursements in respect of its Senior Loan, to
accelerate the maturity of amounts due under its Senior Debt Agreement, and to
direct the Trustee to make a call under the Advance Tariff Agreement with the
Throughput Obligor in the Related Initial Shipper Group subject to the terms
and conditions herein, therein and in the Assignment Agreement with respect
thereto and, if such Senior Lender shall have offered to the Trustee indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such direction and the Trustee for 10 Business
Days after receipt of such direction has failed to make such call, to make
such call and, except as aforesaid, it shall not be necessary for any other
Senior Lender in such Senior Lender Group or the Trustee to consent to, or be
joined as an additional party in, any proceedings for such purposes.
(c) No failure on the part of the Trustee or any Senior Lender
in a Senior Lender Group to exercise, no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement,
any Assignment Agreement or any Senior Debt Agreement shall operate as a
waiver thereof nor shall any single or partial exercise of any right, power or
privilege under any such document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege thereunder. No
Senior Lender in a Senior Lender Group shall be responsible for the failure of
any other Senior Lender in such Senior Lender Group or the Trustee to perform
its obligations hereunder, under any of the Assignment Agreements or under any
Senior Debt Agreement.
Section 9.9. Limitation on Suits. (a) Each Senior Lender in a
Senior Lender Group shall have the right, without the consent of or
participation by the Trustee or any other Senior Lender in its Senior Lender
Group, if and to the extent permitted under the terms of its Senior Debt
Agreement, to declare the Senior Debt Obligations thereunder immediately due
and payable and (i) subject to paragraphs (b) and (c) below and Section
2.2(b), to institute any proceeding, judicial or otherwise, in respect thereof
against the Borrower and (ii) subject to Section 2.2(b), to institute any
proceedings judicial or other against the Throughput Obligor in the Related
Initial Shipper Group following its failure to meet a call for an Advance
Tariff Payment in respect of its Advance Tariff Agreement if permitted by, and
on the terms and conditions set forth in, such Senior Debt Agreement.
(b) The rights of Senior Lenders in a Senior Lender Group are
subject to Section 2.2(b), and no Senior Lender in a Senior Lender Group
individually shall have the right in respect of the Senior Debt Obligations to
commence any proceeding, judicial or otherwise, to realize on the Assigned
Rights assigned for its benefit or to enforce any judgment obtained by it, in
respect of the Senior Debt Obligations or otherwise under its Senior Debt
Agreement, against the Borrower, any Person in the Related Initial Shipper
Group (except as otherwise provided in paragraph (a) above), and, in the case
of Ecopetrol, the Canadian Group, or their respective assets or properties, to
enforce any provision of this Agreement, any Assignment Agreement or the
security interests created hereby or pursuant hereto, it being understood and
intended that (except as otherwise provided in paragraph (a) above) no Senior
Lender in a Senior Lender Group individually shall have any rights in any
manner whatever to affect, disturb or prejudice the rights assigned and the
security interests created hereby or pursuant hereto or the rights of any of
the other Senior Lenders in its Senior Lender Group, or to obtain or seek to
obtain priority or preference over any other Senior Lender in its Senior
Lender Group or to enforce any rights under this Agreement except in the
manner herein provided.
(c) Notwithstanding paragraph (b) above and subject to Section
2.2(b), if (i) the requisite Senior Lenders in a Senior Lender Group have
given an Enforcement Direction to the Trustee, (ii) Senior Lenders in such
Senior Lender Group have offered to the Trustee indemnity satisfactory to the
Trustee against the costs, expenses and liabilities to be incurred in
compliance with such direction, and (iii) the Trustee for 60 days after its
receipt of such Enforcement Direction has failed to institute any proceeding
(unless such time has been extended by mutual consent), then and only then,
unless a successor trustee shall have been appointed within 30 days thereafter
pursuant to Section 12.8, Supermajority Senior Lenders in such Senior Lender
Group acting by themselves may take, or agree that one or more Senior Lenders
in such Senior Lender Group may take, any enforcement action that the Trustee
is authorized to take hereunder for their benefit.
ARTICLE TEN
INTERCREDITOR ARRANGEMENTS
Section 10.1. Meetings of Senior Lenders in a Senior Lender
Group. The Trustee may at any time, and shall upon the request of the
Borrower or any Senior Lender in a Senior Lender Group, convene a meeting of
Senior Lenders in such Senior Lender Group. Any such request shall specify the
general nature of the business proposed to be considered at the meeting.
(b) The meeting shall be held at such time and place as the
Trustee may determine. At least 15 Business Days' notice shall be given by the
Trustee to each Senior Lender in such Senior Lender Group, which notice shall
specify the date, time and place of the meeting and the general nature of the
business proposed to be dealt with. The Trustee may be present at any such
meeting and, if not present, the Senior Lenders in such Senior Lender Group
shall inform the Trustee of any actions taken at such meeting.
ARTICLE ELEVEN
CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
Section 11.1. Scope of Obligation of Confidentiality. Each of the
Senior Lenders and the Trustee shall ensure that all information disclosed to
it concerning the Oleoducto Central, the assets and business of the Borrower
and the assets and business of each member of any Initial Shipper Group, or
the Canadian Group, as the case may be, and not otherwise generally available
(Confidential Information) shall be kept confidential and shall, unless (i) in
the case of the Trustee, in connection with any relevant action, proceeding or
arbitration to which the Trustee or any of its officers, directors or
representatives or any such affiliate is a party; provided, however, that in
the case of any disclosure pursuant to this clause (i), the Trustee will give
the Borrower prior notice of the information to be disclosed to the extent
that such notice is permissible and practicable under the circumstances and,
upon the request of the Borrower, will seek to obtain confidential treatment
of such information by the persons to whom it is disclosed; (ii) as otherwise
required by law or official request issued by a court of competent
jurisdiction or by a judicial, administrative, legislative, regulatory or
self-regulatory authority, including any stock exchange or similar regulatory
authority; or (iii) required by the reasonable good faith judgment of the
disclosing party as a response to any emergency that may have a significant
adverse effect upon the Borrower or such member of any Initial Shipper Group
or the Canadian Group, as the case may be, not be revealed without the consent
of the Borrower or such member of any Initial Shipper Group or the Canadian
Group, as the case may be, other than to:
(a) the directors, officers and representatives of such Senior
Lender or the Trustee, as the case may be;
(b) a financial advisor, prospective manager of an underwriting
syndicate, legal counsel or consultant that has a legitimate business need to
be informed and has signed an agreement to protect the Confidential
Information from further disclosure to the same extent as such Senior Lender
and the Trustee are obligated under this Section 11.1, naming the Borrower or
such member of any Initial Shipper Group or the Canadian Group, as the case
may be, as a third party beneficiary thereof; or
(c) a governmental agency or the public which the disclosing
Party believes in good faith is required by applicable laws or regulations or
the rules of any stock exchange or similar regulatory authority.
Information shall not be deemed Confidential Information, and the
provisions of this Section 11.1 shall not apply, if the information (i) is
already in the possession of such Senior Lender or the Trustee, as the case
may be, provided that such information is not known by such Party to be
subject to another obligation of secrecy, (ii) is or becomes available in the
public domain other than as a result of disclosure by such Senior Lender or
the Trustee, as the case may be, their associates or employees in
contravention of this Section 11.1, or (iii) is not acquired by such Senior
Lender or the Trustee, as the case may be, from the Borrower or any Person in
the related Initial Shipper Group or the Canadian Group, as the case may be,
or persons known by such Senior Lender or the Trustee to be in breach of a
confidentiality agreement with or other obligation of secrecy to the Borrower
or any Person in any Initial Shipper Group or the Canadian Group, as the case
may be.
The disclosing party shall give notice to the Borrower or any Person
in any Initial Shipper Group or the Canadian Group, as the case may be, as
soon as practicable after the making of any disclosure made as a response to
any emergency and as soon as practicable before the making of any disclosure
as permitted by Section 11.1(c). As to any disclosure pursuant to Section
11.1(a) or (b), only such Confidential Information as such third party shall
have a legitimate business need to know shall be disclosed and, in the case of
disclosure to a Person permitted by Section 11.1(a), the party disclosing such
information shall cause such party to protect the Confidential Information
from further disclosure to the same extent as the party disclosing such
information is obligated under this Section 11.1 and, in the case of
disclosure to a third party permitted by Section 11.1(b) or, to the extent
practicable, 11.1(c), the party disclosing such information shall cause such
third party to first agree in writing to so protect the Confidential
Information.
Section 11.2. Return of Confidential Information. As soon as
practicable after termination, in the case of Senior Lenders under a Senior
Debt Agreement, of such Senior Debt Agreement and, in any case, of this
Agreement, each Senior Lender and the Trustee shall, and shall cause their
respective representatives to,
(a) destroy or return all documents containing Confidential
Information that have been provided by the Borrower or any Person in any
Initial Shipper Group or the Canadian Group (or on its behalf) to such Person,
and
(b) destroy any copies of such documents and any document or
other record reproducing, containing or made from or with reference to the
Confidential Information,
except, in each case, for any submissions to or filings with judicial,
administrative, legislative or regulatory authorities.
Section 11.3. Announcements. No public announcement or press
release concerning the business of the Borrower or any Person in any Initial
Shipper Group or the Canadian Group, as the case may be, including the
Oleoducto Central, shall be made by any party other than the Borrower or such
Person in such Initial Shipper Group or the Canadian Group, as the case may
be, without the prior written consent of the Borrower and such Person in such
Initial Shipper Group or the Canadian Group, as the case may be. This
provision shall not prohibit any public announcement or press release required
to be made by the laws, regulations or policies of any federal, provincial or
state governmental agency or similar agency or any stock exchange or similar
regulatory authority or if required by the reasonable good faith judgment of
the disclosing party as a response to any emergency that may have a
significant adverse effect upon such party, provided that the party making
such announcement shall, to the extent practicable, consult with the Borrower
or such Person in such Initial Shipper Group or the Canadian Group, as the
case may be, concerning the timing and content of such announcement before
such announcement is made and shall give a copy thereof to the Borrower or
such Person in such Initial Shipper Group or the Canadian Group, as the case
may be, as soon as reasonably practicable prior to, or at the same time as,
the making of such announcement.
Section 11.4. Survival. The provisions of this Article Eleven shall
survive the termination of the other provisions of this Agreement for a period
of five years after such termination.
ARTICLE TWELVE
THE TRUSTEE
Section 12.1. Appointment of Trustee. Bankers Trust Company, acting
through its corporate trust office, Four Albany Street, New York, New York
10006, is hereby appointed as Trustee hereunder and the Trustee hereby accepts
the trust created by this Agreement upon the terms and conditions hereof.
Section 12.2. Delivery of Documentation. Executed counterparts of
the Senior Debt Agreements referred to in Appendix A, the Assignment
Agreements and the Financing Agreements have been delivered to the Trustee.
The Borrower and each Senior Lender agree to deliver to the Trustee any Senior
Debt Agreements relating to Senior Debt and any instrument amending or
modifying any agreement previously delivered to the Trustee. Amendments or
modifications of the aforementioned agreements shall not affect the duties and
obligations of the Trustee hereunder unless (a) the Trustee has knowledge of
such amendment or modification, and (b) with respect to any amendment or
modification which, in the opinion of the Trustee, enlarges the Trustee's
duties, obligations, or responsibility, the Trustee has consented in writing
thereto.
Section 12.3. Attorney-in-Fact. (a) The Trustee or any officer or
agent thereof, with full power of substitution, is hereby appointed the
attorney-in-fact of the Borrower for the purpose of carrying out the
provisions of this Agreement and any of the Assignment Agreements and taking
any action and executing any instruments which the Trustee at the direction of
Majority Senior Lenders or Supermajority Senior Lenders, as the case may be,
may deem necessary or advisable to accomplish the purposes hereof and thereof,
which appointment as attorney-in-fact is coupled with an interest and
irrevocable and, without limiting the generality of the foregoing, which
appointment hereby gives the Trustee the power and right on behalf of the
Borrower without notice to or assent by any of the foregoing, to the extent
permitted by applicable law, to do the following when and to the extent it is
authorized or directed to do so pursuant to the terms of this Agreement or any
of the Assignment Agreements and subject to the limitations contained herein
and therein:
(i) to ask for, demand, sue for, collect, receive and give
acquittance for any and all monies due or to become due with respect to, and
to the extent of, the rights assigned to it by the Borrower to the extent of
the interest therein of any Senior Lender Group;
(ii) to receive, take, endorse, assign and deliver any and all
checks, notes, drafts, acceptances, documents and other negotiable and
non-negotiable instruments, documents and chattel paper taken or received by
the Trustee in connection with this Agreement or any of the Assignment
Agreements;
(iii) to commence, file, prosecute, defend, settle, compromise,
adjust, revoke, cancel, annul, move to dismiss or otherwise undo any claim,
suit, action or proceeding with respect to the security interests granted for
the benefit of any Senior Debt Tranche, including, subject to Section 2.2(b),
any such proceeding leading to Bankruptcy of the Borrower;
(iv) to deal in or with the Assigned Rights or any part thereof
pursuant to the terms and conditions of this Agreement and the Assignment
Agreements with respect thereto; and
(v) to do, at its option and at the expense and for the account of
the Borrower at any time or from time to time, all acts and things which the
Trustee deems necessary to protect or preserve the Assigned Rights with
respect to any Senior Debt Tranche and to realize upon such Assigned Rights.
The Borrower agrees, if required by applicable law or reasonably requested by
the Trustee, to execute and deliver to the Trustee, and register in every
public registry in Colombia in which such registration is necessary, a
notarized Colombian public deed constituting such power of attorney. The
Trustee shall not be responsible for the negligence or misconduct of any
attorney-in-fact selected by it without gross negligence or willful
misconduct.
(b) Each Senior Lender in each Senior Lender Group agrees, if
required by applicable law or reasonably requested by the Trustee, to execute
and deliver to the Trustee, and register in every public registry in Colombia
in which such registration is necessary, a notarized Colombian public deed
appointing the Trustee and any officer or agent thereof, with full power of
substitution, its attorney-in-fact for purposes of exercising the rights and
remedies of such Senior Lender in such Senior Lender Group under this
Agreement and the Assignment Agreements in accordance with Section 2.2(b) and
taking all action in Colombia on behalf of such Senior Lender in such Senior
Lender Group that the Trustee is authorized to take pursuant to this
Agreement.
Section 12.4. Reliance. The Trustee shall be entitled to act upon
any Majority Senior Lender direction, Supermajority Senior Lender direction,
Enforcement Direction, Notice of Cessation, Officers' Certificate, Opinion of
Counsel, incumbency certificate, notice, certificate, instrument, demand,
request, direction, instruction, waiver, receipt, consent or other document or
communication furnished hereunder or under the Assignment Agreements which it
in good faith reasonably believes to be genuine, and it shall be entitled to
rely upon the due execution, validity and effectiveness, and the truth and
acceptability, of any provisions contained therein. The Trustee shall not have
any responsibility to make any investigation into the facts or matters stated
in any notice, certificate, instrument, demand, request, direction,
instruction, waiver, receipt, consent or other document or communication
furnished to it hereunder or under the Assignment Agreements. The Borrower
shall deliver to the Trustee a list of authorized signatories of any notice,
certificate, instrument, demand, request, direction, instruction, waiver,
receipt, consent or other document or communication furnished to the Trustee
hereunder or under the Assignment Agreements and the Trustee shall be entitled
to rely on such list until a new list is furnished by the Borrower to the
Trustee.
Section 12.5. Liability. The Trustee shall not be liable for any
error of judgment or for any act done or omitted to be done by it in good
faith or for any mistake of fact or law, or for anything which it may do or
refrain from doing, except for its own gross negligence or willful misconduct.
A Senior Lender in a Senior Lender Group shall in no event be liable for any
act done or omitted to be done by the Trustee or by any of its officers or
employees.
Section 12.6. Consultation With Counsel, etc. The Trustee may
consult with, and obtain advice from, legal counsel, accountants and other
experts, in connection with the performance of its duties hereunder and under
the Assignment Agreements and it shall incur no liability and shall be fully
protected in acting in good faith in accordance with the opinion and advice of
such counsel, accountants and other experts. The Trustee shall not be
responsible for the negligence or misconduct of any counsel, accountants and
other experts selected by it without gross negligence or willful misconduct on
its part.
Section 12.7. Duties. The Trustee shall have no duties other than
those specifically set forth or provided for in this Agreement and the
Assignment Agreements and no implied covenants or obligations of the Trustee
shall be read into this Agreement, or the Assignment Agreements or any related
agreement to which the Trustee is a party. The Trustee shall have no
obligation to familiarize itself with and shall have no responsibility with
respect to any other agreement or document relating to the transactions
contemplated by this Agreement or the Assignment Agreements nor any obligation
to inquire whether any notice, certificate, instrument, demand, request,
direction, instruction, waiver, receipt, consent, document, communication,
statement or calculation is in conformity with the terms of any such other
agreement, except those irregularities or errors manifestly apparent on the
face of such document or to the actual knowledge of the Trustee. The Trustee
shall at all times take such care in dealing with the Assigned Rights securing
each Senior Debt Tranche as would a prudent man in dealing with his own
property. The Trustee shall, upon receipt of an Enforcement Direction and
acceptable indemnification, exercise the rights and powers vested in it by
this Agreement or by any Assignment Agreement which it is directed by the
requisite Senior Lenders in a Senior Lender Group to exercise and the Trustee
shall not be liable with respect to any action taken or omitted to be taken by
it in accordance with the direction of such requisite Senior Lenders in such
Senior Lender Group.
Section 12.8. Resignation, Replacement and Successor Trustee. The
Trustee at any time may resign as Trustee hereunder upon giving not less than
three months' notice in writing to the Borrower and each Senior Lender in all
Senior Lender Groups. The Trustee may be removed as Trustee hereunder by an
instrument in writing signed by Supermajority Senior Lenders in any Senior
Lender Group. Upon resignation of the Trustee, a successor trustee (a) if no
Default is continuing, shall be proposed by the Borrower and, if consented to
by Majority Senior Lenders in each Senior Lender Group shall be appointed, or
(b) if a Default is continuing, or if the Borrower fails to propose a
successor, or if the successor proposed is not accepted by Majority Senior
Lenders in each Senior Lender Group, shall be appointed by Majority Senior
Lenders in the Senior Lender Groups acting together. No resignation or removal
of the Trustee and no appointment of a successor trustee shall be effective
until (a) the successor trustee has accepted its appointment and (b) all
indemnities, compensation and expenses required by Sections 12.9, 12.10 and
12.12 shall have been paid or provided for. If no successor trustee shall have
been so appointed and shall have accepted such appointment within 30 days
after the date fixed for such resignation or such removal, the Trustee may
petition any court of competent jurisdiction for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may prescribe, appoint a successor trustee. Any successor trustee appointed
pursuant to this Section 12.8 shall be a bank or trust company organized under
the laws of the United States or of the State of New York having its principal
corporate trust office in The City of New York and a combined capital and
surplus of at least $500 million. Any successor trustee shall evidence its
acceptance of the trust hereunder by executing and delivering to the Borrower,
each Senior Lender in each Senior Lender Group and the Trustee an instrument
accepting this trust and its appointment as Trustee hereunder, and thereupon
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor hereunder with like effect as if originally named as Trustee
herein and therein, and such predecessor shall have no further obligation or
liability thereunder except for liability with respect to its acts or
omissions prior to such succession pursuant to Section 12.5; nevertheless, on
the request of any party hereto or such successor trustee, the Trustee ceasing
to act shall execute and deliver instruments transferring to such successor
trustee all rights and powers of the Trustee so ceasing to act, including any
such instruments necessary to assign the rights under the Financing Agreements
assigned to it pursuant to the Assignment Agreements and to transfer the
accounts maintained hereunder to such successor trustee, and shall deliver to
such successor trustee all property held by it in trust hereunder.
Section 12.9. Indemnity. (a) The Borrower agrees to indemnify the
Trustee and its officers, agents and employees for, and to hold each of them
harmless against, any loss, liability, claim, judgment, settlement,
compromise, obligation, damage, penalty, cost, expense or disbursement of any
kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement and the
Assignment Agreements, unless arising from the gross negligence or willful
misconduct of such of the Trustee or the agents that are seeking
indemnification, including the costs and expenses of defending itself against
any claim of liability in the premises. As security for such payment, the
Trustee shall have an interest prior to the Senior Loans under each Senior
Debt Tranche upon all Assigned Rights securing such Senior Debt Tranche and
other property and funds held or collected by the Trustee as part of the trust
established hereunder.
(b) In any suit, proceeding or action brought by the Trustee
under or with respect to the Assigned Rights for any sum owing hereunder and
under any Senior Debt Agreement, or to enforce any provisions hereof or of any
of the Assignment Agreements, the Borrower will save, indemnify and keep the
Trustee harmless from and against all expense, loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or reduction of
liability whatsoever of the obligee thereunder, arising out of a breach by the
Borrower of any of its obligations hereunder or thereunder or arising out of
any other agreement, indebtedness or liability at any time owing to or in
favor of such obligee or its successors from the Borrower, and all such
obligations of the Borrower shall be and remain enforceable against and only
against the Borrower and shall not be enforceable against the Trustee or any
Senior Lender in the Related Senior Lender Group.
(c) The agreements in this Section 12.9 shall survive the
termination of the other provisions of this Agreement and shall be subject to
Section 2.2(b).
Section 12.10. Compensation. The Trustee shall be entitled to
reasonable compensation (which shall not be limited by any provision of law in
regard to compensation of a trustee of an express trust) as may be agreed from
time to time between the Borrower and the Trustee for all services rendered
under this Agreement and the Assignment Agreements, and such compensation,
together with reimbursement of the Trustee for its advances, disbursements and
expenses in connection with the performance of the trust provided for herein
(including the reasonable fees and expenses of its agents and of counsel,
accountants and other experts referred to in Section 12.6), shall be paid by
the Borrower promptly upon demand from the Trustee from time to time as
services are rendered and expenses are incurred. The Senior Lenders in each
Senior Lender Group shall have no liability for any fees, expenses or
disbursements of the Trustee. Any fees, compensation or expenses of the
Trustee or its counsel not paid as provided for herein may be taken from any
property held by the Trustee hereunder notwithstanding any provisions herein
to the contrary. As security for such payment, subject to Section 2.2(b), the
Trustee shall have an interest prior to the Senior Loans under each Senior
Debt Tranche upon all Assigned Rights and other property and funds held or
collected by the Trustee as part of the trust established hereunder.
Section 12.11. Certificates. Whenever in the administration of the
trusts of this Agreement the Trustee shall deem it necessary or desirable that
a matter be proved or established in connection with taking or omitting any
action by the Trustee hereunder or under the Assignment Agreements, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence or willful misconduct on
the part of the Trustee, be deemed to be conclusively proved or established by
a certificate of the Borrower delivered to the Trustee.
Section 12.12. Stamp and Other Similar Taxes. The Borrower agrees to
indemnify and hold harmless the Trustee and each Senior Lender in a Senior
Lender Group from, and shall reimburse the Trustee and each Senior Lender in a
Senior Lender Group for, any present or future claim for liability for any
stamp or other similar tax and any penalties or interest with respect thereto,
which may be assessed, levied or collected by any jurisdiction in connection
with this Agreement, any Assignment Agreement, the trust created hereunder or
the attachment or perfection of the assignments and the security interest
granted to the Trustee in any Assigned Rights hereunder or pursuant hereto.
The obligations of the Borrower under this Section 12.12 shall survive the
termination of the other provisions of this Agreement.
Section 12.13. Information. (a) The Borrower agrees that, from time
to time upon request of the Trustee, the Borrower shall deliver to the Trustee
a list setting forth, by each Senior Debt Agreement of the Borrower (i) the
aggregate principal amount outstanding thereunder, (ii) the interest rate then
in effect thereunder and (iii) the Senior Lender thereunder.
(b) The Trustee shall promptly deliver (i) to each Senior Lender
in a Senior Lender Group upon receipt a copy of all notices, reports and
demands for payment received or sent by it pursuant to the Assignment
Agreement with respect to the Advance Tariff Agreement with the Throughput
Obligor in the Related Initial Shipper Group and a copy of all notices,
reports and other information received or sent by it hereunder or pursuant
hereto and expressly required herein to be provided to each Senior Lender in
such Senior Lender Group, and (ii) to any Senior Lender in a Senior Lender
Group upon request by it a copy of all notices, reports, demands for payment
received by the Trustee under the Assignment Agreements with respect to the
other Financing Agreements with Persons in the Related Initial Shipper Group
and all other notices, requests and information received by the Trustee for
delivery to such Senior Lender Group hereunder or pursuant hereto.
(c) Each Senior Lender shall deliver to the Trustee an authority
and incumbency certificate setting forth the names and specimen signatures of
the persons authorized to provide instructions or directions to the Trustee as
of the date of its Senior Debt Agreement and shall promptly provide any
changes thereto from time to time thereafter. The Trustee shall be entitled to
conclusively rely on such certificate until it receives a certificate
specifically stating that it is a superseding certificate.
Section 12.14. Limitation on Trustee's Duties in Respect of Assigned
Rights. Beyond its duties set forth in this Agreement as to the custody
thereof and the accounting to the Borrower and each Senior Lender in a Senior
Lender Group for monies received hereunder and under the Assignment
Agreements, the Trustee shall not have any duty to the Borrower or such Senior
Lender in a Senior Lender Group with respect to any Assigned Rights in its
possession or control or in the possession or control of its agent or nominee,
any income thereon, or the preservation of rights against prior parties or any
other rights pertaining thereto. To the extent, however, that the Trustee or
an agent or nominee of the Trustee maintains possession or control of any of
the Assigned Rights or the Assignment Agreements at any office of the Trustee,
the Trustee shall, or shall instruct such agent or nominee to, grant the
Borrower and such Senior Lender in a Senior Lender Group the access to such
Assigned Rights or Assignment Agreements which the Borrower or such Senior
Lender in such Senior Lender Group requires for the conduct of their
businesses, except, in the case of the Borrower, if and to the extent that the
Trustee shall have received an Enforcement Direction.
Section 12.14. Right to Initiate Judicial Proceedings, etc. (a) If
and only if the Trustee shall have received an Enforcement Direction and
during such time as such Enforcement Direction shall not have been withdrawn
(i) the Trustee shall have the right and power, subject to Section 2.2(b), to
institute and maintain such suits and proceedings as (subject to the
instructions of the requisite Senior Lenders in the Related Senior Lender
Group) it may deem appropriate to protect and enforce the rights vested in it
by this Agreement and the Assignment Agreements, and (ii) the Trustee may,
subject to Section 2.2(b), either after entry or without entry, proceed
(subject to the instructions of the requisite Senior Lenders in such Senior
Lender Group) by suit or suits at law or in equity to enforce such rights and
to foreclose upon the Assigned Rights assigned for the benefit and to the
extent of the interest therein of such Senior Lender Group and to realize upon
all or, from time to time, any of the property of the trust established
hereunder for the benefit of such Senior Lender Group under the judgment or
decree of a court of competent jurisdiction.
(b) In case of Bankruptcy of the Borrower or any Person in the
Related Initial Shipper Group or affecting the Assigned Rights, the Trustee
(irrespective of whether the principal of Senior Debt under the Related Senior
Debt Tranche shall then be due and payable) shall be entitled and empowered,
by intervention in such proceeding or otherwise, (i) to file and prove a claim
for the whole amount of the obligations of the Borrower due and unpaid under a
Senior Debt Agreement and this Agreement or of any such other Person under the
Financing Agreement(s) with such Person and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, disbursements
and advances of the Trustee, its agents and counsel) and of Senior Lenders in
a Senior Lender Group allowed in such judicial proceeding and (ii) subject to
Section 2.2(b), to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Senior
Lender in such Senior Lender Group to make such payments to the Trustee.
Section 12.16. Exculpatory Provisions. The Trustee makes no
representations as to the value or condition of the trust created hereunder or
any part thereof, or as to the title of the Borrower thereto or as to the
rights and interests granted or the security afforded by the Assignment
Agreements or this Agreement or as to the validity, execution (except by
itself), enforceability, legality or sufficiency of this Agreement, any
Assignment Agreement or the Senior Debt secured hereby, and the Trustee shall
incur no liability or responsibility in respect of any such matters. The
Trustee shall not be accountable for the use or application by any Person of
disbursements properly made by the Trustee in conformity with the provisions
of this Agreement or the proceeds of Senior Loans under a Senior Debt Tranche
or other monies borrowed by the Borrower.
Section 12.17. Merger of the Trustee. Any corporation into which the
Trustee shall be merged, or with which it shall be consolidated, or any
corporation resulting from any merger or consolidation to which the Trustee
shall be a party, shall be the Trustee under this Agreement without the
execution or filing of any paper or any further act on the part of the parties
hereto.
Section 12.18. Treatment of Senior Lenders in a Senior Lender Group
and of TRO Holders by Trustee. (a) The Trustee may treat the Senior Lenders
in a Senior Lender Group as the holders of the instruments evidencing Senior
Debt Obligations under the Related Senior Debt Tranche and as the absolute
owners thereof for all purposes hereunder unless the Trustee shall receive
notice to the contrary and delivery of a new certificate of incumbency
pursuant to Section 12.13(c) hereof.
(b) Any Person which shall be designated as the Senior Lender
under a Senior Debt Agreement pursuant to paragraph (a) or (b) of the
definition of Senior Lender or as the duly authorized representative of one or
more of the Senior Lenders in a Senior Lender Group to act as such in
connection with any matters pertaining to this Agreement or any Assignment
Agreement or the Assigned Rights with respect to the Related Senior Debt
Tranche shall present to the Trustee such documents, including, without
limitation, opinions of counsel, as the Trustee may reasonably request, in
order to demonstrate to the Trustee the authority of such Person to act as the
representative of such Senior Lender or Lenders in such Senior Lender Group.
(c) The Trustee may treat the TRO Holders as the absolute owners
of the instruments, if any, evidencing Transportation Repayment Obligations
and of such obligations for all purposes of this Agreement unless it shall
have received notice to the contrary and delivery of a new certificate of
incumbency pursuant to Section 12.13(c) hereof. The Trustee shall treat any
Person who has made Tariff Advances as indicated on the books and records of
the Borrower as the holder thereof and any Person registered in the registry
of Transportation Notes maintained by the Borrower or the paying agent with
respect thereto as the holder thereof or the successors and permitted assigns
of any such Person, as a TRO Holder for purposes hereof.
Section 12.19. Additional Security Arrangements. Upon instruction
by each of the Borrower, the Throughput Obligor in an Initial Shipper Group
and any Senior Lender in the Related Senior Lender Group that is the proposed
beneficiary of additional security arrangements with respect to the Senior
Debt Obligations owing to such Senior Lender to be provided by a Person in the
Related Initial Shipper Group (and not the Borrower), the Trustee shall enter
such agreements as trustee, security or collateral trustee, or security or
collateral agent or in any other similar capacity as are necessary or
desirable in the reasonable opinion of such Senior Lender, the Borrower and
such Throughput Obligor to give effect to such additional security
arrangements provided that the Trustee receives an Opinion of Counsel in form
and substance reasonably satisfactory to it with respect to such agreement.
Section 12.20. Miscellaneous. The Trustee shall have the right at
any time to seek instructions concerning the administration of this trust from
any court of competent jurisdiction. In the event of any disagreement between
the other parties to this Agreement or the Assignment Agreements, as the case
may be, resulting in adverse claims being made in connection with property
held by the Trustee and the terms of this Agreement do not unambiguously
mandate the action the Trustee is to take in connection with such property
under the circumstance then existing, or the Trustee is in doubt as to what
action it is required to take, the Trustee shall be entitled to refrain from
taking any action until directed otherwise in writing by the parties hereto
entitled to give such direction or by a court of competent jurisdiction.
None of the provisions of this Agreement or the Assignment
Agreements shall be construed to require the Trustee to expend or risk its own
funds or otherwise to incur any personal financial liability in the
performance of any of its duties hereunder or thereunder if it shall have
reasonable grounds for belief that repayment of such funds or indemnity
against such risk or liability is not reasonably assured to it. The Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Agreement or the Assignment Agreements at the request or direction
of the Borrower or any Senior Lender in a Senior Lender Group, unless the
Trustee shall have been offered security or indemnity reasonably satisfactory
to it against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction (including interest thereon
from the time incurred until reimbursed).
(c) The Trustee (or any parent, subsidiary or associated person)
may accept deposits from, lend money to, and generally engage in any business
with, the Borrower, any Shareholder, any Person in any Initial Shipper Group
or the Canadian Group, the Subaccount Banks, or any Senior Lender in a Senior
Lender Group or lender of Subordinated Debt, or any of their Affiliates,
without affecting the validity of the trust created hereby or the right to
enforce any Senior Debt Obligations under a Senior Debt Tranche or other right
to payment or security interest created hereunder or pursuant hereto as freely
as if it were not the Trustee hereunder. The Trustee shall notify each Senior
Lender in a Senior Lender Group at any time it believes it has any interest
conflicting with its obligations hereunder. The Trustee (without prejudice to
its rights under the last sentence of Section 12.10) hereby waives any right
of banker's Lien, set-off or counterclaim in respect of any assets contained
in the Proceeds Accounts maintained for the benefit of the Senior Lender
Groups, in the Common Account or otherwise that are held by the Trustee as
trustee hereunder.
(d) The Trustee shall not be personally liable for Debts
contracted or liabilities or damages incurred in the management or operations
of the trust hereunder, except for those contracted or incurred as a result of
its negligence or willful misconduct.
ARTICLE THIRTEEN
TERM
Section 13.1. Effectiveness. This Agreement shall come into full
force and effect upon its execution and delivery by each of the parties named
on the signature pages hereof.
Section 13.2. Termination. (a) Upon satisfaction of each of the
following conditions precedent with respect to a Senior Debt Tranche, the
Trustee shall, at the expense of the Borrower, reassign to the Throughput
Obligor in the Related Initial Shipper Group all of the rights under its
Advance Tariff Agreement assigned to the Trustee under the Assignment
Agreement with respect thereto:
(i) all obligations due and owing to the Trustee hereunder have
been paid in full;
(ii) all Senior Debt Obligations owing to such Senior Lender Group
(excluding Transportation Repayment Obligations that have become Senior Debt
under such Senior Debt Tranche pursuant to Section 2.1(b), if any) and all
sums payable hereunder to the Trustee have been paid in full and Senior
Lenders in such Senior Lender Group shall not have delivered a certificate to
the Trustee within 15 days of delivery by the Borrower of the certificate
referred to in clause (ii) below denying that all such Senior Debt Obligations
have been repaid in full; and
(iii) the Borrower shall have delivered to the Trustee a
certificate stating that the conditions precedent to termination pursuant to
this Section 13.2 have been satisfied.
(b) Upon satisfaction of each of the conditions precedent in
clauses (i) and (ii) of paragraph (a) above with respect to all Senior Debt
Tranches, including with respect to Transportation Repayment Obligations that
have become Senior Debt under a Senior Debt Tranche, if any, pursuant to
Section 2.1(b), this Agreement shall terminate and all rights and interests
created by or pursuant to this Agreement or any Assignment Agreement for the
benefit of any Senior Lender shall terminate, and the Trustee shall, at the
expense of the Borrower, execute and deliver a termination statement and such
instruments of satisfaction, discharge and release of security as may be
requested by the Borrower and shall pay, assign, transfer and deliver to or to
the order of the Borrower all monies and investments in the accounts
maintained hereunder and all other trust funds and other property then held by
it hereunder, including any assigned rights under the Financing Agreements and
the Assignment Agreements.
(c) Notwithstanding the termination of this Agreement as
provided above in this Section 13.2(b), the Borrower's obligations to the
Trustee under Sections 12.9, 12.10 and 12.12 and such other provisions hereof
that by their terms are to survive such termination, shall survive such
termination.
ARTICLE FOURTEEN
GENERAL
Section 14.1. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
Party Agent for Service
OLEODUCTO CENTRAL S.A. CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax: (212) 247-2882
Santafe de Bogota, D.C. - Colombia
Telefax: 571-218-3933
Attention: President
BANKERS TRUST COMPANY N/A
Four Albany Street, 4th floor
New York, New York 10006
Telefax: (212) 250-6961
Telephone: (212) 250 6826
Attention: Corporate Trust and Agency Group
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any Party to the others. Any notice, demand,
request, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The Party giving any notice, demand, request, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 14.2. Entire Agreement. This Agreement, together with the
Senior Debt Agreements and the Assignment Agreements, constitutes the entire
agreement among the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties, and there are no warranties,
representations or other agreements between the Parties in connection with the
subject matter hereof except as specifically set forth herein and therein.
Section 14.3. Amendments. Without the consent of any Senior
Lenders, the Borrower, when authorized by a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more amendments
hereto or to any Assignment Agreement, in form satisfactory to each, for any
of the following purposes:
(i) to evidence the succession of another Person to the
Borrower and the assumption by any such successor of the covenants of the
Borrower herein and in the Senior Debt Agreements in accordance with Section
6.1(b);
(ii) to add to the representations or covenants of the
Borrower for the benefit of the Senior Lenders in all Senior Lender Groups or
to surrender any right or power herein conferred upon the Borrower;
(iii) to add any additional Events of Default for the benefit
of the Senior Lenders in all Senior Lender Groups;
(iv) to secure the Senior Debt pursuant to the requirements of
Section 6.2(d) or otherwise;
(v) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Senior Debt in accordance
with Section 12.8; or
(vi) to cure any ambiguity, to correct or supplement any
provision herein or therein which may be defective or inconsistent with any
other provision herein or therein or in the Advance Tariff Agreements or the
Transportation Agreements, or to make any other provisions with respect to
matters or questions arising under this Agreement, provided that such action
pursuant to this clause (vi) shall not adversely affect the interests of the
Senior Lenders in any material respect.
(b) With the consent of Majority Senior Lenders in each Senior
Lender Group adversely affected by such amendment hereto, by action of said
Senior Lenders delivered to the Borrower and the Trustee, the Borrower, when
authorized by a Board Resolution and, with respect to an amendment to this
Agreement, the prior written consent of the Initial Shipper in each Related
Initial Shipper Group, and the Trustee may enter into an amendment or
amendments hereto or to any Assignment Agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or such Assignment Agreement or of modifying in any manner
the rights of said Senior Lenders under this Agreement or such Assignment
Agreement; provided, however, that no such amendment or amendments shall,
without the consent of each Senior Lender affected thereby,
(i) reduce the percentage in principal amount of the outstanding
Senior Debt under any Senior Debt Tranche, the consent of whose Senior Lenders
is required for any such amendment or amendments, or the consent of whose
Senior Lenders 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
(ii) modify any of the provisions of this Section, Section
6.1(1)(i) or Section 6.3, except to increase any such percentage or to provide
that certain other provisions of this Agreement cannot be modified or waived
without the consent of each Senior Lender affected thereby; provided, however,
that this clause shall not be deemed to require the consent of any Senior
Lender in such Senior Lender Group with respect to changes in the references
to the Trustee and concomitant changes in this Section and Section 6.3, or the
deletion of this proviso.
(c) It shall not be necessary for any action of Senior Lenders
under this Section to approve the particular form of any proposed amendment
hereto, but it shall be sufficient if such action shall approve the substance
thereof.
(d) In executing, or accepting the additional trusts created by,
any amendment hereto permitted by this Section or the modifications thereby of
the trusts created by this Agreement, the Trustee shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such amendment hereto is authorized or permitted
by this Agreement and that such amendment constitutes the legal and binding
obligation of the Borrower enforceable in accordance with its terms (subject
to customary exceptions). The Trustee may, but shall not be obligated to,
enter into any such amendment hereto which affects the Trustee's own rights,
duties or immunities under this Agreement or otherwise.
(e) Upon the execution of any amendment hereto under this
Section, this Agreement shall be modified in accordance therewith, and such
amendment shall form a part of this Agreement for all purposes; and the
Borrower, the Trustee, every Senior Lender and every holder of Senior Debt
thereafter shall be bound thereby.
(f) No waiver of this Agreement shall be binding unless executed
in writing. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions (whether or not
similar) nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided. No failure on the part of the Trustee or any Senior Lender
to exercise, and no delay in exercising, any right, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
Section 14.4. No Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the Parties and their
respective successors and assigns, and no other Person shall have any right
hereunder, except (a) as provided herein with respect to the TRO Holders, (b)
as provided in Section 2.2(b), Article Eleven and Section 12.19 with respect
to Persons in any Initial Shipper Group or the Canadian Group and (c) as
otherwise expressly provided herein to the contrary.
Section 14.5. Conflicts. In case of any express conflict between
this Agreement and any Senior Debt Agreement (including any promissory note
delivered thereunder) or (with respect to the rights and obligations of the
parties and the conditions and terms on which rights may be exercised) any
Assignment Agreement, this Agreement shall control.
Section 14.6. Language; Spanish Translation. The Spanish
translation of this Agreement initialed for identification by Colombian
counsel to the Borrower and common Colombian counsel to Senior Lenders and
certified by an official translator registered before the Colombian Ministry
of Foreign Affairs shall be the agreed Spanish translation hereof for all
purposes. Such translation and no other may be filed in one or more public
registries in Colombia or used in any proceeding in Colombia. For all
purposes, the English language version hereof shall be the original instrument
and in case of conflict between the English and the Spanish versions, the
English version shall control.
Section 14.7. Specific Performance. The Trustee and each Senior
Lender acknowledges that the Borrower would be immediately and irreparably
injured in the event of breach of Section 2.2(b) of this Agreement.
Accordingly, the Trustee and each Senior Lender agree that, in addition to
other remedies, the Borrower shall be entitled to an injunction restraining
any violation or threatened violation of Section 2.2(b) of this Agreement or
to specific performance or other equitable relief to enforce the provisions of
Section 2.2(b) of this Agreement. In the event that any action should be
brought in equity to enforce the provisions of Section 2.2(b) of this
Agreement, neither the Trustee nor any Senior Lender shall allege, and the
Trustee and each Senior Lender hereby waives the defense, that there is
adequate remedy at law. Equitable relief shall not be exclusive of any other
remedies to which the Borrower is entitled at law.
Section 14.8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 14.9. Performance Outside Colombia. The Parties acknowledge
and agree that their activities hereunder will be performed substantially
outside Colombia.
Section 14.10. Waiver of Immunity. To the extent that a Party or
any of its revenues, assets or properties shall be entitled, with respect to
any proceeding relating to enforcement of this Agreement or any award
thereunder at any time brought against such Party or any of its revenues,
assets or properties, to any sovereign or other immunity from suit, from
jurisdiction, from attachment prior to judgment, from attachment in aid of
execution of judgment, from execution of a judgment or from any other legal or
judicial process or remedy, and to the extent that in any jurisdiction there
shall be attributed such an immunity, such Party irrevocably agrees not to
claim and irrevocably waives such immunity to the fullest extent permitted by
the laws of such jurisdiction (including, without limitation, the Foreign
Sovereign Immunities Act 1976 of the United States).
Section 14.11. Submission to Jurisdiction; Consent to Service. The
Parties hereby submit to the non-exclusive jurisdiction of the Federal and
State courts in the Borough of Manhattan in The City of New York (the
Specified Courts) in any action, suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby (a Related
Proceeding). Each party hereto hereby waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions, suits
or proceedings, brought in any such court and hereby further waives and agrees
not to plead or claim in any such court that any such action, suit or
proceedings brought therein has been brought in an inconvenient forum. Each
Party irrevocably appoints the agent for service designated opposite its name
in Section 14.1 hereof as its authorized agent in the Borough of Manhattan in
The City of New York upon which process may be served in any such action, suit
or proceeding, and agrees that service of process upon such agent, and written
notice of said service to such Party, by the person serving the same to the
address provided in Section 14.1, shall be deemed in every respect effective
service of process upon such Party in any such suit or proceeding. Each Party
further agrees to take any and all action as may be necessary to maintain such
designation and appointment of such agent in full force and effect for the
duration of this Agreement. The Borrower agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Section 14.11 shall affect the right of any Party to serve
legal process in any other manner permitted by applicable law.
The obligation of a Party in respect of any sum due from it to
another Party expressed in United States Dollars, notwithstanding any judgment
in a currency other than United States Dollars, shall not be discharged until
the first Business Day following receipt by such other Party of any sum
adjudged to be so due in such other currency on which (and only to the extent
that) such other Party may in accordance with normal banking procedures
purchase United States Dollars with such other currency. If the United States
Dollars so purchased are less than the sum originally due to such other Party
hereunder, the first Party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such other Party against such
Dollar shortfall. If the United States Dollars so purchased are greater than
the sum originally due to such other Party hereunder, such other Party agrees
to the fullest extent permitted by law to pay to the first Party an amount
equal to the excess of the Dollars so purchased over the sum originally due to
such other Party hereunder.
Section 14.12. Currency Equivalents. Calculation of currency
equivalents on any day shall be based on the Tasa Representativa del Mercado,
as reported by the Banking Superintendency in Colombia, or other equivalent
rate or, if no such rate is reported in Colombia, then the foreign exchange
spot mid-rates for such day reported in The Wall Street Journal, Eastern
Edition, or, if not so reported, on the mid-market foreign exchange spot
closing rates for such day reported in the Financial Times, or, if not so
reported, on spot foreign exchange mid-market rates for trading among banks in
amounts of $1 million and more as quoted by the Trustee.
Section 14.13. Headings; Table of Contents. The headings and table
of contents contained herein are for convenience of reference only and do not
constitute a part of this Agreement.
Section 14.14. Counterparts. This Agreement may be executed in
seven or more counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page in this Agreement by telecopier shall be as
effective as delivery of a manually executed counterpart of this Agreement.
Section 14.15. Waiver of Jury Trial. Each of the Borrower, the
Trustee and the Senior Lenders 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 actions
of the Borrower, the Trustee or any Senior Lender in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement
to be executed and delivered by their respective proper officers thereunto
duly authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
/s/Gustavo Suarez
By: Gustavo Suarez
Title: President
BANKERS TRUST COMPANY, As Trustee
/s/Marie C. Rasch
By: Marie C. Rasch
Title: Vice President
<PAGE>
APPENDIX A
To Common Security Trust Agreement
SENIOR DEBT SCHEDULE
SENIOR DEBT TRANCHE A
Related Initial Shipper Group:
Shareholder, Initial Shipper and Throughput Obligor: Ecopetrol
Canadian Group:
Shareholders: IPL Enterprises, TCPL
International
Performance Guarantors: IPL Energy, TransCanada Pipelines
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Designated Senior Lender Senior Debt Agreement Providers of Senior Debt Senior Debt Commitment
</TABLE>
SENIOR DEBT TRANCHE B
Related Initial Shipper Group:
Shareholder: BP Pipelines
Initial Shipper and Throughput Obligor: BPEC
Performance Guarantor: BP International Limited
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Designated Senior Lender Senior Debt Agreement Providers of Senior Debt Senior Debt Commitment
</TABLE>
SENIOR DEBT TRANCHE C
Related Initial Shipper Group:
Shareholder: TOTAL Pipeline
Initial Shipper and Throughput Obligor: TOTAL Exploratie
Performance Guarantor: TOTAL S.A.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Designated Senior Lender Senior Debt Agreement Providers of Senior Debt Senior Debt Commitment
</TABLE>
SENIOR DEBT TRANCHE D
Related Initial Shipper Group:
Shareholder: Triton Pipeline
Initial Shipper and Throughput Obligor: Triton Colombia
Performance Guarantor: Triton Energy Corporation
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Designated Senior Lender Senior Debt Agreement Providers of Senior Debt Senior Debt Commitment
</TABLE>
125_LAN04
APPENDIX B
to Common Security Trust Agreement
FORM OF ASSUMPTION AGREEMENT
[date]
Bankers Trust Company
Four Albany Street, 4th Floor
New York, New York 10006
Attention: Corporate Trust and Agency Group
Gentlemen:
Pursuant to Section 2.1(a)(ii) of the Common Security Trust
Agreement, dated as of June 1, 1995, among Oleoducto Central S.A. (the
Borrower) and Bankers Trust Company, as Trustee for the benefit of holders
from time to time of Senior Debt, we confirm our agreement with you as
follows:
1. Designation of Senior Debt. We acknowledge that, in accordance
with Section 2.1(a) of the Common Security Trust Agreement, the Borrower has
designated the additional Debt to be Incurred under [the Tranche [B][C][D]]
Senior Debt Agreement] [the Indenture] to be dated as of [June __, 1995] and
to be entered into between the Borrower and [Name of Additional Lender or
Indenture Trustee] [as [Agent] [Indenture Trustee] for the [providers of Debt]
[Debentureholders] under [the Tranche [B][C][D] Senior Debt Agreement] [the
Indenture] (the "Tranche [A][B][C][D] Senior Debt Agreement") as Senior Debt
under Senior Debt Tranche [A][B][C][D] to be secured by and entitled to the
benefits of the Common Security Trust Agreement and the Throughput Obligor in
the Related Initial Shipper Group has consented to such designation as
evidenced by the Borrower's Officers' Certificate and such Throughput
Obligor's consent attached hereto, and we consent to such designation.
2. Consent to Terms of Common Security Trust Agreement. In
accordance with Section 2.1(a)(ii) of the Common Security Trust Agreement, we
agree on behalf and for the account of [the providers of Senior Debt]
[Debentureholders] under the Tranche [A][B][C][D] Senior Debt Agreement] for
the benefit of the Borrower, the Trustee and the other holders from time to
time of Senior Debt (a) to become a Party to the Common Security Trust
Agreement, (b) to be bound as a Senior Lender by all of the terms and
conditions of the Common Security Trust Agreement and (c) to perform all of
the obligations of a Senior Lender under the Common Security Trust Agreement
in accordance with the terms thereof.
3. Representations and Warranties. We represent and warrant for
the benefit of the Borrower, the Trustee and the other holders from time to
time of Senior Debt that we are a [bank] duly organized and existing under the
laws of [name of jurisdiction] with the requisite power and authority, on
behalf of ourselves and all of [the Senior Lenders] [the Debentureholders]
party to the Tranche [A][B][C][D] Senior Debt Agreement, to enter into this
Agreement and this Agreement, when executed and delivered by us, constitutes a
valid and legally binding agreement.
4. Senior Lender under Common Security Trust Agreement. The
undersigned is the [Senior Lender] [Indenture Trustee] under the Tranche
[A][B][C][D] Senior Debt Agreement pursuant to clause (a) of the definition of
Senior Lenders in the Common Security Trust Agreement and for all purposes
thereof.
5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
6. Definitions. Terms used but not defined herein have the
meanings assigned to them in the Common Security Trust Agreement.
[NAME OF [ADDITIONAL LENDER]
[INDENTURE TRUSTEE]]
____________________________
By:
Title:
Acknowledged as of ______
BANKERS TRUST COMPANY,
As Trustee
125_LAN02/99805.18
APPENDIX C
To Common Security Trust Agreement
FORM OF ASSIGNMENT AND ACKNOWLEDGMENT AGREEMENT
FOR RIGHTS UNDER THE TRANSPORTATION AGREEMENT
This AGREEMENT, dated as of June 1, 1995, by and between:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws
of Colombia (Ocensa); and
BANKERS TRUST COMPANY, a New York banking corporation, as trustee
(the Trustee) under the Common Security Trust Agreement, dated as of June 1,
1995 (the Common Security Trust Agreement), among Ocensa, the holders from
time to time of Senior Debt and the Trustee.
RECITALS
WHEREAS:
A. [INSERT NAME OF INITIAL SHIPPER] (the Initial Shipper) and
Ocensa have entered into a Transportation Agreement, dated as of March 31,
1995 (as amended from time to time in accordance with its terms, the
Transportation Agreement), by which the Initial Shipper has undertaken
obligations to make tariff payments to Ocensa in certain circumstances;
B. Ocensa desires to establish one or more credit facilities and/or
securities issuance facilities that may be used to finance construction and
operation of the Oleoducto Central pursuant to the Common Security Trust
Agreement. In order to facilitate such
transactions, Ocensa is willing to assign to the Trustee certain rights under
the Transportation Agreement to be exercised by the Trustee as provided herein
and in the Common Security Trust Agreement for the benefit of Senior Lender
Group [A] [B] [C] [D], and, to the extent of funds payable thereunder that are
required to be deposited into the Common Account, the other Senior Lender
Groups, as their interests therein may appear; and
C. By execution of this Agreement, Ocensa warrants that all things
necessary to make this Agreement the valid, legally binding and enforceable
obligation of Ocensa have been done and performed and the execution and
performance hereof in all respects has been authorized and approved by all
corporate action necessary on the part of Ocensa.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), Ocensa and the
Trustee agree as follows:
ARTICLE ONE
ASSIGNMENT BY OCENSA TO THE TRUSTEE
Section 1.1. Assignment. Ocensa hereby grants, transfers, sets
over and assigns to the Trustee the following rights (but not obligations or
duties) of Ocensa in, under and arising from the Transportation Agreement,
whether now existing or hereafter arising, to be exercised as provided in the
Common Security Trust Agreement for the benefit of Senior Lender Group [A] [B]
[C] [D], and, to the extent of funds payable thereunder that are required to
be deposited into the Common Account, the other Senior Lender Groups, as their
interests therein may appear:
(i) subject to Article Two hereof, all rights of Ocensa to request
and receive all payments made or due in respect of Tariffs, Tariff Advances,
and proceeds from Transportation Notes, in cash (including the right to
receive cash realized by the payment of such Tariffs, Tariff Advances and
Transportation Notes in kind), to Ocensa by the Initial Shipper pursuant to
the Transportation Agreement;
(ii) all the proceeds of Ocensa from Petroleum transportation
services provided pursuant to Section 1.2 in respect of the Initial Shipper's
Proportionate Share of Available Capacity in the event of a suspension of such
Initial Shipper's right to use its Proportionate Share of Available Capacity
under its Transportation Agreement and to the extent such capacity is taken up
by other shippers other than for transportation of Cusiana Petroleum, always
subject to the terms and conditions of, priorities set forth in, and rights of
the Initial Shipper under the Transportation Agreement (including such Initial
Shipper's right thereunder to always ship Petroleum from the Cusiana Area and
to receive its share of Overutilizer Premiums and Established Third Party
Premiums paid by others), as such rights have been or may be modified by
agreement or waiver of the Initial Shipper; and
(iii) all rights (but not obligations or duties), claims, powers,
privileges, interests and remedies of Ocensa, whether arising under the
Transportation Agreement, by statute, at law, in equity or otherwise,
resulting from any failure by the Initial Shipper to make when due any
payments owing to Ocensa under the Transportation Agreement;
together with full power and authority, in the name of the Trustee or Ocensa
as assignor or otherwise (but subject to Article Two hereof), to request
payment of, enforce, collect, receive and give receipt for any and all of the
foregoing, and proceeds of any and all of the foregoing, as provided in the
Common Security Trust Agreement (the rights, claims, powers, privileges,
interests and remedies referred to in clauses (i) through (iii) being
hereinafter sometimes referred to as the Rights Assigned Hereby). The Trustee
agrees to apply all moneys received by it pursuant hereto as provided in the
Common Security Trust Agreement.
Section 1.2. Marketing Petroleum Transportation Services. To the
extent that Ocensa has suspended receipt of Petroleum from the Initial Shipper
under the Transportation Agreement and any of the Initial Shipper's
Proportionate Share of Available Capacity is not nominated by other Initial
Shippers for shipment of Cusiana Petroleum, Ocensa agrees, so long as such
suspension shall continue, to use its Reasonable Efforts to market Petroleum
transportation services to third parties in respect of such unused
Proportionate Share, at Tariffs at least equal to the Third Party Tariff and
with other terms at least as favorable to Ocensa as those provided for in the
Transportation Agreement. If such Tariffs or other terms cannot be obtained by
Ocensa, Ocensa agrees to use Reasonable Efforts to market Petroleum
transportation services to third parties on terms no more favorable to such
other shipper than the terms of any existing Transportation Agreement and on
terms and conditions no more favorable to the prospective shipper than those
applicable to the Initial Shipper, provided that, to the extent any such
Available Capacity remains unused, the Trustee may designate potential
shippers to Ocensa that Ocensa shall be obligated to enter into a
transportation agreement with such shippers on such terms. The rights of any
such shipper so designated with respect to such Available Capacity shall
terminate upon the reinstatement of the right of the Initial Shipper to use
such capacity and shall always be subject to the terms and conditions of, the
priorities set forth in, and the rights of the Initial Shipper under, the
Transportation Agreement (including its rights to ship Petroleum from the
Cusiana Area and to receive its share of Overutilizer Premiums and Established
Third Party Premiums paid by others), as such rights have been or may be
modified by agreement or waiver of the Initial Shipper. For the avoidance of
doubt, the transportation rights of such shipper would be interruptible in
favor of the firm transportation rights of the Initial Shipper and, with
respect to Petroleum from the Cusiana Area, the other Initial Shippers under
their respective Transportation Agreements. Notwithstanding the foregoing,
Ocensa shall in no event enter into any such transportation agreement with any
party so designated if the transportation of Petroleum pursuant thereto would
disrupt the construction or operation of the Oleoducto Central or prejudice
the transportation of Cusiana Petroleum as reasonably determined by Ocensa and
the Initial Shippers and neither the Trustee nor any Senior Lender shall have
the right to enter into any transportation agreement on behalf or for the
account of Ocensa or the right to designate as a potential shipper for
purposes of this Section 1.2 a Person that is not the producer of the
Petroleum proposed to be shipped through the Oleoducto Central under the
transportation agreement proposed to be entered into with such Person. Any
Tariffs received by Ocensa for unused Available Capacity marketed pursuant to
this Section shall be treated for all purposes of this Agreement as Tariffs
paid by the Initial Shipper under the Transportation Agreement.
ARTICLE TWO
PAYMENTS AND REQUESTS
Section 2.1. Requests. Ocensa may, at any time, and shall at the
request of the Trustee, make all requests in respect of moneys due (including
cash realized from the payment of Tariffs, Tariff Advances or Transportation
Notes in kind) under Articles Four and Five of the Transportation Agreement
and, if and only if for any reason Ocensa fails to do so within two Business
Days of a request by the Trustee, the Trustee may make such requests as
assignee with the same force and effect as if made by Ocensa. Ocensa agrees to
provide the Trustee at its request with copies of all requests made by it in
respect of moneys due from the Initial Shipper under the Transportation
Agreement.
Section 2.2 Payments. Ocensa and the Trustee agree that all funds
received by them in respect of the Rights Assigned Hereby shall be deposited
or caused to be deposited by them into the Proceeds Account maintained for the
benefit of the Senior Lenders in Senior Lender Group [A][B][C][D] and the
Common Account maintained for the benefit of Senior Lenders in each Senior
Lender Group, as their interests therein may appear, all in accordance with
Article Four of the Common Security Trust Agreement.
Section 2.3. Limited Recourse. The Trustee acknowledges on behalf
of itself and each Senior Lender that notwithstanding anything to the contrary
contained in this Agreement, the Transportation Agreement, the Common Security
Trust Agreement or any Senior Debt Agreement, (i) the recourse of the Trustee
(on behalf of itself or any Senior Lender) or any Senior Lender for payment
and performance of Senior Debt Obligations or for any breach of any such
agreement by Ocensa shall be limited solely to the Assigned Rights to the
extent of their respective interests therein pursuant to the Common Security
Trust Agreement, and none of (A) Ocensa, (B) any Person in the Related Initial
Shipper Group or in any other Initial Shipper Group or the Canadian Group, (C)
any Person owning, directly or indirectly, any legal or beneficial interest in
Ocensa or in any Person in the Related Initial Shipper Group or in any other
Initial Shipper Group or the Canadian Group, (D) the Trustee, or (E) any
partner, principal, officer, controlling person, beneficiary, trustee,
shareholder, employee, agent, affiliate or director of any Person described in
clauses (A) through (D) above shall be personally liable for the payment or
performance of any Senior Debt Obligations or for any such breach and (ii)
each Senior Lender and the Trustee acting on behalf of itself or any Senior
Lender expressly waive, as authorized by Article 15 of the Colombian Civil
Code and Article 822 of the Colombian Code of Commerce or any successor
provision, any and all personal actions or rights they may have under
Colombian law and any other applicable law as provided by Article 2488 of the
Colombian Civil Code or any successor provision to demand payment and
performance of Senior Debt Obligations owing to such Senior Lender or for such
breach from the real estate and any other tangible or intangible assets of any
Person described in clauses (A) through (E) and any right to commence,
initiate or cause to be initiated any related proceeding, judicial or
otherwise, against Ocensa under any bankruptcy law or other reorganization,
arrangement, readjustment of Debt, relief of debtors, dissolution, insolvency,
liquidation or similar law or for the appointment of a receiver, trustee or
other officer or representative of a court or of creditors or take any other
action that may result in the Bankruptcy of Ocensa; provided, however, that in
each of cases (i) and (ii), the foregoing shall not impair the validity of any
security interest granted to a Senior Lender under its Senior Debt Agreement
in and to an escrow or trust account into which the proceeds of Senior Debt
under its Senior Debt Agreement, the proceeds therefrom and from investments
thereon and no other funds shall be deposited, or of this Agreement or the
right of the Trustee (or any Senior Lender in a Senior Lender Group to the
extent provided in the Common Security Trust Agreement) to foreclose and/or to
exercise or enforce any rights or remedies in and to the Rights Assigned
Hereby as provided in this Agreement and the Common Security Trust Agreement
(including, as provided in Section 9.9(a) thereof, the right to institute suit
against Ocensa for the payment of money due); and provided, further, however,
that, as to Ocensa but not as to any person listed in (B) through (E) above,
in the event of the Bankruptcy of Ocensa, such recourse shall not be so
limited and such waiver shall not so apply as of or subsequent to such
Bankruptcy, except that such recourse shall continue to be so limited and such
waiver shall continue to apply with respect to a Senior Lender in a Senior
Lender Group or the Trustee acting on its behalf or for the benefit of such
Senior Lender in such Senior Lender Group if such Bankruptcy of Ocensa was
commenced, initiated, caused to be initiated or otherwise resulted from any
action of such Senior Lender in such Senior Lender Group (or the Trustee on
its behalf or for its benefit), notwithstanding their respective agreements to
the contrary.
ARTICLE THREE
ASSIGNMENTS
Section 3.1. Assignment by the Trustee. The Trustee may not assign
this Agreement or any of its rights hereunder or proceeds herefrom, or create
enforceable third party rights herein or to such proceeds, to or in any person
not a party hereto (other than pursuant to the Common Security Trust
Agreement).
Section 3.2. Assignment by Ocensa. Ocensa may not assign its
rights and obligations hereunder or under the Transportation Agreement to any
other person without the prior written consent of the Trustee and the Initial
Shipper.
ARTICLE FOUR
EFFECTIVENESS
Section 4.1. Effectiveness. This Agreement shall not become
effective prior to acknowledgment hereof by the Initial Shipper.
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
If to Ocensa: Agent for Service
OLEODUCTO CENTRAL S.A. CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax: (212) 247-2882
Santafe de Bogota, D.C.-Colombia
Telefax: 571-218-3933
Attention: President
If to the Trustee:
BANKERS TRUST COMPANY
Four Albany Street, 4th Floor
New York, New York 10006
Telefax: (212) 250-6961
Telephone: (212) 250-6826
Attention: Corporate Trust and Agency Group
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 5.2. Entire Agreement; Waiver; Amendment. This Agreement,
together with the Common Security Trust Agreement, constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as specifically set forth
herein and therein. All terms which are defined in the Common Security Trust
Agreement or the Transportation Agreement and not defined herein are used
herein with the meanings therein set forth. No amendment, supplement, waiver
or termination of this Agreement shall be binding unless executed in writing
by the party to be bound thereby and the Initial Shipper. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions (whether or not similar) nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
Section 5.3. No Third Party Beneficiaries. Except with respect to
the last sentence of Section 1.1, Sections 1.2, 2.2, 2.3, 3.1 and 3.2 and the
third sentence of Section 5.2 which shall inure to the benefit of the Initial
Shipper and except as herein otherwise expressly provided to the contrary,
this Agreement shall inure to the benefit of and be binding upon the parties
and their respective successors and permitted assigns, and no other Person
shall have any rights hereunder.
Section 5.4. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect.
Section 5.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.6. Submission to Jurisdiction; Consent to Service.
Ocensa hereby submits to the non-exclusive jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Ocensa irrevocably appoints the agent for service
designated opposite its name in Section 5.1 as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served
in any such suit or proceeding, and agrees that service of process upon such
agent, and written notice of said service to Ocensa, by the person serving the
same to the address provided in Section 5.1 shall be deemed in every respect
effective service of process upon Ocensa in any such suit or proceeding.
Ocensa further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and
effect for the duration of this Agreement. Ocensa agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Section 5.6 shall affect the right of the Trustee to
serve legal process in any other manner permitted by applicable law.
The obligation of Ocensa in respect of any sum due from it to the
Trustee, if expressed in United States dollars hereunder, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first Business Day, following receipt by the Trustee of
any sum adjudged to be so due in such other currency, on which (and only to
the extent that) the Trustee may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to the Trustee
hereunder, Ocensa agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Trustee against such dollar shortfall. If the
United States dollars so purchased are greater than the sum originally due to
the Trustee hereunder, the Trustee agrees to pay to Ocensa an amount equal to
the excess of the dollars so purchased over the sum originally due to the
Trustee hereunder.
Section 5.7. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
Section 5.8. Counterparts. This Agreement may be executed and
acknowledged in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement
to be executed and delivered by their proper officers thereunto duly
authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
By:
Title:
BANKERS TRUST COMPANY,
as Trustee
By:
Title:
ACKNOWLEDGEMENT
BY INITIAL SHIPPER
The Initial Shipper hereby acknowledges that this Agreement has been entered
into by Ocensa with its consent and that the Trustee is a permitted assignee
of Ocensa within the meaning of Section 7.3(b) of the Transportation
Agreement. The Initial Shipper hereby agrees with Ocensa and the Trustee to
make all payments and deliver all proceeds assigned hereunder directly to the
Trustee for application as provided in the Common Security Trust Agreement,
while providing an accounting thereof to Ocensa and the Trustee. The Initial
Shipper further agrees to be bound by the terms of this Agreement and not to
hinder the performance by Ocensa of this Agreement in accordance with its
terms. The Initial Shipper has caused this acknowledgement to be executed and
delivered by its proper officer thereunto duly authorized as of the date first
above written.
[INITIAL SHIPPER]
By:
Title:
_________________________
By:
Title:
<PAGE>
250_LAN01
APPENDIX D
To Common Security Trust Agreement
FORM OF ASSIGNMENT AND ACKNOWLEDGMENT AGREEMENT
FOR RIGHTS UNDER THE ADVANCE TARIFF AGREEMENT
This AGREEMENT, dated as of June 1, 1995, by and between:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws
of Colombia (Ocensa); and
BANKERS TRUST COMPANY, a New York banking corporation, as trustee
(the Trustee) under the Common Security Trust Agreement, dated as of June 1,
1995 (the Common Security Trust Agreement), among Ocensa, the holders from
time to time of Senior Debt and the Trustee.
RECITALS
WHEREAS:
A. [INSERT NAME OF THROUGHPUT OBLIGOR] (the Throughput Obligor) and
Ocensa have entered into an Advance Tariff Agreement, dated as of March 31,
1995 (as amended from time to time in accordance with its terms, the Advance
Tariff Agreement), by which the Throughput Obligor has undertaken obligations
to make payments to Ocensa in certain circumstances;
B. Ocensa desires to establish one or more credit facilities and/or
securities issuance facilities that may be used to finance construction and
operation of the Oleoducto Central pursuant to the Common Security Trust
Agreement. In order to facilitate such transactions, Ocensa is willing to
assign to the Trustee certain rights to receive payments (and the proceeds
thereof) from the Throughput Obligor under the Advance Tariff Agreement to be
exercised by the Trustee as provided herein and in the Common Security Trust
Agreement for the benefit of Senior Lender Group [A] [B] [C] [D], and, to the
extent of funds payable thereunder that are required to be deposited into the
Common Account, the other Senior Lender Groups, as their interests therein may
appear; and
C. By execution of this Agreement, Ocensa warrants that all things
necessary to make this Agreement the valid, legally binding and enforceable
obligation of Ocensa have been done and performed and the execution and
performance hereof in all respects has been authorized and approved by all
corporate action necessary on the part of Ocensa.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), Ocensa and the
Trustee agree as follows:
ARTICLE ONE
ASSIGNMENT BY OCENSA TO THE TRUSTEE
Section 1.1. Assignment. Ocensa hereby grants, transfers, sets
over and assigns to the Trustee all rights (but not obligations or duties) of
Ocensa in, under and arising from the Advance Tariff Agreement, whether now
existing or hereafter arising, to be exercised as provided in the Common
Security Trust Agreement for the benefit of Senior Lender Group [A] [B] [C]
[D], and, to the extent of funds payable thereunder that are required to be
deposited into the Common Account, the other Senior Lender Groups, as their
interests therein may appear, including, without limitation,
(i) subject to Article Two hereof, all rights of Ocensa to request
and receive all payments made or due to Ocensa by the Throughput Obligor
pursuant to the Advance Tariff Agreement and proceeds therefrom (other than
voluntary payments designated by the Throughput Obligor as Advance Tariff
Payments thereunder); and
(ii) all other rights (but not obligations or duties), claims,
powers, privileges, interests and remedies of Ocensa, whether arising under
the Advance Tariff Agreement, by statute, at law, in equity or otherwise,
resulting from any failure by the Throughput Obligor to perform its
obligations under the Advance Tariff Agreement;
together with full power and authority, in the name of the Trustee or Ocensa
as assignor or otherwise (but subject to Article Two hereof), to request
payment of, enforce, collect, receive and give receipt for any and all of the
foregoing as provided in the Common Security Trust Agreement (the rights,
claims, powers, privileges, interests and remedies referred to in clauses (i)
and (ii) being hereinafter sometimes referred to as the Rights Assigned
Hereby). The Trustee agrees to apply all moneys received by it pursuant hereto
as provided in the Common Security Trust Agreement.
ARTICLE TWO
PAYMENTS AND REQUESTS
Section 2.1. Requests. Ocensa may, at any time, and shall at the
request of the Trustee make all requests (which shall set forth in reasonable
detail the calculation of the amounts requested, including a breakdown of
clause (b) and (c) of the definition of Revenue Shortfall in the Advance
Tariff Agreement by item and source of the liabilities referred to therein) in
respect of moneys due from the Throughput Obligor under Section 3.1 of the
Advance Tariff Agreement and, if and only if for any reason Ocensa fails to do
so within two Business Days of request by the Trustee, the Trustee may make
such requests as assignee with the same force and effect as if made by Ocensa.
Ocensa agrees to promptly provide the Trustee with copies of all requests made
by it in respect of moneys due from the Throughput Obligor under the Advance
Tariff Agreement and to promptly notify the Trustee of any reduction of the
payment obligations of the Throughput Obligor with respect to an outstanding
call thereunder known to the Borrower.
Section 2.2 Payments. Ocensa and the Trustee agree that all funds
received by them in respect of the Rights Assigned Hereby shall be deposited
or caused to be deposited by them into the Proceeds Account maintained for the
benefit of Senior Lenders in Senior Lender Group [A] [B] [C] [D] and the
Common Account maintained for the benefit of Senior Lenders in each Senior
Lender Group, as their interests therein may appear, all in accordance with
Article Four of the Common Security Trust Agreement.
Section 2.3. Limited Recourse. The Trustee acknowledges on behalf
of itself and each Senior Lender that notwithstanding anything to the contrary
contained in this Agreement, the Advance Tariff Agreement, the Common Security
Trust Agreement or any Senior Debt Agreement, (i) the recourse of the Trustee
(on behalf of itself or any Senior Lender) or any Senior Lender for payment
and performance of Senior Debt Obligations or for any breach of any such
agreement by Ocensa shall be limited solely to the Assigned Rights to the
extent of their respective interests therein pursuant to the Common Security
Trust Agreement, and none of (A) Ocensa, (B) any Person in the Related Initial
Shipper Group or in any other Initial Shipper Group or the Canadian Group, (C)
any Person owning, directly or indirectly, any legal or beneficial interest in
Ocensa or in any Person in the Related Initial Shipper Group or in any other
Initial Shipper Group or the Canadian Group, (D) the Trustee, or (E) any
partner, principal, officer, controlling person, beneficiary, trustee,
shareholder, employee, agent, affiliate or director of any Person described in
clauses (A) through (D) above shall be personally liable for the payment or
performance of any Senior Debt Obligations or for any such breach and (ii)
each Senior Lender and the Trustee acting on behalf of itself or any Senior
Lender expressly waive, as authorized by Article 15 of the Colombian Civil
Code and Article 822 of the Colombian Code of Commerce or any successor
provision, any and all personal actions or rights they may have under
Colombian law and any other applicable law as provided by Article 2488 of the
Colombian Civil Code or any successor provision to demand payment and
performance of Senior Debt Obligations owing to such Senior Lender or for such
breach from the real estate and any other tangible or intangible assets of any
Person described in clauses (A) through (E) and any right to commence,
initiate or cause to be initiated any related proceeding, judicial or
otherwise, against Ocensa under any bankruptcy law or other reorganization,
arrangement, readjustment of Debt, relief of debtors, dissolution, insolvency,
liquidation or similar law or for the appointment of a receiver, trustee or
other officer or representative of a court or of creditors or take any other
action that may result in the Bankruptcy of Ocensa; provided, however, that in
each of cases (i) and (ii), the foregoing shall not impair the validity of any
security interest granted to a Senior Lender under its Senior Debt Agreement
in and to an escrow or trust account into which the proceeds of Senior Debt
under its Senior Debt Agreement, the proceeds therefrom and from investments
thereon and no other funds shall be deposited, or of this Agreement or the
right of the Trustee (or any Senior Lender in a Senior Lender Group to the
extent provided in the Common Security Trust Agreement) to foreclose and/or to
exercise or enforce any rights or remedies in and to the Rights Assigned
Hereby as provided in this Agreement and the Common Security Trust Agreement
(including, as provided in Section 9.9(a) thereof, the right to institute suit
against Ocensa for the payment of money due); and provided, further, however,
that, as to Ocensa but not as to any person listed in (B) through (E) above,
in the event of the Bankruptcy of Ocensa, such recourse shall not be so
limited and such waiver shall not so apply as of or subsequent to such
Bankruptcy, except that such recourse shall continue to be so limited and such
waiver shall continue to apply with respect to a Senior Lender in a Senior
Lender Group or the Trustee acting on its behalf or for the benefit of such
Senior Lender in such Senior Lender Group if such Bankruptcy of Ocensa was
commenced, initiated, caused to be initiated or otherwise resulted from any
action of such Senior Lender in such Senior Lender Group (or the Trustee
acting on its behalf or for its benefit) notwithstanding their respective
agreements to the contrary.
ARTICLE THREE
ASSIGNMENTS
Section 3.1. Assignment by the Trustee. The Trustee may not assign
this Agreement or any of its rights hereunder or proceeds herefrom, or create
enforceable third party rights herein or to such proceeds, to or in any person
not a party hereto (other than pursuant to the Common Security Trust
Agreement).
Section 3.2. Assignment by Ocensa. Ocensa may not assign its
rights and obligations hereunder or under the Advance Tariff Agreement to any
other person, without the written consent of the Trustee and the Throughput
Obligor.
ARTICLE FOUR
EFFECTIVENESS
Section 4.1. Effectiveness. This Agreement shall not become
effective prior to acknowledgement hereof by the Throughput Obligor.
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
If to Ocensa: Agent for Service:
OLEODUCTO CENTRAL S.A. CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax: (212) 247-2882
Santafe de Bogota, D.C. - Colombia
Telefax: 571-218-3933
Attention: President
BANKERS TRUST COMPANY N/A
Four Albany Street, 4th floor
New York, New York 10006
Telefax: (212) 250-6961
Telephone: (212) 250 6826
Attention: Corporate Trust and Agency Group
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by first class
mail.
Section 5.2. Entire Agreement; Waiver; Amendment. This Agreement,
together with the Common Security Trust Agreement, constitutes the entire
agreement between the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth herein and therein. All
terms which are defined in the Common Security Trust Agreement or the Advance
Tariff Agreement and not defined herein are used herein with the meanings
therein set forth. No amendment, supplement, waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby and the Throughput Obligor. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
Section 5.3. No Third Party Beneficiaries. Except with respect to
the last sentence of Section 1.1, Sections 2.2, 2.3, 3.1 and 3.2 and the third
sentence of Section 5.2 which shall inure to the benefit of the Throughput
Obligor and except as herein otherwise expressly provided to the contrary,
this Agreement shall inure to the benefit of and be binding upon the parties
and their respective successors and permitted assigns, and no other Person
shall have any rights hereunder.
Section 5.4. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect.
Section 5.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.6. Submission to Jurisdiction; Consent to Service.
Ocensa hereby submits to the non-exclusive jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Ocensa irrevocably appoints the agent for service
designated opposite its name in Section 5.1 as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served
in any such suit or proceeding, and agrees that service of process upon such
agent, and written notice of said service to Ocensa, by the person serving the
same to the address provided in Section 5.1 shall be deemed in every respect
effective service of process upon Ocensa in any such suit or proceeding.
Ocensa further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and
effect for the duration of this Agreement. Ocensa agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Section 5.6 shall affect the right of the Trustee to
serve legal process in any other manner permitted by applicable law.
The obligation of Ocensa in respect of any sum due from it to the
Trustee, if expressed in United States dollars hereunder, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first Business Day, following receipt by the Trustee of
any sum adjudged to be so due in such other currency, on which (and only to
the extent that) the Trustee may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to the Trustee
hereunder, Ocensa agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Trustee against such dollar shortfall. If the
United States dollars so purchased are greater than the sum originally due to
the Trustee hereunder, the Trustee agrees to pay to Ocensa an amount equal to
the excess of the dollars so purchased over the sum originally due to the
Trustee hereunder.
Section 5.7. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
Section 5.8. Counterparts. This Agreement may be executed and
acknowledged in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement
to be executed and delivered by their proper officers thereunto duly
authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
By:
Title:
BANKERS TRUST COMPANY,
as Trustee
By:
Title:
ACKNOWLEDGEMENT
BY THROUGHPUT OBLIGOR
The Throughput Obligor hereby acknowledges that this Agreement has been
entered into by Ocensa with its consent and that the Trustee is a permitted
assignee of Ocensa within the meaning of Section 5.5(b) of the Advance Tariff
Agreement. The Throughput Obligor hereby agrees with Ocensa and the Trustee to
make all payments and deliver all proceeds assigned hereunder directly to the
Trustee for application as provided in the Common Security Trust Agreement,
while providing an accounting thereof to Ocensa and the Trustee. The
Throughput Obligor further agrees to be bound by the terms of this Agreement
and not to hinder the performance by Ocensa of this Agreement in accordance
with its terms. The Throughput Obligor has caused this acknowledgement to be
executed and delivered by its proper officer thereunto duly authorized as of
the date first above written.
[THROUGHPUT OBLIGOR]
By:
Title:
<PAGE>
125_LAN04
APPENDIX E
To Common Security Trust Agreement
FORM OF ASSIGNMENT AND ACKNOWLEDGMENT AGREEMENT
FOR RIGHTS UNDER THE SUBSCRIPTION AGREEMENT
AND THE PERFORMANCE GUARANTEE AGREEMENT
This AGREEMENT, made as of June 1, 1995, by and between:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws
of Colombia (Ocensa); and
BANKERS TRUST COMPANY, a New York banking corporation, as trustee
(the Trustee) under the Common Security Trust Agreement), dated as of June 1,
1995 (the Common Security Trust Agreement), among Ocensa, the holders from
time to time of Senior Debt and the Trustee.
RECITALS
WHEREAS:
A. [INSERT NAME OF PURCHASER] (the Purchaser) and Ocensa have
entered into an Amended and Restated Subscription Agreement, dated as of March
31, 1995 (as amended from time to time in accordance with its terms, the
Subscription Agreement), by which the Purchaser has undertaken obligations to
purchase from time to time shares of Ocensa in exchange for cash in certain
circumstances;
[B. [INSERT NAME OF GUARANTOR] (the Guarantor), an Affiliate of the
Purchaser, and Ocensa have entered into a Performance Guarantee Agreement,
dated as of December [13] [14], 1994 (as amended from time to time in
accordance with its terms, the Performance Guarantee Agreement), by which the
Guarantor has guaranteed the performance of the Purchaser's obligations under
the Subscription Agreement];
C. Ocensa desires to establish one or more credit facilities and/or
securities issuance facilities that may be used to finance construction and
operation of the Oleoducto Central pursuant to the Common Security Trust
Agreement. In order to facilitate such transactions, Ocensa is willing to
assign to the Trustee certain of its rights under the Subscription Agreement
[and under the Performance Guarantee Agreement] to be exercised by the Trustee
as provided herein and in the Common Security Trust Agreement for the benefit
of Senior Lender Group [A] [B] [C] [D];
D. By execution of this Agreement, Ocensa warrants that all things
necessary to make this Agreement the valid, legally binding and enforceable
obligation of Ocensa have been done and performed and the execution and
performance hereof in all respects has been authorized and approved by all
corporate action necessary on the part of Ocensa.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein and for other good and valuable consideration (the receipt
and sufficiency of which is hereby acknowledged), Ocensa and the Trustee agree
as follows:
ARTICLE ONE
ASSIGNMENT BY OCENSA TO THE TRUSTEE
Section 1.1. Assignment. Ocensa hereby grants, transfers, sets
over and assigns to the Trustee the following rights (but not obligations or
duties) of Ocensa in, under and arising from the Subscription Agreement [and
the Performance Guarantee Agreement], whether now existing or hereafter
arising, to be exercised as provided herein and in the Common Security Trust
Agreement for the benefit of Senior Lender Group [A] [B] [C] [D]:
(i) subject to Article Two hereof, all rights of Ocensa to request
payment to Ocensa of, and, in the event of a special Call pursuant to the
penultimate paragraph of Section 2.1 of the Subscription Agreement only, to
receive, all monies paid or due [(A)] by the Purchaser pursuant to the
Subscription Agreement [and (B) by the Guarantor pursuant to the Performance
Guarantee Agreement]; and
(ii) all other rights (but not obligations or duties), claims,
powers, privileges, interests and remedies of Ocensa, whether arising under
the Subscription Agreement [or the Performance Guarantee Agreement, as the
case may be, by statute, at law, in equity or otherwise, resulting from any
failure by the Purchaser [or the Guarantor] to perform its obligations under
any such agreement;
together with full power and authority, in the name of the Trustee or Ocensa
as assignor or otherwise (but subject to Article Two hereof), to request,
after a Call has been made, and enforce payment to Ocensa of, and, in the
event of a special Call pursuant to the penultimate paragraph of Section 2.1
of the Subscription Agreement only, to receive and give receipt for, any and
all of such monies paid or due pursuant to the Subscription Agreement [and the
Performance Guarantee Agreement] and proceeds thereof, all in accordance with
the Common Security Trust Agreement (the rights, claims, powers, privileges,
interests and remedies referred to in clauses (i) and (ii) being hereinafter
sometimes referred to as the Rights Assigned Hereby); provided that nothing in
this Agreement shall be taken to constitute an assignment of Ocensa's right to
make Calls pursuant to the Subscription Agreement, except in the event of
Bankruptcy of Ocensa, Decommissioning or a unanimous decision of the Board of
in the Subscription Agreement). The Trustee agrees to apply all moneys
received by it pursuant hereto as provided in the Common Security Trust
Agreement and in the Subscription Agreement.
ARTICLE TWO
PAYMENTS AND REQUESTS
Section 2.1. Requests. Ocensa may at any time, and shall at the
request of the Trustee, make all requests in respect of moneys due from the
Purchaser under the Subscription Agreement [and from the Guarantor under the
Performance Guarantee Agreement] and, if and only if for any reason Ocensa
fails to do so within two Business Days of a request by the Trustee, the
Trustee may make such requests as assignee with the same force and effect as
if made by Ocensa. Ocensa agrees to promptly provide the Trustee at its
request with copies of all requests made by it in respect of moneys due from
the Purchaser under the Subscription Agreement [and from the Guarantor under
the Performance Guarantee Agreement]. This Section 2.1 does not derogate the
proviso in Section 1.1.
Section 2.2. Limited Recourse. The Trustee acknowledges on behalf
of itself and each Senior Lender that notwithstanding anything to the contrary
contained in this Agreement, the Subscription Agreement, [the Performance
Guarantee Agreement,] the Common Security Trust Agreement or any Senior Debt
Agreement, (i) the recourse of the Trustee (on behalf of itself or any Senior
Lender) or any Senior Lender for payment and performance of Senior Debt
Obligations or for any breach of any such agreement by Ocensa shall be limited
solely to the Assigned Rights to the extent of their respective interests
therein pursuant to the Common Security Trust Agreement, and none of (A)
Ocensa, (B) any Person in the Related Initial Shipper Group or in any other
Initial Shipper Group or the Canadian Group, (C) any Person owning, directly
or indirectly, any legal or beneficial interest in Ocensa or in any Person in
the Related Initial Shipper Group, in any other Initial Shipper Group or the
Canadian Group, (D) the Trustee, or (E) any partner, principal, officer,
controlling person, beneficiary, trustee, shareholder, employee, agent,
affiliate or director of any Person described in clauses (A) through (D) above
shall be personally liable for the payment or performance of any Senior Debt
Obligations or for any such breach and (ii) each Senior Lender and the Trustee
acting on behalf of itself or any Senior Lender expressly waive, as authorized
by Article 15 of the Colombian Civil Code and Article 822 of the Colombian
Code of Commerce or any successor provision, any and all personal actions or
rights they may have under Colombian law and any other applicable law as
provided by Article 2488 of the Colombian Civil Code or any successor
provision to demand payment and performance of Senior Debt Obligations owing
to such Senior Lender or for such breach from the real estate and any other
tangible or intangible assets of any Person described in clauses (A) through
(E) and any right to commence, initiate or cause to be initiated any related
proceeding, judicial or otherwise, against Ocensa under any bankruptcy law or
other reorganization, arrangement, readjustment of Debt, relief of debtors,
dissolution, insolvency, liquidation or similar law or for the appointment of
a receiver, trustee or other officer or representative of a court or of
creditors or take any other action that may result in the Bankruptcy of
Ocensa; provided, however, that in each of cases (i) and (ii), the foregoing
shall not impair the validity of any security interest granted to a Senior
Lender under its Senior Debt Agreement in and to an escrow or trust account
into which the proceeds of Senior Debt under its Senior Debt Agreement, the
proceeds therefrom and from investments thereon and no other funds shall be
deposited, or of this Agreement or the right of the Trustee (or any Senior
Lender in a Senior Lender Group to the extent provided in the Common Security
Trust Agreement) to foreclose and/or to exercise or enforce any rights or
remedies in and to the Rights Assigned Hereby as provided in this Agreement
and the Common Security Trust Agreement (including, as provided in Section
9.9(a) thereof, the right to institute suit against Ocensa for the payment of
money due); and provided, further, however, that, as to Ocensa but not as to
any person listed in (B) through (E) above, in the event of the Bankruptcy of
Ocensa, such recourse shall not be so limited and such waiver shall not so
apply as of or subsequent to such Bankruptcy, except that such recourse shall
continue to be so limited and such waiver shall continue to apply with respect
to a Senior Lender in a Senior Lender Group or the Trustee acting on its
behalf or for the benefit of such Senior Lender in such Senior Lender Group if
such Bankruptcy of Ocensa was commenced, initiated, caused to be initiated or
otherwise resulted from any action of such Senior Lender in such Senior Lender
Group (or the Trustee on its behalf or for its benefit) notwithstanding their
respective agreements to the contrary.
ARTICLE THREE
ASSIGNMENT
Section 3.1. Assignment by the Trustee. The Trustee may not assign
this Agreement or any of its rights hereunder or proceeds herefrom, or create
enforceable third party rights herein or to such proceeds, to or in any person
not a party hereto (other than pursuant to the Common Security Trust
Agreement).
Section 3.2. Assignment by Ocensa. Ocensa may not assign its
rights and obligations hereunder or under the Subscription Agreement [or the
Performance Guarantee Agreement] to any other person, without the written
consent of the Trustee and the Purchaser [and, with respect to the Performance
Guarantee Agreement, the Guarantor].
ARTICLE FOUR
EFFECTIVENESS
Section 4.1. Effectiveness. This Agreement shall not become
effective prior to acknowledgement hereof by the Purchaser [and the
Guarantor].
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
If to Ocensa: Agent for Service
OLEODUCTO CENTRAL S.A. CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax: (212) 247-2882
Santafe de Bogota, D.C. - Colombia
Telefax: 571-218-3933
Attention: President
BANKERS TRUST COMPANY N/A
Four Albany Street, 4th floor
New York, New York 10006
Telefax: (212) 250-6961
Telepone: (212) 250 6826
Attention: Corporate Trust and Agency Group
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by personal delivery or by electronic communication shall send the original
thereof by personal delivery or by first class mail.
Section 5.2. Entire Agreement; Waiver; Amendment
. This Agreement, together with the Common Security Trust Agreement,
constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and
there are no warranties, representations or other agreements between the
parties in connection with the subject matter hereof except as specifically
set forth herein and therein. All terms which are not defined herein are,
unless otherwise specified, used herein with the meanings assigned thereto in
the Common Security Trust Agreement or, if not defined therein, the
Subscription Agreement. No amendment, supplement, waiver or termination of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby [,] [and] the Purchaser [and the Guarantor]. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions (whether or not similar) nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
Section 5.3. No Third Party Beneficiaries. Except with respect to
the last sentence of Section 1.1, Sections 2.2, 3.1 and 3.2 and the third
sentence of Section 5.2 which shall inure to the benefit of the Purchaser [and
the Guarantor] and except as herein otherwise expressly provided to the
contrary, this Agreement shall inure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns, and no other
Person shall have any rights hereunder.
Section 5.4. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect.
Section 5.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.6. Submission to Jurisdiction; Consent to Service.
Ocensa hereby submits to the non-exclusive jurisdiction of the Federal and
State courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Ocensa irrevocably appoints the agent for service
designated opposite its name in Section 5.1 as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served
in any such suit or proceeding, and agrees that service of process upon such
agent, and written notice of said service to Ocensa, by the person serving the
same to the address provided in Section 5.1 shall be deemed in every respect
effective service of process upon Ocensa in any such suit or proceeding.
Ocensa further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and
effect for the duration of this Agreement. Ocensa agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Section 5.6 shall affect the right of the Trustee to
serve legal process in any other manner permitted by applicable law.
The obligation of Ocensa in respect of any sum due from it to the
Trustee, if expressed in United States dollars hereunder, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first business day, following receipt by the Trustee of
any sum adjudged to be so due in such other currency, on which (and only to
the extent that) the Trustee may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to the Trustee
hereunder, Ocensa agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Trustee against such dollar shortfall. If the
United States dollars so purchased are greater than the sum originally due to
the Trustee hereunder, the Trustee agrees to pay to Ocensa an amount equal to
the excess of the dollars so purchased over the sum originally due to the
Trustee hereunder.
Section 5.7. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
Section 5.8. Counterparts. This Agreement may be executed and
acknowledged in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
OLEODUCTO CENTRAL S.A.
By:
Title:
BANKERS TRUST COMPANY,
as Trustee
By:
Title:
ACKNOWLEDGEMENT
BY PURCHASER
The Purchaser hereby acknowledges that this Agreement has been entered into by
Ocensa with its consent and that the Trustee is a permitted assignee of Ocensa
within the meaning of Section 5.3(a) of the Subscription Agreement. The
Purchaser hereby agrees with Ocensa and the Trustee in the case of a special
Call pursuant to the penultimate paragraph of Section 2.1 of the Subscription
Agreement to make all payments and deliver all proceeds assigned hereunder
directly to the Trustee for application as provided in the Common Security
Trust Agreement, while providing an accounting thereof to Ocensa and the
Trustee. The Purchaser further agrees to be bound by the terms of this
Agreement and not to hinder the performance by Ocensa of this Agreement in
accordance with its terms. The Purchaser has caused this acknowledgement to be
executed and delivered by its proper officer thereunto duly authorized as of
the date first above written.
[PURCHASER]
By:
Title:
<PAGE>
[ACKNOWLEDGEMENT
BY GUARANTOR
The Guarantor hereby acknowledges that this Agreement has been entered into by
Ocensa with its consent and that the Trustee is a permitted assignee of Ocensa
within the meaning of Section 9 of the Performance Guarantee Agreement. The
Guarantor hereby agrees with Ocensa and the Trustee in the case of a special
Call pursuant to the penultimate paragraph of Section 2.1 of the Subscription
Agreement to make all payments and deliver all proceeds assigned hereunder to
the Trustee for application as provided in the Common Security Trust
Agreement, while providing an accounting thereof to Ocensa and the Trustee.
The Guarantor further agrees to be bound by the terms of this Agreement and
not to hinder the performance by Ocensa of this Agreement in accordance with
its terms. The Guarantor has caused this acknowledgement to be executed and
delivered by its proper officer thereunto duly authorized as of the date first
above written.
[GUARANTOR]
By:
Title:]
<PAGE>
125_LAN04
APPENDIX F
to Common Security Trust Agreement
FORM OF OFF-SHORE SUBACCOUNT BANK AGREEMENT
[date]
Bankers Trust Company
4 Albany, 4th Floor
New York, New York 10006
Attention:
Gentlemen:
This is to confirm our agreement with you as follows:
1. The Subaccount; No Set-Offs. We have today opened a segregated
account in your name, no. ________ (the Subaccount). We acknowledge that all
funds or other assets in such account are trust funds held by you under the
Common Security Trust Agreement, dated as of _________ __, 1995, as amended
from time to time in accordance with the terms thereof, among Oleoducto
Central S.A. (the Borrower) and the other parties thereto, which trust funds
we will hold as your custodian. Accordingly, we will not have, and hereby
waive, any right of banker's lien, set-off or counterclaim in respect of any
funds or other assets in the Subaccount or any Special Account (as defined
below).
2. Consent to Security Interest. We acknowledge and consent to the
security interest in such interest (if any) as the Borrower may have in the
Subaccount or any Special Account created by Section 3.5 of the Common
Security Trust Agreement in favor of the Senior Lenders entitled to the
benefits of the Common Security Trust Agreement.
3. Investments. (a) We agree to remit all funds and other assets
held in or for the Subaccount or any Special Account to you upon at least one
Business Day's notice from you (except, unless you otherwise instruct us,
those investments the remittance of which would involve an interest cost or
penalty, which investments (or the cash received upon liquidation thereof) we
shall in such circumstance remit to you at the first time when such remittance
would not involve such cost or penalty). After receipt of any such notice we
shall continue to remit to you upon receipt any funds or assets we receive for
deposit to the Subaccount or any Special Account.
(b) Until we receive a request for remittance from you pursuant to
clause (a) or a notice from you instructing us to do otherwise, we shall
follow (and understand that we are hereby directed by you to follow)
directions for investment, withdrawal and remittance received from any Person
designated for such purpose from time to time by or on behalf of the Borrower.
We shall have no liability with respect to investments (including purchases or
conversions of foreign exchange) of moneys held in or for the Subaccount or
any Special Account (or any losses resulting therefrom) made at your direction
or the direction of the Borrower or any person designated by or on behalf of
the Borrower. Investments which we make with Subaccount or Special Account
balances will be held by us in your name.
(c) If, in addition to the Subaccount, we have opened other
accounts in your name and we receive funds from you or the Borrower or for
your or the Borrower's account that are not identified as funds for deposit in
the Subaccount or any such other account, and as to which we have received no
instructions from you or the Borrower, we shall deposit such funds to a
segregated account established by us in your name at such time and for such
purpose (Special Account) and promptly thereafter we shall request that the
Borrower instruct us (or, if you have previously notified us otherwise, that
you instruct us) as to the deposit or other disposition of such funds.
4. Books, Accounts and Records. (a) We shall maintain all such
accounts, books and records as may be necessary properly to record all
transactions carried out by us under this Agreement. We shall permit you, the
Senior Lenders and the Borrower and their authorized representatives to
examine such accounts, books and records, provided that any such examination
shall occur upon reasonable notice and during normal business hours.
(b) On or before the fifth Business Day of each calendar month for
so long as such Subaccount and any Special Account are open, we shall deliver
to you a statement indicating the amount of funds and other assets on deposit
in the Subaccount and such Special Account and the nature of any investments
thereof as of the end of the preceding calendar month and identifying all
deposits to and payments from the Subaccount and such Special Account during
such calendar month, including the date on which made. Upon your request, we
will at any other time inform you of deposits, investments, payments, balances
and any other information you may request (and that is reasonably available to
us) regarding the Subaccount and any Special Account.
5. Communications. Any instruction to be given hereunder to us for
the withdrawal and transfer of moneys in the Subaccount or any Special Account
may be given by the Borrower or you, as the case may be, in writing, by
telephone, by tested telex, facsimile or other form of electronic
transmission, and in any manner that we may reasonably accept (subject to
normal and customary verification requirements), in each case from persons
designated for such purpose by the Borrower or you, as the case may be, and
under procedures established from time to time by the Borrower or you and us.
Any initiation of a wire transfer of funds in the Subaccount or any Special
Account effected through computerized facilities offered to the Borrower by us
shall be deemed to be the giving to us of a direction or instruction to make
such transfer. All directions, notices and instructions given to us that are
not in writing or by electronic funds transfer shall be confirmed in writing.
6. Duties of Subaccount Bank. (a) We shall be entitled to act
upon any notice, request, direction, waiver, receipt or other document which
in good faith we believe to be genuine, and we shall be entitled to rely upon
the due execution, validity and effectiveness, and the truth and
acceptability, of any provisions contained therein. We shall not have any
responsibility to make any investigation into the facts or matters stated in
any notice, certificate, instrument, demand, request or other communications
furnished to us hereunder.
(b) We shall not be liable for any error of judgment or for any act
done or omitted by us in good faith or for any mistake of fact or law, or for
anything which we may do or refrain from doing, except for our own negligence
or willful misconduct.
(c) We may consult with, and obtain advice from, legal counsel,
accountants and other experts in connection with the performance of our duties
hereunder and we shall incur no liability and shall be fully protected in
acting in good faith in accordance with the written opinion and written advice
of such counsel, accountants and other experts. We shall not be responsible
for the negligence or misconduct of any counsel, accountants and other experts
selected by us without negligence or willful misconduct.
(d) We shall have no duties other than those specifically set forth
or provided for in this Agreement and no implied covenants or obligations on
our part shall be read into this Agreement. We shall have no obligation to
familiarize ourselves with and shall have no responsibility with respect to
any other agreement relating to the transactions contemplated by this
Agreement nor any obligation to inquire whether any notice, instruction,
statement or calculation is in conformity with the terms of any such other
agreement, except those irregularities or errors manifestly apparent on the
face of such document or to our actual knowledge. If, however, any remittance
or communication received by us appears manifestly erroneous or irregular we
shall be under a duty to make prompt inquiry to the Person originating such
remittance or communication in order to determine whether a clerical error or
inadvertent mistake has occurred. We shall at all times take such care in
dealing with the Subaccount and any Special Account as would a prudent person
in dealing with his own property.
7. Expenses. We acknowledge that you shall have no responsibility
for any fees or expenses incurred by us in connection with this Agreement. Any
arrangements for the payment of such fees and expenses shall be made directly
between us and the Borrower.
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK [COLOMBIAN
SUBACCOUNT BANKS ONLY - COLOMBIA] WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
9. Definitions. Terms used but not defined herein have the
meanings assigned to them in the Common Security Trust Agreement.
[NAME OF SUBACCOUNT BANK]
By:_______________________
125_LAN02/105797.17
APPENDIX G
To Common Security Trust Agreement
COMMON REPRESENTATIONS AND WARRANTIES
(a) Organization and Ownership. The Borrower is a sociedad
anonima duly organized and existing under the laws of Colombia. The Borrower
has all requisite power and authority under the laws of Colombia to own its
property and to carry on the business of the Oleoducto Central. The Shares of
the Borrower, as of the date of such Senior Lender's Senior Debt Agreement,
are owned by the Persons set forth in an Officers' Certificate delivered by
the Borrower to such Senior Lender on the date of such Senior Lender's Senior
Debt Agreement and no Person other than the Shareholder in the Related Initial
Shipper Group and, in the case of Ecopetrol, the Canadian Group has a legal or
beneficial interest in any of the Assigned Rights except as provided in this
Agreement and the Assignment Agreements and no Person except the Borrower has
any interest in any of the Oleoducto Central property except, in the case of
Ecopetrol, pursuant to the Promesas de Compraventa. The Borrower does not own
any material properties or assets other than those incidental to the Oleoducto
Central.
(b) Authority. The Borrower has full power and authority to
enter into such Senior Lender's Senior Debt Agreement and any debt instrument
delivered thereunder and had, as of the date hereof, full power and authority
to enter into this Agreement, the Financing Agreements with Persons in the
Related Initial Shipper Group and, in the case of Ecopetrol, the Canadian
Group, the Assignment Agreements in respect of such Financing Agreements and
the Technical Services and Management Agreement.
(c) Binding Agreement. Except as noted in the legal opinions
delivered in connection with the execution and delivery of each of the
agreements referred to in paragraph (b) as of the date thereof, the execution,
delivery and performance of each such agreement has been duly authorized,
executed and delivered by it, is in full force and effect and constitutes its
valid and legally binding obligation enforceable in accordance with its terms.
(d) Governmental Approvals. All authorizations, approvals and
consents from governmental authorities in Colombia which are necessary (i) for
the execution, delivery and performance by the Borrower of each of the
agreements referred to in paragraph (b) above, the Incurrence of the Senior
Debt under such Senior Lender's Senior Debt Agreement, the repayment of the
Senior Debt Obligations owing to such Senior Lender on a timely basis and the
assignment to the Trustee for the benefit of such Senior Lender of the
Assigned Rights and the performance of its other obligations under this
Agreement and its Senior Debt Agreement have been obtained and are in full
force and effect, and (ii) for the operation of the Oleoducto Central in
accordance with Section 6.1(k) are listed in Appendix H of this Agreement have
been obtained and are in full force and effect, except, in each of clauses (i)
and (ii), as noted in the legal opinions delivered in connection with the
execution and delivery of each of the agreements referred to in paragraph (b)
as of the date thereof or as noted in Appendix H or such as the Borrower has
determined are not necessary or desirable in the conduct of its business and
do not materially adversely affect the Borrower's ability to repay the Senior
Debt Obligations owing to such Senior Lender on a timely basis or such Senior
Lender's ability to realize on the Assigned Rights created by or pursuant to
this Agreement for its benefit.
(e) Consents and Approvals for the Oleoducto Central. The
Borrower has or will have in place at the appropriate time all licenses,
permits, contracts and rights necessary in order to ensure the construction
and operation of the Oleoducto Central in accordance with Section 6.1(k), in
each case, with such exceptions as noted in Appendix H or as the Borrower
shall determine are not necessary or desirable in the conduct of its business
and do not materially adversely affect the Borrower's ability to repay the
Senior Debt Obligations owing to such Senior Lender on a timely basis or such
Senior Lender's ability to realize on the Assigned Rights assigned by or
pursuant to this Agreement for its benefit.
(f) No Conflicts. Except as previously disclosed to such Senior
Lender in writing, there is no provision of law, statute, regulation, rule,
order, injunction, decree, writ or judgment, and no provision of the By-laws
of the Borrower and no provision of any mortgage, indenture, contract or
agreement binding on the Borrower or affecting its properties which would
prohibit, conflict with or in any way prevent the execution, delivery, or
carrying out of the terms of any of the agreements and instruments referred to
in paragraph (b) above.
(g) Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its properties in any court, before or by any
governmental department, board, agency or instrumentality or before any
arbitrator, and no existing default by the Borrower under any applicable
order, writ, injunction or decree of any court, government department, board,
agency or instrumentality or any arbitrator, in each case that, if resolved
adversely to the Borrower, is reasonably expected to have, individually or in
the aggregate, a material adverse effect on the Borrower's ability to repay
Senior Debt Obligations owing to such Senior Lender or such Senior Lender's
ability to realize on Assigned Rights assigned by or pursuant to this
Agreement for its benefit or that questions the legality, validity or
enforceability of any of the agreements referred to in paragraph (b) above.
(h) Oleoducto Central Information. There are no facts or
circumstances known to the Borrower which, individually or in the aggregate,
could reasonably be expected to have a material adverse effect upon the
Borrower's ability to repay the Senior Debt Obligations owing to such Senior
Lender or such Senior Lender's ability to realize on the Assigned Rights
assigned by or pursuant to this Agreement for its benefit and which have not
previously been disclosed to the Trustee.
(i) No Immunity. Except as noted in the legal opinions
delivered in connection with the execution and delivery of this Agreement and
the Assignment Agreements as of the date thereof, neither the Borrower nor any
of its properties has any immunity from jurisdiction or suit of any court or
from any legal process or remedy (whether through service, notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise).
(j) Assignments and Security Interests. The Borrower has good
and valid title to its properties, assets, revenues and the Assigned Rights
assigned by it to the Trustee for the benefit of such Senior Lender's Senior
Lender Group, and, except to the extent previously disclosed to such Senior
Lender in writing, there are no Liens and no adverse or competing claims
against such properties, assets, revenues or Assigned Rights except (i)
pursuant to this Agreement and the Assignment Agreements and (ii) other
Permitted Encumbrances. Except as noted in the legal opinions delivered in
connection with the execution and delivery of this Agreement and the
Assignment Agreements as of the date thereof, this Agreement creates in favor
of such Senior Lender each security interest purported to be created
thereunder and each Assignment Agreement in respect of a Financing Agreement
with a Person in the Related Initial Shipper Group, and, in the case of
Ecopetrol, the Canadian Group, entered into with the Trustee for the benefit
of such Senior Lender, when executed and delivered, created each interest
purported to be created thereby and validly assigned the rights purported to
be assigned thereby. Except as noted in the legal opinions delivered in
connection with the execution and delivery of this Agreement and such
Assignment Agreements as of the date thereof, all such assignments and
security interests are valid and binding, and constitute, under applicable
law, fully perfected interests, superior in right to any Liens, except
Permitted Encumbrances, and enforceable against the grantor of such interests,
any trustee in bankruptcy and any attaching creditor or third party.
(k) Taxes. The Borrower has filed or caused to be filed all tax
returns required to be filed by it, and has paid and discharged all taxes
shown to be due and payable on such returns, or on any assessments made
against it or any of its properties, and all other taxes, assessments and
governmental charges or levies lawfully imposed on it or on its property
following a formal demand for payment from appropriate governmental officials
except (i) such as are contested in good faith and by appropriate proceedings
and with respect to which adequate reserves are maintained by the Borrower and
(ii) such as do not materially adversely affect the ability of the Borrower to
repay Senior Debt Obligations owing to such Senior Lender on a timely basis or
such Senior Lender's ability to realize on the Assigned Rights assigned by or
pursuant to this Agreement for its benefit. Except to the extent previously
disclosed to such Senior Lender in writing, there are no disputes pending or,
to its knowledge, threatened, between the Borrower and any governmental taxing
authority in an amount exceeding $5 million.
(l) Remittance Tax. As of the date hereof no income, stamp or
other taxes or levies, imposts, deductions, charges, compulsory loans or
withholdings whatsoever are or will be, under applicable law in Colombia,
imposed, assessed, levied or collected by Colombia or any political
subdivision or taxing authority thereof or therein or on or in respect of
principal, interest, premiums, penalties, fees, commissions or other amount
payable to such Senior Lender under its Senior Debt Agreement.
(m) Ranking. The obligations of the Borrower under the Senior
Debt Agreement with such Senior Lender, the Senior Loans made thereunder and
any promissory notes evidencing such Senior Loans do and shall, except as
otherwise provided therein, at all times rank in right or warranty of payment
and of Assigned Rights held by the Trustee for their benefit (i) pari passu
with the Borrower's obligations under each other Senior Debt Agreement with a
Senior Lender in such Senior Lender Group, the Senior Loans made thereunder
and any promissory notes evidencing such Senior Loans, (ii) senior to the
obligations of the Borrower in respect of any Subordinated Debt, the
Transportation Repayment Obligations (prior to their conversion to Senior Debt
pursuant to Section 2.1(b) of the Common Security Trust Agreement) and
Shareholder Bridge Loans pursuant to clause (b) of the definition thereof
herein, and (iii) senior to all other Debt of the Borrower other than any Debt
which has priority under applicable Colombian law.
(n) Contracts with Affiliates. The Borrower has not entered
into any agreements, arrangements or understandings with any Affiliate (other
than the Project Agreements, the Financing Agreements and, if applicable, the
Transportation Notes and Subordinated Notes) which, in each case, have been
disclosed in writing to the Trustee other than any of which have been
previously disclosed in writing to such Senior Lender or are not material to
the ability of the Borrower to repay Senior Debt Obligations owing to such
Senior Lender on a timely basis or such Senior Lender's ability to realize on
the Assigned Rights assigned by or pursuant to this Agreement for its benefit.
(o) No Event of Default. No Event of Default has occurred and
is continuing with respect to the Related Senior Debt Tranche.
(p) Copies of Documents. The copies of the Financing Agreements
with Persons in the Related Initial Shipper Group and, in the case of
Ecopetrol, the Canadian Group, the Assignment Agreements in respect of such
Financing Agreements and the Project Agreements and of any amendments to any
of the foregoing provided or to be provided by the Borrower to the Trustee and
such Senior Lender are, or when delivered will be, true and complete copies of
such agreements and documents and each of such agreements heretofore provided
is in full force and effect.
<PAGE>
250_LAN01
APPENDIX H
To Common Security Trust Agreement
COLOMBIAN CONSENTS AND APPROVALS
1. THE ENVIRONMENTAL LICENSE
Pursuant to Law 99, 1993, BPEC, acting on behalf of the future shareholders of
the Borrower, applied on July 12, 1994 for the environmental license for the
Oleoducto Central. the Borrower expects to obtain such license from the
Ministry of the Environment by June 30, 1995.
2. AUTHORIZATION FOR THE CONSTRUCTION OF THE PIPELINE FROM THE MME
Pursuant to Article 189 of the Petroleum Code (Decree 1056 of 1953, as
amended), construction of a private use pipeline must be notified to the MME.
However, if such pipeline were to be considered as a public use pipeline, as
is the case of Oleoducto Central, authorization of the MME is necessary. By
Resolution 6 - 87 dated May 24, 1995 issued by the Ministry of Mines and
Energy (MME), the assignment of the authorization to construct the Oleoducto
Central done by BPEC in favor of the Borrower was approved.
3. AUTHORIZATION OF THE PIPELINE LAYOUT
Pursuant to Articles 54 and 190 of the Petroleum Code, the preliminary and
final layout of a public use pipeline must be approved by the MME. A
preliminary layout for the Oleoducto Central was obtained on September 16,
1994 in Ministry of Mines Resolution 9 409.
4. THE CONCESSION CONTRACT
Pursuant to Article 46 of the Petroleum Code, a concession contract must be
executed between the Borrower and the Ministry of Mines and Energy for the
construction and operation of Oleoducto Central. the Borrower is in the
process of initiating negotiations with the MME for obtaining of the
concession contract.
5. TARIFF AUTHORIZATION
Pursuant to Article 56 of the Petroleum Code, the MME must approve the
applicable tariff for the Oleoducto Central before it begins operations. No
application for such approval has been submitted to date.
6. AUTHORIZATION FOR THE PORT FACILITIES
Pursuant to Articles 5 and 6 of Law I of 1991, a Concession Contract with the
National Government represented by the General Superintendency of Ports must
be entered into in order to operate the Port facilities. No application for
such approval has been submitted to date.
APPENDIX I
To The Common Security Trust Agreement
COMMON CONDITIONS TO DISBURSEMENTS
Section 1.1 Common Conditions Precedent to Initial Disbursements of
Senior Loans.
(a) Authorizations, etc. The Trustee and such Senior Lender
shall have received certified copies of (i) the charter documents of the
Borrower (together with certified English translations of any such Spanish
documents) and (ii) the governing documents of the Persons in the Related
Initial Shipper Group that are party to Financing Agreements and of the
actions of their respective Boards of Directors, as the case may be, taken to
authorize the execution, delivery and performance of this Agreement, its
Senior Debt Agreement, each promissory note delivered thereunder, the
Financing Agreements with Persons in such Initial Shipper Group and each
Assignment Agreement in respect of such Financing Agreements executed for its
benefit, and the performance by them of their respective obligations
thereunder.
(b) Incumbency and Signatures. The Trustee and such Senior
Lender shall have received certificates in English of the Borrower and Persons
in the Related Initial Shipper Group that are party to Financing Agreements in
respect of the authority and incumbency, and containing a specimen signature,
of each person who has signed or will sign on its behalf any of the agreements
referred to in paragraph (a) above, or who will, until replaced by another
person or persons duly authorized for that purpose, otherwise act as
representative for the purposes of signing documents in connection with any of
the agreements referred to in paragraph (a) above and the transactions
contemplated thereby (including the giving of notices, directions and requests
to the Trustee thereunder).
(c) Agreements. The agreements referred to in paragraph (a)
above shall have been executed and delivered by each of the parties named as
proposed signatories thereto, true and complete copies of each of such
agreements shall have been delivered to the Trustee and each Senior Lender and
each such agreement shall be in full force and effect.
(d) Assignment Agreements. Each of the Assignment Agreements
with respect to the Financing Agreements with Persons in the Related Initial
Shipper Group, shall have been executed and delivered by the party required
hereby to execute or grant the same.
(e) Accounts. The Trustee shall have notified the Borrower and
such Senior Lender of the establishment of the Proceeds Account to be
maintained for the benefit of such Senior Lender Group and the Common Account
and any Subaccount Bank Agreements with Subaccount Banks substantially in the
form attached as Appendix F shall have been executed and delivered.
(f) Insurance. The insurance then required to be in effect
pursuant to Section 6.1(o) shall be in full force and effect.
(g) Representations and Warranties; Defaults. Both immediately
prior to such initial disbursement and upon giving effect thereto, the
representations and warranties made in such Senior Lender's Senior Debt
Agreement shall be true and correct in all material respects as if made on and
as of the date of such initial disbursement and no Event of Default or Default
shall have occurred and be continuing with respect to the Related Senior Debt
Tranche.
(h) Governmental Approvals. All authorizations, approvals and
consents from governmental authorities in Colombia listed in Appendix H shall
have been or shall, at the appropriate time, be obtained and be in full force
and effect, except as noted in the legal opinions delivered in connection with
the execution and delivery of each of the agreements referred to in paragraph
(a) above, as noted in Appendix H or such as the Borrower shall have
determined are not necessary or desirable in the conduct of its business and
that the loss thereof would not materially adversely affect the Borrower's
ability to repay Senior Debt Obligations owing to such Senior Lender on a
timely basis or such Senior Lender's ability to realize on the security
interests created by or pursuant to this Agreement for its benefit.
(i) Decommissioning; Abandonment. There shall not have occurred
a Decommissioning or a unanimous decision of the Board of Directors not to
continue with the Oleoducto Central.
(j) Legal Opinions. The Trustee and such Senior Lender in such
Senior Lender Group shall have received in connection with the execution and
delivery of this Agreement the following legal opinions in the English
language addressed to the Trustee and such Senior Lender:
(i) the opinion of Gomez Pinzon & Asociados, Colombian counsel to the
Borrower, to the effect set forth in Appendix M-1,
(ii) the opinion of Cardenas & Cardenas, common Colombian counsel to
Senior Lenders, or other counsel reasonably satisfactory to Senior Lenders, to
the effect set forth in Appendix M-2,
(iii) the opinion of Sullivan & Cromwell, New York counsel to the
Borrower, to the effect set forth in Appendix M-3,
(iv) the opinion of Shearman & Sterling, common New York counsel to
Senior Lenders, or other counsel reasonably satisfactory to Senior Lenders, to
the effect set forth in Appendix M-4,
(v) the opinion of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel,
counsel to the Trustee, to the effect set forth in Appendix M-5,
and such additional opinions of such counsel in connection with the execution
and delivery of such Senior Lender's Senior Debt Agreement covering such other
matters arising from material changes between the date of execution and
delivery of the Common Security Trust Agreement and the date such opinions are
delivered as may be reasonably requested by such Senior Lender.
(k) Certificates. The Borrower shall have delivered to the
Trustee and such Senior Lender an Officers' Certificate to the effect that the
conditions set forth in clauses (g) (as it relates to the Borrower) and (h)
above have been satisfied.
(l) Acceptance of Appointment of Agent for Service. The Trustee
shall have received acceptances from the agents for service appointed in the
Common Security Trust Agreement and its Senior Debt Agreement.
Section 1.2 Initial and Subsequent Senior Loan Disbursements. (a)
The Borrower may agree in the Senior Debt Agreement with a Senior Lender
(other than a fiscal agent or indenture trustee for holders of debt securities
of the Borrower) that the obligation of such Senior Lender to make Senior
Loans under the Related Senior Debt Tranche from time to time (including the
obligation to make the disbursements in respect of its Senior Loan under such
Senior Debt Tranche) be subject to, among other conditions that may be
specified in such Senior Debt Agreement, (i) receipt of a notice of borrowing
substantially in the form set forth in such Senior Debt Agreement, (ii) no
Default or Event of Default shall be continuing with respect to such Senior
Debt Tranche, (iii) the representation in Section 1.1(c) above being true and
correct with respect to the Advance Tariff Agreement with the Throughput
Obligor in the Related Initial Shipper Group, (iv) satisfaction or waiver of
the other conditions precedent set forth in its Senior Debt Agreement or (v)
no suspension of its obligations to make additional disbursements in respect
of its Senior Loan under such Senior Debt Tranche.
(b) Such Senior Lender shall agree, without prejudice to its rights
under its Senior Debt Agreement, promptly to notify the Borrower and the
Trustee if (i) it believes that one or more conditions precedent to its
obligation to make additional disbursements in respect of its Senior Loan will
not be satisfied or waived, (ii) its obligation to make additional
disbursements in respect of its Senior Loan under such Senior Debt Tranche is
suspended for any reason and (iii) it reinstates its obligation to make
additional disbursements in respect of its Senior Loan under such Senior Debt
Tranche.
APPENDIX J
To the Common Security Trust Agreement
SUBORDINATION TERMS
General. To the extent and in the manner set forth herein, the payment
of interest on and principal of Subordinated Debt (including for all purposes
of these subordination terms, all premiums and other amounts payable on or in
respect thereof) is expressly made subordinate and subject in right of payment
to the prior payment in full of all Senior Debt Obligations under Senior Debt
Tranche [A][B][C][D] [identify relevant Senior Debt Tranche(s)] under such
Senior Debt Tranche(s). The Subordinated Lender agrees that it will not ask,
demand, sue for, take or receive from the Borrower, by set-off or in any other
manner, or retain, payment (in whole or in part) of interest on or principal
of Subordinated Debt, or any security therefor, other than payments made at
the times, in the amounts and to the extent permitted under this Agreement
(such payments being herein called Permitted Payments), unless and until all
Senior Debt Obligations under such Senior Debt Tranche(s) have been paid in
full. The Subordinated Lender directs the Borrower to make, and the Borrower
agrees to make, such prior payment of such Senior Debt Obligations.
Limited Recourse. (i) The recourse of any Subordinated Lender or any
trustee therefor for payment of Subordinated Debt shall be limited solely to
the Collateral, if any, securing such Subordinated Debt, and none of (A) the
Borrower, (B) any Person in any Initial Shipper Group or the Canadian Group,
(C) any Person owning, directly or indirectly, any legal or beneficial
interest in the Borrower or in any Person in such Initial Shipper Group or the
Canadian Group, or (D) any partner, principal, officer, controlling person,
beneficiary, trustee, shareholder, employee, agent, affiliate or director of
any Person described in clauses (A) through (C) above shall be personally
liable for the payment of any Subordinated Debt and (ii) for the benefit of
the Borrower, each Senior Lender with respect to such Senior Debt Tranche(s)
and each other Subordinated Lender, each Subordinated Lender and any trustee
therefor expressly waives, as authorized by Article 15 of the Colombian Civil
Code and Article 822 of the Colombian Code of Commerce or any successor
provision, any and all personal actions or rights they may have under
Colombian law and any other applicable law as provided by Article 2488 of the
Colombian Civil Code or any successor provision to demand payment of
Subordinated Debt owing to such Subordinated Lender from the real estate and
any other tangible or intangible assets of any Person described in clauses (A)
through (D) and any right to commence, initiate or cause to be initiated any
related proceeding, judicial or otherwise, against the Borrower under any
bankruptcy law or other reorganization, arrangement, readjustment of debt,
relief of debtors, dissolution, insolvency, liquidation or similar law or for
the appointment of a receiver, trustee or other officer or representative of a
court or of creditors or to take any other action that may result in the
Bankruptcy of the Borrower; provided, however, that in each of cases (i) and
(ii), the foregoing shall not impair the validity of any security interests
granted in accordance with this Agreement or the right of such Subordinated
Lender or any trustee therefor to foreclose and/or enforce any rights or
remedies in and to the Collateral securing the related Subordinated Debt upon
the occurrence of a default with respect to such Subordinated Debt; provided
further, however, that, as to the Borrower but not as to any Person listed in
(B) through (D) above, in the event of the Bankruptcy of the Borrower, such
recourse shall not be so limited and such waiver shall not so apply subsequent
to such Bankruptcy, except that such recourse shall continue to be so limited
and such waiver shall continue to apply with respect to Subordinated Lenders,
or any trustee acting on behalf or for the benefit of such Subordinated
Lenders, if such Bankruptcy of the Borrower was commenced, initiated, caused
to be initiated or otherwise resulted from any action of a Subordinated Lender
or any such trustee on behalf or for the benefit of any Subordinated Lender
notwithstanding its agreement to the contrary.
Payment upon Dissolution, etc. In the event of (a) any Bankruptcy of the
Borrower or (b) any liquidation, dissolution or other winding up of the
Borrower, whether partial or complete and whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy, or (c) any assignment for
the benefit of creditors or any other marshalling of assets and liabilities of
the Borrower, then and in any such event the Senior Lenders in the Related
Senior Lender Group(s) shall be entitled to receive payment in full of all
amounts due or to become due on or in respect of all Senior Debt Obligations
under such Senior Debt Tranche(s) before the Subordinated Lender shall be
entitled to receive any payment on account of Subordinated Debt (whether in
respect of principal, interest, fees, indemnities, commissions, or otherwise),
and to that end, any payment or distribution of any kind or character, whether
in cash, property or securities which may be payable or deliverable in respect
of the Subordinated Debt in any such Bankruptcy, dissolution, liquidation or
other winding up or event shall instead be paid or delivered directly to the
Senior Lenders in the Related Senior Lender Group for application to Senior
Debt Obligations under such Senior Debt Tranche(s), whether or not due, until
Senior Debt Obligations under such Senior Debt Tranche(s) shall have first
been fully paid and satisfied in cash.
The consolidation of the Borrower with, or the merger of the Borrower
into, another person or the liquidation or dissolution of the Borrower
following the conveyance or transfer of its properties and assets
substantially as an entirety to another person shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the
benefit of creditors or marshalling of assets and liabilities of the Borrower
for the purposes of the preceding paragraph if (a) the person formed by such
consolidation or into which the Borrower is merged or the person which
acquires by conveyance or transfer such properties and assets substantially as
an entirety, as the case may be, as a part of such consolidation, merger,
conveyance or transfer, expressly assumes the due and punctual payment of the
principal and interest on the Senior Debt under such Senior Debt Tranche(s)
and the performance of every covenant thereof on the part of the Borrower to
be performed or observed and (b) such consolidation, merger, liquidation or
dissolution is expressly permitted by the provisions of this Agreement as in
effect from time to time.
No Payment When Senior Debt in Default. In the event and during the
continuation of any default in the payment when due of any principal of or
interest on or any other amount payable in respect of any Senior Debt
Obligations under such Senior Debt Tranche(s), unless and until such payment
shall have been made, then no payment (including no Permitted Payment) shall
be made by the Borrower on or in respect of the Subordinated Debt. The
provisions of this paragraph shall not apply to any payment with respect to
which the two preceding paragraphs would be applicable.
Whether or not any default in payment shall exist under any Senior Debt
Agreement relating to Senior Debt Obligations under such Senior Debt
Tranche(s), the Subordinated Lender shall not, without the prior written
consent of the Majority Senior Lenders in (each of) the Senior Lender Group(s)
to which such Senior Debt Obligations under such Senior Debt Tranche(s) are
owed, take any collateral security for the Transportation Notes except as
provided in the Common Security Trust Agreement.
Payment to the Trustee of Certain Amounts Received by Subordinated
Lender. In the event that, notwithstanding the terms hereof, the Subordinated
Lender receives on account or in respect of the Subordinated Debt any
distribution of assets by the Borrower or payment by or on behalf of the
Borrower of any kind or character, whether in cash, securities or other
property, other than a Permitted Payment, the Subordinated Lender shall hold
in trust (as property of the Senior Lenders in the Senior Lender Group(s) to
which such Senior Debt Obligations under such Senior Debt Tranche(s) are owed)
for the benefit of, and shall, immediately upon receipt thereof, pay over or
deliver to such Senior Lenders, such distribution or payment in precisely the
form received (except for the endorsement or assignment by the Subordinated
Lender where necessary) for application in accordance with the Senior Debt
Agreements with such Senior Lenders. In the event of failure of the
Subordinated Lender to make any such endorsement or assignment, such Senior
Lenders and the Trustee on their behalf are irrevocably authorized to make the
same.
Authorizations to the Trustee. The Subordinated Lender (a) irrevocably
authorizes and empowers (without imposing any obligation on) the Senior
Lenders in the Related Senior Lender Group(s) to demand, sue for, collect,
receive and receipt for all payments and distributions on or in respect of the
Subordinated Debt which are required to be paid or delivered to such Senior
Lenders, as provided herein, and to file and prove all claims therefor and
take all such other action, in the name of the Subordinated Lender or
otherwise, as Majority Senior Lenders in (each of) the Related Senior Lender
Group(s) may determine to be necessary or appropriate for the enforcement of
these subordination provisions, all in such manner as Majority Senior Lenders
in (each of) the Related Senior Lender Group(s) shall instruct, (b)
irrevocably authorize and empower (without imposing any obligation on)
Majority Senior Lenders in (each of) the Related Senior Lender Group(s) to
vote the Subordinated Debt (including, without limitation, voting the
Subordinated Debt in favor of or in opposition to any matter which may come
before any meeting of creditors of the Borrower generally or in connection
with, or in anticipation of, any insolvency or bankruptcy case or proceeding,
or any proceeding under any laws relating to the relief of debtors,
readjustment of indebtedness, arrangements, reorganizations, compositions or
extensions relative to the Borrower) in such manner as the Majority Senior
Lenders in (each of) the Senior Lender Group(s) to which such Senior Debt
Obligations under such Senior Debt Tranche(s) are owed shall instruct and (c)
agree to execute and deliver to the Senior Lenders in such Senior Lender
Group(s) all such further instruments confirming the above authorization, and
all such powers of attorney, proofs of claim, assignments of claim and other
instruments, and to take all such other action, as may be requested by
Majority Senior Lenders in (each of) such Senior Lender Group(s) in order to
enable such Senior Lenders to enforce all claims upon or in respect of the
Subordinated Debt.
Notice. The Subordinated Lender agrees, for the benefit of each Senior
Lender in the Related Senior Lender Group(s), that it will give each such
Senior Lender prompt notice of any default by the Borrower in respect of the
Subordinated Debt.
No Waiver, Modification to Senior Debt. No failure on the part of the
Senior Lenders in the Related Senior Lender Group(s), and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof by Senior Lenders in the Related Senior Lender Group(s), nor shall any
single or partial exercise by the Senior Lenders in the Related Senior Lender
Group(s) of any right, remedy or power hereunder preclude any other or future
exercise of any other right, remedy or power. Each and every right, remedy and
power hereby granted to the Senior Lenders in the Related Senior Lender
Group(s) or allowed to such Senior Lenders by law or other agreement shall be
cumulative and not exclusive the one of any other, and may be exercised by
such Senior Lenders from time to time.
Without in any way limiting the generality of the foregoing paragraph,
the Senior Lenders in the Related Senior Lender Group(s) may, at any time and
from time to time, without the consent of or notice to the Subordinated
Lender, without incurring responsibility to the Subordinated Lender, and
without impairing or releasing the subordination provided herein or the
obligations hereunder of the Subordinated Lender, do any one or more of the
following: (a) change the manner, place or terms of payment of or extend the
time of payment of, or renew or alter, Senior Debt Obligations under such
Senior Debt Tranche(s), or otherwise amend or supplement in any manner Senior
Debt Obligations under such Senior Debt Tranche(s) or any instrument
evidencing the same or any agreement under which Senior Debt Obligations under
such Senior Debt Tranche(s) are outstanding or this Agreement; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt Obligations under such Senior Debt Tranche(s);
(c) release any person liable in any manner for the Senior Debt Obligations
under such Senior Debt Tranche(s); and (d) exercise or refrain from exercising
any rights against the Borrower and any other person. The Subordinated Lender
unconditionally waives notice of the incurring of Senior Debt Obligations
under such Senior Debt Tranche(s) or any part thereof.
Subrogation. Subject to the payment in full of all Senior Debt
Obligations under such Senior Debt Tranche(s), the Subordinated Lender shall
be subrogated to the rights of the Senior Lenders in the Related Senior Lender
Group(s) to receive any distribution of assets of the Borrower, or any
payments by or on behalf of the Borrower, made on the Senior Debt Obligations
under such Senior Debt Tranche(s), until the Subordinated Debt shall be paid
in full. For purposes of such subrogation, no payments over, including no
payments or distributions to the Senior Lenders in the Related Senior Lender
Group(s) of any cash, property or securities to which the Subordinated Lender
would be entitled except for the provisions hereof, pursuant to the provisions
hereof, to the Senior Lenders by the Subordinated Lender shall, as among the
Borrower, its creditors other than the Senior Lenders in the Related Senior
Lender Group and the Subordinated Lender, be deemed to be a payment or
distribution by the Borrower on account of the Senior Debt Obligations under
such Senior Debt Tranche(s).
Benefit of Subordination Provisions. These subordination provisions are
intended solely to define the relative rights of the Subordinated Lender and
its successors and assigns on the one hand and the Senior Lenders in the
Related Senior Lender Group(s) and their respective successors and assigns on
the other hand. Nothing contained herein shall (a) impair, as among the
Borrower, its creditors other than Senior Lenders in the Related Senior Lender
Group(s) and the Subordinated Lender, the obligation of the Borrower, which is
absolute and unconditional (and which, subject to the rights hereunder of the
Senior Lenders in the Related Senior Lender Group(s), is intended to rank
equally with all other unsubordinated obligations of the Borrower), to pay the
principal of and interest on the Subordinated Debt as and when the same shall
become due and payable in accordance with the terms thereof or (b) affect the
relative rights against the Borrower of the Subordinated Lender and creditors
of the Borrower other than Senior Lenders in the Related Senior Lender
Group(s).
The Subordinated Lender, by accepting the same, (a) agrees to and shall
be bound by such subordination provisions, (b) authorizes and directs the
Borrower on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination so provided and (c) appoints the Borrower his
attorney-in-fact for any and all such purposes.
Amendment. These subordination provisions may not be amended as modified
without the prior written consent of Majority Senior Lenders in each Senior
Lender Group.
<PAGE>
APPENDIX K
to Common Security Trust Agreement
[SEE SCHEDULE K OF THE AMENDED AND RESTATED
OLEODUCTO CENTRAL AGREEMENT]
APPENDIX L
To Common Security Trust Agreement
[SEE SCHEDULE M OF THE AMENDED AND RESTATED
OLEODUCTO CENTRAL AGREEMENT]
<PAGE>
250_LAN01
APPENDIX M-1
To Common Security Trust Agreement
[LETTERHEAD OF GOMEZ PINZON & ASOCIADOS]
[Initial Disbursement Date]
[Name(s) of Agent(s)/Trustees/Underwriters
for providers of Senior Debt under the
Related Senior Debt Agreement]
Dear Sirs:
We have acted as Colombian counsel for Oleoducto Central S.A., a
sociedad anonima organized under the laws of Colombia (the Borrower), in
connection with the execution and delivery of the [Senior Debt Agreement] and
the Common Security Trust Agreement dated as of June 1, 1995 (the Common
Security Trust Agreement), among the Borrower, Bankers Trust Company, a New
York banking corporation, as trustee and Holders from time to time of Senior
Debt.
Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Common Security Trust Agreement.
In connection therewith, we have examined the Common Security Trust
Agreement and the following agreements (together with the Common Security
Trust Agreement, the Relevant Agreements). In the making of such examination
we have assumed (i) the genuineness of all signatures appearing in the
documents examined, (ii) the authenticity of all documents submitted to us as
originals and (iii) the conformity with the originals of all documents
submitted to us as copies.
We have relied as to all factual matters on the documents we have
examined,
(i) [Senior Debt Agreement];
(ii) The Transportation Agreement, dated as of March 31, 1995,
between the Borrower and [Initial Shipper in Related Initial Shipper Group]
(the Related Transportation Agreement);
(iii) The Advance Tariff Agreement, dated as of March 31, 1995,
between the Borrower and [Throughput Obligor in Related Initial Shipper Group]
(the Related Advance Tariff Agreement);
(iv) The Amended and Restated Subscription Agreement, dated as
of March 31, 1995, between the Borrower and [Shareholder in the Related
Initial Shipper Group] (the Related Subscription Agreement);
(v) The Assignment and Acknowledgment Agreement for Rights under
the Related Transportation Agreement, dated as of June 1, 1995, between the
Borrower and the Trustee acknowledged by [Initial Shipper in the Related
Initial Shipper Group];
(vi) The Assignment and Acknowledgment Agreement for Rights
under the Related Advance Tariff Agreement, dated as of June 1, 1995, between
the Borrower and the Trustee acknowledged by [Throughput Obligor in the
Related Initial Shipper Group]; and
(vii) The Assignment and Acknowledgment Agreement for Rights
under the Related Subscription Agreement [and the Related Performance
Guarantee Agreement], dated as of June 1, 1995, between the Borrower and the
Trustee acknowledged by [Shareholder [and performance guarantor] [Not
applicable for Tranche A] in the Related Initial Shipper Group].
We have also examined Public Deed No. 4747, granted before Notary
Public No. 38 of Santafe de Bogota on December 14, 1994, constituting the
By-laws (estatutos) of the Borrower, and such corporate records, certificates
and other documents, such governmental approvals and filings, and such
questions of law, as we have considered necessary or appropriate for the
purposes of this opinion.
In giving the opinions below, we have assumed (without investigation
on our part) that:
(i) the making and performance of each of the Relevant
Agreements is within the power and authority of, and each of the Relevant
Agreements has been duly authorized, executed and delivered by, each party
thereto except for the Borrower (as to whom we make no such assumption) and
with respect to the Related Transportation Agreement that it does not conflict
with or violate the laws of the jurisdiction of incorporation or organization
of the [Initial Shipper in the Related Initial Shipper Group];
(ii) each of the Common Security Trust Agreement and each of the
Relevant Agreements (other than the Transportation Agreement (except to the
extent provisions thereof are expressed to be governed by laws other than the
laws of Colombia) [For Senior Debt Tranche A - the Amended and Restated
Subscription Agreement], as to which no assumption is made) is in full force
and effect and constitutes, under the law expressly stated therein to govern
the same, the legal, valid and binding obligation of the party or parties
thereto and does not contravene such law; and
(iii) the Tariff Advances provided for in the Related
Transportation Agreement will be provided by the Initial Shipper in the
Related Initial Shipper Group and the Transportation Notes provided for in the
Related Transportation Agreement will be purchased by a financial institution
designated by such Initial Shipper satisfying the requirements of the first
succeeding paragraph; such Transportation Notes will be subject to Colombian
laws regarding the incurrence of foreign indebtedness.
[In giving the opinions below, we have also assumed that no
participation in the Senior Loan under the Senior Debt Agreement is
transferred or assigned to a Person other than a bank or a financial
institution for purposes of Article 28 of Resolution 21 of 1993, as amended,
issued by the Board of Directors of the Banco de la Repblica of Colombia and
Resolutions No. 2988 of 1980, as amended, and No. 4698 of 1980, as amended, of
the Banking Superintendency and that the Senior Lender or Agent in the case of
a Syndicated Facility thereunder has been evidenced as such with the Banco de
la Republica of Colombia and registered with the Banking
Superintendency.]foot1
In addition, our opinion in paragraph (3) below as to the
enforceability in Colombia of the Relevant Agreements is subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium,
concordato and similar laws of general applicability relating to or affecting
creditors' rights, and to the provisions of Articles 867 and 884 of the
Colombian Commercial Code regarding the enforcement of default interest,
contractual penalties or liquidated damages.
Based upon the foregoing, and having regard to legal considerations
we deem relevant, it is our opinion that, as a matter of Colombian law:
(1) The Borrower is a sociedad anonima duly organized and existing
under the laws of Colombia. The Borrower has all requisite power and
authority under the laws of Colombia to own its property and to carry on the
business of the Borrower, except as noted in paragraph (3) below.
(2) The Borrower has full power and authority to enter into each of
the Relevant Agreements in which it is named a party.
(3) (a) Except as provided in this opinion, the execution, delivery
and performance by the Borrower of each of the Relevant Agreements in which it
is named a party have been duly authorized by all requisite action (including
by resolution of the Board of Directors adopted on April 28 and June 1, 1995);
and each such Relevant Agreement has been duly executed and delivered by the
Borrower, is in full force and effect and constitutes the valid and legally
binding obligation of the Borrower, enforceable in accordance with its terms.
The Borrower is entitled to receive, and the Initial Shipper in the Related
Initial Shipper Group is entitled to make, through its Colombian branch,
payments of Tariffs in foreign currency outside of Colombia.
(b) Except as provided below in this opinion, the Related
Transportation Agreement constitutes the valid and legally binding obligation
of the [Initial Shipper in Related Initial Shipper Group], enforceable in
accordance with its terms.
(i) We note that the approval of the Tariffs by the Ministry of Mines and
Energy is required before the beginning of shipments of Petroleum through the
Oleoducto Central.
(ii) We express no opinion as to the legality, validity and enforceability
of the Related Transportation Agreement with respect to provisions thereof
relating to the Related Transportation Agreement Step-up to the extent that
such Step-up exceeds 100% of the Tariffs.
(iii) We express no opinion as to the legality, validity or enforceability of
the set off provisions included in the Relevant Agreements to the extent that
the exercise of such provisions may be considered to violate Articles 1714
through 1723 of the Colombian Civil Code specifying the types of obligations
which may be subject to set off against each other or exchange control
regulations of Colombia as further described in clause (b)(iii) of paragraph
(5) below.
(iv) Our opinion on the legality, validity and enforceability of the Related
Transportation Agreement with respect to payments of Tariffs in foreign
currency outside of Colombia is granted pursuant to the opinion rendered by
the Secretary to the Board of Directors of the Banco de la Repblica of
Colombia, dated December 14, 1994, identified by the number JDS-28214.
(v) Our opinion on the legality, validity and enforceability of the Related
Transportation Agreement with respect to the Applicable Rate and the interest
rate set forth in the Senior Debt Agreement is granted pursuant to the opinion
rendered by the Secretary to the Board of Directors of the Banco de la
Repblica of Colombia, dated August 29, 1994, identified by the number
JDS-1989.
(vi) We note that under Colombian law equitable remedies of specific
performance or injunctive relief are not available.
(vii) We note that under Colombian law indemnification provisions are
enforceable provided there has been no gross negligence or willful misconduct
from the indemnified party.
(viii) We note that under Article 869 of the Colombian Commercial Code the
performance of agreements executed abroad to be performed in Colombia is
governed by Colombian law.
(4) There is no provision of law, statute, regulation or decree in or
of Colombia, no provision of the By-laws of the Borrower, and no provisions of
any mortgage, indenture, contract or agreement known to us, after reasonable
investigation, binding on the Borrower or affecting its properties, which
would prohibit, conflict with or in any way prevent the execution, delivery,
or performance of any of the Relevant Agreements to which the Borrower is a
party.
(5)(a) All authorizations, approvals and consents from governmental
authorities in Colombia which are necessary for (i) the execution and delivery
and performance by the Borrower of each of the Relevant Agreements, (ii) the
incurrence by the Borrower of the Senior Debt under the Senior Debt Agreement
and the repayment of the Senior Debt Obligations owing to the Senior Lenders
on a timely basis, and (iii) the assignment by the Borrower to the Trustee for
the benefit of the Senior Lender of the Assigned Rights and the performance of
its other obligations under the Common Security Trust Agreement and the Senior
Debt Agreement have been obtained by the Borrower and are in full force and
effect, except for such thereof as are expected to be obtained when necessary
in the ordinary course of business and except for the registration before
Banco de la Republica of Colombia of the Proceeds Account and the Common
Account as well as any other account of the Borrower into which proceeds from
any Related Senior Debt are deposited or from which payments under such Senior
Debt Agreements are made, provided that such registration must be made within
the first month after the opening of such accounts.
(b) With respect to the Senior Debt Agreement, the registration of
the Senior Debt Obligations to be incurred thereunder, and the filing of
signed copies thereof by and with Banco de la Republica of Colombia, have been
duly and timely obtained and accomplished, and no further action in Colombia
is required in respect thereof except:
(i) the filing with Banco de la Republica of Colombia of
signed copies of the Senior Debt Agreement along with an official Spanish
translation within 2 months following the first disbursement;
(ii) each disbursement of a borrowing thereunder must be
notified by the Borrower to Banco de la Republica of Colombia within 2 months
following such disbursement or with a monthly compensation account report, as
the case may be;
(iii) the purchase and remittance of foreign currency in
Colombia in exchange for Pesos for purposes of making voluntary or mandatory
prepayments or payments of accelerated amounts of the Senior Loan under such
Senior Debt Agreement shall require (A) in the case of each such prepayment or
payment that causes the aggregate amount of all such prepayments or payments
of principal of such Senior Loan within the 60 months immediately following
the first incurrence of Senior Debt under such Senior Debt Agreement to exceed
40% of the principal amount of Senior Debt under such Senior Debt Agreement so
registered, the prior approval of Banco de la Republica of Colombia or the
making of a deposit with the Banco de la Republica of Colombia, or (B) in all
other cases the prior filing of an amendment of the amortization schedule
registered with the Banco de la Republica of Colombia; and
(iv) [For Capital Markets - Pursuant to Article 1.2.4.2. of
Resolution 400, 1995, issued by the Sala General of the Superintendency of
Securities of Colombia, no voluntary or mandatory prepayment or repayment may
be made within one year counted as from the date of issuance under such Senior
Debt.]
(c) Except as provided in paragraph (b) above, all filings,
registrations and recordations in Colombia that are necessary with respect to
(i) the validity or enforceability in Colombia of the obligations of the
Borrower or any Person in the Related Initial Shipper Group, or the rights of
the Trustee or any Senior Lender, under any of the Relevant Agreements to
which they are party, or (ii) the admissibility in evidence in a court in
Colombia of any of the Relevant Agreements have been made. Each of the
Relevant Agreements is in proper legal form for the effectiveness and
enactment thereof in the courts of Colombia, except that an official
translation to Spanish of each Relevant Agreement which is not executed in the
Spanish language would be required for purposes of enforcement proceedings in
Colombia.
We note that under Colombian law, the admissibility in evidence in a
court in Colombia of any of the Relevant Agreements will generally be subject
to the payment of applicable stamp taxes. We express no opinion as to the
applicability of stamp taxes to the Relevant Agreements. We further note that
Dr. Juan Rafael Bravo has delivered a legal opinion regarding this issue.
(6) As of the date hereof no income, stamp or other taxes or levies,
imposts, deductions, charges, compulsory loans or withholdings whatsoever are
or will be, under applicable law in Colombia, imposed, assessed, levied or
collected by Colombia or any political subdivision or taxing authority thereof
or therein or on or in respect of principal, interest or commissions payable
under the Senior Debt Agreement.
(7) The obligations of the Borrower under the Senior Debt Agreement and
the Common Security Trust Agreement will at all times rank in right of payment
senior with respect to the Assigned Rights, subject in any case to Statutory
Priorities, as defined below. To the extent of any unpaid sums the obligations
of the Borrower under the Senior Debt Agreement and the Common Security Trust
Agreement shall rank equally in Bankruptcy with respect to the assets of the
Borrower with all other general unsecured obligations of the Borrower, except
to the extent in the case of Bankruptcy, such Bankruptcy was initiated by any
Senior Lender in the Related Senior Lender Group as provided in the Common
Security Trust Agreement and except for claims in Colombia for (i) taxes or
similar charges, (ii) labor related claims, employee benefits and social
security contributions, (iii) judicial expenses incurred for the benefit of
creditors generally and (iv) other preferences which are of similar nature and
which are entitled to statutory priorities under Colombian law (clauses (i)
through (iv) above being Statutory Priorities).
(8) (a) Except as otherwise noted in this opinion, assuming that each
Assignment Agreement with respect to a Financing Agreement with a Person in
the Related Initial Shipper Group, and, in the case of Ecopetrol, the Canadian
Group, creates a valid and perfected security interest under New York law,
each such Assignment Agreement creates a security interest superior in right
to any Liens, except Permitted Encumbrances, and enforceable against the
grantor of such interests, any trustee in bankruptcy and any attaching
creditor or third party.
(b) Except as otherwise noted in this opinion, assuming that the
Common Security Trust Agreement creates a valid and perfected security
interest under New York law over the Authorized Investments, the Common
Security Trust Agreement creates a security interest over the Authorized
Investments superior in right to any Liens except Permitted Encumbrances, and
enforceable against the grantor of such interests, any trustee in bankruptcy
and any attaching creditor or third party.
With respect to the subject matter of this paragraph (8), we note that
Colombian law does not provide for the creation or perfection of security
interests in contract rights and other personal rights. We note that the law
of Colombia does not provide for the perfection of a security interest created
in such contract rights or personal rights under the laws of another
jurisdiction by filing or recording in Colombia.
(9) The choice of the law of the State of New York to govern each of the
Relevant Agreements other than the Related Transportation Agreement [and the
Related Subscription Agreement] is, under the laws of Colombia, a valid choice
of governing law and should be honored in a suit on any such agreement brought
in the courts of Colombia, subject to the proof of the applicable provisions
of the laws of the State of New York in the manner provided for in such
proceedings in Colombia and solely to the extent that the provisions of said
law do not violate the public order laws of Colombia.
(10) The Borrower is generally subject to suit in Colombia, and neither
the Borrower nor any of its properties has any immunity from suit, from
jurisdiction of any court or from any legal or judicial process (whether
through service, notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise). Any immunity from proceedings which might
in the future be available under Colombian law, can not be validly waived in
advance.
(11)(a) The submission by the Borrower to the non-exclusive jurisdiction
of any Federal or State Court located in the Borough of Manhattan, The City of
New York, with respect to matters arising under or in connection with the
Common Security Trust Agreement or the Senior Debt Agreement, as set forth in
each such agreement, is valid and effective under the laws of Colombia.
(b) A final judgment or arbitral award against the Borrower for the
payment of money obtained in any such court pursuant to service of process on
an agent of the Borrower in the manner specified in the Common Security Trust
Agreement and in the Senior Debt Agreement providing for such service of
process would be recognized, conclusive and enforceable in the courts of
Colombia without reconsideration on the merits, so long as the following
conditions were met:
(i) If there were a treaty in force between Colombia and
the United States of America with respect to the enforcement of foreign
judgments, the provisions of such treaty, if relevant, would be applied. At
the date hereof, there is no such treaty in force between Colombia and the
United States of America.
(ii) The courts of Colombia would give effect to and
enforce a judgment obtained in a court outside Colombia through a procedural
system provided for under Colombian law known as exequatur, subject to the
provisions of Article 693 of the Civil Procedure Code which requires that
there be reciprocity in the recognition of foreign judgments between the
courts of the relevant jurisdiction and the courts of Colombia and subject to
compliance with the provisions of Article 694 of the Civil Procedure Code.
The pertinent provisions of such articles as they would affect a judgment
obtained in a foreign court ordering payment of money by the Borrower
following a failure to pay amounts due and owing under the Senior Debt
Agreement, are as follows: (A) the foreign judgment presented in Colombia for
enforcement does not conflict with public order laws of Colombia, (B) the
foreign judgment, in accordance with the laws of the country in which it was
obtained, is final and a duly certified and an authenticated copy has been
presented to the court in Colombia, (C) no proceedings are pending in Colombia
with respect to the same cause of actions, and no final judgment has been
awarded in any proceeding on the same subject matter and between the same
parties and (D) in the proceedings commenced in the foreign court which issued
the judgment, the defendant was served in accordance with the law of such
jurisdiction and in a manner reasonably designed to give an opportunity to the
defendant for the defense of the action. Proceedings for execution of a money
judgment by attachment or execution against any assets or property, located in
Colombia would be within the exclusive jurisdiction of Colombian courts. A
judgment obtained in a foreign court ordering payment of money by the Borrower
under the Senior Debt Agreement would not conflict with public order laws of
Colombia.
(iii) In any proceeding in Colombia, service of notice to
the parties thereto will be made in accordance with the provisions of the
Colombian Civil Procedure Code and contractual provisions regarding service of
notice procedures will not be enforceable.
(iv) The enforcement of the Relevant Agreements in Colombia
may be limited by, and any proceedings for enforcement in Colombia would be
subject to, the applicable limitation on actions by prescription, generally
limiting the period for commencement of actions to ten (10) years for an
executive action and twenty (20) years for ordinary actions, except in the
case of actions arising under the Related Transportation Agreement which will
be subject to a special two (2) year prescription, pursuant to Article 993 of
the Commercial Code.
(v) For any proceeding in Colombia, Article 260 of the
Civil Procedure Code and Article 823 of the Commercial Code, require that a
translation must be filed with the Court in Colombia as the basis for
enforcement, and in the event of a disagreement over the meaning of the
translation, the Spanish official translation of the English text will govern,
rather than the original English text for purposes of such proceeding.
(vi) With respect to Court proceedings in Colombia, under
Article 392 of the Civil Procedure Code, any legal costs incurred in
connection with such Court proceedings would be limited to those costs ordered
by the respective Court.
(12)(a) It is not a condition to the ability of the Senior Lender
to bring a legal action in the courts of Colombia against the Borrower in
respect of any of the Relevant Agreements that such Senior Lender have
complied with any requirements in Colombia necessary to enable it to do or
carry on business in Colombia.
(b) No Senior Lender is or will be deemed to be resident, carrying on
business or subject to taxation in Colombia by reason only of the execution or
delivery, or enforcement in Colombia, of the Relevant Agreements to which it
is party or entitled to enforce or of which it is an assignee.
(13) The subordination provisions applicable to the Subordinated Debt
set forth in Appendix J to the Common Security Trust Agreement, are valid and
effective under the law of Colombia and will be given effect in Colombia as a
valid contract among the Borrower, the holder of such Subordinated Debt and
the Trustee and the Senior Lenders; provided that we express no opinion as to
whether a court or trustee in bankruptcy or concordato of the Borrower in
Colombia would give effect to such provisions to the extent such provisions
might be read as calling for the direct allocation by such court or trustee in
bankruptcy or concordato of sums otherwise payable on the Subordinated Debt to
Senior Loans.
(14)(a) The provisions of the Senior Debt Agreement which deem certain
determinations of the Agent as conclusive, including the unilateral
declaration of acceleration after the occurrence of an Event of Default, may
be reviewed in any proceeding in Colombia to determine whether in fact such
determinations were correct and whether the Event of Default within the terms
of the Senior Debt Agreement in fact occurred.
(b) In accordance with Article 902 of the Colombian Commercial Code, the
partial nullification of a clause in the Senior Debt Agreement or the Common
Security Trust Agreement, as the case may be, will only nullify the whole
Senior Debt Agreement or the Common Security Trust Agreement, as the case may
be, when it appears that the parties would not have entered into the Senior
Debt Agreement or the Common Security Trust Agreement, as the case may be,
without the stipulation subject to nullification.
(c) We express no opinion as to whether a court in Colombia would give
effect to the late interest provisions, providing for payment of interest on
past due amounts of interest, or the increased costs or compensation
provisions of the Senior Debt Agreement.
(d) Resolution 53 of 1992, of the Board of Directors of the Banco de la
Republica of Colombia, imposed a cap of 20% as the maximum effective annual
interest rate that can be agreed to in transactions in U.S. dollars.
Accordingly, it imposed a cap of 25% as the maximum default interest rate that
can be agreed to in transactions in U.S. dollars.
(e) Under Colombian law the right to insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, stay
or extension law can not be validly waived inasmuch as such laws would be of a
public order nature in Colombia.
With your approval, we have relied as to certain matters upon
information obtained from public officials, officers of the Borrower, the
Shareholder, the Initial Shipper and the Throughput Obligor in the Initial
Shipper Group [insert name of Related performance guarantor] [Not applicable
for Tranche A] and other sources believed by us to be responsible, which we
have not independently verified.
We express no opinion as to the laws of any jurisdiction other than
the laws of Colombia.
We are qualified to practice law in Colombia and we do not purport
to be experts on any laws other than the laws of Colombia. This opinion may
only be used or relied upon by the addressees hereof and Sullivan & Cromwell,
New York Counsel to the Borrower, and no other person, and may not be
disclosed, quoted, filed or otherwise referred to without our express consent.
Very truly yours,
-
APPENDIX M-2
To Common Security Trust Agreement
[LETTERHEAD OF CARDENAS & CARDENAS
OR OTHER COUNSEL REASONABLY SATISFACTORY TO SENIOR LENDERS]
[Initial Disbursement Date]
[Name(s) of Agent(s)/Trustees/Underwriters for providers of Senior Debt under
the Related Senior Debt Agreement]
Dear Sirs:
We have acted as your Colombian counsel in connection with the
execution and delivery of the [Senior Debt Agreement] and the Common Security
Trust Agreement dated as of June 1, 1995 (the Common Security Trust
Agreement), among the Borrower, Bankers Trust Company, a New York banking
corporation, as trustee and Holders from time to time of Senior Debt.
Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Common Security Trust Agreement.
In connection therewith, we have examined the Common Security Trust
Agreement and the following agreements (together with the Common Security
Trust Agreement, the Relevant Agreements). In the making of such examination
we have assumed (i) the genuineness of all signatures appearing in the
documents examined, (ii) the authenticity of all documents submitted to us as
originals and (iii) the conformity with the originals of all documents
submitted to us as copies.
We have relied as to all factual matters on the documents we have
examined,
(i) Senior Debt Agreement];
(ii) The Transportation Agreement, dated as of March 31, 1995,
between the Borrower and [Initial Shipper in Related Initial Shipper Group]
(the "Related Transportation Agreement");
(iii) The Advance Tariff Agreement, dated as of March 31, 1995,
between the Borrower and [Throughput Obligor in Related Initial Shipper Group]
(the "Related Advance Tariff Agreement");
(iv) The Amended and Restated Subscription Agreement, dated as
of March 31, 1995, between the Borrower and [Shareholder in the Related
Initial Shipper Group] (the "Related Subscription Agreement");
(v) The Assignment and Acknowledgement Agreement for Rights
under the Related Transportation Agreement, dated as of June 1, 1995, between
the Borrower and the Trustee acknowledged by [Initial Shipper in the Related
Initial Shipper Group];
(vi) The Assignment and Acknowledgement Agreement for Rights
under the Related Advance Tariff Agreement, dated as of June 1, 1995, between
the Borrower and the Trustee acknowledged by [Throughput Obligor in the
Related Initial Shipper Group]; and
(vii) The Assignment and Acknowledgement Agreement for Rights
under the Related Subscription Agreement [and the Related Performance
Guarantee Agreement], dated as of June 1, 1995, between the Borrower and the
Trustee acknowledged by [Shareholder [and performance guarantor] [Not
applicable for Tranche A] in the Related Initial Shipper Group].
We have also examined Public Deed No. 4747, granted before Notary
Public No. 38 of Santafe de Bogota on December 14, 1994, constituting the
By-laws (estatutos) of the Borrower, and such corporate records, certificates
and other documents, such governmental approvals and filings, and such
questions of law, as we have considered necessary or appropriate for the
purposes of this opinion.
In giving the opinions below, we have assumed (without investigation
on our part) that:
(i) the making and performance of each of the Relevant Agreements is
within the power and authority of, and each of the Relevant Agreements has
been duly authorized, executed and delivered by, each party thereto except for
the Borrower (as to whom we make no such assumption) and with respect to the
Related Transportation Agreement that it does not conflict with or violate the
laws of the jurisdiction of incorporation or organization of the [Initial
Shipper in the Initial Shipper Group];
(ii) each of the Common Security Trust Agreement and each of the
Relevant Agreements (other than the Transportation Agreement (except to the
extent provisions thereof are expressed to be governed by laws other than the
laws of Colombia) [For Senior Debt Tranche A - the Amended and Restated
Subscription Agreement], as to which no assumption is made) is in full force
and effect and constitutes, under the law expressly stated therein to govern
the same, the legal, valid and binding obligation of the party or parties
thereto and does not contravene such law; and
(iii) the Tariff Advances provided for in the Related
Transportation Agreement will be provided by the Initial Shipper in the
Related Initial Shipper Group and the Transportation Notes provided for in the
Related Transportation Agreement will be purchased by a financial institution
designated by such Initial Shipper satisfying the requirements of the first
succeeding paragraph; such Transportation Notes will be subject to Colombian
laws regarding the incurrence of foreign indebtedness.
[In giving the opinions below, we have also assumed that no
participation in the Senior Loan under the Senior Debt Agreement is
transferred or assigned to a Person other than a bank or a financial
institution for purposes of Article 28 of Resolution 21 of 1993, as amended,
issued by the Board of Directors of the Banco de la Republica of Colombia and
Resolutions No. 2988 of 1980, as amended, and No. 4698 of 1980, as amended, of
the Banking Superintendency and that the Senior Lender or Agent in the case of
a Syndicated Facility thereunder has been evidenced as such with the Banco de
la Republica of Colombia and registered with the Banking Superintendency.foot2
In addition, our opinion in paragraph (3) below as to the
enforceability in Colombia of the Relevant Agreements is subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium,
concordato and similar laws of general applicability relating to or affecting
creditors' rights, and to the provisions of Articles 867 and 884 of the
Colombian Commercial Code regarding the enforcement of default interest,
contractual penalties or liquidated damages.
Based upon the foregoing, and having regard to legal considerations
we deem relevant, it is our opinion that, as a matter of Colombian law:
(1) The Borrower is a sociedad anonima duly organized and existing
under the laws of Colombia. The Borrower has all requisite power and
authority under the laws of Colombia to own its property and to carry on the
business of the Borrower, except as noted in paragraph (3) below.
(2) The Borrower has full power and authority to enter into each of
the Relevant Agreements in which it is named a party.
(3) (a) Except as provided in this opinion, the execution, delivery
and performance by the Borrower of each of the Relevant Agreements in which it
is named a party have been duly authorized by all requisite action (including
by resolution of the Board of Directors adopted on April 28 and June 1, 1995);
and each such Relevant Agreement has been duly executed and delivered by the
Borrower, is in full force and effect and constitutes the valid and legally
binding obligation of the Borrower, enforceable in accordance with its terms.
The Borrower is entitled to receive, and the Initial Shipper in the Related
Initial Shipper Group is entitled to make, through its Colombian branch,
payments of Tariffs in foreign currency outside of Colombia.
(b) Except as provided below in this opinion, the Related
Transportation Agreement constitutes the valid and legally binding obligation
of the [Initial Shipper in Related Initial Shipper Group], enforceable in
accordance with its terms.
(i) We note that the approval of the Tariffs by the Ministry of Mines and
Energy is required before the beginning of shipments of Petroleum through the
Oleoducto Central.
(ii) We express no opinion as to the legality, validity and enforceability
of the Related Transportation Agreement with respect to provisions thereof
relating to the Related Transportation Agreement Step-up to the extent that
such Step-up exceeds 100% of the Tariffs.
(iii) We express no opinion as to the legality, validity or enforceability of
the set off provisions included in the Relevant Agreements to the extent that
the exercise of such provisions may be considered to violate Articles 1714
through 1723 of the Colombian Civil Code specifying the types of obligations
which may be subject to set off against each other or exchange control
regulations of Colombia as further described in clause (b)(iii) of paragraph
(5) below.
(iv) Our opinion on the legality, validity and enforceability of the
Related Transportation Agreement with respect to payments of Tariffs in
foreign currency outside of Colombia is granted pursuant to the opinion
rendered by the Secretary to the Board of Directors of the Banco de la
Republica of Colombia, dated December 14, 1994, identified by the number
JDS-28214.
(v) Our opinion on the legality, validity and enforceability of the
Related Transportation Agreement with respect to the Applicable Rate and the
interest rate set forth in the Senior Debt Agreement is granted pursuant to
the opinion rendered by the Secretary to the Board of Directors of the Banco
de la Republica of Colombia, dated August 29, 1994, identified by the number
JDS-1989.
(vi) We note that under Colombian law equitable remedies of specific
performance or injunctive relief are not available.
(vii) We note that under Colombian law indemnification provisions are
enforceable provided there has been no gross negligence or willful misconduct
from the indemnified party.
(viii) We note that under Article 869 of the Colombian Commercial Code the
performance of agreements executed abroad to be performed in Colombia is
governed by Colombian law.
(4) There is no provision of law, statute, regulation or decree in or
of Colombia and no provision of the By-laws of the Borrower, and no provisions
of any Mortgage, indenture, contract or agreement known to us, after
reasonable investigation, binding on the Borrower or affecting its properties,
which would prohibit, conflict with or in any way prevent the execution,
delivery, or performance of any of the Relevant Agreements to which the
Borrower is a party.
(5)(a) All authorizations, approvals and consents from governmental
authorities in Colombia which are necessary for (i) the execution and delivery
and performance by the Borrower of each of the Relevant Agreements, (ii) the
incurrence by the Borrower of the Senior Debt under the Senior Debt Agreement
and the repayment of the Senior Debt Obligations owing to the Senior Lenders
on a timely basis, and (iii) the assignment by the Borrower to the Trustee for
the benefit of the Senior Lender of the Assigned Rights and the performance of
its other obligations under the Common Security Trust Agreement and the Senior
Debt Agreement have been obtained by the Borrower and are in full force and
effect, except for such thereof as are expected to be obtained when necessary
in the ordinary course of business and except for the registration before the
Banco de la Republica of Colombia of the Proceeds Account and the Common
Account as well as any other account of the Borrower into which proceeds from
any Related Senior Debt are deposited or from which payments under such Senior
Debt Agreements are made, provided that such registration must be made within
the first month after the opening of such accounts.
(b) With respect to the Senior Debt Agreement, the registration of
the Senior Debt Obligations to be incurred thereunder, and the filing of
signed copies thereof by and with Banco de la Republica of Colombia, have been
duly and timely obtained and accomplished, and no further action in Colombia
is required in respect thereof except:
(i) the filing with Banco de la Republica of Colombia of
signed copies of the Senior Debt Agreement along with an official Spanish
translation within 2 months following the first disbursement;
(ii) each disbursement of a borrowing thereunder must be
notified by the Borrower to Banco de la Republica of Colombia within 2 months
following such disbursement or with a monthly compensation account report, as
the case may be;
(iii) the purchase and remittance of foreign currency in
Colombia in exchange for Pesos for purposes of making voluntary or mandatory
prepayments or payments of accelerated amounts of the Senior Loan under such
Senior Debt Agreement shall require (A) in the case of each such prepayment or
payment that causes the aggregate amount of all such prepayments or payments
of principal of such Senior Loan within the 60 months immediately following
the first incurrence of Senior Debt under such Senior Debt Agreement to exceed
40% of the principal amount of Senior Debt under such Senior Debt Agreement so
registered, the prior approval of Banco de la Republica of Colombia or the
making of a deposit with the Banco de la Republica of Colombia, or (B) in all
other cases the prior filing of an amendment of the amortization schedule
registered with the Banco de la Republica of Colombia; and
(iv) [For Capital Markets - Pursuant to Article 1.2.4.2. of
Resolution 400, 1995, issued by the Sala General of the Superintendency of
Securities of Colombia, no voluntary or mandatory prepayment or repayment may
be made within one year counted as from the date of issuance under such Senior
Debt.]
(c) Except as provided in paragraph (b) above, all filings,
registrations and recordations in Colombia that are necessary with respect to
(i) the validity or enforceability in Colombia of the obligations of the
Borrower or any Person in the Related Initial Shipper Group, or the rights of
the Trustee or any Senior Lender, under any of the Relevant Agreements to
which they are party, or (ii) the admissibility in evidence in a court in
Colombia of any of the Relevant Agreements have been made. Each of the
Relevant Agreements is in proper legal form for the effectiveness and
enactment thereof in the courts of Colombia, except that an official
translation to Spanish of each Relevant Agreement which is not executed in the
Spanish language would be required for purposes of enforcement proceedings in
Colombia.
We note that under Colombian law, the admissibility in evidence in a
court in Colombia of any of the Relevant Agreements will generally be subject
to the payment of applicable stamp taxes. We express no opinion as to the
applicability of stamp taxes to the Relevant Agreements. We further note that
Dr. Juan Rafael Bravo has delivered a legal opinion regarding this issue.
(6) As of the date hereof no income, stamp or other taxes or levies,
imposts, deductions, charges, compulsory loans or withholdings whatsoever are
or will be, under applicable law in Colombia, imposed, assessed, levied or
collected by Colombia or any political subdivision or taxing authority thereof
or therein or on or in respect of principal, interest or commissions payable
under the Senior Debt Agreement.
(7) The obligations of the Borrower under the Senior Debt Agreement and
the Common Security Trust Agreement will at all times rank in right of payment
senior with respect to the Assigned Rights, subject in any case to Statutory
Priorities, as defined below. To the extent of any unpaid sums the obligations
of the Borrower under the Senior Debt Agreement and the Common Security Trust
Agreement shall rank equally in Bankruptcy with respect to the assets of the
Borrower with all other general unsecured obligations of the Borrower, except
to the extent in the case of Bankruptcy, such Bankruptcy was initiated by any
Senior Lender in the Related Senior Lender Group as provided in the Common
Security Trust Agreement and except for claims in Colombia for (i) taxes or
similar charges, (ii) labor related claims, employee benefits and social
security contributions, (iii) judicial expenses incurred for the benefit of
creditors generally and (iv) other preferences which are of similar nature and
which are entitled to statutory priorities under Colombian law (clauses (i)
through (iv) above being "Statutory Priorities").
(8) (a) Except as otherwise noted in this opinion, assuming that each
Assignment Agreement with respect to a Financing Agreement with a Person in
the Related Initial Shipper Group, and, in the case of Ecopetrol, the Canadian
Group, creates a valid and perfected security interest under New York law,
each such Assignment Agreement creates a security interest superior in right
to any Liens, except Permitted Encumbrances, and enforceable against the
grantor of such interests, any trustee in bankruptcy and any attaching
creditor or third party.
(b) Except as otherwise noted in this opinion, assuming that the
Common Security Trust Agreement creates a valid and perfected security
interest under New York law over the Authorized Investments, the Common
Security Trust Agreement creates a security interest over the Authorized
Investments superior in right to any Liens except Permitted Encumbrances, and
enforceable against the grantor of such interests, any trustee in bankruptcy
and any attaching creditor or third party.
With respect to the subject matter of this paragraph (8), we note that
Colombian law does not provide for the creation or perfection of security
interests in contract rights and other personal rights. We note that the law
of Colombia does not provide for the perfection of a security interest created
in such contract rights or personal rights under the laws of another
jurisdiction by filing or recording in Colombia.
(9) The choice of the law of the State of New York to govern each of the
Relevant Agreements other than the Related Transportation Agreement [and the
Related Subscription Agreement] is, under the laws of Colombia, a valid choice
of governing law and should be honored in a suit on any such agreement brought
in the courts of Colombia, subject to the proof of the applicable provisions
of the laws of the State of New York in the manner provided for in such
proceedings in Colombia and solely to the extent that the provisions of said
law do not violate the public order laws of Colombia.
(10) The Borrower is generally subject to suit in Colombia, and neither
the Borrower nor any of its properties has any immunity from suit, from
jurisdiction of any court or from any legal or judicial process (whether
through service, notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise). Any immunity from proceedings which might
in the future be available under Colombian law, can not be validly waived in
advance.
(11)(a) The submission by the Borrower to the non-exclusive jurisdiction
of any Federal or State Court located in the Borough of Manhattan, The City of
New York, with respect to matters arising under or in connection with the
Common Security Trust Agreement or the Senior Debt Agreement, as set forth in
each such agreement, is valid and effective under the laws of Colombia.
(b) A final judgment or arbitral award against the Borrower for the
payment of money obtained in any such court pursuant to service of process on
an agent of the Borrower in the manner specified in the Common Security Trust
Agreement and in the Senior Debt Agreement providing for such service of
process would be recognized, conclusive and enforceable in the courts of
Colombia without reconsideration on the merits, so long as the following
conditions were met:
(i) If there were a treaty in force between Colombia and the
United States of America with respect to the enforcement of foreign judgments,
the provisions of such treaty, if relevant, would be applied. At the date
hereof, there is no such treaty in force between Colombia and the United
States of America.
(ii) The courts of Colombia would give effect to and enforce a
judgment obtained in a court outside Colombia through a procedural system
provided for under Colombian law known as "exequatur", subject to the
provisions of Article 693 of the Civil Procedure Code which requires that
there be reciprocity in the recognition of foreign judgments between the
courts of the relevant jurisdiction and the courts of Colombia and subject to
compliance with the provisions of Article 694 of the Civil Procedure Code.
The pertinent provisions of such articles as they would affect a judgment
obtained in a foreign court ordering payment of money by the Borrower
following a failure to pay amounts due and owing under the Senior Debt
Agreement, are as follows: (A) the foreign judgment presented in Colombia for
enforcement does not conflict with public order laws of Colombia, (B) the
foreign judgment, in accordance with the laws of the country in which it was
obtained, is final and a duly certified and an authenticated copy has been
presented to the court in Colombia, (C) no proceedings are pending in Colombia
with respect to the same cause of actions, and no final judgment has been
awarded in any proceeding on the same subject matter and between the same
parties and (D) in the proceedings commenced in the foreign court which issued
the judgment, the defendant was served in accordance with the law of such
jurisdiction and in a manner reasonably designed to give an opportunity to the
defendant for the defense of the action. Proceedings for execution of a money
judgment by attachment or execution against any assets or property, located in
Colombia would be within the exclusive jurisdiction of Colombian courts. A
judgment obtained in a foreign court ordering payment of money by the Borrower
under the Senior Debt Agreement would not conflict with public order laws of
Colombia.
(iii) In any proceeding in Colombia, service of notice to the
parties thereto will be made in accordance with the provisions of the
Colombian Civil Procedure Code and contractual provisions regarding service of
notice procedures will not be enforceable.
(iv) The enforcement of the Relevant Agreements in Colombia may
be limited by, and any proceedings for enforcement in Colombia would be
subject to, the applicable limitation on actions by prescription, generally
limiting the period for commencement of actions to ten (10) years for an
executive action and twenty (20) years for ordinary actions, except in the
case of actions arising under the Related Transportation Agreement which will
be subject to a special two (2) year prescription, pursuant to Article 993 of
the Commercial Code.
(v) For any proceeding in Colombia, Article 260 of the Civil
Procedure Code and Article 823 of the Commercial Code, require that a
translation must be filed with the Court in Colombia as the basis for
enforcement, and in the event of a disagreement over the meaning of the
translation, the Spanish official translation of the English text will govern,
rather than the original English text for purposes of such proceeding.
(vi) With respect to Court proceedings in Colombia, under Article 392
of the Civil Procedure Code, any legal costs incurred in connection with such
Court proceedings would be limited to those costs ordered by the respective
Court.
(12)(a) It is not a condition to the ability of the Senior Lender to
bring a legal action in the courts of Colombia against the Borrower in respect
of any of the Relevant Agreements that such Senior Lender have complied with
any requirements in Colombia necessary to enable it to do or carry on business
in Colombia.
(b) No Senior Lender is or will be deemed to be resident, carrying on
business or subject to taxation in Colombia by reason only of the execution or
delivery, or enforcement in Colombia, of the Relevant Agreements to which it
is party or entitled to enforce or of which it is an assignee.
(13) The subordination provisions applicable to the Subordinated Debt
set forth in Appendix J to the Common Security Trust Agreement, are valid and
effective under the law of Colombia and will be given effect in Colombia as a
valid contract among the Borrower, the holder of such Subordinated Debt and
the Trustee and the Senior Lenders; provided that we express no opinion as to
whether a court or trustee in bankruptcy or concordato of the Borrower in
Colombia would give effect to such provisions to the extent such provisions
might be read as calling for the direct allocation by such court or trustee in
bankruptcy or concordato of sums otherwise payable on the Subordinated Debt to
Senior Loans.
(14)(a) The provisions of the Senior Debt Agreement which deem certain
determinations of the Agent as conclusive, including the unilateral
declaration of acceleration after the occurrence of an Event of Default, may
be reviewed in any proceeding in Colombia to determine whether in fact such
determinations were correct and whether the Event of Default within the terms
of the Senior Debt Agreement in fact occurred.
(b) In accordance with Article 902 of the Colombian Commercial Code, the
partial nullification of a clause in the Senior Debt Agreement or the Common
Security Trust Agreement, as the case may be, will only nullify the whole
Senior Debt Agreement or the Common Security Trust Agreement, as the case may
be, when it appears that the parties would not have entered into the Senior
Debt Agreement or the Common Security Trust Agreement, as the case may be,
without the stipulation subject to nullification.
(c) We express no opinion as to whether a court in Colombia would give
effect to the late interest provisions, providing for payment of interest on
past due amounts of interest, or the increased costs or compensation
provisions of the Senior Debt Agreement.
(d) Resolution 53 of 1992, of the Board of Directors of the Banco de la
Republica of Colombia, imposed a cap of 20% as the maximum effective annual
interest rate that can be agreed to in transactions in U.S. dollars.
Accordingly, it imposed a cap of 25% as the maximum default interest rate that
can be agreed to in transactions in U.S. dollars.
(e) Under Colombian law the right to insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, stay
or extension law can not be validly waived inasmuch as such laws would be of a
public order nature in Colombia.
With your approval, we have relied as to certain matters upon
information obtained from public officials, officers of the Borrower, the
Shareholder, the Initial Shipper and the Throughput Obligor in the Initial
Shipper Group [insert name of Related performance guarantor] [Not applicable
for Tranche A] and other sources believed by us to be responsible, which we
have not independently verified.
We express no opinion as to the laws of any jurisdiction other than
the laws of Colombia.
We are qualified to practice law in Colombia and we do not purport
to be experts on any laws other than the laws of Colombia. This opinion may
only be used or relied upon by the addressees hereof and Shearman & Sterling,
your New York Counsel, and no other person, and may not be disclosed, quoted,
filed or otherwise referred to without our express consent.
Very truly yours,
APPENDIX M-3
to Common Security Trust Agreement
[LETTERHEAD OF SULLIVAN & CROMWELL]
[Initial Disbursement Date]
Name(s) of Agent(s)/Trustee for Holders of Senior Debt under the Related
Senior Debt Agreement/Underwriters]
Dear Sirs:
We have acted as New York counsel for Oleoducto Central S.A., a
sociedad anonima existing under the laws of the Republic of Colombia (the
"Borrower") in connection with (i) the Common Security Trust Agreement, dated
as of June 1, 1995 (the "Common Security Trust Agreement"), among Oleoducto
Central S.A., Bankers Trust Company, as Trustee for the benefit of the holders
from time to time of Senior Debt, and holders from time to time of Senior Debt
and (ii) the [insert name(s) of Related Senior Debt Agreement] dated as of
, 1995, among the Borrower and [insert name(s) of other party/parties]
(the "Senior Debt Agreement") [and the [insert name of debt securities issued
thereunder] (the "Securities")].
Capitalized terms used and not otherwise defined herein shall have
the meanings assigned to them in the Common Security Trust Agreement.
As used herein, (i) "New York UCC" means the Uniform Commercial Code
as in effect on the date hereof in the State of New York; (ii) "Clearing
Corporation Securities" means any securities which are subject to Section
8-320 of the New York UCC (including securities held by The Depository Trust
Company, The Participants Trust Company or any successor of either thereof);
(iii) "Certificated Security", "Clearing Corporation", "Financial
Intermediary", and "Custodian Bank" have the meanings ascribed to such terms
in the New York UCC; (iv) "Instruments" has the meaning ascribed to such term
in Section 9-105(1)(i) of the New York UCC (including, without limitation,
certificates of deposit (as defined in Section 3-104(2)(c)) of the New York
UCC, but excluding Certificated Securities); (v) "Agency Book Entry Security"
means an obligation of an agency or instrumentality of the United States of
America that is maintained in a book entry account with the Federal Reserve
Bank of New York or a Depository Institution (excluding Clearing Corporation
Securities); (vi) "Depository Institution" means a "depository institution" as
that term is defined in 12 U.S.C. 461(b)(1)(A), as amended; and (vii)
"Treasury Securities" means the direct obligations of the United States of
America which are defined in 31 C.F.R. 306.115 (1995).
We have examined such corporate records, 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) The Common Security Trust Agreement constitutes a valid and legally
binding obligation of the Borrower enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(2) The Amended and Restated Subscription Agreement between the Borrower
[, each of IPL Enterprises and TCPL International Investments Inc.] and the
Shareholder in the Related Initial Shipper Group (the "Related Subscription
Agreement[s]") constitutes [a] valid and legally binding obligation of such
Shareholder[s] enforceable in accordance with its [their respective] terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(3) [Each of the] The Performance Guarantee Agreement[s] between the
Borrower and [insert name of the Related performance guarantor[s]] [each of
IPL Energy and TransCanada PipeLines] (the "Related Performance Guarantee
Agreement[s]") constitutes a valid and legally binding obligation of [insert
name of the Related performance guarantor] enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(4) The Advance Tariff Agreement between the Borrower and the Throughput
Obligor in the Related Initial Shipper Group (the "Related Advance Tariff
Agreement") constitutes a valid and legally binding obligation of such
Throughput Obligor enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(5) Each of (a) the Assignment and Acknowledgement Agreement[s] for
Rights under the Subscription Agreement and the Performance Guarantee
Agreement with respect to the Related Subscription Agreement [of each of IPL
Enterprises and TCPL International Investments Inc.] and the Related
Performance Guarantee Agreement [of each of IPL Energy and TransCanada
PipeLines], (b) the Assignment and Acknowledgement Agreement for Rights under
the Advance Tariff Agreement with respect to the Related Advance Tariff
Agreement, and (c) the Assignment and Acknowledgement Agreement for Rights
under the Transportation Agreement with respect to the Transportation
Agreement between the Borrower and the Initial Shipper in the Related Initial
Shipper Group (the "Related Transportation Agreement"), constitutes a valid
and legally binding obligation of the Borrower enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
(6) The Senior Debt Agreement [and the Securities] constitute[s] [a]
valid and legally binding obligation[s] of the Borrower enforceable in
accordance with its [their] terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(7) No regulatory consents, authorizations, approvals or filings are
required to be obtained or made by the Borrower on or prior to the date hereof
under the Federal laws of the United States and the laws of the State of New
York for the execution and delivery of the agreements [and Securities]
referred to in paragraphs (1) through (6) above by each of the Borrower, the
Shareholder in the Related Initial Shipper Group, [insert name of Related
performance guarantor] [IPL Energy and TransCanada PipeLines] and the
Throughput Obligor in the Related Initial Shipper Group, except for action
required from time to time after the date hereof to create or perfect liens,
pledges or security interests pursuant to the Common Security Trust Agreement.
(8) Neither the execution nor delivery of the agreements referred to in
paragraphs (1) through (6) above, nor the performance of obligations
thereunder by the Borrower, will violate any Federal law of the United States
or law of the State of New York applicable to the Borrower; provided, however,
that, for the purposes of this paragraph (8), we express no opinion with
respect to Federal or state securities laws, other antifraud laws and
fraudulent transfer laws; provided, further, however, that insofar as
performance by the Borrower of its obligations under any such agreement is
concerned, we express no opinion as to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(9) The Common Security Trust Agreement, together with the agreements
referred to in paragraph (5) above, is effective to create in favor of the
Trustee for the benefit of the Senior Lender under the Senior Debt Agreement
the security interest purported to be created by the Borrower in the
Borrower's right, title and interest in and to the Related Subscription
Agreement[s], the Related Performance Guarantee Agreement], the Related
Advance Tariff Agreement and the Related Transportation Agreement (together,
the "Related Agreements"), and all claims in respect of Assigned Rights
resulting from any failure of performance or compliance with any of the
provisions of the Related Agreements. To the extent that such Assigned Rights
constitute "accounts" or "general intangibles for money due or to become due"
within the meaning of Section 9-103(3)(c) of the New York UCC, under New York
law such security interest will constitute a perfected security interest by
virtue of the acknowledgements attached to the Assignment and Acknowledgement
Agreements referred to in paragraph (5) above.
(10) The Common Security Trust Agreement creates in favor of the Trustee
for the benefit of the Senior Lender under the Senior Debt Agreement the
security interest purported to be created by the Borrower in the Borrower's
right, title and interest in and to any Authorized Investments Transferred
(within the meaning referred to below) to the Trustee and held from time to
time in the Proceeds Account. The security interest of the Trustee for the
benefit of the Senior Lender under the Senior Debt Agreement in any such
Authorized Investments consisting of Clearing Corporation Securities,
Certificated Securities, Instruments, Agency Book Entry Securities and
Treasury Securities (collectively, "Pledged Securities") created pursuant to
the Common Security Trust Agreement, upon Transfer (within the meaning
referred to below) thereof, will be a perfected security interest.
As used herein, a "Transfer" occurs upon:
(i) the delivery to the Trustee (or its nominee) of Certificated
Securities or Instruments in bearer form, or in registered form registered in
the name of the Trustee (or its nominee), or duly endorsed to the Trustee (or
its nominee) or in blank;
(ii) the acquisition by a Financial Intermediary acting on behalf of the
Trustee of Certificated Securities specially endorsed to or registered in the
name of the Trustee;
(iii) the making by a Clearing Corporation of appropriate entries in its
books reducing the appropriate securities account of the transferor of
Clearing Corporation Securities and increasing the appropriate securities
account of the Trustee with the Clearing Corporation, in each case reflecting
the securities transferred;
(iv) (A) the book entry or other identification as belonging to the
Trustee of specific Certificated Securities or of a quantity of Certificated
Securities which constitute or are part of a fungible bulk of securities in
the possession of a Financial Intermediary (not a Clearing Corporation) or
shown on the account of a Financial Intermediary (not a Clearing Corporation)
on the books of another Financial Intermediary, and (B) the sending by such
Financial Intermediary to the Trustee of a confirmation thereof; or
(v) the making by the Federal Reserve Bank of New York of appropriate
entries transferring Agency Book Entry Securities or Treasury Securities to
the account of the Trustee with the Federal Reserve Bank of New York and the
taking by the Trustee of the steps described in (iv) above as though such
Agency Book Entry Securities or Treasury Securities were Certificated
Securities.
With your approval, we have assumed in connection with the opinions
expressed in paragraphs (9) and (10) that:
(i) all assets held from time to time in the Proceeds Account will be
"proceeds" (as defined in Section 9-306(1) of the New York UCC) and will
consist either of cash (or cash in the bank) or of Pledged Securities;
(ii) each deposit of such cash (or cash in the bank, and including,
without limitation, all interest, dividends, liquidation and other proceeds of
Pledged Securities) to the Proceeds Accounts will be invested in Pledged
Securities within ten days after the date of such deposit; and
(iii) at the time of each such grant, creation and attachment, the
Borrower will have rights in the Assigned Rights (including, to the extent
applicable, rights within the meaning of Sections 9-203 and 8-321 of the New
York UCC) sufficient for the grant, creation and attachment of a valid and
effective lien on and security interest in the Assigned Rights in favor of the
Trustee for the benefit of the Senior Lender under the Senior Debt Agreement.
With your approval, we have also assumed in connection with the
opinions expressed in paragraph (10) that:
(i) the Trustee will accept Transfer of any Pledged Securities in good
faith without notice of any adverse claim;
(ii) whenever possession of Pledged Securities is to be maintained by,
or registration of Pledged Securities is to be made in the name of, the
Trustee, such possession will be continuously maintained in the State of New
York and such registration will be continuously maintained on the books of the
issuer thereof;
(iii) whenever possession of Pledged Securities is to be maintained by,
or a registration or other entry is to be made on the books of, a Financial
Intermediary or Federal Reserve Bank of New York (each, a "Perfecting
Intermediary") with respect to Pledged Securities, (A) such securities either
(x) have been registered in the books of the issuer thereof in the name of
such Perfecting Intermediary and such Perfecting Intermediary has acquired
possession of such securities or (y) such securities have been "transferred"
to such Perfecting Intermediary in a manner described in the definition of
"Transfer" above by another Financial Intermediary or Federal Reserve Bank of
New York (a "Prior Perfecting Intermediary"); (B) each Prior Perfecting
Intermediary either holds such securities in the manner described in clause
(A)(x) above or has accepted "transfer" of such securities in a manner
described in the definition of "Transfer" above from another Prior Perfecting
Intermediary; and (C) possession of, and all registrations and entries with
respect to, such securities, whether relating to the Trustee, a Perfecting
Intermediary or a Prior Perfecting Intermediary, will be continuously
maintained in the State of New York, and all such registrations and entries
will be complete and accurate in all respects;
(iv) as to any securities included in the Pledged Securities held as a
part of a "fungible bulk" (as contemplated by Section 8-313(1)(d) of the New
York UCC), sufficient securities are held by the relevant Financial
Intermediary to satisfy the interests of all persons having an interest
therein (and we note that to the extent that sufficient securities are not so
held, the interest of the Trustee will be limited to a proportionate interest
in such fungible bulk);
(v) the creation, validity and perfection of security interests in Agency
Book Entry Securities are governed by provisions substantially identical to
the provisions of Subpart O, 31 C.F.R. 306.115 (1995) through 306.122 (1995)
(all such provisions applicable to the Agency Book Entry Securities and the
Treasury Securities being, collectively, the "Federal Book Entry
Regulations");
(vi) in respect of Agency Book Entry Securities and Treasury Securities,
(A) the Trustee is and will continue to be a "depository" within the meaning
of the Federal Book Entry Regulations (i.e., a bank, banking institution,
financial firm or similar party which regularly accepts in the course of its
business Treasury Securities as a custodial service for customers and
maintains accounts in the name of such customers reflecting ownership of or
interest in such securities); and (B) New York substantive law (and, in
particular, Article 8 of the New York UCC (excluding the last sentence of the
definition of "security" in Section 8-102(1)(c) and Section 8-321(4) of the
New York UCC)) constitutes the "applicable law to effect a transfer or to
effect and perfect a pledge of the Treasury Securities, or any interest
therein" within the meaning of 31 C.F.R. 306.118(b) and of equivalent
provisions of the other Federal Book Entry Regulations; and
(vii) The Trustee is a Financial Intermediary.
In rendering the opinions set forth in paragraphs (9) and (10)
above, we express no opinion with respect to:
(i) the validity, binding effect or enforceability of any provision in
the Common Security Trust Agreement which purports (A) to impose on the
Trustee or any other person standards for the care of Assigned Rights in its
possession less than the minimum provided for in Section 9-207 of the New York
UCC, (B) to permit the Trustee to vote or otherwise exercise, or any other
person to vote or otherwise exercise, any rights with respect to any of the
Authorized Investments absent compliance with the requirements of applicable
law and regulations as to the voting of or other exercise of rights with
respect to such Authorized Investments, (C) to waive, or consent to the
noncompliance with, any rights of the Borrower or duties owing to it as a
matter of law except to the extent it may so waive or consent under applicable
law, or (D) to prohibit the Borrower from transferring its rights in the
Assigned Rights or any proceeds thereof except as specified therein;
(ii) the priority of any security interest in or to any of the Assigned
Rights and, other than as specifically set forth herein, the perfection of any
security interest in or to any of the Assigned Rights, except a claim to
proceeds to the extent permitted under Sections 9-306 and 9-312 of the New
York UCC;
(iii) the validity, binding effect or enforceability of the security
interests in or to any of the Assigned Rights insofar as they constitute
security interests in a right represented by a judgment (other than a judgment
taken on a right to payment which was Assigned Rights); and
(iv) the right, interest and title in or to any of the Assigned Rights
of any person granting a security interest therein.
In addition, we express no opinion with respect to the validity,
binding effect or enforceability of any contractual provisions purporting to
provide indemnification of any person for any claims, damages, liabilities or
expenses resulting from violation by such person of any applicable laws.
The opinions set forth above with respect to the enforceability of
the Common Security Trust Agreement are qualified to the extent that certain
remedial provisions of such agreement (a) may be subject to the rights of
account debtors, the terms of contracts with such account debtors and any
claims or defenses of such account debtors arising under or outside such
contracts and (b) may be unenforceable in whole or in part under applicable
law. However, the inclusion of such remedial provisions does not affect the
validity of the Common Security Trust Agreement and applicable law does not
make the remedies provided therein inadequate for the practical realization of
the benefits of the security intended to be provided thereby.
We note that provisions of the Common Security Trust Agreement [and
the Senior Debt Agreement] which permit the Trustee or Senior Lenders to take
action or make determinations may be subject to a requirement that such action
be taken or such determinations be made on a reasonable basis and in good
faith. We also note that provisions of the Advance Tariff Agreement between
the Borrower and the Throughput Obligor in the Related Initial Shipper Group
which permit the Borrower to take action or make determinations may be subject
to a requirement that such action be taken or such determinations be made on a
reasonable basis and in good faith.
We further note that in the case of property which becomes Assigned
Rights after the date hereof, (A) the security interests therein will not
attach or be enforceable until the debtor or other grantor has rights in such
property and (B) Section 552 of the Bankruptcy Code of the United States
limits the extent to which property acquired by a debtor or other grantor
after the commencement of a case under the Bankruptcy Code of the United
States may be subject to a security interest arising from a security agreement
entered into by a debtor before the commencement of such case.
In rendering the foregoing opinion, we have assumed that:
(i) each of the agreements referred to in paragraphs (1) through (6)
above has been duly authorized, executed and delivered by each party thereto
and is a valid and legally binding agreement thereof enforceable in accordance
with its terms under the laws of its jurisdiction of incorporation or
organization;
(ii) in connection with the opinions expressed in paragraphs (5)(c) and
9 above with respect to the Related Transportation Agreement, the Related
Transportation Agreement constitutes a valid and legally binding obligation
under Colombian law of the Initial Shipper in the Related Initial Shipper
Group enforceable in accordance with its terms;
(iii) the place of business and chief executive office of the Borrower
is, and will continue to be, in Colombia and the Borrower does not have, and
will continue to not have, a place of business in the United States or Canada;
and
(iv) Colombian law does not provide, in respect of "accounts" or
"general intangibles", for "perfection of security interests by filing or
recording" (within the meaning of Section 9-103(3)(c) of the New York UCC) in
Colombia.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
With your approval, we have relied as to certain matters upon
information obtained from public officials, officers of the Borrower, the
Shareholder, the Initial Shipper and the Throughput Obligor in the Related
Initial Shipper Group [, insert name of Related performance guarantor] [IPL
Energy and TransCanada PipeLines] and other sources believed by us to be
responsible, and we have assumed that the signatures on all documents examined
by us are genuine, assumptions which we have not independently verified.
This opinion is being delivered pursuant to the requirements of
Section [ ] of the [Senior Debt Agreement] and Article Seven of the Common
Security Trust Agreement. This opinion is addressed to the [Agent(s)/Trustee
for the Holders of Senior Debt under the Related Senior Debt
Agreement/Underwriters] and is solely for its [their] benefit.
Very truly yours,
1 Applicable to bank financings.
2 Applicable to bank financings.
APPENDIX M-4
to Common Security Trust Agreement
[LETTERHEAD OF SHEARMAN & STERLING OR
OTHER COUNSEL REASONABLY SATISFACTORY TO SENIOR LENDERS]
[Initial Disbursement Date]
[Name(s) of Agent(s)/Trustee for Holders of Senior Debt under
the Related Senior Debt Agreement/Underwriters]
Dear Sirs:
We have acted as your New York counsel in connection with the Common
Security Trust Agreement, dated as of June 1, 1995 (the "Common Security Trust
Agreement"), among Oleoducto Central S.A., Bankers Trust Company, as Trustee
for the benefit of the holders from time to time of Senior Debt, and holders
from time to time of Senior Debt and, in particular, with the [insert name of
Related Senior Debt Agreement, dated as of 199 , and the title of
any debt securities issued thereunder which are to be covered by this
opinion].
As used herein, (i) "New York UCC" means the Uniform Commercial Code
as in effect on the date hereof in the State of New York; (ii) "Clearing
Corporation Securities" means any securities which are subject to Section
8-320 of the New York UCC (including securities held by The Depository Trust
Company, The Participants Trust Company or any successor of either thereof);
(iii) "Certificated Security", Clearing Corporation", "Financial
Intermediary", and "Custodian Bank" shall have the meanings ascribed to such
terms in the New York UCC; (iv) "Instruments" shall have the meaning ascribed
to such term in Section 9-105(1)(i) of the New York UCC (including, without
limitation, certificates of deposit (as defined in Section 3-104(2)(c) of the
New York UCC) but excluding Certificated Securities); (v) "Agency Book Entry
Security" means an obligation of an agency or instrumentality of the United
States of America that is maintained in a book entry account with the Federal
Reserve Bank of New York or a Depository Institution (excluding Clearing
Corporation Securities); (vi) "Depository Institution" means a "depository
institution" as that term is defined in 12 U.S.C.and 461(b)(1)(A), asamended;
(vii) "Treasury Securities" means the direct obligations of the United States
of America which are defined in 31 C.F.R.and306.115 (1995); and (viii)
"Authorized Investments" means those Authorized Investments (as defined in the
Common Security Trust Agreement) which are referred to and are held in
accordance with (and as to which all steps have been taken for the perfection
of security interests pursuant to) the definition of "Transfer" below.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Common Security Trust Agreement.
We have examined such corporate records, 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) The Common Security Trust Agreement constitutes a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms.
(2) The Amended and Restated Subscription Agreement between the Borrower
[, each of IPL Enterprises and TCPL International Investments Inc.] and the
Shareholder[s] in the Initial Shipper Group which includes [insert name of
Related Initial Shipper] (the "Related Subscription Agreement") constitutes a
legal, valid and binding obligation of each such Shareholder enforceable
against such Shareholder in accordance with its terms.
(3) [Each of the] The Performance Guarantee Agreement[s] between the
Borrower and [insert name of the performance guarantor[s] included in the
Initial Shipper Group which includes [insert name of Related Initial Shipper]]
[each of IPL Energy and TransCanada PipeLines] (the "Related Performance
Guarantee Agreement[s]") constitutes a legal, valid and binding obligation of
[insert name of the performance guarantor[s]] enforceable against [insert name
of performance guarantor[s]] in accordance with its terms.
(4) The Advance Tariff Agreement between the Borrower and the Throughput
Obligor in the Initial Shipper Group which includes [insert name of Related
Initial Shipper] (the "Related Advance Tariff Agreement") constitutes a legal,
valid and binding obligation of such Throughput Obligor enforceable against
such Throughput Obligor in accordance with its terms.
(5) Each of (a) the Assignment and Acknowledgment Agreement[s] for Rights
under the Subscription Agreement and the Performance Guarantee Agreement with
respect to the Related Subscription Agreement [of each of IPLEnterprises and
TCPL International Investments Inc.] and the Related Performance Guarantee
Agreement [of each of IPL Energy and TransCanada PipeLines], (b) the
Assignment and Acknowledgment Agreement for Rights under the Advance Tariff
Agreement with respect to the Related Advance Tariff Agreement, and (c) the
Assignment and Acknowledgment Agreement for Rights under the Transportation
Agreement with respect to the Transportation Agreement between the Borrower
and the Initial Shipper in the Related Initial Shipper Group (the "Related
Transportation Agreement"), constitutes a legal, valid and binding obligation
of the Borrower enforceable against the Borrower in accordance with its terms.
(6) The [insert defined name of Related Senior Debt Agreement and any
debt securities issued thereunder], constitute[s] [a] legal, valid and binding
obligation[s] of the Borrower enforceable against the Borrower in accordance
with its [their] terms.
(7) All regulatory consents, authorizations, approvals and filings
required to be obtained or made by the Borrower on or prior to the date hereof
under the Federal laws of the United States and the laws of the State of New
York for the execution and delivery of the agreements referred to in
paragraphs (1) through (6) above by each of the Borrower, the Shareholder in
the Related Initial Shipper Group, [insert name of Related performance
guarantor] [IPL Energy and TransCanada PipeLines] and the Throughput Obligor
in the Related Initial Shipper Group have been obtained or made, except for
action required from time to time after the date hereof to create or perfect
liens, pledges or security interests pursuant to the Common Security Trust
Agreement.
(8) Neither the execution nor delivery of the agreements referred to in
paragraphs (1) through (6) above, nor the performance of obligations
thereunder by the Borrower, will violate any Federal law of the United States
or law of the State of New York applicable to the Borrower; provided, however,
that, for the purposes of this paragraph (8), we express no opinion with
respect to Federal or state securities laws or other antifraud laws.
(9) The Common Security Trust Agreement, together with the agreements
referred to in paragraph (5) above, are effective to create in favor of the
Trustee for the benefit of the Related Senior Lenders the security interest
purported to be created by the Borrower in the Borrower's right, title and
interest in and to the Related Subscription Agreement[s], the Related
Performance Guarantee Agreement[s]], the Related Advance Tariff Agreement and
the Related Transportation Agreement (together, the "Related Agreements"), and
all claims in respect of Assigned Rights resulting from any failure of
performance or compliance with any of the provisions of the Related
Agreements. To the extentthat such Assigned Rights constitute "accounts" or
"general intangibles for money due or to become due" within the meaning of
Section 9-103(3)(c) of the New York UCC, under New York law such security
interest will constitute a perfected security interest by virtue of the
acknowledgments attached to the Assignment and Acknowledgment Agreements
referred to in paragraph (5) above.
(10) The Common Security Trust Agreement, together with any Authorized
Investments Transferred from time to time to the Trustee and held from time to
time in the Proceeds Account, creates in favor of the Trustee for the benefit
of the Related Senior Lenders a valid and perfected security interest in the
Borrower's right, title and interest in and to such Authorized Investments.
As used herein, a "Transfer" occurs upon:
(i) the delivery to the Trustee (or its nominee) of Certificated
Securities or Instruments in bearer form, or in registered form registered in
the name of the Trustee (or its nominee), or duly endorsed to the Trustee (or
its nominee) or in blank;
(ii) the acquisition by a Financial Intermediary acting on behalf of the
Trustee of Certificated Securities specially endorsed to or registered in the
name of the Trustee;
(iii) the making by a Clearing Corporation of appropriate entries in its
books reducing the appropriate securities account of the transferor of
Clearing Corporation Securities and increasing the appropriate securities
account of the Trustee with the Clearing Corporation, in each case reflecting
the securities transferred;
(iv) (A) the book entry or other identification of specific Certificated
Securities or of a quantity of Certificated Securities which constitute or are
part of a fungible bulk of securities (in each case identifying such
Certificated Securities or quantity, as applicable, as belonging to the
Trustee) that are in the possession of a Financial Intermediary (not a
Clearing Corporation) or, in the case of such quantity of Certificated
Securities, that are shown on the account of such Financial Intermediary on
the books of another Financial Intermediary, and (B) the sending by such
Financial Intermediary to the Trustee of a confirmation thereof; or
(v) (A) the making by the Federal Reserve Bank of New York of
appropriate entries transferring Treasury Securities or Agency Book Entry
Securities to the account of Bankers Trust with the Federal Reserve Bank of
New York and (B) the taking by Bankers Trust of all steps described in clause
(iv) abovein favor of the Trustee, as though such Treasury Securities or
Agency Book Entry Securities were Certificated Securities.
With your approval, we have assumed in connection with the opinions
expressed in paragraph (10) above that:
(i) the Trustee will accept Transfer of any Authorized Investments in
good faith without notice of any adverse claim;
(ii) whenever possession of Authorized Investments is to be maintained
by, or registration of Authorized Investments is to be made in the name of,
the Trustee, such possession will be continuously maintained in the State of
New York and such registration will be continuously maintained on the books of
the issuer thereof;
(iii) whenever possession of Authorized Investments is to be maintained
by, or a registration or other entry is to be made on the books of, a
Financial Intermediary or Federal Reserve Bank of New York (each, a
"Perfecting Intermediary") with respect to Authorized Investments, (A) such
securities either (x) have been registered in the books of the issuer thereof
in the name of such Perfecting Intermediary and such Perfecting Intermediary
has acquired possession of such security or (y) such security has been
"transferred" to such Perfecting Intermediary in a manner described in the
definition of "Transfer" above by another Financial Intermediary or Federal
Reserve Bank of New York (a "Prior Perfecting Intermediary"); (B) each Prior
Perfecting Intermediary either holds such security in the manner described in
clause (A)(x) above or has accepted "Transfer" of such security in a manner
described in the definition of "Transfer" above from another Prior Perfecting
Intermediary; and (C) possession of, and all registrations and entries with
respect to, such security, whether relating to the Trustee, a Perfecting
Intermediary or a Prior Perfecting Intermediary, will be continuously
maintained in the State of New York, and all such registrations and entries
will be complete and accurate in all respects;
(iv) as to any Authorized Investments held as a part of a "fungible
bulk" of securities (as contemplated by Section 8-313(1)(d) of the New York
UCC) sufficient securities are held by the relevant Financial Intermediary to
satisfy the interests of all persons having an interest therein (and we note
that, under Section 8-313(2) of the New York UCC, to the extent that
sufficient securities are not so held, the interest of the Trustee will be
limited to a proportionate interest in such fungible bulk);
(v) the creation, validity and perfection of security interests in
Agency Book Entry Securities are governed by provisions substantially
identical to the provisions of Subpart O ("Book Entry Procedure"), 31 C.F.R.
306.115 (1995) through 306.122 (1995) (all such provisions applicable to the
Treasury Securities and the Agency Book Entry Securities being, collectively,
the "Federal Book Entry Regulations") applicable to Treasury Securities;
(vi) in respect of Treasury Securities and Agency Book Entry
Securities, (A) Bankers Trust is and will continue to be a "depositary" within
the meaning of the Federal Book Entry Regulations (i.e., a bank, banking
institution, financial firm or similar party, which regularly accepts in the
course of its business Treasury Securities as a custodial service for
customers and maintains accounts in the name of such customers reflecting
ownership of or interest in such securities); and (B) New York substantive law
(and, in particular, Article 8 of the New York UCC (excluding the last
sentence of the definition of "security" in Section 8-102(1)(c) and Section
8-321(4) of the New York UCC)) constitutes the "applicable law to effect a
transfer or to effect and perfect a pledge of the Treasury Securities, or any
interest therein" within the meaning of 31 C.F.R.and 306.118(b) and of
equivalent provisions of the other Federal Bank Entry Regulations; and
(vii) Bankers Trust is a Financial Intermediary.
In rendering the opinions set forth in paragraphs (9) and (10)
above, we have assumed (i) that all assets held from time to time in the
Proceeds Account will be proceeds (as defined in Section 9-306(1) of the New
York UCC) and will consist either of cash (or cash in the bank) or of
Authorized Investments, and (ii) that each deposit of such cash (or cash in
the bank, and including, without limitation, all interest, dividends,
liquidation and other proceeds of Authorized Investments) to the Proceeds
Account will be invested in Authorized Investments within ten days after the
date of such deposit.
In rendering the opinions set forth in paragraphs (9) and (10)
above, (a) we have assumed that, at the time of each such grant, creation and
attachment, the Borrower will have rights in the Assigned Rights (including,
to the extent applicable, rights within the meaning of Sections 9-203 and
8-321 of the New York UCC) sufficient for the grant, creation and attachment
of a valid and effective lien on and security interest in the Assigned Rights
in favor of the Trustee for the benefit of __________; and (b) we note that
the validity, binding effect and enforceability of any provision in the Common
Security Trust Agreement which purports to impose on the Trustee or any other
Person standards for the care of the Assigned Rights in its possession are
subject to Section 9-207 of the New York UCC. Furthermore, in rendering such
opinions, we express no opinion with respect to:
(i) the validity, binding effect or enforceability of any provision in
the Common Security Trust Agreement which purports (A) to permit the Trustee
to vote or otherwise exercise, or any other person to vote or otherwise
exercise, any rights with respect to any of the Authorized Investments absent
compliance with the requirements of applicable law and regulations as to the
voting of or other exercise of rights with respect to such Assigned Rights, or
(B) to prohibit the Borrower from transferring its rights in the Assigned
Rights or any proceeds thereof except as specified therein;
(ii) the priority of any security interest in or to any of the Assigned
Rights and, other than as specifically set forth herein, the perfection of any
security interest in or to any of the Assigned Rights;
(iii) the validity, binding effect or enforceability of the security
interests in or to any of the Assigned Rights insofar as they constitute
security interests in a right represented by a judgment (other than a judgment
taken on a right to payment which was Assigned Rights); and
(iv) the right, interest and title in or to any of the Assigned Rights of
any person granting a security interest therein.
In addition, we express no opinion with respect to the validity,
binding effect or enforceability of any contractual provisions purporting to
provide indemnification of any person for any claims, damages, liabilities or
expenses resulting from violation by such person of any applicable laws.
The opinions set forth in paragraphs (1) through (6) above (with
respect to the enforceability of the agreements referred to therein) and, for
purposes of clause (A) below, the opinions set forth in paragraphs (9) and
(10) above are subject to (A) the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers, reorganization and moratorium) or similar laws affecting creditors'
rights generally (except, in the case of the opinions set forth in paragraphs
(9) and (10) above, for Section 544(a) of the Bankruptcy Code of the United
States) and to possible judicial action giving effect to governmental action
or foreign laws affecting creditors' rights and (B) the effect of general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether considered
in a proceeding in equity or at law). In addition, the opinions set forth in
paragraph (1) above with respect to the enforceability of the Common Security
Trust Agreement are qualified to the extent that certain remedial provisions
of such agreement (a) may be subject to the rights of account debtors, the
terms of contracts with such account debtors, and any claims or defenses of
such account debtors arising under or outside such contracts and (b) may be
unenforceable in whole or in part under applicablelaw. However, the inclusion
of such remedial provisions does not affect the validity of the Common
Security Trust Agreement and applicable law does not make the remedies
provided therein inadequate for the practical realization of the benefits of
the security intended to be provided thereby.
In furtherance of the qualifications contained in clause (A) of the
preceding paragraph, we note that, in the case of property which becomes
Assigned Rights after the date hereof, (A) the security interests therein will
not attach or be enforceable until the debtor or other grantor has rights in
such property and (B) Section 552 of the Bankruptcy Code of the United States
limits the extent to which property acquired by a debtor or other grantor
after the commencement of a case under the Bankruptcy Code of the United
States may be subject to a security interest arising from a security agreement
entered into by a debtor before the commencement of such case.
In rendering the foregoing opinions, we have assumed that:
(i) each of the parties to each of the agreements referred to in
paragraphs (1) through (6) above has been duly organized and validly exists
under the laws of the jurisdiction of its purported organization, and that
each such agreement has been duly authorized, executed and delivered by each
of the respective parties thereto;
(ii) in connection with the opinions expressed in paragraphs (5)(c) and 9
above with respect to the Related Transportation Agreement, the Related
Transportation Agreement constitutes a valid and legally binding obligation
under Colombian law of the Initial Shipper in the Related Initial Shipper
Group enforceable in accordance with its terms; and
(iii) the place of business and chief executive office of the Borrower
is, and will continue to be, in Colombia and the Borrower does not have, and
will continue to not have, a place of business in the United States or Canada.
Furthermore, we draw your attention to [paragraph __ of __] [the opinion of
__________, Colombian counsel to __________] [the Colombian Opinion], stating
that Colombian law does not provide, in respect of "accounts" or "general
intangibles", for "perfection of security interests by filing or recording"
(within the meaning of Section 9-103(3)(c) of the New York UCC) in Colombia.
We note that the enforceability in the United States of the waivers
of immunities from court jurisdiction and from legal process, as set forth in
the agreements referred to in paragraphs (1) through (6) above, are subject to
the limitations imposed by the United States Foreign Sovereign Immunities Act
of 1976.
We express no opinion as to the enforceability of any provisions of
any agreement referred to in paragraph (1) through (6) above providing for
indemnity to any person against any loss in obtaining the currency due to such
person under such agreement from a court judgment in another currency. [In
this connection we note that New York state courts generally have rendered
judgments denominated in Dollars and not in any other currency. However,
pursuant to Chapter 326 of the Laws of 1987 of the State of New York, amending
Section 27 of the New York State Judiciary Law, New York state courts may now
render judgments denominated in a currency other than United States dollars
when an appropriate cause of action is based on an obligation denominated in
such other currency. Any such judgment will be converted into dollars at the
rate of exchange prevailing on the date of such judgment. We express no
opinion as to whether a United States federal court sitting in the State of
New York would apply the New York statute--for use for non-United States
dollar loans.]
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
With your approval, we have relied as to certain matters upon
information obtained from public officials, officers of the Borrower, the
Shareholder, the Initial Shipper and the Throughput Obligor in the Related
Initial Shipper Group [, insert name of Related performance guarantor] [IPL
Energy and TransCanada PipeLines] and other sources believed by us to be
responsible, and we have assumed that the signatures on all documents examined
by us are genuine, assumptions which we have not independently verified.
This opinion is being delivered pursuant to the requirement of
Section [ ] of the [Senior Debt Agreement]. This opinion is addressed to the
[Agent(s)/Trustee for the Holders of Senior Debt under the Related Senior Debt
Agreement/Underwriters] and is solely for its [their] benefit.
Very truly yours,
TRANSPORTATION AGREEMENT
dated as of March 31, 1995
between
OLEODUCTO CENTRAL S.A.
and
TRITON COLOMBIA, INC.
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TABLE OF CONTENTS
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SECTION PAGE
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
1.1. Definitions
1.2. Interpretation 2
ARTICLE TWO
TRANSPORTATION
2.1. Dedication 2
2.2. Release 3
2.3. Performance 3
ARTICLE THREE
RIGHTS TO OLEODUCTO CENTRAL CAPACITY
3.1. Entitlement to Capacity 3
3.2. Other Agreements 3
3.3. El Porvenir-Vasconia Segment 4
3.4. Sole Risk Facilities; Entitlement to Sole Risk Capacity 4
ARTICLE FOUR
PAYMENT OF TARIFFS AND OTHER CHARGES
4.1. Payment of Tariffs 5
4.2. Interim Statements 5
4.3. Payment in Kind 5
4.4. Quarterly Reconciliation 6
4.5. Disputed Bills 6
4.6. Remedies of Carrier 7
4.7. Taxes 8
4.8. Modification of Tariff Regulations 9
4.9. Right of Set off 9
ARTICLE FIVE
TARIFF ADVANCES AND TRANSPORTATION NOTES
5.1. Commitment to Provide Tariff Advances or to Purchase Transportation Notes 9
5.2. Terms of Tariff Advances and Transportation Notes 10
ARTICLE SIX
TERM
6.1. Term 11
6.2. Partial Termination 11
6.3. Recommissioning 12
ARTICLE SEVEN
CAPACITY RELEASES; ASSIGNMENT
7.1. Capacity Releases 12
7.2. Conditions to Capacity Release 14
7.3. Assignment by Carrier 15
7.4. Assignment by Initial Shipper 15
7.5. Production from Cusiana Area in Excess of Proportionate Share of Available Capacity 18
7.6. No Assignment 19
ARTICLE EIGHT
EXCUSABLE EVENT
8.1. Excusable Event Defined 19
8.2. Notice 19
8.3. Suspension of Obligations 19
8.4. Strikes 20
8.5. Lack of Finances 20
8.6. Obligation of Carrier 20
ARTICLE NINE
GENERAL
9.1. Notices 20
9.2. Entire Agreement 21
9.3. Governing Law 21
9.4. Commercial Obligations 22
9.5. Nature of Obligations 22
9.6. Waiver of Immunity 22
9.7. Amendment of General Terms and Conditions 22
9.8. JOA and Association Contracts 22
9.9. Severability 22
9.10. Further Assurances 23
9.11. Headings 23
9.12. Remedies 23
9.13. Waiver 23
9.14. Approvals 23
9.15. Acknowledgement 23
9.16. Counterparts 23
9.17. Language of Agreement 23
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Schedule A - Definitions
Schedule B - Oleoducto Central Description
Schedule C - Tariff Regulations
Schedule D - Initial Shippers General Terms and Conditions
Schedule E - Form of Transportation Note
Schedule F - Form of Designation Notice
Schedule G - Form of Disputed Invoice Notice
Schedule H - Central Llanos Contracts
TRANSPORTATION AGREEMENT
AGREEMENT, dated as of March 31, 1995, by and between TRITON
COLOMBIA, INC., a corporation existing under the laws of the State of Delaware
(herein, together with its successors and permitted assigns, called Initial
Shipper), and OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the
laws of Colombia (herein, together with its successors and permitted assigns,
called Carrier).
RECITALS
WHEREAS:
A. Initial Shipper has rights to dispose of its share of
production from the Cusiana Area (as hereinafter defined) and its share of
production from other fields in which it owns an interest in the vicinity of
the Oleoducto Central (as hereinafter defined);
B. Carrier wishes to grant to Initial Shipper transportation
rights to ship Petroleum (as hereinafter defined) through the Oleoducto
Central, subject to the terms and conditions of this Agreement;
C. The Parties wish to specify the terms and conditions upon
which Carrier shall receive, transport, and redeliver such Petroleum through
the Oleoducto Central;
D. Carrier and Initial Shipper are concurrently entering into an
Advance Tariff Agreement (as hereinafter defined); and
E. Pursuant to the terms of the Oleoducto Central Agreement (as
hereinafter defined), Carrier agreed to enter into this Agreement with Initial
Shipper.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), Initial Shipper and
Carrier agree as follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires,
defined terms in this Agreement and the Schedules to this Agreement, which are
identified by the capitalization of the first letter of each principal word
thereof, have the meanings assigned to them in Schedule A hereto.
Section 1.2. Interpretation. For all purposes of this Agreement
and in the Schedules to this Agreement, except as otherwise expressly provided
or to the extent that the context otherwise requires:
(a) the terms defined herein include the plural as well as the singular
and vice versa;
(b) words importing gender include all genders;
(c) any reference to an Article or a Section refers to an Article or a
Section, as the case may be, of this Agreement;
(d) all references to this Agreement mean this Agreement, including
all Schedules hereto, and the words herein, hereof, hereto and hereunder and
other words of similar import refer to this Agreement, as a whole and not to
any particular Article, Schedule, Section or other subdivision; and
(e) all references herein to generally accepted accounting principles
shall mean Accounting Principles Generally Accepted in Colombia, as in effect
from time to time, all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
generally accepted accounting principles with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation.
ARTICLE TWO
TRANSPORTATION
Section 2.1. Dedication. Except as provided in Section 2.2 below
and subject to the terms and conditions of this Agreement, all Petroleum
lifted from the Dedicated Area by Initial Shipper or for Initial Shipper's
account shall be subject to Tariffs in accordance with the terms hereof and
all of such Petroleum not consumed in operations at the Dedicated Area shall
be delivered at the Cusiana Receipt Point of the Oleoducto Central.
Section 2.2. Release. The provisions of Section 2.1 above shall
not apply to quantities produced from the Dedicated Area (not exceeding the
quantities that lawfully can be produced) for the account of Initial Shipper
in excess of Initial Shipper's Allocated Capacity in a Schedule Month for the
Segment containing the Receipt Point for such production:
(a) if and only if (i) the Aggregate Scheduled Capacity of such
Segment equals or exceeds Available Capacity of such Segment, and (ii) the
Available Capacity of such Segment in the most current Schedule was less than
75% of the Throughput Capacity of such Segment; and
(b) if and only if (i) the Advance Tariff Agreement is no longer in
full force and effect, or if the Advance Tariff Agreement is in effect,
Carrier has given its prior consent, and (ii) to the extent that the daily
average quantities produced in any month from the Dedicated Area exceed by 10%
or more the annual average daily throughput necessary from the Dedicated Area
to satisfy the Equity Amortization Deferral Test for an Equity Amortization
Period commencing during the later of (x) the then current year or (y) the
year 2003, and ending as contemplated in Section 5.5 of the Oleoducto Central
Agreement.
Section 2.3. Performance. Initial Shipper shall nominate Petroleum
quantities, and deliver such nominated quantities to the Receipt Points, in
accordance with the provisions of the General Terms and Conditions. Carrier
shall receive Initial Shipper's Petroleum at the Receipt Points and redeliver
a quantity of Petroleum at the Delivery Points corresponding to such delivered
quantities in accordance with the General Terms and Conditions.
ARTICLE THREE
RIGHTS TO OLEODUCTO CENTRAL CAPACITY
Section 3.1. Entitlement to Capacity. Initial Shipper shall, for
each Segment, have the right to fully use its Proportionate Share of Available
Capacity in accordance with the General Terms and Conditions.
Section 3.2. Other Agreements. Initial Shipper acknowledges that
Carrier has entered into Transportation Agreements with each of the other
Initial Shippers on terms substantially the same as this Agreement except as
to Proportionate Share and may in the future enter into Third Party
Transportation Agreements for transportation services on the Oleoducto
Central. Except as otherwise provided herein, such agreements withThird Party
Shippers shall not materially alter the rights or obligations of the Parties
hereunder. Carrier agrees that it shall enforce and procure that its permitted
assigns with respect thereto shall enforce its rights to receive payments
under such other Transportation Agreements and Third Party Transportation
Agreements.
Section 3.3. El Porvenir-Vasconia Segment. The Carrier shall
transport up to 100,000 Standard Barrels of Petroleum per day pursuant to the
contracts listed, and the fields referred to, in Appendix H (the "Existing
Fields") as of the effective date of this Agreement through the El
Porvenir-Vasconia Segment, and, until the earlier of Completion and December
31, 1997, the transportation of such Petroleum, notwithstanding any provision
to the contrary herein, shall have priority in respect of the transportation
of Cusiana Petroleum as follows:
(a) Normal Operations. At such times as the capacity of the El
Porvenir-Vasconia Segment exceeds 150,000 Standard Barrels per day, the
Existing Fields shall have priority up to the first 100,000 Standard Barrels
per day and Cusiana Petroleum shall have priority in filling the capacity
within the 100,000 Standard Barrels per day not used by the Existing Fields.
Cusiana Petroleum shall have priority in respect of any capacity exceeding
100,000 Standard Barrels per day.
(b) Curtailment. If Available Capacity in the El-Porvenir-Vasconia
Segment is less than 150,000 Standard Barrels per day, or if transportation
capacity in the El Porvenir-Vasconia Segment is reduced in a Schedule Month to
less than 150,000 Standard Barrels per day, then the allocation of capacity
between Petroleum produced from the Existing Fields and Cusiana Petroleum
shall be made under the following rules:
(i)the first 50,000 Standard Barrels per day shall be allocated to
Petroleum from the Existing Fields; and
(ii)the next 100,000 Standard Barrels per day shall be allocated equally
between Petroleum produced from the Existing Fields and Cusiana Petroleum.
Section 3.4. Sole Risk Facilities; Entitlement to Sole Risk
Capacity. Initial Shipper shall have the same right to make, and shall be
subject to the same obligations in respect of making, a Capital Investment
Proposal or a Sole Risk Proposal to Carrier as a Shareholder under the
Oleoducto Central Agreement, and Article Six thereof shall apply mutatis
mutandis to any such proposal. Initial Shipper shall have the right to use,
and shall have all obligations in respect of the use of, any Sole Risk
Facilities owned in whole or in part by Initial Shipper or any Affiliate of
such Initial Shipper in accordance with the terms of the Oleoducto Central
Agreement.
ARTICLE FOUR
PAYMENT OF TARIFFS AND OTHER CHARGES
Section 4.1. Payment of Tariffs. Initial Shipper shall pay to
Carrier the Tariffs in accordance with this Agreement, the Tariff Regulations
and the General Terms and Conditions. Tariff payments shall be due and owing
in arrears, and payable in cash or in kind as provided in Section 4.3 of this
Agreement. All Tariffs shall be calculated in dollars and payable in dollars
outside Colombia to the account or accounts maintained by Carrier at the
financial institution or institutions designated by Carrier in writing to
Initial Shipper.
Section 4.2. Interim Statements. Carrier shall send to Initial
Shipper on or before the twentieth day of each month an interim statement
setting forth the amount payable by Initial Shipper for the current month
based on its Nominated Capacity and aggregate Net Deliveries for such month.
Section 4.3. Payment In Kind. (a) Subject to the provisions of
Section 4.3(b) below, Initial Shipper irrevocably authorizes Carrier to
withdraw and dispose of Petroleum delivered to Carrier by Initial Shipper in a
month in an amount sufficient to pay the amount of Tariffs, Surcharges, tariff
increases referred to in Section 4.2 of the Tariff Regulations, Tariff
Advances and Transportation Notes due and owing hereunder with respect to the
transportation of such Petroleum in any prior month and not for any other
purpose. Carrier shall so withdraw and dispose of such Petroleum in accordance
with the procedures of this Section 4.3.
(b) Carrier shall not withdraw and dispose of Initial Shipper's
Petroleum (and the authorization under Section 4.3(a) above shall be
suspended) if (i) on or before the later of 15 days after delivery of the
interim statement provided for in Section 4.2 of this Agreement or the fifth
day of the month next succeeding the month in which such interim statement is
delivered, Initial Shipper pays to Carrier by wire or other electronic funds
transfer (in accordance with reasonable procedures and instructions provided
by Carrier) the amount specified in such interim statement or (ii) there is a
Disputed Invoice Notice and there is no Related Senior Debt outstanding under
the Related Senior Debt Tranche, Initial Shipper complies with Section 4.5(b)
of this Agreement.
(c) Unless the authorization to do so is suspended in accordance
with Section 4.3(b) above, Carrier shall sell Initial Shipper's Petroleum
under any commercially reasonable terms available to Carrier in dollars,
provided that the terms of such sale shall provide for payment outside
Colombia unless in Carrier's sole judgment materially superior commercial
terms are available for payment inside Colombia and such payment inside
Colombia would not adversely affect Carrier's ability to meet any of its
payment obligations denominated in Dollars and payable outside Colombia. From
such proceeds Carrier shall be entitled to deduct, cause payment to it and
retain the amount due andowing hereunder in respect of Tariffs, Charges,
Surcharges, tariff increases referred to in Section 4.2 of the Tariff
Regulations, Tariff Advances and payments for Transportation Notes and the
following charges (collectively, Charges):
(i) all reasonable costs and expenses (including, without
limitation, marketing and insurance expenses) incurred by, and any taxes
imposed upon, Carrier in storing, removing and selling such Petroleum
(collectively, Handling Costs);
(ii) interest on all Handling Costs, calculated at the Applicable
Rate, from the date Carrier incurs such expenses to the date Carrier is
reimbursed such expenses from sale proceeds; and
(iii) interest on all overdue Tariffs, Tariff Advances and payments
for Transportation Notes calculated at the Applicable Rate, from the later of
15 days after delivery of the interim statement or the fifth day of the month
next succeeding the month in which such interim statement was delivered until
the date Carrier is paid such Tariff charges from such sale proceeds.
(d) On or before the fifth day following Carrier's withdrawal and
sale of Initial Shipper's Petroleum under Section 4.3(c) above, Carrier shall
deliver to Initial Shipper a statement showing in reasonable detail the amount
of sale proceeds to be realized and itemizing all Charges to be deducted from
such proceeds. Carrier shall then promptly cause the purchaser in such sale to
pay to Carrier an amount of such sale proceeds equal to such Charges and to
then pay to Initial Shipper (or its designee as instructed by Initial Shipper
substantially in the form of Schedule F) any remaining proceeds after
deduction for all Charges paid to Carrier. Such payment shall be made in
dollars into an account outside Colombia to the account or accounts maintained
by Initial Shipper at the financial institution or institutions designated in
writing by Initial Shipper to Carrier.
Section 4.4. Quarterly Reconciliation. Within thirty days after
each calendar quarter, Carrier shall provide each Initial Shipper with a
statement (a Reconciliation Statement) reconciling all interim statements sent
during the preceding calendar quarter, showing for such period: (i) Nominated
Capacity, (ii) actual measured Receipts, and (iii) the amounts paid and
payable (including the penalty amounts, if any, under Section 4.6 of this
Agreement). Carrier shall credit to Initial Shipper the amount of any surplus,
or Initial Shipper shall owe to Carrier any deficiency, arising from the sum
of the difference between amounts shown on interim statements for such period
and amounts actually owed by Initial Shipper based on its Nominated Capacity
and measured Receipts for the same period. Carrier shall make the appropriate
adjustments in the payment amounts in the interim statement next following the
delivery of the Reconciliation Statement to reflect the surplus or deficiency
specified in the Reconciliation Statement.
Section 4.5. Disputed Bills. (a) If Initial Shipper disputes any
part of any interim statement, it shall so advise Carrier by prompt written
notice (a Disputed Invoice Notice) substantially in the form attached as
Schedule G hereto. For so long as any Related Senior Debt is outstanding,
absent manifest error, Initial Shipper shall pay to Carrier the full amount of
the interim statement when due despite the Disputed Invoice Notice. Upon
receipt of a Disputed Invoice Notice, Carrier shall act promptly and cooperate
fully with Initial Shipper for the conduct of a joint audit to determine the
correctness of the amount in dispute. If it is determined that such amount, or
any portion thereof, was incorrectly paid by Initial Shipper, then Carrier
shall immediately refund to Initial Shipper the amount of any such
overpayment, with interest, calculated at the Applicable Rate, from and
including the date 10 Business Days after delivery of Initial Shipper's
Disputed Invoice Notice until but excluding the date such overpayment is
refunded.
(b) If there is no Senior Debt outstanding under the Related Senior
Debt Tranche, absent manifest error, at Carrier's request, Initial Shipper
shall pay to Carrier the full amount of the interim statement when due despite
the Disputed Invoice Notice. If it is determined that such amount, or any
portion thereof, was incorrectly paid by Initial Shipper, then Carrier shall
immediately refund to Initial Shipper the amount of any overpayment, with
interest, calculated at the Applicable Rate, from and including the date of
delivery of Initial Shipper's Disputed Invoice Notice until but excluding the
date such overpayment is refunded.
Section 4.6. Remedies of Carrier. (a) If Initial Shipper has not
paid any Tariffs, Charges, Surcharges, Tariff Advances or Transportation Notes
due to Carrier hereunder, and such failure to pay has continued for 30 days
after notice from Carrier to Initial Shipper, Carrier may charge Initial
Shipper a tariff surcharge equal to 50% of the Tariff otherwise applicable to
Initial Shipper for the transportation of Petroleum hereunder for a period
beginning on the thirty-first day after such notice and continuing until the
expiration of 180 days after the date on which Initial Shipper has paid in
full all Tariffs, Charges, Surcharges, Tariff Advances and Transportation
Notes due hereunder.
(b) If Carrier has unrecovered Tariffs, Charges, Surcharges, Tariff
Advances or Transportation Notes outstanding for a period of 60 days, and
Carrier reasonably believes that it cannot sell Initial Shipper's Petroleum on
commercially reasonable terms sufficient to recover all Tariffs, Charges,
Surcharges, Tariff Advances or Transportation Notes in the next 30 days, then
Carrier may suspend receipt of Petroleum from Initial Shipper until:
(i) all Tariffs, Charges, Surcharges, tariff increases referred to in
Section 4.2 of the Tariff Regulations, Tariff Advances and payments for
Transportation Notes due and owing hereunder have been paid to Carrier in
full; and
(ii) there is in effect in each Schedule Month a letter of credit, or
similar credit guaranty, from a financial institution reasonably acceptable to
Carrier, for the benefit of Carrier, securing the payment of all Tariffs,
Charges, Tariff Advances and Transportation Notes applicable to Petroleum
volumes nominated by such Initial Shipper in the relevant Nomination Month;
provided that such suspension shall not relieve Initial Shipper from any
obligation to pay any amounts due and owing hereunder, and provided further
that under no circumstances shall Carrier have the right to suspend receipt of
Cusiana Petroleum from Initial Shipper.
To the extent that Carrier has suspended receipt of Petroleum from
Initial Shipper under this Agreement and any of the Initial Shipper's
Proportionate Share of Available Capacity is not nominated by other Initial
Shippers for shipment of Cusiana Petroleum, Carrier agrees, so long as such
suspension shall continue, to use its Reasonable Efforts to market Petroleum
transportation services to third parties in respect of such unused
Proportionate Share, at Tariffs at least equal to the Third Party Tariff and
with other terms at least as favorable to Carrier as those provided for in
this Agreement. If such Tariffs or other terms cannot be obtained by Carrier,
Carrier agrees to use its Reasonable Efforts to market Petroleum
transportation services to third parties on terms no more favorable than the
terms of any existing Transportation Agreement and on terms and conditions no
more favorable to the prospective shipper than those applicable to the Initial
Shipper. The rights of any such other Third Party Shipper or Initial Shipper
with respect to such Available Capacity shall terminate upon the reinstatement
of the right of Initial Shipper to use such capacity and shall always be
subject to the terms and conditions of, the priorities set forth in, and the
rights of the Initial Shipper under, this Agreement (including its rights to
ship Petroleum and to receive its share of Overutilizer Premiums and
Established Third Party Premiums paid by others), as such rights have been or
may be modified by agreement or waiver of Initial Shipper. For the avoidance
of doubt, the transportation rights of such shipper would be interruptible in
favor of the transportation rights of the Initial Shipper and, with respect to
Cusiana Petroleum, the other Initial Shippers under their respective
Transportation Agreements. Notwithstanding the foregoing, Carrier shall in no
event enter into any such transportation agreement with any party if the
transportation of Petroleum pursuant thereto would disrupt the construction or
operation of the Oleoducto Central or prejudice the transportation of Cusiana
Petroleum as reasonably determined by Carrier and Initial Shippers. The
provisions of Sections 7.1 and 7.2 of this Agreement shall not be applicable
with respect to unused Available Capacity resulting from suspension pursuant
to this paragraph, and any Tariffs received by Carrier with respect to the use
thereof shall be deposited in the Related Account or any other account
designated pursuant to an agreement for the deposit of Tariffs paid by Initial
Shipper for the benefit of the holders of Senior Debt as provided therein, and
shall otherwise be treated for all purposes of this Agreement as a payment by
Initial Shipper of Tariffs hereunder.
(c) In addition to the remedies provided herein, Carrier may
enforce any remedies available to it under Colombian law with respect to any
breach by Initial Shipper of its obligations hereunder, provided that this
Section 4.6(c) shall not entitle Carrier to suspend receipt of Cusiana
Petroleum from Initial Shipper or the transportation thereof through the
Oleoducto Central.
Section 4.7. Taxes. Each Party shall bear all taxes imposed on or
assessed against such Party with respect to the transportation of Petroleum
hereunder.
Section 4.8. Modification of Tariff Regulations. The Parties agree
that if (i) the tariff applicable to Third Party Shippers in any Segment is
less than the sum of the Initial Shipper Tariff plus the Third Party Premium
allocated to such Segment divided by the Aggregate Scheduled Capacity for such
Segment and under applicable Colombian law tariffs equal to or higher than
such sum cannot be levied by Carrier, or (ii) as a result of any change in
Colombian laws generally, Carrier has insufficient earnings to provide the
returns to Shareholders provided for in Section 5.4(b) of the Oleoducto
Central Agreement, Carrier and such Initial Shipper, together with the other
Initial Shippers, shall take all reasonable commercial measures available
under Colombian law to effect changes to the Tariff Regulations or make any
other economic changes necessary (including the imposition of other charges or
fees for the use of the Oleoducto Central) to obtain a premium to the Initial
Shipper Tariff in the tariff applicable to Third Party Shippers at least equal
to the Third Party Premium and to achieve the returns to Shareholders provided
for in Section 5.4(b) of the Oleoducto Central Agreement without in any
respect prejudicing the economic interest of the Initial Shippers and
Shareholders as contemplated in the Tariff Regulations and the Oleoducto
Central Agreement, respectively.
Section 4.9. Right of Set Off. The Parties agree that Carrier
shall have the right, in its sole discretion, to set off against sums due by
it under any loan, note or credit held by Initial Shipper or, with respect to
Transportation Notes issued pursuant hereto, its designee the unpaid amount of
any Equity Contributions with respect to which the Shareholder that is a
Person in Initial Shipper's Initial Shipper Group is in default. Initial
Shipper shall procure that holders of such Transportation Notes agree to such
right of set off.
ARTICLE FIVE
TARIFF ADVANCES AND TRANSPORTATION NOTES
Section 5.1. Commitment to Provide Tariff Advances or to Purchase
Transportation Notes. If in the six month period ending on any Semi-annual
Payment Date Non-Cash Items paid or required to have been paid into the
Related Account during such period are less than the amount of Carrier's
scheduled repayment of principal of Related Senior Debt due on such
Semi-annual Payment Date, Initial Shipper shall, on the datespecified in the
written notice from Carrier referred to below, at Initial Shipper's election
(a) provide Carrier with such amount in tariff advances (Tariff Advances)
payable in cash and/or (b) purchase, in accordance with applicable law, or
procure a financial institution duly authorized to provide foreign
indebtedness according to Colombian law (a Financial Institution) to purchase,
Transportation Notes of Carrier for cash, in each case in an amount equal to
such shortfall, provided that Initial Shipper shall not be obligated to
provide Tariff Advances or purchase, in accordance with applicable law, or
procure the purchase of Transportation Notes to the extent that such shortfall
arises from (i) the failure by any other Shipper to pay when due any Tariffs
under its Transportation Agreement or Third Party Transportation Agreement, as
the case may be, or (ii) the failure by any other Initial Shipper to pay when
due any amounts under its Advance Tariff Agreement of even date herewith with
Carrier. By notice to Initial Shipper not less than 10 Business Days prior to
the scheduled repayment date of such principal of Related Senior Debt, Carrier
shall request such Tariff Advances to be made (or, at Initial Shipper's
election, Transportation Notes to be purchased). Such notice shall specify the
date of payment, or purchase, as the case may be, of such Tariff Advance or
Transportation Note, which in each case shall be a date not more than two
Business Days prior to such Semi-annual Payment Date. No Tariff Advance will
be credited nor Transportation Note issued prior to payment in full of such
Tariff Advance or payment of the purchase price of such Transportation Note,
as the case may be.
Section 5.2. Terms of Tariff Advances and Transportation Notes.
(a) Unless otherwise unanimously agreed by Carrier and all Initial Shippers,
each Tariff Advance and Transportation Note shall bear interest accruing from
the date of payment in full of such Tariff Advance or of the purchase price of
such Transportation Note, payable semi-annually in arrears, at the Benchmark
Interest Rate until all Senior Debt under the Related Senior Debt Tranche has
been repaid in full and shall bear interest, payable monthly in arrears,
thereafter at the Benchmark Interest Rate. All Tariff Advances shall be
repayable and all Transportation Notes shall be repurchased in cash by Carrier
in accordance with Section 5.2(b) below no later than the earlier of (i)
January 1, 2013 and (ii) the date on which Carrier's assets have been fully
depreciated based on their capital cost at Completion and shall otherwise have
any minimum maturity required by applicable law in order to avoid any minimum
deposit requirements. Tariff Advances shall be evidenced by entries in the
books and records of Carrier and outstanding amounts of Tariff Advances shall
be reflected in each monthly statement delivered to Initial Shipper by Carrier
hereunder. Transportation Notes shall be evidenced by notes substantially in
the form of Schedule E attached hereto.
(b) Subject to Section 5.4(a) of the Oleoducto Central Agreement,
the requirements of the other Financing Agreements related to the Related
Senior Debt and any agreement entered into for the benefit of the holders of
Related Senior Debt and Section 5.2(d) below, to the extent Carrier has
Cash-on-Hand, Carrier shall repay an amount of Tariff Advances in cash or
repurchase Transportation Notes, in each case in whole or in part, for cash
from Initial Shipper or a Financial Institution on any MonthlyPayment Date
when Non-Cash Items paid into the Related Account in the immediately preceding
month exceed any principal amount of Related Senior Debt due (whether at
maturity or by redemption) on any such Monthly Payment Date at a price equal
to 100% of the outstanding amount of Tariff Advances or principal amount of
Transportation Notes, as the case may be.
(c) Initial Shipper shall not offer, sell, pledge or otherwise
transfer any Tariff Advances or Transportation Notes held by it or a Financial
Institution to a third party except in connection with the assignment of all
of Initial Shipper's rights and obligations hereunder in accordance with
Section 7.4 of this Agreement, provided that at the direction of Initial
Shipper, a Financial Institution may transfer Transportation Notes to other
Financial Institutions. Initial Shipper shall cause any Financial Institution
that purchases Transportation Notes to agree in writing for the benefit of
Carrier in form and substance reasonably satisfactory to Carrier to comply
with this Section 5.2(c).
(d) Tariff Advances shall be subordinated in right of payment to
Senior Debt under the Related Senior Debt Tranche to the same extent as
Transportation Notes as set forth in Paragraph 8 thereof, shall be of limited
recourse to the same extent as Transportation Notes as set forth in Paragraph
11 thereof and shall have all of the other terms and conditions of
Transportation Notes, provided that they shall be evidenced by entries in the
books and records of Carrier and not by any note. Such Tariff Advances shall
rank pari passu with Transportation Notes issued pursuant to this Agreement.
ARTICLE SIX
TERM
Section 6.1. Term. This Agreement shall become effective when
executed and delivered by the Parties and shall continue in full force and
effect through December 31, 2093 unless earlier terminated in part in
accordance with Section 6.2 below, provided, however, that any rights,
including the right to receive (a) Overutilizer Premiums pursuant to Section
3.2(b), (b) Established Third Party Premiums pursuant to Section 3.3(b), (c)
Surcharges pursuant to Section 3.8 of the Tariff Regulations or (d) excess
credits pursuant to Section 3.9 of the Tariff Regulations, and obligations, in
each case existing prior to termination, shall survive any termination of this
Agreement.
Section 6.2. Partial Termination. (a) Initial Shipper may
terminate this Agreement in part as specified in Section 6.2(b) below by
notice to Carrier in writing at any time after the date on which Initial
Shipper's rights and benefits under the Association Contracts terminate
effective as of the date specified in such notice, which effective date shall
not be earlier than 90 days after the date such notice is delivered to
Carrier.
(b) In the event of a termination in part pursuant to Section
6.2(a) above, Articles Three and Nine shall survive until termination of this
Agreement pursuant to Section 6.1 above. In lieu of the provisions of this
Agreement other than Articles Three and Nine and from the date of termination
pursuant to Section 6.2(a) above, there shall be substituted either (i) such
other provisions as may be agreed to by the Parties, or (ii) failing such
agreement, provisions which provide all of the following:
(A) a tariff established in accordance with the Tariff Regulations that
would, among other matters, yield an amount equal to the sum of such
components of the Annual Revenue Requirement as are then applicable if charged
as a uniform per Standard Barrel rate for all volumes of Petroleum transported
through the Oleoducto Central for all Shippers and Surcharges established and
collected in accordance with this Agreement;
(B) in the event of Nominations in excess of Available Capacity, a pro
rata reduction in Initial Shipper's service in parity with reductions for the
most favored class of firm transportation service provided by Carrier;
(C) payment terms and other commercial terms at least as favorable as
those applicable to any other Petroleum transportation services provided by
Carrier;
(D) a prohibition on assignments by Initial Shipper, in whole or in
part, of its rights without Carrier's written consent, which shall not be
unreasonably withheld;
(E) a right of first refusal and participation rights, consistent with
the provisions of Section 7.1 of this Agreement, in favor of all other Initial
Shippers if an Initial Shipper proposes to release any of its Proportionate
Share of Available Capacity; and
(F) no charge or penalty to Initial Shipper for a failure to use its
Allocated Capacity for any period or periods.
(c) Unless otherwise specified in any assignment agreement with an
assign permitted under Section 7.4 of this Agreement, any rights hereunder
that survive any partial termination of this Agreement pursuant to this
Section 6.2 shall be vested in Initial Shipper and its successors but not any
assign thereof.
Section 6.3. Recommissioning. In the event of the implementation
of or a proposal to implement a Recommissioning Proposal not adopted by a
unanimous vote of the Board of Directors, Carrier and Initial Shipper shall
negotiate in good faith the necessity of any amendment to the provisions
hereof, including, without limitation, theprovisions relating to Initial
Shipper's entitlement to capacity of the Oleoducto Central (including any
additional capacity resulting from such implementation).
ARTICLE SEVEN
CAPACITY RELEASES; ASSIGNMENT
Section 7.1. Capacity Releases. (a) If an Initial Shipper (a
Release Shipper) desires to release any of its Proportionate Share of
Available Capacity (Release Capacity), either before or after receiving any
offer from a third party, it shall so notify Carrier. If such Initial Shipper
or Carrier receives a bona fide, firm offer from a third party (which may be
another Initial Shipper) for an assignment of a uniform, undivided part of the
rights and obligations of any Initial Shipper under its Transportation
Agreement, it shall so notify Carrier or each other Initial Shipper,
respectively. Such notice shall include (i) any consideration proposed to be
paid, (ii) the portion of Proportionate Share of Available Capacity to be
assigned (the Release Percentage), (iii) the proposed tariff in respect of the
Release Capacity (which, in the case of a third party, shall be equal to or
greater than the Third Party Tariff and, in the case of an Initial Shipper, at
least equal to the Overutilizer Tariff), (iv) the effective period of such
assignment (the Release Term) and (v) any other material terms.
(b) Carrier shall immediately notify each other Initial Shipper of
the contents of any notice by any Release Shipper that it desires to Release
Capacity or of any notice of a third party offer received under Section 7.1(a)
above (each such notice by Carrier herein called a Capacity Release Notice).
Within 30 days of receipt of a Capacity Release Notice, an Initial Shipper may
by notice to Carrier elect (i) to receive, subject to (c) below, from Release
Shipper an assignment of all of the Release Capacity and the corresponding
obligations for the Release Term (but excluding any consideration to be paid
to Release Shipper contained in any firm offer from a third party (which may
be another Initial Shipper)), or, if less than all of such Release Capacity,
an amount that, when added to the Release Capacity requested to be received by
any other Initial Shipper, is equal to or greater than such Release Capacity,
or (ii) to assign, on the same terms and conditions set forth in the Release
Notice, subject to (c) below, all of the Release Capacity to the third party
(which may be another Initial Shipper). If one or more Initial Shippers makes
such a timely election to receive or to assign, as the case may be, Release
Capacity, then each electing Initial Shipper (including Release Shipper) shall
have the right to receive or assign, as the case may be, a percentage (a
Proportionate Percentage) of the Release Capacity and the corresponding
obligations in the proportion of its Proportionate Share to the aggregate of
the Proportionate Shares of all Initial Shippers electing to so receive such
an assignment or to so assign, as the case may be, provided that, unless
otherwise agreed by each of the electing Initial Shippers, if any Initial
Shipper making such an election assigns less than its Proportionate Percentage
of Release Capacity, then the Release Shipper shall be entitled to assign any
remaining portion of the Release Capacity in accordance with all of the terms
of this Section 7.1 but excluding the last sentence of this Section 7.1(b). If
no timely election is so made, then the Release Shipper may assign the Release
Capacity to the third party on the terms and conditions specified in the
applicable Capacity Release Notice. Any change from the terms and conditions
specified in the Capacity Release Notice shall constitute a new offer subject
again to the provisions of this Section 7.1.
(c) If a Release Shipper or Shippers assign the Release Capacity to
an Initial Shipper or Shippers and the tariff specified in the Capacity
Release Notice is equal to or less than the Overutilizer Tariff, (i) the
applicable tariff shall be the Overutilizer Tariff and (ii) the difference
between such tariff and the Initial Shipper Tariff, shall be deemed to be an
Overutilizer Premium and shall be allocated in whole to the Release Shipper or
Shippers in proportion to the respective Release Percentages released. If the
Release Shipper or Shippers assigns the Release Capacity to an Initial Shipper
or Shippers and the tariff specified in the Capacity Release Notice is greater
than the Overutilizer Tariff, (A) the applicable tariff shall be that
specified in the Capacity Release Notice, (B) the amount by which such tariff
exceeds the Overutilizer Tariff shall be deemed to be an Established Third
Party Premium and allocated among Initial Shippers in accordance with the
terms hereof, and (C) the portion of the applicable tariff equal to the amount
by which the Overutilizer Tariff exceeds the Initial Shipper Tariff shall be
allocated in whole to the Release Shipper or Shippers in proportion to the
respective Release Percentages released. If the Release Shipper or Shippers
assign the Release Capacity to a third party, (x) the tariff shall be the
higher of the tariff specified in the Capacity Release Notice and the Third
Party Tariff as then approved by the MME, (y) the amount by which such tariff
exceeds the Overutilizer Tariff shall be deemed to be an Established Third
Party Premium and allocated among Initial Shippers in accordance with the
terms hereof, and (z) the portion of the applicable tariff equal to the amount
by which the Overutilizer Tariff exceeds the Initial Shipper Tariff shall be
deemed to be an Overutilizer Premium and shall be allocated in whole to the
Release Shipper or Shippers in proportion to the respective Release
Percentages released.
(d) If an Initial Shipper requests that each other Initial Shipper
release Release Capacity to such Initial Shipper under Section 7.1(a) on a
ship or pay basis for a term of at least two years at a Tariff at least equal
to the Overutilizer Tariff and the other Initial Shippers refuse to release to
such requesting Initial Shipper an amount of Release Capacity that in the
aggregate is at least equal to the Release Capacity requested, the requesting
Initial Shipper shall be entitled to make a Sole Risk Proposal reasonably
related, in Carrier's sole judgment, to the Release Capacity sought to be
released by such Initial Shipper less the aggregate amount of Release Capacity
offered to be so released by the other Initial Shippers. Any Sole Risk
Capacity resulting from such Sole Risk Proposal may be used by such requesting
Initial Shipper if it is a Full Nominator with respect to any Segment to which
such Sole Risk Capacity relates.
Section 7.2. Conditions to Capacity Release. (a) As a condition to
the assignments allowed under Section 7.1 above, either (i) the Release
Shipper and its assignee shall execute and deliver, in form and substance
reasonably acceptable to Carrier and its permitted assignee, an instrument of
assignment, whereby the assignee unconditionally agrees to be bound by all the
terms and conditions of the applicable Transportation Agreement, subject to
Section 7.1(c) above, in each case to the extent of the Release Percentage of
Allocated Capacity assigned (with copies thereof certified to be true by the
Release Shipper or Shippers and its or their assignees to be delivered to
Carrier), or (ii) each Release Shipper shall execute and deliver an amendment
to its Transportation Agreement reducing or increasing its Proportionate Share
by the assigned percentage, and the assignee shall execute and deliver a
Transportation Agreement, specifying the assigned percentage as the assignee's
Proportionate Share, with terms and conditions substantially identical to the
original Transportation Agreement, subject to Section 7.1(c) above, giving
effect to the terms of Section 7.1 above, in form and substance reasonably
satisfactory to Carrier. Any such assignment shall be effective upon such
execution and delivery of such documents.
(b) An Initial Shipper shall not be eligible to bid for and may not
acquire Release Capacity unless it has paid all Tariffs, Charges, Surcharges,
Tariff Advances and Transportation Notes due hereunder at the time of such
bidding and of such acquisition.
(c) In the event of a release of Release Capacity pursuant to
Section 7.1 above, the Release Shipper shall remain liable for any obligations
or liabilities of the party or parties acquiring such Release Capacity unless
such acquiring party is an Initial Shipper, in which case such Initial Shipper
shall assume such obligations and liabilities for the term of such assignment
and the Release Shipper shall be released from such obligations.
Section 7.3. Assignment by Carrier. (a) Carrier may assign its
rights and obligations hereunder to any Person concurrently with the
acquisition by such party of all or substantially all of the Oleoducto Central
facilities, provided that such assignee has assumed all Carrier's obligations
and liabilities under any Related Senior Debt.
(b) Except as provided in Section 7.3(a) above, Carrier may not
otherwise assign this Agreement or any of its rights or proceeds hereunder, or
create enforceable third party rights herein, to or in any Person not a party
hereto (or an Affiliate of a party hereto) except that Carrier may assign to
any Person, in each case with the prior written consent of Initial Shipper,
all or any part of Carrier's rights hereunder to any trustee for the benefit
of providers of non-subordinated liabilities of Carrier secured by an interest
in the Related Account. If Initial Shipper consents, Carrier agrees to execute
and deliver all consents and documents reasonably necessary to effect such
assignment and to create a valid and perfected security interest herein. The
claims and rights of each such permitted assignee shall rank pari passu with
the claims and rights of all permitted assignees irrespective of the time or
times at which prior, concurrent or subsequent assignmentsunder this paragraph
(b) are made or perfected. Subject to compliance with the terms of any such
assignment, any such permitted assignee shall have the benefit of the
representations and warranties of Initial Shipper and may enforce the
obligations of Initial Shipper as if such permitted assignee were a party
hereto.
Section 7.4. Assignment by Initial Shipper. (a) Subject to
paragraph (d) below, Initial Shipper may assign its entitlement to Available
Capacity hereunder and its other obligations and rights hereunder (Assignable
Rights) only in the following circumstances:
(i) all or any part of the Assignable Rights to any Person in
connection with the simultaneous transfer (A) to such Person of an undivided
interest held by Initial Shipper or its Affiliates in the Association
Contracts equal (after appropriate adjustments for Royalty Oil) to the
Assigned Percentage times all such undivided interests in the Association
Contracts, and (B) to such Person or an Affiliate thereof of that number of
Shares of Carrier held by any Shareholder that is a Person in Initial
Shipper's Initial Shipper Group which is equal to the Assigned Percentage of
all outstanding Shares of Carrier (but not more than the Shares so held)
pursuant to and in accordance with the conditions set forth in Article Ten of
the Oleoducto Central Agreement, provided this clause (B) shall not apply if
no member of Initial Shipper's Initial Shipper Group holds any Shares;
Assigned Percentage means the entitlement to Available Capacity being assigned
under clause (i) or (ii), as the case may be, of this Section 7.4(a) divided
by the total Available Capacity under all Transportation Agreements expressed
as a percentage;
(ii) all or any part of the Assignable Rights to any Person in
connection with a transfer to such Person or its Affiliate of that number of
Shares held by the Shareholder that is equal to the Assigned Percentage times
all the Shares of Carrier outstanding, such transfer being made pursuant to
and in accordance with the conditions set forth in Article Ten of the
Oleoducto Central Agreement; provided that the transfer of such Assignable
Rights shall not be permitted under this clause (ii) to the extent the number
of Shares so held is less than that required to be transferred by this clause;
(iii) all or any part of the Assignable Rights hereunder to any
Affiliate of Initial Shipper, provided that Initial Shipper remains liable
hereunder; or
(iv) all of the Assignable Rights hereunder to any Person in
connection with the assignment by Initial Shipper to such Person of all or
substantially all of its assets (including all of its undivided interest in
the Association Contracts) by acquisition, amalgamation, merger or other
business combination.
(b) For purposes of determining the Tariffs applicable to Initial
Shipper and any Person that is an assignee permitted by paragraph (a) above,
the following rules shall apply:
(i) if such Person is an assignee pursuant to paragraph (a)(i),
(iii) or (iv) above, such Person shall pay the Initial Shipper Tariff on its
Proportionate Volumes and, subject to paragraph (d)(iii) below, the
Overutilizer Tariff on its Overuse Volumes;
(ii) if such Person is an assignee pursuant to paragraph (a)(ii)
above, (A) such Person shall pay the Initial Shipper Tariff on all shipments
of its Proportionate Volumes of the sum of (1) Petroleum produced by such
Person or any of its Affiliates by virtue of its or their interest under a
contract, concession or other grant to produce such Petroleum and (2) Cusiana
Petroleum produced by such Initial Shipper or any of its Affiliates, in each
case by virtue of its or their respective interests under a contract,
concession or other grant to produce such Cusiana Petroleum, and (B) subject
to paragraph (d)(iii) below, such Person shall pay the Overutilizer Tariff on
all shipments of its Overuse Volumes of Petroleum produced by such Person or
any of its Affiliates by virtue of its or their interest under a contract,
concession or other grant to produce such Petroleum; and
(iii) if, after giving effect to the provisions of clauses (i) and (ii)
above and of paragraph (d)(iii) below, neither the Initial Shipper Tariff nor
the Overutilizer Tariff is applicable to any volume of Petroleum shipped by
such Initial Shipper or any Person that is an assignee pursuant to paragraph
(a) above, the Third Party Tariff shall apply to such volume.
(c) In the event of an assignment by Initial Shipper pursuant to
paragraph (a)(ii) above, such Initial Shipper agrees, and shall procure that
the assignee pursuant to such paragraph shall agree for the benefit of
Carrier, that all Cusiana Petroleum shipped by such Initial Shipper or its
Affiliates or by such assignee or its Affiliates shall be nominated for
shipment by such Initial Shipper up to its Proportionate Share of Available
Capacity with the balance nominated for shipment by such assignee up to its
Proportionate Share of Available Capacity. It is expressly understood that
Carrier shall ship Cusiana Petroleum produced by such Initial Shipper on the
terms and conditions contained herein.
(d) No assignment of any Assignable Rights to any Person may be
made by Initial Shipper pursuant to paragraph (a) above unless each of the
following conditions is met:
(i) so long as the Advance Tariff Agreement between Carrier and
such Initial Shipper is in effect, such Person is the assignee pursuant to the
terms of such Advance Tariff Agreement of the Assigned Percentage of the
rights andobligations under all Advance Tariff Agreements; provided that no
transfer of Assignable Rights shall be permitted under this clause to the
extent the rights and obligations under the Advance Tariff Agreement held by
the Initial Shipper are less than those required to be assigned by this
clause;
(ii) to the extent such Initial Shipper or any of its Affiliates,
successors and assigns under the Association Contracts hold any undivided
interest in the Association Contracts, such Initial Shipper and its
Affiliates, successors and assigns under the Association Contracts shall
remain liable under Article Two and Section 4.3 of the Agreement and Article
Four of the Tariff Regulations with respect to any Cusiana Petroleum shipped
by it or them or on its or their behalf;
(iii) the right to ship Petroleum using Overuse Volumes and to pay
Overutilizer Tariffs in respect thereof may only be assigned to such Person if
such Person, after giving effect to the assignment, holds the largest
undivided interest in the Association Contracts compared to any other assignee
of part or all of such interest from such Initial Shipper, provided that in no
event shall more than one party among such Initial Shipper and each of its
assigns have such right to ship Overuse Volumes and pay the Overutilizer
Tariff in respect thereof, provided further, that if such Person is not
assigned the right to pay Overutilizer Tariffs on its Overuse Volumes, it
shall pay the Third Party Tariff on such Overuse Volumes;
(iv) such Person executes and delivers to Carrier a written
undertaking reasonably satisfactory to Carrier and its permitted assignee,
whereby such Person agrees to be bound by all of the terms and conditions of
this Agreement and, with respect to Article Four of the Tariff Regulations,
shall be deemed for purposes thereof to be such Initial Shipper;
(v) such Initial Shipper executes and delivers to Carrier a written
undertaking reasonably satisfactory to Carrier whereby such Initial Shipper
agrees to be bound by, and to cause its Affiliates, successors and assigns
under the Association Contracts holding undivided interests in the Association
Contracts to be bound by, their remaining obligations hereunder as specified
in clause (ii) above; and
(vi) there is no default under any obligation of such Initial
Shipper in this Agreement or of a Person in its Initial Shipper Group in its
Advance Tariff Agreement.
(e) Following any assignment permitted by paragraph (a) above, (i)
except as otherwise provided in paragraph (d) above, Initial Shipper shall be
released from that portion of its obligations assigned hereunder except for
obligations incurred prior to the effective date of such assignment and (ii)
except as otherwise provided in paragraphs (b) and (c) above, Initial Shipper
and its assignees and, to the extent Initial Shipper retains anyrights and
obligations hereunder, Initial Shipper and its assignees collectively, shall
be considered to be the Initial Shipper hereunder.
Section 7.5. Production from Cusiana Area in Excess of
Proportionate Share of Available Capacity. If the Initial Shippers agree to
any rules applicable to them with respect to (a) nominations, production and
transportation of Cusiana Petroleum by any underlifting or overlifting party
under the JOA or the Association Contracts, delivery of such Cusiana Petroleum
at the Cusiana Receipt Point and delivery and receipt of Petroleum at Vasconia
and at the Port of Covenas and (b) the payment of Tariffs by overlifting
Initial Shippers and underlifting Initial Shippers with respect thereto,
Carrier shall comply with such rules upon being provided with a copy of them
signed by each Initial Shipper and such rules shall automatically be deemed to
be a part of this Agreement as of their date without any action whatsoever
required to be taken by Carrier in connection therewith. Such rules may not
provide for the payment of any Tariff that is less than the Initial Shipper
Tariff, change any remedies available to Carrier for non-payment of any
amounts due to it hereunder or amend any provision of Articles Two or Four of
this Agreement.
Section 7.6. No Assignment. Except as otherwise expressly provided
herein, no Party may assign all or any portion of its rights or obligations
hereunder.
ARTICLE EIGHT
EXCUSABLE EVENT
Section 8.1. Excusable Event Defined. For the purposes of this
Agreement, Excusable Event means an event or circumstance which is reasonably
beyond the control of the Party affected by such event or circumstance
(Claiming Party), which by the exercise of all Reasonable Efforts applied with
all reasonable dispatch (or such greater standard of effort expressly
identified below), the Claiming Party is unable to prevent or overcome,
including:
(a) events constituting "force majeure" under applicable law;
(b) labor disputes and industrial action of any kind on the part of
organized labor, a lockout, act of the public enemy, war (declared or
undeclared), civil war, sabotage, blockade, revolution, riot, insurrection,
civil disturbance, terrorism, epidemic, cyclone, tidal wave, landslide,
lightning, earthquake, flood, storm, fire, adverse weather conditions,
expropriation, nationalization, act of eminent domain, laws, rules,
regulations or orders of governmental authority, explosion, breakage or
accident to machinery or equipment or pipe or transmission line or other
facility, embargo, inability to obtain or delay in obtaining equipment,
materials, transport; or
(c) any event whether similar to the foregoing or not which is not
within the reasonable control of a Party;
in each case which has a material adverse effect on the ability of such Party
to perform its obligations under this Agreement.
Section 8.2. Notice. Subject to Section 8.3, a Claiming Party's
obligations under this Agreement shall be suspended insofar, and only insofar,
as such obligations are affected by an Excusable Event; provided that, unless
otherwise agreed with Carrier, Initial Shipper shall be obligated to pay
Minimum Tariffs for a period of 180 days following delivery of a notice by
Carrier or Initial Shipper of an Excusable Event the effect of which is to
prevent transportation of Petroleum through all Segments. The Claiming Party
shall provide prompt written notice to the other Party containing full
particulars of the Excusable Event, including the day and if appropriate the
time it commenced, together with the obligations affected thereby.
Section 8.3. Suspension of Obligations. Any delay or failure by
the Claiming Party in the performance of any of its obligations hereunder
shall not constitute a default hereunder or give rise to any claim for damages
against the Claiming Party during the period the Excusable Event is in effect
and to the extent such delay or failure is caused by the Excusable Event,
provided that the Claiming Party:
(a) uses all Reasonable Efforts and proceeds with all reasonable
dispatch to mitigate the effect of such delay or failure;
(b) resumes performance of such obligations as soon as reasonably
possible after the conclusion of the Excusable Event;
(c) gives prompt written notice to the other Party of all significant
facts and events concerning the Claiming Party's efforts to perform as
specified in paragraphs (a) and (b) above, and of the conclusion of the
Excusable Event, including the day and if appropriate the time of conclusion;
and
(d) the Claiming Party uses all Reasonable Efforts and proceeds with all
reasonable dispatch to remedy the Excusable Event.
Section 8.4. Strikes. Notwithstanding any provision in this
Agreement, Carrier and Initial Shipper agree that the settlement of strikes,
lockouts, and other industrial disturbances of the Claiming Party's employees
shall be entirely within the discretion of the Claiming Party.
Section 8.5. Lack of Finances. Carrier and Initial Shipper agree
that a lack of funds or other financial circumstance shall not in any
circumstance be considered an Excusable Event for the purposes of this
Agreement.
Section 8.6. Obligation of Carrier. If an Excusable Event has
occurred with respect to an Initial Shipper due to Upstream Expropriatory
Action, then Carrier shall use its Reasonable Efforts to charge the party that
has acquired the expropriated rights of Initial Shipper pursuant to such
Upstream Expropriatory Action a tariff equal to the Tariffs payable in cash or
in kind hereunder and, to the extent Carrier receives tariffs, to apply the
proceeds thereof in accordance with this Agreement and the terms of any
assignment agreement with respect hereto in existence at the time of any such
Upstream Expropriatory Action.
ARTICLE NINE
GENERAL
Section 9.1. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
Initial Shipper: Carrier:
TRITON COLOMBIA, INC. OLEODUCTO CENTRAL S.A.
Carrera 9A No. 99-02 World Trade Center Bogota
Oficina 407 Torre C, Piso 10
Santafe de Bogota, D.C. - Colombia Calle 100 N. 8A-55
Telefax: 571-618-2553 Santafe de Bogota, D.C.- Colombia
Attention: Ivan Fajardo Telefax: 571 218-3911
Attention: President and Chief Operating Officer
Copy to:
TRITON ENERGY CORPORATION
6688 N. Central Expressway
Suite 1400
Dallas, Texas 75206
Telefax: 214-691-0296
Attention: Thomas G. Finck,
Al E. Turner
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any Party to the other. Any notice, demand,
request, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail, and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hoursof the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The Party giving any notice, demand, request, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 9.2. Entire Agreement. This Agreement, together with the
Advance Tariff Agreement, constitutes the entire agreement of the Parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
Parties (including, for the avoidance of doubt, the Tariff Principles attached
as Schedule K to the Oleoducto Central Agreement dated as of December 14,
1994), and there are no warranties, representations or other agreements
between the Parties in connection with the subject matter hereof except as
specifically set forth herein and therein. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provisions (whether or not similar) nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
Section 9.3. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE REPUBLIC OF COLOMBIA WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 9.4. Commercial Obligations. Each Party acknowledges and
agrees that its rights and obligations hereunder are of a commercial and not
governmental nature.
Section 9.5. Nature of Obligations. Except as otherwise
specifically provided in Article Seven, the obligations of Initial Shipper
created by this Agreement, and in particular the obligation to pay Tariffs and
Charges, to provide Tariff Advances and to purchase Transportation Notes, are
several, not joint and several with any other party. Nothing herein shall be
deemed or construed to make Initial Shipper a surety or guarantor of Carrier
or of any other Initial Shipper or liable to meet any obligations of Carrier
or any other Initial Shipper.
Section 9.6. Waiver of Immunity. (a) Each Party irrevocably
consents to and waives any objection which it may now or hereafter have to the
laying of venue of any proceeding relating to enforcement of the arbitration
provisions of the General Terms and Conditions, or any award thereunder
brought in the courts specified, and further irrevocably waives, to the
fullest extent it may effectively do so, the defense of an inconvenient forum
to the maintenance of any such proceeding in such courts.
(b) To the extent that a Party or any of its revenues, assets, or
properties shall be entitled, with respect to any proceeding relating to
enforcement of the arbitration provisions of the General Terms and Conditions,
or any award thereunder at any timebrought against such Party or any of its
revenues, assets, or properties, to any sovereign or other immunity from suit,
from jurisdiction, from attachment prior to judgment, from attachment in aid
of execution of judgment, from execution of a judgment or from any other legal
or judicial process or remedy, and to the extent that in any jurisdiction
there shall be attributed such an immunity, such Party irrevocably agrees not
to claim and irrevocably waives such immunity to the fullest extent permitted
by the laws of such jurisdiction (including, without limitation, the Foreign
Sovereign Immunities Act 1976 of the United States).
Section 9.7. Amendment of General Terms and Conditions. The General
Terms and Conditions may be amended or modified by Carrier (except as to
definitions and other matters specified herein), provided that such amendment
or modification (i) does not materially diminish the rights or materially
increase the obligations of any Initial Shipper and (ii) applies equally to
all Initial Shippers.
Section 9.8. JOA and Association Contracts. Nothing contained in
this Agreement shall constitute a derogation or waiver of any rights or
obligations of the parties to the JOA or the Association Contracts.
Section 9.9. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect. Any provision of this Agreement that is
unenforceable in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
Section 9.10. Further Assurances. The Parties shall execute,
acknowledge and deliver such instruments and take such other actions as may be
necessary to fulfil their respective obligations under this Agreement as and
when required.
Section 9.11. Headings. Headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
Section 9.12. Remedies. Each Party acknowledges and agrees that
Carrier's recourse for non-payment of Tariffs or other charges hereunder are
of a commercial nature and have been negotiated at arms-length and in good
faith. To the extent that Carrier shall be entitled to exercise any of the
remedies available to it under this Agreement, Initial Shipper acknowledges
and agrees that the exercise of any or all such remedies constitutes a
reasonable recourse by Carrier in the event of a failure on the part of
Initial Shipper to make timely payments of any amounts required to be paid by
it hereunder.
Section 9.13. Waiver. Initial Shipper irrevocably agrees not to
claim and waives any objection which it may have now or hereafter to the
exercise by Carrier of any or all of the remedies available to it under this
Agreement to the fullest extent permittedby law, including without limitation,
a defense on the grounds of forfeiture, unjust enrichment or other equitable
defense.
Section 9.14. Approvals. Each of the Parties agrees to use its
reasonable commercial efforts to secure all governmental and related approvals
necessary in order to give full effect to this Agreement and the transactions
contemplated herein and in the Schedules hereto.
Section 9.15. Acknowledgement. Nothing in this Agreement is
intended to create or shall be construed as creating a partnership, joint
venture, association or trust among the Parties.
Section 9.16. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
Section 9.17. Language of Agreement. This Agreement may be executed
in both the English language and the Spanish language. In the event of any
dispute between the meaning of the Spanish language and English language
versions, the Spanish language version shall prevail.
IN WITNESS WHEREOF, the Parties have hereunto caused this Agreement
to be executed and delivered by their respective proper officers thereunto
duly authorized as of the date first written above.
OLEODUCTO CENTRAL S.A.
/s/ Gustavo Suarez
TRITON COLOMBIA, INC.
/s/ Peter Rugg
<PAGE>
125_LAN04
SCHEDULE A
To Transportation Agreement
DEFINITIONS
In this Schedule, in the Agreement and the other Schedules thereto
and in any other document that references this Schedule, the following terms
shall have the meaning assigned below (the singular includes the plural and
vice versa). Unless otherwise specified, Section references in this Schedule
are to Sections of the Agreement.
Actual Project Cost means the actual direct completion cost of the
Oleoducto Central determined as of the date and on the basis set forth in the
Oleoducto Central Agreement.
Advance Tariff Agreement means the Advance Tariff Agreement, dated
as of March 31, 1995, between Carrier and Initial Shipper, as the same may be
amended from time to time in accordance with the terms thereof.
Advance Tariff Payment has the meaning assigned to it in the Advance
Tariff Agreement.
Affiliate of a Person means a Person (a) which is a Subsidiary of
that Person, (b) of which that Person is a Subsidiary, or (c) which is a
Subsidiary of a Person of which that Person is a Subsidiary.
Aggregate Scheduled Capacity means, with respect to any Segment, the
aggregate of all Scheduled Capacities for all nominators.
Aggregate Unused Capacity means, with respect to any Segment, the
Available Capacity of such Segment less the Aggregate Scheduled Capacity of
such Segment.
Allocated Capacity means, for each Initial Shipper and each Segment,
the Proportionate Share of Available Capacity to which an Initial Shipper is
entitled from time to time pursuant to the allocation rules of Article Two of
the General Terms and Conditions.
Annual Operating Budget means the operating budget (including the
then required level of maintenance capital expenditures) and operating plan
for a Fiscal Year identified as such and approved by the Board of Directors.
Annual Posting has the meaning assigned to it in Section 2.1 of the
Tariff Regulations.
Annual Revenue Requirement means, for any Fiscal Year of Carrier,
the sum of the following:
(i) Fixed Costs;
(ii) Non-Cash Items;
(iii) Benchmark Interest Expense; and
(iv) the annual return to be accrued, compounded and paid to
Shareholders by Carrier in accordance with Section 5.4(b) of the Oleoducto
Central Agreement and the Subordinated Fee to be accrued, compounded and paid
to CIT Colombiana S.A. designated under the Technical Services and Management
Agreement.
Applicable Rate means LIBOR plus 6%.
Association Contracts means the two contratos de asociacion between
Ecopetrol and Triton Colombia, Inc. dated 11th June, 1982 (relating to
Santiago de las Atalayas-1) and 5th May, 1988 (relating to Tauramena) and the
contrato de asociacion between Ecopetrol and TOTAL Exploratie en Produktie
Maatschappij B.V. dated December 3, 1990 (relating to Rio Chitamena), in each
case as the same have and may be amended from time to time in accordance with
the terms thereof.
Audit Claims has the meaning assigned to it in Section 5.2 of the
General Terms and Conditions.
Available Capacity means an estimate by Carrier of the maximum
daily average volume of Petroleum, in Standard Barrels, which a Segment is
capable of transporting at uniform rates of flow in a given Schedule Month,
without regard to Sole Risk Capacity, based on
(i) mechanical and physical systems availability;
(ii) availability of capacity on the Central Llanos Line prior to
the Commencement Date of the Segment replacing the Central Llanos Line;
(iii) use of capacity or facilities by Downstream Users;
(iv) access to the ODC Pipeline and the Port of Covenas tanker
loading facilities, pursuant to the ODC Agreement;
(v) the availability of storage at Receipt and Delivery Points and
scheduling of Receipts and Deliveries in accordance with the General Terms and
Conditions; and
(vi) any other factors reasonably foreseeable by Carrier affecting
the throughput capacity of a Segment.
Available Cash means, on any date, all cash (including short-term
marketable securities maturing on or before such date or that can be sold on
or before such date without material economic penalty) then held by Carrier
outside the Related Accounts with respect to Initial Shipper and the other
Initial Shippers under their respective Transportation Agreements or any
common account maintained by Carrier funds in which are allocable to Related
Accounts, less (a) funds withdrawn from any of such Related Accounts for the
payment of Operating and Maintenance Costs and pre-Completion Capital
Expenditures, but which have not yet been applied, and (b) any funds held by
Carrier outside such Related Accounts (or such common account) representing
proceeds of Senior Debt and Equity Contributions, Net Proceeds, Insurance
Proceeds and Expropriation Compensation of Carrier, in each case to the extent
dedicated to fund Capital Expenditures or prepay Senior Debt.
Bankruptcy of a Person means (a) entry by any competent
governmental authority of any jurisdiction or a court having jurisdiction in
the premises of (i) a decree or order for relief in respect of such Person in
an involuntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging such
Person a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of such Person under any applicable law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of such Person or of any substantial part of the property of such
Person, or ordering the winding up or liquidation of the affairs of such
Person; or
(b) commencement by a Person of a voluntary case or proceeding
under any applicable bankruptcy, insolvency, reorganization or other similar
law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by such Person to the entry of a decree or order for
relief in respect of such Person in an involuntary case or proceeding under
any applicable bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
such Person, or the filing by such Person of a petition or answer or consent
seeking reorganization or relief under any applicable law; or consent by such
Person to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or of any substantial part of
the property of such Person, or the making by such Person of an assignment for
the benefit of creditors, or the admission by such Person in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by such Person in furtherance of any such action.
Barrel means the volume equal to 42 U.S. gallons or 158.987304
litres.
Base Revenue Requirement means, at any due date, an amount equal to
the aggregate of any of the following amounts which are payable (by reason of
a date by which payment is required or in accordance with Carrier's normal
payment practices) on or before the next succeeding Due Date: (i) Operating
and Maintenance Costs, provided that following thedeclaration of an Excusable
Event by Initial Shipper, Operating and Maintenance Costs shall only be
included in the Base Revenue Requirement for a period of 180 days following
the date of such declaration if, at the end of such 180 day period, the
transportation of Petroleum through each Segment of the Oleoducto Central has
been suspended continuously for 180 days or for a total of 180 days during the
540 days immediately preceding such date unless Initial Shipper and Carrier
otherwise agree and (ii) payments in respect of all other non-subordinated
liabilities of Carrier for the benefit of the providers of which Carrier has
assigned certain rights under Advance Tariff Agreements, Transportation
Agreements and other agreements, including any penalties, premiums, interest,
indemnities or accelerated amounts associated therewith.
Batch means a nearly homogenous source or stream of Petroleum, the
physical properties of which, as differentiated by Characteristics, are
materially different from other sources and streams.
Benchmark Interest Expense has the meaning assigned to it in Section
2.6 of the Tariff Regulations.
Benchmark Interest Rate has the meaning assigned to it in Section
2.6 of the Tariff Regulations.
Board of Directors has the meaning assigned to it in the by-laws of
Carrier.
Business Day means a day in which commercial banks in Santaf de
Bogot and The City of New York, New York are permitted to be open for domestic
and international business.
Canadian Group means TCPL International Investments Inc. and IPL
Enterprises (Colombia) Inc., their respective successors and permitted assigns
as Shareholders and their respective Affiliates that are parties to
Performance Guarantee Agreements and their respective successors and permitted
assigns.
Capacity Release Notice has the meaning assigned to it in Section
7.1(b) of the Agreement.
Capital Budget means the budget for Capital Expenditures not
included in the Annual Operating Budget for a Fiscal Year identified as such
and approved from time to time by the Board of Directors.
Capital Cost means the aggregate of all direct and indirect
expenditures (including capitalized interest) made by Carrier which are
required to be included in property, plant or equipment, good will, rights of
way and other long-term intangible assets or a similar tangible or intangible
property account, including, without limitation, additions to equipment
andleasehold improvements, on the consolidated balance sheet of Carrier
prepared in accordance with generally accepted accounting principles.
Capital Expenditures means, with respect to any Person for any
period, the aggregate of all direct and indirect expenditures (including
capitalized interest) of such Person during such period which are required to
be included in property, plant or equipment, good will, rights of way and
other long-term intangible assets or a similar tangible or intangible property
account, including, without limitation, additions to equipment and leasehold
improvements, on a consolidated balance sheet of such Person prepared in
accordance with generally accepted accounting principles.
Capital Investment Proposal has the meaning assigned to it under the
Oleoducto Central Agreement.
Carrier means Oleoducto Central S.A., a sociedad anonima existing
under the laws of Colombia, and its successors and permitted assigns.
Cash-on-Hand means, with respect to Initial Shipper, on any date,
all cash (including short-term marketable securities maturing on or before
such date or that can be sold on or before such date without material economic
penalty) then held by Carrier in the Related Account, plus (a) funds withdrawn
from the Related Account for the payment of Operating and Maintenance Costs
and pre-Completion Capital Expenditures, but which have not yet been applied,
(b) funds held in any common proceeds account maintained by Carrier which are
allocable to the Related Account, and (c) Initial Shipper's Proportionate
Share of any Available Cash.
Cash-Trap Interest has the meaning assigned to it in the Oleoducto
Central Agreement.
Central Llanos Fields means the Central Llanos oil fields to which
the contracts listed in Schedule H attached hereto relate.
Central Llanos Line means the existing pipeline and related
facilities from El Porvenir to Vasconia.
Central Llanos Petroleum means Petroleum nominated for
transportation of production from the Central Llanos Fields, up to an average
of 56,000 Standard Barrels per day during any one-year period (65,900 peak),
on the El Porvenir-Vasconia Segment, with respect to Ecopetrol, pursuant to
the Transportation Agreement with Ecopetrol, and with respect to third
parties, pursuant to Third Party Transportation Agreements with such third
parties.
Characteristics means the physical characteristics of Petroleum, as
measured in accordance with the procedures of Article Six of the General Terms
and Conditions, specified on Attachment 1 to the General Terms and Conditions.
Charges has the meaning assigned to it in Section 4.3(c) of the
Agreement.
Claiming Party has the meaning assigned to it in Section 8.1 of the
Agreement.
Collateral has the meaning assigned to it in the Common Security
Trust Agreement.
Colombian Taxes means the sum of all taxes, including, without
limitation, all charges, levies, imposts, income taxes, withholding taxes,
remittance taxes, excise taxes or other levies on Distributions by Carrier in
or from Colombia imposed by any taxation or similar regulatory authority in
Colombia on the recipient of any such Distributions except to the extent that
the amount of any such taxes is included in the Benchmark Interest Rate.
Commencement Date means the first date that any Segment is placed in
service for continuous transportation of Petroleum as certified by Carrier.
Common Security Trust Agreement means the common security trust
agreement or common security trust agreements to be entered into by Carrier,
the providers of Senior Debt named therein and a trustee or trustees or
security agent or agents acting on behalf of such providers, substantially in
the form attached to the Oleoducto Central Agreement with such changes thereto
as may be agreed by the parties thereto, setting forth the obligations of
Carrier to such providers, in each case as the same may be amended from time
to time in accordance with the terms thereof.
Completion means the date after all four Segments of the Oleoducto
Central have been commissioned for purposes of transporting shipments of
Petroleum and on which the five millionth barrel of Petroleum is shipped
through the Oleoducto Central from the Cusiana Receipt Point to the Port of
Covenas Delivery Point, all as certified in a resolution adopted by the Board
of Directors.
Confidential Information has the meaning assigned to it in Section
10.1(a) of the General Terms and Conditions.
Controversy has the meaning assigned to it in Section 11.1 of the
General Terms and Conditions.
Corresponding Percentage of a Shareholder with respect to which
Expropriatory Action has occurred means the product, expressed as a
percentage, of the percentage reductionin such Shareholder's equity interest
in, and/or loans to and/or debt securities issued by, Carrier and the
percentage difference represented by the Fair Market Value of such equity
interest, loans and debt securities, and the value received by such
Shareholder in connection with such Expropriatory Action.
Corresponding Portion of the undivided interest in the Association
Contracts or of Shares, as the case may be, means the portion, expressed as a
percentage, equal to the portion of Initial Shipper's Proportionate Share
being transferred divided by the Proportionate Share held by the Initial
Shipper immediately prior to such transfer.
Covenas Delivery Point means (i) before the commencement of
operations for the ODC Loop, the Interconnection Point, and (ii) after the
commencement of operations for the ODC Loop, any Delivery Point made available
by Carrier for loading tankers in the Port of Covenas.
Cusiana Area means the Cusiana and Cupiagua oil fields located
within the jurisdiction of the Department of Casanare, Colombia to which the
Association Contracts relate.
Cusiana Petroleum means Petroleum produced and available from the
Cusiana Area for disposition by an Initial Shipper as measured from time to
time by the operator under the JOA or any party designated by such operator
and agreed by Carrier.
Cusiana Receipt Point means the point at which Petroleum from the
Cusiana Area is delivered into the Oleoducto Central, which point is indicated
in Schedule B hereto.
Debt means (without duplication), with respect to any Person,
whether recourse is to all or a portion or none of the assets of such Person
and whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations Incurred in
connection with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable
or accrued liabilities arising in the ordinary course of business), and (v)
every obligation of the type referred to in clauses (i) through (iv) of
another Person and all dividends declared or to be declared by another Person
the payment of which, in either case, such Person has guaranteed or is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise.
Decommissioning shall occur if Ocensa voluntarily ceases all or
substantially all construction or transportation activities of any Segment of
the Oleoducto Central as evidenced by a resolution of the Board of Directors
or if the Trustee, acting in accordance with the terms andconditions of the
Common Security Trust Agreement, declares that Decommissioning has occurred.
Dedicated Area means the Cusiana Area to the extent the Initial
Shipper owns interests in the Association Contracts relating to the Cusiana
Area plus such additional areas as may be designated by Initial Shipper from
time to time.
Deliveries means the nominated or actual volumes of Petroleum, as
the context requires, withdrawn from the Oleoducto Central at the Delivery
Points.
Delivery Points means the points indicated on Schedule B attached
hereto where Petroleum is redelivered to Initial Shippers by Carrier, plus any
additional points for redelivery made available to Initial Shippers by
Carrier.
$ or dollars means United States dollars.
Disputed Invoice Notice has the meaning assigned to it in Section
4.5(a) of the Agreement.
Distribution means any distribution by Carrier by means of any
dividend payment, whether in cash, shares, other equity interests or
otherwise, any payment or application of any of its assets to purchase, redeem
or otherwise retire Shares or equity interests held by a Shareholder, any
distribution by way of reduction of capital, split-up (escicin) and
liquidation or otherwise in respect of any of the Shares or equity interests
held by such Shareholder or any interest or other payment in respect of, or
any repayment, repurchase or redemption of, Subordinated Notes held by or on
behalf of a Shareholder.
Dividend Trust Agreement means the Dividend Trust Agreement among
Carrier, each of the Shareholders and the trustee named therein, substantially
in the form attached to the Oleoducto Central Agreement with such changes
thereto as the parties may agree, as the same may be amended from time to time
in accordance with the terms thereof.
Downstream Nomination means a nomination containing a Receipt Point
downstream of the first Segment of the Oleoducto Central made by a Full
Nominator that elects to pay the Underutilizer Tariff with respect to the Net
Deliveries associated with such nomination.
Downstream Users means those third parties owning assets, or rights
to use assets, not owned by Carrier and forming part of a Segment by virtue of
access and use agreements between Carrier and such third parties.
Downstream Volume means the volume of Standard Barrels nominated in
a Downstream Nomination.
Due Date has the meaning assigned to it in the Advance Tariff
Agreement.
Equity Amortization has the meaning assigned to it in the Oleoducto
Central Agreement.
Equity Contribution has the meaning assigned to it in the Common
Security Trust Agreement.
Established Third Party Premium has the meaning assigned to it in
Section 3.3(a) of the Tariff Regulations.
Excess Amount has the meaning assigned to it in Section 2.6(a) of
the Tariff Regulations.
Excess Capacity means, for any Schedule Month, the excess, if any,
of Available Capacity (as notified by Carrier in accordance with the
procedures of Section 3.4(a) of the General Terms and Conditions) over the
aggregate of Scheduled Capacity for all Initial Shippers (as assigned by
Carrier in accordance with the procedures of Section 3.4(c) of the General
Terms and Conditions), arising before or during such Schedule Month for any
reason, whether by revisions to prior estimates or nominations, or by
temporary or permanent increases in the Throughput Capacity of any Segment, or
otherwise. For the avoidance of doubt, reductions to Scheduled Capacity
assigned to Long-term Hauls shall create Excess Capacity only with respect to
the Schedule Month in which the notice of reduction is delivered, or the
following Schedule Month if such notice is delivered after the thirteenth day
of a month.
Excusable Event has the meaning assigned to it in Section 8.1 of the
Agreement.
Existing Fields has the meaning assigned to it in Section 3.3 of the
Agreement.
Expropriation Compensation means all value (whether in the form of
money, securities, property or otherwise) paid or payable by Colombia or its
agencies or instrumentalities, in whole or partial settlement of claims,
whether or not resulting from judicial proceedings and whether paid or payable
within or outside Colombia, as compensation for or in respect of Expropriatory
Action.
Expropriatory Action means any action or series of actions taken,
authorized, ratified or acquiesced in by Colombia or a governing authority
which is in de facto control of part of Colombia for the appropriation,
confiscation, expropriation or nationalization (by intervention, condemnation
or other form of taking), whether with or without compensation and whether
under color of law or otherwise (including through confiscatory taxation or
imposition of confiscatory charges) of ownership or control of the Oleoducto
Central, or any substantial portion thereof, held by Carrier.
Fair Market Value of any Shares or any other asset valued pursuant
to any provision of this Agreement means the fair market value of such Shares
or asset as agreed to by the Shareholders or, in the event that the
Shareholders are unable to agree, as determined by a Valuation Expert.
Financial Institution has the meaning assigned to it in Section 5.1
of the Agreement.
Financing Agreements means the Agreement, the Advance Tariff
Agreement, the Subscription Agreement and, if applicable, the Performance
Guarantee Agreement between Carrier and Persons in an Initial Shipper Group
and, in the case of Ecopetrol, the Canadian Group, rights under which have
been assigned to the trustee named in the Common Security Trust Agreement for
purposes of the exercise of such rights and the application of any proceeds
thereof in accordance with the terms of the Common Security Trust Agreement,
in each case as such agreements may be amended from time to time in accordance
with the terms thereof.
Financing Plan means the plan for the sources and amounts of
financing for the acquisition, construction and development of the Oleoducto
Central, including capitalized interest.
Fiscal Year shall mean the fiscal year of Carrier beginning on
January 1 and ending on December 31 or such other fiscal year as may from time
to time be determined by Carrier in accordance with applicable law.
Fixed Charge has the meaning assigned to it in Section 3.1 of the
Tariff Regulations.
Fixed Costs means the amount of all Operating and Maintenance Costs
less the amount of all Variable Operating Costs.
Full Nominator means any Initial Shipper that delivers a notice of
Nominated Capacity equal to or greater than its Proportionate Share of
Available Capacity for a Segment, all in accordance with the procedures and
rules of Sections 3.4 and 3.5 of the General Terms and Conditions.
General Terms and Conditions means Initial Shippers General Terms
and Conditions, as the same may be amended from time to time in accordance
with the terms of the Agreement, attached as Schedule D to the Agreement.
Handling Costs has the meaning assigned to it in Section 4.3(c)(i)
of the Agreement.
Incur means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Debt or other
obligation or the recording, as required pursuant to generally accepted
accounting principles in Colombia or otherwise, of any such Debt or other
obligation on the balance sheet of such Person (and Incurrence, Incurred,
Incurrable and Incurring shall have meanings correlative to the foregoing);
provided, however, that a change in such generally accepted accounting
principles that results in an obligation of such Person that exists at such
time becoming Debt shall not be deemed an Incurrence of such Debt.
Initial Shipper has the meaning assigned to it in the first
paragraph of the Agreement.
Initial Shipper Bridge Loan means a bridge loan to Carrier from an
Initial Shipper or an Affiliate of such Initial Shipper or a financial
institution on its behalf to fund the amount of Senior Debt under the Senior
Debt Tranche Related to its Initial Shipper Group which Carrier, despite its
best efforts, has been unable to obtain in accordance with its then current
financing plan.
Initial Shipper Group means an Initial Shipper and its Affiliates
that are (a) a Shareholder, (b) a party to a Transportation Agreement, (c) a
party to the Advance Tariff Agreement, and, if applicable, (d) a party to a
Performance Guarantee Agreement and in each case each of their respective
successors and permitted assigns.
Initial Shipper Tariff has the meaning assigned to it in Section 3.1
of the Tariff Regulations.
Initial Shippers means Empresa Colombiana de Petroleos - Ecopetrol,
BP Exploration Company (Colombia) Limited, TOTAL Exploratie en Produktie
Maatschappij B.V., Triton Colombia, Inc. and each of their respective
successors and permitted assigns.
Insurance Proceeds means proceeds from insurance for casualties on
property or assets of Carrier.
Interconnection Point means the most upstream point of
interconnection between the Oleoducto Central and the ODC Pipeline.
Internationally Recognized Statistical Rating Agency means Standard
& Poor's Ratings Group, Moody's Investors Service, Duff & Phelps and Fitch's
Investor Services, and each of the respective successors and assigns to
substantially all of their respective businesses whose business is primarily
the rating of debt and other securities of corporate and other issuers.
JOA means the Joint Operating Agreement for the Santiago de las
Atalayas-1, Tauramena and Rio Chitamena Association Contract Areas by and
among BP Exploration Company (Colombia) Limited, TOTAL Exploratie en Produktie
Maatschappij B.V. and Triton Colombia, Inc., dated as of March 29, 1994, as
the same may be amended from time to time in accordance with the terms
thereof.
Liquidity Facilities has the meaning assigned to it in the Common
Security Trust Agreement.
LIBOR means the annual interest rate determined on the basis of the
offered rate for deposits of not less than U.S. $1,000,000 having a specified
index maturity of one month, commencing on the second Business Day in London
immediately following the date on which any interest calculated at the
Applicable Rate is to begin to accrue, which appears on the display designated
as Page 3750 on the Dow Jones Telerate Service (or such other page as may
replace Page 3750 on that service for the purpose of displaying London
interbank offered rates of major banks) as of 11:00 A.M., London time on such
date.
Long-term Haul means the commitment of Initial Shipper, made
pursuant to the nominations procedures and rules of Sections 3.4 and 3.5 of
the General Terms and Conditions, to use a specified portion of its Allocated
Capacity for one or more Segments for two or more consecutive Schedule Months.
Minimum Tariff has the meaning assigned to it in Section 3.4 of the
Tariff Regulations.
MME means the Colombian Ministry of Mines and Energy and any
successor ministry thereto.
Monthly Payment Date means the first Business Day of each month.
Monthly Posting has the meaning assigned to it in Section 2.2 of the
Tariff Regulations.
Net Deliveries in any Schedule Month in any Segment with respect to
an Initial Shipper means NDi, where
NDi = CP - CRi - NCRi + DNi, provided that NDi can never be less than
zero,
where CP represents such Initial Shipper's share of Cusiana Petroleum, CRi
represents Receipts of Cusiana Petroleum from such Initial Shipper into such
Segment, NCRi represents Receipts of non-Cusiana Petroleum from such
InitialShipper into such Segment (whether or not such non-Cusiana Petroleum
was previously transported through any Segment), and DNi represents the
aggregate Downstream Volumes included in Downstream Nominations by such
Shipper with respect to any Segment downstream of the Segment for which Net
Deliveries is being calculated when the Segment for which Net Deliveries is
being calculated is an Upstream Underutilized Segment, in each case in such
Schedule Month and measured in Standard Barrels;
provided, that in making such determination of Net Deliveries with respect to
any Segment, it shall be assumed that any Delivery out of a Segment shall
consist first of Cusiana Petroleum and then, to the extent that all Cusiana
Petroleum has been delivered, non-Cusiana Petroleum.
Net Proceeds from any sale or other asset disposition by any Person
means cash or readily marketable cash equivalents received (including by way
of sale or discounting of a note, instalment receivable or other receivable,
but excluding any other consideration received in the form of assumption by
the acquiree of Debt or other obligations relating to such properties or
assets or received in any other noncash form) therefrom by such Person, net of
(i) all legal, title and recording tax expenses, commissions and other fees
and expenses incurred and all national, regional, foreign and local taxes
required to be accrued as a liability as a consequence of such sale or asset
disposition and (ii) all payments made by such Person on any debt which is
secured by such assets in accordance with the terms of any lien upon or with
respect to such assets or which must by the terms of such lien, or in order to
obtain a necessary consent to such sale or asset disposition or by applicable
law, be repaid out of the proceeds from such sale or asset disposition.
The terms nominate, and other verb tenses thereof, nomination, and
nominator have the meanings assigned to them in Section 3.4(f) of the General
Terms and Conditions.
Nominated Capacity means, for each Initial Shipper, that amount of
its Allocated Capacity that an Initial Shipper notifies Carrier in the
relevant Nomination Month, pursuant to the procedures of Section 3.4(b) of the
General Terms and Conditions, will be used by Initial Shipper in the relevant
Schedule Months, stated separately by Short-term Haul and Long-term Haul.
Nomination Month means, for Short-term Hauls and Long-term Hauls,
the calendar month immediately preceding the Schedule Month in which the
relevant transportation service begins.
Non-Cash Items means the sum of the following:
(i) accounting and tax depreciation of Carrier's fixed assets using
the straight line method and a useful life of fifteen years (for both tax and
accounting purposes);
(ii) amortization of other items required under generally accepted
accounting principles;
(iii) amounts necessary to establish and maintain any legal reserve
required by Colombian law;
(iv) inflation adjustments on non-monetary items; and
(v) foreign currency translation gains (losses).
ODC Agreement means the Operation and Transport Regulations of the
ODC Pipeline, dated 16th December, 1991, as amended from time to time,
pursuant to which Petroleum delivered by Carrier at the interconnection of the
Oleoducto Central and the ODC Pipeline will be further transported, stored and
loaded into tankers (including the use of loading facilities owned by the
Cravo Norte Association).
ODC Loop means the Segment constructed and installed to transport
Petroleum from Vasconia to the Port of Covenas.
ODC Pipeline means the oil pipeline of Oleoducto de Colombia S.A.,
described in the ODC Agreement, with which the Oleoducto Central will
interconnect.
Oleoducto Central means the pipeline transportation, storage and
loading facilities owned and/or operated by Carrier, more specifically
described in Schedule B hereto, including all additions and modifications to
such facilities other than any Sole Risk Facilities.
Oleoducto Central Agreement means the Amended and Restated Oleoducto
Central Agreement, dated as of March 31, 1995, among Carrier, Empresa
Colombiana de Petroleos - Ecopetrol, BP Colombia Pipelines Limited, TOTAL
Pipeline Colombie S.A., Triton Pipeline Colombia, Inc., IPL Enterprises
(Colombia) Inc. and TCPL International Investments Inc., as the same may be
amended and restated from time to time in accordance with the terms thereof.
Operating and Maintenance Costs means all expenses of Carrier that
would ordinarily appear or be reflected as expenses in Carrier's financial
statements in accordance with generally accepted accounting principles,
together with (x) any Colombian Taxes to the extent that Carrier makes
payments in respect thereof pursuant to Project Agreements and such payments
do not appear or are not reflected as such expenses, (y) payments of trustee
fees, expenses and any amounts due in respect of indemnity obligations of
Carrier thereto, and (z) any amounts paid to underwriters, placement agents,
agent banks or other financial intermediaries in respect of Carrier's Senior
Debt, including, without limitation, legal expenses, relating to or arising
out of indemnification or contribution obligations thereto or damages claims
thereby for any breach ofrepresentations or warranties by Carrier or paid in
respect of claims by third parties for damages arising out of the offer, sale
or incurrence by Carrier of such Senior Debt, provided that in the aggregate
all such amounts in this clause (z) do not exceed $3,000,000, in each case
other than any items:
(i) referred to in items (ii), (iii) and (iv) in the definition of
Annual Revenue Requirement;
(ii) in respect of interest, penalties, premiums, indemnities and
principal in respect of non-subordinated and subordinated indebtedness of
Carrier (except for any such amounts incurred in respect of (A) Liquidity
Facilities, (B) post-Completion unsecured credit facilities to the extent they
do not represent Tariff Advances, Transportation Notes or indebtedness that
represents a refinancing of such indebtedness, on the basis of the same
Collateral and (C) amounts referred to in clause (y) above);
(iii) included in a Capital Budget;
(iv) arising out of or in connection with the gross negligence (culpa
grave) or willful misconduct (dolo) of Carrier; and
(v) in respect of Sole Risk Facilities that are recoverable by the
Carrier from tariffs charged by it on each barrel using such Sole Risk
Facilities.
Operating Segment means a Segment as to which a Commencement Date
has occurred and which has not been decommissioned or removed for the purpose
of the calculation of Tariffs by agreement of Carrier and all Initial
Shippers.
Overuse Volumes means (a) in respect of each Segment other than the
ODC Loop, that volume of an Initial Shipper's nomination which exceeds its
Proportionate Share of Available Capacity, and (b) in respect of the ODC Loop,
that portion of an Initial Shipper's nomination, if any, which exceeds the
Proportionate Volumes in such nomination.
Overutilizer Premium means, for each Schedule Month in a calendar
year, a U.S. dollar amount equal to the increase in the Annual Revenue
Requirement necessary to achieve an increase in Carrier's annual return to
Shareholders calculated in accordance with Section 5.4(b) of the Oleoducto
Central Agreement by one percentage point, using in each calculation the most
current calculation of the Annual Revenue Requirement under the Tariff
Regulations.
Overutilizer Tariff has the meaning assigned to it in Section 3.2 of
the Tariff Regulations.
Parties means Initial Shipper, Carrier and each of their respective
successors and permitted assigns.
Performance Guarantee Agreements means the Performance Guarantee
Agreements executed and delivered for the benefit of Carrier by each of BP
International Limited, TOTAL S.A., Triton Energy Corporation, IPL Energy Inc.
and TransCanada PipeLines, in each case as the same may be amended from time
to time in accordance with the terms thereof.
Person means any individual, corporation, limited liability company,
partnership, joint venture, association, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Pesos or Ps means the lawful currency of Colombia.
Petroleum means crude oil and other liquid hydrocarbons, including
liquid hydrocarbons which are recovered or extracted from natural gas.
Project Agreements has the meaning assigned to it in the Oleoducto
Central Agreement.
Projection has the meaning assigned to it in Section 3.1 of the
General Terms and Conditions.
Proportionate Percentage has the meaning assigned to it in Section
7.1(b) of the Agreement.
Proportionate Share means, with respect to Initial Shipper, 9.6%,
provided that, to the extent that, by any succession or assignment permitted
by Section 7.4 of the Agreement, more than one Person is an Initial Shipper
hereunder, the Proportionate Share with respect to each such Person shall be
determined pursuant to the agreements governing such succession or assignment,
provided further that in each case the aggregate Proportionate Share of all
such Persons shall always be 9.6%. Following any partial release by Initial
Shipper under Section 7.1 of the Agreement, "Proportionate Share", when
referring to "Proportionate Share of Available Capacity" and nominations by
such Initial Shipper, means for this and no other purpose such higher or lower
percentage resulting after addition or subtraction of the Release Percentage
in connection with any partial release to it or by it as permitted under
Section 7.1. In particular, for the avoidance of doubt, Proportionate Share of
such Initial Shipper shall not change following any partial release under
Section 7.1 with respect to determining Overuse Volumes and the allocation of
Overutilizer Premiums and Established Third Party Premiums.
Proportionate Volumes means (a) in respect of each Segment other
than the ODC Loop, that volume of an Initial Shipper's nomination which does
not exceed its ProportionateShare of Available Capacity, and (b) in respect of
the ODC Loop, that volume (whether such volume is Cusiana Petroleum or
non-Cusiana Petroleum) of an Initial Shipper's nomination which is equal to
the higher of (i) the volume of Cusiana Petroleum nominated by such Initial
Shipper into the first Segment, or (ii) that volume of an Initial Shipper's
nomination which does not exceed its Proportionate Share of Available Capacity
in the ODC Loop, provided that in no event shall such volume exceed Initial
Shipper's nomination.
Quality Bank Adjustments has the meaning assigned to it in Section
4.2(b) of the General Terms and Conditions.
Reasonable Efforts means the efforts a Person of ordinary prudence
would exercise in managing his own affairs and safeguarding his own property.
Receipt Points means the points indicated on Schedule B where
Petroleum is received by Carrier from Initial Shippers, plus any additional
points for receipt made available to Initial Shippers by Carrier.
Receipts means the nominated or actual volumes, as the context
requires, introduced into the Oleoducto Central at the Receipt Points.
Recommissioning Proposal has the meaning assigned to it in the
Oleoducto Central Agreement.
Reconciliation Statement has the meaning assigned to it in Section
4.4 of the Agreement.
Related means
(a) when qualifying an Initial Shipper Group, a Senior Lender Group
or a Senior Debt Tranche with respect to each other, the Initial Shipper Group
identified as related to such Senior Debt Tranche in Appendix A to the Common
Security Trust Agreement, such Senior Debt Tranche and the Senior Lender Group
providing Senior Debt under such Senior Debt Tranche, as the case may be; and
(b) when qualifying Tariff Advances and/or Transportation Notes
with respect to an Initial Shipper Group, Senior Lender Group or Senior Debt
Tranche, the Tariff Advances and/or Transportation Notes under or pursuant to
the Transportation Agreement with a Person in such Initial Shipper Group or
the Senior Lender Group or the Senior Debt Tranche Related to such Initial
Shipper Group, as the case may be.
Related Account means any account or accounts into which Carrier has
directed or is required to direct certain payments hereunder and payments of
Tariff Advances or in respectof purchases of Transportation Notes hereunder to
be made in each case by Initial Shipper for the benefit of any permitted
assignee of Carrier.
Release Capacity has the meaning assigned to it in Section 7.1(a) of
the Agreement.
Release Percentage has the meaning assigned to it in Section 7.1(a)
of the Agreement.
Release Shipper has the meaning assigned to it in Section 7.1(a) of
the Agreement.
Release Term has the meaning assigned to it in Section 7.1(a) of the
Agreement.
Royalty Oil has the meaning assigned to it in Section 2.1(a)(i) of
the General Terms and Conditions.
Schedule has the meaning assigned to it in Section 3.3 of the
General Terms and Conditions.
Schedule Month means any calendar month in which the Oleoducto
Central, or any Segment, is operating for the transport of Petroleum.
Scheduled Capacity means, for each Initial Shipper and each Segment,
that portion of Available Capacity allocated to such Initial Shipper by
Carrier and, for each Third Party Shipper, that portion of Excess Capacity
allocated to such Third Party Shipper by Carrier, each pursuant to the General
Terms and Conditions and stated in Standard Barrels per day.
Segment means any one of the four segments of the Oleoducto Central
consisting of the Cusiana-El Porvenir segment, the El Porvenir-Vasconia
(Central Llanos) segment, the Vasconia-Covenas segment (the ODC Loop) and the
delivery facilities at the Port of Covenas terminal.
Semi-annual Payment Date means the Monthly Payment Date in September
and March.
Senior Debt has the meaning assigned to it in the Common Security
Trust Agreement.
Senior Debt Agreements means the individual loan agreements,
indentures, fiscal agency agreements and interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements entered
or to be entered into between Carrier and the respectiveSenior Lender named
therein, as the case may be, with respect to the loans, bonds, notes and other
forms of limited recourse indebtedness of Carrier which are not subordinated
to any other liability of Carrier (except as permitted by applicable law) to
be provided from time to time to Carrier by such Senior Lender and identified
in Appendix A to the Common Security Trust Agreement, as such agreements and
indentures may be amended and supplemented in accordance with the terms
thereof or replaced from time to time.
Senior Debt Shortfall means the amount of Senior Debt required to be
provided and distributed to Carrier in accordance with the Financing Plan that
Carrier has been unable to obtain.
Senior Debt Tranche means the aggregate Senior Debt provided by a
Senior Lender Group supported by Collateral consisting primarily of
obligations of a Related Initial Shipper Group. Senior Debt Tranches are
designated Senior Debt Tranche A, Senior Debt Tranche B, Senior Debt Tranche C
or Senior Debt Tranche D, as the case may be, each as identified in Appendix A
to the Common Security Trust Agreement.
Senior Lender Group means the Persons providing export credit agency
financing, bank financing and other financing or interest or foreign exchange
swaps and any indenture trustee or fiscal agent for holders of Carrier's debt
securities identified in Appendix A to the Common Security Trust Agreement as
holding collectively Senior Debt constituting a single Senior Debt Tranche.
Senior Lenders means the Persons providing export credit agency
financing, bank financing, other financing or interest or Initial Shipper
Bridge Loans and Shareholder Bridge Loans and any indenture trustee or fiscal
agent for holders of Carrier's Debt securities, in each case identified in
Appendix A to the Common Security Trust Agreement, provided, however, that:
(a) solely for the purpose of determining the Senior Lender under a
Senior Debt Agreement in connection with the determination and exercise of any
rights or the taking of any other action under this Agreement and/or such
Senior Debt Agreement (but not for purposes of calculating the principal
amount of Senior Debt outstanding or the amount of Senior Debt Commitments
under the Related Senior Debt Tranche), the holder of Senior Debt designated
in Appendix A to the Common Security Trust Agreement, as the Senior Lender
under such Senior Debt Agreement shall be deemed to be the sole holder of
Senior Debt under such Senior Debt Agreement; and
(b) if a Senior Lender in a Senior Lender Group referred to in paragraph
(a) above ceases to hold any Senior Debt under its related Senior Debt
Agreement it shall (by notice to the trustee named in the Common Security
Trust Agreement, the other Senior Lenders in such Senior Lender Group and
Carrier attaching an amended Appendix A to the Common Security Trust
Agreement, giving effect to such designation) designate the holderof such
Senior Debt under such Senior Debt Agreement or, if there is more than one
such holder, one of the other holders of the Senior Debt under such Senior
Debt Agreement of which it is deemed hereunder to be the sole holder as its
successor as the deemed sole holder thereof for purposes of this Agreement and
such Senior Debt Agreement.
Share Transfer Agreement means the Share Transfer Agreement, dated
as of December 14, 1994, entered into between IPL Enterprises (Colombia) Inc.
and TCPL International Investments Inc., on the one hand, and Ecopetrol, on
the other, as the same may be amended from time to time in accordance with the
terms thereof.
Shareholder means Triton Pipeline Colombia, Inc. and its successors
and permitted assigns.
Shareholder Bridge Loan means a bridge loan to Carrier provided by
one or more Shareholders or their Affiliates or one or more financial
institutions on their behalf to fund (a) an amount of Senior Debt under a
Senior Debt Tranche Related to another Initial Shipper Group which Carrier,
despite its best efforts, has been unable to obtain in accordance with its
then current Financing Plan or (b) a failure by another Shareholder to make an
Equity Contribution.
Shareholders means the parties to the Oleoducto Central Agreement
other than Carrier.
Shareholding Interest has the meaning assigned to it in the Common
Security Trust Agreement.
Shares means the shares of common stock, par value Ps 100,000 each,
of Carrier, each with no preference among themselves with respect to
dividends, voting rights or rights upon liquidation of Carrier.
Shippers means, at any time, all parties (other than Carrier) to
Transportation Agreements and Third Party Transportation Agreements then in
effect.
Short-term Haul means the commitment of an Initial Shipper, made
pursuant to the nominations procedures and rules of Sections 3.4 and 3.5 of
the General Terms and Conditions, to use a specified portion of its Allocated
Capacity for one or more Segments for one Schedule Month.
Sole Risk Capacity means any capacity attributable to or created by
Sole Risk Facilities.
Sole Risk Facilities means additional facilities or modifications in
or to existing facilities of any Segment that expand capacity or otherwise
improve service, that are approved bya vote of four of the six members of the
Board of Directors but not included in the Annual Operating Budget, and that
are constructed at the expense of one or more Shareholders or Initial Shippers
in accordance with the terms and conditions of the Oleoducto Central Agreement
or the Agreement, respectively.
Sole Risk Parties means the Shareholders or Initial Shippers, as the
case may be, participating in the Sole Risk Proposal.
Sole Risk Proposal has the meaning assigned to it in the Oleoducto
Central Agreement.
Standard Barrel means a barrel of Petroleum having the
Characteristics specified on Attachment 1 to the General Terms and Conditions
provided that a Standard Barrel for the El Porvenir-Vasconia Segment and for
the Vasconia-Covenas Segment means a barrel of Petroleum with the
Characteristics of Petroleum composed of production from the Existing Fields
and Cusiana Petroleum combined in proportion to the nominations of each such
Petroleum into the El Porvenir-Vasconia Segment from time to time.
Subordinated Debt means the unsecured Debt of Carrier to a
Subordinated Lender, whether presently outstanding or hereafter created,
ranking in payment and upon liquidation junior to the Senior Debt in
accordance with the subordination terms attached as Appendix J to the Common
Security Trust Agreement other than Transportation Repayment Obligations or
Shareholder Bridge Loans pursuant to clause (b) of the definition thereof
herein.
Subordinated Fee has the meaning assigned to it in the Technical
Services and Management Agreement.
Subordinated Lender means a lender or provider of Subordinated Debt.
Subordinated Notes means notes or other instruments of Carrier
evidencing Subordinated Debt.
Subscription Agreements means the Amended and Restated Subscription
Agreements, each dated as of March 31, 1995, between Carrier and each of the
Shareholders, in each case as the same may be amended and restated from time
to time in accordance with the terms thereof.
Subsidiary of a Person means (i) a corporation more than 50% of the
outstanding Voting Shares of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person
and one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiariesof such
Person, or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the
policies, management and affairs thereof.
Surcharges means all amounts collected by Carrier in respect of (a)
interest on overdue amounts under the Agreement, (b) increases in tariffs
under Section 4.6 of the Agreement and, to the extent they accrue to Carrier
in accordance with Section 4.3 of the Tariff Regulations, under Section 4.2 of
the Tariff Regulations, and (c) penalties and interest under Section 3.5(a),
Section 4.1 and Section 5.4, respectively, of the General Terms and
Conditions.
Tariff Advances has the meaning assigned to it in Section 5.1 of the
Agreement.
Tariff Regulations means the procedures for the calculation and
payment of Tariffs attached as Schedule C hereto.
Tariffs means the Initial Shipper Tariff, the Overutilizer Tariff,
the Third Party Tariff, the Minimum Tariff, the Working Capital Tariff and the
Underutilizer Tariff, or any of them, and any applicable charges pursuant to
Article Five of the Tariff Regulations.
Technical Services and Management Agreement means the Technical
Services and Management Agreement, dated as of March 31, 1995, between Carrier
and CIT Colombiana S.A., as the same may be amended from time to time.
Third Party Premium means, for each Schedule Month in a calendar
year, a dollar amount equal to the increase in the Annual Revenue Requirement
necessary to achieve an increase in Carrier's annual return to Shareholders
calculated in accordance with Section 5.4(b) of the Oleoducto Central
Agreement by two percentage points, using in each calculation the most current
calculation of the Annual Revenue Requirement under the Tariff Regulations and
the most current Schedule for such Schedule Month prepared under the General
Terms and Conditions.
Third Party Shippers means, at any time, all parties (other than
Carrier) to Third Party Transportation Agreements then in effect.
Third Party Tariff has the meaning assigned to it in Section 3.3(a)
of the Tariff Regulations.
Third Party Transportation Agreements means all agreements between
Carrier and parties (other than Initial Shippers) for transportation service
on the Oleoducto Central at the Third Party Tariff in accordance with the
Tariff Regulations and the General Terms and Conditions to the extent
applicable to such parties as indicated therein, as the same may be amended
from time to time in accordance with the terms thereof.
Throughput Capacity means the theoretical design throughput capacity
of a Segment or the Oleoducto Central, as the case may be, as originally
constructed and installed and subsequently modified from time to time (without
regard to Sole Risk Facilities) based on Standard Barrels.
Throughput Share with respect to an Initial Shipper for any Segment
means the percentage equal to the number of Standard Barrels of Petroleum
nominated to be transported by it through such Segment of the Oleoducto
Central and its Net Deliveries in the most recent six calendar months
preceding the month as to which the Throughput Share is to be calculated
(excluding any period during which no Petroleum was shipped through such
Segment of the Oleoducto Central) in which Net Deliveries existed or Petroleum
was so nominated divided by the sum for the same six month period (subject to
the same exclusion) of the aggregate Net Deliveries of all Initial Shippers
and the number of Standard Barrels of Petroleum nominated to be transported by
all Shippers obligated to pay Minimum Tariffs and Working Capital Tariffs
under their transportation agreements in accordance with the terms thereof
(including any Third Party Shippers so obligated but excluding any Third Party
Shipper that has failed to pay any Minimum Tariffs or Working Capital Tariffs
payable by it) through such Segment of the Oleoducto Central.
Transportation Agreements means the Agreement and the other
agreements to be entered into by Carrier and each of the other Initial
Shippers for the transportation by such Initial Shippers of Petroleum through
the Oleoducto Central, as the same may be amended from time to time in
accordance with the terms thereof.
Transportation Agreement Step-Up has the meaning assigned to it in
Section 4.2 of the Tariff Regulations.
Transportation Note means the Transportation Note substantially in
the form attached as Schedule E hereto.
Transportation Repayment Obligations means Carrier's obligations to
pay interest on and to repay Tariff Advances made under, and to repay
principal of and interest on Transportation Notes issued pursuant to, the
Transportation Agreements as well as any and all other amounts payable in
respect thereof.
TRO Holder means a Person to whom Transportation Repayment
Obligations are owing.
Trustee has the meaning assigned to it in the Common Security Trust
Agreement.
Underutilizer Tariff has the meaning assigned to it in Section 3.6
of the Tariff Regulations.
Upstream Delivery Point means a Delivery Point prior to the Covenas
Delivery Point.
Upstream Expropriatory Action with respect to Initial Shipper means
any action or series of actions taken, authorized, ratified or acquiesced in
by Colombia or a governing authority which is in de facto control of part of
Colombia for the appropriation, confiscation, expropriation or nationalization
(by intervention, condemnation or other form of taking), whether with or
without compensation and whether under color of law or otherwise (including
through confiscatory taxation or imposition of confiscatory charges) of the
rights of any Initial Shipper (other than Ecopetrol) or any of its respective
affiliates, as the case may be, under the contract(s) through which it has
rights to lift and dispose of Cusiana Petroleum and its direct or indirect
interest in the Dedicated Area or the Petroleum produced therefrom if such
action or series of actions, together with similar prior actions or series of
actions, if any, result in the appropriation, confiscation, expropriation or
nationalization of the rights under such contract(s) or rights to lift and
dispose of Petroleum produced thereunder of Initial Shipper (or any of its
Affiliates, as the case may be).
Upstream Underutilized Segment means a Segment where the Aggregate
Scheduled Capacity of such Segment is less than the Available Capacity of such
Segment.
Valuation Expert means an internationally recognized independent
investment banking or other advisory firm with experience in the valuation of
petroleum pipeline operating companies jointly selected by the member of the
Initial Shipper Group affected by Expropriatory Action and Carrier.
Variable Charge means the Variable Operating Costs for the
transportation of one Standard Barrel for a specified Segment and throughput
volume.
Variable Operating Costs means, with respect to any Segment, the
costs of energy, lubricants and drag reduction and other additives consumed by
Carrier in its transportation operations in connection with such Segment.
Voting Shares means shares which ordinarily have voting power for
the election of directors (or persons performing similar functions), whether
at all times or only so long as no senior class of shares has such voting
power by reason of any contingency.
Weighted Average Throughput Share with respect to an Initial Shipper
means the quotient obtained by dividing (a) the sum of the products obtained
by multiplying the Throughput Share of such Initial Shipper for each Operating
Segment by the Capital Cost for such Operating Segment by (b) the Capital Cost
for all Operating Segments.
Working Capital Tariffs has the meaning assigned to it in Section
3.5(a) of the Tariff Regulations.
SCHEDULE B
to Transportation Agreement
OLEODUCTO CENTRAL DESCRIPTION
This description of Carrier's oil transportation and storage
facilities is separated into two categories: (i) existing assets which will
be transferred to Carrier as provided in the Oleoducto Central Agreement and
(ii) assets that will be built during the construction phase currently
estimated to begin mid-year 1995 and to be completed mid-year 1997. The
existing assets are interconnected by a variety of facilities which will not
become part of the Oleoducto Central, but which will be used. Once completed,
Carrier will own a complete transportation system, capable of transporting
Petroleum from the Fields to the export terminal in the Port of Covenas on the
Caribbean coast. At any time, the Oleoducto Central shall, for the purposes
of the Agreement, be comprised of any pipeline assets that are owned by
Carrier and shall, unless otherwise determined by Carrier by a decision of its
Board of Directors in accordance with the By-laws of Carrier, consist of the
assets described or referred to in this Schedule which are at such time owned
by Carrier.
EXISTING FACILITIES
The current assets which will be transferred to Carrier during 1995
consist of the following facilities (see Figure):
CUSIANA PUMP STATION
The Cusiana Pump Station is located in the central processing
facilities of the Santiago de las Atalayas, Tauramena, and Rio Chitamena
Association Contracts and includes the following main equipment:
1. Two production storage tanks, with a nominal capacity of 50,000
barrels each.
2. Two production storage tanks (one under construction) with a nominal
capacity of 100,000 barrels.
3. One off-spec tank with a nominal capacity of 10,000 barrels.
4. BS&W analyzer.
5. Two metering skids.
6. High alarm.
7. Two vertical canned off-spec oil recycle pumps.
8. Four crude dehydrators.
9. Four crude oil transfer pumps.
10. Four crude oil booster pumps with 1,200 GPM capacity and
differential pressure of 100 psi.
11. Four crude oil shipping pumps, with 1,200 GPM capacity and
differential pressure of 1,450 psi.
B. EL PORVENIR-VASCONIA (CENTRAL LLANOS) PIPELINE UPGRADE
1. El Porvenir Station
The following equipment is completed or under completion:
(a) Five main crude oil shipping pumps, of 4,000 HP and with 110
MBPD capacity (3208 GPM), 1,615 psi each.
(b) Five crude oil booster pumps with 350 HP and 73.3 MBPD capacity
(2138) each, at a differential pressure of 150 psi.
(c) Fire Protection System, including a 25 MB water tank.
(d) Three 150,000 barrel metering runs for receiving crude oil from
Cusiana
(e) 2 KVA, Electric Substation.
(f) Three 1,000 KV Generator Sets.
(g) Pressure relief valves at receiving and dispatching points.
(h) One scraper trap for receiving crude.
(i) Four 112.8 MBPD meter runs for shipping crude oil.
(j) Distributed control system.
2. Miraflores Station:
(a)Five main crude oil shipping pumps, with 4,500 HP and 73.3
MBPD, 2,315 psig capacity each.
(b) Distributed Control System.
(c) Fire Protection System, including a 5,000 barrel water tank.
(d) Pressure relief valves available at receiving and dispatching
points.
(e) Scraper traps at dispatching points.
3. Vasconia Station:
(a) High pressure metering skid (260 MBPD) composed of 8 meter
runs, with BS&W Analyzer.
(b) One low pressure flow meter, 150 MBPD.
(c) Upgraded DCS.
(d) Scraper traps installed at receiving points.
4. 30" Pipeline (96 kilometers of 30" outside diameter pipe with 5/8"
and 3/4" wall thickness).
C. COVENAS TERMINAL
The Covenas Terminal is located in the Port of Covenas and the
following equipment is contained within the existing Oleoducto de Colombia.
1.Four crude oil storage tanks with a nominal capacity of 350,000
barrels.
POST-CONSTRUCTION FACILITIES
The completed Oleoducto Central, as envisaged under current
development plans, will comprise an 800 km transportation system linking the
production centers in the Fields to the terminal facilities in the Port of
Covenas (see Figure). The proposed pipeline divides naturally into four
segments:
1.CUSIANA SEGMENT: A 35 KM SECTION OF 30" PIPE WHICH CONNECTS THE
CUSIANA PUMP STATION WITHIN FIELD FACILITIES TO THE EL PORVENIR PUMP STATION;
2. EL PORVENIR-VASCONIA (CENTRAL LLANOS) SEGMENT: A 280 KM SECTION OF
30" AND 36" PIPE LINKING EL PORVENIR TO LA BELLEZA, ALONG WITH ADDITIONAL
PUMPING CAPACITY ADDED TO EL PORVENIR AND MIRAFLORES:
3. ODC LOOP: A 480 KM SECTION OF 30" PIPE WHICH LEADS FROM VASCONIA TO
COVEAS; AND
4. COVEAS TERMINAL: EXPORT TERMINAL FACILITIES AT THE PORT OF COVENAS.
CUSIANA TO EL PORVENIR SEGMENT
A new 30" pipeline is proposed between Cusiana and El Porvenir to
transport an annual average of 500 MBD. The existing 20" pipeline will be
converted for the transportation of gas. New pumps and equipment will be
installed for the new 30" pipeline. Incremental tankage will be installed as
part of the field facilities to provide for a total volume equivalent to three
days of production.
B.EL PORVENIR TO LA BELLEZA - EL PORVENIR-VASCONIA (CENTRAL LLANOS)
SEGMENT
A new 36" pipeline will be constructed between El Porvenir and
Miraflores and a new 30" pipeline will be constructed between Miraflores and
La Belleza. Additional pumps and drivers will be added to the El Porvenir and
Miraflores Pump Stations, allowing this new system to transport an annual
average of 556 MBD.
The existing 20" Central Llanos Line will be leased by Carrier from
1995 until completion of the El Porvenir to La Belleza loop and then it will
be removed from the crude oil transport system and converted to a gas
transmission line. At La Belleza, the new line will be connected to the
existing 30" line described above. At Vasconia, about 210 MBD will be
off-loaded from the Oleoducto Central for transport through ODC to Covenas.
The remainder of the oil, 290 MBD, will flow directly into a new Vasconia to
Covenas pipeline for transport to Covenas.
C. VASCONIA TO COVENAS SEGMENT (ODC LOOP)
A 30" pipeline will be constructed from Vasconia to Covenas. This
pipeline will carry an annual average of 290 MBD. The existing ODC will be
used to transport oil from Vasconia that is not sent to the refinery in
Barrancabermeja.
D. COVENAS TERMINAL
One Tanker Loading Unit will be added to the Covenas terminal and
the tank farm will be expanded to a total storage capacity of 2,000 to 3,000
MB.
<PAGE>
Map on the production values corresponding to annual rates for a case
with 500 MBD from Cusiana and Cupiagua and existing production for
1996 not filed here within.
SCHEDULE C
To Transportation Agreement
TARIFF REGULATIONS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
SECTION PAGE
ARTICLE ONE
DEFINITIONS
1.1. Definitions C-1
ARTICLE TWO
TARIFF POSTINGS
2.1. Annual Postings C-1
2.2. Monthly Postings C-1
2.3. Capital Costs C-2
2.4. Annual Revenue Requirement C-2
2.5. Adjustments to Annual Revenue Requirement C-3
2.6. Benchmark Interest Expense C-3
ARTICLE THREE
CALCULATION AND PAYMENT OF TARIFFS
3.1. Initial Shipper Tariff C-5
3.2. Overutilizer Tariff C-5
3.3. Third Party Tariff C-5
3.4. Minimum Tariffs C-6
3.5. Working Capital Tariffs C-6
3.6. Underutilizer Tariffs C-7
3.7. Changes to Initial Shipper Tariff and Overutilizer Tariff C-7
3.8. Surcharges C-8
3.9. Excess Credits C-8
3.10. Reduction of Initial Shipper Tariff and Overutilizer Tariff C-8
ARTICLE FOUR
RELATED SHAREHOLDER DEFAULTS
4.1. Oleoducto Central Agreements Defaults C-8
4.2. Transportation Agreement Step-Up C-9
4.3. Accruals C-10
4.4. Acknowledgements C-10
ARTICLE FIVE
OTHER CHARGES
5.1. Charges in Respect of Excess Amounts C-10
5.2. Rebates C-12
5.3. Charges in Respect of Increased Costs and Withholding Taxes C-12
</TABLE>
TARIFF REGULATIONS
ARTICLE ONE
DEFINITIONS
Section 1.1. Definitions. All capitalized terms used and not
defined herein have the meanings assigned to them in the Agreement.
ARTICLE TWO
TARIFF POSTINGS
Section 2.1. Annual Postings. As much in advance of the
commencement of operations of each Segment as practicable, and on or before
the fifteenth of each subsequent month of November, Carrier shall provide to
Initial Shipper a tariff posting (the Annual Posting) with Carrier's estimates
of the following information for the next Fiscal Year:
(i)the Annual Revenue Requirement included in the Annual Operating
Budget;
(ii)the allocation of the Annual Revenue Requirement among all
Operating Segments;
(iii)the Variable Operating Costs, based on the most current
Projection; and
(iv)the Tariffs for each Segment, each calculated in accordance with
Article Three below.
Section 2.2. Monthly Postings. (a) On or before the fifth day of
each Nomination Month, Carrier shall deliver to Initial Shipper a tariff
posting (the Monthly Posting) with Carrier's estimates of the following
information for the following Schedule Month:
(i) any adjustments to the Annual Revenue Requirement required
by Section 2.5 of these Tariff Regulations;
(ii) any revisions to Variable Operating Costs based on the most
current Projection; and
(iii) the Tariffs for each Segment, calculated in accordance
with Article Three below.
(b) In the Nomination Months of March, June, September and
December of each year, Carrier shall reflect in the Monthly Posting actual
costs and volumes of Petroleum transported for each Operating Segment on a
year-to-date basis, with a revised Schedule for the remainder of the year.
Section 2.3. Capital Costs. (a) Prior to the determination of the
Actual Project Cost and its allocation to each Segment in accordance with
Section 2.3(b) below, the Capital Cost of each Segment shall be the Capital
Cost incurred by Carrier in connection with the acquisition and/or
construction of such Segment.
(b) For purposes of allocating the Annual Revenue Requirement
among the Segments, the Capital Cost of each Segment shall be determined by
unanimous agreement of Carrier and all Initial Shippers at the time the
Shareholders and Carrier determine the Actual Project Cost in accordance with
the Oleoducto Central Agreement.
(c) After the commencement of operations at each Segment, the
Capital Cost for such Segment shall be determined from time to time by Carrier
by adjusting the Capital Cost thereof in accordance with the Capital Cost
entries in Carrier's accounting books and records.
(d) Before and after the commencement of operations at each
Segment, all Capital Costs incurred by Carrier not directly in connection with
a particular Segment shall be allocated by Carrier to each Segment in the
proportion that the Capital Cost thereof represents to the total Capital Cost
of all Segments as of the date of the most recent financial statements of
Carrier.
Section 2.4. Annual Revenue Requirement. The Annual Revenue
Requirement and Variable Operating Costs shall be fully recovered from Tariffs
paid on all barrels of Cusiana Petroleum and all barrels of other Petroleum
nominated to be transported through the Oleoducto Central, provided that (i)
Tariffs shall be allocated only to Operating Segments and (ii) if no Petroleum
is being transported through a Segment no Tariff shall be applicable thereto
(except for any Minimum Tariffs applicable thereto in accordance with Section
3.4 below and any Underutilizer Tariffs applicable thereto in accordance with
Section 3.6 below, in each case subject to the Agreement). If no Petroleum is
transported through any Segment and there are no Net Deliveries with respect
to any Segment in any month, the Annual Revenue Requirement for such month
(less any Minimum Tariffs and/or Advance Tariff Payments provided in respect
of Operating and Maintenance Costs) shall, unless otherwise agreed by Carrier
and each Initial Shipper, be added to the Annual Revenue Requirement for the
next succeeding six months. If no Petroleum is transported through a Segment
and there are Net Deliveries with respect to such Segment, the portion of the
Annual Revenue Requirement allocated to such Segment shall be recovered from
Tariffs paid on such Net Deliveries. The Annual Revenue Requirement shall be
allocated to each Operating Segment in the proportion that the Capital Cost
thereof represents tothe total Capital Cost of all Operating Segments as of
the date of the most recent financial statements of Carrier.
Section 2.5. Adjustments to Annual Revenue Requirement. (a) The
portion of the Annual Revenue Requirement related to each Operating Segment
shall be adjusted monthly by Carrier to reflect (i) differences between
estimates in the Monthly Posting for such Operating Segment and actual figures
for the previous month in respect of cash expenses incurred by Carrier and
volumes of Petroleum and Net Deliveries as to which Tariffs are payable, and
(ii) changes in forecasts of such items for future periods.
(b) On December 31 and June 30 of each year, Carrier shall make
an adjustment to the Annual Revenue Requirement and corresponding adjustments
to the Tariffs to take into account a conservative forecast of the peso/dollar
exchange rate on the expected date of any Distribution to Shareholders with
respect to the six months then ended. If the peso/dollar exchange rate on the
actual date of payment of such Distribution is such that the Distribution is
higher or lower than the annual return to Shareholders contemplated by Section
5.4(b) of the Oleoducto Central Agreement, the Annual Revenue Requirement
shall be adjusted in the subsequent six month period so that the resulting
adjustment in Tariffs will cause the Distribution with respect to the
subsequent period to be decreased or increased such that the aggregate annual
return for the period beginning on the date of the first Equity Contribution
to such date of payment will equal the annual return to Shareholders
contemplated by Section 5.4(b) of the Oleoducto Central Agreement.
(c) Prior to the end of each Fiscal Year, Carrier shall make any
adjustment required to the Annual Revenue Requirement, and corresponding
adjustments to the Tariffs, necessary to generate to Carrier sufficient
Cash-on-Hand to repay any outstanding Working Capital Tariff not repaid when
required under Section 3.5 below.
(d) In the event Carrier gives a notice for (or invoices) an
Advance Tariff Payment in respect of costs covered by clause (i) of the
definition of Base Revenue Requirement, pursuant to Section 3.1 of the Advance
Tariff Agreement, Carrier agrees to increase the Tariffs payable by Initial
Shipper by the amount of the expense referred to in Section 3.1(c) First of
the Advance Tariff Agreement, and, to the extent such Advance Tariff Payment
is made, to credit Initial Shipper's Tariffs payable by the amount of such
expense.
(e) Notwithstanding any provision in the Agreement to the contrary,
neither the Annual Revenue Requirement nor the Tariffs shall be established or
adjusted to take into account any decrease in revenues due to the failure by
any Initial Shipper to pay any amounts due under its Transportation Agreement
or Advance Tariff Agreement or by any Shipper to pay any amounts due under its
Third Party Transportation Agreement.
Section 2.6. Benchmark Interest Expense. (a) The interest expense
used in the estimation of the Annual Revenue Requirement (the Benchmark
Interest Expense) in any periodshall be calculated by applying the Benchmark
Interest Rate at the beginning of such period to the outstanding principal
amount of Senior Debt (excluding for these purposes only (i) the Excess Amount
with respect to any Senior Debt Tranche for the six-month period following the
first incurrence of Senior Debt causing the existence or an increase of such
Excess Amount under such Senior Debt Tranche, and, following such period, such
Excess Amount under such Senior Debt Tranche, adjusted from time to time to
give effect to the use of the proceeds thereof, and (ii) any Senior Debt
outstanding under Liquidity Facilities and under any post-Completion credit
facilities to the extent they do not represent Tariff Advances, Transportation
Notes or indebtedness that represents a refinancing of such indebtedness on
the basis of the same Collateral), Tariff Advances and Transportation Notes.
"Excess Amount" shall mean the amount of Senior Debt outstanding
under any Senior Debt Tranche that is equal to the excess of (A) the sum of
the principal amount of Senior Debt outstanding under such Senior Debt Tranche
over (B) the Related Initial Shipper Group's Proportionate Share (as defined
in the Transportation Agreement with the Person that is the Initial Shipper in
such related Initial Shipper Group) of the sum of the principal amount of
Senior Debt that is outstanding in the aggregate (excluding any overdue
amounts) which was scheduled to be incurred (whether actually incurred or not
and excluding any amounts that were incurred in excess of the amounts so
scheduled to be incurred) in accordance with the "Uses of Funds" table in the
Financing Plan as of the date of the incurrence of the Senior Debt listed
under clause (A) above that causes the existence or increase, as the case may
be, of such excess. Subject to applicable mandatory requirements of law,
"Benchmark Interest Rate" means the highest of the weighted average annual
interest rates (for this purpose, "interest rate" shall include any additional
amounts paid in respect of withholding or deduction for any taxes, duties,
assessments or governmental charges of whatever nature imposed upon or levied
upon or as the result of the payment by Carrier of principal and interest on
such Senior Debt by Colombia or any political subdivision or taxing authority
thereof or therein as a result of any amendment to, or change in, the laws
(or any regulation or rulings thereunder) of Colombia or any political
subdivision or taxing authority thereof or therein affecting taxation or any
amendment to or change in any official interpretation or application of such
laws or regulations but shall exclude any default or penalty interest rate to
the extent such rate exceeds the otherwise applicable interest rate together
with any interest accruing on any principal amount of Senior Debt due but not
yet paid) on Senior Debt in each Senior Debt Tranche outstanding during such
period, and, if all remaining Senior Debt matures or is repaid in such period,
the Benchmark Interest Rate shall be fixed at the Benchmark Interest Rate
prevailing immediately prior to such maturity or repayment provided, however,
that the Benchmark Interest Rate shall never be lower than the annual yield
from time to time in effect on U.S. Treasury notes with a remaining term to
maturity of 10 years plus 2%, expressed as a bond equivalent. The weighted
average interest rate in any period for each Initial Shipper shall be the
ratio of (x) the total interest expense (and any fees payable under the Senior
Debt Agreement relating to the Related Senior Debt other than fees that are
incurred in connection with the obtaining of such Senior Debt and capitalized
by Carrier) on the Senior Debt under the Related Senior Debt Tranche during
such period and (y) the total average outstanding amount of SeniorDebt under
the Related Senior Debt Tranche during such period. The Benchmark Interest
Rate shall be recomputed every time Carrier incurs new Senior Debt. Until any
Senior Debt is incurred by Carrier, the Benchmark Interest Rate shall be the
annual yield from time to time in effect on U.S. Treasury notes with a
remaining term of maturity of 10 years plus 2%, expressed as a bond
equivalent, fixed at the time Carrier incurs any liability which bears
interest set with reference to the Benchmark Interest Rate.
(b) Any difference between the Benchmark Interest Expense included
in Tariffs payable in the Related Account and the actual interest expense paid
by Carrier on the Related Senior Debt, Related Tariff Advances and/or Related
Transportation Notes provided by such Initial Shipper shall be fully credited
by Carrier (i) as a discount to be applied to Tariffs paid by such Initial
Shipper, (ii) as a discount to be paid in cash by Carrier to such Initial
Shipper or its designee, (iii) as a guarantee fee paid to a Financial
Institution designated by such Initial Shipper or (iv) by any other method not
adverse to Carrier, in each case as directed by such Initial Shipper.
ARTICLE THREE
CALCULATION AND PAYMENT OF TARIFFS
Section 3.1. Initial Shipper Tariff. (a) Each Initial Shipper
shall pay, with respect to each Segment and Schedule Month, a tariff per
Standard Barrel for such Segment (the Initial Shipper Tariff) for
Proportionate Volumes applicable to such Segment. The Initial Shipper Tariff
shall be the sum of (i) the amount equal to the Annual Revenue Requirement
allocated to such Segment (the Fixed Charge) divided by the sum of the
Aggregate Scheduled Capacity for such Segment and any Net Deliveries of such
Initial Shipper applicable to such Segment, and (ii) the Variable Charge for
such Segment, based on such Aggregate Scheduled Capacity.
Section 3.2. Overutilizer Tariff. (a) Each Initial Shipper shall
pay, with respect to each Segment and Schedule Month, a tariff per Standard
Barrel for such Segment (the Overutilizer Tariff) for Overuse Volumes
applicable to such Segment, provided that to the extent that such Overuse
Volumes arise from any decrease in Throughput Capacity from that at Completion
of the Oleoducto Central as the result of the Decommissioning of any Segment,
no Overutilizer Tariff will be payable with respect to such volumes. The
Overutilizer Tariff shall equal the Initial Shipper Tariff for such Segment
plus the lesser of (i) the amount of the Overutilizer Premium allocated to
such Segment divided by the sum of the Aggregate Scheduled Capacity for such
Segment and any Net Deliveries of such Initial Shipper applicable to such
Segment and (ii) the Established Third Party Premium for such Segment (or zero
if there is no Established Third Party Premium). In determining the
Overutilizer Tariff for each Segment, Carrier shall allocate the total
Overutilizer Premiums in the proportion that such Segment'sCapital Cost bears
to the aggregate Capital Cost of all Operating Segments as determined in
accordance with Section 2.3 above.
(b) All Overutilizer Premiums paid with respect to a Segment in
a Schedule Month shall be credited by Carrier against Tariffs paid with
respect to such Segment in such Schedule Month by each Initial Shipper that
nominated less than its Proportionate Share of Available Capacity in such
Segment. Such credits shall be shared pro rata among each Initial Shipper in
the proportion that (i) the difference between such Initial Shipper's
Nominated Capacity and its Allocated Capacity in such Schedule Month in such
Segment bears to (ii) the Aggregate Unused Capacity in such Segment in such
Schedule Month.
Section 3.3. Third Party Tariff. (a) Shippers other than Initial
Shippers shall pay with respect to each Segment and Schedule Month a tariff
per Standard Barrel (the Third Party Tariff) approved by the Colombian
Ministry of Mines and Energy (the MME). Carrier shall apply, and Initial
Shipper shall support such application, for approval of a Third Party Tariff
with respect to each Segment equal to the sum of the Initial Shipper Tariff
plus the Third Party Premium allocated to such Segment divided by the
Aggregate Scheduled Capacity for such Segment. The amount by which the Third
Party Tariff, as approved by the MME, exceeds the Initial Shipper Tariff, if
any, is called the Established Third Party Premium. In determining the
Established Third Party Premium for each Segment, Carrier shall allocate the
total Established Third Party Premiums in the proportion that such Segment's
Capital Cost bears to the aggregate Capital Cost of all Operating Segments as
determined in accordance with Section 2.3 above.
(b) Until the earlier of Completion and December 31, 1997, all
Established Third Party Premiums with respect to a Segment in a Schedule Month
shall be credited by Carrier against Tariffs paid with respect to such Segment
in such Schedule Month by each Initial Shipper that nominated less than its
Proportionate Share of Available Capacity in such Segment. Such credits shall
be shared pro rata among each Initial Shipper in the proportion that (i) the
actual volume of Standard Barrels nominated for transportation by such Initial
Shipper in such Segment during such Schedule Month bears to (ii) the Aggregate
Unused Capacity in such Segment in such Schedule Month.
(c) After the earlier of Completion and December 31, 1997,
Established Third Party Premiums, if any, shall be shared pro rata among
Initial Shippers according to their respective Proportionate Shares.
Section 3.4. Minimum Tariffs. During any period after the
termination of the Advance Tariff Agreement between Carrier and Initial
Shipper in which no Petroleum is transported in any Segment and there are no
Net Deliveries with respect to any Segment, such Initial Shipper shall pay to
Carrier with respect to each Segment in such period a minimum tariff (the
Minimum Tariff) in an amount equal to Initial Shipper's Weighted Average
Throughput Share with respect to such Segment (assuming for these purposes
that it is an Operating Segment)multiplied by the sum of (i) the Fixed Costs
with respect to such Segment and (ii) any interest expense on indebtedness of
Carrier (other than any increase in such interest expense following any
payment default by Carrier in respect of such indebtedness), provided that
Carrier shall not charge Initial Shipper any Minimum Tariff to the extent that
it results from the failure by any other Initial Shipper to pay any amounts
due under its Transportation Agreement or Advance Tariff Agreement or by any
Shipper to pay any amounts due under its Third Party Transportation Agreement.
Such interest expense shall be allocated to such Segment in the proportion
that such Segment's Capital Cost bears to the aggregate Capital Cost of all
Operating Segments as determined in accordance with Section 2.3 above.
Section 3.5. Working Capital Tariffs. (a) Subject to paragraph (d)
below, Initial Shipper shall, within 15 days after the approval of each Annual
Operating Budget and upon notice from Carrier, pay to Carrier in cash working
capital advances (the Working Capital Tariffs), less the amount of any
outstanding Working Capital Tariffs previously paid by Initial Shipper to
Carrier. The aggregate Working Capital Tariffs provided by Initial Shipper
outstanding in any one fiscal year shall not exceed Initial Shipper's Weighted
Average Throughput Share of one-twelfth of the Operating and Maintenance Costs
included in the Annual Revenue Requirement established in such approved Annual
Operating Budget, provided that the Working Capital Tariffs related to the
first Annual Operating Budget shall not exceed Initial Shipper's Proportionate
Share (and not Weighted Average Throughput Share) of one-twelfth of the
Operating and Maintenance Costs included in the Annual Revenue Requirement
included therein, provided that Carrier shall not charge Initial Shipper any
Working Capital Tariffs to the extent that it results from the failure by any
other Initial Shipper to pay any amounts due under its Transportation
Agreement or Advance Tariff Agreement or by any Shipper to pay any amounts due
under its Third Party Transportation Agreement. Subject always to the
limitation provided in the preceding sentence, Carrier may request Initial
Shipper to provide additional Working Capital Tariffs in any month during its
fiscal year to reflect additional working capital needs identified in the
Annual Operating Budget as amended during such year.
(b) Working Capital Tariffs shall constitute advance payments of
Tariffs. Subject to Section 3.5(c) below, Working Capital Tariffs shall be
credited by Carrier against the payment of Tariffs by Initial Shipper or
repaid to Initial Shipper or its designee in cash in each case to the extent
that the aggregate amount of any outstanding Working Capital Tariffs exceeds
the amount of Working Capital Tariffs required to be provided by Initial
Shipper in accordance with the Annual Revenue Requirement established in the
Annual Operating Budget for the next succeeding fiscal year. Such credit or
repayment shall be without interest and shall be credited or repaid by Carrier
once annually at the end of the fiscal year in which such Working Capital
Tariffs were made.
(c) If on any date for repayment specified in Section 3.5(b)
above Carrier has insufficient Cash-on-Hand to repay the Working Capital
Tariff, the Initial Shipper Tariff shall beadjusted as provided for in Section
2.5(c) above, and such payment shall be made as soon thereafter as Carrier has
sufficient Cash-on-Hand.
(d) The obligation to pay Working Capital Tariffs hereunder
shall terminate on the later of (i) the date on which all Tariff Advances
provided hereunder and Transportation Notes purchased hereunder have been
repaid or (ii) the date of final maturity of the Related Senior Debt.
Section 3.6. Underutilizer Tariffs. Each Initial Shipper shall
pay, with respect to each Segment and Schedule Month, a Tariff (the
"Underutilizer Tariff") equal to the quotient of (i) the product of the Fixed
Charge and the Net Deliveries of such Initial Shipper applicable to such
Segment divided by (ii) the sum of the Aggregate Scheduled Capacity applicable
to such Segment and the Net Deliveries of such Initial Shipper applicable to
such Segment.
Section 3.7. Changes to Initial Shipper Tariff and Overutilizer
Tariff. If in any month the Third Party Tariff in any Segment is less than the
Initial Shipper Tariff for such Segment, the Fixed Charge included in the
Initial Shipper Tariff shall be increased by an amount equal to the product of
(i) the number of barrels of Petroleum nominated by third parties and (ii) the
difference between the Initial Shipper Tariff and the Third Party Tariff.
Section 3.8. Surcharges. All Surcharges collected by Carrier with
respect to any Segment in any Schedule Month shall be credited to the payment
of Tariffs by Initial Shippers with respect to such Segment who did not incur
such Surcharges in proportion to their respective Throughput Shares with
respect to such Segment in such Schedule Month.
Section 3.9. Excess Credits. To the extent that credits to Initial
Shipper attributable to Overutilizer Premiums, Established Third Party
Premiums or Surcharges are to be credited to the payment of Tariffs by Initial
Shipper but in any period exceed the Tariffs to be paid by Initial Shipper in
such period, such excess shall be applied by Carrier to Tariffs to be paid by
Initial Shipper in the following period or periods, or, at the election of
Initial Shipper, paid in cash by Carrier to Initial Shipper or its designee.
Section 3.10. Reduction of Initial Shipper Tariff and Overutilizer
Tariff. If (i) Expropriatory Action occurs with respect to the Shareholder in
the Initial Shipper Group of the Initial Shipper, (ii) such Shareholder has
not received the Fair Market Value, as determined by a Valuation Expert, for
the property expropriated, and (iii) the expropriating party has not become a
party to the Dividend Trust Agreement, the Initial Shipper Tariff and the
Overutilizer Tariff otherwise payable by such Initial Shipper shall
automatically be reduced by the Corresponding Percentage of the amount
included in each such Tariff in order to generate the annual return to be paid
to Shareholders (including any interest paid on Subordinated Notes) by Carrier
in accordance with Section 5.4(b) of the Oleoducto Central Agreement for so
long as such Expropriatory Action remains in effect, provided that no such
reduction in Tariffs shall beapplicable prior to Completion. Carrier shall use
its Reasonable Efforts to make the expropriating party a party to the Dividend
Trust Agreement.
ARTICLE FOUR
RELATED SHAREHOLDER DEFAULTS
Section 4.1. Oleoducto Central Agreement Defaults. (a) If with
respect to the Shareholder that is a Person in the same Initial Shipper Group
as Initial Shipper either one or both of the provisions of (i) subsections
5.2(e)(i) or (ii), or (ii) subsections 5.3(b)(i) or (ii), of the Oleoducto
Central Agreement apply, then (b) or (c) below shall apply:
(b) if (i) the total amount of Senior Debt supported by such
Initial Shipper Group's Collateral that has been disbursed to Carrier as of
such date is less than 85% of the aggregate Senior Debt Tranche to be
supported by such Initial Shipper Group's Collateral in the then current
Financing Plan or (ii) the sum of such Senior Debt disbursed to Carrier plus
Equity Contributions made by such Initial Shipper Group as of such date is
less than 85% of the aggregate Senior Debt to be supported by such Initial
Shipper Group's Collateral plus Equity Contributions to be made by such
Initial Shipper Group in such Financing Plan, Carrier shall apply the
Transportation Agreement Step-Up (as defined below) to the Initial Shipper in
such Initial Shipper Group and the applicable percentage shall be 250%; or
(c) if (i) the total amount of Senior Debt supported by such
Initial Shipper Group's Collateral that has been disbursed to Carrier as of
such date is greater than 85% of the aggregate Senior Debt Tranche to be
supported by such Initial Shipper Group's Collateral in the then current
Financing Plan and (ii) the sum of such Senior Debt supported by such Initial
Shipper Group's Collateral disbursed to Carrier plus the Equity Contributions
made by such Initial Shipper Group as of such date is greater than 85% of the
aggregate Senior Debt to be supported by such Initial Shipper Group's
Collateral plus Equity Contributions to be made by such Initial Shipper Group
in such Financing Plan, then Carrier shall apply the Transportation Agreement
Step-Up to Initial Shipper in such Initial Shipper Group and the applicable
percentage shall be 150%, provided that the 150% tariff increase shall apply
only to such Initial Shipper's pro rata share of all Petroleum in excess of
185,000 barrels per day shipped by such Initial Shipper or on its behalf.
(d) If the Shareholder that is a Person in the same Initial
Shipper Group as Initial Shipper breaches any of its obligations to Carrier
and the other Shareholders with respect to the transfer, pledge, encumbrance
or hypothecation of Shares of Carrier under Article Ten of the Oleoducto
Central Agreement, Carrier shall apply the Transportation Agreement Step-Up to
such Initial Shipper and the applicable percentage shall be 250% in which case
the period set forth in Section 4.2(a) shall be one year after the
effectiveness of such transfer, pledge, encumbrance or hypothecation and the
percentage amount set forth in Section 4.2(b) shall be the quotient of
itsShareholding Interest so transferred, pledged, encumbered or hypothecated
divided by its Shareholding Interest immediately prior to such transfer,
pledge, encumbrance or hypothecation expressed as a percentage.
Section 4.2. Transportation Agreement Step-Up. The Transportation
Agreement Step-Up means the right which is hereby granted by Initial Shipper
to Carrier:
(a) to increase the Tariffs applicable to Petroleum shipped by
such Initial Shipper or on its behalf by a specified percentage of the Tariff
originally applicable under the Agreement for the transportation of Petroleum
(or to exercise any alternative right provided in the Agreement or which may
otherwise be available to it and which will achieve substantially the same
economic result), for a period beginning, in the case of Senior Debt, on the
date specified in the notice of Senior Debt Shortfall provided to the
Shareholder, and in the case of an Equity Contribution shortfall, on the date
specified in the call for the Equity Contribution provided to the Shareholder,
and ending one year after the date the Senior Debt Shortfall actually was
remedied (whether by Initial Shipper Bridge Loan or by obtaining Senior Debt
from a third party which may be an existing provider of Senior Debt), in each
case solely supported by Collateral other than any other Initial Shipper
Group's Collateral or any assets of Carrier, or the Equity Contribution is
made, and
(b) for the remaining term of the Agreement, to apply the
highest of the Initial Shipper Tariff, the Overutilizer Tariff and the Third
Party Tariff to Initial Shipper's Proportionate Share of Available Capacity
for each Segment represented by the percentage amount that, in the case of a
Senior Debt Shortfall, is equal to the amount of the Senior Debt Shortfall
divided by the sum of the aggregate amount of Senior Debt in the Senior Debt
Tranche for the Shareholder, and the maximum amount of Equity Contributions
set forth in the Subscription Agreement of the Shareholder, in each case as
shown in the then current Financing Plan, and, in the case of a failure to
make an Equity Contribution, is the amount of such Equity Contribution divided
by the same denominator.
Section 4.3. Accruals. (a) The incremental tariffs payable to
Carrier by such Initial Shipper included in the sum of (a) plus (b) in Section
4.2 above which exceed those Tariffs otherwise payable to Carrier by such
Initial Shipper (i) shall accrue, after Colombian Taxes, and be directly paid
by Carrier to the party that provided funding for such Senior Debt Shortfall
or Equity Contribution shortfall or (ii) if an Initial Shipper or its
Affiliate provided funding for such Senior Debt Shortfall or Equity
Contribution shortfall such incremental tariffs shall be credited by Carrier
against Tariffs otherwise payable by such Initial Shipper or the Initial
Shipper that is an Affiliate of the party that provided such funding, and
(iii) otherwise shall accrue to Carrier.
(b) Any incremental Tariffs payable to Carrier by Initial Shipper
under Section 4.1(d) above which exceed those Tariffs otherwise payable to
Carrier by such Initial Shipper (i) shall accrue, after Colombian taxes, and
be repaid by Carrier to, the other Initial Shippers prorata in accordance with
their Proportionate Shares or (ii) shall be credited by Carrier against
Tariffs otherwise payable by such Initial Shippers, and (iii) otherwise shall
accrue to Carrier.
Section 4.4. Acknowledgements. In recognition of the serious
consequences of any Shareholder default and the difficulty of ascertaining the
damages that would result from such consequences, Initial Shipper recognizes
and acknowledges that the rights of Carrier under this Article Four are
reasonable.
ARTICLE FIVE
OTHER CHARGES
Section 5.1. Charges in respect of Excess Amounts. (a) Subject to
paragraph (b) below, in the event there exists under any Senior Debt Tranche
an Excess Amount of Senior Debt outstanding (in its entirety or as adjusted
pursuant to clause (i) of Section 2.6(a)), then:
(i) if and to the extent that each Shareholder that is a member of an
Initial Shipper Group has consented to an agreement that has been reached
among the Shareholder in Initial Shipper's Initial Shipper Group and one or
more other Shareholders pursuant to Section 5.2(c)(vi) of the Oleoducto
Central Agreement with respect to sharing the additional interest expense
associated with respect to all or part of such Excess Amount of Senior Debt
(in its entirety or as so adjusted, as the case may be), Tariffs payable by
Initial Shipper in any period shall be increased by a portion of the
additional interest expense accrued during such period on any such amount of
Senior Debt determined in accordance with such agreement as certified to
Carrier and Initial Shipper by the Shareholders that are parties thereto;
(ii) if and to the extent clause (i) is not applicable with respect to
any Excess Amount of Senior Debt, then for each month in the six-month period
following the first date on which such Senior Debt is incurred by Carrier that
gives rise to such Excess Amount or an increase thereof, Tariffs payable by
Initial Shipper shall be increased by one-sixth of its Proportionate Share of
the additional interest expense on that portion of such Excess Amount of
Senior Debt which is scheduled to be drawn to meet the requirement for
spending identified in the Use of Funds table in the Financing Plan as of the
incurrence of such Excess Amount of Senior Debt during that six-month period;
and
(iii) if and only if and to the extent that such Excess Amount of Senior
Debt is outstanding under Initial Shipper's Related Senior Debt Tranche,
Tariffs payable by Initial Shipper for each month in each six-month period
following the first date on which such Senior Debt is incurred by Carrier
shall be increased by the total additional interest expense on such Excess
Amount of Senior Debt (as adjusted pursuant to clause (i) ofSection 2.6(a))
for such six-month period to the extent clauses (i) and (ii) above are not
applicable with respect thereto.
(b) In the event that there exists an Excess Amount of Senior Debt
outstanding under Initial Shipper's Related Senior Debt Tranche (in its
entirety or as adjusted pursuant to clause (i) of Section 2.6), not as the
immediate result of the original incurrence of any Senior Debt but rather as
the immediate result of the failure to pay or prepay such Senior Debt as
provided by the terms thereof, then Tariffs payable by Initial Shipper shall
be increased by the total additional interest expense on the portion of such
Excess Amount, as so adjusted, attributable to such failure to so pay or
prepay Senior Debt.
(c) In the event that, following Completion, the sum of the
principal amount of Senior Debt under any Senior Debt Tranche and Related
Tariff Advances and Transportation Notes is in excess of the Related Initial
Shipper Group's Proportionate Share (as defined in the Transportation
Agreement with the Initial Shipper in such Initial Shipper Group) of the sum
of the aggregate principal amount of Senior Debt, Tariff Advances and
Transportation Notes outstanding and, as a result, the Benchmark Interest
Expense payable (directly or indirectly) as part of Tariffs into Initial
Shipper's Related Account would be insufficient to meet the additional
interest expense (calculated on the basis of the applicable interest rate,
within the meaning of the term in Section 2.6 above) on Senior Debt
outstanding under Initial Shipper's Related Senior Debt Tranche and on Related
Tariff Advances and Transportation Notes, Carrier shall impose on Initial
Shipper as part of Tariffs a charge equal to the amount of such deficit of
additional interest expense.
(d) For purposes of this Section, additional interest expense in any
period means, if a positive amount, the interest expense on an amount of
Senior Debt outstanding calculated based on the applicable interest rate
(within the meaning of interest rate specified in Section 2.6 above) less any
interest income (net of taxes) received by Carrier on the unspent proceeds
thereof and on Cash-on-Hand with respect to the related Initial Shipper.
(e) In the event that Initial Shipper (or an Affiliate thereof or
other Person acceptable to each other Initial Shipper and Carrier, as the case
may be) fails to pay any amount due by it to Carrier under its Letter
Agreement or Agreements with Carrier with respect to certain indemnification
and contribution obligations of Initial Shipper to Carrier that, if paid by
Carrier, would be considered to be Operating and Maintenance Costs but for the
dollar limitation thereon set forth in the definition thereof, Carrier shall
increase the Tariffs otherwise payable by such Initial Shipper by an amount
equal to such amount.
Section 5.2. Rebates. Initial Shipper may, at its option, require
that, to the extent Carrier has Available Cash (and up to Initial Shipper's
Proportionate Share thereof after giving effect to any investment directions
received from Shareholders pursuant to Section 5.6(b) of the Oleoducto Central
Agreement), Carrier apply as a cash rebate on its Tariffs Initial
Shipper'sProportionate Share of Cash-Trap Interest (after giving effect to any
investment directions received from the Shareholder that is a Person in such
Initial Shipper's Initial Shipper Group pursuant to Section 5.6(b) of the
Oleoducto Central Agreement), and any other interest on Cash-on-Hand with
respect to Initial Shipper.
Section 5.3. Charges in Respect of Increased Costs and Withholding
Taxes. In the event that Carrier incurs any costs in respect of Senior Debt,
outstanding under Initial Shipper's Related Senior Debt Tranche in respect of
withholding or deduction for any taxes, duties, assessments or governmental
charges of whatever nature imposed upon or levied upon or as the result of the
payment by Carrier of principal and interest on such Senior Debt by any
jurisdiction or any political subdivision or taxing authority or in such
jurisdiction as a result of any amendment to, or change in, the laws (or any
regulation or rulings thereunder) of such jurisdiction or any political
subdivision, taxing, governmental, fiscal, monetary or other authority thereof
or therein affecting taxation or the manner in which any provider of such
Senior Debt allocates capital in respect of its assets or liabilities or
deposits with it or for its account or advances or commitments made by it or
otherwise affecting such provider's costs in connection with such Senior Debt
or any amendment to or change in any official interpretation or application of
such laws or regulations, then Initial Shipper's Tariffs shall be increased by
the amount of such costs that is in excess of any such costs included in
"interest rate" (within the meaning of Section 2.6 above) on such Senior Debt.
<PAGE>
SCHEDULE D
To Transportation Agreement
INITIAL SHIPPERS
GENERAL TERMS AND CONDITIONS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
ARTICLE ONE
DEFINITIONS
1.1 Definitions D-1
ARTICLE TWO
ALLOCATION RULES
2.1 Availabile Capacity D-1
2.2 Excess Capacity D-2
2.3 Sole Risk Capacity D-2
ARTICLE THREE
NOMINATION PROCEDURES
3.1 Projections D-3
3.2 Updated Projections D-3
3.3 Schedules D-3
3.4 Nominations D-4
3.5 Nomination Rules D-5
3.6 Interim Revisions D-5
ARTICLE FOUR
RECEIPTS AND DELIVERIES
4.1 Penalties D-6
4.2 Routine Adjustments D-7
4.3 Accounted For Losses D-7
ARTICLE FIVE
AUDIT
5.1 Audit D-8
5.2 Audit Claims D-8
5.3 Duration of Audit Rights D-8
5.4 Corrections D-8
ARTICLE SIX
DETERMINATION OF QUANTITIES AND QUALITY
6.1 Measurements D-9
6.2 Calibration of Equipment D-9
6.3 Taking of Samples D-9
6.4 Determination of Volumes D-10
6.5 Recording of Data D-10
6.6 Metering Systems D-10
6.7 Mnaual Measurements D-11
6.8 Corrections D-11
6.9 Conversions D-12
ARTICLE SEVEN
QUALITY REQUIREMENTS
7.1 Minimum Quality D-12
7.2 Certification as to Quality D-12
7.3 Removal of Petroleum D-12
ARTICLE EIGHT
QUALITY BANKS; SCHEDULING AND USE
8.1 Inlet Quality Bank Adjustment D-13
8.2 Inlet Quality Bank Adjustment Procedures D-13
8.3 Schedling and Use of Terminal D-13
ARTICLE NINE
INDEMNIFICATION
9.1 Shipper's Indemnity D-14
9.2 Carrier's Indemnity D-14
ARTICLE TEN
CONFIDENTIAL INFORMATION
10.1 Scope D-15
10.2 Notice D-16
10.3 Return of Confidential Information D-16
ARTICLE ELVEN
DISPUTE RESOLUTION
11.1 Controversies D-16
11.2 Procedures D-17
ARTICLE TWELVE
OPERATIONS
12.1 Substances Limited D-17
12.2 Carrier Notices D-17
12.3 Capacity Reductions D-17
12.4 Planned Maintenance D-18
12.5 Unplanned Reductions D-18
12.6 Use of Petroleum D-18
12.7 Line Fill D-18
ARTICLE THIRTEEN
BANKRUPTCY
13.1 Waiver of Rights in Bankruptcy D-19
ARTICLE FOURTEEN
GENERAL
14.1 Notices D-19
14.2 Amendments D-20
14.3 No Third Party Beneficiaires D-20
14.4 Severability D-20
14.5 Further Assurances D-20
14.6 Headings D-20
14.7 Remedies D-20
14.8 Waiver D-20
14.9 Acknowledgement D-21
Attachmemt 1 - Characteristics of Cusiana Petroleum
Attachment 2 - Minimum Quality Specifications and Testing Specifications
</TABLE>
INITIAL SHIPPERS
GENERAL TERMS AND CONDITIONS
ARTICLE ONE
DEFINITIONS
Section 1.1. Definitions. The defined terms used herein have the
meanings assigned to them in Schedule A to the Agreement to which these
General Terms and Conditions are attached.
ARTICLE TWO
ALLOCATION RULES
Section 2.1. Available Capacity. (a) The Available Capacity
(including Excess Capacity) of each Segment shall be made available to Initial
Shippers, pursuant to the nomination procedures of Article Three, before any
Available Capacity is allocated to other Shippers (except that such priority
shall be subject to Section 3.3 of the Agreement prior to the earlier of the
Completion Date and December 31, 1997), observing the priority that, unless a
nominator makes a Downstream Nomination, nominations for Deliveries commencing
at a Delivery Point which is upstream of a second Delivery Point (whether on
the same Segment or two or more contiguous Segments) shall be allocated
Available Capacity before and in preference to nominations for Deliveries at
such second Delivery Point. As between Initial Shippers and Third Party
Shippers, Carrier shall make available to each Initial Shipper its Allocated
Capacity for each Segment, observing the following priorities, in each case
giving priority to Long-term Hauls over Short-term Hauls:
(i) first, to all nominations for Petroleum accorded a
transportation priority pursuant to applicable law (Royalty Oil), provided
that any such Royalty Oil shall always be deemed to be transported through the
Proportionate Share of Available Capacity of Ecopetrol;
(ii) second, to all nominations for transportation of Cusiana
Petroleum, in proportion to each Initial Shipper's Proportionate Share, when
Available Capacity is in excess of an average of 556,000 Standard Barrels per
day during any one year period (654,000 peak);
(iii) third, proration equally among all nominations for
transportation of Cusiana Petroleum (in proportion to each Initial
Shipper'sProportionate Share) and all nominations for transportation of
Central Llanos Petroleum (not to exceed an average of 56,000 Standard Barrels
per day during any one year period (65,900 peak)), when Available Capacity is
in excess of an average of 450,000 Standard Barrels per day during any one
year period (530,000 peak) but less than an average of 556,000 Standard
Barrels per day during any one year period (654,000 peak);
(iv) fourth, when Available Capacity is less than an average of
450,000 Standard Barrels per day during any one year period (530,000 peak), to
all nominations for transportation of Cusiana Petroleum, in proportion to each
Initial Shipper's Proportionate Share;
(v) fifth, to all nominations for transportation of Petroleum
produced by each Initial Shipper from a Dedicated Area by virtue of its
interest under a contract, concession or other grant to produce such Petroleum
in situ, in proportion to each Initial Shipper's Proportionate Share;
(vi) sixth, to all nominations for transportation of other
Petroleum produced by each Initial Shipper or any of its Affiliates by virtue
of its interest under a contract, concession or other grant to produce such
Petroleum in situ, in proportion to each Initial Shipper's Proportionate
Share; and
(vii) seventh, to all nominations for transportation of Petroleum
by third parties, pro rata to requests from such third parties.
In the event of a reduction in Available Capacity within a Schedule Month,
Carrier shall apply curtailments using the priorities set forth in this
Section 2.1 in reverse order on a category by category basis and, within
categories, in proportion to the nominations made within each category.
(b) Each Initial Shipper shall use the Oleoducto Central for the
purpose of transporting Petroleum in priority to all alternatives to transport
Petroleum on any route joining any of the Receipt Points and Delivery Points,
provided that there is Available Capacity and that such use does not adversely
affect such Initial Shipper.
Section 2.2. Excess Capacity. If aggregate Initial Shipper
nominations for a Segment in a Schedule Month are less than the Available
Capacity of such Segment, then Carrier shall make the resulting Excess
Capacity available to other Shippers in proportion to the nominations of such
other Shippers.
Section 2.3. Sole Risk Capacity. If (i) the Aggregate Scheduled
Capacity equals the Available Capacity for a Segment in a Schedule Month and
(ii) an InitialShipper is a Full Nominator for such Segment, then such Initial
Shipper may nominate all or any portion of its share of Sole Risk Capacity for
such Segment. Sole Risk Capacity may be made available pursuant to rules
adopted by the Sole Risk Parties in connection with such Sole Risk Facilities,
provided that such rules shall not deviate in any respect from the rules
established in the first sentence of this Section 2.3 and provided further
that no Initial Shipper (other than an Initial Shipper that is a Sole Risk
Party with respect to such Sole Risk Capacity) shall be entitled to use Sole
Risk Capacity unless the Sole Risk Parties otherwise agree.
ARTICLE THREE
NOMINAL PROCEDURES
Section 3.1. Projections. Carrier shall give each Initial Shipper
as much advance notice of the expected Commencement Date as practicable. As
much in advance of the Commencement Date as practicable, and on or before the
first day of each subsequent September, each Initial Shipper shall provide
Carrier a document (a Projection) with the following information (in a format
and with such contents as are reasonably requested by Carrier) with respect to
each Segment for (a) the immediately ensuing Fiscal Year, on a month-by-month
basis, and (b) total volumes for each of the two Fiscal Years next succeeding
the first Fiscal Year:
(i) Shipper's best estimate of the volume to be transported in
actual barrels per day, assuming uniform rates of flow, separately stated for
each Batch;
(ii) the Characteristics for each Batch;
(iii) Receipt Points, separately stated for each Batch, with the
schedule of Receipts for each; and
(iv) Delivery Points, separately stated for each Batch, with the
schedule of Deliveries for each.
Section 3.2. Updated Projections. Within 10 days before the
end of each calendar quarter each Shipper shall provide Carrier with an update
of its then current Projection, noting all material changes to the information
contained therein.
Section 3.3. Schedules. Based on the Projections received and the
Available Capacity from time to time, Carrier shall prepare a schedule (a
Schedule) of projected Deliveries and Receipts for the Oleoducto Central and
each Segment, corresponding to the first Fiscal Year and Batch subdivisions
set out in the Projections.Carrier shall deliver to each Shipper a Schedule
and an updated Schedule within 30 days after its receipt of the corresponding
Projections and updated Projections, respectively.
Section 3.4. Nominations. (a) On or before the third day of each
Nomination Month, Carrier shall deliver to each Initial Shipper an updated
Schedule showing the Available Capacity for each Segment for the following
Schedule Month and each of the three next succeeding calendar months.
(b) On or before the sixth day of each Nomination Month, each
Initial Shipper shall notify Carrier, in any written form or format reasonably
required by Carrier, of its Nominated Capacity by Segment for the following
Schedule Month, for Short-term Hauls, and the two or more following Schedule
Months, for Long-term Hauls, included in such notice shall be the Initial
Shipper's schedule of Deliveries for each Delivery Point.
(c) On or before the ninth day of each Nomination Month, Carrier
shall notify each Initial Shipper of the Scheduled Capacity by Segment for all
Shippers, based on the Nominated Capacity figures received, and the volume of
Excess Capacity, if any, by Segment for the following Schedule Month.
(d) On or before the twelfth day of each Nomination Month, each
Full Nominator shall notify Carrier, in any written form or format reasonably
required by Carrier, of its request to be allocated all or any portion of the
Excess Capacity and any Sole Risk Capacity of any Segment. Included in such
notice shall be the Initial Shipper's schedule of Deliveries for each Delivery
Point.
(e) On or before the fifteenth day of each Nomination Month,
Carrier shall notify each Initial Shipper of the Scheduled Capacity by Segment
for all Shippers (including Third Party Shippers) for the following Schedule
Months for which Short-term Haul and Long-term Haul nominations have been
made, including the allocations of Excess Capacity and Sole Risk Capacity, if
any.
(f) The notices delivered by Initial Shippers in accordance with
sub-paragraphs (b) and (d) immediately preceding are herein called
nominations; the verb nominate and the noun nominator shall have commensurate
meanings.
(g) Carrier may provide to the Initial Shippers a written form for
nominations to be made in a single submission from which Carrier shall be
authorized to assign Scheduled Capacity in accordance with the allocation
rules of Article Two above and the nomination rules of this Article Three. Use
of such form shall not be mandatory. The Initial Shipper may submit
nominations through one or more designees (such as a field operator).
Section 3.5. Nomination Rules. (a) If Initial Shipper fails to
timely nominate in accordance with the procedures of the preceding provisions
of this Article Three, then the Tariff applicable to the volumes contained in
first such non-conforming nomination shall be equal to 102% of the otherwise
applicable Tariff rates (excluding the Minimum Tariff), and the Tariff
applicable to the volumes contained in the second and all subsequent
non-conforming nomination shall be equal to 105% of the otherwise applicable
Tariff rates (excluding the Minimum Tariff).
(b) In allocating Scheduled Capacity amounts, Carrier shall observe
the allocation and priority rules of Article Two above.
(c) Any Scheduled Capacity for a Schedule Month allocated by
Carrier in a good faith interpretation of the terms of the Transportation
Agreements and these General Terms and Conditions, and based on the
information available and nominations received by Carrier on or before the
twelfth day of the immediately preceding calendar month, shall be binding on
the Initial Shippers for such Schedule Month. Any disagreement concerning the
allocation of Scheduled Capacity not covered by the immediately preceding
sentence shall be resolved pursuant to the arbitration rules of Article Eleven
below. Pending the conclusion of any such arbitration proceedings, Carrier may
rely on its good faith interpretations of the Transportation Agreements, and
the results of any arbitration proceeding shall have prospective effect only.
(d) An Initial Shipper shall give Carrier notice as soon as
possible after it becomes aware that (i) its Deliveries in any Month at a
Delivery Point will be less than 95% of the Scheduled Capacity for the Segment
to which such Delivery Point is directly connected, or (ii) its Receipts in
any Month at a Receipt Point will be less than 95% of the Scheduled Capacity
for the Segment to which such Receipt Point is directly connected.
(e) An Initial Shipper may not nominate a capacity amount for a
Segment in any Schedule Month in excess of 105% of the amount assigned to such
Initial Shipper for such month in the Projection, or updated Projection, last
delivered to Carrier by such Initial Shipper unless in the relevant Schedule
Month there is at all times unused capacity in such Segment.
Section 3.6. Interim Revisions. (a) Carrier shall promptly notify
all Initial Shippers of any reduction in Available Capacity (not reflected in
the then current Schedule) for a Schedule Month which occurs after the
seventeenth day of the prior calendar month. With such notice Carrier shall
also notify the Initial Shippers of the revised Scheduled Capacity allocations
resulting from such reduction using the allocation and priority rules of
Article Two above.
(b) Carrier shall promptly notify all Initial Shippers of the
amount of any increase in Available Capacity (not reflected in the then
current Schedule) for a Schedule Month which occurs after the seventeenth day
of the prior calendar month and before the seventeenth day of such Schedule
Month. Within two days after receipt of such notice, each Full Nominator shall
notify Carrier, in any form or format reasonably required by Carrier, of its
request to be allocated all or any portion of the increased capacity of such
Segment. Within two days after receipt of such nominations, Carrier shall
notify the Initial Shippers of the revised Scheduled Capacity allocations
resulting from such increase and nominations, using the allocation and
priority rules of Article Two above.
ARTICLE FOUR
RECEIPTS AND DELIVERIES
Section 4.1. Penalties. (a) Each nomination by an Initial Shipper
for a Segment shall constitute its commitment to deliver Receipts and accept
Deliveries in amounts, and at as near uniform rates of flow for the nominated
Schedule of Receipts and Deliveries as can be practicably achieved, as
necessary to effect Receipts equal to (i) not less than 95% of its Scheduled
Capacity, and (ii) not more than 105% of its Scheduled Capacity.
(b) If an Initial Shipper fails, for reasons other than an Excusable
Event, to deliver Receipts at least equal to 90% of its Scheduled Capacity,
then such Shipper shall be liable for the full amount of Tariffs on any amount
of nominated Receipts not delivered which are in excess of 10% of Scheduled
Capacity, and the penalties specified below. Except in the case where an
Initial Shipper delivers volumes in excess of 105% of its Scheduled Capacity
and there was at all times in such Schedule Month unused transportation
capacity in such Segment, if an Initial Shipper delivers, for reasons other
than an Excusable Event, more than 105% of its Scheduled Capacity, then such
Initial Shipper shall be liable for 105% of the applicable Tariff for each
Standard Barrel of such overdelivery, and any additional penalties specified
in paragraph (c) below.
(c) In the events described in paragraph (b) above, an Initial
Shipper overdelivering or underdelivering shall be liable for the following
penalties:
(i) with respect to the second failure to so deliver such Receipts
or accept such Deliveries within the same twelve-month period, a Tariff equal
to 105% of the otherwise applicable Tariff amount for each Standard Barrel of
such over or underdelivery; and
(ii) with respect to the third and all subsequent failures to so
deliver such Receipts or accept such Deliveries within the same twelve-month
period, a Tariff equal to 110% of the otherwise applicable Tariff amount for
each Standard Barrel of such over or underdelivery;
provided that such penalties shall not apply to any nominations for
transportation of Cusiana Petroleum.
Section 4.2. Routine Adjustments. Carrier shall redeliver to each
Initial Shipper, measured at the Delivery Points nominated by such Initial
Shipper, a volume of Petroleum equal to the volume delivered by such Shipper
and measured at the Receipt Points, adjusted as follows:
(a) deductions for accounted-for and unaccounted-for line loss in
each Segment, apportioned among the Initial Shippers in proportion to their
measured Receipts into such Segment;
(b) deductions for fuel and lubrication volumes of Petroleum used
by Carrier, if separately measured at the point of withdrawal from a Segment,
and if the Tariff of each Initial Shipper in respect of such Segment for the
month of such use is credited with an amount equal to such Shipper's share (in
proportion to the measured Receipts into such Segment of all such Shippers) of
the product of (i) the number of measured barrels so used, times (ii) a U.S.
dollar per barrel price equal to the value assigned to such Petroleum in the
quality bank adjustments set forth in Article Eight (the Quality Bank
Adjustments) (or in the absence of such assigned value, an equivalent market
value of such Petroleum, F.O.B. Port of Covenas, reasonably selected by
Carrier); and
(c) increases or decreases as required to equate the quality and
volume of Petroleum sampled and measured at the Receipt Points to an
equivalent volume of the different quality of Petroleum sampled and measured
at the Delivery Points, using the conversion procedures of the Quality Bank
Adjustments.
Section 4.3. Accounted For Losses. The volume of all losses of
Petroleum that due to loss of system integrity (such as spills, rupture,
explosion, sabotage, acts of terrorism, and other events, whether Excusable
Events or not) shall be estimated by Carrier using its best engineering
judgment and, if requested by any Initial Shipper, the assistance of qualified
consultants.
ARTICLE FIVE
Section 5.1. Audit. Each Initial Shipper shall have the right, at
its expense, to inspect, examine and audit, at all reasonable times, but not
more than twice each year, the books of account and records of Carrier which
relate to the operations of the Oleoducto Central to the extent necessary to
verify the accuracy of all amounts used in the calculation of Tariffs and all
statements delivered hereunder. Initial Shippers will make Reasonable Efforts
to conduct such audit jointly or simultaneously with other Initial Shippers so
as to minimize any undue burden on Carrier.
Section 5.2. Audit Claims. Any Initial Shipper performing an audit
shall submit to Carrier any claims of discrepancies within 60 days of
completion of an audit (Audit Claims). Carrier shall respond in writing to
such claims within 60 days of receipt of such claims. Upon expiration of 180
days following the submission by Initial Shipper of an Audit Claim, Carrier
shall pay Initial Shipper the full amount of any such claims as to which
Carrier has failed to respond with reasonable documentary support showing the
inaccuracy of such Audit Claim. Claims remaining unresolved after a period of
180 days following the submission of any Audit Claim by any Initial Shipper
shall be submitted to arbitration under Article Eleven of this Agreement,
unless Carrier and Initial Shipper agree to a time extension.
Section 5.3. Duration of Audit Rights. Initial Shipper's right to
audit set forth in Section 5.1 above shall expire twenty-four months from the
end of the Fiscal Year to which the particular amounts were attributed.
Section 5.4. Corrections. Items established to be inaccurate as a
result of any audit shall be rectified as soon as possible after completion of
such audit. Carrier shall immediately refund Initial Shipper the amount of any
overpayment and its reasonable audit costs associated therewith with interest
calculated at the Applicable Rate from the date 10 days after completion of
such audit until such overpayment is refunded. Initial Shipper shall
immediately pay Carrier the amount of any underpayment with interest
calculated at the Applicable Rate from the date 10 days after completion of
such audit until such payment is made.
ARTICLE SIX
DETERNIMATION OF QUANTITIES AND QUALITY
Section 6.1. Measurements. The quantity measurements and the
quality sampling of Receipts and Deliveries (including calibration of
instruments) shall be the responsibility of Carrier, in accordance with the
prevailing standards and practices for pipelines accepted by the American
Petroleum Institute. The type and amount of the equipment installed to carry
out measurements and samplings shall be determined by Carrier.
Section 6.2. Calibration of Equipment. (a) Carrier shall ensure
that adequate measurements and calibration procedures for the metering systems
are established within an approximation of 0.02% repeatability through testers
at appropriate places in each Segment, at the Receipt Points and the Delivery
Points. The calibration of the metering systems shall be made when the
operational circumstances so require in the judgment of Carrier, but no less
often then once every two weeks. The calibration factor of the meters shall be
effective only as from the date of the last calibration, except for manifest
error.
(b) Prior to the routine calibration of the meters, Carrier shall
notify the Shippers reasonably in advance regarding the dates on which said
calibration will be carried out in order that their authorized representatives
may, if they consider it necessary, witness such calibration.
(c) Before commencing any Receipt or Delivery and at intervals no
more frequently than twice each month, Initial Shipper may appoint, at its own
expense, an independent petroleum inspector, reasonably acceptable to Carrier,
in order that he may independently inspect at any Delivery Point or Receipt
Point the accuracy of the results of the measurements and samplings for the
determination of the quantity and quality of Petroleum.
Section 6.3. Taking of Samples. Carrier is responsible for taking
four Petroleum samples, of two litres each, for each Receipt and Delivery. The
frequency of such sampling shall be determined from time to time by Carrier
based on, among other factors, the quality and consistency of the Petroleum.
The samples shall be distributed as follows:
(a) One sample shall be used for the determination of quality.
(b) Carrier shall retain one sample for each Receipt or Delivery in
which the Petroleum is of abnormal character and arrange for it to be stored
safelyfor a period of 90 days. In the event of a conflict regarding a
specified Receipt or Delivery, Carrier shall retain the sample which shall be
sealed for a period of 90 days.
(c) When Petroleum is delivered into a tanker, two samples shall be
delivered: one to the representative of the tanker captain, and the other as
the Initial Shipper shall direct.
Section 6.4. Determination of Volumes. The volumes of Petroleum
which Carrier accepts to be transported shall be determined in appropriate
measurements, using the meters which shall be installed for such purpose by
Carrier at the Receipt Point and the Delivery Points; or, in the absence of
such meters, through the direct measurement of the level of the respective
tanks, in accordance with API MPMS Chapter 3.1A, as amended from time to time,
or as approved by the MME. Any measurement in the tanks will be carried out
one hour before commencing Receipts and one hour after the Deliveries have
ended.
Section 6.5. Recording of Data. Upon the Receipt of a given
quantity of Petroleum for transport and Delivery at the Delivery Point, the
official Carrier forms shall be filled out for each measurement mode in which
the following data, among others, will be noted: the date, the registers of
the meters or the measurements of the storage tank or tanks before commencing
and after ending Receipts and Deliveries, gravities, densities, temperatures,
pressures, percentages of sediment and water and any other fact necessary for
their identification. The samplings, measurement, and temperature readings may
be witnessed by representatives of Initial Shipper and Carrier. The forms
referred to above constitute the documents on which Tariff and Quality Bank
Adjustment calculations will be made, and they shall serve as probative
documents for any other purpose.
Section 6.6. Metering Systems. The quantity and quality
measurements and the samples of Petroleum delivered or withdrawn shall be
taken by Carrier through the metering systems installed at Receipt Point and
Delivery Point locations mutually agreed between Carrier and Initial Shippers.
Each metering system shall include:
(a) A proving loop installed and calibrated according to the
water-draw method, as specified in API MPMS-4 Petroleum Measurement Standards
Manual, Chapter 4-Proving Systems, latest edition, as amended from time to
time.
(b) Turbine or positive displacement meters installed according to
the API MPMS-6 Petroleum Measurement Standards Manual, Chapter 6-Metering
Assemblies Standards, latest edition, as amended from time to time. The meter
factors shall be derived by calibration, using the same standards, with
temperature and pressure correction.
(c) An installed continuous sampler and sample taking, as specified
in API MPMS-8 Petroleum Measurement Standards Manual, Chapter 8-Sampling,
latest edition, as amended from time to time. The Petroleum samples shall be
analyzed in accordance with the latest methods published, as amended from time
to time, namely:
Water (by distillation) ASTM D 1744
Salt content ASTM D 3230
Sediments (by extraction) ASTM D 473
Density ASTM D 4052
Sulphur ASTM D 4294
BS & W measuring equipment by the centrifuge method may also be available,
using test method ASTM D 4007, as amended from time to time. (The density
determination of the samples shall be carried out in the event of damage to
the densitometer, and for densitometer validation and calibration.)
(d) A densitometer for the continuous measurement of density.
(e) An electronic flow measurement system meeting the requirements
of API MPMS Chapter.21.2, latest edition, as amended from time to time.
(f) The volumetric correction factor to be applied to the
measurements shall be that which appears in the latest publication of ASTM
tables 23 and 24 (ASTM 1250).
Section 6.7. Manual Measurements. If measurements and samplings by
manual methods are required, they shall be taken in accordance with the latest
methods published, as amended from time to time, including:
Temperature API MPMS Chapter 7
Sampling API MPMS Chapter 8
Tank Volume API MPMS Chapter 3.1A
Section 6.8 Corrections. In relation to the corrections for
temperature that will be used to determine volumes in barrels at 60 F, the
tables entitled Petroleum Measurement Tables Volume Correction Factor, Chapter
11.1 (latest edition), Tables 5A and 6A for crude oils and Tables 5B and 6B
for fuel oils will be used. For the correction of crude Petroleum pressure,
MPMS Chapter 11.2.1 shall be used. MPMS Chapter 11.2.2 shall be used for
natural gas liquids.
Section 6.9. Conversions. For the purpose of calculating Tariffs,
Carrier shall convert the number of actual barrels of Petroleum received to an
equivalent number of Standard Barrels in accordance with a hydraulic model of
the Oleoducto Central, developed and maintained by Carrier, that identifies,
to the reasonable satisfaction of the Initial Shippers, (i) the differences in
the throughput capacity and Variable Operating Costs associated with
differences in the Characteristics of Petroleum, and (ii) a corresponding,
technically sound basis for converting actual barrels of Petroleum to an
equivalent number of Standard Barrels based on such differences.
ARTICLE SEVEN
QUALITY REQUIREMENTS
Section 7.1. Minimum Quality. Initial Shipper shall not deliver to
Carrier and Carrier shall not be obligated to accept for transportation
Petroleum that, as determined by Carrier, fails to meet the minimum quality
specifications set out in Attachment 2 hereto, using the most current versions
of the testing methods specified in Attachment 2.
Section 7.2. Certification as to Quality. Initial Shipper shall,
as reasonably required by Carrier, provide to Carrier a certificate verifying
the Characteristics and quality specifications of Cusiana Petroleum and
Petroleum from other fields to be delivered to Carrier by Initial Shipper
during the ensuing twelve months. Initial Shipper shall promptly provide to
Carrier a revised certificate at any time that the Characteristics or quality
specifications of Petroleum to be delivered materially change.
Section 7.3. Removal of Petroleum. If Carrier determines that an
Initial Shipper has delivered Petroleum that differs substantially from the
minimum quality specifications specified herein, then Carrier may remove such
Petroleum from the Oleoducto Central at the sole cost, risk, and expense of
Initial Shipper. Carrier shall have the further right to sell, as Initial
Shipper's agent, such removed Petroleum in any commercially reasonable manner.
Carrier shall pay from the proceeds of such sale all Handling Costs incurred
by Carrier and any resulting damages to the Petroleum of other Shippers. The
remainder of such proceeds, if any, shall be promptly paid by Carrier to
Initial Shipper. The rights given to Carrier in this Section 7.3 are in
addition to and not in substitution for any other rights available to Carrier.
ARTICLE EIGHT
QUALITY BANKS; SCHEDULING AND USE
Section 8.1. Inlet Quality Bank Adjustment. At each point of the
Oleoducto Central where two streams of Petroleum are commingled for the
purpose of transportation, a Quality Bank Adjustment will be established at
the request of any Initial Shipper affected by such commingling of Petroleum.
Any such Quality Bank Adjustment is to be administered by Carrier, and all
associated costs will be borne by Carrier. The purpose of any such Quality
Bank Adjustment is to keep each affected Initial Shipper in a materially
equivalent economic position to that which would have existed without the
commingling of Petroleum based on the market price received for Petroleum
transported through the Oleoducto Central.
Section 8.2. Inlet Quality Bank Adjustment Procedures. Carrier
shall establish detailed Quality Bank Adjustment procedures, and such Quality
Bank Adjustment procedures shall constitute an integral part of these General
Terms and Conditions. Unless otherwise agreed, the principles followed by such
Quality Bank Adjustment procedures will be as follows:
(a) The procedures will implement the requirements of Section 8.1
above;
(b) The procedures will rely upon appropriate modification of the
cut distillation methodology, an industry standard crude valuation procedure;
(c) The procedures will take into account contaminants such as
metals, sulfur and any other contaminants that would raise or lower the value
of a non-commingled crude oil; and
(d) The procedures will reference active markets near or downstream
from the actual disposition points of the commingled crude oil for the market
prices of such cuts as are present in the Petroleum, and such active markets
shall have publicly documented price records, as available in Platt's or its
equivalent.
Section 8.3. Scheduling and Use of Terminal. Carrier and Initial
Shippers agree that they will establish procedures with respect to scheduling
of lifting and vessels and that such procedures shall constitute an integral
part of these General Terms and Conditions.
ARTICLE NINE
INDEMNIFICATION
Section 9.1. Shipper's Indemnity. Each Initial Shipper shall
severally (and not jointly):
(a) be liable to Carrier for any and all claims, demands, suits,
actions, damages, costs, losses and expenses of whatsoever nature which
Carrier may suffer, sustain, pay or incur; and
(b) indemnify Carrier from and against any and all claims, demands,
suits, actions, damages, costs, losses and expenses of whatsoever nature which
may be brought against or suffered by Carrier or which it may suffer, sustain,
pay or incur;
including loss or damage to the Oleoducto Central, arising out of such Initial
Shipper's gross negligence (culpa grave), willful misconduct (dolo) or breach
of the Agreement, the Tariff Regulations or these General Terms and
Conditions; provided that in no event, whether as a result of alleged gross
negligence (culpa grave) or willful misconduct (dolo) of such Initial Shipper
or otherwise, shall such Initial Shipper be liable to Carrier for its loss of
profits or revenue, cost of capital, cancellation of permits, termination of
contracts or for any other consequential damage or claim whatsoever, except
and to the extent that such Initial Shipper may recover any such losses,
costs, damages or claims under any policy of insurance maintained by such
Initial Shipper in its sole discretion.
Section 9.2. Carrier's Indemnity. Carrier shall:
(a) be liable to each Initial Shipper for any and all claims,
demands, suits, actions, damages, costs, losses and expenses of whatsoever
nature which Initial Shipper may suffer, sustain, pay or incur; and
(b) indemnify each Initial Shipper from and against any and all
claims, demands, suits, actions, damages, costs, losses and expenses of
whatsoever nature which may be brought against or suffered by Initial Shipper
or which it may suffer, sustain, pay or incur;
including loss or damage to the facilities of Initial Shipper, arising out of
Carrier's gross negligence (culpa grave), willful misconduct (dolo) or breach
of the Agreement, the Tariff Regulations or these General Terms and
Conditions; provided that any liability or indemnity for claims arising out of
Carrier's gross negligence (culpa grave) or willful misconduct (dolo) shall
not exceed Initial Shipper's Proportionate Share of $20 million;and provided
further that in no event, whether as a result of alleged gross negligence
(culpa grave) or willful misconduct (dolo) of Carrier or otherwise, shall
Carrier be liable to any Initial Shipper for its loss of profits or revenue,
cost of capital, cancellation of permits, termination of contracts or for any
other consequential damage or claim whatsoever, except and to the extent that
Carrier may recover any such losses, costs, damages or claims under any policy
of insurance maintained by Carrier in its sole discretion.
ARTICLE TEN
CONFIDENTIAL INFORMATION
Section 10.1. Scope. (a) Each Party shall use its best efforts to
ensure that all information exchanged pursuant to Article Three above or
otherwise disclosed to it in connection with the Agreement and identified by
the disclosing Party as being confidential (collectively, Confidential
Information), shall be kept confidential.
(b) Unless (x) otherwise required by law or official request issued
by a court of competent jurisdiction or by a judicial, administrative,
legislative, regulatory or self-regulatory authority (including any stock
exchange or similar regulatory authority), or (y) required by the reasonable
good faith judgment of the disclosing Party as a response to any environmental
or other emergency that may have a significant adverse effect upon the
Parties, Confidential Information shall not be revealed without the consent of
the disclosing Party other than to:
(i) the directors, officers, and employees of the Parties;
(ii) a financial advisor, prospective managers of an underwriting
syndicate, legal counsel, consultant, contractor or subcontractor that has a
legitimate business need to be informed and has signed an agreement to protect
the Confidential Information from further disclosure to the same extent as the
Parties are obligated under this Section 10.1;
(iii) any third party to whom the disclosing Party contemplates an
assignment of all or any part of its rights hereunder in accordance with the
terms hereof, and has signed a confidentiality agreement satisfactory to the
disclosing Party; or
(iv) a governmental agency or to the public which the disclosing
Party believes in good faith is required by applicable laws or regulations or
the rules of any stock exchange or similar regulatory authority.
Section 10.2. Notice. The disclosing Party shall give notice to
the other Party as soon as practicable after the making of any disclosure made
as a response to any environmental or other emergency or as permitted by
Section 10.1(b) above. If Carrier is the disclosing Party, it shall give such
notice to all Initial Shippers. As to any disclosure pursuant to Section
10.1(b)(i) or (ii) above, only such Confidential Information as such third
party shall have a legitimate business need to know shall be disclosed and, in
the case of disclosure to a third party permitted by Section 10.1(b)(iii)
above, the Party disclosing such information shall cause such party to protect
the Confidential Information from further disclosure to the same extent as the
Parties are obligated under Section 10.1 above and, in the case of disclosure
to a third party permitted by Section 10.1(b)(ii) or (iii) above, the Party
disclosing such information shall cause such third party to first agree in
writing to so protect the Confidential Information.
Section 10.3. Return of Confidential Information. Upon request in
writing by the disclosing Party to the other Party, such other Party shall,
and shall cause its representatives to,
(i) return all documents containing Confidential Information that
have been provided by the Party demanding the return of Confidential
Information (or on its behalf); and
(ii) destroy any copies of such documents and any document or other
record reproducing, containing or made from or with reference to the
Confidential Information;
except, in each case, for any submissions to or filings with judicial,
administrative, legislative or regulatory authorities, or items exchanged
under Article Three above and reasonably retained for audit purposes. Such
return or destruction shall take place as soon as practicable after the
receipt of such notice.
ARTICLE ELEVEN
DISPUTE RESOLUTION
Section 11.1. Controversies. If (i) any controversy, claim, or
dispute arises between Carrier and an Initial Shipper that relates to the
Agreement, including the termination or invalidity hereof (hereinafter
referred to as a Controversy) and (ii) the Parties have not resolved such
Controversy within fifteen (15) days (or such other period of time as the
Parties may at the time agree upon) after either Party gives notice of such
Controversy to the other, then the Controversy in question shall, at the
request of any Party, be resolved by arbitration in accordance with the
succeeding provisions of thisSection 11.1, which shall be the sole and
exclusive remedy for resolution of such Controversy. Any claimed default based
upon such Controversy shall be deemed suspended until the Controversy is
settled, provided that the Party claimed to be in default is proceeding
diligently with the arbitration. For greater clarity and certainty,
arbitration shall not be available to anyone who is not a Party, and the
aforesaid requirement to arbitrate shall not preclude a Party from seeking
contribution, indemnification, or damages from the other Party in proceedings
instituted by third parties in courts of competent jurisdiction. Judgment on
an arbitration decision may be entered by any court having jurisdiction.
Section 11.2. Procedures. Any Controversy shall be settled by a
Court of Arbitration designated by the board of directors of the Chamber of
Commerce of Santaf de Bogot by drawing lots among the arbitrators appearing in
the list of arbitrators with a specialization which relates to the matter
under dispute kept by the Center of Mercantile Arbitration and Conciliation of
said Chamber. The Court thus designated shall abide by the provisions of the
Code of Civil Procedure and the Commercial Code in accordance with the
following rules: (A) the Court shall consist of three arbitrators; (B) the
internal organization of the Court shall be subject to the rules established
to such end by the Center of Mercantile Arbitration and Conciliation of the
Chamber of Commerce of Santaf de Bogot; (C) the decision of the Court shall be
in law; and (D) the Court shall meet in Santaf de Bogot, at the Center of
Mercantile Arbitration and Conciliation of the Chamber of Commerce of such
city.
ARTICLE TWELVE
OPERATIONS
Section 12.1. Substances Limited. Nothing in this Agreement shall
be construed as requiring Carrier to transport any substance that is not
Petroleum or any Petroleum not meeting the minimum quality requirements set
out herein.
Section 12.2. Carrier Notices. Carrier shall give each Shipper
prompt notice of (i) ruptures and other breaches of Oleoducto Central physical
integrity, including the location, cause, and estimates of losses resulting,
(ii) changes in Attachment 1 hereto, and (iii) any significant change in
Available Capacity not reflected in a current Schedule.
Section 12.3. Capacity Reductions. Carrier shall take all
reasonable steps to minimize reductions in Available Capacity arising from
matters under Carrier's control, and shall not reduce or interrupt in any
material respect the transportation of Petroleum in the Oleoducto Central or
any Segment.
Section 12.4. Planned Maintenance. Carrier shall use all
Reasonable Efforts to expedite maintenance, repairs, or alterations to the
Oleoducto Central in order to minimize the duration of any reduction in
throughput capacity.
Section 12.5. Unplanned Reductions. If any unplanned or unexpected
reduction in Available Capacity in excess of 5% occurs or is foreseeable, then
Carrier shall advise the Shipper as soon as reasonably practicable, giving
particulars as to the time the reduction started or is expected to start, the
location, the extent of the reduction, and the date and time that the
reduction is expected to be remedied.
Section 12.6. Use of Petroleum. Carrier may use any reasonable
amount of the Petroleum delivered by any Initial Shipper to the Oleoducto
Central as fuel or lubrication for equipment or any other similar Oleoducto
Central operations purpose, provided that Carrier gives the Initial Shipper
advance written notice of any anticipated use of its Petroleum and makes
payment for such use as contemplated in Section 4.2(b) above.
Section 12.7. Line Fill. Each of the Initial Shippers shall, in
proportion to each Initial Shipper's Proportionate Share, deliver to Carrier
line fill for each Segment of the Oleoducto Central within 90 days or such
shorter or longer period as may be agreed by the Parties of the receipt by
each of a request from Carrier for their share of line fill for such Segment.
Carrier, at its option, may elect to purchase such line fill from each Initial
Shipper at a price to be agreed between Carrier and such Initial Shipper
provided that Carrier shall not purchase any line fill from any Initial
Shipper unless it purchases a ratable amount of line fill from each other
Initial Shipper at the same price per barrel. Any decision to purchase such
line fill, and the financing of such purchase, shall be made by Carrier's
Board of Directors in accordance with Carrier's By-laws. Initial Shippers
shall thereafter continue to supply line fill in accordance with the
reasonable directions of Carrier and Carrier, at its option, may elect to
purchase such additional line fill from Initial Shippers. Within 30 days
following the completion of line fill procedures for a Segment, Carrier will
notify each Initial Shipper of the total volume of line fill and of the
portion supplied by each Initial Shipper. Within 15 days following such
notification, Carrier will notify each Initial Shipper of the volume of the
line fill supplied by it and, if it has elected to purchase such line fill,
pay to each Initial Shipper the purchase price therefor. If such line fill is
not purchased by Carrier, the rights of each of the Initial Shippers with
respect to such line fill shall survive the date on which such Initial
Shipper's rights and benefits under the Association Contracts terminate. To
the extent that an Initial Shipper's Proportionate Share is reduced, or its
Weighted Average Throughput Share for any year is less than its Proportionate
Share at the end of such year, Carrier shall pay such Initial Shipper an
amount equal to the value of the portion of such Initial Shipper's line fill
that corresponds to the reduction in such Initial Shipper's Proportionate
Share or the difference between such Weighted Average Throughput Share and
such Proportionate Share, as the case may be. To the extent that an Initial
Shipper's Proportionate Share isincreased or its Weighted Average Throughput
Share in any year is greater than its Proportionate Share at the end of such
year, such Initial Shipper shall be obligated to supply additional line fill
to Carrier in a volume that corresponds to the increase in such Initial
Shipper's Proportionate Share or the difference between such Weighted Average
Throughput Share and such Proportionate Share, as the case may be, and
Carrier, at its option, may elect to purchase such additional line fill from
such Initial Shipper.
ARTICLE THIRTEEN
BANKRUPTCY
Section 13.1. Waiver of Rights in Bankruptcy. Initial Shipper
expressly waives, as authorized by Article 15 of the Colombian Civil Code and
Article 822 of the Colombian Code of Commerce or any successor provision, any
and all personal actions or rights it may have under Colombian law and any
other applicable law as provided by Article 2488 of the Colombian Civil Code
or any successor provision to demand payment and performance of obligations
under the Agreement owing to such Initial Shipper from the real estate and any
other tangible or intangible assets of Carrier and any right to commence,
initiate or cause to be initiated any related proceeding, judicial or
otherwise, against Carrier under any bankruptcy law or other reorganization,
arrangement, readjustment of debt, relief of debtors, dissolution, insolvency,
liquidation or similar law or for the appointment of a receiver, trustee or
other officer or representative of a court or of creditors or to take any
other action that may result in the Bankruptcy of Carrier.
ARTICLE FOURTEEN
GENERAL
Section 14.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by certified or registered mail, or by electronic means of
communication addressed to the recipient at the address and telephone number
specified in the Agreement, or to such other address, individual or facsimile
telephone number as may be designated by notice given by any Party to the
others. Any demand, notice or other communication given by personal delivery
shall be conclusively deemed to have been given on the day of actual delivery
thereof and, if given by certified or registered mail, on the fifth business
day following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the business day during which such
normal business hours next occur if not given during such hours on any day.
The Party giving any demand, notice or other communication by electronic
communication shall send the original thereof by personal delivery or by first
class mail.
Section 14.2. Amendments. These General Terms and Conditions may
be amended or modified by Carrier, provided that such amendment or
modification (i) does not materially diminish the rights or materially
increase the burdens of any Initial Shipper, and (ii) applies equally to all
Initial Shippers.
Section 14.3. No Third Party Beneficiaries. Except as herein
otherwise expressly provided to the contrary, these General Terms and
Conditions shall enure to the benefit of and be binding upon the Parties and
their respective successors and assigns, and no other Person shall have any
right hereunder.
Section 14.4. Severability. If, for any reason, any provision of
these General Terms and Conditions is unenforceable, the remaining provisions
hereof shall nevertheless be carried into effect. Any provision of these
General Terms and Conditions that is unenforceable in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
Section 14.5. Further Assurances. The Parties shall execute,
acknowledge and deliver such instruments and take such other actions as may be
necessary to fulfil the respective obligations under these General Terms and
Conditions as and when required.
Section 14.6. Headings. Headings contained herein are for
convenience of reference only and do not constitute a part of these General
Terms and Conditions.
Section 14.7. Remedies. Each Party acknowledges and agrees that
Carrier's recourse for non-payment of Tariffs or other charges hereunder are
of a commercial nature and have been negotiated at arms-length and in good
faith. To the extent that Carrier shall be entitled to exercise any of the
remedies available to it under the Agreement, Initial Shipper acknowledges and
agrees that the exercise of any or all such remedies constitutes a reasonable
recourse by Carrier in the event of a failure on the part of Initial Shipper
to make timely payments of any amounts required to be paid by it hereunder.
Section 14.8. Waiver. Initial Shipper irrevocably agrees not to
claim and waives any objection which it may have now or hereafter to the
exercise by Carrier of any or all of the remedies available to it under
Article Four hereof to the fullest extent permitted by law, including without
limitation, a defense on the grounds of forfeiture, unjust enrichment or other
equitable defense.
Section 14.9. Acknowledgement. Nothing in these General Terms and
Conditions is intended to create or shall be construed as creating a
partnership, joint venture, association or trust among the Parties.
<PAGE>
ATTACHMENT 1
to General Terms and Conditions
CHARACTERISTICS OF CUSIANA PETROLEUM
The characteristics of Cusiana Petroleum will vary from time to
time.
A. General Properties
<TABLE>
<CAPTION>
<S> <C> <C>
Characteristics Measure Unit
---------------- -------- -----------
Gravity 36.3* API Degrees
Density at 15C 0.84 kg/ltre
Sulphur 0.25 %wt
Viscosity at 20C 7.26 cSt
Viscosity at 30C 4.73 cSt
Viscosity at 40C 3.31 cSt
Pour Point 0 C
Acidity <0.05 mgKOH/g
Carbon residue 1.2(C) %wt
Asphaltenes 0.09 %wt
Vanadium <2 ppm wt
Nickel <2 ppm wt
Salt <1 lb/1000bbl
Water <0.05 %vol
</TABLE>
B. Assay Summary
Constituent Weight Volume
(%)
Light Hydrcarbon Analysis
Methane ---
Ethane 0.05
Propane 0.43
1-butane 0.41
n-butane 0.96
1-butane 1.05
n-butane 1.09
Assay/TBP Data
Gas to C4 (corrected)* 1.85 2.2
Light Distillates to
149C (API) 17.9 20.8
Kerosene 149-232 C 15.15 15.9
Gas Oil 232-342 C 24.9 24.3
Residue Above 342 C 40.2 36.8
* Volume expansion of 0.60 percent volume on crude subtracted from the gas
yield.
ATTACHMENT 2
to General Terms and Conditions
MINIMUM QUALITY SPECIFICATIONS AND TESTING SPECIFICATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
TEST PETROLEUM TESTING
PARAMETER STANDARD
Sediment and water not to exceed Sediment-ASTM
or particulates 0.5% by volume D473
Water-Karl Fisher
Density @ 15C not to exceed 927 kg/m3 ASTM D445 or D446
Wiscosity @ lower of not to exceed 250 cs
-receipt temperature
-reference temperature
Vapour pressure not to exceed 103kPA. ASTM D323
Reid Vapour Pressure
Receipt temperature not to exceed 38.0 C.
Organic chlorides none
</TABLE>
<PAGE>
SCHEDULE E
To Transportation Agreement
FORM OF TRANSPORTATION NOTE
THIS TRANSPORTATION NOTE IS SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH IN
THE TRANSPORTATION AGREEMENT DATED AS OF MARCH __, 1995 BETWEEN OLEODUCTO
CENTRAL S.A. AND [NAME OF INITIAL SHIPPER] WHICH IS AVAILABLE FOR INSPECTION
AT THE OFFICE OR AGENCY OF OLEODUCTO CENTRAL S.A. MAINTAINED FOR PURPOSES OF
PAYMENTS WITH RESPECT TO THIS TRANSPORTATION NOTE IN NEW YORK, NEW YORK.
THIS TRANSPORTATION NOTE IS SUBORDINATED IN RIGHT OF PAYMENT AND IN
LIQUIDATION TO THE RELATED SENIOR DEBT OBLIGATIONS TO THE EXTENT SET FORTH
HEREIN AND IN THE COMMON SECURITY TRUST AGREEMENT REFERRED TO HEREIN.
OLEODUCTO CENTRAL S.A.
TRANSPORTATION NOTE
No. __________$________
1. Oleoducto Central S.A., a sociedad anonima duly organized and existing
under the laws of Colombia (herein called the Ocensa, which term includes any
successor Person thereto), for value received, hereby promises to pay to
or registered assigns, the principal sum of
United States Dollars on [Semi-annual Payment Date], 2012, and to pay interest
thereon semi-annually on the first Business Day in March and the first
Business Day in September in each year (each, a Semi-annual Payment Date),
commencing ___________, and, after repayment in full of all Related Senior
Debt at the election of the Holder, monthly on the first Business Day in each
month (each, a Monthly Payment Date) from the date hereof or from the most
recent Semi-annual Payment Date or Monthly Payment Date, as the case may be,
to which interest has been paid or duly provided for, at the rate of [insert
Benchmark Interest Rate and specify formula], until the principal hereof is
paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Semi-annual Payment Date or Monthly Payment
Date, as the case may be, will be paid to the Person in whose name this
Transportation Note is registered at the close of business on the next
preceding Semi-annual Payment Date or Monthly Payment Date, as the case may
be, (Record Date). Payment of the principal of and interest on this
Transportation Note will be made at the office or agency of Ocensa maintained
for thatpurpose in [New York, New York] [offshore jurisdiction], in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts or by wire transfer in
immediately available funds to the account designated by the Holder to Ocensa
not later than 10 days prior to such payment.
2. This Transportation Note is one of a duly authorized issue of the
Transportation Notes of Ocensa designated as its Transportation Notes (herein
called the Transportation Notes), issued and to be issued under the
Transportation Agreement, dated as of March 31, 1995 (herein called the
Agreement) between Ocensa and _______________________ (herein called the
Initial Shipper) and entitled to certain benefits under the Common Security
Trust Agreement, dated as of , 1995 (herein called the Common
Security Trust Agreement), between Ocensa and ________ as Trustee (herein
called the Trustee) to which Agreement and Common Security Trust Agreement and
all agreements supplemental thereto reference is hereby made for a statement
of the terms upon which the Transportation Notes are, and are to be, executed
and delivered and of the respective rights, limitations of rights, duties and
immunities thereunder of Ocensa, the Trustee, the holders of Senior Debt (the
Related Senior Lenders) under Senior Debt Tranche [A][B][C][D] (Related Senior
Debt Tranche) and the Holders of the Transportation Notes and the holders of
repayment obligations in respect of Tariff Advances under the Agreement. As
used herein, the term Holder means the person in whose name such
Transportation Note is registered.
3. The Transportation Notes are issuable as registered Transportation
Notes, without coupons, in denominations of U.S.$1,000 and integral multiples
thereof. Subject to certain limitations set forth in Paragraph 4,
Transportation Notes are exchangeable for a like aggregate principal amount of
Transportation Notes of any authorized denomination as requested by the Holder
surrendering the same.
4. (a) Ocensa will maintain in the Borough of Manhattan, The City of
New York, New York [offshore jurisdiction], an office or agency where
Transportation Notes may be surrendered for transfer or exchange.
(b) This Transportation Note may be transferred by a written instrument
of transfer in form satisfactory to Ocensa duly executed by the Holder thereof
or his attorney duly authorized in writing.
(c) In the event of a redemption or repurchase in part, Ocensa shall not
be required (i) to register the transfer of or exchange any Transportation
Note during a period beginning at the opening of business 15 days before the
date notice is given identifying the Transportation Notes to be redeemed, or
(ii) to register the transfer of or to exchange any Transportation Note, or
portion thereof, called for redemption or as to which a notice to purchase has
been given under Section 7(e) hereof.
(d) Ocensa and any paying agency of Ocensa may deem and treat the person
in whose name a Transportation Note is registered as the owner hereof for all
purposes, whether or not this Transportation Note is overdue, and neither
Ocensa nor any such agent shall be affected by notice to the contrary.
5. (a) Ocensa shall pay to the Holder in The City of New York [offshore
jurisdiction], on or prior to each Semi-annual Payment Date or Monthly Payment
Date, as the case may be, any redemption date and the maturity date of the
Transportation Notes, in such coin or currency of the United States as at the
time of payment is legal tender for the payment of public and private debts,
amounts sufficient to pay the interest on, the redemption price of and accrued
interest (if the redemption date is not a Semi-annual Payment Date or Monthly
Payment Date, as the case may be) on, and the principal of, the Transportation
Notes due and payable on such Semi-annual Payment Date or Monthly Payment
Date, redemption date or maturity date, as the case may be. Ocensa shall have
the right, in its sole discretion, to set off against sums due by it under
this Transportation Note the unpaid amount of any equity contribution with
respect to which a shareholder affiliated with the Initial Shipper is in
default under its subscription agreement with Ocensa.
(b) In any case where the date for the payment of the principal of or
interest on any Transportation Note or the date fixed for redemption of any
Transportation Note shall be at any place of payment a day on which banking
institutions are authorized or obligated by law to close, then payment of
principal or interest need not be made on such date at such place but may be
made on the next succeeding day at such place of payment which is not a day on
which banking institutions are authorized or obligated by law to close, with
the same force and effect as if made on the date for the payment of the
principal or interest or the date fixed for redemption, and no interest shall
accrue for the period after such date.
6. Ocensa shall not be required to make any payment with respect to any
tax, assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein on or in respect
of the Holder.
7. (a) The Transportation Notes are subject to redemption at any time,
as a whole or in part, at the election of Ocensa, at a redemption price equal
to 100% of the principal amount, together with accrued interest (except if the
redemption date is a Semi-annual Payment Date or Monthly Payment Date, as the
case may be) to the redemption date, but interest installments on
Transportation Notes that are due on or prior to such redemption date will be
payable to the Holders of such Transportation Notes of record at the close of
business on the relevant Record Dates referred to above.
(b) In the case of any partial redemption of Transportation Notes, the
Transportation Notes to be redeemed shall be selected by Ocensa not more than
60 daysprior to the redemption date, from the Outstanding Transportation Notes
not previously called for redemption, by such method as Ocensa shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (not less than U.S.$25,000) of the principal amount of Transportation
Notes.
(c) Notices to redeem Transportation Notes shall be given to Holders of
Transportation Notes in writing mailed, first-class postage prepaid, to each
Holder of Transportation Notes, or portions thereof, so to be redeemed, at his
address as it appears on the books of Ocensa. Such notice will be given once
not more than 30 days nor less than 15 days prior to the date fixed for
redemption. Notices to redeem Transportation Notes shall specify the date
fixed for redemption, the redemption price, the place or places of payment,
that payment will be made upon presentation and surrender of the
Transportation Notes to be redeemed (or portion thereof in the case of a
partial redemption), that interest accrued to the date fixed for redemption
(unless the redemption date is a Semi-annual Payment Date or Monthly Payment
Date, as the case may be) will be paid as specified in said notice, and that
on and after said date interest thereon will cease to accrue. In the case of a
partial redemption, the redemption notice shall specify the last date prior to
the second notice on which exchanges or registration of transfers of
Transportation Notes may be made and shall also specify the Transportation
Notes called for redemption and the aggregate principal amount of the
Transportation Notes to remain outstanding after the redemption.
(d) If notice of redemption has been given in the manner set forth in
Paragraph 7(c) hereof, the Transportation Notes so to be redeemed shall become
due and payable on the redemption date specified in such notice and upon
presentation and surrender of the Transportation Notes at the place or places
specified in such notice, the Transportation Notes shall be paid and redeemed
by Ocensa at the places and in the manner and currency herein specified and at
the redemption price together with accrued interest (unless the redemption
date is a Semi-annual Payment Date) to the redemption date. If monies for the
redemption of the Transportation Notes are not made available for payment
until after the redemption date, the Transportation Notes called for
redemption shall not cease to bear interest until such monies have been so
made available.
(e) The Holder of this Transportation Note may on at least 15 days, but
not more than 30 days, prior written notice require Ocensa to purchase all or
part of this Transportation Note on the next applicable Payment Date at a
purchase price equal to 100% of the principal amount thereof, together with
accrued interest to the date purchased, provided, however, that the total
purchase price for this Transportation Note (or a portion thereof) taken
together with the aggregate purchase price for all other Transportation Notes
to be repurchased and all other Transportation Repayment Obligations to be
refunded on such Payment Date shall not exceed the accumulated Non-Cash Items
credited to the Related Account (as defined in the Agreement) of the Initial
Shipper as of such PaymentDate less any application of Non-Cash Items from
such Related Account on such Payment Date to any other transactions that have
priority over purchase of this Transportation Note. In the event that Ocensa
cannot purchase the full amount of this Transportation Note to be purchased
because of the preceding proviso, the principal and interest on this
Transportation Note to be so purchased shall be pro rated in proportion to all
other Transportation Notes to be purchased and all other repayment obligations
in respect of Tariff Advances to be refunded on such Payment Date. Ocensa
shall have no obligation to purchase any portion of this Transportation Note
if the purchase price for such portion would be less than $25,000.
(f) Any Transportation Note which is to be redeemed only in part shall
be surrendered with, if Ocensa so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to Ocensa duly executed by, the
Holder thereof or his attorney duly authorized in writing, and Ocensa shall
execute and deliver to the Holder of such Transportation Note without service
charge a new Transportation Note or Transportation Notes, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal
to and in exchange for the unredeemed portion of the principal of the
Transportation Note so surrendered.
(g) Transportation Notes redeemed or otherwise acquired by Ocensa will
forthwith be delivered to Ocensa for cancellation and may not be reissued or
resold, except that Transportation Notes delivered to Ocensa in replacement of
mutilated, lost, stolen or destroyed Transportation Notes pursuant to
Paragraph 12 hereof.
8. (a) The indebtedness evidenced by this Transportation Note is
subordinate and subject in right of payment to the prior payment in full of
all Senior Debt Obligations under the Related Senior Debt Tranche (Related
Senior Debt Obligations). The Holder agrees that it will not ask, demand, sue
for, take or receive from Ocensa, by set-off or in any other manner, or
retain, payment (in whole or in part) of interest on or principal of the
Transportation Notes, or any security therefor, other than payments made at
the times, in the amounts and to the extent permitted under the Common
Security Trust Agreement, such payments being herein called Permitted
Payments, unless and until all Related Senior Debt Obligations have been paid
in full. The Holder directs Ocensa to make, and Ocensa agrees to make, such
prior payment of the Related Senior Debt Obligations.
(b) In the event of (i) Bankruptcy of Ocensa or (ii) any liquidation,
dissolution or other winding up of Ocensa, whether partial or complete and
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (iii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of Ocensa, then and in any such event
the Related Senior Lenders shall be entitled to receive payment in full of all
amounts due or to become due on or in respect of all Related Senior Debt
Obligations before the Holder shall be entitled to receive any payment on
account of theTransportation Notes (whether in respect of principal, interest,
fees, indemnities, commissions, or otherwise), and to that end, any payment or
distribution of any kind or character, whether in cash, property or securities
which may be payable or deliverable in respect of the Transportation Notes in
any such Bankruptcy, proceeding, dissolution, liquidation or other winding up
or event shall instead be paid or delivered directly to the Related Senior
Lenders for application to Related Senior Debt Obligations, whether or not
due, until Related Senior Debt Obligations shall have first been fully paid
and satisfied in cash.
(c) A transaction permitted under Section 6.1(b) of the Common Security
Trust Agreement shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of
assets and liabilities of Ocensa for the purposes of paragraph (b) above.
(d) In the event and during the continuation of any default in the
payment when due of any principal of or interest on or any other amount
payable in respect of any Related Senior Debt, unless and until such payment
shall have been made, then no payment (including no Permitted Payment) shall
be made by Ocensa on or in respect of the Transportation Notes. The provisions
of this paragraph shall not apply to any payment with respect to which the two
preceding paragraphs would be applicable.
(e) In the event that, notwithstanding the terms hereof, the Holder
receives on account or in respect of the Transportation Notes any distribution
of assets by Ocensa or payment by or on behalf of Ocensa of any kind or
character, whether in cash, securities or other property, other than a
Permitted Payment, the Holder shall hold in trust (as property of the Related
Senior Lenders to which such Related Senior Debt Obligations are owed) for the
benefit of, and shall, immediately upon receipt thereof, pay over or deliver
to, such Related Senior Lenders, such distribution or payment in precisely the
form received (except for the endorsement or assignment by the Holder where
necessary) for application in accordance with the Senior Debt Agreements with
such Senior Lenders. In the event of failure of the Holder to make any such
endorsement or assignment, the Related Senior Lenders are irrevocably
authorized to make the same.
(f) The Holder (i) irrevocably authorizes and empowers (without imposing
any obligation on) the Trustee on behalf of the Related Senior Lenders to
demand, sue for, collect, receive and receipt for all payments and
distributions on or in respect of the Transportation Notes which are required
to be paid or delivered to the Related Senior Lenders, as provided herein, and
to file and prove all claims therefor and take all such other action, in the
name of the Holder or otherwise, as the Trustee on behalf of the Related
Senior Lenders may determine to be necessary or appropriate for the
enforcement of these subordination provisions, all in such manner as the
Majority Senior Lenders (as defined in the Common Security Trust Agreement) to
which the Related Senior DebtObligations are owed shall instruct, (ii)
irrevocably authorize and empower (without imposing any obligation on) the
Trustee to vote the Transportation Notes (including, without limitation,
voting the Transportation Notes in favor of or in opposition to any matter
which may come before any meeting of creditors of Ocensa generally or in
connection with, or in anticipation of, any Bankruptcy of Ocensa but only to
the extent consistent with the agreements in Section 2.2(b) of the Common
Security Trust Agreement and Paragraph 11(a)) in such manner as the Majority
Senior Lenders (as defined in the Common Security Trust Agreement) to which
such Related Senior Debt Obligations are owed shall instruct and (iii) agree
to execute and deliver to the Trustee all such further instruments confirming
the above authorization, and all such powers of attorney, proofs of claim,
assignments of claim and other instruments, and to take all such other action,
as may be requested by the Trustee on behalf of the Related Senior Lenders in
order to enable the Trustee on behalf of the Related Senior Lenders to enforce
all claims upon or in respect of the Transportation Notes.
(g) The Holder agrees, for the benefit of each Related Senior Lender,
that it will give the Trustee prompt notice of any default by Ocensa in
respect of the Transportation Notes.
(h) No failure on the part of the Related Senior Lenders or the Trustee
acting on their behalf, and no delay in exercising, any right, remedy or power
hereunder shall operate as a waiver thereof by Related Senior Lenders or the
Trustee, nor shall any single or partial exercise by the Related Senior
Lenders or the Trustee of any right, remedy or power hereunder preclude any
other or future exercise of any other right, remedy or power. Each and every
right, remedy and power hereby granted to the Related Senior Lenders or the
Trustee or allowed to the Related Senior Lenders or the Trustee by law or
other agreement shall be cumulative and not exclusive the one of any other,
and may be exercised by the Related Senior Lenders or the Trustee from time to
time.
(i) Without in any way limiting the generality of the foregoing
paragraph, the Related Senior Lenders may, at any time and from time to time,
without the consent of or notice to the Holder, without incurring
responsibility to the Holder, and without impairing or releasing the
subordination provided herein or the obligations hereunder of the Holder, do
any one or more of the following: (i) change the manner, place or terms of
payment of or extend the time of payment of, or renew or alter, Related Senior
Debt Obligations, or otherwise amend or supplement in any manner Related
Senior Debt Obligations or any instrument evidencing the same or any agreement
under which Related Senior Debt Obligations are outstanding or the Common
Security Trust Agreement; (ii) release any person liable in any manner for the
Related Senior Debt Obligations; and (iii) exercise or refrain from exercising
any rights against Ocensa and any other person. The Holder unconditionally
waives notice of the incurring of Related Senior Debt Obligations or any part
thereof.
(j) Subject to the payment in full of all Related Senior Debt
Obligations, the Holder shall be subrogated to the rights of the Related
Senior Lenders to receive distribution of assets of Ocensa, or payments by or
on behalf of Ocensa, if any, made on the Related Senior Debt Obligations,
until the Transportation Notes shall be paid in full. For purposes of such
subrogation, no payments over, including no payments or distributions to the
Related Senior Lenders of any cash, property or securities to which the Holder
would be entitled except for the provisions hereof, pursuant to the provisions
hereof, to the Related Senior Lenders by the Holder shall, as among Ocensa,
its creditors other than the Related Senior Lenders and the Holder, be deemed
to be a payment or distribution by Ocensa on account of the Related Senior
Debt Obligations.
(k) These subordination provisions are intended solely to define the
relative rights of the Holder and its successors and assigns on the one hand
and the Related Senior Lenders and the Related Senior Lenders' respective
successors and assigns on the other hand. Nothing contained herein shall (i)
impair, as among Ocensa, its creditors other than Related Senior Lenders and
the Holder, the obligation of Ocensa is absolute and unconditional (and which,
subject to the rights hereunder of the Related Senior Lenders, is intended to
rank equally with all other unsubordinated obligations of Ocensa in respect of
money borrowed), to pay the principal of and interest on the Transportation
Notes as and when the same shall become due and payable in accordance with the
terms thereof or (ii) affect the relative rights against Ocensa of the Holder
and creditors of Ocensa other than Related Senior Lenders.
(l) The Holder of this Transportation Note, by accepting the same, (i)
agrees to and shall be bound by such subordination provisions, (ii) authorizes
and directs Ocensa and the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (iii)
appoints each of Ocensa and the Trustee his attorneys-in-fact for any and all
such purposes.
9. (a) In the event all the Senior Debt of the Related Senior Debt
Tranche becomes due and payable prior to its maturity, then all the principal
of this Transportation Note and the interest accrued hereon shall thereupon
become due and payable immediately without further notice.
(b) In the event of the Bankruptcy of Ocensa, the Holder of this
Transportation Note may declare all the principal and interest accrued hereon
due and payable immediately by notice in writing to Ocensa.
10. (a) The Common Security Trust Agreement permits, with certain
exceptions as therein provided, the amendment thereof and the modification of
the rights and obligations of Ocensa and the rights of the Holders of the
Transportation Notes under theCommon Security Trust Agreement at any time by
the Trustee without the consent of the Holders.
(b) No reference herein to the Agreement and the Common Security Trust
Agreement and no provision of this Transportation Note or of the Agreement or
of the Common Security Trust Agreement shall alter or impair the obligation of
Ocensa, which is absolute and unconditional, to pay the principal of and
interest on this Transportation Note at the times, place and rate, and in the
coin or currency, herein prescribed.
11. (a) So long as any Related Senior Debt is outstanding, regardless
of anything contained in this Transportation Note, the Agreement or the Common
Security Trust Agreement to the contrary, (i) the recourse of the Trustee or
any Holder for payment and performance obligations of Ocensa under this
Transportation Note shall be limited solely to the right to receive payment
under Section 4.4 of the Common Security Trust Agreement, and none of (A)
Ocensa, (B) any Person's obligations to Ocensa which form part of the
Collateral, (C) any Person owning, directly or indirectly, any legal or
beneficial interest in Ocensa or in any such Person, or (D) any partner,
principal, officer, controlling person, beneficiary, trustee, shareholder,
employee, agent, affiliate or director of any Person described in clauses (A)
through (C) above shall be personally liable for the payment or performance of
any such obligations and (ii) each Holder expressly waives, as authorized by
Article 15 of the Colombian Civil Code and Article 822 of the Colombian Code
of Commerce or any successor provisions, any and all personal actions or
rights they may have under Colombian law as provided by Article 2488 of the
Colombian Civil Code or any successor provisions to demand payment and
performance of such obligations owing to such Holder from the real estate and
any other tangible or intangible assets of any Person described in clauses (A)
through (D) and any right hereunder to commence any proceeding, judicial or
otherwise, against Ocensa under any bankruptcy law or other reorganization,
arrangement, readjustment of debt, relief of debtors, dissolution, insolvency,
liquidation or similar law or for the appointment of a receiver, trustee or
other officer or representative of a court or of creditors or take any other
action that may result in Bankruptcy of Ocensa; provided, however, that in
each of cases (i) and (ii), the foregoing shall not impair the validity of the
Collateral created by or pursuant to the Common Security Trust Agreement or
the right of the Trustee to foreclose and/or enforce any rights or remedies in
and to the Collateral upon the occurrence of a default as provided in the
Common Security Trust Agreement; provided further, however, that in the event
of Bankruptcy of Ocensa, as to Ocensa but not as to any person listed in
clauses (B) through (D) above, such recourse shall not be so limited and such
waiver shall not so apply subsequent to such Bankruptcy, except that such
recourse shall continue to be so limited and such waiver shall continue to
apply with respect to Holders of Transportation Notes, or the Trustee acting
on behalf or for the benefit of such Holders, if such Bankruptcy of Ocensa was
commenced, initiated, caused to be initiated or otherwise resulted from
anyaction of any such Holder, of any holder of Transportation Repayment
Obligations under the Agreement or of the Trustee on behalf or for the benefit
of any such Holder or holder.
(b) No remedy conferred upon the Holder or the Trustee herein or
pursuant to the Common Security Trust Agreement is intended to be exclusive of
any other remedy so conferred and each and every such remedy shall be
cumulative. The remedies conferred herein or pursuant hereto shall be
exclusive to every other remedy now or hereafter existing contractually, at
law or in equity or by statute or otherwise.
(c) The amounts payable by Ocensa at any time under this Transportation
Note shall be a separate and independent debt and the Holder, except as
otherwise specifically provided in this Transportation Note and the Common
Security Trust Agreement, shall be entitled to protect and enforce its rights
arising out of this Transportation Note and the Common Security Trust
Agreement, and, except as aforesaid, it shall not be necessary for any other
Holder or the Trustee to consent to or be joined as an additional party in,
any proceedings for such purposes.
(d) No failure on the part of the Trustee or any Holder to exercise and
no delay in exercising, and no course of dealing with respect to, any right,
power, or privilege under this Transportation Note and the Common Security
Trust Agreement shall operate as a waiver thereof nor shall any single or
partial exercise of any right, power or privilege under any such document nor
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. No Holder shall be responsible for the failure of
any other Holder or the Trustee to perform its obligations hereunder or under
the Common Security Trust Agreement.
(e) So long as any Related Senior Debt is outstanding, no Holder shall
have the right to commence any proceeding, judicial or otherwise, to enforce
any judgment obtained by it in respect of the obligations hereunder or
otherwise under the Common Security Trust Agreement, against Ocensa, it being
understood and intended that no Holder shall have any rights in any manner
whatever to affect, disturb or prejudice the rights created by or pursuant to
the Common Security Trust Agreement of any of the other Holders, or to obtain
or seek to obtain priority or preference over any other Holder or to enforce
any rights under this Transportation Note or the Common Security Trust
Agreement except in the manner herein and therein provided.
12. (a) If any mutilated Transportation Note is surrendered to Ocensa,
Ocensa shall execute and deliver in exchange therefor a new Transportation
Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding, appertaining to the surrendered Transportation
Note.
(b) If there be delivered to Ocensa (i) evidence to its satisfaction of
the destruction, loss or theft of any Transportation Note, and (ii) such
security or indemnity as may be required by it to save it and any agent of it
harmless, then, in the absence of notice to Ocensa that such Transportation
Note has been acquired by a bona fide purchaser, Ocensa shall execute and
deliver in lieu of any such destroyed, lost or stolen Transportation Note a
new Transportation Note of like tenor and principal amount and bearing a
number not contemporaneously outstanding, appertaining to such destroyed, lost
or stolen Transportation Note.
(c) Upon the issuance of any new Transportation Note under this Section,
Ocensa may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and the expenses of any agent) connected
therewith.
(d) Every new Transportation Note issued pursuant to this Section in
lieu of any destroyed, lost or stolen Transportation Note, shall constitute an
original additional contractual obligation of Ocensa, whether or not the
destroyed, lost or stolen Transportation Note shall be at any time enforceable
by anyone.
(e) Any new Transportation Note delivered pursuant to this Section shall
be so dated that neither gain nor loss in interest shall result from such
exchange.
(f) The provisions of this Section 12 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Transportation
Notes.
13. Ocensa hereby certifies and declares that all acts, conditions and
things required to be done and performed and to have happened precedent to the
creation and issuance of the Transportation Notes, and to constitute the same
the valid obligations of Ocensa, have been done and performed and have
happened in due compliance with all applicable laws.
14. THIS TRANSPORTATION NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
15. All terms used in this Transportation Note which are defined in the
Agreement shall have the meanings assigned to them in the Agreement.
IN WITNESS WHEREOF, Ocensa has caused this instrument to be duly executed
and delivered.
Dated:
OLEODUCTO CENTRAL S.A.
By_______________________
SCHEDULE F
to Transportation Agreement
FORM OF DESIGNATION NOTICE
[Date]
TO: Oleoducto Central S.A. (Carrier)
FROM: [Initial Shipper]
RE:Notice of Designation pursuant to Section 4.3(d) of the Transportation
Agreement dated as of March 31, 1995, as amended from time to time in
accordance with the terms thereof (Transportation Agreement)
[Initial Shipper] hereby instructs Carrier to disburse to [name of
bank, transit and account numbers] all proceeds due to [Initial Shipper] under
Section 4.3(d) of the Transportation Agreement.
All defined terms used herein and not defined herein have the
meanings assigned to them in the Transportation Agreement.
[INITIAL SHIPPER]
By: ___________________
Name:
Title:
SCHEDULE G
to Transportation Agreement
FORM OF DISPUTED INVOICE NOTICE
[Date]
TO: Oleoducto Central S.A. (Carrier)
FROM: [Initial Shipper]
RE:Notice of Disputed Invoice pursuant to Section 4.5 of the Transportation
Agreement dated as of March 31, 1995, as amended from time to time in
accordance with the terms thereof (Transportation Agreement)
[Initial Shipper] hereby notifies Carrier that it disputes the
amount of $ set forth on the interim statement, dated _________, 19__ for
the reasons set forth in detail below:
[Insert details]
All defined terms used herein and not defined herein have the
meanings assigned to them in the Transportation Agreement.
[INITIAL SHIPPER]
By: ___________________
Name:
Title:
SCHEDULE H
to Transportation Agreement
CENTRAL LLANOS CONTRACTS
1. Contrato de Asociacion Casanare among Kelt Colombia S.A., L.L. & E.,
Homcol and Hocol S.A.
2. Contrato de Asociacion Estero among Kelt Colombia S.A., Hocol S.A. and
Homcol.
3. Contrato de Asociacion Garcero among Kelt Colombia S.A., Hocol S.A. and
Homcol.
4. Contrato de Asociacion Upia (Lasmo Oil (Colombia) Limited).
5. Contrato de Asociacion Rio Meta between Petrobras Internacional
S.A.-Braspetro and Hocol S.A.
6. Contrato de Asociacion Cubarral (Chevron Petroleum Company).
7. Contrato de Asociacion Cano La Hermosa (Nomeco Colombia Oil Co.).
8. Contrato de Asociacion Corocera with Kelt Colombia S.A.
9. Contrato de Asociacion Orocue with Kelt Colombia S.A.
10. Contrato de Concesion Trinidad-Yalea between Kelt Colombia S.A and the
Colombian government.
11. All fields owned by Ecopetrol in the Llanos area which on the date of
the Agreement are in production.
125_LAN04
ADVANCE TARIFF AGREEMENT
dated as of March 31, 1995
between
OLEODUCTO CENTRAL S.A.
and
TRITON COLOMBIA, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Section Page
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
1.1 Definitions 1
1.2 Interpretation 8
ARTICLE TWO
TRANSPORTATION AGREEMENT
2.1 Transportation Agreement 8
ARTICLE THREE
ADVANCE TARIFF PAYMENTS
3.1 Advance Tariffs 8
3.2 Overdue Amounts 11
3.3 Indemnification by Throughput Obligor 11
ARTICLE FOUR
TERM
4.1 Term 12
4.2 Effectiveness 12
ARTICLE FIVE
GENERAL
5.1 Notices
5.2 Other Advance Tariff Agreements; Amendments and Waivers 12
5.3 Taxes 13
5.4 Representations and Warranties 13
5.5 Assignments 13
5.6 Nature of Obligations 16
5.7 No Third Party Beneficiaries 16
5.8 Severability 16
5.9 Governing Law 17
5.1 Performance Outside Colombia 17
5.11 Commercial Obligations 17
5.12 Submission to Jurisdiction; Consent to Service 17
5.13 Waiver of Immunity 17
5.14 Headings; Table of Contents 18
5.15 Counterparts 18
</TABLE>
ADVANCE TARIFF AGREEMENT
AGREEMENT, dated as of March 31, 1995, by and between OLEODUCTO
CENTRAL S.A., a sociedad anonima existing under the laws of Colombia (Ocensa),
and TRITON COLOMBIA, INC., a corporation existing under the laws of the State
of Delaware (the Throughput Obligor).
RECITALS
WHEREAS:
A. Ocensa intends to construct, own and operate the Oleoducto
Central for the purpose of evacuating Petroleum from the Cusiana Area, and, to
the extent of unused capacity, to solicit shipments of other Petroleum through
the Oleoducto Central by the Initial Shippers and others;
B. Ocensa and the Throughput Obligor have entered into a
Transportation Agreement providing for the transportation of the Throughput
Obligor's Petroleum through the Oleoducto Central and the payment of Tariffs
therefor; and
C. The Throughput Obligor wishes to assure in accordance with the
terms of this Agreement that Ocensa has sufficient revenue so that Ocensa is
able to provide the Throughput Obligor with pipeline capacity to permit it to
evacuate its Petroleum from the Cusiana Area and, to the extent of unused
capacity, to solicit shipments of other Petroleum through the Oleoducto
Central by the Initial Shippers and others.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), Ocensa and the
Throughput Obligor agree as follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires,
the following words and phrases shall have the meanings indicated below:
Accounting Period means the period from the date of this Agreement
through June 30, 1995, and each period of six successive months beginning on
any subsequent January 1st or July 1st during the continuance of this
Agreement.
Advance Tariff Agreements means this Agreement and the other advance
tariffs agreements between Ocensa and each of the other Throughput Obligors
having terms substantially the same as this Agreement.
Advance Tariff Payment means a payment made pursuant to Section 3.1
to the extent not repaid or credited under Section 3.1(c) or (d).
Affiliate of a Person means a Person (a) which is a Subsidiary of
that Person, (b) of which that Person is a Subsidiary, or (c) which is a
Subsidiary of a Person of which that Person is a Subsidiary.
Agreement means this Advance Tariff Agreement as the same may be
amended from time to time in accordance with the terms hereof.
Association Contracts means the two contratos de asociacion between
Empresa Colombiana de Petroleos - Ecopetrol and Triton Colombia, Inc. dated
11th June, 1982 (relating to Santiago de las Atalayas-1) and 5th May, 1988
(relating to Tauramena) and the contrato de asociacion between Empresa
Colombiana de Petroleos - Ecopetrol and TOTAL Exploratie en Produktie
Maatschappij B.V. dated December 3, 1990 (relating to Ro Chitamena), in each
case as the same have been and may be amended from time to time in accordance
with the terms thereof.
Base Revenue Requirement has the meaning assigned to it in the
Transportation Agreement.
Business Day means a day in which commercial banks in Santaf de
Bogot, Colombia and The City of New York, New York are permitted by law to be
open for domestic and international business.
Capital Expenditures means, with respect to any Person for any
period, the aggregate of all direct and indirect expenditures (including
capitalized interest) of such Person during such period which are required to
be included in property, plant or equipment, good will, rights of way and
other long-term intangible assets or a similar tangible or intangible property
account, including, without limitation, additions to equipment and leasehold
improvements, on a consolidated balance sheet of such Person prepared in
accordance with generally accepted accounting principles in Colombia.
Cash-on-Hand means, on any Due Date, all cash (including short-term
marketable securities maturing on or before the Due Date or that can be sold
on or before the DueDate without material economic penalty) then held in the
Related Account, plus (a) funds withdrawn from the Related Account for the
payment of Operating and Maintenance Costs for the relevant period, but which
have not yet been applied, (b) funds held in any common proceeds account
maintained by Ocensa which are allocable to the Related Account and (c) the
Proportionate Share of any funds held by Ocensa outside any account assigned
for the benefit of providers of unsubordinated liabilities of Ocensa (other
than funds withdrawn from any such account, including the Related Account, for
the payment of Operating and Maintenance Costs and pre-Completion Capital
Expenditures for the relevant period but which have not yet been applied),
including proceeds from unsubordinated liabilities, equity contributions, Net
Proceeds, Insurance Proceeds and Expropriation Compensation of Ocensa to the
extent not dedicated to fund Capital Expenditures or prepay unsubordinated
liabilities of Ocensa. In the event of bankruptcy, reorganization,
liquidation, dissolution or other similar proceedings with respect to Ocensa,
decommissioning of all four Segments of the Oleoducto Central by action of the
board of directors of Ocensa or the providers of unsubordinated liabilities of
Ocensa (or a trustee therefor) or a unanimous decision of the board of
directors of Ocensa not to continue with the Oleoducto Central, the amount of
Cash-on-Hand shall be increased by the amount of any equity contributions
required to be made to Ocensa and to be deposited in the Related Account
pursuant to the terms of a subscription agreement between any shareholder of
Ocensa and Ocensa, unless such equity contributions have been called under
such subscription agreement and not paid when due. For purposes of this
Agreement, Cash-on-Hand shall be deemed to first be applied to clause (a) and
then to clause (b) of the definition of Revenue Shortfall.
Colombia means the Republic of Colombia.
Completion has the meaning assigned to it in the Transportation
Agreement.
Corresponding Portion of the undivided interest in the Association
Contracts or of Shares, as the case may be, means the portion, expressed as a
percentage, equal to the obligation to make Advance Tariff Payments hereunder
being transferred divided by the obligation to make Advance Tariff Payments
hereunder held by the Throughput Obligor immediately prior to such transfer.
Cusiana Area means the Cusiana and Cupiagua oil fields located
within the jurisdiction of the Department of Casanare, Colombia.
$ or dollars means United States dollars.
Due Date means the first Business Day of each calendar month.
Expropriation Compensation means all value (whether in the form of
money, securities, property or otherwise) paid or payable by Colombia or its
agencies or instrumentalities, in whole or partial settlement of claims,
whether or not resulting from judicial proceedings and whether paid or payable
within or outside Colombia, as compensation for or in respect of Expropriatory
Action.
Expropriatory Action means any action or series of actions taken,
authorized, ratified or acquiesced in by Colombia or a governing authority
which is in de facto control of part of Colombia for the appropriation,
confiscation, expropriation or nationalization (by intervention, condemnation
or other form of taking), whether with or without compensation and whether
under color of law or otherwise (including through confiscatory taxation or
imposition of confiscatory charges) of ownership or control of the Oleoducto
Central, or any substantial portion thereof, held by Ocensa.
Initial Shipper means a Throughput Obligor in its capacity as
original party to one of the Transportation Agreements and its successors and
permitted assigns in such capacity.
Initial Shipper Group means the Throughput Obligor (also in its
capacity as Initial Shipper) and any of its Affiliates that is a Shareholder,
any guarantor of any obligations of the Shareholder, and each of their
respective successors and permitted assigns.
Internationally Recognized Statistical Rating Agency means Standard
& Poor's Ratings Group, Moody's Investors Service, Duff & Phelps and Fitch's
Investor Services and each of the respective successors and assigns to
substantially all of their respective businesses whose business is primarily
the rating of debt and other securities of corporate and other issuers.
Insurance Proceeds means proceeds from insurance for casualties on
property or assets of Ocensa.
JOA means the Joint Operating Agreement for the Santiago de las
Atalayas-1, Tauramena and Rio Chitamena Association Contract Areas among BP
Exploration Company (Colombia) Limited, TOTAL Exploratie en Produktie
Maatschappij B.V. and Triton Colombia, Inc., dated as of March 29, 1994, as
the same may be amended from time to time in accordance with the terms
thereof.
Net Proceeds from any sale or other asset disposition by any Person
means cash or readily marketable cash equivalents received (including by way
of sale or discounting of a note, instalment receivable or other receivable,
but excluding any other consideration received in the form of assumption by
the acquiree of Debt or other obligations relating to such properties or
assets or received in any other noncash form) therefrom by such Person, net of
(i) all legal, title and recording tax expenses, commissions and other fees
and expenses incurred and all national, regional, foreign and local taxes
required to be accrued as a liability as a consequence of such sale or asset
disposition and (ii) all payments made by such Person on any debt which is
secured by such assets in accordance with the terms of any lien upon or with
respect to such assets or which must by the terms of such lien, or in order to
obtain a necessary consent to such sale or asset disposition or by applicable
law, be repaid out of the proceeds from such sale or asset disposition.
Non-Cash Items has the meaning assigned to it in the Transportation
Agreement.
Ocensa has the meaning assigned to it in the first paragraph of this
Agreement.
Officers' Certificate means a certificate signed by (a) the Chairman
of the Board, the President, a Vice President, the Chief Operating Officer or
a Director, and (b) another Director, the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of Ocensa.
Oleoducto Central means the existing and to be constructed pipeline
transportation systems from the Cusiana Area to the Port of Covenas, Colombia
owned and to be owned by Ocensa, including the upgrading of the facilities at
the Port of Covenas, comprising a pipeline system of four Segments for the
transportation of Petroleum approximately 800 kilometers in length, including
related pumping, storage and loading facilities and such other facilities as
Ocensa may own, utilize or operate in whole or in part from time to time
together with any additional related facilities, but excluding any Sole Risk
Facilities.
Oleoducto Central Agreement means the Amended and Restated Oleoducto
Central Agreement, dated as of March 31, 1995, among Ocensa, Empresa
Colombiana de Petroleos - Ecopetrol, BP Pipelines Colombia Limited, TOTAL
Pipeline Colombie S.A., Triton Pipeline Colombia, Inc., IPL Enterprises
(Colombia) Inc. and TCPL International Investment Inc., as the same may be
amended and restated from time to time in accordance with the terms thereof.
Operating and Maintenance Costs has the meaning assigned to it in
the Transportation Agreement.
Operating Segment has the meaning assigned to it in the
Transportation Agreement.
Party or Parties means Ocensa, the Throughput Obligor and their
respective successors or permitted assigns.
Person means any individual, corporation, limited liability company,
partnership, joint venture, association, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Petroleum means crude oil and other liquid hydrocarbons, including
the liquid hydrocarbons which are recovered or extracted from natural gas.
Proportionate Share means 9.6%, provided that to the extent that by
succession or assignment more than one Person is the Throughput Obligor
hereunder, the Proportionate Share with respect to each such Person shall be
determined pursuant to the agreements governing such succession or assignment,
provided further that in each case the aggregate Proportionate Share of all
such Persons shall always be 9.6%.
Ps or pesos means Colombian pesos.
Related Account means any account or accounts into which Ocensa or
its permitted assign hereunder has directed or is required to direct payments
of Tariff Advances and payments for purchases of Transportation Notes by the
Throughput Obligor or, if a different Person, the Initial Shipper under the
Transportation Agreement.
Related Proceeding has the meaning assigned to it in Section 5.12.
Revenue Shortfall means, as to any Due Date, the amount by which the
sum of (a) the Throughput Obligor's Weighted Average Throughput Share of the
amount calculated under clause (i) of the definition of Base Revenue
Requirement plus (b) the amount calculated under clause (ii) of the definition
of Base Revenue Requirement (excluding any amounts due in respect of any
unsubordinated liabilities of Ocensa and any penalty amounts in respect
thereof (A) for the benefit of the providers of which Ocensa has not assigned
any of its rights or interest in the Related Account or (B) due to a Person
that initiated or caused to be initiated any bankruptcy, reorganization,
dissolution, liquidation or similar proceedings with respect to Ocensa or its
assets notwithstanding its agreement with Ocensa to the contrary but (C)
including the amount of any penalties, late payment charges, fees, costs,
additional interest, withholding, indemnities, commissions and expenses
payable by Ocensa on its unsubordinated liabilities as a result of the
Throughput Obligor's or, if a different Person, the Initial Shipper's failure
to pay Tariffs under the Transportation Agreement) plus (c) the amount of any
deposit required to be made by Ocensa with the Banco de la Republica of
Colombia in respect of the payment by Ocensa of any of its obligations set
forth in clause (b) above, each as certified in an Officers' Certificate,
exceeds the amount of Cash-on-Hand. Without affecting the obligation of the
Throughput Obligor to make when due all Advance Tariff Payments payable
pursuant to Section 3.1, the amount of any such Revenue Shortfall shall be
calculated on the basis that (i) all amounts required to be paid pursuant to
the provisions of Section 3.1 in respect of any prior Revenue Shortfall, and
all amounts required to be paid by the other Throughput Obligors in respect of
any prior revenue shortfall under their Advance Tariff Agreements, were in
each case paid in full on the due date to which they related and applied to
pay such prior revenue shortfall due and payable on such due date, and (ii)
all amounts required to be paid by the Initial Shippers under their respective
Transportation Agreements have been paid. The Revenue Shortfall shall be
calculated in dollars, translating any non-dollar amount based on the Tasa
Representativa del Mercado, as reported by the Banking Superintendency in
Colombia, or other equivalent rate or, if no such rate is reported in
Colombia, then the foreign exchange spot mid-rates for such day reported in
The Wall Street Journal, Eastern Edition, or, if not so reported, on the
mid-market foreign exchange spot closing rates for such day reported in the
Financial Times, or, if not so reported, on spot foreign exchange mid-market
rates for trading among banks in amounts of $1,000,000 and more as quoted by
Morgan Guaranty Trust Company of New York.
Segment has the meaning assigned to it in the Transportation
Agreement.
Shareholders means the parties to the Oleoducto Central Agreement
other than Ocensa and their respective successors and permitted assigns.
Shares means the shares of common stock, par value Ps 100,000 each,
of Ocensa, each with no preference among themselves with respect to dividends,
voting rights or rights upon liquidation of Ocensa.
Sole Risk Facilities has the meaning assigned to it in the
Transportation Agreement.
Specified Court has the meaning assigned to it in Section 5.12.
Subsidiary of a Person means (a) a corporation more than 50% of the
outstanding Voting Shares of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person
and one or more Subsidiaries thereof or (b) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the
policies, management and affairs thereof.
Tariff Advances has the meaning assigned to it in the Transportation
Agreement.
Tariffs has the meaning assigned to it in the Transportation
Agreement.
Throughput Capacity has the meaning assigned to it in the
Transportation Agreement.
Throughput Obligor means Triton Colombia, Inc. and its successors
and permitted assigns.
Throughput Obligors means the Throughput Obligor and Empresa
Colombiana de Petroleos - Ecopetrol, BP Exploration Company (Colombia) Limited
and TOTAL Exploratie en Produktie Maatschappij B.V. and their respective
successors and permitted assigns.
Throughput Share has the meaning assigned to it in the
Transportation Agreement, provided that to the extent that by succession or
assignment more than one Person is the Throughput Obligor hereunder, the
Throughput Share with respect to each such Person shall be determined pursuant
to the agreements governing such succession or assignment.
Transportation Agreement means the Transportation Agreement, dated
as of the date hereof, between Ocensa and the Throughput Obligor, and, when
used in plural number, the substantially similar agreements entered into by
Ocensa and the other Throughput Obligors, in each case as the same may be
amended from time to time in accordance with the terms thereof.
Transportation Notes has the meaning assigned to it in the
Transportation Agreement.
Voting Shares means shares which ordinarily have voting power for
the election of directors (or persons performing similar functions), whether
at all times or only so long as no senior class of shares has such voting
power by reason of any contingency.
Weighted Average Throughput Share with respect to an Initial Shipper
or a Throughput Obligor means the quotient obtained by dividing (a) the sum of
the products obtained by multiplying the Throughput Share of such Initial
Shipper or Throughput Obligor, as the case may be, for each Operating Segment
by the Capital Cost for such Operating Segment, by (b) the Capital Cost for
all Operating Segments. For purposes of this definition, Capital Cost has the
meaning assigned to it in and is calculated pursuant to the Transportation
Agreement.
Withdrawing Shareholder means a Shareholder exercising its right to
withdraw from the Oleoducto Central project and to terminate the Oleoducto
Central Agreement effective March 31, 1995 pursuant to the terms thereof.
Section 1.2. Interpretation. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular and vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or a Section refers to an Article or a
Section, as the case may be, of this Agreement; and
(d) all references to this Agreement and the words herein, hereof,
hereto and hereunder and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section or other subdivision.
ARTICLE TWO
TRANSPORTATION AGREEMENT
Section 2.1. Transportation Agreement. The Throughput Obligor and
Ocensa have entered into the Transportation Agreement with respect to the
shipment of Petroleum of the Throughput Obligor pursuant to which inter alia
Ocensa has agreed to transport Petroleum delivered to it by the Throughput
Obligor.
ARTICLE THREE
ADVANCE TARIFF PAYMENTS
Section 3.1. Advance Tariffs. (a) If for any reason at any time
within the calendar month prior to any Due Date Ocensa has, or reasonably
anticipates that it will have, a Revenue Shortfall on such Due Date, Ocensa
promptly (but in any case at least 10 Business Days prior to such Due Date) by
notice shall request from the Throughput Obligor an Advance Tariff Payment in
Dollars equal to the amount of such Revenue Shortfall projected by Ocensa for
such Due Date. In addition, the Throughput Obligor may at any time and at its
sole discretion designate voluntary payments made or caused to be made by it
(i) into the Related Account or (ii) directly to extinguish liabilities of
Ocensa included in clause (b) of the definition of Revenue Shortfall as
Advance Tariff Payments hereunder, whereupon such payments shall be treated as
Advance Tariff Payments for all purposes of this Agreement.
(b) The notice referred to in the first sentence of paragraph (a)
shall specify the applicable Due Date, the amount of the Revenue Shortfall
projected for such Due Date, the place or places of payment, the calculation
of such shortfall in reasonable detail (including, without limitation, the
amount of Cash-on-Hand and the breakdown of the amounts in clause (b) and (c)
of the definition of Revenue Shortfall by item thereof and source of the
related liabilities), the intended use of the proceeds from such Advance
Tariff Payment and the estimated time or times of such use. If such notice is
given less than 15 Business Days prior to such Due Date, it shall be given by
telephone confirmed by facsimile transmission. Following receipt of such
notice the Throughput Obligor shall pay to, or on behalf of, Ocensa not later
than 12:00 p.m. (noon) New York City time, on such Due Date, in immediately
available cash funds in dollars and/or pesos as specified in such notice, in
such specified place or places of payment, an amount equal to such Revenue
Shortfall on such Due Date, which amount, subject to paragraph (d) below,
shall be payable in full without set off, withholding, deduction or reduction
for any cause, including without limitation any credit of such Throughput
Obligor existing under Section 3.1(c).
(c) Each Advance Tariff Payment made by the Throughput Obligor
shall constitute an advance payment of Tariffs under the Transportation
Agreement by the Throughput Obligor for subsequent transportation of Petroleum
through the Oleoducto Central and shall be applied as a credit for such
transportation to the Throughput Obligor or its designee or repaid in cash to
the Throughput Obligor or its designee as follows:
First, applied as a credit for such transportation during the period
Tariffs payable under the Transportation Agreement have been correspondingly
increased pursuant thereto to the extent that Colombian generally accepted
accounting principles require Ocensa to expense in such quarter the amounts
paid in respect of goods or services acquired by or provided to Ocensa with
the proceeds of such Advance Tariff Payment, provided that such Advance Tariff
Payment is credited (or invoiced) concurrently with, and only in the same
proportion that, advance tariff payments madeor called but not yet paid by
other Throughput Obligors under their respective Advance Tariff Agreements are
applied as credits for transportation;
Second, if such Advance Tariff Payment was made in respect of a
Revenue Shortfall (but only to the extent such Revenue Shortfall resulted from
insufficient Cash-on-Hand to meet the unsubordinated liabilities of Ocensa for
the benefit of the providers of which Ocensa has assigned certain of its
rights and interest in the Related Account, excluding any penalties, penalty
interest and indemnities but including accelerated amounts associated
therewith), applied as a credit for such transportation in each successive
period in which Tariffs are due under the Transportation Agreement to the
extent that such Advance Tariff Payment is equal to or less than the Non-Cash
Items included in such Tariffs in such period less payments (if any) by Ocensa
in respect of such unsubordinated liabilities and Transportation Notes and
Tariff Advances provided by the Throughput Obligor and, to the extent that
such Revenue Shortfall resulted from insufficient Cash-on-Hand to meet any
such unsubordinated liabilities in respect of any penalties, penalty interest
and indemnities, such sum shall be applied as a credit against the adjustment
to such Tariffs required under Section 2.5(d) of Schedule C of the
Transportation Agreement; and
Third, to the extent not credited pursuant to clauses First and
Second above and to the extent Ocensa has available Cash-on-Hand, repaid in
cash to the Throughput Obligor or its designee on the next Due Date (except
that the limitation on the right to such repayment to such Cash-on-Hand shall
not apply in the event of (i) bankruptcy of Ocensa or (ii) liquidation of
Ocensa), provided that any repayment of an Advance Tariff Payment (or portion
thereof) made in respect of a Revenue Shortfall (but only to the extent that
such Revenue Shortfall resulted from insufficient Cash-on-Hand to meet the
unsubordinated liabilities of Ocensa for the benefit of the providers of which
Ocensa has assigned certain of its rights and interest in the Related Account,
excluding any penalties, penalty interest or indemnities, but including
accelerated amounts associated therewith) not credited pursuant to clause
Second above, shall be limited to that portion of the available Cash-on-Hand
of Ocensa that was generated from the Non-Cash Items paid as part of Tariffs
directly or indirectly into the Related Account, whether retained therein or
not (except that the limitation on the right to such repayment to only such
Cash-on-Hand so generated shall not apply in the case (A) that no Petroleum is
flowing through the Oleoducto Central, other than by reason of maintenance or
repairs, and (x) 180 days have passed since Petroleum has last flowed or (y)
decommissioning of all four segments of the Oleoducto Central has occurred,
whichever is earlier, (B) of bankruptcy of Ocensa or (C) of liquidation of
Ocensa), and provided, further, in each case, that such repayment shall be
subordinated in right of payment and in liquidation to all of Ocensa's
unsubordinated liabilities for the benefit of the providers of which Ocensa
has assigned certain of its rights and interest in the Related Account and
subordinated in right of payment (but not in liquidation unless otherwise
agreed) to such other payments of Ocensa as rank senior in right of repayment
pursuant to Section 5.4(a) of the Oleoducto Central Agreement.
Notwithstanding anything to the contrary contained in this Section 3.1(c),
Ocensa shall not repay any Advance Tariff Payment in cash to the Throughput
Obligor or its designee so long as the Throughput Obligor or the party (other
than Ocensa) to the Transportation Agreement, if different, is in default of
any of its payment obligations under the Transportation Agreement. No credit
applied to any Tariffs in respect of an Advance Tariff Payment called but not
yet paid shall release or reduce the obligation to make such Advance Tariff
Payment in cash. Advance Tariff Payments shall not bear interest. The Parties
agree that Ocensa shall have the right, in its sole discretion, to set off
against sums due by it under any payment obligation, loan, note or credit held
by the Throughput Obligor the unpaid amount of any equity contribution with
respect to which the Shareholder in its Initial Shipper Group is in default
under its subscription agreement with Ocensa.
(d) (i) In the event Ocensa pays amounts for which an Advance
Tariff Payment has been called but not yet paid or notifies the Throughput
Obligor that it reasonably anticipates that the Revenue Shortfall as of the
related Due Date will be otherwise reduced or eliminated, the obligation of
the Throughput Obligor to make such Advance Tariff Payment shall, to the
extent of such payment or the reasonably anticipated reduction or elimination
set forth in such notice, be deemed satisfied and, if called and paid, be
credited or repaid to the Throughput Obligor.
(ii) If a call has been made for an Advance Tariff Payment in
respect of a Revenue Shortfall for an amount calculated by reference to item
(ii) of the Base Revenue Requirement and such Advance Tariff Payment is
overdue, the amount due in respect of such Advance Tariff Payment by the
Throughput Obligor shall be reduced by the amount of any payment made by the
Throughput Obligor or its designee directly in satisfaction of the liabilities
included in item (ii) of the definition of Base Revenue Requirement by
reference to which such Revenue Shortfall has been calculated or by the amount
by which such liabilities have otherwise been released or reduced.
(e) If, at the expiration of the stated term of this Agreement, the
Throughput Obligor shall have made Advance Tariff Payments which shall not
then have been credited or repaid as provided in Section 3.1(c) or (d), the
amount of such Advance Tariff Payments shall be so credited or repaid
following the end of such stated term.
Section 3.2. Overdue Amounts. If the Throughput Obligor shall fail
to pay any amount due and payable by it pursuant to Section 3.1 on or before
the Due Date when such amount is due and payable, the Throughput Obligor shall
be liable to Ocensa for the sum of the amount so due and payable and remaining
unpaid by such Throughput Obligor, and, in each case to the extent permitted
by law,
(a) without duplication with any amounts included in clause (C) of the
definition of Revenue Shortfall, the amount of any penalties, late payment
charges, fees, costs, additional interest, withholding, indemnities,
commissions and expenses arising from such failure to pay and set forth in an
Officers' Certificate, or if higher, the amount actually paid by Ocensa in
respect of such amounts, and
(b) to the extent paragraph (a) above is not applicable, interest on the
amount due and payable pursuant to Section 3.1 from and including such Due
Date (or if later the date such amount became due) to but excluding the date
of payment thereof calculated at the rate per annum equal to the prime rate of
Morgan Guaranty Trust Company of New York and any successors and assigns to
substantially all of its banking business as in effect from time to time plus
5%, provided that this paragraph (b) shall also not apply if paragraph (a)
were applicable and waived.
Payments due and owing by the Throughput Obligor under this Section 3.2 shall
be made in cash without set off, deduction, withholding or reduction for any
cause including without limitation any credit of such Throughput Obligor
existing pursuant to Section 3.1(c) or (d).
Section 3.3. Indemnification by Throughput Obligor. The Throughput
Obligor shall indemnify Ocensa against any loss, liability, damage or claim
(or action in respect thereof) (including, but not limited to, legal fees and
expenses) suffered or incurred:
(a) as a result of the occurrence of the events listed in Section 3.2;
or
(b) in connection with the enforcement, preservation or protection of
any rights against the Throughput Obligor under this Agreement;
provided, however, that in no event shall the Throughput Obligor be obligated
to indemnify Ocensa for loss of anticipated profits or other consequential
damages.
ARTICLE FOUR
TERM
Section 4.1. Term. This Agreement shall continue in full force and
effect so long as any assignment of rights of Ocensa under this Agreement is
still in effect and shall, unless earlier terminated by written agreement of
the Parties, terminate at the time of any assignment to the Throughput Obligor
of the rights hereunder that were previously assigned to a permitted assignee
of Ocensa, provided, however, that any rights and obligations existing prior
to termination shall survive any termination of this Agreement, including,
without limitation, any rights of the Throughput Obligor pursuant to Section
3.1(e).
Section 4.2. Effectiveness. This Agreement shall have no effect or
validity unless and until Ocensa enters into all other Advance Tariff
Agreements.
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
If to Ocensa: Copy to: Agent for Service
OLEODUCTO CENTRAL S.A. N/A CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax (212) 247-2882
Santafe de Bogota, D.C. - Colombia
Telefax 571-528-3933
Attention: President
If to the Throughput Obligor
TRITON COLOMBIA, INC. TRITON ENERGY CORPORATION CT CORPORATION SYSTEM
Carrera 9A No. 99-02 6688 N. Central Expressway 1633 Broadway
Oficina 407 Suite 1400 New York, New York 10019
Santafe de Bogota, D.C.-Colombia Dallas, Texas 75206 Telefax (212) 247-2882
Telefax 571-618-2553 Telefax: (214) 691-0296
Attention: Ivan Fajardo Attention: Thomas G. Finck,
A. E. Turner
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any Party to the other. Any demand, notice or
other communication given by personal delivery shall be conclusively deemed to
have been given on the day of actual delivery thereof and, if given by
certified or registered mail, on the fifth Business Day following the deposit
thereof in the mail and, if given by electronic communication, on the day of
transmittal thereof if given during the normal business hours of the recipient
and on the Business Day during which such normal business hours next occur if
not given during such hours on any day. The Party giving any demand, notice or
other communication by electronic communication shall send the original
thereof by personal delivery or by first class mail.
Section 5.2. Other Advance Tariff Agreements; Amendments and Waivers.
Ocensa will enter into other Advance Tariff Agreements on substantially
identical terms with the otherThroughput Obligors, and the Throughput Obligor
shall have no obligation with respect to any such other Advance Tariff
Agreements. No amendment, supplement, waiver or termination of this Agreement
shall be binding unless executed in writing by the party to be bound thereby
and any permitted assignees. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
Section 5.3. Taxes. Each Party shall be solely responsible for the
payment of all taxes imposed on it, whether by taxing authorities within the
Republic of Colombia or elsewhere.
Section 5.4. Representations and Warranties.
(a) Each Party represents and warrants to the other that:
(i) it is a corporation duly incorporated and organized under
the laws of its jurisdiction of incorporation;
(ii) it has the requisite power and authority to enter into and
perform its obligations under this Agreement, the Transportation Agreement and
the Association Contracts to which it is a party and this Agreement, the
Transportation Agreement and the Association Contracts to which it is a party,
when executed and delivered by such Party, constitute valid and legally
binding agreements of such Party;
(iii) the execution and delivery of, and the performance by it
of its obligations under, this Agreement, the Transportation Agreement and the
Association Contracts to which it is a party do not and will not result in a
breach of or constitute a default under:
(A) any provision of its charter or articles of incorporation or its
by-laws;
(B) any agreement or instrument to which it is a party and which is
material to the performance by it of its obligations hereunder; and
(C) any statute, rule, regulation or order, judgment or decree of any
governmental agency or court having jurisdiction over it or by which it is
bound;
(iv) neither it nor any of its property has any immunity from
jurisdiction of any court or from set-off or any legal process;
(b) The Throughput Obligor represents and warrants to Ocensa that:
(i) there are no pending actions, suits or proceedings against
or affecting the Throughput Obligor, any of its Subsidiaries or any of their
respective properties that, if determined adversely to the Throughput Obligor
or any of its Subsidiaries, would individually or in the aggregate have a
material adverse effect on the financial condition or results of operation of
the Throughput Obligor and its Subsidiaries taken as a whole, or would
materially and adversely affect the ability of the Throughput Obligor to
perform its obligations under this Agreement, and no such actions, suits or
proceedings are threatened or, to the Throughput Obligor's knowledge,
contemplated; and
(ii) the financial statements provided to Ocensa present fairly
the financial position of the Throughput Obligor and its consolidated
subsidiaries as of the dates shown therein and their results of operations and
cash flows for the periods shown therein, such financial statements have been
prepared in conformity with generally accepted accounting principles in the
United States applied on a consistent basis and, as of the date hereof, there
has been no material adverse change in the financial condition or results of
operations of the Throughput Obligor since the date of such financial
statements.
Section 5.5. Assignments. (a) Ocensa may assign it rights and
obligations hereunder to any party concurrently with the acquisition by such
party of all or substantially all of the Oleoducto Central, provided that such
assignee has assumed all Ocensa's obligations and unsubordinated liabilities.
(b) Except as set forth in paragraph (a), Ocensa may not assign
this Agreement or any of its rights or proceeds hereunder, or create
enforceable third party rights herein, to or in any person not a party hereto
(or an Affiliate of a party hereto) except that Ocensa may assign to any
person, in each case with the prior written consent of the Throughput Obligor,
all or any part of Ocensa's rights or proceeds hereunder to any trustee for
the benefit of providers of unsubordinated liabilities of Ocensa secured by an
interest in the Related Account. If the Throughput Obligor consents, Ocensa
agrees to execute and deliver all consents and documents reasonably necessary
to effect such assignment and to create a valid and perfected security
interest herein. The claims and rights of each such permitted assignee shall
rank pari passu with the claims and rights of all permitted assignees
irrespective of the time or times at which prior, concurrent or subsequent
assignments under this Section 5.5 are made or perfected. Subject to
compliance with the terms of any such assignment, any such permitted assignee
shall have the benefit of the representations and warranties of the Throughput
Obligor and may enforce the obligations of the Throughput Obligor hereunder as
if such permitted assignee were a party hereto.
(c) The Throughput Obligor may assign this Agreement and its
obligations hereunder in the following circumstances:
(i) all or any part of its rights and obligations hereunder to
any person in connection with the simultaneous transfer to such person of a
Corresponding Portion of the undivided interest held by the Throughput Obligor
or its Affiliates in the Association Contracts. Nothing contained herein shall
constitute a derogation or waiver of any rights or obligations of the parties
to the JOA or the Association Contracts;
(ii) all or any part of its rights and obligations hereunder to
any Person, provided that following such transfer the unsubordinated
liabilities of Ocensa secured by an assignment of certain rights and interests
in the Related Account continue to have a credit rating by an Internationally
Recognized Statistical Rating Agency at least equal to such credit rating
immediately prior to the time of such assignment (or, if earlier, any
announcement thereof), or, alternatively, if there are no such rated
unsubordinated liabilities, prior to such transfer Ocensa may obtain (at the
sole cost and expense of the Throughput Obligor requesting such rating) a
provisional rating by an Internationally Recognized Statistical Rating Agency
in respect of such unsubordinated liabilities that may be issued in the
future, and the standard in this proviso will be deemed to have been met if at
least such provisional rating is confirmed following such transfer or
announcement;
(iii) all or any part of its rights and obligations hereunder to any
Affiliate of the Throughput Obligor, provided that the Throughput Obligor
remains liable hereunder;
(iv) to any person whose obligations hereunder are guaranteed by a
person satisfying the criteria under (i); or
(v) to any Person in connection with the transfer by the
Throughput Obligor of all or substantially all of its assets by acquisition,
amalgamation, merger or other business combination;
provided, however, that in each such case such assignee executes and delivers
to Ocensa a written undertaking satisfactory to Ocensa (and Ocensa's permitted
assignee) whereby such assignee agrees to be bound by all the terms and
conditions of this Agreement.
Except as otherwise provided herein, upon the unconditional
assumption of the Throughput Obligor's rights and obligations hereunder by a
permitted assignee thereof, and subject to any limitations in any assignment
and assumption agreement, such Throughput Obligor shall be released and
discharged from all of its obligations hereunder, except obligations which
shall have been incurred prior to such assignment and assumption.
(d) The Throughput Obligor may assign its rights hereunder as
security for lenders providing financing for the development and operation of
the Cusiana Area.
Section 5.6. Nature of Obligations. (a) Subject to the terms of
this Agreement, the obligations of the Throughput Obligor under this Agreement
to make any Advance Tariff Payments and the obligations of Ocensa to apply
such Advance Tariff Payments as a credit for transportation or to repay them
in cash shall be unconditional and absolute and shall not be deferred,
excused, released, discharged or in any way affected by (i) any right of set
off, counterclaim or defense by reason of any claims against Ocensa or the
Throughput Obligor arising under this Agreement or on any other account
whatsoever, (ii) any sale or other transfer by any of the Shareholders (among
themselves or otherwise) of any of Ocensa's shares or the failure by any of
the other Throughput Obligors or, if different Persons, the other Initial
Shippers to perform their obligations under their respective Advance Tariff
Agreements or Transportation Agreements with Ocensa, (iii) any bankruptcy,
reorganization or dissolution (on whatever grounds) of Ocensa or the
Throughput Obligor (but only to the extent that any obligations hereunder in
respect of a Revenue Shortfall result from insufficient Cash-on-Hand to meet
unsubordinated liabilities of Ocensa for the benefit of the providers of which
Ocensa has assigned certain of its rights under this Advance Tariff Agreement,
including any penalties, interest, indemnities or accelerated amounts
associated therewith) or (iv) any change, waiver, extension, indulgence or
other action or omission in respect of any of the Throughput Obligor's
obligations, in each case, whether or not Ocensa or the Throughput Obligor
shall have had any notice or knowledge of any of the foregoing.
(b) The obligations of the Throughput Obligor created by this
Agreement, and in particular the obligation to make Advance Tariff Payments,
are several, not joint and several with any other party. Nothing herein shall
be deemed or construed to make the Throughput Obligor a surety or a guarantor
of Ocensa or of any other Throughput Obligor or liable to meet any obligation
of Ocensa or of any other Throughput Obligor.
Section 5.7. No Third Party Beneficiaries. Except as herein
otherwise expressly provided to the contrary, this Agreement shall inure to
the benefit of and be binding upon the Parties and their respective successors
and permitted assignees, and no other Person shall have any rights hereunder.
Section 5.8. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect.
Section 5.9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.10. Performance Outside Colombia. The Parties
acknowledge and agree that their activities hereunder will be performed
substantially outside Colombia.
Section 5.11. Commercial Obligations. Each Party acknowledges and
agrees that its rights and obligations hereunder are commercial and not
governmental in nature.
Section 5.12. Submission to Jurisdiction; Consent to Service. (a)
Each of the Parties hereby submits to the non-exclusive jurisdiction of the
Federal and State courts in the Borough of Manhattan in The City of New York
(each, a Specified Court) in any suit, action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby (a Related
Proceeding). Each of the Parties irrevocably appoints the agent for service
designated opposite its name in Section 5.1 hereof as its authorized agent in
the Borough of Manhattan in The City of New York upon which process may be
served in any such suit or proceeding, and agrees that service of process upon
such agent, and written notice of said service to such Party, by the person
serving the same to the address provided in Section 5.1, shall be deemed in
every respect effective service of process upon such party in any such suit,
action or proceeding. Each of the Parties further agrees to take any and all
action as may be necessary to maintain such designation and appointment of
such agent in full force and effect for the duration of this Agreement.
(b) The obligation of a Party in respect of any sum due from it to
the other Party, if expressed in dollars hereunder, notwithstanding any
judgment in a currency other than dollars, shall not be discharged until the
first Business Day, following receipt by such Party of any sum adjudged to be
so due in such other currency, on which (and only to the extent that) such
Party may in accordance with normal banking procedures purchase dollars with
such other currency; if the dollars so purchased are less than the sum
originally due to such Party hereunder, the other Party agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Party
against such loss. If the dollars so purchased are greater than the sum
originally due to such Party hereunder, such Party agrees to pay to the other
Party an amount equal to the excess of the dollars so purchased over the sum
originally due to such Party hereunder.
Section 5.13. Waiver of Immunity. (a) The Throughput Obligor
irrevocably consents to and waives any objection which it may now or hereafter
have to the laying of venue of any Related Proceeding brought in a Specified
Court or to the laying of venue of any suit, action or proceeding brought
solely for the purpose of enforcing or executing any judgment relating thereto
in a Specified Court and further irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of any Related Proceeding or any such suit, action or proceeding in any such
Specified Court.
(b) To the extent that the Throughput Obligor or any of its
revenues, assets or properties shall be entitled, with respect to any Related
Proceeding at any time brought against the Throughput Obligor or any of its
revenues, assets or properties in the jurisdiction in which a Specified Court
is located, or with respect to any suit, action or proceeding at any time
brought solely for the purpose of enforcing or executing any judgment relating
thereto in any jurisdiction, to any sovereign or other immunity from suit,
from the jurisdiction of any such court, from attachment prior to judgment,
from attachment in aid of execution of judgment, from execution of a judgment
or from any other legal or judicial process or remedy, and to the extent that
in any such jurisdiction there shall be attributed such an immunity, the
Throughput Obligor irrevocably agrees not to claim and irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction
(including, without limitation, the Foreign Sovereign Immunities Act 1976 of
the United States).
Section 5.14. Headings; Table of Contents. The headings and table
of contents contained herein are for convenience of reference only and do not
constitute a part of this Agreement.
Section 5.15. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have hereunto caused this agreement
to be executed and delivered by their proper officers thereunto duly
authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
By:Gustavo Suarez
Title:President
TRITON COLOMBIA, INC.
By:Peter Rugg
Title:Vice President
<PAGE>
-
AMENDED AND RESTATED SUBSCRIPTION AGREEMENT
dated as of March 31, 1995
between
OLEODUCTO CENTRAL S.A.
and
TRITON PIPELINE COLOMBIA, INC.
<PAGE>
AMENDED AND RESTATED SUBSCRIPTION AGREEMENT
AGREEMENT, dated as of March 31, 1995, between OLEODUCTO CENTRAL
S.A., a sociedad anonima organized under the laws of Colombia (Ocensa), and
TRITON PIPELINE COLOMBIA, INC., a corporation existing under the laws of the
Cayman Islands (the Purchaser). This Agreement amends and restates in its
entirety the subscription agreement, dated as of December 14, 1994, between
Ocensa and the Purchaser (the Original Subscription Agreement).
RECITALS
WHEREAS:
A. The Purchaser is a Shareholder of Ocensa, and Ocensa and the
Purchaser are parties to the Amended and Restated Oleoducto Central Agreement
(the Oleoducto Central Agreement), dated as of March 31, 1995, among Ocensa,
the Purchaser and the other Shareholders parties thereto;
B. The Purchaser has entered into the Original Subscription
Agreement to acquire from time to time upon the call of Ocensa and subject to
certain other conditions set forth herein, Shares (as hereinafter defined) in
exchange for cash and in proportion to the Purchaser's Shareholding Interest
(as hereinafter defined); and
C. The Purchaser and Ocensa desire to amend and restate the
Original Subscription Agreement to alter the conditions of a call by Ocensa to
the Purchaser to purchase Shares.
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree
that the Original Subscription Agreement is amended and restated as follows:
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless the context otherwise requires, the
following words and phrases shall have the meanings indicated below:
Bankruptcy of Ocensa means (a) entry by any competent governmental
authority of any jurisdiction or a court having jurisdiction in the premises
of (i) a decree or order
for relief in respect of Ocensa in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or (ii)
an involuntary or contested decree or order adjudging Ocensa a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Ocensa under any
applicable law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of Ocensa or of any
substantial part of the property of Ocensa, or ordering the winding up or
liquidation of the affairs of Ocensa and the continuance of any such decree or
order unstayed and in effect for a period of 90 consecutive days; or
(b) commencement by Ocensa of a voluntary case or proceeding under
any applicable bankruptcy, insolvency, reorganization or other similar law or
of any other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by Ocensa to the entry of a decree or order for relief in respect
of Ocensa in an involuntary case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
Ocensa, or the filing by Ocensa of a petition or answer or consent seeking
reorganization or relief under any applicable law; or consent by Ocensa to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of Ocensa or of any substantial part of the property of Ocensa, or
the making by Ocensa of an assignment for the benefit of creditors, or the
admission by Ocensa in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by Ocensa in furtherance of
any such action.
Business Day means a day in which commercial banks in Santaf de Bogot and
The City of New York, New York are permitted to be open for domestic and
international business.
Call has the meaning assigned to it in Section 2.1.
Capital Budget means the budget for Capital Expenditures not included in
the Annual Operating Budget for a fiscal year identified as such and approved
by the Board of Directors.
Capital Expenditures means, with respect to Ocensa for any period, the
aggregate of all direct and indirect expenditures (including capitalized
interest) of Ocensa during such period which are required to be included in
property, plant or equipment, good will, rights of way and other long-term
intangible assets or a similar tangible or intangible property account,
including, without limitation, additions to equipment and leasehold
improvements, on a consolidated balance sheet of Ocensa prepared in accordance
with generally accepted accounting principles in Colombia.
Completion means the date after all four Segments of the Oleoducto
Central have been commissioned for purposes of transporting shipments of
Petroleum and on which the five millionth barrel of Petroleum is shipped
through the Oleoducto Central from the Cusiana ReceiptPoint to the Covenas
Delivery Point (as such terms are defined in the Transportation Agreements),
all as certified in a resolution adopted by the Board of Directors.
Corresponding Portion of Shares means the portion, expressed as a
percentage, equal to the payment obligations hereunder being transferred
divided by the payment obligations hereunder held by the Purchaser immediately
prior to such transfer.
Current Shareholding Interest of the Purchaser means for purposes of this
definition the percentage equal to the number of Shares held by the Purchaser
divided by the total number of Shares outstanding, in each case as of the date
of determination.
Decommissioning has the meaning assigned to it in the Common Security
Trust Agreement.
Notice of Exercise of Call has the meaning assigned to it in Section 2.1.
Oleoducto Central Agreement has the meaning assigned to it in the
Recitals.
Permitted Assignee means a person to whom Ocensa or the Purchaser, as the
case may be, has assigned or transferred rights or obligations under this
Agreement in accordance with Section 5.3.
Political Events Agreement means the Political Events Agreement, dated as
of December 14, 1994, among the parties to the Oleoducto Central Agreement
providing definitions and procedures relating to certain political events, as
the same may be amended from time to time in accordance with the terms
thereof.
Related Account means any account or accounts into which Ocensa or its
permitted assign under the Transportation Agreement with a Person in the
Purchaser's Initial Shipper Group has directed or is required to direct
payments of Tariff Advances and payments for purchases of Transportation Notes
under such agreement.
Senior Debt to Equity Ratio means the ratio for the Senior Debt Tranche
for the benefit of which this Subscription Agreement has been assigned of (a)
the principal amount of Senior Debt outstanding under such Senior Debt Tranche
secured by an interest in the Related Account (excluding the notional amount
of any liability under interest rate swap agreements, interest rate cap
agreements, interest rate collar agreements, interest rate insurance, currency
swap agreements, currency options, futures or purchase or sale agreements or
other agreements and arrangements designed to protect against fluctuations in
interest rates and currency exchange rates in each case constituting Senior
Debt under such Senior Debt Tranche to the extent the aggregate of such
notional amount is not in excess of the aggregate principal amount outstanding
of all other Senior Debt under such Senior Debt Tranche) less any proceeds of
Senior Debt under such Senior DebtTranche held in an escrow account or other
similar account or fund pursuant to the related Senior Debt Agreement to (b)
the sum of (without duplication) (i) the greater of (A) the sum of (x) Equity
Contributions made by Persons in the Purchaser's Initial Shipper Group, and
(y) the Purchaser's Current Shareholding Interest in Pre-Completion Accrued
Returns, and (B) the Purchaser's Current Shareholding Interest of Ocensa's
shareholders' equity determined on a consolidated basis in accordance with
generally accepted accounting principles in the United States (but excluding
Ocensa's equity interest in any Unrestricted Subsidiaries), (ii) any
Transportation Repayment Obligations owing to the Related TRO Holders, (iii)
any other outstanding debt subordinated to Senior Debt (other than Shareholder
Bridge Loans incurred to fund failures by Shareholders in other Initial
Shipper Groups or the Canadian Group to make Equity Contributions as required)
provided by Persons in the Purchaser's Initial Shipper Group, or in each case
financial institutions designated by any such Person and Shareholder Bridge
Loans incurred to fund a failure of Purchaser or another Shareholder in its
Initial Shipper Group to make Equity Contributions as required, (iv) the
Purchaser's Initial Shipper Group's Proportionate Share of any outstanding
debt subordinated to Senior Debt that has not been provided by a Person in an
Initial Shipper Group or the Canadian Group or a financial institution
designated by any such Person and (v) any Advance Tariff Payments under the
Advance Tariff Agreement with a Person in the Purchaser's Initial Shipper
Group to the extent not included as an expense item in the income statement of
Ocensa for the relevant period.
Shareholding Interest of the Purchaser means the percentage equal to the
number of Shares held by the Purchaser divided by the total number of Shares
outstanding, in each case as of December 14, 1994.
Shares means the shares of capital stock of Ocensa, par value Ps. 100,000
each, each with no preference among themselves with respect to dividends,
voting rights or rights upon liquidation of Ocensa.
Specified Court has the meaning assigned to it in Section 5.11.
Time of Delivery has the meaning assigned to it in Section 2.1.
Unrestricted Subsidiary" has the meaning assigned to it in the Common
Secretary Trust Agreement.
Section 1.2. Interpretation. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular and vice-versa;
(b) words importing gender include all genders;
(c) any reference to an Article or Section refers to an Article or a
Section, as the case may be, of this Agreement; and
(d) all references to this Agreement and the words herein, hereof,
hereto and hereunder and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section or other subdivision.
All defined terms used and not defined herein have the meanings assigned to
them in the Oleoducto Central Agreement.
ARTICLE TWO
COMMITMENT
Section 2.1. Commitment to Purchase Shares. On the terms and subject to
the conditions hereinafter set forth, the Purchaser agrees from time to time
to acquire Shares upon the call (each, a Call) of Ocensa to be exercised by a
notice of exercise (each, a Notice of Exercise of Call), in each case in
exchange for cash, in the number, at the purchase price per Share and on the
date and at the time (each, a Time of Delivery) set forth in the Notice of
Exercise of Call; provided, however, that, in each case,
(a) the Call shall be made (i) in accordance with the procedures
established for such purpose in the By-Laws of Ocensa and applicable laws,
(ii) prior to (x) Bankruptcy of Ocensa, (y) Decommissioning or (z) a unanimous
decision of the Board of Directors not to continue with the Oleoducto Central,
in conformity with a Capital Budget and a Funding Resolution of Ocensa, and
(iii) simultaneously with Calls to all other purchasers under other
Subscription Agreements, as soon as practicable after all necessary
governmental and shareholder approvals for the issuance of such equity have
been obtained,
(b) the Notice of Exercise of Call shall be substantially in the form of
the Notice of Exercise of Call attached as Annex I hereto and shall be
transmitted simultaneously to all purchasers under other Subscription
Agreements,
(c) the number of Shares to be purchased by the Purchaser at such Time
of Delivery and the aggregate purchase price therefor shall be in the same
proportion to the aggregate amount of Shares being sold by Ocensa pursuant to
such Call and the aggregate price therefor as the Purchaser's Shareholding
Interest,
(d) the purchase price per Share to be sold at each Time of Delivery,
the Time of Delivery and all other terms of purchase shall be identical for
all Shareholders, and
(e) the Time of Delivery shall be not less than 15 Business Days after
the date of delivery of the Notice of Exercise of Call.
In addition, one special Call (which shall be for a contribution of funds
but not for additional Shares) may be made without reference to a Capital
Budget or Funding Resolution in the event of (x) Bankruptcy of Ocensa, (y)
Decommissioning or (z) a unanimous decision of the Board of Directors not to
continue with the Oleoducto Central, if at the time of such event the Senior
Debt to Equity Ratio is higher than 70/30, for an amount sufficient so that,
after giving effect to such Call and the actual or pro forma application of
the proceeds thereof to repay Senior Debt, such ratio shall be 70/30.
Ocensa agrees to make Calls to the Purchaser to acquire Shares in
exchange for cash only in compliance with this Section 2.1.
Section 2.2. Sale of the Shares. At each Time of Delivery, Ocensa shall
issue, sell, transfer, convey, assign and deliver to the Purchaser, and the
Purchaser will acquire from Ocensa, all right, title and interest in and to
the Shares being purchased by the Purchaser at Time of Delivery at such
purchase price per Share set forth in the Notice of Exercise of Call. Upon
payment of the aggregate purchase price therefor as provided herein and in
such Notice of Exercise of Call, the Purchaser shall have no further
obligations thereunder.
Section 2.3. Payment and Delivery. The certificate(s) representing the
Shares purchased by the Purchaser hereunder at each Time of Delivery shall be
delivered by or on behalf of Ocensa to the Purchaser's designated
representative in the place set forth in the Notice of Exercise of Call
against payment in full by the Purchaser of the purchase price as set forth in
the Notice of Exercise of Call.
Section 2.4. Conditions to Purchase. The obligations of the Purchaser
hereunder to purchase the Shares to be delivered at each Time of Delivery
shall be subject to the conditions that (a) the representations and warranties
of Ocensa in Section 2.6 are, at and as of such Time of Delivery, true and
correct, and (b) that the aggregate purchase price of all Shares purchased and
contributions of funds by the Purchaser pursuant to Calls of Ocensa hereunder
shall not exceed the lower of (i) $58.5 million and (ii) the Purchaser's
Shareholding Interest of the Aggregate Subscription Obligation (or, in each
case, the equivalent thereof in Colombian Pesos determined by reference to
exchange rates between U.S. dollars and Pesos in effect on each Time of
Delivery hereunder based on such rates available to Ocensa as reasonably
determined by Ocensa), less, in each case, all amounts (similarly determined)
paid by the Purchaser or any guarantor thereof pursuant to a Performance
Guarantee Agreement pursuant hereto or thereto. It is acknowledged that such
Shares are subject to the terms of the Oleoducto Central Agreement, the Voting
Trust Agreement and the Dividend Trust Agreement.
Section 2.5. Mutual Representations and Warranties. Each party
represents and warrants to the other for its benefit that:
(a) it is a corporation duly incorporated and organized under the laws
of its jurisdiction of incorporation;
(b) it has the requisite power and authority to enter into and perform
its obligations under this Agreement and this Agreement, when executed and
delivered by such party, constitutes the valid and legally binding agreement
of such party; and
(c) the execution and delivery of, and the performance by it of its
obligations under, this Agreement will not result in a breach of or constitute
a default under:
(i) any provision of its charter or articles of incorporation or its
By-laws;
(ii) any agreement or instrument to which it is a party and which is
material to the performance by it of its obligations hereunder; and
(iii) any order, judgment or decree of any court or governmental
agency to which it is a party or by which it is bound.
Section 2.6. Additional Representations and Warranties of Ocensa.
Ocensa represents and warrants to the Purchaser for its benefit and for the
benefit of its Permitted Assignees that the Shares to be issued and sold by
Ocensa hereunder and under the related Notice of Exercise of Call at each Time
of Delivery will have been duly and validly authorized and, when issued and
delivered against payment in full therefor as provided herein and in such
Notice of Exercise of Call, will be fully paid and non-assessable.
Section 2.7. Use of Proceeds. All proceeds from the purchase of Shares
hereunder (except pursuant to a special Call pursuant to the penultimate
paragraph of Section 2.1 which shall be deposited into the Related Account)
shall be used solely to pay the Purchaser's Shareholding Interest of the
Capital Expenditures of Ocensa or to refinance indebtedness of Ocensa incurred
in order to finance its Shareholding Interest of such Capital Expenditures.
Section 2.8. Fees and Expenses. All fees and expenses incurred by or on
behalf of each party hereto in connection with the negotiation and execution
of this Agreement and the transfer of the Shares to be sold hereunder at each
Time of Delivery shall be borne by such party.
Section 2.9. Taxes. Ocensa shall be solely responsible for the payment
of all taxes imposed on it, whether by taxing authorities within Colombia or
elsewhere, arising from or in connection with the transactions contemplated
hereby.
ARTICLE THREE
POLITICAL EVENTS
Section 3.1. Political Events. The obligations of the Purchaser under
this Agreement to purchase Shares are subject to the terms of the Political
Events Agreement. For purposes of the Political Events Agreement the special
Call referred to in the penultimate paragraph of Section 2.1 and the similar
special Calls under the Amended and Restated Subscription Agreements entered
into as of the date hereof by the other Shareholders shall be a Purchase
Obligation as defined in the Political Events Agreement.
ARTICLE FOUR
TERM; EFFECTIVENESS
Section 4.1. Term. This Agreement shall be effective as of the date of
the Original Subscription Agreement and shall continue in force and effect
until the earliest of (i) the termination of the Oleoducto Central Agreement,
(ii) December 31, 2001, (iii) as provided in the Political Events Agreement,
(iv) Completion and (v) following a unanimous decision of the Board of
Directors of Ocensa not to continue with the Oleoducto Central, Bankruptcy of
Ocensa or Decommissioning, at the earlier, in the case of this clause (v), of
(A) full satisfaction of a special Call pursuant to the penultimate paragraph
of Section 2.1 and (B) when a Senior Debt to Equity Ratio of 70/30 has
otherwise been achieved, provided, that, in each case (i) through (v), any
rights and obligations existing prior to termination shall survive termination
of this Agreement.
Section 4.2. Effectiveness. Notwithstanding Section 4.1, this Agreement
shall have no effect or validity unless and until Ocensa has entered into
amended and restated Subscription Agreements in substantially identical form
to this Agreement with the other Shareholders, supported, in each case (other
than with respect to Ecopetrol) by performance guarantee agreements
substantially in the form attached as Schedule H to the Oleoducto Central
Agreement.
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be given by personal
delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
If to Ocensa: Copy to: Agent for Service
OLEODUCTO CENTRAL S.A. N/A CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax (212) 247-2882
Santafe de Bogota, D.C. - Colombia
Telefax 571-528-3933
Attention: President
If to the Throughput Obligor
TRITON COLOMBIA, INC. TRITON ENERGY CORPORATION CT CORPORATION SYSTEM
Carrera 9A No. 99-02 6688 N. Central Expressway 1633 Broadway
Oficina 407 Suite 1400 New York, New York 10019
Santafe de Bogota, D.C.-Colombia Dallas, Texas 75206 Telefax (212) 247-2882
Telefax 571-618-2553 Telefax: (214) 691-0296
Attention: Ivan Fajardo Attention: Thomas G. Finck,
A. E. Turner
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 5.2. Amendments and Waivers. Ocensa will enter into other
Subscription Agreements on substantially identical terms with the other
Shareholders, and the Purchaser shall have no obligations with respect to any
other such Subscription Agreement. No amendment, supplement, waiver or
termination of this Agreement shall be binding unless executed in writing by
the party to be bound thereby. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
Section 5.3. Assignments. (a) Ocensa may not assign this Agreement or
any of its rights hereunder, or create enforceable third party rights herein,
to or in any person not a party hereto (or an Affiliate of a party hereto)
except that Ocensa may assign to any person, in each case with the prior
written consent of the Purchaser, all or any part of Ocensa's rights hereunder
to the trustee under the Common Security Trust Agreement. If the Purchaser
consents, it agrees to execute and deliver all consents and documents
reasonably necessary to effect such assignment and to create a valid and
perfected security interest herein. The claims and rights of each such
Permitted Assignee shall rank pari passu with the claims and rights of all
Permitted Assignees irrespective of the time or times at which prior,
concurrent or subsequent assignments under this Section 5.3 are made or
perfected. Subject to compliance with the terms of any such assignment, any
such Permitted Assignee shall have the benefit of the representations and
warranties of the Purchaser and may enforce the obligations of the Purchaser
hereunder as if such Permitted Assignee were a party hereto.
(b) The Purchaser shall assign all or part of its rights and obligations
hereunder in connection with a transfer of the Corresponding Portion of its
Shares to a Person that is a permitted transferee thereof pursuant to Article
Ten of the Oleoducto Central Agreement. Upon the unconditional assumption of
the Purchaser's rights and obligations being assigned to such permitted
transferee of the Purchaser pursuant to this Section 5.3(b) by such permitted
transferee, and subject to any limitations in any assignment agreement, the
Purchaser shall be released and discharged from all of its obligations
hereunder, except obligations which shall have been incurred prior to such
assignment and assumption.
Section 5.4. Nature of Obligations.
(a) Subject to the terms of this Agreement, the obligations of the
Purchaser under this Agreement to purchase Shares shall be unconditional and
absolute and, shall not be deferred, excused, released, discharged, or in any
way affected by (i) any right of set off, counterclaim, or defense by reason
of any claims against Ocensa arising under this Agreement or on any other
account whatsoever, (ii) any sale or other transfer by any of the Shareholders
(among themselves or otherwise) of any of the Shares, or the failure by any
other Shareholder to perform its obligations under its Subscription Agreement,
(iii) Bankruptcy of Ocensa or any bankruptcy, reorganization or dissolution
(on whatever grounds) of the Purchaser, or (iv) any change, waiver, extension,
indulgence, or other action or omission in respect of any of Ocensa's
obligations, in each case whether or not the parties hereto shall have had any
notice or knowledge of any of the foregoing.
(b) The obligations of the Purchaser created by this Agreement, and
in particular the obligation to acquire Shares in exchange for cash pursuant
to Calls, are several, not joint and several with any other party. Nothing
herein shall be deemed or construed to make the Purchaser a surety or a
guarantor of Ocensa or of any other Shareholder or liable to meet any
obligation of Ocensa or of any other Shareholder.
Section 5.5. No Third Party Beneficiaries. Except with respect to the
second sentence of Section 3.1, which shall also inure to the benefit of
Shareholders referred to therein, and as otherwise expressly provided herein
to the contrary, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and Permitted
Assignees, and no other Person shall have any rights hereunder.
Section 5.6. Severability. If, for any reason, any provision of this
Agreement is unenforceable, the remaining provisions hereof shall nevertheless
be carried into effect.
Section 5.7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.8. Performance Outside Colombia. The parties hereto
acknowledge and agree that their activities hereunder will be performed
substantially outside Colombia.
Section 5.9. Commercial Obligations. Each Party acknowledges and agrees
that its rights and obligations hereunder are commercial and not governmental
in nature.
Section 5.10. Arbitration. Any dispute, controversy or claim arising
out of or relating to this Agreement, or the performance, breach, termination,
or invalidity hereof, shall be settled by arbitration in accordance with the
UNCITRAL Arbitration Rules in effect as of the date hereof. The arbitration
shall be the sole and exclusive forum for resolution of the dispute,
controversy or claim, and the award shall be final and binding. Judgment
thereon may be entered by any court having jurisdiction. The number of
arbitrators shall be three, each of whom shall be disinterested in the
dispute, controversy or claim, and shall have no connection with any party.
Should the services of an appointing authority be necessary, the appointing
authority shall be the American Arbitration Association. The parties and the
appointing authority may appoint from among the nationals of any country,
whether or not a party is a national of that country. The place of arbitration
shall be The City of New York, New York. The arbitration shall be conducted in
the English language and any foreign-language documents presented at such
arbitration shall be accompanied by an English translation thereof. The
arbitrators shall apply the law of the State of New York without regard to the
principles of conflicts of laws.
Section 5.11. Submission to Jurisdiction; Consent to Service. Each of
the parties hereto hereby submits to the exclusive jurisdiction of the United
States District Court for the Southern District of New York (the Specified
Court) with respect to the enforcement of the arbitration provisions of this
Agreement and the non-exclusive jurisdiction of such court with respect to the
enforcement of any award thereunder. Each of the parties hereto irrevocably
appoints the agent for service specified opposite its name in Section 5.1 as
its authorized agent in the Borough of Manhattan in The City of New York upon
which process may be served in any related suit or proceeding, and agrees that
service of process upon such agent, and written notice of said service to such
party, by the person serving the same to the address provided in Section 5.1,
shall be deemed in every respect effective service of process upon such party
in any such suit or proceeding. Each of the parties hereto further agrees to
take any and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect for the duration of this
Agreement.
The obligation of a party in respect of any sum due from it to the other
party hereunder expressed in United States dollars, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first Business Day following receipt by such party of any
sum adjudged to be so due in such other currency on which (and only to the
extent that) such party may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to such party
hereunder, the other party agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such party against such dollar
shortfall. If the United States dollars so purchased are greater than the sum
originally due to such party hereunder, such party agrees to pay to the other
party an amount equal to the excess of the dollars so purchased over the sum
originally due to such party hereunder.
Section 5.12. Waiver of Immunity. (a) The Purchaser irrevocably
consents to and waives any objection which it may now or hereafter have to the
laying of venue of any proceeding relating to enforcement of the arbitration
provisions of this Agreement brought in the Specified Court and further
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of any such proceeding in
the Specified Court.
(b) To the extent that the Purchaser or any of its revenues, assets or
properties shall be entitled, with respect to any proceeding relating to
enforcement of the arbitration provisions of this Agreement at any time
brought against the Purchaser or any of its revenues, assets or properties, to
any sovereign or other immunity from suit, from jurisdiction, from attachment
prior to judgment, from attachment in aid of execution of judgment, from
execution of a judgment or from any other legal or judicial process or remedy,
and to the extent that in any jurisdiction there shall be attributed such an
immunity, the Purchaser irrevocably agrees not to claim and irrevocably waives
such immunity to the fullest extent permitted by the laws of such jurisdiction
(including, without limitation, the Foreign Sovereign Immunities Act 1976 of
the United States).
Section 5.13. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
Section 5.14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have hereunto caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
OLEODUCTO CENTRAL S.A.
By: Gustavo Suarez
Title: President
TRITON PIPELINE COLOMBIA, INC.
By: Bernard Gros Dubois
Title:Vice President
<PAGE>
ANNEX I
TO SUBSCRIPTION AGREEMENT
[Date, not less than 15
Business Days prior to
requested purchase date]
NOTICE OF EXERCISE OF CALL
TO: Empresa Colombiana de Petroleos - Ecopetrol
BP Colombia Pipelines Limited
TOTAL Pipeline Colombie S.A.
Triton Pipeline Colombia, Inc.
IPL Enterprises (Colombia) Inc.
TCPL International Investments Inc.
[Permitted Assignees]
FROM: Oleoducto Central S.A. (Ocensa)
RE:Notice of Exercise of Call Pursuant to Section 2.1 of the Subscription
Agreement with each of the addressees (Purchasers), each dated as of March 31,
1995 (each, a Subscription Agreement)
Ocensa hereby requires [the purchase on __________, ____ of the
number of Shares of Ocensa] [the contribution of funds in the amount] set
forth opposite your name in the table below by each of you severally [against
payment of the aggregate purchase price indicated in such table]. Payment
should be made in [same] [next] day funds by [official or certified bank check
or checks] [wire transfer to the account indicated opposite your name in the
table below] [and in the case of a special Call pursuant to the penultimate
paragraph of Section 2.1 such funds shall be exclusively payable to the
account specified in the Common Security Trust Agreement].
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NUMBER PRICE AGREGATE OR [NAME OF BANK
OF PER CONTRIBUTION AND
PURCHASER SHARES SHARE PRICE ACCOUNT NUMBER]
Empresa Colombiana de Petroleos - Ecopetrol
BP Colombia Pipelines Limited
TOTAL Pipeline Colombie S.A.
Triton Pipeline Colombia, Inc.
IPL Enterprises (Colombia) Inc.
TCPL International Investments Inc.
[Any Permitted Assignees]
Total
</TABLE>
Ocensa hereby represents and warrants to each Purchaser that, as of
the date hereof:
1. The requested payment date is a Business Day;
2. The Call exercised hereby is [in conformity with a Capital
Budget and Funding Resolution of Ocensa][made at or following [the Bankruptcy
of Ocensa][Decommissioning][a unanimous decision of the Board of Directors not
to continue with the Oleoducto Central] and after giving effect to this Call,
the Senior Debt to Equity Ratio shall be 70/30];
[3. The number of Shares to be purchased by each Purchaser at the
Time of Delivery pursuant hereto and the Subscription Agreement to which such
Purchaser is a party and the aggregate purchase price therefor is in
proportion to such Purchaser's Shareholding Interest;
4. The terms of purchase hereunder and under such Purchaser's
Subscription Agreement are identical for all Purchasers; and
5. The representations and warranties of Ocensa in such Purchaser's
Subscription Agreement are true and correct.]
All defined terms used herein and not defined herein shall have the
meanings assigned to them in the Subscription Agreement with each Purchaser.
OLEODUCTO CENTRAL S.A.
By:
Title:
<PAGE>
ASSIGNMENT AND ACKNOWLEDGMENT AGREEMENT
FOR RIGHTS UNDER THE ADVANCE TARIFF AGREEMENT
This AGREEMENT, dated as of June 1, 1995, by and between:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws of
Colombia (Ocensa); and
BANKERS TRUST COMPANY, a New York banking corporation, as trustee
(the Trustee) under the Common Security Trust Agreement, dated as of June 1,
1995 (the Common Security Trust Agreement), among Ocensa, the holders from
time to time of Senior Debt and the Trustee.
RECITALS
WHEREAS:
A. Triton Colombia, Inc. (the Throughput Obligor) and Ocensa have
entered into an Advance Tariff Agreement, dated as of March 31, 1995 (as
amended from time to time in accordance with its terms, the Advance Tariff
Agreement), by which the Throughput Obligor has undertaken obligations to make
payments to Ocensa in certain circumstances;
B. Ocensa desires to establish one or more credit facilities and/or
securities issuance facilities that may be used to finance construction and
operation of the Oleoducto Central pursuant to the Common Security Trust
Agreement. In order to facilitate such transactions, Ocensa is willing to
assign to the Trustee certain rights to receive payments (and the proceeds
thereof) from the Throughput Obligor under the Advance Tariff Agreement to be
exercised by the Trustee as provided herein and in the Common Security Trust
Agreement for the benefit of Senior Lender Group D and, to the extent of funds
payable thereunder that are required to be deposited into the Common Account,
the other Senior Lender Groups, as their interests therein may appear; and
C. By execution of this Agreement, Ocensa warrants that all things
necessary to make this Agreement the valid, legally binding and enforceable
obligation of Ocensa have been done and performed and the execution and
performance hereof in all respects has been authorized and approved by all
corporate action necessary on the part of Ocensa.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), Ocensa and the
Trustee agree as follows:
ARTICLE ONE
ASSIGNMENT BY OCENSA TO THE TRUSTEE
Section 1.1. Assignment. Ocensa hereby grants, transfers, sets
over and assigns to the Trustee all rights (but not obligations or duties) of
Ocensa in, under and arising from the Advance Tariff Agreement, whether now
existing or hereafter arising, to be exercised as provided in the Common
Security Trust Agreement for the benefit of Senior Lender Group D and, to the
extent of funds payable thereunder that are required to be deposited into the
Common Account, the other Senior Lender Groups, as their interests therein may
appear, including, without limitation,
(i) subject to Article Two hereof, all rights of Ocensa to request and
receive all payments made or due to Ocensa by the Throughput Obligor pursuant
to the Advance Tariff Agreement and proceeds therefrom (other than voluntary
payments designated by the Throughput Obligor as Advance Tariff Payments
thereunder); and
(ii) all other rights (but not obligations or duties), claims, powers,
privileges, interests and remedies of Ocensa, whether arising under the
Advance Tariff Agreement, by statute, at law, in equity or otherwise,
resulting from any failure by the Throughput Obligor to perform its
obligations under the Advance Tariff Agreement;
together with full power and authority, in the name of the Trustee or Ocensa
as assignor or otherwise (but subject to Article Two hereof), to request
payment of, enforce, collect, receive and give receipt for any and all of the
foregoing as provided in the Common Security Trust Agreement (the rights,
claims, powers, privileges, interests and remedies referred to in clauses (i)
and (ii) being hereinafter sometimes referred to as the Rights Assigned
Hereby). The Trustee agrees to apply all moneys received by it pursuant hereto
as provided in the Common Security Trust Agreement.
ARTICLE TWO
PAYMENTS AND REQUESTS
Section 2.1. Requests. Ocensa may, at any time, and shall at the
request of the Trustee make all requests (which shall set forth in reasonable
detail the calculation of the amounts requested, including a breakdown of
clause (b) and (c) of the definition of Revenue Shortfall in the Advance
Tariff Agreement by item and source of the liabilities referred to therein) in
respect of moneys due from the Throughput Obligor under Section 3.1 of the
Advance Tariff Agreement and, if and only if for any reason Ocensa fails to do
so within two Business Days of request bythe Trustee, the Trustee may make
such requests as assignee with the same force and effect as if made by Ocensa.
Ocensa agrees to promptly provide the Trustee with copies of all requests made
by it in respect of moneys due from the Throughput Obligor under the Advance
Tariff Agreement and to promptly notify the Trustee of any reduction of the
payment obligations of the Throughput Obligor with respect to an outstanding
call thereunder known to the Borrower.
Section 2.2 Payments. Ocensa and the Trustee agree that all funds
received by them in respect of the Rights Assigned Hereby shall be deposited
or caused to be deposited by them into the Proceeds Account maintained for the
benefit of Senior Lenders in Senior Lender Group D and the Common Account
maintained for the benefit of Senior Lenders in each Senior Lender Group, as
their interests therein may appear, all in accordance with Article Four of the
Common Security Trust Agreement.
Section 2.3. Limited Recourse. The Trustee acknowledges on behalf
of itself and each Senior Lender that notwithstanding anything to the contrary
contained in this Agreement, the Agreement, the Common Security Trust
Agreement or any Senior Debt Agreement, (i) the recourse of the Trustee (on
behalf of itself or any Senior Lender) or any Senior Lender for payment and
performance of Senior Debt Obligations or for any breach of any such agreement
by Ocensa shall be limited solely to the Assigned Rights to the extent of
their respective interests therein pursuant to the Common Security Trust
Agreement, and none of (A) Ocensa, (B) any Person in the Related Initial
Shipper Group or in any other Initial Shipper Group or the Canadian Group, (C)
any Person owning, directly or indirectly, any legal or beneficial interest in
Ocensa or in any Person in the Related Initial Shipper Group or in any other
Initial Shipper Group or the Canadian Group, (D) the Trustee, or (E) any
partner, principal, officer, controlling person, beneficiary, trustee,
shareholder, employee, agent, affiliate or director of any Person described in
clauses (A) through (D) above shall be personally liable for the payment or
performance of any Senior Debt Obligations or for any such breach and (ii)
each Senior Lender and the Trustee acting on behalf of itself or any Senior
Lender expressly waive, as authorized by Article 15 of the Colombian Civil
Code and Article 822 of the Colombian Code of Commerce or any successor
provision, any and all personal actions or rights they may have under
Colombian law and any other applicable law as provided by Article 2488 of the
Colombian Civil Code or any successor provision to demand payment and
performance of Senior Debt Obligations owing to such Senior Lender or for such
breach from the real estate and any other tangible or intangible assets of any
Person described in clauses (A) through (E) and any right to commence,
initiate or cause to be initiated any related proceeding, judicial or
otherwise, against Ocensa under any bankruptcy law or other reorganization,
arrangement, readjustment of Debt, relief of debtors, dissolution, insolvency,
liquidation or similar law or for the appointment of a receiver, trustee or
other officer or representative of a court or of creditors or take any other
action that may result in the Bankruptcy of Ocensa; provided, however, that in
each of cases (i) and (ii), the foregoing shall not impair the validity of any
security interest granted to a Senior Lender under its Senior Debt Agreement
in and to an escrow or trust account into which the proceeds of Senior Debt
under its Senior Debt Agreement, the proceeds therefrom and from investments
thereon and no other fundsshall be deposited, or of this Agreement or the
right of the Trustee (or any Senior Lender in a Senior Lender Group to the
extent provided in the Common Security Trust Agreement) to foreclose and/or to
exercise or enforce any rights or remedies in and to the Rights Assigned
Hereby as provided in this Agreement and the Common Security Trust Agreement
(including, as provided in Section 9.9(a) thereof, the right to institute suit
against Ocensa for the payment of money due); and provided, further, however,
that, as to Ocensa but not as to any person listed in (B) through (E) above,
in the event of the Bankruptcy of Ocensa, such recourse shall not be so
limited and such waiver shall not so apply as of or subsequent to such
Bankruptcy, except that such recourse shall continue to be so limited and such
waiver shall continue to apply with respect to a Senior Lender in a Senior
Lender Group or the Trustee acting on its behalf or for the benefit of such
Senior Lender in such Senior Lender Group if such Bankruptcy of Ocensa was
commenced, initiated, caused to be initiated or otherwise resulted from any
action of such Senior Lender in such Senior Lender Group (or the Trustee
acting on its behalf or for its benefit) notwithstanding their respective
agreements to the contrary.
ARTICLE THREE
ASSIGNMENTS
Section 3.1. Assignment by the Trustee. The Trustee may not assign
this Agreement or any of its rights hereunder or proceeds herefrom, or create
enforceable third party rights herein or to such proceeds, to or in any person
not a party hereto (other than pursuant to the Common Security Trust
Agreement).
Section 3.2. Assignment by Ocensa. Ocensa may not assign its
rights and obligations hereunder or under the Advance Tariff Agreement to any
other person, without the written consent of the Trustee and the Throughput
Obligor.
ARTICLE FOUR
EFFECTIVENESS
Section 4.1. Effectiveness. This Agreement shall not become
effective prior to acknowledgement hereof by the Throughput Obligor.
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
If to Ocensa: Agent for Service
OLEODUCTO CENTRAL S.A. CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax (212) 247-2882
Santafe de Bogota, D.C. - Colombia
Telefax 571-528-3933
Attention: President
If to the Trustee:
BANKERS TRUST COMPANY
Four Albany Street, 4th Floor
New York, New York 10006
Telefax: (212)250-6961
Telephone: (212) 250-6826
Attention: Corporate Trust
and Agnecy Group
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by first class
mail.
Section 5.2. Entire Agreement; Waiver; Amendment. This Agreement,
together with the Common Security Trust Agreement, constitutes the entire
agreement between the partiespertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth herein and therein. All
terms which are defined in the Common Security Trust Agreement or the Advance
Tariff Agreement and not defined herein are used herein with the meanings
therein set forth. No amendment, supplement, waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby and the Throughput Obligor. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
Section 5.3. No Third Party Beneficiaries. Except with respect to
the last sentence of Section 1.1, Sections 2.2, 2.3, 3.1 and 3.2 and the third
sentence of Section 5.2 which shall inure to the benefit of the Throughput
Obligor and except as herein otherwise expressly provided to the contrary,
this Agreement shall inure to the benefit of and be binding upon the parties
and their respective successors and permitted assigns, and no other Person
shall have any rights hereunder.
Section 5.4. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect.
Section 5.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.6. Submission to Jurisdiction; Consent to Service.
Ocensa hereby submits to the non-exclusive jurisdiction of the Federal and
state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Ocensa irrevocably appoints the agent for service
designated opposite its name in Section 5.1 as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served
in any such suit or proceeding, and agrees that service of process upon such
agent, and written notice of said service to Ocensa, by the person serving the
same to the address provided in Section 5.1 shall be deemed in every respect
effective service of process upon Ocensa in any such suit or proceeding.
Ocensa further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and
effect for the duration of this Agreement. Ocensa agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Section 5.6 shall affect the right of the Trustee to
serve legal process in any other manner permitted by applicable law.
The obligation of Ocensa in respect of any sum due from it to the
Trustee, if expressed in United States dollars hereunder, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first Business Day, following receipt by the Trustee of
any sum adjudged to be so due in such other currency, on which (and only to
the extent that) the Trustee may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to the Trustee
hereunder, Ocensa agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Trustee against such dollar shortfall. If the
United States dollars so purchased are greater than the sum originally due to
the Trustee hereunder, the Trustee agrees to pay to Ocensa an amount equal to
the excess of the dollars so purchased over the sum originally due to the
Trustee hereunder.
Section 5.7. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
<PAGE>
Section 5.8. Counterparts. This Agreement may be executed and
acknowledged in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement
to be executed and delivered by their proper officers thereunto duly
authorized as of the date first above written.
OLEODUCTO CENTRAL S.A.
By: Gustavo Suarez
Title:President
BANKERS TRUST COMPANY,
as Trustee
By: James C. McDonough
Title: Assistant Vice President
ACKNOWLEDGEMENT
BY THROUGHPUT OBLIGOR
The Throughput Obligor hereby acknowledges that this Agreement has been
entered into by Ocensa with its consent and that the Trustee is a permitted
assignee of Ocensa within the meaning of Section 5.5(b) of the Advance Tariff
Agreement. The Throughput Obligor hereby agrees with Ocensa and the Trustee to
make all payments and deliver all proceeds assigned hereunder directly to the
Trustee for application as provided in the Common Security Trust Agreement,
while providing an accounting thereof to Ocensa and the Trustee. The
Throughput Obligor further agrees to be bound by the terms of this Agreement
and not to hinder the performance by Ocensa of this Agreement in accordance
with its terms. The Throughput Obligor has caused this acknowledgement to be
executed and delivered by its proper officer thereunto duly authorized as of
the date first above written.
TRITON COLOMBIA, INC.
By: Al E. Turner
Title: Senior Vice President - Operations
<PAGE>
ASSIGNMENT AND ACKNOWLEDGMENT AGREEMENT
FOR RIGHTS UNDER THE TRANSPORTATION AGREEMENT
This AGREEMENT, dated as of June 1, 1995, by and between:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws of
Colombia (Ocensa); and
BANKERS TRUST COMPANY, a New York banking corporation, as trustee
(the Trustee) under the Common Security Trust Agreement, dated as of June 1,
1995 (the Common Security Trust Agreement), among Ocensa, the holders from
time to time of Senior Debt and the Trustee.
RECITALS
WHEREAS:
A. Triton Colombia, Inc. (the Initial Shipper) and Ocensa have
entered into a Transportation Agreement, dated as of March 31, 1995 (as
amended from time to time in accordance with its terms, the Transportation
Agreement), by which the Initial Shipper has undertaken obligations to make
tariff payments to Ocensa in certain circumstances;
B. Ocensa desires to establish one or more credit facilities and/or
securities issuance facilities that may be used to finance construction and
operation of the Oleoducto Central pursuant to the Common Security Trust
Agreement. In order to facilitate such transactions, Ocensa is willing to
assign to the Trustee certain rights under the Transportation Agreement to be
exercised by the Trustee as provided herein and in the Common Security Trust
Agreement for the benefit of Senior Lender Group D, and, to the extent of
funds payable thereunder that are required to be deposited into the Common
Account, the other Senior Lender Groups, as their interests therein may
appear; and
C. By execution of this Agreement, Ocensa warrants that all things
necessary to make this Agreement the valid, legally binding and enforceable
obligation of Ocensa have been done and performed and the execution and
performance hereof in all respects has been authorized and approved by all
corporate action necessary on the part of Ocensa.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), Ocensa and the
Trustee agree as follows:
ARTICLE ONE
ASSIGNMENT BY OCENSA TO THE TRUSTEE
Section 1.1. Assignment. Ocensa hereby grants, transfers, sets
over and assigns to the Trustee the following rights (but not obligations or
duties) of Ocensa in, under and arising from the Transportation Agreement,
whether now existing or hereafter arising, to be exercised as provided in the
Common Security Trust Agreement for the benefit of Senior Lender Group D, and,
to the extent of funds payable thereunder that are required to be deposited
into the Common Account, the other Senior Lender Groups, as their interests
therein may appear:
(i) subject to Article Two hereof, all rights of Ocensa to request and
receive all payments made or due in respect of Tariffs, Tariff Advances, and
proceeds from Transportation Notes, in cash (including the right to receive
cash realized by the payment of such Tariffs, Tariff Advances and
Transportation Notes in kind), to Ocensa by the Initial Shipper pursuant to
the Transportation Agreement;
(ii) all the proceeds of Ocensa from Petroleum transportation services
provided pursuant to Section 1.2 in respect of the Initial Shipper's
Proportionate Share of Available Capacity in the event of a suspension of such
Initial Shipper's right to use its Proportionate Share of Available Capacity
under its Transportation Agreement and to the extent such capacity is taken up
by other shippers other than for transportation of Cusiana Petroleum, always
subject to the terms and conditions of, priorities set forth in, and rights of
the Initial Shipper under the Transportation Agreement (including such Initial
Shipper's right thereunder to always ship Petroleum from the Cusiana Area and
to receive its share of Overutilizer Premiums and Established Third Party
Premiums paid by others), as such rights have been or may be modified by
agreement or waiver of the Initial Shipper; and
(iii) all rights (but not obligations or duties), claims, powers,
privileges, interests and remedies of Ocensa, whether arising under the
Transportation Agreement, by statute, at law, in equity or otherwise,
resulting from any failure by the Initial Shipper to make when due any
payments owing to Ocensa under the Transportation Agreement;
together with full power and authority, in the name of the Trustee or Ocensa
as assignor or otherwise (but subject to Article Two hereof), to request
payment of, enforce, collect, receive and give receipt for any and all of the
foregoing, and proceeds of any and all of the foregoing, as provided in the
Common Security Trust Agreement (the rights, claims, powers, privileges,
interests and remedies referred to in clauses (i) through (iii) being
hereinafter sometimes referred to as the Rights Assigned Hereby). The Trustee
agrees to apply all moneys received by it pursuant hereto as provided in the
Common Security Trust Agreement.
Section 1.2. Marketing Petroleum Transportation Services. To the
extent that Ocensa has suspended receipt of Petroleum from the Initial Shipper
under the Transportation Agreement and any of the Initial Shipper's
Proportionate Share of Available Capacity is not nominated by other Initial
Shippers for shipment of Cusiana Petroleum, Ocensa agrees, so long as such
suspension shall continue, to use its Reasonable Efforts to market Petroleum
transportation services to third parties in respect of such unused
Proportionate Share, at Tariffs at least equal to the Third Party Tariff and
with other terms at least as favorable to Ocensa as those provided for in the
Transportation Agreement. If such Tariffs or other terms cannot be obtained by
Ocensa, Ocensa agrees to use Reasonable Efforts to market Petroleum
transportation services to third parties on terms no more favorable to such
other shipper than the terms of any existing Transportation Agreement and on
terms and conditions no more favorable to the prospective shipper than those
applicable to the Initial Shipper, provided that, to the extent any such
Available Capacity remains unused, the Trustee may designate potential
shippers to Ocensa that Ocensa shall be obligated to enter into a
transportation agreement with such shippers on such terms. The rights of any
such shipper so designated with respect to such Available Capacity shall
terminate upon the reinstatement of the right of the Initial Shipper to use
such capacity and shall always be subject to the terms and conditions of, the
priorities set forth in, and the rights of the Initial Shipper under, the
Transportation Agreement (including its rights to ship Petroleum from the
Cusiana Area and to receive its share of Overutilizer Premiums and Established
Third Party Premiums paid by others), as such rights have been or may be
modified by agreement or waiver of the Initial Shipper. For the avoidance of
doubt, the transportation rights of such shipper would be interruptible in
favor of the firm transportation rights of the Initial Shipper and, with
respect to Petroleum from the Cusiana Area, the other Initial Shippers under
their respective Transportation Agreements. Notwithstanding the foregoing,
Ocensa shall in no event enter into any such transportation agreement with any
party so designated if the transportation of Petroleum pursuant thereto would
disrupt the construction or operation of the Oleoducto Central or prejudice
the transportation of Cusiana Petroleum as reasonably determined by Ocensa and
the Initial Shippers and neither the Trustee nor any Senior Lender shall have
the right to enter into any transportation agreement on behalf or for the
account of Ocensa or the right to designate as a potential shipper for
purposes of this Section 1.2 a Person that is not the producer of the
Petroleum proposed to be shipped through the Oleoducto Central under the
transportation agreement proposed to be entered into with such Person. Any
Tariffs received by Ocensa for unused Available Capacity marketed pursuant to
this Section shall be treated for all purposes of this Agreement as Tariffs
paid by the Initial Shipper under the Transportation Agreement.
ARTICLE TWO
PAYMENTS AND REQUESTS
Section 2.1. Requests. Ocensa may, at any time, and shall at the
request of the Trustee, make all requests in respect of moneys due (including
cash realized from the paymentof Tariffs, Tariff Advances or Transportation
Notes in kind) under Articles Four and Five of the Transportation Agreement
and, if and only if for any reason Ocensa fails to do so within two Business
Days of a request by the Trustee, the Trustee may make such requests as
assignee with the same force and effect as if made by Ocensa. Ocensa agrees to
provide the Trustee at its request with copies of all requests made by it in
respect of moneys due from the Initial Shipper under the Transportation
Agreement.
Section 2.2 Payments. Ocensa and the Trustee agree that all funds
received by them in respect of the Rights Assigned Hereby shall be deposited
or caused to be deposited by them into the Proceeds Account maintained for the
benefit of the Senior Lenders in Senior Lender Group D and the Common Account
maintained for the benefit of Senior Lenders in each Senior Lender Group, as
their interests therein may appear, all in accordance with Article Four of the
Common Security Trust Agreement.
Section 2.3. Limited Recourse. The Trustee acknowledges on behalf
of itself and each Senior Lender that notwithstanding anything to the contrary
contained in this Agreement, the Transportation Agreement, the Common Security
Trust Agreement or any Senior Debt Agreement, (i) the recourse of the Trustee
(on behalf of itself or any Senior Lender) or any Senior Lender for payment
and performance of Senior Debt Obligations or for any breach of any such
agreement by Ocensa shall be limited solely to the Assigned Rights to the
extent of their respective interests therein pursuant to the Common Security
Trust Agreement, and none of (A) Ocensa, (B) any Person in the Related Initial
Shipper Group or in any other Initial Shipper Group or the Canadian Group, (C)
any Person owning, directly or indirectly, any legal or beneficial interest in
Ocensa or in any Person in the Related Initial Shipper Group or in any other
Initial Shipper Group or the Canadian Group, (D) the Trustee, or (E) any
partner, principal, officer, controlling person, beneficiary, trustee,
shareholder, employee, agent, affiliate or director of any Person described in
clauses (A) through (D) above shall be personally liable for the payment or
performance of any Senior Debt Obligations or for any such breach and (ii)
each Senior Lender and the Trustee acting on behalf of itself or any Senior
Lender expressly waive, as authorized by Article 15 of the Colombian Civil
Code and Article 822 of the Colombian Code of Commerce or any successor
provision, any and all personal actions or rights they may have under
Colombian law and any other applicable law as provided by Article 2488 of the
Colombian Civil Code or any successor provision to demand payment and
performance of Senior Debt Obligations owing to such Senior Lender or for such
breach from the real estate and any other tangible or intangible assets of any
Person described in clauses (A) through (E) and any right to commence,
initiate or cause to be initiated any related proceeding, judicial or
otherwise, against Ocensa under any bankruptcy law or other reorganization,
arrangement, readjustment of Debt, relief of debtors, dissolution, insolvency,
liquidation or similar law or for the appointment of a receiver, trustee or
other officer or representative of a court or of creditors or take any other
action that may result in the Bankruptcy of Ocensa; provided, however, that in
each of cases (i) and (ii), the foregoing shall not impair the validity of any
security interest granted to a Senior Lender under its Senior Debt Agreement
in and to an escrow or trust account into which the proceeds of Senior
Debtunder its Senior Debt Agreement, the proceeds therefrom and from
investments thereon and no other funds shall be deposited, or of this
Agreement or the right of the Trustee (or any Senior Lender in a Senior Lender
Group to the extent provided in the Common Security Trust Agreement) to
foreclose and/or to exercise or enforce any rights or remedies in and to the
Rights Assigned Hereby as provided in this Agreement and the Common Security
Trust Agreement (including, as provided in Section 9.9(a) thereof, the right
to institute suit against Ocensa for the payment of money due); and provided,
further, however, that, as to Ocensa but not as to any person listed in (B)
through (E) above, in the event of the Bankruptcy of Ocensa, such recourse
shall not be so limited and such waiver shall not so apply as of or subsequent
to such Bankruptcy, except that such recourse shall continue to be so limited
and such waiver shall continue to apply with respect to a Senior Lender in a
Senior Lender Group or the Trustee acting on its behalf or for the benefit of
such Senior Lender in such Senior Lender Group if such Bankruptcy of Ocensa
was commenced, initiated, caused to be initiated or otherwise resulted from
any action of such Senior Lender in such Senior Lender Group (or the Trustee
on its behalf or for its benefit), notwithstanding their respective agreements
to the contrary.
ARTICLE THREE
ASSIGNMENTS
Section 3.1. Assignment by the Trustee. The Trustee may not assign
this Agreement or any of its rights hereunder or proceeds herefrom, or create
enforceable third party rights herein or to such proceeds, to or in any person
not a party hereto (other than pursuant to the Common Security Trust
Agreement).
Section 3.2. Assignment by Ocensa. Ocensa may not assign its
rights and obligations hereunder or under the Transportation Agreement to any
other person without the prior written consent of the Trustee and the Initial
Shipper.
ARTICLE FOUR
EFFECTIVENESS
Section 4.1. Effectiveness. This Agreement shall not become
effective prior to acknowledgment hereof by the Initial Shipper.
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
If to Ocensa: Agent for Service
OLEODUCTO CENTRAL S.A. CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax (212) 247-2882
Santafe de Bogota, D.C. - Colombia
Telefax 571-528-3933
Attention: President
If to the Trustee:
BANKERS TRUST COMPANY
Four Albany Street. 4th floor
New York, New York 10006
Telefax: (212) 250-6961
Telephone: (212) 250-6826
Attention: Corporate Trust and Agency Group
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
following the deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by electronic communication shall send the original thereof by personal
delivery or by first class mail.
Section 5.2. Entire Agreement; Waiver; Amendment. This Agreement,
together with the Common Security Trust Agreement, constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof
and supersedes all prior agreements, understandings,negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as specifically set forth
herein and therein. All terms which are defined in the Common Security Trust
Agreement or the Transportation Agreement and not defined herein are used
herein with the meanings therein set forth. No amendment, supplement, waiver
or termination of this Agreement shall be binding unless executed in writing
by the party to be bound thereby and the Initial Shipper. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions (whether or not similar) nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
Section 5.3. No Third Party Beneficiaries. Except with respect to the
last sentence of Section 1.1, Sections 1.2, 2.2, 2.3, 3.1 and 3.2 and the
third sentence of Section 5.2 which shall inure to the benefit of the Initial
Shipper and except as herein otherwise expressly provided to the contrary,
this Agreement shall inure to the benefit of and be binding upon the parties
and their respective successors and permitted assigns, and no other Person
shall have any rights hereunder.
Section 5.4. Severability. If, for any reason, any provision of this
Agreement is unenforceable, the remaining provisions hereof shall nevertheless
be carried into effect.
Section 5.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.6. Submission to Jurisdiction; Consent to Service. Ocensa
hereby submits to the non-exclusive jurisdiction of the Federal and state
courts in the Borough of Manhattan in The City of New York in any suit or
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Ocensa irrevocably appoints the agent for service
designated opposite its name in Section 5.1 as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served
in any such suit or proceeding, and agrees that service of process upon such
agent, and written notice of said service to Ocensa, by the person serving the
same to the address provided in Section 5.1 shall be deemed in every respect
effective service of process upon Ocensa in any such suit or proceeding.
Ocensa further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and
effect for the duration of this Agreement. Ocensa agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 5.6 shall affect the right of the
Trustee to serve legal process in any other manner permitted by applicable
law.
The obligation of Ocensa in respect of any sum due from it to the
Trustee, if expressed in United States dollars hereunder, notwithstanding any
judgment in a currency otherthan United States dollars, shall not be
discharged until the first Business Day, following receipt by the Trustee of
any sum adjudged to be so due in such other currency, on which (and only to
the extent that) the Trustee may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to the Trustee
hereunder, Ocensa agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Trustee against such dollar shortfall. If the
United States dollars so purchased are greater than the sum originally due to
the Trustee hereunder, the Trustee agrees to pay to Ocensa an amount equal to
the excess of the dollars so purchased over the sum originally due to the
Trustee hereunder.
Section 5.7. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
Section 5.8. Counterparts. This Agreement may be executed and
acknowledged in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be
executed and delivered by their proper officers thereunto duly authorized as
of the date first above written.
OLEODUCTO CENTRAL S.A.
By: Gustavo Suarez
Title: President
BANKERS TRUST COMPANY,
as Trustee
By: Marie C. Rasch
Title: Vice President
ACKNOWLEDGEMENT
BY INITIAL SHIPPER
The Initial Shipper hereby acknowledges that this Agreement has been entered
into by Ocensa with its consent and that the Trustee is a permitted assignee
of Ocensa within the meaning of Section 7.3(b) of the Transportation
Agreement. The Initial Shipper hereby agrees with Ocensa and the Trustee to
make all payments and deliver all proceeds assigned hereunder directly to the
Trustee for application as provided in the Common Security Trust Agreement,
while providing an accounting thereof to Ocensa and the Trustee. The Initial
Shipper further agrees to be bound by the terms of this Agreement and not to
hinder the performance by Ocensa of this Agreement in accordance with its
terms. The Initial Shipper has caused this acknowledgement to be executed and
delivered by its proper officer thereunto duly authorized as of the date first
above written.
TRITON COLOMBIA, INC.
By: Al E. Turner
Title: Senior Vice President-Operations
<PAGE>
ASSIGNMENT AND ACKNOWLEDGMENT AGREEMENT
FOR RIGHTS UNDER THE SUBSCRIPTION AGREEMENT
AND THE PERFORMANCE GUARANTEE AGREEMENT
This AGREEMENT, made as of June 1, 1995, by and between:
OLEODUCTO CENTRAL S.A., a sociedad anonima existing under the laws of
Colombia (Ocensa); and
BANKERS TRUST COMPANY, a New York banking corporation, as trustee
(the Trustee) under the Common Security Trust Agreement), dated as of June 1,
1995 (the Common Security Trust Agreement), among Ocensa, the holders from
time to time of Senior Debt and the Trustee.
RECITALS
WHEREAS:
A. Triton Pipeline Colombia, Inc. (the Purchaser) and Ocensa have
entered into an Amended and Restated Subscription Agreement, dated as of March
31, 1995 (as amended from time to time in accordance with its terms, the
Subscription Agreement), by which the Purchaser has undertaken obligations to
purchase from time to time shares of Ocensa in exchange for cash in certain
circumstances;
B. Triton Energy Corporation (the Guarantor), an Affiliate of the
Purchaser, and Ocensa have entered into a Performance Guarantee Agreement,
dated as of December 14, 1994 (as amended from time to time in accordance with
its terms, the Performance Guarantee Agreement), by which the Guarantor has
guaranteed the performance of the Purchaser's obligations under the
Subscription Agreement;
C. Ocensa desires to establish one or more credit facilities and/or
securities issuance facilities that may be used to finance construction and
operation of the Oleoducto Central pursuant to the Common Security Trust
Agreement. In order to facilitate such transactions, Ocensa is willing to
assign to the Trustee certain of its rights under the Subscription Agreement
and under the Performance Guarantee Agreement to be exercised by the Trustee
as provided herein and in the Common Security Trust Agreement for the benefit
of Senior Lender Group D;
D. By execution of this Agreement, Ocensa warrants that all things
necessary to make this Agreement the valid, legally binding and enforceable
done and performed and the execution and performance hereof in all respects
has been authorized and approved by all corporate action necessary on the part
of Ocensa.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein and for other good and valuable consideration (the receipt
and sufficiency of which is hereby acknowledged), Ocensa and the Trustee agree
as follows:
ARTICLE ONE
ASSIGNMENT BY OCENSA TO THE TRUSTEE
Section 1.1. Assignment. Ocensa hereby grants, transfers, sets
over and assigns to the Trustee the following rights (but not obligations or
duties) of Ocensa in, under and arising from the Subscription Agreement and
the Performance Guarantee Agreement, whether now existing or hereafter
arising, to be exercised as provided herein and in the Common Security Trust
Agreement for the benefit of Senior Lender Group D:
(i) subject to Article Two hereof, all rights of Ocensa to request
payment to Ocensa of, and, in the event of a special Call pursuant to the
penultimate paragraph of Section 2.1 of the Subscription Agreement only, to
receive, all monies paid or due (A) by the Purchaser pursuant to the
Subscription Agreement and (B) by the Guarantor pursuant to the Performance
Guarantee Agreement; and
(ii) all other rights (but not obligations or duties), claims, powers,
privileges, interests and remedies of Ocensa, whether arising under the
Subscription Agreement or the Performance Guarantee Agreement, as the case may
be, by statute, at law, in equity or otherwise, resulting from any failure by
the Purchaser or the Guarantor to perform its obligations under any such
agreement;
together with full power and authority, in the name of the Trustee or Ocensa
as assignor or otherwise (but subject to Article Two hereof), to request,
after a Call has been made, and enforce payment to Ocensa of, and, in the
event of a special Call pursuant to the penultimate paragraph of Section 2.1
of the Subscription Agreement only, to receive and give receipt for, any and
all of such monies paid or due pursuant to the Subscription Agreement and the
Performance Guarantee Agreement and proceeds thereof, all in accordance with
the Common Security Trust Agreement (the rights, claims, powers, privileges,
interests and remedies referred to in clauses (i) and (ii) being hereinafter
sometimes referred to as the Rights Assigned Hereby); provided that nothing in
this Agreement shall be taken to constitute an assignment of Ocensa's right to
make Calls pursuant to the Subscription Agreement, except in the event of
Bankruptcy of Ocensa, Decommissioning or a unanimous decision of the Board of
Oleoducto Central (as defined in the Subscription Agreement). The Trustee
agrees to apply all moneys received by it pursuant hereto as provided in the
Common Security Trust Agreement and in the Subscription Agreement.
ARTICLE TWO
PAYMENTS AND REQUESTS
Section 2.1. Requests. Ocensa may at any time, and shall at the
request of the Trustee, make all requests in respect of moneys due from the
Purchaser under the Subscription Agreement and from the Guarantor under the
Performance Guarantee Agreement and, if and only if for any reason Ocensa
fails to do so within two Business Days of a request by the Trustee, the
Trustee may make such requests as assignee with the same force and effect as
if made by Ocensa. Ocensa agrees to promptly provide the Trustee at its
request with copies of all requests made by it in respect of moneys due from
the Purchaser under the Subscription Agreement and from the Guarantor under
the Performance Guarantee Agreement. This Section 2.1 does not derogate the
proviso in Section 1.1.
Section 2.2. Limited Recourse. The Trustee acknowledges on behalf
of itself and each Senior Lender that notwithstanding anything to the contrary
contained in this Agreement, the Subscription Agreement, the Performance
Guarantee Agreement, the Common Security Trust Agreement or any Senior Debt
Agreement, (i) the recourse of the Trustee (on behalf of itself or any Senior
Lender) or any Senior Lender for payment and performance of Senior Debt
Obligations or for any breach of any such agreement by Ocensa shall be limited
solely to the Assigned Rights to the extent of their respective interests
therein pursuant to the Common Security Trust Agreement, and none of (A)
Ocensa, (B) any Person in the Related Initial Shipper Group or in any other
Initial Shipper Group or the Canadian Group, (C) any Person owning, directly
or indirectly, any legal or beneficial interest in Ocensa or in any Person in
the Related Initial Shipper Group, in any other Initial Shipper Group or the
Canadian Group, (D) the Trustee, or (E) any partner, principal, officer,
controlling person, beneficiary, trustee, shareholder, employee, agent,
affiliate or director of any Person described in clauses (A) through (D) above
shall be personally liable for the payment or performance of any Senior Debt
Obligations or for any such breach and (ii) each Senior Lender and the Trustee
acting on behalf of itself or any Senior Lender expressly waive, as authorized
by Article 15 of the Colombian Civil Code and Article 822 of the Colombian
Code of Commerce or any successor provision, any and all personal actions or
rights they may have under Colombian law and any other applicable law as
provided by Article 2488 of the Colombian Civil Code or any successor
provision to demand payment and performance of Senior Debt Obligations owing
to such Senior Lender or for such breach from the real estate and any other
tangible or intangible assets of any Person described in clauses (A) through
(E) and any right to commence, initiate or cause to be initiated any related
proceeding, judicial or otherwise, against Ocensa under any bankruptcy law or
other reorganization, arrangement, readjustment of Debt,relief of debtors,
dissolution, insolvency, liquidation or similar law or for the appointment of
a receiver, trustee or other officer or representative of a court or of
creditors or take any other action that may result in the Bankruptcy of
Ocensa; provided, however, that in each of cases (i) and (ii), the foregoing
shall not impair the validity of any security interest granted to a Senior
Lender under its Senior Debt Agreement in and to an escrow or trust account
into which the proceeds of Senior Debt under its Senior Debt Agreement, the
proceeds therefrom and from investments thereon and no other funds shall be
deposited, or of this Agreement or the right of the Trustee (or any Senior
Lender in a Senior Lender Group to the extent provided in the Common Security
Trust Agreement) to foreclose and/or to exercise or enforce any rights or
remedies in and to the Rights Assigned Hereby as provided in this Agreement
and the Common Security Trust Agreement (including, as provided in Section
9.9(a) thereof, the right to institute suit against Ocensa for the payment of
money due); and provided, further, however, that, as to Ocensa but not as to
any person listed in (B) through (E) above, in the event of the Bankruptcy of
Ocensa, such recourse shall not be so limited and such waiver shall not so
apply as of or subsequent to such Bankruptcy, except that such recourse shall
continue to be so limited and such waiver shall continue to apply with respect
to a Senior Lender in a Senior Lender Group or the Trustee acting on its
behalf or for the benefit of such Senior Lender in such Senior Lender Group if
such Bankruptcy of Ocensa was commenced, initiated, caused to be initiated or
otherwise resulted from any action of such Senior Lender in such Senior Lender
Group (or the Trustee on its behalf or for its benefit) notwithstanding their
respective agreements to the contrary.
ARTICLE THREE
ASSIGNMENT
Section 3.1. Assignment by the Trustee. The Trustee may not assign
this Agreement or any of its rights hereunder or proceeds herefrom, or create
enforceable third party rights herein or to such proceeds, to or in any person
not a party hereto (other than pursuant to the Common Security Trust
Agreement).
Section 3.2. Assignment by Ocensa. Ocensa may not assign its
rights and obligations hereunder or under the Subscription Agreement or the
Performance Guarantee Agreement to any other person, without the written
consent of the Trustee and the Purchaser and, with respect to the Performance
Guarantee Agreement, the Guarantor.
ARTICLE FOUR
EFFECTIVENESS
Section 4.1. Effectiveness. This Agreement shall not become
effective prior to acknowledgement hereof by the Purchaser and the Guarantor.
ARTICLE FIVE
GENERAL
Section 5.1. Notices. All notices, requests, demands, directions
and other communications hereunder shall be in writing and shall be given by
personal delivery, by certified or registered mail, or by electronic means of
communications addressed to the recipient as follows:
<TABLE>
<CAPTION>
<S> <C>
If to Ocensa: Agent for Service
OLEODUCTO CENTRAL S.A. CT CORPORATION SYSTEM
World Trade Center Bogota 1633 Broadway
Torre C, Piso 10 New York, New York 10019
Calle 100 N. 8A-55 Telefax (212) 247-2882
Santafe de Bogota, D.C. - Colombia
Telefax 571-528-3933
Attention: President
If to the Trustee:
BANKERS TRUST COMPANY
Four Albany, 4th Floor
New York, New York 10006
Telefax: (212) 250-6961
Telephone: (212) 250-6826
Attention: Corporate Trust and Agency Group
</TABLE>
or to such other address, individual or facsimile telephone number as may be
designated by notice given by any party to the other. Any notice, request,
demand, direction or other communication given by personal delivery shall be
conclusively deemed to have been given on the day of actual delivery thereof
and, if given by certified or registered mail, on the fifth Business Day
followingthe deposit thereof in the mail and, if given by electronic
communication, on the day of transmittal thereof if given during the normal
business hours of the recipient and on the Business Day during which such
normal business hours next occur if not given during such hours on any day.
The party giving any notice, request, demand, direction or other communication
by personal delivery or by electronic communication shall send the original
thereof by personal delivery or by first class mail.
Section 5.2. Entire Agreement; Waiver; Amendment. This Agreement,
together with the Common Security Trust Agreement, constitutes the entire
agreement between the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof except as specifically set forth herein and therein. All
terms which are not defined herein are, unless otherwise specified, used
herein with the meanings assigned thereto in the Common Security Trust
Agreement or, if not defined therein, the Subscription Agreement. No
amendment, supplement, waiver or termination of this Agreement shall be
binding unless executed in writing by the party to be bound thereby, the
Purchaser and the Guarantor. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
(whether or not similar) nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
Section 5.3. No Third Party Beneficiaries. Except with respect to
the last sentence of Section 1.1, Sections 2.2, 3.1 and 3.2 and the third
sentence of Section 5.2 which shall inure to the benefit of the Purchaser and
the Guarantor and except as herein otherwise expressly provided to the
contrary, this Agreement shall inure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns, and no other
Person shall have any rights hereunder.
Section 5.4. Severability. If, for any reason, any provision of
this Agreement is unenforceable, the remaining provisions hereof shall
nevertheless be carried into effect.
Section 5.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 5.6. Submission to Jurisdiction; Consent to Service.
Ocensa hereby submits to the non-exclusive jurisdiction of the Federal and
State courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. Ocensa irrevocably appoints the agent for service
designated opposite its name in Section 5.1 as its authorized agent in the
Borough of Manhattan in The City of New York upon which process may be served
in any such suit or proceeding, and agrees that service of process upon such
agent, and written notice of said serviceto Ocensa, by the person serving the
same to the address provided in Section 5.1 shall be deemed in every respect
effective service of process upon Ocensa in any such suit or proceeding.
Ocensa further agrees to take any and all action as may be necessary to
maintain such designation and appointment of such agent in full force and
effect for the duration of this Agreement. Ocensa agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Section 5.6 shall affect the right of the
Trustee to serve legal process in any other manner permitted by applicable
law.
The obligation of Ocensa in respect of any sum due from it to the
Trustee, if expressed in United States dollars hereunder, notwithstanding any
judgment in a currency other than United States dollars, shall not be
discharged until the first business day, following receipt by the Trustee of
any sum adjudged to be so due in such other currency, on which (and only to
the extent that) the Trustee may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to the Trustee
hereunder, Ocensa agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Trustee against such dollar shortfall. If the
United States dollars so purchased are greater than the sum originally due to
the Trustee hereunder, the Trustee agrees to pay to Ocensa an amount equal to
the excess of the dollars so purchased over the sum originally due to the
Trustee hereunder.
Section 5.7. Headings. The headings contained herein are for
convenience of reference only and do not constitute a part of this Agreement.
Section 5.8. Counterparts. This Agreement may be executed and
acknowledged in one or more counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
OLEODUCTO CENTRAL S.A.
By: Gustavo Suarez
Title:
BANKERS TRUST COMPANY,
as Trustee
By: Marie C. Rasch
Title: Vice President
ACKNOWLEDGEMENT
BY PURCHASER
The Purchaser hereby acknowledges that this Agreement has been entered into by
Ocensa with its consent and that the Trustee is a permitted assignee of Ocensa
within the meaning of Section 5.3(a) of the Subscription Agreement. The
Purchaser hereby agrees with Ocensa and the Trustee in the case of a special
Call pursuant to the penultimate paragraph of Section 2.1 of the Subscription
Agreement to make all payments and deliver all proceeds assigned hereunder
directly to the Trustee for application as provided in the Common Security
Trust Agreement, while providing an accounting thereof to Ocensa and the
Trustee. The Purchaser further agrees to be bound by the terms of this
Agreement and not to hinder the performance by Ocensa of this Agreement in
accordance with its terms. The Purchaser has caused this acknowledgement to be
executed and delivered by its proper officer thereunto duly authorized as of
the date first above written.
TRITON PIPELINE COLOMBIA, INC.
By: Bernard Gros Dubois
Title: Vice President of Planning
<PAGE>
ACKNOWLEDGEMENT
BY GUARANTOR
The Guarantor hereby acknowledges that this Agreement has been entered into by
Ocensa with its consent and that the Trustee is a permitted assignee of Ocensa
within the meaning of Section 9 of the Performance Guarantee Agreement. The
Guarantor hereby agrees with Ocensa and the Trustee in the case of a special
Call pursuant to the penultimate paragraph of Section 2.1 of the Subscription
Agreement to make all payments and deliver all proceeds assigned hereunder to
the Trustee for application as provided in the Common Security Trust
Agreement, while providing an accounting thereof to Ocensa and the Trustee.
The Guarantor further agrees to be bound by the terms of this Agreement and
not to hinder the performance by Ocensa of this Agreement in accordance with
its terms. The Guarantor has caused this acknowledgement to be executed and
delivered by its proper officer thereunto duly authorized as of the date first
above written.
TRITON ENERGY CORPORATION
By: Bernard Gros Dubois
Title:
