AMENDED AND RESTATED FIRST PRIORITY OPEN PLEDGE AGREEMENT OVER CREDIT RIGHTS DERIVED FROM CRUDE OIL COMMERCIAL SALES AGREEMENTS (this “Pledge Agreement”)
Exhibit
10.5
EXECUTION
VERSION
AMENDED
AND RESTATED FIRST PRIORITY OPEN PLEDGE AGREEMENT OVER CREDIT RIGHTS DERIVED
FROM CRUDE OIL COMMERCIAL SALES AGREEMENTS (this “Pledge Agreement”)
Between
(i) GRAN TIERRA ENERGY COLOMBIA, LTD. (formerly Argosy Energy International), a
limited partnership organized under the laws of the State of Utah (Registered
No. 2110646-0180) and having its principal office at Calle 114 Xx. 0 - 00, 00xx
Xxxxx, XX Xxxxxxxx, Xxxxxx X. X., Xxxxxxxx with a branch denominated GRAN TIERRA
ENERGY COLOMBIA, LTD., (hereinafter the “PLEDGOR”)
incorporated through Public Deed No. 5323 on October 25, 1983, granted by the
Seventh Notary of Bogotá, registered on November 23, 1983 under Number 2092 of
Book VI, with Mercantile Register No. 00841851, and its main domicile in Bogotá,
D.C., represented by XXXXX XXXXX DYES, as evidenced in the
certificate of incumbency and legal representation, of legal age, resident of
Bogotá D.C., bearer of Alien’s Identity Document Number 223.325, acting in his
capacity as legal representative and (ii) STANDARD BANK PLC,
a public limited company organized under the laws of England and Wales (Company
No. 2130447) and having its registered office at 00 Xxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX with main domicile in the United Kingdom, acting for
and on behalf of the Secured Parties as administrative agent under the Credit
Agreement referred to below (in such capacity, together with its successors and
assigns in such capacity, the “PLEDGEE”),
represented in this act by XXXXXX XXXXXXXX and XXXXXXXX X. XXXXXX, both of legal
age, domiciled in New York City identified as it appears below their signatures.
WHEREAS:
A. The
PLEDGEE and the PLEDGOR are parties to that certain Credit Agreement, dated as
of February 22, 2007 (the “Original Credit
Agreement”), in connection to which, the PLEDGOR pledged its credit
rights derived from a certain crude oil commercial sales agreement, dated
December 1, 2006 (the “2006 Ecopetrol Offtake
Agreement”), between ECOPETROL (as defined below) and the PLEDGOR,
pursuant to the First Priority Open Pledge Agreement Over Credit Rights Derived
From A Crude Oil Sales Agreement, dated as of February 22, 2007 (the “Original Pledge
Agreement”).
B. The
Original Credit Agreement was amended and restated by the Amended and Restated
Credit Agreement, dated August 24, 2009 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”),
among the PLEDGOR, ARGOSY ENERGY, LLC, a limited liability company organized
under the laws of the State of Delaware (Registered No. 3234977), SOLANA
PETROLEUM EXPLORATION (COLOMBIA) LIMITED, an exempted company organized under
the laws of the Cayman Islands, SOLANA RESOURCES LIMITED, a limited company
organized under the laws of Province of Alberta, Canada, GRAN TIERRA ENERGY
CAYMAN ISLANDS INC., an exempted company organized under the laws of the Cayman
Islands (together with its successors and assigns, the “Borrower”), each of
the Banks party thereto from time to time and the PLEDGEE, by means of which a
loan facility for a sum of up to US$200,000,000 was granted by the Banks to the
Borrower on the terms and subject to the conditions set forth
therein.
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C. Under
the Credit Agreement, the PLEDGOR continues to be obligated to create a pledge
over all of the present and future rights, titles and interests of the PLEDGOR
to receivables payable from Crude Oil Commercial Sales Agreements (as defined
below) in order to secure the fulfillment of the obligations stipulated in the
Credit Agreement.
D. On
February 12, 2009, ECOPETROL S.A. (hereinafter, “ECOPETROL”), a
decentralized entity of the national order, established through Law 165 of 1948,
organized as a joint Stock Company pursuant to Decree 1760 of 2003, with Tax
Identification Number 899-999-068-1, attached to the Ministry of Mines and
Energy, with main domicile in Bogotá D.C., whose corporate bylaws are contained
in Public Deed No. 4832 dated October 31, 2005, and Public Deed 4302 of
September 26, 2006, from the Second Notary of the Bogotá D.C. Circle and on the
other hand the PLEDGOR engaged in a crude oil commercial sales agreement for the
purchase of the crude produced under the Chaza block (the “2009 Ecopetrol Offtake
Agreement” and together with the 2006 Ecopetrol Offtake Agreement, the
“Ecopetrol Offtake
Agreements”).
E. Under
the Ecopetrol Offtake Agreements, the payments made by ECOPETROL to the PLEDGOR
are as follows: (a) one part payable in Colombian pesos, equivalent to
twenty-five (25%) of the volumes determined and delivered, in accordance with
the provisions contained therein; (b) the remaining seventy five percent (75%)
in United States dollars (“U.S. Dollars”).
F. In
order to secure the prompt payment and performance in full of the secured
obligations under the Credit Agreement, the PLEDGOR has agreed to amend and
restate the Original Pledge Agreement to extend its first priority open pledge
in favor of the PLEDGEE to include all the present and future rights, titles and
interests of the PLEDGOR to receivables and credits payable from time to time by
ECOPETROL and other Offtakers under the 2009 Ecopetrol Offtake Agreement and
under all other present and future Offtake Agreements entered into by the
PLEDGOR.
G. The
parties hereto have agreed that the Original Pledge Agreement be amended,
restated and replaced, and pursuant to the terms and conditions
hereto.
NOW,
THEREFORE, the parties agree as follows:
FIRST
CLAUSE. DEFINED TERMS: Capitalized terms used in this Pledge Agreement
(including the preamble and whereas clauses) and not otherwise defined herein,
unless the context otherwise requires, have the respective meanings given to
such terms in the Credit Agreement.
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SECOND
CLAUSE. PURPOSE: The PLEDGOR hereby creates a first priority open pledge
in favor of the PLEDGEE over all the present and future rights, titles and
interests of the PLEDGOR to receivables and credits payable from time to time by
ECOPETROL and other Offtakers under the Ecopetrol Offtake Agreements and each
other offtake agreement entered into by the PLEDGOR in the future, but limited
to those included in the definition of “Offtake Agreements” under the Credit
Agreement (collectively, including the Ecopetrol Offtake Agreements, the “Crude Oil Commercial Sales
Agreements” and each, a “Crude Oil Commercial Sales
Agreement”). The pledge created hereunder, includes the rights of the
PLEDGOR to receive: (i) the full price of the crude oil agreed between the
PLEDGOR and ECOPETROL and any other Offtaker; (ii) all the default interest
derived from the Crude Oil Commercial Sales Agreements, if any; (iii) all the
fines, compensations or indemnifications of any nature to which the PLEDGOR may
be entitled to by virtue of breaches of the Crude Oil Commercial Sales
Agreements; (iv) all the indemnifications paid by insurance companies or banks,
to which the PLEDGOR is entitled to, derived from or related to the Crude Oil
Commercial Sales Agreements; and (v) all and any other amounts to which the
PLEDGOR may be entitled to by virtue of the Crude Oil Commercial Sales
Agreements.
THIRD
CLAUSE. SECURITY FOR OBLIGATIONS: The pledge created by means of this
Pledge Agreement is an open pledge, that secures the payment and performance in
full by the Obligors of all present and future obligations (including, in the
case of the Guarantors, the Guaranteed Obligations) to the Secured Parties under
the Credit Agreement and the other Loan Documents (hereinafter the “Secured
Obligations”).
The
PLEDGEE may enforce the pledge created by means of this Pledge Agreement at any
time after (i) an Event of Default under Section 10(f) or 10(g) of the Credit
Agreement has occurred, or (ii) any other Event of Default in respect of which
the PLEDGEE has delivered a notice to the Borrower, terminating the Commitments
and/or declaring all amounts payable by the Obligors as immediately due and
payable pursuant to the Credit Agreement.
Notwithstanding
the above, the Parties hereto agree that the amount of the Secured Obligations
will correspond to the sum of USD$200,000,000 of principal plus any interest and
any other costs, expenses, fees, commissions, indemnifications and other amounts
due by any Obligor pursuant to the Credit Agreement and the other Loan
Documents.
FOURTH
CLAUSE. COLLECTIONS: All and any payments made in U.S. Dollars under the
Crude Oil Commercial Sales Agreements, including, but not limited to, payments
made under the Ecopetrol Offtake Agreements corresponding to the seventy five
percent (75%) portion made in U.S. Dollars, shall be made by ECOPETROL or the
applicable Offtaker by means of transference and deposit of those payments in
account number 103353265 opened by the PLEDGOR with JPMorgan Chase Bank, N.A.
New York, New York the (the “Collection Account”).
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FIFTH
CLAUSE. SERVICES AND INSTRUCTIONS TO ECOPETROL: The PLEDGOR shall notify
in writing ECOPETROL and any other Offtaker, within the three (3)
working days following the date of execution of this Pledge Agreement, in the
manner indicated in Annex No. 1 to this Pledge Agreement, that from the date on
which this Pledge Agreement is entered into all the rights of the PLEDGOR to
receive payments under the applicable Crude Oil Commercial Sales Agreement have
been pledged in favor of the PLEDGEE. Additionally, the PLEDGOR shall instruct
irrevocably ECOPETROL and any other Offtaker to transfer and deposit all U.S.
Dollar payments derived from the Ecopetrol Offtake Agreements or any other Crude
Oil Sales Agreements into the Collection Account. Each of the Crude Oil
Commercial Sales Agreements executed by the PLEDGOR after the date hereof will
be deemed to form part of this pledge and the PLEDGOR shall provide notice and
instruction to the Offtaker under such Crude Oil Commercial Sales Agreement in
accordance to this Fifth Clause and the receivables and credits payable under
such Crude Oil Commercial Sales Agreement shall be deposited in the Collection
Account.
SIXTH
CLAUSE. ADDITIONAL OBLIGATIONS: In addition to the obligations stipulated
in all other clauses of this Pledge Agreement and in any applicable regulations,
the PLEDGOR undertakes the following specific obligations: (i) be liable for the
existence, validity and duly and timely compliance of the Crude Oil Commercial
Sales Agreements; (ii)
abstain from fully or partially assigning the Crude Oil Commercial Sales
Agreements or the rights derived therefrom without prior, specific and written
authorization of the PLEDGEE; (iii) promptly inform the PLEDGEE about any breach
of the Crude Oil Commercial Sales Agreements regardless its cause, by the
PLEDGOR, ECOPETROL or any Offtaker; (iv) maintain in force and without any liens
or limitations all its rights under the Crude Oil Commercial Sales Agreements
other than Permitted Liens; (v) promptly inform the PLEDGEE about any claim,
lawsuit, seizure or precautionary measure of any nature instituted or intended
to be instituted by any person in regards to the rights of the PLEDGOR under the
Crude Oil Commercial Sales Agreements; (vi) promptly provide to PLEDGEE a copy
of all of the Crude Oil Commercial Sales Agreements executed to date, or any
future Crude Oil Commercial Sales Agreement executed, which are pledged under
this Pledge Agreement, within the following two (2) working days of the
execution of this Pledge Agreement, or within the following two (2) working days
from the execution of the Crude Oil Commercial Sales Agreement, as applicable,
as well as to keep the documents in the offices located in Bogota D.C.;
and (vii) not to modify, amend or renegotiate the instructions and
the form of payment under the Crude Oil Commercial Sales Agreements, unless such
amendment, modification or renegotiation increases, in U.S. Dollars, the
returned percentages; consequently the amendments to the Crude Oil Commercial
Sales Agreements may not increase the returned percentage in Colombian
pesos.
SEVENTH CLAUSE. TERM: This
Pledge Agreement shall remain in force and effect until the Maturity Date, which
is February 22, 2010 or such later date as may be determined in accordance with
the Credit Agreement; provided that this
pledge shall continue to serve as security for the Secured Obligations until the
payment and discharge of the Secured Obligations in full and the termination of
all Commitments under the Credit Agreement. Once all of the Secured Obligations
have been paid or discharged in full, the PLEDGOR will be entitled to receive
from the PLEDGEE the execution of a document canceling the pledge created under
this Pledge Agreement; provided always that
if any payment in respect of the Secured Obligations is avoided or reduced as a
result of the insolvency of the PLEDGOR or any analogous event, such pledge
shall to the fullest extent permitted by law be reinstated as if the payment and
discharge of the Secured Obligations had not occurred, and the liability of the
PLEDGOR shall continue as if the payment in respect of the Secured Obligations
had not occurred, and the PLEDGEE shall be entitled to recover the amount of
such payment from the PLEDGOR as if such payment had not been
made.
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EIGHTH CLAUSE. REPRESENTATIONS AND
WARRANTEES: PLEDGOR hereby represents and warrants in favor of the
PLEDGEE and for the benefit of all the Secured Parties, the
following:
(i) That
all the rights of the PLEDGOR under the Crude Oil Commercial Sales Agreements
are of its exclusive property, have not been previously assigned or transferred
and are free from any seizures, pledges, lawsuits, and in general from any other
types of liens and limitations to ownership other than Permitted
Liens.
(ii) That
the Crude Oil Commercial Sales Agreements are valid and binding upon each of the
PLEDGOR and, to its knowledge, ECOPETROL or the applicable Offtaker and
enforceable against each of them, in accordance with the terms and conditions
stipulated therein.
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(iii)
That the PLEDGOR has no knowledge of any fact or event that could imply or
produce a breach of the Crude Oil Commercial Sales
Agreements.
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(iv) That
it is legally empowered to enter into and perform this Pledge Agreement and that
for its execution and performance there are no legal, contractual or statutory
restrictions applicable to the PLEDGOR.
(v) That
all the actions and conditions (statutory or of any other type) required for the
execution and performance of this Pledge Agreement, have been duly and fully
obtained, performed, fulfilled with and satisfied.
(vi) That
this Pledge Agreement creates valid and binding obligations upon the PLEDGOR
enforceable against it, according to the terms and conditions provided
herein.
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(vii)
That except for the authorizations already received, the entering into and
perfecting of this Pledge Agreement as well as its compliance and
performance, does not breach or imply a non-compliance, neither requires
any consent or authorization under: (a) the constituent documents of the
PLEDGOR; (b) any law, decree, resolution, agreement, order, judicial
decision, writ, administrative decision, license or permit applicable to
the PLEDGOR or to which the PLEDGOR is bound, or (c) any contract or
document to which the PLEDGOR is a party or is
obligated.
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NINTH
CLAUSE. EXPENSES AND TAXES: All the expenses and taxes that may be caused
or derived from the execution and compliance of this Pledge Agreement shall be
fully assumed and paid by the PLEDGOR.
TENTH
CLAUSE. COSTS AND FEES: The expenses and costs to be incurred by the
PLEDGEE in case this pledge is made effective, including lawyer’s fees, will be
fully assumed by the PLEDGOR.
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ELEVENTH
CLAUSE. APPLICABLE LAW: This Pledge Agreement is governed by, and shall
be construed and interpreted in accordance with, the laws of the Republic of
Colombia.
TWELFTH
CLAUSE. USE OF ENGLISH LANGUAGE: The English text of this Pledge
Agreement shall be controlling in all cases, except in connection with any legal
action or proceeding brought in respect of this Pledge Agreement in the
competent courts of Colombia, in which case an official translation into Spanish
of this Pledge Agreement shall be controlling.
THIRTEENTH
CLAUSE. NOTICES: Any message, notification or summon required, demanded
or permitted by this Pledge Agreement shall be made in writing and shall be
given in accordance with Section 12.02 of the Credit Agreement.
FOURTEENTH
CLAUSE. MISCELLANEOUS:
14.1.
Survival of Agreements. Each agreement, representation, warranty, and
covenant contained or referred to in this Pledge Agreement shall survive any
investigation at any time made by the PLEDGEE and shall survive any disbursement
under the Loans, except for changes permitted hereby and, except as otherwise
provided in this article, shall terminate only when all amounts due or to become
due under the Loan Documents are indefeasibly paid.
14.2.
Integration; Amendments. This Pledge Agreement and the other Loan
Documents embodies the entire understanding of the parties and supersedes all
prior negotiations, understandings, and agreements between them with respect to
the subject matter hereof. The provisions of this Pledge Agreement and of its
Annexes may be waived, supplemented, or amended only by an instrument in writing
signed by the Parties hereto.
14.3.
Severability. If any provision of this Pledge Agreement is
prohibited or held to be invalid, illegal, or unenforceable in any jurisdiction,
then to the fullest extent permitted by law, such invalidity, illegality, or
unenforceability shall not affect the validity, legality, and enforceability of
the other provisions of this Pledge Agreement and shall not render such
provision prohibited, invalid, illegal, or unenforceable in any other
jurisdiction. If, and to the extent that, any obligation of the PLEDGOR is
unenforceable for any reason, the PLEDGOR shall, independent of any other
obligation hereunder, make the maximum contribution to the payment and
satisfaction thereof as is permissible under applicable law.
14.4.
No Waiver.
(a) No
failure or delay by the PLEDGEE in exercising any right, power, or remedy shall
operate as a waiver thereof or otherwise impair any of its other rights, powers,
or remedies. No single or partial exercise of any such right, power, or remedy
shall preclude any other or further exercise thereof or the exercise of any
other legal right, power, or remedy. No waiver of any right, power, or remedy
shall be effective unless given in writing.
(b) The
rights, powers or remedies provided for herein are cumulative and are not
exclusive of any other rights, powers, or remedies provided by law. The
assertion or employment of any right, power or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion of any other rights, powers, or
remedies.
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14.5. Execution in
Counterparts.
This
Pledge Agreement may be executed in counterparts, each of which when so executed
and delivered shall be deemed an original and all of which together shall
constitute one and the same instrument.
[Remainder
intentionally left blank.]
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In
witness whereof, the Pledge Agreement is signed as of August 24,
2009
GRAN
TIERRA ENERGY COLOMBIA, LTD.
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By: Argosy
Energy, LLC, its General Partner
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By:
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/s/ Xxxxx Xxxxx Dyes
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Name: Xxxxx
Xxxxx Dyes
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Title: Manager
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STANDARD
BANK PLC
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By:
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/s/ Xxxxxx Xxxxxxxx
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Name:
Xxxxxx Xxxxxxxx
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Title:
Director
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By:
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/s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx
X. Xxxxxx
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Title:
Global Head of Oil & Gas,
Renewables
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