1
EXHIBIT 10.c
AMENDMENT TO OPERATING AGREEMENTS
In consideration of the premises, and the agreements set forth
herein, GHK COMPANY COLOMBIA, SOCIEDAD INTERNACIONAL PETROLERA S.A., CIMARRONA,
L.L.C., SEVEN SEAS PETROLEUM COLOMBIA, INC. and PETROLINSON, S.A. hereby agree
to amend the Rio Seco and Dindal Operating Agreements as follows:
1. The following language shall be added at the end of Article 1.13:
"In addition, the area and depth covered by the "On-Top
Contract," defined in that certain Exploration Agreement
between the Parties dated January 25, 2001, shall be a part
of the Contract Area hereunder,"
2. The language in Article 1.4 which reads,
"plus four (4) percentage points..."
shall be amended to read,
"plus eight (8) percentage points..."
3. The language in Article 3.2(D) which reads,
"Each Party shall pay when due, in accordance with
the Accounting Procedure, its Participating Interest
share of Joint Account expenses, including cash
advances and interest, accrued pursuant to this
Agreement."
shall be amended to read,
"Each Party shall pay when due, in accordance with
the Accounting Procedure, its Participating Interest
share of Joint Account expenses made in connection
with approved Work Programs and Budgets and
otherwise when Operator commits or expends funds for
the Joint Account or Exclusive Operations in
accordance with explicit authority granted to the
Operator under the terms of this Agreement,
including cash advances and interest, accrued
pursuant to this Agreement."
1
2
4. The language in Article 4.2(A) which reads,
"Subject to the terms and conditions of this
Agreement, Operator shall have all of the rights,
functions and duties of Operator under the Contract,
and shall have exclusive charge of and shall conduct
all Joint Operations."
shall be amended to read,
"Subject to the terms and conditions of this
Agreement, Operator shall have all of the rights,
functions and duties of Operator under the Contract,
and shall have exclusive charge of and shall conduct
all Joint Operations in accordance with this
Agreement and the instructions of the Operating
Committee."
5. The language in Article 4.2(B)(10) which reads,
"Have in accordance with the decisions of the
Operating Committee, the exclusive right and
obligation to represent the Parties in all dealings
with the Government with respect to matters arising
under the Contract and Joint Operations."
shall be amended to read,
"Have in accordance with the decisions and
directions of the Operating Committee, the exclusive
right and obligation to represent the Parties in all
dealings with the Government with respect to matters
arising under the Contract and Joint Operations."
6. The language in Article 4.2(B)(10) which reads,
"Nothing contained in this Agreement shall restrict
any Party from holding discussions with the
Government with respect to any issue peculiar to its
particular business interests arising under this
Agreement, but in such event such Party shall
promptly advise the Parties, if possible, before and
in any event promptly after such discussions,
provided that such Party shall not be required..."
shall be amended to read,
"Nothing contained in this Agreement shall restrict
any Party from holding discussions or from
communicating by letter or otherwise with the
Government with respect to any issue peculiar to its
particular business interests arising under this
Agreement, provided that Non-Operators shall
2
3
advise the other Parties, in writing, not less than
two (2) business days prior to such discussions or
transmitting such communication, provided that no
Party shall be required ..."
7. The language in Article 4.10(A) and (A) (1) which reads,
"Subject to Article 4.11, Operator shall be removed
upon receipt of notice from any Non-Operator if:
(A) An order is made by a court or an effective
resolution is passed for the dissolution,
liquidation, winding up, or reorganization of
Operator;"
shall be amended to read,
"Except as otherwise expressly set forth below and
notwithstanding Article 4.11, Operator shall be
automatically and immediately removed upon the
occurrence of any of the following events and
Sipetrol shall immediately be named Operator:
(A) An order is made by a court or an effective
resolution is passed for the dissolution,
liquidation, winding up, or reorganization of
Operator (or, in the case of the current Operator,
GHK, for the dissolution, liquidation, or winding up
of Seven Seas Petroleum Inc. ("Seven Seas") or any
company which is directly or indirectly owned by
Seven Seas and which directly or indirectly owns the
stock of (i) Operator or (ii) any other company that
is a Party to this Agreement), in any jurisdiction;"
8. The language in Article 4.10(A)(2) which reads,
"Operator dissolves, liquidates or terminates its
corporate existence;"
shall be amended to read,
"Operator dissolves, liquidates or terminates its
corporate existence (or, subject to the provisions
of Article 4.10(E), in the case of the current
Operator, GHK, if Seven Seas dissolves, liquidates
or terminates its corporate existence other than in
connection with a change of control or a sale of
substantially all of its assets);"
3
4
9. The language in Article 4.10(A)(3) which reads,
"Operator becomes insolvent, bankrupt or makes an
assignment for the benefit of creditors; or"
shall be amended to read,
"Operator (or, subject to the provisions of Article
4.10(E), in the case of the current Operator, GHK,
if Seven Seas or any company which is directly or
indirectly owned by Seven Seas and which directly or
indirectly owns the stock of (i) Operator or (ii)
any other company that is a Party to this Agreement)
becomes insolvent, bankrupt or makes an assignment
for the benefit of creditors, in any jurisdiction;
or"
10. The language in Article 4.10(A)(4) which reads,
"A receiver is appointed for a substantial part of
Operator's Assets."
shall be amended to read,
"A receiver is appointed for a substantial part of
Operator's (or, in the case of the current Operator,
GHK, of Seven Seas') Assets."
11. There shall be added a new Article 4.10(A)(5) to read,
"In the case of the current Operator, GHK, if any of
the following events occurs in relation to GHK or
Seven Seas or any company which is directly or
indirectly owned by Seven Seas and which directly or
indirectly owns the stock of Operator or) any other
company that is a Party to this Agreement): (i) an
`Event of Default' (as defined in that certain
Indenture dated as of May 7, 1998, between Seven
Seas and The Bank of Nova Scotia Trust Company of
New York, as trustee pertaining to $110,000,000 12
1/2% Senior Notes due 2005 (the "Indenture")) occurs
under the Indenture, or (ii) if there occurs an
event of default under the Stillwater Bank Loan
Agreement between Seven Seas and The Stillwater
National Bank, N.A., dated December 20, 2000, or
(iii) if there occurs a default under any other
material agreement pertaining to any existing or
future bank loans, other loans for borrowed money,
debt securities convertible into equity securities,
or preferred stock arrangements such companies may
enter into that
4
5
call for the repayment of principal, and the
defaults or events of default described in
the preceding clauses (i), (ii) and (iii) have not
been timely cured or waived within 30 days from the
date of the default. In the event of any such
default(s) under the above mentioned documents and
such default(s) is publicly disclosed, GHK shall
send all Parties, within twenty-four (24) hours of
the release all publicly disclosed information
relating to such default(s). If Seven Seas is a
privately held company or such notice of default is
sent to a privately held Affiliate of Seven Seas,
then GHK shall send a copy of such default notice to
all Parties within five days of its issuance.
In the event that Seven Seas or any of its
Affiliates, enters into any future bank loans, debt,
convertible debt, or preferred stock arrangements or
any other arrangement that calls for the repayment
of principal, then GHK shall make available to all
non-Operators a copy of said instruments within
twenty-four (24) hours of its public disclosure upon
request. If Seven Seas and its Affiliates are all
privately held entities, then GHK shall make said
instruments available upon request.
In addition, GHK shall send any letters related to
any such defaults from any lender, debt holder,
trustee, or any party representing them within three
(3) days of Seven Seas' receipt of same.
12. There shall be added a new Article 4.10(A)(6) to read,
"For the purposes of Article 4.10(A), the term
`directly or indirectly owned' shall be applicable
if fifty percent (50%) or more of the stock, debt or
assets of the owned party is owned by the owning
party."
13. There shall be added a new Article 4.10(E) to read,
"The parenthetical language in Articles 4.10(A)(2)
and 4.10(A)(3) shall not apply if there is a direct
or indirect change of control of Seven Seas to a
non-Affiliate of Seven Seas which the Parties agree
is solvent, which agreement shall not be
unreasonably withheld."
5
6
14. The language in Article 6.7(B) which reads,
"at such time that Operator is certain that the
limits of Article 6.7(A) will be exceeded, Operator
shall furnish a supplemental AFE for the estimated
overexpenditures...."
shall be amended to read,
"at such time that Operator reasonably believes that
the limits of Article 6.7(A) will be exceeded,
Operator shall furnish a supplemental AFE for the
estimated overexpenditures...."
15. The language in Article 8.1 which reads,
"Any Party that fails to pay when due its
Participating Interest share of Joint Account
expenses including cash advances and interest,
accrued pursuant to this Agreement (a `Defaulting
Party'), shall be in default under this Agreement."
shall be amended to read,
"Any Party that fails to pay when due its
Participating Interest share of Joint Account
expenses made in connection with approved Work
Programs and Budgets, and otherwise when Operator
commits or expends funds for the Joint Account or
Exclusive Operations, in accordance with explicit
authority granted to the Operator under the terms of
this Agreement, including cash advances and
interest, accrued pursuant to this Agreement (a
`Defaulting Party'), shall be in default under this
Agreement."
16. Each Operating Agreement shall be reprinted and re-executed by
all parties hereto. The Title of each such document shall be "First Amended and
Restated International Operating Agreement" with appropriate changes made
therein to reflect this fact; to refer only to existing parties; and to
otherwise reflect these amendments.
Except as specifically amended hereby, the Rio Seco and Dindal
Operating Agreements shall remain in effect as previously written.
6
7
EXECUTED by the Parties this 25th day of January, 2001, effective for
all purposes as of such date.
FARMORS FARMEES
SOCIEDAD INTERNACIONAL PETROLERA S.A. GHK COMPANY COLOMBIA
------------------------------------ ----------------------------------
Authorized Agent Authorized Agent
------------------------------------ ----------------------------------
Print or Type Name Print or Type Name
------------------------------------ ----------------------------------
Title Title
January 25, 2001 January 25, 2001
CIMARRONA L.L.C. BY MTV SEVEN SEAS PETROLEUM COLOMBIA, INC.
INVESTMENTS LIMITED PARTNERSHIP,
SOLE MEMBER BY MTV ASSOCIATES, INC.,
MANAGING GENERAL PARTNER P. XXXX
XXXXX, PRESIDENT ----------------------------------
Authorized Agent
------------------------------------ ----------------------------------
Authorized Agent Print or Type Name
------------------------------------ ----------------------------------
Print or Type Name Title
------------------------------------ January 25, 2001
Title
January 25, 2001 PETROLINSON S. A.
----------------------------------
Authorized Agent
----------------------------------
Print or Type Name
----------------------------------
Title
January 25, 2001
7
