FIRST PRIORITY OPEN PLEDGE AGREEMENT OVER A COMMERCIAL ESTABLISHMENT WHEREAS:
Exhibit
10.4
FIRST
PRIORITY OPEN PLEDGE AGREEMENT OVER A COMMERCIAL ESTABLISHMENT
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3.
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Xxxxx
Xxxxx Dyes of age, domiciled in Bogotá, identified with Id No C.E. 223.325
de Bogota acting in name and representation of SOLANA PETROLEUM
EXPLORATION COLOMBIA LIMITED, (hereinafter the “PLEDGOR”) a
company duly organized and existent under the laws of Cayman Islands, in
his capacity as Principal Legal Representative authorized to execute this
agreement, as evidenced in the certified copy of the Resolution of the
Board of Directors of the PLEDGOR, dated 24 of August, 2009 which is
attached hereof, and form integral part of this document
and
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4.
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Xxxx
Xxxx Xxxxxxxx of age, domiciled in Bogotá, identified with Id No
80.090.506 of Bogota, D.C. acting in name and representation of STANDARD
BANK PLC, (hereinafter the “PLEDGEE”) a
company duly organized and existent under the laws of England and Wales
(Company No. 2130447) and having its registered office at Xxxxxx Xxxxxx
Xxxxx, 00 Xxxxxxx Xxxx, Xxxxxx XX0X 2SB, with main domicile in the United
Kingdom, have executed the following Open Pledge
Agreement (hereinafter the “Pledge
Agreement”) :
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WHEREAS:
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(A)
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WHEREAS
an AMENDED AND RESTATED CREDIT AGREEMENT dated July [---] 2009
(as amended, restated, supplemented or otherwise modified from time to
time, the “Credit
Agreement”; all capitalized terms used and not otherwise defined
herein have the meanings given to such terms in the Credit Agreement), was
executed among GRAN TIERRA ENERGY COLOMBIA, LTD. (formerly Argosy Energy
International), ARGOSY ENERGY LLC (formerly Argosy Energy Corp.), a
limited liability company organized under the laws of the State of
Delaware (Registered No. 3234977), the PLEDGOR, SOLANA RESOURCES LIMITED,
a limited company organized under the laws of Province of Alberta, Canada,
GRAN TIERRA ENERGY CAYMAN ISLANDS INC., a corporation organized under the
laws of the Cayman Islands (the “Borrower”),
each of the Banks party thereto from time to time; and STANDARD BANK PLC
as Issuing Bank, Arranger and as Administrative Agent (in such capacity,
together with its successors in such capacity, the “Administrative
Agent”) 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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(B)
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WHEREAS,
PLEDGOR is a company dedicated to the exploration and production of
hydrocarbons in Colombia, and in order to develop its corporate purpose
has established a commercial establishment (Branch), denominated SOLANA
PETROLEUM EXPLORATION COLOMBIA LIMITED, (hereinafter the “Commercial
Establishment”), located in Bogotá, D.C., registered before Bogotá’s
Chamber of Commerce under trade registration No 00901181 of October 26,
1998, as evidenced in the certificate issued by said entity, which will be
attached to this agreement and forms integral part;
and
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(C)
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WHEREAS,
in order to secure the prompt payment and performance in full of the
Secured Obligations, the Parties have agreed to execute this Pledge
Agreement by virtue of which the PLEDGOR hereby creates an open pledge, in
favor of PLEDGEE, over its Commercial
Establishment.
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NOW, THEREFORE, the Parties
have decided to enter into this PLEDGE AGREEMENT which shall
be governed by the following provisions (the “Pledge Agreement”):
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CLAUSES
FIRST CLAUSE. - PURPOSE:
Considering the recitals mentioned above, the PLEDGOR, acting under the
conditions indicated on this Pledge Agreement, in the terms of articles 532,
1207 to 1220 of the Colombian Commercial Code, hereby creates in favor of
PLEDGEE, a first priority open pledge, without tenancy over the Commercial
Establishment, this being understood as those assets property of the PLEDGOR and
its Branch which are principally located in the city of Bogotá and form part of
its Commercial Establishment, together with its circulating assets along with
the elements, acts and agreements identified in the Third Clause of this
Agreement.
Under
this clause, the PLEDGOR agrees to (i) obtain a duly legalized and apostilled
cancellation of the first priority open pledge over the Commercial
Establishment, dated December 20, 2007 (the “BNP Pledge”), by the
PLEDGOR in favor of BNP PARIBAS, and register the cancellation of the BNP Pledge
in the commercial registry belonging to the Colombian territory within ten (10)
days of the date of this Pledge Agreement or such later date as the PLEDGOR and
the PLEDGEE may agree to in writing, (ii) register this Pledge Agreement in the
commercial registry belonging to the Colombian territory within the three (3)
Business Days following the date of the cancellation and registration of the BNP
Pledge and (iii) to deliver to the PLEDGEE, within five (5) Business Days
following the request of inscription of the present Pledge Agreement in the
commercial registry, a copy of said inscription.
SECOND CLAUSE.- SECURED
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 principal of and interest on the Loans made by the Banks to, and the Notes
held by each Bank from, and Reimbursement Obligations in respect of Letters of
Credit issued for the account of, and the Designated Hedging Obligations of, the
Borrower and all other amounts from time to time owing to the Secured Parties by
the Borrower under the Credit Agreement, under the Notes, under each Designated
Hedging Agreement and by any other Obligor under any of the other Loan Documents
to which such Obligor is a party, in each case strictly in accordance with the
terms hereof and thereof (hereinafter the “Secured
Obligations”). For legal purposes,
especially for the provisions of article 58 of Law 788, 2002, it is hereby
stated that at the date of the execution of the Pledge Agreement, no
disbursement has been effectively made under the Credit Agreement since its
execution on [---].
Notwithstanding
the above, the Parties hereto agree that the amount of the Secured Obligations
will correspond to the sum of up to USD$200,000,000 for principal plus any
interest and any other costs, expenses, fees, commissions, indemnifications and
other amounts due from any Obligor pursuant to the Credit Agreement and the
other Loan Documents.
THIRD CLAUSE.- COMMERCIAL
ESTABLISHMENT ASSETS: Pursuant to this Pledge Agreement, the items
provided in article 516 of the Code of Commerce form part of the Commercial
Establishment and are thus subject to this pledge, including but not limited to
the circulating assets and the following assets:
3.1.
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All
present and future rights owned by the PLEDGOR
over engineering, designs, blueprints, programs and information
required for the operation and maintenance of the facilities destined to
the exploration and production of oil, gas, and any other hydrocarbon,
conducted by the Commercial
Establishment;
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3.2.
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All
present and future rights owned by the PLEDGOR over the movable goods,
machinery, equipment, instruments, spare parts, and any other
inventory, necessary for the operation and maintenance of the
facilities destined to the exploration and production of oil, gas and any
other hydrocarbon, conducted by the Commercial
Establishment;
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3.3.
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All
present and future authorizations, approvals, concessions, permits, and
licenses of any nature held by the PLEDGOR for the operation and
maintenance of the facilities destined to the exploration and production
of oil, gas and any other hydrocarbon, conducted
by the Commercial
Establishment;
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3.4.
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All
present and future easements and transit rights held by the PLEDGOR over
the real state properties required for the construction, operation and
maintenance of the facilities destined to the exploration and production
of oil, gas, or any other hydrocarbon, conducted by the Commercial
Establishment;
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3.5.
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All
present and future rights held by the PLEDGOR over any oleoduct which
currently utilizes or may reach to
use;
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3.6.
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All
present and future rights held by the PLEDGOR derived from any oil
purchase agreements and any oil, gas or any other hydrocarbon
transportation agreement;
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3.7.
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All
present and future machinery and equipment owned by the PLEDGOR, installed
by the PLEDGOR for the development of any exploration and production
activity of oil, gas or any other hydrocarbon, conducted by the Commercial
Establishment;
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3.8.
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All
present and future movable goods, office equipment, and computer systems
owned by the PLEDGOR;
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3.9.
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All
present and future trade names, and trademarks of goods and services,
owned by the PLEDGOR;
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3.10.
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All
present and future patents, utility models, and industrial designs owned
by the PLEDGOR;
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3.11.
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All
present and future rights of the PLEDGOR, different from those
mentioned above in 3.9 and 3.10 regarding inventions or industrial and
technical creations used by the PLEDGOR in the normal
activities of the Commercial
Establishment;
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3.12.
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All
lease, commodatum, and leasing agreements executed by
the PLEDGOR, as well as all rights of the PLEDGOR to
lease the offices or premises in which the Commercial Establishment
operates if those offices or premises are not owned by
the PLEDGOR, and the indemnifications which, according to the
law and the agreements mentioned above, the PLEDGOR has the
right to receive and all commodatum, leasing and lease agreements
executed by the PLEDGOR in the
future;
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3.13.
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All
present and future engineering, design, construction and services
agreements executed by the PLEDGOR for the operation and
maintenance of the facilities destined to the exploration and production
of oil, gas, and any other
hydrocarbon;
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3.14.
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All
agreements which grant the PLEDGOR, direct or indirect
participation over any hydrocarbon project in Colombia, including but not
limited to, exploration and production of hydrocarbons agreements executed
(of any type) with Ecopetrol or the AGENCIA NACIONAL DE HIDROCARBUROS
(XXX) or private agreements executed by or on behalf of
the PLEDGOR with third parties which have contracted areas for
the exploration and production of hydrocarbons (of any type)
with Ecopetrol or the ANH;
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3.15.
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All
credit rights in favor of the PLEDGOR and any other similar
values;
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3.16.
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All
rights of the PLEDGOR, acquired through its
Commercial Establishment in Colombia, under every and any kind of
agreement related to exploration and production of hydrocarbon activities
in Colombia with the ANH, Ecopetrol or any third party;
and
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3.17.
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All
other rights of the PLEDGOR derived from the normal operation of the
Commercial Establishment.
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The
Commercial Establishment does not include the rights of the Borrower derived
from any crude oil sales commercial agreements, over which the parties have
constituted a pledge in favor of the PLEDGEE as additional collateral security
to the Secured Obligations pursuant to a separate pledge agreement.
FOURTH CLAUSE.- COMMERCIAL
ESTABLISHMENT LOCATION: The offices in which de Commercial Establishment
operates in Bogotá, D.C. are located at, Xxxxx 000 Xx 0 – 00 Xxxxx00.
The PLEDGOR is hereby allowed to change the domicile of the Commercial
Establishment in case of termination of the existing lease agreement, in which
case the PLEDGOR shall inform the PLEDGEE in a prior, express and explicit
manner the new domicile of the Commercial Establishment; provided, however, that
the new domicile shall be kept in the city of Bogotá D.C..
Notwithstanding
the above, the PLEDGOR is expressly authorized to move the items mentioned above
in the following events: a) when the change of location is done inside the
premises of the PLEDGOR; or b) when events of force majeure or acts of god occur
(as defined in Law 95 of 1890) and the mobilization is required in order to
maintain their integrity. The PLEDGOR must return the goods immediately to the
location previously determined, once the events of force majeure and act of god
cease, unless express authorization from the PLEDGEE.
Likewise,
the assets which are of property of the PLEDGOR that were necessary for the
location in which the exploration and production of hydrocarbons are carried out
and can be mobilized pursuant to the business' needs, without affecting in any
way the rights and interests of the PLEDGEE under this document, the Credit
Agreement or any other related document thereto. Notwithstanding, in this case,
the PLEDGOR shall inform the PLEDGEE about the new location of the assets that
have been mobilized.
FIFTH CLAUSE.- SALE OF ASSETS:
The PLEDGOR
may not sell, assign, encumber, or in any form limit, affect, or transfer the
property rights, possession, or any other right it may hold over the Commercial
Establishment encumbered by the present Pledge Agreement, unless prior written
consent has been obtained from the PLEDGEE, subject to any applicable provisions
in the Credit Agreement and the other Loan Documents.
SIXTH CLAUSE. - INSPECTION RIGHTS:
The PLEDGOR
must allow the PLEDGEE or the individuals designated by the PLEDGEE, to inspect
the Commercial Establishment, which includes every single asset of the
Commercial Establishment including its accounting, provided that it is made in
working days, at any time during the term of the Pledge Agreement.
SEVENTH CLAUSE. – TENANCY: The
PLEDGOR, under the condition stated in clause four of this Pledge Agreement,
will maintain the tenancy of the Commercial Establishment, and the assets and
rights that comprise it, being allowed to use them in accordance with their
normal form of use, having to preserve them with due care and diligence, and
agrees to attend with the maximum care and diligence to the custody,
conservation and maintenance of said assets, and will be held responsible for
minimum negligence, in such a manner that during the term of this Pledge
Agreement they are kept in normal conditions, save for the normal wear and tear
derived from its adequate use. Said obligations include those of performing
maintenance work, substitutions and replacements and the repairs that the nature
of the assets and goods require or that the industry advises, without
diminishing the goods or assets.
EIGHTH CLAUSE. –
TERM: This Pledge Agreement will have the same term as the
Credit Agreement, which is until February 22, 2010, or any of its extensions in
accordance to the Credit Agreement. However, this pledge will serve as a
security for the Secured Obligations until they are cancelled in full. Once all
of the Secured Obligations have been paid or discharged in full, the PLEDGOR
will be entitled, at its sole cost and expense, 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 will 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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NINTH CLAUSE. – ADDITIONAL
OBLIGATIONS: The PLEDGOR agrees to perform its corporate purpose in
Colombia solely and exclusively by means of the Commercial Establishment and to
not open or establish for such commercial purposes establishments other than the
Commercial Establishment encumbered through this pledge, except the new
Commercial Establishment is included as part of the guaranty under this Pledge
Agreement and the PLEDGEE grants its prior and written consent.
TENTH CLAUSE. – REPRESENTATIONS AND
WARRANTIES OF THE PLEDGOR: The PLEDGOR represents and warranties to the
PLEDGEE the following:
10.1. That the Commercial
Establishment and the assets that it comprises (with the exception of the assets
that have been leased or received by lease or commodatum) are of its exclusive
property, since they have not been previously sold or transferred to any third
party and that they are free of any liens, pledges, civil claims and in general
of any other type of encumbrance or property limitation, except for (i) those
expressly permitted under the Credit Agreement and (ii) the BNP Pledge, provided that the BNP
Pledge shall be cancelled and the cancellation of the BNP Pledge registered
within ten (10) days of the date of this Pledge Agreement or such later date as
the PLEDGOR and PLEDGEE may agree to in writing in accordance with the First
Clause of this Pledge Agreement.
10.2. That the agreements from
which the rights that form part of the Commercial Establishment are derived are
valid and binding for the parties and enforceable against them, in accordance
with the terms and conditions established therein.
10.3. That to the better
understanding of the PLEDGOR it has not neither has any other party of any of
the agreements from which the rights and obligations that form part of the
Commercial Establishment are derived, failed to comply in total or in part, with
any material aspect, any of the terms and conditions established in said
agreements and that the PLEDGOR has not been notified nor has knowledge of any
fact that can cause any breach with any term or condition established in said
agreements.
10.4. The PLEDGOR is legally
empowered to execute and grant this Pledge Agreement and that there are no
legal, contractual o statutory restrictions applicable to the PLEDGOR in order
to execute and grant this Pledge Agreement.
10.5. That all actions and
conditions (statutory or other) that are required in order to validly subscribe
and comply with this Pledge Agreement, have been executed, complied with and
satisfied.
10.6. That this Pledge
Agreement generates valid and binding obligations for the PLEDGOR that are
enforceable against him, in accordance to the terms and conditions stated
herein.
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10.7 That, except for the
consents and authorizations already received, the granting and execution of this
Pledge Agreement and the compliance with the terms and conditions stated herein,
do not result in a breach nor do they require authorization under: (i) the
by-laws, (b) any law, decree, resolution, agreement, order, judicial decision,
judicial ruling, decision, license or permission applicable to the PLEDGOR or to
which the PLEDGOR is subject to, or (c) any agreement or instrument to which the
PLEDGOR is part to or is obligated by.
ELEVENTH CLAUSE. – EXPENSES AND
TAXES: The registration fees before the Chamber of Commerce, the expenses
related to the issuance of the certificate evidencing the registration of the
pledge to be delivered to the PLEDGEE, the expenses originated from the
notarization of this document, the expenses and taxes caused by the cancellation
of this pledge and the remaining expenses that are caused by the execution and
granting of this Pledge Agreement, shall be fully assumed by the
PLEDGOR.
TWELFTH CLAUSE. – INSURANCE
POLICY: The PLEDGOR agrees to maintain one or more insurance policies
with financially solid insurance companies duly authorized to operate in
Colombia, over the assets that form part of the Commercial Establishment, based
on the ordinary Colombian hydrocarbon sector’s usual amounts, coverages, terms
and conditions. Additionally, the PLEDGOR agrees to maintain the assets that
from part of the Commercial Establishment, insured during the full term of this
Pledge Agreement.
THIRTEENTH.- ENFORCEABILITY OF THE
PLEDGE: The PLEDGEE will only be able to enforce this Pledge following
the established procedures in Colombian legislation and any other regulation, as
well as any of the following events: (i) when an Event of Default occurs as
defined in the Credit Agreement and/or any of the Secured Obligations and/or any
other agreement or document entered into in connection to or as a result of the
Credit Agreement, (ii) when a default occurs under this Pledge Agreement or
(iii) any representation or warranty granted under this Pledge Agreement results
false, inexact or incorrect. (iv) when the value of the Commercial Establishment
is diminished or the goods, assets and rights that conform it are lost or
deteriorated, and so become insufficient to guarantee the Secured Obligations
unless the PLEDGOR provides an additional security reasonably satisfactory to
the PLEDGEE.
FOURTEENTH CLAUSE. – FORECLOSURE
PROCEEDINGS: In case that the PLEDGEE initiates a foreclosure proceeding
against the PLEDGOR for breaches of the Secured Obligations, the parties agree
to the following:
a)
Appoint a suitable person, indicated in good faith by the PLEDGEE, to act as
confiscator in the proceeding and that will continue to administrate the
Commercial Establishment.
b)
Designate the person that the PLEDGEE indicates in good faith, as an expert or
experts for the appraisal of the assets that compose the Commercial
Establishment.
FIRST PARAGRAPH: The PLEDGOR
expressly states that it adheres to the appointment of the confiscator and the
expert or experts made by the PLEDGEE, as provided in letters a) and b) of the
present Clause, in accordance to the Colombian Civil Procedure Code and waives
the right to request the division of the assets into lots in order to hold a
public auction.
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SECOND PARAGRAPH: In order to
enforce this Pledge Agreement, the PLEDGOR grants a blank promissory note with a
letter of instructions which shall be fulfilled by the PLEDGEE pursuant to the
terms and conditions provided therein and with the owed amounts under the Credit
Agreement. In order to fulfill the owed amount, the PLEDGEE shall discount any
paid amount under any other guaranty granted pursuant to the Credit
Agreement.
FIFTEENTH CLAUSE. – TRANSFER:
The PLEDGOR
accepts from the execution of this Pledge Agreement, any assignment or total or
partial transfer that the PLEDGEE may make of this Pledge Agreement, as a
consequence of the transfer of the Secured Obligations, as long as said transfer
or assignment is made in accordance to what is established in the Credit
Agreement. In the event of a partial transfer of the present Pledge Agreement as
a consequence of the transfer of the Secured Obligations, the PLEDGOR will
expressly be obligated to issue a new original copy of said agreement, with the
corresponding reproduction of the registration stamps before the corresponding
Chamber of Commerce, and deliver them to the PLEDGEE´s partial assignee or to
deliver a document with the modifications to this pledge, in which the transfer
is referenced and the assignee’s acceptance to all the terms of the present
Pledge Agreement is stated.
SIXTEENTH CLAUSE. – APPLICABLE LAW:
This Pledge Agreement is subject to Colombian law.
SEVENTEENTH CLAUSE. – HEADERS:
The titles contained in this Pledge Agreement have been inserted for
parties’ convenience and cannot affect in anyway the interpretation and meaning
of any of the provisions of this Pledge Agreement.
EIGHTEENTH CLAUSE. – MODIFICATION:
The present Pledge Agreement, including its Exhibits when the case may
be, can only be modified or amended by mutual agreement between the parties
stated in writing and proof that those who represent the parties are duly
empowered to do so.
NINETEENTH CLAUSE. -
NOTIFICATIONS: Any message, notification or summon required, demanded or
permitted by this Pledge Agreement to be delivered to the PLEDGOR or PLEDGEE
shall be made in writing and shall be given in accordance with Section 12.02 of
the Credit Agreement
TWENTIETH CLAUSE. – TOTAL AGREEMENT:
The present Pledge Agreement, accepted and signed, constitutes the total
agreement between the parties; it has priority and replaces any other agreement
that might have existed previously between them in relation with the object of
this Pledge Agreement.
TWENTY-FIRST CLAUSE. – NULLITY OR
ILLEGALITY OF THE PROVISIONS: In the event that one or more of the
provisions of this Pledge Agreement is declared to be null, inefficient or
contrary to Colombian law, this does not imply the nullity, inefficiency or
illegality of the remaining provisions of this Pledge Agreement, which will
continue to be binding and mandatory for the parties and will remain in force
and in effect. Additionally, the parties agree to cooperate amongst themselves
to replace the null, inefficient or illegal provision, for another provision
that is valid and enforceable and that serves the same purpose and renders the
same effects as the provision that has been declared illegal, null or
inefficient.
TWENTY-SECOND CLAUSE. –WAIVER:
Waivers, by either of the parties to what has been stated in this Pledge
Agreement cannot be interpreted as a waiver to exercise the rights and actions
granted by this Pledge Agreement or by the Law, with the exception of waivers
that have been expressly previously recognized through a written communication.
No omission, delay or action done by the parties while exercising any of its
rights, powers or resources under the present Pledge Agreement will be
considered as a waiver of said rights, powers or resources. No waiver of a
right, power or resources by either of the parties is considered to be valid
except when said party has notified it by writing. The rights and actions in
this Pledge Agreement are cumulative and do not excludes the remaining rights
and actions established in the applicable law. The exercise of any right or
action under this Pledge Agreement, does not exclude the possibility to exercise
another right or resources.
TWENTY-THIRD CLAUSE. – 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 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.
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In
witness whereof, this Pledge Agreement is signed in multiple original copies, of
the same contents by:
Before
the Notary Public, in the city of Bogota D.C., on August 24 of two
thousand and nine (2009).
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Before
the Notary Public, in the city of Bogotá, D.C., on August 24 of two
thousand and nine (2009).
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By
PLEDGOR
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By
PLEDGEE
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/s/ Xxxxx Xxxxx Dyes
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/s/ Xxxx Xxxx Xxxxxxxx
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XXXXX
XXXXX DYES
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XXXX
XXXX XXXXXXXX
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C.E.
223.325
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C.C.
No. 80.090.506 Bogota
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Principal
Legal Representative
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[Proxy]
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