EXECUTION COPY
U.S. $249,150,000
LETTER OF CREDIT ISSUANCE AND
REIMBURSEMENT AGREEMENT
Dated as of October 2, 2002
Among
PECOM ENERGIA S.A.,
JPMORGAN CHASE BANK,
as Letter of Credit Administrative Agent,
DEUTSCHE BANK AG NEW YORK BRANCH,
CITIBANK N.A.,
BNP PARIBAS,
WESTLB AG,
CREDIT AGRICOLE INDOSUEZ,
MIZUHO CORPORATE BANK, LTD.
and
BAYERISCHE HYPO-UND VEREINSBANK AG,
as Issuing Banks
and
THE LENDERS NAMED HEREIN
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS....................................................................... 1
SECTION 1.01. Certain Defined Terms................................................................... 1
SECTION 1.02. Computation of Time Periods............................................................. 1
SECTION 1.03. Accounting Terms........................................................................ 1
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT........................................... 2
SECTION 2.01. The Letters of Credit................................................................... 2
SECTION 2.02. Drawings and Reimbursement Under Letters of Credit...................................... 4
SECTION 2.03. Fees ................................................................................... 7
SECTION 2.04. Prepayments of Letter of Credit Advances, Reduction of Available
Amounts of Letters of Credit and Other Actions.......................................... 8
SECTION 2.05. Repayment............................................................................... 20
SECTION 2.06. Interest................................................................................ 24
SECTION 2.07. Interest Rate Determination............................................................. 25
SECTION 2.08. Conversion of Advances.................................................................. 27
SECTION 2.09. Increased Costs......................................................................... 28
SECTION 2.10. Illegality.............................................................................. 30
SECTION 2.11. Payments and Computations............................................................... 30
SECTION 2.12. Taxes .................................................................................. 32
SECTION 2.13. Notes .................................................................................. 32
SECTION 2.14. Event of Sovereign Risk................................................................. 33
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING.............................................................. 33
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01................................... 33
SECTION 3.02. Determinations Under Section 3.01....................................................... 36
i
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................ 36
SECTION 4.01. Representations and Warranties of the Company........................................... 36
ARTICLE V COVENANTS OF THE COMPANY............................................................................... 36
SECTION 5.01. Covenants............................................................................... 36
ARTICLE VI EVENTS OF DEFAULT..................................................................................... 37
SECTION 6.01. Events of Default....................................................................... 37
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default................................ 37
ARTICLE VII THE LETTER OF CREDIT ADMINISTRATIVE AGENT............................................................ 38
SECTION 7.01. Authorization and Action................................................................ 38
SECTION 7.02. Letter of Credit Administrative Agent's Reliance, Etc................................... 38
SECTION 7.03. JPMorgan Chase Bank and Affiliates...................................................... 39
SECTION 7.04. Lender Credit Decision.................................................................. 39
SECTION 7.05. Indemnification......................................................................... 39
SECTION 7.06. Successor Letter of Credit Administrative Agent......................................... 40
ARTICLE VIII MISCELLANEOUS....................................................................................... 41
SECTION 8.01. Amendments, Etc......................................................................... 41
SECTION 8.02. Notices, Etc............................................................................ 41
SECTION 8.03. No Waiver; Remedies..................................................................... 42
SECTION 8.04. Costs and Expenses...................................................................... 42
SECTION 8.05. Binding Effect.......................................................................... 43
SECTION 8.06. Assignments and Participations.......................................................... 43
SECTION 8.07. GOVERNING LAW........................................................................... 46
SECTION 8.08. Execution in Counterparts............................................................... 46
SECTION 8.09. Jurisdiction; Waiver of Immunities...................................................... 47
SECTION 8.10. Judgment Currency....................................................................... 48
ii
SECTION 8.11. Waiver of Jury Trial.................................................................... 48
SECTION 8.12. Representations and Acknowledgments of Lenders.......................................... 48
SECTION 8.13. No Liability of Lenders................................................................. 50
SECTION 8.14. Right of Set-Off........................................................................ 51
iii
Schedules
Schedule I - List of Issuing Banks, Aggregate Face Amounts of Letters of Credit
Required to be Issued and Lending Offices
Schedule II - List of L/C Funding Lenders, Lending Offices and Aggregate
Principal Amount of Letter of Credit Advances Required to be Purchased from Each
Issuing Bank
Schedule III - Up-Front Fees
Schedule 5.01 - Underlying Transactions Secured by Letters of Credit Issued
Under Short Term L/C Series C Facility, Long Term L/C Series C Facility and Long
Term L/C Series D Facility
Schedule 8.12(b) - Surviving Provisions Under OCP Letter of Credit Agreement and
Related Participation Agreements
Schedule 8.12(c) - Surviving Provisions Under CAI Letter dated July 24, 2002
Schedule 8.12(d) - Surviving Provisions Under West LB Letter of Credit Agreement
Schedule 8.12(e) - Surviving Provisions Under Mizuho Letter of Credit Agreement
Schedule 8.12(f) - Surviving Provisions Under HVB Letter of Credit Agreement
Exhibits
Exhibit A - Form of Short Term Series A Letter of Credit Issued By Deutsche Bank
Exhibit B - Form of Short Term Series B Letter of Credit Issued By Deutsche Bank
Exhibit C-1 - Form of Short Term Series C Letter of Credit Issued By CAI
Exhibit C-2 - Form of Short Term Series C Letter of Credit Issued By Mizuho
Exhibit C-3 - Form of Short Term Series C Letter of Credit Issued By West LB
Exhibit D-1 - Form of Long Term Series A Letter of Credit Issued By Deutsche
Bank
Exhibit D-2 - Form of Long Term Series A Letter of Credit Issued By Citibank
Exhibit D-3 - Form of Long Term Series A Letter of Credit Issued By BNP PARIBAS
Exhibit E-1 - Form of Long Term Series B Letter of Credit Issued by Deutsche
Bank
Exhibit E-2 - Form of Long Term Series B Letter of Credit Issued by BNP PARIBAS
Exhibit F-1 - Form of Long Term Series C Letter of Credit Issued by CAI
iv
Exhibit F-2 - Form of Long Term Series C Letter of Credit Issued by West LB
Exhibit G - Form of Long Term Series D Letter of Credit Issued by HVB
Exhibit H-1 - Form of MT Note Supplemental Indenture for Converted Short Term
Letter of Credit Advances
Exhibit H-2 - Form of MT Note Supplemental Indenture for Converted Long Term
Letter of Credit Advances
Exhibit I - Form of Note Purchase Agreement for MT Notes
Exhibit J - Form of Settlement Agreement Executed Upon a Conversion of Letter of
Credit Advances to MT Notes
Exhibit K - Form of Letter of Credit Advance Note
Exhibit L - Form of Assignment and Acceptance
Annexes
Annex A - Index of Defined Terms
Annex B - Representations and Warranties
Annex C - Covenants
Annex D - Events of Default
v
LETTER OF CREDIT ISSUANCE AND
REIMBURSEMENT AGREEMENT
Dated as of October 2, 2002
PECOM ENERGIA S.A., a sociedad anonima organized under the
laws of Argentina (the "Company"), and JPMORGAN CHASE BANK, as administrative
agent (the "Letter of Credit Administrative Agent") for the Lenders (as
hereinafter defined), DEUTSCHE BANK AG NEW YORK BRANCH ("Deutsche Bank"), as
Short Term L/C Series A Issuing Bank (the "Short Term L/C Series A Issuing
Bank"), DEUTSCHE BANK, as Short Term L/C Series B Issuing Bank (the "Short Term
L/C Series B Issuing Bank"), CREDIT AGRICOLE INDOSUEZ ("CAI"), MIZUHO CORPORATE
BANK, LTD. ("Mizuho"), and WESTLB AG ("West LB"), as Short Term L/C Series C
Issuing Banks (the "Short Term L/C Series C Issuing Banks"), DEUTSCHE BANK, BNP
PARIBAS and CITIBANK N.A. ("Citibank"), as Long Term L/C Series A Issuing Banks
(the "Long Term L/C Series A Issuing Banks"), DEUTSCHE BANK and BNP PARIBAS, as
Long Term L/C Series B Issuing Banks (the "Long Term L/C Series B Issuing
Banks"), CAI and WEST LB, as Long Term L/C Series C Issuing Banks (the "Long
Term L/C Series C Issuing Banks"), BAYERISCHE HYPO-UND VEREINSBANK AG ("HVB"),
as Long Term L/C Series D Issuing Bank (the "Long Term L/C Series D Issuing
Bank" and, together with the Short Term L/C Series A Issuing Bank, the Short
Term L/C Series B Issuing Bank, the Short Term L/C Series C Issuing Banks, the
Long Term L/C Series A Issuing Banks, the Long Term L/C Series B Issuing Banks
and the Long Term L/C Series C Issuing Banks, the "Issuing Banks") and the L/C
Funding Lenders, agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. Capitalized terms used in
this Agreement shall have the meanings set forth in Annex A hereto (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined).
SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with Argentine
GAAP.
1
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
SECTION 2.01. The Letters of Credit. (a) (i) The Short Term
L/C Series A Issuing Bank agrees, on the terms and conditions hereinafter set
forth, to issue on the Effective Date a standby letter of credit, substantially
in the form attached hereto as Exhibit A or otherwise in form and substance
satisfactory to such Issuing Bank, for the account of the Company in the
aggregate face amount of $4,500,000 (such standby letter of credit, the "Short
Term Series A Letter of Credit").
(ii) The Short Term L/C Series B Issuing Bank agrees, on
the terms and conditions hereinafter set forth, to issue on the Effective Date a
standby letter of credit, substantially in the form attached hereto as Exhibit B
or otherwise in form and substance satisfactory to such Issuing Bank, for the
account of the Company in the aggregate face amount of $1,500,000 (such standby
letter of credit, the "Short Term Series B Letter of Credit").
(iii) Each Short Term L/C Series C Issuing Bank agrees, on
the terms and conditions hereinafter set forth, to issue on the Effective Date
(i) in the case of CAI, a standby letter of credit, substantially in the form
attached hereto as Exhibit C-1 or otherwise in form and substance satisfactory
to such Issuing Bank, for the account of the Company in the aggregate face
amount of $6,000,000, (ii) in the case of Mizuho, a standby letter of credit,
substantially in the form attached hereto as Exhibit C-2 or otherwise in form
and substance satisfactory to such Issuing Bank, for the account of the Company
in the aggregate face amount of $10,000,000, and (iii) in the case of West LB, a
standby letter of credit, substantially in the form attached hereto as Exhibit
C-3 or otherwise in form and substance satisfactory to such Issuing Bank, for
the account of the Company in the aggregate face amount of $6,000,000 (all such
standby letters of credit, the "Short Term Series C Letters of Credit"). Each
Short Term Series C Letter of Credit shall be issued for the purpose of serving
as collateral pursuant to the Master Commodity Swap Agreement dated as of
September 26, 1991 between the Company and J. Aron & Company, as in effect from
time to time.
(iv) Each Long Term L/C Series A Issuing Bank agrees, on
the terms and conditions hereinafter set forth, to issue on the Effective Date
(i) in the case of Deutsche Bank, a standby letter of credit, substantially in
the form attached hereto as Exhibit D-1 or otherwise in form and substance
satisfactory to such Issuing Bank, for the account of the Company in the
aggregate face amount of $54,450,000, (ii) in the case of Citibank, a standby
letter of credit, substantially in the form attached hereto as Exhibit D-2 or
otherwise in form and substance satisfactory to such Issuing Bank, for the
account of the Company in the aggregate face amount of $80,000,000 and (iii) in
the case of BNP PARIBAS, a standby letter of credit, substantially in the form
attached hereto as Exhibit D-3 or otherwise in form and substance satisfactory
to such Issuing Bank, for the account of the Company in the aggregate face
amount of $19,000,000 (all such standby letters of credit, the "Long Term Series
A Letters of Credit").
(v) Each Long Term L/C Series B Issuing Bank agrees, on
the terms and conditions hereinafter set forth, to issue on the Effective Date
(i) in the case of Deutsche Bank, a standby letter of credit, substantially in
the form attached hereto as Exhibit E-1 or otherwise in
2
form and substance satisfactory to such Issuing Bank, for the account of the
Company in the aggregate face amount of $28,700,000 and (ii) in the case of BNP
PARIBAS, a standby letter of credit, substantially in the form attached hereto
as Exhibit E-2 or otherwise in form and substance satisfactory to such Issuing
Bank, for the account of the Company in the aggregate face amount of $11,000,000
(all such standby letters of credit, the "Long Term Series B Letters of
Credit").
(vi) Each Long Term L/C Series C Issuing Bank agrees, on
the terms and conditions hereinafter set forth, to issue on the Effective Date
(i) in the case of CAI, a standby letter of credit, substantially in the form
attached hereto as Exhibit F-1 or otherwise in form and substance satisfactory
to such Issuing Bank, for the account of the Company in the aggregate face
amount of $4,000,000 and (ii) in the case of West LB, a standby letter of
credit, substantially in the form attached hereto as Exhibit F-2 or otherwise in
form and substance satisfactory to such Issuing Bank, for the account of the
Company in the aggregate face amount of $14,000,000 (all such standby letters of
credit, the "Long Term Series C Letters of Credit"). Each Long Term Series C
Letter of Credit shall be issued for the purpose of serving as collateral
pursuant to the Master Commodity Swap Agreement dated as of September 26, 1991
between the Company and J. Aron & Company, as in effect from time to time.
(vii) The Long Term L/C Series D Issuing Bank agrees, on
the terms and conditions hereinafter set forth, to issue on the Effective Date a
standby letter of credit, substantially in the form of Exhibit G or otherwise in
form and substance satisfactory to such Issuing Bank, for the account of the
Company in the aggregate face amount of $10,000,000 (the "Long Term Series D
Letter of Credit"). The Long Term Series D Letter of Credit shall be issued for
the purpose of serving as collateral pursuant to the Master Commodity Swap
Agreement dated as of September 26, 1991 between the Company and J. Aron &
Company, as in effect from time to time.
(b) No Letter of Credit may be issued hereunder after the
date that is the fourth anniversary of the Effective Date. The maximum tenor for
any Letter of Credit issued hereunder shall be one (1) year from the date of
original issuance, but the expiration date of each Long Term Letter of Credit
shall be automatically extended (i) in the case of each Long Term Series A
Letter of Credit and each Long Term Series B Letter of Credit, for up to four
additional one-year terms after the original expiration date and (ii) in the
case of each of the Long Term Series C Letter of Credit and the Long Term Series
D Letter of Credit, for up to two additional one-year terms after the original
expiration date, and for a final term from the last day of the last such
extended term to December 31, 2005; provided that each Issuing Bank may elect,
in its sole discretion, not to extend the expiration date of any Letter of
Credit in accordance with the terms specified in such Letter of Credit. Each
Issuing Bank shall notify the Letter of Credit Administrative Agent promptly
upon its issuance of any Letter of Credit and upon any change or amendment to
any outstanding Letter of Credit issued by such Issuing Bank. Notwithstanding
the foregoing, each Letter of Credit shall terminate no later than (i) in the
case of any Short Term Letter of Credit (other than the Short Term Series C
Letter of Credit), October 4, 2003, (ii) in the case of any Long Term Letter of
Credit (other than the Long Term Series C Letter of Credit and the Long Term
Series D Letter of Credit), October 4, 2007 and (iii) in the case of each of the
Short Term Series C Letters of Credit, the Long Term Series C Letters of Credit
and the Long Term Series D Letter of Credit, December 31, 2005, and no Issuing
Bank shall have any
3
obligation to honor a draw under any Letter of Credit after such date except as
otherwise provided in such Letter of Credit.
SECTION 2.02. Drawings and Reimbursement Under Letters of
Credit. (a) Drawing and Reimbursement. (i) The payment by the Short Term L/C
Series A Issuing Bank of a draw under the Short Term Series A Letter of Credit
shall constitute for all purposes of this Agreement the making by such Issuing
Bank of a Short Term Series A Letter of Credit Advance, which shall initially be
a Base Rate Advance, in the amount of such payment. Upon written demand by such
Issuing Bank to the Letter of Credit Administrative Agent, which shall
immediately present such demand to all Short Term L/C Series A Funding Lenders,
each Short Term L/C Series A Funding Lender shall purchase from such Issuing
Bank, and such Issuing Bank shall sell and assign to each such Short Term L/C
Series A Funding Lender, such Short Term L/C Series A Funding Lender's Pro Rata
Share of such outstanding Short Term Series A Letter of Credit Advance (after
deducting the amount of principal thereof to be prepaid pursuant to Section
2.04(c)) as of the date of such purchase, by making available for the account of
its Lending Office to the Letter of Credit Administrative Agent for the account
of such Issuing Bank in accordance with Section 2.02(a)(viii), by deposit to the
Agent's Account, in same day funds, an amount equal to such Pro Rata Share of
the outstanding principal amount of such Short Term Series A Letter of Credit
Advance to be purchased by such Short Term L/C Series A Funding Lender, together
with all accrued interest on the principal amount so purchased. Upon receipt
thereof, the Letter of Credit Administrative Agent shall transfer such funds to
such Issuing Bank.
(ii) The payment by the Short Term L/C Series B Issuing
Bank of a draw under the Short Term Series B Letter of Credit shall constitute
for all purposes of this Agreement the making by such Issuing Bank of a Short
Term Series B Letter of Credit Advance, which shall initially be a Base Rate
Advance, in the amount of such payment. Upon written demand by such Issuing Bank
to the Letter of Credit Administrative Agent, which shall immediately present
such demand to all Short Term L/C Series B Funding Lenders, each Short Term L/C
Series B Funding Lender shall purchase from such Issuing Bank, and such Issuing
Bank shall sell and assign to each such Short Term L/C Series B Funding Lender,
such Short Term L/C Series B Funding Lender's Pro Rata Share of such outstanding
Short Term Series B Letter of Credit Advance (after deducting the amount of
principal thereof to be prepaid pursuant to Section 2.04(c)) as of the date of
such purchase, by making available for the account of its Lending Office to the
Letter of Credit Administrative Agent for the account of such Issuing Bank in
accordance with Section 2.02(a)(viii), by deposit to the Agent's Account, in
same day funds, an amount equal to such Pro Rata Share of the outstanding
principal amount of such Short Term Series B Letter of Credit Advance to be
purchased by such Short Term L/C Series B Funding Lender, together with all
accrued interest on the principal amount so purchased. Upon receipt thereof, the
Letter of Credit Administrative Agent shall transfer such funds to such Issuing
Bank.
(iii) The payment by each Short Term L/C Series C Issuing
Bank of a draw under the Short Term Series C Letter of Credit issued by it shall
constitute for all purposes of this Agreement the making by such Issuing Bank of
a Short Term Series C Letter of Credit Advance, which shall initially be a Base
Rate Advance, in the amount of such payment. Upon written demand by such Issuing
Bank to the Letter of Credit Administrative Agent, which shall immediately
present such demand to all Short Term L/C Series C Funding Lenders, each Short
Term L/C Series C Funding Lender shall purchase from such Issuing Bank, and such
Issuing
4
Bank shall sell and assign to each such Short Term L/C Series C Funding Lender,
such Short Term L/C Series C Funding Lender's Pro Rata Share of such outstanding
Short Term Series C Letter of Credit Advance (after deducting the amount of
principal thereof to be prepaid pursuant to Section 2.04(c)) as of the date of
such purchase, by making available for the account of its Lending Office to the
Letter of Credit Administrative Agent for the account of such Issuing Bank in
accordance with Section 2.02(a)(viii), by deposit to the Agent's Account, in
same day funds, an amount equal to such Pro Rata Share of the outstanding
principal amount of such Short Term Series C Letter of Credit Advance to be
purchased by such Short Term L/C Series C Funding Lender, together with all
accrued interest on the principal amount so purchased. Upon receipt thereof, the
Letter of Credit Administrative Agent shall transfer such funds to such Issuing
Bank.
(iv) The payment by each Long Term L/C Series A Issuing
Bank of a draw under the Long Term Series A Letter of Credit issued by it shall
constitute for all purposes of this Agreement the making by such Issuing Bank of
a Long Term Series A Letter of Credit Advance, which shall initially be a Base
Rate Advance, in the amount of such payment. In the case of any Long Term Series
A Letter of Credit Advance made by Deutsche Bank, upon written demand by such
Issuing Bank to the Letter of Credit Administrative Agent, which shall
immediately present such demand to all Long Term L/C Series A Funding Lenders,
each Long Term L/C Series A Funding Lender shall purchase from such Issuing
Bank, and such Issuing Bank shall sell and assign to each such Long Term L/C
Series A Funding Lender, such Long Term L/C Series A Funding Lender's Pro Rata
Share of such outstanding Long Term Series A Letter of Credit Advance (after
deducting the amount of principal thereof to be prepaid pursuant to Section
2.04(c)) as of the date of such purchase, by making available for the account of
its Lending Office to the Letter of Credit Administrative Agent for the account
of such Issuing Bank in accordance with Section 2.02(a)(viii), by deposit to the
Agent's Account, in same day funds, an amount equal to such Pro Rata Share of
the outstanding principal amount of such Long Term Series A Letter of Credit
Advance to be purchased by such Long Term L/C Series A Funding Lender, together
with all accrued interest on the principal amount so purchased. Upon receipt
thereof, the Letter of Credit Administrative Agent shall transfer such funds to
such Issuing Bank.
(v) The payment by each Long Term L/C Series B Issuing
Bank of a draw under the Long Term Series B Letter of Credit issued by it shall
constitute for all purposes of this Agreement the making by such Issuing Bank of
a Long Term Series B Letter of Credit Advance, which shall initially be a Base
Rate Advance, in the amount of such payment. In the case of any Long Term Series
B Letter of Credit Advance made by Deutsche Bank, upon written demand by such
Issuing Bank, addressed to all Short Term L/C Series B Funding Lenders to the
Letter of Credit Administrative Agent, which shall immediately present such
demand to all Long Term L/C Series B Funding Lenders, each Long Term L/C Series
B Funding Lender shall purchase from such Issuing Bank, and such Issuing Bank
shall sell and assign to each such Long Term L/C Series B Funding Lender, such
Long Term L/C Series B Funding Lender's Pro Rata Share of such outstanding Long
Term Series B Letter of Credit Advance (after deducting the amount of principal
thereof to be prepaid pursuant to Section 2.04(c)) as of the date of such
purchase, by making available for the account of its Lending Office to the
Letter of Credit Administrative Agent for the account of such Issuing Bank
within in accordance with Section 2.02(a)(viii), by deposit to the Agent's
Account, in same day funds, an amount equal to such Pro Rata Share of the
outstanding principal amount of such Long Term Series B Letter of Credit Advance
to be purchased by such Long Term L/C Series B Funding Lender, together with all
accrued interest
5
on the principal amount so purchased. Upon receipt thereof, the Letter of Credit
Administrative Agent shall transfer such funds to such Issuing Bank.
(vi) The payment by each Long Term L/C Series C Issuing
Bank of a draw under the Long Term Series C Letter of Credit issued by it shall
constitute for all purposes of this Agreement the making by such Issuing Bank of
a Long Term Series C Letter of Credit Advance, which shall initially be a Base
Rate Advance, in the amount of such payment. Upon written demand by such Issuing
Bank to the Letter of Credit Administrative Agent, which shall immediately
present such demand to all Long Term L/C Funding Lenders, each Long Term L/C
Series C Funding Lender shall purchase from such Issuing Bank, and such Issuing
Bank shall sell and assign to each such Long Term L/C Series C Funding Lender,
such Long Term L/C Series C Funding Lender's Pro Rata Share of such outstanding
Long Term Series C Letter of Credit Advance (after deducting the amount of
principal thereof to be prepaid pursuant to Section 2.04(c)) as of the date of
such purchase, by making available for the account of its Lending Office to the
Letter of Credit Administrative Agent for the account of such Issuing Bank in
accordance with Section 2.02(a)(viii), by deposit to the Agent's Account, in
same day funds, an amount equal to such Pro Rata Share of the outstanding
principal amount of such Long Term Series C Letter of Credit Advance to be
purchased by such Long Term L/C Series C Funding Lender, together with all
accrued interest on the principal amount so purchased. Upon receipt thereof, the
Letter of Credit Administrative Agent shall transfer such funds to such Issuing
Bank.
(vii) The payment by the Long Term L/C Series D Issuing
Bank of a draw under the Long Term Series D Letter of Credit shall constitute
for all purposes of this Agreement the making by such Issuing Bank of a Long
Term Series D Letter of Credit Advance, which shall initially be a Base Rate
Advance, in the amount of such payment.
(viii) The Company hereby agrees to each sale and assignment
made pursuant to this Section 2.02(a). Each L/C Funding Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit Advance hereunder
on (i) the Business Day on which demand therefor is made by the Issuing Bank
which made such Letter of Credit Advance, provided that notice of such demand
shall have been given in accordance with the terms hereof and shall have been
received not later than 11:00 A.M. (local time in the place where such L/C
Funding Lender's Lending Office is located) on such Business Day, or (ii) the
first Business Day next succeeding the date of such demand if notice of such
demand is given after such time. Upon each assignment by an Issuing Bank to any
L/C Funding Lender of a portion of a Letter of Credit Advance, such Issuing Bank
shall be deemed to represent and warrant to such other Lender that such Issuing
Bank is the legal and beneficial owner of such interest being assigned by it,
free and clear of any liens, but shall not be deemed to make any other
representation or warranty and shall not assume any responsibility with respect
to such Letter of Credit Advance, the Loan Documents or the Company. In the
event that, as of the fourth Business Day after the date of any Letter of Credit
Advance made by any Issuing Bank, the prepayment required to be made pursuant to
Section 2.04(c) has failed to occur for any reason, each L/C Funding Lender
required to purchase a Pro Rata Share of such Letter of Credit Advance shall,
upon notice of such failure given by the Issuing Bank and the Letter of Credit
Administrative Agent as provided for in Sections 2.02(a)(i) through (vi),
immediately purchase its Pro Rata Share of the amount of such Letter of Credit
Advance previously disregarded pursuant to this Section 2.02(a) in respect of
the prepayment amount anticipated to be paid pursuant to Section 2.04(c).
6
(b) Failure to Make Letter of Credit Advances. (i) If and
to the extent that any L/C Funding Lender shall not have made a required amount
of a Letter of Credit Advance available to the Letter of Credit Administrative
Agent pursuant to the terms of Section 2.02(a), such L/C Funding Lender agrees
to pay to the Letter of Credit Administrative Agent forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
the Issuing Bank from whom such L/C Funding Lender was required to purchase all
or a portion of such Letter of Credit Advance until the date such amount is paid
to the Letter of Credit Administrative Agent (A) during the first three (3)
Business Days after such payment was due, at the Federal Funds Rate and (B)
thereafter, at the Federal Funds Rate plus 2% per annum, for its account or the
account of such Issuing Bank, as applicable. For so long as amounts are due from
an L/C Funding Lender pursuant to this Section 2.02(b), the Issuing Bank to whom
such amounts are owed shall have the right without notice to such L/C Funding
Lender, to the extent permitted by applicable law, to set-off and appropriate
and apply against such amount any and all deposits, in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, at any time held or owing by such
Issuing Bank or any branch or agency thereof to or for the credit or the account
of such Issuing Bank. If such Lender shall pay to the Letter of Credit
Administrative Agent such amount for the account of such Issuing Bank such
Lender's Pro Rata Share of the outstanding principal amount of the Letter of
Credit Advance so purchased shall constitute a Letter of Credit Advance made by
such Lender on the date such payment is made or, if such day is not a Business
Day, on the next succeeding Business Day for purposes of this Agreement, and the
outstanding principal amount of the Letter of Credit Advance made by such
Issuing Bank shall be reduced by such amount on such Business Day.
(ii) The failure of any Lender to make a Letter of Credit
Advance to be made by it on the date specified in Section 2.02(a) shall not
relieve any other Lender of its obligation hereunder to make any Letter of
Credit Advance on such date or any other date, but no L/C Funding Lender shall
be responsible for any amount greater than its Pro Rata Share with respect to
any Letter of Credit Advance solely as a result of the failure of any other
Lender required to purchase its Pro Rata Share of such Letter of Credit Advance
to make such purchase pursuant to Section 2.02(a).
SECTION 2.03. Fees. (a) Letter of Credit Fees. (i) The Company
shall pay to the Letter of Credit Administrative Agent, for the ratable account
of the Lenders with respect to each Letter of Credit (based on the proportional
obligation, as of the date of such payment, of each L/C Funding Lender to
purchase, and of the Issuing Bank to retain for its own account, any Letter of
Credit Advances made upon a draw under such Letter of Credit) a fee, payable
quarterly in arrears on the last day of each March, June, September and December
and on the Expiration Date with respect to such Letter of Credit (each, a
"Facility Fee Payment Date"), commencing on December 31, 2002, in an amount
equal to (A) the L/C Accrual Rate with respect to such Letter of Credit on the
difference between (I) the average daily Available Amount outstanding from time
to time with respect to such Letter of Credit during the period beginning on the
most recent Facility Fee Payment Date (or, if no Facility Fee Payment Date has
occurred, the Effective Date) to, but not including, such Facility Fee Payment
Date and (II) the average daily amount of that portion of the L/C Collateral
Account with respect to such Letter of Credit Facility allocable to such Letter
of Credit (based, on any day, on the Available Amount of such Letter of Credit
compared to the aggregate Available Amounts of all Letters of Credit under
7
such Letter of Credit Facility) from time to time during such period plus (B)
0.375% per annum on the amount in (A)(II). No fees under this Section 2.03(a)(i)
shall accrue in respect of any Letter of Credit under any circumstances after
the Expiration Date with respect to such Letter of Credit.
(ii) Upon the occurrence and during the continuance of a
Default or Event of Default, the amount of any fee payable pursuant to any
clause of this Section 2.03(a)(ii) shall be determined by reference to a rate
per annum that is 2% per annum above the rate per annum referred to in such
clause.
(b) Fronting Fees. The Company shall pay such fronting
fees to each Issuing Bank as may from time to time be agreed between the Company
and such Issuing Bank.
(c) Up-Front Fees. On the Effective Date, the Company
shall pay to each Lender an up-front fee in the amount set forth opposite such
Lender's name on Schedule III hereto.
(d) Other Fees. The Company shall pay to each Issuing
Bank, for its own account, the reasonable costs and expenses of such Issuing
Bank in connection with the issuance and administration of each Letter of Credit
issued by such Issuing Bank, in an aggregate amount per annum per Letter of
Credit not to exceed $1,200.
(e) Administrative Agent's Fees. The Company shall pay to
the Letter of Credit Administrative Agent for its own account such fees as may
from time to time be agreed between the Company and the Letter of Credit
Administrative Agent.
SECTION 2.04. Prepayments of Letter of Credit Advances,
Reduction of Available Amounts of Letters of Credit and Other Actions. (a)
Reduction of Available Amounts of Letters of Credit. (i)The Company shall reduce
the Available Amount of any Letter of Credit issued under the Short Term L/C
Series A Facility, the Short Term L/C Series B Facility, the Long Term L/C
Series A Facility or the Long Term L/C Series B Facility, without premium or
penalty, at any time when such reduction is permitted to be made under any
agreement or instrument relating to such Letter of Credit. Any such reductions
shall be effected ratably (by Available Amounts under each outstanding Letter of
Credit under (A) the Short Term L/C Series A Facility and the Long Term L/C
Series A Facility or (B) the Short Term L/C Series B Facility and the Long Term
L/C Series B Facility, as the case may be) by means of a Reduction Certificate,
as delivered from time to time by the beneficiary under such Letter of Credit to
its Issuing Bank, such reductions to be effected on the date such Reduction
Certificate is delivered to such Issuing Bank or otherwise as provided for in
such Letter of Credit.
(ii) The Company shall reduce the full then-outstanding
Available Amount of all Letters of Credit issued under the Short Term L/C Series
C Facility, the Long Term L/C Series C Facility and the Long Term L/C Series D
Facility, without premium or penalty, at any time when such full
then-outstanding Available Amounts are no longer needed under any agreement or
instrument relating to such Letters of Credit. Upon the reduction of such
Available Amount of each Letter of Credit, the Company shall deliver to the
Letter of Credit Administrative Agent a consent, in form and substance
satisfactory to the Letter of Credit
8
Administrative Agent and the Issuing Bank that issued such Letter of Credit, in
which the beneficiary of such Letter of Credit consents to the termination of
such Available Amount of such Letter of Credit.
(b) Optional Prepayment of Letter of Credit Advances. The
Company may, upon at least three Eurodollar Business Days' irrevocable notice to
the Letter of Credit Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Company shall, prepay the outstanding principal amount of all outstanding Letter
of Credit Advances in whole or ratably in part together with, in accordance with
Section 2.04(k), all interest and any other amounts accrued or otherwise due in
respect of such Letter of Credit Advances through the date of such prepayment
(including, without limitation, all LIBOR Funding Costs incurred by the Lenders
in connection with such prepayment and payable by the Company pursuant to
Section 8.04(c)).
(c) Mandatory Prepayment of Letter of Credit Advances.
The Company shall, no later than the fourth Business Day after any date on which
Letter of Credit Advances are made by any Issuing Banks under any Letter of
Credit Facility pursuant to Section 2.02(a), ratably prepay such Letter of
Credit Advances, from cash credited to the L/C Collateral Account with respect
to such Letter of Credit Facility, in an amount equal to the lesser of (i) the
amount then allocated to such L/C Collateral Account and (ii) the aggregate
principal amount of all such Letter of Credit Advances. Notwithstanding the
provisions of Section 8.04(c), the Company shall not be required to pay any
LIBOR Funding Costs incurred by any Lender in connection with any timely
prepayment made pursuant to this Section 2.04(c). All accrued interest on any
principal amount prepaid pursuant to this Section 2.04(c) shall be paid in
accordance with Section 2.04(k) but no amounts in any L/C Collateral Account
shall be used to pay any such accrued interest. The Company irrevocably
authorizes and instructs the Letter of Credit Administrative Agent to apply all
amounts credited to such L/C Collateral Account to the prepayment required under
this Section 2.04(c).
(d) Actions Required On Repayment of Long Term Notes. On
the date of any scheduled repayment of principal of Long Term Trade Series Notes
or Long Term Working Capital Series Notes, the Company shall, with respect to
each Long Term L/C Facility:
(i) first, prepay the outstanding principal amounts of
any Letter of Credit Advances in respect of such Long Term L/C Facility
and outstanding principal amounts of any MT Notes issued upon the
conversion of any Letter of Credit Advances made under such Long Term
L/C Facility (ratably, in accordance with the respective principal
amounts thereof then outstanding), and
(ii) second, to the extent necessary, cause a reduction in
the Available Amount of all Letters of Credit outstanding under such
Long Term L/C Facility, ratably in accordance with the respective
Available Amounts thereof, and/or deposit cash into the L/C Collateral
Account with respect to such Long Term L/C Facility,
so that, after giving effect to the above transactions, the fraction, expressed
as a percentage,
(A) the numerator of which is equal to:
9
(I) the aggregate principal amount of such
Letter of Credit Advances and MT Notes so prepaid on such
date, plus
(II) the aggregate scheduled repayment of the
principal amount of such Letter of Credit Advances and MT
Notes made on such date, plus
(III) the aggregate reductions of such Available
Amounts on such date, plus
(IV) the amount of cash so deposited into such
L/C Collateral Account on such date, and
(B) the denominator of which is equal to:
(I) the aggregate principal amount of such
Letter of Credit Advances and MT Notes outstanding immediately
prior to any prepayment pursuant to this subsection, plus
(II) the aggregate Available Amount of any such
Letters of Credit immediately prior to any reduction pursuant
to this subsection, minus
(III) the aggregate amount of cash and investments
thereof credited to such L/C Collateral Account immediately
prior to any deposit pursuant to this subsection,
is equal to the percentage of the aggregate outstanding principal amount of the
Long Term Trade Series Notes and Long Term Working Capital Series Notes required
to be repaid on such date.
(e) Actions Required on Receipt of Excess Cash. On the
first Payment Date that occurs at least 120 days after the end of each fiscal
year of the Company, the Company shall, with respect to each Letter of Credit
Facility:
(i) first, prepay the outstanding principal amounts of
any Letter of Credit Advances in respect of such Letter of Credit
Facility and outstanding principal amounts of any MT Notes issued upon
the conversion of any Letter of Credit Advances made under such Letter
of Credit Facility (ratably, in accordance with the respective
principal amounts thereof then outstanding), and
(ii) second, to the extent necessary, cause a reduction in
the Available Amounts of all Letters of Credit outstanding under such
Letter of Credit Facility, ratably in accordance with the respective
Available Amounts thereof, and/or deposit cash into the L/C Collateral
Account with respect to such Letter of Credit Facility,
so that, after giving effect to the above transactions, the amount equal to:
(A) the aggregate principal amount of such Letter of
Credit Advances and MT Notes so prepaid on such date, plus
10
(B) the aggregate amount of such reduction in such
Available Amounts on such date, plus
(C) the aggregate amount of cash so deposited in such L/C
Collateral Account on such date,
is equal to:
(I) 50% of the Excess Cash of the Company for
such fiscal year, multiplied by
(II) a fraction:
(1) the numerator of which is equal to:
(x) the aggregate principal
amount of such Letter of Credit Advances and
MT Notes outstanding immediately prior to
any prepayment pursuant to this subsection,
plus
(y) the aggregate Available
Amount of any such Letters of Credit
immediately prior to any reduction pursuant
to this subsection, minus
(z) the aggregate amount of
cash and investments thereof credited to
such L/C Collateral Account immediately
prior to any deposit pursuant to this
subsection, and
(2) the denominator of which is equal
to:
(x) the aggregate principal
amount of all Letter of Credit Advances
outstanding under all Letter of Credit
Facilities, all MT Notes issued upon the
conversion of any Letter of Credit Advances,
all Trade Series Notes and all Working
Capital Series Notes, in each case
outstanding immediately prior to any
prepayment thereof from such Excess Cash,
plus
(y) the aggregate Available
Amount of all Letters of Credit outstanding
under all Letter of Credit Facilities
immediately prior to any reduction in
respect of such Excess Cash, minus
(z) the aggregate amount of
cash and investments thereof credited to the
L/C Collateral Accounts in respect of all
Letter of Credit Facilities immediately
prior to any deposit in respect of such
Excess Cash.
(f) Actions Required in Respect of Net Cash Proceeds from
Asset Sales. On the first Payment Date that occurs at least 180 days after the
date of any Asset Sale by the
11
Company or any of its Subsidiaries (excluding Asset Sales in the ordinary course
of business), the Company shall, with respect to each Letter of Credit Facility:
(i) first, prepay the outstanding principal amounts of
any Letter of Credit Advances in respect of such Letter of Credit
Facility and outstanding principal amounts of any outstanding MT Notes
issued upon the conversion of any Letter of Credit Advances made under
such Letter of Credit Facility (ratably, in accordance with the
respective principal amounts thereof then outstanding), and
(ii) second, to the extent necessary, reduce the Available
Amounts of any Letters of Credit outstanding under such Letter of
Credit Facility and/or deposit cash into the L/C Collateral Account
with respect to such Letter of Credit Facility,
so that, after giving effect to the above transactions, the amount equal to:
(A) the aggregate principal amount of such Letter of
Credit Advances and MT Notes so prepaid on such date, plus
(B) the aggregate amount of such reduction in such
Available Amounts on such date, plus
(C) the aggregate amount of cash so deposited in such L/C
Collateral Account on such date,
is equal to:
(I) 100% of the Net Cash Proceeds from such
Asset Sale less the sum of the proceeds of such Asset Sale
that shall have been used for Capital Expenditures prior to
such Payment Date as permitted by subsection (e) of the
Negative Covenants in Annex C and, if such Asset Sale consists
of a Sale of Ecuadorian Assets, the amount of Net Cash
Proceeds of such Asset Sale required to be applied in
accordance with Section 2.04(j), multiplied by
(II) a fraction:
(1) the numerator of which is equal to:
(x) the aggregate principal amount of
such Letter of Credit Advances and MT Notes
outstanding immediately prior to any prepayment
pursuant to this subsection, plus
(y) the aggregate Available Amount of
any such Letters of Credit immediately prior to any
reduction pursuant to this subsection, minus
(z) the aggregate amount of cash and
investments thereof credited to such L/C Collateral
Account immediately prior to any deposit pursuant to
this subsection, and
12
(2) the denominator of which is equal
to:
(x) the aggregate principal amount of
all Letter of Credit Advances outstanding under all
Letter of Credit Facilities, all MT Notes issued upon
the conversion of any Letter of Credit Advances, all
Trade Series Notes and all Working Capital Series
Notes, in each case outstanding immediately prior to
any prepayment thereof from such Net Cash Proceeds,
plus
(y) the aggregate Available Amount of
all Letters of Credit outstanding under all Letter of
Credit Facilities immediately prior to any reduction
in respect of such Net Cash Proceeds, minus
(z) the aggregate amount of cash and
investments thereof credited to the L/C Collateral
Accounts in respect of all Letter of Credit
Facilities immediately prior to any deposit in
respect of such Net Cash Proceeds.
(g) Actions Required Regarding Changes in Debt. On the
first Business Day that occurs at least 50 days after the end of each fiscal
quarter of the Company, the Company shall, with respect to each Letter of Credit
Facility:
(i) first, prepay the outstanding principal amounts of
any Letter of Credit Advances in respect of such Letter of Credit
Facility and outstanding principal amounts of any MT Notes issued upon
the conversion of any Letter of Credit Advances made under such Letter
of Credit Facility (ratably, in accordance with the respective
principal amounts thereof then outstanding), and
(ii) second, to the extent necessary, cause a reduction in
the Available Amounts of all Letters of Credit outstanding under such
Letter of Credit Facility, ratably in accordance with the respective
Available Amounts thereof, and/or deposit cash into the L/C Collateral
Account with respect to such Letter of Credit Facility,
so that, after giving effect to the above transactions, the amount equal to:
(A) the aggregate principal amount of such Letter of
Credit Advances and MT Notes so prepaid on such date, plus
(B) the aggregate amount of such reduction in such
Available Amounts on such date, plus
(C) the aggregate amount of cash so deposited in such L/C
Collateral Account on such date,
is equal to:
13
(I) 50% of the New Debt Amount with respect to
such fiscal quarter multiplied by
(II) a fraction:
(A) the numerator of which is equal to:
(1) the aggregate principal amount of
such Letter of Credit Advances and MT Notes
outstanding immediately prior to any prepayment
pursuant to this subsection, plus
(2) the aggregate Available Amount of
any such Letters of Credit immediately prior to any
reduction pursuant to this subsection, minus
(3) the aggregate amount of cash and
investments thereof credited to such L/C Collateral
Account immediately prior to any deposit pursuant to
this subsection, and
(B) the denominator of which is equal to:
(1) the aggregate principal amount of
all Letter of Credit Advances outstanding under all
Letter of Credit Facilities, all MT Notes issued upon
the conversion of any Letter of Credit Advances, all
Trade Series Notes and all Working Capital Series
Notes, in each case outstanding immediately prior to
any prepayment thereof in respect of such New Debt
Amount, plus
(2) the aggregate Available Amount of
all Letters of Credit outstanding under all Letter of
Credit Facilities immediately prior to any reduction
in respect of such New Debt Amount, minus
(3) the aggregate amount of cash and
investments thereof credited to the L/C Collateral
Accounts in respect of all Letter of Credit
Facilities immediately prior to any deposit in
respect of such New Debt Amount.
(h) Actions Required upon the Optional Prepayment of
Trade Series Notes, Working Capital Series Notes, MT Notes, Letter of Credit
Advances or Long Term Debt or the Occurrence of Certain Other Events. (x) With
respect to each Letter of Credit Facility, on any date on which the Company
shall at its option (i) prepay, redeem, repurchase or in any manner defease or
discharge any principal amount outstanding under Long Term Working Capital
Series Notes, Long Term Trade Series Notes, Long Term Letter of Credit Advances
made under any other Letter of Credit Facility, MT Notes issued upon the
conversion of Long Term Letter of Credit Advances made under any other Letter of
Credit Facility or Long Term Debt or (ii) (A) make any deposit to an L/C
Collateral Account pledged in favor of the Lenders under any other
14
Letter of Credit Facility or (B) reduce the Available Amount of any Letter of
Credit issued under any other Letter of Credit Facility by either (I) causing a
new letter of credit for which the Company or one or more of its Subsidiaries is
the account party to be issued other than under this Agreement or (II) having
the Company or one or more of its Subsidiaries create, assume, incur or suffer
to exist a Lien on cash or financial assets for the benefit of, or contribute
cash or financial assets to, the beneficiary thereof, at a time when no such
deposit or reduction would otherwise be required pursuant to this Agreement, the
Company shall:
(i) first, prepay the outstanding principal amounts of
any Letter of Credit Advances in respect of such Letter of Credit
Facility and outstanding principal amounts of any MT Notes issued upon
the conversion of any Letter of Credit Advances made under such Letter
of Credit Facility (ratably, in accordance with the respective
principal amounts thereof then outstanding), and
(ii) second, to the extent necessary, cause a reduction in
the Available Amount of all Letters of Credit outstanding under such
Letter of Credit Facility, ratably in accordance with the respective
Available Amounts thereof, and/or deposit cash into the L/C Collateral
Account with respect to such Letter of Credit Facility,
so that, after giving effect to the above transactions, the fraction, expressed
as a percentage,
(A) the numerator of which is equal to:
(I) the aggregate principal amount of Letter of
Credit Advances and MT Notes in respect of such Letter of
Credit Facility so prepaid on such date, plus
(II) the aggregate reductions of such Available
Amounts so caused in respect of Letters of Credit issued under
such Letter of Credit Facility on such date, plus
(III) the amount of cash so deposited into the L/C
Collateral Account in respect of such Letter of Credit
Facility on such date, and
(B) the denominator of which is equal to:
(I) the aggregate principal amount of such
Letter of Credit Advances and MT Notes outstanding immediately
prior to any prepayment pursuant to this subsection, plus
(II) the aggregate Available Amount of any such
Letters of Credit immediately prior to any reduction pursuant
to this subsection date, minus
(III) the aggregate amount of cash and investments
thereof credited to such L/C Collateral Account immediately
prior to any deposit pursuant to this subsection,
is equal to:
15
(x) if action by the Company is required under this
subsection as a result of any prepayment of Long Term Working Capital
Series Notes, Long Term Trade Series Notes, MT Notes issued upon the
conversion of Long Term Letter of Credit Advances made under such other
Letter of Credit Facility or Long Term Debt, the percentage of the
aggregate then-outstanding principal amount of such Debt so prepaid;
(y) if action by the Company is required under this
subsection as a result of any prepayment of Long Term Letter of Credit
Advances or any optional contribution or reduction by the Company
described in the first paragraph of this subsection (h), the percentage
that the amount so prepaid or contributed, or the amount of such
reduction, as the case may be, represents in respect of:
(a) the aggregate outstanding principal amount
of all Long Term Letter of Credit Advances under the
applicable Letter of Credit Facility, plus
(b) the aggregate principal amount then
outstanding of all MT Notes issued upon the conversion of Long
Term Letter of Credit Advances made under the applicable
Letter of Credit Facility, plus
(c) the aggregate Available Amounts of all
outstanding Letters of Credit issued under the applicable
Letter of Credit Facility, minus
(d) the aggregate amount of cash and investments
thereof credited to the L/C Collateral Account established
with respect to the applicable Letter of Credit Facility;
in each case, as calculated immediately prior to such
prepayment, deposit or reduction.
In the event that the Company shall, at any time, with respect to any Long Term
Letter of Credit Advances, Long Term MT Notes, Long Term New Notes or Long Term
Debt, enter into any amendment to, or in any other manner cause any change or
rescheduling of, the scheduled payments of principal with respect to such Debt
that would result in a shortening of the remaining average life of any such
Debt, any payment of principal of such Debt on any date shall be treated as an
optional prepayment of such Debt for purposes of this Section 2.04(h)(x). Any
actions required by the Company under this Section 2.04(h)(x) shall be without
duplication of any actions required to be taken by the Company under Section
2.04(d).
(y) The Company shall not on any date prior to the
Maturity Date thereof prepay, repurchase or in any manner defease or discharge
any principal amount of any Short Term Letter of Credit Advance, Short Term MT
Note or Short Term New Note (the "Prepaid Debt") unless otherwise required under
this Section 2.04 or under Section 2.4.2 of any Supplemental Indenture pursuant
to which Short Term New Notes are issued or unless on the same date it shall
have:
16
(i) in the case of Short Term New Notes (other than Short
Term MT Notes), other than any of the same constituting Prepaid Debt
("Other Short Term New Notes"), prepaid a principal amount thereof, and
(ii) in the case of Short Term L/C Facilities, other than
any thereof in respect of the Prepaid Debt ( "Other Short Term L/C
Facilities"), at its option:
(A) prepaid the principal amount of Short Term
Letter of Credit Advances and Short Term MT Notes in respect
of such Letter of Credit Facilities,
(B) reduced the Available Amount of Letters of
Credit issued under such Short Term L/C Facilities and/or
(C) deposited cash into L/C Collateral Accounts
in respect of such Short Term L/C Facilities,
so that the aggregate amount of such prepayments and, if applicable, reductions
and deposits, as a percentage of:
(I) in the case of each other series of Other Short Term
New Notes, the aggregate principal amount of such series of Other Short
Term New Notes then outstanding, and
(II) in the case of each Other Short Term L/C Facilities,
the total Available Amount of Letters of Credit issued and principal
amount of Letter of Credit Advances and Short Term MT Notes outstanding
in respect of such Other Short Term L/C Facility, minus the value of
cash and investments on deposit in the L/C Collateral Account in
respect of such Other Short Term L/C Facility,
is the same as the percentage of the prepaid principal amount of Prepaid Debt is
of
(1) if such Prepaid Debt is Short Term New Notes, the
principal amount of such series of Short Term New Notes then
outstanding,
(2) if such Prepaid Debt is in respect of a Short Term
L/C Facility, the total Available Amount of all Letters of Credit
issued and the aggregate principal amount of Letter of Credit Advances
and MT Notes in respect of such Short Term L/C Facility, minus the
value of cash and investments on deposit in the L/C Collateral Account
in respect of the Short Term L/C Facility.
In the event that the Company shall, at any time, with respect to any Short Term
Letter of Credit Advances, Short Term MT Notes or Short Term New Notes, enter
into any amendment to, or in any other manner cause any change or rescheduling
of, the scheduled payments of principal with respect to such Debt that would
result in a shortening of the remaining average life of any such Debt, any
payment of principal of such Debt on any date shall be treated as an optional
prepayment of such Debt for purposes of this Section 2.04(h)(y). Any actions
required by the
17
Company under this Section 2.04(h)(y) shall be without duplication of any
actions required to be taken by the Company under Section 2.04(d).
(i) Actions Required on Prepayments of MT Notes. On the
date on which the Company shall at its option prepay any MT Notes issued upon
the conversion of Letter of Advances made under any Letter of Credit Facility,
the Company shall, with respect to such Letter of Credit Facility:
(i) first, prepay the outstanding principal amounts of
any Letter of Credit Advances in respect of such Letter of Credit
Facility, and
(ii) second, to the extent necessary, cause a reduction in
the Available Amount of all Letters of Credit outstanding under such
Letter of Credit Facility, ratably in accordance with the respective
Available Amounts thereof, and/or deposit cash into the L/C Collateral
Account with respect to such Letter of Credit Facility,
so that, after giving effect to the above transactions, the fraction, expressed
as a percentage,
(A) the numerator of which is equal to:
(I) the aggregate principal amount of Letter of
Credit Advances so prepaid on such date, plus
(II) the aggregate reductions of such Available
Amounts in respect of Letters of Credit issued under such
Letter of Credit Facility on such date, plus
(III) the amount of cash so deposited into the L/C
Collateral Account in respect of such Letter of Credit
Facility on such date, and
(B) the denominator of which is equal to:
(I) the aggregate principal amount of such
Letter of Credit Advances outstanding immediately prior to any
prepayment pursuant to this subsection, plus
(II) the aggregate Available Amount of any such
Letters of Credit immediately prior to any reduction pursuant
to this subsection date, minus
(III) the aggregate amount of cash and investments
thereof credited to such L/C Collateral Account immediately
prior to any deposit pursuant to this subsection,
is equal to the percentage of the aggregate outstanding principal amount of such
MT Notes so prepaid.
(j) Actions Required on Sale of Ecuadorian Assets. No
later than ten (10) days following the date on which the Company shall complete
any Sale of Ecuadorian Assets, the Company shall, with respect to each of the
Short Term L/C Series A Facility, the Long Term
18
L/C Series A Facility, the Short Term L/C Series B Facility and the Long Term
L/C Series B Facility only:
(i) first, prepay outstanding principal amounts of any
Letter of Credit Advances under such Letter of Credit Facility and
outstanding principal amounts of any MT Notes issued upon the
conversion of any Letter of Credit Advances made under such Letter of
Credit Facility (ratably, in accordance with the respective principal
amounts thereof then outstanding), and
(ii) second, to the extent necessary, reduce the Available
Amount of any Letters of Credit outstanding under such Letter of Credit
Facility and/or deposit cash into the L/C Collateral Account with
respect to such Letter of Credit Facility,
so that, after giving effect to the above transactions, the fraction, expressed
as a percentage,
(A) the numerator of which is equal to:
(I) the aggregate principal amount of Letter of
Credit Advances and MT Notes so prepaid on such date, plus
(II) the aggregate reductions of such Available
Amounts in respect of Letters of Credit issued under such
Letter of Credit Facility on such date, plus
(III) the amount of cash so deposited into the L/C
Collateral Account in respect of such Letter of Credit
Facility on such date, and
(B) the denominator of which is equal to:
(I) the aggregate principal amount of such
Letter of Credit Advances and MT Notes outstanding immediately
prior to any prepayment pursuant to this subsection, plus
(II) the aggregate Available Amount of any such
Letters of Credit immediately prior to any reduction pursuant
to this subsection, minus
(III) the aggregate amount of cash and investments
thereof credited to such L/C Collateral Account immediately
prior to any deposit pursuant to this subsection,
is equal to the greater of:
(x) the percentage of the Company's ownership of its OCP
Shares that was subject to the Sale of Ecuadorian Assets, and
(y) the percentage of the Company's participation in
Block 31 that was subject to the Sale of Ecuadorian Assets.
19
(k) Mechanics of Prepayments. All prepayments of Letter
of Credit Advances shall be made together with accrued interest to the date of
such prepayment on the principal amount so prepaid and all amounts that may be
owing under Section 8.04(c). Each prepayment of a Letter of Credit Advance shall
be applied ratably to the remaining scheduled principal payments in respect of
such Letter of Credit Advance. If any prepayment of Eurodollar Rate Advances
under a Letter of Credit Facility otherwise would be required to be made under
this Section 2.04(k) on a day other than the last day of the applicable Interest
Period therefor, the Company may transfer an amount to the Letter of Credit
Administrative Agent, for deposit into a separate collateral account established
(at the Company's sole expense) for such purpose and administered by the Letter
of Credit Administrative Agent, equal to the principal amount required to be so
prepaid, together with all interest that would accrue on such principal amount
(assuming such principal amount were prepaid on the last day of the applicable
Interest Period) and on the last day of such Interest Period, the Letter of
Credit Administrative Agent shall release all such amounts deposited from such
L/C Collateral Account and shall apply all such amounts to the prepayment of
such Eurodollar Rate Advances.
SECTION 2.05. Repayment. (a) The Company shall repay, on the
date that is one year from the Effective Date, to the Letter of Credit
Administrative Agent, for the account of the Short Term L/C Series A Issuing
Bank and each Short Term L/C Series A Funding Lender that has made a Short Term
Series A Letter of Credit Advance, the aggregate outstanding principal amount of
each Short Term Series A Letter of Credit Advance made by each of them prior to
or on such date.
(b) The Company shall repay, on the date that is one year
from the Effective Date, to the Letter of Credit Administrative Agent, for the
account of the Short Term L/C Series B Issuing Bank and each Short Term L/C
Series B Funding Lender that has made a Short Term Series B Letter of Credit
Advance, the aggregate outstanding principal amount of each Short Term Series B
Letter of Credit Advance made by each of them prior to or on such date.
(c) The Company shall repay, on the date that is one year
from the Effective Date, to the Letter of Credit Administrative Agent, for the
account of each Short Term L/C Series C Issuing Bank and each Short Term L/C
Series C Funding Lender that has made a Short Term Series C Letter of Credit
Advance, the aggregate outstanding principal amount of each Short Term Series C
Letter of Credit Advance made by each of them prior to or on such date.
(d) (i) The Company shall repay to the Letter of Credit
Administrative Agent, for the account of each Long Term L/C Series A Issuing
Bank and each Long Term L/C Series A Funding Lender that has made a Long Term
Series A Letter of Credit Advance prior to the Payment Date on which the first
scheduled principal installment is due in respect of the Long Term Trade Series
Notes and Long Term Working Capital Series Notes, on such Payment Date, 2.5% of
the outstanding principal amount of each such Long Term Series A Letter of
Credit Advance on the date such Letter of Credit Advance was made and
thereafter, shall repay the remaining outstanding principal amount of each such
Long Term Series A Letter of Credit Advance in equal quarterly installments
beginning on the next following Payment Date and ending on the Maturity Date
with respect to the Long Term Series A Letter of Credit Advances (as such
initial repayment amount and such subsequent installments shall be reduced as a
result of the application of prepayments in accordance with Section 2.04 or as a
result of any optional
20
conversions of any Long Term Series A Letter of Credit Advances into MT Notes
pursuant to Section 2.08); provided that the final such installment shall in any
event be in an amount sufficient to pay the aggregate principal amount of such
Long Term Series A Letter of Credit Advance in full and shall occur no later
than the Maturity Date with respect to the Long Term Series A Letter of Credit
Advances.
(ii) The Company shall repay to the Letter of Credit
Administrative Agent, for the account of each Long Term L/C Series A Issuing
Bank and each Long Term L/C Series A Funding Lender that has made a Long Term
Series A Letter of Credit Advance after the Payment Date on which the first
scheduled principal installment is due in respect of the Long Term Trade Series
Notes and Long Term Working Capital Series Notes, the outstanding principal
amount of each such Long Term Series A Letter of Credit Advance in equal
quarterly installments (as such installments shall be reduced as a result of the
application of prepayments in accordance with Section 2.04 or as a result of any
optional conversions of any Long Term Series A Letter of Credit Advances into MT
Notes pursuant to Section 2.08) beginning on the Payment Date that is the first
scheduled principal payment date of the Long Term Working Capital Series Notes
immediately following the date such Long Term Series A Letter of Credit Advance
is made and ending on the Maturity Date with respect to the Long Term Series A
Letter of Credit Advances; provided that the final such installment shall in any
event be in an amount sufficient to pay the aggregate principal amount of such
Long Term Series A Letter of Credit Advance in full and shall occur no later
than the Maturity Date with respect to the Long Term Series A Letter of Credit
Advances.
(e) (i) The Company shall repay to the Letter of Credit
Administrative Agent, for the account of each Long Term L/C Series B Issuing
Bank and each Long Term L/C Series B Funding Lender that has made a Long Term
Series B Letter of Credit Advance prior to the Payment Date on which the first
scheduled principal installment is due in respect of the Long Term Trade Series
Notes and Long Term Working Capital Series Notes, on such Payment Date, 2.5% of
the outstanding principal amount of each such Long Term Series B Letter of
Credit Advance on the date such Letter of Credit Advance was made and
thereafter, shall repay the remaining outstanding principal amount of each such
Long Term Series B Letter of Credit Advance in equal quarterly installments
beginning on the next following Payment Date and ending on the Maturity Date
with respect to the Long Term Series B Letter of Credit Advances (as such
initial repayment amount and such subsequent installments shall be reduced as a
result of the application of prepayments in accordance with Section 2.04 or as a
result of any optional conversions of any Long Term Series B Letter of Credit
Advances into MT Notes pursuant to Section 2.08); provided that the final such
installment shall in any event be in an amount sufficient to pay the aggregate
principal amount of such Long Term Series B Letter of Credit Advance in full and
shall occur no later than the Maturity Date with respect to the Long Term Series
B Letter of Credit Advances.
(ii) The Company shall repay to the Letter of Credit
Administrative Agent, for the account of each Long Term L/C Series B Issuing
Bank and each Long Term L/C Series B Funding Lender that has made a Long Term
Series B Letter of Credit Advance after the Payment Date on which the first
scheduled principal installment is due in respect of the Long Term Trade Series
Notes and Long Term Working Capital Series Notes, the outstanding principal
amount of each such Long Term Series B Letter of Credit Advance in equal
quarterly installments (as such
21
installments shall be reduced as a result of the application of prepayments in
accordance with Section 2.04 or as a result of any optional conversions of any
Long Term Series B Letter of Credit Advances into MT Notes pursuant to Section
2.08) beginning on the Payment Date that is the first scheduled principal
payment date of the Long Term Working Capital Series Notes immediately following
the date such Long Term Series B Letter of Credit Advance is made and ending on
the Maturity Date with respect to the Long Term Series B Letter of Credit
Advances; provided that the final such installment shall in any event be in an
amount sufficient to pay the aggregate principal amount of such Long Term Series
B Letter of Credit Advance in full and shall occur no later than the Maturity
Date with respect to the Long Term Series B Letter of Credit Advances.
(f) (i) The Company shall repay to the Letter of Credit
Administrative Agent, for the account of each Long Term L/C Series C Issuing
Bank and each Long Term L/C Series C Funding Lender that has made a Long Term
Series C Letter of Credit Advance prior to the Payment Date on which the first
scheduled principal installment is due in respect of the Long Term Trade Series
Notes and Long Term Working Capital Series Notes, on such Payment Date, 2.5% of
the outstanding principal amount of each such Long Term Series C Letter of
Credit Advance on the date such Letter of Credit Advance was made and
thereafter, shall repay the remaining outstanding principal amount of each such
Long Term Series C Letter of Credit Advance in equal quarterly installments
beginning on the next following Payment Date and ending on the Maturity Date
with respect to the Long Term Series C Letter of Credit Advances (as such
initial repayment amount and such subsequent installments shall be reduced as a
result of the application of prepayments in accordance with Section 2.04 or as a
result of any optional conversions of any Long Term Series C Letter of Credit
Advances into MT Notes pursuant to Section 2.08); provided that the final such
installment shall in any event be in an amount sufficient to pay the aggregate
principal amount of such Long Term Series C Letter of Credit Advance in full and
shall occur no later than the Maturity Date with respect to the Long Term Series
C Letter of Credit Advances.
(ii) The Company shall repay to the Letter of Credit
Administrative Agent, for the account of each Long Term L/C Series C Issuing
Bank and each Long Term L/C Series C Funding Lender that has made a Long Term
Series C Letter of Credit Advance after the Payment Date on which the first
scheduled principal installment is due in respect of the Long Term Trade Series
Notes and the Long Term Working Capital Series Notes, the outstanding principal
amount of each such Long Term Series C Letter of Credit Advance in equal
quarterly installments (as such installments shall be reduced as a result of the
application of prepayments in accordance with Section 2.04 or as a result of any
optional conversions of any Long Term Series C Letter of Credit Advances into MT
Notes pursuant to Section 2.08) beginning on the Payment Date that is the first
scheduled principal payment date of the Long Term Working Capital Series Notes
immediately following the date such Long Term Series C Letter of Credit Advance
is made and ending on the Maturity Date with respect to the Long Term Series C
Letter of Credit Advances; provided that the final such installment shall in any
event be in an amount sufficient to pay the aggregate principal amount of such
Long Term Series C Letter of Credit Advance in full and shall occur no later
than the Maturity Date with respect to the Long Term Series C Letter of Credit
Advances.
22
(g) (i) The Company shall repay to the Letter of
Credit Administrative Agent, for the account of the Long Term L/C Series D
Issuing Bank that has made a Long Term Series D Letter of Credit Advance prior
to the Payment Date on which the first scheduled principal installment is due in
respect of the Long Term Trade Series Notes and Long Term Working Capital
Series, on such Payment Date, 2.5% of the outstanding principal amount of each
such Long Term Series D Letter of Credit Advance on the date such Letter of
Credit Advance was made and thereafter, shall repay the remaining outstanding
principal amount of each such Long Term Series D Letter of Credit Advance in
equal quarterly installments beginning on the next following Payment Date and
ending on the Maturity Date with respect to the Long Term Series D Letter of
Credit Advances (as such initial repayment amount and such subsequent
installments shall be reduced as a result of the application of prepayments in
accordance with Section 2.04 or as a result of any optional conversions of any
Long Term Series D Letter of Credit Advances into MT Notes pursuant to Section
2.08); provided that the final such installment shall in any event be in an
amount sufficient to pay the aggregate principal amount of such Long Term Series
D Letter of Credit Advance in full and shall occur no later than the Maturity
Date with respect to the Long Term Series D Letter of Credit Advances.
(ii) The Company shall repay to the Letter of Credit
Administrative Agent, for the account of the Long Term L/C Series D Issuing Bank
that has made a Long Term Series D Letter of Credit Advance after the Payment
Date on which the first scheduled principal installment is due in respect of the
Long Term Trade Series Notes and the Long Term Working Capital Series Notes, the
outstanding principal amount of each such Long Term Series D Letter of Credit
Advance in equal quarterly installments (as such installments shall be reduced
as a result of the application of prepayments in accordance with Section 2.04 or
as a result of any optional conversions of any Long Term Series D Letter of
Credit Advances into MT Notes pursuant to Section 2.08) beginning on the Payment
Date that is the first scheduled principal payment date of the Long Term Working
Capital Series Notes immediately following the date such Long Term Series D
Letter of Credit Advance is made and ending on the Maturity Date with respect to
the Long Term Series D Letter of Credit Advances; provided that the final such
installment shall in any event be in an amount sufficient to pay the aggregate
principal amount of such Long Term Series D Letter of Credit Advance in full and
shall occur no later than the Maturity Date with respect to the Long Term Series
D Letter of Credit Advances.
(h) The Obligations of the Company under this Agreement
and any other agreement or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it
being understood that any such payment by the Company is without prejudice to,
and does not constitute a waiver of, any rights the Company might have or might
acquire as a result of the payment by any Issuing Bank of any draft or the
reimbursement by the Company thereof):
(i) any lack of validity or enforceability of any Loan
Document, any Letter of Credit or any other agreement or instrument
relating thereto (all of the foregoing being, collectively, the "L/C
Related Documents");
23
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations of the
Company in respect of any L/C Related Document or any other amendment
or waiver of or any consent to departure from all or any of the L/C
Related Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Company may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for which any such
beneficiary or any such transferee may be acting), any Issuing Bank,
any Lender or any other Person, whether in connection with the
transactions contemplated by the L/C Related Documents or any unrelated
transaction;
(iv) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by any Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(vi) any exchange, release or non-perfection of any
collateral for all or any of the Obligations of the Company in respect
of the L/C Related Documents; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including, without
limitation, any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Company.
SECTION 2.06. Interest. (a) Scheduled Interest. The Company
shall pay interest on the unpaid principal amount of each Letter of Credit
Advance owing to a Lender from the date of such Letter of Credit Advance until
such principal amount shall be paid in full, at the following rates per annum:
(i) Base Rate Advances. During such periods as such
Letter of Credit Advance is a Base Rate Advance, a rate per annum equal
at all times to the sum of (x) the Base Rate in effect from time to
time plus (y) the Applicable Margin in effect from time to time with
respect to such Letter of Credit Advance, payable in arrears quarterly
on each Payment Date during such periods and on the date such Base Rate
Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such
Letter of Credit Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during each Interest Period for such Letter of
Credit Advance to the sum of (x) LIBOR for such Interest Period for
such Letter of Credit Advance plus (y) the Applicable Margin with
respect to such Letter of Credit Advance in effect from time to time,
payable in arrears on the last day of such Interest Period and on the
date such Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon any failure by the Company to
make any payment hereunder or under any Letter of Credit Advance Note, the
Company shall pay interest on (i) the
24
unpaid principal amount of each Letter of Credit Advance owing to each Lender,
payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) above,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on such Letter of Credit Advance pursuant to clause (a)(i)
or (a)(ii) above and (ii) to the fullest extent permitted by law, the amount of
any interest, fee or other amount payable hereunder or under any Letter of
Credit Advance Note that is not paid when due, from the date such amount shall
be due until such amount shall be paid in full, payable in full in arrears on
any date any such amount shall be paid and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum then required to be paid,
in the case of interest, on the Type of Letter of Credit Advance on which such
interest has accrued pursuant to clause (a)(i) or (a)(ii) above and, in all
other cases, on Eurodollar Rate Advances pursuant to clause (a)(ii) above (such
rate of interest, the "Default Rate").
SECTION 2.07. Interest Rate Determination. (a) The Letter of
Credit Administrative Agent shall promptly determine and shall give prompt
notice to the Company and the Lenders of the applicable interest rate determined
by the Letter of Credit Administrative Agent for purposes of Section 2.06(a)(i)
or (ii).
(b) If (i) on or prior to the first day of any Interest
Period the Letter of Credit Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means do
not exist for ascertaining LIBOR for such Interest Period or (ii) on or prior to
the first day of any Interest Period the Majority Holders with respect to a
Letter of Credit Facility advise the Letter of Credit Administrative Agent that
LIBOR for such Interest Period will not adequately and fairly reflect the cost
to such Majority Holders of making, funding or maintaining their Eurodollar Rate
Advances under such Letter of Credit Facility during such Interest Period, the
Letter of Credit Administrative Agent shall forthwith give notice thereof (an
"Alternate Rate Notice") in respect of such Interest Period to the Company and
the Lenders, whereupon until the Letter of Credit Administrative Agent gives
notice (an "Alternate Rate Rescission Notice") to the Company and the Lenders
that the circumstances giving rise to such Alternate Rate Notice no longer exist
(it being understood that the Letter of Credit Administrative Agent will give
such notice reasonably promptly after it has knowledge that such circumstances
ceased to exist), the interest rate applicable to the Eurodollar Rate Advances
under such Letter of Credit Facility shall be determined pursuant to the
provisions set forth in Section 2.07(c) or 2.07(d), as applicable.
(c) Upon delivery of an Alternate Rate Notice upon the
occurrence of conditions set forth in clause (i) of Section 2.07(b), the
alternative basis for computing interest on the relevant Eurodollar Rate
Advances, which shall be payable in connection with such Interest Period shall
be the greater of (x) the Federal Funds Rate plus 0.5% or (y) the Prime Rate,
plus in each case the Applicable Margin with respect to such Eurodollar Rate
Advances. The Letter of Credit Administrative Agent shall give prompt written
notice to the Company and the Lenders of the rate of interest so determined, and
its determination thereof shall be prima facie evidence thereof, absent manifest
error.
(d) Upon delivery of an Alternate Rate Notice upon the
occurrence of conditions set forth in clause (ii) of Section 2.07(b), during the
30 days next succeeding the giving of such Alternate Rate Notice, the Company
and the Letter of Credit Administrative
25
Agent shall negotiate in good faith in order to arrive at a mutually
satisfactory alternative basis (having the written approval of the Majority
Holders with respect to the relevant Letter of Credit Facility) for computing
interest on the Eurodollar Rate Advances outstanding under such Letter of Credit
Facility (the "Alternative Basis Interest Rate"), which shall be payable in
connection with such Interest Period in order to compensate the Lenders of the
relevant Letter of Credit Advances for the inadequate interest rate resulting
from the occurrence of the conditions specified in clause (ii) of this Section
2.07(b). If within such 30-day period, the Company and the Letter of Credit
Administrative Agent agree in writing upon the Alternative Basis Interest Rate,
such Alternative Basis Interest Rate shall be payable to all Lenders under such
Letter of Credit Facility from the commencement of, and only for, the duration
of such Interest Period. If the Company and the Letter of Credit Administrative
Agent fail to agree upon an Alternative Basis Interest Rate within such 30-day
period, the Alternative Basis Interest Rate in connection with such Interest
Period payable to each Lender under such Letter of Credit Facility for such
Interest Period shall be such Alternative Basis Interest Rate as such Lender
shall determine (in a certificate delivered by such Lender to the Letter of
Credit Administrative Agent setting forth the basis of the computation of such
amount, which certificate shall be conclusive and binding for all purposes,
absent manifest error) to be necessary to compensate such Lender for its cost of
obtaining (in good faith and using commercially reasonable efforts to minimize
the interest cost to the Company) as of the commencement of such Interest Period
funds for such Interest Period in an amount equal to the principal amount of
such Lender's outstanding Eurodollar Rate Advances plus the Applicable Margin
with respect to such Eurodollar Rate Advances. The Letter of Credit
Administrative Agent shall notify the Company of each such determination as
promptly as practicable. As the negotiations described in this Section 2.07(d)
and any resulting Alternative Basis Interest Rate are intended for the direct
benefit of the Lenders under the relevant Letter of Credit Facility, the Company
expressly covenants and acknowledges (i) that as a result of any such
negotiations following the delivery of an Alternate Rate Notice, such Lenders
shall not receive a lower rate of interest on their Eurodollar Rate Advances
than they would have received had there not been such negotiations, and (ii)
that such negotiations shall in no event cause, justify or give rise to any
delay or reduction in the payment of interest, principal or other amounts
payable by the Company under this Agreement or any Letter of Credit Advance
Note.
(e) Notwithstanding subsections (a) through (d) above, if
(i) the circumstances in clause (i) of subsection (b) above arise in respect of
ascertaining LIBOR for the initial Interest Period occurring after any
Conversion hereunder of any Base Rate Advances made under any Letter of Credit
Facility to Eurodollar Rate Advances under such Letter of Credit Facility or
(ii) the circumstances in clause (ii) of subsection (b) above arise in respect
of the making, funding or maintaining of Eurodollar Rate Advances to be made,
funded or maintained upon the Conversion hereunder of any Base Rate Advances
made under any Letter of Credit Facility to Eurodollar Rate Advances under such
Letter of Credit Facility, in each such case the provisions in subsections (a)
through (d) above shall not apply and such Base Rate Advances shall not be
converted to Eurodollar Rate Advances until the Letter of Credit Administrative
Agent gives notice to the Company that the circumstances in clause (i) or (ii)
of subsection (b), respectively, no longer exist (it being understood that the
Letter of Credit Administrative Agent will give such notice reasonably promptly
after it has knowledge that such circumstances ceased to exist). Three Business
Days after the date of such notification, all such Base Rate Advances shall
automatically be Converted to Eurodollar Rate Advances.
26
SECTION 2.08. Conversion of Advances. (a) Subject to the
provisions in Section 2.10, Base Rate Advances comprising the same Borrowing
shall be automatically Converted into Eurodollar Rate Advances four Business
Days after the date such Base Rate Advances are made.
(b) The Company may on any Business Day, upon notice to
the Letter of Credit Administrative Agent given not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the date of the proposed
Conversion, Convert Letter of Credit Advances comprising the same Borrowing
(provided that the Company shall not convert any Letter of Credit Advance made
by an Issuing Bank pursuant to Section 2.02 upon payment of a draft drawn under
any Letter of Credit (i) unless all relevant L/C Funding Lenders have purchased
their Pro Rata Shares of such Letter of Credit Advance in accordance with
Section 2.02, (ii) unless any prepayment of such Letter of Credit Advance
required under Section 2.04(c) shall have been received by the relevant Lenders
and (iii) at any time when payments to be made under such MT Notes would be
subject to foreign exchange restrictions, controls or prohibitions under
Argentine law) into Debt evidenced by notes (the "MT Notes") issued under the
Medium Term Note Program pursuant to a supplemental indenture substantially in
the form attached hereto as Exhibit H-1 in the case of any Short Term Letter of
Credit Advances so Converted and in the form attached hereto as Exhibit H-2 in
the case of any Long Term Letter of Credit Advances so Converted, with respect
to which, in the case of MT Notes issued upon a Conversion of Letter of Credit
Advances made by any Lender under the Short Term L/C Series A Facility, the
Short Term L/C Series B Facility, the Long Term L/C Series A Facility or the
Long Term L/C Series B Facility, each of Perez Companc International S.A., Perez
Companc Ecuador and EcuadorTLC S.A. shall be a co-obligor with the Company in
respect of all Obligations thereunder, and in the case of MT Notes issued upon a
Conversion of Letter of Credit Advances made by any Lender under the Long Term
L/C Series D Facility, Pecom Energia S.A., Sucursal Bolivia shall be a
co-obligor with the Company in respect of all Obligations thereunder, in each
case pursuant to documentation in form and substance satisfactory to such
Lender. Any such Conversion shall ratably Convert Letter of Credit Advances
comprising the same Borrowing; provided that the Letter of Credit Advances of
any Lender that, as of the Conversion Date (as defined below), cannot make all
of the representations set forth in Section 8.12 hereof shall not be Converted
and such Letter of Credit Advances shall remain Letter of Credit Advances
hereunder. On the date of the proposed conversion (the "Conversion Date"), the
Company shall, pursuant to the terms of a note purchase agreement substantially
in the form attached hereto as Exhibit I, deliver or cause to be delivered to
each purchasing Lender an MT Note in the aggregate face amount to be purchased
by such Lender (or such Lender's assignee), dated the issue date and registered
in such Lender's (or assignee's) name, against delivery to the Company of (i) a
settlement agreement, in the form of Exhibit J hereto, transferring all of such
Lender's rights, title and interest in respect of all amounts owing to such
Lender by the Company in respect of the Letter of Credit Advances to be
Converted (other than in respect of interest accrued through (and including) the
day preceding the Conversion Date and any other amounts other than principal
owing or accrued in respect thereof on the Conversion Date) and (ii) the Letter
of Credit Advance Note or Letter of Credit Advance Notes, as applicable, held by
such Lender representing or evidencing the obligations of the Company with
respect to the Letter of Credit Advances to be converted. Upon the issuance of
an MT Note to a Lender (or assignee) pursuant to this Section 2.08(b), the
Company shall have no further obligations under this Agreement or any instrument
or note delivered hereunder with
27
respect to the Letter of Credit Advances of such Lender (or assignee) Converted
pursuant to this Section 2.08(b), and the Note Documents with respect to such MT
Notes shall supersede and replace the Loan Documents and all instruments and
notes delivered under such Loan Documents with respect to the Letter of Credit
Advances of such Lender Converted pursuant to this Section 2.08(b) (without any
such act causing the novation of the obligations under the Loan Documents);
provided that the obligations of the Company under Sections 2.09, 2.12 and 8.04
shall remain in effect to the extent that any claim thereunder relates to an
event arising prior to the Conversion Date. Upon any Conversion of Letter of
Credit Advances comprising the same Borrowing pursuant to this Section 2.08(b),
the remaining scheduled principal payments in respect of such Letter of Credit
Advances shall be ratably reduced in an aggregate amount equal to the amount of
such Letter of Credit Advances so Converted.
SECTION 2.09. Increased Costs. (a) If, on or after the date
hereof, the adoption of any applicable law, rule or regulation, or any change in
any applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency, (i) shall subject any Lender (or its Lending Office) to any tax, duty or
other charge with respect to one or more of its Eurodollar Rate Advances or its
obligation to make Eurodollar Rate Advances, or shall change the basis of
taxation of payments to any Lender (or its Lending Office) of the principal of
or interest on its Eurodollar Rate Advances or any other amounts due under this
Agreement or any Letter of Credit Advance Notes (except for the introduction of,
or changes in the rate of, tax on the overall net income of such Lender or its
Lending Office, or franchise taxes, imposed by the jurisdiction (or any
political subdivision or taxing authority thereof) under the laws of which such
Lender is organized, or in which such Lender's principal office or Lending
Office is located); or (ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System and minimum reserve requirements of the
European Central Bank but excluding any such requirement included in an
applicable Eurodollar Reserve Percentage), special deposit, insurance assessment
or similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (or its Lending Office) or shall impose on any
Lender (or its Lending Office) or the London interbank market any other
condition affecting the purchasing, owning, holding or maintaining of any one or
more Eurodollar Rate Advances by such Lender or the obligation of such Lender to
make Eurodollar Rate Advances and the result of any of the foregoing is to
increase the cost to such Lender (or its Lending Office) of purchasing, owning,
holding, maintaining, making or being obligated to make any one or more of its
Eurodollar Rate Advances, or to reduce the amount of any sum received or
receivable by such Lender (or its Lending Office) under the Agreement and any
one or more of its Letter of Credit Advance Notes, by an amount deemed by such
Lender to be material (excluding, for purposes of this Section 2.09 any
increased costs or any reductions resulting from any Indemnifiable Taxes (as
defined in Section 2.12) or Other Taxes (payable by the Company pursuant to
Section 2.12)), then, promptly after demand by such Lender (with a copy to the
Letter of Credit Administrative Agent), which demand shall be accompanied by a
certificate of such Lender setting forth in reasonable detail the circumstances
which give rise to such increase or reduction, the amount of the claim and the
calculation thereof (and which certificate shall be conclusive and binding for
all purposes, absent manifest error), the Company shall, to the extent that it
shall not have done
28
so under any other provision of this Agreement, pay to such Lender such
additional amount or amounts as will, without duplication, compensate such
Lender for such increased cost or reduction.
(b) If, on or after the date hereof, any Lender shall
determine that the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change in any such law, rule or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has the effect of reducing the rate of return on capital of
any Lender as a consequence of such Lender's purchasing, owning, maintaining or
holding any Eurodollar Rate Advances or such Lender's obligation to make
Eurodollar Rate Advances hereunder to a level below that which such Lender could
have achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, promptly after demand by
such Lender (with a copy to the Letter of Credit Administrative Agent), which
demand shall be accompanied by a certificate of such Lender setting forth in
reasonable detail the circumstances which give rise to such reduction, the
amount of the claim and the calculation thereof (and which certificate shall be
conclusive and binding for all purposes, absent manifest error), the Company
shall, to the extent that it shall not have already done so under any other
provision of this Agreement, pay to such Lender such additional amount or
amounts as will, without duplication, compensate such Lender for such reduction.
(c) Each Lender will promptly notify the Company and the
Letter of Credit Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to compensation
pursuant to this Section 2.09. Each Lender will, before requesting compensation
for additional amounts pursuant to this Section 2.09, use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
minimize or eliminate the requirement of such compensation by transferring its
Letter of Credit Advances, Letter of Credit Advance Notes and its obligations to
make Letter of Credit Advances hereunder or to purchase a Pro Rata Share of any
Letter of Credit Advances hereunder, as applicable, to a different lending
office if such transfer will avoid or reduce the need for compensation for such
additional amounts and will not, in the sole judgment of such Lender, be
otherwise disadvantageous (economically or otherwise) to such Lender; provided
that no Lender shall have any obligation to provide any information as to any
possible actions or designations considered and taken or rejected by such Lender
or the reasons therefor. A certificate of any Lender claiming compensation under
this Section 2.09 and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) The Company shall not be required to compensate a
Lender as provided by this Section 2.09 if the increased cost or reduction in
respect of which such claim for additional amounts arises results solely from a
requirement which is applicable to the relevant Lender by reason of its
financial condition or assets and which is not of general application to similar
persons of a similar type in similar circumstances in the same jurisdiction.
29
SECTION 2.10. Illegality. (a) Notwithstanding any other
provision of this Agreement, if on or after the date hereof any Lender shall
notify the Letter of Credit Administrative Agent that the introduction of or any
change in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other Governmental Authority asserts that it is unlawful,
for such Lender or its Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder (after such Lender has used reasonable efforts to transfer its
Eurodollar Rate Advances, its Letter of Credit Advance Notes evidencing
Eurodollar Rate Advances and its obligations to fund and maintain Eurodollar
Rate Advances to a different lending office if such transfer will avoid
illegality and shall not, in the sole judgment of such Lender, be
disadvantageous (economically or otherwise) to such Lender), each Eurodollar
Rate Advance will automatically, upon demand, Convert into a Base Rate Advance
and no Base Rate Advances shall be converted into Eurodollar Rate Advances until
the circumstances giving rise to such illegality no longer exist; provided that
on the date such circumstances no longer exist and all Lenders are able to make
Eurodollar Rate Advances hereunder, all Base Rate Advances shall automatically
be Converted into Eurodollar Rate Advances three Business Days after such date
and all Base Rate Advances made after such date shall automatically be Converted
to Eurodollar Rate Advances pursuant to Section 2.08.
(b) If any L/C Funding Lender shall notify the Letter of
Credit Administrative Agent that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any central bank
or other Governmental Authority asserts that it is unlawful, for such Lender or
its Lending Office to perform its obligations hereunder to make any Advances
under any Letter of Credit Facility or to fund or maintain any Advances under
any Letter of Credit Facility, to the extent the circumstances in subsection (a)
do not apply and after such Lender has used reasonable efforts to transfer its
Advances, its Letter of Credit Advance Notes evidencing such Advances and its
obligations to fund and maintain Advances to a different lending office if such
transfer will avoid illegality and shall not, in the sole judgment of such
Lender, be disadvantageous (economically or otherwise) to such Lender, (i) the
Company shall immediately prepay in full the then outstanding principal amount
of such Advances, together with accrued interest thereon; (ii) the obligation of
such L/C Funding Lender to make any Advances shall be suspended until such
Lender notifies the Company and the Letter of Credit Administrative Agent that
the circumstances giving rise to such suspension no longer exist; and (iii) the
Company shall deposit into the L/C Collateral Account with respect to the Letter
of Credit Facility under which such Advances were made an amount in cash equal
to the aggregate principal amount of advances such L/C Funding Lender would
otherwise have been required to make under such Letter of Credit Facility
pursuant to Section 2.02 (assuming all Letters of Credit outstanding under such
Letter of Credit Facility were fully drawn at the time of such suspension).
SECTION 2.11. Payments and Computations. (a) The Company shall
make each payment hereunder and under the Letter of Credit Advance Notes not
later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars
to the Letter of Credit Administrative Agent at the Agent's Account in same day
funds. With respect to funds paid to the Letter of Credit Administrative Agent,
the Letter of Credit Administrative Agent will promptly thereafter cause like
funds to be distributed (i) if such payment by the Company is in respect of
principal, interest, fees or any other Obligation then payable hereunder and
under the Letter of Credit Advance Notes to more than one Lender, to such
Lenders for the account of their respective
30
Lending Offices ratably in accordance with the amounts of such respective
Obligations then payable to such Lenders and (ii) if such payment by the Company
is in respect of any Obligation then payable hereunder to one Lender, to such
Lender for the account of its Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.06(d), from and after the effective date
specified in such Assignment and Acceptance, the Letter of Credit Administrative
Agent shall make all payments hereunder and under the Letter of Credit Advance
Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) All interest hereunder shall be computed by the
Letter of Credit Administrative Agent on the basis of a year of 360 days and
paid for the actual number of days elapsed (including the first day but
excluding the last day). Notwithstanding the foregoing, (i) during each
Alternate Rate Period, for each day that an alternative basis interest rate is
determined pursuant to Section 2.07(c) and such alternative basis interest rate
is based upon the Prime Rate as contemplated therein, interest shall be computed
on the basis of a year of 365 or 366 days, as the case may be, and paid for the
actual number of days elapsed (including the first day but excluding the last
day) and (ii) all computations of interest based on the Base Rate shall be made
on the basis of a year of 365 or 366 days, as the case may be, and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Each determination by the Letter of Credit Administrative Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(c) Whenever any payment hereunder or under the Letter of
Credit Advance Notes shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of payment
of interest or facility fee, as the case may be; provided that, if such
extension would cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day.
(d) Unless the Letter of Credit Administrative Agent
shall have received notice from the Company prior to the date on which any
payment is due to the Lenders hereunder that the Company will not make such
payment in full, the Letter of Credit Administrative Agent may assume that the
Company has made such payment in full to the Letter of Credit Administrative
Agent on such date and the Letter of Credit Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Company shall not have so made such payment in full to the Letter of
Credit Administrative Agent, each Lender shall repay to the Letter of Credit
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Letter of Credit Administrative Agent, at the Federal Funds Rate.
31
SECTION 2.12. Taxes. (a) Any and all payments by the Company
hereunder or under any Letter of Credit Advance Note shall be made free and
clear of, and without withholding or deduction for or on account of, any Taxes,
excluding, (i) in the case of each Lender and the Letter of Credit
Administrative Agent, Taxes that are imposed on its overall net income (and
franchise taxes imposed in lieu thereof) by any state or foreign jurisdiction
under the laws of which such Lender or the Letter of Credit Administrative
Agent, as the case may be, is organized or any political subdivision thereof,
and (ii) in the case of each Lender, Taxes that are imposed on its overall net
income (and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction of its Lending Office or any political subdivision thereof (all
such nonexcluded Taxes in respect of payments hereunder or under any Letter of
Credit Advance Notes collectively, "Indemnifiable Taxes"). If any Indemnifiable
Taxes are required to be withheld or deducted from any such payment, the Company
shall pay such additional amounts as may be necessary to ensure that the amounts
received by each Lender or the Letter of Credit Administrative Agent, as the
case may be, after such withholding or deduction (and after withholding or
deduction on amounts payable under this Section 2.12) shall equal the respective
amounts that would have been receivable from the Company (any such additional
amounts required to be paid by the Company, "Additional Amounts").
(b) The Company shall promptly pay when due any present
or future stamp, court or documentary taxes or any other excise or property
taxes, charges or similar levies (including the Personal Property Tax) that
arise in any jurisdiction from any payment made hereunder or from the execution,
delivery, enforcement or registration of this Agreement or any other document or
instrument referred to herein or therein (collectively, "Other Taxes").
(c) The Company agrees to indemnify each Lender and the
Administrative Agent for the full amount of Indemnifiable Taxes and Other Taxes,
and for the full amount of taxes of any kind imposed or asserted by any
jurisdiction on amounts payable under this Section 2.12, imposed on or paid by
any such Lender or the Letter of Credit Administrative Agent, as the case may
be, and any liability (including penalties, additions to tax interest and
expenses) arising therefrom or with respect thereto. Amounts payable by the
Company under the indemnity set forth in this subsection (c) shall be paid
within 30 days from the date on which the applicable Lender or the
Administrative Agent, as the case may be, makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes
under this Section 2.12, the Company will notify the Letter of Credit
Administrative Agent of such payment and, at the request of the Letter of Credit
Administrative Agent, furnish the Letter of Credit Administrative Agent at its
address referred to in Section 8.02 the original or a certified copy of a
receipt evidencing payment thereof. Upon request, the Company shall provide the
Letter of Credit Administrative Agent with documentation reasonably satisfactory
to the Letter of Credit Administrative Agent evidencing the payment of any
Additional Amounts. Copies of such documentation shall be made available by the
Letter of Credit Administrative Agent to the Lenders upon request therefor.
SECTION 2.13. Notes. (a) As additional evidence of the
Company's obligation to pay the principal of and interest on the Letter of
Credit Advances as provided in this Agreement and in accordance with Section
3.02 of this Agreement, the Company shall execute and deliver to each Lender on
or prior to each Borrowing pursuant to Section 2.02, a duly
32
executed and notarized Letter of Credit Advance Note of the Company, in the form
of Exhibit K hereto, made payable to the order of such Lender, dated the date of
such Borrowing, in an aggregate principal amount equal to the amount of the
Letter of Credit Advance to be made by such Lender on such date. If any Lender
exercises any right in any court in Argentina under any Letter of Credit Advance
Note delivered pursuant to this Agreement, it shall not be required for such
purpose to evidence to the Company or any other Person that such Letter of
Credit Advance Note represents obligations of the Company under this Agreement
nor that any condition herein has been fulfilled. In addition, the Company
hereby agrees and covenants that it will execute and deliver any and all
amendments or endorsements to the Letter of Credit Advance Notes, and take all
further action that may in the reasonable judgment of the Letter of Credit
Administrative Agent, be necessary, or that the Letter of Credit Administrative
Agent may reasonably request from time to time, in order to ensure that the
Letter of Credit Advance Notes duly reflect the terms of this Agreement.
(b) Notwithstanding discharge in full of any Letter of
Credit Advance Note, if the amount (including, without limitation, default
interest) paid or payable to any of the Lenders under such Letter of Credit
Advance Note (whether arising from the enforcement thereof in Argentina or
otherwise) is less than the amount due and payable to such Lender in accordance
with this Agreement with respect to the Letter of Credit Advance, or portion
thereof, evidenced by such Letter of Credit Advance Note, the Company agrees, to
the fullest extent it may effectively do so, to pay to such Lender upon demand
such difference in accordance with Section 2.11 hereunder and as otherwise
specified in this Agreement.
SECTION 2.14. Event of Sovereign Risk. The Company agrees
that, notwithstanding any foreign exchange restriction or prohibition in
Argentina, any and all payments hereunder and under the Letter of Credit Advance
Notes shall be made exclusively in Dollars in immediately available funds. In
the event any such foreign exchange restriction or prohibition is in effect, the
Company shall, during the continuance of such prohibition or restriction and at
its own expense, obtain such Dollars including, (i) by purchasing in Argentina
(in compliance with any applicable Argentine Central Bank or other Governmental
Authority regulation in force at the time of such purchase), any Dollar
denominated public or private debt or equity tradable security issued in
Argentina and tradable in foreign markets, and transferring and selling the same
outside of Argentina for Dollars or (ii) by means of any other legal and
appropriate mechanism for the acquisition of Dollars. No form of payment shall
be deemed to constitute payment of the applicable Obligation until receipt of
the full amount of Dollars due in respect thereof. All costs, expenses and taxes
payable in connection with compliance with this Section 2.14 shall be for the
account of the Company.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section
2.01. The obligation of each Issuing Bank to issue the Letters of Credit
specified in Section 2.01 of this Agreement shall become effective on and as of
the first date (the "Effective Date") on which the following conditions
precedent have been satisfied:
33
(a) There shall have occurred no change or effect since
June 30, 2002 that, individually or in the aggregate, could materially
adversely affect the financial condition, business, properties,
prospects or results of operations of the Company and its Subsidiaries
taken as a whole and which could reasonably be expected to affect
materially and adversely the Company's ability to perform its
obligations under the Loan Documents.
(b) There shall have occurred no change or effect since
the date hereof that could be materially adverse to the Argentine, U.S.
or international financial bank syndication or capital market
conditions or to such regulatory, political or economic environment.
(c) All letters of credit specified in Section 8.12(b)
through (f) shall have been cancelled and delivered to the
corresponding Issuing Banks and all promissory notes and instruments
issued in connection with reimbursement obligations in respect of such
letters of credit shall have been cancelled and delivered to the
Company.
(d) All governmental and third party consents and
approvals necessary in connection with the transactions contemplated
hereby, if any, shall have been obtained (without the imposition of any
conditions that are not acceptable to the Lenders) and shall remain in
effect.
(e) The Company shall have notified each Lender and the
Letter of Credit Administrative Agent in writing, at least one day in
advance, as to the proposed Effective Date.
(f) On the Effective Date, the following statements shall
be true and the Letter of Credit Administrative Agent shall have
received for the account of each Lender a certificate signed by a duly
authorized officer of the Company, dated the Effective Date, stating
that:
(i) The representations and warranties referred
to in Section 4.01 are correct on and as of the Effective
Date, and
(ii) No event has occurred and is continuing that
constitutes a Default.
(g) On the Effective Date, the Company shall deposit (i)
$8,878,147.33 into the Long Term L/C Series A Account; (ii)
$4,798,671.87 into the Long Term L/C Series B Account; (iii)
$2,175,720.24 into the Long Term L/C Series C Account; and (iv)
$1,208,733.47 into the Long Term L/C Series D Account.
(h) The receipt by the Company of all necessary
governmental, regulatory and other approvals (including CNV approval),
if any, for the consummation of the transactions contemplated herein.
(i) Creditors of the Company holding an aggregate
principal amount of Debt of at least $673,487,697.39 shall have agreed
to purchase, and simultaneously with the issuance of the Letters of
Credit hereunder, the Company shall have issued Short Term
34
Trade Series Notes in an aggregate principal amount of $75,693,000;
Long Term Trade Series Notes in an aggregate principal amount of
$286,262,000; Short Term Working Capital Series Notes in an aggregate
principal amount of $55,633,000; and Long Term Working Capital Series
Notes in an aggregate principal amount of $181,824,000, pursuant to the
Note Purchase Agreement and in accordance with the terms of the
Indenture.
(j) All conditions set forth in Section 14 of the Note
Purchase Agreement (other than the condition set forth in clause 14.13
thereof) shall have been satisfied.
(k) The Company shall have paid to each Lender the full
amount set forth opposite such Lender's name on Schedule III hereto.
(l) The Letter of Credit Administrative Agent shall have
received, on behalf of the Lenders, on or before the Effective Date the
following, each dated the Effective Date (except for the letter
referred to in clause (xi) of this Section 3.01(l)), in form and
substance satisfactory to the Lenders and the Letter of Credit
Administrative Agent and (except for the Letter of Credit Advance
Notes) in sufficient copies for each Lender:
(i) Certified copies and English translations of
(A) the resolutions of the Board of Directors of the Company
approving this Agreement and each other Loan Document to which
it is or is to be a party and the transactions contemplated
thereby, (B) the Estatutos of the Company as in effect on the
date the resolutions specified in clause (A) were adopted and
the absence of any change or amendment to such document since
such date and (C) all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to, this Agreement and each other Loan Document and
the transactions contemplated hereby and thereby.
(ii) A favorable opinion of Shearman & Sterling,
New York counsel to the Company, in form and substance
satisfactory to the Lenders.
(iii) A favorable opinion of Cleary, Gottlieb,
Steen & Hamilton, New York counsel to the Lenders and the
Letter of Credit Administrative Agent, in form and substance
satisfactory to the Lenders.
(iv) A favorable opinion of Hector Daniel Casal,
in-house counsel to the Company, in form and substance
satisfactory to the Lenders.
(v) A favorable opinion of Bruchou Fernandez
Madero Lombardi & Mitrani, Argentine counsel to the Company,
in form and substance satisfactory to the Lenders.
(vi) A favorable opinion of Marval, O'Farrell and
Mairal, Argentine counsel to the Lenders and the Letter of
Credit Administrative Agent, in form and substance
satisfactory to the Letter of Credit Administrative Agent and
the Lenders.
35
(vii) A favorable opinion of Walkers S.P.V.,
counsel to Perez Companc Ecuador, in form and substance
satisfactory to the Lenders.
(viii) A favorable opinion of Moreno Baldivieso,
counsel to Perez Companc International, S.A., in form and
substance satisfactory to the Lenders.
(ix) A favorable opinion of Gonzalez, Pena
Herrera & Asociados, counsel to EcuadorTLC S.A., in form and
substance satisfactory to the Lenders.
(x) An excess payments and intercreditor
agreement dated as of the date hereof shall have been executed
and delivered by each Lender and New Note Holder.
(xi) A letter from the Process Agent dated on or
before the date hereof, in form and substance satisfactory to
the Lenders, pursuant to which the Process Agent agrees to act
as Process Agent on behalf of the Company, the Co-Obligors and
Pecom Energia S.A., Sucursal Bolivia with respect to the Loan
Documents.
SECTION 3.02. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Letter of Credit Administrative Agent responsible for the transactions
contemplated by this Agreement shall have received notice from such Lender prior
to the date that the Company, by notice to the Lenders, designates as the
proposed Effective Date, specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Company.
The Company hereby makes the representations and warranties set forth in Annex B
hereto.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Covenants. The Company shall perform and observe
each covenant set forth in Annex C hereto under the terms and conditions set
forth therein. In addition, the Company shall notify the Lenders under any
Letter of Credit Facility of any event, when it becomes aware, that would
entitle a beneficiary to draw under any Letter of Credit issued under such
Letter of Credit Facility. The Company agrees, for so long as any Applicable
Debt under the Short Term L/C Series C Facility, the Long Term L/C Series C
Facility or the Long Term L/C Series D Facility remains unpaid or outstanding,
that it shall not enter into or permit to exist (a) any amendment or
modification of any agreement or transaction with the beneficiary under each of
the Short Term Series C Letters of Credit, the Long Term Series C
36
Letters of Credit and the Long Term Series D Letter of Credit which has the
effect of extending the period of time that the Company is required to provide
such Letters of Credit as collateral or (b) any transactions with the
beneficiary under each of the Short Term Series C Letters of Credit, the Long
Term Series C Letters of Credit and the Long Term Series D Letter of Credit not
specified on Schedule 5.01, except for any transactions for which no collateral
is required to be posted by the Company, including, without limitation, (i) any
commodity hedging transaction whose purpose is the unwinding of any transaction
set forth on Schedule 5.01 or (ii) any transaction involving the purchase of
call options, put options, call swaptions, put swaptions or any other type of
commodity options.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any Event of Default set
forth in Annex D hereto with respect to a Tranche of Letter of Credit Advances
shall occur and be continuing, the Letter of Credit Administrative Agent shall
at the request, or may with the consent, of the Majority Holders with respect to
the Letter of Credit Facility under which such Tranche of Letter of Credit
Advances was made, by notice to the Company, (i) declare all such Letter of
Credit Advances, all interest thereon and all other amounts payable under the
Applicable Transaction Documents with respect to such Tranche of Letter of
Credit Advances to be forthwith due and payable, whereupon such Tranche of
Letter of Credit Advances, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Company, and (ii) to the extent required by the terms thereof, by notice to each
party required under the terms of any agreement in support of which a Letter of
Credit is issued under the Letter of Credit Facility under which such Tranche of
Letter of Credit Advances was made, declare all Obligations under such agreement
due and payable; provided that in the event of an actual or deemed entry of an
order for relief with respect to the Company or any Material Subsidiary under
clauses (i), (k) or (m) of the Events of Default set forth in Annex D, such
Tranche of Letter of Credit Advances, all such interest and all such amounts
shall automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Company.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If (i) any Event of Default set forth in Annex D with respect to any
Tranche of Letter of Credit Advances issued under a Letter of Credit Facility
shall occur and be continuing or (ii) on any date on which there are no
outstanding Letter of Credit Advances under a Letter of Credit Facility, an
Event of Default would exist on such date with respect to any outstanding Letter
of Credit Advance made under such Letter of Credit Facility, the Letter of
Credit Administrative Agent may, or shall at the request of the Majority Holders
with respect to such Letter of Credit Facility, irrespective of whether it is
taking any of the actions described in Section 6.01 or otherwise, make demand
upon the Company to, and forthwith upon such demand the Company will, pay to the
Letter of Credit Administrative Agent on behalf of the Lenders under such Letter
of Credit Facility, in same day funds at the Letter of Credit Administrative
Agent's office designated in such demand, for deposit in the L/C Collateral
Account for such Letter of Credit
37
Facility, an amount equal to the aggregate Available Amounts of all Letters of
Credit issued under such Letter of Credit Facility then outstanding. If at any
time the Letter of Credit Administrative Agent determines that any funds held in
such L/C Collateral Account are subject to any right or claim of any Person
other than the Letter of Credit Administrative Agent and the Lenders under such
Letter of Credit Facility or that the total amount of such funds is less than
the aggregate Available Amounts of all Letters of Credit issued under such
Letter of Credit Facility then outstanding, the Company will, forthwith upon
demand by the Letter of Credit Administrative Agent, pay to the Letter of Credit
Administrative Agent, as additional funds to be deposited and held in such L/C
Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amounts over (b) the total amount of funds, if any, then held in such
L/C Collateral Account that the Letter of Credit Administrative Agent determines
to be free and clear of any such right and claim. Upon the drawing of any Letter
of Credit issued under such Letter of Credit Facility, funds on deposit in such
L/C Collateral Account shall be applied to reimburse the relevant Issuing Bank
or L/C Funding Lenders, as applicable, to the extent permitted by applicable
law.
ARTICLE VII
THE LETTER OF CREDIT ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Letter of Credit Administrative Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the Letter of
Credit Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement and the other Loan Documents (including, without
limitation, enforcement or collection of the Letter of Credit Advance Notes),
the Letter of Credit Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding upon all Lenders and all holders of Letter of Credit Advance Notes;
provided, however, that the Letter of Credit Administrative Agent shall not be
required to take any action that exposes the Letter of Credit Administrative
Agent to personal liability or that is contrary to this Agreement or applicable
law. The Letter of Credit Administrative Agent agrees to give to each Lender
prompt notice of each notice given to it by the Company pursuant to the terms of
this Agreement. The Letter of Credit Administrative Agent shall exercise
remedies under the L/C Collateral Accounts Security Agreement on behalf of the
Lenders under each Letter of Credit Facility in respect of the collateral
pledged in favor of the Letter of Credit Administrative Agent on behalf of such
Lenders only at the written direction of the Majority Holders with respect to
such Letter of Credit Facility.
SECTION 7.02. Letter of Credit Administrative Agent's
Reliance, Etc. Neither the Letter of Credit Administrative Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement and
the other Loan Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Letter of Credit
38
Administrative Agent: (i) may treat the payee of any Letter of Credit Advance
Note as the holder thereof until the Letter of Credit Administrative Agent
receives and accepts an Assignment and Acceptance entered into by the Lender
that is the payee of such Letter of Credit Advance Note, as assignor, and an
assignee, as provided in Section 8.06; (ii) may consult with legal counsel
(including counsel for the Company), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement and the other Loan Documents; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement and the other Loan Documents on the
part of the Company or to inspect the property (including the books and records)
of the Company; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (vi) shall incur no liability under or in respect of this Agreement
or any other Loan Document by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier, telegram or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. JPMorgan Chase Bank and Affiliates. With respect
to its obligations to make Letter of Credit Advances hereunder, the Letter of
Credit Advances made by it and the Letter of Credit Advance Notes issued to it,
JPMorgan Chase Bank shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not the Letter of Credit Administrative Agent; and the terms
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
JPMorgan Chase Bank in its individual capacity. JPMorgan Chase Bank and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, the Company, any of its Subsidiaries and any
Person who may do business with or own securities of the Company or any such
Subsidiary, all as if JPMorgan Chase Bank were not the Letter of Credit
Administrative Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges
that it has, independently and without reliance upon the Letter of Credit
Administrative Agent or any other Lender and based on the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Letter of Credit Administrative Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify
the Letter of Credit Administrative Agent (to the extent not reimbursed by the
Company), ratably according to the respective principal amounts of the Letter of
Credit Advance Notes then held by each of them (or if no Letter of Credit
Advance Notes are at the time outstanding or if any Letter of Credit
39
Advance Notes are held by Persons that are not Lenders, ratably according to the
aggregate amounts of Letter of Credit Advances with respect to all Letter of
Credit Facilities required to be purchased by such Lender, in the case of an L/C
Funding Lender, as set forth in the Register, and, in the case of an Issuing
Bank, the aggregate amounts of Letter of Credit Advances required to be made by
such Issuing Bank under all Letter of Credit Facilities as set forth in the
Register), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Letter of Credit Administrative Agent in any way relating
to or arising out of the Loan Documents or any action taken or omitted by the
Letter of Credit Administrative Agent under the Loan Documents (collectively,
the "Indemnified Costs"), provided that no Lender shall be liable for any
portion of the Indemnified Costs resulting from the Letter of Credit
Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Letter of
Credit Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Letter of Credit
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, the Loan Documents, to the extent that the
Letter of Credit Administrative Agent is not reimbursed for such expenses by the
Company. In the case of any investigation, litigation or proceeding giving rise
to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Letter of Credit
Administrative Agent, any Lender or a third party.
SECTION 7.06. Successor Letter of Credit Administrative Agent.
The Letter of Credit Administrative Agent may resign at any time by giving not
less than 30 days' written notice thereof to the Lenders and the Company and may
be removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint a successor Letter of Credit Administrative Agent. If no successor
Letter of Credit Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Letter of Credit Administrative Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Letter of Credit
Administrative Agent, then the retiring Letter of Credit Administrative Agent
may, on behalf of the Lenders, appoint a successor Letter of Credit
Administrative Agent, which shall be a commercial bank organized under the laws
of the United States or of any State thereof and having a combined capital and
surplus of at least U.S.$50,000,000. Upon the acceptance of any appointment as
Letter of Credit Administrative Agent hereunder by a successor Letter of Credit
Administrative Agent, such successor Letter of Credit Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Letter of Credit Administrative Agent, and
the retiring Letter of Credit Administrative Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Letter of Credit
Administrative Agent's resignation or removal hereunder as Letter of Credit
Administrative Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Letter
of Credit Administrative Agent under this Agreement.
40
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Letter of Credit Advance Notes or any other
Loan Document, nor consent to any departure by the Company therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Required Lenders where such action shall be applicable to all Letter of Credit
Facilities or, if such action affects only one Letter of Credit Facility, the
Designated Lenders of such Letter of Credit Facility; provided that (a) any
amendment or waiver of any provision contained in the Negative Covenants
Applicable to Applicable Debt Under Short Term L/C Series A Facility, Long Term
L/C Series A Facility, Short Term L/C Series B Facility and Long Term L/C Series
B Facility shall require at all times, the written consent of the Designated
Lenders with respect to each of the Short Term L/C Series A Facility, the Short
Term L/C Series B Facility, the Long Term L/C Series A Facility and the Long
Term L/C Series B Facility and (b) any amendment or waiver of (i) the third
sentence of Section 5.01 or (ii) subsection (h)(vi) of the Affirmative Covenants
in Annex C shall require, at all times, the written consent of the Designated
Lenders under each of the Short Term L/C Series C Facility, the Long Term L/C
Series C Facility and the Long Term L/C Series D Facility; and, in each case,
the obtainment of such consent shall be sufficient for the effectiveness of such
amendment or waiver; and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided
that no amendment, waiver or consent shall, unless in writing and signed by all
the Lenders affected thereby, do any of the following: (a) waive any of the
conditions specified in Section 3.01, (b) subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Letter of Credit
Advance Notes or any fees or other amounts payable hereunder or thereunder, (d)
postpone any date fixed for any payment of principal of, or interest on, the
Letter of Credit Advance Notes or any fees or other amounts payable hereunder or
thereunder, (e) change the definition of "Required Lenders", "Majority Holders"
or "Designated Lenders" or otherwise change the number of Lenders that shall be
required for the Lenders or any of them to take any action hereunder or under
any Letter of Credit Advance Note, (f) limit the liability of the Company under
any of the Loan Documents, (g) change the currency or any place of payment to be
made hereunder or under any Letter of Credit Advance Note, (h) change the
ranking of the Letter of Credit Advances, (i) change the governing law of this
Agreement or the Letter of Credit Advance Notes, (j) decrease the amounts
required to be deposited in the L/C Collateral Accounts hereunder or release any
material portion of the collateral pledged under the L/C Collateral Accounts
Security Agreement to secure the Obligations owing to the Lenders hereunder or
(k) amend this Section 8.01; and provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Letter of Credit
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Letter of Credit Administrative Agent
under this Agreement or any Letter of Credit Advance Note.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed
or delivered, if to the Company, at its address at Maipu 1, Piso 20, Buenos
Aires, Argentina, Telephone: +5411-4344-6694, Facsimile: +5411-4344-
41
6325, Attention: Luis Sas; if to any Issuing Bank or any L/C Funding Lender
party to this Agreement on the date hereof, at its Lending Office specified
opposite its name on Schedule I or II, as applicable, hereto; if to any other
Lender, at its Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender; and if to the Letter of Credit
Administrative Agent, at its address at One Chase Manhattan Plaza, 8th Floor,
New York, NY 10081, Telephone: +212-552-7242, Facsimile: +212-552-5646,
Attention: Lascelles D. Thompson; or, as to the Company or the Letter of Credit
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties and, as to each other party, at such
other address as shall be designated by such party in a written notice to the
Company and the Letter of Credit Administrative Agent. All such notices and
communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, telecopied, delivered to the telegraph
company or confirmed by telex answerback, respectively, except that notices and
communications to the Letter of Credit Administrative Agent pursuant to Article
II, III or VII shall not be effective until received by the Letter of Credit
Administrative Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Letter of Credit
Advance Notes or of any Exhibit hereto to be executed and delivered hereunder
shall be effective as delivery of a manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
any Lender or the Letter of Credit Administrative Agent to exercise, and no
delay in exercising, any right hereunder or under any Letter of Credit Advance
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Company agrees to
pay the reasonable fees and expenses of Cleary, Gottlieb, Steen & Hamilton and
Marval, O'Farrell & Mairal, as counsel for the Letter of Credit Administrative
Agent and the Lenders with respect to the preparation, execution and delivery of
the Loan Documents. The Company further agrees to pay all reasonable
out-of-pocket costs and expenses of the Letter of Credit Administrative Agent
and the Lenders, if any (including, without limitation, reasonable counsel fees
and expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Letter of Credit Advance
Notes, the other Loan Documents and the other documents to be delivered
hereunder, including, without limitation, reasonable fees and expenses of
counsel for the Letter of Credit Administrative Agent and each Lender in
connection with the enforcement of rights under this Section 8.04(a).
(b) The Company agrees to indemnify and hold harmless the
Letter of Credit Administrative Agent and each Lender and each of their
Affiliates and their officers, directors, employees, agents and advisors (each,
an "Indemnified Party") from and against any and all claims, damages, losses,
costs and other liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) the Loan Documents, any of the transactions contemplated
thereby or the actual or proposed use of the proceeds of the Letter of Credit
42
Advances; provided that no Indemnified Party shall have any right to be
indemnified hereunder for its own willful misconduct or gross negligence, as
determined in a final, non-appealable judgment by a court of competent
jurisdiction. In the case of an investigation, litigation or other proceeding to
which the indemnity in this Section 8.04(b) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is brought
by the Company, its directors, shareholders or creditors or an Indemnified Party
or any other Person or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The Company
also agrees not to assert any claim against the Letter of Credit Administrative
Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Loan Documents, any of the transactions
contemplated therein or the actual or proposed use of the proceeds of the Letter
of Credit Advances.
(c) If (i) the conditions set forth in Section 3.01 are
not satisfied on the date proposed by the Company as the Effective Date pursuant
to Section 3.01(e) or (ii) any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Company to or for the account of a Lender
other than on the last day of the Interest Period for such Letter of Credit
Advance, as a result of a payment or Conversion pursuant to Section 2.04 (other
than as a result of any prepayment pursuant to Section 2.04(c)), 2.08(b) or
2.10, acceleration of the maturity of the Letter of Credit Advance Notes
pursuant to Section 6.01 or for any other reason, then in each case, the Company
shall, promptly upon demand by such Lender (with a copy of such demand to the
Letter of Credit Administrative Agent), pay to the Letter of Credit
Administrative Agent for the account of such Lender any LIBOR Funding Costs
incurred by such Lender incurred in connection with such payment or Conversion;
provided that such Lender shall have delivered to the Company a certificate as
to the amount of such loss or expense, which certificate shall be conclusive and
binding for all purposes, absent manifest error.
(d) Without prejudice to the survival of any other
agreement of the Company hereunder or under any other Loan Document, the
agreements and obligations of the Company contained in Sections 2.10, 2.13 ,
8.04, 8.07, 8.09, 8.10 and 8.11 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the other Loan
Documents.
SECTION 8.05. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Company and the Letter of
Credit Administrative Agent and when the Letter of Credit Administrative Agent
shall have been notified by each Lender that such Lender has executed it and
thereafter shall be binding upon and inure to the benefit of the Company, the
Letter of Credit Administrative Agent and each Lender and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.
SECTION 8.06. Assignments and Participations(a). (a) Each
Lender may assign to one or more Persons all or a portion of each Letter of
Credit Advance owing to it; provided that (i) the aggregate principal amount of
such Letter of Credit Advance being assigned (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall, if the entire
principal amount of such Letter of Credit Advance is not so assigned, in no
event be less
43
than U.S.$100,000 (ii) each such assignment shall be to a Person who is able to
make the representations set forth in Section 8.12 and (iii) the parties to each
such assignment shall execute and deliver to the Letter of Credit Administrative
Agent, with a copy to the Company, for the Letter of Credit Administrative
Agent's acceptance and recording in the Register, an Assignment and Acceptance,
together with any Letter of Credit Advance Note evidencing all or part of such
Letter of Credit Advance subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and have the rights of a Lender hereunder with respect to the rights
assigned under such Assignment and Acceptance and (y) the Lender assignor
thereunder shall relinquish its rights under this Agreement to the extent of
such assignment (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of an assigning Lender's rights under this Agreement,
such Lender shall cease to be a party hereto).
(b) Each L/C Funding Lender may assign to one or more
Persons all or a portion of its obligations hereunder to purchase a Pro Rata
Share of Letter of Credit Advances resulting from a draw under any Letter of
Credit issued under any Letter of Credit Facility with the consent of the
Issuing Bank that issued such Letter of Credit; provided that (i) the aggregate
amount of such obligation being assigned (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall, if the entire
remaining obligations of such assigning Lender to purchase Letter of Credit
Advances is not so assigned, in no event be less than U.S.$100,000 (ii) each
such assignment shall be to a Person who is able to make the representations set
forth in Section 8.12 and (iii) the parties to each such assignment shall
execute and deliver to the Letter of Credit Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance. Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in each Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and have the rights of a Lender hereunder with respect
to the rights assigned under such Assignment and Acceptance and (y) the Lender
assignor thereunder shall relinquish its rights under this Agreement to the
extent of such assignment (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights under this
Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
Company or the performance or observance by the Company of any of its
obligations under this Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the
44
financial statements referred to in subsection (f) of the Representations and
Warranties set forth in Annex B and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Letter of Credit Administrative Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee appoints and
authorizes the Letter of Credit Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Letter of Credit Administrative Agent by the
terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Letter of Credit Administrative Agent shall
maintain at its address referred to in Section 8.02 a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the relevant Pro Rata
Shares of each such Lender with respect to the Letter of Credit Advances under
each Letter of Credit Facility resulting from a draw under the relevant Letter
of Credit and/or relevant amounts required to be retained by each such Lender
upon the making of each Letter of Credit Advance by it, and principal amount of
the Advances owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Company, the Letter of Credit Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and assignee, together with any Letter of Credit
Advance Note or Letter of Credit Advance Notes subject to such assignment, the
Letter of Credit Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit L hereto, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Company.
Within five Business Days after its receipt of such notice, the Company, at its
own expense, shall, in case of any assignment made pursuant to Section 8.06(a),
execute and deliver to the Letter of Credit Administrative Agent in exchange for
any surrendered Letter of Credit Advance Note a new Letter of Credit Advance
Note to the order of such assignee in an amount equal to the aggregate principal
amount of Letter of Credit Advances assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained any principal amount of
Letter of Credit Advances hereunder, a new Letter of Credit Advance Note to the
order of the assigning Lender in an amount equal to the aggregate principal
amount of Letter of Credit Advances retained by it hereunder. Such new Letter of
Credit Advance Note or Letter of Credit Advance Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Letter of Credit Advance Note or Letter of Credit Advance Notes, shall be dated
the effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit K hereto.
45
(f) Each Lender may sell participations to one or more
banks or other entities (other than the Company or any of its Affiliates) in or
to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its obligations to make
Letter of Credit Advances hereunder or to purchase a Pro Rata Share of any
Letter of Credit Advances hereunder, any Letter of Credit Advances owing to it
and any Letter of Credit Advance Note or Letter of Credit Advance Notes held by
it); provided, that (i) such Lender's obligations under this Agreement
(including, without limitation, its obligation to make Letter of Credit Advances
hereunder and to purchase a Pro Rata Share of any Letter of Credit Advances
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Letter of Credit Advance
Note for all purposes of this Agreement, (iv) the Company, the Letter of Credit
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement, any Letter of Credit Advance Note or any other Loan
Document, or any consent to any departure by the Company therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Letter of Credit Advance Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation, or
postpone any date fixed for any payment of principal of, or interest on, the
Letter of Credit Advance Notes or any fees or other amounts payable hereunder,
in each case to the extent subject to such participation. The Company's right to
convert any Letter of Credit Advance pursuant to Section 2.08 shall not be
affected or limited in any way by any sale or purchase of a participation
pursuant to this Section 8.06(f).
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.06 or in connection with any securitization, hedge or other transaction under
which payments are to be made by reference to this Agreement, any Letter of
Credit or Letter of Credit Advance or any of the Company and its Subsidiaries,
disclose to the assignee, participant or counterparty or proposed assignee,
participant or counterparty, any information relating to the Company furnished
to such Lender by or on behalf of the Company.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Letter of Credit Advances owing to it and the Letter of Credit Advance Note held
by it) in favor of any Federal Reserve Bank in accordance with Regulation A of
the Board of Governors of the U.S. Federal Reserve System.
SECTION 8.07. GOVERNING LAW. THIS AGREEMENT AND THE LETTER OF
CREDIT ADVANCE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
SECTION 8.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page
46
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 8.09. Jurisdiction; Waiver of Immunities. (a) The
Company hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to any Loan Document, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. The Company 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.
The Company hereby irrevocably appoints CT Corporation System (the "Process
Agent"), with an office on the date hereof at 111 Eighth Avenue, New York, New
York 10011, United States, as its agent to receive on behalf of the Company and
its property service of copies of the summons and complaint and any other
process which may be served in any such action or proceeding. Such service may
be made by mailing or delivering a copy of such process to the Company in care
of the Process Agent at the Process Agent's above address, and the Company
hereby irrevocably authorizes and directs the Process Agent to accept such
service on its behalf. As an alternative method of service, the Company also
irrevocably consents to the service of any and all process in any such action or
proceeding by the mailing of copies of such process to the Company at its
address specified in Section 8.02. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or the Letter of Credit Advance Notes in the courts
of any jurisdiction.
(b) The Company irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to any Loan Document in any New York State
or federal court. The Company hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(c) To the extent that the Company has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal process
(whether through service or notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, the Company hereby irrevocably and unconditionally waives such
immunity in respect of its obligations under this Agreement and the Letter of
Credit Advance Notes and, without limiting the generality of the foregoing,
agrees that the waivers set forth in this subsection (c) shall have the fullest
scope permitted under the Foreign Sovereign Immunities Act of 1976 of the United
States and are intended to be irrevocable for purposes of such Act.
(d) Nothing in this Section 8.10 shall affect the right
of any Lender or the Letter of Credit Administrative Agent to serve legal
process in any other manner permitted by law or affect the right of any Lender
or the Letter of Credit Administrative Agent to bring any
47
action or proceeding against the Company or its property in the courts or other
jurisdictions, including, without limitation, the courts of the Ciudad Autonoma
de Buenos Aires.
SECTION 8.10. Judgment Currency. (a) If, for the purposes of
obtaining judgment in any court, it is necessary to convert a sum due hereunder
or under the Letter of Credit Advance Notes in U.S. dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which, in
accordance with normal banking procedures, the Letter of Credit Administrative
Agent or each Lender, as the case may be, could purchase U.S. dollars with such
other currency in New York City at 11:00 A.M. (New York City time) on the
Business Day preceding that on which final, nonappealable judgment is given.
(b) The obligations of the Company in respect of any sum
due to the Letter of Credit Administrative Agent or any of the Lenders hereunder
or under the Letter of Credit Advance Notes shall, notwithstanding any judgment
in a currency other than U.S. dollars, be discharged only to the extent that on
the Business Day following receipt by the Letter of Credit Administrative Agent
or such Lender, as the case may be, of any sum adjudged to be so due in such
other currency, the Letter of Credit Administrative Agent or any Lender, as the
case may be, may, in accordance with normal, reasonable banking procedures,
purchase U.S. dollars with such other currency. If the amount of U.S. dollars so
purchased is less than the sum originally due to the Letter of Credit
Administrative Agent or such Lender, in U.S. dollars, the Company agrees, to the
fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify the Letter of Credit
Administrative Agent or such Lender, as the case may be, against such loss. If
the amount of U.S. dollars so purchased exceeds the sum originally due to the
Letter of Credit Administrative Agent or such Lender by the Company, each of the
Letter of Credit Administrative Agent and such Lender, as the case may be, shall
remit to the Company such excess.
SECTION 8.11. Waiver of Jury Trial. Each of the Company, the
Letter of Credit Administrative Agent and the 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 Letter of Credit Advance Notes or the actions of the Letter of
Credit Administrative Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
SECTION 8.12. Representations and Acknowledgments of Lenders.
(a) Each of the Lenders listed on the signature pages hereof, and any successor
Person which becomes a Lender, makes the following representations to the
Company as of the date hereof or as of the date it becomes a Lender hereunder,
as the case may be:
(i) such Lender's Lending Office is authorized to accept
deposits and make loans in the jurisdiction of its location;
(ii) if such Lender is a "U.S. person" within the meaning
of Rule 902 promulgated under the Securities Act, such Lender is a
"qualified institutional buyer" within the meaning of Rule 144A under
the Securities Act and has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
48
risks of its investment in MT Notes issued to it upon any Conversion of
its Letter of Credit Advances and that such Lender and any accounts for
which such Lender is acting are each able to bear the economic risk of
such investment;
(iii) if such Lender is a "U.S. person" within the meaning
of Rule 902 promulgated under the Securities Act, such Lender is
acquiring the Letter of Credit Advance Notes and MT Notes issued upon
any Conversion of any of its Lender of Credit Advances for its own
account and not with a view to their distribution, or for one or more
accounts (each of which is an institutional "accredited investor") as
to each of which it exercises sole investment discretion; and
(iv) if such Lender is a "U.S. person" within the meaning
of Rule 902 promulgated under the Securities Act, such Lender
acknowledges that MT Notes issued upon any Conversion of its Lender of
Credit Advances will not be registered under the Securities Act and
will constitute "restricted securities" within the meaning of Rule
144(a)(3) under the Securities Act that may only be resold pursuant to
an effective registration statement or an available exemption from the
registration requirements of the Securities Act.
(b) Each Lender party hereto that is a party to or
beneficiary of the Letter of Credit and Reimbursement Agreement dated as of
March 21, 2001 among the Company, the issuers named therein and Deutsche Bank AG
London, as administrative agent (as amended, amended and restated, supplemented
or otherwise modified from time to time, the "OCP Letter of Credit Agreement")
or a party to or beneficiary of a participation agreement entered into pursuant
to Section 8.07 of the OCP Letter of Credit Agreement (each such participation
agreement, as amended, amended and restated, supplemented or otherwise modified
from time to time, a "Participation Agreement") hereby agrees that, as of the
Effective Date and after giving effect to the transactions contemplated herein
and delivery of each letter of credit issued pursuant to the OCP Letter of
Credit Agreement by the beneficiaries thereof for cancellation, the OCP Letter
of Credit Agreement and such Participation Agreement shall be terminated and the
Company shall have no Obligations under or in respect of the OCP Letter of
Credit Agreement or such Participation Agreement other than with respect to
those provisions of the OCP Letter of Credit Agreement or such Participation
Agreement set forth on Schedule 8.12(b) hereto.
(c) CAI hereby agrees that, as of the Effective Date and
after giving effect to the transactions contemplated herein and delivery of the
Letter of Credit No. CRE99705 A issued by it on July 31, 2002 in favor of J.
Aron and Company (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CAI Letter of Credit") by the beneficiary
thereof for cancellation, the letter agreement, in respect of undertaking
reimbursement obligations in respect of the CAI Letter of Credit, dated July 24,
2002 and the letter from the Company to CAI dated September 18, 2002, requesting
an extension of the CAI Letter of Credit (each such letter, as amended,
supplemented or otherwise modified from time to time, the "CAI Letters") shall
be terminated and the Company shall have no Obligations under the CAI Letters,
other than with respect to those provisions of the CAI Letter dated July 24,
2002 set forth on Schedule 8.12(c) hereto.
49
(d) West LB hereby agrees that, as of the Effective Date
and after giving effect to the transactions contemplated herein and delivery of
the Irrevocable Standby Letter of Credit No. 22703100839WLB issued in favor of
J. Aron and Company (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "West LB Letter of Credit") by the beneficiary
thereof for cancellation, the Letter of Credit Reimbursement Agreement dated as
of March 28, 2000 made by Perez Companc S.A. in favor of West LB (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"West LB Letter of Credit Agreement") shall be terminated; and the Company shall
have no Obligations under the West LB Letter of Credit Agreement, other than
with respect to those provisions of the West LB Letter of Credit Agreement set
forth on Schedule 8.12(d) hereto.
(e) Mizuho hereby agrees that, as of the Effective Date
and after giving effect to the transactions contemplated herein and delivery of
the Irrevocable Stand-by Letter of Credit No. SL 001194475 issued by it in favor
of J. Aron and Company (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Mizuho Letter of Credit") by the
beneficiary thereof for cancellation, the Letter of Credit Reimbursement
Agreement dated as of August 28, 2000 made by the Company in favor of The
Industrial Bank of Japan, Limited (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Mizuho Letter of
Credit Agreement") shall be terminated; and the Company shall have no
Obligations under or in respect of the Mizuho Letter of Credit Agreement, other
than with respect to those provisions of the Mizuho Letter of Credit Agreement
set forth on Schedule 8.12(e) hereto.
(f) HVB hereby agrees that, as of the Effective Date and
after giving effect to the transactions contemplated herein and delivery of the
Letter of Credit SB103695 issued by it in favor of J. Aron and Company (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "HVB Letter of Credit") by the beneficiary thereof for cancellation,
the Continuing Reimbursement Agreement dated as of May 18, 2002 made by each of
the Company and Pecom Energia S.A., Sucursal Bolivia (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "HVB Letter
of Credit Agreement") shall be terminated; and neither the Company nor Pecom
Energia S.A., Sucursal Bolivia shall have any Obligations under or in respect of
the HVB Letter of Credit Agreement, other than with respect to those provisions
of the HVB Letter of Credit Agreement set forth on Schedule 8.12(f) hereto.
SECTION 8.13. No Liability of Lenders. The Company assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither any Lender nor
any of its officers or directors shall be liable or responsible for: (a) the use
that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by any Lender against presentation of
documents that substantially comply in all material respects with the terms of
any Letter of Credit, or (d) any other circumstances whatsoever in making or
failing to make payment under any such Letter of Credit, except that the Company
shall have a claim against any Lender, and such Lender shall be liable to the
Company, to the extent of any direct, but not consequential, damages suffered by
the Company that the Company proves were caused by
50
(i) such Lender's willful misconduct or gross negligence as determined in a
final, non-appealable judgment by a court of competent jurisdiction in
determining whether documents presented under such Lender's Letter of Credit
comply with the terms of such Letter of Credit or (ii) such Lender's failure to
make lawful payment under its Letter of Credit after the presentation to it of
certificates strictly complying with the terms and conditions of such Letter of
Credit.
SECTION 8.14. Right of Set-Off. Upon the occurrence and during
the continuance of any Event of Default, and so long as any payment obligation
is owing hereunder or under any Letter of Credit Advance Note by the Company to
the Letter of Credit Administrative Agent or any Lender, each such Lender and
each of its Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time,
held and other indebtedness at any time owing by such Lender or such Affiliate
to or for the credit or the account of the Company against any and all of the
obligations of the Company now or hereafter existing under this Agreement or
under any Letter of Credit Advance Note held by such Lender, whether or not such
Lender shall have made any demand under this Agreement or under any Letter of
Credit Advance Note and although such obligations may be unmatured. The rights
of each Lender and its Affiliates under this Section 8.14 are in addition to
other rights and remedies that such Lender and its Affiliates may have. Any
Lender exercising its rights under this Section 8.14 shall give notice thereof
to the Company and the Letter of Credit Administrative Agent promptly after the
exercise of such rights and the Letter of Credit Administrative Agent shall, in
turn, give notice to the Lenders; provided that failure to give such notice
shall not affect the validity of such exercise.
51
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
PECOM ENERGIA S.A.
By _________________________________
Name:
Title:
JPMORGAN CHASE BANK,
as Letter of Credit Administrative Agent
By _________________________________
Name:
Title:
Issuing Banks
[INSERT SIGNATURE BLOCKS OF ISSUING
BANKS]
By _________________________________
Name:
Title:
L/C Funding Lenders
[INSERT SIGNATURE BLOCKS OF L/C
FUNDING LENDERS]
By _________________________________
Name:
Title:
CONSENT AND AGREEMENT
Each of the undersigned hereby agrees that it shall be hereby joined as
a joint and several obligor under the Letter of Credit Issuance and
Reimbursement Agreement dated as of October 2, 2002, as amended from time to
time (the "L/C Agreement"), jointly and severally liable, together with the
Company and each other Co-Obligor party to this Consent and Agreement, solely
for all Obligations of the Company under the Letter of Credit Issuance and
Reimbursement Agreement with respect to the Short Term L/C Series A Facility and
the Short Term Series A Letter of Credit Advances made thereunder; the Long Term
L/C Series A Facility and the Long Term Series A Letter of Credit Advances made
thereunder; the Short Term L/C Series B Facility and the Short Term Series B
Letter of Credit Advances made thereunder; and the Long Term Series B Facility
and the Long Term Series B Advances made thereunder (collectively, the "Joined
Obligations").
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to them in the L/C Agreement.
For purposes of Section 8.02 of the L/C Agreement, the following
addresses shall apply:
(i) With respect to Perez Companc International S.A., its
address at K.M. 3 1/2 Antigua Carretera A Cochabamba, Santa Cruz de la
Sierra, Bolivia, Telephone: +59-1-33-556-100, Facsimile:
+59-1-33-556-200, Attention: Roberto Dipinto Cafiero;
(ii) With respect to Perez Companc Ecuador, its address at
Walkers House, Mary Street, P.O. Box 265 G, Georgetown, Grand Cayman,
Cayman Island, Telephone: +345-945-3727, Facsimile: +345-949-7886; and
(iii) With respect to EcuadorTLC S.A., its address at Suiza
209 y Eloy Alfaro, Edificio Azul 6(degree)piso, Quito, Ecuador,
Telephone: +5932-22-72963, Facsimile: +5932-2459-101, Attention:
Horacio Begaries.
Each of the Co-Obligors party to this Consent and Agreement makes the
representations and warranties, as to itself and its Subsidiaries only, set
forth in subsections (a), (b), (c), (d), (e), (k), (l), (m), (o), (p), (r), (s),
(t), (u) and (v) of Annex B to the L/C Agreement and any reference in each such
subsection (including in any defined terms used therein) to "the Company" shall
be deemed a reference to such Co-Obligor, provided that each such representation
shall be made with respect to only the Applicable Debt referred to therein with
respect to which it has a co-obligation and the Applicable Transaction Documents
referred to therein to which it is a party and provided, further, that with
respect to subsections (r), (s), (t) and (v), in the case of Perez Companc
International, each such representation shall be made only in respect of the
laws of Bolivia; in the case of EcuadorTLC S.A., each such representation shall
be made only in respect of the laws of Ecuador; and in the case of Perez Companc
Ecuador, each such representation shall be made only in respect of the laws of
the Cayman Islands.
Sections 8.05, 8.07, 8.08, 8.09, 8.10, 8.11, 8.13 and 8.14 of the L/C
Agreement are incorporated herein by reference and shall apply (solely with
respect to and in connection with the Joined Obligations) to each of the
undersigned mutatis mutandi as if each such party were the Company.
PEREZ COMPANC INTERNATIONAL S.A.
By:__________________________________
Name:
Title:
PEREZ COMPANC ECUADOR
By:__________________________________
Name:
Title:
ECUADORTLC S.A.
By:__________________________________
Name:
Title:
CONSENT AND AGREEMENT
The undersigned hereby agrees that it shall be hereby joined as a joint
and several obligor under the Letter of Credit Issuance and Reimbursement
Agreement dated as of October 2, 2002, as amended from time to time (the "L/C
Agreement"), jointly and severally liable, together with the Company, solely for
all Obligations of the Company under the L/C Agreement with respect to the Long
Term L/C Series D Facility and the Long Term Series D Letter of Credit Advances
made thereunder (collectively, the "Joined Obligations").
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to them in the L/C Agreement.
For purposes of Section 8.02 of the L/C Agreement, the following
address shall apply:
Pecom Energia S.A., Sucursal Bolivia
KM. 3 1/2 Antigua Carretera A Cochabamba
Santa Cruz de la Sierra, Bolivia
Telephone: +59-1-33-556-100
Facsimile: +59-1-33-556-200
Attention: Roberto Dipinto Cafiero
Pecom Energia S.A., Sucursal Bolivia makes the representations and
warranties, as to itself and its Subsidiaries only, set forth in subsections
(a), (b), (c), (d), (e), (k), (l), (m), (o), (p), (r), (s), (t), (u) and (v) of
Annex B to the Letter of Credit Issuance and Reimbursement Agreement and any
reference in each such subsection (including in any defined terms used therein)
to "the Company" shall be deemed a reference to Pecom Energia S.A., Sucursal
Bolivia, provided that each such representation shall be made with respect to
only the Applicable Debt referred to therein with respect to which it has a
co-obligation and the Applicable Transaction Documents referred to therein to
which it is a party and provided, further, that with respect to subsections (r),
(s), (t) and (v), each such representation shall be made only in respect of the
laws of Bolivia.
Pecom Energia S.A., Sucursal Bolivia covenants and agrees that, so long
as any Obligation in respect of the Available Amounts of the Long Term Series D
Letter of Credit or any Long Term Series D Letter of Credit Advances shall
remain unpaid or outstanding it shall:
(a) (i) within 120 days after the end of each fiscal year, furnish
to the Long Term L/C Series D Issuing Bank statements of its financial condition
(including at least a balance sheet and a statement of income) for such fiscal
year; and (ii) within a reasonable time after written request by the Long Term
L/C Series D Issuing Bank, to furnish any information reasonably requested
regarding its business affairs or financial condition, including but not limited
to any written information regarding its finances or business that shall be
furnished to any other institutional creditor; and,
(b) (i) maintain all of its Property useful and necessary in the
business conducted by it in good working order and condition, ordinary wear and
tear excepted and (ii) maintain insurance with creditworthy insurance companies
against such risks and in such amounts as are usually maintained or insured
against in Bolivia, and any other jurisdiction in which it conducts its
operations, by other companies of established repute engaged in the same or a
similar business; and
(c) cause its obligations under the L/C Agreement to at all times
rank at least pari passu with all its other present and future unsecured and
unsubordinated indebtedness, except for indebtedness ranking senior by operation
of law (but not by contract or agreement); and
(d) not (i) consolidate or merge with or into any other Person or
(ii) sell, lease or otherwise transfer, directly or indirectly, all or
substantially all of its assets to any other Person, if such action in the
reasonable judgment of the Long Term L/C Series D Issuing Bank materially
affects the ability of Pecom Energia S.A., Sucursal Bolivia to perform its
payment obligations under the L/C Agreement; provided that Pecom Energia S.A.,
Sucursal Bolivia may merge with another Person if (A) it is the surviving
corporation to such merger and after giving effect to any such merger no Event
of Default under Annex D hereto, or event which, with the passage of time or the
giving of notice, would constitute an Event of Default under Annex D hereto,
shall have occurred and be continuing or (B) (I) in the sole and reasonable
judgment of the Long Term L/C Series D Issuing Bank, the surviving entity has a
credit worthiness the same or better than Pecom Energia S.A., Sucursal Bolivia
at the date of the merger and (II) in the sole judgment of the Long Term L/C
Series D Issuing Bank, the ability of the surviving entity to perform its
payment obligations under the L/C Agreement is not materially less than that of
Pecom Energia S.A., Sucursal Bolivia at the date of the merger.
Sections 8.05, 8.07, 8.08, 8.09, 8.10, 8.11, 8.13 and 8.14 of the L/C
Agreement are incorporated herein by reference and shall apply (solely with
respect to and in connection with the Joined Obligations) to the undersigned
mutatis mutandi as if it were the Company.
PECOM ENERGIA S.A., SUCURSAL BOLIVIA
By:__________________________________
Name:
Title:
SCHEDULE I
ISSUING BANKS
SHORT TERM L/C SERIES A FACILITY
Aggregate Face Amount of Short Term L/C Series A
Letter of Credit
Name of Issuing Bank Lending Office Required to be Issued on Effective Date
- ----------------------------------------------------------------------------------------------------------------
Deutsche Bank AG New York
Branch
60 Wall Street, 25th Floor
New York, NY 10005
Attn: Carl Carrier
Deutsche Bank AG New Telephone: +212-602-2753
York Branch Facsimile: +212-797-0473 $4,500,000
- ----------------------------------------------------------------------------------------------------------------
SHORT TERM L/C SERIES B FACILITY
Aggregate Face Amount of Short Term L/C Series B
Letter of Credit
Name of Issuing Bank Lending Office Required to be Issued on Effective Date
- ----------------------------------------------------------------------------------------------------------------
Deutsche Bank AG New York
Branch
60 Wall Street, 25th Floor
New York, NY 10005
Attn: Carl Carrier
Deutsche Bank AG New Telephone: +212-602-2753
York Branch Facsimile: +212-797-0473 $1,500,000
- ----------------------------------------------------------------------------------------------------------------
SHORT TERM L/C SERIES C FACILITY
Aggregate Face Amount of Short Term L/C Series C
Letter of Credit
Name of Issuing Bank Lending Office Required to be Issued on Effective Date
- ----------------------------------------------------------------------------------------------------------------
9 quai du President Paul
Doumer
92920 Paris La Defense
Cedex - France
Attention: Viviane
Madelaine
Telephone: +331-4189-3208
Facsimile: +331-4189-1521
With a Copy of all Notices
to: Mathieu Vidal/Florence
Gaymard/Dominique Mazel
Telephone: +331-4189-
6489/+331-4189-
3932/+331-4189-2630
Credit Agricole Indosuez Facsimile: +331-4189-3969 $6,000,000
- ----------------------------------------------------------------------------------------------------------------
Mizuho Corporate Bank,
Ltd.
Americas Corporate
Banking Division No.3
1251 Avenue of the
Americas
New York, NY 10020
Attn: Marco Aponte
Telephone: +212-282-3533
Mizuho Corporate Bank, Ltd. Facsimile: +212-282-4488 $10,000,000
- ----------------------------------------------------------------------------------------------------------------
WestLB AG
New York Branch
1211 Avenue of the
Americas
New York, NY 10036
Telephone: +212-852-6314
Facsimile: +212-597-8388
WestLB AG Attention: Ravi Sood $6,000,000
- ----------------------------------------------------------------------------------------------------------------
LONG TERM L/C SERIES A FACILITY
Aggregate Face Amount of Long Term L/C Series A
Letter of Credit
Name of Issuing Bank Lending Office Required to be Issued on Effective Date
- ---------------------------------------------------------------------------------------------------------------
Deutsche Bank AG New
York Branch
60 Wall Street, 25th Floor
New York, NY 10005
Attn: Carl Carrier
Deutsche Bank AG New Telephone: +212-602-2753
York Branch Facsimile: +212-797-0473 $54,450,000
- ---------------------------------------------------------------------------------------------------------------
BNP PARIBAS
787 Seventh Avenue, 30th
Floor
New York, NY 10019
Attention: Raquel
Latuff/Marilynn Zamuz
Telephone: +212-841-
2031/+212-841-3669
BNP PARIBAS Facsimile: +212-841-2537 $19,000,000
- ---------------------------------------------------------------------------------------------------------------
Citibank N.A.
C/o Citicorp North
America, Inc.
3800 Citibank Center,
Building F1
Tampa, FL 33610
Attention: Luz
Smith/Norma Cordero
Telephone: +813-604-
7164/+813-604-7174
Citibank N.A. Facsimile: +813-604-7175 $80,000,000
- ---------------------------------------------------------------------------------------------------------------
LONG TERM L/C SERIES B FACILITY
Aggregate Face Amount of Long Term L/C Series B
Letter of Credit
Name of Issuing Bank Lending Office Required to be Issued on Effective Date
- ---------------------------------------------------------------------------------------------------------------
Deutsche Bank AG New
York Branch
60 Wall Street, 25th Floor
New York, NY 10005
Attn: Carl Carrier
Deutsche Bank AG New Telephone: +212-602-2753
York Branch Facsimile: +212-797-0473 $28,700,000
- ---------------------------------------------------------------------------------------------------------------
BNP PARIBAS
787 Seventh Avenue, 30th
Floor
New York, NY 10019
Attention: Raquel
Latuff/Marilynn Zamuz
Telephone: +212-841-
2031/+212-841-3669
BNP PARIBAS Facsimile: +212-841-2537 $11,000,000
- ---------------------------------------------------------------------------------------------------------------
LONG TERM L/C SERIES C FACILITY
Aggregate Face Amount of Long Term L/C Series C
Letter of Credit
Name of Issuing Bank Lending Office Required to be Issued on Effective Date
- ---------------------------------------------------------------------------------------------------------------
9 quai du President Paul
Doumer
92920 Paris La Defense
Cedex - France
Attention: Viviane
Madelaine
Telephone: +331-4189-
3208
Facsimile: +331-4189-1521
With a Copy of all Notices
to: Mathieu Vidal/Florence
Gaymard/Dominique Mazel
Telephone: +331-4189-
6489/+331-4189-
3932/+331-4189-2630
Credit Agricole Indosuez Facsimile: +331-4189-3969 $4,000,000
- ---------------------------------------------------------------------------------------------------------------
WestLB AG
New York Branch
1211 Avenue of the
Americas
New York, NY 10036
Telephone: +212-852-6314
Facsimile: +212-597-8388
WestLB AG Attention: Ravi Sood $14,000,000
- ---------------------------------------------------------------------------------------------------------------
LONG TERM L/C SERIES D FACILITY
Aggregate Face Amount of Long Term L/C Series D
Letter of Credit
Name of Issuing Bank Lending Office Required to be Issued on Effective Date
- ---------------------------------------------------------------------------------------------------------------
Bayerische Hypo-und
Vereinsbank AG, New York
Branch
150 East 42nd Street
New York, NY 10017
Bayerische Hypo-und Attn: Frederick Schlomann
Vereinsbank AG New York Telephone: +212-672-5370
Branch Facsimile: +212-672-5909 $10,000,000
- ---------------------------------------------------------------------------------------------------------------
SCHEDULE II
L/C FUNDING LENDERS EXISTING ON EFFECTIVE DATE
SHORT TERM L/C SERIES A FACILITY
- ---------------------------------------------------------------------------------------------------------
Aggregate Commitment to
Purchase Principal Amount of
Letter of Credit Advances from
Deutsche Bank AG in Respect of
its Short Term Series A Letter of
Name of
L/C Funding Lender Lending Office Credit Pro Rata Share
- ---------------------------------------------------------------------------------------------------------
Banque Europeenne
Pour L'Amerique
Latine (B.E.A.L.) S.A.
Buenos Aires Branch
Av.L.N. Alem 855, P.
31
C1001AAD
Buenos Aires
Attention: Susana
Mancini
Banque Europeenne Telephone: +5411-
Pour L'Amerique 5776-0085
Latine (B.E.A.L.) Facsimile: +5411-
S.A. 5776-0090 $4,500,000 100%
- ---------------------------------------------------------------------------------------------------------
SHORT TERM L/C SERIES B FACILITY
Aggregate Commitment to Purchase
Principal Amount of Letter of
Name of Credit Advances from Deutsche
L/C Funding Bank in Respect of its Short Term
Lender Lending Office Series B Letter of Credit Pro Rata Share
- -------------------------------------------------------------------------------------------------------
Banque Europeenne
Pour L'Amerique
Latine (B.E.A.L.) S.A.
Buenos Aires Branch
Av.L.N. Alem 855, P.
31
C1001AAD
Buenos Aires
Attention: Susana
Mancini
Banque Telephone: +5411-
Europeenne Pour 5776-0085
L'Amerique Latine Facsimile: +5411-
(B.E.A.L.) S.A. 5776-0090 $1,500,000 100%
- -------------------------------------------------------------------------------------------------------
SHORT TERM L/C SERIES C FACILITY
Aggregate Commitment to
Purchase Principal Amount of
Name of Letter of Credit Advances from
L/C Funding CAI in Respect of its Short Term
Lender Lending Office Series C Letter of Credit Pro Rata Share
- -------------------------------------------------------------------------------------------------------
Mizuho Corporate
Bank, Ltd.
Americas Corporate
Banking Division No.3
1251 Avenue of the
Americas
New York, NY 10020
Attn: Marco Aponte
Telephone: +212-282-
Mizuho 3533
Corporate Bank, Facsimile: +212-282-
Ltd. 4488 $ 2,727,273 45.455%
- -------------------------------------------------------------------------------------------------------
WestLB AG
New York Branch
1211 Avenue of the
Americas
New York, NY 10036
Telephone: +212-852-
6314
Facsimile: +212-597-
8388
WestLB AG Attention: Ravi Sood $ 1,636,364 27.273%
- -------------------------------------------------------------------------------------------------------
SHORT TERM L/C SERIES C FACILITY
Aggregate Commitment to
Purchase Principal Amount of
Name of Letter of Credit Advances from
L/C Funding Mizuho in Respect of its Short
Lender Lending Office Term Series C Letter of Credit Pro Rata Share
- -------------------------------------------------------------------------------------------------------
9 quai du President
Paul Doumer
92920 Paris La Defense
Cedex - France
Attention: Viviane
Madelaine
Telephone: +331-4189-
3208
Facsimile: +331-4189-
1521
With a Copy of all
Notices to: Mathieu
Vidal/Florence
Gaymard/Dominique
Mazel
Telephone: +331-4189-
6489/+331-4189-
3932/+331-4189-2630
Credit Agricole Facsimile:
Indosuez +331-4189-3969 $2,727,273 27.273%
- -------------------------------------------------------------------------------------------------------
WestLB AG
New York Branch
1211 Avenue of the
Americas
New York, NY 10036
Telephone: +212-852-
6314
Facsimile: +212-597-
8388
WestLB AG Attention: Ravi Sood $2,727,273 27.273%
- -------------------------------------------------------------------------------------------------------
SHORT TERM L/C SERIES C FACILITY
Aggregate Commitment to
Purchase Principal Amount of
Letter of Credit Advances from
Name of West LB in Respect of its
L/C Funding Short Term Series C Letter of
Lender Lending Office Credit Pro Rata Share
- -------------------------------------------------------------------------------------------------------
9 quai du President
Paul Doumer
92920 Paris La Defense
Cedex - France
Attention: Viviane
Madelaine
Telephone: +331-4189-
3208
Facsimile: +331-4189-
1521
With a Copy of all
Notices to: Mathieu
Vidal/Florence
Gaymard/Dominique Mazel
Telephone: +331-4189-
6489/+331-4189-
3932/+331-4189-2630
Credit Agricole Facsimile: +331-4189-
Indosuez 3969 $1,636,364 27.273%
- -------------------------------------------------------------------------------------------------------
Mizuho Corporate
Bank, Ltd.
Americas Corporate
Banking Division No.3
1251 Avenue of the
Americas
New York, NY 10020
Attn: Marco Aponte
Telephone: +212-282-
Mizuho 3533
Corporate Bank, Facsimile: +212-282-
Ltd. 4488 $2,727,273 45.455%
- -------------------------------------------------------------------------------------------------------
LONG TERM L/C SERIES A FACILITY
Aggregate
Commitment to
Purchase Principal
Amount of Letter
of Credit Advances
from Deutsche
Bank in Respect of
Name of its Long Term
L/C Funding Series A Letter of
Lender Lending Office Credit Pro Rata Share
- -----------------------------------------------------------------------------------------------------
Banco Latinoamericano de
Exportaciones S.A. - New York
Agency
708 Third Avenue
16th Floor
New York, New York 10017
Attention: Pedro Toll
Telephone: +212-754-9191
Facsimile: +212-753-9060
With a Copy of All Notices to:
Banco Latinoamericano de
Exportaciones S.A.
Banco Calle 50 y Aquilino de la Guardia
Latinoamericano de Panama, Republica de Panama
de Exportaciones Attention: Lourdes Huang
S.A. - New York Telephone: +507-210-8500
Agency Facsimile: +507-269-6333 $ 5,000,000 9.183%
- -----------------------------------------------------------------------------------------------------
Vereins -Und Westbank AG
Alter Wall 22
G 20457
Hamburg
Germany
Attention: Mr. Peter Jens
Vereins -Und Telephone: +4940-3692-2009
Westbank AG Facsimile: +4940-3692-4155 $10,000,000 18.365%
- -----------------------------------------------------------------------------------------------------
Bayerische Hypo-und Vereinsbank
AG, New York Branch
Bayerische 150 East 42nd Street
Hypo-und New York, NY 10017
Vereinsbank AG Attn: Frederick Schlomann
New York Telephone: +212-672-5370
Branch Facsimile: +212-672-5909 $ 5,000,000 9.183%
- -----------------------------------------------------------------------------------------------------
Aggregate
Commitment to
Purchase Principal
Amount of Letter
of Credit Advances
from Deutsche
Bank in Respect of
Name of its Long Term
L/C Funding Series A Letter of
Lender Lending Office Credit Pro Rata Share
- -----------------------------------------------------------------------------------------------------
BankBoston N.A.
100 Rustcraft Road
Dedham, MA 02026
Attention: Lee Shay/Idaliz Rivera
Telephone: +781-467-2529
BankBoston N.A. Facsimile: +781-467-2094 $23,950,000 43.985%
- -----------------------------------------------------------------------------------------------------
Banque Europeenne Pour
L'Amerique Latine (B.E.A.L.) S.A.
Buenos Aires Branch
Av.L.N. Alem 855, P. 31
Banque C1001AAD
Europeenne Pour Buenos Aires
L'Amerique Attention: Susana Mancini
Latine (B.E.A.L.) Telephone: +5411-5776-0085
S.A. Facsimile: +5411-5776-0090 $10,500,000 19.284%
- -----------------------------------------------------------------------------------------------------
LONG TERM L/C SERIES B FACILITY
Aggregate Commitment to
Purchase Principal Amount of
Letter of Credit Advances from
Name of Deutsche Bank in Respect of its
L/C Funding Long Term Series B Letter of
Lender Lending Office Credit Pro Rata Share
- --------------------------------------------------------------------------------------------------------
BankBoston N.A.
100 Rustcraft Road
Dedham, MA 02026
Attention: Lee
Shay/Idaliz Rivera
Telephone: +781-467-
2529
BankBoston Facsimile: +781-467-
N.A 2094 $6,700,000 23.345%
- --------------------------------------------------------------------------------------------------------
Banque Europeenne
Pour L'Amerique
Latine (B.E.A.L.) S.A.
Buenos Aires Branch
Av.L.N. Alem 855, P.
31
C1001AAD
Buenos Aires
Attention: Susana
Banque Mancini
Europeenne Pour Telephone: +5411-
L'Amerique 5776-0085
Latine Facsimile: +5411-
(B.E.A.L.) S.A. 5776-0090 $3,500,000 12.195%
- --------------------------------------------------------------------------------------------------------
LONG TERM L/C SERIES C FACILITY
- --------------------------------------------------------------------------------------
Aggregate Commitment to
Purchase Principal Amount of
Name of Letter of Credit Advances from
L/C Funding CAI in Respect of its Long Term
Lender Lending Office Series C Letter of Credit Pro Rata Share
- --------------------------------------------------------------------------------------
WestLB AG
New York Branch
1211 Avenue of the
Americas
New York,
NY
10036
Telephone: +212-
852-6314
Facsimile: +212-597-
8388
WestLB AG Attention: Ravi Sood $ 3,111,111 77.778%
- --------------------------------------------------------------------------------------
LONG TERM L/C SERIES C FACILITY
- ----------------------------------------------------------------------------------------
Aggregate Commitment to
Purchase Principal Amount of
Name of Letter of Credit Advances from
L/C Funding West LB in Respect of its Long
Lender Lending Office Term Series C Letter of Credit Pro Rata Share
- ----------------------------------------------------------------------------------------
9 quai du President
Paul Doumer
92920 Paris La
Defense Cedex -
France
Attention: Viviane
Madelaine
Telephone: +331-
4189-3208
Facsimile: +331-
4189-1521
With a Copy of all
Notices to: Mathieu
Vidal/Florence
Gaymard/Dominique
Mazel
Telephone: +331-
4189-6489/+331-
4189-3932/+331-
4189-2630
Credit Agricole Facsimile: +331-
Indosuez 4189-3969 $ 3,111,111 22.222%
- ----------------------------------------------------------------------------------------
SCHEDULE III
UP-FRONT FEES
- ---------------------------------------------------------------------
TOTAL AMOUNT OF UP-
NAME OF LENDER FRONT FEE
- ---------------------------------------------------------------------
Banco Latinoamericano de Exportaciones S.A.
- New York Agency $ 21,978.17
- ---------------------------------------------------------------------
BankBoston N.A. $ 134,726.16
- ---------------------------------------------------------------------
Banque Europeenne Pour L'Amerique Latine
(B.E.A.L.) S.A. $ 183,077.73
- ---------------------------------------------------------------------
Bayerische Hypo-und Vereinsbank AG New
York Branch $ 65,934.50
- ---------------------------------------------------------------------
BNP PARIBAS $ 131,869.00
- ---------------------------------------------------------------------
Citibank N.A. $ 400,000.00
- ---------------------------------------------------------------------
Credit Agricole Indosuez $ 47,582.53
- ---------------------------------------------------------------------
Deutsche Bank AG New York Branch $ 81,319.22
- ---------------------------------------------------------------------
Mizuho Corporate Bank, Ltd. $ 106,666.67
- ---------------------------------------------------------------------
Vereins -Und Westbank AG $ 43,956.33
- ---------------------------------------------------------------------
EXECUTION COPY
Annex A
INDEX OF DEFINED TERMS
"Acquired Debt" means Debt of a Person or any of its
Subsidiaries existing at the time such Person becomes a Material Subsidiary or
at the time it merges or consolidates with the Company or any of its Material
Subsidiaries or is assumed in connection with the acquisition of assets from
such Person. Such Debt shall be deemed to have been incurred at the time such
Person becomes a Material Subsidiary or at the time it merges or consolidates
with the Company or a Material Subsidiary or at the time such Debt is assumed in
connection with the acquisition of assets from such Person.
"Additional Amounts" (i) with respect to payments made in
respect of the New Notes, has the meaning specified in Section 2.8 of the
Supplemental Indentures and (ii) with respect to payments made in respect of the
Letter of Credit Facilities, has the meaning specified in Section 2.12 of the
Letter of Credit Issuance and Reimbursement Agreement.
"Adjusted Argentine GAAP" means Argentine GAAP, without giving
effect to any proportional consolidation of the Financial Statement of jointly
controlled corporations that are under the joint control of the Company and one
or more Persons other than a Subsidiary.
"Adjusted EBITDA" means, with respect to any period and as
calculated on a Quarterly Basis (a) the net sales less cost of sales and
administrative, selling and exploration expenses plus/minus (b) the sum of (i)
depreciation expense, (ii) amortization expense and (iii) dividends and advisory
fees received on a recurring basis from any Affiliates, in each case on a
Consolidated basis, determined in accordance with Adjusted Argentine GAAP.
"Administrative Questionnaire" means, with respect to each New
Note Holder, an administrative questionnaire in the form supplied by the New
Notes Administrative Agent and submitted to the Trustee, with a copy to the New
Notes Administrative Agent, duly completed by such New Note Holder.
"Advances" means Base Rate Advances and Eurodollar Rate
Advances.
"Affiliate" means, as to any Person, any other Person that
controls, is controlled by or is under common control with such Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise; provided,
that beneficial ownership of more than 50% of the Voting Stock of a Person shall
be deemed to be control.
"Agent's Account" means the account of the Company maintained
with the Letter of Credit Administrative Agent at its office at JPMorgan Chase
Bank, New York, New York,
1
United States, ABA # 021000021, Account No. 323225241 Account Name: Pecom
Energia Clearing Account, Attention: Lascelles Thompson.
"Alternate Rate Notice" has the meaning specified (a) with
respect to the Long Term Trade Series Note, in Section 2.7 of the Long Term
Trade Series Supplemental Indenture, (b) with respect to the Short Term Trade
Series Note, in Section 2.7 of the Short Term Trade Series Supplemental
Indenture, (c) with respect to the Long Term Working Capital Series Note, in
Section 2.7 of the Long Term Working Capital Series Supplemental Indenture, (d)
with respect to the Short Term Working Capital Series Note, in Section 2.7 of
the Short Term Working Capital Series Supplemental Indenture, and (e) with
respect to the Letter of Credit Advances, Section 2.07(b) of the Letter of
Credit Issuance and Reimbursement Agreement.
"Alternate Rate Period" means any period from and including
the date on which the New Notes Administrative Agent or the Letter of Credit
Administrative Agent, as the case may be, shall have given an Alternate Rate
Notice to the Issuer (a) with respect to the Long Term Trade Series Note,
pursuant to Section 2.7 of the Long Term Trade Series Supplemental Indenture,
(b) with respect to the Short Term Trade Series Note, pursuant to Section 2.7 of
the Short Term Trade Series Supplemental Indenture, (c) with respect to the Long
Term Working Capital Series Note, pursuant to Section 2.7 of the Long Term
Working Capital Series Supplemental Indenture, (d) with respect to the Short
Term Working Capital Series Note, pursuant to Section 2.7 of the Short Term
Working Capital Series Supplemental Indenture, and (e) with respect to the
Letter of Credit Advances, pursuant to Section 2.11(c) of the Letter of Credit
Issuance and Reimbursement Agreement, and in each case continuing thereafter,
unless the Calculation Agent or the Letter of Credit Administrative Agent, as
the case may be, shall have given an Alternate Rate Rescission Notice in respect
of such Alternate Rate Notice, in which case such Alternate Rate Period shall
continue only to, but excluding, the date upon which such Alternate Rate
Rescission Notice is given.
"Alternate Rate Rescission Notice" has the meaning specified
(a) with respect to the Long Term Trade Series Note, in Section 2.7 of the Long
Term Trade Series Supplemental Indenture, (b) with respect to the Short Term
Trade Series Note, in Section 2.7 of the Short Term Trade Series Supplemental
Indenture, (c) with respect to the Long Term Working Capital Series Note, in
Section 2.7 of the Long Term Working Capital Series Supplemental Indenture, (d)
with respect to the Short Term Working Capital Series Note, in Section 2.7 of
the Short Term Working Capital Series Supplemental Indenture, and (e) with
respect to the Letter of Credit Advances, Section 2.07(b) of the Letter of
Credit Issuance and Reimbursement Agreement.
"Alternative Basis Interest Rate" has the meaning specified
(a) with respect to the Long Term Trade Series Note, in Section 2.3.5 of the
Long Term Trade Series Supplemental Indenture, (b) with respect to with respect
to the Short Term Trade Series Note, in Section 2.3.5 of the Short Term Trade
Series Supplemental Indenture, (c) with respect to the Long Term Working Capital
Series Note, in Section 2.3.5 of the Long Term Working Capital Series
Supplemental Indenture, (d) with respect to the Short Term Working Capital
Series Note, in Section 2.3.5 of the Short Term Working Capital Series
Supplemental Indenture, (e) with respect to the Letter of Credit Advances,
Section 2.07(b) of the Letter of Credit Issuance and Reimbursement Agreement.
2
"Applicable Agent Party" means (a) with respect to Applicable
Debt consisting of Letter of Credit Advances, the Letter of Credit
Administrative Agent and (b) with respect to Applicable Debt consisting of New
Notes issued under a Supplemental Indenture, the New Notes Administrative Agent
party to such Supplemental Indenture.
"Applicable Debt" means, with respect to any Event of Default,
covenant or representation or warranty, the Debt issued relating to the
Transaction Document to which the annex containing such Event of Default,
covenant, representation or warranty is attached, except that with respect to
any Event of Default, covenant, representation or warranty relating to the
Letter of Credit Issuance and Reimbursement Agreement, Applicable Debt shall
mean, with respect to any Letter of Credit Facility and without duplication (x)
the Obligations in respect of the Available Amounts of the Letters of Credit
issued under such Letter of Credit Facility and (y) the Letter of Credit
Advances under such Letter of Credit Facility.
"Applicable Interest Coverage Ratio" means, with respect to
any period of four fiscal quarters of the Company, (a) if all such fiscal
quarters occur in the same calendar year, the number specified below under such
calendar year and (b) otherwise, the number equal to (i)(A) the number of such
fiscal quarters occurring in the earlier calendar year specified below
multiplied by the number specified below under such calendar year plus (B) the
number of such quarters occurring in the later calendar year specified below,
multiplied by the number specified below under such calendar year, divided by
(ii) four:
- -------------------------------------------------------------------------
Year: 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------
2.25 2.75 3.00 3.00 3.00 3.00
- -------------------------------------------------------------------------
"Applicable Leverage Ratio" means, as of any date of
determination, (a) if all consecutive fiscal quarters of the Company for which
Financial Statements are required to be filed with the CNV ending on or prior to
such date of determination occur within the same calendar year, the number
specified below under such calendar year, and (b) otherwise, the number equal to
(i) (A) the number of such four consecutive quarters prior to such date of
determination occurring in the earlier calendar year specified below, multiplied
by the number specified below under such calendar year, plus (B) the number of
such four consecutive quarters prior to such date of determination occurring in
the later calendar year specified below, multiplied by the number specified
below under such calendar year, divided by (ii) four:
- -------------------------------------------------------------------------
Year: 2002 2003 2004 2005 2006 2007
- -------------------------------------------------------------------------
5.00 4.50 3.50 3.00 3.00 3.00
- -------------------------------------------------------------------------
"Applicable LIBOR Rate" means, for any particular Interest
Period, LIBOR plus the Applicable Margin.
"Applicable Margin" means, as of any date:
3
(a) with respect to the Long Term Trade Series Notes,
4.00% per annum,
(b) with respect to the Short Term Trade Series Notes,
3.75% per annum;
(c) with respect to the Long Term Working Capital Series
Notes, 4.75% per annum;
(d) with respect to the Short Term Working Capital Series
Notes, 4.00% per annum;
(e) with respect to the Long Term Letter of Credit
Advances, 4.75% per annum; and
(f) with respect to the Short Term Letter of Credit
Advances, 4.00% per annum,
except that:
(i) for so long as any Governmental Rule is in effect or
any governmental policy is being implemented through action or inaction
by any Governmental Authority that materially impairs the ability of
the Company or any of its Subsidiaries to export goods or services or
to deposit and maintain in accounts in countries that are members of
the Organization of Economic Cooperation and Development freely
disposable Dollars received from collections of receivables arising
from sales of such goods and services, and
(ii) such Governmental Rule or policy either:
(A) relates to crude oil and/or oil derivatives,
or
(B) results in the Company's not being able to
meet a ratio specified in subsection (s) of Annex D,
the Applicable Margin shall be 4.75% for the Long Term Trade Series Notes and
4.00% for the Short Term Trade Series Notes.
"Applicable Transaction Documents" means (a) with respect to
Applicable Debt consisting of Letter of Credit Advances with respect to a Letter
of Credit Facility, the Loan Documents with respect to such Letter of Credit
Advances under such Letter of Credit Facility; and (b) with respect to any
Applicable Debt consisting of New Notes, the Note Documents with respect to such
New Notes.
"Applicable Transaction Parties" means (a) with respect to
Applicable Debt under a Letter of Credit Facility, the Lenders that have made or
have the obligation to make Letter of Credit Advances under such Letter of
Credit Facility (including for the avoidance of doubt any L/C Funding Lender
required to purchase any portion of such Letter of Credit Advance) and (b)
4
with respect to Applicable Debt consisting of New Notes, the New Note Holders
holding such New Notes.
"Argentina" means the Republic of Argentina.
"Argentine GAAP" means generally accepted accounting
principles as required to be applied by CNV and as in effect from time to time
in Argentina.
"Asset Sale" means any sale, lease, transfer or other
disposition of any Property (including any casualty to any Property except with
respect to any casualty in respect of which the insurance proceeds received are
less than U.S.$250,000) consummated at any time after the Effective Date,
including, without limitation, as a result of an expropriation or
nationalization.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and accepted by the Letter of Credit Administrative
Agent, in substantially the form of Exhibit L to the Letter of Credit Issuance
and Reimbursement Agreement.
"Available Amount" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Available Asset Sale Proceeds" shall mean, as of any date of
determination and with respect to each Asset Sale (excluding Asset Sales in the
ordinary course of business) consummated by the Company or any of its
Subsidiaries prior to such date, the aggregate Net Cash Proceeds received by the
Company or any of its Subsidiaries in respect of such Asset Sale, to the extent
that such Net Cash Proceeds (i) have not been, and are not required to be,
applied to prepay principal of Letter of Credit Advances and New Notes and/or to
be deposited to L/C Collateral Accounts in respect of Letter of Credit
Facilities and (ii) have not previously been applied to any Capital Expenditure
of the Company as permitted by Section (e)(ii) of the Negative Covenants set
forth in Annex C.
"Bankruptcy Law" means Argentine Law No. 24,522 or any other
applicable law that amends, supplements or supersedes Argentine Law No. 24,522
and any other applicable bankruptcy, insolvency, reorganization or other similar
law of any applicable jurisdiction.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be equal to
the highest of:
(a) the arithmetic average of the rate of interest
announced (i) by JPMorgan Chase Bank in New York, New York, from time
to time as JPMorgan Chase's base rate; (ii) by Citibank, N.A. in New
York, New York from time to time as Citibank's base rate; and (iii) by
Deutsche Bank AG in New York, New York from time to time as Deutsche
Bank' s base rate;
(b) the sum (adjusted to the nearest 1/16th of 1% or, if
there is no nearest 1/16th of 1%, to the next higher 1/16th of 1%) of
(i) 1/2 of 1% per annum, plus (ii) the rate obtained by dividing (A)
the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of
deposit
5
of major United States money market banks, such three-week moving
average (adjusted to the basis of a year of 360 days) being determined
weekly on each Monday (or, if such day is not a Business Day, on the
next succeeding Business Day) for the three-week period ending on the
previous Friday by the Letter of Credit Administrative Agent on the
basis of such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by the Letter of Credit
Administrative Agent from three New York certificate of deposit dealers
of recognized standing selected by the Letter of Credit Administrative
Agent , by (B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by the Board
of Governors of the U.S. Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not limited
to, any emergency, supplemental or other marginal reserve requirement)
for JPMorgan Chase Bank with respect to liabilities consisting of or
including (among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States, plus (iii) the average
during such three-week period of the annual assessment rates estimated
by the Letter of Credit Administrative Agent for determining the then
current annual assessment payable by JPMorgan Chase Bank to the Federal
Deposit Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of JPMorgan Chase Bank in the United States; and
(c) 1/2 of one percent per annum above the Federal Funds
Rate.
"Base Rate Advance" means a Letter of Credit Advance that
bears interest as provided in Section 2.06(a)(i) of the Letter of Credit
Issuance and Reimbursement Agreement.
"Beneficial Owner" means any Person who holds a beneficial
interest in a New Note through a Participant or an Indirect Participant.
"Block 18" means a 70% share of all concessionaire rights
relating to the concession known as Block 18, including without limitation 70%
of all rights of the concessionaire under the Contrato de Participaciones para
la Exploracion de Hidrocarburos y Explotacion de Petroleo Crudo en el Bloque 18
del Mapa Catastral Petrolero Ecuatoriano dated as of December 19, 1995 between
Amoco Ecuador B.V. and Empresa Estatal Petroleos del Ecuador, (which were
ultimately assigned and acquired by the Company and certain of its Subsidiaries
pursuant to a sequence of actions variously approved by Acuerdo Ministerial No.
336 of June 4, 1996, Acuerdo Ministerial No. 76 of September 29, 1997, Acuerdo
Ministerial No. 079 of November 4, 1997, Acuerdo Ministerial No. 089 of January
6, 1998, Acuerdo Ministerial No. 142 of April 9, 2001, Acuerdo Ministerial No.
146 of April 19, 2001 and Acuerdo Ministerial No. 155 of May 17, 2001),
facilities related thereto and the oil production in connection therewith, and
all future proceeds or receivables related to any of the foregoing.
"Block 31" means all concessionaire rights relating to the
concession known as Block 31, including without limitation all rights of the
concessionaire under the Contrato de Participaciones para la Exploracion de
Hidrocarburos y Explotacion de Petroleo dated July 26, 1996 between Perez
Companc Ecuador and Empresa Estatal de Petroleos del Ecuador, facilities
6
related thereto and the oil production in connection therewith, and all future
proceeds or receivables related to any of the foregoing.
"Board of Directors" means the board of directors of the
Company.
"Borrowing" means a borrowing consisting of Letter of Credit
Advances of the same Type made on the same day and under the same Letter of
Credit Facility by the Lenders.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City or Buenos Aires with
respect to normal banking or foreign exchange transactions and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London, England interbank market.
"Calculation Agent" means the New Notes Administrative Agent
for purposes of the Supplemental Indentures and (b) the Letter of Credit
Administrative Agent for purposes of the Letter of Credit Issuance and
Reimbursement Agreement.
"Capital Expenditures" means, for any period, the sum (without
duplication) of:
(a) all expenditures (whether in cash or otherwise, and
including the aggregate principal amount of all Debt (including
obligations under capital leases) assumed or incurred in connection
with any such expenditures) made, by the Company or any of its
Subsidiaries for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or
additions thereto, that have been or should be, in accordance with
Adjusted Argentine GAAP, reflected as additions to property, plant or
equipment on a consolidated balance sheet of the Company;
(b) all loans and advances to, purchases and other
acquisitions of equity and Debt of, capital contributions to and other
investments in Unconsolidated Persons; and
(c) all expenditures (whether in cash or otherwise, and
including the aggregate principal amount of all Debt (including
obligations under capital leases) assumed or incurred in connection
with any such expenditures) made, by the Company or any of its
Subsidiaries during such period in acquiring equity capital of any
Person that becomes a Subsidiary of the Company,
in each case during such period, except that the accrual of interest on any loan
or advance to or Debt of any Unconsolidated Person, whether or not capitalized,
shall not be deemed to be a Capital Expenditure.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of common stock and preferred stock of such Person, (ii) with respect
to any Person that is not a corporation, any and all partnership or other equity
or ownership interests of such Person; and (iii) any warrants, rights or options
to purchase any of the instruments or interests referred to in (i) or (ii).
7
"Cash" means Dollars.
"Change of Control" means,
(a) except in the case where Petroleo Brasileiro S.A.
("Petrobras") has (either directly or indirectly through one or more of
its Subsidiaries) beneficial ownership of Voting Stock of the Company
(or other securities convertible into such Voting Stock) representing
50% or more of the combined voting power of all Voting Stock of the
Company immediately following such acquisition, the acquisition by any
Person or two or more Persons acting in concert of:
(i) beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) directly or indirectly,
whether by virtue of (a) the issuance, sale or other
disposition of Capital Stock of the Company or a direct or
indirect holder of Capital Stock of the Company, (b) a merger,
consolidation or sale of assets involving the Company, a
Subsidiary of the Company or a direct or indirect holder of
Capital Stock of the Company, (c) any voting trust or other
agreement to which the Company or any such holder is a party
or is subject, or (d) otherwise, of Voting Stock of the
Company (or other securities convertible into such Voting
Stock) representing 50% or more of the combined voting power
of all Voting Stock of the Company, or
(ii) the power (whether by contract or otherwise)
to appoint and/or remove the majority of the members of the
Board of Directors or other governing body of the Company or
otherwise to direct or cause the direction of the affairs and
policies of the Company, or
(b) the dissolution of the Company, whether or not
otherwise in compliance with the provisions of the Indenture and the
Supplemental Indentures.
"Clearstream" means Clearstream, Banking, societe anonyme.
"CNV" means the National Securities Commission of Argentina
(Comision Nacional de Valores), which at the date hereof is located at 25 de
Mayo, 175 Buenos Aires, Argentina, or, if at any time after the execution of the
Documents, the CNV is not existing and performing the duties now assigned to it
under Argentine Law, then the body performing such duties at such time.
"CNV Filing" means the filing of certain documents with the
CNV required pursuant to Article 75, Chapter VI of the Regulations of the CNV
(as amended and restated by General Resolution No. 368/2001 of the CNV or any
further amendment or restatement).
"Company" means Pecom Energia, S.A.
8
"Consolidated" refers to the consolidation of accounts in
accordance with Adjusted Argentine GAAP.
"Consolidated Assets" means, as of any date of determination,
the total assets as of such date as reflected in the Financial Statements
required to be filed by the Company with the CNV prior to such date.
"Conversion Date" has the meaning specified in Section 2.08(b)
of the Letter of Credit Issuance and Reimbursement Agreement.
"Convert", "Conversion" and "Converted" each refers to either
of (i) a conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08(a) of the Letter of Credit Issuance and Reimbursement
Agreement or (ii) the conversion of Advances into Debt evidenced by MT Notes
pursuant to Section 2.08(b) of the Letter of Credit Issuance and Reimbursement
Agreement.
"Converted A/B Notes" means all New Notes issued upon a
Conversion of any Letter of Credit Advances under the Short Term L/C Series A
Facility, the Long Term L/C Series A Facility, the Short Term L/C Series B
Facility and the Long Term L/C Series B Facility.
"Converted D Notes" means all New Notes issued upon a
Conversion of any Letter of Credit Advances under the Long Term L/C Series D
Facility.
"Co-Obligors" shall mean, collectively, Perez Companc
International S.A., Perez Companc Ecuador, Ecuador TLC S.A. and Pecom Energia
S.A., Sucursal Bolivia.
"Debt" of any Person means, without duplication and whether or
not required by Argentine GAAP to be recorded as a liability, actual or
contingent, (a) all indebtedness of such Person for borrowed money, (b) all
Obligations of such Person for the deferred purchase price of Property or
services (other than trade payables not overdue by more than 90 days incurred in
the ordinary course of such Person's business), (c) all Obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments, (d)
all Obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to Property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
Property), (e) all Obligations of such Person as lessee under leases that have
been or should be, in accordance with U.S. GAAP recorded as capital leases, (f)
all Obligations, contingent or otherwise, of such Person in respect of
acceptances, letters of credit or similar extensions of credit, (g) all
Obligations of such Person in respect of Hedge Agreements, (h) all Guaranteed
Debt, and (i) all Debt referred to in clauses (a) through (h) above (including
Guaranteed Debt) secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Debt. Debt outstanding under any Hedge Agreement shall be valued (a) in
the case of a Hedge Agreement documented pursuant to the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and Derivatives
Association, Inc. (capitalized terms used in this paragraph and not otherwise
defined in this Agreement having the respective meanings
9
specified in such master agreement), the amount, if any, that would be payable
by the Company or any of its Subsidiaries to its counterparty to such Hedge
Agreement, as if (i) such Hedge Agreement was being terminated early on such
date of determination, (ii) the Company or its Subsidiary was the sole "Affected
Party", and (iii) the counterparty was the sole party determining such payment
amount (with the counterparty making such determination pursuant to the
provisions of the form of such master agreement); or (b) in the case of a Hedge
Agreement traded on an exchange, the mark-to-market value of such Hedge
Agreement, which will be the unrealized loss on such Hedge Agreement to the
Company or its Subsidiary party to such Hedge Agreement based on the settlement
price of such Hedge Agreement on such date of determination, and (c) in all
other cases, the mark-to-market value of such Hedge Agreement, which will be the
amount, if any, that, would be payable by the Company or any of its Subsidiaries
to its counterparty to such Hedge Agreement if (i) such Hedge Agreement were
terminated early on such date of determination, (ii) the methodology of
calculating the amount owed or owing were the most favorable to the counterparty
under such Hedge Agreement, and (iii) the counterparty was the sole party
determining such payment amount (in accordance with the provisions of such Hedge
Agreement). For purposes of the Transaction Documents fluctuations in the value
of any Hedge Agreement as described in the preceding sentence, changes in
Exchange Rates (including de-pesofication), re-evaluation of index mechanisms
and other fluctuations which have the effect of increasing the nominal value of
the Company's Debt but which do not represent receipt of cash or other assets by
the Company shall not, in each case, be deemed an incurrence of Debt.
"Debt Service" means, for any period, the sum (computed
without duplication) of all principal payments scheduled to be made by the
Company and its Subsidiaries in respect of Debt during such period, plus
Interest Expense for such period.
"Default" means, with respect to the Applicable Debt, any
Event of Default or any event that would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.
"Default Rate" has the meaning specified in Section 2.06(b) of
the Letter of Credit Issuance and Reimbursement Agreement.
"Designated Lenders" means,
(a) with respect to any Letter of Credit Facility, the
Lenders owed, or holding at least 66-2/3% of the sum of:
(i) the then outstanding aggregate principal
amount of Letter of Credit Advances under such Facility,
(ii) the then aggregate amount of the obligations
of all Funding Lenders to purchase their Pro Rata Shares of
the Letter of Credit Advances required to be made (assuming
the full drawdown of the then outstanding Available Amounts of
all Letters of Credit) under such Facility, and
(iii) the then aggregate amount of the obligations
of all Issuing Banks to retain the amounts of all Letter of
Credit Advances required to be made by
10
them under such Facility (assuming the full drawdown of the
then outstanding Available Amounts of the Letters of Credit);
(b) with respect to holders of any series New Notes at
least 66-2/3% of the then outstanding aggregate principal amount of
such series of New Notes at such time;
"Distribution Agreement" means the Distribution Agreement
between the Issuer and J.P. Morgan Securities Inc. dated May 6, 1998 relating to
the Issuer's U.S.$1,000,000,000 Medium-Term Note Program.
"Dollars" means the lawful currency of the United States.
"Ecuadorian Assets" means the OCP Shares, the Sucursal Shares,
Block 18, Block 31, all other assets in Ecuador owned by the Company or any
Subsidiary, all facilities related thereto, all oil production in connection
therewith, and all future proceeds or receivables related to any of the
foregoing
"Effective Date" has the meaning specified in Section 3.01 of
the Letter of Credit Issuance and Reimbursement Agreement.
"Eligible Trade Transactions" means all exports of goods and
services by the Company and its Subsidiaries.
"Eligible Trade Transactions Report" means a quarterly report
setting forth a description of the Eligible Trade Transactions during such
fiscal quarter, along with shipment dates, currencies, supplier or buyer names
and payment terms with respect to such Eligible Trade Transactions.
"Environmental Laws" means all applicable laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants currently as
in force from time to time in the applicable jurisdiction.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the U.S. Federal Reserve
System, as in effect from time to time.
"Eurodollar Business Day" means a day (other than a Saturday
or Sunday) on which dollar deposits may be dealt in on the London inter-bank
market.
"Eurodollar Rate Advance" means a Letter of Credit Advance
that bears interest as provided in Section 2.06(a)(ii) of the Letter of Credit
Issuance and Reimbursement Agreement.
11
"Eurodollar Reserve Percentage" means, for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing or New
Notes, as applicable, the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time to time
by the Board of Governors of the U.S. Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a member
bank of the U.S. Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities as
defined in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"Events of Default" with respect to the Applicable Date, has
the meaning specified in Annex D.
"Excess Cash" means, for any fiscal year, an amount equal to
the greater of zero and the sum of (a) the aggregate net cash provided by (used
in) operating activities as reflected on the Consolidated Financial Statements
of the Company for such fiscal year and as calculated on a Quarterly Basis,
minus (b) Permitted Capital Expenditure for such fiscal year to the extent
incurred during such fiscal year, minus (c) Net Financial Liabilities Paid for
such fiscal year.
"Exchange Rate" means (a) for any date, (i) with respect to
Argentine pesos to be converted to Dollars, the rate for the purchase of Dollars
with Argentine pesos (or any other legal tender of Argentina for such date)
quoted by Reuters page ARSIB= offer prices as of 3:00 P.M., Buenos Aires time on
such date and (ii) with respect to any other non-Dollar currency to be converted
to Dollars, the noon dollar buying rate in The City of New York for cable
transfers of the non-Dollar currency to be converted to Dollars published by the
Federal Reserve Bank of New York and (b) for any period, the average of the
Exchange Rates calculated for each Business Day of such period. With respect to
the determination of the Exchange Rate between Dollars and Argentine pesos, in
the event that Reuters page ARSIB= does not quote a rate for such date or
period, such Exchange Rate will be determined in accordance with the CME/EMTA
ARS Industry Survey Rate which is published on the Reuters Screen EMTA Page, the
EMTA website (www.emta.org) and the CME website (www.cme.com) by approximately
1:00 p.m., Buenos Aires time, on such date or period.
"Existing Property" means Property owned by the Company and
its Subsidiaries on the date hereof (or equity of entities owning solely assets
owned by the Company and its Subsidiaries on the date hereof).
"Expiration Date" shall mean, with respect to any Letter of
Credit, the date on which such Letter of Credit is fully drawn, expires,
terminates or is cancelled in accordance with its terms.
"Facility Fee Payment Date" shall have the meaning ascribed
thereto in Section 2.03(a)(i) of the Letter of Credit Issuance and Reimbursement
Agreement.
12
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
U.S. Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding Business
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
such day on such transactions received by the New Notes Administrative Agent or
the Letter of Credit Administrative Agent, as the case may be, from three
Federal funds brokers of recognized standing selected by it.
"Financial Statements" means the consolidated balance sheets,
related statement of income and statement of cash flow, of any Person, in the
case of the Company, prepared in accordance with Argentine GAAP.
"Governmental Approval" means any authorization, consent,
approval, license, ruling, permit, concession, certification, exemption, filing,
variance, order, judgment, decree, publication, notice to, declaration of or
with or registration by or with any Governmental Authority.
"Governmental Authority" means any government or any state,
department or other political subdivision thereof, or any governmental body,
agency, authority (including without limitation any central bank or taxing
authority) or instrumentality (including without limitation any court or
tribunal) exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any corporation,
partnership or other entity directly or indirectly owned by or subject to the
control of any of the foregoing.
"Governmental Rule" means any constitution, statute, law,
regulation, ordinance, rule, judgment, order, decree, permit, concession, grant,
franchise, license, agreement, directive, guideline, requirement of, or other
governmental restriction or any similar form of decision of or determination by,
or any interpretation or administration of any of the foregoing by, any
Governmental Authority.
"Guaranteed Debt" of any Person means all Debt of others
guarantied directly or indirectly in any manner by such Person, or in effect
guarantied directly or indirectly by such Person through an agreement or
commitment (a) to pay or purchase such Debt or to advance or supply funds for
the payment or purchase of such Debt, (b) to purchase, sell or lease (as lessee
or lessor) property, or to purchase or sell services, primarily for the purpose
of enabling the debtor to make payment of such Debt or to assure the holder of
such Debt against loss, (c) to supply funds to or in any other manner invest in
the debtor (including any agreement to pay for property or services irrespective
of whether such property is received or such services are rendered) or (d)
otherwise to assure a creditor against loss.
"Hedge Agreements" means, with respect to any Person, interest
rate swap agreements, interest rate cap or collar agreements or arrangements
designed to protect such Person or its Subsidiaries against fluctuations in
interest rates, as in effect from time to time, currency swaps agreements,
forward exchange rate agreements, foreign currency options or futures, exchange
rate collar agreements, exchange rate insurance and other agreements or
arrangements designed to provide protection against fluctuations in currency
exchange rates.
13
"Holding Office" means any particular office or branch through
which a New Note Holder holds a New Note.
"Indemnified Party" has the meaning for purposes of (a) the
Letter of Credit Issuance and Reimbursement Agreement as specified in Section
8.04(b) of the Letter of Credit Issuance and Reimbursement Agreement (b) the
Long Term Trade Series Supplemental Indenture as specified in Section 6.9 of the
Long Term Trade Supplemental Indenture, (c) the Short Term Trade Series
Supplemental Indenture as specified in Section 6.9 of the Short Term Trade
Supplemental Indenture, (d) the Long Term Working Capital Series Supplemental
Indenture as specified in Section 6.9 of the Long Term Working Capital
Supplemental Indenture, and (e) the Short Term Working Capital Series
Supplemental Indenture as specified in Section 6.9 of the Short Term Working
Capital Supplemental Indenture.
"Indenture" means the Amended and Restated Indenture between
the Company and Citibank, N.A. as trustee (and The Bank of New York as successor
trustee), dated as of August 1, 2002, as amended, amended and restated or
modified from time to time.
"Indirect Participant" means a Person who holds an interest in
a New Note through a Participant.
"Interest Expense" means, for any period, the sum of, without
duplication determined on a Consolidated basis for the Company and its
Subsidiaries:
(a) the aggregate of accrued cash and non-cash interest
expense and other financial expense (and to the extent not accrued, any
amount expended, capitalized, or paid by the Company and its
Subsidiaries) of the Company and its Subsidiaries for such period
including, without limitation (whether or not constituting interest
expense in accordance with Adjusted Argentine GAAP):
(i) any amortization or accretion of Debt
discount or any interest accrued on Debt of the Company in the
form of additional Debt,
(ii) any amortization of deferred financing
costs,
(iii) the net results, whether positive or
negative, of (A) costs accrued less (B) payments received
under any interest rate swap agreements, interest rate cap or
collar agreements or arrangements designed to protect against
fluctuations in interest rates (including amortization of
fees),
(iv) all capitalized interest,
(v) the interest portion of any Debt consisting
of deferred payment obligations,
(vi) commissions, discounts and other fees and
charges incurred in respect of letters of credit or bankers'
acceptances, and
14
(vii) any interest expense on Guaranteed Debt of
the Company or one of its Subsidiaries or secured by a Lien on
the assets of the Company or one of its Subsidiaries (whether
or not such guarantee or Lien is called upon); and
(b) the interest component of capital lease Obligations
accrued and/or scheduled to be accrued (and to the extent not accrued,
any amount expended, capitalized or paid by the Company and its
Subsidiaries) during such period.
"Interest Period" means, (a) for each Trade Series Note or
Working Capital Series Note, the period commencing on (and including) the date
of the Takedown with respect to such Trade Series Note or Working Capital Series
Note, respectively, or the last day of the preceding Interest Period, as
applicable, and ending on (but excluding) the next succeeding Payment Date and
(b) for each Eurodollar Advance, comprising part of the same Borrowing, the
period commencing on the date of such Eurodollar Rate Advance or the date of
Conversion of any Base Rate Advance into such Eurodollar Rate Advance, and
ending on the next succeeding Payment Date and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on (but excluding) the next succeeding Payment Date; provided that,
in each case,
(i) if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day, and
(ii) the final Interest Period shall end on Maturity Date
with respect to such Trade Series Note, Working Capital Note or
Eurodollar Rate Advance, as applicable.
"Issuing Banks" means the Short Term L/C Series A Issuing
Bank, the Short Term L/C Series B Issuing Bank, the Short Term L/C Series C
Issuing Banks, the Long Term L/C Series A Issuing Banks, the Long Term L/C
Series B Issuing Banks, the Long Term L/C Series C Issuing Banks and the Long
Term L/C Series D Issuing Bank and any permitted assignee thereof.
"L/C Accrual Rate" shall mean (i) with respect to any Letter
of Credit issued under a Short Term Letter of Credit Facility, 4.00% per annum
and (ii) with respect to any Letter of Credit issued under a Long Term Letter of
Credit Facility, 4.75% per annum.
"L/C Collateral Accounts" means the Long Term L/C Series A
Account, the Long Term L/C Series B Account, the Long Term L/C Series C Account,
the Long Term L/C Series D Account, the Short Term L/C Series A Account, the
Short Term L/C Series B Account and the Short Term L/C Series C Account.
"L/C Collateral Accounts Security Agreement" means the
Security Agreement dated October 4, 2002 between the Company and JPMorgan Chase
Bank as the Letter of Credit Administrative Agent and account bank.
"L/C Funding Lenders" means each Person set forth on Schedule
II of the Letter of Credit Issuance and Reimbursement Agreement as an L/C
Funding Lender under a Letter of
15
Credit Facility and each Person that shall become an L/C Funding Lender pursuant
to Section 8.06 of the Letter of Credit Issuance and Reimbursement Agreement for
so long as such Person shall be a party to the Letter of Credit Issuance and
Reimbursement Agreement.
"L/C Related Documents" has the meaning specified in Section
2.05(h)(i) of the Letter of Credit Issuance and Reimbursement Agreement.
"Lenders" means the Issuing Banks, the L/C Funding Lenders and
each Person that shall become a party to the Letter of Credit Issuance and
Reimbursement Agreement pursuant to Section 8.06 of the Letter of Credit
Issuance and Reimbursement Agreement.
"Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Lending Office" opposite its name on Schedule I
or Schedule II, as applicable, or in the Assignment and Acceptance pursuant to
which it became a Lender, as the case may be, or such other office of such
Lender as such Lender may from time to time specify to the Company and the
Letter of Credit Administrative Agent.
"Letters of Credit" means the Short Term Series A Letter of
Credit, the Short Term Series B Letter of Credit, the Short Term Series C
Letters of Credit, the Long Term Series A Letters of Credit, the Long Term
Series C Letters of Credit and the Long Term Series D Letter of Credit.
"Letter of Credit Administrative Agent" has the meaning
specified in the recital of parties to the Letter of Credit Issuance and
Reimbursement Agreement.
"Letter of Credit Advance Note" means a promissory note of the
Company payable to the order of any Issuing Bank or any L/C Funding Lender, in
substantially the form of Exhibit K of the Letter of Credit Issuance and
Reimbursement Agreement, evidencing the indebtedness of the Company to such
Lender resulting from any Letter of Credit Advance made by such Lender, as
amended.
"Letter of Credit Advances" means the Short Term Series A
Letter of Credit Advances, the Short Term Series B Letter of Credit Advances,
the Short Term Series C Letter of Credit Advances, the Long Term Series A Letter
of Credit Advances, the Long Term Series B Letter of Credit Advances, the Long
Term Series C Letter of Credit Advances and the Long Term Series D Letter of
Credit Advances and a "Tranche" of Letter of Credit Advances shall be a
reference to all Letter of Credit Advances made under the same Letter of Credit
Facility.
"Letter of Credit Facilities" means the Short Term L/C Series
A Facility, the Short Term L/C Series B Facility, the Short Term L/C Series C
Facility, the Long Term L/C Series A Facility, the Long Term L/C Series B
Facility, the Long Term L/C Series C Facility and the Long Term L/C Series D
Facility.
"Letter of Credit Issuance and Reimbursement Agreement" means
the Letter of Credit Issuance and Reimbursement Agreement dated as of October 2,
2002 among the Company, the Letter of Credit Administrative Agent, the Issuing
Banks and the L/C Funding Lenders.
16
"Leverage Index" means, at any date of determination, the
ratio of
(i) the amount that is equal to:
(A) the aggregate outstanding principal
amount of Consolidated Debt of the Company (excluding
Subordinated Debt) as of such date (if not
denominated in Dollars, converted into Dollars at the
applicable Exchange Rate on such date) (without
giving effect to any prepayment or repayment referred
to in clause (C) below), minus
(B) the value of the cash and
investments thereof credited to the L/C Collateral
Accounts as of such date, minus
(C) the portion of the proceeds of any
Debt incurred on such date that is:
(1) applied to the prepayment
or repayment of Consolidated Debt, or
(2) deposited into L/C
Collateral Accounts that are subject to
Liens permitted under subsection (a) of the
Negative Covenants applicable to all
Applicable Debt,
at the time of such incurrence or that is outstanding
on such date but is required so to be and is applied
or deposited by the earlier of (x) the 30th day after
such incurrence and (y) the end of the fiscal quarter
of the Company in which such incurrence occurs, to
(ii) Consolidated Adjusted EBITDA of the Company
(calculated on a Quarterly Basis) for the period of four fiscal quarters ending
on or most recently prior to such day for which Financial Statements are
required to be filed with the CNV.
"LIBOR" means, for any particular Interest Period, the rate
per annum determined by the Calculation Agent (any such determination to be
conclusive, absent manifest error):
(a) on the basis of the offered rate for deposits of not
less than U.S. $1,000,000 having a maturity equal to such Interest
Period, which appears on the display designated as page "3750" on the
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) (or, if such display is not available at any such time, a
comparable display, as determined in the sole discretion of, and
selected by, the Calculation Agent or the Letter of Credit
Administrative Agent, as the case may be, of London interbank offered
rates of major banks as may be available from a similar service)
("Telerate Page 3750") as of 11:00 A.M., London time, on the Eurodollar
Business Day that is two Eurodollar Business Days before the first day
of such Interest Period, provided that if such rates do not appear or
otherwise are not available, then LIBOR will be determined as described
in clause (b) below, and (ii) if an Alternate Rate Rescission Notice
has been given during
17
such Interest Period, then LIBOR will be determined as provided in this
clause (a) as of 11:00 A.M., London time, on the Eurodollar Business
Day immediately following the date on which such Alternate Rate
Rescission Notice was given, it being understood and agreed by the
parties hereto the Applicable LIBOR Rate based on the LIBOR as
determined pursuant to this subclause (ii) shall apply for each
remaining day of such Interest Period after the Alternate Period ended
by the giving of such Alternate Rate Rescission Notice.
(b) for a LIBOR interest determination date on which no
offered rate for the Interest Period specified herein may be determined
as described in (a) above, the Calculation Agent or the Letter of
Credit Administrative Agent, as the case may be, will request the
principal London offices of each of four major banks in the London
interbank market, as selected by such Calculation Agent or Letter of
Credit Administrative Agent, to provide such Calculation Agent or
Letter of Credit Administrative Agent with its offered quotations for
deposits in Dollars, commencing on the first day of such Interest
Period, to prime banks in the London interbank market at approximately
11:00 A.M. (London time) on such interest determination date and in a
principal amount not less than U.S.$1,000,000 for such Interest Period
that is representative of a single transaction in such market at such
time. If at least three such quotations are provided, LIBOR with
respect to such Interest Period will be the interest rate per annum
equal to the rate per annum obtained by the arithmetic mean (rounded
upwards to the nearest 1/16th of 1%) of such quotations. If fewer than
three quotations are provided, LIBOR with respect to such Interest
Period will be the interest rate per annum equal to the arithmetic mean
(rounded upwards to the nearest 1/16th of 1%) of the rates quoted at
approximately 11:00 A.M. (New York City time) on such interest
determination date by three major banks in New York City selected by
the such Calculation Agent or Letter of Credit Administrative Agent for
the applicable interest period in Dollars to leading European banks
and/or banks incorporated in the United States of America, commencing
on the first day of such Interest Period, and in a principal amount not
less than U.S.$1,000,000 for such Interest Period that is
representative of a single transaction in such market at such time.
"LIBOR Funding Costs" means any loss or expense which (i) a
New Note Holder or Lender may sustain or incur as a consequence of a payment or
prepayment of any New Notes or Letter of Credit Advances, as applicable, on any
day that is not the last day of the applicable Interest Period or (ii) a
Purchaser may incur as a consequence of any postponement or failure to issue any
New Notes, including, in each case, without limitation, any such loss (excluding
loss of the Applicable Margin) or expense arising from the reemployment of funds
obtained by such New Note Holder, Purchaser or Lender or from amounts payable by
such New Note Holder, Purchaser or Lender to lenders of funds obtained by such
New Notes or Letter of Credit Advances, as applicable.
"Lien" means any mortgage, pledge, hypothecation, lien,
security interest or other charge, encumbrance of any kind or nature whatsoever,
including, without limitation, the lien or retained title of a conditional
vendor, or any other arrangement having substantially the same economic or
practical effect of the foregoing and any easement, right of way or other
encumbrance on title to real property, provided that the lessee in respect of
any lease required to
18
be recorded as a capital lease under U.S. GAAP shall be deemed to have incurred
a Lien on the Property leased thereunder.
"Loan Document" means each of, and "Loan Documents" means all
of, with respect to the Letter of Credit Advances under each Letter of Credit
Facility, the Letter of Credit Issuance and Reimbursement Agreement, the Letter
of Credit Advance Notes evidencing such Letter of Credit Advances and the L/C
Collateral Accounts Security Agreement, in each case as amended or otherwise
modified from time to time.
"Long Term Debt" means Debt (excluding Debt under the
Transaction Documents) that by its terms matures more than one year after the
date of determination or matures within one year from such date but is renewable
or extendible, at the option of such Person, to a date more than one year after
such date or arises under a revolving credit or similar agreement that obligates
the lender or lenders to extend credit during a period of more than one year
after such date.
"Long Term L/C Facilities" means the Long Term L/C Series A
Facility, the Long Term L/C Series B Facility, the Long Term L/C Series C
Facility and the Long Term L/C Series D Facility.
"Long Term L/C Lenders" means the Long Term L/C Series A
Funding Lenders, the Long Term L/C Series B Funding Lenders, the Long Term L/C
Series C Funding Lenders and all Issuing Banks under the Long Term L/C Series A
Facility, the Long Term L/C Series B Facility, the Long Term L/C Series C
Facility and the Long Term L/C Series D Facility.
"Long Term L/C Series A Account" has the meaning specified in
Section 6 of the L/C Collateral Accounts Security Agreement.
"Long Term L/C Series A Facility" means an amount equal to
$153,450,000, which amount represents the maximum aggregate amount available to
be drawn under the Long Term Series A Letters of Credit and the maximum
aggregate amount of Long Term Series A Letter of Credit Advances to be made by
the Long Term L/C Series A Issuing Banks and the Long Term L/C Series A Funding
Lenders with respect to drawings under such Long Term Series A Letters of Credit
pursuant to the terms and conditions of the Letter of Credit Issuance and
Reimbursement Agreement, and the rights and obligations of the Company, the Long
Term L/C Series A Issuing Banks and Long Term L/C Series A Funding Lenders in
respect of such Long Term Series A Letters of Credit and Long Term Series A
Letter of Credit Advances.
"Long Term L/C Series A Funding Lenders" means the banks,
financial institutions and other institutional lenders listed on Schedule II of
the Letter of Credit Issuance and Reimbursement Agreement as the Long Term L/C
Series A Funding Lenders and each Person that shall become a Long Term L/C
Series A Funding Lender under the Letter of Credit Issuance and Reimbursement
Agreement pursuant to Section 8.06 of such agreement.
"Long Term L/C Series A Issuing Bank" has the meaning
specified in the recital of parties to the Letter of Credit Issuance and
Reimbursement Agreement.
19
"Long Term L/C Series A Lenders" means the Long Term L/C
Series A Issuing Bank and the Long Term L/C Series A Funding Lenders.
"Long Term L/C Series B Account" has the meaning specified in
Section 6 of the L/C Collateral Accounts Security Agreement.
"Long Term L/C Series B Facility" means an amount equal to
$39,700,000, which amount represents the maximum aggregate amount available to
be drawn under the Long Term Series B Letters of Credit and the maximum
aggregate amount of Long Term Series B Letter of Credit Advances to be made by
the Long Term L/C Series B Issuing Banks and the Long Term L/C Series B Funding
Lenders with respect to drawings under such Long Term Series B Letters of Credit
pursuant to the terms and conditions of the Letter of Credit Issuance and
Reimbursement Agreement, and the rights and obligations of the Company, the Long
Term L/C Series B Issuing Banks and Long Term L/C Series B Funding Lenders in
respect of such Long Term Series B Letter of Credit and Long Term Series B
Letter of Credit Advances.
"Long Term L/C Series B Funding Lenders" means the banks,
financial institutions and other institutional lenders listed on Schedule II of
the Letter of Credit Issuance and Reimbursement Agreement as the Long Term L/C
Series B Funding Lenders and each Person that shall become a Long Term L/C
Series B Funding Lender under the Letter of Credit Issuance and Reimbursement
Agreement pursuant to Section 8.06 of such agreement.
"Long Term L/C Series B Issuing Bank" has the meaning
specified in the recital of parties to the Letter of Credit Issuance and
Reimbursement Agreement.
"Long Term L/C Series B Lenders" means the Long Term L/C
Series B Issuing Bank and the Long Term L/C Series B Funding Lenders.
"Long Term L/C Series C Account" has the meaning specified in
Section 6 of the L/C Collateral Accounts Security Agreement.
"Long Term L/C Series C Facility" means an amount equal to
$18,000,000, which amount represents the maximum aggregate amount available to
be drawn under the Long Term Series C Letters of Credit and the maximum
aggregate amount of Long Term Series C Letter of Credit Advances to be made by
the Long Term L/C Series C Issuing Banks and the Long Term L/C Series C Funding
Lenders with respect to drawings under such Long Term Series C Letters of Credit
pursuant to the terms and conditions of the Letter of Credit Issuance and
Reimbursement Agreement, and the rights and obligations of the Company, the Long
Term L/C Series C Issuing Banks and Long Term L/C Series C Funding Lenders in
respect of such Long Term Series C Letters of Credit and Long Term Series C
Letter of Credit Advances.
"Long Term L/C Series C Funding Lenders" means the banks,
financial institutions and other institutional lenders listed on Schedule II of
the Letter of Credit Issuance and Reimbursement Agreement as the Long Term L/C
Series C Funding Lenders and each Person that shall become a Long Term L/C
Series C Funding Lender under the Letter of Credit Issuance and Reimbursement
Agreement pursuant to Section 8.06 of such agreement.
20
"Long Term L/C Series C Issuing Bank" has the meaning
specified in the recital of parties to the Letter of Credit Issuance and
Reimbursement Agreement.
"Long Term L/C Series C Lenders" means the Long Term L/C
Series C Issuing Bank and the Long Term L/C Series C Funding Lenders.
"Long Term L/C Series D Account" has the meaning specified in
Section 6 of the L/C Collateral Accounts Security Agreement.
"Long Term L/C Series D Facility" means an amount equal to
$10,000,000, which amount represents the maximum aggregate amount available to
be drawn under the Long Term Series D Letter of Credit and the maximum aggregate
amount of Long Term Series D Letter of Credit Advances to be made by the Long
Term L/C Series D Issuing Bank with respect to drawings under the Long Term
Series D Letter of Credit pursuant to the terms and conditions of the Letter of
Credit Issuance and Reimbursement Agreement, and the rights and obligations of
the Company and the Long Term L/C Series D Issuing Bank in respect of the Long
Term Series D Letter of Credit and Long Term Series D Letter of Credit Advances.
"Long Term L/C Series D Issuing Bank" has the meaning
specified in the recital of parties to the Letter of Credit Issuance and
Reimbursement Agreement.
"Long Term Letter of Credit Advances" means the Long Term
Series A Letter of Credit Advances, the Long Term Series B Letter of Credit
Advances, the Long Term Series C Letter of Credit Advances and the Long Term
Series D Letter of Credit Advances.
"Long Term Letters of Credit" means the Long Term Series A
Letters of Credit, the Long Term Series B Letters of Credit, the Long Term
Series C Letters of Credit and the Long Term Series D Letter of Credit.
"Long Term MT Notes" means notes issued pursuant to a
supplemental indenture in the form of Exhibit H-2 to the Letter of Credit
Issuance and Reimbursement Agreement upon a Conversion of Letter of Credit
Advances pursuant to Section 2.08(b) of the Letter of Credit Issuance and
Reimbursement Agreement.
"Long Term New Notes" means the Long Term Working Capital
Series Notes, Long Term Trade Series Notes and Long Term MT Notes.
"Long Term Series A Letters of Credit" has the meaning set
forth in Section 2.01(a)(iv) of the Letter of Credit Issuance and Reimbursement
Agreement.
"Long Term Series A Letter of Credit Advance" means an advance
by a Lender to the Company pursuant to Section 2.02(a)(iv) of the Letter of
Credit Issuance and Reimbursement Agreement.
"Long Term Series B Letters of Credit" has the meaning set
forth in Section 2.01(a)(v) of the Letter of Credit Issuance and Reimbursement
Agreement.
21
"Long Term Series B Letter of Credit Advance" means an advance
by a Lender to the Company pursuant to Section 2.02(b)(v) of the Letter of
Credit Issuance and Reimbursement Agreement.
"Long Term Series C Letters of Credit" has the meaning set
forth in Section 2.01(a)(vi) of the Letter of Credit Issuance and Reimbursement
Agreement.
"Long Term Series C Letter of Credit Advance" means an advance
deemed made by a Lender to the Company pursuant to Section 2.02(a)(vi) of the
Letter of Credit Issuance and Reimbursement Agreement.
"Long Term Series D Letters of Credit" has the meaning set
forth in Section 2.01(a)(vi) of the Letter of Credit Issuance and Reimbursement
Agreement.
"Long Term Series D Letter of Credit Advance" means an advance
deemed made by a Lender to the Company pursuant to Section 2.02(a)(vii) of the
Letter of Credit Issuance and Reimbursement Agreement.
"Long Term Series D Letters of Credit" has the meaning set
forth in Section 2.01(a)(vii) of the Letter of Credit Issuance and Reimbursement
Agreement.
"Long Term Series D Letter of Credit Advance" means an advance
deemed made by a Lender to the Company pursuant to Section 2.02(a)(vi) of the
Letter of Credit Issuance and Reimbursement Agreement.
"Long Term Trade Series Agent" has the meaning set forth in
Section 6.1.1 of the Long Term Trade Supplemental Indenture.
"Long Term Trade Series Holder" means, as to any outstanding
Long Term Trade Series Note, a Holder of such Long Term Trade Series Note.
"Long Term Trade Series Notes" has the meaning set forth in
Section 2.1 of the Long Term Trade Series Supplemental Indenture.
"Long Term Trade Series Supplemental Indenture" means the
Second Supplemental Indenture dated as of October 4, 2002 among the Company, The
Bank of New York, as Trustee, Co-Security Registrar, Authenticating Agent,
Paying Agent and Transfer Agent in New York, Banco Rio de la Plata S.A., as
Security Registrar, Argentine Paying Agent and Transfer Agent in Argentina and
JPMorgan Chase Bank, as Administrative Agent and Calculation Agent.
"Long Term Working Capital Series Agent" has the meaning set
forth in Section 6.1.1 of the Long Term Working Capital Series Supplemental
Indenture.
"Long Term Working Capital Series Holder" means, as to any
outstanding Long Term Working Capital Series Note a Holder of such Long Term
Working Capital Series Note.
22
"Long Term Working Capital Series Notes" has the meaning set
forth in Section 2.1 of the Long Term Working Capital Series Supplemental
Indenture.
"Long Term Working Capital Series Supplemental Indenture"
means the Fourth Supplemental Indenture dated as of October 4, 2002 among the
Company, The Bank of New York, as Trustee, Co-Security Registrar, Authenticating
Agent, Paying Agent and Transfer Agent in New York, Banco Rio de la Plata S.A.,
as Security Registrar, Argentine Paying Agent and Transfer Agent in Argentina
and JPMorgan Chase Bank, as Administrative Agent and Calculation Agent.
"Majority Holders" means,
(a) with respect to any Letter of Credit Facility, the
Lenders owed, or holding at least a majority in interest of the sum of:
(i) the then outstanding aggregate principal
amount of Letter of Credit Advances under such Letter of
Credit Facility,
(ii) the then aggregate amount of the obligations
of all Funding Lenders to purchase their Pro Rata Shares of
the Letter of Credit Advances required to be made (assuming
the full drawdown of the then outstanding Available Amounts of
all Letters of Credit) under such Facility, and
(iii) the then aggregate amount of the obligations
of Issuing Banks to retain amounts of all Letter of Credit
Advances required to be made by them under such Facility
(assuming the full drawdown of the then outstanding Available
Amount) of the Letter of Credits);
(b) with respect to any series of New Notes, holders of
at least a majority in interest of the then outstanding aggregate
principal amount of such Series of New Notes at such time;
"Material Adverse Change" means any material adverse change in
the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its Subsidiaries taken as a whole and
(b) the ability of the Company or any Co-Obligor party thereto to perform its
obligations under any Transaction Document.
"Material Subsidiary" means any Subsidiary of the Company
whose total assets exceed 1.5% of the Company's Consolidated Assets (as shown on
the Company's most recent Financial Statements required to be delivered to the
Applicable Transaction Parties with respect to the Applicable Debt).
"Maturity Date" means (a) with respect to the Long Term Letter
of Credit Advances, October 4, 2007, (b) with respect to the Short Term Letter
of Credit Advances,
23
October 4, 2003, (c) with respect to the Long Term New Notes October 4, 2007 and
(d) with respect to the Short Term New Notes October 3, 2003.
"Medium Term Note Program" means the Medium Term Note Program
established pursuant to a resolution of the shareholders of the Company adopted
on April 8, 1998 and a resolution of the Board of Directors of the Company
adopted on April 17, 1998, and to an extraordinary resolution of the
shareholders of the Company adopted on June 20, 2002 and a resolution of the
Board of Directors of the Company adopted on June 7, 2002, for the issuance of
medium term notes pursuant to the Indenture, in accordance with which the
Company is authorized to issue from time to time up to an aggregate principal
amount outstanding at any time up to U.S. $2,500,000,000 of securities in one or
more series.
"MT Notes" means the Short Term MT Notes and the Long Term MT
Notes.
"Net Cash Proceeds" means, with respect to any Asset Sale or
the incurrence or issuance of any Debt or the sale or issuance of any equity
interest by any Person, the aggregate amount of cash received from time to time
(whether as initial consideration or through payment or disposition of deferred
consideration) by or on behalf, or on account of, such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions, (b) the taxes
paid or payable in respect of such Asset Sale after taking into account any
reduction in Consolidated tax liability due to available tax credits or
deductions and any tax sharing arrangements and (c) the amount of any Debt
secured by a Lien on any asset subject to such Asset Sale that, by the terms of
such transaction, is required to be repaid upon such disposition, in each case
to the extent, but only to the extent, that the amounts so deducted are, at the
time of receipt of such cash, actually paid to a Person that is not an Affiliate
of such Person or the Company or any Affiliate of the Company and are properly
attributable to such transaction or to the Property that is the subject thereof.
"Net Financial Liabilities Paid" means, with respect to any
period, an amount equal to:
(a) the aggregate principal amount of Consolidated Debt
of the Company paid or prepaid during such period (other than any
principal amount of Short Term New Notes or Short Term Letter of Credit
Advances paid on a date other than their respective Maturity Dates,
unless paid ratably with payments of principal of Long Term New Notes,
Long Term Letter of Credit Advances and Long Term MT Notes), plus
(b) the aggregate amounts deposited into all L/C
Collateral Accounts during such period (other than any amounts
deposited into the Short Term L/C Series A Account, the Short Term L/C
Series B Account or the Short Term L/C Series C Account unless (A)
deposits are made ratably into the Long Term L/C Series A Account, the
Long Term L/C Series B Account, the Long Term L/C Series C Account and
the Long Term L/C Series D Account (or payments are made ratably on the
related Long Term Letter of Credit Advances) and (B) payments are made
ratably of principal of Long Term New Notes and Long Term Letter of
Credit Advances), less
24
(c) the aggregate principal amount of Consolidated Debt
incurred by the Company during such period and the aggregate amount of
cash released from all L/C Collateral Accounts during such period for
the Company's account, provided that the Net Financial Liabilities Paid
shall at no time be less than zero and provided, further that amounts
paid or incurred in respect of Project Finance Debt and Subordinated
Debt shall not be included in the determination of Net Financial
Liabilities Paid.
"New Debt Amounts" means, with respect to any fiscal quarter
of the Company, the sum of (computed without duplication):
(b) the aggregate Net Cash Proceeds received by the
Company and its Subsidiaries during such fiscal quarter from Debt
(other than Subordinated Debt and Project Finance Debt) incurred by
them during such fiscal quarter (if not denominated in Dollars,
converted into Dollars at the Exchange Rate applicable at the date of
incurrence), minus
(c) the aggregate principal amount of Debt of the Company
and its Subsidiaries (other than Subordinated Debt and Project Finance
Debt) repaid or prepaid during such fiscal quarter (if not denominated
in Dollars, converted into Dollars at the Exchange Rate applicable at
the date of such repayment or prepayment), minus
(d) the aggregate amount deposited into L/C Collateral
Accounts during such fiscal quarter.
For purposes of this definition, any amounts drawn or disbursed under any
acceptance, letter of credit or similar extension of credit (other than any
Letter of Credit or any trade or standby letter of credit issued for the account
of the Company or any Subsidiary in accordance with normal business practices)
as to which the Company or any of its Subsidiaries would have any Obligations,
whether or not such amounts were received by the Company or its Subsidiaries,
will be considered Net Cash Proceeds received by the Company and its
Subsidiaries during the fiscal quarter in which such drawing or disbursement
occurred.
"New Note Holder" means, as to any outstanding New Note, the
registered holder of such New Note.
"New Notes" means the Trade Series Notes, the Working Capital
Series Notes and the MT Notes.
"New Notes Administrative Agent" means JPMorgan Chase Bank.
"Note Documents" means (a) with respect to the Long Term Trade
Series Notes, the Long Term Trade Series Supplemental Indenture, the Note
Purchase Agreement, and the Long Term Trade Series Notes, (b) with respect to
the Long Term Working Capital Series Notes, the Long Term Working Capital Series
Supplemental Indenture, the Note Purchase Agreement, and the Long Term Working
Capital Series Notes, (c) with respect to the Short Term Trade Series Notes, the
Short Term Trade Series Supplemental Indenture, the Note Purchase Agreement, and
the Short Term Trade Series Notes, (d) with respect to the Short Term Working
Capital Series Notes, the Short Term Working Capital Series Supplemental
Indenture, the Note
25
Purchase Agreement, and the Short Term Working Capital Series Notes, and (e)
with respect to any series of MT Notes, the supplemental indenture pursuant to
which such Notes are issued, the note purchase agreement pursuant to which such
Notes are acquired and the notes evidencing such MT Notes.
"Note Payment" means, with respect to any New Notes, the sum
(computed without duplication) payable by the Company of all principal and
interest plus any default interest, and all fees, expenses, reimbursements and
other amounts, payable in respect of any Obligation, accrued and unpaid,
including, without limitation, fees, expenses, reimbursements, indemnities and
Additional Amounts pursuant to such New Notes, the Applicable Transaction
Documents related to such New Notes and the Base Indenture (as it relates to
such New Notes).
"Note Purchase Agreement" means the Note Purchase Agreement
dated as of October 2, 2002 among the Company, the Purchasers named therein and
JPMorgan Chase Bank as agent.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Sections (f), (g) and (h) of Annex D. Without limiting the generality of the
foregoing, the Obligations of the Company under the Applicable Transaction
Documents with respect to the Applicable Debt include (a) the obligation to pay
principal, interest, letter of credit commissions, charges, expenses, fees,
attorneys' fees and disbursements, indemnities and other amounts payable by the
Company under any such Applicable Transaction Document and (b) the obligation of
the Company to reimburse any amount in respect of any of the foregoing that the
Applicable Agent Party with respect to the Applicable Debt or any Applicable
Transaction Party with respect to Applicable Debt, in its sole discretion, may
elect or be required to pay or advance on behalf of the Company or its
Subsidiaries.
"OCP Agreements" means (a) the Amended and Restated Initial
Shipper Transportation Agreement between Oleoducto de Crudos Pesados (OCP)
Ecuador S.A. and Perez Companc Ecuador dated as of May 29, 2001; (b) the
Performance Guarantee Agreement dated as of May 29, 2001 made by Pecom Energia
S.A. in favor of Oleoducto de Crudos Pesados (OCP) Ltd.; (c) the Amended and
Restated Owners Agreement among Oleoducto de Crudos Pesados (OCP) Ltd., Perez
Companc International S.A. and the other parties thereto dated as of May 29,
2001; and (d) the Performance Guarantee Agreement dated as of May 29, 2001 made
by Pecom Energia S.A. in favor of Oleoducto de Crudos Pesados (OCP) Ltd., in
each case as amended, amended and restated, supplemented or otherwise modified
from time to time.
"OCP Shares" means shares of capital stock of Oleoductos de
Crudos Pesados (OCP) Ltd., a Cayman Islands company, owned directly or
indirectly by the Company.
"Offering Memorandum" means the offering memorandum dated June
10, 2002, as supplemented by the supplementary offering memorandum dated July
22, 2002 and the
26
offering memorandum supplement dated September 12, 2002 and with respect to (i)
the Long Term Trade Series Notes the pricing supplement dated September 30,
2002, (ii) the Short Term Trade Series Notes the pricing supplement dated
September 30, 2002, (iii) the Long Term Working Capital Series Notes the pricing
supplement dated September 30, 2002 and (iv) the Short Term Working Capital
Series Notes the pricing supplement dated September 30, 2002, in each case,
prepared by the Company in respect of the Medium-Term Notes Program.
"Other Taxes" has the meaning specified in Section 2.12(b) of
the Letter of Credit Issuance and Reimbursement Agreement.
"Participant" means, with respect to DTC, Euroclear or
Clearstream, Luxembourg, Persons who have accounts with DTC, Euroclear or
Clearstream, Luxembourg, respectively (and, with respect to DTC, shall include
Euroclear and Clearstream, Luxembourg).
"Payment Date" means the fourth day of each of April, July,
October and January.
"Permitted Capital Expenditure" means for each fiscal year of
the Company, the amount set forth opposite to that year in the table in Section
(e)(iii)(A) of the Negative Covenants set forth in Annex C.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or a
government or any political subdivision or agency thereof.
"Personal Property Tax" means the tax imposed pursuant to
Argentine Personal Property Tax Law and Decree No. 127/96, as amended by Decree
No. 812/96, as the same may be further amended after the date hereof.
"Pesos" means the lawful currency of Argentina.
"PORTAL" means The Private Offerings, Resales and Trading
through the Automated Linkages Market of The National Association of Securities
Dealers, Inc.
"Prime Rate" means the arithmetic average of the rate of
interest per annum publicly announced from time to time by JPMorgan Chase Bank,
Deutsche Bank AG and Citibank, N.A. as their respective prime rate in effect at
their respective principal offices in New York City. The Prime Rate is not
intended to be the lowest rate of interest charged by JPMorgan Chase Bank,
Deutsche Bank AG or Citibank, N.A. in connection with extensions of credit to
debtors.
"Project Finance Debt" means Debt incurred or existing in
connection with the financing (but not refinancing) of any Property in
connection with a project of any Person, including the acquisition, development,
expansion, renovation, upgrade or other modification or construction of such
project, if the person or persons providing such financing agree, whether or not
expressly, to look to the Property financed and the revenues arising out of, or
other proceeds of realization from, such Property as the sole source of
repayment for the monies advanced, with recourse to those revenues and proceeds
and Property forming the subject matter of such Property (including, without
limitation, credit support provided by third parties (other than a
27
Subsidiary of the Company) without recourse to the Company or a Subsidiary,
insurance, contracts and shares or other rights of ownership in the entity or
entities that own the relevant Property) and other Property ancillary thereto
but without recourse to any other Property of the Company or a Subsidiary;
provided that recourse shall not be deemed to exist by reason of normal and
customary sponsor support arrangements including, but not limited to, sponsor
completion guaranties. For the avoidance of doubt, Long Term Debt of Perez
Companc de Venezuela S.A. under a credit facility including International
Finance Corporation as a lender shall be deemed to be Project Finance Debt,
provided that (i) such Debt is incurred for acquisitions, construction,
development, improvements and/or repairs for the hydro-carbon business in
Venezuela of Perez Companc de Venezuela S.A. and ancillary purposes and (ii) the
aggregate principal amount of such Debt does not exceed $400,000,000 (or its
equivalent in other currencies).
"Project Financing" means financing obtained through the
incurrence of Project Finance Debt.
"Pro Rata Share" of any Letter of Credit Advance made upon a
draw under a Letter of Credit issued under any Letter of Credit Facility means,
with respect to any L/C Funding Lender at any time, the product of the amount of
such Letter of Credit Advance (taking into account any prepayment of such Letter
of Credit Advance to be effected pursuant to Section 2.04(c) of the Letter of
Credit Issuance and Reimbursement Agreement) multiplied by the percentage set
forth in the Register at such time next to such L/C Funding Lender's name
representing the percentage of each Letter of Credit Advance made upon a draw
under such Letter of Credit required to be purchased by such L/C Funding Lender.
"Property" means any asset, revenue, present or future, or
other property, tangible or intangible, real or personal, including without
limitation, any right to receive income.
"Quarterly Basis" means, with respect to any financial
calculation set forth in Annex C involving a determination of any item set forth
in the Company's Consolidated statements of income or statements of cash flow
for any period of one or more fiscal quarters of the Company, that such
calculation shall be made on the basis of each such fiscal quarter's results as
set forth in the quarterly financial statements relating to such fiscal quarter
individually (as adjusted to reflect financial statements prepared on the basis
of Adjusted Argentine GAAP), without giving effect to any subsequent adjustments
to the information set forth in such quarterly financial statements for
inflation or exchange rate fluctuations and after converting such item into
Dollars at the Exchange Rate applicable to such quarter.
"Register" has the meaning specified in Section 8.06(d) of the
Letter of Credit Issuance and Reimbursement Agreement.
"Required Holders" means at any time with respect to any
series of New Notes, the New Note Holders holding New Notes representing at
least 66-2/3% of the then outstanding aggregate principal amount of such series
of New Notes.
"Required Lenders" means at any time Lenders owed at least
66-2/3% of the sum of (i) the then outstanding aggregate unpaid principal
amounts of the Letter of Credit Advances,
28
(ii) the then aggregate amount of the obligations of all L/C Series Funding
Lenders to purchase their Pro Rata Shares of the Letter of Credit Advances
required to be made by the Issuing Banks assuming the full drawdown of the then
outstanding Available Amounts of all Letters of Credit and (iii) the then
aggregate amount of the obligations of the Issuing Banks to retain the Letter of
Credit Advances required to be made by them (assuming the full drawdown of the
then outstanding Available Amounts with respect to the Letters of Credit).
"Sale of Ecuadorian Assets" has the meaning specified in
Section (b) of the Covenants Applicable to Applicable Debt Under Short Term L/C
Series A Facility, Long Term L/C Series A Facility, Short Term L/C Series B
Facility and Long Term L/C Series B Facility and Converted A/B Notes set forth
in Annex C.
"Satisfied in Cash" means, with respect to a Note Payment
obligation with respect to each of the Trade Series Notes and Working Capital
Series Notes, the receipt by the Paying Agent (or the Argentine Paying Agent, if
applicable) for the benefit of the Trade Series Holders or Working Capital
Series Holders, as applicable, under the terms of the applicable Supplemental
Indenture of an amount in Cash paid by the Issuer in satisfaction of such Note
Payment obligation, it being understood and agreed that such Note Payment
obligation of the Issuer will be deemed reduced by, and to the extent of, such
payment.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Settlement Agreement" has the meaning specified in Section 5
of the Note Purchase Agreement.
"Short Term Debt" of any Person means the principal amount of
Debt that by its terms matures within one year after the date of determination
and is not renewable or extendable solely and unconditionally at the option of
such Person to a date that is more than one year after the date of
determination. With respect to any calculation of Short Term Debt on any date,
Short Term Debt in respect of the reimbursement obligation under the Letter of
Credit Issuance and Reimbursement Agreement shall equal the amount of Debt that
the Company would incur (assuming a full drawdown of all Letters of Credit on
such date) and that would mature in its entirety within a year from such date.
"Short Term L/C Facilities" means the Short Term L/C Series A
Facility, the Short Term L/C Series B Facility and the Short Term L/C Series C
Facility.
"Short Term L/C Series A Account" has the meaning specified in
Section 6 of the L/C Collateral Accounts Security Agreement.
"Short Term L/C Series A Facility" means an amount equal to
$4,500,000, which amount represents the maximum aggregate amount available to be
drawn under the Short Term Series A Letter of Credit and the maximum aggregate
amount of Short Term Series A Letter of Credit Advances to be made by the Short
Term L/C Series A Issuing Bank and the Short Term L/C Series A Funding Lenders
with respect to drawings under the Short Term Series A Letter of Credit pursuant
to the terms and conditions of the Letter of Credit Issuance and Reimbursement
Agreement, and the rights and obligations of the Company, the Short Term L/C
Series A Issuing
29
Bank and Short Term L/C Series A Funding Lenders in respect of the Short Term
Series A Letters of Credit and Short Term Series A Letter of Credit Advances.
"Short Term L/C Series A Funding Lender" means the banks,
financial institutions and other institutional lenders listed on Schedule II of
the Letter of Credit Issuance and Reimbursement Agreement as the Short Term L/C
Series A Funding Lenders and each Person that shall become a Short Term L/C
Series A Funding Lender under the Letter of Credit Issuance and Reimbursement
Agreement pursuant to Section 8.06 of such agreement.
"Short Term L/C Series A Issuing Bank" has the meaning
specified in the recital of parties to the Letter of Credit Issuance and
Reimbursement Agreement.
"Short Term L/C Series A Lenders" means the Short Term L/C
Series A Issuing Bank and the Short Term L/C Series A Funding Lenders.
"Short Term L/C Series B Account" has the meaning specified in
Section 6 of the L/C Collateral Accounts Security Agreement.
"Short Term L/C Series B Facility" means an amount equal to
$1,500,000, which amount represents the maximum aggregate amount available to be
drawn under the Short Term Series B Letter of Credit and the maximum aggregate
amount of Short Term Series B Letter of Credit Advances to be made by the Short
Term L/C Series B Issuing Bank and the Short Term L/C Series B Funding Lenders
with respect to drawings under the Short Term Series B Letter of Credit pursuant
to the terms and conditions of the Letter of Credit Issuance and Reimbursement
Agreement, and the rights and obligations of the Company, the Short Term L/C
Series B Issuing Bank and Short Term L/C Series B Funding Lenders in respect of
the Short Term Series B Letter of Credit and Short Term Series B Letter of
Credit Advances.
"Short Term L/C Series B Funding Lender" means the banks,
financial institutions and other institutional lenders listed on Schedule II of
the Letter of Credit Issuance and Reimbursement Agreement as the Short Term L/C
Series B Funding Lenders and each Person that shall become a Short Term L/C
Series B Funding Lender under the Letter of Credit Issuance and Reimbursement
Agreement pursuant to Section 8.06 of such agreement..
"Short Term L/C Series B Issuing Bank" has the meaning
specified in the recital of parties to the Letter of Credit Issuance and
Reimbursement Agreement.
"Short Term L/C Series B Lenders" means the Short Term L/C
Series B Issuing Bank and the Short Term L/C Series B Funding Lenders.
"Short Term L/C Series C Account" has the meaning specified in
Section 6 of the L/C Collateral Accounts Security Agreement.
"Short Term L/C Series C Facility" means an amount equal to
$22,000,000, which amount represents the maximum aggregate amount available to
be drawn under the Short Term Series C Letters of Credit and the maximum
aggregate amount of Short Term Series C Letter of Credit Advances to be made by
the Short Term L/C Series C Issuing Banks and the Short Term L/C Series C
Funding Lenders with respect to drawings under such Short Term
30
Series C Letters of Credit pursuant to the terms and conditions of the Letter of
Credit Issuance and Reimbursement Agreement, and the rights and obligations of
the Company, the Short Term L/C Series C Issuing Banks and Short Term L/C Series
C Funding Lenders in respect of such Short Term Series C Letters of Credit and
Short Term Series C Letter of Credit Advances.
"Short Term L/C Series C Funding Lender" means the banks,
financial institutions and other institutional lenders listed on Schedule II of
the Letter of Credit Issuance and Reimbursement Agreement as the Short Term L/C
Series C Funding Lenders and each Person that shall become a Short Term L/C
Series C Funding Lender under the Letter of Credit Issuance and Reimbursement
Agreement pursuant to Section 8.06 of such agreement.
"Short Term L/C Series C Issuing Banks" has the meaning
specified in the recital of parties to the Letter of Credit Issuance and
Reimbursement Agreement.
"Short Term L/C Series C Lenders" means the Short Term L/C
Series C Issuing Banks and the Short Term L/C Series C Funding Lenders.
"Short Term Letters of Credit" means the Short Term Series A
Letter of Credit, the Short Term Series B Letters of Credit and the Short Term
Series C Letters of Credit.
"Short Term Letter of Credit Advances" means the Short Term
Series A Letter of Credit Advances, the Short Term Series B Letter of Credit
Advances and the Short Term Series C Letter of Credit Advances.
"Short Term MT Notes" means notes issued pursuant to a
supplemental indenture in the form of Exhibit H-1 to the Letter of Credit
Issuance and Reimbursement Agreement upon a Conversion of Letter of Credit
Advances pursuant to Section 2.08(b) of the Letter of Credit Issuance and
Reimbursement Agreement.
"Short Term New Notes" means the Short Term Trade Series
Notes, the Short Term Working Capital Series Notes and the Short Term MT Notes.
"Short Term Series A Letter of Credit" has the meaning set
forth in Section 2.01(a)(i) of the Letter of Credit Issuance and Reimbursement
Agreement.
"Short Term Series A Letters of Credit Advance" means an
advance by a Lender to the Company pursuant to Section 2.02(a)(i) of the Letter
of Credit Issuance and Reimbursement Agreement.
"Short Term Series B Letter of Credit" has the meaning set
forth in Section 2.01(a)(ii) of the Letter of Credit Issuance and Reimbursement
Agreement.
"Short Term Series B Letter of Credit Advance" means an
advance by a Lender to the Company pursuant to Section 2.02(a)(ii) of the Letter
of Credit Issuance and Reimbursement Agreement.
"Short Term Series C Letter of Credit" has the meaning set
forth in Section 2.01(a)(iii) of the Letter of Credit Issuance and Reimbursement
Agreement.
31
"Short Term Series C Letter of Credit Advance" means an
advance by a Lender to the Company pursuant to Section 2.02(a)(iii) of the
Letter of Credit Issuance and Reimbursement Agreement.
"Short Term Trade Series Agent" has the meaning set forth in
Section 6.1.1 of the Short Term Trade Series Supplemental Indenture.
"Short Term Trade Series Holder" means, as to any outstanding
Short Term Trade Series Note a Holder of such Short Term Trade Series Note.
"Short Term Trade Series Notes" has the meaning set forth in
Section 2.1 of the Short Term Trade Series Supplemental Indenture.
"Short Term Trade Series Supplemental Indenture" means the
First Supplemental Indenture dated as of October 4, 2002 among the Company, The
Bank of New York, as Trustee, Co-Security Registrar, Authenticating Agent,
Paying Agent and Transfer Agent in New York, Banco Rio de la Plata S.A., as
Security Registrar, Argentine Paying Agent and Transfer Agent in Argentina and
JPMorgan Chase Bank, as Administrative Agent and Calculation Agent.
"Short Term Working Capital Series Agent" has the meaning set
forth in Section 6.1.1 of the Short Term Working Capital Series Supplemental
Indenture.
"Short Term Working Capital Series Holder" means, as to any
outstanding Short Term Working Capital Series Note a Holder of such Short Term
Working Capital Series Note.
"Short Term Working Capital Series Notes" has the meaning set
forth in Section 2.1 of the Short Term Working Capital Series Supplemental
Indenture.
"Short Term Working Capital Series Supplemental Indenture"
means the Third Supplemental Indenture dated as of October 4, 2002 among the
Company, The Bank of New York, as Trustee, Co-Security Registrar, Authenticating
Agent, Paying Agent and Transfer Agent in New York, Banco Rio de la Plata S.A.,
as Security Registrar, Argentine Paying Agent and Transfer Agent in Argentina
and JPMorgan Chase Bank, as Administrative Agent and Calculation Agent.
"Specified Amount" means, at any date of determination, an
amount equal to the greater of (A) U.S.$15,000,000 (or its equivalent in other
currencies) and (B) 1% of the Company's Consolidated stockholders' equity as
reflected in the Financial Statements of the Company most recently required to
be filed by the Company with the CNV.
"Subordinated Debt" means all future Debt of the Company,
subordinated in right of payment to the New Notes and Letter of Credit Advances
pursuant to a subordination agreement substantially in the form of Exhibit A to
this Annex A, which shall have no covenants or event of default or similar
provisions with the exception of a cross acceleration provision relating to the
New Notes and the Letter of Credit Advances.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued
32
and outstanding capital stock having ordinary voting power to elect a majority
of the Board of Directors of such corporation (irrespective of whether at the
time capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency), (b) the
interest in the capital or profits of such limited liability company,
partnership or joint venture or (c) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more of
such Person's other Subsidiaries.
"Sucursal Shares" means shares of capital stock of Perez
Companc Ecuador Sucursal Ecuador, a corporation organized and existing under the
laws of the Cayman Islands and duly authorized for the development of commercial
activities in the Republic of Ecuador.
"Supplemental Indentures" means the Long Term Trade Series
Supplemental Indenture, the Long Term Working Capital Series Supplemental
Indenture, the Short Term Trade Series Supplemental Indenture and the Short Term
Working Capital Series Supplemental Indenture and any supplemental indenture
pursuant to which MT Notes are issued.
"Takedown" means, with respect to each of the Trade Series
Notes and the Working Capital Series Notes, the initial issuance, purchase and
sale of the Trade Series Notes and the Working Capital Series Notes,
respectively which shall take place on the Effective Date.
"Taxes" means any present or future taxes, duties, levies,
imposts, deductions, withholdings or other governmental charges of whatever
nature and all liabilities with respect thereto.
"Trade Series Holder" means, as to any outstanding Trade
Series Note, a Holder of such Trade Series Note.
"Trade Series Notes" means the Long Term Trade Series Notes
and the Short Term Trade Series Notes.
"Tranche" has the meaning specified in the definition of
Letter of Credit Advances in this Annex A.
"Transaction Documents" means the Loan Documents with respect
to all Letter of Credit Advances under all Letter of Credit Facilities and the
Note Documents with respect to all New Notes.
"Trust Indenture Act" means the United States Trust Indenture
Act of 1939, as amended.
"Trustee" means Bank of New York, as trustee under the
Supplemental Indentures.
"Type" refers to the distinction between Letter of Credit
Advances bearing interest at the Base Rate and Letter of Credit Advances bearing
interest at LIBOR.
33
"Unconsolidated Person" means any Person (A) whose primary
business is related to a core business of the Company and its Subsidiaries as of
the date hereof, (B) that is not a Subsidiary of the Company, (C) over which the
Company or any of its Subsidiaries, by contract, ownership of equity, membership
on the board of directors (or similar governing body) or otherwise, has input or
influence in the management, business or operations (whether or not such input
or influence is shared with other Persons or other Persons have a greater role
or deciding voice with respect to such Unconsolidated Person's management,
business or operations).
"United States" or "U.S." means the United States of America
(including the states and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
"U.S. Dollars", "U.S.$" and "$" means the lawful currency of
the United States.
"U.S. GAAP", means generally accepted accounting principles,
as in effect from time to time in the United States of America.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"Working Capital Series Holder" means, as to any outstanding
Working Capital Series Note, a Holder of such Working Capital Series Note.
"Working Capital Series Notes" means the Long Term Working
Capital Series Notes and the Short Term Working Capital Series Notes.
34
EXECUTION COPY
Annex B
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants as follows:
(a) Good Standing and Power. (i) The Company has been
duly incorporated and is validly existing as a sociedad anonima duly
established under the laws of Argentina, with power and authority
(corporate and other) to own its properties and conduct its business as
now being conducted, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, except to the extent that the failure to be so qualified
or in good standing would not have a Material Adverse Effect.
(ii) Each of the Company's Subsidiaries has been
duly incorporated and is validly existing as a corporation
under the laws of its jurisdiction of incorporation, with
power and authority (corporate and other) to own its
properties and conduct its business as now being conducted;
and each of the Company's Subsidiaries has been duly qualified
as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any
business, so as to require such qualification, except to the
extent that the failure to be so qualified or in good standing
would not have a material adverse effect on the Company and
its Subsidiaries taken as a whole; and all the outstanding
shares of capital stock of each Subsidiary of the Company have
been duly authorized and validly issued, are fully-paid and
non-assessable, and (except for directors' qualifying shares
and except as set forth in the financial statements contained
in the Offering Memorandum) are owned by the Company, directly
or indirectly, free and clear of all liens, encumbrances,
security interests or claims.
(b) Corporate Authority. (i) The execution, delivery and
performance by the Company and each Subsidiary of each Applicable
Transaction Document with respect to the Applicable Debt to which it is
a party are within the Company's and such Subsidiary's corporate powers
and have been duly authorized by all necessary corporate action. No
consent or approval of stockholders or any Governmental Authority is
required as a condition to the validity or performance of such
Applicable Transaction Documents, except that the Company must obtain
approval from the Central Bank of Argentina prior to transferring
foreign exchange from Argentina to effect any payments of principal or
interest with respect to the Applicable Debt.
1
(ii) Each Applicable Transaction Document with
respect to the Applicable Debt, when delivered, will have been
duly authorized, executed and delivered by the Company and
each Subsidiary party thereto and will be the legal, valid and
binding obligation of the Company and such Subsidiary
enforceable against the Company and such Subsidiary 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 principles of equity, and
such Applicable Transaction Document does not contain any
provision contrary to Argentine law, regulations or public
policy.
(c) Authorizations. All authorizations, consents,
approvals, registrations, orders, filings, qualifications, exemptions
and licenses with or from Governmental Authorities which are necessary
for the execution and delivery of, and the consummation of the
transactions contemplated by the Applicable Transaction Documents with
respect to the Applicable Debt and the performance by each of the
Company and its Subsidiaries of its obligations thereunder have been
effected or obtained and are in full force and effect, except that the
Company must obtain approval from the Central Bank of Argentina prior
to transferring foreign exchange from Argentina to effect any payments
of principal or interest with respect to the Applicable Debt.
(d) Litigation. Except as disclosed in the Offering
Memorandum, there are no legal or governmental investigations, actions,
arbitrations, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any of its
Material Subsidiaries or any of their respective material properties
which, if determined adversely to the Company or any of its Material
Subsidiaries, could individually or in the aggregate have, or
reasonably be expected to have, a Material Adverse Effect including
upon the results of operations or shareholders' equity of the Company
and its Subsidiaries taken as a whole.
(e) No Conflicts, Compliance with Law. Neither the
Company nor any of its Subsidiaries is, or with the giving of notice or
lapse of time or both would be, in violation of or in default under,
its governing ordinance, memorandum or certificate of incorporation (or
other equivalent instrument) or its by laws (or other equivalent
instrument) or any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults
which individually or in the aggregate are not material to the Company
and its Subsidiaries taken as a whole or to the Applicable Transaction
Parties with respect to the Applicable Debt. The performance by the
Company or any of its Subsidiaries of all of its obligations under the
Applicable Transaction Documents with respect to the Applicable Debt to
which it is a party, and the consummation of the transactions therein
contemplated, will not conflict with or result in a breach of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its Subsidiaries is a
party, by which the Company or any of its Subsidiaries is bound or to
which any of the Property or assets of the Company or any of its
Subsidiaries is subject, except for violations or defaults that
individually or in the aggregate are not material to the
2
Company and its Subsidiaries taken as a whole or the Applicable
Transaction Parties with respect to the Applicable Debt; nor will such
action (i) result in any violation of the provisions of the governing
ordinance, memorandum or certificate of incorporation (or other
equivalent instrument) or by-laws (or other equivalent instrument) of
the Company or any applicable law or statute or any order, rule,
judgment or regulation of any court or governmental agency or body
having jurisdiction over the Company (including, without limitation,
any foreign exchange controls), any of its Subsidiaries or any of their
respective properties, provided however, that the authorization of the
Central Bank of Argentina may be required to the extent that any
payment of principal or interest is made from Argentina, or (ii) result
in or require the creation or imposition of any Lien upon or with
respect to any of the properties of the Company or any of its
Subsidiaries; except that the Company must obtain approval from the
Central Bank of Argentina prior to transferring foreign exchange from
Argentina to effect any payments of principal or interest with respect
to the Applicable Debt. The Company and its Subsidiaries are in
compliance with all Governmental Rules except for any non-compliance
which could not be expected to result in a Material Adverse Effect.
(f) Offering Memorandum. The Offering Memorandum does not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(g) Financial Condition. The annual consolidated balance
sheet of the Company and its Subsidiaries as of December 31, 2001,
together with consolidated statements of income and expense, retained
earnings, paid-in capital and surplus and changes in financial position
for the fiscal year then ended, audited by Pistrelli, Diaz y Asociados,
and the consolidated balance sheet of the Company and its Subsidiaries
as of June 30, 2002, together with consolidated statements of income
and expense and changes in financial position for the six months then
ended, certified by the chief financial officer of the Company,
heretofore delivered to the Applicable Transaction Parties with respect
to the Applicable Debt, fairly present the financial condition of the
Company and its Subsidiaries and the results of their operations and
transactions in their surplus accounts as of the dates and for the
periods referred to and have been prepared in accordance with Argentine
GAAP applied on a consistent basis by the Company and its Subsidiaries
throughout the periods involved. There are no liabilities, direct or
indirect, fixed or contingent, of the Company or any of its
Subsidiaries as of the dates of such balance sheets which are not
reflected therein or in the notes thereto. Furthermore, there has not
been any change in the capital stock or long-term debt of the Company
and its Subsidiaries since the date of the latest audited financial
statements except as set forth on Schedule I hereto.
(h) Taxes. The Company and its Subsidiaries have filed in
all jurisdictions all tax returns which they are required to file and
have paid all taxes shown thereon and all assessments received by any
of them to the extent that such taxes and assessments have become due
and are not being contested in good faith, except where the failure to
make such filings or pay such taxes or assessments would not have a
Material Adverse Effect; and except as disclosed in the Offering
Memorandum, there is no material tax deficiency
3
which has been or might reasonably be expected to be asserted or
threatened against the Company or any Subsidiary.
(i) Tax Liability. There is no income, stamp or other
tax, duty, impost, levy, deduction or other charge imposed (whether by
withholding or otherwise) by Argentina (including any political
subdivision thereof) or any Argentine governmental agency or other
Argentine governmental or taxing authority or agency either (i) on or
by virtue of the execution, delivery or performance by the Company of
any Applicable Transaction Document with respect to the Applicable Debt
or (ii) if the Applicable Debt consists of New Notes, on any payment to
be made in respect of such Applicable Debt to the extent the New Notes
were placed in a manner that satisfies the requirements of Article 36
of Argentine Negotiable Obligations LAW. If the Applicable Debt
consists of Debt under the Letter of Credit Issuance and Reimbursement
Agreement, payments to be made in respect of such Applicable Debt will
be subject to Argentine withholding tax and will entitle the recipients
of such payments to the benefits of Section 2.12 of the Letter of
Credit Issuance and Reimbursement Agreement, subject to the limitations
set forth therein.
(j) No Material Misstatements. No information, report,
financial statement, exhibit or schedule furnished by or on behalf of
the Company to the Applicable Transaction Parties with respect to the
Applicable Debt in connection with the negotiation of the Applicable
Transaction Documents with respect to the Applicable Debt or included
therein or delivered pursuant thereto contained or contains any
material misstatement of fact or omitted or omits to state any material
fact necessary to make the statements therein not misleading; provided
that, in each case, to the extent any such information, report or
financial statement, exhibit or schedule was based upon or constitutes
a forecast or projection, the Company represents only that it has acted
in good faith and utilized reasonable assumptions and due care in the
preparation of such information, report, financial statement or
schedule, it being recognized that actual financial performance may
differ from such forecast or projection.
(k) Title to Properties; Possession Under Leases. Each of
the Company and each of its Subsidiaries has (i) good and marketable
title in fee simple to all items of real property owned by it; (ii)
good and marketable title to all personal property owned by it and
(iii) a good and valid leasehold, easement or other applicable interest
in all tangible property (including real property) it leases or
otherwise possesses, except, in each case, where failure to have, as
applicable, good and marketable title or a good and valid leasehold,
easement or other applicable interest would not have a Material Adverse
Effect. To the extent that each of the Company and each of its
Subsidiaries has, as applicable, good and marketable title to or a good
and valid leasehold, easement or other applicable interest in the
Property described in the foregoing sentence, each of the Company and
each such Subsidiary owns, leases, or possesses, as applicable, such
Property free and clear of all Liens and defects except such as are
described in Schedule II hereto or such as would not, individually or
in the aggregate, have a Material Adverse Effect. Neither the Company
nor any of its Subsidiaries has any Obligation to create or incur
Liens, except such as are described in Schedule III hereto.
4
(l) Ownership of Property; Liens. Each of the Company and
its Subsidiaries owns, possesses or has obtained all licenses, permits,
certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal,
state, local and other Governmental Authorities, all self-regulatory
organizations and all courts and other tribunals, domestic or foreign,
necessary to own or lease, as the case may be, and to operate its
properties and to carry on its business as conducted as of the date
hereof except where the failure to own, possess or obtain such
licenses, permits, certificates, consents, orders, approvals or
authorizations, or to make such declarations or filings, would not,
individually or in the aggregate, have a material adverse effect on the
Company and its Subsidiaries taken as a whole; and neither the Company
nor any such Subsidiary has received any notice of any proceeding
relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization; and each
of the Company and its Subsidiaries has all licenses, franchises,
concessions, permits, authorizations, approvals and orders of and from
all governmental and regulatory officials and bodies that are necessary
to effect oil and gas exploration, production, refining, transportation
and distribution activities as they are currently conducted thereby,
except where the failure to have such licenses, franchises,
concessions, permits, authorizations, approvals and orders is not
material to the conduct of the business of the Company and its
Subsidiaries taken as a whole; and each of the Company and its
Subsidiaries is in material compliance with all laws and regulations
relating to the conduct of its business as conducted as of the date
hereof.
(m) Not an Investment Company. Neither the Company nor
any of its Subsidiaries that is a party to any Transaction Document is,
or after giving effect to the issuance of the notes evidencing the
Applicable Debt, will be an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(n) Margin Stock. Neither the Company nor any of its
Subsidiaries will, directly or indirectly, use any of the proceeds of
the Applicable Debt for any purpose, whether immediate, incidental or
ultimate, of buying "margin stock" or of maintaining, reducing or
retiring any Debt originally incurred to purchase stock that is
currently a "margin stock", and the issuance of the Applicable Debt
will not constitute an extension of "purpose credit" that is directly
or indirectly secured by "margin stock" in each case within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System
(the "Federal Reserve") and will not violate or result in a violation
of such Regulation U or of Regulation T or Regulation X or any other
regulation of the Federal Reserve.
(o) Environmental Protection. Each of the Company and its
Subsidiaries (i) is in material compliance with any and all
Environmental Laws, (ii) has received all permits, licenses or other
approvals required of them under applicable Environmental Laws to
conduct its business as currently conducted and (iii) is in material
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws,
failure to receive such required permits, licenses or other approvals
or failure to comply with the terms and conditions of such
5
permits, licenses or approvals would not, individually or in the
aggregate, have a Material Adverse Effect.
(p) Adequate Licenses. Each of the Company and its
Subsidiaries possesses adequate licenses (including without limitation
concessions and permits) or other rights to use all know-how necessary,
to conduct the business now operated by them, the loss of which would
have a Material Adverse Effect, and neither the Company nor its
Subsidiaries has received any notice of and does not know of any
infringement of asserted rights of others with respect to any such
know-how which, if such assertion of infringement were sustained, would
have a Material Adverse Effect.
(q) Labor Relations. There are no existing or, to the
best knowledge of the Company, threatened labor disputes with the
employees of the Company or any of its Subsidiaries which are likely to
have a material adverse effect on the Company and its Subsidiaries
taken as a whole, nor is the Company aware of any existing, threatened
or imminent labor disturbance by the employees of its principal
suppliers, contractors or customers that could reasonably be expected
to result in any Material Adverse Effect including upon the results of
operations or shareholders' equity of the Company and its Subsidiaries
taken as a whole.
(r) Absence of Filing Requirements. It is not necessary,
in order to establish or maintain the legality, validity or
enforceability of any Applicable Transaction Document with respect to
the Applicable Debt under the laws of Argentina, Ecuador, Bolivia, or
the Cayman Islands or to establish the admissibility into evidence of
any such Applicable Transaction Document in any court in Argentina,
Ecuador, Bolivia or the Cayman Islands that such Applicable Transaction
Document be submitted to, filed or recorded with any court or other
authority in Argentina, Ecuador, Bolivia or the Cayman Islands or that
any tax, imposition or charge be paid in Argentina, Ecuador, Bolivia or
the Cayman Islands on or in respect of such Applicable Transaction
Document, other than a court tax of 3% of the amount in controversy so
claimed with respect to the institution of any judicial proceeding to
enforce such Applicable Transaction Document in the Federal District of
Argentina; all documentation to be presented before the courts of
Argentina will be required (i) to be officially translated into Spanish
and (ii) in many cases, to carry legalizations.
(s) No Qualification Necessary. It is not necessary under
the laws of Argentina, Ecuador, Bolivia or the Cayman Islands that any
of the Applicable Transaction Parties with respect to the Applicable
Debt or any Applicable Agent Party with respect to the Applicable Debt
be licensed, qualified or entitled to carry on business in Argentina,
Ecuador, Bolivia or the Cayman Islands by reason of the execution,
delivery, performance or enforcement of any Applicable Transaction
Document with respect to the Applicable Debt.
(t) No Filing Needed. It is not necessary, in order to
establish or maintain the legality, validity, enforceability or
priority of (i) any of the Applicable Transaction Documents with
respect to the Applicable Debt under the laws of Argentina, Ecuador,
Bolivia or the Cayman Islands or to establish the admissibility into
evidence of any of the
6
Applicable Transaction Documents with respect to the Applicable Debt in
any court in Argentina, Ecuador, Bolivia or the Cayman Islands, that
such Applicable Transaction Documents be submitted to, filed or
recorded with any court or other authority in Argentina, Ecuador,
Bolivia or the Cayman Islands.
(u) Ranking. The Applicable Debt will be unsecured and
unsubordinated obligations of the Company and will rank pari passu with
no preference among themselves, and the obligations of the Company with
respect to the Applicable Debt, except (i) as is or may be provided
under Argentine law, will rank at least pari passu in right of payment
with all other present or future unsecured and unsubordinated
obligations of the Company from time to time outstanding and (ii) for
any preference or security in the L/C Collateral Accounts pursuant to
the L/C Collateral Accounts Security Agreement.
(v) Jurisdiction. The submission of the Company and the
Co-Obligors to the non-exclusive jurisdiction of the Federal and state
courts in the borough of Manhattan in the City of New York pursuant to
the Applicable Transaction Documents with respect to the Applicable
Debt is legal, valid and binding under the laws of Argentina, Ecuador,
Bolivia and the Cayman Islands, as applicable; and the appointment of
CT Corporation System as its Process Agent for the purposes described
in each Applicable Transaction Document with respect to the Applicable
Debt is legal, valid and binding under the laws of Argentina, Ecuador,
Bolivia and the Cayman Islands, as applicable.
(w) Ecuadorian Assets. The Ecuadorian Assets relating to
the OCP Shares, Block 18 and Block 31 comprise all of the Property of
the Company and its Subsidiaries in Ecuador, other than any Properties,
the value of which, taken as a whole, does not represent a material
portion of the aggregate value of the Ecuadorian Assets; and no Lien
exists on the Ecuadorian Assets.
(x) Foreign Exchange Regulations. (i) The Company has
complied, and is currently in compliance, in all material respects,
with any and all foreign exchange and transfer restriction regulations.
(ii) Under the laws and regulations of Argentina
and any political subdivision thereof in force as of the date
hereof (including the regulations of the Central Bank and
Section 5 of Decree 1589/89), the Company may freely sell and
dispose of the hydrocarbons produced by it in Argentina, and
has the right to freely dispose (without being obliged to
repatriate) up to 70% of the proceeds from exports of its
hydrocarbon (crude oil and crude oil derivatives).
(iii) There are no investigations, actions, suits
or proceedings by any Argentine Governmental Authority pending
or, to the knowledge of the Company, threatened against or
affecting the Company, for breach of Argentine foreign
exchange control or transfer restrictions laws and
regulations, which, if determined adversely to the Company,
could have, or be reasonably expected to have, a Material
Adverse Effect.
7
(iv) Under the laws and regulations of Argentina
and any political subdivision thereof in force as of the date
hereof, all interest, principal, premium, if any, and any
other payments due or made on the Applicable Debt may be paid
by the Company to a holder thereof in Dollars outside of
Argentina (a) by applying (without being obliged to
repatriate) the percentage of export proceeds mentioned in
(ii) above, without any kind of prior or subsequent
authorization from the Central Bank of Argentina or any other
Governmental Authority; and/or (b) by means of the transfer to
a destination outside of Argentina of Dollars acquired by the
Company in Argentina in the local currency market, subject in
this case (b) to the prior authorization from the Central Bank
of Argentina for such transfer of Dollars.
(y) Use of Proceeds of Eligible Trade Transactions. The
Company intends to apply the proceeds generated by Eligible Trade
Transactions to the payment of amounts due under the New Notes and the
Letter of Credit Advances.
8
EXECUTION COPY
Annex C
COVENANTS OF THE COMPANY
Affirmative Covenants. So long as any amount of the Applicable
Debt shall remain unpaid or outstanding, the Company shall:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Material Subsidiaries to comply, in all material respects, with all
Governmental Rules (including without limitation, environmental laws,
social security laws, retirement and pension fund laws and the rules
and regulations thereunder) except where the necessity of compliance
therewith is being contested in good faith by appropriate proceedings
or where noncompliance therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, (i) all their material obligations and liabilities,
including all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that,
if unpaid, might by law become a Lien upon its property; provided that
neither the Company nor any of its Subsidiaries shall be required to
pay or discharge any such obligation, liability, tax, assessment,
charge or claim that (A) is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being maintained
in accordance with Argentine GAAP, or (B) where non-compliance
therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(c) Maintenance of Insurance. Keep, and cause each of its
Material Subsidiaries to keep, at all times all of its properties which
are of an insurable nature insured against loss or damage with insurers
believed by the Company or such Material Subsidiary, as the case may
be, to be responsible to the extent that property of similar
characteristics is usually so insured by similar companies (within
Argentina or the relevant jurisdiction in which the properties are
located) and in accordance with rules and regulations applicable to
such companies in Argentina or the relevant jurisdiction in which the
properties are located; provided that the management of the Company or
such Material Subsidiary may in any event increase the amount of any
deductible or other retention of risk by the Company or such Material
Subsidiary or reduce the level of insurance cover if it shall determine
in good faith that such actions are in the best interests of the
Company or such Material Subsidiary and not materially adverse to the
interests of the Applicable Transaction Parties with respect to such
Applicable Debt. Upon request of the Applicable Agent Party with
respect to such Applicable Debt, the Company will furnish to such
Applicable Agent Party, for distribution to the Applicable Transaction
Parties with respect to such Applicable Debt, copies of the information
provided annually by it or its Material Subsidiaries to Argentine or
other regulatory agencies as to the insurance so carried.
(d) Preservation of Corporate Existence, Etc. Preserve
and maintain, and cause to be done all things necessary to, preserve
and keep in full force and effect its corporate existence and will use
its best efforts to do or cause to be done all things necessary to
preserve and keep in full force and effect its rights (charter and
statutory) and franchises and such rights and franchises of its
Subsidiaries; provided that (i) the Company shall not be required to
preserve or to cause its Subsidiaries to preserve any such right or
franchise or preserve its Subsidiaries' existence if the Board of
Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its
Subsidiaries taken as a whole and that the loss of such right,
franchise or existence is not disadvantageous in any material respect
to the Applicable Transaction Parties with respect to such Applicable
Debt and (ii) the Company may consummate any merger or consolidation
permitted under clause (c) of the Negative Covenants set forth in this
Annex C.
(e) Inspection of Property, Books and Records. Keep, and
cause each Material Subsidiary to keep, proper books of records and
accounts in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities in
accordance with standard accounting practices in the relevant
jurisdictions; and permit, and cause each Material Subsidiary to
permit, after at least five days' notice (except no such notice shall
be required at any time after an Event of Default with respect to the
Applicable Debt shall have occurred and be continuing) and during
regular business hours, any Applicable Transaction Party with respect
to such Applicable Debt or its representative, at such Applicable
Transaction Party's expense, to visit and inspect any of the Company's
and its Material Subsidiaries' respective properties, to examine any of
their respective books and records, including documents relating to
Eligible Trade Transactions, and to discuss their respective affairs,
finances and accounts with their respective officers, employees and
independent public accountants, all at such reasonable times and as
often as may reasonably be desired; except that the Company shall not
be required to provide such access to any information that it may
reasonably deem confidential.
(f) Maintenance of Properties, Etc. (i) Maintain and
preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its tangible properties that are used or useful in the conduct
of business in good condition, repair and working order and supplied
with all necessary equipment and cause to be made all necessary
renewals, replacements and improvements thereof, all as in the judgment
of the Company or such Subsidiary may be necessary that the business
carried on in connection therewith may be properly and advantageously
conducted at all times, provided that this covenant shall not in any
way prevent the Company or such Subsidiary from discontinuing the
operation or maintenance of any of its properties if such
discontinuance is, as determined by the Board of Directors or
responsible officers of the Company or such Subsidiary in good faith,
desirable in the conduct of the business of the Company and its
Subsidiaries taken as a whole and could not reasonably be expected to
have a Material Adverse Effect.
(g) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, any transaction otherwise permitted
under the Applicable Transaction Documents with respect to such
Applicable Debt with any stockholder of the Company
2
or any Affiliate of such stockholder which is not the Company or one of
its Subsidiaries on terms that are no less favorable to the Company or
such Subsidiary than it would obtain in a comparable arm's-length
transaction with a Person not such a stockholder or Affiliate.
(h) Reporting Requirements. Furnish to the Applicable
Agent Party with respect to such Applicable Debt:
(i) in sufficient copies for distribution to
each Applicable Transaction Party with respect to such
Applicable Debt (and such Applicable Agent Party shall in turn
deliver to such Applicable Transaction Party):
(A) within 120 days after the end of
each fiscal year or 45 days after such reports are
made public, annual reports in English, which will
include a report of the Board of Directors and annual
audited consolidated and unconsolidated financial
statements of the Company prepared in conformity with
Argentine GAAP, together with, in the case of annual
audited consolidated financial statements, a
reconciliation thereof to U.S. GAAP and
(B) within 45 days after the end of
each of the first three fiscal quarters of each
fiscal year of the Company, quarterly reports in
English which will include unaudited consolidated and
unconsolidated interim financial statements prepared
in conformity with Argentine GAAP, accompanied by a
limited review report prepared by an internationally
recognized independent public accountant,
in each case together with a certificate from each of an
internationally recognized independent public accountant and
the chief financial officer of the Company certifying:
(I) the adjustments to such financial
statements that would be required to reflect
financial statements prepared on the basis of
Adjusted Argentine GAAP, and
(II) the Company's compliance with the
Financial Covenants and with the Dividends, Capital
Expenditures and Incurrence of Debt covenants
contained in this Annex C as of the last day of such
fiscal year or fiscal quarter, as applicable,
accompanied by a schedule setting forth in reasonable
detail the computations used by such accountant or
the chief financial officer, as applicable, in
certifying such compliance; and in the case of annual
reports, together with a certificate of such
accountant certifying the amount of Excess Cash for
the fiscal year covered by such annual report;
(ii) as soon as possible and in any event within
five days after a senior executive officer of the Company
acquires knowledge of the occurrence of any Default with
respect to such Applicable Debt continuing on the date of such
3
statement, a statement of the chief financial officer of the
Company setting forth details of such Default and the action
that the Company has taken and proposes to take with respect
thereto;
(iii) as soon as reasonably practicable after a
senior executive officer of the Company obtains knowledge of
the commencement of, or of a threat of the commencement of, an
action suit or proceeding against the Company or any of its
Material Subsidiaries before any court or arbitrator or
Governmental Authority in which there is a significant
likelihood of an adverse decision which would have a Material
Adverse Effect or which in any manner questions the validity
of any Applicable Transaction Document with respect to such
Applicable Debt, a certificate of a senior financial officer
of the Company setting forth the nature of such pending or
threatened action, suit or proceeding and such additional
information with respect thereto as may be reasonably
requested by any Applicable Transaction Party with respect to
such Applicable Debt;
(iv) as soon as reasonably practicable after a
senior executive officer of the Company obtains knowledge
thereof, notice of any event or conditions which has had or
could reasonably be expected to have a Material Adverse Effect
and the nature of such Material Adverse Effect or event or
condition;
(v) within 15 days after the end of each of the
Company's fiscal quarters in each fiscal year, a certificate
of the chief financial officer of the Company certifying (A)
in the case of any Letter of Credit issued under the Short
Term L/C Series C Facility or the Long Term L/C Series C
Facility, whether any event has occurred whereby the full then
outstanding Available Amount of such Letter of Credit is no
longer needed under any agreement or instrument relating to
such Letter of Credit, and (B) with respect to each Letter of
Credit issued under each other Letter of Credit Facility,
whether any event has occurred that would permit a reduction
in the Available Amount of such Letter of Credit and, where
such reduction has not been effected, setting forth the
reasons why such reduction has not been effected; and
(vi) within 15 days after the end of each fiscal
quarter of the Company, for delivery only to the Lenders under
the Short Term L/C Series C Facility, the Long Term L/C Series
C Facility and the Long Term L/C Series D Facility, a
certificate of the chief financial officer of the Company
certifying, with respect to the commodity hedging transactions
set forth on Schedule 2.01(a) of the Letter of Credit Issuance
and Reimbursement Agreement, (A) the fair value as of the end
of such fiscal quarter of each such commodity hedging
transaction and the fair value as of the end of such quarter
of the entire portfolio of such commodity hedging
transactions; (B) the total collateral posted as of the end of
such fiscal quarter in the form of stand-by letters of credit,
cash or other eligible assets securing such commodity hedging
transactions; (C) information, as of the end of such fiscal
quarter, relating to the terms of such commodity hedging
transactions with respect to (I) the types of instruments
used, (II) quantity (bbls/day), (III) periods, (IV) settlement
frequency, (V) contractual swap rate or strike price (US$/bbl)
and (VI)
4
market price (US$/bbl) and (D) that the transactions described
in such certificate are the only transactions as to which the
Letters of Credit under the relevant Letter of Credit Facility
are serving as collateral.
(i) Payment of Obligations. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, at or before maturity,
all their respective material obligations and liabilities, including
without limitation tax liabilities, except (i) where the same may be
contested in good faith by appropriate proceedings and appropriate
reserves shall have been established for the accrual of any of the same
or (ii) if the failure to pay and discharge or to cause any Subsidiary
to pay or discharge such obligations and liabilities could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(j) Maintenance of Governmental Approvals. Maintain, and
cause its Subsidiaries to maintain, in full force and effect all
Governmental Approvals, and comply with all on-going notification and
reporting requirements in Argentina, in each case, as are required or
material for the operation of the business of the Company and its
Subsidiaries taken as a whole and for the compliance by the Company
with its Obligations under the Applicable Transaction Documents with
respect to such Applicable Debt.
Negative Covenants. So long as any amount of the Applicable
Debt shall remain unpaid or outstanding, the Company shall not:
(a) Liens, Etc. Create or permit to subsist, or permit
any Material Subsidiary to create or permit to subsist, any Lien upon
the whole or any part of its Property, unless, at the same time or
prior thereto, the Company's obligations under the Transaction
Documents are secured equally and ratably therewith, except that the
foregoing restriction shall not apply to any of the following:
(i) Liens securing Debt incurred or assumed, in
each case after the date hereof, solely for the purpose of
financing all or any part of the cost of acquiring,
constructing, developing, improving or repairing any Property
(including, without limitation, an oil and/or gas concession,
an oil and/or gas exploration, production or development
contract or any interest therein), which Lien attaches solely
to:
(A) such Property (but not any Property
theretofore owned by the Company or a Subsidiary,
other than (I) unimproved real property and oil and
gas concessions and rights and (II) Existing Property
that is the subject of any Project Financing), but
only if such Lien attaches concurrently with or
within 180 days after the acquisition of, or the
commencement of construction, development,
improvement or repair of all or any part of, such
Property, and/or
5
(B) Capital Stock of a special-purpose
entity that incurs such Debt and acquires,
constructs, develops or repairs such Property, but
only if such entity:
(I) is engaged only in the
business of acquiring, constructing,
developing, improving, repairing,
maintaining or operating such Property and
ancillary activities and
(II) has no assets other than
such Property and Property ancillary
thereto;
provided that:
(1) no Debt shall be permitted to be
secured with a Lien on Existing Property hereunder if
after giving effect to the incurrence of such Debt
the aggregate principal amount of Debt secured by
Liens on Existing Property permitted under this
clause (i) shall exceed 15% of the Company's
Consolidated Assets as of the end of the most
recently completed fiscal quarter for which Financial
Statements are required to be delivered to the CNV
prior to the date on which such Debt is incurred or
assumed; and
(2) for the avoidance of doubt, Long
Term Debt of Perez Companc de Venezuela S.A. under a
credit facility including International Finance
Corporation as a lender shall be deemed to be Debt
permitted to be secured by a Lien permitted under
this clause (i), but only so long as:
(x) the aggregate principal
amount of such Debt does not exceed
$400,000,000 (or its equivalent in other
currencies) and
(y) such Debt is incurred for
acquisitions, construction, development,
improvements and/or repairs for such
Person's hydro-carbon business in Venezuela
and ancillary purposes;
(ii) Liens on any Property or assets of any
Person existing at the time such Person becomes a Subsidiary
of the Company and not created in contemplation of such
acquisition;
(iii) Liens on any Property existing at the time
of the acquisition of such Property and not created in
contemplation of such acquisition;
(iv) Liens solely in favor of the Company or any
Subsidiary;
(v) Liens arising by operation of law;
(vi) Liens created as a result of regulations or
requirements of a Governmental Authority;
6
(vii) Liens on any Property in connection with any
regulated program for the industrial development related to
the activities performed by the Company imposed or entered
into as a result of regulations or requirements of a
Governmental Authority;
(viii) Liens securing current taxes, assessments or
other governmental charges the validity of which is being
contested by the Company in good faith by appropriate
proceedings; Liens created pursuant to any order of attachment
or similar legal process arising in connection with court
proceedings which are being contested by the Company in good
faith by appropriate proceedings; any Lien securing claims
provided for by mandatory provisions of Argentine law which
are being contested by the Company in good faith by
appropriate proceedings;
(ix) Liens on assets securing Debt the aggregate
principal amount of which (excluding Debt secured solely by
Liens otherwise permitted under the Applicable Transaction
Documents with respect to the Applicable Debt) is not more
than U.S.$25,000,000 (or its equivalent in other currencies);
(x) Liens on cash and financial assets, deposit
or securities accounts, time deposits, certificates of deposit
or other similar assets securing Obligations of the Company or
a Material Subsidiary under commodity hedging transactions
existing on the date hereof, including Liens required to be
created after the date hereof under such hedging transactions;
(xi) Liens on cash and financial assets, deposit
or securities accounts, time deposits, certificates of deposit
or other similar assets securing Obligations of the Company or
a Material Subsidiary under commodity hedging transactions
entered into on or after the date hereof in the ordinary
course of business, the aggregate value of which, at the time
when any such assets become subject to such Lien (excluding
any amounts secured solely by Liens otherwise permitted under
clause (x) above) is not more than U.S.$50,000,000 (or its
equivalent in other currencies); provided that the sum of (A)
the aggregate principal amount of Debt permitted to be secured
under clause (ix) of this subsection (a) and (B) the aggregate
value of assets subject to a Lien permitted under this clause
(xi) at the time when such assets become subject to such Lien
shall not at any time exceed in the aggregate U.S.$50,000,000
(or its equivalent in other currencies);
(xii) Liens or obligations to create Liens
existing on the Effective Date and listed on Schedules II and
III to Annex B of the Transaction Document to which this Annex
C is attached;
(xiii) Liens created under the L/C Collateral
Accounts Security Agreement;
(xiv) Liens on cash and financial assets pledged
in favor of any beneficiary of a Letter of Credit so long as
the Available Amount of such Letter of Credit is reduced by an
amount equal to the value of the cash and financial
7
assets so pledged and concurrently with the incurrence of such
Lien the Company satisfies its obligations under Section
2.04(h) of the Letter of Credit Issuance and Reimbursement
Agreement;
(xv) Liens securing an extension, renewal,
replacement and/or exchange of any Debt or Obligations secured
in accordance with clause (i), (ii), (iii), (iv), (ix) and (x)
above, provided that (A) such Liens do not extend to, or cover
any Property other than the Property securing the Debt being
refinanced, (B) the principal amount of such Debt is not
increased and (C) the Debt so extended, renewed or replaced
would be permitted to be incurred under the Applicable
Transaction Documents with respect to such Applicable Debt if
incurred at the time of such extension, renewal, replacement
or exchange; and
(xvi) Liens on cash and financial assets pledged
to secure reimbursement obligations arising (A) under any
letter of credit (other than any Letter of Credit) issued in
connection with obligations under any one or more OCP
Agreements provided, for purposes of this clause (A), that the
aggregate value of such cash and financial assets securing
such obligations shall not at any time exceed $55,000,000 (or
its equivalent in other currencies); and (B) under any letter
of credit (other than any Letter of Credit) issued in
connection with the financing of an import, which letter of
credit expires no later than 180 days from the date of
issuance.
(b) Change in Nature of Business. Make, or permit any of
its Material Subsidiaries to make, any material change in the nature of
its business as carried on at the date hereof.
(c) Consolidation, Mergers and Sales of Assets.
Consolidate or merge with or into any other Person or sell, lease, or
otherwise transfer, directly or indirectly, all or substantially all of
its assets to any other Person; provided that the Company may merge or
consolidate with another Person if:
(i) no Default with respect to such Applicable
Debt shall occur as a direct result of such merger or
consolidation;
(ii) the surviving entity has a consolidated net
worth the same or better than the Company immediately prior to
such merger or consolidation; and
(iii) the surviving entity shall assume all
Obligations of the Company under the Applicable Transaction
Documents with respect to such Applicable Debt.
(d) Dividends, Etc. Purchase or redeem any of its issued
shares or reduce its share capital, make a distribution of assets or
other capital distribution to its shareholders, declare or pay any
dividend or make any other distribution (including payment of
management or other similar fees) to its shareholders or any of their
Subsidiaries or repay any shareholders' loans or Subordinated Debt
except that (i) the Company may at any time declare or pay any
dividends payable in equity interests of the Company and (ii) the
8
Company may purchase or redeem any of its issued shares or reduce its
share capital, make a distribution of assets or other capital
distribution (including payment of management or other similar fees) to
its shareholders or any of their Subsidiaries, declare or pay any
dividend or make any other distribution to its shareholders or repay
any shareholders' loans or Subordinated Debt at any time after December
31, 2004 so long as (A) the aggregate amount of such purchases,
redemptions, reductions of share capital, distributions, declarations
or payments of dividends, fees or repayments of shareholders' loans or
Subordinated Debt in any fiscal year does not exceed 50% of the Excess
Cash for the Company's prior fiscal year and (B) no Default with
respect to such Applicable Debt has occurred and is continuing.
(e) Capital Expenditures. Make, or permit any of its
Subsidiaries to make, any Capital Expenditure at any time, except that
the Company and its Subsidiaries may make such Capital Expenditure:
(i) to the extent that such Capital Expenditure
is paid with assets that constitute property, plant or
equipment of the Company and its Subsidiaries or equity
capital of a Subsidiary holding solely such property, plant or
equipment;
(ii) to the extent of the aggregate amount of
Available Asset Sale Proceeds as of the date of such Capital
Expenditure (applied against Available Asset Sale Proceeds
with respect to each Asset Sale in the order of occurrence of
such Asset Sales); and
(iii) if, after giving effect to such Capital
Expenditure, the aggregate amount of all Capital Expenditures
of the Company and its Subsidiaries in such fiscal year
(excluding the amount of all Capital Expenditures permitted
under clauses (i) and (ii) above) would not exceed:
(A) the amount shown in the table below
opposite such fiscal year:
- --------------------------------------------------
Fiscal Year Ending In Amount
- --------------------------------------------------
2002 $165,000,000
- --------------------------------------------------
2003 $425,000,000
- --------------------------------------------------
2004 $450,000,000
- --------------------------------------------------
2005 $425,000,000
- --------------------------------------------------
2006 $475,000,000
- --------------------------------------------------
2007 $475,000,000
- --------------------------------------------------
plus
(B) 50% of Excess Cash for the
immediately preceding fiscal year; plus
(C) the sum of:
9
(I) the aggregate Net Cash
Proceeds (to the extent not included under
clause (a) of the definition of Excess Cash)
received by the Company or any of its
Subsidiaries during such fiscal year and
prior to the date of such Capital
Expenditure from::
(1) any equity,
Subordinated Debt or Project
Finance Debt issued or incurred by
the Company or any of its
Subsidiaries; and
(2) the aggregate
principal amount of any prior
Capital Expenditures in the form of
Short Term Debt loaned to an
Unconsolidated Person that was
repaid prior to the date of the
Capital Expenditure being
considered and within one year
after the date on which such loan
was initially made, and
(II) the sum of 50% of the
aggregate New Debt Amount for the last
fiscal quarter of the prior fiscal year and
for each of the first three fiscal quarters
of the Company occurring in such fiscal year
and completed on or prior to the date of
such Capital Expenditure; minus
(D) the aggregate amount of any
purchases, redemptions, reductions, asset or capital
distributions, dividends or other distributions
(including payments of management or similar fees) or
repayments of loans and Subordinated Debt, in each
case that are described in subsection (d) above and
have been made during such fiscal year prior to the
date of such Capital Expenditure.
(f) Incurrence of Debt. Incur, or permit any Subsidiary
to incur, any Debt on any date, other than:
(i) Project Finance Debt,
(ii) Debt under the Transaction Documents,
(iii) Subordinated Debt,
(iv) Debt in respect of reimbursement obligations
arising under letters of credit issued in connection with
import financings which letters of credit expire no later than
180 days from the date of issuance but only to the extent of
the value of cash and financial assets securing such Debt, and
(v) Debt in respect of reimbursement obligations
arising under letters of credit (other than any Letter of
Credit) issued in connection with obligations under any one or
more OCP Agreements but only to the extent of the lesser of
10
$55,000,000 and the value of cash and financial assets
securing such reimbursement obligations,
if:
(A) the amount that is equal to:
(I) the aggregate principal
amount of Consolidated Debt of the Company
outstanding immediately prior to such
incurrence, minus
(II) the value of the cash and
investments thereof on such date credited to
the L/C Collateral Accounts,
is less than the amount that is equal to:
(1) the amount calculated
under sub-clauses (I) and (II) of this
clause (A), plus
(2) the aggregate principal
amount of the Debt proposed to be incurred,
minus
(3) the portion of the
proceeds of the incurrence of such Debt that
is:
(x) applied to the
prepayment or repayment of
Consolidated Debt, or
(y) deposited into
any L/C Collateral Account,
at the time of such incurrence or that is
required so to be and is applied or
deposited by the earlier of (aa) the 30th
day after the incurrence thereof and (bb)
the end of the fiscal quarter of the Company
in which such incurrence occurs, and
(B) after giving effect to such
incurrence and the application of the proceeds
thereof, the ratio of:
(I) (A) the aggregate
outstanding principal amount of Consolidated
Debt of the Company (other than Subordinated
Debt) as of such date (if not denominated in
Dollars, converted into Dollars at the
Exchange Rate applicable on such date),
minus
(B) the value of the cash and
investments thereof on such date credited to
the L/C Collateral Accounts, to
(II) Adjusted EBITDA
(calculated on a Quarterly Basis) for the
four most recently completed fiscal quarters
of the
11
Company for which Financial Statements are
required to be filed by the Company with the
CNV,
would be greater than 3.50:1.00;
provided that the proceeds of any Debt permitted to be incurred hereunder shall
not be applied to purchase or redeem any of its issued shares or reduce its
share capital, make a distribution of assets or other capital distribution to
its shareholders, declare or pay any dividend or make any other distribution
(including payment of management or other similar fees) to its shareholders or
any of their Subsidiaries or repay any shareholders' loans or Subordinated Debt.
(g) Preservation of Collateral Capacity. At any time
effect, incur or enter into or permit any Subsidiary to effect, incur
or enter into, any transaction that restricts, or create or otherwise
cause or permit to exist, or permit any Subsidiary to create or
otherwise cause or permit to exist, any encumbrance or restriction on,
the ability of the Company to comply in full with its obligations to
make deposits into the L/C Collateral Accounts under Section 2.04 of
the Letter of Credit Issuance and Reimbursement Agreement, except that
the Company and its Subsidiaries may agree to a restriction or
encumbrance on such ability so long as such restriction or encumbrance
is subject to a basket that is sufficient to allow the Company at any
time to comply with its obligations under such Section 2.04, assuming
that an amount equal to 100% of the Available Amount of all Letters of
Credit outstanding at such time were required to be deposited into the
applicable L/C Collateral Accounts, and so long as the Company at all
times maintains sufficient availability under such basket to fund all
amounts that may in the future be required to be deposited under such
Section 2.04.
(h) Limitation on Dividend and Other Payment Restrictions
Affecting Material Subsidiaries.
(i) Except as provided in clause (ii) below, the
Company will not, and will not cause or permit any of its
Material Subsidiaries (other than any Subsidiary in respect of
or as a result of the incurrence of Project Finance Debt) to,
directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on
the ability of any Material Subsidiary (other than any
Subsidiary in respect of or as a result of the incurrence of
Project Finance Debt) to:
(A) pay dividends or make any other
distributions on or in respect of its Capital Stock
to the Company or any other Material Subsidiary or
pay any Debt owed to the Company or any other
Material Subsidiary; or
(B) make loans or advances to, or guarantee any
Debt or other obligations of, or make any Investment
in, the Company or any Material Subsidiary.
(ii) Clause (i) above will not apply to
encumbrances or restrictions existing under or by reason of:
12
(A) applicable law;
(B) any Transaction Documents;
(C) the restrictions in effect on the Effective
Date and as set forth on Schedule I to this Annex C;
and any amendments, restatements, renewals,
replacements or refinancings thereof; provided, that
any amendment, restatement, renewal, replacement or
refinancing is not materially more restrictive with
respect to such encumbrances or restrictions than
those in existence on the Effective Date;
(D) customary non-assignment provisions of any
contract and customary provisions restricting
assignment or subletting in any lease governing a
leasehold interest of any Material Subsidiary, or any
customary restriction on the ability of a Material
Subsidiary to dividend, distribute or otherwise
transfer any asset which secures Debt secured by a
Lien, in each case permitted to be incurred under the
Transaction Documents;
(E) any instrument governing Acquired Debt not
incurred in connection with or in anticipation or
contemplation of, the relevant acquisition, merger or
consolidation, which encumbrance or restriction is
not applicable to any Person, or the properties or
assets of any Person, other than the Person or the
properties or assets of the Person so acquired;
(F) restrictions with respect to a Material
Subsidiary of the Company imposed pursuant to a
binding agreement which has been entered into for the
sale or disposition of Capital Stock or assets of
such Material Subsidiary; provided, that such
restrictions apply solely to the Capital Stock or
assets of such Material Subsidiary being sold;
(G) customary restrictions imposed on the
transfer of copyrighted or patented materials; or
(H) an agreement governing Debt incurred to
refinance the Debt issued, assumed or incurred
pursuant to an agreement referred to in clause (C) or
(E) of this clause (ii); provided, that such
refinancing agreement is not materially more
restrictive with respect to such encumbrances or
restrictions than those contained in the agreement
referred to in such clause (C) or (E).
Covenants Applicable to Applicable Debt Under Short Term L/C
Series A Facility, Long Term L/C Series A Facility, Short Term L/C Series B
Facility and Long Term L/C Series B Facility and Converted A/B Notes. With
respect to any Applicable Debt under the Short Term L/C Series A Facility, Long
Term L/C Series A Facility, Short Term L/C Series B Facility or Long Term L/C
Series B Facility and any Applicable Debt consisting of Converted
13
A/B Notes, so long as any amount of such Applicable Debt shall remain unpaid or
outstanding, the Company shall not:
(a) Liens on Ecuadorian Assets. The provisions of
subsection (a) of the Negative Covenants set forth in this Annex C
notwithstanding, create or permit to subsist any Lien, permit any
Subsidiary to create, or permit to subsist, any Lien on the Ecuadorian
Assets, except for any Lien created on the Ecuadorian Assets to secure
any Project Finance Debt and any Lien arising by operation of law;
provided that in such event the Ecuadorian Assets shall at all times
equally and ratably secure the obligations of the Company and the
Co-Obligors (other than Pecom Energia S.A., Sucursal Bolivia) to the
Lenders under the Short Term L/C Series A Facility, the Long Term L/C
Series A Facility, the Short Term L/C Series B Facility and the Long
Term L/C Series B Facility and the Converted A/B Notes; and provided
further, that solely with respect to that portion of such obligations
referred to in the immediately preceding proviso as are in respect of
reimbursement obligations in respect of Available Amounts of Letters of
Credit (and not to obligations in respect of outstanding Letter of
Credit Advances and any other amounts then owing to such Lenders),
(i) if the Ecuadorian Assets securing any such
Project Finance Debt are comprised entirely of Ecuadorian
Assets relating to Block 18, such Ecuadorian Assets need so
secure only 25% of such reimbursement obligations (without
giving effect to any reductions to such reimbursement
obligations upon the reduction of Available Amounts pursuant
to Section 2.04(j) of the Letter of Credit Issuance and
Reimbursement Agreement or deduction from such reimbursement
obligations of any such amounts secured by the assets
consisting of Block 31 pursuant to this clause (a)) or such
other reasonable percentage proposed by the Company and
acceptable to the Designated Lenders with respect to each of
the Short Term L/C Series A Facility, the Short Term L/C
Series B Facility, the Long Term L/C Series A Facility and the
Long Term L/C Series B Facility, and
(ii) if the Ecuadorian Assets securing any such
Project Finance Debt are entirely comprised of Ecuadorian
Assets relating to Block 31, such Ecuadorian Assets need so
secure only 75% of such reimbursement obligations (without
giving effect to any reductions to such reimbursement
obligations upon the reduction of Available Amounts pursuant
to Section 2.04(j) of the Letter of Credit Issuance and
Reimbursement Agreement or deduction from such reimbursement
obligations of any such amounts secured by the assets
consisting of Block 18 pursuant to this clause (a)) or such
other reasonable percentage proposed by the Company and
acceptable to the Designated Lenders with respect to each of
the Short Term L/C Series A Facility, the Short Term L/C
Series B Facility, the Long Term L/C Series A Facility and the
Long Term L/C Series B Facility.
(b) Sale of Ecuadorian Assets. Sell, lease, transfer or
otherwise dispose of, or permit any other Person to sell, lease,
transfer or otherwise dispose of any portion of the Ecuadorian Assets,
or grant any option or other right to purchase, lease or otherwise
14
acquire any portion of the Ecuadorian Assets, in each case other than
Ecuadorian Assets relating to Block 18 (such sale, lease, transfer or
disposition or such grant of option or other right, a "Sale of
Ecuadorian Assets"), unless it shall comply with the provisions of
Section 2.04(j) of the Letter of Credit Issuance and Reimbursement
Agreement.
The covenants set forth above in subsections (a) and (b) above shall
inure to the benefit of only the Lenders under the Short Term L/C
Series A Facility, the Long Term L/C Series A Facility, the Short Term
L/C Series B Facility and the Long Term L/C Series B Facility and the
Holders of Converted A/B Notes, and (without prejudice to any rights
arising under clause (g) of Annex D with respect to all Applicable
Debt) no other Person shall have any right to enforce any such
covenant; to any remedies or damages for the failure of the Company to
comply with any such covenant; to amend any such covenant or waive
compliance by the Company with respect to any such covenant; or any
right to accelerate the payment of Obligations under any Transaction
Document upon the breach of any such covenant by the Company. The
failure of the Company to comply with any such covenant shall give rise
to an Event of Default described in clause (f) of Annex C with respect
to only the Applicable Debt under the Short Term L/C Series A Facility,
Long Term L/C Series A Facility, Short Term L/C Series B Facility and
Long Term L/C Series B Facility and Applicable Debt consisting of any
Converted A/B Notes.
Financial Covenants. So long as any amount of the Applicable
Debt shall remain unpaid or outstanding, the Company shall:
(a) Leverage Test. Maintain on any date a Leverage Index
not greater than the Applicable Leverage Ratio as of such date.
(b) Interest Coverage Test. As of the last day of each
fiscal quarter of the Company, beginning with the fiscal quarter ending
December 31, 2002, maintain a ratio of (i) Consolidated Adjusted EBITDA
(calculated on a Quarterly Basis) for the four most recent fiscal
quarters ending on such last day to (ii) Consolidated Interest Expense
of the Company (calculated on a Quarterly Basis) for the four most
recent fiscal quarters ending on such last day, equal to or greater
than the Applicable Interest Coverage Ratio for such four fiscal
quarter period.
(c) Limitation on Short Term Debt. Not permit, on any
date on or after the date hereof, (i) the aggregate principal amount of
Short Term Debt of the Company as of such date (converted to U.S.
Dollars at the Exchange Rate on such date) less (ii) the aggregate
amount of cash and investments thereof credited to the L/C Collateral
Accounts as of such date, to exceed U.S.$650,000,000.
15
EXECUTION COPY
ANNEX D
EVENTS OF DEFAULT
Events of Default. Each of the following events, conditions or
circumstances shall constitute an Event of Default with respect to any
Applicable Debt:
(a) If the Applicable Debt consists of any New Notes, the
Company shall fail (i) to pay any principal of such Applicable Debt
when the same becomes due and payable; or (ii) to pay any interest on
such Applicable Debt or make any other payment of fees or other amounts
payable with respect to such Applicable Debt under any Applicable
Transaction Document with respect to such Applicable Debt, in each case
under this clause (ii) within three Business Days after the same
becomes due and payable.
(b) If the Applicable Debt consists of Obligations with
respect to any Letter of Credit Facility, the Company shall fail (i) to
pay any principal of such Applicable Debt when the same becomes due and
payable or (ii) to pay any interest on such Applicable Debt or make any
other payment of fees or other amounts payable with respect to such
Applicable Debt under any Applicable Transaction Document with respect
to such Applicable Debt, in each case under this clause (ii) within
three Business Days after the same becomes due and payable; provided
that, in each case, any failure to pay any amount in respect of such
Applicable Debt shall be an Event of Default for purposes of this
subsection (b) with respect to only the Tranche of Applicable Debt
amounts in respect of which are unpaid under the conditions described
in this subsection (b).
(c) If the Applicable Debt consists of Obligations with
respect to any Letter of Credit Facility, the Company shall fail (i) to
reduce, when required in accordance with Section 2.04(d), (e), (f),
(g), (h), (i) or (j) of the Letter of Credit Issuance and Reimbursement
Agreement, any Available Amount of any Letter of Credit issued under a
Letter of Credit Facility or (ii) to deposit, when required in
accordance with Section 2.04(d), (e), (f), (g), (h), (i) or (j) of the
Letter of Credit Issuance and Reimbursement Agreement, any cash amounts
in any L/C Collateral Account; provided that, in each case, any failure
of the Company to take any such actions shall be an Event of Default
for purposes of this subsection (c) with respect to only the Tranche of
Applicable Debt made under such Letter of Credit Facility or for whose
benefit such L/C Collateral Account was established.
(d) If the Applicable Debt consists of any New Notes, any
representation or warranty made or deemed made, by or on behalf of the
Company under any Applicable Transaction Document with respect to such
Applicable Debt or by or on behalf of the Company in connection with
any such Applicable Transaction Document shall prove to have been
incorrect in any material respect when made or deemed made.
(e) If the Applicable Debt consists of Obligations with
respect to any Letter of Credit Facility, any representation or
warranty made or deemed made, by or on behalf of the Company under any
Applicable Transaction Document with respect to such
Applicable Debt or by or on behalf of the Company in connection with
any such Applicable Transaction Document shall prove to have been
incorrect in any material respect when made or deemed made; provided
that the events, conditions and circumstances set forth in this
subsection (e) shall be an Event of Default for purposes of this
subsection (e) with respect to only the Tranche of Applicable Debt
representations in respect of which or in respect of the Applicable
Transaction Documents, the Applicable Transaction Parties or the
Applicable Agent Party relating to such Tranche of Applicable Debt are
proven to be incorrect in any material respect when made.
(f) The Company or, where applicable, any Co-Obligor,
shall fail to perform or observe (i) any term, covenant or agreement
contained in (A) subsection (d) or (g) of the Affirmative Covenants set
forth in Annex C; (B) the Negative Covenants set forth in Annex C; or
(C) the Negative Covenants Applicable to Applicable Debt Under Short
Term L/C Series A Facility, Long Term L/C Series A Facility, Short Term
L/C Series B Facility and Long Term L/C Series B Facility and Converted
A/B Notes set forth in Annex C; provided that with respect to this
clause (C) the failure of the Company or any Co-Obligor (other than
Pecom Energia S.A., Sucursal Bolivia) to perform or observe any such
covenants shall be an Event of Default for purposes of this subsection
(f) with respect to such Applicable Debt only if such Applicable Debt
consists of Debt under the Short Term L/C Series A Facility, Long Term
L/C Series A Facility, Short Term L/C Series B Facility or Long Term
L/C Series B Facility or Converted A/B Notes; or (D) the Financial
Covenants set forth in Annex C; or (ii) in any material respect, any
other term, covenant or agreement contained in any Applicable
Transaction Document with respect to such Applicable Debt on its part
to be performed or observed if such failure shall remain unremedied for
30 days after an executive officer of the Company or the Co-Obligor
party to the Transaction Documents for such Applicable Debt has
knowledge thereof.
(g) (i) A default occurs in payment of principal,
interest or other amounts when due and payable in respect of any
outstanding Debt of the Company or any of its Material Subsidiaries
(but excluding such Applicable Debt) having an aggregate principal
amount equal to or exceeding the Specified Amount at the time of such
default, or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
outstanding Debt of the Company having an aggregate principal amount
equal to or exceeding the Specified Amount at the time of such default
(but excluding such Applicable Debt), whether such Debt now exists or
shall hereafter be created and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; (ii) a default, other than a payment
default described in the preceding subparagraph (but only when such
default permits acceleration of the relevant Debt), occurs under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Debt of the Company or a
Subsidiary that is outstanding in an aggregate principal amount equal
to or exceeding the Specified Amount at the time of such default (but
excluding such Applicable Debt), whether such Debt now exists or shall
hereafter be created; or (iii) the Company shall default under any
agreement between the Company and the beneficiary of any Short Term
Series C Letter of Credit, Long Term Series C Letter of Credit or Long
Term Series D Letter of Credit relating to any commodity
2
hedging transaction supported by such Letter of Credit, involving
Obligations of the Company equal to or exceeding, in the aggregate, the
Specified Amount at the time of such default, and such default shall
continue after the applicable grace period (without giving effect to
any cure resulting from a draw under the above referenced Letters of
Credit), if any, specified in such agreement; provided that any default
under such agreement caused solely as a result of an Issuing Bank's
failure to honor a request for a draw under any of the Long Term Series
C Letter of Credit, the Short Term Series C Letter of Credit and the
Long Term Series D Letter of Credit, in each case made in accordance
with the terms of such Letter of Credit, shall not constitute an Event
of Default under this subsection (g).
(h) A distress, attachment, execution, seizure before
judgment or other legal process is levied, enforced or sued out on or
against any part of the Property of the Company or any of its Material
Subsidiaries in an amount that equals or exceeds the Specified Amount
at the time of such event and (i) such distress, attachment, execution,
seizure before judgment or other legal process is not discharged or
stayed within 60 days after having been notified to the Company or any
of its Material Subsidiaries, as the case may be; or (ii) if such
distress, attachment, execution, seizure before judgment or other legal
process shall not have been discharged within such period, the Company
or any of its Material Subsidiaries, as the case may be, shall have
within such 60 day period contested in good faith by appropriate
proceedings upon stay of execution of the enforcement thereof or upon
posting a bond in connection therewith; provided that in no event shall
the grace period provided by clause (ii) of this subsection (h) extend
beyond the 360th day after the notification to the Company or any of
its Material Subsidiaries, as the case may be, of such proceedings.
(i) A court having jurisdiction enters a decree for (A)
relief in respect of the Company or any Material Subsidiary in an
involuntary case under Argentine Law No. 24,522 or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect
in any applicable jurisdiction, or (B) appointment of an administrator,
receiver, trustee or intervenor for the Company or any Material
Subsidiary for all or substantially all of the property or assets of
the Company or any of its Material Subsidiaries and, in each case, such
decree or order shall remain unstayed and in effect for a period of 60
days.
(j) If the Applicable Debt consists of Obligations with
respect to the Short Term Series A Letter of Credit Facility, the Long
Term Series A Letter of Credit Facility, the Short Term Series B Letter
of Credit Facility or the Long Term Series B Letter of Credit Facility,
a court having jurisdiction enters a decree for (A) relief in respect
of any Co-Obligor (other than Pecom Energia S.A., Sucursal Bolivia) in
an involuntary case under Argentine Law No. 24,5222 or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect
in any applicable jurisdiction or (B) appointment of an administrator,
receiver, trustee or intervenor for any Co-Obligor (other than Pecom
Energia S.A., Sucursal Bolivia) for all or substantially all of the
property or assets of such Co-Obligor, and in each case, such decree or
order shall remain unstayed and in effect for a period of 60 days.
3
(k) The Company or a Material Subsidiary consents to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any Bankruptcy Law, or the consent by it to the filing
of any such petition or the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official
under any Bankruptcy Law, including a "sindico") of the Company or any
Material Subsidiary or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors pursuant to
the Bankruptcy Law, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of
corporate action by the Company or any Material Subsidiary in
furtherance of any such action.
(l) If the Applicable Debt consists of Obligations with
respect to the Short Term Series A Letter of Credit Facility, the Long
Term Series A Letter of Credit Facility, the Short Term Series B Letter
of Credit Facility or the Long Term Series B Letter of Credit Facility,
any Co-Obligor (other than Pecom Energia S.A., Sucursal Bolivia)
consents to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any Bankruptcy Law, or the
consent by it to the filing of any such petition or the appointment of
a custodian, receiver, liquidator, assignee, trustee, sequestrator (or
other similar official under any Bankruptcy Law, including a "sindico")
of such Co-Obligor or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors pursuant to
the Bankruptcy Law, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of
corporate action by such Co-Obligor in furtherance of any such action.
(m) An order is made or an effective resolution is passed
for the winding up or dissolution or administration under judicial
supervision of the Company or any of its Material Subsidiaries and is
not discharged or stayed within 30 days of having been notified to the
Company or any of its Material Subsidiaries, as the case may be, or the
Company ceases or threatens to cease to carry on all or a material part
of its business or operations, except for the purpose of and followed
by a reconstruction, amalgamation, reorganization, merger, demerger or
consolidation (i) on terms approved by the Designated Lenders in the
case of Applicable Debt under any Letter of Credit Facility and by the
Required Holders with respect to the Applicable Debt in the case of
Applicable Debt consisting of any New Notes or (ii) completed as
otherwise permitted under the Applicable Transaction Documents with
respect to such Applicable Debt.
(n) If the Applicable Debt consists of Obligations with
respect to the Short Term Series A Letter of Credit Facility, the Long
Term Series A Letter of Credit Facility, the Short Term Series B Letter
of Credit Facility or the Long Term Series B Letter of Credit Facility,
an order is made or an effective resolution is passed for the winding
up or dissolution or administration under judicial supervision of any
Co-Obligor (other than Pecom Energia S.A., Sucursal Bolivia) not
discharged or stayed within 30 days or such Co-Obligor ceases or
threatens to cease to carry on all or a material part of its business
or operations, except for the purpose of and followed by a
reconstruction, amalgamation, reorganization, merger, demerger or
consolidation (i) on terms approved by the Designated Lenders with
respect to each of the Short Term L/C Series A Facility, the
4
Short Term L/C Series B Facility, the Long Term L/C Series A Facility
and the Long Term L/C Series B Facility or (ii) completed as otherwise
permitted under the Applicable Transaction Documents with respect to
such Applicable Debt.
(o) The Obligations of the Company or any Subsidiary
party thereto under any Applicable Transaction Document with respect to
such Applicable Debt shall fail to rank at least pari passu with all
other unsecured and unsubordinated Debt of the Company or any
Subsidiary party thereto; provided that the pledge by the Company of
the L/C Collateral Accounts pursuant to the L/C Collateral Accounts
Security Agreement shall not be and shall not result in an Event of
Default under this subsection (o).
(p) If the Applicable Debt consists of any New Notes, any
provision of any Applicable Transaction Document with respect to such
Applicable Debt shall cease to be valid and binding on or enforceable
against the Company or any Subsidiary party thereto, or the Company or
any Subsidiary party thereto shall so assert or state in writing, or it
becomes unlawful for the Company or any Subsidiary to perform or comply
with any of its obligations under any such Applicable Transaction
Document to which it is a party.
(q) If the Applicable Debt consists of Obligations with
respect to any Letter of Credit Facility, any provision of any
Applicable Transaction Document with respect to such Applicable Debt
shall cease to be valid and binding on or enforceable against the
Company or any Subsidiary party thereto, or the Company or any
Subsidiary party thereto shall so assert or state in writing, or it
becomes unlawful for the Company or any Subsidiary to perform or comply
with any of its obligations under any such Applicable Transaction
Document to which it is a party; provided that that the events,
conditions and circumstances set forth in this subsection (q) shall be
an Event of Default for purposes of this subsection (q) with respect to
only the Tranche of Applicable Debt whose rights under such Applicable
Transaction Documents are impaired in any way due to such events,
conditions and circumstances.
(r) Any governmental or other consent, license, approval
or authorization which is now or may in the future be necessary or
appropriate under any applicable law or regulation for the execution,
delivery or performance by the Company or any of its Subsidiaries of
any Applicable Transaction Document or its obligations thereunder with
respect to such Applicable Debt to which it is a party or to make such
Applicable Transaction Document legal, valid, enforceable and
admissible in evidence shall not be obtained or shall be withdrawn,
revoked or modified or shall cease to be in full force and effect or
shall be modified in any manner which would have a material adverse
effect on the rights or remedies of the Applicable Transaction Parties
with respect to such Applicable Debt.
(s) The ratio of:
(i) (A) the aggregate amount (without duplication) of
receivables generated from Eligible Trade Transactions and cash
received from spot sales made in connection with Eligible Trade
Transactions during any of the following periods to (B) Debt Service in
respect of the Trade Series Notes for such period shall be less than
1.25:1.00:
5
(I) the Company's fiscal quarter ending December 31,
2002,
(II) the Company's two fiscal quarters ending March 31,
2003,
(III) the Company's three fiscal quarters ending June 30,
2003, and
(IV) the Company's four fiscal quarters ending September
30, 2003; or
(ii) (A) the aggregate amount (without duplication) of
receivables generated from Eligible Trade Transactions and cash
received from spot sales made in connection with Eligible Trade
Transactions during any fiscal quarter of the Company ending after
September 30, 2003 to (B) Debt Service in respect of the Trade Series
Notes for such fiscal quarter shall be less than 1.00:1.00; or
(iii) (A) the aggregate amount (without duplication) of
receivables generated from Eligible Trade Transactions and cash
received from spot sales made in connection with Eligible Trade
Transactions during any period of two consecutive fiscal quarters
ending after September 30, 2003 to (B) the Debt Service in respect of
the Trade Series Notes for such fiscal quarters shall be less than
1.25:1.00,
(iv) (A) the aggregate amount (without duplication) of
collections of receivables arising from Eligible Trade Transactions and
cash received from spot sales made in connection with Eligible Trade
Transactions that the Company and its Subsidiaries deposit or cause to
be deposited and may maintain as freely disposable Dollars in accounts
with commercial banks in countries that are members of the Organization
of Economic Cooperation and Development during any of the following
periods to (B) Debt Service in respect of the Trade Series Notes for
such period shall be less than 1.10:1.00:
(I) any period specified in clause (i) above, and
(II) any fiscal quarter ending after September 30, 2003;
except that the failure to satisfy a ratio in clause (i), (ii), (iii) or (iv)
above in this subsection (p) shall not give rise to an Event of Default for so
long as
(A) any Governmental Rule is in effect or any
governmental policy is being implemented through action or inaction by
any Government Authority that materially impairs the ability of the
Company or any of its Subsidiaries to export goods or services
6
or to deposit and maintain in accounts in countries that are members of
the Organization of Economic Cooperation and Development freely
disposable Dollars received from collections of receivables arising
from sales of such goods and services, and
(B) such Governmental Rule or policy either:
(I) relates to crude oil and/or oil derivatives,
or
(II) is the sole cause of the Company's inability
to meet such ratio.
(t) Any Change of Control shall occur.
(u) Petroleo Brasileiro S.A. or its Subsidiaries shall
fail to acquire beneficial ownership (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) of Capital Stock of the
Company representing more than 51% of the combined voting power of all
Voting Stock of the Company on or before February 28, 2003.
7